10 Ways To Spruce Up Your Home For Under $100

10 Ways To Spruce Up Your Home For Under $100

             Written by Jaymi Naciri

1. Update your bathroom. You can change your faucets and fixtures out for under $100, but if you're not super DIY, you may have to deal with plumbers and electricians, which can bust your $100 budget. Instead, take those dusty old tulip glass light shades and swap them for something more modern. You can find shades in a variety of styles, like this four-pack for $45. And, you can apply the same update to a ceiling fan. And, if your fan has ugly blades, you can easily switch those out to shiny new ones inexpensively.
2. Get your carpets cleaned. Yeah, it seems like a no-brainer, but it's an easy fix that can make a big difference in how you feel about your home. Stains just not coming out? A throw rug can help ground the room or create a focal point. Check your favorite home décor store, or try Costco, which sometimes has 8x10 rugs for $99.
3. Paint something. Paint everything! We talk about the power of paint all the time, and how a simple can of color can help transform a space. For $30, you can turn a drab room into a dramatic room, take a too-bold space down a notch or turn a boring bedroom into as romantic lair. All it takes is a trip to the local paint or big box store, a steady hand, and a few rolls of tape.
4. Buy some new drapes. Think it's too expensive? These drapes from Target start under $20.
And they come in two other colors and a couple of different sizes.
5. Paint your front door. Don't underestimate the impact it can have on your curb appeal. Not sure of what color to go? Blue is a great Feng Shui color, says Houzz. Yellow evokes mental clarity, perception, understanding, wisdom, confidence, curiosity, humor and merriment." Red is welcoming. Want more ideas? Visit Houzz.
6. Plant some flowers. Even if you don't have a green thumb, you can pretty up your yard without too much effort or money. Check out this easy spring planting guide from P. Allen Smith.
7. Inject some color. Hate your couch or need to freshen it up? We've been there. But when $2,000 isn't in the budget, a throw and a few pillows can make a world of difference. HomeGoods and TJ Maxx are great options for affordable décor. Or hit up online marketplace Overstock, where these statement zebra print pillows start at $20.
8. Get new furniture for the backyard. You don't have to buy a full-blown set. Look at these colorful Adirondack chairs from Lowes. They're plastic, which makes them easy to care for, and they're $18, which makes them easy on the budget.
9. Jazz up your table. If your dining room table has seen better days, refinish it. Stain or paint can give it a whole new look, as long as you're willing to put in a little elbow grease. A sander can make the job easier, and you can get an entry-level version for about $50.
10. Celebrate the season. Any season. In Spring, give your home an instant lift with a centerpiece of tulips. Or paint a piece of furniture bright yellow. You can't be unhappy when you're walking past a yellow table.
With a little effort and a little money, you can make updates to your home that will make it feel fresh again.

V.A. FINANCING IS AN EXCELLENT OPTION FOR MANY WHO DON'T REALIZE IT

Written by Bob Hunt on Monday, 10 March 2014 1:45 pm

United States military veterans are not a protected class for purposes of anti-discrimination actions. But, in some areas, they should be. My market (south Orange County, California) is one of those areas. OK, ok, to be precise, it is not vets, per se, who are treated in a discriminatory fashion, it is vets who want to use V.A. financing.

That this is an issue could certainly be surprising to many real estate agents. There are many parts of the country where V.A. financing is the bread and butter of the business. There are market areas where V.A. and FHA financing are the norm. If you work in one of those areas, you might find it almost incomprehensible that many -- probably most -- agents in areas such as this one have never been involved in a transaction in which V.A. financing was used.

The problem, then, becomes this: When an offer is brought that involves V.A. financing, it is liable to be dismissed out of hand. Why? Because the agent -- never having had first-hand experience with V.A. financing -- relies on horror stories and bad-news experiences handed down from days long gone by.

Thus we thank our good friend, Kevin Budde, one of the brighter lights in our part of the lending world, for providing the inspiration and most of the factual content, for today's column.

Kevin says that there are four myths about V.A. financing that inhibit agents in our, and similar, areas from using and/or accepting V.A. financing.

Myth number one is that sellers will have to pay points based upon the loan amount. This belief dates back to days when the (maximum) interest rate was set periodically by the V.A. In those days, if market rates available to lenders were higher than the rate set by the V.A., the veteran could not make up the difference, so the seller had to. Today, V.A. loan rates float with the market. (At the time of this writing they are about 4.125%). There is no longer a ‘gap' that the seller has to fill.

The second myth is that sellers have to pay additional closing cost fees that the veteran is not allowed to pay. Undertoday's rules, the veteran pays customary buyer's fees in the market area.

A third ancient seller objection to V.A. loans is that V.A. appraisals often require "fix it" work (paint window sills, replace cabinet handles, etc.) that increases the seller's costs. Kevin points out that now, "…the focus is on health and safety issues of the property which are deficiencies that could cause harm to the occupant." These would need to be addressed in any kind of transaction.

Finally, there are those who still believe that V.A. insured loans take much longer to close than do conventional ones. It just isn't -- or needn't be -- so. If everyone does their homework and submits information on time, V.A. loans close within the same time frames that conventional loans do.

V.A. loan guarantee limits vary from area to area. In Orange County, California, the limit -- with no down payment -- is $687,500. In Monterey County, California, it is $500,000. In Arapahoe County, Colorado, it is $425,000. But a vet can buy above the limit by putting down 25% of the amount above the limit. Thus, here in this area, a vet could buy an $800,000 house putting only $28,125 (3.5%) down. What former E-4 Corporal wouldn't want to do that?

V.A. financing opens up purchasing possibilities to a significant number of qualified buyers. Sellers -- or their agents -- who don't want to accommodate that are making a serious mistake.

Bob Hunt is a director of the California Association of Realtors®. He is the author of Real Estate the Ethical Way.

It's Tax Time - What Homeowners Should Know

It's Tax Time - What Homeowners Should Know

Written by Benny L. Kass   

                          

"The only difference between a tax man and a taxidermist is that the taxidermist leaves the skin."

-- Mark Twain
 

It's tax season, and many Americans are determining whether to file early, file on the April 15 deadline, or file late.

If you request an automatic extension, you will have to pay any tax you owe in April, but the final return would not have to be filed until October 15.
 
Regardless of when you decide to file, you should start preparing now. Every year, the Internal Revenue Service circulates a large publication, entitled "1040 Instructions" which is available on its Web site. According to the IRS, the average time required to complete and file Form 1040 (the most commonly used income tax return form) is 15 hours. The bulk of this time - eight hours - involves only record keeping; tax planning accounts for two hours, completion of the form and submission another four hours, and one hour for miscellaneous.

You should have received statements from your employer and lender at the end of January. By law, any lender (private or commercial) that receives $600 or more in mortgage interest must send the borrower Form 1098. Although in recent years, most consumers were not paying points to buy down a mortgage loan, any points that were paid must also be listed on this form. The form will also include any mortgage insurance premiums that were paid last year.

If you paid such insurance premiums on policies issued on or after Jan. 1, 2007, and if the policy was for "aquisition debt" - which refers to a home that you purchased or substantially improved - those payments may be deductible on your 2013 tax return. Unfortunately, this was one of the many tax benefits that Congress did not extend for this year.

When you get Form 1098, don't just put it in your tax file. Review it carefully, since the same information has been transmitted to the IRS. Get an amortization table - available on the Internet or in local bookstores - and make sure that all of your payments have been properly credited. This is especially important for those of you who have been making extra principal payments over the years, so as to reduce your loan obligation as quickly as possible.

And if you bought or refinanced a house (including a condominium or a cooperative apartment) last year, there may be real estate tax adjustments or interest payments reflected on the HUD-1 settlement statement which may not be included in the1098 form.
Every year, there is always something new in the tax law. Sometimes, it will cost you more money. For example, beginning in 2013, a 0.9 percent Medicare tax may be imposed, depending on your income.

But you may also get a tax benefit. If you have a same-sex spouse whom you legally married in a state (or even a foreign country) that recognizes same-sex marriage, you and your spouse generally can use the married filing jointly or married filing separately on your 2013 return. According to the IRS, this is true even if you and your spouse now live in a state that does not recognized such marriages.

I am always asked - especially by homeowners who for the first time will be able to itemize their tax deductions - what's the best way to start. My suggestion: Go to the IRS Web site, and download a number of its helpful publications.

Recently, the IRS announced that it has significantly updated "Your Federal Income Tax" forms. According to the IRS, Publication 17 includes important changes to help taxpayers "get the most out of various tax benefits and get a jump on preparing their 2013 federal income tax returns." This 292-page guide contains thousands of interactive links to help taxpayers quickly get answers to their questions.

Other publications which may assist you include: No. 1, "Your Rights as a Taxpayer;" No. 502, "Medical and Dental Expenses;" No. 504, "Divorced or Separated Individuals;" No. 523, "Selling Your Home;" and No. 530, "Tax Information for First Time Homebuyers."
A complete list can be found at www.irs.gov, click on Forms and Publications.

Additionally, you can obtain free help with problems you cannot resolve on your own by contacting the IRS Taxpayer Advocate Service. According to the IRS, there are offices in every state as well as in the District.

Finally, beware of scam e-mails or phone calls. The IRS periodically issues a warning not to provide any personal and financial information - such as name, Social Security number, bank account and credit card or even PIN numbers - to anyone calling or e-mailing claiming to represent the IRS.

The IRS makes it very clear: It does not send taxpayers e-mails about their accounts. And the only way to get a tax refund or to arrange for a direct deposit is to file a tax return. For more information, see "Suspicious e-mails and identity theft" on the IRS Web site.

When Remodeling, Protect Yourself

 

 

When Remodeling, Protect Yourself  

Written by Benny L. Kass

 

You are planning major renovation to your home. There are many steps you have to take in order to adequately protect yourself.

First, do you need an architect? That's a difficult question to answer. The architect can assist you with developing the appropriate plans, but this comes at an additional cost. Many legitimate home improvement contractors - while not licensed architects - can serve the same function, at little or no additional cost to you. Equally important, it's the contractor that will be doing the job, and invariably you will find that changes have to be made. So quite often, the architect's plans have to be modified when the job is ongoing.   

Next, how do you find a good home improvement contractor? In my experience, word of mouth from friends and neighbors is your best bet. Interview at least three contractors; ask for references and personally inspect the jobs they did for others.

 

Keep in mind, however, that you will only get good references. Obviously, no one will give you names of those who will bad-mouth the contractor. You should also contact your local Better Business Bureau to determine if any complaints have been filed against the company you are considering.

 

Finally, you - or your attorney - should review the court records in your jurisdiction to determine if there are any lawsuits pending against the contractor. This information is now publically available from your local courts, and even available online (search "court cases in X state), although some are accessible only by attorneys.

When you have selected the contractor, before you sign any contract, call the licensing board in your state, county or city. You want to make sure that the appropriate licenses have been issues - and are current.

Negotiate the price of the job. Will this be a fixed price or a time-and-materials contract? The latter means that you will be paying the contractor an hourly fee for the work done by the contractor and the subs that work on your house. If it is a time-and-material contract, make sure you get in writing the maximum hourly rates, and a statement in your contract that you will get a weekly statement of how many hours were worked that week, and by whom. I have been involved in cases where the contractor padded his hours; we discovered this when the homeowner said he was at home one day and no one showed up - despite the fact that he was billed for 6 hours.
You need a written contract. Many contractors use what I call the "two page special". This is a simple contract which merely states who the contractor is, a very general description of the work to be performed, and the total cost of the job.

This is not in your best interest.

The American Institute of Architects (AIA), headquartered in Washington, D.C., publishes a number of contract forms for use by homeowners, architects and contractors, and you should insist that your contractor use one of these forms. One such form is A105, a standard agreement between owner and contractor for a residential or small commercial project. Form A107 - which is more comprehensive - can also be used for projects of limited scope.

Why use an AIA form? Because it contains many provisions that will protect you. For example, what warranty will you get? Any changes in the scope of work must be in writing. There will be a schedule of when you have to make periodic payments. What happens if the contractor walks off the job? What rights do you have if you are dissatisfied with the quality (or timeliness) of the job? And, perhaps the most important provision: how much money should you hold-back (retain) until the job is finished, you are satisfied, and you get a written release of liens from the contractor and all subs. I like to see a 15 percent retention of the total price, but in any event no less then 10 percent.

The AIA can be reached on the web at www.aia.org, or by phone at 1-800-AIA-3837.
You now have a good contract, and the work has begun. When it is completed - at least in the eyes of the contractor - you are not happy with a number of items. What can you do?

The AIA contract provides for arbitration of such disputes. You can contact the American Arbitration Association (www.adr.org) or by a toll free call to 1-800-778-7879, to get more information about the process and the costs involved. If there is an arbitration requirement in your contract, you cannot file a lawsuit. And in many situations, arbitration may be much less expensive - and faster - than the court system.
What if you did not follow my advice and do not have a good contract. You are unhappy with the work and stop making payments. The contractor walks off the job, and now you are forced to find someone else to make the necessary corrections and finish the project.

You now learn that your contractor did not have the appropriate home improvement contractor license. The laws vary: in many states, if the contractor is not licensed at the time the contract was initially signed (or when the work began) the contract cannot collect anything. In fact, he/she might have to give back what was already paid by the homeowner. For example:

District of Columbia: The laws here provide the best consumer protection in the area. If you have paid an unlicensed contractor $300 or more up front, you are entitled to get back all of the moneys you paid him or her. It does not matter that you knew the contractor was unlicensed when you first started the job, nor how good the job is. According to DC law, no person shall accept payment for a home improvement contract in advance of full completion of the work without a home improvement license issued by the District Consumer and Regulatory Affairs Department. The public policy of the District is to penalize contractors who do not have that license.

Virginia: the Virginia Board for Contractors issues different classes of licenses, depending on the dollar amount of the job. For example Class C contractors can perform work on single jobs that are greater than $1,000 but not more than $7,500, and yearly not to exceed $150,000 for all jobs.
It is a misdemeanor, punishable by fine (and perhaps jail) for a contractor that does not have a license. Additionally, it may be a violation of the Virginia Consumer Protection Act, which allows recovery of treble damages and attorneys fees if the homeowner is successful in court.

Maryland: as in the District of Columbia, unlicensed contractors are not entitled to recover if they sue the homeowner for breach of their contract. The Maryland Home Improvement Commission regulates and supervised contractors. It is a misdemeanor not to have a license, and upon conviction, the contractor can be fined up to $1000 or imprisoned for up to 30 days.

Conversely, if the contractor is licensed in Maryland, homeowners can recover up to $20,000 from the Home Improvement Guaranty Fund for losses caused by poor or incomplete work.

Before you sign up with a home improvement contractor, do your homework. Too many homeowners have found themselves having paid 80 or even 100 percent of the contract price and the contractor has walked off the job having done less than 75 percent of the work. Careful planning - and with a fair and balanced contract, you will be in the driver's seat.

Kitchens Sell a House

Kitchens Sell a House

             Written by Carla Hill

 

 

 

It's a tool used by house flippers all across the nation. Stagers know its power. Real estate agents push its importance. What is this not-so-well-kept secret of real estate? A kitchen can sell a house.

A kitchen is the heart of a home. This is true all across the globe. The old saying that the "stomach is the way to the heart" carries a lot of truth. Kitchens are where we spend much of our time and most of that is with our families. It's the room where we nourish our bodies and our spirits.    

Kitchens are integral to entertaining and in today's age of open floor plans, they're a focal piece of many family rooms. It's because of this that kitchens play such an important role in the buying and selling process.

 

This one room is the showpiece of the house. You'll see it every day and your guests will see it during most visits. This means buyers want homes with up-to-date kitchens.
Kitchens, however, can be one of the most expensive rooms to renovate. These projects can also be the most labor and time intensive of all home renovations. It's not just a new layer of paint.

Instead you find a complicated array of flooring, tiling, cabinets, and counters. This means buyers may want a home with an up-to-date kitchen but they aren't willing to tackle this problem themselves. Most buyers want a kitchen that is ready to use the day they move in.

What do buyers look for in up-to-date kitchens? A lot of this depends on what price range your home is in.

The main thing to remember as a seller is to not price yourself out of your market. If homes in your neighborhood are selling for $100,000 with tidy, but not luxury kitchens, then this is no time to upgrade to granite, travertine, and marble at the price tag of $40,000+. You simply won't find a buyer.

Scope out the competition. Use open houses in your area or MLS listings to find out what your competitions' kitchens look like.

Do area homes have new solid wood cabinets and granite counters in today's designer colors? You'll be wise to consider making the same move. Are they including new stainless steel appliances and add-ons like dishwashers, wine-coolers, and trash compactors?

Are you in a higher-end neighborhood? It's time to think high-end. Your older home may have a highly functional kitchen, but a buyer will take one look at your formica counters and white appliances and become lost in the stress of how much money and time it would take to remodel. If you don't want to put in the time yourself to make upgrades then you'll have to make concessions in the price.

Don't become overwhelmed, though. Sometimes a kitchen update can mean doing just a few minor changes. Change the paint color to a warm, neutral tone. Get rid of any clutter. Update your appliances, paint your cabinets, change the pulls, or get a high-end looking counter for a fraction of the cost (faux-granite or lower end granite). You might even save a bundle by doing much of the work yourself.

The bottom line is a kitchen can sell a home. Do a little research and find out what your kitchen needs to make it competitive with area listings.

Lenders Generating Your Facebook Score

Lenders Generating Your Facebook Score

Hot Cities For Real Estate Investors

Hot Cities For Real Estate Investors

The Essentials Checklist for Newly Married Homeowners

The Essentials Checklist for Newly Married Homeowners

New Loan Requirements For Getting A Mortgage

New Loan Requirements For Getting A Mortgage

             Written by Phoebe Chongchua

The number of homes purchased with a home loan has been dropping steadily since May, according to RealtyTrac. Instead, cash is king for many reasons. As mortgage rates began creeping up, some homebuyers started opting to purchase with all cash. And that trend may continue as new loan requirements become more strict.

However, for those buyers who do need to purchase a home with a loan, expect to see some changes in the loan requirements as the new year rings in. Here are a just a few of the changes that are going into effect in January 2014. Some of these requirements are already in place by lenders.   

The new guidelines are being implemented under The Consumer Financial Protection Bureau's Qualified Mortgage (QM) and are designed to help avoid the borrowing catastrophes that caused the housing crisis. The guidelines are what the lenders use to prove borrowers' ability to repay a loan.

 

One of the guidelines’ requirements is that borrowers must have a maximum debt-to-income ratio of 43 percent. Debt-to-income ratios have already been in place but the new rules won't allow for any compensating circumstances. That means that not even a significant downpayment or a large cash reserve will be allowed to offset a higher debt ratio.

The incentive to follow these guidelines is huge for the lender. If the mortgages don't meet the QM guidelines, the lender will be required to hold the loan as opposed to selling it to Fannie Mae and Freddie Mac.

The QM requirements potentially may have lower loan limits for conventional conforming loans. The agency that regulates Fannie Mae and Freddie Mac, The Federal Housing Finance Agency, will delay its normal adjustment of loan limits from January 1, 2014 to sometime later in the year. The agency is trying to see what kind of impact the new QM guidelines will have on the housing industry. For most housing markets, the current limits are $417,000 and up to $625,000 in high-cost areas. How these figures will change remains to be seen in 2014.

Origination fees will be limited under the QM requirements, which could make getting a smaller loan more difficult. Origination loan fees will be limited to no more than 3 percent of the loan amount. This could make mortgage lenders less likely to offer smaller loan amounts because they may not always be able to recoup their costs and make a profit.

Self-employed borrowers already face tough standards and they'll likely be even more strict in 2014. In the QM guidelines, all borrowers must prove there is sufficient cash flow to make payments on their loan but self-employed borrowers' incomes typically fluctuate. These borrowers frequently have cash reserves that they rely on to pay bills when their income is off in a particular month. However, even if there is a large amount of money in reserve, it may still be difficult for the self-employed borrower to get a loan approved due to this new "ability-to-repay" QM guideline.

Expect to see changes in the loan approval process as the new year begins. However, some of the specific requirements may not be determined until later in 2014.

Going Solar: Is It For You?

Going Solar: Is It For You?

Deferring Maintenance In Your HOA

Deferring Maintenance In Your HOA

             Written by Richard Thompson

Deferring maintenance in a homeowner association has negative and lasting effects. While postponing maintenance may seem to be a money-saving technique, the consequences are usually a much higher cost over time.

Painting is one of the largest elements of routine common area maintenance for many HOAs. Poorly maintained paint will fail prematurely. Touchup should be done annually. Wood trim should be painted every 3-4 years. The complete painting of buildings should be done every 6-8 years.   

Drainage. Rain and sprinkler run-off can create problems for the lawn, landscaping and underground building areas. The landscape contractor can often provide for drainage corrections that will mitigate these areas.

 

Salt Air Corrosion. Salt air found at coastal locations can rapidly deteriorate and short-circuit light fixtures, elevator electronics, fire sprinkler system plumbing, electrical boxes and door hardware. These should be checked every year.

Concrete sidewalks and driveways need to be inspected annually for cracks and raised areas, as well as degradation of the surface. Raised areas create a trip hazard which can be corrected by grinding or removal and replacement.

Asphalt paving needs to be repaired and seal coated every 3-5 years to properly protect it so it will achieve its maximum useful life of 25-30 years.

Roofs need to be part of a Spring and Fall maintenance plan. They need to be inspected, repaired and cleaned by a qualified roofing maintenance contractor.

Roof gutters and downspouts should be cleaned at least twice a year, more often in "hotspots" where leaf debris is prevalent. Failure to do this causes backups and overflow that damages paint, siding and landscaping.

Playground equipment should be inspected and maintained to ensure child safety.
Directional signage should be in good repair and easily readable in order to assist emergency response services like police, fire and pizza delivery (joke). Directories with name and addresses also facilitate emergency response. The directory should be regularly updated for accuracy.

Reserve Study. This is a 30 year plan to manage and fund (usually) large projects. A Reserve Study will help the board to schedule, budget and properly maintain the common elements. It is highly recommended that the study be done and updated by experienced professionals like PRA (Professional Reserve Analysts) members of the Association of Professional Analysts. See www.apra-usa.com for a directory PRA members.

Use these hints to help craft your own Preventive Maintenance Plan. Deferring maintenance is a sucker bet that will come back to bite. Follow Doctor Oz's advice and use an "Oz (Ounce) of Prevention".

What's the Difference Between a CMA and an Appraisal?

What's the Difference Between a CMA and an Appraisal?

Assume This Is THE Article Home Buyers Can't Miss

Assume This Is THE Article Home Buyers Can't Miss

             Written by PJ Wade

Real estate buyers' Number One Mistake is assuming - that's guessing, hoping, ignoring, and NOT knowing.

Assumptions can be very expensive in real estate. For real estate buyers this may be an expense that only materializes after they have spent their money and moved in to their new house or condominium unit. Assumptions lie at the heart of buyer's remorse.   

With the wide range of financial, legal, and lifestyle complexities involved in real estate, buyers' assumptions are often clarified in hindsight. When buyers discover the gap between reality and their assumptions, their responses usually begin with "I thought...," "I believed...," "I hoped...," and often "I assumed." Suddenly, they realize what they did not know or understand, and what that ignorance has cost them.

 

"Buyers think [read assume] they can use a coastal condominium unit as a second home during parts of the year and rent it out when they are not using it to help offset the cost of ownership," explained Ralph De Martino CRS, GRI, RSPS, broker/owner of Miami-based Ocean International Realty, which specializes in coastal second homes for international buyers. "If the condo doesn't allow 30, 60, or 90 day rentals, they won't be able to rent out, and will have to foot the whole bill of ownership.... Without me asking them directly, their intended form of use would not be mentioned because they assumethat they can rent short term. In our market, most condo buildings have more stringent restrictions."

De Martino, having identified a common assumption, is quick to stress that he does not let prospective second-home buyers make this mistake. His advise for buyer is simple: "They should get an agent that knows what they are doing with condos and who asks exactly how will they be using [the unit], so the end result will be exactly what they want."

Professional expertise is the antidote to assumptions, but it is not always easy for real estate professionals to apply. The added frustration for them is the resistance they meet while exploring what prospective buyers know about real estate and what they reallywant and need. The sales processes that professionals take prospects through are designed to uncover assumptions, objections, and other limiting factors, but this aim is only achieved with cooperation from prospective buyers.

"Sometimes buyers get so upset with the process that they give up, and in some instances walk away from the deal, and end up fighting over the escrow check with the seller," said Realtor Kay Conageski, PA, of Miami-based Keyes Company, who targets first-time and international buyers. "It's truly unnecessary because knowing what to expect eases a lot of this frustration."

Conageski explained by email that she consistently found condo buyers did not understand that they must go through the condo associations approval process in order to purchase a unit.

"Educating these buyers is the key to a successful transaction," stresses Conageski. "Knowing the ins and outs of various condo buildings is the job of a good agent, and eliminating unnecessary stress for their buyers is the real estate professional's responsibility. They have to hand hold in a lot of cases, and should assist the entire way to make the process less chaotic for everyone."

This article draws on my recent research with the MIAMI Association of REALTORS® (MIAMI), which also generated my column, "Avoid Six Way Too Common Condo Buyer Mistakes," however, I must stress that assumptions are not just a problem in condominium sales. Buyers, sellers, and professionals must be wary of their assumptions and those of others whether dealing with commercial or industrial real estate, home buying and recreational purchases, leases of any type, and real estate markets in all locations.

"Many condo buyers have a belief (read assumption) that the real estate market is frozen in time," emailed Realtor Patricia Rotsztain, Director of Operation and Broker Associate at Decorus Realty and MIAMI Governor. "There has been so much press about the real estate bubble, foreclosures, etc. that buyers still expect to find an oceanfront condo in a hot area for peanuts. It doesn't happen any more...the market has changed completely and the demand keeps pushing prices up."

Buyers may not understand the full effect of international buyers on their local markets. In "hot" areas like Miami and South Florida, competition for properties takes on global scale, placing even greater emphasis on having the right information for every aspect of the purchase.

Rotszain makes no assumptions about where problems lie: "Buyers need to look at the current numbers and talk to a trusted advisor (Realtor) instead of searching in sites where the information is not updated and they can see a property that was sold 4 years ago as a 'current listing.' Realtor.com updates information every day, so it is a much more reliable source of information.... The best approach for buyers is to work with reputable professionals who will show buyers the right data and help prevent costly mistakes. In my case, I have a network of attorneys, CPA's, inspection companies, etc. Spending a little money on an inspection, talking about tax implications, and setting up the right structure from the beginning can save money and headaches."

Assumptions - calculated and unconscious - are common distractions and counter-productive elements in thinking and problem-solving. Assumptions involve, and can create, inconsistencies, contradictions, disparities, problems and questions. Professional expertise is essential to tease out assumptions that prospective buyers may not be aware they were using as a standard for evaluating properties and making buying choices. What assumptions are undermining your real estate efforts?

For Agents: "Anti-Oops Assumption Busting " - Take this Assumption Busting Test for Professionals to learn what's undermining your effectiveness. This exercise is excerpted from Chapter 5 of the business ebook What's Your Point? Cut The Crap, Hit The Mark & Stick! with permission of Catapult Publishing.

Note to you: Don't be shy let's share your Board's or Brokerage's special real estate knowledge. Send me a short note not just a link to your website. Email me with your point at pjwade@thecatalyst.com This email address is being protected from spambots. You need JavaScript enabled to view it. .

All the joy of the season and the Happiest of New Years to you and your families.

Home Design and Remodeling Trends For 2014

Home Design and Remodeling Trends For 2014

HEAD WEST TO FIND THE HEALTHIEST REAL ESTATE MARKETS

HEAD WEST TO FIND THE HEALTHIEST REAL ESTATE MARKETS

Written by Phoebe Chongchua 

Tracking the housing markets healthiest cities can be challenging as things change fairly quickly and surprisingly. For instance, who would have guessed that California would be listed as having five of the 10 healthiest housing markets in the nation? In fact, for healthy markets, head west.

According to zillow.com, not only does California have five healthy housing markets but it also has the number one healthiest housing market: San Jose. San Francisco, Los Angeles and San Diego are also in the top five and Sacramento is number 10 on the list.

"Rapid home value appreciation in the West, particularly California, is currently having a very positive effect on a number of other factors, including negative equity, foreclosure activity and the overall financial health of local homeowners. But that same rapid appreciation may cause affordability issues in the future in these markets, leading to potentially unhealthy conditions," said Zillow Chief Economist Stan Humphries.

Filling out the remainder of the top 10 healthiest housing markets are: Denver, Colorado (4th), Boston, Massachusetts (5th), Pittsburgh, Pennsylvania (6th), Portland, Oregon (7th), and New York, New York (9th).

So how does Zillow figure out which markets are the healthiest? The Zillow Market Heath Index is formed from 10 different metrics as detailed in a press statement by zillow.com, month-over-month change in the Zillow Home Value Index (ZHVI); year-over-year change in ZHVI; percent change in 1-year ZHVI forecast; percentage of homes selling for a gain; days listings spend on Zillow, adjusted for seasonality and for deviations from historic norms; the percentage of mortgage holders with negative equity; the percentage of mortgage holders delinquent on their loans; the number of foreclosures out of 10,000 homes; the percentage of sales composed of previously foreclosed homes; and the number of foreclosures out of 10,000 still held by banks, i.e. unsold REOs.

According to Zillow, "For each of the 10 metrics used in the Market Health Index, we assign each region a score along a continuous scale from 0 to 10, where 10 corresponds to the healthiest value and 0 to the least healthy among all regions in the US with available data. We take the average of these scores and then re-scale the average to range from 0 to 10. This becomes the Market Health Index. To ensure sufficient data availability, we only score regions with data from at least 5 of the 10 metrics we measure."

Influencing a real estate market's health is not just about supply and demand from buyers and sellers. It's also about real estate investors. Two of the worst markets are also markets that once had high real estate investor activity. Phoenix, Arizona, and Las Vegas, Nevada, are among the unhealthiest markets in large part due to rapid price appreciation from investor demand. Today, in Phoenix, there is a lot of housing inventory available (up 40 percent from a year ago). However, it's not clear if it's investors selling or homeowners who have gained some equity and now are electing to move.

As you watch market trends, keep an eye on investors who are now turning their investment-purchasing power to markets such as Atlanta, Georgia, and Charlotte, North Carolina, to see how investors will impact those real estate markets.

Refinancing Through Family Makes Sense

Refinancing Through Family Makes Sense

             Written by Benny L. Kass

  Question: I am looking into refinancing my home from a 5/1 ARM to a fixed rate. During this process my mother stated that she would lend me the $150K to pay off my existing loan and I would pay her back at the current market rate for a 30-year fixed. This would provide her a stable investment and I can forego the closing costs, paperwork, appraisal, etc. associated with the refinance.

What are the legal implications of this transaction? If I pay off my current loan do I assume title? What paperwork do I have to sign with my mom to validate the transaction and where do we file it? She would have to claim the income; can I still write off the interest as I would do with any other home loan? Is this transaction as simple as it sounds?

 

Answer: Yes, it is simple and makes a lot of sense. Instead of giving the money to a stranger (your new lender) you will be keeping it in the family. However, I strongly recommend that you retain local counsel to assist you, since there are a number of legal documents and administrative steps that have to take place.
You first have to send a letter to your current mortgage lender, asking for the amount that will be necessary to completely pay off that loan. The lender will send you a pay-off letter, showing the current principal balance plus a per-diem amount. Interest is paid in arrears. That means that the payment you will send in January will cover interest for the month of December.
However, unless you pay off the balance as of the end of a month, you will have to send in a check that includes the number of additional days until the lender receives your check. To be on the safe side, I would add three extra days of interest based on the per-diem amount that you receive from your lender.
Once you have the pay-off number, you will have to sign a deed of trust and a promissory note in favor of your mother. (Some states call it a Mortgage). It would make sense to have your attorney prepare those two documents for you, and the fee should not be more than $400-500. The lawyer will also record the deed of trust on the land records where your property is located, and there will be a nominal fee that has to be paid to the Recorder of Deeds.
You asked about title. You currently own the property, but it is subject to a deed of trust (the mortgage document). This means that you have deeded the property in trust to a third party selected by the lender. If you pay off the loan, the trustee will release the trust from land records - which is what you have to do after you pay off your current lender.
On the other hand, if you are in default on your loan, the trustee has the power to sell your property at a foreclosure sale. For example, turn to the classified section of today’s paper and you will see a large number of properties being advertised for foreclosure by the trustee.
The monthly payments you make to your mother have two parts: income and interest. Your mother will have to declare as income the annual amount of interest that you pay her. And so long as the deed of trust is recorded, you can deduct that interest when you file your tax returns.
Your mother will have to send you and the IRS form 1098 at the end of each year, which will show the amount of interest that you have paid.
Your mother has presented you with an attractive offer which you should not hesitate to accept.

Smart Home Renovations That Pay You Back

Smart Home Renovations That Pay You Back

              Written by Jaymi Naciri

 Small renovations to your home can pack a big punch. Big renovations can also pack a big punch - but they can also be a big headache and come at a big cost. While you may be eyeing a new bonus room and guest bedroom in the attic, beware that not every renovation pays you back at the same rate. "Homeowners in many areas of the United States can still recoup 80 to 90 percent of the money spent on home improvements," said MSN Money. "The key is to know where to spend. Just because you put $20,000 into renovations, it won't necessarily add that much value. The key to adding value is to focus on the things that are important to buyers, and to not over-improve. You don't want to have the most expensive house on the block. So if the houses in your neighborhood have concrete driveways, investing in expensive brick pavers may not be in your best interest financially." It is also important to consider your lifestyle, so that you make smart changes according to your desired outcome, said CBS News. "Home remodeling is all about return on investment. When deciding which project to tackle in your house, consider your circumstances. If you're planning on staying forever, make changes to the space that makes it more livable for you. Just remember not to go so overboard that you can never sell the house if you suddenly needed to. If your current place is not your forever home, only invest time and energy into projects that will give you a decent return when you eventually sell it."

Here are some tips for making smart renovations that can bring enjoyment of your home and also make you money.

How much should you spend?

The easy answer is to determine what you're comfortable with budget-wise and then bump that amount up against home values in your area and the latest numbers defining ROI for your project. Remodeling magazine releases a cost versus value report every year. You can read the 2013 version here.

"The biggest mistake homeowners make is spending more on the remodeling project than their home value can support. Don't expect to get optimum return on a $65,000 kitchen if the home is valued at $300,000," said HGTV. Generally speaking, you can spend between 6 and 10 percent of the total home value and get fair returns. You also can be too thrifty and overlook items that buyers look for in your price range.

"Remodeling for resale means choosing materials that appeal to the masses. This means opting for stainless steel appliances that are high quality rather than professional-grade models. Spend on functional features like pantry drawers, soft close cabinet drawers and doors, waste-recycling cabinetry. But don't over-personalize the space. You may appreciate the art-deco drawer pulls that cost $50 a pop, but will buyers care? Probably not.

Exterior

Before you consider an exterior renovation, take a good look at your home's exterior with fresh eyes. Is the paint peeling? Is the lawn dead? "If your house doesn't look appealing from the outside, chances are a potential buyer will never make it inside," said TLC. "According to Bankrate.com, a good first impression can add five to 10 percent to the value of your home. If the exterior color of your house is dated or fading, painting is a good place to start your improvements. Choose colors and exterior details that match the period of your house."

If it's landscaping you need, re-seeding your lawn costs a fraction of putting down new sod, but takes longer to bear fruit. If you just need a quick fix before an Open House, head to a home improvement store for some potted flowers to place at either side of the door or along your front walkway. The splash of color brightens up a house and can turn drab to dreamy.

An important, but often overlooked, renovation is the front door. In fact, replacing a "low-quality entry door with a steel version will give you the biggest bang for your buck." According to Remodeling's Cost vs. Value report as reported by Forbes, "homeowners can expect an 85.6 percent return on investment, or $856 on a $1,000 job."

Sound boring?

No. 2 on their list will give you some enjoyment out of your space while also providing you a great return on your investment when it's time to sell: add a deck. And make sure you do it professionally.

A New Coat

Once you have taken stock of your exterior, it's time to take a look around the inside. Outside of picking up your stuff and de-cluttering the home, painting is probably the easiest change you can make for the lowest cost and biggest impact. "Painting is one of the least expensive ways to freshen and improve your home's look, and consequently its value," said TLC.

Are all your walls white? You can add a little personality without going overboard just by splashing some neutral paint on the walls. Are the colors too bold or to personal for potential buyers? Toning it down will help buyers see the home, and not get lost in the cobalt blue walls. In addition to the walls, "A coat of paint can do wonders to brighten up dingy cupboards, for example, or old paneling," said TLC.

Kitchens

Yes, paint can indeed provide an easy update in a kitchen. If you have old cabinetry and it's not cost-effective to change it out, a coat of paint can give you a great head start and turn around potential buyers that would have been turned off by all that outdated mid-range maple.

"For potential buyers, the kitchen is the room that can make or break the sale. An upgraded, attractive kitchen can make your home irresistible. Ideally, your kitchen renovation should earn a 70 percent return on investment when you sell your home, said HGTV. "But this depends on the features you choose, how much you spend remodeling and whether your priority is to create a dream kitchen for yourself or a kitchen that will appeal to potential buyers. The biggest mistake homeowners make is spending more on the remodeling project than their home value can support. Don't expect to get optimum return on a $65,000 kitchen if the home is valued at $300,000."

Kitchen remodels remain a top choice of homeowners - both those who are looking to sell and those who just want to improve the aesthetic or function of their home.

"Over the last five years, nearly four in ten home improvement dollars have gone into kitchens and future spending is likely to follow the same trend, according to a recent survey by Houzz," said Huffington Post. "U.S. homeowners on average spent $28,030 to remodel their kitchens over the last five years, with costs varying widely at different budget levels. Nationwide, the average cost for a high-end kitchen was $54,942, $22,390 for a mid-range kitchen, and $7,133 for a lower-budget kitchen."

For more reno dos and don'ts, see Life Hacker's guide to the renovations that raise your value - and the ones that don't.

Bathroom

A recent story about home renovation projects from the Chicago Tribune found that "the average small bathroom home renovation cost is a little under $16,000. However, you'd only expect to see a payback of a little over $10,200 on that project if you turned around and sold your home within a year of completing the project.

That's not to say that a well-thought-out and executed bathroom reno won't pay off for you. Kitchen and bathroom remodels continue to be two of the best investments you can make in your house," said HGTV. "They're always right up there at the top of the list. They're the big, sexy rooms that new home builders splurge on, so when buyers are shopping around that's what they want in an existing home, too."

If you're considering a bathroom renovation, Better Homes and Gardens recommends:

• "White sinks, tubs, and toilets all cost less than those in colorsbecause manufacturers make and sell more of them." Updated vanities and tubs can fetch a near 100% ROI, said Yahoo.
• Skimp on high-cost items like tile, buying only enough to tile "only the shower and/or bath area walls. If it's within your budget, tile halfway up the wall, add a border design, and paint the area above."
• Update the cabinet Hardware "to provide an instant visual impact at a minimal cost"
• Trendy Tile

If you love the look of pricey hand-painted or mosaic tile but you're on a budget, include a few... among affordable field tiles.
 

A Look At 2014: Repeat Buyers Expected To Boost Market And Renters Will Pay More

A Look At 2014: Repeat Buyers Expected To Boost Market And Renters Will Pay More             

Written by Phoebe Chongchua

 

 



This past year has been the year of the investor but things are expected to change in 2014, according to trulia.com. Their chief economist, Jed Kolko, is predicting that repeat homebuyers will soon dominate the market.
"As prices rise, buying homes will become less attractive to investors as well as first-time home buyers, but repeat buyers will be able to offset the higher price of the home they buy with the higher price from the home they sell," said Kolko on HousingWire.com.

Kolko reported that prices hit bottom and began a sharp rebound in Winter 2012. Then by Spring 2013, inventory and mortgage rates started climbing and price increases slowed. Kolko is hoping to see construction and household formation start to normalize. Many young adults are still living in their parents' home.

Kolko also predicts that there will be a decline in homeownership or the market may become stagnant in 2014 due to 18-34 year olds opting to live in rentals. The plus is that many of these young adults will move out of their parents' homes and into their own rentals.

Trulia tracks five key indicators of which two remain unbalanced. Progress has been seen in existing home sales, delinquency and foreclosure rates, and prices from a bubble condition. The other two indicators, new construction starts, and young adult employment are still lagging.

While the rental market is growing (35 percent in 2012 compared to 31 percent in 2004), it's not necessarily a rosy picture for renters. According to Harvard Joint Center for Housing Studies, in recent years, rent has become significantly less affordable. The report released this month, states that 50 percent of U.S. renters are spending more than 30 percent of their gross income on rent. That statistic (from 2010) is up a record 12 percentage points compared to a decade prior when it was only 38 percent. Nearly 30 percent of renters, according to the study, spent more than half of their salary on rent. That's up from 19 percent 10 years ago.

The study reports that landlords continue to hike rents, making it difficult for renters to save for a downpayment on a home. According to trulia.com, rents increased 2.7 percent in the year-period leading up to October 2013. The hikes are causing renters to have to cut other essential needs.

A still soft economy and unemployment rising are making it tough for new construction. Newly constructed homes dipped to a 50-year low. In order to reach normal levels, housing construction would need to increase 50 percent. But new homes aren't likely to be affordable when, according to Bureau of Labor Statistics, the average seasonally adjusted hourly earnings of all employees on private non-farm payrolls was $24.15 in November compared to $23.67 a year ago.

Lest this starts to depress you, know that there are still many real estate transactions occurring and, during the end of the year and early start of the new year, there are also eager sellers. So, if you're in the market to buy, in order to escape the escalating rental hikes, now might be the ideal time to start your house hunting

Condo Association May Violate Consumer Protections Acts

Condo Association May Violate Consumer Protections Acts

             Written by Benny L. Kass     

                        

 

Although they differ in form and substance, many States have enacted Consumer Protection Laws. Their purpose, in the words of the Virginia law, for example, is "to promote fair and ethical standards of dealings between suppliers and the consuming public."


When we analyze these laws, even practicing attorneys consider them as protecting the consuming public from bad acts from merchants - car dealers, grocery stores and even mortgage brokers and lenders.     

However, on April 30, 2012, the Maryland Court of Appeals ruled that even a condominium could be held to violate the Maryland Consumer Protection Act. (MRA Property Management v Armstrong).

 

 

The case is complex and goes back many years. Twenty five condominium unit purchasers sued their association and its property manager, claiming that the resale packages each plaintiff received violated the Consumer Protection Act because the budgets spelled out in those packages "had the capacity, tendency and effect of misleading" the potential purchasers."


The Plaintiffs brought the lawsuit when their association imposed a special assessment to pay for water damage to the buildings. The Plaintiffs alleged, among thirteen counts, that even though the budget in the resale package they received reflected that repair expenses were declining, the association and management knew - as far back as 1996 - the extent of that damage.


In the majority of states, if you plan to buy a condominium unit from a current owner (not the developer) your seller (and the association) is required to provide you with a package of information, called a "resale certificate". This would include, for example, the association’s legal documents, insurance information, and an updated budget which contains the income and expense of the association for the coming year, a statement of how much money in held in reserves, and in some jurisdictions, a statement of any planned expenditures and assessments.


The trial judge found for the Plaintiffs, issued a million dollar judgment against the defendants, basing the ruling that the association and management violated the Maryland Consumer Protection Act.


The Maryland High Court issued a 34 page opinion, which can be instructive to condo owners, managers as well as attorneys. The court reaffirmed an earlier decision that there "simply does not exist contractual privity between the condo association (called ‘council of unit owners in Maryland) and the buyer of a unit." The buyer has a contract to purchase a unit from a unit owner, not from the association.


However, the court went on to state that the association does have a duty - imposed by the Maryland condominium act - to provide buyers with the "resale certificate". One of the items required to be disclosed is "the current operating budget of the condominium including details concerned the reserve fund for repairs and replacement and its intended use, or a statement that there is no reserve fund."


And the Consumer Protection Act prohibits "false, ...misleading oral or written statement... which has the capacity, tendency, or effect of deceiving or misleading consumers..."


Why is the association and the manager considered a "supplier"? According to the opinion, the statutory obligation under the condo act "injects (the manager and) the association into the sales transaction as central participants because where they to have failed to provide these materials, the contract for sale would not have been enforceable." In the words of the court, both the manager and the association are "sufficiently involved" in the sale.


The Court sent the case back to the trial judge. Having determined that the consumer protection act could apply, the lower court now has to decide if the statements contained in the resale package were, in fact, deceptive. Unless the case is settled, that’s yet another round in a court of law.


The resale certificate is an important document, and unfortunately is not always taken seriously by either boards of directors or their management company. The laws in each of the three jurisdictions differ slightly as to what must be disclosed.


For example, In Maryland, the buyer must receive the package no later than 15 days before closing, and has the right to cancel within 7 days of receipt. In the District, the buyer must be provided the package 10 days after the contract is signed, and has 3 days to cancel. In Virginia, the package must be given to the buyer within 14 days after a contract is signed. If the package is hand-delivered or emailed, the contract must be cancelled within 3 days from receipt. However, if it is mailed, the rescission right is extended to 6 days.


If the resale package is not complete, and does not comply with applicable state law, a potential buyer can walk away from a sales contract, and get a full refund of the earnest money deposit. And in today’s economy, where buyers are having second thoughts about buying real estate, it’s easy to back away from a contract if the resale certificate is not complete.


But more importantly, it also has to be accurate. The laws require that the association - not the property manager - provide the certificate. Accordingly, while management should review the form at least once a year, it should be signed only by a board member.


We are a litigious society. Make sure your resale certificate complies with your state law and that it is absolutely accurate.