WAYS TO ASSESS YOUR READINESS TO BUY YOUR FIRST HOME


1. You think about buying your own home all the time. You subscribe to home & garden magazines, read your newspaper’s lifestyle section every day, look online at homes for sale in your favorite neighborhoods, go on drive-byes to homes that pique your interest, & stop at open houses just to stroll around. Or so you say. Basically, you dream of sheep jumping over the fence you just installed on your newly acquired property. And, you really want to find a place to call & make your own!

2. You have a good job. Not only is your employment record good, but you intend to keep working-and maybe even get promoted! If your spouse or a partner is in the same position, that’s even better. Employment is the pivot upon which all house-hunting activity will revolve, & you will need your salary statements & Form W-2 to verify all job information.

3. You’re confident about your credit history. Lenders are going to take a hard look at your credit history, so find out whether anything in your record might present a problem. Order a report two or three months before making a mortgage application to give yourself enough time to iron out any wrinkles. Any one of the big three credit bureaus: Experian, Equifax, & Trans Union take into account about 100 variables gathered from your credit file. The mortgage “credit score” specifically looks at such things as how much you are currently in debt, how many places you have applied for credit recently, & what kind of credit you have taken in the past. Take the time to dispute any derogatory items or credit inquiries. Doing this successfully can raise your credit score by tens or even over 100 points! Go through all 3 credit reports with a fine tooth comb and dispute everything you can to have it removed. Don’t close credit cards, but try to have the greatest variance between your balance & the credit limit on each card.

4. You’re a budget whiz. You actually know where your money is coming from & you know where it goes every month. A long time ago, you learned that making & keeping a budget is the first step toward financial security. Calculate how much money you can afford for down & monthly payments. Look closely at the mortgage picture & find the interest rates, processing costs, & adjustment features that suit your needs. If you make an offer & it’s rejected, consider offering more money while asking the seller to cover some of your closing or other costs. Often, negotiations on a price go back & forth several times before a deal is made.

5. You have money in the bank (or under the mattress). Once you’ve located a house you love & you know you can afford it, you’ll need a sizeable down payment to get the ball rolling. The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require 10-20% of the purchase price. Closing costs average 3-4% of the price of your home. These costs cover various fees your lender charges & other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won’t be caught by surprise.

6. You’re not afraid of commitment. Enlist the help of local realtors & attorneys to represent your interests, & convince them that you’re pushing on without fear or trepidation. You don’t get panic attacks, you sleep like a baby, & perhaps more important-you really like signing your name. An accepted contract is like a marriage agreement, the deal is not complete, it’s just started. There are many things you must do to successfully avoid the money pits. The ability of experienced professionals to open doors for you & close the deal can never be underestimated.

6 REASONS WHY IT’S A GREAT TIME TO BUY

The housing market is looking healthier. Here are six reasons why now is the time to jump into the market.

1. Uncle Sam is willing to help. First-time buyers (defined as anyone who hasn’t owned a home in the last three years) are entitled to a maximum $8,000 tax credit; interest rates are at record lows; and the Federal Reserve is doing its best to make mortgage loans available.

2. People have to live somewhere. About 800,000 new households are formed each year in this country, ensuring that the housing market will tighten, even if the economy doesn’t soar.

3. Borrowers leverage their investment. If you put $10,000 into the stock market and it earns 10 percent, you’ve earned $1,000. If you put $10,000 down on a home and its values increases 10 percent, you’ve made $10,000.

4. When prices come back up, you’ll have instant equity. In parts of the country where foreclosures have driven down prices, better times will mean the price of the home you buy will rise rapidly.

5. Mortgage costs stay the same. If you get a fixed-rate mortgage, the monthly payment stays the same – while everything else, including rent, goes upward.

6. You own it. There is something comforting in the notion that your home is your own. You can paint it any color you want, let the dog run in the back yard and hang a swing for the kids in the front.

BUYING FORECLOSURES AT THE AUCTION

foreclosure

Buying foreclosures from the County Courthouse steps is a lucrative and exciting full time business. Some of the wealthiest men in Colorado made their fortunes at these foreclosure sales. You must know 4 key things before you EVER attempt to make a purchase at one of these foreclosures auctions.

1. Take careful notes of the condition of the home the day before or two days before the foreclosures sale date. A lot can happen to an empty foreclosure home over time. It may not be in the same condition when it finally goes up for a foreclosure sale.

2. Make sure to pull a title report on the foreclosure sale property weeks before the auction. You need to know what loans and liens are placed against the property. Many of these liens will be wiped out at the foreclosures sale, but MANY will not. And probably most importantly, the position (rank) of the lender that you are paying off in the auction dictates which loans and liens will be wiped off and which will not. Knowing the position that you are buying into is critical. Conducting a title search beforehand will help you determine that position and the risk involved in buying the property. Many title companies will do a semi title search for you for FREE if you promise them your business in the future.

3. Foreclosure sales are a place of great competition at times. You must know your top number BEFORE you walk into the foreclosure sale. This number should take into account the cost of the repairs (that you double checked yesterday!), the cost of holding the property, and your expected sales price. DO NOT BID OVER YOUR TOP NUMBER! It can be easy to get caught up in a competition with another bidder. Do not get emotional. Walk away when the bidding has gone over your number.

4. Keep information on foreclosure sales that get postponed on the day that they were supposed to go to auction. Bankruptcies, seller negotiations, family issues, and lender leniency can all cause a foreclosure sale to be postponed. Track these homes and the new date that the sale has been postponed to. Other investors may not keep this information and will be caught off guard when the new future sale date arrives. That is one less investor competing against you for that foreclosure sale. Sometimes that is all it takes.

TIPS FOR FIRST TIME HOME BUYERS

home buyer

1. What are the benefits? You should buy a home. That’s what your friends & family tells you. So by now, you’ve weighed the benefits & decided that home ownership is the best decision for you.

2. Define your search criteria. Most searches start on the internet. Buyers can see hundreds of virtual listings, pictures, virtual tours, & aerial shots of homes & neighborhoods. Buyers should know what town, school district, number of bedrooms, square footage, etc. will work best for them. Drive around different towns & explore. Walk down the street of the downtown area to get a feel for the town. Do you fit in? Can you see yourself living here?

3. How long should the process take? Right now (Fall, 2008), it’s a buyer’s market. A motivated buyer should be able to find a house in a few weeks. Some buyers can find a house within a few days. It all depends on what you’re used to. If you live in a cardboard box on the sidewalk, most of the houses you see will look good. If you live in a penthouse in the Plaza Hotel, you may have more picky tastes. Find a good real estate agent & have them show you homes based on your search criteria. The narrower your search criteria is, the faster you’ll find you home & the better able you’ll be to analyze the homes to find the best deal.

4. How many homes should I see? Don’t see more than 7 homes in 1 day, or your brain will be on overload. Take notes on the listing sheet about the homes you see. Good or bad? Rank the homes you’ve seen in order, so you’ll always have something on the top of the list that all other houses should be compared to.

5. Compare & contrast. Bring a digital camera & start with a close-up of the house number to identify each group of home photos. Take notes of unusual features, colors, & design elements. Pay attention to the home’s surroundings. What is next door? Down the block? Do you like the location? Is it near a park? Train Station? Is there road noise from a highway? Are there high tension power lines above the house?

6. Always look at some houses twice before making an offer. Look carefully & don’t overlook any closet or attic or basement. Remember the three most important rules of real estate: location, location, location. Try to buy the cheapest house on the block, not the most expensive. Remember your exit strategy; make sure other people will want to buy this house when you are ready to sell. Colonials are the most desirable type of home. Raised ranches are the least desirable. Other important items that affect value: flat driveway, flat usable property, non-double yellow line road, no road noise nearby, close to railroad, etc.

7. Don’t let your realtor influence your decision. It’s not their choice; they won’t be living in the house. Make sure that your agent points out any defects that you may have overlooked. Get an inspection before buying.

BIGGEST REAL ESTATE MISTAKES

1. Buying a House for its Decor: Remember that you are buying the house, not the stuff inside of it, so make sure you see beyond the decorations and look at the bones of the home. Focus on the floor plan and the square footage. You also might want to measure the dimensions and graph out how that’s going to work with your current belongings.

2. Not Providing Easy Access for Showings: Make your house easily accessible to potential buyers. If there’s nowhere to park or it’s difficult to get into, buyers may just skip it and look at someone else’s property instead.

3. Not Researching the Neighborhood: It’s absolutely critical that you research the neighborhood before you buy. Check out the area, amenities and the school system to be sure that your address corresponds with the correct school district. Also attend a community meeting, if possible. You’re not just buying a house, you’re buying a piece of that real estate and the land around it.

4. Losing Money With Auctions: While the starting bidding price for a house on auction might be a good deal, it doesn’t mean the final price will be. Make sure that you are very strict with your budget when you are bidding—do not go over your final price because you got wrapped up in the excitement of a bidding war. Another thing to keep in mind is that when you buy a property at auction, you aren’t able to get any of the warrantees or guarantees, and you are not able to do a home inspection. Find out if the auctioneer is going to put those charges on top of the sale price as well as if there are any liens on the property. You could be responsible for paying the property taxes on that house you just bought, which could make what looks like a good deal into a really bad deal.

5. Trying to Make the “Hard Sell” While Showing: If you are selling your house, you really shouldn’t be around at the open house. You might want to try and sell the place on all the reasons you think the house is great, but that might not translate to the buyer. If you leave, you allow the buyers to really give unbiased objective feedback to the agent, which is only going to help you in the end.

6. Waiting Until Spring to Sell Your House: Spring is the time of heaviest real estate activity, but that does not mean that people don’t buy houses 365 days of the year. That doesn’t mean you can’t emphasize your home’s seasonal amenities. You don’t have to wait until the weather is nice to put your home on the market. That’s a common real estate myth.

7. Treating Real Estate Like the Stock Market: When the real estate market is really hot and is appreciating really fast, people tend to look at it like it’s the stock market. But playing real estate is nothing like the stock market—when you invest in real estate, you really need to take a long-term approach.

8. Failing to Market Your Home in Different Ways: Don’t market your home with just a for-sale sign. Explore other marketing tools as well. Talk to your real estate agent about the marketing that they will do. It’s something that should be set up from the initial signing of a contract with an agent. Some homes have virtual tours and photographs online. If you choose to go that route, don’t forget to include the floor plans. That way, people can see the layout of your home and know that if it it’s right for them.

9. Not Thinking About Resale: When you are decorating and renovating your home, you need to think about what is going to appeal to a broad section of buyers when it comes time to sell it. Buying houses and being in the real estate market is like chess, you always want to look two or three steps ahead in the game.

10. Buying Without Actually Seeing the Property: It’s really easy to buy a house without seeing it because of the Internet and virtual tours, but virtual tours can be deceiving. Plus, it’s really hard to actually get a sense and feel of a home by only looking at it online. You need to actually walk through the place yourself. If that’s just not possible, hire an inspector to go look at the property and provide you with an assessment.

11. Trusting Everything a Real Estate Advertisement Says: Don’t assume every ad is fact. Learn to decipher real estate lingo. For example, cozy means small, and as-is means it’s a fixer-upper. If there are a lot of exclamation points in an ad, it means they are there just to take up room because there is so little to say about the place. Follow the old adage: If it sounds too good to be true, it probably is.

12. Picking the Wrong Agent: Treat meetings with agents like a job interview because that’s really how it works—that person is going to be working for you. Talk to your friends who’ve sold houses and had a good experience with their agent, and go to open houses and observe how that agent interacts with other people. It’s also a good idea to meet with the agent in their office. It allows you to see how organized they are, what kind of environment they work in, and whether that’s conducive for them being able to do a good job for you.

13. Not Hiring an Agent: There’s a lot more to selling a house than just putting a sign on the front lawn. If you don’t have an agent, you will not get on the multiple-listing service (MLS). That means that other agents are not going to know that your property is for sale. Another thing to consider is if you are willing to show the house each time someone wants to come by and look at it? If you do plan to sell your house on your own, always have a lawyer present at a closing. It’s really important to have someone on your side who understands all the complexities.

14. Buying the Most Expensive Home on the Block: The most expensive house will only depreciate in value over time, rather than appreciate, which is what you want. Also, those houses are often not the first house to sell because they are usually overbuilt to the neighborhood. It’s absolutely critical that you research the neighborhood before you buy to find out what the price point should be.

15. Not Setting a Realistic Budget: Just because the bank pre-qualifies you for a loan amount of $400,000 doesn’t mean you can afford to make that payment every month. Before hitting the streets for a house hunt, you should sit down and make a monthly budget of what you spend every month. Come up with a number that you are comfortable spending on your mortgage payment, aside from those other expenditures. An easy way to do this is to take a third of your gross income and have that figure be the number you spend on the house. It is also a good idea to have six to nine months of mortgage payments in the bank, plus a little extra if you have any repairs that you might need to do.

16. Visiting the House Only Once: It’s important to visit a house more than once because the neighborhood itself may be very different, depending on the day of the week and the time of day. It’s also a good idea to go home and think about it, even sleep on it, before you go back again.

17. Not Being Pro-Active at Closing: The best thing to do when going into a closing is to get all the paperwork ahead of time. All that information should come from a mortgage broker or banker. They have what they call a HUD (Housing and Urban Development) One form that lists out all the charges, and you can legally get it in your hands 24 hours before closing. Schedule the closing for in the morning, so you have a fresh mind and plenty of time to go over everything and ask questions. The final walk-through is another imperative part of the process. You may want to have a home inspector accompany you.

18. Doing Major Renovations/Remodeling Before Selling: Minor upgrades usually have a higher return on your money than tackling major renovations before placing a home on the market. The main reason? Huge construction projects always cost more than you think they will, and they also take longer than you expect. The best place to spend money is outside. Research shows that increasing the curb appeal often returns the most value on your money. It’s what gets buyers inside the house, after all. Don’t feel like you have to tackle major renovations before placing your home on the market. Just touch-ups here and there—especially outside the home—typically do the trick.

19. Skipping the Loan Pre-Approval Step: When you are pre-approved, the bank is saying, “We will give you a mortgage of up to this amount, so now all you have to do is find your home.” Some sellers only allow Realtors to show their house if someone has a pre-approved letter. That indicates that the shopper really is serious about buying a home.

20. Falling in Love With the First Property You See: Many homebuyers, particularly first time homebuyers, fall into the trap of falling in love with the very first house that they see. You need to at least look at three more houses in the area to get an idea of what the comparables are in that price range. You want your realtor now to show you homes comparable to what you saw. At the end of the day, re-evaluate.

21. Buying a Home Without a Professional Inspection: There are a lot of things a home inspection can reveal about a property that are not visible to the naked eye. Be sure to hire someone that comes with a good referral basis, that’s been in the business a while and knows what to look for. Look up the American Society of Home Inspectors and get a list of qualified home inspectors in your area. Once you find an inspector, insist that they compile a written report, complete with photos. Photographs are important because there are areas a home inspector will go that you might not look at. Be sure to hire a home inspector to thoroughly check out a house you are interested in purchasing.

22. Overlooking the Extra and Hidden Costs: Buying a home is not just about the money that you spend up front; it’s about all the rest of the money you have to spend beyond that. Find out what the property taxes are, what your water bill might be and what a standard electric bill is in that home, especially if you have electric heat vs. gas heat. You also need to factor in furnishings you may need to purchase before you can move in.

23. Buying What You Want, Not What You Need: Look at the space that you are already living in. It will help you to realize what you have been missing and what you need in your next home. Make a list those of needs and then ask your agent to start shopping these needs. On average, Americans live in a house for about nine years. Remember, you can always trade up a few times before you find the ultimate home.

24. Setting Too High of a Sale Price: As a seller it’s really important to do your research, and in order to come up with your sale price, look up what comparable homes in your neighborhood have sold for. Figure out what the going price is and try to put yours right in the middle of that, unless you have something extra special to offer. It is always better to price a home sharply than to start too high and have to reduce. Once you reduce, it always looks like something is wrong with the home.

25. Failing to Showcase Your Home and Make Small Cosmetic Changes: When you are selling your house, you have to really look at it objectively and think about it from the viewpoint of the house hunter. Make minor enhancements to the house and maybe hire a professional stager to come and arrange your furniture. Staging is about decorating your house for the buyers’ taste, not yours. A great place to start is with the front of the home and the main entryway. Home staging is designed to increase the potential selling price and reduce the amount of time the house stays on the market.

 

Our Holiday Favorites!!!

Happy Holidays from King Real Estate Group!

In the spirit of the holiday season we wanted to share a couple of our favorite holiday recipes with you!

Ginger Snap Cocktail

I got this yummy Ginger Snap Cocktail recipe from the food network and thought I would share. www.foodnetwork.com

 

Ingredients

ginger snap drink

 

  • 1 1/2 ounces vodka
  • 1 ounce ginger liqueur, such as Domaine de Canton
  • 1 ounce fresh lemon juice
  • 1/4 teaspoon agave syrup
  • 1/4 teaspoon peeled and grated fresh ginger
  • Pinch ground cinnamon
  • Pinch ground cloves
  • Pinch grated nutmeg
  • Ice
  • Cinnamon stick, for garnish

 

Directions

Shake all together the vodka, ginger liqueur, lemon juice, agave syrup, grated ginger, cinnamon, cloves and nutmeg in an ice-filled cocktail shaker. Strain into a chilled cocktail glass. Garnish with a cinnamon stick.

Reindeer Cookie Ball Pops

Reindeer-Cookie-Ball-Pops-52162

I got this yummy recipe for Reindeer Cookie Ball Pops from http://www.kraftrecipes.com.

Kraft Recipe Ingredients

1 pkg.  (8 oz.) PHILADELPHIA Cream Cheese, softened

40 NABISCO Ginger Snaps, finely crushed (about 2-1/4 cups)

4 pkg.  (4 oz. each) BAKER’S Semi-Sweet Chocolate, broken into pieces, melted

1-1/4 cups  candy-coated chocolate pieces

1 cup  small pretzel twists, broken into pieces

 

Kraft Recipie Directions

MIX cream cheese and ginger snap crumbs until well blended.

SHAPE into 30 (1-inch) balls; place in single layer in shallow pan. Freeze 10 min. Dip balls in chocolate; place in single layer in waxed paper-lined pan. Insert lollipop stick into each ball. Decorate with candies and pretzels as shown in photo.

REFRIGERATE 1 hour or until firm. Keep refrigerated.

Do you have a favorite holiday recipe? We loved to know! Please share it with us in the comment section of our blog!

About Us:  

King Real Estate Group is an independent real estate company located in Greenwood Village, CO. We offer a local Buyer’s and  expert listing service in the Colorado Front Range. Our marketing, tracking and buyer assistance programs are the best in the business.

If you are interested in selling your current house or need help finding your dream home contact King Real Estate Group. King Real Estate Group offers their clients professional, knowledgeable, and innovative real estate services.   For more information about real estate trends visit our website at: KingRealEstateGroup 

21 WAYS TO SAVE ON YOUR REMODEL

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1. Increase efficiency, not size. If you can reorganize and equip your kitchen for maximum utility, you may not need to blow out the walls to gain square footage. Start by replacing space-hogging shelves with cabinet-height pullout drawers 8 inches wide, containing racks for canned goods and other items. “You’re getting three or more horizontal planes where you might otherwise get only one,” says Louis Smith Jr., an architect with Meier Group, in Ann Arbor, Michigan. You could easily shell out a few thousand to outfit cabinets with upgrades like dividers, pull-out pot trays, and lazy Susan’s, but you’ll save many times that amount by skipping the addition you thought you needed. *Cost to expand kitchen by 200 square feet: $48,000 to $95,000 Cost of super-efficient, custom-designed cabinets: $35,000 SAVED: Up to $60,000

2. Bring in natural light without adding windows. Before cutting a big hole in the side of your house and rearranging the framing, consider less invasive and less expensive ways of capturing light. To brighten up a windowless bath or hallway, for instance, you can install a “light tube,” which slips between roof rafters and funnels sunshine down into the living space. Cost to add a double-pane insulated window: $1,500 Cost for a light tube: $500 SAVED: $1,000

3. Hit the recycling center. Do-it-yourselfers can reap big savings with recycled or lightly used fixtures and building materials. Habitat for Humanity operates about 400 ReStores nationwide, which offer salvaged materials at half off home-center prices. One caveat: Many contractors won’t work with salvaged items or homeowner–supplied materials in general, because they don’t want to assume the liability if something goes wrong. That said, if you’re doing your own work, you can find anything from pre-hung doors to acrylic skylights to partial bundles of insulation. (To find a ReStore near you, visit habitat.org.) Price of 4×5 foot insulated window in a home center: $600 Price at ReStore: $300 SAVED: $300

4. Donate your trash. Before you begin a remodeling job, invite the local Habitat for Humanity chapter to remove materials and fixtures for later resale. “About 85 percent of a house is reusable,” says B.J. Perkins, Habitat’s ReUse program manager, in Austin, Texas. “We can do a total takedown, or do a cherry-pick job and take the cabinets, the tub, the sink, and so on.” You save space in the landfill, collect a charitable tax credit for the donation, and help a good cause. Visit Habitat’s website (see Way to Save #3) to find an affiliate near you. Cost to trash a suite of bathroom fixtures: $50 to $75 Cost to donate: Nothing, plus you get a tax deduction SAVED: Space in the landfill (and a little bit of your soul)

5. Do your own demo. Knocking down may not be as costly as rebuilding, but you can still shave dollars by doing some of the demolition yourself, as long as you proceed with care. “If a homeowner wants to demo a deck, well, I am sure they can handle that,” says Michael Winn, owner of Winn Design, in Virginia. “But when it comes to interior spaces, I would dissuade them from doing it unless they have done it before.” The reason: A reckless wrecker might unwittingly take out a load-bearing wall or, worse still, plunge a reciprocating saw into live wiring or pressurized plumbing. (For tips on how to do demo right, see our October 2005 feature, “Before You Construct, You Have to Destruct.”) Cost to demo a 200 square foot deck yourself: $450 (Dumpster rental and parking permit) Cost for a pro: $1,000 SAVED: $550

6. Consider long term costs, not just short term gains. If your addition calls for clapboard siding, for instance, you can save more in the long run by ponying up now for the pre-primed and pre-painted variety. It costs an extra 10 to 20 cents per foot, but “you’ll wind up paying for half as many paint jobs down the road,” says Paul Eldrenkamp, owner of Byggmeister, a design build remodeling firm in Newton, Massachusetts. The reason? Factory finishes are applied on dry wood under controlled conditions: no rain, no harsh sun. “I used prefinished claps on my house about ten years ago and the only flaw in the finish is the occasional mildew spot, easily washed off,” Eldrenkamp says. “The paint looks as if it’ll be good for another ten years, easily.” Cost of unfinished siding for a 10×40 foot addition, plus two paint jobs: $5,000 Cost for prefinished claps and one coat of paint at installation: $3,750 SAVED: $1,250

7. Tap your contractor’s sources. When it comes to things like flooring, ask your subcontractor if he has odds and ends stock left over from other jobs. While renovating a Civil War era bed and breakfast in New Jersey some years back, contractor Bill Asdal needed wood flooring. He made a few phone calls and came up with hundreds of square feet of hardwood, in various lengths and widths, that otherwise would have gone into the trash on other job sites. Just by planning it to uniform thickness, then sanding and refinishing it, he saved his client almost $9,000 in materials costs. Cost of new flooring: $19,200 Cost to use someone else’s discards: $10,500 SAVED: $8,700

8. Limit recessed light fixtures. “The more recessed lights you put in, the more it’s going to cost,” says Tom Silva, This Old House’s general contractor. In addition to the fixtures, there’s the labor to cut all the holes and insulate them properly. A wall or ceiling mounted light can also deliver more wattage, which means you may be able to get away with fewer fixtures. Cost to install six can lights: $900 Cost to install one surface mounted fixture of equal wattage: $300 SAVED: $600

9. Consult an architect. Depending on the scale of your project, you might not need a full on architectural commission, which involves extensive meetings, multiple job site visits, and several sets of construction drawings, to the tune of about 8 percent of a project’s construction budget. You might be able to tap an architect’s design savvy by having him undertake a one-time design consultation. For example, for a $400 flat fee, Baton Rouge architect Kevin Harris will meet with a homeowner, examine the problem, and sketch out a few solutions that could be as simple as opening up a partition wall or moving a door. The homeowner can then give the sketch to a builder or take it to a drafting service, which will charge about $1 to $1.50 a square foot to crank out formal construction drawings. Architect’s fee to design a 300 square foot home office: $2,250 Fee for design consultation only and plans: $580 SAVED: $1,670

10. Partner with a contractor. Though the practice is controversial among the trades, some contractors will offer consulting and mentoring services to skilled do it yourselfers on an hourly basis. Chicago area builder Ted Welch charges $150 per hour for such coaching, with a two hour minimum commitment. “The most satisfied clients tend to be those who have good manual dexterity, who realizes that skills need to be practiced in order to be perfected, and who are willing to risk making a few mistakes and then learn from them,” he says. Cost to drywall one room: $1,000 Cost with DIY consultation: $300 (2 hours of coaching), plus materials SAVED: $700

11. Make sweat equity count. Unless you’ve got loads of time (and expertise) to spend on your project, the best way to add sweat equity is up front, by handling your own demolition, or at the back end, by doing some of the finish work yourself. “If you want to save money, dig in and start helping out,” says Tom Silva. “You can insulate, you can paint, you can sand.” Or better still, he says, help with cleanup every day. “Instead of paying someone to pick up sawdust off the floor, put your money into the time it takes to trim the window properly,” he advises. Cost for construction crew to handle cleanup: $200 per day Cost to do it yourself: $0 SAVED: About 3 to 5 percent of the overall job cost

12. Do your own schlepping. If you’re doing your own project, slash your materials delivery fees by picking up goods yourself. No pickup truck? For about $400, you can purchase a nearly new single axle utility trailer online, which you can tow behind your SUV. Get one just big enough to carry 4×8 sheet goods flat. Use it for a half dozen trips, and it’s paid for itself. Find trailers for sale near you via eBay Motors, or try your local classifieds. Cost of 10 deliveries: $750 Cost to buy a used trailer: $400 SAVED: $350, plus you get to keep (or sell) the trailer

13. Don’t overspend on wall prep. If your walls are in such rough shape that it would take a painting contractor days of filling and sanding to make them ready for the roller, consider using materials such as Texturglas, from Deerfield Beach, Florida based company Roos International. A breathable, nontoxic wall covering made of fine glass filaments; Texturglas has a similar look and feel to the fiberglass matting used in auto body work. It’s available in a variety of surface patterns, takes paint readily, and is designed to be installed right on top of existing surfaces, adding strength while covering up dings. Cost to patch and paint a 15×20 foot room with heavily damaged walls: $1,525 Cost to install Texturglas: $1,050 SAVED: $475

14. Consider look a likes. Some imitations just make sense: Lumber giant Weyerhaeuser sells a fast-growing natural eucalyptus hybrid under the brand name Lyptus. Sustainably harvested in plantations in Brazil, the clear grained hardwood looks and feels remarkably like mahogany. It’s sold as tongue and groove flooring and in planks and sheets for cabinetry and millwork. (Visit Lyptus.com to find a distributor near you.) Cost of 100 board feet of mahogany: $808 Cost of same quantity Lyptus: $395 SAVED: $413

15. Demolish the whole house and start from scratch. “Most clients don’t want to hear those words,” says Paul Irwin, design director with Landis Construction, in the Washington, D.C., area, “but it really needs to be considered on major remodels. “In one case, for example, plans for a 1,300 square foot addition revealed that the house’s existing foundation wasn’t up to code and would have to be replaced, a $30,000 proposition. After crunching the numbers, the owners concluded that it would cost as much to update the house, a former summer cottage, as it would to reproduce it new. “For a relatively small additional cost,” says the owner, “we get all the benefits of new construction while preserving the character and feel of our old house.” Cost to remodel: $570,000 Cost to replicate: $588,000 SAVED: For $18,000, the owners gained as much as $60,000 worth of new living space, plus improved safety and energy efficiency.

16. Wait until contractors want your business. Don’t schedule your renovation in the height of summer or between September, when the kids go back to school, and Christmas. “That’s premium time,” explains Lisa Stacholy, owner of LKS Architects, in Atlanta, Georgia. Suppliers tend to be busier, labor scarcer, and deliveries slower. One Virginia based contractor offers discounts of between 4.5 and 5.5 percent (depending on the overall budget) on projects during his down time, right after the New Year. Cost of a major bathroom remodel in peak season: $25,000 Cost in January: $23,625 SAVED: $1,375

17. Skip the foundation. If local code allows, you may be able to support a small addition on posts and beams, as you would a deck, explains contractor Dennis Gavin, of Gavin Design–Build, in Media, Pennsylvania. 220 square foot addition with poured foundation: $40,000 Same size addition on posts and beams: $35,000 SAVED: $5,000

18. Don’t move the kitchen sink, or the toilet, if you can avoid it. “That often becomes the biggest part of the plumbing price increase,” says Richard Trethewey, This Old House plumbing and heating expert. If your new layout requires that you move the toilet, use the opportunity to upgrade the pipes at the same time. “That will save you money in the long run,” says Richard. Cost to move toilet more than 3 feet: $500-$1,000 Cost to leave in existing location: $0 SAVED: Up to $1,000

19. Plan with stock sizes in mind. “Ask yourself, ‘Why am I building something 10 feet wide if plywood comes in 4 foot wide sheets?'” says Lisa Stacholy, of LKS Architects, in Atlanta. The same applies to stock windows and doors: Use manufacturers’ off–the–shelf dimensions from the outset and you will save the premiums of custom fabrication. Cost of custom doors: $1,500-$2,500 Cost of standard doors: $500-$800 SAVED: Up to $2,000

20. Buy building supplies at auction. Brian Peppel, a homeowner in Phoenixville, Pennsylvania, attends one building supply auction each month in nearby Lancaster County. His recent finds include two pallets of concrete block for $10 and a solid–wood prehung exterior door for $65. “Their inventory is everything under the sun, a lot of scratch and dent, misordered custom items, or new overstock supplies,” reports Peppel. He once watched the auctioneer’s gavel fall on a large, custom–made triangular window with an original retail value that he pegs at several thousand dollars. The winning bid? $1. Cost of solid cherry wall cabinet at a home center: $300 Cost at building supply auction: $10 SAVED:$290

21. Make decisions early. Start prowling the aisles at the hardware store or home center way before the wrecking crew shows up. Get a good feeling for what you want in fixtures and appliances and what they cost. If you aren’t absolutely specific up front about what you want, you’ll have to rely on your contractor’s estimate, called an allowance, and his notion of what is acceptable may be quite different from yours. “Ninety eight percent of the time, allowances are too low,” says Tom Silva. For instance, you may have had a glass–tile backsplash in mind, but your contractor’s bid was for ceramic. Cost to plan ahead: $0 Cost of change orders midstream: The difference in the item price, but also time lost to project delays and communications glitches SAVED: Up to thousands.

4 CRITICAL RULES FOR BUYING A REAL ESTATE INVESTMENT PROPERTY

Investors and Buyers who are looking to capture a deal in this wild real estate market will be presented with more “opportunities” than they know what to do with. It is important that as a buyer you carry some critical rules with you in your tool bag as you shop through the market to help you identify which potential real estate investment properties with be the best for you in the long run, and be the easiest to manage during the ride.

Here are the 4 easy to understand rules:

1. Selecting the right area: The first task will be deciding which area you want to invest in. There are a number of areas that you may be interested in, and they all may very well be great investment areas, so here are some criteria to help you narrow the search. First, invest in a property that is no further than 10 miles away from you. This will make a world of difference when you are collecting late rents, trying to get in touch with the tenant, keeping an eye on the property, running over to make emergency repairs, or checking on an emergency phone call. If possible, invest in properties that are in your “normal” travel path: to work, to the kid’s school, to the grocery store, to the gym. This will make all of the above trips to the property much more bearable and improve your ability to manage the property. So now, within that 5 mile circle that surrounds your home you must search for neighborhoods that are just below the average price for an area. NOT the average quality, just the average price. If the median selling price for homes in your area is $180,000, then look for homes in the $120,000 to $160,000 range. These will be in the highest demand by renters. This range should also keep you out of the bad, low value areas, and this price range should fare well as prices increase. Not too high, not too low, but just right. Now that you’ve narrowed the search, look for neighborhoods that are well maintained. PRIDE OF OWNERSHIP IS CONTAGIOUS. You can see evidence of this as you pass from one street to the next in a neighborhood, or even as you move between clusters of homes in a subdivision. The neighborhood slob drags one street down, while the guy who never stops working on his house and yard oftentimes guilt’s the other neighbors into doing the same. Look for well-groomed yards, no trash, and clean driveways.

2. Look for Average Joe’s Address. Now that you have identified the neighborhoods and streets that you’d like to invest in, you need to start evaluating the individual houses. Here are the rules, as little grass as possible (go desert or low water), NO POOLS, avoid RV parking, and stay away from wood fences and wood siding. Try to find stucco or aluminum siding houses, a pitched roof, & single story. This will do volumes for you in the way of keeping the house up, avoid neighborhood scrutiny “homeowners association type phone calls”, and keep management and replacement costs down.

3. Avoid the “Odd Couple”. Stay away from homes that have something odd about them. Did the old owner add something on without permits? Are there tacky awnings or patios? Did Michelangelo build a rock and brick waterfall monument in the front yard? You want the house to maintain a low profile. Odd items can tell you a lot about the old owner, and possibly how they took care of the home.

4. Keep maintenance to a minimum, whenever you are replacing something in the home (toilets, flooring, and landscape). Do not replace it with what you would like to have: for the simple reason that you are not living there. Tenants will often do damage to the home, intentionally or not. Give them as little to break as possible. Keep in mind, most of the ideas that you have add little or no resale value to the home.

REASONS TO BUY A HOME AROUND THE HOLIDAY

Holiday-house

From Thanksgiving until Valentine’s Day is one of the slowest periods for home sales. That’s one reason you, as a smart buyer, should be out there looking.

In most parts of the United States, house sales follow predictable seasonal patterns. They’re strongest in spring and summer and bottom out around Christmas and the New Year before picking up again in spring.

That means that late December/early January is a great time to look for a house. There are other advantages to buying at year-end, too. So if you are thinking of purchasing a home in the near future, consider fast-forwarding your plans and starting your house-hunt now.

Here are five good reasons:

1. Lower prices. A lot of people don’t have the time or the desire to look for a house during the holiday season; they’re too busy shopping, going to holiday parties and catching up with family and friends. The slackening of demand is reflected in softer house prices. Houses that failed to sell in the pre-holiday period may have reduced prices; new listings, though sparse, will be priced to reflect the slow market, which picks up only gradually in the New Year. It’s a good time to find a bargain. Many sellers who are not motivated take their house off the market in the dead of winter. So those who are still on the market may be more motivated, hence more negotiable.

2. Less buyer competition. With fewer active house-hunters out there, you are unlikely to end up in a bidding war that would drive up the price for the house you want or put it out of your financial reach. Less competition also means less stress for you during the bidding process.

3. Motivated sellers. Many sellers who failed to make a deal before the holidays will be very motivated now, especially if their houses have been on the market for several months. They will be eager to sell and to avoid scheduling their holiday plans around viewings by prospective purchasers, so they are likely to look at any reasonable offer favorably and to negotiate on price. They may also be open to requests for extras like appliances and window coverings, and to giving you the closing date you want.

4. Favorable mortgage terms. Fewer home sales translate into less demand for mortgage money during the holiday season. Lenders may be willing to shave a few basis points off the interest rate they offer you or to forgo some of their fees in order to get your business. Make sure you shop around to get the best deal available.

5. Tax deduction. If you close on or before December 31, you are likely to be eligible to deduct the interest component of your first monthly mortgage payment from your taxable income for that year. You may also be able to deduct any money you pay for points to reduce the interest rate on your loan. Consult a tax advisor to see how the mortgage interest deduction applies in your situation.

HOT TIPS TO HELP SELL YOUR PROPERTY

Once you’ve decided to put your home on the market, it’s important to take a close look at it from the viewpoint of a prospective buyer. Objectively evaluating each area & then making your home “show ready” can have a major pay-off in terms of the offers it will attract & how soon those offers come in.

THE BIG PICTURE:

  1. Keep it uncluttered: It will look neater & look larger. You will convey a more spacious feeling.
  2. Keep it clean: You will create the impression that the house is well cared for. Fresh paint makes rooms look clean & new.
  3. Keep it repaired: Fix items before buyers question them. The need for repairs can make or break a sale.
  4. Keep it neutral: Get rid of distracting colors & personal accessories. Neutral colors & simple decor help prospective buyers visualize their own belongings in a room.
  5. Keep it dynamic: Make your home memorable. Fresh flowers & fresh clean smells make your home more inviting.
  6. Keep it light & bright: Open curtains & drapes to let the sun shine in. Turn on lights.
  7. Showtime: Put away any toys, clothes, food, or other “left out” items.

THE SMALL DETAILS:

Outside: Trim, weed, tidy up lawn & garden. Clean up pet areas; re-sod or reseed. Repair screens, windows & doors. Add fresh mulch under shrubs. Add potted or hanging flowers to decks & porches.

In the kitchen: Clean away extra small appliances. Remove stains & items from sink. Straighten up memo areas & remove papers. Clean & deodorize vent or exhaust hood.

In the bathroom: Clean counters of extra toiletries. Store them out of sight. Remove stains or mold from sink, tub, & shower. Patch, caulk & grout as needed. Put out attractive “for showings only” towels.

IN THE LIVING ROOM & FAMILY ROOMS:

Rearrange furniture for a more spacious feel. Remove any extra pieces & store. Spot clean carpets or rugs. Have neutral paint or wallpaper. Accent with fresh flowers. Open the shades & drapes to let in light.

IN THE BEDROOM:

Straighten up closets. Box & store clothing, shoes, etc. as necessary. Arrange toys to look appealing. Add curtains or valences to rooms without them. Remove attention-getting posters.

IN THE BASEMENT OR GARAGE:

Thoroughly clean & deodorize areas where pets sleep or spend time. Straighten tool shop & laundry. Sweep floors. Clean up grease spots & other spills. Get rid of items you won’t be taking with you.