Real Estate Information

According to credit experts, 42% of U.S. consumers have credit scores between 550 and 699. As a result, these consumers typically don’t qualify for preferred interest rates and, depending on their overall credit profile, they may not even qualify for certain loans and credit cards.

As a member of the Top 5 in Real Estate Network®, I have worked with many clients throughout my years in the business and have seen first-hand how credit scores can wreak havoc on securing a favorable mortgage. Most clients I work with don’t have a clear picture of what impacts their credit profile and, more importantly, don’t know what steps they can take to help improve it. I find this short quiz, from credit consultants ApprovalGuard.com, to be immensely helpful when it comes to understanding how your credit profile works. Take a few minutes to see if your credit knowledge is up to par.

1. To have the best credit-profile impact, what is the maximum amount of your monthly credit line that should be used?
a) 70%
b) 30%
c) 50%

2. What is the number-one contributing factor to a good credit score?
a) Length of credit history
b) Amounts you owe
c) Payment history

3. If you pay 2% each month on your credit card (typical minimum payment), when will you pay off a $3,000 balance at 10% interest?
a) 18 years
b) 6 years
c) 3 years

4. After paying off a high-interest credit card, you should:
a) Continue using it occasionally
b) Close the account
c) Use the full amount of available credit every month

5. Applying for credit cards in order to just receive a free sign-up gift (t-shirts, mugs, etc.) has no impact on my credit profile?
True or False

6. Rewards points on credit cards are a good deal when:
a) I get cash back
b) I get free airline tickets
c) I carry no balance each month

7. To have a credit score, I must have at least one creditor reporting activity on my credit report for:
a) 12 months
b) 8 months
c) 6 months

8. Credit bureaus that manage your personal credit report data and credit scores are a:
a) Government entity
b) Non-profit agency
c) Regular business corporation

9. Banks and credit card companies think you are creditworthy by how many credit offers you receive by mail?
True or False

10. Credit scores are used by lenders mainly to:
a) Tell how I compare to other consumers
b) Tell if I make my payments on time
c) Predict the likeliness that I will repay my loan on time

Answers: 1 – c, 2 – c, 3 – a, 4 – a, 5 – False, 6 – c, 7 – c, 8 – c, 9 – False, 10 – c

If you find you answered more than half of these questions wrong, you’re not alone, says ApprovalGuard, whose surveys reveal that the majority of consumers do not know the answers to these and similar types of questions. The good news is it’s not too late. With a good understanding and proper guidance of how credit works, consumers can learn how to effectively manage their personal credit profile. For more information, please e-mail me, and please feel free to forward this quiz to others.

Thanks to the perfect storm of low prices, attractive inventory, and affordable interest rates, this continues to be a lucrative time to invest in a home, whether it be a first home, a move-up home, or a second home.

Choosing a home is no easy process, however, and many factors must be carefully weighed before making your selection. As a member of the Top 5 in Real Estate Network®, I advise my clients to pay careful attention to a few details in particular when considering a home—these important details will significantly impact your long-term happiness in the home as well as the home’s appreciation over time. So, as you begin to consider properties in our neighborhood, here are a few issues to think about that may help you find exactly the right home for you and your family:

Type of home: One-story or two, single-family, duplex or condo? How will paying homeowner dues affect your overall buying power? Will a swimming pool be a bonus or a hindrance? Making these decisions in advance will help you focus on the right types of home to look at.

New or existing: A new home is all shiny and clean, but will carry with it some hefty initial costs such as landscaping and window coverings. An existing home will have many of these things, but repairs or renovations that may need to be made will also impact your budget.

Features: Weigh the costs of gas vs. electric heating and cooling, and the possible need for fencing. How important is a fireplace? Does the home have enough bedrooms and bathrooms to support your family in the coming years?

Ease of maintenance: What is the condition of the roof? The appliances? Will you have to paint the interior or exterior and/or replace the carpeting? Be sure to factor in such costs in your budget and your negotiations.

Location: Do you want to be in the city or in the country? Nearer to libraries, parks and entertainment or set among tall trees and lakes? What about the need for public transportation? Nearby hospitals and schools?

Crime rate and public schools: Check with local enforcement and local residents to get a feeling for statistics and quality. I can also provide you with up-to-date statistics on this information.

Economic stability: Whether an area is growing or not can affect its future property value—as will the economic stability of the area.

Property tax: Examine the annual amount of real estate taxes and other assessments levied in the neighborhoods you are considering.

I can help find the answers to the above concerns as well as provide more suggestions on what to look for in a new home—just e-mail me. Also, please pass this article onto others who may benefit from this information

June not only marks the commencement of the summer season, but more importantly for homeowners, National Home Safety Month. While our thoughts turn to smoke detectors and child safety locks when considering a safe home, many homeowners often overlook the risks of poor indoor air quality—especially important as the temperature and humidity rise with summer.

As a Member of the Top 5 in Real Estate Network®, I’ve worked with many clients who have suffered from health-related issues due to poor air quality in their homes. Yet rarely do people think about the quality of their indoor air. Service experts recommend using the following checklist to ensure your air is as healthy as possible:

• Do you smoke in your home?
• Do your kitchen, bathroom, and laundry room have ventilation and exhaust fans?
• Do you change your air filters once a month?
• When cleaning or doing laundry, do you use bleach, ammonia, or aerosol spray cans?
• Is your gas fireplace and/or gas stove checked yearly for emissions?
• Was your home built before 1978? If so, has it been checked for lead-based paint?
• Do your bathrooms have carpet where moisture and dust can build up?

If you have answered "yes" to any of these questions, it’s time to consider making some changes. Many of the quick fixes to improve one’s indoor air quality at home can be accomplished through a few simple adjustments to your regular maintenance practices.

Others, like checking for lead paint, can often be handled through local, county or state programs that are partially or wholly subsidized, and heating source emissions checks can often be done through one’s own utility provider.

For more information on home safety or for a referral on companies that can help you with home maintenance, please e-mail me. And feel free to pass this email on to friends and family members who may have concerns regarding their indoor air quality.

With summer officially upon us, many homeowners will be confronted with rising electric bills as fans and air conditioners kick into high gear in an effort to keep cool. Demand for electricity can also increase if you have house guests or children home for the summer.

As a member of the Top 5 in Real Estate Network®, I have access to lots of great ideas for planning ahead to control energy costs this summer. The following tips are from the experts at Public Service Electric and Gas Company (PSE&G):

• Use ceiling fans in the counter-clockwise direction to create a wind-chill effect, making you feel cooler. Also, whole-house fans that bring in cooler night-time air can pre-cool a house and reduce energy use in the daytime if heat is kept out by closing windows and shades.
• Install a programmable thermostat. If health conditions permit, raise the setting from 73 to 78 degrees. You can save 3-5% on your air conditioning costs for each degree you raise the thermostat.
• Close doors leading to uncooled parts of your home. If you have central air conditioning, close off vents to unused rooms and be sure to keep filters clean.
• Plant shade trees close to the house on the South and West sides.
• Seal holes and cracks around doors and windows. Eliminate air leaks between window air conditioners and windows with foam insulation or weather-stripping.
• Turn off power sources. TVs, computers and other electronic devices draw power when they are in standby mode or turned off but still plugged in. Plug electronics into power strips and turn off the power switch when the items are not in use.
• Switch to compact fluorescent light bulbs (CFLs), which use 75% less electricity and burn more coolly than incandescent bulbs. Keep in mind that CFLs are especially handy in hard-to-reach fixtures and won't need to be replaced for about five years.
• Use timers and motion detectors on indoor and outdoor lighting.
• Delay heat-producing tasks such as laundry until later in the day. Wash full loads, using cold water whenever possible.
• Run the dishwasher at night, using the shortest cycle that will get the dishes clean. If manufacturers' directions permit, turn the dishwasher off before the dry cycle or use the air dry feature if your machine has one.
• Take short showers as they use less hot water than a bath.
• Replace old appliances with new energy efficient Energy Star appliances.
• Unplug the extra refrigerator in your garage or basement and use it only when necessary. Refrigerators that are only 10 years old can use twice as much electricity as new Energy Star labeled models.

For more information on preparing your home for summer, please e-mail me. I encourage you to pass this email along to your friends and family as well.

While it is certainly understandable why some people would like to avoid paying a real estate agent’s commission—especially in today’s economy—homeowners need to be aware of the serious pitfalls that can occur before they embark on the process of selling their own home.

As a member of the Top 5 in Real Estate Network®, I have had many clients enlist my services after losing valuable time and money attempting to sell their own home. What seems like a relatively easy undertaking at first, can become a time-consuming and overwhelming process. I’d like to share with you some of the most significant snags that often occur when selling one’s own home:

1.  Ineffective marketing. Most homeowners simply lack the resources necessary to effectively market their own home. Working with a professional real estate agent, such as a member of the Top 5 in Real Estate Network®, however, usually means your home will be marketed to the widest group of potential buyers possible, both through digital and print advertising, virtual tours, and online listing portals.

2.  Mispricing your home. In order to sell your home quickly for the best possible price, pricing your home correctly is critical. This very nuanced process of choosing the right listing price, however, is always best left to a real estate professional. Most who sell their own homes price too high, resulting in their home sitting on the market for an extended period of time. And, unfortunately, the longer a home remains on the market, the less desirable it becomes for buyers.

3.  Missing documentation. These days, a real estate transaction requires more documentation than ever before. It’s virtually impossible for the average homeowner to be aware of all the forms necessary to complete a real estate deal, and missing paperwork will bring any transaction to a grinding halt.

4.  Overlooking legalities. The risk of overlooking important legalities, such as disclosure and compliance regulations that vary from state to state, is high for most homeowners. The average person is, understandably, not well versed in the many laws that govern the sale and purchase of a property.

5.  Dealing with unqualified buyers. If you accept an offer from an unqualified buyer, you can delay the sale of your home indefinitely. A professional real estate agent will take the necessary steps to work with a lender to ensure a buyer is qualified before accepting their offer.

In most cases, owners end up exhausting more dollars than they would have paid in commission when attempting to sell their own home. If you would like more information on selling your home, please e-mail me. I also encourage you to forward this blog to anyone you know who might be considering taking on the monumental task of selling their own home.

As a rule of thumb, bankruptcy is the least desirable option available to you when your finances have gotten out of control. However, if your financial situation has been going downhill for an extended period of time, your credit standing is probably so bad that filing for bankruptcy really won’t do much to make it worse, with one exception: A bankruptcy remains on your credit report for 10 long years. With this in mind, creditors will know that once you file bankruptcy, you cannot do so again for seven years.

As a member of the Top 5 in Real Estate Network®, I am well versed in some of the ways you—or someone you know—can start to rebuild your financial life after bankruptcy. Here are 10 tips from consumer credit experts ApprovalGuard.com:

1. Plan your credit recovery. Take it slow and easy, do it right and don’t exceed what you can afford.

2. Learn more about how credit works through the Internet, counseling services or a service. Do it right and know what you’re doing.

3.  If your credit report contains inaccuracies about debt that was discharged through your bankruptcy, contact the creditor or the credit bureaus to request a correction.

4. If you didn’t have enough savings to survive a setback, get serious about savings for an emergency fund. In the current economy you need at least 12-16 months.

5. If your problem was overspending, create a written budget and stick to it.

6. If your problem was related to medical bills, seek out a solution for insurance.

7. To re-establish a strong credit profile, you need a good history of payments from credit cards and installment debt such as autos, student loans or a home loan.

8. The rebuilding process requires you to use credit responsibly. Use only a small portion (30% or less) of your available credit line and ensure you make a payment every month.

9.  When you start to re-establish your credit, consider a “secure” credit card. Such cards are usually backed by your savings account or money you place in escrow to cover 100% of your credit line in case you don’t pay your payment.

10.You may be able to apply for a home loan in as little as two years after the discharge of your bankruptcy, however, expect to pay higher fees and interest rates.

When you are ready to rebuild, make sure you understand credit and how to use it responsibly. Feel free to e-mail me for further information and please forward this e-mail to family and friends to keep them in the know as well.

Top 5 Remodeling Headaches to Avoid

Whether you’re adding a room to accommodate an expanding family or remodeling to increase value, home renovations can be one of the best investments you make, especially in today’s economy. The key to a successful remodel, however, is knowing what mistakes to avoid.

As a member of the Top 5 in Real Estate Network®, I have advised many clients on what renovations will offer the best return on their investment and pay dividends when the time comes to sell their home.

According to a Consumer Reports poll, the most popular remodeling projects for homeowners are kitchens (19%) and bathrooms (17%). In another survey, however, Consumer Reports asked 6,000 readers to reveal what went wrong when they remodeled their kitchens and baths and how much those mistakes added to the overall cost of their projects. Here's how to avoid their mistakes and save:

1.Don't rush in. Changing plans is the most common, but costliest remodeling gaffe. Be sure to leave time for research and create a comprehensive plan, listing every product.
2.Prepare for the unexpected. There's a lot going on behind the walls. Unexpected water damage was an issue with 17% of bathroom remodels, while structural problems caused headaches for 10% of kitchen projects. A good contractor will be able to anticipate such problems, allowing the homeowner to budget accordingly.
3.Don't chase the “low ball.” Contractors are lowering their profit margins due to the tight market, but they often make up their costs in labor or other areas. Readers who went for “low-ball” pricing ended up spending a median of $1,500 extra for labor on their kitchens and $1,000 extra on their bathrooms. Don't sign a contract with a lot of open-ended amounts for products and materials—these are called "allowances," in contractor speak.
4.Get the paperwork in order. Have the contractor attach copies of his or her up-to-date license, insurance and workers' compensation policies to the written contract. He or she should also get permits and provide a lien waiver when the job is done; this will keep suppliers from contacting the homeowner for unpaid bills.
5.Focus on the boring bits. Specifying lighting and placement of trash cans are not much fun, but are critical to the process. For example, the proper exhaust fan will prevent mildew in baths and vent odors in kitchens.

Following the above advice will help ensure a successful—and profitable—remodel. For more information or for contractor referrals, please e-mail me. And please forward this email on to anyone you know in the midst of remodeling—don’t let them make these same mistakes!

If you’re one of the many who have recently taken advantage of the first-time or move-up home buyer tax credit, there’s a happy move in your future. Unfortunately, I’ve seen the stresses of moving cast a cloud over the excitement my clients feel about heading to their new home, making for a nightmarish experience instead of a momentous occasion.

Thanks to my network of leading real estate professionals, the Top 5 in Real Estate Network®, and my relationships with top moving experts, I can offer several tips to make moving a more streamlined, more palatable experience:

• Put your move details in writing.
Use a large notebook or binder to centralize all the important details of your move. It should contain detailed lists, including an inventory of boxes. Supplement this with a computer printout of box contents and e-mail it to yourself and a couple of other trusted sources as a back-up.

• Order boxes and moving supplies as far in advance as possible.
It’s never too early to start packing as we all have items that are not currently in use—think winter clothes, your baseball card collection, holiday decorations. Moving companies may allow you to return unused boxes, so order more than you think you'll need, by 20%. Invest in the right tape to keep boxes securely fastened, some new Sharpie pens, and labels to color-code your move.

• Document your AV details.
Take photos and notes on how your media equipment is set up: television, sound equipment, computer equipment, etc., in order to avoid an AV nightmare in your new home. Label all remotes and wires as well.

• Plan for your pets.
Moving can be particularly stressful for animals. Consider leaving them with a friend or at a reputable pet boarding service.

• Plan for valuables and critical documents.
Most homeowners insurance will not cover property in transit, so consider insuring certain items separately. Take photos for documentation to support loss or damage claims, and carry irreplaceable and legal items, like passports and birth certificates, with you.

• Choose a reputable moving company.
Good companies that can guide you through the process will have a proven track record. Ask your friends and your real estate agent for referrals.

• Keep your moving receipts for income tax deductions.
In many cases, moving expenses are deductible from federal income taxes. If you are moving because of a change in employment, you may be able to claim this deduction even if you do not itemize.

For more information on making your move as painless as possible, please e-mail me—and please feel free to forward these tips to any family and friends with a move in their future.

Did you know that in 2009, the Federal Housing Administration (FHA) insured nearly 30% of the single-family mortgage market and that more than 50% of all first-time home buyers used FHA programs?

In today’s challenging credit climate, many home buyers and homeowners are turning to FHA for insurance, to purchase loans, and for refinancing options to get out of risky ARMs or subprime loans. As a Member of the Top 5 in Real Estate Network®, I have access to information from the National Association of Realtors® (NAR) regarding recent and upcoming changes to FHA’s single-family program that could impact the use of these important programs for consumers in the future. According to Jerome Nagy, senior regulatory policy representative at NAR, in order to replenish its dwindling reserves, FHA has implemented or proposed the following changes:

1.  Mortgage Insurance Premium (MIP)
FHA has increased the upfront MIP from 1.75% to 2.25% for borrowers while it awaits legislative authority to increase the annual premium. FHA stated it will decrease the upfront premium when they can increase the annual premium.

2.  Credit Score Changes
FHA has proposed that borrowers with a credit score below 580 be required to make at least a 10% down payment. The minimum down payment will remain at 3.5% for all other borrowers.

3.  Seller Concessions
FHA intends to propose a rule to decrease allowable seller concessions from 6% to 3%. NAR plans to argue against this decrease since closing costs differ greatly among states, and with fees on services (such as appraisals) increasing, seller concessions can be a vital part of closing the transaction.

4.  FHA Loan Limits
Current FHA loan limits are as high as $729,750 in high-cost areas, and are set to expire at the end of the year and revert to lower amounts, potentially putting a damper on a housing market rebound. A decrease of current limits would adversely affect 612 counties in 40 states and the District of Columbia, reports NAR, which is urging passage of legislation to make the loan limits permanent.

5.  Condominium Rules
FHA is delaying implementation of “Mortgagee Letter 2009-19” and making temporary enhancements to the policy instead, such as eliminating the owner-occupancy requirement for FHA condo mortgages and reducing the number of units sold prior to FHA’s endorsement of a unit from 50% to 30%.

Please feel free to e-mail me for guidance on the above FHA programs and how changes might affect your particular situation. Also, please pass this article on to anyone you know who could be impacted by changes to FHA policy.

Fact: All Real Estate Headlines Are Not Local

None of us are immune to the constant stream of negative news about the real estate market. There’s no denying the fact that the market has suffered, along with our country’s economy, over the past couple of years.

Unfortunately, this has created a serious dilemma as many consumers unwittingly base their real estate decisions on national media reports. Those of us in the industry live by the term “all real estate is local,” and as a consumer, so should you—otherwise, you run the risk of making an irreversible real estate mistake.

The truth, which you won’t find in the national media, is that real estate markets not only vary from region to region but from county to county, neighborhood to neighborhood…even street to street. I know from my national network of leading real estate professionals, The Top 5 in Real Estate Network®, that there is tremendous variation in home sales prices from locality to locality, and that buyers and sellers are often heading into—or worse, avoiding all together—a real estate investment based on misinformation from national media reporting.

Therefore, if you are thinking about buying or selling a home, it’s essential that you talk to a seasoned real estate professional in the areas you’re considering. Keep the following tips in mind when considering a real estate sale or purchase:

1.  Consult with a local real estate professional—like a Member of Top 5—for the most up-to-date information on the local market.
2.  Ask for statistical reports and trend graphs—the hard facts. Real estate professionals have access to actual data that can be broken down into extremely finite components, such as a particular street or neighborhood.
3.  Ask for comparative reports for the last 3-4 months of the current year, versus the previous year. This will reveal the latest market trend and provide you with concrete facts.
4.  Media reports can vary widely based on state, city, and neighborhood – read, listen, learn, but always revert to the facts for the specific area in which you are looking, especially if you are relocating to a different state or region.
5.  Also take seasonal considerations into account. In vacation-destination areas, the numbers will vary greatly from national and state data.

For many real estate consumers, today’s market is an unbelievable opportunity to buy or move up to a different home. Don’t let the national headlines scare you away. Consult with a local real estate professional to get only the facts that matter to your specific situation and location. Please e-mail me for more information and pass this article along to others who might benefit from the real facts.