Do you know what happens at closing?

Not working with a Realtor to sell your home is a lot like going to court and representing yourself.... We specialize in this field and are here to make sure there are no big surprises. Here is a great article about one of the many ways a Realtor can help you: 

Potential homebuyers mostly unaware of closing costs but survey reveals Realtors are a "go-to" source for info

April 2015

Consumers - and particularly millennials and first-time homebuyers - tend to be unaware of closing costs. That knowledge gap means they may need to adjust their assumptions about how much house they can afford, according to findings in a new survey. 

It even means deals could unravel, the survey sponsors suggested. 

By a wide margin, the "ClosingCorp National Closing Costs Survey" showed most people learn about closing costs from Realtors, or by doing their own research. Researchers who analyzed the results reported millennial homebuyers (those in the 18-to-34-year-old age bracket) turn to Realtors for information on closing costs rather than lenders. In fact, they do so by a two-to-one margin.

ClosingCorp CEO Brian Benson expressed surprise at that finding, saying the study shows millennials are more dependent on Realtors than previously presumed. "We know they are more tech-savvy than their predecessors, so we believe this really highlights the complexity of a residential real estate transaction."

The ClosingCorp survey targeted 1,007 adults nationwide. Researchers reported about two-thirds of millennials who plan to buy are home were unaware of closing costs. They survey also revealed that across all adult age brackets, more than one-third of potential homeowners are "not very" or "not at all" aware of closing costs.

People need access to correct information, and it needs to be simple to understand, Benson emphasized, adding, "With the upcoming changes to the disclosure process being made by the Consumer Financial Protection Bureau this August, we as an industry should be stepping up our proactive education efforts to ensure homebuyers are fully prepared to make the most significant financial transaction of their lives."

In a statement about its survey, ClosingCorp noted the addition of costs for title insurance, lender origination fees, commissions and other settlement costs could mean a median-priced $202,600 home could end up costing more than $220,000 at closing.

"Not understanding how everything is related can be a real impediment for first-time homebuyers who want to get into the market," Benson stated.

"Much has been written about millennials because they are the largest generation so far in U.S. history, and their longstanding impact on the real estate market and economy is going to be huge," the ClosingCorp CEO remarked. "Their buying behaviors are much different than previous generations, and of particular concern to the industry is that they are waiting longer to buy their first homes. This study emphasizes the need to better educate millennials, and really all consumers in general, on the real estate closing process." 

ClosingCorp® owns and operates a leading source of intelligence for closing costs and service providers in the U.S. residential real estate industry. Last year the company introduced a tool called Seller Net Sheet which is designed to help real estate agents give sellers an estimate of how much they can expect to net at closing.

Source: NWMLS/NW REporter

http://nwreporter.nwmls.com/Issues/April-2015/page/Closing-Cost-Surprise

Great Home Additions on a Budget: Recycled Pallets

Wanting to add an accent wall to the bathroom? Or maybe you want some decorative pieces of furniture that blend well with your historic home? It is time to discover the joy of recycled pallets! These are easy to obtain: you can check with local warehouses, supply stores or craigslist/classified ads. Most of the time they are FREE.

This can also be a great way to gather the wood needed for a remodel project. As you can see, we have some pallets still in tact, and my husband broke down several into usable planks.

There are many projects and inspirations you can find online using pallets, and it is as easy as typing "projects using pallets" into your search engine.

Here are some direct links for project inspiration:
http://www.1001pallets.com/
http://thepalletproject.blogspot.ca/
http://www.remodelaholic.com/2013/03/diy-pallet-wood-wall-bathroom/

With a little bit of time invested, the possibilities are endless for home improvement while your cost is little to nothing!

We have made items such as benches, tables, accent furniture, storage chests, and decorative signs. We are currently making plans to use pallets for a bathroom revamp, a deck and possibly flooring over some outdated vinyl flooring.

Now on BlogLovin!

Find me on Bloglovin, the site that allows you to follow all different types of blogs and organizes a feed of information for you!

<a href="http://www.bloglovin.com/blog/13444739/?claim=r3mbbtm7uwz">Follow my blog with Bloglovin</a>

FHA, USDA: What is the difference?

Probably one of the most confusing parts about buying a home is the financial route you take. Many find themselves wondering:

Will I need a lot of money for a down payment?

If I qualify, what are my options?

What do all these loans and terms mean?

A conventional bank loan is a standard loan issued by a bank, that usually requires a down payment. However, the most common loans used buy home buyers (especially non-investors or first-timers) include the FHA and USDA programs. In fact, when my husband purchased our home a few years ago, the transaction was completed using USDA financing.

Usually, if you are able to qualify for an USDA home loan, you are also able to qualify for an FHA loan- and vice versa. Let's take a look at the details of each, to help you understand the difference and decide what may be your best route...


USDA (Rural Development Guaranteed Loan Program):

Run by the United State Department of Agriculture, this loan program's main purpose is to help buyers with a lower income achieve their dream of owning property. Although it targets consumers with low income, you still must be able to prove that you can pay a certain amount in a mortgage (monthly house payment) and have reliable credit. It does not require a down payment, and allows you to pursue a modest but stable home to own.

USDA loans are pretty strict, but I personally feel this is helpful for first-time buyers. Homes purchased with USDA financing must be resided in upon purchase (you cannot use this loan to purchase an additional/rental/income producing property), must be located in a small town or rural area, cannot have an income producing building on site (such as a barn that will be used for raising/selling livestock), must pass inspection and requires mortgage insurance for the beginning period of the loan.

For a full list of rules, click here: http://www.rurdev.usda.gov/supportdocuments/3550-1chapter05.pdf

As I mentioned, I feel that a USDA loan is for the most part hassle-free and a great option for a first-time buyer. It helps to protect you from unforseen troubles when jumping into the home ownership pool.

For more information on USDA loans, rates, and qulaifications click here:
http://www.usda.gov/wps/portal/usda/usdahome?navid=HOUSING_ASSISTA&navtype=RT&parentnav=RURAL_DEVELOPMENT


FHA (Federal Housing Administration Home Loan Program): 

Run by the United States Department of Urban Housing and Development, an FHA loan has a bit more flexibility than a USDA loan in terms of property, location and buildings on site. However, this loan requires a minimum down payment of about 3.5%. Those with credit scores between 500 and 579 must make down payments of at least 10 percent. This still is a lot more affordable than the down payment for a conventional loan, which has an average of about 20% for a down payment. 

This loan is also helpful for those with a lower income, but also can be an option for those with lower credit scores in comparison to USDA. As I mentioned, though, this route does require a down payment which can increase with a lower credit score. These are also a pretty secure route to take in purchasing a home as they require an appraisal, inspection, and mortgage insurance as well. 

For a helpful list of guidelines for properties purchased with FHA loans, click here: 
http://www.investopedia.com/articles/mortgages-real-estate/11/fha-minimum-property-standards.asp

This loan is also linked with HUD HOMES, which are forclosed/auction homes that are available at a great price, and are able to be purchased with FHA financing. In fact, those with FHA financing have priority over other types of financing during the bidding process.

For information on HUD HOMES, click here:
http://www.hudhomestore.com/Home/Index.aspx

*FHA news update, interesting article about how the government is cutting FHA loan costs:
http://www.bloomberg.com/news/2015-01-08/obama-cutting-fha-cost-boosts-first-time-buyers-builders.html

The main thing to do after gaining this knowledge is to talk to a lender in your area that others recommend. Now that you have a basis of different options, you can have the upper hand in the home buying process. I hope today's post was helpful for you, and I am always happy to answer further questions. Contact me by email: kimberlylinson@johnlscott.com

How to Keep Your Old Home Warm for the Winter

The holidays are a time to cozy up by the fire, have family over, decorate with soft glowing lights, fill the house with the smell of something roasting in the oven, and appreciate the things that surround us.

UNLESS WE NEED TO BE CAREFUL ABOUT OUR UTILITY BILL...

Do you have an older home that seems impossible to keep the heat in? Here are some easy winterizing tips we have learned to use, that have saved us tons! We are now able to enjoy our farmhouse Christmas without the underlying stress of cost.

1. Is all the heat going upstairs? Hang a blanket to stop the draft at the bottom or top of the stairs. It looks a bit silly at first, but it keeps the house warm with little effort. We use a thick flannel sheet- it does the trick and looks a little festive for the winter season.

2. Everyone suggests it, because it works: winterize those windows! Especially with older homes, heat escapes and cold parades in through single pane windows. Even upgraded windows should still be winterized. Stores like Home Depot sell window kits to accomplish this, but it can also be done with bubble wrap/tape.

3. Diminish that door draft. Many older homes have mysterious areas that bring in a draft from outside, especially under doors. Department stores carry "draft stoppers". These can also be made at home using fabric (or socks) and dry beans, or even foam pipe covers.

4. If you have a stove/fireplace, use it to its full potential! We do not yet have a wood stove, but do know that by collecting firewood throughout the year and preparing, you can save hundreds to thousands on your heating costs, while having a HOT home throughout the winter. Make sure to have a fan nearby the stove/fireplace to circulate the warm air through your home. *Always follow safe procedures when using a fireplace/stove, and do not leave unattended.

5. If you have only a thermostat, learn to "work the system". Before we discovered this trick, we would turn the heat off at night, while we were gone, and after the furnace ran for a few hours. It was cold, miserable in the morning, and actually made our heating system work harder than it does now. We are actually saving more money by keeping the thermostat set to about 65 degrees. If the furnace has to heat the home from 30 degrees to 70 degrees, it uses a lot of energy in a little amount of time. It is better to keep the temperature at a medium, and allow the furnace to "touch up" the heat. This, matched with our other techniques, keeps our home warm all day for such a little cost. I was so surprised to see that our last bill was only two digits! ($80.00 compared to $150.00)

6. Winterize your bed. If you do want to save even more, and turn the heat down at night, (we do not turn it off anymore, however, we do turn it down) make your bed an alternative rather than a punishment. Layer it with flannel sheets, a down comforter, and a cotton comforter. During the really cold evenings, add some layers of knit blankets. There are nights where we wake up in a sweat, just from how warm the blankets keep us! The great part about this is that blankets are CHEAP while producing a good outcome.


Good site for DIY Door Drafts: http://www.goodhousekeeping.com/home/crafts/door-draft-stoppers-draft-snakes-460109#slide-14

Window Winterizing Kits: http://www.homedepot.com/s/window+winterizing?NCNI-5

Home Supply Thrift Stores: DIY Restoration Meccas

Every homeowner knows it is a big, and sometimes improbable expense to restore an old home. However, if this is done in small steps while finding deals, it can be a fun and definitely less stressful experience.

Especially if you are looking to restore an old home to the specific time period, home supply thrift stores are a great place to find old fixtures and supplies. And at amazingly low cost, you are enabled to stock up and "splurge" during your trip.

We have had a lot of success at these stores. We have come across high quality tile, snap hardwood flooring, old light fixtures, and even old time kitchen décor. Beware: these stores will make you want to remodel your bathroom that weekend; pedestal sinks and cabinets galore!

Several major second hand home supply stores include: Habitat for Humanity, Rebuild, and many religious based organizations. The easiest way to find them in your area is to search online. They vary in name and type by every city.

If you are not close to one of these stores, always keep your eye out on websites like www.craigslist.com or local free/for sale/wanted pages on www.facebook.com . If there are home supply thrift stores a day trip away, I highly suggest driving the truck/van/trailer out and making a day of adventure from the journey.

Linson home, upstairs bedroom #3

5 Ways to Determine if a House will be a Home for Years to Come.

So, you have found "the house", and are ready to buy. It has shutters, fruit trees, big windows, and charm. However, there are many things to consider before taking the next (quite large) step...

As the saying goes, "Never judge a book by it's cover".


1. How is the neighborhood.... At night?

Do a drive by of the home, and explore the streets nearby to make sure activity is safe. Is there is a party house next door that is dormant during the day? Is there late night traffic in the neighborhood, on foot/bike/vehicle? Is the area quiet? Is there adequate street lighting to scare off potential predators?


2. Check those nooks and crannies.

It is important to make sure that the charm of a home does not distract you from any latent defects. A latent defect is a problem that is not clearly visible without some investigation. Although many facts will be revealed in an inspection, it is helpful to try and spot these before spending the funds to discover through the inspection. When walking through the home, look beyond the staging and room colors. Check the walls near the shower/bath. See if the doors close completely (without a gap between the door and floor). Is a portion of the wall covered by paneling, wallpaper or a large decoration? Pay attention to details to see if it is for looks or a cover-up. Find the furnace and water heater; do they look sound?


3. Make a list of changes.

Try and compose a mental or paper list of everything you would eventually want to change about the home. For example, changing the floor, or adding an eating area off the kitchen. Are there many changes you desire to make? Are the ideas for this home realistic financially and time-wise? What kind of changes are on your list- cosmetic or constructive?


4. Determine your true budget.

Although you have been approved for a home up to $190,000- Are you going to be able to sustain that mortgage payment? Consider your current AND future financial situation. Make room in your funds for emergencies, travel, family status change and savings. You want to ensure that you will be able to enjoy your home, rather that toil over a hefty monthly payment. It is exciting to qualify for a high amount, but just make certain that the payments will be doable for the entire term of your loan.


5. Carefully consider your options.

How many homes have you looked at? Re-evaluate the amount of choices on the board, and the features you are seeking. Is this the first house to excite you, or the "one"?


I believe these 5 steps are very important to take before deciding to make an offer on a home. This is a place where you possibly will be for a long time, create memories, and invest in. It never hurts to be cautious in order to make the best decision for you and your family.

Think outside the box, and inside the book.





written by Kimberly Linson, Broker at John L. Scott Centralia
Kimberly Linson on Facebook
John L. Scott Website