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/Loan Modifications: What You Need to Knowhttp://realestate.aol.com/blog/2010/11/09/loan-modifications-what-you-need-to-know/http://realestate.aol.com/blog/2010/11/09/loan-modifications-what-you-need-to-know/http://realestate.aol.com/blog/2010/11/09/loan-modifications-what-you-need-to-know/#commentsLast year was difficult for Adline Peck and her husband. Peck, who lives in Inkster, Mich. was battling medical issues, and her husband had been laid off from work. Though they struggled to make their monthly mortgage payments, they continued to try their best, even if it meant sending in payments a week or two late. Eventually, Peck approached a friend in real estate who proposed a solution for their financial hardships: A home loan modification.

"The three of us got together, and we found the best package there is," Peck said of her loan modification. "It was not the headache I thought it was going to be."

The Pecks' loan modification enabled them to keep up with their payments and, more important, to keep their home. If you're seeking a loan modification, here's how to start:

What to Know When Considering Loan Modification

A loan modification is a potential solution for homeowners like the Pecks, who have encountered financial hardships and want to change the terms of their loan. The goal is to lower the monthly payments to a level that the homeowner can afford, whether through
  1. a reduction in the principal balance,
  2. a reduction of the interest rate,
  3. or an extension of the loan term.
"In short, a homeowner can save thousands if not millions of dollars in the course of the rest of the life of their loan," says Alessandra Marx, of NSS Financial Services.

Before starting down the road of a loan modification, there are important things to know:

A reduction in the principal balance is rare, says Joshua Talayka, a Realtor in Reno, Nev., with Chase International Real Estate. "There have been a few stories out there where a lender has done this, but they are few and far between, and typically the result of extraordinary circumstances," he says.

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Then there's an effect of the loan modification on the borrower's credit score. While loan officers may assure homeowners considering loan modifications that doing so will have no impact on credit scores, there is evidence that says otherwise.

And a modification won't reverse the effects that missed payments have already had. Talayka advises homeowners considering a loan modification to meet with an attorney and a tax professional to see what other penalties might accompany their decision.

Homeowners should expect their loan servicer to explore other options before deciding to go with a loan modification. "The simplest option is called a temporary forbearance, where a borrower is allowed to skip a few payments when there is a temporary loss of income and allowed to make the overdue payments in a lump sum when their income is restored," says Souren Sarkar, executive vice president of ISGN.

"Alternatively, a portion of the overdue payments are added or capitalized into the monthly payments, resulting in a small increase in the monthly payment amount until the overdue amount is paid off."

If the loss of income experienced by the homeowner is permanent, then a loan modification is the next step. Lenders will first see if the borrower is eligible for the federal Home Affordable Modification Program (HAMP) or state programs; if that doesn't work, says Talayka, they'll see if they can work out an in-house modification.


The Loan Modification Process

The first step of the loan modification process requires the homeowner to submit a "hardship letter" detailing their financial difficulties. The hardship must be significant -- unemployment, reduction in income, a death in the family, etc.

Homeowners will also need to fill out a financial information worksheet, which itemizes their income and expenses, and to submit supporting documents, including bank statements and tax returns.

The lender then runs an analysis of the borrower's situation and approves or rejects the application for a loan modification. "However, the decision of the servicer is negotiable, and the borrower is well-advised to appeal the servicer's decision if they don't get an optimal response, providing additional documentation as needed to plead their case," says Sarkar.

It's essential for homeowners seeking a loan modification to follow up, and to do so often throughout the process to make sure documentation has been received.

Homeowners on the verge of being approved for a loan modification might be put through a trial repayment period at the new payment amount. During this stage, borrowers have to show they have the capacity to make these payments. "A lot of effort is expended by some programs to make sure 'bad actors' don't get through, or to prove beyond a shadow of doubt the borrower's ability to pay," says Steve Home, president of Wingspan Portfolio Advisors.


Two Loan Modification Caveats

Though getting a home loan during the peak of the housing market might have taken just a few weeks, securing a loan modification today might take months of agonizing back-and-forths with lenders. That's why it's essential for homeowners seeking a loan modification to follow up, and to do so often throughout the process to make sure documentation has been received.

Homeowners should also be wary of scams that promise loan modifications in exchange for upfront fees, a practice that the government has banned.

Peck's two pointers for homeowners thinking about getting a home loan modification are:
  • seek guidance from somebody who is knowledgeable about mortgages.
  • keep communication going with the servicing company throughout the process.

She was fortunate to avoid the potential pitfalls that come along with loan modifications and found herself with new loan terms that enabled her and her husband to make their monthly payments and keep their home. "It was like 'snap snap' -- when something goes so quick like it never happened." Peck says that if everyone knew companies like the one she worked with, "there would be no mortgage problems at all."

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]]>forbearanceforeclosureforeclosure crisisforeclosure preventionForeclosureCrisisForeclosurePreventionHAMPloan modificationLoanModificationMaking Home AffordableMakingHomeAffordablemortgageJason Hahn2010-11-09T09:00:00 00:00Home Appraisals: Show Your Home's Best Sidehttp://realestate.aol.com/blog/2010/10/04/home-appraisals-how-to-prepare-for-the-best-results/http://realestate.aol.com/blog/2010/10/04/home-appraisals-how-to-prepare-for-the-best-results/http://realestate.aol.com/blog/2010/10/04/home-appraisals-how-to-prepare-for-the-best-results/#comments
When Martin Erle, a certified athletic trainer who lives in Glen Mills, Pa., was preparing for a home appraisal, he knew there were factors he couldn't control, such as the location of the neighborhood and the value of other houses on his block. But Erle could control what the appraiser saw when he walked up to the front door.

"I could control the physical and visual condition of my house and property," Erle said, when recounting his thought process before the appraisal.

He's right. As with many events in life, successful home appraisals depend on good preparation, careful attention to detail and a dose of fortunate circumstances. The good news, as Erle noted, is that there is a lot homeowners can do to give themselves the best chance for a favorable appraisal. Here are some tips to follow.


1. Start with the right mindset

"When it comes to getting a home appraisal, the homeowner needs to approach the inspection as if he/she is selling the property to the appraiser," says Jennifer Creech, president of InHouse Inc., a provider of residential real estate appraisal management technologies and services. "They must not assume the appraiser will be able to determine all the amenities of the property on their own."

Another simple step in preparation is to "ask the appraiser if there is anything else you should do or have prepared for them upon their arrival at the property," says Kevin Donegan, an appraiser with NY Appraisal Source in Floral Park, N.Y. "This will help guard against any unnecessary delays in the completion of the appraisal and will further ensure that the appraiser is working with all the relevant facts to properly do their job."


2. Get your paperwork in order

You should've seen this one coming. Whenever you embark on any home-value project, expect paperwork to be involved. This time, however, it's not about forms to fill out, but records you have to gather. Here are some things it would be prudent to have on hand:
  • A list of improvements you've made to your home and the related receipts. That will enable the appraiser "to identify the full value of a home improvement rather than to guess each improvement's worth," says Creech. A new or updated electrical system, roof, air conditioning system, security system, irrigation system, smart-home features and energy-efficient items are especially important to include.
  • A list of the number of bathrooms, bedrooms and other important rooms your property has, "as the appraiser might think a room is a closet when it is actually not," says Creech. She also recommends making it a point to tell the appraiser if there is a parking space associated with your property.
  • Other documents to consider having ready are building plans, land titles, the most recent property tax bill, copies of agreements with neighbors regarding shared resources, recent appraisals or home inspection reports, and a Certificate of Occupancy. The latter is a document stating the legally permissible occupancy of a residential property, and is especially important for homes that were converted from one use to another.
Overall, homeowners don't have to go crazy with preparing mountains of official documents for the appraisal. Most appraisers make it their business to try to gather all the information they can from a variety of sources. "It is typically not necessary for a homeowner to have to prepare much for an appraisal -- it is the appraiser's job to do his or her own diligence," Donegan says.


3. Take care of repairs and maintenance

"Before an appraisal of your home begins, be sure to have your home in order," says William Fall, CEO of William Fall Group, a national provider of valuation services and products for the real estate and mortgage industries. "If there are any corrections and repairs to be made, try to have them completed before the appraisal. And if you don't have time to complete them but intend to do a repair, have proof of an estimate or scheduled repair to show the appraiser."

Don't neglect minor repairs, either, such as leaky faucets, damaged window screens, dead smoke detectors, and poor paint jobs. Delaying these types of maintenance jobs can dent the appraisal value of your home. Ditto for the curb appeal of your home, which means a tidy lawn and clean landscape could be helpful.


4. Get rid of clutter

Appraisers can't evaluate what they can't see. "A cluttered home will make it harder for an appraiser to take note of important characteristics," Fall says. "Most appraisals now require a photo of each room, so a well-kept property can help."

The best thing that you can do to get ready is to make sure that the appraiser has easy access to the entire property, inside and out. Pay careful attention to areas that you may not frequently access, like tool sheds, attics and basements. Also, in case the appraiser is allergic to certain animals, it's prudent to send your pet elsewhere during the appraisal.


5. Smile and be honest

While the appraisal is focused on the home and not the homeowner, it can only help if you're pleasant and friendly. Be ready to accompany the appraiser as he walks through your home, ready to answer any questions he might have. Answer honestly and don't raise suspicions by skirting questions.

Going along for the walk through your home can be helpful for the appraiser, and it "also provides the homeowner peace of mind that the appraiser is doing their job appropriately without fear of theft or unacceptable behavior while on-site," says Fall.

Erle cleared out the clutter, had every carpet cleaned by professionals, set table places, burned aromatic candles and tactically placed books and magazines on coffee tables. He essentially treated the house as though it were a "dollhouse for display." The outside was also improved, as Erle restocked flower beds with new mulch, trimmed and pruned bushes, and touched up the siding.

"Does it help? Not sure. Does it hurt? Not at all," he says. "The appraiser is a stranger visiting your home for a huge purpose. Make them feel welcome, comfortable and pleased."

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]]>Jason Hahn2010-10-04T19:51:00 00:00Place Named 'Awesometown' -- Awesome?http://realestate.aol.com/blog/2010/09/29/place-named-awesometown-awesome-or-not/http://realestate.aol.com/blog/2010/09/29/place-named-awesometown-awesome-or-not/http://realestate.aol.com/blog/2010/09/29/place-named-awesometown-awesome-or-not/#commentsFiled under: ,

Andy SambergIf you were to round up a group of silly adolescents, give them all the candy and soda they could ever desire and asked them to come up with a list of names for a utopian community, "Awesometown" would probably be near the top of that list. Newland Hall, a community planner in north Los Angeles County, didn't need the youngsters and rushes of sugar to come up with the idea of dubbing the planned community of Valencia just that: Awesometown. The branding of the housing development in Santa Clarita, Calif. has been met with mixed reactions.

"If the Awesometown term is simply a marketing campaign and not the permanent name of a the community or subdivision, I think they should have fun with it and roll with the punches, and use the hype and attention to draw more interest," says Steve Crossland, a Realtor in Austin, Texas. "If they've actually named a part of the community Awesometown, the way a parent would name a child 'Moon Blossom' or something, I think that will eventually be viewed as a mistake."
Hearing "Awesometown" may cause some to remember the 20-minute pilot created by the comedy trio The Lonely Island back in May 2005. The group, made up of Andy Samberg (pictured), Akiva Schaffer and Jorma Taccone, put out the comedy pilot for Fox, which never aired it. This version of Awesometown, no matter what people may think, is no joke.

Back in February, Newhall Land began plastering billboards in the Valencia area with the word "Awesometown" on them. Six months later, the developer finally offered an explanation in a blog post titled, "Why Awesometown?"

"In the process of brainstorming our new campaign, we asked local residents for their thoughts about life in Valencia," the Newhall Land Co. explained in the post. "People raved about Valencia's unique lifestyle, great schools, incredible friendliness and convenient shopping and dining. Many folks even described Valencia as awesome. It seemed unusual at first that people would use such a term to describe a town, but the more we thought about it, the more it made sense."

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The community planner went on to highlight the acres of parks, more than 60,000 jobs and one of the country's top art colleges as some of the strengths of the town. "So why did we start calling Valencia Awesometown? Turns out it was Awesome all along."

"Wow, apparently the Newhall Land Co. has been taken over by teenagers," says Jeri Creson, a broker in the Santa Clarita region, of her first reaction. She says her next reaction was that the name was apt for an area that she would live in, if it weren't for the business that she and her husband have in Studio City.

"I like the name Awesometown because it reflects how I see Valencia, and would remind you, every time you passed the sign, to remember to be grateful for having an awesome place to be," Creson says. "It's a little corny, sure, but I see it as a positive moniker and one that will have an uplifting, energizing effect on the community."

Others, however, are not so keen on the idea. "Pretentious, stupid, dumb," is what Crossland calls it.

In July 2006 and May 2007, Crossland decided to examine whether or not "politically incorrect" street names like Shoot Out Court, Ammunition Drive and Six Gun Trail had a negative impact on the sales prices of the homes located on them. While his findings were inconclusive, Zoopla.co.uk, a property-search site in the U.K., did a similar investigation in June and found that some street names had higher average property values than others. Properties on "hills" or "lanes" were worth 50 percent more than the national average, while "streets" and "terraces" had the lowest average property values.

Does this translate into the names of community or town names affecting property values? "There could certainly be examples of where the name does matter a lot to a small few," says Crossland. "But I think in most cases it probably doesn't affect the decision and, thus, not the price." He added that Awesometown is a case in which "it's an entire community brand that a buyer must buy into and be willing to be labeled with. That's a bit different than a bad street name."

While there might not be a tangible monetary consequence tied with community names, it still has an effect on potential buyers. Creson recounted a recent escrow closing in which she and her client learned that the client's new subdivision was "Wisteria," which elicited chuckles because of the connection with "Desperate Housewives."

"We love to laugh, smile and feel good about our surroundings, don't we?" says Creson. "Do I think a street name affects the home's value? Not really, but it sometimes can make it more memorable." She listed urban legends and celebrity sightings as factors that can have a minor effect on an area's value, given the charm of being where the action is and the chance to share something special about one's home at a party.

Crossland, however, says home values still boil down to three things: "Price, location and condition. Everything else is secondary."

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]]>andy sambergawesometowncaliforniacommunityhome valueslonely islandnamessanta claritastreetsvalenciaJason Hahn2010-09-29T13:51:00 00:00Home Security: Systems With Cutting-Edge Protectionhttp://realestate.aol.com/blog/2010/08/19/home-security-systems-with-cutting-edge-protection/http://realestate.aol.com/blog/2010/08/19/home-security-systems-with-cutting-edge-protection/http://realestate.aol.com/blog/2010/08/19/home-security-systems-with-cutting-edge-protection/#commentsAs a 33-year-old single woman living near a not-so-safe area in Massachusetts, Heidi said she felt the need for some kind of home security system to protect herself and her belongings. So she did her homework. "I did research online, in magazines, and asked neighbors and family about what security systems they have," she says.

Armed with solid knowledge and a clear-cut desire for a 24/7 live monitoring system that didn't have off-shore support, Heidi narrowed her focus to one home security company. It turned out that most of her neighbors had security systems from that same company, which allowed her to get a first-hand glimpse of the actual setup and how it worked.

With technology permeating every aspect of our lives, it's apparent that it can be used for less-than-wholesome purposes. However, its innovations are also making some of the most convenient and effective professional home-security options available to everyday homeowners. Here's a rundown of some of their features, from the conventional to the cutting edge.

1. Wireless Home Security Systems

"All forms of technology are going wireless, and home security is no exception," says Louis Stilp, founder of LifeShield Home Security. "By using a wireless home security system, the hard-wired installation costs and labors are completely eliminated."

Door and window sensors, glass and shock sensors, motion sensors and even control panels now come wire-free from most security system companies. These wireless systems protect homeowners from being "vulnerable to phone-line or Internet-line cuts, like traditional security systems are," says Yvonne Grahovac, manager of marketing communications at Alarm.com. She adds that you should ensure that the system is able to "send a signal to the central monitoring station -- who alerts police, emergency and fire services -- even if the security control panel was damaged or destroyed."

Of course, wireless home security systems require batteries to power them, so make sure that the one you choose has a battery backup unit, so your home will be monitored even if the power runs out. Another potential risk to the effectiveness of going wireless is interference. While these security systems don't rely on hardwired connections to sensors and landline channels of communication, they can still encounter signal-strength problems, should a physical object or long distances act as obstacles. Also, on rare occasions, harsh weather and jammers might cause disruptions for these wireless systems. So how can homeowners confront all of these possible risks?


2. Multi-path communications

The shortcomings and risks of both landline and wireless home security systems can be avoided by using multi-path communications. "If there's a break-in at your home, what good does a security system do if a monitoring station can't receive the alarm?" asks Ralph Maniscalo, director of marketing and communications at Honeywell Security & Communications. "You can have all the fancy add-on devices in the world, but if your system's communication signal isn't reliable, it isn't worth much."

That's why it's key to make sure that a home security provider offers reliable, multi-path communications technology. "That is, if one communication path goes down, another one should be there to make sure the alarm signal goes through." For instance, a security system might offer an encrypted, two-way cellular connection with the security company's central network, along with a traditional landline connection.

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3. Cameras

Chances are that you've seen some form of home security surveillance cameras in at least one movie or television show you've seen recently. Home security cameras are made available by just about every home security company and are a useful and helpful tool for securing your home.

Whether they're continuously monitoring your home or are triggered by motion, surveillance cameras enable homeowners to watch the outside and inside of their homes around the clock, even when they're not home, which brings us to our next feature.



4. Mobile Home Security Systems

Maybe the most convenient benefit of having a wireless home security system is being able to monitor your home through your laptop, BlackBerry, iPhone or other mobile device. Not only can homeowners opt to receive text and e-mail alerts (along with notices being sent to the home security company) when a notable event occurs, they can actually control their home's security systems from their mobile devices, as well.

"Just go to any public place and look around - you'll find at least one person pulling out a smart phone, checking their e-mail, updating Facebook and Twitter, getting the latest news, you name it," says Maniscalco. "It's only natural, then, for the security industry to grab hold of this trend and give home and business owners the ability to manage their security systems using these devices."

These capabilities are lifestyle-enhancing, according to Maniscalo, who notes that "working parents can be notified when their children come home from school, or if a gun or liquor cabinet is opened. Homeowners on vacation can be alerted if a pipe bursts, and family members can check in on elderly relatives." And if cameras are installed, the homeowner can actually see what's going on outside and inside their home while they're away.



"In hindsight, I don't think I would have done anything differently," says Heidi, who like many of her neighbors opted for an ADT security system. The system offered the round-the-clock monitoring she was looking for. But Heidi urges homeowners looking for a security system to do their homework. "Make sure you understand the investment involved," she says, "and what you are receiving for it."


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]]>alarmalertcamerasDIYhome securityhome+improvementHomeSecuritymobilerenovationsensorsurveillancewirelessJason Hahn2010-08-19T14:52:00 00:00Home Appraisals for Sellershttp://realestate.aol.com/blog/2010/08/17/home-appraisals-for-sellers/http://realestate.aol.com/blog/2010/08/17/home-appraisals-for-sellers/http://realestate.aol.com/blog/2010/08/17/home-appraisals-for-sellers/#commentsFiled under:

When Chris M. decided to list his home in upstate New York and move closer to Manhattan to ease his wife's commute to her new job, he ran into a major hurdle: "There was no consensus among the agents we spoke with about what our house was worth," he said. The solution? Hire a local appraiser to handle the job of evaluating the home's worth to help arrive at a listing price.

While appraisals are associated with the buyer's side of a home-buying transaction, they offer a useful and potentially headache-saving tool for sellers. However, there are important things you need to know when considering an appraisal before you list your property. Here are a few pointers when it comes to home appraisals for sellers.

First, understand what an appraisal is (and isn't)

Basically, an appraisal is an "opinion of value," according to Kevin Donegan, an appraiser with Appraisal Source in Floral Park, N.Y. Don't let the word "opinion" scare you. "An appraiser's job is to remain independent and develop on opinion based solely on factual market data," Donegan says.

Getting an appraisal isn't free--expect to pay between $300 to $500. So what's the point of doling out that kind of cash for an appraisal if it isn't even a necessary part of the home selling process? For one thing, it helps the seller determine a reasonable asking price that isn't too high or too low. Trying to set a listing price is often an anxiety-ridden part of the home selling process, so getting some neutral, well-informed help with this task will lift a lot of weight from a seller's shoulders.

An appraisal also helps sellers steer clear from accepting a low-ball offer on their home, especially during cooler markets. The appraisal sends the message to buyers and their agents that you've done your homework and can give you more leverage in negotiating a final price with a potential buyer.

Lastly, having an appraisal done before you list your home for sale gives you a chance to find out about any unnoticed problems with your home. It's better to know about these potential hitches before going into the negotiating process with a prospective buyer, only to have the deal fall through later because of them. (Similarly, a pre-listing inspection can also help uncover problems with the home.)


Find a qualified appraiser

If you've weighed the costs and benefits of a home appraisal and decided to go ahead with the process, the next step is to find a qualified, independent appraiser. This is where the seller needs to let go a bit, since buyers, sellers and lenders are currently prevented from handpicking an appraiser of their choice. New appraisal-related legislation set to kick in before the year is up could change this, but at present, appraisal management companies (AMCs) act as middlemen who have stables of appraisers to choose from for any given job.

Though sellers can't directly choose an appraiser, they can request that the appraiser be familiar with the home's local market. "If the appraiser is coming from an area, say, 50 miles away, in an urban or suburban area, and doesn't have much experience in your market area, there can be trouble," says Stan Thoren of S.A. Thoren, Inc. Getting an appraiser with some sort of professional designation, such as the Appraisal Institute's MAI, SRA and SRPA, also helps.


Prepare for the appraisal

Once you've scheduled an appraisal, it's time to get your home in order for the process. It's tempting for a seller to fret and frantically make sure the home is spotless in order to win the favor and high appraisal value of an appraiser, but that's not really the right way to approach this. While it can't hurt for a home to be in tip-top shape when the appraiser comes, the main concern should just be to ensure that the appraiser has access to every part of the house. "This may seem like common sense, but every appraiser has had many, many experiences of arriving at a property only to find that some portion of it was inaccessible at the time of inspection," says Donegan.

The appraiser's opinion of value technically won't depend on the quality of furnishings in the home or how much dust is visible, but Donegan notes that appraisers are humans, too, and are affected by many factors. "Bottom line, you don't have to go on a cleaning spree to get ready for an appraiser's visit, but there's also no reason for you to make it more difficult for them to see your home's physical attributes. Practically speaking, if your house is what you might consider 'a bit of a mess,' at least make sure there is room for the appraiser to move through the dwelling -- from room to room and floor to floor."

Tending to your lawn might also be a good idea, according to Chris Tesch, an agent serving College Station and Bryan, Texas. "Anything that would make a buyer or an appraiser feel like your home is well cared for will translate into more generous offers or appraisals." The only "special" thing to do might be having a list of recent improvements on hand for the appraiser.

It's also important to highlight the unseen, according to Thoren. For example, if an appraiser visits a seller's home in midwinter, it couldn't hurt to mention the beautiful landscaping visible during the warmer months of the year. "The seller's Realtor should try to be present for the appraisal and should give the appraiser a list of comparable sales, and should also tell the appraiser of sale conditions for the subject property," Thoren adds.


What to do if you're unhappy with the appraised value

Once you have had the appraisal and listed the property for sale, it's time to wait for an interested buyer to get an appraisal of their own. This is where things could get messy, especially if the potential buyer's appraisal yields a different, lower value -- the situation that happened to Chris M. and his wife.

In that case, though the seller's appraisal won't be accepted by the potential buyer's lender, it could serve as a convincing piece of support should the seller contact the lender's appraiser to ask for a review of its findings. The seller's appraisal can also act as backup for the asking price for the home and could be a form of leverage during negotiations. In fact, giving a copy of the pre-sale appraisal to the lender's appraiser can be a smart move.

Chris tried to contact the lender's appraiser and even submitted documentation comparing the two appraisals and pointing out where the errors were. "If we hadn't had the market value analysis done before we listed the property, we would have had no documentation and no basis on which to dispute the lender's appraisal," he said.

Nevertheless, the lender declined to pursue a change in its appraisal and the buyer decided to move on. But Chris is still glad that he had his own independent appraisal up front. "A market value analysis by a qualified local appraiser before listing is worth every penny," he said.


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]]>AolOriginalappraisalappraisershomehome appraisalhome appraisalshome appraiserhome appraisershome buyinghome sellersHomeAppraisalHomeAppraisalsHomeAppraiserHomeAppraisershomebuyersHomeBuyingHomeSellershouselist priceListPriceMyNextMovereal estateRealEstatesalesellsellersJason Hahn2010-08-17T19:38:00 00:00How to Sell Your Home in a Short Salehttp://realestate.aol.com/blog/2010/08/10/sell-your-home-in-a-short-sale/http://realestate.aol.com/blog/2010/08/10/sell-your-home-in-a-short-sale/http://realestate.aol.com/blog/2010/08/10/sell-your-home-in-a-short-sale/#commentsIf you want to know what a short sale experience is really like, just ask Erin. In 2005, Erin and her husband, then newly married, purchased their first home, in Sacramento, Calif., for $350,000. Just three years later, her husband's commodities business was in decline and their financial situation soured to the point where they couldn't keep up with their monthly payments.

The couple considered renegotiating the terms of their loan with their bank, which might have extended the life of their loan for 10 additional years. But considering that their home lost half of its value, the prospect of spending the next 40 years to pay off their mortgage seemed less than desirable. That's when they entertained a short sale.

"I've always considered myself to be an honest and forthright person, and there is no doubt that in making the decision to short sell I was, in fact, breaking my word and a promise I made to the bank to pay off their loan in its entirely," said Erin. "But when I step back and look at the big picture -- at the banking industry, all of the broken promises it has made to homeowners like myself who were manipulated into truly lopsided loans, and the reality of my financial situation -- it was clear that the short sale was our best and most viable option."

Stories like Erin's are certainly not rare. A short sale occurs when a homeowner in poor financial shape sells a home for less than the amount due on the mortgage, with all the proceeds going to the lender. They offer an appealing alternative to foreclosures, but that doesn't mean that it's an easier process to endure. Here's an overview of what a homeowner should do when considering selling in a short sale.


1. Talk to people

After enduring a financial hardship and finding out that your home is underwater, your first steps should be to talk to three key parties: a CPA, a real estate attorney and a qualified real estate agent.

"Each state has its own laws regarding the lender's ability to come after the borrower for a deficiency after the sale or foreclosure, so it is highly recommended that homeowners discuss their situation with all three of these people," says Bob Hertzog, a real estate broker with Summit Home Consultants in Phoenix. He adds that in some cases, it might be better to just go with a foreclosure or bankruptcy filing. Consulting with these three parties will help you to confidently go forward with the short sale, or to learn early on whether or not you should go another route altogether.


2. Find the right agent

If your discussions lead to a decision that a short sale is the way to go, it's time to choose the best real estate agent available. While many agents will tout themselves as short-sale experts and tag on fancy titles and certifications to their names, many times these are nothing more than titles granted after completion of a course. If you want to use titles as guidelines, keep an eye out for Certified Distressed Property Experts (CDPE) or National Association of Realtors Short Sale Specialists.

Beyond titles and organization names, it's important to ask questions like, "How many short sale listings do you currently have? How many short-sale listings have you lost to foreclosure? Can I have the names and phone numbers of your last five short-sale listing clients?" "The short-sale process lives and dies with the listing agent," says John Makarewicz, a real estate agent in Atlanta who specializes in short sales. Also, be wary of scammers who offer things that sound too good to be true.


3. Find the true value of your home

Before embarking on the long process of a short sale, homeowners should verify the value of their home. This can be done in several ways. If you're trying to do as much work on your own, you can use tools like AOL Real Estate's home value generator to approximate the value of your property by comparing it with the values of similar, neighboring houses. You can also look to your real estate broker to give you an estimate. A third option is to get an estimate from an independent appraiser. One way to do this is to search the Appraisal Institute website to find an appraiser in your area. "Too often I will see homes listed way below market value marketed as a short sale," says Makarewicz. "The banks are not dumb and they are looking for as close to market value as possible."


4. List the home at the right price

The price that the home is listed at is a key step in the short sale process. It should be slightly above market value, and the price should be lowered at pre-determined intervals until an offer is received. This will appease your bank by showing them that you tried to do your best to get them the most for your home.

"Not only do you need an attractive sales price to entice a buyer to go through the shenanigans inherent in a short sale, but you need to satisfy the bank's appetite for profit," says Elizabeth Weintraub, a broker-associate at Lyon Real Estate and writer of the homebuying/selling guide at About.com. "If you can't give the bank a decent sales price, the bank might reject the short sale."


5. Get your package together

Once an offer is received, it's time to start building your short-sale package. Your lender will require a number of documents, including a hardship letter, your tax returns from the last two years and your last two pay stubs, among other things. When all is said and done, the whole package could be 60 to 80 pages long, according to Hertzog. It's essential that all required documents are included in the package, as banks will look for any and every reason to put off your short sale.


6. Wait

Now it's all about patience, a key part of the short-sale process. It could take about 30 to 45 days for the lender to get your short-sale package, put all the information on their system and assign the sale to a negotiator -- in some cases, it could take up to three months.


7. Negotiate

The negotiator from the lender will offer a broker-price opinion (BPO), or an appraisal, of your home. Typically, if the offer you've received is within 5 percent of the BPO and if all necessary information is given to the lender, the short sale will be approved. If the offer is too low, the lender could counter with a higher sale price. This may lead to some back-and-forth negotiating, and buyers may come and go, but keep your agent close and don't get discouraged. This is all part of the game. The entire short-sale process could take six weeks, while others may take a year or longer.


After 14 grueling months of negotiating and nitpicking from the bank, Erin completed a short sale of her home in May. The long, involved process of short selling her home was a true team effort. "A short sale is not for the faint of heart and having a team of Realtors to work with that's well versed in the art of short selling is a necessity."

For more about short sales these AOL Real Estate guides can help, whether you're buying or a selling:

More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.


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]]>appraisalsbankforeclosure preventionForeclosurePreventionForeclosureshomehome salehomeownersHomeSalelendermortgagesreal estateshort saleshort sale propertiesshort salesJason Hahn2010-08-10T20:54:00 00:00Low-Cost Home Security Solutionshttp://realestate.aol.com/blog/2010/07/29/low-cost-home-security-solutions/http://realestate.aol.com/blog/2010/07/29/low-cost-home-security-solutions/http://realestate.aol.com/blog/2010/07/29/low-cost-home-security-solutions/#commentsHome security sign Thanks to her stint in the military, Mary F. was used to moving around. However, after settling down in Texas and enduring the unpleasant experience of having her home robbed, she decided that feeling like a sitting target was something she didn't want to get used to. "I knew I had to do something, but as a single mom of two young kids I wasn't sure I could afford home security, so I shopped around."

Mary shopped for a week before deciding on an option that satisfied her needs, from both security and budget standpoints.

According to the FBI's "Crime Clock" statistics from 2008, property crime happened once every 3.2 seconds in 2008, and a burglary happened every 14.2 seconds. While automated security systems are becoming more of a standard for new homes, many homeowners have to make smart choices when it comes to securing their houses the right way.
This guide reviews several simple home security methods available to protect your family and home from invasion. And peace of mind may come cheaper than you think.


Lock up at all times

This may seem like common sense, but Louis Stilp, founder of LifeShield Home Security, says "Some people may neglect to lock their doors while they run out quickly to the grocery store or post office." He points to research from SuperHomeSecurity.com, which finds that 34 percent of burglars enter homes through the front door, and to an article from The Washington Post that states burglars spend an average of 8 to 15 minutes in your home. Leaving your door unlocked, even only for a few minutes, provides easy access to potential burglars. (Cost: $0.)


Keep the lights on

Dark homes make for easy break-ins and exits. Keeping the entrances and walkways to your home well-lit makes your residence a lot less appealing for burglars who are looking for an easy target. Light makes it much easier to identify a burglar, should a neighbor or passerby notice their misdeeds. Timer-based or motion-sensor lights are more energy-efficient and worry-free options, since they negate the need to remember to turn lights on at night. Motion-sensing lights also serve to startle anyone (or anything) that walks within range of the sensor. Installing these lights yourself will keep costs down, but having someone else install them for you raises the price tag of this option. (Cost: $50 to $400, plus minimal electric bill increase.)


Trim hedges and shrubs

That's right -- those bushes that surround your home can actually help you keep your home protected. Trimming hedges and shrubs might not appear to be anything more than an exercise in improving aesthetics, but keeping them low and well-groomed will eliminate hiding spots for any potential burglars. For homeowners who want to take this a step further, planting "defensive shrubs or thorny bushes" around your basement or ground-floor windows will make it "difficult for the bad guy to get through," according to Robert Siciliano, security consultant to ADT.com. (Cost: $0-$50.)


Put on a show

Making it seem like someone's home can go a long way to deterring burglars. This can be as easy as leaving some lights on when you're away and as strange as using a life-size cutout of yourself (or someone else) and placing it a few feet from a window. Other simple ways to give off the impression that the home is occupied include: leaving the TV or stereo on, making sure that a car is parked in the driveway, asking someone to pick up your daily mail and newspaper deliveries (or suspend the delivery of both) while you're away, and keeping your lawn maintained.
Though seemingly silly, putting up intimidating signs (mentioning video surveillance or menacing dogs, for example) can also help defend your home, even if what they say is untrue. Whether it's while you're away for an extended vacation or just during the day (when 80 percent of break-ins occur, according to a study conducted by The City College of New York and the University of Pennsylvania), taking these simple measures can help fake out burglars and stop potential break-ins. (Cost: $0-$75.)


Secure doors and windows

Alarms that play sounds (like a barking dog or a siren) when a door handle is jiggled, or alarm-sounding security bars that wedge under door handles, can also be effective deterrents against break-ins. Also, locking windows and installing brackets to prevent them from opening more than 6 to 10 inches can help protect your home, according to Siciliano. He also adds that using window film (which is often priced per square foot) can be an effective form of protection because it makes it difficult to break glass -- it also doubles as an energy saver. (Cost: $5 and up.)


Watch what you say (or tweet)

Some of the best ways to keep your home safe appear to have nothing to do with your house's security at all. For instance, be wary of what you share online, especially on social networking sites like Twitter. Many people tweet about where and when they're going on vacation, which is akin to shouting "Please rob me!" Off-line, don't reveal your first name on your mailbox or in the phone book, and don't leave a greeting on your voice mail or answering machine saying that you'll be away for a period of time. Sometimes, not doing certain things can be just as effective as taking measures to protect your home. (Cost: $0.)


After researching and calling some of the big home security companies out there, Mary chose to go with a wireless security system from LifeShield. She loved that it fit her budget and that no matter where the military next stations her, she can take her wireless home security system with her and knows that "no matter what city we are in, my family is safe."

Mary decided to go with one method, but no one has to limit themselves to just one option. As Thomas N. Davidson, a retired police officer, says, "The bottom line here is: Like putting on extra blankets when you are cold in bed, layer yourself in these prevention and deterrence techniques."


More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.

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Want to learn more about home buying and home finance? If so, you won't want to miss
our online discussion with industry experts,
"What Works Now: Smart Moves When Buying a Home,"
created by AOL Real Estate in participation with Bank of America Home Loans.
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]]>alarmsDIYdoorshomehome securityhome+improvementrenovationsecuritysecurity systemwindowsJason Hahn2010-07-29T15:11:00 00:00Best Ways to Cool Down Your Rentalhttp://realestate.aol.com/blog/2010/07/20/best-ways-to-cool-down-your-rental/http://realestate.aol.com/blog/2010/07/20/best-ways-to-cool-down-your-rental/http://realestate.aol.com/blog/2010/07/20/best-ways-to-cool-down-your-rental/#commentsrental air conditioningWhen summer rolls around, it can mean the start of vacation, a new romance or more outdoor activities, but for many renters it means the start of hot, stifling, sweaty apartments.

While some solutions are obvious, most renters are unaware of the long list of options available. From changing lightbulbs to switching window shades, there are plenty of ways renters can keep their apartments cool when it's hot outside.

Here's a list of some of those options, from the cheap to the more expensive -- and with each solution we offer the pros, cons and approximate costs.


Unplug

Simply unplugging unused appliances, computers, chargers, etc., gets rid of "phantom" loads that gobble electricity and product heat when they're plugged in. If this is too much to ask, turning off electronics and appliances that aren't being used can cut down your energy bill while cooling down your apartment.

  • Pros: lower energy bills, good for the environment, opens your eyes to healthy/fulfilling activities
  • Cons: bothersome, takes time/patience
  • Costs: $0
  • Payback: N/A

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Close the gaps

 If you have any gaps around your doors or windows, unwanted heat from outdoors might be sneaking into your apartment, and cool air from your air conditioner might be seeping out. Closing those gaps can be an easy way to keep your apartment a bit cooler during the hot summer months (and warmer during the winter), so ask your landlord to look into it.
  • Pros: doesn't require much work on your part
  • Cons: requires cooperation from your landlord
  • Cost: $0
  • Payback: N/A


Compact fluorescent lamps

Replace your old-fashioned incandescent lamps with compact fluorescent lamps "which provide comparable lumen output but consume much less heat-generating electricity," according to Terry Townsend, president of Townsend Engineering, Inc., and former president of ASHRAE. He says that this simple change, which surprises many who try it, cuts three-quarters of the heat generation during operation. Oh, and they're good for the environment.
  • Pros: good for the environment, affordable, lower energy bills
  • Cons: more expensive than traditional lightbulbs, might not fit all fixtures, may cause headaches
  • Cost: $0-$50
  • Payback: 1-2 years


Plants

Yes, plants can serve as a real way to help keep your apartment cool, and can also act as something of a placebo. Indoor plants that block windows during the day can serve as shade and help block out the heat. They can also be used to shade air conditioning units, which will use less energy as a result. Decorating with plants instead of rugs and carpets can also trick you into thinking that you feel cooler, so try that if you're in for getting duped -- in a good way.
  • Pros: creates pleasing look and feel in your apartment, cleaner air
  • Cons: might take up valuable room in smaller apartments
  • Costs: $0-$50
  • Payback: N/A


Close blinds/curtains

If your apartment has windows that let in the sun, close blinds or curtains when you're out during the day. Of course, this requires a good set of window shades to work. "I've lived in several apartments over the years and have found that one of the best ways to beat the heat is to get a good set of drapes and close them in the afternoon," says Kerry Taylor, who blogs about frugal living at Squawkfox.com. Insulated curtains with a white or heat-reflective color facing outdoors can also help keep the heat out of your apartment. Using cotton black-out shades worked for Cambria Bold, managing editor for Apartment Therapy Re-Nest. "It's made a considerable difference in bringing down the temperature of our apartment," she says. "When we get home from work, we pull them up to enjoy the light, and later in the evening if it's cooled down a bit, we'll open a window at the front and back of our apartment to circulate some air."
  • Pros: small adjustment, relatively cheap
  • Cons: requires not being forgetful
  • Costs: $0-$100 (depending on need for curtains)
  • Payback: 0-4 years


Fans/dehumidifiers

Portable fans are boring, but effective -- if used correctly. Plugging in a simple portable fan or turning on a ceiling fan helped Taylor survive hot temperatures. However, when used in a closed room or when an air conditioning unit isn't present, fans just blow hot air around the room. The key is to blow hot air out during the day (point fan outside), and bring cool air in at night (point fan inside). Fans used in conjunction with dehumidifiers are "especially effective," according to Townsend, who says that in Tennessee and Florida (where "weather conditions are comparable to a rain forest"), many individuals are surprised at how effective dehumidifiers are at lowering moisture and producing drier environments.
  • Pros: can allow you to set higher thermostat set-points, brings about tangible coolness, uses less energy than an air conditioner, higher standard of living
  • Cons: requires an investment, especially if you spring for fancier fans/dehumidifiers
  • Cost: $25-$500
  • Payback: 4-7 years


Air conditioners

This is, of course, the most obvious solution to a hot apartment. However, it might not be the most cost-effective or eco-friendly approach to your problem. If you go this route, make sure you know how big a unit you'll need for your apartment. Also, don't use a dehumidifier at the same time as your A/C unit, as it will force the unit to use more energy and work harder. Maintenance is also key for A/C units, especially for older ones. Make sure that air filters are in good shape, that freon isn't leaking, that it's set at proper levels, and that all gaps are closed between the unit and the window it's situated in.
  • Pros: quick and easy, guarantees a cooler apartment
  • Cons: not the most eco-friendly solution, potentially noisy, expensive
  • Costs: $75+
  • Payback: 5+ years

*some information provided by Townsend Engineering, Inc.

Want to know how to deal with other rental issues? Here are some AOL Real Estate guides that can help:
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Find homes for sale in your area.
Find foreclosures in your area.
Get property tax help from our experts.


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Want to learn more about home buying and home finance? If so, you won't want to miss
our online discussion with industry experts,
"What Works Now: Smart Moves When Buying a Home,"
created by AOL Real Estate in participation with Bank of America Home Loans.
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]]>air conditioningapartmentcflcoolcurtainsdehumidifierfanhotrentalssummerJason Hahn2010-07-20T14:10:00 00:00LeBron James Lured With Luxury NYC Homes and a Websitehttp://realestate.aol.com/blog/2010/07/08/lebron-james-lured-with-luxury-nyc-homes/http://realestate.aol.com/blog/2010/07/08/lebron-james-lured-with-luxury-nyc-homes/http://realestate.aol.com/blog/2010/07/08/lebron-james-lured-with-luxury-nyc-homes/#commentsFiled under: ,

LeBron James NYCLeBron James has overwhelmed all channels of news and information during the past week. His epic stature in this summer's NBA free agency has inundated the realms of TV and the Internet -- especially on Twitter, the popular online social network that's been buzzing all about James lately and where the King himself officially debuted on Monday.

Basketball fans in New York City have been rabid for James to come and save the woeful Knicks from years of disgrace -- some have even offered extravagant perks to the 25-year-old basketball superstar, should he sign with New York.

One real estate company in New York City has jumped into the fray with a proposal of its own, and has even launched a shamelessly promotional website dedicated to wooing James to the Big Apple: EveryKingNeedsACastle.com.

James is expected to announce his team choice tonight on ESPN during a TV broadcast titled "The Decision." At least five cities that have been courting James will be disappointed.
"LeBron James and New York City -- sounds like it was meant to be," says Diane M. Ramirez, president of Halstead, in a cheesy-but-fun video on the home page of EveryKingNeedsACastle.com. "As the largest privately held real estate firm in the New York metro area, we want to help the King find his castle."

The video, which was mostly filmed at Van Vorhees Park in Brooklyn and features former Knick John Starks, offers James the company's brokerage services and expert local guidance to help him find his "New York dream home."

Halstead isn't eyeing a bulging commission check -- the company is promising to donate the full company portion of the commission from James' purchase of a New York home to the donation of his choice. This amount could reach six figures, Ramirez says in the video.

"As a result, we can make a difference both on and off the court," the website's home pages declares.

EveryKingNeedsACastle.com features a page for "Castles" (luxury homes) and another for "Kingdoms" (neighborhoods).

Of the 311 plush homes listed on the "Castles" page of the site, the most expensive is a $25 million town house located on Broad Street in Lower Manhattan. "With large windows on three sides, an elevator and state-of-the-art technology such as a Cisco Tele-Presence conference room, this imposing building, owner-occupied, offers 15,218 SF above grade plus 3,043 SF below grade," Halstead's listing notes.

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The cheapest "castle" offered by Halstead to James is a three-room condominium on Madison Avenue listed at $895,000, with $1,389.68 in common charges and $902 in real estate taxes per month.

Among the New York-area "kingdoms" are Hoboken, N.J.; New Canaan, Conn.; and Park Slope in Brooklyn, N.Y. Each neighborhood is accompanied by a video guide and hosted by a Halstead executive.

Free agents will be allowed to sign with teams on Thursday. The Knicks already have notched a five-year, $100 million deal with Amar'e Stoudemire, who immediately becomes the team's best player in recent memory. However, everyone knows the biggest, most desired catch is James.

The Cleveland Cavaliers, Chicago Bulls, New York Knicks, New Jersey Nets and Miami Heat are all thought to have a chance to land him. The ESPN special about his announcement will broadcast tonight at 9 p.m. EDT; proceeds from its sponsors go to the Boys & Girls Clubs of America.

Good luck to all the cities and basketball fans.

More on AOL Real Estate:
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]]>lebron jamesluxury real estatenbanew york city real estateJason Hahn2010-07-08T11:57:00 00:00Chicago Senior Residential Projects Go Greenhttp://realestate.aol.com/blog/2010/07/02/chicago-senior-residential-projects-go-green/http://realestate.aol.com/blog/2010/07/02/chicago-senior-residential-projects-go-green/http://realestate.aol.com/blog/2010/07/02/chicago-senior-residential-projects-go-green/#commentsFiled under: ,

Green rooftopWhat's not to love about rooftop gardens and terraces in a quiet neighborhood just north of a major metropolitan downtown area? They serve many purposes, especially for a community of seniors in Lakeview, just 4 miles north of the Loop.

Everyone in Chicago seems to be going green these days. Not only was it recently ranked as the greenest U.S. city based on the number of LEED certified buildings, Chicago's City Hall itself boasts a rooftop garden. Now senior living residences are following suit, offering residents the luxuries of green relaxation while making for more efficient and connected buildings in their communities.
Greenview Place, located 1501 West Melrose St. in Chicago, had its grand opening on May 27. The community for residents ages 65 and up is made up of more than 100 studio and one-bedroom apartments in addition to "an 8,400-square-foot rooftop terrace, a spacious courtyard, sidewalk gardens plus a 9,000-square-foot green roof," according to Greenview's press release.

The green roof "prevents overcharging city sewer systems by holding rainwater, it reduces the urban heat island effect and it offers amazing neighborhood and Chicago skyline views to our residents," said Jeanmarie Kapp, COO of The Renaissance Companies, the property developer for Greenview Place and project manager for the residence.

She added that the 130,000-square-foot building was built with sustainable ideas and technologies in mind, and that Greenview was meant to be a building that fit into the larger residential neighborhood. While the residence is meant to be an "oasis" for seniors, it's also meant to keep them connected to the community around them.

That's why a pathway was built between Greenview and Saint Luke Academy, which is right down the block. Students are encouraged to enjoy the rooftop garden terrace while mingling with the residents there.

Green roofs and buildings are nothing new in Chicago, and building these eco-sensitive spaces for senior living is not much of a stretch. Todd Wiltse, an architect with Worn Jerabek Architects, the firm that partnered with The Renaissance Companies for Greenview Place, and that was responsible for City Hall's rooftop garden, said green projects for senior centers are pretty much the same as green initiatives for any other building type. He explains, "The major difference at Greenview Place was a concerted effort to make the green roof areas visible from the building's interior corridors and exterior terrace, so that seniors would be encouraged to go outside."

The benefits of green roofs in particular go far beyond mere aesthetics. They "form an integral part of the overall building design," according to Wiltse. "They enhance the experience of the residents while adding insulation value in winter, providing evaporative cooling in summer, and most critically, absorbing excess stormwater."

He added that green roofs in Chicago are becoming mainstream, and that the challenges for these projects going forward "are not technical, but rather bureaucratic and financial."

Worn Jerabek Architects' other senior living projects have green rooftops and initiatives as well.

Casa Maravilla, a senior living complex in the Pilsen neighborhood of Chicago completed by McShane Construction Company and The Resurrection Project, also boasts a green roof. It had its open house on May 27, the same day Greenview Place officially opened.

Also at AOL Real Estate:
See homes for sale in Chicago.
See how to calculate mortgage payments.

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]]>architecturebuildingchicagoenvironmentgreenrooftopsenior livingseniorsJason Hahn2010-07-02T11:20:00 00:00How Much Home Can I Afford?http://realestate.aol.com/blog/2010/06/29/how-much-home-can-i-afford/http://realestate.aol.com/blog/2010/06/29/how-much-home-can-i-afford/http://realestate.aol.com/blog/2010/06/29/how-much-home-can-i-afford/#comments
Eddie Kim's parents made savvy residential real estate purchases in New Jersey 15 years before the housing bubble burst, so he was fully aware of how unique the housing boom was. After he married in March, his parents encouraged him and his wife to take a different approach than they did: Not to buy a home as "an investment opportunity or retirement portfolio, but just as a place where we can grow our future family," says Kim.

This strategy has made it even more important for Kim and his wife to carefully and soberly assess the question: How much home can I afford? They're using a conservative estimate of how much monthly income they can spend to buy a house because, as Kim says, they agree that they "would like to afford to go on vacations every so often and not be forced to spend our time off in our living room, living vicariously through commercials on TV."

Like most big questions in life, there's a quick answer and a long answer to how much house you can pay for. Both are helpful to think about so you'll buy a home with a mortgage you can afford.


The Quick Answer

The rule of thumb is that most potential homebuyers can afford to buy a home that costs between two and two-and-a-half times their gross annual household income. So, for example, if Rita Renter is looking to become a homeowner and she earns $50,000 a year, she can afford a home that would cost between $100,000 and $125,000.

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For those who can afford to plop down a big down payment, and have light debt loads or none at all, a buying a home up to four times their annual income might be reasonable. While this quick estimate offers a helpful lens through which to eyeball how much home you can afford, there are other ways to look at it, and they involve ratios, history and costs.


The Long Answer

It's one thing to think about how much you might be able to spend on a home, it's another to think about how much you'll be allowed to. Or is it? Maybe the most comprehensive, helpful way to assess what you can afford is to look at it from a lender's perspective, which might be the most sober and insightful.

Mortgage lenders use two main calculations to decide whether you actually can pay them back: the front-end ratio and the back-end ratio. (They're not nearly as complicated as they might sound.)

  • The front-end ratio, or the housing expense ratio, is simply the percentage of your gross (that is, pretax) monthly income that will go toward paying the mortgage. Generally, conservative lenders want that to be less than 28 percent; others might push it to 30 percent or higher. But check with lenders to see what their actual thresholds are. (Since the housing bubble burst it's a lot harder to find lenders willing to accept a 40 percent ratio, though that's probably a good thing.) If you earn $5,000 per month, and the lender has a 28-percent threshold, the most they'd be comfortable with would be $1,400 ($5,000 x 0.28).
  • The back-end ratio, or the debt-to-income ratio, is the percentage of your gross monthly income that will go toward paying all of your debt obligations: mortgage, credit cards, child support, car and student loans, etc. Some lenders want your total debt payments to be less than 36 percent; others allow as much as 40 percent or more. If you earn $5,000 per month and your monthly debt obligations now are $300, or 6 percent of your gross monthly income, your back-end ratio will be 34 percent ($1,400 + $300). Since that's below the threshold of $1,800, or 36 percent ($5,000 x 0.28), you could be a good candidate for a loan.

Types of Loans

There are three main types of mortgage loans: conventional; FHA (Federal Housing Administration); and VA (U.S. Department of Veterans Affairs).

  • Conventional loans are the most common way to buy a home in the U.S., hence the name. They typically require a down payment of at least 10 percent and sometimes up to 20 percent, in addition to a pretty solid credit score. However, these mortgages present lenders fewer hurdles than the other two.
  • FHA loans are a bit more forgiving, in the sense that they require down payments as low as 3.5 percent and are usually a bit more flexible with credit scores. Their thresholds for front- and back-end ratios differ from conventional loans, though.
  • VA loans are great for U.S. military veterans and those now serving. Those who qualify don't have to make a down payment and aren't required to get private mortgage insurance.

That's a quick overview, but the takeaway is: Explore your loan options to make sure you find the best fit.


Potential homeowners also need to figure in the other costs associated with a mortgage, like property taxes, homeowners insurance and closing costs. It's also important to note that the house you buy will be considered by your lender as collateral on the mortgage loan. In other words, should you be unable to repay the loan, the lender can foreclose on your mortgage and seize the house.


Home-Related Costs

The mortgage isn't the whole story. Owning a home is expensive and it's crucial to know that from the get-go. Things like maintenance, utilities, furniture, and association fees are among the month-to-month costs that you'll incur along with the mortgage when you buy a home.


Use Your Weapons

There are tools to help you determine how much home you can afford, even beyond this guide. Mortgage calculators and home ownership calculators are easily found online and can narrow down how much house you actually can afford.

And use common sense. It's easy to get swept up by the ocean of numbers that figure into a discussion of affordability, but don't forget the basics. How much are you comfortable paying toward your home each month, really? Can big plans for the future affect your financial circumstances? How long do you plan on staying in the home? What would be the consequences of not being able to make your mortgage payments?

Owning a home is great, but carefully consider how much you're willing to give up for it. You might find that renting is your best option right now. Knowing what you want to spend might be worlds apart from knowing what you can pay, so use every resource you can to help determine how much you can afford to spend on a new home.


How Much House Can You Afford?

Still trying to decide which is right for you? Here are some AOL Real Estate guides to help you decide how much home you can afford:
More on AOL Real Estate:
Find out how to calculate mortgage payments.
Get property tax help from our experts.

 

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]]>affordableback-end ratioBack-endRatiobanksbuying a homedebt to incomedebt-to-incomeDebtToIncomeDTIfirst time home buyerfirst time home buyersfront-endfront-end ratioFront-endRatiohomehomeownerhousehousing expensehow muchincomelendersloansmortgageratioJason Hahn2010-06-29T19:19:00 00:00Luxury Apartment Rentals Are Hot Againhttp://realestate.aol.com/blog/2010/06/28/luxury-apartment-rentals-are-hot-again/http://realestate.aol.com/blog/2010/06/28/luxury-apartment-rentals-are-hot-again/http://realestate.aol.com/blog/2010/06/28/luxury-apartment-rentals-are-hot-again/#commentsFiled under:

With amenities that include outdoor spas, poolside cabanas, private wine lockers, 24-hour fitness centers with views of the city -- who wouldn't want to live in an apartment these days? In Chicago, the big bets developers made by building nearly 1,300 new downtown apartments in 2009 appear to be paying off, big time.

While the condo market flounders in the continued throes of a stifled economy, the downtown rental market in Chicago is booming, according to the Chicago Tribune. Despite rents that exceed $5,000 per month, many potential condo buyers are opting to rent an apartment thanks in part to some very appealing amenities.

So why would anyone consider paying pricey monthly rent, rather than purchase a home or condo for comparatively cheap (compared to the pre-bust era) prices? Because of the risk of continued declines in those prices, says the Tribune. It notes that the median price for a traditionally sold condo or town house in April fell almost 10 percent to $316,000, according to numbers from the Chicago Association of Realtors by Midwest Real Estate Data.

The ability to maintain more financial flexibility has also made apartments with sexy amenities more appealing to younger workers looking to live downtown, according to the Tribune.

While many renters already have benefited by taking up offers of one to two months of free rent, those bargaining chips quickly are becoming history. Since there aren't many building projects on the horizon in downtown Chicago, occupancy rates are expected to reach 90 percent in the next year or so, and market-rate increases are expected by spring 2012.

For an idea of what's available in downtown Chicago, take a look at unit 2207 in EnV Chicago, a 603 square-foot studio apartment with one bathroom, priced between $1,682 to $2,088 per month. While that's pretty pricey given that the average price for a studio in Chicago was $911 in May, according to MyApartmentMap, amenities include:

  • Rooftop: Pool terrace with cabanas and chaise lounges, all-season bar and catering kitchen, barbecue grill area, 24-hour fitness center overlooking a captivating city skyline and private wine lockers
  • 7th floor: Fire-pit lounge and garden, media room with large-screen television and surround sound, Internet lounge, juice and coffee bar, dog run and iPod-docking stations
  • Community features: Wi-Fi throughout the building, full-service concierge, EnV iPhone app
  • Interior unit features: bamboo floors, granite countertops and kitchen islands, 9-foot high ceilings, built-in wine racks

Taking all of that into account, paying around $2,000 per month probably doesn't seem as painful to potential renters.

Apartments are also seeing a strong year in New York City. Marcee Yadgar, rental manager at Anchor Associates in New York, is seeing fewer vacancies this summer compared to last summer, which means fewer benefits for potential renters.

Yadgar notes that fewer concessions (i.e., landlords paying broker fees or offering free rent) are being offered this year. "Landlords filled their vacancies last year, and it seems as though tenants are staying and renewing their leases -- thus fewer availabilities, making it harder for new tenants to negotiate prices."

Patience may be the name of the game, as more availabilities should present themselves in the fall once the summer rush is over, and "landlords will start to offer more incentives again."

Apartment hunters may have become a bit spoiled in light of all of the concessions and negotiating leverage they've experienced lately. "Often, I think clients expect too much," said Yadgar. "They are still expecting to find that $4,500 apartment for $3,000. It is our job to educate them and share our vast knowledge in this changing market."

See apartments for rent in Chicago and New York City in AOL Real Estate

 

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]]>amenitiesapartmentchicagocondoslandlordnew yorkNYCrentalsJason Hahn2010-06-28T13:28:00 00:00Debt to Income Ratios, Diving Deeperhttp://realestate.aol.com/blog/2010/06/17/home-affordability/http://realestate.aol.com/blog/2010/06/17/home-affordability/http://realestate.aol.com/blog/2010/06/17/home-affordability/#commentsdebt to income ratiosOf all the important numbers to consider when applying for a home loan, one should be known at the start by homebuyers: your debt to income ratio.

Debt to income ratio, or DTI, is actually two numbers: a front-end ratio and a back-end ratio. These practical, helpful numbers are a dependable guide to helping you understand just how much home you can afford. If calculated and used correctly, debt to income ratios also can save you headaches once you begin paying off that brand new mortgage.

Both the front- and back-end ratios are used by mortgage lenders to help determine whether you'll be able to pay them back each month. But debt to income ratios are also critical for homebuyers to know because they present a simple way to step into the shoes of the lender early in the home-shopping process. They give you quick insight into which houses are within your reach financially. They are reality checks.

What's in the Front-End Ratio?

There are two main types of loans available to most borrowers: conventional loans and FHA loans. Conventional loans typically have conservative thresholds for front- and back-end ratios, while FHA loans will have higher limits.

The front-end ratio, also called the housing expense ratio, is the percentage of your gross (or pretax) income that will go to paying off your mortgage payments each month. While conservative lenders will look to make sure their borrowers don't pay more than 28 percent of their monthly gross income toward their mortgage, other lenders might be willing to push this threshold up to 30 percent and beyond. Of course, in this post-boom era, it's more difficult to find lenders willing to take on borrowers with front-end atios in the upper realms. It's a good idea to check with your lender to see what their desired range is.

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So, for example, if you earn $5,000 per month, and your mortgage lender has a maximum front-end ratio threshold of 28 percent, they would probably be willing to handle a mortgage that requires you to pay no more than $1,400 ($5,000 x 0.28) per month.


What's in the Back-End Ratio?

The back-end ratio, also called the debt-to-income ratio, is the percentage of your gross monthly income that will go toward paying off all of your debt obligations. This includes your mortgage, credit card payments, student loan payments, car payments, child support, etc. Conservative lenders likely will want no more than 36 percent of your monthly gross income going toward your debt obligations, while others may be willing to push this up to 40 percent or more.

So, for example, if you earn $5,000 per month and your monthly non-mortgage debt payments equal $400 (8 percent of your gross monthly income), that's added to your $1,400 in mortgage payments each month, making your debt to income ratio 36 percent ($1,400 + $400 / $5,000). Since this meets the conservative 36-percent threshold, you would probably be a strong candidate for a mortgage.


What Works Now

Brian Dixon, vice president of Perl Mortgage Inc., has seen debt to income ratios trend toward the conservative side of the spectrum in the past year or so. "It was not uncommon only a year ago, where Fannie and Freddie would accept back-end ratios as high as 60 percent -- even higher for strong credit files," he notes. However, agencies are now capping their back-end ratios within the 45 to 50 percent range.

Back-end ratios will settle around 45 percent for conventional loans, according to Dixon, who expects FHA-backed loans to follow suit. Since back-end ratios take into account gross income, this 45-percent mark is "still quite high."

Mary Tootikian, author of "Stunned in America: Sub-Crime Mortgage Crisis" and longtime mortgage underwriter, has observed loans with back-end ratios as high as 48 percent being approved lately, so long as there are "compensating factors," which include sufficient cash in the bank and solid credit scores.

While the bursting of the housing bubble has reduced some questionably high debt to income ratios acceptable to riskier lenders, it doesn't mean that those ratios are no longer accepted. Still, for buyers, the importance of DTI has never been clearer. If your front-end ratio shows you can't make the payments for that dream home, it's time to stop and rethink whether you're ready for something that big. And if your back-end debt to income ratio is rising over 40 percent -- it's time to get your debt under control.

Debt to income ratios can be a harsh master, but understanding the full implications can make all the difference in the world to a homebuyer.

 

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]]>back end ratiosBackEndRatiosbuying a homeBuyingAHomedebt to incomedebt to mortgage ratiosDebtToIncomeDebtToMortgageRatiosDTIfront end ratiosFrontEndRatioshome affordabilityHomeAffordabilitymortgagemortgageswhat works nowWhatWorksNowJason Hahn2010-06-17T16:07:00 00:00Neighborly Revenge With the 'Dear Girls Above Me'http://realestate.aol.com/blog/2010/06/15/neighborly-revenge-with-the-dear-girls-above-me/http://realestate.aol.com/blog/2010/06/15/neighborly-revenge-with-the-dear-girls-above-me/http://realestate.aol.com/blog/2010/06/15/neighborly-revenge-with-the-dear-girls-above-me/#commentsFiled under:

dear girls above meBad neighbors should be avoided at all costs, since there are so many ways that living beside strangers in the close quarters of an apartment building can go wrong: hearing the awkward sounds of copulation; inadvertently catching late-night arguments in which you shouldn't be involved; smelling the consequences of a disregarded room.

But as with most things, you can find a silver lining -- if you pay enough attention.

Charlie McDowell, president and CEO of Cloudbreak Productions, saw an opportunity in launching witty, hilarious and engaging website called "Dear Girls Above Me," which originated on his Twitter account, @charliemcdowell, earlier this year. On his site and Twitter feed resides a collection of his brief letters to two effusive, oblivious girls who live in the Los Angeles apartment above him.

McDowell talked with RentedSpaces about the inspiration for "Dear Girls Above Me" and the response it's gotten, and offered some advice to readers who have bothersome neighbors.

Rented Spaces: Can you please introduce yourself?
Hello, my name is Charlie McDowell and I'm an alcoho -- Oh, wait. Sorry, different interview. I apologize. My name is Charlie McDowell. That is all.

Can you describe your apartment, how you found it and the neighborhood it's in?
I found the apartment because one of my best friends lives in the building as well. It's a really cool, old building -- only problem is the walls are paper thin. That, mixed with extremely loud talkers, equals "Dear Girls Above Me."

What gave you the idea to start "Dear Girls Above Me"?
I honestly don't really remember. I had been writing down things they had said for a few months, thinking I would use it in a script one day. I woke up one gloomy morning to them having a 40-minute conversation about what to do if it rained. I yelled from my bed, "Shut the hell up, invest in an umbrella and be done with it." They can't hear me for some reason, which makes the "relationship" feel very one-sided. But, anyway, I randomly logged onto my Twitter account and wrote a couple "letters" to them. I think I had 11 followers (10 of whom were my friends). I got a few responses and people started re-Tweeting them. Then it just got bigger and bigger. I remember there was a point when I realized, "Crap, now I gotta keep writing these damn letters."

How much of what you share is true?
Everything I share comes from the truth. Of course, as a writer I am able to take poetic license in what I write. Since Twitter only gives you 140 characters, it's impossible to take every conversation and simplify it to a single short quote. In saying that, yes, the girls are very real; yes, they are extremely loud; and yes, I may now open the windows so I can hear them better. It's sick, I know.

What's your favorite DGAM letter?
I think one of my favorites would have to be: "Dear Girls Above Me, 'I had the s******** day, all I wanna do is get wasted.' I remember you saying the same thing last week when having the best day." Another one I like, 'cause it shows how pathetic I really am, is: "Dear Girls Above Me, Sometimes when you're having sex, I play you in Jenga. Right now I'm winning 3 games to 2."

What's your offline relationship with the two girls (whom you've dubbed Cathy and Claire) like?
I see them in the parking lot, laundry room and the hallway. They really don't pay much attention to me. To them, I'm the weird bearded guy who giggles like a schoolgirl every time I see them. I can't help it -- seeing them is much more exciting than a celebrity sighting.

Are they aware that you're doing this?
They have no idea.

What's the response to this been like? Have there been any unique or memorable reactions?
Well, when I first started doing the "letters," I was shocked to hear from so many people with loud-neighbor stories. I've never been in a noisy living situation before, so this was all new to me, but there has definitely been an overwhelming response. It's nice to know you're not alone in the world. I would say the most unique reaction was a couple of girls who made "GAM" (girls above me) hats and t-shirts. Those girls have almost as much free time as I do!

Are these two girls your worst neighbors yet? If not, who was the worst and why?
Yes, by far the worst neighbors. But, at the same time, without them "Dear Girls Above Me" wouldn't exist. So, it's a bit of a love/hate "relationship."

How will you feel when they are no longer the girls who live above you? Is Pinkberry your second favorite place to eavesdrop?
Pinkberry, the mall, Sephora, "Sex and the City 2" screenings, nails salons -- these are the places you will find me.

Knowing what you do now, if you knew those girls would be living above you, would you have moved into that apartment to begin with?
Well, I already lived in my apartment when they moved in. I love my place and am not going anywhere, so it will have to be them. Although, I don't think they are planning a move anytime soon -- trust me, I would hear about it.

Lastly, do you have any tips for readers who live in apartments next to, above or below irritating neighbors?
Well, the way I look at it, you have two options. One: You can tell them to shut the hell up and/or complain to the landlord. Or two, the much more passive-aggressive approach: You can write down everything they say, put it in a blog and find humor in the situation. It's not the worst thing in the world -- I've actually learned quite a bit about the opposite gender. Hopefully it will work to my advantage one of these days! Until then, it's just me and the girls.

 

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]]>apartmentbadgirlsloudneighborsoverheardrentalsrentingtwitterJason Hahn2010-06-15T17:30:00 00:00Homeowner's Insurance at Risk for Hoarding Chicago Couple?http://realestate.aol.com/blog/2010/05/28/homeowners-insurance-at-risk-for-hoarding-chicago-couple/http://realestate.aol.com/blog/2010/05/28/homeowners-insurance-at-risk-for-hoarding-chicago-couple/http://realestate.aol.com/blog/2010/05/28/homeowners-insurance-at-risk-for-hoarding-chicago-couple/#commentsFiled under: ,

HoardingWhat's the difference between the Jonas Brothers getting stuck in an elevator for 45 minutes and an elderly couple being trapped under heaps of garbage in their own home for two weeks? One of those scenarios has potential ramifications for homeowner's insurance, while the other causes the hearts of some teen-age girls to skip a beat.

Thelma Gaston, 79, and her husband Jesse, 76, were rescued on Monday from their South Side home, which was filled with enough debris to trap the couple for as long as two weeks. Besides reminding people about the dangers of hoarding, the story serves as a cautionary tale for homeowners whose houses are qualified to be featured on "Clean House" or "Hoarding: Buried Alive."
"Hoarding is the excessive collection of items, along with the inability to discard them," according to Mayo Clinic. "Hoarding often creates such cramped living conditions that homes may be filled to capacity, with only narrow pathways winding through stacks of clutter... Hoarding, also called compulsive hoarding and compulsive hoarding syndrome, can be a symptom of obsessive-compulsive disorder (OCD)."

It turns out that hoarding isn't just a really bad habit that could be a sign of bigger issues -- it could be bad news for a hoarder's homeowner's insurance.

Although insurers probably won't find out about hoarding issues until a claim is filed, and while the "claim would be paid according to contract," things could get stickier after that, according to a story on WalletPop.

"In severe cases, the insurance company may cancel your homeowner's coverage, and in other cases, they may raise your cost because of the increased risk of hoarding."

The risks listed in the article are: 1) the risk posed to your friends, who could trip over your things and file a claim; 2) the increased fire risk, thanks to the trash and flammable items lying on the ground; and 3) the tendency for hoarders to disregard basic maintenance tasks.

A blog post at The Insurance Expert echoes these sentiments virtually verbatim, but adds that insurers' options for recourse depend on the state they're in. While some will allow them to cancel policies immediately, others require the insurer to wait until the term is up.

However, Joe Schneider, an Allstate agency owner in Chicago, doesn't really see much of a connection between hoarding and homeowner's insurance. "As far as the insurance company is concerned, if it's a covered loss, it's a covered loss," he said. "It's kind of a boring answer, but it's the truth."

Schneider, who had seen an eviction case for hoarding renters in Virginia when he was a claims adjuster, added that he thought the Gastons' case was "kind of a sad situation." He saw hoarding as "more of a personal way of life" than an issue related to homeowner's insurance.

Neighbors had filed complaints about the couple's well-being, as well as the unkempt appearance of the Gastons' house, located in the 1500 block of East 69th Street. After Thelma Gaston fell through the small mountain of possessions, Jesse also got trapped when he attempted to save her.

A Cook County Circuit Court judge gave the go-ahead to city officials to start the cleanup process of the two-flat, which is scheduled to begin today and expected to take about 10 days. The Cook County Public Guardian's Office will look into whether the county should take custody of the couple.

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]]>chicagocook countyhoardinghomeowners insuranceinsuranceJason Hahn2010-05-28T11:00:00 00:00The LeBron Effect: Home Values When Celebrities Move Inhttp://realestate.aol.com/blog/2010/05/24/the-lebron-effect-home-values-when-celebrities-move-in/http://realestate.aol.com/blog/2010/05/24/the-lebron-effect-home-values-when-celebrities-move-in/http://realestate.aol.com/blog/2010/05/24/the-lebron-effect-home-values-when-celebrities-move-in/#commentsFiled under: ,

LeBron JamesLast week, a rampant rumor spread around Chicago that LeBron James was seen getting out of an SUV to check out a house for sale on Sheridan Road in Highland Park, Ill., with Michael Jordan (who happens to live in Highland Park as well).

This was huge news, of course, since James is probably the biggest NBA free agent of all time, and many analysts seem to think the Chicago Bulls would be a great fit for the Cleveland Cavaliers star. Highland Park, many quickly pointed out, was close to the Berto Center in Deerfield, which is where the Bulls practice.

The rumor ended up being nothing more than a piece of juicy-yet-unfounded gossip. But after the Highland Park neighborhood's name appeared repeatedly in the press, the real question at hand became: Do celebrities actually help the home values in the neighborhoods they move into?
"I don't know of there being any actual value added to nearby homes by virtue of a celebrity moving in," said Bob Goldsborough, who writes the "Elite Street" column for the Chicago Tribune and updates the "Big Time Listings" blog for Berg Properties.

While this may happen when celebrities promise to move into high-rises in Manhattan, "in most cases, it seems, the celeb never actually moves in," Goldsborough noted. "But in ordinary neighborhoods, no, I would say that there's little to no evidence that a celebrity's proximity helps or hurts neighboring home values."

The exception? "Dennis Rodman's oceanfront duplex that he owned in Newport Beach, Calif., some years back; it was a party house, and it drove the neighbors nuts and probably depressed home values as well."

Matt Silver, broker associate with @properties, had similar perspectives on the matter. While there was a lot of "hubbub, for obvious reasons," surrounding James' rumored interest in Highland Park, Silver had not seen significant effects when so-called rock stars move into neighborhoods. "On many levels, it's a wash."

CEOs with school-age children have a more significant impact on the neighborhoods that welcome them, according to Silver. "Athletes could care less" about the impact they have on the areas they move into, especially since they're rarely home anyway. Silver added that celebrities moving into neighborhoods potentially have "a little bit more of a negative impact," since their presence may cause people to start "tooling around the neighborhood."

Besides, most residents really don't care if a celebrity moves into their neighborhood. "They're more interested in: How much did they pay for it? Did they get a discount because of their celebrity status?"

According to Trulia, the San Francisco-based real estate search engine, the median sales price for homes in Highland Park was $428,750 from February through April -- down $36,250, or 7.8 percent, from the same period last year.

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]]>celebritiescelebritychicagochicago bullschicago real estatedeerfielddennis rodmanhighland parkhighland park chicagohighland park illinoishighland park real estatehome valuesill.illinoislake countylebron jameslebron james chicagolebron james highland parklebron james house huntingmichael jordanneighborhoodJason Hahn2010-05-24T11:30:00 00:00New York's Googling Doormen: It's Getting Creepyhttp://realestate.aol.com/blog/2010/05/21/new-york-doormen-googling-getting-creepy/http://realestate.aol.com/blog/2010/05/21/new-york-doormen-googling-getting-creepy/http://realestate.aol.com/blog/2010/05/21/new-york-doormen-googling-getting-creepy/#commentsFiled under:

doormanKnock, knock.
Who's there?
The doorman.
The doorman who?
The doorman who's tweeting about this terrible joke.

The exchange above is no laughing matter, and some tenants in New York City are finding their relationships with their doormen just as unfunny. That's because some of those men and women who faithfully open doors, carry things and make conversation with tenants could be the same who are Googling tenants' names, tweeting about their conversations, and even writing books about them without the residents ever knowing.

The kicker is that tenants who unwittingly stumble into these situations might not have any recourse but to keep to themselves.

A recent New York Daily News article told the story of Rafat Ali, a tenant in the Murray Hill neighborhood of Manhattan who was Googled by his irritated doorman. Ali sold a media company, made himself a few bucks and had redecorated his apartment. This, Ali guessed, probably made the doorman curious enough to Google the tenant's name.

The last straw for the doorman was when Ali said he was waiting on guests for his housewarming party; the doorman replied with a warning that Ali was not allowed on the roof, and accused him of having an attitude.

"You think you're better than us," the doorman reportedly told Ali. "I Googled you and because you sold your company for however many millions of dollars, you think you are a big shot."

Ali filed a complaint with the building's superintendent, who responded with a written apology.

This isn't the only report of a doorman wading into the gray depths of tenant privacy. Last summer, there was some buzz about a doorman who shared tidbits about his tenants with his Twitter handle, DoormaninNYcity, which has since been shut down.

During the potential doorman strike last month (which, in light of this subject, might have been something of a relief for irked apartment tenants), apartment tenants in New York began receiving e-mails urging them to support a fair contract for building workers in the city. The problem: They never signed up to be on those e-mail lists.

There was speculation that doormen got tenants' e-mail addresses from building rosters, and that tenants were given misleading forms to fill out.

Yet another story comes courtesy of a purported doorman who contributes under the name "Openthedoor-man" on BrickUnderground.com, where he/she recently posted about helping out with the trash sometimes. Recently, the anonymous writer wrote about finding an empty pill bottle of Famciclovir, the generic drug used to treat herpes. The bottle allegedly belonged to one of the more promiscuous residents of the building.

"Ever since then, I am in the strange position of sitting silently by while this resident brings home many guests who may be unsuspecting of this resident's condition," Openthedoor-man wrote. "Am I a bad person for not warning them? Sadly for both of us, it's not my business."

But that didn't stop him from penning a short book titled "Opening Doors: A New York City Doorman's Secrets and Stories." The short compilation of intriguing tales about tenants is available on Scribd.com.

"You'd be surprised what we all know," the anonymous author writes in his introduction. "What we've seen and heard. And what secrets tenants have wanted us to keep hidden. So allow me now to open the doors of just one building and the life of a doorman who has worked in it."

While the above examples are certainly distressing, most doormen are far more respectful of the line between the private and public realms, according to Andrew J. Spinnell, an attorney for the Law Offices of Andrew J. Spinnell LLC in New York.

"Most doormen that I have encountered," he said, "regard their job as carrying almost like a fiduciary or trusting confidential relationship to tenants that requires them to keep confidential what they see and hear in the building."

Eduardo A. Fajardo, an attorney with De Lotto & Fajardo LLP in New York, downplays the significance of things like Googling tenants or tweeting about interactions with them. "On the surface this seems like a juicy issue, but at the end of the day it is probably more drama than anything else."

He said that being Googled "may be creepy, but it is not an invasion of privacy." He added that tweets are only actionable if defamation is involved.

"In any event, in my experience I have seen that most NYC doormen make horrible witnesses at court because they tend to follow the code of 'see no evil, speak no evil' in connection with landlord-tenant disputes. You may know how it is in NYC -- you don't bother me, I don't bother you."

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]]>apartmentdoormandoormengooglenew yorknew york citynycprivacytenantstwitterJason Hahn2010-05-21T10:00:00 00:00Chicago Public Housing Wait-List Opens for First Time in a Decadehttp://realestate.aol.com/blog/2010/05/12/chicago-public-housing-waitlist-opens-for-first-time-in-10-years/http://realestate.aol.com/blog/2010/05/12/chicago-public-housing-waitlist-opens-for-first-time-in-10-years/http://realestate.aol.com/blog/2010/05/12/chicago-public-housing-waitlist-opens-for-first-time-in-10-years/#commentsThere's a lottery in Chicago that will draw 40,000 winners. Sound too good to be true? Well, kind of, but not too far off.

The Chicago Housing Authority is getting ready to open its "Family Housing Wait List" for the first time in a decade.

After the four-week application window closes this summer, an electronically generated list of 40,000 eligible families will be added to the waiting list. These families will then wait about five to seven years before being given the keys to rehabilitated CHA rental units across the city of Chicago.

The registration window will be open from June 14 to July 9, when applicants can register online at CHAwaitlist.org.
To qualify for CHA public housing, applicants must be Chicago residents who are 18 years or older, and earn less than 80 percent of the area's median income. According to the Chicago Department of Community Development, the income limits for households looking to apply are as follows:

Household Size 80% of Area Median Income
1 $42,200
2 $48,250
3 $54,250
4 $60,300
5 $65,100
6 $69,950
7 $74,750
8 $79,500

The list, which has been closed since 1999, is used to select eligible applicants to live in nearly 10,000 rental units built for family housing. This list will place people in scattered-site, family and mixed-income CHA properties. The 5,000 families remaining on the current wait list will be rolled over to the new list, says CHA spokeswoman Kellie O'Connell-Miller. She adds that the new wait list should be active for five to seven years, depending on the turnover rate in existing public housing units and the development of new ones.

There are expected to be nearly 1,000 units becoming available this year.

Residents who are granted these public housing units will either have to go to school, volunteer or work up to 15 hours per week during the first year, and 20 hours per week thereafter; those rules in the CHA Work Requirement Policy were enacted last year.

Chicagoans who are interested in applying for the wait list but have disabilities, or require reasonable accommodations to complete the form online, should contact the ADA/Section 504 Compliance Department at 312-913-7690.

Those who are interested but don't have Internet access should call 311 or 866-784-3242 to find out about nearby locations with free Web access. Other frequently asked questions are answered on the CHA's website regarding the wait list.

To give an idea of how many applications might be received for this lottery: In 2008, after the CHA opened up its wait list for Section 8 housing, 232,000 people applied for 40,000 spots.

As of March 31, the CHA's family wait list was 51.4 percent black, 14.5 percent Latino and 11.2 percent white. In addition, 82.3 percent earned less than 30 percent of the area's median income, while 13.5 percent were disabled.

Sixty-five percent of CHA family-housing leaseholders as of March 31 were female.

There are other resources available to Chicago-area residents who are looking for help finding affordable housing. The City of Chicago's official website has a housing page with resources and information, as does the Illinois Housing Development Authority.

The Greater Chicago Housing and Community Development also has a site with a wealth of information and a list of housing assistance programs and resources.

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]]>affordable homesaffordable housingchicago affordable real estatechicago illinoischicago public housingchicago real estatelow income housingpublic housingJason Hahn2010-05-12T17:00:00 00:00Chicago Foreclosure Volume Fouls Up Censushttp://realestate.aol.com/blog/2010/05/05/chicago-foreclosure-volume-fouls-up-census/http://realestate.aol.com/blog/2010/05/05/chicago-foreclosure-volume-fouls-up-census/http://realestate.aol.com/blog/2010/05/05/chicago-foreclosure-volume-fouls-up-census/#commentsCensus 2010Empty houses are hard to survey, but that's the challenge facing census workers in the Chicago area, where foreclosures and vacancies are weighing down response rates. This isn't just a predicament for the U.S. Census Bureau, it's a problem for these communities and their residents. Each uncounted resident could cost Chicago $1,200 per year.
The latest figures from the Woodstock Institute show that there were 9,302 completed foreclosure auctions in the six-county Chicago region during the first quarter of 2010. That's up 56 percent from the same quarter a year ago, and up 79.3 percent from the fourth quarter of 2009.

This marked the most foreclosure auction activity in that area since the housing disaster began in 2006.

For the city of Chicago in particular, 3,489 completed foreclosure auctions took place in the first quarter, up 59 percent from the first quarter of 2009 and up 113 percent from the previous quarter.

In addition, the Department of Commerce's Census Bureau recently announced that the Chicago metropolitan statistical area (which includes Naperville and Joliet) had a homeowner vacancy rate of 3.2 percent in the first quarter of the year. That makes it the MSA with the 16th highest homeowner-vacancy rate of the 75 areas covered by the report.

These housing woes only fuel the potential setbacks that low census participation rates will bring to the Chicago area.

A recent Chicago Tribune article highlighted the plight that census workers were facing in North Lawndale, a community nearly 30 miles west of the Loop. Kim Jackson, executive director of Lawndale Christian Development Corp., said there was a transition of 20 percent of North Lawndale's 43,000 residents from the 2000 census, thanks to "the recessions, loss of jobs, loss of homes." It means that displaced residents will be hard to track down for the 2010 census, partly because they might not want to be counted as members of the households they're staying in, for fear of losing governmental aid.

According to the Woodstock Institute, 53 foreclosure auctions were completed in North Lawndale in the first quarter -- up 17.8 percent from the same quarter last year. North Lawndale's census tracts had census participation rates in the 41 to 50 percent range as of this past weekend, notably lower than the 63 percent rate the city of Chicago had.

Community leaders in North Lawndale are working hard to make sure that its residents aren't undercounted like Chicago was in the 2000 census. That cost the city an estimated $193 million over the last 10 years, according to the Tribune article, which also notes that the U.S. Census Bureau estimates that each uncounted person could cost Chicago $1,200 per year for the next decade.

Imperiled financial aid means more than just missed dollars - quality of education, safe neighborhoods and homeowner assistance are all at stake for citizens of North Lawndale, Chicago and beyond.

"Accurate data reflecting changes in your community are crucial in apportioning seats in the U.S. House of Representatives and deciding how more than $400 billion per year is allocated for projects like new hospitals and schools," the U.S. Census Bureau notes on its website. "That's more than $4 trillion over a 10-year period for things like new roads and schools, and services like job training centers."

Other Chicago communities like Englewood, Austin and New City are, like North Lawndale, experiencing a correlation between high foreclosure activity and low census-participation rates, while others like Hegewisch, Edison Park and Forest Glen, which have been relatively safe from the foreclosure mess, can boast of higher participation rates.

The sad irony of the situation in Chicago is all too clear: The help that so many residents in difficult situations would welcome might not be delivered to them in sufficient supply for the next 10 years, thanks to the very circumstances they're in.

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]]>censuschicagochicago census rateschicago foreclosureschicago housing marketchicago real estatechicago real estate newscook countyForeclosuresHomeOwnershipilnorth lawndalevacancywoodstock instituteJason Hahn2010-05-05T17:00:00 00:00Chicago: Law's Revamp Would Help Foreclosed-On Renters Recover Depositshttp://realestate.aol.com/blog/2010/04/29/foreclosed-on-chicago-renters-get-deposits-back/http://realestate.aol.com/blog/2010/04/29/foreclosed-on-chicago-renters-get-deposits-back/http://realestate.aol.com/blog/2010/04/29/foreclosed-on-chicago-renters-get-deposits-back/#commentsFiled under:

Security deposits haven't been that secure for many Chicago tenants lately, especially after foreclosures forced occupants from more than 8,500 rental units in 2009.

That ended up costing renters as much as $7.3 million in lost deposits.

Current city law requires landlords to return security deposits to displaced tenants after their buildings are foreclosed on, but it comes as no surprise that this is about as appealing to lessors as familial ties are to Michael and Dina Lohan.

But thanks to an ordinance proposed by Mayor Richard Daley and approved by a City Council committee Tuesday, renters in Chicago could soon have an easier time getting back their security deposits, even after their buildings are foreclosed on.

Key to it is a clear definition of what a "successor landlord" actually is. And it's not nearly as complex as it sounds.
The current version of the city's Residential Landlords and Tenants Ordinance holds the "successor landlord" of a sold, leased or transferred property liable for any tenant's security deposit. That includes pre-determined interest, or rent prepaid by the tenant. But the ordinance fails to clearly define what the term "successor landlord' means.

Mayor Daley's proposed amendment to the ordinance shines some light into the grayness and defines a successor landlord as "any person who follows a landlord in ownership or control of a dwelling unit or the building of which it is part, and shall include a lienholder who takes ownership or control either by contract, operation of law or a court order."

In the case of foreclosed apartment buildings, the most important term there is "lienholder." That usually turns out to be a bank.

So instead of forcing tenants to hunt down their financially-strapped former landlords in order to get their deposits back, the proposed ordinance would hold the new owners of foreclosed apartment buildings responsible for the repayments.

Before the City Council committee approved the proposal, Alderman and Building Committee Chairman Bernie Stone brought some drama by suggesting an amendment that would have given landlords 14 days to resolve security deposit violations. Then if a landlord returned deposits even a day late, they could be forced to pay the tenant twice the amount of the original deposit.

An amendment sponsored by the Chicagoland Apartment Association would have required tenants to send landlords a handwritten letter requesting their security deposits, or else landlords would be able to keep them interest- and penalty-free.

Alderman and Vice President of the Committee on Housing and Real Estate Helen Shiller voiced her opposition, saying that if she was a landlord, she "would just wait until that tenant contacted me to return their money - most of them, they won't know they have the right, they won't do it or they might be intimidated."

In the end, Stone's idea failed to get enough votes to be included in the proposal. It now goes to the full City Council for a vote, with some aldermen pushing for better oversight of the depositing of security deposits in interest-bearing accounts, as required by the Residential Landlords and Tenants Ordinance.

While the help offered in this proposal may come too late for many tenants in Chicago who have already been squeezed out of their apartments and security deposits thanks to foreclosures, there may be plenty of renters who could benefit in the near future.

According to a study released earlier this month by DePaul University's Institute for Housing Studies, 42 percent of Cook County's two- to six-unit rental buildings are underwater, which means more is owed on those buildings than they're worth. Meanwhile, 74,000 apartments in Chicago are earning rental revenues at or below operating costs.

This sounds like a perfect recipe for more foreclosure woes for Chicago tenants, but if Mayor Daley's proposal is eventually voted through, the "security" in security deposits might take on a whole new meaning for the city's renters.


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]]>apartmentapartment foreclosuresbuildingchicagochicago foreclosureschicago rentalscook countyForeclosuresillinoislandlordlandlord foreclosedmayor daleysecurity deposittenantJason Hahn2010-04-29T16:03:00 00:00