Archive for June, 2010
What Would MacGyver Do? In an Emergency, Reach for the Duct Tape!
Monday, June 28th, 2010 | Home Improvements | No Comments
We’ve all had them: the clogged drain, the ripped vacuum hose, the unsightly hole in the wall. Home repair emergencies like these are the last thing you need when you’re running out the door, running after the kids, or fielding other household chores. Channel your inner MacGyver by taking advantage of one common household item the classic action hero made famous: a roll of duct tape.
We’ve collected some MacGyver-inspired ideas from the Internet.
What MacGyver did:
Used duct tape to seal a hole in a hot air balloon, allowing him to escape his pursuers.
What you can do:
- Fix a slow-running toilet. Clear the clogged flush passage with wire, then empty the water tank and seal the passage hole with duct tape. Fill the tank with a quart of vinegar and leave overnight.
- Weatherproof windows. Use strips of duct tape to make windows air tight until you can fix or replace them.
- Make a temporary roof shingle. Wrap strips of duct tape across a ¼ inch thick piece of plywood cut to size.
- Tie off loose wires. Wrap small, thin strips of duct tape around exposed ends.
- Patch holes and tears in duct work, dryer vents, and a torn vacuum hose to temporarily seal leaks.
(HouseLogic.com)
Sun Prairie, WI ~ Hickory Grove -2 Story, 1341 Chipper
Thursday, June 24th, 2010 | Home Selling | No Comments
Making Sense of a Confusing Market
Thursday, June 24th, 2010 | Home Buying, Home Selling, Market News | 1 Comment
A question we get quite a bit lately is, “why should we trust housing? We’ve been burned before, how do we know we won’t be burned again.
This is a great question, and I feel like I could write a book about it. It’s a question we face ourselves every day, and one that is truly fundamental. Let me offer briefly here some of the main reasons we think housing remains an asset you should trust.
First of all, the most recent housing bust was at root a product of shoddy mortgage lending creating a huge excess demand that pushed home prices in some markets far above that which would be dictated by the fundamentals. In short, a bubble. Whenever this happens, regardless of the asset class, the forces of supply and demand will eventually bring prices back in line. This process can be painful, but it is necessary, and it always happens. Once the pain has been endured, however, market fundamentals dictate that prices will stabilize, and eventually begin to rise again along with economic growth.
How do we know they will rise? Well, in the most cosmic sense, nothing is ever 100% certain, and the shorter the time span we’re looking at, the less certain we can be. However, if we make certain basic assumptions about the future, we can usually safely assume that certain things will happen over time. Here are the basic assumptions that drive our belief that housing will be solid in the future. First, housing is a very basic essential. Everyone needs to live somewhere. So as long as there are people, there will be demand for housing. Second, populations continue to grow over time, so demand for housing grows over time. Third, despite cyclical ups and downs that can make things seem uncertain, the fact is that economies always grow over time. Why? Because that’s what we as humans do every day. We work, we produce, and we try to improve our situation over time. Collectively, we naturally try to get better every day. Yes, we have our mistakes and setbacks…the last three years have been the fallout from some very large mistakes. But the market corrects, we lick our wounds, and we go back to work to try again. And over long periods of time, we grow and get better. And as we grow, our ability and demand for everything, including housing, grows.
So, if you assume over long periods of time (I’m talking 10, 20 years and more) that the population will grow, the economy will grow, and that people will always need a place to live, then we think it’s pretty safe to assume that over those same long periods, the value of our housing stock will grow. But remember…real estate is a “get rich slow” investment, and in a healthy market, prices rise at very close to the rate of inflation. We can’t guarantee that if you buy real estate today, you can sell it for more next year. But 5 to 10 years from now? We think that’s a pretty safe bet. ( www.StarkHomes.com )
Protect Yourself and Your Home from Flooding
Tuesday, June 22nd, 2010 | Home Improvements, Market News | No Comments
Flooding is the most common natural disaster in the United States. In 2007, the latest year for which numbers are available, flooding occurred in all 50 states, according to the National Flood Insurance Program, a government-sponsored pool that provides flood insurance to homeowners. Furthermore, basic homeowners insurance policies don’t cover flooding: You generally need to purchase flood policies. The key to mitigating as much flood damage as possible is to take precautions, which in many cases you can accomplish in a few hours to a few days.
First, understand the threats
Storms with hard rains: Hurricanes, nor’easters, and other storms with driving rains can saturate the ground and cause bodies of water to rise, both of which can cause flooding. Blocked drainage systems can force water into roadways or homes.
Snow or ice melt: When frozen precipitation melts, it can cause a great deal of water to saturate the ground. Without proper drainage, the water can cause flooding.
Bodies of water: When rainfall, storms, saturated ground, or other factors affect bodies of water, they may surge over banks, beaches, or other barriers, flooding streets, homes, and virtually everything else in their paths.
Levees and dams: Man-made water barriers and controls can be strained by excessive rainfall or snow or ice melt.
Protect yourself
It’s not a good idea to bet the odds—20% to 25% of flood claims came from low- to moderate-risk areas in 2007. Check with your insurance agent to see what flood insurance will cost you. And check the Community Status Book to see if your community is already an NFIP partner. The NFIP offers flood insurance to homeowners and renters whose community participates in NFIP. Participating communities agree to adopt and enforce ordinances that meet or exceed FEMA requirements to reduce the risk of flooding, according to NFIP.
If you live in a high-risk area, it’s a good idea to have a “go-bag” ready in case you need to leave quickly. It should include a few changes of clothing for you and family members, insurance policy numbers, phone numbers of your agent, your insurance company’s main number, essential toiletries, and some money to get you through a few days. It’s also wise to have an evacuation route mapped out and to have a location to which you can go, such as a loved one’s home or hotel.
Always follow the direction of local and state authorities if ordered to evacuate. Remember: Your possessions and your home are small comfort if your family is injured or worse. As a preventative measure, if you believe water will begin to accumulate in your home, shut off power at the main electrical panel in your home, says Bill Begal, owner of Begal Enterprises, a Rockville, Md., disaster restoration company. But never stand in water to do so—if the area around the box is already flooded, leave it alone.
In addition, be sure to protect yourself against contact with water, which may be contaminated, even if it looks clear.
Protect your home
Before your rainy season or spring thaw begins, there are actions you can take to protect your home.
Fix leaks and cracks immediately. Leaky roofs and foundation cracks can let water into the home more readily and weaken the structure and provide a perfect habitat for mold. When you notice wet spots on the ceiling or cracks in the foundation, fix them immediately. Check to ensure that roofing shingles are secure.
In addition, home improvement expert and retired contractor John Wilder suggests that any roof replacements include a rubber roof underlayment, which is essentially a waterproof membrane that is installed under roofing shingles to protect the structure and interior of the home against moisture. That adds a few hundred dollars to most roofing jobs, but can extend the life of a roof, says Wilder.
For foundation cracks, he recommends mortar and masonry caulk or hydraulic cement, which expands and fills gaps completely and costs only a few dollars, instead of patching with mortar or cement, which may crack again. If water is a recurring problem, be sure to investigate other solutions.
Clear gutters and drains. When gutters and drainage systems are blocked by leaves or other debris, water can’t escape and may flood the home or yard. Check all gutters and drainage systems regularly for leaves, nests, and other obstructions. Also double-check storm drains on your street, as leaves and debris can block them, causing water to collect.
Invest in a battery-powered sump pump. Sump pumps let you pump water out of your home and can be an excellent defense against flooding—unless they’re powered by electricity and the power is out. Battery-powered sump pumps are a relatively inexpensive ($150-$400) solution.
Catalog possessions. Using a digital camcorder or camera, record as many of your possessions as possible. Although traditional video and photographs are adequate, they can be bulky to carry and may get damaged if left in a flooded home. Digital files can be stored on a small USB drive and kept in your go bag or on an online backup system. Inexpensive digital cameras start at about $100. Online backup systems like idrive.com, mozy.com, or boxstr.com offer free online backup up to certain levels of storage space, then charge for more.
Move expensive items to a safer location. If you have a second floor or an attic, you may want to move furniture, photographs, and artwork to a higher level. This will protect them in all but the most severe floods. Elevate furnaces and water pumps when they’re installed, if possible, by elevating them to a height of 12 inches above the highest known flood level for your area, suggests FEMA.
The Institute for Business and Home Safety also recommends ensuring that any fuel tanks are properly anchored to prevent them from floating, which may make them more likely to rupture and release fuel into flood water. Once the power sources of system units like furnaces and water heaters are disabled and the units cooled, you can also wrap them in waterproof tarps to mitigate water damage.
Prevent sewer backup. FEMA recommends that sewer or septic lines have check valves, which allow waste to only flow one way. This prevents sewage from backing up into the standing water in the home, contaminating it with raw sewage. Check valves are $10-$15 each and available at most home improvement stores, but you’ll likely need a plumber to install them, which can cost $100 or more per valve. They’re typically installed at a point in the pipe that’s easy to access for repair, and work with most plumbing systems.
Floods are a common challenge that many homeowners will face at one time or another. However, by keeping your home in good repair, moving valuables out of water’s way, and putting good practices in place, you can mitigate potential damage.
Gwen Moran has written about real estate and finance for a number of national publications and lives near the Jersey shore, although not in a high-risk flood zone.
By: Gwen Moran @ HouseLogic.com
Senate OKs new tax credit closing deadline
Friday, June 18th, 2010 | Home Buying, Market News | No Comments
Senate OKs new tax credit closing deadline
Backers of amendment cite backlog of 180K homebuyers
The Senate has amended a bill to give homebuyers who were under contract on a home purchase by April 30 an additional three months to close the deal and claim the federal homebuyer tax credit.
Extending the deadline for closing from June 30 to Sept. 30 would allow lenders more time to clear a backlog of 180,000 homebuyers nationwide, said amendment sponsor Sen. Harry Reid, D-Nev.
The amendment to HR 4213, the “American Jobs and Closing Tax Loopholes Act of 2010″ — which primarily extends unemployment insurance benefits — was approved in a 60-37 vote Wednesday. The vote on the amendment was mostly along party lines, with only four Republicans in favor and one Democrat opposed. The Senate has not yet voted on the amended bill itself.
“While I am disappointed that more Republicans did not support this common-sense measure to strengthen the economy and reduce the deficit, I am committed to ensuring that more Nevadans and Americans can become homeowners and that this amendment becomes law,” Reid said in a statement.
The House passed an earlier version of the bill in December, which the Senate amended and approved in March. The House and Senate must resolve differences between versions of the bill before it becomes law.
The National Association of Realtors supports the amendment, saying Realtors have reported that as many as one-third of qualified applicants have been told by lenders that their loans will not close before June 30 because of the sheer volume of loan applications in the pipeline.
The amendment does not extend the deadline for homebuyers to qualify for the tax credit, NAR said in urging lawmakers to approve it, but simply extends the deadline for closing transactions already in contract.
“Since these applications were already in the pipeline and figured into the program’s cost, the extension of the closing deadline should not incur any further government costs,” NAR President Vicki Cox Golder said in a statement.
There has been some speculation that some homebuyers will attempt to submit fraudulent claims for the tax credit by backdating documents showing they were under contract by April 30, and that extending the deadline for closing would expose the government to more fraudulent claims.
By Inman News, Wednesday, June 16, 2010.
Will a Short Sale Save Your Credit?
Thursday, June 17th, 2010 | Home Selling, Market News | No Comments
RISMEDIA, June 11, 2010— (MCT)—Stuck in a house you can’t afford or can’t sell for more than you owe on it? Beware the Web, where you’ll see plenty of claims that short sales will save your credit, simple as that. But there’s nothing simple about deciding whether to sell your house in a foreclosure or in a short sale, which means you sell the property for less than you owe the bank. And in most cases, going through either process will wreck your credit score.
“Both short sales and foreclosures are considered negative by the score, because our data shows us it’s very predictive of future credit risk,” Tom Quinn, Minneapolis-based Fair Isaac Corp.’s vice president of FICO scores, said. “The claim that doing a short sale is not going to hurt your score is false. It’s inaccurate.”
Credit scores, which are designed to assess how likely it is that consumers will uphold their side of the bargain, look at the severity (are we talking bankruptcy or a late car payment?), frequency (have you skipped a payment once, or have you missed a bunch?), and recency (did you miss a payment last month or last year?) of items on your credit report.
In both short sales and foreclosures, “you made a lender eat a big number,” said Alex Stenback, a mortgage banker with Residential Mortgage Group in Wayzata, Minn.
That’s not to say that there aren’t some instances where short sales are better. If a borrower is current at the point of a short sale, for instance, then the consumer’s credit score won’t sink as far as it would have if he hadn’t made a mortgage payment for six months. Still, Fair Isaac says that the benefit from not having prior delinquencies on file pales when compared with the hit a score takes from a short sale.
Dan Williams, program director for LSS Financial Counseling Service, says this widespread notion that short sales are better for credit is a big problem because it deters some people from going into foreclosure when that would be the best option for them.
In Minnesota, homeowners can stay in their houses for six months after the foreclosure sheriff’s sale. Factor in the fact that many banks don’t start foreclosure proceedings right after the third missed payment, and families can potentially stay in a house for more than a year rent-free, hopefully saving that money to help them get back on their feet. This could amount to thousands of dollars.
Housing counselors say that most clients have credit scores in the basement already. “If you’ve got a poor credit score and are doing a short sale to preserve your credit, it’s ridiculous,” Williams said. And it’s happening every day.”
If you’re having mortgage trouble, seek help right away from a housing counselor or an attorney. Realtors are the go-to professionals to learn about the local housing market and what it takes to sell your home. But they aren’t credit experts, and I’d get a second opinion if anyone is telling you that a short sale will save your score. And don’t pay someone a lot of money if they promise to quickly rehab your credit score after foreclosure. Credit scores are forgiving—over time.
Both FICO and its credit scoring competitor VantageScore have released estimates for what happens to consumers’ credit scores when they make mortgage missteps. In the VantageScore study, a homeowner with an otherwise clean record who then has a short sale sees their credit score drop between 120 and 130 points (on a scale of 501-990) compared with between 130 and 140 points if the same homeowner ends up in foreclosure.
For a homeowner whose credit report is rife with late payments on everything from credit cards to car loans, a short sale would ding them between 15 to 25 points compared with 10 and 20 points for a foreclosure. Customers with rotten scores will see smaller point drops than someone whose score is good, because the score already has taken into account the lower-scoring customer’s risky behavior and adjusted the score downward.
FICO’s example found short sales and foreclosures will set you back between 140 and 160 points if your credit score is a respectable 780 (on a scale of 300 to 850), or between 85 and 105 points if your credit is 680.
Even if you do your homework, you ultimately can’t control how your housing woes are reported to the credit bureaus. For example, mortgage servicers may report your situation to the credit bureaus using different codes that could be interpreted more or less favorably by FICO, Quinn said.
What if your circumstances change and you’re able to save your home from a foreclosure? “Once you’ve got a foreclosure starting to track on your credit file, you’re taking a major hit,” even if you ultimately save your house, said Sarah Davies, a VantageScore senior vice president.
Credit scores play such a central role in consumer’s lives. Yet it’s so hard to understand them that people can end up making disastrous choices based on myths that are taken as fact. It’s certainly not a catchall solution, but Congress should at least grant consumers free access to their credit scores, an idea which is currently being floated at the capitol.
(c) 2010, Star Tribune (Minneapolis)
Distributed by McClatchy-Tribune Information Services.
Real Estate Future vs. Real Estate Past
Monday, June 14th, 2010 | Home Buying, Home Selling | No Comments
FUTURE HOME BUYING MODEL:
Technology soon will revolutionize the real estate industry and allow homes to be purchased in as little as an hour.
Buyers will spot a home that interests them and contact the REALTOR® via cell phone. After the agent quickly prequalifies the buyers, a “key” sent via cell phone unlocks the home, and electronic tracking systems keep an eye on buyers during the tour. Buyers can use their phones to make an offer on the spot. “It’ll take a little bit of time (until it’s available), but I think it’s going to happen soon.”
(ZipRealty President and CEO Pat Lashinsky)
1960’s HOME BUYING MODEL:
In the 1960’s, most people didn’t lock their doors. There were Realtors who would leave vacant properties unlocked; when prospects contacted them, they would simply direct the prospects to show themselves through the house.
Realtors bring trust and negotiation expertise to the process and these are low-tech items.
The ZipRealty approach seems like a hi-tech version of the same scenario.
(Roger Stauter, Stark Company, Realtors)
EXTENSION ON TIME TO CLOSE DEADLINE FOR TAX CREDIT ???
Friday, June 11th, 2010 | Home Buying | No Comments
Congress is considering an extension for would-be home buyers who are racing to close home sales in order to receive a federal tax credit.
The real-estate industry has warned that tens of thousands of buyers who rushed to buy homes to qualify might not close before the deadline imposed by Congress, meaning they could miss out on receiving credits worth thousands of dollars without action from Congress.
Congress last fall extended an $8,000 tax credit for first-time home buyers and added a smaller $6,500 credit for current homeowners who were buying a primary residence. To qualify for the credit, buyers had to sign purchase contracts by April 30 and must close on the transaction by June 30.
But there are so many transactions in the pipeline that the companies responsible for handling the sales, including mortgage lenders, appraisers and title insurers and real-estate brokers, say the last-minute home-buying rush in April has created bottlenecks.
On Thursday, Senate Majority Leader Harry Reid (D., Nev.) said he would back a measure to extend the June 30 closing date to Sept. 30 for buyers who had met the April contract deadline.
The National Association of Realtors estimates that between 55,000 and 75,000 home buyers who are under contract won’t be able to close in time to claim the tax credit. The trade group is lobbying Congress to extend the June 30 deadline only for those buyers who met the April deadline.
“Everybody who got under contract at the end of April deserves to get the tax credit,” says Stephen Adamo, president of Weichert Financial Services, a division of real-estate brokerage Weichert Realtors. “For reasons out of their control, they’re in jeopardy of losing it.”
That is causing heartburn for buyers like Alan Nickelson, a first-time home buyer who went into contract on a three-bedroom home in Kent, Wash., days before the tax-credit deadline in April. While he was pre-approved for a loan and will make a 20% down payment on the $275,000 home, he says the transaction has been held up because of home inspections and work repairs required by the appraiser.
Mr. Nickelson says it is “entirely possible” that he will miss out on the tax credit. He says he would have bought the home anyway but that he planned to use the $8,000 credit to offset repair costs. “It was icing on the cake, but it was really sweet icing,” says the 52-year-old machinist.
One particular worry is that short sales, where a lender allows a home to sell for less than the amount owed, won’t receive requisite approvals in time to meet the closing deadline. Unlike normal sales where only two parties—the buyer and the seller—negotiate the price, short sales are more time-consuming affairs because they require note-holders to agree on price.
“From February on, I told people, you have no chance” of finishing a short sale by June 30, says Steve Capen, a real-estate agent in St. Petersburg, Fla. But he says clients who have been pursuing deals before that could miss the deadline.
Real-estate agents say that even “plain-vanilla” transactions are increasingly at risk. Response times from loan officers and appraisers have doubled over the past month, says Kailee Rainey, who works for a Seattle-based real-estate brokerage.
Lee Barrett, president of Century 21 Barrett, a real-estate firm in Las Vegas, spent part of the week in Washington meeting with his congressional delegation about the need to extend the closing deadline. “The lenders are overwhelmed. The title companies are overwhelmed,” he says. “It’s just a mad surge of everybody trying to close deals.”
At Wells Fargo & Co., employees from other sales divisions are being brought in to handle mortgages, and staffs are working weekends and nights to process higher volumes. “It’s all hands on deck,” says Greg Gwizdz, an executive vice president at Wells Fargo Home Mortgage. He says the bank has prioritized “every customer who qualified for the tax credit.”
A spokeswoman for Bank of America Corp. says the lender is also placing “increased priority” on loan applications submitted before the April 30 deadline. Luke Hayden, president of PHH Mortgage, a lender based in Mount Laurel, N.J., says consumers can help speed the process along by being “very responsive to requests for documentation” from lenders.
Some of the delay reflects new rules related to disclosure and appraisal requirements enacted to correct the excesses of the bubble years. The new regulations have prompted lenders to take extra caution at every step, stretching closing timelines.
The tax incentive was credited with boosting existing-home sales in April by 23% from year-earlier levels, according to the NAR, while new-home sales gained by 47.8% from one year ago, according to government figures.
It is unclear how many sales would fall through for those who miss out on the tax credit. Buyers could be hard-pressed to void sales contracts unless they have made their closing contingent on receiving the tax credit or are willing to forgo any deposits.
An extension would benefit Kalliopi Michalopoulou, a first-time home buyer who went into contract in February and agreed to put 25% down on a $580,000 three-bedroom cooperative apartment in Upper Manhattan. Her pre-approval for the loan expired last month after renovations took longer than expected to complete.
“I’m so close to canceling now the contract because I’m so upset,” she says. “If I knew I was going to get the tax credit, I wouldn’t mind that much. But this feels like a punishment.”
JUNE 10, 2010, 1:42 P.M. ET
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By NICK TIMIRAOS
Wall Street Journal ~ www.WSJ.COM
NEW LISTING ~ 1121 Fleetwood, Madison
Tuesday, June 8th, 2010 | Home Buying, Home Selling | 1 Comment
GRANDMA’S HOUSE IS FOR SALE! Well cared for 3 bdrm, 1.5 bath ranch nestled on a large lot on quiet street. Large eat-in kitchen-all appliances stay, Master Bedroom with bath & double closets. Hardwood floors under carpet. Don’t forget the 2 car garage! Roof ’03, electrical update ’10, freshly painted. UHP Home Warranty. Move right in! 1595629
Market Updates ~
Monday, June 7th, 2010 | Market News | No Comments
The news from the housing sector was positive. April Pending Home Sales rose 6% from March, which was stronger than expected, to the highest level since October 2009. Pending sales are a leading indicator of future housing market activity.
The April 30 expiration of the homebuyer tax credit likely pulled some pending sales forward which otherwise might have taken place later in the year. The benefits, though, of extremely low mortgage rates and very affordable home prices are in place to promote home buying activity even without the homebuyer tax credit.
