Five Reasons Clients Should Buy in 2013

December 18, 2013 by Emily Endress · Leave a Comment

Time is ticking down on 2013 and if your clients are debating on whether or not to make an offer before the year is over, maybe these 5 reasons will help!
In this full article from homefinder.org, top mortgage and real estate experts share five ways you will benefit if you buy a home by December 31, 2013.

1.) Avoid rising rates roulette: Mortgage interest rates, while still attractive, are up 1 to 2 percent over this time last year. It’s possible to lock in a 30-year fixed rate mortgage at about 4.5 percent now and mortgage rates are now forecasting to rise about 5 percent in 2014.

2.) New Year, new lending rule: Lending rules will change on January 1, 2014 and it could be harder to get a loan. 2014’s rules will allow you to borrow less, at your same level of income, says Huettner. 2013’s current mortgage rules allow for a 45% total debt to income ratio (DTI); in 2014, the DTI will go down to 43%.

3.) Easier financing: If you are waiting for home prices to decrease, don’t. 2014’s mortgage changes could make it harder to get financing so if you are looking to save a few dollars by waiting for home prices to drop, you could miss your window to secure a mortgage entirely.

4.) Lower sales could mean higher inventory: While 2013’s housing theme was limited inventory and higher prices, historically, the fourth quarter of the year usually slows down the housing market and this year is no exception. Housing sales have been declining since September so inventory has increased. You may get the deal of December!

5.) Maximize tax deductions: It’s important to remember that if you buy before the end of the year, you can begin deducting interest and building equity immediately. Some closing costs and points are tax deductible in the year you buy a home. Buying now allows you to include them on your 2013 tax return.

8 Home Inspection Red Flags! by AOL Real Estate Editors

Our gallery of home inspection nightmares (see website for pictures) is good for a laugh, but a home inspection is serious business. It's the buyer's opportunity to make sure that the house they're about to purchase doesn't hold any expensive surprises.

A typical home inspection includes a check of a house's structural and mechanical condition, from the roof to the foundation, as well as tests for the presence of radon gas and the detection of wood-destroying insects. Depending on the seriousness of what the inspection uncovers, the buyer can walk away from the deal (most contracts include an inspection contingency in the event of major flaws) or negotiate with the seller for the necessary repairs.

These are the red flags that should send a buyer back to the negotiating table, according to home improvement expert Tom Kraeutler of The Money Pit.

1. Termites and other live-in pests: The home you've fallen in love with may also be adored by the local termite population. The sooner termites are detected, the better. The same goes for other wood-devouring pests like powder-post beetles. Keep in mind that getting rid of the intruders is just the first step. Once the problem has been addressed, have a pest control expert advise you on what needs to be done in order to prevent their return.

2. Drainage issues: Poor drainage can lead to wood rot, wet basements, perennially wet crawlspaces and major mold growth. Problems are usually caused by missing or damaged gutters and downspouts, or improper grading at ground level. Correcting grading and replacing gutters is a lot less costly than undoing damage caused by the accumulation of moisture.

3. Pervasive mold: Where moisture collects, so grows mold, a threat to human health as well as to a home's structure. Improper ventilation can be the culprit in smaller, more contained spaces, such as bathrooms. But think twice about buying a property where mold is pervasive -- that's a sign of long-term moisture issues.

4. Faulty foundation: A cracked or crumbling foundation calls for attention and repair, with costs ranging from moderate to astronomically expensive. The topper of foundation expenses is the foundation that needs to be replaced altogether -- a possibility if you insist on shopping "historic" properties. Be aware that their beautiful details and old-fashioned charms may come with epic underlying expenses.

6. Worn-out roofing: Enter any sale agreement with an awareness of your own cost tolerance forroof repair versus replacement. The age and type of roofing material will figure into your home inspector's findings, as well as the price tag of repair or replacement. An older home still sheltered by asbestos roofing material, for example, requires costly disposal processes to prevent release of and exposure to its dangerous contents.

7. Toxic materials: Asbestos may be elsewhere in a home's finishes, calling for your consideration of containment and replacement costs. Other expensive finish issues include lead paint and, more recently, Chinese drywall, which found its way into homes built during the boom years of 2004 and 2005. This product's sulfur off-gassing leads to illness as well as damage to home systems, so you'll need to have it completely removed and replaced if it's found in the home that you're hoping to buy.

8. Outdated wiring: Home inspectors will typically open and inspect the main electrical panel, looking for overloaded circuits, proper grounding and the presence of any trouble spots like aluminum branch circuit wiring, a serious fire hazard.

This information is courtesy of AOL Real Estate: Retrieved on July 23,2013 - from this website.

Should I Avoid an Adjustable Rate Mortgage?

       Because adjustable rate mortgages, or ARMs, fluctuate with the market, they offer less stability than fixed-rate loans.  If an ARM is adjusted upward, monthly payments will increase, and for a lot of people that can be too big a risk to take.  On the other hand, should rates drop dramatically, homeowners can reap the benefits of lower rates without refinancing, thereby saving thousands of dollars.
Lenders first introduced ARMs in the 1980s when interest rates soared into the double digits, forcing many people out of the home buying market.  They tied the rate to a variable national index, such as U.S. Treasury bills.
Today, many first-time buyers who have difficulty qualifying for a home loan, still settle for adjustable rate loans because the initial, “teaser” interest rate of the mortgage is normally two or three points lower than a fixed rate loan.  ARMs are particularly attractive if you plan to be in your home a short time.  They tend to adjust yearly or every three years, usually within certain limits, or caps, that prohibit the interest rate from shooting up too high.  Make sure terms such as these are spelled out in any ARM agreement you choose.

Reprinted with permission from RISMedia. ©2013. All rights reserved.

How to Make Your House Marketable!

Small improvements can make a huge difference in how much your home sells for. Pillar To Post is the leading home inspection company in North America, according to Entrepreneur Magazine. Here are five tips from Pillar To Post for making your home more marketable:

First impressions: The first thing a potential buyer is going to see is the outside of your home. Make it count. Make sure the outside of your home is freshly painted, that the landscaping and the lawn are well manicured and that toys and other clutter are removed. Putting a layer of mulch on gardens and other non-grassy areas is an easy improvement that doesn’t cost that much. It not only makes your yard look nicer, but it also helps prevent weeds

Paint: A fresh coat of interior paint is one of the easiest ways to increase your property value. A light, neutral color makes your home look larger and prevents potential buyers from worrying about their belongings not “going” with your home.

Staging is everything: You’ll want to remove larger pieces of furniture and other clutter to make your home look as big as possible. You should also make sure dishes are clean and put away, clothes are neatly hung in the closets and towels in the bathroom and kitchen are clean and nicely folded. You should also remove personal items, such as photos and knick-knacks, so it’s easier for potential buyers to imagine what their stuff will look like in the home. Replacing stained carpeting and outdated tile floors is another easy fix that instantly adds to your home’s value. You’ll also want to make sure all light bulbs work, particularly in closets and other dark spaces.

Update the kitchen and bathroom: Update older appliances and fixtures. If this isn’t in your budget, updating the hardware on the cabinets and sinks is an inexpensive way to give them a more modern look.

Hire an inspector: It’s a good idea to hire an inspector to come out before listing your home. You don’t have to fix everything, but it allows you to be up-front with potential buyers, so there aren’t surprises later on.

Source: www.pillartopostfranchise.com

Reprinted with permission from RISMedia. ©2013. All rights reserved.

Real Estate Q&A - What is seller financing?

Q: What is seller financing?

A: Also known as a purchase money mortgage, it is when the seller agrees to "lend" money to the buyer to purchase and close on the seller's home. Usually sellers do this when money is tight, interest rates are high or when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price.
Seller financing differs from a traditional loan because the seller does not actually give the buyer cash to complete the purchase, as does the lender. Instead, it involves issuing a credit against the purchase price of the home. The buyer executes a promissory note or trust deed in the seller's favor.
The seller may take back a second note or finance the entire purchase if he owns the home free and clear.
The buyer makes a sizeable down payment and agrees to pay the seller directly every month. 

For further details don't hesitate to contact my office - 812-323-1231 - I, or any of our agents would be happy to help you in your search for a new home... or sell your current home. 

Avoid These Common Home Improvement Blunders

Consumer complaints and lawsuits regarding home improvements are on the rise according to Ripoff Reports; a homeowner that does not do their homework before embarking on a project could find themselves with poor workmanship, inferior products, health and safety issues or even legal problems.

So what's a homeowner in need of a fix up to do?

"Start by reviewing the three most common mistakes people make when embarking on a home improvement project," says Dave Harrison, chief marketing officer of Champion Windows, Sunrooms, Roofing and Home Exteriors, one of the nation's leading home improvement companies.

No.1: Buying Only on Price
Your home is probably one of the most expensive items you own, so making improvements is not the place to budget shop.- "Make sure you are getting quality products professionally installed. A properly done home improvement should only have to be done once," added Harrison, "and remember the old adage 'you get what you pay for'."

No. 2: Not looking at the Long Term Investment Benefits
When your home improvement project is finally over, you should be getting more than an upgrade to your home; you should also see an increase in your home's value. When you do it right you can reduce energy and maintenance costs and increase comfort and pride in your home, and never have to worry about it again for as long as you own your home.

On the flip side a poorly executed project can lower the value of your home, have to be re-done in several years and even put your family's health at risk. For example, water damage from faulty windows could cause mold.

No. 3: Not Knowing How to Screen a Contractor
"I've seen many independently owned contractors close their businesses after a short year or two," said Harrison. "When selecting a contractor to work with it is important to get a sense of who they are, what products they use and how long they have been in business."

According to Harrison there are four essential questions to ask during this screening process:
- Who designs it?
- Who builds it?
- Who installs it?
- Who guarantees it?

"When you don't get the correct answers to these four questions you may end up with an inferior investment, expensive surprises, property damage or even lawsuits and liabilities," says Harrison.

"Ultimately, the answer you want is that there is a single source of accountability for your project. Having one company design, build, install and guarantee the product and work can save you time, money and hassles in the long run."

Make sure you have a contractor relationship you can trust for the long-term. This long-term relationship starts with a quality product and professional installation and includes a lifetime warranty from a company that has longevity and provides you with a sense that they will still be in business five or ten years down the road. -You should also ensure that your warranty is transferable, applies to all systems, applications and materials, and is non-prorated. A non-prorated warranty is considered to be the most valuable as it means that the manufacturer or seller will replace or repair the item at no cost to the buyer if there is a problem with a product.

Top 10 Predictions for Housing in 2013

RE/MAX Co-Founder - Dave Liniger - Sees 2013 as the Best in Years

Denver, CO – The national housing market made a strong rebound in 2012 and that positive trend is expected to continue in the New Year, according to RE/MAX Co-Founder and Chairman Dave Liniger. His 2013 Top 10 Predictions are revealed in a video presentation released today.
“Although interest rates have been at historic lows, they have not been the driving force behind this recovery,” said Liniger. “There’s no single factor driving this market; it’s been a combination of low prices, low inventory, improving consumer confidence and a huge pent-up demand. That was true throughout 2012 and will continue to be true in 2013.”
Many consumers now understand what real estate professionals have known for the last year, a number of related factors have combined to create a favorable opportunity for homebuyers and investors to purchase residential properties.
“The 2013 situation is so unique that those of us who’ve worked in real estate for many years have never seen opportunities like this,” Liniger added.

Dave Liniger’s Top 10 Real Estate Predictions for 2013 are:

1. More Homebuyers and Sellers come back to the market.

2. Homes Sales will rise by 6-7% and Prices rise by 3-4%.

3. The inventory of homes for sale will hit a bottom.

4. Higher priced homes begin to sell.

5. Distressed property numbers continue to fall.

6. Shadow inventory continues to fall.

7. The number of Short Sale closings will rise to a peak.

8. Record low mortgage rates rise slightly by year-end.

9. Lending remains tight.

10. Home affordability remains the best in years.

While Liniger feels that 2013 could be the best year in real estate in many years, he admits that the recovery is fragile and still faces some obstacles. In his video presentation, he states that tight lending, government regulation and the overall economy still have the potential to negatively impact housing.
However, Liniger also believes that “if housing can stay on the road to recovery, it’s possible that it can pull the rest of the economy along with it.”
In recent years, Liniger has been a highly vocal advocate for the home buying and selling consumer, and real estate professionals. He has supported reforms aimed at helping troubled homeowners avoid foreclosure and streamlining the Short Sale process.
In October, his open letter to candidates Obama and Romney called for a continuation of mortgage interest deductions, an extension of the Debt Relief Act and more reasonable regulations on mortgage lending. The Fiscal Cliff Agreement left the deductions mostly intact and extended the Debt Relief Act until the end of 2013. These moves support the American dream of home ownership, help distressed families avoid foreclosure and promote a sustainable housing recovery.

Information Courtesy of RE/MAX of Indiana - Press Release January 2013 - For more information visit remax.com