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August 30, 2016

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Real Estate Investing: How to Find Great Deals on Undeveloped Lots with Big Potential

Real Estate Investing: How to Find Great Deals on Undeveloped Lots with Big PotentialPurchasing a plot of land can be one of the best investments to make. A landowner has great (but not unlimited) freedom in how to develop their plot, and land never expires so its potential is essentially infinite. That said, buying undeveloped or vacant land can be risky business, so read on to find tips on purchasing a plot.

Do Your Homework: Before You Get Onto The Land

Before anything else happens, figure out your priorities. Decide what you want the land for, what amenities and what location you want, what you’re looking for in terms of neighbors or local government, and, of course, know your budget. More specific questions will arise around taxes, fees,and permits for building, available utilities/water access but, first, just start with your ideal land plot and work backwards (and into reality) from there.

Do Your Due Diligence: On The Land Itself

Once you find a plot that fits your needs on paper, get out onto it. Walk the land with an eye on the topography (any unexpected hills or valleys? Is the ground solid/fertile/arable, depending on what you need?), neighboring properties, size and shape of the plot, and any other element that the walk brings to your senses (smell and hearing as well as sight). Ideally, do this walk in the fall, so there is no foliage hiding your view of the property and what’s around it.

Don’t Despair: It’s Costly, But There Are Deals Out There

Remember that developing the land will incur costs too. Budget for as many foreseeable costs as you can, including a land survey, well/utility installation, legal fees, land clearing, landscaping, road construction and others. That said there are places you can look at for deals on the initial land purchase, including property lots for sale (which are cheaper the farther they are from major cities, road access, and already-connected utilities) or bank-owned plots. For those, you can talk to your real estate agent about asking local banks for lists of their foreclosed properties, which tend to be cheaper as banks look to sell them off.

Don’t Be Afraid To Ask: Reaching Out To Experts

Finally, talk to people. Ask locals about the neighborhood, previous uses of the land, potential surprises (like calm paths that turn into snowmobile trails in the winter). Connect with professionals in the local health department, zoning and building departments, accountancy and other areas of development for in-depth answers to your municipal questions.

But remember: while you will need to talk with many professionals in your due diligence, let your local real estate agent be your first point of contact.

August 29, 2016

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What’s Ahead For Mortgage Rates This Week – August 29, 2016

Last week’s economic reports included readings on new and existing home sales, a speech by Fed Chair Janet Yellen, and a report on consumer sentiment. Weekly reports on mortgage rates and new jobless claims were also released.

New Home Sales Rise in July as Pre-Owned Home Sales Fall

Sales of new homes jumped in July to a seasonally-adjusted annual rate of 654,000 sales, which surpassed expectations of 579,000 sales and June’s downwardly-revised reading of 582,000 sales. This was the highest reading for new home sales since 2008 and represented a 31.30 percent increase since July 2015.

Builders were seen by analysts as addressing the need for more affordable homes; this trend contributes to a healthy housing market by supplying homes for a wider range of buyers. First-time buyers play a vital part in housing markets as their purchases enable current homeowners to buy larger homes or relocate.

Sales of pre-owned homes fell 3.20 percent to a seasonally-adjusted annual rate of 5.39 million sales as compared to expectations of 5.59 million sales and June’s reading of 5.57 million sales. Year-over-year, sales were 1.60 percent lower. Limited inventories of available pre-owned homes have narrowed buyer options; increasing prices and narrow choices were seen as factors contributing to lower sales. There was a 4.60 month supply of available homes in July. Real estate pros typically consider a six months a normal reading for homes on the market.

Lawrence Yun, chief economist for the National Association of Realtors®, noted that a slowdown in home appraisals may have contributed to July’s lower sales reading for pre-owned homes. Low mortgage rates prompted a surge in refinancing which created a backlog in home appraisals. While low mortgage rates may entice home buyers, stricter mortgage requirements can also keep prospective buyers at bay.

Federal Reserve Chair Janet Yellen indicated that the stage could be set for a federal rate increase as early as next month. If the Fed hikes its target federal funds rate, interest rates for consumer credit and mortgages can be expected to rise.

Mortgage Rates Hold Steady; New Jobless Claims Fall

Freddie Mac reported that fixed mortgage rates for 30 and 15-year loans were unchanged at 3.43 and 2.74 percent respectively. The average rate for a 5/1 adjustable-rate mortgage was one basis point lower at 2.75 percent. Discount points averaged 0.60, 0.50 and 0.40 percent.

New jobless claims were lower last week. 261,000 new jobless claims were filed against expectations of 264,000 new claims and the prior week’s reading of 262,000 new claims filed. Declining jobless claims can indicate strengthening labor markets, but can also indicate that workers are leaving the labor markets.

Consumer sentiment declined slightly in August due to concerns over the upcoming presidential election. Analysts expected a reading of 91.0 for August, but the reading for August was revised from 90.4 to 89.80.

What’s Ahead

Next week’s scheduled economic news includes reports on pending home sales, inflation, construction spending and consumer confidence. National unemployment, non-farm payrolls and ADP payrolls are also scheduled.

August 26, 2016

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Foundation Problems? Here’s What to Do If You’re Worried About Your Home’s Foundation

Foundation Problems? Here's What to Do If You're Worried About Your Home's FoundationLike in a relationship, the foundation of a house is integral, and must be strong. There are many reasons why a house’s foundation might crack or shift including temperature variances in the soil surrounding it, since earth expands in heat and contracts in cold. But whatever the reason, there are certain steps to follow when addressing concerns about your house’s foundation.

Prevent The Problem, If Possible

First, whenever possible act to prevent problems before they arise. Make it a habit to check for foundational stress by taking a walk through your basement and around the outside of your home. Signs of a problem include cracks in the foundation itself (particularly horizontal ones larger than a hairline), uneven or sloping floors, doors or windows that won’t open or close properly anymore, and water damage (puddles or moisture in the wood) that signals improper drainage.

Confirm The Problem, If There’s Time

If you find a crack that has you worried, but isn’t an insurmountable gap, take the time to coat it with concrete waterproofing paint. Then keep an eye on it. If the crack reappears after the paint has dried, it means the gap that produced the crack is growing and should be addressed. If you suspect water drainage problems, try shutting down all water-using appliances in your home. Then watch the water meter for 6 to 12 hours. If the levels change in that time, your water is finding another way out of the house. Finally, if you suspect a sloping floor, rest a tennis ball on it and look for rolling.

Fix The Problem, If It’s Small

Sometimes DIY methods can be used to address small issues, like little cracks (ones not in the foundation itself, but in walls or floors). Fill them with a vinyl concrete patch, or a similar product. Be sure the material you use is flexible and can move a little, because the concrete will it slightly expands and contracts to keep stable.

Call For Reinforcements!

That said, the absolute best method of dealing with foundation problems is to call in reinforcements, because even successful DIY fixes are temporary. And because, even though it will cost a little more, the money is worth it to prevent your house from collapsing! Reach out to a foundational specialist or a structural engineer if there are any signs that have you worried about a shifting or crumbling foundation.

If you have more in-depth questions, or want advice on a foundational specialist, talk to your trusted local real estate agent.

August 25, 2016

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Electronic Gopher Repellers and 4 Other Home Gizmos You Never Thought You Needed

Electronic Gopher Repellers and 4 Other Home Gizmos You Never Thought You NeededAs a homeowner, thinking outside the box, gadget-wise, can lead you to gizmos that solve your problems – even ones you didn’t know you had in more humane, sustainable, energy-efficient ways than ever before. Read on to find out about five such inventions.

It’s Humane!: Solar-Powered Gopher Repellent

If you ever have a problem with rodents like gophers, moles, voles or shrews intruding on your lawn, look no further. This humane repellent doesn’t hurt anyone (people or animals), it simply emits a high-pitched sound at regular intervals to disrupt the animals’ sleeping patterns. It discourages them from moving in by making your lawn inhospitable but without using traps or poison. The sound is too high for humans to hear it, and only travels underground so dogs aren’t disturbed, either.

It’s Tasty!: Outdoor Wine Glass Holders

They seem simple, but sometimes the most obvious things are the hardest to recognize. Like outdoor wine or champagne glass holders removing the need to balance a full glass on uneven ground. Next time you’re on a picnic, take along these portable items, stick them in the grass (or the sand, if you’re at a beach) and hang your stemmed glass on the hook.

It’s Easy!: One Touch Jar Opener

Who hasn’t struggled with a jar opener for the pasta sauce while the noodles boil over and the onions burn? For any cook that doesn’t have a sous-chef handy, don’t worry there’s now a one-touch jar opener for just that occasion. Conveniently sized and battery-operated, these little guys adjust to any jar size and have padded edges to protect the jars so you can reuse them.

It’s Handy!: iPad Fridge Mount

Increasingly, people these days are cooking with recipes from the Internet. With an iPad Fridge Mount, you don’t need to copy out the recipes, print them or worry about your device getting splashed or hit with dinner. The mount is easy to install no tools needed and easy to remove, so the iPad is as portable as ever. The mount can also go on walls or doors.

It’s Smart!: Automated Watering Controller

Unlike the other items on this list, which ranged from $10 to $30, the Blossom Smart Watering Controller sells on Amazon for just under $400. But it saves money, and conserves water, by monitoring the weather (so it can adjust its lawn/garden watering schedule for wetter or dryer days), and you control it through your smartphone. No new wiring, sprinklers or valves are needed.

If you need more info or want suggestions on neat home gizmos that work well in your neighborhood, reach out to your local real estate agent.

August 24, 2016

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Thinking about Refinancing? 3 Ways That You Can Boost Your Home’s Assessed Value First

Thinking about Refinancing? 3 Ways That You Can Boost Your Home's Assessed Value FirstIn an effort to boost the value of their property, many homeowners invest in renovations that will help them sell at a higher price. However, with all of the renovation options, it can be hard to know what kind of fix-ups are really worth investing time and money into. If you’re looking at all of your options for home improvements, here are some surefire fixes that won’t stress the bank and will probably bump up the offering price.

Add In Stainless Steel

The look and functionality of the kitchen is one of the deciding factors for many homebuyers, and this means that if you have old appliances or an outdated look, you should definitely spend some money on a little upgrading. Since kitchen renovations can be a significant expense when it comes to knocking out walls and adding an island, you may want to stick with smaller stuff like a stainless steel appliance replacement or even renovating your cabinets for a more up-to-date look.

Increase Energy Efficiency

With the push towards reducing overall housing costs and being environmentally sustainable, making your home more energy efficient can be a huge selling feature for the kind of buyers who will be able to save money as a result of renos. While there are many financially taxing overhauls that can seriously bust the bank, try simple fixes like adding extra insulation where drafts exist, and installing LED lights for lowered energy costs and longer light bulb expectancy.

Prep For Paint

It may require a little bit of work to get the job done, but re-painting your home can be one of the best, and most economical, means for upping the value of your home. While painting can still be an economical option even with professional painters, a shiny new coat can take years off the look of your house and instantly improve its appearance. You just need to make sure you choose a neutral color and a high-quality paint for maximum effect.

While taking on home renovations will require a bit of spending, it can be a great idea if you’re re-financing your home and are looking to boost its value. The only thing to keep in mind is making sure you choose the kind of fixes that will be inexpensive and popular on the market. Contact your trusted real estate professional for more information.

August 22, 2016

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What’s Ahead For Mortgage Rates This Week – August 22, 2016

Last week’s economic news included the NAHB Housing Market Index, Commerce Department releases on housing starts and building permits issued. Weekly reports on mortgage rates and new jobless claims were also released.

Shortages of available single-family homes have driven up home prices and increased competition among homebuyers; short inventories of homes for sale are affecting affordability in many areas, although buyers seem motivated by lower mortgage rates and some easing of mortgage requirements. Analysts have repeatedly said that the only solution to the shortage of homes is building more homes.

Fortunately, the National Association of Home Builders reported that builder sentiment concerning U.S. housing markets increased in August. The HMI moved up to a reading of 60 in August as compared to July’s reading of 58. Readings over 50 indicate that a majority of builders surveyed are confident about housing market conditions.

According to NAHB, home builders continued to face obstacles including shortages of buildable lots and skilled labor. Regulatory issues were also cited by some builders, but overall, builders remain optimistic about housing market conditions.

Housing Starts Up, Building Permits Issued Slip in July

Commerce Department reading s on housing starts and building permits issued were mixed; housing starts rose from July’s reading of 1.186 million permits issued to 1.211 million permits issued in August. July’s reading was the second highest since the recession but was driven by multi-family construction. Building permits were lower in August with a reading of 1.152 million permits issued against July’s reading of 1.153 million permits issued.

Analysts said that under present market conditions, there is little reason for homebuilders to increase single-family home production as current pricing has put many would-be buyers on the sidelines.

Mortgage Rates Mixed, New Jobless Claims Lower

Freddie Mac reported that average rates for 30-year and 15-year fixed rate mortgages dropped last week while the average rate for 5/1 adjustable rate mortgages rose. The average rate for a 30 year fixed rate mortgage was 3.43 percent and the average rate for a 15-year fixed rate mortgage was 2.74 percent; both readings were two basis points lower than for the prior week. The average rate for a 5/1 adjustable-rate mortgage was two basis points higher at 2.76 percent. Average discount points held steady for fixed rate mortgages at 0.50 percent; average discount points for 5/1 adjustable rate mortgages were lower at 0.40 percent.

New Jobless claims fell by 4000 claims to 262,000 new claims, which was lower than analyst expectations of 265,000 new claims and the prior week’s reading of 266,000 new claims. Job security is important to home buyers and signs of strong labor markets can help propel would-be buyers into the market,

Whats Ahead

This week’s scheduled economic news includes releases on new and existing home sales and consumer sentiment. Weekly reports on mortgage rates and new jobless claims will be released on schedule.

August 19, 2016

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Pocket the Profits: The Secrets to Selling Your Home above the Asking Price

Pocket the Profits: The Secrets to Selling Your Home above the Asking PriceWe all want to sell our homes at above asking price, but what is it that makes a seller succeed at this? Here’s our expert advice on how you can sell your home above the asking price.

Ask For Less

You may be surprised, but pricing your home lower than market value can have an extremely positive effect on the offers you receive. This is because a low-priced listing will stand out and will draw more attention, which boosts your chance of a bidding war.

By attracting more buyers to come and look at your home, you will find more buyers who are willing to make an offer on your property. When they view your home they will see its true market value, and are then more likely to make a higher offer in hopes of outbidding others. It’s all about creating hype, and a low asking price will do just that.

Wait It Out

While it may be tempting to accept the first offer that comes along, in some cases, it may be better to wait and see what other offers come in. If you accept the first offer on your property you have closed the door to competition.

Consider Who You’re Selling To

Is your home better suited towards traditional buyers, or is it a valuable property for investors? If your home could easily be renovated and flipped, has high potential as an income property, or is in an up-and-coming neighborhood, it may be better marketed as an incredible investment property.

Investors expect a return on the money that they spend so are often more willing to make a higher offer – they know those funds will come right back to them.

Rock Your Renos

There are several simple renovations that can add a huge amount of value to your home. The return on investment for a few small upgrades is often very worthwhile when your goal is to receive more than asking price.

Make sure the flooring, kitchen, and bathrooms in your home are updated and appealing, and if not, consider upgrading these areas first. If you’re targeting investors, adding an income suite to your property may be the best investment you can make. Consider which kind of buyer you’re targeting and what areas of your home need the most TLC, and choose accordingly. Speak with your trusted real estate professional today to learn more.

August 18, 2016

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NAHB: Builder Sentiment Improves in August

Buyer Beware: 4 Common Problems Home Sellers Try to HideAccording to the National Association of Home Builders, August home builder sentiment met analyst expectations and rose by two points to a reading of 60; July’s reading was revised downward to 58. Two out of three components used in calculating the Home Builder Index were higher. Builder sentiment concerning current housing conditions rose two points to 65. Builders were also more confident about housing market conditions within the next six months; August’s reading was one point higher at 56. Builders were less confident about buyer traffic in new housing developments. August’s reading slipped one point to 44.

Any reading above 50 indicates that a majority of builders surveyed were confident in market conditions; readings for buyer traffic have not reached 50 since 2005.

Building More Homes Seen as Solution to Persistent Home Shortage

Shortages of available homes have caused demand for homes to surge in recent months. As demand increases, home prices rise. This thwarts positive conditions including low mortgage rates and recent reports of rebounding job creation. If builder confidence rises, it follows that builders will expand construction, but builders also cited factors including regulatory obstacles, a lack of qualified labor and shortages of land available for development as ongoing concerns.

Regional Confidence Readings Mixed

Regional readings for builder confidence were mixed; builder confidence in the Northeast increased by two points to 41. In the South, builder confidence also rose two points to 63. Builder sentiment in the West was unchanged at 69 while builder sentiment in the Midwest fell two points to 55.

Although growing builder confidence considered positive in light of home shortages, analysts said that single-family housing starts remain well below historical levels.

In related news, NAHB reported that readings for the 55 plus housing market index increased by one point to 57 as compared to the first quarter reading and was unchanged as compared to the second quarter of 2015. As with the general HMI, any reading over 50 indicates that more builders than fewer are confident in market conditions for 55 plus housing markets.

August 17, 2016

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3 Different Types of Loan That Will Negatively Impact Your Ability to Get a Mortgage

3 Different Types of Loan That Will Negatively Impact Your Ability to Get a MortgageA good credit rating is built on a number of financial factors including paying your bills on time and the length of your credit history, but loans can also be a source of bolstering your credit score in a positive way. While this means that loans can actually be a good thing, there are also the kinds of loans that can have a damaging impact on acquiring a mortgage. If you’ll soon be pursuing your own home purchase, here are some loans that may have a negative impact.

Borrowing For Education

When you are young, student loans are an ideal means of paying down your debt and developing a positive credit history. However, if these loans are left to linger they can have a marked effect on your chances of a mortgage approval. Since paying back your student loans will be one of the first times in your financial life that you’ll be able to prove your reliability, you should ensure you pay them on a consistent basis in order to lower your overall debt-to-income ratio.

Credit Card Debt

Many people don’t think of the purchases that go on their credit card as loans, but the money on your credit card does not really belong to you until it’s paid off. While credit cards can be a great boon for establishing your credit in the early days, if you rack up a lot of credit card debt and do not pay your minimum payments by the due date, it will cause a considerable dip in your credit score. In addition, taking on too many cards can be a negative signal to lenders.

Payday Loans

In recent years, payday loans have sometimes been broken out separately from other loans on a person’s credit report. However, unlike many other types of loans, payday loans can be seen in a bad light by lenders because they can be indicative of someone who’s experienced significant financial setbacks, which would negatively impact their ability to pay a mortgage. While some mortgage lenders will not decline an application due to payday loans, some have already started to take this step.

Acquiring loans can be a good means of developing a credit history, but there are types of loans that may look bad on your mortgage application and won’t be of service if you can’t pay them off consistently. If you’re considering submitting a mortgage application, contact your local real estate professional for more information.

August 16, 2016

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Can You Get a Mortgage after a Chapter 7 Bankruptcy Discharge? Yes – But You’ll Have to Wait

Can You Get a Mortgage after a Chapter 7 Bankruptcy Discharge? Yes - But You'll Have to Wait There was a time when it was possible to acquire a mortgage shortly after filing for Chapter 7 bankruptcy, but with the shifts in the financial sector, the timeline on such a mortgage approval has changed in recent years. If you’re currently undergoing a Chapter 7 bankruptcy and are wondering how this will impact home ownership, here are the basics on this type of bankruptcy and what it may mean for you.

What Is Chapter 7?

While a Chapter 13 bankruptcy is the kind of financial situation that requires debt repayment, Chapter 7 is different in that it involves the liquidation of an individual’s personal assets to pay back the debt that is owed. A trustee will be designated to take care of the bankruptcy process, but a Chapter 7 bankruptcy will remain on your credit report for 10 years and have a negative impact on your credit score, which can mean increased interest rates on a mortgage down the road.

Re-Building Your Credit Score

The most important step to obtaining a mortgage following a Chapter 7 bankruptcy is keeping on top of your credit. Because your credit score will be lowered and bankruptcy will remain on your report for a long time, paying all of your bills on time in full and ensuring every aspect of your financial health is in check is of primary importance. Since most lenders will not even consider your application if you’re delinquent with payments, impeccable form is necessary in this case.

The Timeline On A Mortgage

According to the Federal Housing Administration (FHA), anyone applying for a mortgage must wait a minimum of two years after the discharge date of their Chapter 7 bankruptcy, which is the date they are cleared of obligation to their debt. While this is good news for those who want to apply for a mortgage in the near future, it’s important that a good credit history is developed and all FHA requirements are met to ensure approval.

Filing for Chapter 7 bankruptcy can be a hard financial pill to swallow, but by keeping your credit history in check for the duration of the 2-year period, you can be well on your way to a mortgage approval. If you’re planning on being in the market for a home in the near future, contact your trusted real estate professional for more information about opportunities in your community.

Chris Brown
Chris Brown is the premier expert on HARP loans and Government FHA and VA loans. Please visit The Mortgage Chili Blog