Take a good look

Don’t Overlook a Home’s Potential

Cosmetic issues are easy to remedy

By Michele Dawson



Home shopping for first-time homebuyers it’s an exciting, albeit nerve-wracking, experience. If you’re like others in the market for their first home, you probably have in mind exactly how your soon-to-be home will look.

 
But it’s important not to fall into the bad decorating, dingy walls and dirt-bare back yard equals bad-home trap. If you don’t see past the hideous wallpaper, funky light fixtures and avocado green carpeting, you may miss out on a home with great potential.
 
And, if you’re looking for a home in a seller’s market where homes are being snatched up as soon as they go on the market, you’ll come to realize you can’t be choosy if you want to make a competitive offer.
 
One of the first things to do is to get pre-approved for a loan and determine the maximum you can afford to offer for a house. Don’t look at homes that are asking for more than 5 percent above your maximum, otherwise you’ll be setting yourself up for disappointment if you find the perfect—but outside your budget—home.
 
So what to do?
 
The floor plan of the home is extremely important. If a floor plan isn’t quite to your liking, consider rearranging it or adding on. If you’re looking at an existing home and will need to remodel or expand to suit your needs, the estimated cost of renovation needs to be considered when making an offer.
Also, consider the features of a home:
  • Walls. While these are among the easiest to remedy, they also make a huge first impression. If the walls need to be painted, are covered in wallpaper or are painted a color you find distasteful, picture them crisp and clean in the color of your choice—that’s how they could look after you paint them.


  • Floors. Like walls, carpet or floor surfaces that are old or outdated can be easily replaced. You could even ask for a carpet allowance in your bid, especially if you’re in a buyer’s market.


  • View. Things like old, ugly—even dirty—windows and window treatments can make a view appear less desirable. Those things can be improved, so unless the only view you have is of your neighbor’s clunker on the side of the house, don’t get hung up on what is surely a fixable view.


  • Landscaping. Your best bet is a moderately landscaped yard because you can always improve landscaping without spending too much. Worst case, even if you’re looking at dirt, landscaping is one of the easier projects to tackle. Plus you get to design it however you’d like if you’re starting from scratch.


  • Closets and garages. You can never have too much storage space, which is why so many newer homes have three-car garages. But if you encounter a converted garage that is now a bedroom or storage room, don’t give up. Converted garages can almost always go back to their original purpose without much cost or labor.


  • Kitchen. The most popular room in the house, many homeowners want their kitchen to be large and have modern appliances. Don’t let outdated color schemes deter you because there’s nothing like a fresh coat (or two) of paint to make a kitchen your own. Plus, if you like the rest of the house enough to make an offer, you can give the kitchen a minor spruce-up with some new appliances or a major overhaul complete with new countertops, cabinets, and flooring.


  • The exterior. If the home doesn’t have good curb appeal, try to picture it with a fresh coat of paint and revitalized landscaping.


  • Pools. If you want a pool, buy a home with a pool already built in. Pools are expensive and you will not get a full return on the cost when you go to sell. Let someone else lose the return. The cost of repairing a pool is less than putting one in, so if you’re looking at a home with an old pool that looks like it’s in bad shape, it’s still a better bet than putting one in later.


When making an offer, consider what you can’t live without, as well as your budget. Also, be sure you hire a professional home inspector to inspect the house. If the home’s systems are in good working order and the house has everything you want except a minor item or two, make an offer accordingly.
 
Most importantly, keep in mind that unless you’re building your dream home from scratch, you’ll probably never find the perfect home. But seeing past a previous owner’s bad decorating choices to the core of the home and its potential for livability will yield you the home you’ve always wanted. It may take some work, but hey—it’s yours.
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It’s Open house time — Are YOU ready?

5 Ways to Prep Your Home for an Open House

Preparing your home for an open house can be a little like getting ready for a blind date. You don’t know what you may be facing but it is important to look your best. Open houses can often be stressful for homeowners because they know that strangers will be tromping through the door evaluating every last detail. You know the home needs to be as clean as possible but here are a few other things to keep in mind as you prepare.

Depersonalize as much as you can: You don’t want strangers seeing all your personal stuff and that’s reason enough to put photos, awards and sentimental objects elsewhere but there’s another reason as well. All that stuff is distracting and your potential home buyer could spend more time looking at what is in the home than actually seeing their lives taking place there. Your goal is to have your home appear as a blank slate, just waiting for a new buyer to make their mark. Pets should be out of the home not just for the day but ideally for a few days in order to allow any lingering odors to dissipate.

Don’t shove it all in the closet: You’ve got clutter, you need to get it out of sight, at least temporarily. The first instinct might be to move it all out to the garage, put it up in the attic, stack it in the basement, or fill up the closets. But remember your potential buyer probably has a fair amount of clutter too. They will be looking at all those storage spaces and the more available room they see, the more it will look like your home has all the space they need. Ask relatives or friends if you can temporarily store some items with them. You can also rent a storage space. The important thing is to make your home appear spacious and inviting.

Warm it up: The old trick of baking bread or cookies works to appeal to clients because it makes the home feel warm and lived in. Scented candles can work a similar magic. Fresh flowers or plants are also a nice touch and one that stagers often use. Another trick from stagers is to use colorful pillows and softly draped throws to provide a bit of color in bedrooms and living spaces. The home needs to be depersonalized but it still needs to look lived in and so a stack of plates left on the counter, fruit in the fruit bowl, towels in the bathroom, all go toward showing that the home is a great place to live.

Keep it bright: Light sells homes. Windows should be freshly cleaned on both the inside and the outside for maximum sunlight potential. Also go around and check to make sure all your light bulbs are working and that they are bright enough to really show off the rooms to their best advantage. Open all curtains and shades and take down any heavy curtains that might block some of the light streaming in.

Make a day of it: You know you shouldn’t be hovering around your open house but instead of going down to the local coffee shop and waiting until it’s over, reward yourself with a real mini vacation. Even the happiest of moves are stressful, so defuse some of that by taking yourself and your family out for a little reward. Put some distance between you and the home by going on a small day trip. Then later you can reconnect with your Realtor after he or she has had time to gather up all the impressions about the home.

Remember, you may not get an offer on the first day but an open house can lead to future showings and an eventual sale.

Women and Home Buying

A Single Woman’s Guide to Buying a Home

THE PROS AND CONS OF BUYING WHEN SINGLE

By Aviva Friedlander
 
Finish school, find a job, get married, buy a house. In that order. While this is often still the traditional pattern of life events for many women, more and more single women are buying their first house earlier in their lives.
 
Whether it’s because rents are high, home prices are affordable in the desired area or simply because of an aversion to living with roommates, single women are becoming a stronger force in the real estate market. In fact, according to the Joint Center for Housing Studies, more than one in five homebuyers in the U.S. is a single woman.
 
If you’re single and ready to make the big purchase, make sure you know what it takes to go it alone. 
 

Going over finances

 
Make sure you speak with an accountant or financial advisor to figure out what you can afford. Consider the amount you will need for the mortgage payment itself, property taxes, insurance premiums, utility bills, as well as money for repairs and maintenance. The main reason that buying early in life is a smart choice is appreciation value. Your home gains in value over time and when you sell it, that extra money can go a long way toward a down payment on a new home, or other investments. 
 

Finding a reliable real estate agent

 
If real estate is foreign to you and even if it isn’t, you would be best off working with a real estate agent to help you find that perfect place and to guide you down the road to homeownership. Consider finding a real estate agent close to your age, and even better, one who is single and successful just like you. A good Realtor should also be able to recommend a trustworthy financial advisor, lawyer, inspector and contractor to help you with the process.
 
Starting small
 
Buying a smaller place, with two bedrooms or less, has a number of advantages for a single. The lower purchase price will likely net you a mortgage payment that is lower than rent in that same area. You will save on utilities, maintenance and cleaning costs. You will have fewer rooms to furnish and decorate. And, when the time comes, it may be easier to sell when you are ready to move on.
 
Considering alternative dwellings
 

Living in a single-family home with a landscaped yard and a picket fence is the stuff dreams are made of. Reality says that buyers must do what’s practical for them. Many singles choose condominiums, co-ops or townhouses over single-family homes for some very good reasons. Aside from being more affordable, they may provide maintenance services, security in the form of a buzzer-operated front door or doorman and a built-in social network of neighbors. Overall it’s a smart idea for single women to invest in a home. By navigating the ins and outs of homeownership when you’re single, you’ll be in an excellent position to guide your husband through the process should you want to buy again once you’re married.

How to know if you are ready to buy a house

Are You Ready to Buy a House?

Answering these eight questions will help you decide
 
The idea of owning your home is an exciting one, but how do you know if you’re ready? Before you take the plunge, answer the questions below.


What’s your financial situation?
Having a clear understanding of your finances is necessary when you’re considering buying a home. Prior to speaking with a real estate agent, you should make a budget to see how much you can reasonably afford to pay. Don’t forget to factor in the cost of taxes, insurance premiums, maintenance and other upkeep.
 
Can you afford even the initial costs?
 
Down payment amounts vary based on the type of loan you’re offered or if you’re eligible for a first-time homebuyers’ program, but remember that the more you put down, the lower your mortgage payments will be.
Other initial costs can be substantial: loan set-up fees, home inspections, insurance, property taxes and other fees will cost you about 2 to 4 percent of your home price.
 
Is your money organized?
 
Hopefully you’re the kind of person who balances your checkbook and understands where your money goes, but if you take a more lackadaisical approach to your finances, you’ll need to step up your game. Get organized, check your credit report and keep building your savings. Getting your affairs in order helps you improve your credit score, qualifying you for better interest rates, and good financial records will help you take full advantage of tax deductions.
 
What are your future expenses?
 
Think ahead to the next few years. Are you making any big life changes that will hit your wallet hard? If you’re planning to have children or start paying tuition soon, you should factor that cost into your decision now. It can become difficult to replace an aging car or take an expensive vacation once you’re paying a mortgage.
 
Do you have an emergency fund?
 
Before you devote all your savings into a down payment or upkeep for your house, look at the bigger picture. You need to build a financial cushion in case of financial setbacks like unexpected unemployment or serious illness.
It’s not just money that should affect your decision to buy a home.
 
Are you flexible when it comes to getting what you want?
 
Your first home may not have all the bells and whistles you’re looking for. Are you willing to defer on your wish list now in order to have a home of your own? In a few years, you may be able to find a home that better suits your needs, but in the meantime you could also consider fixing up a less
expensive home, buying a home with friends or renting out part of your home for additional income.
 
Do you plan to move in three to five years?
 
There is a lot of effort, time and cost involved in buying a house – you want to make your investment pay off for you. In addition to the price of the house itself, you should also take into the set-up costs already mentioned.
 
If you’re planning to move in a year for work or school, you may want to wait until after that time. Otherwise, you might find yourself in a tough spot if you’re forced to sell your home for less than its purchase price in a slow market.
 
Do you enjoy home improvement?
 
If you’re already looking at homes, it’s hard not to imagine how adding a fresh coat of paint to the walls or changing the light fixtures will make a house truly yours. But if you’re used to calling the landlord for anything that goes awry in your home, owning a house might be a jarring wake-up call. When you own your house, any issue becomes your responsibility, from replacing blown electrical fuses to installing a new roof.
 
Now is the time to consider whether you enjoy home improvement projects. Are you confident in your ability to patch drywall or install a ceiling fan, or would you rather pay someone else to do it? If it’s the latter, consider that even if you hire someone else to handle your home improvement issues, you will still have to invest not only money but your time by researching contractors and supervising their work.
 
 
Once you’ve answered these questions and taken the first steps toward purchasing your new home, be sure to find out the going home values in your area –just contact Remax Realty Center in Wisconsin!
 
By Tasha Schroeder 

Now or Later – You make the call

I can help you determine what makes the most sense for YOU! 

Contact me to help you get a plan in place to buy a house, whether now or next year! 

 Lisabear@remax.net




Are you self emplyeed and wanting to buy a house?

Self-Employed? The Mortgage Rule You Need to Know

When applying for a mortgage, lenders will classify you as a wage earner employee or self-employed. Furthermore, if you also own a business or a percentage of a business, you might be considered self-employed even though you are a W-2 wage earner. If this is you, here’s what you’ll need to know to complete a mortgage application.

To start with, here are the income classifications for lending:

  • Employee: Individual is a W-2 wage earner and receives a paycheck. Taxes are withheld from the paycheck.

  • Self-employed: This includes everything else — a sole proprietorship, any business entity where income is derived or lost (including all affiliated corporations), and income derived from real estate or dividend income.

Where the Two Worlds Intersect
Bona fide employees who also have an ownership interest in the company can actually be considered self-employed. For example, if you’re a W-2 wage earner employee and you also have more than a 25 percent ownership interest in the company that employs you, this would earmark you as‘self-employed for the purposes of completing a mortgage application. If you happen to be a W-2 wage earner, but you have a percentage of ownership in another business, you would be considered both an employee and self-employed.

Business Ownership and Getting a Home Loan
Your federal income tax returns are required for the purposes of documenting your ability to repay when securing a new mortgage. On your tax returns, as a sole proprietor you file a Schedule C, and this income carries over to Schedule A. Most sole proprietors don’t have separate business entities, so corporate returns are not required as it is 100 percent ownership. However, things are different when you have an ownership interest in a company.

  1. Schedule E identifies whether there is additional business income and/or that you are an owner in an additional business.
  2. If an additional business is present on the return, the mortgage lender will require a K-1 to determine the percentage of ownership.

Mortgage Tip: If you own 24 percent of a business, you are not considered self-employed for the purposes of the loan application, and the lender will not need to obtain the corporate income tax returns. However, if you own 25 percent or more of a business — whether it’s your current employer or another business entity, as identified on the K-1 — then, yes, you’ll need to provide additional income tax returns for the entity in addition to your personal tax returns for obtaining the mortgage.

Why All Income Examination Matters
An ability-to-repay analysis is required on all mortgage loans. Simply providing W-2s, pay stubs and personal tax returns is not enough if you have more than a 25 percent business ownership interest in another company. If you’re receiving additional income from another business, and that income is tied to your personal tax returns necessary for securing that mortgage, it becomes necessary for the lender to have the additional tax returns because they support your reported income and subsequent ability to repay. Lenders are required to average your income in most cases during the past 24 months (including the business income) and that averaged income or loss will be used on the application in accordance with obtaining the new mortgage.

A financial word to the wise for the self-employed: You don’t need to provide the additional tax returns if you are a small minority share owner in a company.

Do you know how much your home is really worth?

How Much Is Your Home Really Worth?

If you’re thinking of selling your home, you may be fantasizing about the profit you’ll reap from the sale or calculating exactly how much you’ll need to pay off your current mortgage and have enough left over for a down payment on the next house.
 
Before your fantasies run amok you need to realize that, while you can estimate the value of your home in a variety of ways, the true value is only what a buyer will pay for it. That said, there are several ways to get a strong idea of how much a buyer will pay for the property in current market conditions.
 

 
What Your Home Isn’t Worth
Many homeowners find it confusing that there are various numbers floating around that indicate their home value. Here are a few:
  • Property tax assessment. Each jurisdiction uses a formula to establish home values for a tax assessment, but this price rarely correlates with the market value of your home. Your tax assessment can be higher or lower than the current market value.


  • Homeowners insurance value. Insurance estimates are based on the cost of replacing your home without the land, so this value is skewed compared to market value.


  • Mortgage balance. Your mortgage balance simply reflects your home loan. The difference between your loan payoff and the market value of your home is your equity.


  • Neighbor’s home value. Even if your neighbor’s home is similar to yours, it’s not likely to be identical. A REALTOR® can help you evaluate your home’s worth in the context of other nearby properties.


  • Cost when you purchased the home. Regardless of how long ago you purchased your property, the value can have gone up or down.


  • Desired value. You can always try to put your home on the market for your desired price, but if you’ve over- or under-priced it, you’re shortchanging yourself. because you’re either selling too low or your house could sit on the market and eventually sell for less than if you priced it correctly in the beginning.


Comparative Market Analysis
 
A REALTOR® can do a comparative market analysis with recent market data to help you estimate your home value. When you sell your home, an appraisal will be required by the buyers’ lender, so keep in mind that your home has to appraise for the selling price or, depending on how your contract is written, you’ll have to renegotiate the sale or the buyers will need to come up with extra cash.
A CMA is both an art and a science. While it’s based on data, it also requires local market knowledge and intuition about which homes to compare and how to interpret the prices. Most realtors will look for recent sales of homes that are similar to yours, preferably within the past two or three months, up to about six months. In addition, a realtor can look at other homes currently on the market and homes that didn’t sell that were taken off the market to compare values.
 
The comparison of your home with others should include not only the size and the number of bedrooms and baths, but also the condition of your home, the neighborhood and the proximity to amenities. If you do not understand the comparisons a realtor is making, ask to see some of the homes currently on the market or look online at photos of the properties.
 
While it may be tempting to list your home with the realtor who tells you it can sell at the highest price, a smarter way to sell your home is to price it as accurately as possible from the beginning. Studies show that an overpriced home that lingers on the market will end up selling for less than the estimated correct price.
 
 

Don’t move it!

Keep Your Money Where It Is

It’s not wise to make any huge purchases or move your money around three to six months before buying a new home. You don’t want to take any big chances with your credit profile.


Lenders need to see that you’re reliable and they want a complete paper trail so that they can get you the best loan possible. If you open new credit cards, amass too much debt or buy a lot of big-ticket items, you’re going to have a hard time getting a loan.

I was already PRE- Qualified

Get Pre-Approved for Your Home Loan

There’s a big difference between a buyer being pre-qualified and a buyer who has a pre-approved mortgage. Anybody can get pre-qualified for a loan. Getting pre-approved means a lender has looked at all of your financial information and they’ve let you know how much you can afford and how much they will lend you. Being pre-approved will save you a lot of time and energy so you are not running around looking at houses you can’t afford. It also gives you the opportunity to shop around for the best deal and the best interest rates. 

Do your research: Learn about junk fees, processing fees or points and make sure there aren’t any hidden costs in the loan.

How Much Does My Agent Need to Know About My Finances?

How Much Does My Agent Need to Know About My Finances?
How Much Does My Agent Need to Know About My Finances?
Money is a delicate issue. How much we earn and how much we owe is information many of us prefer to keep close to the vest.

If you’re concerned about detailing your finances to your real estate agent, rest assured that there’s plenty of privacy in the client/agent relationship.

In their wheelhouse, Real estate agents don’t need, or expect, you to disclose everything about your money. That said, they must understand your overall situation to help guide you to a home that’s within your budget.

An agent’s job is to negotiate a home purchase or sale on your behalf, keep the transaction on track and help you navigate real estate paperwork. His or her strength lies in understanding home values, and property and neighborhood features. Home financing is an altogether separate story from a home search or sale; therefore, agents usually don’t delve into your finances to crunch the numbers.

Leave it to the lender

Agents are happy to let your mortgage lender handle the financial questioning. A loan officer at a bank or mortgage company calculates your maximum purchasing power and your monthly payments based on your loan application, financial documentation and debt-to-income ratio.

Be prepared to supply your lender with your last two years of tax returns, recent pay stubs, bank statements and investment accounts. Agents then present a lender-generated preapproval letter to listing agents, indicating the amount you’re able to borrow.

Contact your local RE/MAX agent if you have questions about buying a house or selling one. These real estate professionals can guide you – with discretion – toward your next home.