Real Estate Watch: No, there isn’t a housing bubble? – The Island Now: Business

Is there a Bubble in Housing? Absolutely Not!  

Everything in the world, for the most part is supply and demand economics.  

When one has a reduced supply, which is what we have at the current moment and a greater demand, that is not able to be satisfied, you have pressure on the current smaller inventory, to increase in price and existing not for sale property to increase in value. 

However, seven to nine years ago, as the market was crashing and supply was increasing and demand was waning and prices followed suit, going lower; as well as existing home’s values.  

Building permits also came to a screeching halt throughout the country, because of the lack of demand and tightened money supply and lending requirements.  

Because of all these changing variables it might take 20 years and more, to even come close to satisfying current and future demand.   

The greatest demand is coming from the Millenials, who were born between 1982 and 2000, and who number approximately 83.1 million as noted in the most recent U.S. census.  

The continued increase in the Hispanics and Asian populations (non-white) and those under 65 and over (13 percent) (expected to increase to 20 percent by 2050 and the upwardly mobile in incomes, and those that have been living at home or in rentals, saving more and more money for a down payment to enter the home market to grab a piece of the “American Dream.”   

The pressure on prices to increase has no end in sight.  There will also be shifts in population trends and movements due to higher prices, taxes, jobs etc that will also have an impact on supply.  

Population increases of 42 percent in the U.S., are predicted for the age groups 15-64 between 2000-2050, and reduction of those populations; 10 percent in China, 25 percent in Europe, 30 percent in South Korean and 40 percent in Japan.

It is how fast the builders can catch up with the ever expanding demand over the last five years that will determine when and if the next bubble will come to pass.  

Of course there are always exceptions to the rule of supply and demand, if some U.S. or global event occurs to squash the current demand.  

The huge question arises as to whether we will continue to spend and borrow and our huge debts now and in the future will continue to rise; will have some kind of effect on housing market based on higher interest rates.  

Right now, it isn’t happening.  If we raise interest rates too much that will slow the housing market, as well as everything else that is tied to it; however, if we keep them too low, that is not helpful to all involved and dependent on a return on their fixed incomes.  

Dammed if you do and dammed if we don’t.  It is a perfect storm, low interest rates, low supply of housing and higher demand, and I am hoping for continued positive outcomes going forward, but I am not totally 100 percent sure!

The problem with Long Island, especially in Nassau County, is the lack of buildable land to satisfy the ever increasing demand.  

Even Suffolk County, with a lot more usable land to build on, is ever increasingly being grabbed up and held in a land trust, to keep any building from happening.  

But again, the water supply will become an ever increasing major issue on the expansion of any future construction, as was mentioned in last weeks article.  

All these facts point to the lack of supply in the future and the increase in prices in Long Island and many other areas around the U.S.  

However, will many areas of Long Island become so expensive that only the rich and super wealthy be able to live here?  

Lastly, what is also keeping our bubble in check,  is the fact that more people are leaving New York.  

Our children, family and friends continue to leave as they have been over the years, since the lack of reasonable housing will continue to force them to find other venues and move where it is more affordable. 

4 Credit Tips for Buying a New Home | Money.com

Here’s what you really need to become a homeowner.

This may come as a surprise, but you don’t need a perfect credit score to buy a home or get a mortgage.

In some cases, your credit just needs to be sufficient. Good, bad, ugly or indifferent, as long as your credit score matches the criteria of the mortgage size and property type you are looking for, you may be able to get financing.

Here’s a quick cheat sheet of the top three most commons mortgages and their basic credit score requirements.

 

• FHA loans. You’ll generally need a credit score of at least 600. There are lenders that do FHA Loans with credit scores as low as 580, but it’s going to come at a cost. Expect the lender to go through your file with a much finer-toothed comb if your score is at 620 or below. Conversely, if your credit score is 620 or higher, not only will you get better rates and fees, but you’ll also have an easier loan process.
• Jumbo Loans. You’ll generally need a credit score of at least 680. You will also generally need at least 30% equity when buying or refinancing a home. A 700 or better score yields better rates and terms and requires less down (possibly as little as 20%).

Of course, a good credit score generally helps you net better terms and conditions. If you have some credit challenges preventing you from getting a mortgage with competitive rates and fees, here are some strategies straight from a mortgage pro that could improve your situation.

1. Pay Down Debt/Rapid Re-Scoring

Some mortgage lenders have a credit doctor service, known as rapid re-scoring, available through their credit reporting company. This service allows them to run statistical credit modeling: the lender plugs in a certain credit score needed, an algorithm analyzes your complete credit portfolio and outlines what can be done to get you to that aforementioned threshold.

Oftentimes, high credit utilization (the amount of debt you are carrying versus your total available credit) is the culprit for a low score. In those instances, paying down certain credit accounts could make you more creditworthy — and mortgage eligible — within short period of time.

 

2. Time

If buying a house is a longer-term goal, time can be your friend. Credit history is a large component of a healthy credit score. Make your payments on time, keep the amount of debt you are carrying low and avoid late payments of any kind. These smart spending habits show that you are responsible with your obligations and will bolster your credit score eventually.

 

3. Quit or Resolve Disputes

In order to get a mortgage, you generally cannot have any accounts in dispute on your credit reports. At the same time, simply removing a dispute from your credit report can make your credit score drop. The reason? Credit scoring models generally ignore information being disputed, like an account with a late payment, which would otherwise hurt your credit score.

In order to circumvent these problems, work to resolve any disputes. (You can find more about getting errors off of your credit reports here.) You can also consider handling any issue you may have with a lender directly in lieu of filing a formal dispute with the credit bureaus. Here are some tips for negotiating with creditors.

 

4. Put More Money Down

Putting more money down to buy a home could put you in an entirely different mortgage category and help you bypass certain credit scoring problems.

Remember, if you have been told “no” by a bank or lender, you owe it to yourself to get a second or third opinion. What’s more, your credit score could improve from month to month, depending on what’s holding you back, so keep an eye on it in the meantime.

3 Reasons We’re Not in a Housing Bubble | Realtor Magazine

3 Reasons We’re Not in a Housing Bubble

Daily Real Estate News | Wednesday, March 16, 2016

Home prices are rising three to four times faster than wages while credit conditions are loosening, Lawrence Yun, chief economist for the National Association of REALTORS®, notes in his latest column at Forbes.com. These kinds of conditions usually prompt housing analysts to start uttering the words “housing bubble,” but Yun discounts those warnings.

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“Even though the credit conditions appear to be easing somewhat, the move is from overly stringent conditions to not-so-overly-stringent conditions,” Yun writes. “It is a far-fetched view to imply the current mortgage approval process in any way resembles the loosey-goosey, easy subprime mortgage access conditions of a decade ago.”

Indeed, mortgage credit scores are nowhere near where they were during the housing bubble. Today, scores are at about 740 to 750 compared to 710 to 720 during the housing crisis, according to Fannie Mae data. Also, the no-doc requirements for subprime mortgages of yesteryear are nearly gone today.

Yun also notes that while home prices are rising above wages, low mortgage rates have been a silver lining.

“For someone making a 20 percent down payment, the monthly mortgage payment at today’s mortgage rates would take up 15 percent of a person’s gross income,” Yun writes. “During the bubble years, it was reaching 25 percent of income.”

Finally, Yun says you can squash those bubble fears by just looking at the housing supply. Inventories are at about four to five months today, which is similar to the bubble years. However, sales aren’t moving at the same pace. Existing-home sales and new-home sales combined were at 8.4 million back then. In 2015, combined home sales were 5.76 million — about one-third lower, Yun notes.

The limited supply of homes for sale is what mostly is behind the latest home-price increases, he says.

“We are not in a housing market bubble in terms of an inevitable impending home-price crash,” Yun says. “Rather, we are facing an above-normal home-price growth trend, which admittedly is unhealthy on several levels because of the simple economic law of insufficient supply. We need more homebuilding.”

4 Reasons to Get Happy About Housing | Realtor Magazine

Real estate’s outlook should put you in a good mood. National Mortgage News recently highlighted the following four reasons why the housing market will likely strengthen over the next several years:

1. Low interest rates.

The Federal Reserve recently hinted that it may delay future rate hikes. This could help keep mortgage rates low. The 30-year fixed-rate mortgage today remains below 4 percent – which means savings in the financing costs for home buyers.

2. Strengthening job and wage growth.

The unemployment rate in the U.S. has been in recovery mode the last few years, and is now at 4.9 percent (after reaching 10 percent during the recession). Wages are on the rise too: Average hourly earnings rose 2.5 percent year-over-year, according to the U.S. Bureau of Labor Statistics report from January.

3. The millennial debut.

This 75 million strong cohort may have initially delayed home ownership but they’re on board now. The oldest millennials are now in their mid-30s, and as they start forming families and advancing in their careers, they’re drawn to home ownership. They are expected to have a significant impact on housing and mortgage markets: “Over the next decades, a total of more than $30 trillion will be passed from baby boomers to millennials, fueling a housing boom that will be strong and long-lasting,” the National Mortgage News reports.

4. The comeback buyers. 

For owners who lost their home to foreclosure during the recession, they are gradually re-entering the market and are expected to become a growing force. Following a foreclosure or short sale, these home owners were required to stay out of the market for a two- to seven-year waiting period as they repair their credits and become eligible for financing again. Many of these boomerang buyers are re-entering markets now. RealtyTrac estimates that more than 7 million Americans lost their homes during the recession – and that means the buying pool is huge. “The number of boomerang buyers eligible to return to home ownership will surge over the next year, peaking in 2018 at more than 1.5 million,” the National Mortgage News reports.

How to purchase a home in a competitive market – WECT TV6-WECT.com:News, weather & sports Wilmington, NC

Spring is the best of times and the worst of times – to buy a house, that is. The coming season is a tempting time to purchase. A spring or early summer move works well with most school schedules, and available home inventory increases as many families prepare to relocate. Of course, if you are thinking of purchasing a home in the next few months, you also will see a lot of competition. Be sure that you are prepared – and not overextending yourself – with these eight tips. 

1. Check your debt ratio. To qualify for a home mortgage, you need to convince a lender that you can pay the mortgage and the bills that go along with home ownership. Lenders usually look for buyers whose monthly debt payments – including all housing expenses – are no more than 36-43 percent of gross (pre-tax) income. For a buyer whose monthly income is $4,000, that means payments on housing, credit cards, auto loan, and student loans should add up to $1,720 or less. Lenders like to see that the total housing payments (mortgage principal and interest, insurance and taxes) of a possible new home will add up to no more than 28 percent of monthly gross (before-tax) income. If your debt is higher, work on repaying some of it before you apply for a mortgage.

2. Check your credit score. Before you even look into buying a home, you should obtain and review your credit reports, and check your credit scores. Credit scores are calculated based on your history paying student loans, car loans, credit cards, any previous mortgages, and other obligations. These days, many banks, credit cards and other financial services make credit scores available to customers periodically. Still, it is smart to check your full credit reports. You can get a free copy each year from www.annualcreditreport.com. If you spot any inaccuracies, contact the credit bureau to have them corrected before you apply.

3. Remember that a home costs more than the mortgage. The mortgage total is just the beginning when it comes to home ownership. You should also be prepared to pay to furnish the home, and manage maintenance and upkeep. You also may take on additional services, such as utilities, internet, cable and trash collection. Be sure you completely understand the fees, benefits and rules of any applicable homeowners association (HOA) before you choose a property. 

4. Look into mortgage insurance to make it work. One great thing about buying a home is that you can lock in today’s interest rates. If you are close to being able to put down 20 percent, but a too-small down payment is holding you back, ask your lender about a smaller down payment and private mortgage insurance (PMI) to protect the difference. At least through 2016, you will be able to deduct the cost of PMI on your federal income taxes.

5. Investigate FHA or VA loans. The Federal Housing Administration (FHA) and the Veterans Administration (VA) back some mortgages. These programs have slightly more flexible financial requirements to allow more people to buy a home, especially first-time buyers. FHA loans require a minimum credit score of just 580. VA loans require a minimum of 620. In contrast, many conventional lenders may require a score starting around 720. Government-backed loans permit lower down payments, too – sometimes as low as 3.5 percent down, rather than 10-20 percent.

6. Compare lenders. New FHA rules no longer penalize lenders for a few buyers who default. As a result, some lenders may become more flexible. If one lender turns you down, check with others. Be prepared to prove that you can be a good homeowner. You will want to show that you have steady employment, that you have little debt and any other information that might convince a loan officer to take a chance on you. View the loan application process as a learning experience. Use what the lender tells you to improve your credit for the future.

7. Be aware some properties will not accept an FHA buyer. Sometimes, sellers will not accept offers from buyers with an FHA or VA loan. This may happen for several reasons. FHA or VA loans have lower credit requirements, so these buyers are considered riskier. Other properties might not pass an FHA inspection. Some townhome and condo developments have had too many foreclosures to qualify as FHA properties. If an FHA loan is your only option, have patience to find the right property – and meanwhile, continue to work to improve your credit score.

8. Talk to a housing counselor. Some people associate “HUD homes” with the 1990s, but the Department of Housing and Urban Development (HUD) offers several sound housing programs today. HUD’s housing counselors can help you learn how you can buy a home. Programs such as the “Good Neighbor Next Door” offer discounted homes in certain areas to people who qualify, including teachers and some public workers, like firefighters. When considering purchasing a home, it is important to have a healthy credit score, to carry minimal debt and to maintain a steady employment history. If you are still working on these factors, try to remain patient and focused on your goals. It is possible for many people to buy a home, even in today’s tightening market.

First-Time Home Buyers Guide: Finding The Perfect House

How To Find The “Best Home” For Your Needs

At any given moment, there are millions of homes for sale nationwide.

With so many homes from which to choose, it’s no wonder that finding the “best house” can be a challenge.

However, for home buyers who take the time to think about what they want in a home — what they really want — shopping for the right home can be a lot more simple.

The key is to keep your interests top-of-mind throughout the home-buying process.

Make a list of the features that you require in a home — and those features you could do without — before beginning your search.

There are ten categories to consider, at least.

1. The Price Of The Home

You can’t shop for homes until you know your budget.

To find your housing budget, determine the monthly payment you’d be comfortable making on a home. Then, use a 3-in-1 mortgage calculator to “work backwards” toward your purchase price.

Once you know your maximum purchase price, it’s time to connect with a lender, who will tell you whether you could be approved at your intended home purchase price.

This process is known as a pre-approval. It helps your offer stand out when you finally find a home. It also helps you to avoid the heartache of falling in love with a home you can’t afford to buy.

Once you have your budget set, look for homes that fit.

Searching for homes in a specific price range will narrow your search results for you and will also help guide you in choosing an appropriate location. For example, homes in the suburbs may be more affordable than homes closer to a city’s downtown district.

Keep in mind that it is important to look at houses that don’t take up your full budget.

In addition to the price of your home, you should leave room in your budget for moving expenses, closing costs, and renovations to the home, if necessary.

2. The Number Of Bedrooms

Aside from its price, the size of a home is another important factor which will affect your decision to purchase.

Knowing how large or small of a home you need will help you find a home which best fits your needs.

A good way to assess how much home you’ll need is to ask yourself how many bedrooms you would like for your home to have?

This question is especially important for homebuyers who have children, or are planning to have children.

Can children share a room, or will it be better for each child to have their own room? Would you like to have an extra bedroom for guests, or a potential space for your parents to move in when they get older?

If a house has fewer bedrooms than you’d like, are there other spaces in the house which could convert to a bedroom? For example, could an office could be converted into a small guest room? Could a finished basement could be converted into a playroom for kids?

You will also want to consider the size of the bedrooms. A large bedroom may be more suitable for siblings to share than a small bedroom.

3. The Number of Bathrooms

Just as home buyers must consider how many bedrooms are required to meet their needs, they must also consider how many bathrooms are needed.

Will one bathroom per bedroom meet your needs? Would you like for your home to have a bathroom for your guests?

What about an easily-accessible half-bathroom on the first floor of the house? Do you need a bathroom in the basement?

You should also think about what features you want included in your bathrooms.

Would you like to have a bathtub in each bathroom, or is a stand-alone shower acceptable? Would you like a bathroom to have multiple sinks so that two or more children can get ready for school or bedtime at the same time?

4. The Kitchen

Homeowners who like to cook often prefer large kitchens with lots of room for cooking and storage. By contrast, homeowners who dine out more frequently may have different kitchen needs.

When you consider a home’s kitchen, look for up-to-date appliances including the dishwasher, stove, oven, and refrigerator. If the appliances in the kitchen don’t suit your needs, make room in your budget to update them.

Also, consider whether the kitchen will be your primary “meals” room. If you plan to eat meals in the kitchen as opposed to a formal dining room, you’ll want to make sure the kitchen can accommodate your entire household for breakfast, lunch, and dinner.

5. The Dining Room

Some homes feature a combined kitchen and dining room. In others, the dining room is separate.

Whether you eat in the kitchen or dining room, consider the “extra space” a dining room may provide when hosting small or large numbers of guests.

Think about how your household dines, and make sure the home can accommodate. Dining rooms can be repurposed as living rooms or music rooms, depending on your needs.

6. The Home’s Location

You may know that you’re moving to a certain city, or certain part of town, but every street is different. The location of your home is important.

For example, if you have children or plan to have children, you may want to move into the best public school district you can afford. Do you want to live within walking distance to schools, though? Or, would you rather your children take the bus?

Similarly, would you like to live in a community with a nearby arts district? What about with nearby parks?

Is it important that your neighborhood be kid-friendly? Is there a community pool nearby? What is the crime rate like?

Consider what you would like within walking distance from your home, and what you do not mind taking public transportation or driving to.

7. The Type Of Home

Just as the size and location of your home is important, so is the “type” of home you buy.

Homebuyers who want a large backyard, or room to grow a garden, may not want to move into a condo or townhouse, where yard space is often limited.

Similarly, if you prefer to live in a home without stairs, a ranch-style home may better suit your needs than a two-story colonial.

8. The Back Yard, The Front Yard

When you’re buying a home, it’s important to consider its outdoor spaces, too.

For example, home buyers who love to garden may want to search for homes with favorable sun exposure and ample room to grow fruits and vegetables. Similarly, families with children may prefer a large yard for playing.

Consider whether you will want room a swing set, a playhouse, or a pool.

Home buyers who enjoy spending time outdoors may also prefer homes with a sizeable porch or patio. And, do you want a yard with a bit more privacy? Is there room to build a fence or plant bushes?

9. The Parking

Adequate parking is another important factor in a home.

If a house has no driveway or garage, is there ample space to park on the street? Will there be enough street parking for guests during a party or get-together?

A house with a driveway or garage gives a home more privacy, and makes it easier to bring groceries inside. A long driveway may also keep young children from running into the street.

Households with multiple cars or sports equipment may need a garage for storage space.

10. The Energy Efficiency

Finding a home that is energy-efficient not only helps the environment, but can also save you money.

For example, a home with many windows may help to save money on electricity because of an abundance of natural light during the day.

Insulation of a home is important, too. Homes with proper insulation can save you money on gas and electric bills. Some homes may even come with solar panels to help cut energy costs.

Tips to Move Out of a Home You’ve Just Sold

Previous 8 Steps:

1) Clean Up

          2) Hire Realtor

          3) Determine Price

          4) Pretty Up the Place

          5) Market Your House

          6) Strike the right deal

          7) Getting Ready to Close

          8) Head to Closing

Well, dear home sellers, we’ve come a long way—together! From the first coat of paint you used to freshen up your house’s trim to the stress of wrangling your way to a deal, we’ve been with you every step of the way. Now you’ve made it to the final hurdle of selling a home: moving on out!

Don’t worry, this is the easy part. But, as with the previous eight steps, you want to do it right—and that’s why we’re here to help. With this final installment of our Home-Selling Guide, we’ll get you through the last leg of your journey without a hitch.

Get your timeline in order

Once the paperwork is signed at closing, the buyers will officially own the house … and you won’t. That means that, technically, if you or your stuff is still there after the close, “the buyer could evict you,” says Joshua Jarvis, founder of Jarvis Team Realty in Duluth, GA. So make sure to have your exit strategy in place!

Still, most buyers will understand if you need a bit more time and have a legitimate reason—like if you can’t move until the weekend due to your work schedule. Just be sure to discuss these issues as soon as possible before the close, so your buyers can plan accordingly.

Decide what to leave behind

To make sure you’re leaving behind everything the buyer wanted—and that you agreed to—double-check the closing documents. There should be an itemized list of what comes with the house. And even if the buyers didn’t formally request them, it’s just good form to leave certain types of things behind.

Such as? “Generally speaking, you should leave anything that’s bolted to the wall,” says Jarvis. “Some homeowners want to take their fans and blinds to the next home, but generally if it’s screwed in, it stays.”

Also, if you and the buyers agreed to transfer any services—such as alarm monitoring or pest control—be sure to set that up before you go. Leave the buyers a detailed note in the house, or ask your agent to get in touch with theirs to make sure the transfer goes smoothly.

If you do inadvertently take an item that the buyers had requested, they have the right to ask for it back—and they could potentially sue you in civil court for the cost of a replacement. So, when in doubt, feel free to check with the buyers before you grab and go.

But don’t leave anything else behind

 

Just as important as what you leave behind is what you don’t. Your buyers have a right to move into a home that’s been cleared of furniture and other movable items they didn’t expressly request.

“Some folks leave all kinds of unwanted clothes, furniture, paint cans, and other items, thinking they are helping the buyers,” Jarvis says. If you truly think your buyers might love to have your old planting pots or kiddie equipment, go ahead and ask—but please don’t assume they’ll welcome your leftovers.

Even if you’re careful, you might forget something—at which point the buyers may contact their agent to get it back to you, but they also have the legal right to just keep or get rid of it. So double-check areas (e.g., the attic, garage, basement, storage shed, kitchen, and bathroom drawers) where people commonly overlook items.

Clean up

It’s common courtesy to leave the place not only clear of your possessions, but also clean. However, that doesn’t mean you have to leave it immaculate. “Generally, you shouldn’t have to pay to have it deep cleaned,” Jarvis says.

In most cases, a simple broom-clean will do. That means wiping down the countertops, cleaning out drawers, sweeping or vacuuming all the floors, and giving the bathroom and kitchen appliances a once-over so the new owners aren’t grossed out when they arrive.

Wait! Are you forgetting anything?

Before you close the door for the last time, run through a quick checklist. Did you eyeball every room for stray items? Have you forwarded your mail and turned off the utilities? Is the water running in the pool? Have you left behind incriminating evidence of a capital crime? (We’re kidding on that last part … we think.)

We all get in a bit of a rush even in the best planned moves, but you won’t be able to get back in, so it can’t hurt to do a final run-through.

Once you’re ready, it’s time to leave. You can drop a line to your Realtor® to let her know you’re out, although it’s usually a courtesy more than a necessity. If you’re feeling truly gracious, feel free to leave a note, card, or bottle of bubbly congratulating the people who’ve inherited your former home. Given all the fond memories you’ve built between those walls, wouldn’t it be nice to start the home’s new owners off on the right foot?

And buy yourself some Champagne, too. Make it the good stuff—you’ve earned it.

5 Things You Need to Know Before You Buy a Home | PJ Media

For so many people, being able to buy a home is a major life accomplishment. It is a milestone as significant as getting married or having a baby. For those of us who have lived in a major city for much of our lives, the prospect of finally having some space (that doesn’t share a wall with a stranger and is larger than, say, a match box) sounds glorious. And it is. Or it can be. But there are moments when owning a home can be an utter horror.

In the event that you are searching for a home (or if you already own one and feel like commiserating for the next 500 words or so), strap on your seat belt and get ready for a ride. Because home ownership is not all white picket fences and dinner parties. It can sometimes feel more like “Nightmare on Elm Street” with a little bit of “The Money Pit” mixed in for good measure.

 

1. Contractors

Most of us need them. I, for one, cannot put up sheet rock, demolish a bathroom, or redo a closet. My husband is amazing at many things, but home renovation is not his specialty. So when it comes time to update that god-awful ’70s green tile kitchen of yours, you’ll probably have to turn to a professional. Just be sure to do your homework, get referrals, and meet with several contractors before deciding on one. Get a contract in writing. And most importantly, keep in mind that the time and dollar amount that you are given will not be anywhere near reality. Two weeks can easily turn into four, and $3,000 is more like $6,000. So budget your time and money realistically.

 

2. Permits

 

If you are doing work (even if you’re doing it yourself), chances are you need permits from your municipality. These ensure that any major plumbing, electric, or construction are being done to code. Permits can be pricey, and can take weeks (or months!) to obtain, so plan your work accordingly. Also, in order to close a permit out, you’ll need to have the work looked at by municipal inspectors who may or may not work on a part-time basis. The whole process can be maddening. But knowing ahead of time is better than being hit with a fine by the city later.

3. Roots in the Sewer Line

 

I certainly never knew about this issue prior to owning a home. Our neighborhood (like many across America), has big, beautiful trees lining the block. But those very trees have very big roots that penetrate the sewer lines. Yes, the pipes that carry waste from your home to the public sewer. When the pipes get too clogged with roots, the waste has nowhere to go but back into your house. Yum. The only effective way to deal with it is to have professionals clear out the roots, and then treat the line with chemicals to prevent the same thing from happening again. After that, it’s best to get the line treated annually.

 

4. Burst Pipes

 

 Oh this is a fun one. When the temperature dips below freezing, pipes have a funny habit of exploding. The damage can be devastating as water pours throughout your house. In our home, a pipe on the third floor burst and dumped water all the way down to the basement. We were out of the house at the time, and within twelve hours ceilings collapsed, doors warped, and wooden floors needed to be replaced. Your best bet is to drip your faucets when the mercury drops. Some recommend dripping the faucet the furthest from the water boiler, so that moving water will have to travel throughout the house. Homeowners insurance covers burst pipe damage, but dealing with the logistics of getting everything fixed isn’t just a headache, but a migraine from hell.

 

5. Property Taxes and Insurance

 

When scrolling through real estate sites in search of your new dream home, don’t just calculate how much you’ll be able to afford in monthly mortgage payments. As a homeowner, you’ll also be responsible for property taxes and homeowners insurance (which most mortgage companies require in order to back your loan). Taxes in some towns are prohibitively expensive, so be sure to factor in these costs when calculating how much you can afford. Chances are, you’ll need a little less house for what you can pay.

So You Wanna Sell Your Home? Step 8: Head to Closing – Real Estate News and Advice – realtor.com

First 7 Steps:

1) Clean Up

2) Hire Realtor

3) Determine Price

4) Pretty Up the Place

5) Market Your House

6) Strike the right deal

7) Getting Ready to Close

Get the repairs done

First things first: You’ve got to get those repairs done. We get it—the last thing you want to do now is work on a house you are about to sell. But if you agreed to make repairs or improvements, don’t put them off until the last minute.

“Some sellers do try to get cute and wait until the day of closing, but they really should do all the repairs at least a week before closing,” says Joshua Jarvis, founder of Jarvis Team Realty in Duluth, GA. Getting things done ahead of time will give you plenty of wiggle room if something should still go wrong, or if the buyer finds a problem during the final walkthrough (more on that to come).

So check the approved offer, make a note of any repairs you and the buyer agreed on, and get to it—and don’t forget to cover yourself. Save receipts from items purchased and invoices from contractors, and take before and after photos of any work completed. You will have proof that repairs were completed on the off chance that the buyers contest them during the walkthrough or at closing.
The final walkthrough

Before your closing date—often 24 hours before—the buyers and the buyers’ agent will do one more walkthrough of the house (for which you should not be present). They will go through every room of the house, inside and outside—a process that typically takes about a half hour. Some buyers will go into detail, testing every light switch. But in most cases, the buyer is just looking to make sure agreed-upon repairs were made and no new issues have crept up before closing.

“Buyers are basically looking for anything unexpected in the home,” Jarvis says. “Say, for example, there was a rug covering a problem area.” (Not that you would do that, you awesome seller, you.) If the buyers do find an issue, you may have a chance to fix the problem ahead of time.

“In most cases, the seller would be notified immediately after the walkthrough,” Jarvis says.

If the problem is big enough, you may have to delay your closing date to give time for the repair. But that only happens occasionally. Often, the buyers will take a trade.

“Many times, the buyers ask for money instead,” Jarvis says. But once the documents are ready to go, the terms usually can’t be altered to include the new amount, and that is where the trade comes in. “You typically see gift cards or appliance trades [added to the deal],” Jarvis says.

The closing

Many closings go smoothly. By this point, the buyers are excited to get into their new house, agreed-on repairs have been made, and the sellers are ready to get out. If things are going smoothly, the closing for you might boil down to a blur of paperwork. “The sellers sign eight documents and will have to sit through an hour and a half of watching the buyer sign,” Jarvis says.

Unless problems creep up—or the buyer wants to negotiate further—you only have two jobs: waiting and reading documents. Some are worth perusing more than others. For example, make sure you pay close attention to the settlement statement. “There are other documents you’ll need to sign like a warranty deed or ‘Don’t sue the attorney’ documents, but the settlement is the most important,” Jarvis says. It includes the money you’re making on the sale, plus tax implications. Make sure to check that these numbers jibe with what you’ve been told and were expecting—and if not, pull your real estate agent or attorney aside and point them out.

Last-minute drama

So what if things aren’t going smoothly? What if the buyers want to negotiate again? The buyer has the right to hash out concerns up until the time they sign the final document and take possession of your house. It makes sense to at least hear them out. After all, you’ve come this far.

If the buyer is negotiating for something you can solve without amending the terms (say, for example, you can offer up the washer and dryer in the house), you’ll probably be able to hammer those details out at closing.

But if you and the buyer have negotiated a lower price at the last minute, you may have to delay closing.

“Big changes just mess the whole thing up,” Jarvis says. “For example, a seller could say, ‘I’ll drop the price by $2,000.’  There’s an amendment that needs to be done and the the loan would have to be rerun,” Jarvis says. That could take anywhere from one day to a week, depending on the bank’s turnaround times.

Once the negotiations are handled and the papers are signed, the buyers’ funds are transferred to your attorney, who will handle the payments to cover your loan and pay your real estate team. Thankfully, this part is handled by someone else.

And then comes the best part: You’ll get a check for the remainder, usually the same day in most states.

In our next (and final) installment, we’ll cover the last step: Officially moving out and moving on!

Should You Buy A House This Year? – The Alternative Daily

A white picket fence around a half-acre of perfectly curated lawn is the American dream. Better yet, if there happens to be a house on that lawn. This dream turned into a nightmare for many Americans during the 2008 financial crisis. Eight years later, potential homeowners are still wary of the market. It may not be time to jump into a mortgage just yet, but it is time to stop running in the opposite direction. Historically low interest rates and rising rents mean that many renters would be better off trading in their landlord for a piece of the American dream.

Here are a few key elements of homeownership to help you begin thinking about whether you should buy a house this year.

Building equity 

Every year, scores of Americans pay for housing in the rental market. In a very real sense, they are making monthly payments towards someone else’s mortgage. You might make more money investing (and continuing to rent) when compared to the cost of homeownership. However, the planning, self-control and follow-through of a rigid savings and investment strategy is a lot more challenging than saving for a down payment and turning throw-away rent money into equity for yourself instead. It’s hardly a surprise that the median net worth of homeowners is more than $170,000, while non-homeowners average just over $5,000 in net worth.

Mortgage 101 

There are a few key things to understand about mortgages before signing the dotted line. Usually, the interest on your mortgage is frontloaded. This means that you will be paying your lender before you really begin building equity for yourself. (On the other hand, the interest is tax-deductible!) When calculating your expected equity in a property, you need to take into account both the principal loan balance and the cumulative interest on this loan. If opting for a flexible mortgage rate, plan for your rate to fluctuate upwards after your fixed-rate term ends. Taking out a mortgage has enough associated costs that it is not generally recommended for buyers who aren’t fairly stable in their employment, location, and chosen living partner.

The importance of interest rates

We mentioned historically low interest rates, but what does that really mean? It means that your loan will cost less. It is worth noting that your specific interest rate will vary with factors such as your credit score and down payment amount. If you have poor credit or haven’t managed to save a sizable chunk of cash, you may be better off waiting. However, if you are ready right now, you are likely to get one of the best rates in recent history. In the future, who knows?

Hidden costs of homeownership 

You’ve done the math. You’re excited about buying. Before scouring the neighborhood for real estate signs, take out the calculator one last time. Even if you have the down payment sorted and your monthly mortgage payments add up to less than your current rent, you should incorporate less obvious costs. You can expect to pay closing fees, property taxes and insurance. On top of this, basic maintenance costs can soar well beyond what renters might imagine, usually about one percent of the home’s sale price every year, on average. On the flip side, government incentives for homeownership offset these costs. The New York Times has a great online calculator to compare the cost of renting with buying given a plethora of factors.

Some factors don’t come with a price tag. Buyers also should consider lifestyle costs. Many urbanites, for example, are effectively priced out of city living when they look to buy. Trading in a centrally located apartment for a home of your own in the suburbs may incur subjective costs that no dollar amount can justify.

What can go wrong?

Home ownership can seem straightforward. Save for a down payment, choose a mortgage and watch your equity grow. What could go wrong? Answer: an awful lot.  First and foremost, your home may lose value. Suddenly your mortgage is much higher than the value of your home. No need to panic quite yet. What goes down can come back up. This coupled with a loss of income or a sudden need to sell, however, can spell disaster. To temper risks associated with homeownership, buy within your means and only purchase from a place of personal and professional stability. Buyers should make sure that they could still fulfill mortgage commitments even under the worst-case scenario.

Whither the housing market? 

A key component of whether to buy a home in 2016 is market projections. Home prices are on the rise now, but counting on a bull market can land buyers in a heap of trouble. As millennials begin to test the waters of homeownership, expect demand to increase. As baby boomers face retirement and find all their assets locked in illiquid homes, expect supply to increase, too. Any number of other factors will also impact the housing market.For a good number of people, excellent market conditions don’t matter. Neither does good luck. They simply aren’t making enough money to buy much of anything, much less the American dream. Young people saddled with student loan debt and older Americans whose finances and credit were destroyed by the 2008 crisis find themselves renting despite a desire to buy. Rising rental costs then become just one more impediment to savings and, ultimately, buying a home.