AOL Real Estate - Blog http://realestate.aol.com/blog AOL Real Estate - Blog http://realestate.aol.com/blog/media/feedlogo.gif AOL Real Estate - Blog http://realestate.aol.com/blog en-us Copyright 2013 Weblogs, Inc. The contents of this feed are available for non-commercial use only. Blogsmith http://www.blogsmith.com/Are No-Cost Mortgages Always the Best Deal?http://realestate.aol.com/blog/2013/05/17/no-cost-mortgages/http://realestate.aol.com/blog/2013/05/17/no-cost-mortgages/http://realestate.aol.com/blog/2013/05/17/no-cost-mortgages/#commentsFiled under: , ,

fever chart with Monopoly game housesBy Scott Sheldon

A program made popular in the height of the subprime lending environment was the no-cost mortgage. No-cost mortgages have gotten quite a bit of exposure lately, as consumers seek to better understand loan terms, interest rates and how to qualify for mortgages in an ever-tightening credit market. And then there's the low-cost mortgage. No-cost mortgages, low-cost mortgages -- two distinct kinds -- here's how they differ.

Some Lending Lingo

1. Annual Percentage Rate is a function of blending the closing costs with the loan amount and re-amortizing that figure over the term of the loan. On traditional loan financing, the APR is usually within .125% of the actual note rate tied to the amount borrowed.

What to know: APR is a comparative tool enforced by the Truth In Lending Act to quickly assess cost differences between loan choices. The APR has no bearing on your principal and interest payment amount or the note rate. APR is a barometer of loan cost solely. The interest rate, rather than note rate, determines the monthly mortgage payment.

2. No-Cost Mortgage is truly a "no-cost" loan -- no appraisal fee, no lender fees and no closing costs. These fees are assessed by virtue of taking out the loan. The mortgage lender provides a credit at the close of escrow equal to the amount of the closing costs, thereby creating a "no fees" loan. APR is equal to the interest rate, but disclosure will have a higher APR just as a traditional mortgage would, as lenders are required to disclose APR whether there is a lender credit or not.

What to Know: No-cost mortgages will contain a higher interest rate and APR, so you're in essence amortizing the closing costs over the life of the loan (i.e. 360 months representing a 30-year fixed rate mortgage). The higher interest rate allows the lender to generate "overage" for the benefit of the consumer taking out the no-cost mortgage.

3. Low-Cost Mortgage is a traditional mortgage all lenders offer that is considered the norm, taking out a loan while paying any applicable fees associated with doing so, excluding discount points, which are usually optional. (In some cases paying discount points may very well make sense, but for our purposes a low-cost mortgage is under the assumption of no discount points.)

What to Know: Low-cost mortgages will contain lower rates than their no-cost mortgage counterparts. Because the lender does not have to inflate the rate for generating overage to pay the borrower's closing costs, the lender can offer the consumer premium pricing when it comes to the interest rate and terms. Not always, but in most cases, the interest rate and APR are lower on low-cost mortgages than on no-cost mortgages.

Which Is Better for You?

The benefits you would gain from either type of loan depends on how long you plan to hold the loan and your financial goals. For example, because the future for many is unknown in terms of how long the loan will be held for and/or how long the property will be held for, a low-cost mortgage is a more appropriate long-term strategy as the realized benefits of the lower-cost mortgage materialize over time -- i.e., lower interest savings over the life of the loan. Conversely, if the property hold time or the loan payoff is going to be dramatically shorter, such as within the next 12 months, a no-cost mortgage is more appropriate despite the higher interest rate.

Read the rest of this story on Credit.com.

See more on Credit.com:
The First Thing to Do Before Buying a Home
Can You Really Get Your Credit Score for Free?
19 Confusing Mortgage Terms Deciphered

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Find out how to calculate mortgage payments.
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Personal Finance Terms 101: Mortgage

 

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]]>APRlow-cost mortgagesmortgage financemortgage ratesmortgagesno-cost mortgagesCredit.com2013-05-17T13:30:00+00:00DIY Kitchen Remodels for Investment Propertieshttp://realestate.aol.com/blog/2013/05/14/diy-kitchen-remodels-for-investment-properties/http://realestate.aol.com/blog/2013/05/14/diy-kitchen-remodels-for-investment-properties/http://realestate.aol.com/blog/2013/05/14/diy-kitchen-remodels-for-investment-properties/#commentsFiled under: , , ,



By ProfessorBaron.com

If you are an investor who is buying rental properties, are a do-it-yourself type or want to renovate your kitchen, there are many things you can do to reduce your costs on doing some updating. Note that most renovations run way over budget and encounter issues, regardless of where DIY, semi-DIY, or having a contractor do the job. Make sure you estimate plenty of contingency funds for those guaranteed cost overruns.

Also, be cautious about spending a lot of money on kitchen renovations. While any property renovation will add value to the property, it's unlikely to add as much value as it costs. For example, if you spend $20,000 on a kitchen, it might only add $12,000 in value. Finally, again be cautious on how much you spend as it probably won't dramatically increase your rental amount, but it probably will increase the length of time that your tenants stay at the property, and smart landlords love long-term tenants.

Some fixer-upper options:

Cabinets - If the cabinets are in good shape, but old and gray, a fresh coat of paint from a skilled painter can add a world of life to the kitchen. But the painter needs to take the cabinets off, sand them lightly, brush paint them with the proper type of brush and paint, and re-install them. And of course sand and paint the cabinet exterior fascias too! A nice job of painting on an average kitchen probably runs $750 - $1,000 if done right. And don't forget to paint the inside and bottoms!

You can also put new hinges onto the cabinet doors if they are the ones that show on the exterior of the cabinet when the door is closed. Word of caution: If the existing holes don't match the new hinges, it can end up being a big headache and probably won't be worthwhile. Brushed nickel hinges are $2-$4/hinge.

And new handles on those cabinets are a must. You can buy the 20/30 packs of brushed nickel handles at the home renovation stores. They're about $2-$3 per handle and look great.
If the cabinets are past their useful life, you can check into cabinet re-facing or cabinet replacing - both are expensive options. If you are going to replace them, make sure to look at the in-stock and "special order" cabinets available at the stores, before you jump into custom-made cabinets. If you are going to re-face or replace, make sure to get several bids for the work.

Countertop - If you are going to keep the cabinets, a new countertop will be a big help. But, if you're not ready to replace the cabinets just yet, wait on the countertop, too. Countertops can run $15-$65 per square foot. I like the giant granite squares that can be found at your home renovation store. They are installed at 18 inches wide and 24 inches deep, so they're much better than the 12 inch by 12 inch standard granite square tiles. Cost of these installed is probably $22-$30 per square foot; granite is $10-$15 per square foot. Note: Use dark grout for rentals! You can also buy brand-new laminate counter tops, which are less expensive and easy to do.

Sink/faucet - If you are replacing the countertop, it's time to do the sink and faucet! Most home repair stores offer a stainless sink and faucet combination for about $200-$300. Make sure you buy the "combo pack."

Flooring - Flooring really should be tile (which isn't cheap) or linoleum - which doesn't last that long. It's essential to use dark grout for tile in rental floors, and a tougher grade of linoleum is best if you go that route. Skip the carpets or wood laminate flooring for any kitchen/bathroom floors.

Appliances - If you need to replace the appliances, go with moderate grade appliances. Most appliances will last a long time. I've bought many properties with 20-year old appliances working fine, but they look terrible and could be energy inefficient, so I replaced them.

Lighting - Kitchen lighting can be easily updated from an extensive selection at the home improvement stores. They're usually easy to install. Check out the ones with low energy bulbs.

Water/Electrical - If the property is older, it's probably a good time to bring in the plumber and electrician. Change out old water valves and update the kitchen switches and electrical outlets to new GFCI circuits for water-related safety.

All the items above cost money whether you DIY the job or semi-DIY it. But an updated kitchen will help in the most important goal in rental property ownership, which is to keep your tenants as long as possible. Just like you, your tenants want to live in a nice place too and a nice kitchen will inspire them to stay a long time!

More on Zillow:
What's the Best Way to Earn Wealth in Real Estate?
Rental Property Investing 101
Rental Homes: Making More Money by Keeping Your Tenants Happy

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Find out how to calculate mortgage payments.
Find homes for sale in your area.
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]]>DIYDIY kitchenDIY kitchen remodeldo it yourselfdo it yourself helphome improvementhome remodelingkitchen renovationZillow2013-05-14T13:00:00+00:00Remodeling? Avoid These Costly Mistakeshttp://realestate.aol.com/blog/2013/05/08/remodeling-avoid-these-costly-mistakes/http://realestate.aol.com/blog/2013/05/08/remodeling-avoid-these-costly-mistakes/http://realestate.aol.com/blog/2013/05/08/remodeling-avoid-these-costly-mistakes/#commentsFiled under: ,

plumbing parts and blueprint
By Vera Gibbons

While many Americans are ready to take on remodeling/renovation projects this spring, doing it the wrong way can be costly. Some errors to avoid:

1. Not knowing exactly what you want. If you don't know exactly what you want or specify what you want, you're going to get what the contractor thinks you want. And it could end up costing you dearly! For home remodeling design ideas, inspiration and a whole lot more (including cost estimates), check out Zillow Digs (free on the iPad or the Web). You can search by style, cost or room. And what's really cool is that you can search by specific elements within a room, such as quartz or granite countertops, for example. Share your boards with your contractor so that you're clear on your objectives.

2. Hiring the first contractor who comes along. Sure, he may seem nice, and he may seem competent, but have you checked him out? What do your friends say about him? Have you contacted his references? Seen his work? Are there any complaints lodged against him? (P.S.: The Better Business Bureau just released its top 10 list of inquiries from consumers, and half relate to home improvement.) What do subcontractors and suppliers have to say about their dealings with him? Is he licensed and insured? As excited as you may be about taking on this new project, you need to do a fair amount of due diligence.

3. Jumping at the lowest bid. Get at least three bids, and throw out the lowest one so as to avoid the inevitable consequence: cheap materials, shoddy installation, etc. Don't invite trouble in! Rather, hire someone who not only comes in within target, price-wise, but is someone you feel personally comfortable with.

4. Not insisting on a written contract. Every detail about your project should be included in a contract, from the start date to the approximate completion date, right down to the brand of fixtures to the number of coats of paint. Be as specific as possible! Also important: setting a time limit for fixing defects so that if a dispute arises, it's not endless.

5. Not setting a payment schedule. How you pay a contractor is almost as important as how much. Spell out the payment schedule in the contract, beginning with the amount to be paid upfront (which should be no more than 30 percent). Periodic payments after the work starts should correspond to completed segments of the project. And the best way to ensure that work gets done when and how you want it? Leave a significant sum (at least 10 percent) to be paid only when the job is completed to your satisfaction.

See more on Zillow:
Why You Need to Get 3 Bids for Your Home Improvement Project
5 Considerations for Finding a Roofing Contractor
5 Home 'Upgrades' You Should Avoid

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Find out how to calculate mortgage payments.
Find homes for sale in your area.
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The Top 10 Mistakes When Hiring a Contractor

 

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]]>diyDIY mistakesDIY tipshome improvementhome improvementsremodelingremodeling mistakesremodeling tipsZillow2013-05-08T11:37:00+00:00Does a Pool Make a Home a Better Investment?http://realestate.aol.com/blog/2013/04/29/invest-home-pool/http://realestate.aol.com/blog/2013/04/29/invest-home-pool/http://realestate.aol.com/blog/2013/04/29/invest-home-pool/#commentsFiled under: , ,

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By Tracy Royce

I know I'm not the only one with the looming feeling investors might face this time of year: "Should I buy a house that has a pool?" In places like Arizona, we might look at things a little differently (any relief from the scorching desert is a plus!). If you're in the Midwest, having a pool might mean different costs and value. But, let's look at the pros and cons of purchasing a rental or flip that has a pool.

How Bad Is It?

I've seen my share of distressed properties, and I guess after awhile, I feel like a Ghostbuster walking through freshly-minted foreclosures. ("I ain't afraid of no ghosts!") This comes with the exception of pools, though. A dark green pool may be hiding years of neglect, bad siding, algae, and who knows what else.

It can be difficult to estimate what pool repairs may be needed, and if you have, say, 20 minutes to do a full inspection of the house, the "ifs" of a range of $50 to $5,000 can swing your margins in the red quickly. If the home is a short sale, the pool may be sitting for months longer and cost more than you initially estimated, as well. If you have longer to get an inspection, and a pool person is able to give you an estimate on getting the pool back in working condition, then the initial costs may be worth the investment. However, there are further things to consider.

1. Who will be responsible for maintaining the pool?
2. Do your state laws require fencing, depending on who's purchasing/renting the house from you? If so, who's responsible for paying for that?
3. If you allow the renters (if you rent the property out) to take care of the pool, how are you assured they are actually checking and keeping the PH levels balanced and maintaining the cleaning?
4. Are you willing to accept the maintenance down the road for redoing decking/siding? Lost or stolen equipment?
5. What extra liability might you face if, heaven forbid, a serious or fatal accident should happen?

Liquid Gold?

Much of this might be negated if you're flipping the property. Similar to a fireplace in a warm-weather state building in more value (go figure!), a pool may add extra attraction to your property as well. It's advisable not to ever add the pool yourself, since dollar-for-dollar you will never recoup even your costs.

However, if there are matching houses and one has a pool, the one with the extra amenity may help you procure a buyer that much faster, therefore decreasing your holding time and/or increasing your sales price. I know many investors out there wouldn't touch a pool with a 6-foot pole (or a skimmer, I suppose!), but others find it to be a draw as a rental or a flip.

This story was originally published on BiggerPockets.com.

See more on BiggerPockets.com:
9 Steps to Flipping Houses
How to Screen Tenants
How to Rent Your House

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Find out how to calculate mortgage payments.
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Smart Home 2013 Pool Tour

 

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]]>homes with poolsinvestingreal estate investingSwimming poolsBiggerPockets.com2013-04-29T08:00:00+00:005 Tips for Buyers Who Want a Million-Dollar Homehttp://realestate.aol.com/blog/2013/04/26/buying-million-dollar-homes/http://realestate.aol.com/blog/2013/04/26/buying-million-dollar-homes/http://realestate.aol.com/blog/2013/04/26/buying-million-dollar-homes/#commentsFiled under: , ,




By Dolly Lenz

Called the "Queen of Real Estate" and even "Jaws" for her aggressively successful tactics, super broker Dolly Lenz (pictured in the inset above) has sold over $8.5 billion dollars in high-end properties, catering to clients like Barbra Streisand, Billy Joel and P. Diddy. Now she's revealing five tips to buying a million-dollar home.

In a Buyer's Market: Be Aggressive

In a buyer's market, sellers have fewer options. Buyers are scarce and, therefore, they have the upper hand in that they are better able to dictate terms. In this instance, buyers can be aggressive in their bidding and are free to probe how motivated a seller is to sell. In this environment, buyers should consider asking the seller to pick up certain closing costs, include furnishings as part of the deal, and even request seller financing.

In buyer's markets, sellers become very competitive with one another and buyers can use this to their advantage. Buyers should not be shy about using one seller against another and see which one will offer a better deal. This is especially advantageous in neighborhoods which have similar homes and buyers are indifferent about which property they prefer.

In a Seller's Market: Be Prepared

In a seller's market, multiple bids on the same property are common as inventory levels are low. Nothing gets a seller's attention more than a buyer who is both ready and able to consummate a deal. For this reason, potential buyers have to be prepared before they start bidding. Obviously, cash is king and those paying cash are in a commanding position to seal the deal with a seller. But for most buyers, financing is a necessary element to a purchase, and those bidding with commitment in hand stand a much better chance of attracting a seller's attention than those without.

Demonstrating an ability to act quickly is also desirable to sellers. This obligates a buyer to be responsive to a seller's communications in real time and be prepared with pre-approved financing, a closing attorney and a flexible closing date. Most people think that the bidder offering the highest price will get the deal but often that is not the case.

Savvy sellers evaluate all the terms of a deal as a package and price is only one factor. For example, most sellers will find a $1 million offer with a commitment letter for 70 percent financing superior to a higher offer of $1,060,000 with a contingency of 80 percent financing, unless the buyer with the higher offer can demonstrate likelihood that they will obtain the necessary financing.

Beware the Onerous Mortgage Contingency

In negotiating a deal, both buyers and sellers assume risk. Just as you are taking a risk by agreeing to buy, a seller takes on risk by agreeing to sell. Naturally, a seller wants a deal with zero contingencies, to eliminate the likelihood of the buyer backing out, while a buyer wants a deal with as many contingencies as possible, should his circumstances change.

The mortgage contingency is a major contract issue for both buyer and seller, and as a buyer you want to obtain terms that are favorable to you. Failure to do this properly could jeopardize your contract deposit. The key element is to establish a maximum amount you are going to finance, and the higher the percentage you can get in the contract, the better off you'll be. The seller will try to negotiate a lower percentage, but the key is to establish a number that you are comfortable with.

See more tips to buy a million-dollar home at CNBC.

See more on CNBC:
Why Housing Stalled: $1 Trillion in Student Debt
CNBC Explains REO
CNBC Explains Jumbo Mortgage

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Negotiating a Home Purchase

 

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]]>bidding warsbuyers marketbuying a homehigh-end homeshigh-end real estatemillion-dollar homesmortgagesnegotiating a home purchasesellers marketCNBC2013-04-26T08:00:00+00:00Renting vs. Owning: How Do You Know Which Is Right for You?http://realestate.aol.com/blog/2013/04/25/renting-vs-owning-which-is-right-for-you/http://realestate.aol.com/blog/2013/04/25/renting-vs-owning-which-is-right-for-you/http://realestate.aol.com/blog/2013/04/25/renting-vs-owning-which-is-right-for-you/#commentsFiled under: , , ,

By Benjamin Feldman

At this time, when housing prices are starting to rebound and interest rates are still very low, a lot of people are saying that you should buy a house in 2013. But is homeownership the right choice for your finances? The answer, of course, is "it depends." However, for many of us there is a clear answer based on where we live, how much money we have saved up, and what our future plans are.

The "Rent vs. Own" debate has been raging for decades, and will no doubt continue for many decades to come. Here are some important factors you should consider to help determine whether renting or owning a home is the right decision for you.

Basic Market Trends

Have you ever heard the saying that the three most important criteria in setting the value of a home are "location, location, location"? Well, that remains true today, but they might want to add: "timing, timing, timing."

Anyone who watched the gut-wrenching rise and fall of the housing market during the past 10 years can readily attest to the fact that timing has a lot to do with whether a house purchase becomes a good investment or metaphorical anchor tied to your finances.

Just looking at a graph of the Case-Shiller index shows how rapidly home values can increase and decline. The line on the graph looks like a roller coaster -- it goes up and up and up and then drops back down, all in the span of a few years. You want to avoid buying a house at the peak of a housing bubble, obviously!

But how to avoid it? To help you navigate these market variations, I'd recommend using something called the "price-to-rent" ratio. This is a formula that takes into account the price of renting versus the cost of buying in your area (with many factors included) and gives you a sense of whether the market dynamics favor buying or renting. If are trying to evaluate this, look online for some handy calculators/charts/graphs that show you the price-to-rent ratio for your city. Also remember that interest rates for mortgages fluctuate over time and it's always better to lock in a low interest rate if you can.

Your Financial Picture

One of the main considerations you have to make is this: does your current financial picture put you in a strong position for home ownership? If not, then buying a house will not be a good idea no matter what the market trends indicate.

To evaluate your finances and see if you're prepared for homeownership, you'll need to sit down and look at all your financial accounts as well as your income and expectation of future earnings (not to mention job security).

First, look at any debt you have and calculate how long it would take you to pay it off. If you have a lot of consumer debt and especially if you're struggling to make your monthly payments, then this may not be a good time for you to buy. After all, homeownership is a big commitment, and if things go wrong you can end up on the hook for a big loan. You also won't be able to secure a good interest rate if your debt to income ratio is high.

With student loan debt -- something Americans of all ages are dealing with right now -- you can certainly buy a house as long as the monthly payments will not overwhelm you.

Your job security is also a very important factor because, as many people found out during the recession, losing a job while paying a mortgage can be extremely stressful and unpleasant. You can wind up being tied to a location that doesn't have good job prospects, burning through your savings, and possibly losing your house (and equity). So think carefully about any potential threats to your job and career before making the leap into homeownership.

How Much Do You Have Saved Up?

Assuming that you're not worried about debt paydown or losing your job, then the most important factor to consider is how much savings you have. Many home purchases require 10 percent or 20 percent as a down payment on a mortgage, and while there are programs for first-time homebuyers and other ways to lower your down payment to 5 percent (or even 3 percent in some cases), that will increase your monthly payment because it will mean your total loan amount will be larger.

The right down payment amount and home loan amount for you will depend on the factors mentioned above, but in general it's better to have a lot saved up before you apply for a mortgage If you have enough for a 20 percent down payment, you can feel more confident because (A) you're more likely to be approved for a loan and (B) your monthly mortgage payments will be lower. That can make all the difference in your foray into buying a home.

What Are Your Future Plans?

One of the things you always hear people talk about is that it doesn't make sense to buy a house if you plan to move in the next five years -- and this is absolutely true. Why? Because buying a house requires lots of fees and "transaction costs" -- these costs are unavoidable and can total up to 5 percent of the cost of the house or more.

That means if you buy a house and then quickly sell it again you'll have to pay both the costs of buying and the costs of selling (usually a 6 percent commission for the real estate agent who sells your property) in a short time period. And you won't live in the house long enough to enjoy the financial benefits of homeownership, such as appreciation in your home's value.

It still depends on the individual situation, of course, but the general rule is to avoid buying if you expect you'll need or want to move anytime soon. Ultimately, if you consider all the factors and determine how homeownership can affect your credit score, you will make a good choice.

See more on Credit.com:
Can You Really Get Your Credit Score for Free?
The First Thing You Must Do Before Buying a Home
The Ultimate Credit Report Cheat Sheet

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
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Should You Rent or Buy a Home?

 

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]]>buying a homemarket timingRent vs buyrent vs ownrentingCredit.com2013-04-25T10:15:00+00:00Selling Your Home Remotelyhttp://realestate.aol.com/blog/2013/04/24/sell-home-remotely/http://realestate.aol.com/blog/2013/04/24/sell-home-remotely/http://realestate.aol.com/blog/2013/04/24/sell-home-remotely/#commentsFiled under: , ,

remote home sales: yard sign with sale pendingBy Brendon DeSimone

In recent years, many homeowners couldn't sell their homes because they couldn't get the price they needed. Many were fortunate enough to stay in their homes, but others moved because of job transfers or other life changes. Many ended up renting out their homes rather than taking a big hit when selling them.

These "accidental landlords" were never in the game to be investors but were forced into it because of the market. And now, with the market bouncing back at last, the executive who moved to Miami is likely looking forward to selling her house in Seattle and ending her days as an accidental landlord. But being a remote seller brings a whole set of concerns, questions and uncertainties. Here are five things you should do to sell your house remotely.

1. Speak to your tax professional. Depending on your situation, there could be negative or positive tax implications based on the date you sell, when you purchased and when you last lived in your home. Talking to your CPA well before you plan a sale can save you lots of time and money. For example, it might be that selling your home will result in a loss, which could help your taxes, but you want that loss to happen in the next tax year. On the other hand, if you're looking at a gain but you lived in the house in recent years, you might save on taxes by selling your home within a certain time frame.

2. Leverage your agent. The best real estate agents maintain contact with their previous clients on a regular basis. A good agent may even help you obtain new tenants, come to the aid of your current tenant or be your remote "feet on the street" when you're trying to sell a home from many miles away. By maintaining ties to your agent, it will be easier to turn to them when you're ready to finally offload the property and get the ball rolling. Don't have a previous relationship with a good local real estate agent? Ask your neighbors, use social media or go online to find some potential agents to interview.

3. Plan a long weekend trip to your previous home. If you know you want to sell, plan a trip to see your property months in advance if possible. This is your chance to do your homework and plan the next few steps. Meet face-to-face with the tenant and notify them of your desire to sell. Assess whether the home needs work before selling and, if so, meet with the necessary painters, carpenters or stagers. Identify exactly what needs work and get bids. Also use this time to interview agents if you don't have one already. If you already have an agent, use this time to meet with them, preferably at your property. Introduce your agent to your tenant, too, if possible.

4. Go see the comps. While you're back in town, get a feel for the most recent comps, either with your agent or by going to open houses. Try to understand your property's baseline home value, based on what you see. From there, ask your agent to regularly send you updates about the local market.

5. Treat your tenant well. For many tenants, a potential sale is a disruption in their lives. As stressful as it is on you to be selling the home, the tenant has to find a new home, potentially pay more in rent and physically move.

Treat your tenant well from the very first time you discuss the selling option. Giving them enough advanced notice will benefit both your tenant and your sale. If the property shows well, incentivize your tenant (provided they're a "good" tenant) to stay in the property during the marketing period by offering to reduce their rent. A "staged" or lived-in home sells faster than a vacant one. Once you have an offer from a buyer, coordinate with the tenant on the timing of a closing. By reducing their rent, you can also ask them to cooperate with showings, open houses or inspections.

If they aren't the best tenant or the home doesn't show so well with their stuff there, plan on giving them enough advanced notice to move out so you can do any necessary work. Be sure their lease has officially ended, that they receive their security deposit back and that there aren't any loose ends.

Best strategy: plan ahead. Selling a home is never a decision that happens overnight. Planning the sale months in advance is your key to a successful exit strategy, especially when trying to sell a property from many miles away.

See more on Zillow:
Why Buyers Should Consider Short Sales or Foreclosures
Don't Be Fooled By These 3 Real Estate Myths
Tips for Gen X and Gen Y Home Buyers

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent in your area.

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First Impressions Sell Homes

 

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]]>selling a homeselling a home remotelyZillow2013-04-24T10:00:00+00:00Nightmare Roommate Stories: 'Our Table Was Her Wasteland'http://realestate.aol.com/blog/on/nightmare-roommate-stories-our-table-was-her-wasteland/http://realestate.aol.com/blog/on/nightmare-roommate-stories-our-table-was-her-wasteland/http://realestate.aol.com/blog/on/nightmare-roommate-stories-our-table-was-her-wasteland/#commentsFiled under: , ,

Nightmare roommate: leaving a mess

Devon Fleming said that she thought she had found the perfect roommate. The woman seemed smart, was easy to spend time with, and the two shared many mutual friends. It was an almost serendipitous situation: The roommate had just broken up with her boyfriend and Fleming had an extra room in her apartment in Manhattan's Upper East Side neighborhood. It was the perfect arrangement.

Devon FlemingThat was until one day, Fleming said, that she received a call from a nearby Ann Taylor store. A representative there was calling to inform Fleming that her store account was overdue for a payment. Fleming was shocked: She'd never shopped at nor opened an account at Ann Taylor. Someone apparently had impersonated her, using her name, credit card details and all of her contact information to open a store account.

Fleming said that she called the first person she could turn to: her roommate. "I told her, 'Oh my god, I'm being impersonated!' Then strangely, she told me she had to go and hung up quickly," Fleming told AOL Real Estate. "Shortly after that, I got a call back from Ann Taylor saying they found out who it was -- and it was my roommate! She'd also listed her real cell phone, and they figured it out."

Fleming said that she immediately went to her roommate's office to confront her -- and found her dressed head-to-toe in Fleming's clothing. "I was freaked out and asked her, 'Why?' She said that 'You have so much, I want to be just like you. But I don't make as much money, so I just pretended I was you.' It was so creepy. I asked her to find another place to live, and she moved out."

Vanessa WadeVannessa Wade also said that she thought she'd found the perfect roommate to share her Houston apartment. They'd gone to the same college, the woman seemed friendly and funny, and they'd spoken extensively on the phone. She moved into Wade's apartment, and everything seemed to be going well. But that was until Wade began to notice the mess -- and not just a stray sock here and there. The apartment began to seriously resemble a garbage dump.

"When I walked though the door, I was greeted by cups, plates and candy wrappers. The table would be outlined with whatever meals she had for breakfast or lunch -- our table was her wasteland. The trash would overflow, things overflowed in the sink," Wade told AOL Real Estate. "I felt slighted and upset. Looking back, I would have dug deeper and asked questions like, 'What type of living space do you like? How often do you clean?' That would have saved me the frustration."

How to Find a Good Roommate

Though Fleming and Wade's cases are extreme, many of us have experienced a bad roommate -- whether simply because of bad judgment or Craigslist gone wrong. But there's a lot we can do to ensure that doesn't happen.

According to rental expert Rory Bolger of New York realty firm Citi Habitats, a lot of roommate-related heartache and frustration can be prevented in the vetting process. It's nice if friends can vouch for a potential roommate, but as in Fleming's case, this isn't always successful. It's important to seriously do your homework -- you'll be living under the same roof, after all, so it's important that they're not just "cool" and "nice" but also compatible with you.

"Take a look at what they are currently doing with their life. What do they do for a living, and what are their interests and hobbies? Look at their Facebook and LinkedIn pages, it can be a huge help in getting to know more about this potential roommate," Bolger advised. "The more info about a person you can ascertain, the better."

His thoughts are echoed by Gary Malin, president of Citi Habitats and a longtime Realtor, who says it's important to ask all the "awkward" questions upfront -- and not just to your future roommate, either.

"Ask yourself: Are you a neat-freak, or do you take a more laissez-faire approach to cleaning? Your roommate should likely have a similar attitude to avoid conflict," said Malin. "Also, how do you feel about houseguests? The more the merrier, or do you prefer a quiet home? Nothing can be more annoying than to walk into a wild party when you've had a rough day at work."

Both Bolger and Malin also added a word of caution about Craigslist. While it's a convenient way to find roommates, especially on short notice, added caution must be taken when committing to share an apartment with complete strangers. Bolger also advised renters to have numerous in-person meetings before agreeing to move in together -- and to "listen to your gut."

Wade adds that it's important to speak openly and clearly with your potential roommate about expectations, particularly when it comes to cleanliness and house conduct. Be honest about what you'd like them to do before moving in together. "I talked extensively to my messy roommate, but now I know it was not to the extent we should have. I told her I like a clean space," Wade told AOL Real Estate. "Now, I know to go into greater detail, because 'clean' is in the eye of the beholder!"

See more about roommates:
Roommate Agreements, and Breaking Up When Things Go Badly
How to Interview Potential Roommates

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Find rental housing in your area.
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.

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How to Deal With a Bad Roommate

 

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]]>finding a roommatenightmare roommatesrentingroommatesAOL Real Estate Editors2013-04-17T16:45:00+00:00Before Co-Signing a Mortgage, Consider These 6 Possible Pitfallshttp://realestate.aol.com/blog/2013/04/15/co-signing-mortgage/http://realestate.aol.com/blog/2013/04/15/co-signing-mortgage/http://realestate.aol.com/blog/2013/04/15/co-signing-mortgage/#commentsFiled under: ,

Mortgage loan agreementBy Scott Sheldon

Want to be 100 percent responsible for someone else's obligation? Then co-sign for them on a mortgage -- and you'll be just as responsible for repaying the obligation as they are, even though you are co-signing to simply help the other party. When you co-sign on a big-ticket item like a mortgage, you are in essence lending a portion of your future income and credit worthiness for the benefit of someone else's obligation. Doing so requires meticulous consideration to every detail of the terms, as well as a potential exit strategy. Here are some facts about co-signing on a mortgage you should fully understand before you commit:

Relationship doesn't matter, although it helps. When you co-sign to help somebody else qualify for a mortgage, the relationship between you and the primary borrower taking out the loan doesn't matter, as long as it's fully explained and documented. Typically, it's immediate family or blood relatives who co-sign for another family member -- e.g. parents co-sign for their kids to buy their first home.

Someone else's choices shape your chances. Let's say you helped your brother buy a home a few years ago by co-signing for him. But now he has fallen on tough financial times and subsequently has not been able to make his house payment obligation, resulting in a negative mark on his credit report. This delinquency will appear on your credit report as well, as you have just as much obligation on his liability as he does. Remember that the responsibility to make timely payments per the mortgage note -- no matter how the title is held -- is still 50/50 between parties.

Get used to each other. All parties are conjoined. The person who you co-signed for will have to pay off the mortgage by means of refinancing you off the mortgage, or by selling the property, which pays off the note.

You may want to consider living together. You don't have to live in the property you are co-signing for, referred to as a non-occupant co-borrower. However, if all parties purchase and live in the house of their primary residence, there is a greater level of transparency of financial status amongst the borrowers, which could mitigate difficulties down the road.

Your borrowing power will be reduced. Planning to take out another mortgage? Your ability to get another mortgage, another credit card, another auto loan, etc., will be hindered to the extent of how much of your income and liabilities are being used for the benefit of the person you originally co-signed for. Simply put, to co-sign for someone else reduces your chances of qualifying for future credit obligations. However, if you can provide a 12-month history of someone else making a payment on an obligation you co-signed for, most of the time the obligation can be omitted, which would improve borrowing ability.

Make sure you understand what co-signing really means. It means you are literally applying for credit by virtue of supplying income, credit worthiness, payment liabilities and assets for the purposes of procuring credit, i.e. a mortgage. People co-sign for other people to help secure mortgage loan financing, not knowing the full ramifications of what co-signing does for the long-term prospects of obtaining credit in the future.

And a final mortgage tip: Two alternatives to co-signing that substantially help someone else include providing gift funds for a down payment and/or paying off someone else's debt -- both of which improve borrowing ability as loans are made against income.

See more on Credit.com:
Can You Really Get Your Credit Score for Free?
The First Thing to Do Before Buying a Home
19 Confusing Mortgage Terms Deciphered

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Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
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What Is a Mortgage?

 

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]]>buying a homeco-sign mortgagecreditmortgage advicemortgagesCredit.com2013-04-15T13:00:00+00:00Housing Is Back! Best Moves for Homebuyershttp://realestate.aol.com/blog/2013/04/09/best-moves-for-homebuyers/http://realestate.aol.com/blog/2013/04/09/best-moves-for-homebuyers/http://realestate.aol.com/blog/2013/04/09/best-moves-for-homebuyers/#commentsFiled under: ,



By Beth Braverman

Real estate has finally started to bounce back across the country -- even roar back in some places. Low mortgage rates and pent-up demand have coaxed buyers back into the market, and homeowners who list their houses are seeing more traffic. That quaint relic of the bubble, the bidding war, has even started to re-emerge in some cities. Consider the mounting evidence that the long national real estate nightmare is over: During the past year, home prices increased in 92 of the country's 100 largest metropolitan areas, according to data provider CoreLogic, with prices rising as high as 23 percent in Phoenix and 17 percent in San Francisco. Sales volume rose in 69 of the top 100 markets, and 35 of those showed double-digit gains.

Yet while most economists agree that the bottom is behind us and the five-year outlook for housing is on solid footing, the shorter term is shakier. "2013 and 2014 are going to be transition years," says Mark Fleming, CoreLogic's chief economist. "The market's improving, but it's not totally healed."

Related: Find Homes for Sale in Your Area

Thinking about buying a home? For the first time in more than half a decade, the economics of the market are working against you in most places. Inventory is tight, and bidding wars are back in some parts of the country. To snag your dream home, you'll have to pay up and contend with continuing strict loan requirements. The bright side: Despite rising prices and mortgage rates that are edging upward, buying a home is still cheaper than renting in the majority of the top 100 markets.

Don't Waste Time With a Low-Ball Offer

Yes, home prices are still way down from their highs, but the days when you could scoop up a house for 20% less than the list price are long gone. The typical home sells for pretty close to what the owners asked for, and even in shaky markets, sellers have gotten more realistic about pricing. The median sales-to-list-price ratio in Detroit, for example, is 98 percent; the national number is 97 percent. (To find the figure for your market, go to zillow.com/local-info and click on "More metrics.")

Here's how to figure out how much to offer initially: In places where homes are still selling below list price but deals are being made in less than two months, come in no more than 2% to 3% below the asking price, says Michael Murphree, a realtor in Birmingham, Ala. Where homes are selling above the listing price, make your first offer the asking price.

Be the Winner in a Bidding War

In January and February, 73percent of agents with broker Redfin said their clients' offers faced rival bids, up from 56% who said so in the fall of 2011. You win bidding wars, of course, by raising your price; it also helps to have few contingencies and to move quickly, since today's sellers don't want multiple go-rounds. "You have to give your best offer," says Dallas real estate agent Mary Beth Harrison. "Step up to the plate or walk away."

Be flexible about closing too: Quick deals -- the median time on the market for homes is 71 days, down from 99 a year ago -- have left many sellers scrambling for alternative housing. Leave the closing date blank on your contract for the seller to fill in, or negotiate a leaseback if the seller needs to stay put for a while.

Read the rest of this story on CNNMoney.

See more on CNNMoney:
Selling Your Home? The Cards Are In Your Favor
Own a Home? Take Advantage of Rising Home Equity

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Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Find homes for rent in your area.

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]]>bidding warsbuying a homehomebuyer tipshousing markethousing recoverymaking an offer on a homeCNNMoney2013-04-09T12:15:00+00:00You Can Buy a Home Even When It's Not for Salehttp://realestate.aol.com/blog/2013/03/25/buy-home-not-for-sale/http://realestate.aol.com/blog/2013/03/25/buy-home-not-for-sale/http://realestate.aol.com/blog/2013/03/25/buy-home-not-for-sale/#commentsFiled under: , ,

Home for sale signBy Marilen Cawad

Chris Lichon found her "dream" starter home as she was driving around Rutherford County, Tenn., one fine spring day. The house was on about an acre of ground, on a dead-end street, with a big pasture beside it that she could rent for her horse. It was perfect, she thought, except for one small detail. The house was not for sale.

Lichon had already been house-hunting for four months when she came across the 1970s ranch-style home. So when she found what she was looking for, her trusted real estate agent didn't think twice about knocking on the door and asking the question, "Would you consider selling your home?" To Lichon's surprise, the homeowners said yes. "They just asked us to give them a half hour to tidy up and then they showed us around the house," she said. Save for a few places that needed additional insulation, she found the three-bedroom, one-bath home to be well-maintained.

More: The Formula for Figuring Out If You Should Sell Your Home Now

As luck would have it, the owners were a growing family of seven who had long thought about moving to a larger place. They named their price, Lichon found it fair, and just like that, the house was sold. The lesson in this story: When buying a home, don't just rely on a real estate listing or a "for sale" sign. Trust your instincts and let your Realtor do the dirty work for you.

Joshua Baris, a real estate agent for Coldwell Banker in Northern New Jersey, recently had to knock on an unsuspecting homeowner's door for his client who wanted a specific three-bedroom luxury condo in West New York, N.J. His bold step resulted in a successful sale. "If you want to succeed in this market, you really have to be aggressive and creative," said Baris. Not only is he going house-to-house, he's also sending out letters to owners of unlisted homes on behalf of his clients.

More: America's Packing Up Bad Economy, Losing It in the Move

His letter would typically say: "My client is looking to buy a house and came across yours. Please call me to discuss in greater detail." Some recipients of his letter might find his actions intrusive and some might even think it's a scam, but Baris said that more often than not, people are willing to talk and negotiate. "It's not that everyone has a price, but you'll be surprised how many homeowners have thought about selling, but just never got around to doing it," said Baris. "The best deals are sometimes made when the buyer's agent is one step ahead."

The practice is not uncommon. All over the U.S., Realtors have been resorting to cold calls to get prospective buyers into unlisted homes. "This is happening more often than you might think, especially in the current market, in places where inventories are extremely low," said Keith Sorem, a real estate consultant and associate at Keller Williams Real Estate Services in Los Angeles.

More: Manhattan Bidding Wars to Persist as Housing Supply Stays Tight

A house, for example, may have failed to sell one or two years ago, so the owner took it off the market. However, home values in the area may already have increased today -- enough to where the owner would be willing to sell. In this case, Sorem said, a cold call would be welcomed by both buyer and seller.

When buying a home, it's always best to keep in mind that you have more options than you are presented with. You might consider selling your own home if prospective buyers asked and the offer was right. Similarly, your ideal home may not be on sale, but that doesn't mean you cannot buy it.

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Find out how to calculate mortgage payments.
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How to Sell Your Home Yourself

 

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]]>buy a home not for salebuying a homehome buying advicehousing inventoryhousing recoveryhousing shortageTheStreet.com2013-03-25T13:30:00+00:005 Ways to Get Your Home When Housing Inventory Is So Tighthttp://realestate.aol.com/blog/2013/03/25/low-housing-inventory-home-buying-advice/http://realestate.aol.com/blog/2013/03/25/low-housing-inventory-home-buying-advice/http://realestate.aol.com/blog/2013/03/25/low-housing-inventory-home-buying-advice/#commentsFiled under: , ,

Shopping for a homeBy Brendon DeSimone

The news is out. Real estate is back. Homebuyers are in the game again, but they're facing a huge inventory shortage in most markets. Some buyers make three or four offers on homes, only to keep losing out to other buyers. In this tight market, buyers and real estate agents need to think outside the box. You may need to go after homes that aren't listed for sale. Here are five ways to do that.

1. Look for 'expired' and 'withdrawn' listings. A good agent will scour the MLS for homes that were listed in the recent past but never sold. Many homes failed to sell because they were seen as overpriced at the time. Does their last list price seem like a valid price today? Chances are, the owner doesn't realize how much the market has picked up and might still be open to selling the home. Have your agent contact the owner with a letter expressing your interest in purchasing the property. Show the owner you're serious, and you'll likely get a response.

2. Search for 'make me move' prices. Do you feel like cattle being herded through a busy open house with dozens of other buyers? Scouring the Zillow app while on the Sunday open house circuit? You might want to filter listings by searching for homes with a Make Me Move price in the neighborhoods where you want to own.

Owners who have set a Make Me Move price have gone out of their way to indicate a price that would make them sell. Some would-be sellers are unrealistic in their pricing. But others may have listed their property months or years ago, and their price may in fact be doable. Reach out to them with an offer. It often works.

3. Check rental listings. Why would a buyer go after rental listings? Here's why: The owner may have lived in the home at some point but had to move for a job transfer, divorce or life change. At that time, their home could have been underwater or the market simply wouldn't support the asking price. Instead of listing it with an agent, they just decided to rent it and "ride it out" for a couple of years. Their current tenant might have given notice and, without knowledge of the changing market, the owner simply wants to rent it again. Go see the home. If you like it, find out if the owner would be open to selling. Make it easy, and they may be on board.

4. Don't ignore overpriced listings. The No. 1 complaint among real estate agents everywhere is working with a seller who's unrealistic about their home's price, especially in this tight market. But as a buyer, you might use it to your advantage. After six weeks or less in some markets, an overpriced home loses its luster. The seller doesn't clean as often. Weeds grow in front. And it just may not show as well. The fading curb appeal, along with an unrealistic price, will keep buyers away.

How is this good for the buyer? Many sellers won't list their home at a lower price but will sell it at a lower price. Go in with an offer before the first price reduction, if possible. Once they do drop the price, other buyers will take notice again, and you may have competition.

5. Off-market or pocket listings. Some homeowners want to sell but don't want to or can't list. Maybe they simply don't want the hassle of keeping a clean home and dealing with showings. Or perhaps they're just very private. Especially in the luxury market, some owners just don't want to publicly list their homes.

In many markets, real estate agents regularly network with each other about potential deals. Some areas have dedicated websites for agents to share off-market properties, also known as "pocket" listings. Also, brokerage firms generally release upcoming listings to their agents a few weeks before they hit the MLS. Work with a well-connected agent and make sure you're privy to these potential opportunities.

Most active buyers spend months looking for a home the traditional way. Until prices rise enough to bring more sellers and inventory into the market, these buyers will likely keep facing tight housing inventory. That's why it's important to make sure your agent is trying every way possible to uncover opportunities for you. Be open to using non-traditional methods to beat the competition and take advantage of low interest rates and favorable pricing.

See more on Zillow:
How to Buy or Sell a Home That's Off the Market
3 Tips for Avoiding House-Hunt Heartbreak
Ways to Get Creative in a Real Estate Transaction

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Find out how to calculate mortgage payments.
Find foreclosures in your area.
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Daily Digit: Housing Stock at 13-Yr Low

 

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]]>bidding warsbuying a homehome buying advicehousing inventoryhousing inventory shortageZillow2013-03-25T08:00:00+00:00The Biggest Mortgage Mistake Consumers Makehttp://realestate.aol.com/blog/2013/03/19/biggest-mortgage-mistake/http://realestate.aol.com/blog/2013/03/19/biggest-mortgage-mistake/http://realestate.aol.com/blog/2013/03/19/biggest-mortgage-mistake/#commentsFiled under: ,

By Scott Sheldon

Despite the technical rigors of qualifying for a loan today, there is something more ominous lurking in all mortgage applications that most consumers wouldn't think twice about. Specifically, we're talking about the eligible funds for the mortgage transaction. You might have the money in the bank, but it isn't that simple. A lender will still want to know who the funds belong to, and how the money got there. And if you can't document these things, your mortgage could get delayed -- or denied.

Bank Statements Don't Reveal the Whole Picture

Bank statements show the funds in your account, but whether these funds are legitimate is another question entirely. And cash deposits that are inconsistent with your banking history will be under the lender's magnifying glass. In fact, cash deposits cause more problems and scrutiny for consumers trying to secure mortgages today than any other credit item. So let's take a look at the typical scenarios homebuyers need to be ready for when documenting their cash in the bank.

If any deposit is more than 25% of your monthly income...

Then monies will have to be sourced with a clear letter of explanation, or a potential gift letter if the money came in the form of a gift, along with a statement from the person gifting that money showing they had the ability to do so.

If any deposits are less than 25% of your monthly income...

Then these funds can be used in the loan transaction, although the consumer may be asked to explain where the funds originated. However, no paper trailing will be required.

If cash is from a side job or any other exterior source other than your occupation...

Then -- if it is needed for the mortgage transaction -- that money will have to be "seasoned" for a period of 60 days, meaning those funds are ineligible for use toward the mortgage until two statement cycles have passed. Then those funds will be eligible.

If a deposit is a gift...

Then the person giving the gift needs to show on paper a clear ability for them to gift money to the recipient. In other words, a friend of the person giving the gift can't make a deposit in the giftor's account without getting a clear and concise explanation, including a gift letter and subsequent paper trail with bank statements showing where the funds originated and where the funds ended up.

If additional reserves are needed, e.g. two months' worth of mortgage payments liquid in the bank (which is typically what's needed)...

Then consumer must meet the 60-day seasoning requirement, unless the funds are from paychecks in the normal course of pay periods.

How This Mistake Could Cost You

Should any one of these situations occur, plan on a longer escrow followed by a longer interest rate lock. The longer a transaction takes, the higher the cost. Circumstances like gathering together financial documentation at the last minute, sourcing monies and/or getting contractual purchase contract extensions, which often run as high as $100 per day for every day the transaction does not close on time, are all examples of how important timing is in procuring loan approval.

It is in the consumer's best interest to handle the paper trailing concerns and credit characteristics with the lender upfront, so it doesn't become an issue later on when loan contingencies need to be removed or when the refinance slated to close is delayed because an updated statement shows deposits inconsistent with the consumer's income.

See more on Credit.com:
The First Thing to Do Before Buying a Home
Why You Shouldn't Obsess Over Mortgage Rates
3 Things That Can Stop a Mortgage in Its Tracks

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
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]]>creditmortgage creditmortgage mistakemortgage transactionsmortgagesCredit.com2013-03-19T10:00:00+00:00Spring Home Makeover Don'ts: HGTV's Sabrina Soto On Big Mistakeshttp://realestate.aol.com/blog/on/spring-home-makeover-donts/http://realestate.aol.com/blog/on/spring-home-makeover-donts/http://realestate.aol.com/blog/on/spring-home-makeover-donts/#commentsFiled under: , , , ,




Springtime is upon us, and you know what that means. Well, yeah, all that spring cleaning, but now's a great time to do something else with your home: give it a makeover. You may be considering repainting your home, buying new furniture or even going all the way with a remodel. You may also think you know what you're doing -- when you actually don't. In the video clip above, HGTV design expert Sabrina Soto dispels some common myths about home makeovers and explains what NOT to do when redesigning your home.

Here's what you definitely can do, though, that doesn't take a lot of time (or money): update your home accents by switching out your drawer and door hardware, spot-paint boo-boos and scratches on bed frames and walls, and use decorative paper to cover the switch plates on electrical outlets that complement your decor scheme. These are just a few quick and easy home makeovers you can do in a flash and on the cheap.

Soto has much more advice on home makeovers besides what not to do. Watch the full segment on Huffington Post Live, where we even asked her a question of our own: What room is the easiest and cheapest to makeover? We weren't expecting the answer she gave. And since we're on the topic of home makeovers, click through the gallery below to see some of the best and worst we've ever seen.

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See more:
Extreme Home Makeovers: From Sorry to Stunning
Quick and Easy Home Makeovers
Disabled Teen Gets Home Makeover That Will Change His Life

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Find out how to calculate mortgage payments.
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Sabrina Soto: spring makeover tips on HuffPost Live.

 

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]]>home designhome makeoverremodelingrenovationsabrina sotospring cleaningAOL Real Estate Editors2013-03-18T10:00:00+00:00Renting a Room in Your House: Why It Might Not Be the Best Ideahttp://realestate.aol.com/blog/2013/03/04/rent-room-house/http://realestate.aol.com/blog/2013/03/04/rent-room-house/http://realestate.aol.com/blog/2013/03/04/rent-room-house/#commentsFiled under: , ,

Renting a room in your house: For rent signHouselogic logo

By Donna DeZube

Find a great housemate and you can end up with a new best friend. Make a bad choice, and you can end up with a fiend. I had the fiend experience back in the '80s when I agreed to split a two-bedroom house with a college student whom I'd just met. It took me a few months to realize that the textbooks she carried around were a prop that she used to do a naughty schoolgirl routine at the massage parlor where she worked. Her chronic sniffles weren't from allergies; they were from too much cocaine snorting.

That was the end of my willingness to share my space until I met my husband. We have a lot of extra space in our current home, but I'd have to be really hard up for cash to rent out any of it. There are apparently several million people who disagree with me. The Census Bureau says 6.2 million Americans live in shared households (not counting the 15.8 million adults who live with their parents). Among the people who think I'm way wrong about house-sharing: Crystal Stemberger, a blogger who's rented a spare bedroom in her Houston home to five different people over the past six years.

Her first roommate was a friend who simply needed a place to live for a while. "A while" turned out to be four months and when he moved out, Stemberger and her husband decided that having housemates agreed with them. "We were addicted to the pretty easy extra money that was covering two-thirds of our mortgage by itself," she says. They put an ad on Craigslist to find a replacement renter. (Fortunately, the Stembergers didn't live in Boston, where at the time "Craigslist killer" Philip Markoff trolled for victims.)

Their second roommate was a single guy with a busy social life and a heavy workload that kept him out of the house. "When he was around, he was clean, friendly, and was always very helpful," Stemberger says. "He stayed for more than a year and we still miss him." A housemate that doesn't come home sounds good to me. Annamarie Pluhar, who blogs for the website Sharing Housing, says money is the first thing people think about. "You save literally thousands of dollars in a year," she says. But what ends up making a difference in your life is having help with household tasks, such as maintenance and pet sitting.

Pluhar adds to her list of positives: "having someone there to find you when you fall and can't get up"-- after a woman in her hometown of Brattleboro, Vt., slipped on an icy front sidewalk and died of hypothermia when no one noticed her. Great housemates not only find you when you're lying unconscious on your icy sidewalk, they create relationships that are different than the ones you have with friends, Pluhar says. "You pass each other in the kitchen and say, 'Hi,' or you spend 45 minutes talking about the latest things. It's a daily connection with someone who can really lift your life."

I get that if you're single, but if you're married, that's what your spouse allegedly does. Maybe a housemate would work out if he'd do all the things my husband and I don't want to do -- like tackle Laundry Mountain or seal the driveway.

This article was originally published on HouseLogic.

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Airbnb Host Rents Rooms from His Apartment

 

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]]>rent a room in your houserentingHouseLogic2013-03-04T10:11:00+00:00How to Choose an Investment Property That Earns You the Mosthttp://realestate.aol.com/blog/2013/02/28/how-to-choose-investment-property/http://realestate.aol.com/blog/2013/02/28/how-to-choose-investment-property/http://realestate.aol.com/blog/2013/02/28/how-to-choose-investment-property/#commentsFiled under: , ,

investment propertyBy Jeff Brown

What type of investment property should you buy -- a condo or single-family home? Until recently, that was a trick question, as real estate was too risky and illiquid for most investors. But growing evidence of a rebound in the housing market reduces the risk your investment property would lose value. Rising prices also improve your chances of selling without too long a wait if being a landlord doesn't suit you.

On Tuesday, S&P Dow Jones Indices reported that its S&P/Case-Shiller Home Price Indices showed home prices gained 7.3 percent nationwide last year. Various other surveys have showed gains, but the Case-Shiller gauge is widely viewed as one of the most definitive, and it's a very healthy gain. "As of the fourth quarter of 2012, average home prices across the United States are back at their autumn 2003 levels," the firm said. That's a good-news/bad-news statement: good because the market's improving, but also a reminder of how bad things were.

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Low mortgage rates make homes very affordable at today's prices, and investors have become very active in many markets. If you've already decided you can live with the hassles of being a landlord, what type of property is best -- a single family home or condo? To a large extent, that will depend on the individual market. In communities such as the Florida coast, there may be many more condos than single-family homes. In suburbs and rural areas, single-family homes dominate.

Rental rates on the two types of properties are a key issue. Investors generally assume that it will take four or five years of rent increases for income to cover maintenance costs, taxes and other expenses. If there's a glut of condos or single-family homes, you may not be able to raise rents very fast, prolonging your time in the red. Of course, a glut also means home prices will not rise very fast. The ideal rental property is in high demand, allowing the owner to raise rents every year and assume that property values will rise at a good clip.

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Generally, operating costs are easier to estimate on condos, because the exterior work is covered by your association fees. With a single-family home, costs for a new roof, landscaping and exterior painting could hit you out of the blue. Another factor to consider: the type of renter likely to be drawn to your property. A recent survey by Premier Property Management Group, which manages 1,700 properties in 20 U.S. cities, found that renters of single-family homes are 18 percent more likely to stay in the home for five years or longer. Generally, that's good for the property owner, because each change in tenants can mean going a month or two without rent.

The survey noted an increase in recent years of the number of single-family homes for rent. That's due, in part, to the large numbers of foreclosed properties that have been turned into rentals and the difficulty many renters have had in getting mortgages. "Single-family renters make more money and are nearly twice as likely to have children as apartment dwellers," the survey found. Around the country, the median income for single-family renters ranges from $75,000 to $100,000, compared with $50,000 to $75,000 for renters in multifamily housing. About 63 percent of single-family renters have children, compared with 34 percent of multifamily renters. Single-family renters also tend to be older.

More from TheStreet: 5 Worst Housing Markets for 2013

No doubt, there are lots of terrific tenants among the childless 20- and 30-somethings who prefer multifamily housing and are likely to move fairly often. But tenants who are older, more prosperous, used to dealing with responsibilities such as children and likely to stay in the home for a number of years can be especially appealing for the property owner. With an unusually large number of renters of this type looking for homes, the single-family investment property is worth considering.

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Is Real Estate Still A Good Investment? From Maria Bartiromo

 

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]]>how to choose an investment propertyinvestment propertylandlord issuesreal estate investingreal estate investorsTheStreet.com2013-02-28T10:00:00+00:00Homeowner Tax-Filing Tips: What New Owners Should Knowhttp://realestate.aol.com/blog/2013/02/26/homeowner-tax-filing-tips/http://realestate.aol.com/blog/2013/02/26/homeowner-tax-filing-tips/http://realestate.aol.com/blog/2013/02/26/homeowner-tax-filing-tips/#commentsFiled under: ,

homeowners taxBy Aaron Crowe

Being a homeowner for the first time comes with all kinds of responsibilities that normally don't come with renting. There's yard work, home repairs, picking paint colors, insurance and of course, figuring out your tax liability. American homeownership has long been subsidized by tax savings, and if your real estate agent didn't tell you about them, an accountant or tax preparer will.

"The path to owning a home has a great deal of tax benefits, and a discussion with your tax professional will help to clarify the details," says William Slade, a certified financial planner in California and enrolled agent licensed by the IRS. For many, the deductions available for being a homeowner will allow them to offset their personal exemptions on their paychecks, allowing them to receive more money in their paychecks throughout the year, Slade says. That could be more money to pay a mortgage.

The biggest change new homeowners should know when filing their taxes is they'll need to itemize deductions in Schedule A, which is more complicated than the standard deduction they may have taken on previous tax returns. Itemized deductions for new homeowners include mortgage interest, property taxes, points paid on a home loan, mortgage insurance and charitable contributions (such as cleaning out a garage and donating clothes to charity). Homeowners who haven't itemized deductions before may also be introduced to other Schedule A items such as personal property tax, state tax withholding and charitable contributions that can lead to a bigger overall tax deduction, Slade says. The savings is based on your tax bracket. If your tax rate is 33 percent, then for each dollar of mortgage interest spent you save 33 cents.

Slade says he is regularly asked if home improvements such as adding rooms, remodeling and landscaping will help on taxes. They won't when they're being done, but they will help when the property is sold by increasing the cost basis and lowering the gains on the sale, he says. Coupled with the tax exclusion, a home sale usually means most homeowners won't pay capital gains taxes on the sale if it's their primary residence, they've lived there for two of five years, and have a tax exclusion of $250,000 for a single person or $500,000 for married couples, Slade says.

The American Taxpayer Relief Act of 2012, which President Obama signed on Jan. 1 to avoid the "fiscal cliff," helps homeowners by restoring two tax breaks. The first is the deduction for mortgage insurance premiums. Lenders often require the insurance if the loan balance is for more than 78 percent of the home's value. The second reclaimed tax break is a credit of up to $500 for making certain improvements that increase a home's energy efficiency. A credit is money taken off the amount owed to the IRS. The tax credit is typically 10 percent, up to $500 total, for buying and installing certain products such as a new water heater, central air conditioner, insulation, windows or roof.

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What Are Tax Credits and How Do They Save Money? TurboTax Tax Tips Video

 

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]]>2013 taxesfiling taxeshomeowner tax breakshomeowners taxreal estate taxtax-filing tipstaxesCredit.com2013-02-26T10:00:00+00:006 Home Energy-Saving Tips Many Homeowners Don't Think Ofhttp://realestate.aol.com/blog/2013/02/21/home-energy-saving-tips/http://realestate.aol.com/blog/2013/02/21/home-energy-saving-tips/http://realestate.aol.com/blog/2013/02/21/home-energy-saving-tips/#commentsFiled under: ,

Save on home energy with fluorescent lightbulbs. By Steve McLinden

You've heard the usual energy-saving advice: Buy only Energy Star-rated appliances, replace incandescent lightbulbs with those curly fluorescents, shop for cheaper electric providers (if you can in your town). But numerous low-cost, energy-saving strategies escape homeowners' attention. Energy experts say that about 35 percent of heating and cooling is lost through the roof, and more escapes through the walls, windows, doors and by air leaks.

"Making your home energy-efficient means starting with the basics, and the most important of these are the proper sealing of air leaks and insulating sufficiently for your climate," says Ronnie Kweller, who was spokeswoman for the Alliance to Save Energy in Washington, D.C., at the time of the interview. "Those steps can cut heating and cooling bills by up to 20 percent."
Here are some of the best bang-for-the-buck ways to save on home energy bills.

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Energy Saving Tips For Your Home

 

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]]>energy efficiencyenergy-efficient home projectsenergy-efficient homeshome energy savinghome projects saving energysaving energyBankrate.com2013-02-21T10:00:00+00:00Selling Homes at Auction Helps Homeowners Unload Properties Quicklyhttp://realestate.aol.com/blog/2013/01/30/selling-homes-at-auction/http://realestate.aol.com/blog/2013/01/30/selling-homes-at-auction/http://realestate.aol.com/blog/2013/01/30/selling-homes-at-auction/#commentsFiled under: , ,

Home auctions: A home auction sign advertises a foreclosure.Home auctions aren't just for fat-pocketed investors scooping up decrepit foreclosures that banks are desperate to get off their books. At home auctions, you also can find perfectly fine homes in good condition that never fell into foreclosure. The sellers of these houses are the homeowners themselves, and the buyers are usually everyday people looking for a dream home.

Homeowners trying to avoid the long slog of listing their homes for sale, hosting open houses and waiting for an interested buyer to make an offer are increasingly turning to auctions to sell them quickly, The Tennessean newspaper reported. Most of these everyday homeowners auctioning off their houses are looking to downsize in retirement. The newspaper spoke to one of them, John Chaffin, who sold his home at auction when he decided to downsize. He said it sold in less than an hour.

"You don't have to be bothered by people for three or four months. They show up at one time, and you get just as much or more than if you put it on the market," he said. Tommy Anderson, a Realtor with Prudential Woodmont Realty who sold Chaffin's home at auction, said that he sees homeowners putting homes across Tennessee up for auction, "from $10,000 investment houses to $2 million luxury properties."

There are all kinds of home auction houses that include listings for homeowner-occupied homes as well as foreclosures: Try RealtyBid.com, Auction.com and WilliamsAuction.com. Buyers, understand that all auctions require some amount of cash upfront to secure your bid. But many auction sales will offer a financing option, so that you can put in a bid and get a mortgage to cover the rest of the cost. One note of caution to sellers auctioning off their homes: Though it's not always the case, selling at auction often means accepting an offer that's lower than market value.


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]]>home auction houseshome auctionshomeowner auctionsreal estate auctionsselling homes at autionselling your homeselling your home in a down marketGraham Wood2013-01-30T08:00:00+00:00Security Deposit Refund: 1 in 4 Renters Don't Get Their Money Back, Survey Findshttp://realestate.aol.com/blog/2013/01/29/security-deposit-refund/http://realestate.aol.com/blog/2013/01/29/security-deposit-refund/http://realestate.aol.com/blog/2013/01/29/security-deposit-refund/#commentsFiled under: , ,

Security deposit refund clause in a lease agreementMost renters expect a refund on their security deposit when they move out of their apartment (save for those who have completely trashed the place). But a hefty percentage of renters aren't getting their money back. More than a quarter -- 26 percent -- of renters have been denied their security deposits, a Rent.com survey found.

The biggest reason for landlords withholding security deposits was a tenant moving out early, according to the survey. Almost half -- 44 percent -- of renters ages 18 to 24 and 33 percent of men who responded to the survey cited breaking the lease agreement as the reason they didn't get their security deposits back. Nine percent of women and 3 percent of men in the survey of 1,000 respondents said that they lost their security deposits because of pet damage.

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But the most alarming statistic: 36 percent of respondents said that their landlords offered no explanation at all for why they were withholding security deposits. Well, guess what: That's not always legal. In New York, for example, landlords are required to return security deposits, minus any legal deductions, within a certain period of time. In California, there are only four reasons why a landlord may withhold a security deposit: to cover unpaid rent, to clean the rental when a tenant moves out, to repair damages caused by the renter, or to replace furnishings (only if the lease agreement explicitly states that this is allowable). And a landlord must state the reason to the renter for why his or her security deposit is being withheld. Landlord.com has a list of security deposit laws in all 50 states to help you find the rules where you live.

Though you can't be certain how your landlord is going to handle your security deposit, there are things that you can do as a renter to ensure your eligibility to receive a full refund. Rent.com offers these tips:

Ask for permission to renovate. If you renovate or add on to an apartment you are renting without getting permission from your landlord first, that gives them cause to withhold your security deposit. You may think that you are improving your unit, but your landlord may not see it that way. Remember, they own the place, not you.

Read your lease. Most lease agreements lay out specific requirements that need to be met in order for the tenant to get a security deposit refund on move-out day. You can't claim that you didn't know about the requirements. Make sure you read over the lease and agree to the conditions of a security deposit refund before you sign on the dotted line. Ignorance is not a defense.

Take photos. Pull out your camera and take photos of your apartment the day you move in. This will give you proof of what condition the apartment was in when you moved in. On move-out day, have the photos accessible so that you can lay to rest any disputes over damage that may or may not have been caused by you.

Be ready to compromise. If you're breaking your lease agreement, work with your landlord to resolve the matter. You could offer to find a replacement tenant or keep paying the rent until one is found. The landlord will likely appreciate your efforts to make it easy for them, and he or she may be more likely to refund your deposit.

See also:
How to Get Out of the Lease for a Flea-Bitten, Water-Damaged Apartment
6 Ways to Make Sure You Get Back Your Security Deposit

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]]>lease agreementsrental agreementsrental security depositrentersrenters rightssecurity depositsecurity deposit lawssecurity deposit refundGraham Wood2013-01-29T15:52:00+00:00