First-Time Home Buyers: Tips to Make Your House a Home

RISMEDIA, June 21, 2010—After getting the keys to their new homes, many first-time home buyers are excited about finally having the opportunity to personalize and furnish their new house. From coffee tables to lamps to lawnmowers, many previous renters leap into homeownership quickly realizing they need to do a lot of shopping to truly make their house a home.

“Whether you’ve been living in an apartment with roommates or at your parents’ house, many first-time home buyers do not think about all the items they need – and want – when moving into a house,” said Janice Jones, national vice president of merchandising for Centex. “With a little advance planning and budgeting, you won’t break the bank to make your new home a reflection of your personal style and showcase your pride of homeownership.”

A typical home buyer spends $7,400 on average on their home, with more than half of that spent in the first year after purchase, according to the National Association of Home Builders.

While many first-time home buyers may not have accounted for this level of spending, Jones offers advice on what types of items to purchase to not only properly maintain and live in the home, but also more importantly, items that help new homeowners feel like their house is a place to call home.

Furnishings

Many first-time home buyers no longer want their parents’ hand-me downs or their childhood bedroom set. From sofas to dining room sets to mattresses, many first-time home buyers take the opportunity to upgrade their furniture when moving into their new home. According to an NAHB study, furnishings take the biggest chunk of the budget, with home buyers spending about $5,300 on furnishings during the first year after buying a home. The biggest ticket item for all households is bedroom furnishings, including mattresses, followed by sofas.

Window coverings and linens

The median square footage of homes bought by first-time buyers is 1,500. So, you can only imagine the number of windows that need to be covered to ensure privacy and security in a home. According to Jones, many home buyers don’t account for this in their budget. Additionally, with the ability to now paint and decorate each room, new homeowners find that they want to purchase new bedroom and bathroom linens.

Garden tools

Since a first-time home buyer is likely to move into their home from an apartment, unless you plan on hiring a gardener, you’ll need to purchase a few basic gardening tools, including a lawnmower, garden hose, sprinkler and a shovel (for winter weather).

Flat screen TV

Let’s face it: many home buyers shop for their new home while taking into a consideration how a new, large, flat-screen television set will be situated in their new living space. So, it’s not a surprise that a hot item on the list is purchasing an entertainment system.

However, you’ll also need the basic appliances in your new home: a refrigerator, stove, and a washer/dryer. While many existing homes usually come with appliances, a home buyer needs to take inventory as to whether or not they will need to purchase these big ticket items before they purchase their new bedroom set.

Basic tool kit

Every home needs a well-stocked tool box. Many home improvement stores have sets you can purchase, but make sure it includes a hammer, screw drivers, pliers, wrenches, a tape measure and a staple gun.
“My biggest piece of advice for new home buyers is to be creative and tackle this room by room,” said Jones. “For example, after outfitting your home with the necessary items—like appliances and window coverings—move on to the kitchen and family room spaces. This area is the heart of your home where everyone gathers.

“Look for great values on the items you need that will be utilized most. Take your time and get the feel of how you want to use each space for both function and enjoyment. This strategy allows homeowners to stage their purchases and add new furnishings as the budget allows. Decorating your new home should be fun and a reflection of your personal style.”

For more information, visit www.centex.com.

RISMedia welcomes your questions and comments. Send your e-mail to: realestatemagazinefeedback@rismedia.com.

Five Ways To Keep Your Kid Safe This Summer

Five Ways to Keep Your Kids Safe This Summer

By Kristen Gerencher



RISMEDIA, June 9, 2010–(MCT)–As summer approaches, so does the prime injury season for children. Parents have different ideas about how to keep their kids safe, but their assumptions don’t always match up with some of the biggest known threats.

“By far, the leading cause of death in children is injuries, and there’s a lot we can do to prevent those injuries,” said Garry Gardner, a pediatrician in Darien, Ill., and chairman of the American Academy of Pediatrics’ committee on injury, violence and poison prevention. “Injuries, in general, cause more deaths in kids over a year of age than the next seven leading causes of death combined.”

Parents shouldn’t underestimate their role in keeping their kids out of harm’s way, said Alfred Sacchetti, an emergency physician at Our Lady of Lourdes Medical Center in Camden, N.J. “You are the No. 1 safety feature that comes with your child.”

Here are some of the biggest safety risks for children during the summer and otherwise — and what you can do to minimize them.

1. Suffocation and strangulation.

This pair is the leading cause of unintentional-injury deaths in children under age 1, according to the Centers for Disease Control and Prevention.

How to reduce the risk:

Make sure your infant has a sleeping environment free of pillows and soft bedding, and put him or her to sleep on his back in a crib, rather than in a bed with adults. Also position the baby far away from loose or hanging cords.

Parents should use cribs with four fixed sides, rather than those with sides that drop down. With the latter, parts can more easily break, deform or detach, opening up spaces where youngsters can become entrapped and suffocate, according to the Consumer Product Safety Commission and Consumer Reports. Drop-side cribs have been responsible for 32 infant and toddler deaths in the past nine years, according to the Consumer Product Safety Commission, which has recalled 7 million such cribs since 2005.

Parents who use a drop-side crib should check the plastic slides regularly and tighten the hardware if necessary, said Don Mays, senior director for product safety at Consumer Reports. “If there’s any missing or broken hardware, get rid of the crib,” he said. “Don’t try to fix it yourself.”

2. Drowning.

Among children ages 1 to 4, drowning is nearly tied with motor-vehicle accidents as the leading cause of death. Incidents frequently revolve around swimming pools and bathtubs.

How to reduce the risk:

Never leave a child unattended in a bathtub or allow a kid to swim without supervision. Avoid making or answering phone calls; that’s the biggest distraction for parents when children are in a bath or pool, sometimes with fatal results, Sacchetti said.

Home swimming pools should have a fence that wraps around all four sides of the pool instead of having one side open to the house, he said. Having four-sided fencing plus a separate pool-entrance gate can greatly reduce the likelihood of a child falling in and drowning.

Swimming lessons for kids over six months old can be fun, but parents shouldn’t get a false sense of security because there’s no such thing as drown-proofing your child, Gardner said. “I would recommend touch supervision under the age of three or four,” he said, which means you’re supervising your child in the pool or lake and they’re only a hand reach away.

3. Motor-vehicle crashes.

Car accidents are the leading cause of death among children over one year old, according to the CDC. And they account for as many as two-thirds of deaths among teenagers and young adults age 15 to 24.

How to reduce the risk:

Using age-appropriate car seats is critical to boosting a small child’s chances of surviving a crash, according to the National Highway Traffic Safety Administration.

Infants from birth to at least age 1 and 20 pounds should ride facing backward in a car seat placed in the back seat. After that, children should ride in the back seat using forward-facing toddler seats and then booster seats until regular seat belts fit properly—usually not until age 8 or when they’re 4 feet 9 inches tall, the NHTSA said.

Parents can have their car-seat installation checked by a professional for free. The NHTSA’s website lists car-safety experts by area.

4. Other car-related accidents.

Nearly 42 percent of the nontraffic fatalities in children under age 15 between 2004 and 2008 happened because drivers backed over kids, who often were in the vehicles’ blind spots, according to Kids and Cars, a nonprofit that tracks such accidents. More than 18 percent of nontraffic deaths occurred because children got heatstroke after being left in cars. Other risks include power-window strangulation, trunk entrapment and vehicles that are accidentally set in motion.

How to reduce the risk:

Teach children not to play in or around cars and supervise them carefully around vehicles. Make sure kids aren’t around before pressing the gas pedal.

It doesn’t take long for a child left in a car to overheat and die. So drivers should put a stuffed animal in the front seat or a briefcase or purse in the back seat so they don’t forget about the child in the back seat. “It can get very hot, lethally hot, very quickly, and children should never be allowed to be alone in a car ever, even for a moment,” Gardner said.

5. Head injuries.

Brain injuries remain among the most devastating for patients.

How to reduce the risk:

Always use the proper car seat or seat belts. Make sure kids wear sport-specific helmets when they’re playing sports or riding bicycles or skateboards. A child’s aversion to helmets is no excuse for not wearing them, Sacchetti said. “Your responsibility is to be their parent, not their friend,” he said. “The one thing you can’t do is sacrifice their safety to make them like you.”

(c) 2010, MarketWatch.com Inc.Distributed by McClatchy-Tribune Information Services.

FHA203K Rehab Loans

An FHA loan can provide a great deal of help to many families, but not everyone knows exactly what is and who it helps. To start, “FHA” stands for Federal Housing Association. This is the organization that administers the loan, and it is also a part of the Department of Housing and Urban Development (HUD.) Since the FHA doesn’t provide the loan directly, the borrower must contact a financial lending institution to receive the loan.

What is Required?

The FHA does, however, investigate the applicant and insures the lending institution against loss of principal, just in case the borrow does meet all the guidelines of terms of the mortgage. The borrower, who pays an insurance premium of one half of one percent on declining balances for the lender's protection, receives two benefits:

1. A careful appraisal by an FHA inspector.

2. A lower interest rate on the mortgage than the lender might have offered without the protection.

This federal assistance mortgage loan, secured by real property through the use of a mortgage note, can only be issued by federally qualified lenders. Other deciding elements of the application process include getting the house appraised and approval of the buyer’s credit.

The main mission of this kind of loan is to provide lower-income families with the resources to buy a home that they would otherwise not be able to purchase. The program started around the time of the Great Depression when foreclosures and defaults were on the rise. Nowadays, it strives to provide the same kind of assistance.

Insurance

You may be asking, “How does this program survive and where does it get its money?” Well, upon its entrance into the home-buying market, the loan was intended to provide lenders with enough insurance to make a profit. Today, it is fairly self-supporting thanks to the premiums that are paid to the lenders by borrowers.

While this loan program helps families in need maintain a home they would otherwise lose, it is more centrally focused on rehabilitation. The FHA 203(k) program could be categorized as a “home improvement” loan system. One of HUD’s main values is to open provide greater opportunity for homeowners to capitalize on their property, and this mission is carried out through the 203(k) program as well.


Lenders Won't Short You

Some lenders have been known to partner with nonprofit organization to assist with the revitalization of many homes, incorporating other housing assist services to give the borrower as many useful resources as possible.

Through their generous participation, lenders further their dedication to the Community Reinvestment Act (CRA), which was created in 1977 under the Housing and Community Development Act. The CRA is a federal law that encourages banks and other saving services to target and assist different segments of their respective communities with housing, especially lower income families.

What are All Its Uses?

The program isn’t always used directly by the lender. It can also provide money to rehabilitate property in three different ways:

- The loan can be used to purchase a dwelling on the land on which it resides, then restoring and reviving the property.

- The loan can be used to refinance current debt and refurbish a home (like most borrowers would use it for.)

- The loan can be used to buy a dwelling on a separate site and then move it to the land that has been mortgaged, then they can proceed to rehabilitate it in its new location.

No matter how you ended up with existing debt or a run-down home that you were unable to afford repairs for, the FHA 203(k) loan rehabilitation plan may be your light at the end of the tunnel. Lenders a generally rather generous and it can make an enormous impact in the life of you and your family.

For further comments of question, please feel free to contact me anytime by email, which is peg@maloney.com, or by phone at 402.598.3965.

What is a Real Estate Short Sale?

A “short sale” is a handy term for a situation in which a homeowner’s debt on his or her property is greater than the amount for which the property can be sold.

Here’s an example: Assume a homeowner has an unpaid loan balance of $110,000, but the property will only sell for $100,000. The unhappy lender accepts that $100,000 as full payment from you or another investor. This is obviously “short” of the full $110,000 amount, thus the name “short sale.”

Let’s be clear – lenders don’t like short sales and often will go through them only as a last resort. After all, they’re not in business to lose money! In many cases, they’ll prefer the option of foreclosure since that choice makes more financial sense.

However, there are instances in which lenders accept short sales and, if you’re “Johnny-on-the-spot,” you can make a very good profit – if you’re willing to brave a complicated process!

Why Is a Short Sale More Complicated Than a Normal Real Estate Transaction?

Simply put, it’s complicated because there are so many factors involved:

- the loan mitigation policies of the lender and third-party investors
- the financial condition of the lender and third-party investors
- financial condition of the borrower
- the property’s as-is value
- the cost to “repair” the property to put it into saleable condition and market it, etc.

On top of these factors, approval for short sale has to come from the investor who actually owns the loan. And then, if the lender is a government-sponsored institution like Fannie Mae or Freddie Mac,approval can eat up a lot of time. After all, you’re dealing with government bureaucracies!

When Will Lenders Accept a Short Sale?

There are a variety of situations in which lenders accept short sales. For example, homeowners experience a devastating illness that eats up all their financial resources. Or they may be military personnel called up to active duty for extended periods of time, and they lack the income to continue mortgage payments.

Other examples include anyone who falls into the “hardship” category—disabling, permanent injuries; financial insolvency; convictions; lack of employment due to economic conditions beyond the homeowner’s control, etc.
In these instances, lenders are willing to consider a short sale.

How Do I Find Out If A Property Qualifies for a Short Sale?

You’ll have to do some digging and gain knowledge about the lenders in your area. In order to acquire that knowledge, complete the following tasks:

Task 1: Talk to the lender and find out their loss mitigation policy. If they seldom or never do short sales, don’t bother with them. Find another lender with a better record in this area.

Task 2: Find out the number of liens recorded against the property title and the total amount of money in those liens.

Task 3: Know the borrower’s present financial condition.

Task 4: Know the type of loan that’s in default and its current status.

Task 5: Know both the property’s as-is market value and its as-repaired value.

Task 6: Be aware of the state of the local economy and the current real estate market conditions. Analyze all this information to determine if a short sale is worth pursuing.

Okay, let’s assume you’ve completed all those tasks and know the short sale is worth pursuing. What’s next?

How to Pursue a Short Sale

First, have the homeowner sign an authorization to release the loan information. Next – and this is very important! - you must have cash on hand. Why? Because all short sales are cash transactions! What’s more, you also need verifiable proof that you possess the money!

Also very important - short sales can’t be made to relatives, family members, or close friends of the homeowner. In real estate, this is called an “arm’s length transaction.” What happens if you do this and the lender discovers that you’ve done an arm’s length deal? The lender can file a lawsuit to have the sale overturned!

As you might expect, the property owners themselves can complicate the process. After all, they can’t receive any of the money from a short payoff sale. That means not much of an incentive for them to do a short sale. 

And one last negative - the debt that’s canceled by the short sale payoff of a mortgage or deed of trust is subject to federal income tax as ordinary earned income. This is not true of a bankruptcy or insolvency.

How to Start the Short Sale Process

Follow these steps (yes, there are many):

- Get in touch with the homeowner who’s in foreclosure.
- Determine the homeowner’s financial condition.
- Analyze the condition of the property.
- If both the financial and property condition are suitable, ask the homeowner for written authorization to communicate with the loan loss mitigation department of the lender.
- Get in touch with the decision-maker in the loan loss mitigation department of the lender and provide them with a copy of the written authorization.
- Contact the decision-maker to discuss the short sale and request that the decision-maker send the appropriate short-sale documents to the homeowner.
- Ask the homeowner gather all documentation to provide support for financial hardship case.
- Get repair cost estimates from a minimum of three licensed home improvement contractors.
 - Do a comparable value study by assessing the value of three similar neighborhood properties sold in the last six months.
- Return the short sale proposal to the lender’s decision-maker. It should include a signed purchase agreement for a percentage less than the amount owed to the lender; e.g., 20%, 30%, 40% less, etc. Include a HUD 1 Settlement Statement in your proposal. You can download the statement in PDF form here.
- The lender’s decision-maker reviews your proposal and orders a BPO to determine the property’s as-is and as-repaired values.
- The decision-maker either accepts your proposal or rejects it.
- If the decision-maker feels a short sale is appropriate, they’ll make a counteroffer.
- You then accept or reject the counteroffer.
- If you accept the counteroffer, you close on the transaction within 30 days.

I hope this brief introduction to short sales gave you enough information to decide whether or not you want to pursue this type of transaction. If you have more questions, please contact me today at peg@maloney.com or 402.598.3965 and we can discuss this topic or any other area of real estate.

Ever Wondered Which Home Improvements Give You the Best Return on Investment (ROI)? I’ve Got the Answers for You!

Below I provide you with the best home improvements to make in terms of their Return on Investment (ROI). Choose the ones that best fit your situation and your budget!

Natural Gas Furnace Replacement

The ROI on furnace replacement can reach as high as 100%. How can that be? Well, of course, it depends on how long you keep the house before you sell it. In the first year, the ROI of a new furnace may be only around 10%.

However, consider that a new furnace adds to the resale value of your home and makes your home very attractive to potential buyers. And, then, if you look at the money saved in utility bills over, say, a five-to-ten year period, well, then you’ll be hitting that ROI of 100%!

Painting

 Amazingly, a new coat of paint on the exterior of your home can give you an ROI of 90%. Dollar for dollar, it’s one of the most cost-effective home improvement projects you can undertake!

Depending on the quality of exterior paint, it can cost you anywhere from $25 to $50 a gallon. To give you an idea of the overall costs, the average 3,000-square-foot home takes about 15 gallons of paint. So, you may pay anywhere from around $375 to $1,500.

Looking at the interior, you’ll likely pay anywhere from $12.00 to $50 a gallon, again depending on the quality of the paint. Plus, of course, you have the cost of rollers, brushes, drop cloths, etc. If you do the work yourself, it’ll likely cost you around $300.00. If you hire a professional, double the cost. In either case, you’ll end up with an ROI of around 75%.

Vinyl Siding Replacement

If appropriate, siding is a great place to start your home improvement projects. It has an ROI of around 88%.
Nearly everyone loves vinyl siding for two reasons – it’s low maintenance and has great durability. Plus, of course, the shiny appearance adds the perception of increased value in the eyes of potential buyers. And you have two options for putting it on. If you have the time and talent, you can do it yourself for around $1.00 per square foot!

If you have little time and money, call a professional. Depending on your area and the size of your home, the job may cost you around $7.00 per square foot and anywhere from $3,000 to $12,000.

Replacement Windows

New windows have an ROI of 80% plus. It’s true that they are expensive, running $300 for a basic design up to $1,000 for custom designs. However, they have tremendous value in terms of both maintaining the house and increasing its value for sale.

Chosen wisely, replacement windows can really improve the look of your home from the exterior and in the interior. In addition, of course, they can really save on heating bills since old windows are great leakers of energy.

Kitchen Remodeling

Remodeling your kitchen can give you an ROI of around 80%. Now, it’s true that such a remodel can be expensive; the average cost is about $17,000. However, you must remember that the condition of the kitchen is very often the deciding “sale/no sale” factor in the minds of potential buyers!

So, seriously consider this remodeling project. Add new countertops, cabinets and appliances. If you have the time and skills, do much of the work yourself. Plus, of course, shop all the sales to get the lowest price on any appliances like stoves and refrigerators.

Roof Replacement

Replacing a roof has an ROI from around 60% to 65%. Depending on the nature of the replacement, it can cost about $100 to replace a few asphalt shingles on up to around $100 to $350 for a 10 x 10 foot square.

An overall re-roofing can cost anywhere from $6,000 to $14,000, depending on the size of the roof and the nature of the shingles (asphalt, wooden, etc.).

Now, while roof repair or replacement doesn’t have as high an ROI as some other home improvements, it’s definitely important because buyers will back quickly away from the purchase of a home that needs roof repairs. So, put this one high on your list!

Bathroom Remodeling

The ROI on a bathroom remodel ranges up to 78-80%. The average remodel costs in the $12,000 to $13,000 range. If you go “whole hog,” costs can range up past $30,000. However, you don’t have to do all the remodeling at one time, and you may be able to make some of the changes yourself.

For example, new tile or linoleum can up down for anywhere from $100 to $1,000, depending on the size of the bathroom and the materials used. New light fixtures can also be an inexpensive do-it-yourself project.

So, there you have it – a list of home improvements that will give you the best return on investment!

If you’d like to discuss the ROI on other home improvements, contact me today at peg@maloney.com or 402.598.3965, and I’ll give you all the information you need.

Want to Sell Your Home? Clinch the Deal With Curb Appeal!

For this article I sat down with Cathy Sykora at Omaha Drapery & Blind and we talked about Curb appeal and what you can do to your home to make it more appealing from the street. If you are planning on selling your home in the near future you're going to want to read this article and watch my video.

Believe me, great curb appeal is everything when it comes to getting potential buyers into your home! Plus, outstanding curb appeal can not only make the sale but increase your profit from that sale as well!

The benefits don’t stop there. Curb appeal can actually be achieved with very little money (depending on the size and condition of the home, of course). So, don’t think of it as cash spent; it’s actually an investment in more profit!

Below, I provide you some very low-cost and sensible methods for making your home “shine!”

Clean – Then Clean Again!

I don’t know about you but when I see dirt and grime in a house, it’s a turn off because, as a buyer, I certainly don’t want to end up cleaning it all out!

But, there’s another negative to a messy house – it tells potential buyers, “The owner doesn’t seem to care about his property, so why should I care?” Granted, this is not always a fair conclusion, but, remember, we’re dealing with the “emotional” side of the buyer. What they see is what forms their opinion of a property.

So, don’t risk the possibility of a negative opinion! From top to bottom, clean your home or have it cleaned by a professional service. Especially pay attention to getting rid of any odors! Unpleasant smells have a particularly negative impact upon potential buyers since odors create an immediate impact upon the most primitive and powerful part of the brain.

Get Out the Paint Brush…Roller…Sprayer!

The big temptation here is to go with the cheapest paint possible. Don’t give in to this urge. Go with good quality paint for both the interior and exterior! It simply looks better and emphasizes the quality of care you’ve put into your home. Buyers will notice that!

Roll Out the “Red” Carpet!

If your present carpet is at all worn or threadbare, consider replacing it with new carpet. I know, I know, it can be expensive, but new carpet can also add several thousand dollars to the final sale price! Once again, think of it as an investment, not as an expense.

At a minimum, if your current carpet is in good shape, have it professionally cleaned to make it look even better.

Repair All the Little Things!

By themselves, a missing knob, a crooked gutter, an ill-fitting door, etc., don’t have much of a negative impact upon a buyer’s perceptions. However, when they see all these things together, they definitely get a sour attitude very quickly. So, repair all the little things to enhance exterior and interior curb appeal. Replace/repair gutters, rotted wood, broken door latches, leaky faucets, etc.

Manicure That Lawn!

A mowed and edged lawn really enhances the curb appeal of your home and shows potential buyers that you take good care of your place. To really put the “icing” on the curb appeal “cake,” add plantings like flowers, bushes, etc. They add color and delightful smells.

If you really want to make your home stand out in terms of terms of exterior and interior, consider hiring an accredited, professional “home stager” (ASP).

What’s a Home Stager?

Home stagers work with the “flow” of a home. Think of them as similar to set designers for plays and movies. They know how to “set the stage” in exactly the right way to impress any potential buyer visiting your home.

Overall, they eliminate clutter, arrange furniture, and help you enhance interior/exterior curb appeal in every way possible. Their charges may be on an hourly basis or a flat fee.

For information on home staging professionals, google “Home Staging Professionals” to see who’s available in your area. Or, check out these sources on the Internet:

STAGEDHOMES.COM  and The Real Estate Staging Association

If you’d like more information on home staging or any other methods of increasing your home’s curb appeal, contact me today at peg@maloney.com or 402.598.3965.

Home Buyers/Refinancers: Expanded Title Insurance Is a Necessity These Days!

Recently I spoke with Julie Hudkins of First Nebraska Title and Escrow. She’s an expert on the subject of title insurance and, more importantly, expanded title insurance.

As I’m sure you already know, basic title insurance is necessary to protect you against any unexpected defects, claims on any house you buy, or judgments against previous owners like alimony, child support, etc.

For example, you’d want to know if there are liens against a previous owner because, if there are, then you could be held legally responsible for paying them!

That’s why you always need title insurance – it’s protection in advance.

But, these days you need more than the basic form, especially if you’re buying a foreclosed home! Expanded title insurance protects you against unexpected things like:

• Building permit violations (from previous owners)
• Encroachment violations
• Subdivision violations
• Covenant violations (from previous owners)
• Living trusts
• Structure damage from mineral extractions
• Variety of encroachments and forgeries after title insurance is issued, etc.

For example, assume a contractor put the wrong kind of shingles on a roof; that is, they violated the subdivision rules. Or, in the course of refinancing, you find that you built a fence that encroaches on your neighbor’s property, etc. In either case, you’re more fully protected when you have extended title insurance!

In short, whether you’re buying a new home or refinancing your current one, extended title insurance is vital to protecting your interests!

To learn more about this subject, call Julie immediately at 402.691.9933. For all your real estate needs, call me today at 402.598.3965 or contact me at peg@maloney.com!