If you’re house hunting over the holidays, you’re likely a serious buyer with an immediate need.  Perhaps you have to relocate for a new job opportunity, or there’s been a change in your personal life? Regardless, while you may assume it’s not an ideal time to be looking — namely because there isn’t much to look at — there are some advantages to buying this time of year.

Less competition

Let’s start with the obvious one: less competition. This lowers the chances of multiple offers and bidding wars (something we saw a lot of last spring/summer), and should translate into a bigger discount for you. Know your market! This is where sites like Zillow come in handy. Start your research here for comps in your area and to see what homes are selling for.

Serious home sellers

Why would sellers pick such an inconvenient time — while everyone is busy entertaining family and friends and enjoying the spirit of the holidays  — to list their properties? Probably because they need to sell and may feel compelled to do so before the end of the year for tax purposes. What this means for you: less hassle when it comes to negotiating; a greater willingness, on the part of the seller, to agree to concessions; less chance of the seller waffling; and greater respect for your offer, even if it’s a little lower than the seller was perhaps expecting.

Faster mortgage approval

Lenders aren’t as busy this time of year, and less volume could mean faster approval. Some lenders might even be willing to reduce fees during the off-peak season in hopes of gaining your business. Regardless, don’t just go with the first lender who comes along. It pays to shop around.

Greater affordability

Sure, home prices have been rising, but they’re typically lower in December than during any other month (so you don’t have to be as aggressive with your initial first offer, compared with buying during peak to high season). Reports have showed home value appreciation slowing. As we enter the slower home shopping season many overheated markets are moving away from bubble brink and ultimately becoming more affordable than they have been historically. If you want to take advantage of low interest rates, the time to act is now.

Since HARP, the Home Affordable Refinance Program, was made available in 2009, more than 2.9 million* homeowners have used the program to refinance their properties. But over the years, HARP has seen significant enhancements, and there are now many eligible borrowers whose properties are not their primary residences. Today, 1 in 6 HARP refinances are for a second home or investment property.

People have second homes or investment properties for a variety of reasons. Maybe you wanted a vacation home to get away or decided to join the investment property business. Sometimes a home becomes an “accidental rental” due to an unexpected or unplanned move, and you were unable to sell because of the drop in home value. Regardless of the reason, you are encouraged to look at HARP as a refinance option. You may be financially stable and are making your monthly mortgage payments, but you are making payments on a loan that no longer matches the value of the home.

HARP is a unique program created by the federal government for people in your situation. If your property — primary residence, second home or investment property — is valued at less than what you owe, take advantage of the program and get a better rate and/or terms on your loan; you may be able to build equity faster. You’re doing everything right, so visit HARP.gov to learn more and talk to your lender.

The same rules apply

To qualify a second home, it must be a single unit or condo; for an investment property, it must be a 1- to 4-unit home. Otherwise, all requirements for the primary home also apply to the second home or investment property:

• Your mortgage has to be backed by Fannie Mae or Freddie Mac and acquired before June 1, 2009.
• You must be current on your payments (no 30-day+ late payments in the past six months and no more than one in the past 12 months).
• Your loan-to-value ratio (the amount you owe versus the amount your house is currently worth) must be greater than 80 percent.

 *Numbers based on reported refinance data from FHFA Refinance Report October 2013.

Shopping for the best mortgage involves more than just checking interest rates and loan terms. Many borrowers are surprised by the many additional costs involved in closing the loan.

Almost all closing costs relate to fees that the mortgage lender is charged by a third-party company and then passes on to the borrower. Some of the fees are additional costs the lender levies. Because these fees are all settled at the closing table, they are commonly referred to as closing costs.

Breaking down closing costs

Closing costs usually account for 2 to 5 percent of a home’s sale price, although they may be more or less in some cases. These costs typically cover:

• Obtaining a credit report
• Processing paperwork for the loan (loan origination fees)
• Legal fees
• Home inspections
• Appraisals
• Surveys
• Title insurance
• Title searches
• An escrow deposit
• Recording the transaction in the city or county’s records
• Underwriting the mortgage (evaluating the borrower and the property)

In addition to these fees, home buyers may elect to increase their closing costs through discount points, which lower the mortgage’s interest rate and saves the borrower money over the life of the loan.

Who pays closing costs?

In most cases, the buyer pays the bulk of the closing costs. In some cases, however, other parties may absorb a portion or all of these costs. For instance, if a home is purchased using a Veterans Affairs (VA) loan, then the seller will pay some of the closing costs, and the buyer will pay the remaining costs.

Some mortgage lenders advertise mortgages without closing costs. These may or may not be a good choice, depending on the specifics of the mortgage. Home buyers, however, should realize that any bank offering mortgages without closing costs will likely build those fees into the structure of the mortgage. Buyers (or sellers) will probably pay the fees associated with purchasing a house, one way or another.

Saving for closing costs

Home buyers should be aware of the closing costs they will be expected to pay because these fees can significantly increase the amount of money needed at closing. The good news is that lenders must provide a Good Faith Estimate (GFE) of these costs shortly after the borrower applies for the loan. The law now states that the final settlement of the loan must not deviate from this estimate by more than 105 percent — and for some loan products not at all.

But, borrowers can still be surprised by the GFE if they are not already planning to pay at least some closing costs.

Consider the following example: A home is sold for $100,000, and the buyer will make an initial down payment of $10,000 (10 percent). But that’s not all the money the buyer will need to bring to the closing table. The closing costs can be expected to be around 5 percent, or $5,000. The buyer actually needs to have $15,000, not $10,000 at closing. The fees increase how much the home buyer needs at closing by 50 percent, in this case.

More than just a minor inconvenience, frozen pipes are destructive and disruptive. That’s because the frozen water doesn’t just stop flowing through pipes – it actually expands and can cause pipes to crack or burst.

An 8-inch crack in a pipe can leak up to 250 gallons of water per day. That unexpected, unwelcome flood can ruin floors, furnishings, appliances, photos and other valuables.

Each winter, more than 250,000 U.S. households have their homes destroyed and their lives disrupted by frozen pipes. Oftentimes pipes burst while the residents are away for a few days. Residents turn down the thermostat in an effort to save money, not considering the potential damage that could occur. If they’re gone for a long period of time, the water damage can quickly turn to mold.

Here are some tips to manage and prevent frozen pipes.

Resolve the problem quickly

If your water pipes freeze, immediately turn off the water at your home’s main shut-off valve and call a plumber.

You may be able to thaw a frozen pipe with warm air from a hairdryer. Start by aiming the air at the part of the pipe closest to the faucet and move toward the coldest span of pipe. Never use a torch or other open flame to attempt to thaw a pipe.

Protect your pipes

A few simple actions may protect your pipes the next time temperatures drop.

1. Let a trickle of water run from indoor faucets located along exterior walls. This dripping water provides relief from the excessive pressure that builds between the faucet and the ice blockage when freezing occurs. If there is no excessive water pressure, the pipe won’t burst – even if the water inside the pipe freezes.
2. Open cabinet doors to allow heat to get to pipes under sinks along exterior walls.

Weatherize your home before winter

Taking steps to winterize or weatherproof your home can also help prevent frozen pipes. Consider these tactics before next winter rolls around.

1. Insulate the pipes in your crawl space and attic, which are especially susceptible to freezing. Pipe insulation cannot prevent water from freezing in pipes, but it can increase the time needed for freezing to occur.
2. Heat tape or heat cables can be used to wrap pipes. Use these products only for their intended use (interior or exterior) and follow the manufacturer’s instructions for installation and use.
3. Seal leaks that allow cold air inside, especially near pipes. Double-check around electrical wiring, dryer vents and pipes. Caulk or insulation can work wonders when it comes to keeping cold air out and warm air in.
4. Disconnect garden hoses when garden season ends. If the faucet drips even a small amount, water will eventually fill the hose near the faucet, as well as the faucet and the span of hose just inside the house. When temperatures drop, that water will freeze and damage will likely result.

     If you bought a rental property during the pre-crash era, you may be feeling the lingering pain of the investment. Whether you’re experiencing negative cash flow or the property is simply not as terrific as you’d first hoped, either in terms of quality or location, you’re probably wondering if this investment is worth the hassle. Before you make any rash selling decisions, here are some issues you should consider:

Do you want to be a landlord?

In the mid-2000s, many people jumped into the rental market, assuming they’d buy rental properties, prices would go up, and they’d get rich with little effort. Chances are, you’ve already learned that isn’t true. Being a good landlord is work. Are you willing to put forth the time and effort required to keep properties full and tenants happy? If you’ve decided rental ownership isn’t for you, now is probably a good time to unload the property — even if you have to take a loss on the property.

What if the property is underwater with major negative equity?

Fortunately, the values of rental properties in many markets have bounced back in the past six months. Negative equity is bad, but not necessarily the end of the world. A more important consideration: Cash flow. If your income from renters minus expenses and mortgage is positive (or very close to it) and your experience has been a good one, keep the property. A decade or two down the road, you will have forgotten the recent economic downturn and, instead, you’ll have a paid-off property, positive cash flow, and the satisfaction of knowing your current tenants paying for your retirement.

What if your cash flow is negative?

Some properties are never going to make money. If you picked up one of these well-located “Prize Properties” for very little money, you’re probably realizing it’s no prize at all. Did you do an analysis of the property’s cash flow potential before you bought? If you had, you might have realized it could be decades before you see positive cash flow. If you are in the red by $1,000 or more per month, it’s probably best to dump the property and cut your losses.

What if you want to be a landlord but this property is a stinker?

Ask yourself: is a little short-term pain worth a long-term gain? If your current situation isn’t totally unbearable, you may want to buckle down, hold on to this first property and consider this sometimes uncomfortable situation a “life lesson.” If, on the other hand, the future of the property is bleaker than bleak, this may be a good time to dump it. Take the loss and start fresh with a new property.

As you consider your next move, remember that owning rental properties is hard work and unloading one property in favor of another may not make your job easier. If you have the desire, time and energy – and a willingness to get your hands a little dirty – you will likely make it work.

       You need new floors but, at this point in life, you have far more ambition than cash. Not to worry. There are inexpensive flooring options on the market that, if you’re willing and able to tackle installation, can give your home a facelift without breaking the bank.

Vinyl flooring

It used to be that resilient vinyl sheeting had to be fastened down with not-so-easy-to-apply mastic. These days, installation of this kitchen- and bath-friendly flooring is considerably easier. You simply remove the shoe molding from around the room, make a paper template of the room, cut the flooring to size using a utility knife, lay the flooring down and replace the molding. There’s no glue, no staples, no nails. Sheet vinyl flooring typically comes in 12-foot-wide rolls, resulting in seamless coverage in most rooms. Prices start at about $2 per square foot. One foot-square peel-and-stick vinyl tiles, which start at about $1 per square foot, are also available for even easier do-it-yourself installation.

Linoleum

Vinyl and linoleum flooring are often confused but they’re actually very different. Vinyl is a synthetic product made of chlorinated petrochemicals. Linoleum is made from all-natural materials such as solidified linseed oil, pine rosin, ground cord dust and wood flour. Vinyl melts; linoleum doesn’t. Vinyl designs tend to be printed on the surface, while the colors in linoleum go all the way through the product. Linoleum was very popular until the 1960s, when cheaper and more colorful vinyl took over the market. Today, linoleum is making a resurgence, due in part to the fact that it’s now available in hundreds of colors and because it’s a “green” product. Linoleum comes both in sheets and tiles. DIYers can install linoleum tile, which start at $4 per square foot; installation of sheet linoleum is best left to professionals.

Laminate flooring

This floating floor system is made of tongue-and-groove planks that snap together – no nails, staples or glue. Laminate comes in dozens of colors and wood-grain patterns and is available in a variety of widths. Laminate flooring’s top surface is made of plastic laminate, not hardwood; that makes the product resistant to stains, scratches, fading and wear. You’ll find low-end laminate flooring for less than $1 per square foot. Premium products tend to be thicker and more durable, often coming with warranties of up to 30 years; they’ll cost you $4 to $6 per square foot.

Ceramic tile

Ceramic tile flooring is not the absolute cheapest flooring option, nor is it the easiest to install, but its durability and long lifespan make it worth considering. The success of any tile job depends on a solid base with little flex in it. If the old floor is sturdy and even, you can simplify the tiling job by covering the old floor with a thin underlayment that gives you a fresh, clean start. Larger tiles are easier to lay than smaller ones. No matter what size tile you choose, you’ll likely need to rent or borrow a wet saw for the project. Tiling a small bathroom or entry way is most likely a two-day project – even for a rookie. If you’re comfortable using basic hand tools and have the patience to align tiles just right, you can handle this job. For a bit of added confidence, take a free class at a home improvement store. Ceramic tile, uninstalled, costs anywhere from $3 to upward of $50 per square foot.

There’s a lot to consider when buying a house: location, price, bedroom count, taxes, and a slew of other items everyone and your uncle will remind you about, especially if you’re a first-time homebuyer.

Here’s yet another item you shouldn’t forget: Educating yourself about local schools. Whether you have a full house, you’re an empty nester looking to downsize, or you’re years from starting a family, the quality of schools should factor into your home search.

According to the National Association of Realtors, schools will affect:

• The sale price: Homes in the best school districts sell for more, on average, than similar houses in areas with lower-rated schools.
• The number of people looking at the same homes you are: In a 2012 National Association of Realtors report, 25 percent of buyers listed school quality as a deciding factor in their purchase.
• The resale value of your home: Home values in sought-after school districts often fare better, even in a down market, than similar homes in areas with less reputable schools.

So how do you find out about schools if you’re new to the area? Search online for school district websites. Many of them post test scores of individual schools and comparisons to other schools statewide.

You can also explore greatschools.org, which features data, school “report cards” and comments from parents and students.
If you’re a parent, keep in mind that school boundaries change. Call the local district to verify that the home you’re looking at is still within the bounds of the schools you like.

Of course, nothing beats firsthand information, so ask residents in your targeted areas about local schools and other educational options.

We can tell you more, too. We know our communities and have up-to-date neighborhood information.

     Many people ask me why they should pay a broker a 4%, 5% or 6% commission. They believe they can “save” money by selling it themselves. Here are the top 8 reasons why working with a Realtor actually saves you time and money.

1. High Success rate  For Sale by Owners “FSBOs” are successful at selling about 14 percent of the time. Of that group, 7 percent knew whom they were selling their homes to ahead of time (friend, relative, neighbor, etc.) That means that true FSBOs are only successful about 7 percent of the time.
2. Higher sales price. In 2012, The typical “FSBO” home sold for $174,900 compared to $215,000 for agent-assisted home sales.  Which means a Realtor can get the seller up to 23% a higher price for their home than a “FSBO” . On a typical 6 percent commission, A Realtor sold home can net up to 17% more on the sale.
3. Higher initial offer price. Typically, buyers who look for “FSBOs” usually offer 6-10% below the price of comparable properties because they know you are not paying a commission.
4. Good marketing can attract a bidding war. A real estate agent at the top of his or her profession will know exactly how to market your home effectively.
5. Time is of the essence. The longer a home is on the market the lower the final sale price is. Why? Because it acquires what is known as “market age.” Most buyers think that if the home has not sold after this long…there must be something wrong with the home. Market age is a deterrent to later selling at the proper market price.
6. Conflict resolution Potential buyers often are reluctant to bring out and discuss objections with the owner because of the personal element involved. They do not want to put the owner in the position of defending his own home. Thus, an owner can’t represent himself properly with many prospects because the owner does not know that the prospects have unrevealed objections.
7. Low litigation rate 71% of all real estate litigation is a result of one party not being represented in the transaction. This is the classic FSBO, because the buyer has an agent protecting their best interest while the seller does not. In fact FSBOs gets sued more than any other group in real estate.
8. Navigating forms and documents 100 to 150 pages of documents and at least two dozen forms involved in the real estate transaction. The FSBO needs to be intimately familiar with each page. If they are not familiar with each form, I would never recommend signing a legal and binding document.

Please feel free to call me at 414.745.3339 or email me at [email protected] with any questions, or for a FREE market valuation of your home.