How To Buy A Home In A Tight Housing Market

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Shopping for a home is a challenging task right now. Home prices went up 6.3% in December compared to the year prior, according to the latest S&P CoreLogic Case-Shiller national home prices index. That’s likely due to high demand and a tight supply of homes.

That makes it a seller’s market, which means—as a buyer—it may be harder to land the home you want. Here are some strategies for making it happen:

Do some preliminary shopping. Determine when you’re going to start shopping seriously—that is, when you’ll be ready to start making offers on houses—and start looking two to three months prior to that date. That helps you get a feel for a market, for how things are priced, and for how the bidding process goes. (Do homes frequently go for above ask? How much above? Which homes?) “You’ll develop a sense of what to expect from homes in that market,” says Holden Lewis, research analyst at NerdWallet. “And that’s especially the case if you’re working with an experienced buyer’s agent.”

Find a good buyer’s agent. Speaking of which, working with someone who really knows the area can give you a leg up, particularly if they have an ear to the ground. They might know about homes for sale before they hit the market or have some insight into what a home seller needs to close a deal.

Get preapproved. When you’re ready to get down to business, have a lender run your paperwork to determine how much mortgage you can qualify for. You’ll get an approval letter that outlines what kind of loan you can get. “Home sellers often find themselves in a situation where they accept an offer and then the buyers can’t qualify for the loan,” Lewis says. “They want to avoid that.” Your preapproval letter can give you a competitive edge.

Offer to put more down. In many markets, a standard deposit with a home contract is 1% of the home’s sale price. If you can put more down than that, offer to do so. “Your offer is a lot more attractive if you can make a deposit of 3% or 5%,” Lewis says. “Then they know that you’re not just a tire kicker, and that you’re really serious.”

Find out what the seller wants. The best way to do this is to ask—either through your agent or by speaking to the seller directly. What are the seller’s priorities? “Don’t make any assumptions,” Lewis says. “For a lot of sellers, their top priority is getting top dollar, but not all of them. Some sellers are relocating and want to close on the house as quickly as possible. So if you can show that you’re ready to go, you’re more competitive.”

Be nice. Go the extra mile. If you’re house hunting on a snowy day, take your boots off at the door or carry a dry pair of shoes with you. If you use the bathroom, flush. Be thoughtful and courteous. And don’t say anything negative while you’re in the house. “If you have something critical to say, wait until you leave,” Lewis says. “If there’s a buyer who’s rude, that might tip the scales in your favor if you’re the polite one. Make them like you.”

This article was originally published on Forbes.com
Author: Kate Ashford

19 Things to Do Immediately to Reduce Your Home Energy and Maintenance Costs

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So you’ve just moved into your nice new home. You’ve unloaded the boxes and started to unpack your life.

Right now is the perfect time to walk through a checklist of ways to save money on your home for years to come.

Starting on these things as early as possible will allow you to start saving money sooner rather than later. Plus, some of them will be easier to accomplish before you hang pictures or get too settled in — and lose your move-in momentum.

Here are 19 things to check or do immediately that will reduce the energy and maintenance costs of your home over the long haul.

1. Check the insulation in your attic – and install more if needed.

If you have an unfinished attic, pop your head up there and take a look around. You should see insulation up there between the beams, and there should be at least six inches of it everywhere (more if you live in the northern part of the United States).

If there’s inadequate insulation up there – or the insulation you have appears to be damaged – install new insulation. Here’s a great guide from the Department of Energy on attic insulation, including specifics on how much you should have depending on where you live. Many states offer financial incentives, up to a 75% refund for instance, to encourage homeowners to better insulate their homes.

2. Lower the temperature on your hot water heater down to 120 degrees Fahrenheit (55 degrees Celsius).

This is the optimum temperature for your hot water heater. Most people don’t use water hotter than 120 degrees — indeed, water hotter than that can scald you or a child — and thus the energy needed to keep the water above 120 degrees isn’t used effectively. Lower the temperature, save money on your energy bill, and you’ll never skip a beat.

3. Toss a water heater blanket over that hot water heater as well.

While most modern hot water heaters are well-insulated, some are insulated better than others, and many older heaters aren’t insulated well at all. A small investment in a blanket for your water heater will slowly and gradually save you money on your heating bill over time by keeping the heat in the water instead of letting it disperse slowly into your basement or utility closet.

The Department of Energy recommends being “careful not to cover the water heater’s top, bottom, thermostat, or burner compartment.” And of course, on-demand (or “tankless”) water heaters don’t require this treatment.

4. Install ceiling fans in most rooms.

Ceiling fans are a low-energy way to keep air moving in your home. Because of the air circulation effect, you can get away with keeping your thermostat a degree or two higher in summer and a degree or two lower in winter, netting a rather large savings.

A while back, I wrote a guide to maximizing ceiling fan use. The most important thing to know is that the air directly below the fan should be blowing down on you in the summer and should be pulled upwards away from you in the winter — you can use the reversal switch on your fan to switch between the modes at the start of each season.

5. Wrap exposed water pipes with insulation.

Exposed hot water pipes lose heat as they move water from your heater to your faucet or shower. Wrapping them in pipe insulation, especially in cold basements or garages, can make a two- to four-degree difference in the temperature of the water, and also allows hot water to reach your faucet faster.

Check the pipes into and out of your hot water heater first, as the first three feet out of the heater (and the last few feet of inlet water) are key. Use good-quality pipe insulation for the job, which is actually quite simple — here’s a tutorial.

6. Install a programmable thermostat – and learn how to use it.

A programmable thermostat allows you to schedule automatic increases and decreases in your home’s temperature, saving money on cooling in the summer and heating in the winter.

They’re easy to install and easy to use, especially if you keep a fairly routine schedule. Just program the thermostat to drop a few degrees at night while you’re sleeping or off at work during the day, and set it to return to your preferred temperature just before you wake up or return home from work. You won’t notice the difference — until you see your lower utility bill.

7. Replace your air filters.

When you first move in, you almost always need to replace the air handling filter or the filter on your furnace or AC unit. Don’t worry, it’s easy to do – it takes about 10 seconds.

Go down to your air handling unit, find where the filter is (it’s almost always a large rectangle), and mark down the measurements (printed around the edges). Then, go to the hardware store and pick up a few of them. Go home and replace the old one with a new filter, and save the rest so you always have a clean one ready to go. An outdated filter not only doesn’t filter air as well, it also has a negative impact on air flow, meaning your air handling system or HVAC unit has to work harder — and use more energy — to pump out lower quality air.

8. Make sure the vents in all rooms are clear of dust and obstructions.

None of the vents in your home should be covered or blocked by anything – doing that makes your heating and cooling work overtime. You should also peek into all of your vents and make sure they’re as dust-free as possible, and brush them out if you see any dust bunnies. This improves air flow into the room, reducing the amount of blowing that needs to happen.

9. Mark any cracks in the basement with dated masking tape.

Many homes have a few small cracks in their basement walls from the settling of the foundation and the weight of the house. In a stable home, the small cracks aren’t growing at all – they’re safe. If they’re growing, however, you’ll save a ton of money by getting the problem addressed now rather than later.

How do you tell if they’re growing? Take some masking tape and cover up the end of any cracks you notice inside or outside, and write today’s date on the tape. Then, in a few months, check the tape – if you see a crack growing out of the end of the tape, you might have a problem and should call a specialist before the problem gets out of hand.

10. Hang a clothes rack in your laundry room (or better yet, an outdoor clothesline).

Even an efficient clothes dryer can really eat up your energy costs, but it’s convenient for many people. If you’re willing to battle that convenience, you can save money by hanging a clothes rack from the wall in the laundry room and using it for some items; t-shirts, underwear, towels, and pillow cases dry great on clothes racks. If you can hang up 20% of the clothes in a load on a rack, you can get away with running the dryer 20% less than before, saving you cash.

Even better: If you can, install a clothesline in your back yard and hang most of your clothes to dry outside, where a good breeze can do the work of a dryer in no time — and at no cost.

11. Check all toilets and under-sink plumbing for leaks or constant running – and check faucets, too.

Do a survey of the plumbing in your home before you settle in. If you find a toilet is running constantly, it’s going to cost you money – here’s how to easily fix that constantly-running toilet.

You should also peek under the basin of all the sinks in your home, just to make sure there aren’t any leaks. Got a leaky faucet? You should repair or replace any of those, because the drip-drip-drip of water is also a drip-drip-drip of money; not to mention the terrible interplay between mold and home insurance.

12. Install LED or CFL light bulbs.

LED and CFL bulbs can save you a lot of money on energy use over the long haul, plus they have much longer lives than normal incandescent bulbs, making them well worth the upfront investment. Consider installing some in various places — especially in areas where the lights may be in use for long periods, like the living room or kitchen, or left on accidentally, like a back hallway or basement. CFL bulbs tend to be cheaper, but LED bulbs are usually preferable in terms of performance, and have come down in cost quite a bit over the past few years.

13. Choose energy efficient appliances, even if you have to pay more up front.

Unless you were lucky enough to buy a fully-furnished home, you’ll likely have to do some appliance shopping. Focus on reliability and energy efficiency above all, even if that seriously increases the cost you have to pay up front. A refrigerator that uses little energy and lasts 20 years is far, far cheaper over the long run than a fridge that runs for seven years and guzzles electricity. If you plan ahead, you can buy it with a credit card that offers a big sign-up bonus. You’ll pay the balance off immediately and walk away with hundreds in cash or travel rewards.

14. Set up your home electronics with a SmartStrip or two.

Looking forward to getting your television, cable box, DVD player, sound system, and video game console set up? When you do it, set things up with proper surge protection (to shield your equipment from electric surges). You might also want to consider a SmartStrip, which makes it easy to “unplug” devices that aren’t in use.

A SmartStrip allows the on-off status of one device — say, the television — to control whether or not there’s power flowing to other devices (say, the DVD player or the video game console). Having the power cut automatically from such auxiliary devices can save a lot of money over time, especially since many such devices eat quite a bit of power as they sit there in standby mode, constantly draining your money.

15. Plant shade trees near your house.

Mother nature can help you save significantly on your summer cooling costs — and heating costs in winter, too.

Plant deciduous trees — the kind that lose their leaves in the fall — on the western and eastern sides of your house. The leafy shade trees will naturally cool your home during the hot summer months by reducing the amount of direct sunlight that hits your house.

In the winter, they’ll lose their leaves, allowing that same sunlight to stream through your windows and heat up the home a bit more. And if you plant evergreens on the north and northwest sides of your home, they won’t affect the sunlight, but will shield your home from cold winter winds.

As an added benefit, mature trees can increase your property value. Just make sure to plant them a safe distance from power lines and your home itself (no one wants a downed limb poking through their roof). Plant them now, and they’ll grow and shade your house sooner.

16. Change the locks and make spare keys.

One of the first things many homeowners do is change the locks on their new home. You don’t need to be particularly handy to install new door hardware, and a set of basic doorknobs and locks for your front and back door will only set you back $20-$80 or so. It may seem unnecessary, but there’s no way to know whether there are copies of your old key floating around, and who might have them if so. Investing a bit of money and time today can protect you from burglary down the road.

While you’re at it, get an extra copy of your key made and leave it with someone you trust, so you don’t have to shell out $100 to a locksmith when you inevitably lock yourself out.

17. Air-seal your home.

This isn’t such a problem in new homes, some of which are built tight as drums, but in older homes, it’s important to look for any places where air may be leaking directly into or out of your home. Common trouble spots are around doorways, windows, and even electric outlets.

These aren’t just air leaks – they’re money leaks. Thankfully, fixing small air leaks is pretty easy – here’s a great Department of Energy guide to caulking and weatherstripping, which will keep such air leaks from sucking the heat – and money – out of your home.

18. Take advantage of tax benefits and other incentives.

The energy tax credit, which was set to expire in 2014, was renewed at the last minute in December. That means homeowners who made energy-based improvements to their homes last year were eligible to receive a tax credit for 10% of the cost, up to $500 lifetime. Whether this popular credit is renewed for another year, however, is anyone’s guess. A whopping 30% tax credit toward the cost of solar energy systems, residential wind turbines, and geothermal heat pumps is in effect through 2016.

Your state or city may offer even more benefits, from no-interest loans to rebates, so do some research when you invest money improving the efficiency of your home — you may save even more money than you expected.

Many states and local utility companies also provide home energy audits for free or at a discount. Someone will thoroughly inspect your home to find where you’re wasting energy. They’ll look for air leaks and uninsulated pipes, test the efficiency of your heating and cooling equipment, and even replace any older incandescent light bulbs for free.

19. Develop a home maintenance checklist, and run through it for the first time.

One final tip: Create a home maintenance checklist. This list should include regular home maintenance tasks that you’d want to do on a monthly, quarterly, or annual basis. Then, make it a habit to run through the items on this list every so often. Doing so will extend the life of almost everything in your home, saving you buckets of money over time.

This article was originally published on TheSimpleDollar.com

11 Ways to Save for a Down Payment

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On the path to home ownership, few tasks seem more insurmountable than having to save for a down payment. The median asking price for U.S. housing in 2018 was just over $206,000, according to data from the U.S. Census Bureau. For that price, competitive buyers are expected to put down between $20,600 and $41,200—no small chunk of change for most people. Stagnant wages and student loan debt have made it more difficult than ever before to save for a down payment, but plenty of people do it with careful savings plans. Read on for some actionable down payment advice, including 11 ways you can start building up the capital you need.

How much do you need to save for a down payment?

You may have heard that 20% is the gold standard when it comes to down payments, but in fact, many of today’s buyers are putting down closer to 5% or 10%. And if you’re a first time buyer who’s willing to take on the added cost of mortgage insurance, you can even get away with putting down just 3% of your total home’s purchase price as a down payment.

Keep in mind that the amount you need to save for a down payment varies greatly by your lender and your credit qualifications. To get a feel for your own situation, reach out to a mortgage broker. They’ll be able to pull your true credit score (not the one you see on a consumer report) and based on their expertise tell you how much you’ll likely be expected to put down.

How to save for a down payment

Whether you’re putting down $1,000 or $50,000, you’ve still got to figure out how to save what you need. Incorporate one or more of the following tips into your savings plan to start saving faster.

  1. Open a new savings account that’s just for your down payment

    Create a separate account with no linking debit card or checks that you can use solely for the purpose of saving for your down payment. Try to transfer a certain percentage of all incoming money into the account—every little bit makes a difference.

  2. Use cash instead of credit

    As much as you can, rely on cash for your everyday spending instead of a credit card. You’ll be more conscious of how much you spend and less likely to splurge on unnecessary or overpriced things, in turn helping you keep more money in the bank that you can put toward a down payment.

  3. Set achievable goals

    Again, even small amounts add up. Instead of focusing on one big number that you have to get to, break it up into smaller, more manageable amounts. Try to save just $100, then another $100, and so on. It will put things into perspective so that when you do manage to set aside $10 or $20 toward your goal you’ll actually recognize it for the accomplishment that it is.

  4. Create a budget

    One of the best things you can do for yourself when actively saving money for a down payment is determine just how much you have left over after necessities. This is the money you’ll be able to save from, after all. Set a budget that takes into account all of your monthly payments in order to help you make smart choices about how you spend the leftovers.

  5. Sign up for automatic saving plans

    Many banks will help you automatically save by rounding up the dollar amount on purchases you make and putting the extra into a savings account. It’s a no-fuss way to save money without having to even really think about it.

  6. Dedicate any extra income to your down payment

    Put any bonuses or cash gifts aside for your down payment instead of spending them as they come in. Even that $20 your grandma sent for your birthday is worth holding on to.

  7. Think, then spend

    Trying to save for a down payment doesn’t mean you have to completely stop spending money on things you enjoy, like clothes or concert tickets. But it does mean that you want to put more thought into buying those things that take you a few steps back from achieving your goal. For any purchase that isn’t a necessity, give yourself 24 hours to think about it and decide if it’s worth it. If it’s a really big purchase, give yourself a week.

  8. Put your spending into context

    It’s much easier to save money when you consider purchases in terms of how hard you had to work to pay for them. Is a designer bag really worth a week’s worth of work? Probably not, but a house certainly is.

  9. Remove temptation

    If you’re subscribed to marketing emails from your favorite brands or stores you’re baiting yourself to spend money on non-essentials. Click “unsubscribe” so less temptation ends up in your inbox and you can focus more on the purchase that matters most to you.

  10. Make shopping lists (and stick to them)

    Stores work hard to get you to buy more than you came for. Beat the system and save a ton of money by creating a list of what you need before you go and actually sticking to it. Yes, even if that means forgoing the oh-so-tempting dollar section at Target.

  11. Sell stuff you don’t want or need anymore

    Chances are you have plenty of things in your home that you never use. Put unneeded belongings to good use by selling them for cash online or with a yard sale. Not only will you make some money, you’ll also have less to pack up when you do finally save enough and make your move—a win-win!

Don’t look at a down payment as an impossible hurdle to jump over. Break it into small, digestible goals so that you can see your progress in action, and never lose sight of the reason you’re working so hard to save. If owning your own home is truly important to you, it will be more than worth it to pass on the expenses that bring you immediate gratification but take you further away from what you really want. Be smart in your spending and realistic in your home buying budget and you should be able to save up what you need.

This article was originally published on realtor.com

10 Lightweight, Versatile Furniture Pieces for Frequent Movers

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If you’re renting (or move frequently), you know how challenging it can be to get settled in a new space. Large, heavy pieces of furniture can get stuck in doorways and snagged on stairs. And even once they’re inside, some of your pieces may not work as well in the new space. What to do? Think small, versatile and easily mobile — starting with the 10 essential pieces straight ahead.

1. Love seat. Unlike a full-size sofa, this two-seater style can tuck in just about anywhere. In a small living room, use a love seat with a pair of small-scale chairs. Have more room? Add a second love seat. And if you spring for a full-size sofa down the road, you can still use that love seat in a master bedroom, home office, library or den.

2. Sleek media unit. Look for a media unit that fits a TV on top (or floating on the wall above) and has room behind cabinet doors for electronics and storage but not much else. All-in-one media cabinets designed to hold the TV inside will just add unnecessary weight and bulk to your next move. 

3. Rolling bar cart. A rolling cart can be used to house drinks and glassware to be sure. But it can also come in handy as a server in the dining room, extra storage in a rental kitchen, an impromptu bookshelf, portable arts and crafts station or towel valet in an apartment without a linen closet.

4. Stools, ottomans and poufs. Small stools and ottomans can be used as side tables, footstools, extra seats or, clustered together, a coffee table. Firm surfaces make the most versatile pieces, but soft poufs can be a handy addition as well — place a tray on top to turn a pouf into a functional table.

5. Butterfly chair. With leather or canvas stretched over a collapsible metal frame, a butterfly-style chair is both a design classic and a move-friendly space saver. Tuck one into the corner of the living room or bedroom, and when you need to move it, just fold it up and go.

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6. Extending table. A dining table that can extend in size gives you the ability to keep it small in a compact apartment but stretch it out for parties and special occasions. And if you move into a space with a larger dining area, you can use the same table in its extended state. 
A gateleg table, like the one shown here, is optimal for very tight spaces, because with both leaves down it transforms into a slim console table. If you have a bit more room, a good alternative to the gateleg table is an extending table with leaves.

7. Wicker or rattan headboard. A simple platform bed means you can skip the box spring (one less thing to move!), and you can go a step further by choosing a lightweight headboard made of wicker or rattan instead of solid wood or iron. Your back will thank you.

8. Small chests of drawers. A pair of small dressers is better than one large chest: They’re easier to lift and move and can fit in just about any space. Put two side by side in a large bedroom, or place them on adjacent walls if space is tight. 

Bonus: A small chest can stand in as a bar or buffet in the dining room or as a changing table in the nursery (with plenty of room for diapers inside).

9. Small bookcases. Small bookshelves that can be positioned horizontally or vertically offer the most options. If you have only a sliver of wall space, place the bookcase vertically; if you have a longer wall, or need to fit the shelves below a window, position it horizontally. As with dressers, it’s better to choose several smaller bookcases than a single massive unit that may or may not fit in your next place.

10. Daybed. A twin daybed can be used as a guest bed and as extra seating when guests aren’t staying over. Because it’s small, it fits well in a combo home office or nursery, or it can work as a window seat in the living room or on a sun porch. And while not super lightweight, daybeds do tend to weigh less than sofa beds and are typically more comfortable to sleep on.

This article originally appeared on houzz.com

10 Designer Tips on Preparing Your Home for the Holidays

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The holiday season is in full swing, which means it's time to entertain family and friends. Here, we share holiday home prep tips from some of our favorite interior designers on everything from crafting festive tablescapes to arranging a stylish bar for your celebrations.

Arrange a Stylish Bar.

"I always include vintage glassware from local antique shops when styling a bar. I love their patina and mixing shapes and colors. Vintage pitchers also work beautifully as vases and I prefer leaves and greenery to flowers. Of course, you can never have too many bottles of spirits and liquor, which are beautiful in their own right." – Jodi Morton, 2to5 Design.

Present Food in an Aesthetically Pleasing Way.

"We created a sweets table using colorful bowls to invite people into the magic of the holidays. The small iron Christmas tree with mercury glass ornaments and birds create shine, and the miniature papier mache horse, glittery white reindeer and candy sticks add a touch of whimsy. The different heights create layers and beautify the vignette. A delicious apple pie and holiday cookies are displayed on an interesting three-tiered platter and retro cake platform. The final touch is the natural pine branch, which conceals a delicious smelling candle!" – Barbara Elza Hirsch, Elza B Design, Inc.

Make a Statement with Dining Chairs.

"Dining chairs are the perfect opportunity to make a design statement – our pops of cherry red here deliver a festive ambiance, and it doesn't hurt that the color red encourages your appetite! Toss in some fresh cut greenery or branches from the garden for a natural, relaxed elegant touch. This look is a favorite; easy and fun – my two goals when entertaining." – Linda Banks, Banks Design Associates Ltd.

Craft Full, Yet Elegant, Dining Table Settings.

"Layering on a table gives dimension and here I used various heights and delicate proportions to complete the look. Having candles lit really brings in a feeling of warmth and the individual flowers in mini vases are a fun switch up from bouquets, and makes each guest feel special. I didn't want the decorative objects to obstruct views from having comfortable conversations across the table which these slim profiles allow for, and they also allow enough room for serving platters. The runner, placemats and linen napkins all have subtle metallic accents to glam up the simple and versatile dinnerware, flatware and glassware." – Rachel Simone

Minimalism Can Be Chic, Too.

"For me, a table centerpiece–whether flowers, candles or other decorations–should be simpler and unobtrusive. The focus is on the food and the guests. One should not overpower the other. There are so many places in a home to have your 'wow factor' and still get great impact while celebrating the holidays. I always like a table full of candles to add a glow and make your guests feel like they are still getting something special." –  J Randall Powers

Bring a Festive Vibe to Your Kitchen. 

"When styling your kitchen for the holidays, stay true to your style and search for what works in your home. Modern holiday decor in a traditional home doesn't make sense; nor does traditional decor in a modern home. This client wanted to keep the kitchen monochromatic, so the decor reflects that as well. A festive vibe can be created with some simple decor quite easily that way." – Tara Kantor

Incorporate Colorful Tabletop Items.

"Set the table with an element that provides some contrast in the space. A pop of color works wonders. These Baccarat tabletop items bring a classic dose of glamour and their signature red is the perfect holiday hue." –  Amy Lau

Embrace Accessories with Personality.

"I love to add additional layers of texture for holiday entertaining. Metallic touches like a tabletop object, silver tray or candlesticks add warmth and elegance when prepping for a soiree. I also like to layer in a fur throw or pillow, or an overlay rug to make a space feel extra warm and cozy during the holidays."  – Wendy Labrum

Have Ample Seating.

“The seating grouping is inviting, comfortable, and allows for easy entertaining. There are plenty of places to sit comfortably and converse while having a holiday drink or hors d’oeuvres. The coffee table and well-appointed drinks tables in this grouping allow for easy access and worry-free food or beverage placement. It's ideal for having family and friends over for the holiday season!” – Shelley Morris

Pay Attention to High-Traffic Areas, Including the Bathroom.

"Turn your bathroom into a beautiful space that will welcome and pamper your guests. Small, bright flower arrangements can be placed on a vanity, bench or the toilet tank. Change out waste baskets and tissue covers for some that make a bath feel finished. Splurge on special handcream, bath salts, sea sponges and handmade soaps. Use a tiny tray, clear glass containers or just a small wood stool or table to display them. A simple scented candle is a nice addition and make sure hand towels are displayed neatly."  – Sophia Shibles

This article was taken from Forbes.com

12 First- Time Home Buyer Mistakes and How to Avoid Them

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1. Shopping for a house first before a mortgage

Talk to a mortgage professional about getting pre-qualified or even preapproved for a home loan before you start to seriously shop for a place.

It’s more fun to look at homes than it is to talk about your finances with a lender. So that’s what a lot of first-time home buyers do: They visit properties before finding out how much they are able to borrow. Then, they are disappointed when they discover they were looking in the wrong price range (either too high or too low) or when they find the right home, but aren’t able to make a serious offer.

How to avoid this mistake: Talk to a mortgage professional about getting pre-qualified or even preapproved for a home loan before you start to seriously shop for a place. The pre-qualification or preapproval process involves a review of your income and expenses, and it can make your bid more competitive because you’ll be able to show sellers that you can back up your offer. 

Neal Khoorchand, broker-owner of Century 21 Professional Realty, in the South Ozone Park neighborhood of Queens, New York, pre-qualifies his clients before showing them properties.

“If you’re qualified for a one-family house for $500,000, we’re not going to show you a one-family for $600,000 — it would be a waste of time,” he says.

2. Not looking for first-time home buyer programs

As a first-time home buyer, you probably don’t have a ton of money saved up for the down payment and closing costs. But don’t make the error of assuming that you have to delay homeownership while saving for a huge down payment. There are plenty of low-down-payment loan programs out there.

How to avoid this mistake: Ask a mortgage lender about your options. You might qualify for a Veterans Administration or U.S. Department of Agriculture loan that doesn’t require a down payment. Federal Housing Administration loans have a minimum down payment of 3.5%, and some conventional loan programs allow down payments as low as 3%.

3. Not hiring a buyer’s agent

Work with an exclusive buyer’s agent, someone who has a duty to work in your best interests.

Some home buyers make the mistake of working directly with the seller’s real estate agent, who is obligated to secure the best price and terms for the seller. As a novice home buyer, you could be overmatched when negotiating with an experienced agent who’s working on the seller’s behalf.

How to avoid this mistake: Work with an exclusive buyer’s agent, who has a duty to work in your best interests. 

4. Using up all of your savings

If you buy a previously owned home, it almost inevitably will need an unexpected repair not long after. Maybe you’ll need to replace a water heater, repair a crack in the chimney or get rid of hidden mold.

“That’s a growing pain for the first-time homeowner, when stuff breaks,” says John Pataky, executive vice president of the consumer division of EverBank. “If they don’t have enough in back reserves, emergency funds, they find themselves in a hole quickly.”

How to avoid this mistake: Save enough money to make a down payment, pay for closing costs and moving expenses, and take care of unexpected expenses. This is easier said than done. But you can buy a home with a down payment of much less than 20%, allowing you to conserve your savings. 

5. Ignoring a home’s drawbacks

Write a list of the attractive and the unattractive qualities of each house, and pay attention to each home’s downsides.

A lot of first-time home buyers fall in love with one of the first properties they look at. They ignore the negatives of the house and its neighborhood.

But you can’t disregard the downsides forever. For example, you might think you’ll be OK with a long commute, but after a few months of spending too many hours stuck in traffic, you’ll wish you had bought a house closer to work.

How to avoid this mistake: Do two things. First, resolve to visit “10, 15, 20 houses” before making an offer, Khoorchand says, so you’ll be less likely to fall in love with the first or second or third home you look at.

Second, write a list of the attractive and the unattractive qualities of each house, and pay attention to each home’s downsides.

6. Being indecisive

The flip side of choosing a place too quickly is acting too slowly when you find the right home. In a market with more buyers than sellers, you have to move fast.

Khoorchand says he can talk all day about clients who “needed some time to think about it” and made an offer two or three days after viewing a house, only to discover that another buyer had swooped in and made a successful offer.

How to avoid this mistake: “Once you look at multiple houses, and you get a feel of the market and you know what the market is like and where the prices are at, and you see something you like, don’t hesitate to make an offer, because you and 10 other people will be interested in that same property,” Khoorchand says.

7. Overpaying for a house

First-time home buyers tend to pay more than experienced buyers would pay for the same house, according to research conducted by two economists with the Federal Housing Finance Agency. In their analysis of appraisal data from more than 1.7 million home sales, FHFA economists Jessica Shui and Shriya Murthy concluded that first-timers overpay by an average of 0.79%, which was nearly $2,200 per house, according to the data set they examined.

Shui and Murthy pointed to the inexperience of first-time home buyers. Real estate agents say newbie buyers let their emotions take over, too. “You tend to overlook potential negatives and only look at the positives of a particular house,” says Jim Murrett, president of the Appraisal Institute, an association of real estate appraisers.

How to avoid this mistake: Ask your agent for a competitive market analysis, a report that looks at the prices of comparable nearby homes that have been sold recently. And it helps to fully understand the real estate process, so seek homebuying advice from a certified HUD housing counselor.

8. Skipping the home inspection

It’s a mistake to buy a previously owned home without an inspection because there could be expensive, hidden damage.

In some markets, a lot of buyers compete for a small number of properties for sale. In these strong seller’s markets, buyers are tempted to waive a home inspection. It gives them a competitive edge over smarter buyers who wouldn’t dream of forgoing an inspection before plunking down hundreds of thousands of dollars for a home.

It’s a mistake to buy a previously owned home without an inspection because there could be expensive, hidden damage that you wouldn’t spot but an inspector would.

How to avoid this mistake: Simple: Hire a licensed home inspector. Your real estate agent will gladly make a recommendation.

9. Underestimating the costs of ownership

After you buy a home, the monthly bills keep stacking up. This can come as a surprise if you’re not ready.

“It’s not just your mortgage payment,” says Seth Feinman, vice president of Silver Fin Capital, a mortgage brokerage in Great Neck, New York. “You’re going to have the oil bill, the gas bill, you’re going to have a cable bill, you’re going to have all these things that the bank doesn’t care about when qualifying you for a mortgage.”

Renters often pay these kinds of bills, too. But the new home could have higher costs — and it might come with entirely new bills, such as homeowner association fees.

How to avoid this mistake: Work with a real estate agent who can tell you how much the neighborhood’s property taxes and insurance typically cost. Ask to see the seller’s utility bills for the last 12 months the home was occupied so you have an idea how much they will cost after you move in.

10. Miscalculating repair and renovation costs

Assume that all home repair estimates are low. Seek more than one estimate for expensive repairs, such as remodeling.

First-time home buyers are frequently surprised by high repair and renovation costs. Buyers can make two mistakes: First, they get a repair estimate from just one contractor, and the estimate is unrealistically low. Second, their perspective is distorted by reality TV shows that make renovations look faster, cheaper and easier than they are in the real world.

How to avoid this mistake: Assume that all repair estimates are low. James Ramos, owner of Re/Max Bay to Bay, a real estate brokerage in Tampa, Florida, recommends doubling the estimates to get a more realistic view of costs.

Seek more than one estimate for expensive repairs, such as roof replacements. A good real estate agent should be able to give you referrals to contractors who can give you estimates. But also seek independent referrals from friends, family and co-workers so you can compare those estimates against ones you receive from contractors your agent refers.

11. Applying for credit before the sale is final

It’s a mistake to get a new credit card, buy furniture or appliances on credit or take out an auto loan before a mortgage closes.

One day, you apply for a mortgage. A few weeks later, you close, or finalize, the loan and get the keys to the house. The period between is critical: You want to leave your credit alone as much as possible. It’s a mistake to get a new credit card, buy furniture or appliances on credit or take out an auto loan before the mortgage closing.

Here’s why: The lender’s mortgage decision is based on your credit score and your debt-to-income ratio, which is the percentage of your income that goes toward monthly debt payments. Applying for credit can reduce your credit score a few points. Getting a new loan, or adding to your monthly debt payments, will increase your debt-to-income ratio. Neither of those is good from the mortgage lender’s perspective.

Within about a week of the closing, the lender will check your credit one last time. If your credit score has fallen, or if your debt-to-income ratio has gone up, the lender might change the interest rate or fees on the mortgage. It could cause a delay in your closing, or even result in a canceled mortgage.

How to avoid this mistake: Wait until after closing to open new credit accounts or to charge furniture, appliances or tools to your credit cards. It’s OK to have all those things picked out ahead of time; just don’t buy them on credit until after you have the keys in hand.

12. Missing the first mortgage payment

Sounds hard to believe, but it’s not rare for new homeowners to be late with their first monthly payment, or to miss it altogether, says Neil Garfinkel, a real estate attorney with Abrams Garfinkel Margolis Bergson in New York City. “Maybe you didn’t fully understand the process. You thought it was being auto-deducted but it’s not being auto-deducted. You didn’t get the bill in the mail. Whatever. Those first couple of payments, from a credit perspective, are really, really important,” he says.

How to avoid this mistake: At the real estate closing, ask when the first mortgage payment will be due and write it down. Ask how you will receive notice that the payment is due: A coupon book? A letter in the mail? An email or a text? Then, look out for that notification.

In many cases, the mortgage servicer — the company that bills you, collects the payments and makes sure the principal, interest, taxes and insurance all go to the right places — will mail you a welcome letter with these details.

This article originally appeared on nerdwallet.com

6 Maintenance Tasks You Should Tackle While Selling Your Home

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If you're a homeowner, you already know that keeping your property in tiptop shape requires dedication and patience for ongoing maintenance. But what if you've put your home on the market, or even accepted an offer? Perhaps you're thinking: Not my problem anymore.

Sorry, folks, we've got news for you: Just because you’re selling doesn't mean you're off the hook from routine maintenance tasks—and that's especially true if you’ve already vacated the house.

Sure, a well-cared-for house shows better: Small things like broken doorbells and leaky faucets make buyers wonder if your property also has bigger issues elsewhere. But more important, a little routine maintenance can help you avoid a catastrophic problem down the line (e.g., burst pipes, roof leaks, critters moving into your attic) that could devalue your property and derail that sale.

1. Keep up the yard and walkways

Whether you're still living at the home or not, you'll want to make sure to keep your landscaping tidy—remove dead tree limbs, rake leaves, and clean out flowerbeds.

If your home is already vacant, have someone tend to the yard regularly so that grass and weeds don’t detract from your home’s appearance, suggests Kyle Hiscock, a Realtor® with Re/Max Reality Group in Rochester, NY.

“If your home does not have a well-maintained exterior, (potential buyers) will keep driving,” he cautions. “Plus, this kind of neglect can be a bull's-eye for vandals to break into your property.”

Consider having lights on timers so the house doesn’t look dark all the time, and arrange for driveways and walkways to be plowed weekly in the winter months. And don't let mail pile up in the mailbox.

2. Clean the gutters and check the roof

This one's easy to forget about, even when you don't plan on going anywhere. But when it comes to gutter and roof issues, neglect can cause a dangerous domino effect.

Overflowing gutters can damage your foundation, and also lead to drainage issues. And, of course, you don’t want buyers seeing puddling water as they approach your house.

Just ask Alise Roberts, owner/broker at Alise Roberts & Company in Bellevue, WA. In the rainy Pacific Northwest climate, she frequently has to remind her clients to keep sidewalks clear of moss and clean gutters of pine needles and leaves.

"Buyers, seeing the house when it’s raining, will also see your gutters overflowing," she says. "That’s a terrible first impression.”

And then there's the roof. Of course, it'll be examined during the home inspection, but it would behoove you to do it before putting your home on the market. Small roof cracks can remain undetected for years, causing water to slowly infiltrate your home and damage ceilings and walls.

“If water starts to penetrate a property, it can be a very difficult sale," Hiscock notes. "Water in basements or in homes is one of the top three things buyers are scared of.”

3. Service your heating systems

It’s not sexy, but the hidden guts of your home need regular attention, whether you’re still living there or not. That means having your HVAC systems professionally serviced.

First up, your furnace: If you get it addressed before you list your home, it won't smell like dust when you crank up the heat during an open house on a chilly day. While you're at it, have the duct work and filters cleaned as well. And if you have baseboard heaters, vacuum those out, too.

(Speaking of heat, Roberts suggests keeping the thermostat at 66 degrees Fahrenheit when agents are showing your house so buyers can visit your place comfortably. This will also avoid any issues with pipes freezing or bursting.)

Have a chimney? Be sure to have it inspected and cleaned as well.

“You want to make sure there are no cracked flue tiles, and that from the exterior, there are no gaps in the mortar between the bricks,” Hiscock explains. “Otherwise, you could potentially have the chimney fall over onto the house, and that’s a very expensive fix.”

4. Keep the critters out

If you don’t want to add "family of raccoons included" to your listing (and pay the hefty tab for getting them out), inspect the inside and outside of your home for any areas that need to plugged up. Take care of holes from damaged siding or fascia under the roofline—and do it promptly.

“In a colder climate, squirrels look for somewhere warm to go, and they’ll find their way into your property,” Hiscock says.

Stove and dryer vents, for example, should be covered with wire mesh to deter pests.

5. Wash your windows

Most people associate sparkling windows with spring-cleaning, Roberts says. But if your house is on the market, it doesn't matter what time of year it is—you need to get those babies squeaky clean.

“If buyers walk through your home and all they see is dirty windows, that’ll really mar the showing process," she says.

Make sure to wipe them down after a bad storm, when they're especially likely to show muck and grime buildup.

6. Check the calendar

Depending on what time of year you bring your house to market, pay attention to any details that scream, "We don’t live here or care anymore," Roberts says.

That means tackling seasonal tasks such as clearing away lawn mowers in the fall and storing shovels in the spring.

“Too often, I see a seller’s patio furniture still outside during the winter time. To me, that's not a good reflection on the property,” Hiscock says. “It shows deferred maintenance and lack of caring, and can really turn off a potential buyer.

"If a seller can’t put away their patio furniture and lawn mower, what makes you believe that they've actually maintained the property all the years they've been there?” he adds.

Staying on top of these regular tasks will make it easier to sell your home with fewer headaches. Plus, it'll preserve the value of your property, and potentially, the thickness of your wallet, too.

6 Reasons There Aren't Enough Homes on the Market

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Almost anyone who has searched for a house recently knows there are not enough houses for sale.

One simple number defines the problem:

In October 2017, the nation had a 3.9-month supply of existing homes for resale. That means, at the pace seen then, it would have taken 3.9 months to sell all the homes on the market. A supply under six months puts home buyers at a disadvantage.

“Inventory is tighter than it appears. It’s much lower for entry-level buyers,” said Sam Khater, deputy chief economist for CoreLogic, a data provider for the real estate industry. He spoke at the Urban Institute’s annual housing finance symposium on Nov. 1.

Why don’t millennial, first-time buyers and Generation X move-up buyers have more to choose from? Who is responsible for the shortage of homes for sale and why? We’ve identified some suspects.

1. Boomers won’t move

More than three-quarters of baby boomers own their homes. For millennials to buy their first homes, and for homeowning Gen Xers to move up to their second home, boomers have to sell. But boomers are staying put.

Realtor.com conducted a survey this year that found that 85% of boomer homeowners planned to stay put over the next 12 months. “The reasons for that could be that they’re living longer, they’re living healthier and so staying in place is more possible for them,” says Danielle Hale, chief economist for Realtor.com.

“[Baby boomers] have been slower than previous generations to sell the family home, thus exacerbating the shortage of houses for sale,” concluded a Freddie Mac research report.

Also, thanks to rising home prices, would-be downsizers can’t find smaller homes that cost much less than their current homes, says Dennis Cisterna, chief executive officer of Investability Solutions, a real-estate investor marketplace. So they stay put. “There’s no urgency to sell right now unless you have to,” he says.

2. Landlords won’t sell

Millions of single-family homes were converted to rentals after the foreclosure crisis, Cisterna says. “Those investors have no incentive to sell,” he says. When a house goes up for sale, “now you’re competing not only with your neighbor who wants to buy that house, you’re also competing with investors.”

Renters made up 36% of households in the third quarter of 2017, up from 31% in 2005, according to the Census Bureau.

With greater demand for homes, but less supply, home values rise. Meanwhile, rents are rising faster than home prices. “Both of those factors would tend to encourage landlords to hold onto those homes and rent them out,” Hale says.

3. Owners are hooked on low mortgage rates

Over the last three years, the interest rate on outstanding mortgages averaged just 3.8%, according to the Department of Commerce. People savor their low mortgage rates and don’t want to give them up.

So as mortgage rates rise, homeowners tend to keep their homes a little longer, said Frank Nothaft, chief economist for CoreLogic, at the Urban Institute symposium.

“That means the inventory of homes for sale, which is already very low, is likely to remain that way if we see higher interest rates,” Nothaft said.

4. Builders ignore entry-level buyers

Through the first nine months of 2017, about 473,000 newly constructed houses were sold, according to the Census Bureau. Fifty-five percent of those homes cost $300,000 or more. “Of the new homes that we are building, the vast majority are move-up products,” Cisterna says. “They’re not for the entry-level buyer anymore.”

Builders counter that they pay $45,000 for a typical buildable lot nationally and around three times that in New England. And they say they face a shortage of skilled construction labor because experienced workers dropped out of the construction trades during the Great Recession, younger people aren’t replacing them, many job applicants can’t pass drug tests, and immigration enforcement is scaring some laborers away.

5. Regulations add costs

Homebuilders say regulations — including environmental protection, infrastructure fees and rules that specify minimum lot sizes — add tens of thousands of dollars to the cost of every home. Regulations account for about one-quarter of the cost of each home, said Michael Neal, assistant vice president for forecasting and analysis for the National Association of Home Builders.

A Freddie Mac report concurred. “Land-use regulations have become more burdensome” in the last 30 years, making it costlier to build, it said. Freddie Mac found that it takes just 3.5 months to get a building permit in lenient New Orleans, whereas it takes 17 months to get a building permit in restrictive Honolulu. A longer permitting process costs money as developers carry the investments on their books while awaiting permission to build.

6. Owners want to restrict supply

Local zoning and land-use regulations aren’t bestowed by a hidden hand. They’re enacted by officials who were elected by the people. When planning and zoning officials limit the number of houses that can be built in a neighborhood, or when they set minimum square footage for houses, they’re limiting the supply of homes and making them more expensive. They’re responding to constituents.

“There are regulations that are more about the neighbors’ sensibilities than they are about the safety of the people living in the houses,” says Miriam Axel-Lute, associate director of the National Housing Institute, a nonprofit that examines how social issues affect housing.

“It’s neighbors who want their property values to go up, in most cases, who are insistent upon some excess safety design standards or minimum lot sizes or other things,” she says. “They either want their property values to go up or they don’t want, quote, ‘the wrong sort of people’ in their neighborhoods. This is the pressure behind a lot of the most damaging regulations out there.”

How can home buyers respond?

Clearly, it will take time and concerted effort to fix the problem of not enough houses for sale. Meantime, there are things home buyers can do:

  • Be realistic about how long it will take to find and buy a home. Real-estate agents can provide an estimate, based on market conditions.
  • Save plenty of money for a down payment and reserves.
  • Improve your credit score to get a good mortgage deal.
  • Be ready to make a competitive offer when a suitable home comes on the market.

That advice works for any real-estate market, whether it favors sellers or buyers. But these tips are especially appropriate when inventory is low.

 

This article originally appeared on NerdWallet

6 Near Genius Ways to Fool Burglars Into Thinking You're Home

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Your home: You love it, but sometimes you have to leave it.

 

Whether it’s the eight hours a day or eight days on a dreamy beach, allowing your biggest investment to fend for itself can be stressful. And it’s a legit concern; when your home looks empty, break-ins happen. A lot. Ugh.

You could deter burglars by never leaving your house again. Or you could do the next best (OK, way better) thing, and just make it look like someone is there all the time. Here’s how.

1. Light Up a Room (From the Road)

Your parents may still rely on their lighting timer — on at 8 p.m., off at 7 a.m. That old-fashioned option still works, but apps are more fun. They not only turn your lights on and off, but can do so randomly for a more realistic effect. And you can decide to flip on your porch light while sipping a mojito in Fiji.

You can Google your options, but one affordable example is the Lutron Caséta Wireless system (about $80 for the device and $55 per switch). You replace your current wall switches with these wireless ones and “talk” to your lights from afar.

2. Fake a Netflix Binge

Nothing says “we are definitely home” like the colorful glare of a television dancing in the window. Put the little FakeTV gizmo where it can project light onto a curtain, and that’s exactly what your home will say to passersby. The device (which runs between about $20 and $40 depending on size) plugs into an adapter and can either work on a timer or with a light sensor, so it can switch on when it gets dark.

3. Change Up Your Shades Remotely

Leave your window shades down while you’re gone and you might as well put out a “Gone Fishin’” sign.

Check out wireless options to throw some shade on the go. Several companies have systems — including Hunter Douglas PowerView, Pella Insynctive, and Lutron Serena — that allow shades to go up and down at your command for about $300 to $500 a window.

4Make Some Noise

Burglars can change plans in a hurry at the first sound of life inside a home — they’re a bit tetchy that way. So, one option when you’re just gone for the day is a noise app, like Sleep And Noise Sounds that can play on a homebound phone, tablet, or computer. With noises like vacuuming and a boiling kettle, it can deter a thief who cracks open a window.

5. Make Them Ring And Run

“Burglars will often ring your doorbell, and if no one answers, they’ll go around back and kick in the door,” says Deputy Michael Favata with the Monroe County Sheriff’s office in New York. Now you can answer the door with the Ring Video Doorbell ($180 for the basic model).

If someone pushes the doorbell, you can talk to them through an app on your phone. Whether it’s your nosey neighbor or a sketchy stranger, you can say, “I’m in the basement” while you’re really on the slopes. They’ll never know. And even if they don’t believe you, they know they’re being watched (insert devilish laugh here).

6. Try a No-Tech Technique

Not everything requires a gadget. Here are ways to up your home security without downloading a single app:

  • Hire a house sitter. Then someone will be home.
  • If there’s snow, have a neighbor walk up and down the path to your door, shovel a passage up to the garage door and drive in and out of the driveway. If it’s hot out, ask them to keep your plants looking fresh with regular waterings. And don’t forget to bring them a nice gift from your getaway.
  • Ask friends, family, or neighbors to just be present on your property — use your patio, play in your yard, or bring in the mail.
  • Invite a neighbor to keep a car parked in your driveway. During the holidays, they may be happy if they need overflow for visitors.
  • Install a fake security camera for as low as $8. Burglars may not notice these fakes don’t have all the wiring necessary to be real. And their blinking red lights offer reasonable doubt.
  • Get a dog. A real dog. While you’re at work or running errands, nothing deters bad guys and gals like a barking, slobbery security guard. And when you go away, having a pet sitter stay can be as economical as some boarding facilities (especially if you have multiple dogs), and you’ll get the benefit of a human and canine sentinel.

These tips were pulled from an article on CAR.org

 

 

7 Home Staging Tricks to Make a Small Room Look Huge

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When it comes to home staging, there's really one golden rule: Make your space look bigger to would-be buyers. And perhaps nowhere is that concept more vitally important than in the living room—the place where homeowners tend to spend most of their time entertaining and relaxing, and where potential buyers will be placing extra scrutiny.

But you don't have to knock down walls or spend a small fortune to make things look big. Fortunately, there are a few quick and relatively affordable ways to maximize your living room's first impression, even when the square footage is lacking.

1. Don't leave your living room empty

This one might seem counterintuitive, but it's worth considering: "An empty room gives buyers no point of reference for size," says designer Kristie Barnett.

"I have seen many buyers walk away from a vacant home because they falsely believe their own furniture will not fit in the master bedroom or that the living room will not provide enough seating for entertaining," she adds. "Staging rooms helps establish the room's size and helps a buyer visualize how they can arrange their own furniture."

But don't just shove some furniture in the living room and call it a day. There's actually a science to arranging your stuff in a way that makes the room feel bigger.

Most buyers scan a room from left to right upon entry, "just like the way we read," Barnett explains. If you place the tallest piece of furniture in the far left corner, the room will appear larger than if that same piece of furniture is closer to the entry. Placing a large or tall piece of furniture near an entryway or door tricks the eye into thinking a space is smaller than it is, so keep taller items in corners or eliminate them altogether.

2. Carefully consider your seating scheme

Choose a focal point—a fireplace or windows with a view are the usual suspects, but maybe yours is a great piece of art or a family heirloom—and position your seating arrangement around it. And remember: You want prospective buyers to imagine themselves actually living in and using your space, so your seating concept should be functional.

“A well-staged room has a singular definable purpose and a focal point,” says interior designer Susan Anthony of Susan Anthony Interiors. “The purpose of a living room is to socialize, so the seating should encourage sitting and talking.”

That means carefully considering how your room flows.

“You never want a buyer to walk into a room that's blocked or overloaded with heavy furniture,” says Caryn Benoit, co-owner of Nicole Jocelyn Staging & Design in Boston. “Make sure you’re not walking into the back of a large sofa, no chairs are in your way, and there aren’t other pieces of furniture in walking paths.”

3. Scale down your furniture

This should come as no surprise, but you never want to fill your small space with a truckload of huge stuff; you'll dwarf the space, naturally.

“Instead of a sectional or large sofa, use a love seat, a wedge sofa, or a semicircular sofa that curves inward,” says Michelle Ellis, owner of e-commerce retailer Cottage & Bungalow. “Using smaller furniture leaves more white space, which will make the room seem larger.”

Another alternative: Choose a piece that looks airy in a material like wicker or rattan (both of which are typically in high supply at retailers such as HomeGoods and Marshalls).

Beware, though, not to go overboard with the tiny pieces. Too many can make a room look cluttered and, therefore, smaller. Less is more here, folks.

4. Build around your largest piece—and edit ruthlessly

“Making the most of a small place can be difficult,” says Nicola Croughan, lead interior designer for Roman Blinds Direct. “You need to weigh up functionality with style.”

Her advice?  Assess the room for your largest piece (likely your sofa), and judge every other item in the room against it.

“Think, ‘Does this serve a purpose, either functional or decorative?’” Croughan says. “If you can’t come up with an answer immediately, it’s not worth keeping.”

While you're at it, ditch bold, busy pieces of artwork for more neutral, unobtrusive prints, and get rid of the clunky family photos on the mantel. Remember: The goal is for your space—not your trinkets—to do the talking.

Pro stagers also nearly universally recommend ditching TV sets, which occupy a lot of visual real estate. The only exception?  A wall-mounted, flat-screen TV that's appropriately sized to the room (that's the kicker).

5. Balance color

You don't need to slather your walls in an uninspiring, institution-evoking white. You can have some fun with it. But you'll need to follow some basic rules to avoid overwhelming the space.

First, and perhaps the most obvious, you'll want to nix dark or bold paint colors, which make cramped spaces feel tighter—or at least use them sparingly.

"You can definitely do an accent wall in a bolder color, but all four walls in navy blue will be oppressive," says Bee Heinemann, an interior design expert at Vant Wall Panels.

"Brighter colors need to be repeated to be balanced well—especially in a smaller space," adds Anthony. "If the rug is red and everything else in the room is various shades of neutral, add red to the pillows and accessories."

When it comes to ceiling colors, choose a shade that's lighter than your walls to give the impression of openness, Heinemann advises. And for extra credit, match your wall color to larger (lighter-hued) pieces of furniture, which Heinemann says makes the latter blend in and seem smaller.

6. Use the right materials

"When it comes to furnishings, materials like glass and metal, which reflect light and feel more airy, give a greater sense of space than dark, heavy wood pieces," Heinemann says.

Avoid heavy bookshelves and try floating shelves instead. Then, embrace your inner Marie Kondo and declutter their contents by at least 60%.

7. Lighten up

An abundance of natural light tricks the eye into thinking a space is larger. To maximize light, keep your window treatments minimal with a simple roller shade, Croughan says.

If you must have curtains, choose a lightweight, airy fabric such as voile or linen and mount the rod as close to the ceiling as possible to create the illusion of height. For darker rooms, hang mirrors to reflect the light you have.

The 9-to-5er's guide to keeping your house clean

If cleaning the house seems like one big chore, you're probably doing it wrong. Before you put off cleaning for another month, here are some ways to make housework a comfortable and even enjoyable part of your daily routine.   Start small   If you begin and end each day with a little picking up, you'll never get swamped with housework again. Keeping a clean house begins with good habits like making your bed every morning and doing your dishes while you cook. Nobody wants to navigate through a minefield of yesterday's mess to make coffee, so never allow yourself to go to sleep with dirty dishes or a disheveled living room. Before you leave for work in the morning, take one to two minutes to tidy up. That way you can look forward to returning to a clean and stress-free house.   Enjoy yourself   Even the most reviled of household chores can be enjoyable if you have headphones or a portable speaker. Truth be told, cleaning the house is a hidden source of me time you will eventually grow to love.  For example, if you think vacuuming kind of sucks, listen to an energetic playlist of your favorite songs and sway to the music like nobody's watching. If you haven't had much time to read lately, listen to audiobooks and podcasts while you do the dishes. If you're a parent and miss watching movies and shows without singing princesses, prop up your phone or tablet and use some wireless headphones to do a little binge watching. Yay for chores!   Simplify your chore list   Rather than making a never ending list of unattainable projects, break it up into manageable, bite-sized pieces.  Get a blank sheet of paper and make four columns: Daily, weekly, monthly, and yearly. Everyday chores like making the bed, picking up the house and doing the dishes can go in the daily column. Chores like vacuuming and dusting can go in either the weekly or monthly column, depending on what's realistic for your lifestyle. Reserve the yearly column for big projects such as cleaning the oven, shampooing the carpets, or wiping down fan blades.   Even if you fall behind on your chore list, seeing it all laid out on one page will reduce your anxiety and make procrastination a thing of the past.   Stock your cleaning caddy   Instead of using one caddy to store all your cleaning supplies, only fill it with what you'll use on a weekly basis: spray bottles of all purpose cleaner and window cleaner, paper towels, a rag, dusting cloth, scrub brush, heavy duty sponge, and an old toothbrush to get into hard to reach places.   To ensure that you'll actually use the caddy, keep it in your bathroom so it's easily accessible.Store specialty kitchen cleaning products (stainless steel and cooktop cleaners) in the kitchen, and keep big bottles of bleach, vinegar and floor cleaner in the garage. And of course, keep any cleaning products out of the reach of young children.   Multitask   Even though your sink is caked with toothpaste, soap scum and beard stubble, you still haven’t found the time to clean your bathroom lately. Well, fellow procrastinators, here’s a little secret: You can wipe the sink while you get ready in the morning! Keep a roll of paper towels underneath the sink so you can wipe the countertop and basin whenever you brush your teeth.  To keep the shower clean, fill a hollow dish scrubber with a mixture of half dish soap and half vinegar, keep it in the shower and scrub the tiles a little every time you shower.  To spot clean the kitchen floor and put off mopping another week, save any damp paper towels whenever you clean the kitchen counters. Before throwing them out, use them to clean up messes on the floor.   Aim for finished, not perfect   Nobody’s going to go over your cleaning job with a fine-tooth comb, so don’t bother sweating the small stuff. The goal is to make cleaning an attainable habit that fits in nicely with your busy lifestyle; worrying about not doing a good enough job will only make you procrastinate more.  Another problem is biting off more than you can chew. If mopping the whole house at once seems too daunting a task for one afternoon, settle for the kitchen floor for now. You can always move on to another room if you feel the urge.

If cleaning the house seems like one big chore, you're probably doing it wrong. Before you put off cleaning for another month, here are some ways to make housework a comfortable and even enjoyable part of your daily routine.

Start small

If you begin and end each day with a little picking up, you'll never get swamped with housework again. Keeping a clean house begins with good habits like making your bed every morning and doing your dishes while you cook. Nobody wants to navigate through a minefield of yesterday's mess to make coffee, so never allow yourself to go to sleep with dirty dishes or a disheveled living room. Before you leave for work in the morning, take one to two minutes to tidy up. That way you can look forward to returning to a clean and stress-free house.

Enjoy yourself

Even the most reviled of household chores can be enjoyable if you have headphones or a portable speaker. Truth be told, cleaning the house is a hidden source of me time you will eventually grow to love.

For example, if you think vacuuming kind of sucks, listen to an energetic playlist of your favorite songs and sway to the music like nobody's watching. If you haven't had much time to read lately, listen to audiobooks and podcasts while you do the dishes. If you're a parent and miss watching movies and shows without singing princesses, prop up your phone or tablet and use some wireless headphones to do a little binge watching. Yay for chores!

Simplify your chore list

Rather than making a never ending list of unattainable projects, break it up into manageable, bite-sized pieces.

Get a blank sheet of paper and make four columns: Daily, weekly, monthly, and yearly. Everyday chores like making the bed, picking up the house and doing the dishes can go in the daily column. Chores like vacuuming and dusting can go in either the weekly or monthly column, depending on what's realistic for your lifestyle. Reserve the yearly column for big projects such as cleaning the oven, shampooing the carpets, or wiping down fan blades. 

Even if you fall behind on your chore list, seeing it all laid out on one page will reduce your anxiety and make procrastination a thing of the past.

Stock your cleaning caddy

Instead of using one caddy to store all your cleaning supplies, only fill it with what you'll use on a weekly basis: spray bottles of all purpose cleaner and window cleaner, paper towels, a rag, dusting cloth, scrub brush, heavy duty sponge, and an old toothbrush to get into hard to reach places. 

To ensure that you'll actually use the caddy, keep it in your bathroom so it's easily accessible.Store specialty kitchen cleaning products (stainless steel and cooktop cleaners) in the kitchen, and keep big bottles of bleach, vinegar and floor cleaner in the garage. And of course, keep any cleaning products out of the reach of young children.

Multitask

Even though your sink is caked with toothpaste, soap scum and beard stubble, you still haven’t found the time to clean your bathroom lately. Well, fellow procrastinators, here’s a little secret: You can wipe the sink while you get ready in the morning! Keep a roll of paper towels underneath the sink so you can wipe the countertop and basin whenever you brush your teeth.

To keep the shower clean, fill a hollow dish scrubber with a mixture of half dish soap and half vinegar, keep it in the shower and scrub the tiles a little every time you shower.

To spot clean the kitchen floor and put off mopping another week, save any damp paper towels whenever you clean the kitchen counters. Before throwing them out, use them to clean up messes on the floor.

Aim for finished, not perfect

Nobody’s going to go over your cleaning job with a fine-tooth comb, so don’t bother sweating the small stuff. The goal is to make cleaning an attainable habit that fits in nicely with your busy lifestyle; worrying about not doing a good enough job will only make you procrastinate more.

Another problem is biting off more than you can chew. If mopping the whole house at once seems too daunting a task for one afternoon, settle for the kitchen floor for now. You can always move on to another room if you feel the urge.

10 Things Every Homeowner Should Know Before Disaster Strikes

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If a disaster were to strike your home right now, would you know what to do? What would your first move be—besides, you know, panicking?

If we've learned anything recently, it's that hurricanes, earthquakes, and wildfires can affect anyone—at any time. So it's probably a good idea to take a quick refresher on how to help yourself during an emergency. Granted, no one likes to imagine themselves in the midst of a natural disaster. But a little preparation could prevent damage to your home, make processing claims easier—and, most importantly, save your life.

Here’s what every homeowner needs to do now that will help you if disaster strikes later.

1. Make sure your smoke detectors work

Whether because of damaged electrical wiring or generators being used improperly, “fires tend to happen around natural disasters,” warns Tom Heneghan, senior program manager for Disaster Cycle Services at the American Red Cross.

Make sure that your smoke detectors are properly placed inside your home—and that they work. If they’re hard-wired, make sure they also have battery backup. (You can change the batteries each time daylight saving time begins and ends.) And don’t forget to replace the detectors themselves every 10 years—the sensors go bad over time, Heneghan says.

2. Memorize your escape plan

Everyone in your family should know not one, but two ways to get out of the house fast, Heneghan says. Then, set up a safe meeting place nearby—like the elm tree across the street or a neighbor's porch—and arrange to meet there once you’re out.

3. Know where to access your most important belongings

Social Security cards, birth certificates, wedding and baby photos ... if you have to evacuate quickly, you shouldn't be running through your house trying to remember where you keep these precious things.

Instead, your most valuable possessions should live in a fireproof safe or a container you can quickly grab on your way out of the house, Heneghan says.

4. Be prepared to survive for a few days on your own

“Have a grab-and-go kit ready to go at the foot of your bed," Heneghan advises. "A flashlight, water, and all-purpose tools can go a long way."

Don’t forget a battery-powered or hand-crank radio, which will help you to communicate with the outside world and keep up with local breaking news, even when the power's out.

“It's important to follow the directions of your local officials,” Heneghan says. They’ll be able to tell you, for instance, if your water is safe to drink, if and when you should leave your home, and where you can go for help.

5. Know how to deal with your utilities

“If you smell natural gas, see downed power lines, or suspect another emergency situation, leave the area immediately,” says Teresa Young, a spokesperson for Pacific Gas and Electric.

Call 911, then call your utility company. Alert everyone nearby, and head to an upwind location.

“Don’t use anything that could be a source of ignition, including cellphones, flashlights, light switches, matches, or vehicles until you’re a safe distance away,” Young adds.

Although your gas can be turned off at the main gas service shut-off valve, experts don't advise attempting this unless you smell or hear gas, see a broken gas line, or suspect a leak. (In which case, you really should get the heck out of there anyway.)

It's also wise to know where your main electric panel is. In an emergency, you can flip the main breaker switch inside to turn off all the power in your house. But use common sense. For instance, if your panel's located in a flooded basement, you shouldn't go anywhere near it until an electrician gives you the all-clear.

6. Anchor your heavy furniture

Live in a fault zone? Don't wait until "the big one" hits to anchor your heavy shelves to the walls. Not only will these tip over and hurt you, Heneghan says, but the various tchotchkes on them could become projectile missiles as well.

7. Read your insurance policy

Do you have flood insurance? Are you protected against earthquake damage? Now's the time to make sure you're covered.

“If your home was impacted by a major disaster, you may be eligible to apply for federal assistance,” says Jenny Burke, a Federal Emergency Management Agency spokeswoman.

That said, any grant money you're eligible for might not cover all your damage. Or, you might only qualify for a loan that will need to be paid back.

8. Estimate how much everything in your home costs—and will cost to replace

One of the most common mistakes homeowners make, Burke says, is not documenting and insuring property, valuables, and critical documents.

Get ahead of the game by taking video or pics of all of your belongings—that means everything from your grandmother’s diamond ring to your sectional couch to your juicer. If your home is damaged during a natural disaster, this inventory can help prove to your insurer what you own and speed up processing of your claim.

9. Get to know the people you'll count on

Now's a great time to meet your neighbors.

“You’ll really depend on each other during and after an emergency,” Heneghan notes. “Who’s near you who will need help? Who can help you?”

Get friendly with your block now.

10. Know that you got this

Panic might be your default setting in an emergency, but when you freak out, you lose the ability to think clearly and help yourself and others around you. Learn some coping mechanisms before you truly need them, even if it's just taking a few deep breaths and asking yourself, "What can I do right now?"

You can also download one of the Red Cross' free apps for advice on handling common first-aid emergencies, tracking weather alerts, and other tips on preparing for specific emergencies.

Sure, it's scary to think about being stuck in a natural disaster. But being prepared will help you panic less.

These tips were pulled from an article on realtor.com

Everything You Need To Know About HOA Fees

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There are lots of things that you might expect to pay for as part of your monthly mortgage payment. You have the principal and interest on the loan as well as the taxes and insurance. If your property is located within a homeowners association, chances are, you’ll also have to pay a homeowners association fee.

What’s the purpose of a homeowners association (HOA)? What do HOA fees cover? What are the pros and cons of buying in an area with an HOA? Finally, what questions should you be asking the association before you buy? We’ve got the answers.

Why a Homeowners Association?

If you’re looking at buying a home, one of the advantages of moving into an area with an HOA is that they take care of much of the basic maintenance and service functions associated with owning your home.

A good way to think about this is that you take care of everything on the interior of the property, and the association typically takes care of most things on the exterior of the property.

One thing to be aware of is that since the HOA is taking care of the exterior, they often have regulations regarding the look and feel of the outside of your home. There may be certain things you can and cannot do, such as putting up a fence, a personal pool, etc. It’s something to consider.

So, where are your HOA fees going?

What Do HOA Fees Cover?

Each association has different policies. This is why it’s wise to ask the seller for a list of the HOA rules and regulations. If the seller doesn’t have one available, you can ask for the name of the property management company that oversees the community in order to get more details.

In general, these are some of the costs that can be covered by HOA fees:

  • City services: Services such as trash removal, water and sewage are often covered.
  • Insurance: This only includes insurance for damage to the outside of the building and the property around it. You still need an individual insurance policy to cover everything inside the condo.
  • Lawn care: This usually includes snow removal, gardening and general lawn maintenance.
  • Pest control: Many HOAs schedule a monthly inspection from a pest control company in order to avoid pest infestations.
  • Maintenance and repairs to the outside of the building: This includes things such as roof leaks, exterior painting, driveway pavement repairs and so on. It also covers the cost of gym or pool maintenance, etc., if applicable.

If you don’t mind paying HOA fees every month and like the convenience of having some labor-free amenities, purchasing a condo or home within a neighborhood association might be the best option for you.

Who Decides on HOA Fees?

If you’re considering moving into a community with an HOA, one of your considerations should definitely be how much the fees are. But what goes into determining the fees, and who decides on them?

There are some things the homeowners association may not have as much control over as you would think. Property values are experiencing a general upward trend right now. If property values go up over a certain threshold, you’ll have to pay more for insurance for the exterior, and your association will have to raise the dues. A similar effect will happen if the price of certain services goes up due to inflation.

That’s not to say you don’t get any input on what your dues are. HOAs hold meetings at least once a year. You can go to these meetings and make your voice heard. If you want, you can run for the association’s board and help negotiate the prices you pay for the services the HOA provides.

Questions You Should Ask of Your HOA

If you’re looking at getting into a community with an HOA, there are a few key questions you should ask of the association in order to properly compare one community to another.

Services

One of the first things you should ask is what services you’ll be getting for your dues. Some associations have more maintenance commitments and benefits than others.

If you like to cut your own lawn for example, this is also a good time to ask whether you can opt out of services that you ordinarily wouldn’t pay for.

Fee Structure

You should definitely ask what the fees are. But it goes a bit beyond that as well. Occasionally, a homeowners association will have a big expense that’s not part of your normal dues. Let’s say the roof on the clubhouse needs to be re-shingled or a pool has to be resurfaced.

Your HOA should collect a certain amount to fund these maintenance projects as part of your normal dues, but if the reserves don’t cover the entire cost, the association may have the community vote on whether there should be a special assessment. You should check into how regular fees and these special assessments are voted on and when they’re due.

Finally, make sure you really check into what the rules are. If you fall behind on your dues because of temporary financial trouble, what powers does the association have? Depending on the way the bylaws are written, it’s not uncommon for the association to have the ability to put a lien on your house. You should also see if they have a way for you to get on a payment plan to get back in good standing.

9 Home-Buying Costs Veterans and Active Military Should Keep In Mind

For veterans and active military, VA loans are a great way to achieve the dream of homeownership. More than 22 million service members have used these flexible, no down payment loans since 1944.  But when people hear “no down payment,” they often don’t realize they'll still need some cash on hand to finish the deal.  While the amount you need to close will vary according to your location and situation, experts say you can usually expect to need about 3% of the purchase price on hand to close.  Want to break it down? Here are some home-buying costs that veterans and active military shouldn’t overlook.  1. Credit report  Buyers will often pay this fee, which runs, on average, about $30, to their lender when they first apply for a loan. Be aware that this fee is nonrefundable even if the loan doesn’t close.  2. Earnest money  The earnest money deposit is key to the home-buying process. It essentially allows you to put a "hold" on a house while you conduct the inspections and appraisal. Without earnest money, you could theoretically make offers on many homes, essentially taking them off the market until you decided which one you liked best. As the name suggests, it shows that you are earnest about moving forward on the purchase.  “The seller wants that buyer to have some money in the game when they take the house off the market,” Chubirko explains.  Depending on where you live, you can expect to put down anywhere from 1% to even 10% of the home’s purchase price as earnest money. (In some highly competitive markets, buyers are making even larger deposits in an effort to stand out.)  But don't worry! Whatever you put down for earnest money will go toward your down payment and closing costs as soon as the deal goes through. (If the deal falters, you could lose some or all of your deposit, depending on the reason why the agreement tanks.)  3. Appraisal  All VA loans require an appraisal to ensure the property is up to acceptable standards and meets the VA's Minimum Property Requirements. What does that mean? Well, an appraiser will calculate the square footage, confirm the property is worth the price you're offering, and that it's safe, structurally sound, and sanitary. Among other things, the appraiser will check for safe mechanical systems, acceptable roof life, and hazard-free basements and crawl space. VA buyers will often pay for the appraisal upfront, but they may be able to recoup the cost at closing.  4. Home inspection  While the appraisal is required, a home inspection is technically optional (except for a pest inspection, which is required in certain states and can cost roughly $50 to $150). But you never want to take a pass on the inspection, unless you're buying a tear-down (not with a VA loan!).  The home inspection is your all-too-crucial opportunity to uncover any problems with the house before you make it official. It's also your chance to point out repairs you can ask the seller to make on your behalf (and those repairs could cost much more than the inspection itself, which is going to run about $300 to $500.)  5. Recording fees  Recording fees must be paid out of pocket at the time of closing. This is the fee you pay the county to record your mortgage in the public record, and the cost varies from county to county.  6. Real estate transfer taxes  These costs vary by state—from none in Indiana, to a $2 flat fee in Arizona, to $2 per each $500 in value in New York. States, counties, and municipalities collect these taxes to transfer the title of the property from the previous owner to the new owner.  7. Title insurance  Title insurance protects you (and your lender) in the event there are title issues from previous owners of the home. The average cost of title insurance is around $1,000 per policy, but that amount varies widely from state to state and depends on the price of your home.  8. HOA fees  If you buy a home in an area where there is a required homeowners association, you will need to pay the application fee, which is variable depending on the local rules. Then there are your monthly dues. For a typical single-family home, HOA fees can cost homeowners around $200 to $300 per month, although they'll be lower or much higher depending on the size of your unit and the amenities.  9. Loan origination fees  An origination fee is one of several that will make up your closing costs. The VA allows lenders to charge up to 1% of the loan amount to cover origination, processing, and underwriting costs.  The bottom line? While VA loans are a great option for any veteran hoping to buy a house, being prepared before you apply will ensure no surprises throughout the process.  These tips were pulled from an article on  Realtor.com

For veterans and active military, VA loans are a great way to achieve the dream of homeownership. More than 22 million service members have used these flexible, no down payment loans since 1944.

But when people hear “no down payment,” they often don’t realize they'll still need some cash on hand to finish the deal.

While the amount you need to close will vary according to your location and situation, experts say you can usually expect to need about 3% of the purchase price on hand to close.

Want to break it down? Here are some home-buying costs that veterans and active military shouldn’t overlook.

1. Credit report

Buyers will often pay this fee, which runs, on average, about $30, to their lender when they first apply for a loan. Be aware that this fee is nonrefundable even if the loan doesn’t close.

2. Earnest money

The earnest money deposit is key to the home-buying process. It essentially allows you to put a "hold" on a house while you conduct the inspections and appraisal. Without earnest money, you could theoretically make offers on many homes, essentially taking them off the market until you decided which one you liked best. As the name suggests, it shows that you are earnest about moving forward on the purchase.

“The seller wants that buyer to have some money in the game when they take the house off the market,” Chubirko explains.

Depending on where you live, you can expect to put down anywhere from 1% to even 10% of the home’s purchase price as earnest money. (In some highly competitive markets, buyers are making even larger deposits in an effort to stand out.)

But don't worry! Whatever you put down for earnest money will go toward your down payment and closing costs as soon as the deal goes through. (If the deal falters, you could lose some or all of your deposit, depending on the reason why the agreement tanks.)

3. Appraisal

All VA loans require an appraisal to ensure the property is up to acceptable standards and meets the VA's Minimum Property Requirements. What does that mean? Well, an appraiser will calculate the square footage, confirm the property is worth the price you're offering, and that it's safe, structurally sound, and sanitary. Among other things, the appraiser will check for safe mechanical systems, acceptable roof life, and hazard-free basements and crawl space. VA buyers will often pay for the appraisal upfront, but they may be able to recoup the cost at closing.

4. Home inspection

While the appraisal is required, a home inspection is technically optional (except for a pest inspection, which is required in certain states and can cost roughly $50 to $150). But you never want to take a pass on the inspection, unless you're buying a tear-down (not with a VA loan!).

The home inspection is your all-too-crucial opportunity to uncover any problems with the house before you make it official. It's also your chance to point out repairs you can ask the seller to make on your behalf (and those repairs could cost much more than the inspection itself, which is going to run about $300 to $500.)

5. Recording fees

Recording fees must be paid out of pocket at the time of closing. This is the fee you pay the county to record your mortgage in the public record, and the cost varies from county to county.

6. Real estate transfer taxes

These costs vary by state—from none in Indiana, to a $2 flat fee in Arizona, to $2 per each $500 in value in New York. States, counties, and municipalities collect these taxes to transfer the title of the property from the previous owner to the new owner.

7. Title insurance

Title insurance protects you (and your lender) in the event there are title issues from previous owners of the home. The average cost of title insurance is around $1,000 per policy, but that amount varies widely from state to state and depends on the price of your home.

8. HOA fees

If you buy a home in an area where there is a required homeowners association, you will need to pay the application fee, which is variable depending on the local rules. Then there are your monthly dues. For a typical single-family home, HOA fees can cost homeowners around $200 to $300 per month, although they'll be lower or much higher depending on the size of your unit and the amenities.

9. Loan origination fees

An origination fee is one of several that will make up your closing costs. The VA allows lenders to charge up to 1% of the loan amount to cover origination, processing, and underwriting costs.

The bottom line? While VA loans are a great option for any veteran hoping to buy a house, being prepared before you apply will ensure no surprises throughout the process.

These tips were pulled from an article on Realtor.com

Everything You Need To Know About FHA Loans

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1. What is an FHA Loan?

An FHA (Federal Housing Administration) loan is a mortgage insured program that allows borrowers the possibility of homeownership when other programs may not. FHA loans are a great way to turn the American Dream into a reality! Mortgage insurance will be paid by the borrower and while it may have a bad rap it’s what allows the FHA loan to be possible by protecting the lender from a loss if the borrower defaults on the loan.

2. How do I qualify for an FHA Loan?

Anyone can qualify for an FHA loan if the meet the FHA requirements.  Borrowers will need a 3.5% down payment and a credit score of 580 or higher OR a 10% down payment and a credit score above 500. The lower the credit score the more the borrower will pay in interest. FHA loan requirements are not as strict as other mortgage programs.

3. What are the FHA Loan requirements for buyers?

For buyers, an FHA loan is going to require a 3.5% - 10% down payment. It will also require you to pay mortgage insurance over the life of the loan which isn’t as bad as it sounds. You will also be required to have a credit score of over 500 (580 to qualify for the 3.5% down payment program).

4. What is the minimum credit score for FHA Loans?

The minimum credit score for FHA loans is 500 with 10% down payment and 580 with a 3.5% down payment. This means that people with bad credit can still afford a home! The lower your credit score the higher your interest rate will be. The FHA loan is a great loan for folks with low credit scores to be able to buy a home (albeit while paying a premium).

5. What is the difference between FHA and Conventional Loans?

There are several differences between FHA and Conventional loans. The main difference is that an FHA loan has a greater likelihood that people can qualify while conventional loans may be a bit more challenging. FHA loans require 3.5% down while Conventional loans require 5% down. FHA loans will have mortgage insurance over the life of the loan. Conventional loans require at least 20% equity in the home. Once you have paid down the mortgage balance to 80% of the home’s appraised value call the lender and ask them to cancel PMI. They are not required to remove PMI until the balance reaches 78%. That’s a big saving for you so make sure to call!

6. What is the maximum amount for FHA Loans?

The max amount of an FHA loan depends on what county you live in. The current limit in Los Angeles is $625,000.

7. Can closing costs be included in FHA loans?

In short, yes, your closing costs can be included in an FHA loan. There are specific sets of rules that apply to including closing costs in an FHA loan. You still need to bring a minimum 3.5% down payment. If the seller is paying part of your closing cost expenses another set of FHA rules kick in: “The seller and/or third party may contribute up to six percent of the lesser of the property’s sales price or the appraised value of the buyer’s closing costs, prepaid expenses, discount points and other financing concessions."

8. Are there income limits for an FHA Loan?

No. There are no income limits or restrictions that prohibit you from qualifying for an FHA loan. As long as you meet the other FHA requirements and guidelines you have the opportunity to use an FHA loan to help when purchasing a home.

9. Can you use an FHA Loan for new construction?

Yes. You can use an FHA loan for new construction no matter if the home is to be built or is an inventory home ready for move-in. The same FHA requirements and guidelines will apply to this loan known as the ‘one-time close.’ The one-time close allows lenders flexibility to offer FHA loans to borrowers who want to build a new house, buy a manufactured or modular home. The FHA one-time close allows lenders to dictate what types of homes will be included in their one-time close guidelines.

10. Can I refinance an FHA Loan?

Yes. You can refinance an FHA loan to a conventional loan or even a different FHA loan. Refinancing an FHA mortgage to conventional loan makes sense when your goal is to remove the mortgage insurance from your FHA loan. In some cases, especially when you intend to own the home for a long time, refinancing an FHA loan can make sense. There is a large cost to refinancing though! 

11. Can I use an FHA Loan after bankruptcy?

Borrowers are typically ineligible for an FHA loan after Chapter 7 bankruptcy until two years have passed. There are times when a medical emergency or a death to a spouse, or any other life-altering event can cut the wait time down to one year. It takes three years for an FHA loan if you had a foreclosure, short sale or deed in lieu of foreclosure.

 

Study: FSBOs Don't Save Real Estate Commission

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One of the main reasons why For Sale By Owners (FSBOs) don’t use a real estate agent is because they believe they will save the commission an agent charges for getting their house on the market and selling it. A new study by Collateral Analytics, however, reveals that FSBOs don’t actually save anything, and in some cases may be costing themselves more, by not listing with an agent.

In the study, they analyzed home sales in a variety of markets in 2016 and the first half of 2017. The data showed that:

“FSBOs tend to sell for lower prices than comparable home sales, and in many cases below the average differential represented by the prevailing commission rate.” 

Why would FSBOs net less money than if they used an agent?

The study makes several suggestions:

  • “There could be systematic bias on the buyer side as well. FSBO sales might attract more strategic buyers than MLS sales, particularly buyers who rationalize lower-priced bids on with the logic that the seller is “saving” a traditional commission. Such buyers might specifically search for and target sellers who are not getting representational assistance from agents.” In other words, ‘bargain lookers’ might shop FSBOs more often.
  • “Experienced agents are experts at ‘staging’ homes for sale” which could bring more money for the home.
  • “Properties listed with a broker that is a member of the local MLS will be listed online with all other participating broker websites, marketing the home to a much larger buyer population. And those MLS properties generally offer compensation to agents who represent buyers, incentivizing them to show and sell the property and again potentially enlarging the buyer pool.” If more buyers see a home, the greater the chances are that there could be a bidding war for the property.

    Three conclusions from the study:

  • FSBOs achieve prices significantly lower than those from similar properties sold by Realtors using the MLS.
  • The differential in selling prices for FSBOs when compared to MLS sales of similar properties is about 5.5%.
  • The sales in 2017 suggest the average price was near 6% lower for FSBO sales of similar properties.

Don't Buy a House in 2018 Until You Read This

How to Prepare to Buy a House in 2018

Step 1: Check your Credit Score

This step is important if you are planning to take a mortgage or home loan. To qualify for a mortgage and get the best terms possible, you need to have a good credit score.

There are a lot of great websites online that can help you understand where your credit score is at (creditkarma.com is a great one). The scores aren't always 100% accurate so take them with a grain of salt. Using the mobile app on my phone I'm able to understand the strengths and weaknesses of why my score is the way it is. Try not to close your older credit accounts because these give you a good average length of credit history. 

A credit score is simply a representation of your credit worthiness. FICO credit scores range from 300 – 850. A higher credit score is always better when taking out a mortgage. You are bound to get the best interest rate (lowest interest rate possible) and best loan terms if your credit score is 740 or more. The interest you pay for your loan is important because it dictates the entire cost of the loan. Furthermore, getting a rate that is .25% lower can translate to thousands of dollars in savings every year for the entire term of your mortgage. 

Step 2: No New Credit Cards

When preparing to buy a house, you should also stay away from new credit cards even if they come with irresistible benefits. This is highly recommended since opening new credit lines can hurt your chances of qualifying for a mortgage, and if by any chance you are eligible for a mortgage, you won’t get the best rate. New credit lines usually change mortgage loan application numbers. To make sure your mortgage loan application numbers stay the same, avoid new credit lines by all means. You should also avoid overusing existing credit going forward to avoid getting bad terms in the future. 

What are the benefits of the credit card? Can you call your bank and see if there is any way to get around using a credit card until you have purchased the new home? This will allow you to have the highest credit score possible when it comes time to get a mortgage.

Step 3: Find a Mortgage Lender

Before you start looking for a home to buy, you need to get a mortgage lender first. This step is critical because it lets you know the kind of home you can afford to buy. It saves you the time, money and headaches during the home buying process. It also makes sense to start a conversation with a mortgage lender well in advance of you buying a home because they can help prepare you for the actual application process.

Finding a good mortgage lender is easy, though it requires a lot of effort and that's the hard part. You can start by asking your bank if you have established a good relationship with them what are the best steps you can take for a mortgage approval? Next, you will want to compare products. Each lender and bank will have different products they can offer certain types of people so don't settle for the first one. Look at all of your options and choose the one that makes the most sense for you!

Step 4: Get Preapproved

Serious buyers make a pre approval their first step when buying a home. This is because they are serious and know that if they are going to buy a house they will need it. As with most markets, if you try to buy a house in this market you're going to compete with a lot of other buyers.

Before you can approach potential home sellers, you have to get pre approved which simply tells the seller you are capable of buying the home in question. Getting preapproved is easy. You just need several documents. Typically, you will need your tax returns and W-2 forms for the past year or two. You’ll also need your current paycheck stubs for three or more months as well as a list of your debts and assets. Other documents such as proof of mortgage/rent payments may be required as well. Once you get pre approved, it’s important to avoid making big purchases, missing debt payments and changing jobs as you wait to get a mortgage to avoid altering information in your mortgage application.

Step 5: Find A Great Real Estate Agent

Before you find the house you need to find a great real estate agent and this is more important now than in previous years. With so much information online it's hard to believe what's real and what isn't. A great Realtor will help you navigate the world of real estate. Often people will be willing to see a house with anyone who will show it to them. Strong Agents are going to have tougher barriers that you need to break through because they are in high demand.

Often people will be willing to see a house with anyone who will show it to them. Strong Agents are going to have tougher barriers that you need to break through because they are in high demand. It's worth working with someone who is good, that has good reviews, than it is working with someone random. Do your research.

When someone asks to see a home for sale in a competitive market, we typically require a phone call or in-person meeting beforehand to help learn if we are the right fit for that client. This is a benefit to the client as it is to us. We make a commitment to our clients not to work with too many clients at once because that would jeopardize our ability to work for them.

Once you are pre-approved, you can get yourself a good real estate agent to help you find the perfect home for you. Real estate agents are easy to find today regardless of your location. You can use referrals, relatives or the internet to get the best real estate agent in your area. This step is important since real estate agents are knowledgeable about real estate. They offer useful support on all matters relating to real estate from finding the right house to negotiating and closing. 

Step 6: Find a Great House

Start with the location you want.

A lot of folks in our area are basing their home purchase in 2018 on school districts. Finding a great house doesn't necessarily make you dependent on a school district, though it does make sense for families who make it a priority.

Determining your priorities is going to help you find a great house. Have a list of 'must haves' and stick to it while being reasonable. Understand that most homes are not going to have everything you want and if it does then you should act quickly. When you find a great house, don't wait, make an offer on it because if you don't, someone else will.

Step 7: Don’t Forget about the Closing Costs

Even if you are a first time home buyer with a 0% down payment loan you need to remember that bringing money to closing is often required. Most people don't realize that closing costs can be around $5,000 when you include the attorney, lender, inspection, and other fees. Remember, as the buyer you don't pay any Realtor fees.

If you're buying a home in 2018 you should start the conversation now. Begin saving up for your down payment, your closing costs, and have a cash reserve for a rainy day!

It’s also important to discuss with your agent on ways of reducing closing costs. However, if you hire a reputable real estate agent, you have nothing to worry about. 

Summary

Buying a house is challenging if you don’t understand the process. The above steps give a great overview to how best prepare when buying a house in 2018. The information may vary slightly depending on location as well as the mortgage lender you choose.

If you're buying a home with a significant other you will want to start preparing for that as well. There are a lot of additional steps to take and the laws will vary by state on how it works. Consult with a Real Estate attorney if you have any questions on how to take title.

12 Things That Make a Neighborhood Truly Great

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1. Lifestyle match

Is the neighborhood in sync with your current lifestyle? Both renters and homebuyers tend to gravitate to areas with similar demographics. Just as a fantastic suburban neighborhood in a gated community may not be right for a young single professional, a family with three small children might not find a small condo in a hip downtown neighborhood to be the best fit for their lifestyle.

2. Pride in ownership

Pride in ownership is obvious when the residents maintain their homes and care about their neighborhood. Neighbors connect and create local groups that bring the residents together for the betterment of the area.

3. Low crime rate

Low crime rates give a neighborhood a sense of ease and calm. Crime rates are a quick way to tell if a neighborhood is improving or not, since everyone is concerned with safety and security. You can usually spot a transitional and improving neighborhood by the improvement in its crime rates.

4. Great schools

For homeowners and renters with children, great schools top the list of what makes a great neighborhood. Not only are great schools important for families with children, but they also make the surrounding neighborhoods more valuable and more sought after, keeping property values strong.

5. Outdoor activities abound

Being close to the outdoor adventures you love can sweeten the appeal of your neighborhood. Being close (or within a reasonable drive) to places to jog, sail, or pedal can keep you in love with your home. Proximity and access to tennis courts, neighborhood swim clubs, and golf courses are also qualities that keep your neighborhood on par.

6. Stepping back in time

There’s something about an area with history that makes it very desirable. Tree-lined streets give neighborhoods a charming, older, and established feel. These neighborhoods are usually very stable, with longtime residents and community support, which also helps encourage safety and low crime rates.

7. Access to medical care

Being close enough to get to a hospital or doctor’s office quickly is key for many people, especially for seniors, retirees, and families with young children.

8. Family-friendly

Neighborhoods where plenty of families live are a real draw for buyers with children. There are more opportunities for children to play, socialize, and make lifelong friends. Carpooling groups and other children’s programs are much more accessible when the neighborhood is overflowing with kiddos.

9. Close to public transportation

Easy access to public transportation is a fantastic plus for a neighborhood and an amenity for almost any lifestyle. From a commuting millennial to a retiree who wishes to keep the car at home, public transit is a solid upgrade to any neighborhood.

10. Nearby shopping and restaurants

If you want to join the hustle and bustle (and don’t want to cook dinner every night), having great restaurants, shopping, and markets in close proximity is a must!

11. Nightlife and entertainment

Is there a nearby town center or downtown with movies, theaters, bars, and nightlife? This could be the one thing that makes your neighborhood come alive. This is a priority for anyone who is young and single, but everyone appreciates a neighborhood where the hot spots are within walking distance or a short cab ride away.

12. Walkability

Being able to leave the car keys at home and hit the pavement to walk to markets, shopping, restaurants, parks, and all the other amenities your neighborhood has to offer can alleviate a lot of road rage … and make you fall even more deeply in love with your neighborhood.

These tips were pulled from an article on Trulia.com