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Buyer/Seller Tips

Today's Top Real Estate News

Provided by RISMedia News
2/20/2020  4:04:14 AM

Is a House or a Condo a Better Choice for You?
When looking for a new place to live, the first thing you need to decide is what type of home you want. Many 
people dream of owning a house, but others prefer to live in condominiums. Each has advantages and drawbacks.

Pros and Cons of Owning a House
One of the main advantages of living in a house is the amount of space. Houses come in a wide array of sizes to suit the needs of any family. They typically have yards where children and pets can play and the owners can host family and friends. With a house, the owners are free to renovate, paint and make other changes, subject to local laws and ordinances. Houses also offer more privacy than condos since neighbors are not as close.

The primary downside of owning a house is that the owners are responsible for all repairs and maintenance. This can cost a lot in terms of both money and time. The burden can feel overwhelming if several things go wrong at once. Electricity bills are typically higher for houses than for condos because houses are larger.

Advantages and Disadvantages of Condo Ownership
Many people who like to live in urban areas opt for condos. They are often located near restaurants, entertainment venues and other attractions. Condos typically offer amenities such as pools and gyms that would be too expensive for many homeowners. Condo owners pay fees that cover maintenance and repairs for the building and grounds.

Some people are reluctant to consider living in condos because they do not like having so many people nearby. Noisy and inconsiderate neighbors can be problematic. Another downside is the need to pay association fees for maintenance. The fees can change from year to year and can be a significant burden. Owners are also expected to abide by rules set by the association.

Which Is Right for You?
If you like the idea of having a lot of space to yourself or plan to expand your family, a house may be a better choice. A house is also a good idea if having your own yard is a priority.

If, on the other hand, you dread the thought of spending your free time mowing the lawn, cleaning the gutters and performing other tasks, you can avoid all of that by buying a condo. If you like the idea of having amenities located where you live instead of having to drive somewhere and pay a monthly membership fee, a condo could also be a good choice.

If you are trying to decide whether a house or a condo is a better choice for you, think about your personality, lifestyle and preferences. Weigh the pros and cons of each type of housing and explore options in your area to see which is right for you.

Published with permission from RISMedia.

What to Expect from a Home Inspection
A home inspection can make or break a transaction. Without it, you wouldn’t know if you’re buying a money pit or a home that will last a lifetime.

Homebuyers are responsible for hiring a professional home inspector, who should uncover possible problems before they buy the home. An offer on a home is often conditional upon a successful inspection.

The inspector should evaluate the physical structure and its critical internal systems. These include:
  • Electrical
  • Plumbing
  • Heating and cooling systems
  • Walls, ceiling and flooring
  • Windows and doors
  • Roof
  • Basement
  • Attic
  • Foundation
  • Insulation
There are some things a home inspector may not uncover. These can include hidden problems like pests, mold, asbestos and flaws in areas below ground or that are inaccessible, such as wells and septic tanks. Additional inspections, such as for termites, may be needed for those areas. Some states require a pest inspector before a home loan can close. Even if it’s optional, a pest inspection is a good thing to add as a buyer.

Try to be at the home during the inspection. Follow the inspector around the house and ask questions. You should be able to ask about potential issues and how to make repairs or take care of certain areas of the home.

Don’t chat the inspector up too much. It could distract them from their work and they could miss something. If you can’t be there, meet with them later to go over the report.

Remember that an inspection is only a snapshot of the time and day of the inspection. A home might perform differently in the winter than the summer.

Home inspections are very detailed, so expect to see dozens of issues—many of them small—in the list of deficiencies. The severity of each problem should be listed, and some may even include cost estimates to fix each issue.

If there are too many problems than you’re willing to handle that are found in a home inspection, you can back out of the sale or negotiate with the seller to make the repairs or lower the price.

But not all infractions are equal. If you’re going to negotiate some repairs, focus on the red flag items such as the roof, foundation, HVAC systems or other expensive problems. Don’t worry about small details like a cracked electrical cover or small things that can be easily fixed with a trip to the hardware store.

Published with permission from RISMedia.

The Pros of Buying a Home Warranty
For $600 or so a year, plus a service fee of around $75 every time you ask for repair, a home warranty can be an inexpensive way to have peace of mind as a new homeowner.

Home warranties cover breakdowns in a home, from HVAC systems to appliances. A broken water heater can be repaired within hours, but if it can’t be fixed, a home warranty can pay for a new one to be installed.

For homeowners with an older house, they may want more things covered than a newer home would need—such as older appliances—and will likely pay more for it. If you just bought new appliances and have a manufacturer’s warranty for a year or more, you won’t need this coverage. You may be able to exclude new appliances from a home warranty to cut down on costs.

Things that can be covered by a home warranty include ductwork, electrical, plumbing, dishwashers, refrigerators, ovens, stoves, clothes washers and dryers, and water heaters.

Things that are unlikely to be covered include expensive items such as septic tanks, wells, heating systems, pools, garage doors, windows and doors, sprinkler systems, pre-existing conditions, and walls. Coverage for such items may cost more. Roofs may also be exempt, though some home warranty companies sell plans to fix leaking roofs.

Consider Cost
A big factor in deciding if a home warranty is worth buying is cost. Basic coverage can start at about $300 and go up to $600 or more.

Some home warranties charge for a service call, such as $75 or so, while others allow unlimited service calls. Contractors are screened and sent out by the company.

To determine if a home warranty cost is worth it, start by learning how old your appliances and home systems are and if the original equipment manufacturer warranties still cover them. Find out what the expected lifespan of each item is to help you figure out if a home warranty is needed.

Some home warranty companies require annual maintenance on appliances and home systems to keep the warranties valid. Some may ask how long you’ve had them. Don’t expect the home warranty company to pay for the annual maintenance of your appliances or home systems.

Read the contract carefully to make sure that old appliances are covered in the home warranty. Some don’t cover old appliances, such as anything more than 10 years old.

Any home, whether old, new or somewhere in between, will have things break sooner or later. Appliances and home systems only last so long. For $50 a month or so, a home warranty can provide peace of mind when things eventually fail.

Published with permission from RISMedia.

3 Ways to Protect Yourself from Identity Theft
Checking your credit report consistently for fraudulent activity may not be enough to protect your personal information and thus your credit score. What will help are three tools that are common in the credit world: fraud alerts, security freezes and credit locks.

Fraud Alert
This is a free alert you can place with one of the three major credit reporting bureaus: Equifax, Experian or TransUnion. Once the alert is placed with one bureau, it will pass on to the other two.

A fraud alert is a notice put on your credit report, warning prospective lenders that you’re the victim of identity theft. Lenders who see this warning should take extra steps to verify your identity before giving credit to someone claiming to be you. For example, a bank may try to contact you in various ways to verify your identity before approving you for new credit.

An initial fraud alert lasts for 90 days. It can be renewed for another 90 days after the first alert expires. It can also be extended for seven years if you’ve been the victim of identity theft.

Credit Freeze
Also called a security freeze, a credit freeze is an extra step beyond a fraud alert that can offer more protection. It can cost $2 to $12 to start, lift or remove a credit freeze, though most states require it to be free for identity theft victims.

A credit freeze does what the name implies—it “freezes” or locks access to a credit file against anyone trying to open a new account or get new credit in the person’s name. It’s more severe than a fraud alert. If you think your information or credit cards have been stolen and you’re at high risk of fraud, a credit freeze may be worthwhile.

But that protection comes with a price. It also shuts out companies that you may want to do business with, such as lenders, insurers and cellular service providers that may want to check your credit report. To get around that, you have to temporarily lift the freeze with a PIN and set a date for the freeze to be reinstated automatically.

Credit Lock
A credit lock is similar to a credit freeze and should be easier to use. It’s offered by a credit reporting company and allows users to lock and unlock the account online easily instead of having to verify their identity each time a lift or security freeze is done.

Credit locks usually require an annual fee, typically around $60. A credit lock lasts for as long as you pay the annual fee. The lock only works for the credit reporting company that you start it with. Credit locks must be initiated with each company if you want all of your information to be locked.

Published with permission from RISMedia.

Title Insurance and Why You Need It
Title insurance can be one of those things that someone says you need when you buy a home, but you don’t understand why.

Without it, you could be left with a nagging question in the back of your mind: "Does the seller really own the property?" If the answer is no, it could be bad if you don’t have title insurance.

Some people or companies other than the title owner may have rights to the property. For example, the property owner may have sold mineral, air or utility rights to someone else. Or a bank with a mortgage on the property may own an interest in it. The government can also have a lien on the property for unpaid taxes.

What does title insurance do, exactly? Basically, it covers events related to the title that have already happened. It doesn’t cover future things that happen to the title after it has been issued.

First, the title company or an attorney verifies that the seller owns the property and is free to sell it. The title search includes searching property records to make sure there haven’t been any clerical errors and that there aren’t any undisclosed heirs, spousal claims, omissions in deeds, unknown liens or fraud with the deed. If there are any errors, they’re fixed before the home purchase transaction is completed.

Second, the title company contracts an underwriting company to issue an insurance policy, called title insurance. This protects you in court if anyone challenges you to the title of your home. If you lose any equity, you’ll be compensated.

Two insurance policies will often have to be bought by the homeowner: one protecting them as the owner, and a lender’s policy protecting the lender. The lender requires the insurance because it is providing a loan with the property as security. A problem with the title affects the value of the lender’s security. Only the amount of the loan will be covered in the lender’s policy, and it will decrease as the homeowner pays back the loan.

Published with permission from RISMedia.

Managing Credit Responsibly as a College Student
Building good credit in college is one of the best financial moves students can make. Having good credit allows them to qualify for loans, rental applications, auto insurance, phone plans and can help them get a job.

Being responsible with credit is the best way to establish and improve a credit score. For college students without much credit history, there are small but important steps they can take to build up their score.

Obtaining a Student Credit Card
Some credit cards are marketed to students and others who don’t have much borrowing history. Federal laws restrict issuing credit cards to anyone under 21 unless the applicant has the independent ability to repay debt or has an adult co-signer who accepts joint liability for the account.

Student credit cards may have low credit limits, such as $1,000, but they are otherwise indistinguishable from other credit cards. They may even have features such as cash back, no annual fees and budget management tools.

Using Credit Cards Wisely
After getting a credit card, students can start using it slowly and for occasional, small purchases that can be paid for on time. This will help build credit history and help them stay out of debt.

Students shouldn't let a new card sit in their wallet. They must use it or risk the bank closing it due to inactivity. Putting small, recurring charges on it, such as a Netflix account or other website subscription, is an easy way to maintain use at a low cost.

Students shouldn't make any big purchases unless it’s an emergency. Having low debt levels on their credit card will allow them to have enough of a credit line available in an emergency, and will increase the credit utilization part of their credit score.

Building Credit With Student Loans
One of the last things college students want is to default on their student loans, as this affects credit.

Borrowers should make at least the minimum payment each month and do it on time. They should borrow only what they need to go to school, instead of using the funds to buy a car or dine out. Once they graduate, they may want to consolidate their student loans to get a better interest rate.

On-time payments and paying off student loans will improve the credit score over time. If students run into problems making payments, they should contact their student loan provider and ask for forbearance. Federal student loans also offer Income-Driven Repayment plans that base payments on a borrower’s income.

Published with permission from RISMedia.

Budget-Friendly Tricks for Updating Your Older Home
When it comes to updating an older home, you can make big style statements on a small budget, experienced decorators say.

“Start with a pop of color,” Keysha Jillian, owner of Jillian’s Designs in Tampa, Fla. told Reader's Digest in an interview. “Paint the front door—and the shutters, if you have them. If your mailbox sits out front, paint it, too. You’ll protect them from the elements and create a fresh, new look for the cost of a gallon or two of paint.”

Indoors, Jillian recommends a few of these small, but mighty, do-overs:

Toss out your throw pillows. Replace them with fuller, crisper new ones, mixing and matching colors and textures to add a fresh breath to your living space and bring your color scheme together.

Add an area rug. An area rug can transform any room, grounding furniture groupings and adding interest and definition to your living space.

Change out the hall light. Make a statement in your entry way with a chandelier or other contemporary ceiling fixture that brightens the space and welcomes guests with a flourish. (Adding table or floor lights may help your living space look larger.)

Add artwork and accessories. Stroll through stores like HomeGoods, Target or Tuesday Morning to find framed artwork and a few accessories to coordinate with your new throw pillows. It can bring a room together and add a fresh, new look without replacing older furniture.

Replace the light switch plates. Switch out those old, faded plastic switch plates for brushed nickel or other designs for as little as $5 per plate.

Throw on a backsplash. It can jazz up an old kitchen or bathroom instantly without breaking the bank. For as little as $10 per foot in most big box stores, you can find a choice of DIY designs, including mesh backing for easier installation. If that sounds too intimidating, consider creating an accent wall behind the sink with a contrasting and bright colored paint.Install closet organizers. Most older homes come with small closets. Maximize the space with inexpensive closet organizers available at most big box stores.

Published with permission from RISMedia.

Alternative Ways to Fund a College Education
The average student loan debt for a college graduate in 2016 was $37,172, according to Forbes. That’s a lot of debt to be saddled with when starting a career. However, you can help your children avoid student loan debt by looking into some alternatives:

Save Early
This takes years of forethought, but it can be one of the best ways to pay a large chunk of college expenses. Start contributing to a 529 college savings plan as soon as your child is born. Put in only $100 a month from birth and a high school graduate will have about $40,000—enough money to fund two years of going to a public college. If your child is working part-time or during the summer, they can also contribute to the fund.

Payment Plans
Many colleges offer monthly installment plans that stretch out payments over the course of a year or several years instead of requiring a lump sum before classes start. Payment plans can include four years of tuition, and some can be paid years in advance at current prices. Some college costs aren’t included in payment plans, such as room and board, books, supplies, and personal items.

Recruitment Scholarships
If your child has been accepted to a college that they're overqualified for from an admissions perspective, they may be eligible for a recruitment scholarship from the school. These are used to recruit students who stand out the most in their applicant pool.

Advanced High School Courses
Some college credits can be earned in high school by taking Advanced Placement classes. Students can graduate from college a semester early or even sooner, saving you money.

Community College
Spending the first two years at a community college can save them a lot of money on education. They can also live at home to save money. If doing this, your kids will have to check with their academic advisor at the community college to ensure they're taking the right classes to transfer to a four-year college. Otherwise, you’ll be wasting money on classes that won’t count toward their degree.

Employer Assistance
Your employer may offer scholarships for your children. If your child is working part-time while attending college, their employer may also offer a tuition reimbursement program that will pay a large part of the college bill.

Published with permission from RISMedia.

How to Extend the Life of Your Carpet
Whether you adore your new carpet or can't afford to replace it every few years, below are a handful of ways to extend the life of your carpet—even if you have kids and pets.

1. Lay down a rug in high traffic spots.  It may seem weird to lay a rug over your carpet, but in places that see a ton of foot traffic—like by the bed, couch or doorways—adding an extra layer of protection in the form of a rug or mat can seriously prolong your carpet's life.

2. Vacuum frequently. Make sure you vacuum once a week to pull up damaging dirt and dander that can wear down your carpet overtime.

3.  Take off your shoes. By enforcing a "no shoes inside" policy in your home, you will reduce the amount of dirt that gets tracked in. Add a shoe rack by the front door to help make it easy.

4. Act fast with spills. If you get a splash or spill on your carpet, tackle it immediately, but don't rub it in. Instead, use a spray bottle to mist a bit of water onto the stain and then blot it up gently with a towel as many times as needed. If it needs more work, create a solution that is 1:1 white vinegar and water and repeat the process.5. Deep clean. Once a year, deep clean your carpet with a professional carpet cleaning device. Often, you can rent out these cleaners, or hire someone to do it for you.

Published with permission from RISMedia.

What You Should Know Before Co-Signing a Home Loan
Many homebuyers need help from friends and family to qualify for a home loan through co-signing. Of home purchase loans in the U.S. during the second quarter of 2017, 22.8 percent included a co-signer, up from 21.3 percent in the second quarter of 2016—according to a study by Attom Data Solutions, a property database in Irvine, Calif.

Here's what you need to know before co-signing a mortgage:

Payments Are Now Your Responsibility
You’re now 100 percent responsible for someone else’s obligation. While you probably won’t be making a monthly payment on the house, as a co-signer you’re now just as responsible for repaying the obligation as the homebuyer is.

Your offer to help by using your income and good credit score as qualifying factors extends to paying the mortgage if they don’t make payments.

Your Future Credit is Affected
A co-signer is, in essence, lending their future credit worthiness for someone else’s current mortgage obligation. If the person you’re co-signing for loses their job and can’t make house payments, then their credit report will be hurt, and so will yours.

The delinquency will appear on your credit report too, as does the obligation to pay the mortgage bill on time each month. This could hurt your ability to get credit in the future if you apply for a home, auto, personal, business or student loan, or want to get a good rate on a credit card.

Even if the mortgage payments are made on time and in full each month, being a co-signer on the mortgage can count against you when qualifying for future loans. That large loan is still a risk that you’re obligated to pay, and could threaten your credit score.

Your Debts Will Be Looked At
A co-signer’s debts will be considered in approving the home loan, with the expected outcome that debt and income from two borrowers will lower the debt-to-income ratio, or DTI, for the home loan.

For conforming loans, Fannie Mae and Freddie Mac will allow a “blended ratio” DTI that combines the incomes of the occupant and non-occupant co-borrowers. This can help when the co-signer isn’t going to live in the house and has most of the income, such as for parents helping their child buy a home.

As a co-signer, you should be prepared to provide paperwork for all of the same credit requirements that the borrower is subject to, such as bank statements and income tax returns.

Published with permission from RISMedia.