Monday, July 26, 2010

How to Catch the Eye of the Buyer

When about 84% of home buyers start their search online, you know you need to have an Internet presence in order to sell your home!

But that presence needs to have a professional appearance! You can’t simply slap up casual photos or boring videos. They won’t do the “sell” job for you. So, here’s some advice on how make your property as attractive as possible on the Internet.

Guideline 1: Hire a Professional Photographer or Find a Realtor Who Uses One!

There’s simply no substitute for high-quality photos of your property, inside and out. And, frankly, most of us just can’t reach the level achieved by a professional photographer. So, use the services of one to make your house stand out.

He or she should take several photos inside and out, highlighting the most attractive features of the home. Of course, get shots done on sunny days and be sure to include photos of the most important areas of the house; i.e., kitchen, a bathroom, dining room and a bedroom. 
Then post the best photos (or have them posted) on an easily accessible site. It’s important to have a number of them online since potential buyers will pass over a listing with just one or two photos, feeling that they’re not getting enough information.

Guideline 2: Hire a Professional Videographer or Find a Realtor Who Uses One!

Video tours of your home are a great marketing tool. They’re dynamic and interesting to viewers – if done correctly. Also, such tours are very attractive to younger buyers who are familiar with such sites as YouTube.

I’m not saying you can’t film a video tour itself. In fact, it’s very easily done with YouTube. But, you need to ask yourself, “Do I have the talent for this?”

If you don’t and film a tour, then, frankly, the results can look very amateurish and may well end up turning off buyers who have high expectations of the videos they see online!

So, I recommend working with a professional videographer or with a realtor who has access to one. The money will be worth it. Of course, check out the videographer’s credentials first and ask for samples of their work. They should be able to send you to their own website where those samples are posted or to real estate listing sites on which their work is displayed.

Guideline 3: Work with a Realtor Who’s Knowledgeable about Social Media!

If you’re not familiar with the term “social media,” it refers to free Internet services like Facebook,YouTube, Twitter, etc. where people go online to socialize and get their messages out. A savvy realtor will link your video tour and photographs to all these sites, thus increasing the pool of potential buyers for your property and, again, tapping into a younger audience who may be the ideal customers for your home.

Need to know more about how to make the most of your Internet listing? Contact me immediately and let’s get started today! 

Friday, July 9, 2010

What’s the One Unbreakable Law of Real Estate?

“Perform due diligence!” is the one law you should never break in any kind of real estate deal – residential, multi-occupant, or commercial!

What is due diligence? It’s a common phrase for the evaluation of a property and its surrounding environment before you commit to buying it.

Due diligence has two objectives. First, you want to reduce or eliminate risk! Needless to say, you’ll be assuming a large loan and will want to know exactly what’s right or wrong with a property before you sink any money into it.

Two, due diligence allows you to uncover real bargains, especially for investors. On the surface, one property may look like a “loser,” but a closer inspection may reveal that the building is structurally sound and requires only minor and inexpensive maintenance and repairs.

One part of due diligence is what you’d expect – the physical inspection of the property and inspection of all documents and records concerning that specific property. The other part is the inspection of the documents and records concerning that property.

In this article, I’ll just talk about the physical inspection portion of due diligence.

Physical Inspection of Properties

Below, I’ve listed all the inspection tasks which should be performed by a professional inspector. Of course, you should visit the property as well. Many times, a quick “eyeballing” can reveal any obvious signs or poor maintenance or decay - a leaky roof, wet basement, foundation cracks, cracks in the walls, plumbing leaks, etc.. In those cases, you’ll know you don’t need to waste any further time on that property.

As I mentioned earlier, such an inspection may reveal that you’ve actually got a bargain on your hands instead of a “dog.” In such a case, you’ll want to purchase or invest in that property quickly.

What happens when you find problems in a property and still like it? Well, then, you can require that the seller correct those problems or reduce the price before you sign any contract.

In general, defects fall into two categories. One category contains the obvious defects – wet basements, peeling paint, broken windows, leaky plumbing, warped floors, etc.

The other category contains the more expensive and dangerous hidden defects. These can include corroded pipes in the walls, roof or window leaks that don’t show up until it rains or snows, subtle cracks in the foundation.

Obviously, you want to make sure these hazards are spotted before you ever sign a purchase agreement. They can cost you a lot of money in the long run, not to mention the fact that they can send your blood pressure through the roof!

What Do Professional Inspectors Look For?

Below are the items inspectors examine when they check a property:

• Overall structural integrity
• Property drainage/landscaping
• Walks and drives
• Foundation, footings, crawl space, basements, sub-flooring, decks
• Exterior walls, siding, trim
• Windows, doors, cabinets, counters
• Gutters, downspouts
• Roof, roof shingles, roof structures. chimneys, attic
• Floors, walls, ceilings, etc.
• HVAC systems
• Plumbing systems, (fixtures, supply lines, drains, water heating devices, etc.)
• Electrical system (wiring, service panel, devices, and service capacity
• Energy conservation/safety Items
• Insulation & ventilation
• Moisture intrusion/mold

And, of course, we can’t forget the voracious appetites of….bugs!

Pest Control Inspection

Depending on the area of the country in which you live, insects can cause a heckuva lot of damage to a property!

I’m talking about such bugs as termites, carpenter ants, powder post beetles, and any other insect that likes to munch on wood. Then, there’s fungus, in the form of “dry rot.” It can also cause a lot of destruction.
In such cases, you’ll need to hire the services of a specialist (pest control inspector) to examine the property.

If the operator identifies any problems, he or she should provide you with a diagram that pinpoints the location of the infestations. If serious problems exist, they need to be corrected immediately! The expense is usually paid for by the seller.

To protect yourself against any of the problems I mentioned above, ensure that the purchase contract provides for cancellation without penalty or loss of money if the physical condition of the property doesn’t meet standards.

So, there you have it – all the physical items you or an inspector should check on to meet the law of due diligence! Remember – never, ever break this law! To learn more about any special concerns for due diligence in our area, contact me today!

Thursday, July 8, 2010

For Your Clients: Interpreting a Home Inspection Report

RISMEDIA, July 8, 2010—A home inspection report is an important document that a potential buyer will have that accurately describes the conditions that exist in the house they are considering buying. It is crucial that your client receive a well written and detailed home inspection report and working with your client to interpret the inspection report can help eliminate confusion and indecision. This article will attempt to give you some guidance to assist your buyers with interpreting a home inspection report.

There are many styles of home inspection reports used by property inspectors, including a hand written checklist, a digital checklist or a computer generated report. But the most important aspect within an inspection report is the descriptions given for each system or component.

A typical home inspection report will be divided up into systems that make up the building. Each system is identified and a report on the condition of each system is delivered to the client.

A system is a group components assembled together through building techniques that make it complete. For example, a roofing system might be made up of several components such as rafters, sheathing, roof covering and flashing. The inspection report will identify the visual components that make up the system and report on their condition.

If there is an issue with the condition of the system or any individual component, the inspection report will comment on the type of deficiency and provide the buyer with possible recommendations such as replacing, repairing, monitoring or even bringing in a professional for further evaluation.

Deficient or defective items: If an item is deemed deficient in the inspector’s opinion, then it is either not functioning as intended, has come to the end its useful life expectancy or has deteriorated to the point that replacement or repair is imminent. An example of a deficient item may be a roof covering with severely cracked and curled shingles, even if there is no sign of leaking. The inspector may report this as deficient because the condition of the system is nearing the end of its useful life and replacement in the very near future is imminent.

Safety issues: If the inspector finds safety issues in the home, the report will reflect the nature of the safety issue—where in the home the safety concern was found and a recommendation to correct the safety concern. Safety issues can be minor in expense but important to the safety of the occupants of the home. For example, a bathroom without a GFCI (ground fault circuit interrupter) may only be $15.00 to repair, but the potential danger it poses for the occupants of the home would necessitate the item being tagged as a safety issue.

Maintenance: If a maintenance item is in the report, the inspector has determined that some maintenance is needed to prevent a safety issue or the deterioration of another part of the home. For example: If the inspector finds the gutters are full of debris but are properly attached to the home and in good condition, they might put that in the report because during a rain storm, the gutters would overflow, dumping large amounts of water next to the foundation of the home and eventually begin to erode the soil around the foundation.

Common terms used in an inspection report

-Recommend: The inspectors’ opinion of how to guide the client to resolve noteworthy issues found during the inspection. Common recommendations would be to replace, repair, monitor or evaluate.

-Visual inspection: The general scope of the inspection is limited to a visual inspection which means that the inspector is not required to disassemble equipment.

-HVAC: Heating ventilation air condition system.

-Condensate line: The copper pipe that runs from the outside air conditioning condenser to the inside furnace (where the A/C coil is located).

-Ductwork: A system of distribution channels used to transmit heated or cooled air from a central system (HVAC) throughout a home.

-Damper: An air valve that regulates the flow of air inside the flue of a furnace or fireplace.

-Pilot light: A small, continuous flame (in a hot water heater, boiler or furnace) that ignites gas or oil burners when needed.

-Accessible: Can be approached or entered by the inspector safely, without difficulty or danger.

-Blow insulation: Fiber insulation in loose form used to insulate attics and existing walls where framing members are not exposed.

-Board and batten: A method of siding in which the joints between vertically placed boards or plywood are covered by narrow strips of wood.

-Buckling: The bending of a building material as a result of wear and tear or contact with a substance such as water.

-Cantilever: A projecting beam or other structure supported only at one end. Any part of a structure that projects beyond its main support and is balanced on it.

-Cast iron: Heavy metal formed by casting on molds. The metal is covered with a porcelain enamel coating to make fixtures such as cast iron tubs.

-Ceiling joist: One of a series of parallel framing members used to support ceiling loads and supported in turn by larger beams, girders or bearing walls. Also called roof joists.

-Cellulose insulation: Ground-up newspaper that is treated with a fire retardant.

-Celotex: A brand of black fibrous board that is used as exterior sheathing.

-Flashing: Material used around any angle in a roof or wall to prevent leaks.

-Earthquake strap: A metal strap used to secure gas hot water heaters to the framing or foundation of a house. It is intended to reduce the chances of having the water heater fall over in an earthquake and causing a gas leak.

-Sump: Pit or large plastic bucket/barrel inside the home designed to collect ground water from a perimeter drain system.

-Sump pump: A submersible pump in a sump pit that pumps any excess ground water to the outside of the home.

-Trap: A plumbing fitting that holds water to prevent air, gas and vermin from backing up into a fixture.

-Knob and tube wiring: A common form of electrical wiring used before World War II. When in good condition, it may still be functional for low amperage use.

-BX cable: Armored electrical cable wrapped in galvanized steel outer covering. A factory assembly of insulated conductors inside a flexible metallic covering.

-Circuit breaker: A protective device which automatically opens an electrical circuit when it is overloaded.

-Ground-fault circuit interrupter (GFCI): A device intended for the protection of personnel that functions to de-energize a circuit

-Grounded: Connected to earth or to some conducting body that serves in place of the earth.

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Tuesday, July 6, 2010

7 Things All Borrowers Should Know About FHA Loans

RISMEDIA, July 3, 2010—FHA Pros, LLC, a national FHA condo approval service, has developed a list of facts speaking to the top misconceptions associated with FHA loans in order to help home buyers better navigate an already confusing market.

FHA loans are mortgages issued by qualified lenders and insured by the Federal Housing Administration (FHA).

“We have seen home buyer interest in FHA loans go from practically zero three years ago to upwards of 87% today,” said Christopher Gardner, founder and president of FHA Pros, LLC. “Despite this rapid rise in popularity, many buyers still do not fully understand the benefits of these loans, and we believe it’s time to change that.”

1. FHA loans are not only for lower-income borrowers. FHA loans are available to everyone. There is no maximum income restriction associated with FHA loans, but borrowers do need to substantiate income and assets by submitting proper documentation. This requirement ensures that borrowers are well-vetted and truly
able to afford their future homes.

2. FHA loans are not only for first-time buyers. Many people believe FHA loans are available only to first-time home buyers, but this is not the case. Whether borrowers are making their first home purchase or their fifth, they can look to FHA loans as a home financing option.

3. FHA loans are not just small loans; in fact, loan amounts can be as high as almost $800,000. The overnment recently raised the maximum loan amount from its original cap of $362,790 to $793,750 as a way to help stabilize the housing market. The amount a buyer can borrow varies from county to county though. Later this summer, condo buyers interested in FHA loans can visit to instantly identify FHA-approved condo associations and review maximum loan amounts for a given location.

4. FHA loans are not affiliated with the section 8 housing program. While both programs are administered by the U.S. Department of Housing and Urban Development (HUD), FHA loans have nothing to do with low-income subsidized housing. FHA loans are simply mortgages insured by FHA. This insurance provided by the federal government allows lenders to lend more freely by assuring them that they will be repaid in the event of default. Most traditional lenders, including Wells Fargo & Co., JP Morgan Chase and Citigroup are able to provide FHA loans to their customers.

5. FHA loans are often more affordable than conventional loans. While FHA loans typically offer the same interest rates as other loans, borrowers benefit from a much lower down payment of as low as 3.5%.

6. FHA-approved condo developments are more desirable to buyers. With 87% of home buyers indicating that they plan to use FHA loans, condo associations that are not FHA approved are missing out on a significant pool of prospective buyers. Under rules in place since February 2010, an entire condominium
development must now apply to HUD and be granted FHA approval before a buyer can purchase a unit in an association with an FHA loan or before an existing unit owner can refinance into an FHA loan.

Due to the general unwillingness of today’s lenders to extend credit with respect to conventional loans, many borrowers find that FHA is their best bet. Lenders don’t mind lending when the federal government (FHA) assures them of repayment. Homeowners associations (HOAs) should note that although FHA-insured mortgages might be easier to obtain, they are not “risky” loans, due in large part to the strict “full documentation” requirements placed on borrowers. Individual buyers or sellers can initiate the approval process or current owners can encourage their HOA to apply.

7. FHA loans are assumable. In addition to lower down-payment and credit-qualifying requirements as compared to conventional loans, FHA loans are assumable. This means that when a seller with an FHA loan sells his or her property, the loan and its financing terms (interest rate) can be transferred to the new buyer. This unique feature will certainly make a property more valuable in times of rising interest rates.

“Now, more than ever, buyers and sellers need to understand the options available to them when it comes time to buy a home,” continued Gardner. “At FHA Pros we have worked with countless HOAs, attorneys and individuals to easily and  efficiently navigate the historically tricky FHA-approval process.”

For more information, visit