Real Estate Blog
Tuesday, February 17 2015
The foreclosure situation is a good deal different from what we were discussing a few years ago when the tidal wave of 7.3 million foreclosures and short sales swept the nation. When The New York Times “Dealbook” recently pronounced that the supply of cheap foreclosed homes in America is dwindling, it came as news to…well, no one.
Let’s face it: investors wouldn’t need to look up the latest statistics to guess that number of offerings would be down. The continuing rebound in home values, slow but steady improvement in the overall economic picture, and even just the passage of time has to mean that the glut of subprime-crisis-era foreclosures would have worked their way through the system.
But there are always new foreclosures, and for anyone hoping to make a bargain buy in today’s foreclosure market, the same qualities that brought post-crisis success still apply today:
- Knowledge of (or willingness to research) comparable neighborhood values
- Realistic appreciation of rehabilitation costs
- Decisiveness (willingness to act swiftly)
- Ready access to investment capital
The principal difference in today’s foreclosure milieu is that far fewer are available, and the difference between market value and listing price has narrowed. There may be fewer competitors to worry about, but some are still out there, as always. Today sees fewer institutional investors—in fact, some are leaving the market altogether, taking their profits and selling out to groups more committed to long-term property management.
Aside from the qualities described, there is still no blanket formula for landing the best foreclosure deal. But among other observations, there are two that are worth considering.
First, despite the lessening of the impact institutional investors previously had on the market, it may still be necessary to prepare to offer more than the listed price. The dwindling number of foreclosed homes tends to create an imbalance between supply and demand. If other buyers are offering higher amounts than the asking price, it can easily result in a bidding war situation. As always, by researching underlying values, the best investors avoid foreclosure buys that wind up being little more than break-even propositions.
Another wrinkle to be aware of is the possibility of future cost increases. For instance, it can transpire that an investor succeeds in purchasing a property significantly below its true value, only to find that a reassessment by taxing authorities raises its property tax bill through the roof! Canny investors prevent this surprise by finding out how the local Assessor’s office sets rates and schedules appraisals.
The foreclosure picture changes constantly. If you are interested in the investment possibilities—or are looking for a buy on your next home—don’t hesitate to give me a call to discuss the latest offerings! You can reach me on my cell phone: 812-499-9234 or email Rolando@RolandoTrentini.com
Monday, November 24 2014
For anyone who has looked into to buying a home several times—but kept getting discouraged every time because of a negative credit report—read on!
You probably already know that you are not alone—but so what?—it’s small consolation, especially when you consider how much financial ground you lose every year you continue to pay rent (the entire amount of which has zero tax deductibility). Many people mishandle credit in their teens and 20s, not knowing how it can come back to bite them when credit reports determine their credit worthiness. We see the fallout in the form of mortgage application turndowns or discouraging interest rate proposals.
But that just makes it all the more important that you stop letting past errors continue to keep you from getting the loans and rates you want. You can choose to take action now to clean up that credit score. Not only will it speed the moment when you become eligible for the significant benefits of home ownership—the actions you take now will serve to set you in the driver seat when it comes to credit management. You will become aware of any apparently minor oversights that can depress your credit score for years to come. It will put you ‘in the game’ of credit report management, instead of continuing to be a passive outsider.
Steps consumers can take now:
Review your credit file for accurate information
The credit reporting bureaus’ job is to report the most accurate information possible, but in the past the Federal Trade Commission has found that 5% of reports have at least one mistake. Get your current credit report from any number of services (start with a free one: you can always subscribe to a paid service later). Check all the accounts and verify that the amounts reported and the account statuses are correct. If a creditor reported your information incorrectly, file a dispute through the credit bureaus’ online sites to get the inaccuracy fixed. The same FTC report says that 13% of consumers who reported an error saw a boost in their credit score.
Get old negative accounts removed
Credit reports carry negative information like missed payments or a collection account for seven years, but are required to delete it after that. If an account is lingering past the seven year mark, use the dispute tools available on credit bureaus’ websites to mark the account as too old for reporting. Note that the seven-year time period is calculated from the date of first delinquency, not the date the account was first opened.
Talk to collection companies about their input
Even when you pay off collection accounts, that history continues to hurt your credit score. Some lenders look solely at those details when starting the process, so even paid collections can disqualify you for a loan. Instead of dealing with this frustrating problem, while you are negotiating with collection agencies to pay off a debt, ask that they put in writing that they will remove their report as part of their part of the bargain for your satisfaction of the debt. Some agencies will and some won’t (but it can’t hurt to ask).
Once you have acted, and begun to see the negatives dropping off your current credit report, your path to local home ownership will open up markedly. Then it’s time to give me a call! You can reach me on my cell phone: 812-499-9234 or email:Rolando@RolandoTrentini.com
Thursday, October 30 2014
You’re about to close a deal to become a tenant. The landlord seems like a straight shooter and the place is a joy: immaculate and welcoming. Now all that’s left is to wait for the landlord’s okay after an evaluation of you as the new tenant, right?
Well, not quite. Just as the landlord should check financial or job references as part of their due diligence, you have some to perform for your own benefit. It’s up to you to assess the landlord’s system to determine whether this rental arrangement is the good fit you hope it is. Only by asking pertinent questions can you decide whether the landlord’s management style and expectations align with your needs.
1. Do you offer emergency maintenance services?
When a plumbing leak becomes uncontrollable or the heater goes out on a cold winter night, you need maintenance assistance quickly. Find out how quickly your landlord can respond—and how readily he or she answers. An experienced landlord is familiar with the inevitability of maintenance emergencies—and isn’t surprised (or put off) by the question. A great landlord is confident of the system he or she has put in place!
2. What are my maintenance responsibilities?
Lease language can be less than precise about the tenant’s responsibilities—most often when it comes to outdoor areas. A lease might vaguely state that the tenant is responsible for general lawn maintenance. Ask your landlord to pinpoint the specifics, and jot down notes that you can refer to later. Some landlords might expect mowing the lawn and weeding planted areas; others might expect you to attend to more, such as lawn treatments. Finding out your landlord’s specific expectations will give you a sense of the upkeep requirements for your end. It can’t help but minimize the possibility of any future conflict.
3. Is there a homeowners association?
As a rental tenant, most likely you won’t be responsible for any homeowners association dues. However, you might be subject to its rules and regulations. For example, if the association has strict lawn care requirements and you are responsible for garden maintenance, you should know about those details. If your landlord answers yes to this question, ask for a copy of the association rules.
4. What are my responsibilities before I vacate the property?
It’s not being overly negative to bring up the subject of the end of your tenancy. When you move out of a rental home, you want to leave the property in good condition so that you are not hit with any charges—or see your security deposit disappear without good reason. Find out if your landlord has any specific requirements, such as professional carpet cleaning or filling the holes in the wall.
5. How do I contact you on nights and weekends?
Problems with your rental unit do not always occur Monday to Friday, 9 to 5. By asking your landlord for contact information during non-business hours, you get a sense of how accessible he or she is. If he or she willingly gives you a cellphone number, you’ve probably found a landlord who will be easy to work with— and easy to track down should problems arise!
My work as a Realtor® lets me help set the stage for tenants and landlords to create a mutually beneficial relationship. If you are looking to purchase an income property taking advantage of this fall’s very favorable terms, don’t hesitate to give me a call! You can reach me on my cell phone 812-499-9234 or email: Rolando@RolandoTrentini.com
Thursday, September 11 2014
You’ve successfully located the home that fits your wish list! The listing agent says the home is in “great condition!” Financing is pretty much a done deal! Time to relax!
Er—maybe not just yet.
When you are buying a home, among the scores of thoughts that might be racing through your head (“Is this the best one for the money?” “Will everyone be comfortable in it?” “Will it be enough house over the long haul?”), one you definitely don’t need is “Will this house become a money pit?”
The home that looks perfect may well be exactly that—but if not, you certainly don’t want to find yourself pouring hard-earned dollars into repairs that become apparent only after you have signed. Surprises are fine for birthday parties, but to avoid the sort no home buyer needs, getting a professional property inspection is the most direct way to tell if there are any significant underlying issues.
To alleviate the worry, you should make any offer conditional on a home inspection…then order up a professional property inspection done by an experienced home inspector.
When a home inspector arrives at the property, he or she will invite you along on the tour. However, you don’t have to accompany the inspector to some of the less-accessible areas like the roof, attic and crawl spaces (unless you want to). The inspector will likely start outside, checking for any suspicious areas that may allow water to penetrate, then move indoors for a thorough investigation of each room in the house. As the inspection moves along, definitely feel free to ask questions as they crop up: after all, inspector works for you!
It’s important to remember that any property inspection is not 100% certain to uncover every possible defect: a home inspector, no matter how experienced, is not clairvoyant. But you will receive a thoroughgoing assessment of the potential likely problems with the home’s systems—as well as an opinion on the condition of the home. You may be able to renegotiate your offer should conditions warrant it.
Property inspection costs tend to differ depending on the size and condition of the home, and usually take anywhere from 2 to 6 hours to complete. Often, the verbal assessment made at the time will be very informative. Later, you’ll get the fuller detailed written report. If the inspection reveals a deal-breaking flaw, you will have saved yourself from a bad investment. Less commonly, more detailed property inspections could be in order—especially if you are also ordering sewer line, pool, fireplace or other specific inspections. Most inspectors offer discounted rates if subsequent inspections are in order.
Property inspections are not intended to offer warrantees or guarantees, but an experienced home inspection is the next best thing. It’s something most homebuyers find makes their purchase a lot less stressful. If you’re looking at buying a home in the Evansville area this fall, call me today to discuss the market. And once you find a likely new home, I can recommend several of our most experienced and reliable property inspectors. You can reach me on my cell phone at 812-499-9234 or email Rolando@RolandoTrentini.com
Wednesday, September 10 2014
Residents don’t have to have children at home to know when we’ve gone through the familiar back-to-school rituals. Just turn on a radio or TV, step into a retail store, or drive past a school and the calls to educational muster are evident. At the same time, it’s hard not to be reminded how significant education is when it comes to home buying—how likely it is for schools to be on the forefront of many buyers’ minds.
Most people know intuitively that top-notch schools carry significant weight in the searching and home buying processes—but the result of a survey done by realtor.com has spelled it out in black-and-white. Their research reveals that more than 60% of buyers consider school district boundaries during their home buying process. It’s a surprisingly weighty number.
The depth of interest that buyers registered was also illuminating. The same survey uncovered the fact that prospective homebuyers are willing to spend more—and give up other features—in exchange for a house located in a preferred school district. For example, many buyers said that they are ready to ignore access to shopping malls and parks to be in a district where their preferred school is located.
Prospective buyers are likely to also factor in the impact the same phenomenon could have on a property’s resale value down the line. That could be part of the reason why more than 23% of respondents said that are willing to pay 1-5% over their budget to be in a preferred school district boundary. Another 20% said they would pay 6-10 % above budget, while 9% would pay as much as 11-20% more!
When queried about which factors weigh most heavily on their home buying preferences, over 90% said that school district boundaries are either “important” or “somewhat important.” Only 7.4% said that school districts are “unimportant” or “very unimportant,” while 2% classified them as “neutral.”
This level of unanimity should be of interest to anyone about to embark on their own home buying expedition—whether or not they have children of their own. It’s hard to ignore the proposition that when you go to resell a house in the future, its school district may carry the same importance to home buyers down the line. If today’s buyers give such importance to school district boundaries, it may not pay (to borrow Wall Street’s famous phrase) to “fight the tape.” In any case, it always pays to ask questions, do some neighborhood research—and to call me when you’re looking to buy or sell in Evansville! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Monday, June 09 2014
For real estate investors (BTW, that includes homeowners and soon-to-be homeowners of all stripes), there’s some long wished-for news: the solid reputation of real estate as an investment is back! After years of falling off, the latest Gallup poll on the economy and personal finance finds that Americans are now convinced that their best long term investment is in the housing market. Real estate won out against all other alternatives: bonds, gold, stocks, mutual funds and CDs.
For the past few years, gold had been investment #1—but see-sawing gold price movements have whiplashed public sentiment. Just as takes place everywhere in the nation, whenever real estate market improves, so does its reception by potential buyers who view their home as a savings vehicle as well as a place to hang their hat. As Gallup Economy’s headline put it, Americans Sold on Real Estate as Best Long-Term Investment.
Public sentiment by itself is, of course, not reason enough to change long-term investment strategies. But when any investment class is on the rise in public’s estimation, the effect is to create competition among buyers—and further price improvement often follows. It can make a difference when it comes to real estate.
One possibility for those selling real estate this summer might be to consider capitalizing on the investment trend by including a marketing approach: one that targets investors. You can have your agent or a local property manager provide a rental evaluation for the property, along with approximate leasing fees and property management fees. Having such an evaluation at the ready lets investment-minded prospects evaluate the potential cash flow and return. It’s even possible to post the information on your sales website, and to display it along with other marketing materials at showings and open houses.
In many neighborhoods, real estate prices have a lot further to go to near their previous high water marks; if you look at neighborhoods individually, you can find some plum opportunities to make a sound investment. If you are thinking of buying or selling in Evansville this summer, contact me to discuss your ideas—and how you will make the most of America’s new Number One investment opportunity! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Monday, April 21 2014
Buying a home in Evansville is sort of a modern day adventure. At first there’s the intrigue of figuring out the advantages and disadvantages between the neighborhoods and listings competing for your attention; then there are all the challenging, sometimes exhausting—then, ultimately, exhilarating steps that lead to home ownership.
But even after the previous owner has handed over the keys, there’s more to come: a few extra steps new homeowners can decide they wish to take. Here are five of those—things you can choose to do after buying a home:
#1 Change the Locks
Who knows how many people have a copy of those keys? It’s a good idea to change the locks on all exterior doors, because it’s not just the previous owners who have had access to the property; there may also have been guests or tradespeople with access to the keys. By installing new locks, you can be sure that you are complete control of the keys to your new home.
#2 Have the House Cleaned
While the previous homeowners are obliged to leave the home in reasonable condition (usually “broom clean”), consider scheduling a professional cleaning crew before you move in. If your budget and schedule allows, it can be a plus to know some serious deep cleaning has been performed on counters, plumbing fixtures, carpets, etc.
#3 Smooth Transfer of Utilities
After buying a home, it’s usually possible to transfer utilities into your name without having to live through a break in service. Contacting all utility companies ahead of time will ensure that the transfer is orderly and scheduled in a manner that will be convenient to your move. It’s also an opportunity to be sure that utility bills have been fully paid before closing on the property.
#4 Store the Settlement Papers
At the end of the process of buying a home, a host of details come fast and furious, making it doubly easy to misplace things—even important things, like copies of the papers you execute during settlement. Later, when it’s tax time (or in the future should you sell the property), you’ll save yourself a lot of desperate rummaging if you’ve prepared a secure place to keep them from the start.
#5 Take Photos of Your Household Items
It’s important to keep an accurate list of your household contents in the case of theft, fire or other mishap—records to act as verification of your belongings and their condition. Buying a home is the perfect time to take that inventory. Go from room to room snapping digital pictures of everything you own. It will never get easier!
Like anything worth doing, buying your new dream home probably came with its own set of stresses. But it should stand as one of the most rewarding financial moves you will ever make. If you’re thinking of buying or selling a home in Evansville this spring or summer, do give me a call! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Thursday, March 06 2014
It can be perplexing—and not least because it’s one of the least-discussed details you run into when buying a home. The issue is flood insurance, and it’s sometimes first brought to the fore when you are buying a home in Evansville that you would not have thought was on a “flood plain.” If it is, it’s going to require flood insurance before the bank will sign off on a loan.
As we only see from time to time, devastating floods can strike when and where least expected: sometimes, in areas where that ruinous flooding is unprecedented. In 2005, when FEMA paid out over $17 billion in flood claims, it once again became clear why flood insurance is absolutely necessary. Here’s what you need to know about flood insurance if the home you are looking at is in a flood plain.
The Zone Matters
FEMA assigns different zones within a single flood plain. For example, homes that are located on the bank of a creek may be assigned to Zone A, ( floods highly likely). Homes that are further away from a water source may be assigned to Zone Z, (lower risk). Naturally, Zone Z premiums are a good deal more affordable than premiums for Zone A. In fact, if your home is in a Z zone, you may even qualify for a special price break for two years before full premium goes into effect.
Figuring Out the Cost
Unlike car or home insurance, you won’t find a better rate on flood insurance by shopping around. The federal government sets flood premium rates based on factors like the zone, the home’s value, and the value of its contents. You may choose to insure the home only, but it’s seldom a good idea to leave contents without coverage. Any local insurance agent specializing in flood insurance will be able to assist you in determining the cost of the policy; they will also answer any questions you may have about the process.
Making Your Decision
Buying a local home that turns out to be on considered within a flood plain means factoring in some added insurance expense, and possibly even potential risk to your personal items. But when the house is right, and your heart is absolutely set on the property, it’s a dollars-and-cents calculation. I’m always at the ready to help my clients clarify this and all other the other details that go into buying a home in Evansville. You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Tuesday, February 11 2014
January presented us with major changes to mortgage lending rules. These new guidelines aim to curb some of the excesses that occurred during the sub-prime years—hopefully resulting in a lower risk of default and foreclosure by borrowers and a healthier real estate climate for everyone.
QM: “Qualified Mortgage”
This all came about as one offshoot of the Dodd-Frank legislation that went into effect in 2014. It creates a new category, “Qualified Mortgage.” Lending institutions are required to document each loan they deem to be a QM; when they do, they benefit by being able to sell them to Freddie Mae and Fannie Mac, and are protected from legal action in the event of a future default.
The reason that these changes won’t keep most borrowers from getting a loan is that loans that don’t qualify (“Non-QM” loans) will still be offered by some banks—they’ll simply keep them on their own books.
The bedrock requirement for a QM is an evaluation of the borrower’s debt-to-income ratio. That’s the projection of debts divided by income on a month-to-month basis — especially important when getting a loan with a variable interest rate. If it seems to you that this calculation makes common sense for any loan—I’m in your camp! The reason a bank might choose to issue a loan that does not meet the letter of this requirement could be their analysis that the percentages dictated by the rules are too strict for a particular borrower.
A Qualified Mortgage can’t have any of the risky factors that were hallmarks of the mortgage meltdown. Included are “no” or “low-doc” loans; loans with terms longer than 30 years, interest-only loans, and those with minimum payments that don’t keep pace with interest rates, causing the loan balance to increase.
So: what’s the bottom line for buyer’s intent on getting a loan this year?
The good news: most loans will go through as before (estimates are about 95% of them). But more paperwork and longer processing times are likely, and since fees and charges for a QM cannot exceed 3% of the mortgage, getting a smaller loan might become more difficult if banks determine they can’t make a profit.
In any case, coming prepared is still the best insurance that your loan goes through as smoothly as possible. If you’re looking to buy a home in Evansville this season, I’ll help make sure your preparation is first-rate! You will be able to take advantage of my extensive network of different mortgage providers in order to make the purchase of your new home as seamless as possible. You can reach me on my cell phone at 812-499-9234 or email Rolando@RolandoTrentini.com
Wednesday, February 05 2014
One of the unusual situations that sometimes crops up in real estate is one where the buyer purchases a house without ever seeing it. This may sound nuts—but there are circumstances (more than you’d think) where it can be the only practical solution.
Wholesalers and house-flippers, for instance, sometimes simply haven’t time to visit every property they suspect is a great buy. Other times, buyers might be relocating to Evansville from out of state (or even out of the country) under a timetable that doesn’t allow them an extra visit—or even a first visit! According to the latest full-year data from the National Association of Realtors®, home sales to foreign buyers amounted to $68 billion!
As you’d guess, the risks of purchasing a house sight-unseen when relocating to Evansville remain stark. Nonetheless, there are ways such buyers can protect themselves:
Adding a contractual walk-though contingency—one which allows a final walk-though before signing at closing—is the surest protection. Sellers aren’t obligated to accept such a contingency (and in a competitive market it’s less likely to be acceptable), but if it’s allowed, it’s also a sign that the property is likely to pass muster.
The odds of a good “sight-unseen” result when relocating to Evansville grow significantly better when you present your agent with a clear list of requirements. Some important factors outside of specific house metrics could be the quality of local schools, transportation links and commuting times, crime rates, shopping and entertainment and recreation area access.
It is especially important to hire a first-class home inspector. When you can’t visit the property yourself, your inspector can be the trained eyes that prevent your inheriting unneeded maintenance issues. If the listing doesn’t give you a clear idea of how the home is laid out, requesting a video of both interior and exterior of the property is a good idea. If one isn’t available, don’t be shy about asking your agent to make a walk-through video for you.
For anyone relocating to Evansville when a ‘sight-unseen’ home purchase is necessary, choosing the best-qualified Realtor and inspector couldn’t be more important. In that situation, they become your ears and eyes on the ground! Please feel free to call me at 812-499-9234 or email Rolando@RolandoTrentini.com and I will be more than happy to assist you with your real estate needs. Our motto is “With an Accent on Service”
Wednesday, January 29 2014
Part of the recovery in Evansville’s real estate scene is the increasing likelihood of multiple offers on a listed property. This is every seller’s dream— but if you are one of the bidders, it’s important that you don’t allow it to become your nightmare.
There is one way— the only sure way—to keep the specter of competing multiple offers from upsetting your home buying prospects. Summed up in one word, it’s “preparation.”
Preparation starts with assembling a strong financial package. If your target property attracts multiple offers, you want yours to stand out. By the time you learn that other offers are at hand, it’s probably already too late to begin putting together documents—they should be in hand before you even identify a property. Getting pre-approval for your loan, having a letter that says so, and being able to show you have funds available can be persuasive.
When it comes to making the offer itself, although including “Subject to” clauses will protect you from unforeseen problems with the property, when multiple offers are on the table, the fewer contingencies the better. Again, only preparation will make this reasonable. If you’ve had an advance home inspection, and also made sure that there aren’t any right-of-way or easement issues, your offer can be significantly more attractive.
Personal preparation can be another positive. Visiting the property on several occasions at different times of the day should give you added confidence for what the home is truly worth to you…and when the listing agent and owner can put a face to your offer, it tends to strengthen its validity.
When multiple offers on a property occur, it’s possible that someone is going to bid more than the home is really worth. If you’ve done thorough research and know precisely what its value is in today’s market, that won’t be you. Having your bottom line number unshakably in mind means that in any bidding war, you’ll be able to sweeten your offer without hesitation. You can be creative, perhaps by offering to reduce the seller’s costs by picking up escrow fees, transfer fees or title policies; perhaps by offering the seller a few additional days to move without seeking financial compensation in return; perhaps by increasing the down payment or earnest money. When you know your bottom line, the arithmetic is uncomplicated (and your less-prepared competitors are more likely to throw up their hands!)
And then…should the bidding go over what you know it’s worth, you’ll be ready to walk away. There will be other properties to bid for – and I’m always here to help keep all your options open!
Wednesday, December 18 2013
Buying a home in Evansville is hardly a do-it-yourself kind of project. Having confidence that the all the i’s are dotted and the t’s crossed requires the input of professionals whose daily dealings keeps them in touch with the current legal and financial arenas.
Call them the “Fundamental Four” — the four groups of professionals you will want to have on your team when buying a home in Evansville this winter.
First and foremost, you need to be sure the money factor is handled in an advantageous way. By far the most popular route is via a mortgage: a home loan. Your specialist here is the professional mortgage broker. He or she will advise you on the types of mortgages available this winter; will work with you to determine the amount you qualify for, the different payment plans you can choose, and guide you through the maze of paperwork.
A real estate agent does more than just sparing you the trouble of going through the listings to find a suitable home. Yes, your agent will help you identify homes for sale that suit your budget and preferences, but will also be a vital part of the negotiating process and the disclosure and associated paperwork. Your agent is actually the professional who ties together the work of all your other consultants.
The inspector is your expert when it comes to verifying the quality of the property itself. He will inspect and prepare a comprehensive report on every critical physical aspect. Buying a home can’t be a guessing game when it comes to the state of the structure itself: your inspector will help you determine if it fits the price tag.
The title/escrow company facilitates the actual transaction itself, which can be a bit more complicated than you might think. They will prepare all the legal documents after inspecting the title of the property, and, via contract, oversee the timing as the home is transferred from the seller to you.
Thinking of buying a home in Evansville this winter? Start with the information that’s just a phone call away. Contact me today! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Monday, November 18 2013
When a first-time home buyer begins hunting for the prize that has to serve both as a satisfactory home base and a solid investment, most feel a mixture of excitement (a home is a landmark achievement!) and maybe just a touch of apprehension. Like any expense you’ve never encountered before, it’s appropriate to take extra care the first time out — and to pay attention to what experience teaches. Along those lines, here are some mistakes that are easy for a first-time home buyer to make. Fortunately, they’re also easy to sidestep:
1. Waiting for a better rate
Adjustable rates may well be about as low as they’re going to get right now – and some signs point to an increase in the coming months. For a first-time home owner who will be taking out a loan, if the property is right, hesitating to make a commitment based on a loan rate gamble is seldom a good idea.
2. Thinking short term
Consider thinking of a home as a lifetime investment. Even for those who are single or newly-wedded, it’s possible that being open to a house with extra rooms could end up saving considerably on moving, transaction and agent fees, taxes, etc. It’s equally important to look at neighborhoods and how they are changing and developing. If you do resell your home, location can make a big difference in how.
3. Underestimating hidden costs
The monthly mortgage payment isn’t the ultimate bottom line. When a first-time home buyer comes across a property that fills (or exceeds) everything he or she has been looking for, if the mortgage payment looks to be right, it’s easy to overlook other homeowner expenses. Experienced buyers make hardheaded estimates of maintenance fees and property taxes — they will be every bit as consequential as the mortgage bill.
For a first-time home buyer in Evansville, when thoughtful perspective goes into your final decision, it’s that much more likely to be a decision that pays off in the long run. If you are preparing to buy this fall, I’ll be standing by to help get you started! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Tuesday, October 15 2013
If you’re looking for a superior deal on a new home, you may find that a local bank-owned home is a serious contender. Today’s real estate market includes a variety of foreclosed homes, some of which can be had at prices well below baseline levels.
Adding to the activity in that sector is the virtual disappearance of any degree of the stigma formerly attached to the bank-owned home market. By May of 2012, Realtor Magazine was already reporting how the rise in distressed inventories had brought about an increased appetite for the sector: “Nearly 65% of buyers say they’re likely to buy a foreclosure today compared to 25% who said that in October 2009.” And 92% of those surveyed were interested in a bank-owned home as their primary residence, rather than as an investment vehicle.
If you think a local bank-owned home could be a serious contender for your attention, you should be aware of how to best prepare for the opportunities to be had among them.
Pre-qualification not only speeds up the purchase of a bank-owned home, it also produces a concrete range for your home-buying budget. Some banks charge a fee for the credit-checking procedure, while others simply build that into the bottom line.
Beware Potential Property Issues
The biggest issue facing the buyer of a foreclosed home is the potential for damage to the property. If it’s been vacant for some time, issues tied to improper weatherization or pest infestation can have resulted. A bank-owned home is typically sold as-is — so ordering a thorough, professional home inspection is an absolute must.
Buying a bank-owned home in Evansville can proceed on a different timetable than does a regular home buy, so be prepared to be patient. It’s also particularly helpful to have a buyer’s agent on your team to help answer questions as they arise.
If you are in the market for a new home this fall — whether it be a bank-owned home or not — I’m here to advise my clients from beginning to end. Getting started is just a phone call away! You can reach me on my cell phone 812-499-9234 or email Rolando@RolandoTrentini.com
Wednesday, July 17 2013
Buying a house for the first time! It means you’ll be joining the club: the home ownership club that Americans have traditionally recognized as emblematic of the fullest community membership. It’s an exciting endeavour — one that ushers in a whole new realm of pride, maturity…and of a truly major commitment.
It’s the show of responsibility that’s the reason home ownership bestows automatic respect from the community. It is, after all, unmistakable evidence of long-term stability, as well as commitment to deal with the future with all it holds — known and unknown. That commitment is something all homeowners share.
Today, buying a house in Evansville means entering a changing market. Still-historically low interest rates continue, but now they have started to rise. Broader lending prospects are improving along with that rise (which is the good news). But especially for first-time buyers, it should also mean that it is doubly important to think of the long term, and to let caution and prudence lead to a buying decision that will prove to be the right choice for the future.
What that means when buying a house in Evansville, especially when taking advantage of an attractive adjustable interest rate (ARM) loan, is to plan for the likelihood that monthly repayments will eventually increase. Before taking advantage of a great deal, consider whether you will be able to manage monthly repayments if they jump by 1, 2 — even 3%. Although it’s only natural to expect that your family income will grow as time passes and professional experience broadens, cautious buyers keep their budget in line with actual current finances. And they make hard-headed estimates of the upkeep expenses that accompany home ownership.
If the past seven years have taught anything about buying a house, it’s the advantage of tempering optimism with realism. I’m here to help my clients make educated real estate decisions for the short term and long term. If you’ve been preparing to make that exciting first buy, I hope you will give me a call to meet and discuss your goals and the current market – I’d love to hear from you! You can reach me on my cell phone 812-499-9234 or by email Rolando@RolandoTrentini.com
Wednesday, January 30 2013
Anyone who is buying a house in Evansville-- or even just checking up on the market -- is likely to find that some of the rules of the game seem to have shifted. Particularly anyone expecting to be deluged by the kind of amazing deals being offered in 2008 and 2009 should see what I mean.
As the latest housing statistics continue to paint an upbeat picture, at least when it comes to bargain-priced properties, the days of multiple bids and ‘offers over asking’ are back. If you are weighing the advantages of buying a house in Evansville before interest rates and prices rise in earnest, it should be useful to take a look at some strategies that work -- and some that virtually never work:
1) Blanket Low-balling – Running around writing up a bunch of low-ball offers is a surefire way to get yourself ignored, or worse, miss out on an otherwise great property. A better approach? Work with a knowledgeable agent whose expertise in neighborhoods will allow you to check on the most recent comps, then write a serious offer.
2) Dismissing Imperfect Properties – The degree of your success in buying a house in Evansville can depend on starting out with a reality check: only very rarely is a property totally perfect for you and priced absolutely right.
3) Highest and Best - Unfortunately, the tempting low prices listed for some local bank-owned homes also means that it’s increasingly common to encounter the dreaded “multiple offer situation.” If you find yourself there, be prepared to submit your highest and best offer first -- you may not have another shot.
This changing market doesn’t mean we are headed into the kind of fever-induced ‘bubble’ we saw in the mid- 2000’s. But for those seeking a deal and waiting for the bottom of the market before buying a house in Evansville, the market does not seem to be waiting. 2013 is clearly the time to jump in!
Friday, January 13 2012
If you’re one of the millions who has an eye on 2012 as the year in which you’ll buy a home (first or not), here are five things you can do now to put yourself on the right path:
1. Check your credit. Take my word for it: there is no bad surprise worse than a bad credit surprise. Okay, maybe there is one thing worse – a credit surprise you receive while you’re in the midst of trying to buy a home!
Recent studies have revealed that a record high number of real estate transactions are falling out of escrow, and that credit “issues” are a leading cause of these dead deals. Your best chance at catching and correcting score-lowering errors and other derogatory items before they destroy your personal American Dream is to start checking and correcting while you still have time on your side.
2. Do your research. The more rapidly the real estate market changes, the more it behooves smart buyers to study up before they jump in. And now’s the time – you can start doing online and in-person research into topics ranging from:
· Target states, cities and neighborhoods. Whether you’re relocating or simply trying to narrow down the local districts to focus on during your 2012 house hunt, December is a great time to start your online research into decision-driving factors like tax rates, school districts, neighborhood character and even prices in various areas. Resident ratings and reviews sites like Trulia and NabeWise can help you make the neighborhood-lifestyle match.
Once you narrow things down and start speaking to local agents, ask them to brief you on the local market dynamics, including how long homes typically stay on the market and whether they generally go for more or less than the asking price, so you can be smart about how you search. (And yes, there are areas where homes sell for more than asking, even as we speak!)
· Real estate and mortgage pros. If you don’t already have your pros picked out, now is the time to get on the horn or drop an email or Facebook message to your circle of contacts, asking them for a referral to a broker or agent they love. Follow up by: checking whether these pros are active in answering questions on Trulia Voices, searching for their name and seeing what sort of feedback on them you can cull from the web, then giving them a ring and launching a conversation about whether you and they might be a good partnership.
· Short sales and REOs. Distressed property sales are not for the unwary. If you want to target upside down or foreclosed homes, or are planning to house hunt in an area where many of the listings are described as short sales or foreclosures, get educated about what you can expect from a distressed property purchase transaction before you get your heart set on a short sale.
· What you get for the money. Online house hunting is a powerful tool – especially when it’s cold and wet! But there comes a point in your house hunt where you’ve got to just get out into the actual physical homes you’re seeing online in order to get a strong, accurate sense of what home features, aesthetics and location characteristics correlate with what price points.
· Mortgage musts. You can read a bunch of articles about mortgages and get yourself pretty far down the path toward qualifying for a home loan, but you can only get a personalized action plan for a smooth road ‘home’ by talking with a local mortgage broker and having them assess your basic financials. They might say you need to move funds around, pay a bill down or off or produce some sort of documentation from your employer. And the time to start all that is now.
3. Fluff up your cash cushion. So, you’ve saved up your 3.5 percent down payment. Perhaps you saved a little extra for closing costs. Or maybe you’re even one of those uber-aggressive 20-percent-down-ers. No matter how much you’ve saved, you’ll find that you could use more once you activate your home buying action plan. Mark my words – after closing, you’ll crave extra cash to do some repairs, upgrade a couple of things, buy appliances or even just to hold onto in order to minimize your anxiety about depleting your savings!
4. Shed some stuff. Sell it. Donate it. Give it to relatives who’ve always coveted it. Just get rid of it. You might even be able to kill three birds with one stone: (a) getting some cold hard cash to go toward your savings, (b) getting some tax receipts to help you out on your 2012 tax returns, (c) clearing the mental clutter that physical clutter creates and (d) getting a long head start on preparing for your move, affirming your commitment to your home ownership goal.
5. Sit very, very still. Sometimes, the best way to further our goals is to stop tripping ourselves up. In that vein, commit right now to refrain from making any major financial moves until you buy your home. Don’t quit your job to start that personal chef business (yet), don’t pull a bunch of cash out of your savings account (without getting clearance form your mortgage pro first), and don’t start buying cars (or anything else, for that matter) on credit.
Thursday, July 07 2011
Now that you're ready to purchase a place, you want to make sure it's the right one for you. Follow these tips to find a home that's a perfect fit for you:
Go for the long haul
When looking for a home, search for one that you could see yourself living in for several years -- at least five to seven years is ideal. Buying -- and moving -- to a new home takes a lot of time and effort, and can add up significantly in closing and moving costs, etc. Staying in place longer will help you avoid those added expenses. Plus, the extra time spent in your home could be just enough to help you ride out a downturn in the real estate market.
Leave room to grow
Aim for a home that can adapt to your needs as your life changes, say, if you have a new baby, or Junior moves back in after college. If you can't afford a place that's large enough to meet your anticipated future needs now, look for one that will allow you to build on later on.
Consider a place with rooms that can serve multiple functions, so the home remains highly functional for you through the years. For example, an open-floor-plan-style home is very adaptable. A kitchen that overlooks a family room is helpful when one's children are young (you can cook while watching the kids), while such a kitchen is also great for entertaining your friends once the kids leave the roost.
Go for your type
Think about what style of home fits you best -- house, condo, townhome, etc. -- they're not one size fits all. For example, a single-family home -- which sits on its own lot and must be maintained by the homeowner -- may be great for a person seeking privacy, but not so wonderful for somebody who doesn't want to worry about mowing the lawn, fixing the plumbing, etc. Meanwhile, a condo might be perfect for somebody who wants a "lock 'n' leave" lifestyle, but not for somebody who doesn't like sharing a wall with his neighbors.
Check the surroundings
When you purchase a home, you not only get a house, you also buy into a neighborhood. Think about whether that neighborhood will suit you. Sure, you might love the house itself, but will the loud neighbors next door or the school across the street become too bothersome for you? Also, do you like the feel of the neighborhood and does it offer everything you need? It's best to find a place in a community that you'll enjoy.
Buy what you can afford
It's easy to shoot for the sky and overspend when buying a home -- you understandably want the best your money can buy. Examine your finances, keeping in mind current and future expenses, and don't exceed your means. It's smarter to buy a home you can easily afford than one you have to stretch to get into. Stay down to earth, and you'll be better prepared should unexpected financial commitments and problems arise later down the road.
Think "home" first
When purchasing a home, don't imagine the dollar signs you'll see the day you sell it. A home is just that -- primarily a "home," and not an investment. So, buy a place that'd be great to live in first and think about its resale value second. Predicting real estate cycles and home appreciation is tough enough for the experts -- and much more for the average home buyer. Plus, while home renovations tend to add value to a residence, they rarely recoup more than what was spent on them.
Look at both old and new
It's nice to move into a place that's brand-new. But, new isn't always better. Consider both old and new. While you might not like a previous homeowner's decorating decisions, you might like the owner-installed upgrades -- like a finished basement and a backyard deck -- that a new home might not have.
You've heard this tip before, but a home's location does matter. A house that's located on a busy, noisy street may be less enjoyable to you as a homeowner than one situated on a quiet, secluded cul-de-sac. Plus, a home on a cul-de-sac is likely to be worth more than a poorly located one when it comes time to resell. So consider a home's location before you're smitten by a spectacular interior.
When it comes time to sell
While you want to think of your place as a home first and not an investment, it doesn't make sense to purchase a white elephant, either. You should put at least some thought into how easy -- or difficult -- it'll be to resell the home one day. If a home is so unlike other nearby homes in terms of size, style, price, etc., you might want to skip it and look elsewhere -- it could become a burden should you want to someday move on.
Monday, May 09 2011
To rent or to buy: what used to be a given – that you would buy a home as soon as you could afford to – has become an agonizing conundrum for many a would-be homebuyer, in the face of the housing market’s big bust and super-slow recovery. Low prices seem to create a wide-open window of opportunity, but they also create the concern that prices will keep falling after closing. And that Catch-22 has hundreds of thousands of buyers-to-be stuck on the fence.
Fortunately, there are handful of life, mortgage and local market signals which indicate that the time *might* be right to hop – scratch that – leap off the fence and into homeownership:
Mortgage rates are going up. Home prices have been low for the last several years, and in fact are currently looking like they’re heading back down to the same levels they were at the depths of the real estate recession. During this same time frame, interest rates have also been low – this one-two punch has created record-high affordability for the last four years running, causing buyers to believe that this window of opportunity won’t be closing anytime soon.
While prices don’t look like they’ll be skyrocketing anytime soon, interest rates are another story. Rates have been on a rollercoaster over the past few months, and with inflation and Fed rates set to spike later this year, today’s low interest rates might be as good as they’re going to get for a long time to come. And I mean a very long time – in the next few years, governmental intervention in the mortgage markets is likely to wind down, and that means higher mortgage interest rates are not only inevitable, they’ll probably be here for a long, long time.
Mortgage rates on the rise are one signal that now might be the peak of home affordability, and the peak of the opportunity to buy.
Rents are going up. Rental rates in many areas are also on the rise – in fact, the foreclosure crisis has acted created additional demand on many markets’ rental housing inventory in several different ways. First, former homeowners who lost homes to foreclosure now need to rent; as well, buyers in foreclosure hot spots have been hesitant to buy, many electing to stay renters far beyond when they would have otherwise. On top of all that, super-tight lending guidelines have stopped even some who would like to buy homes from doing so. As a result, rental homes are in high demand – and rents are rising.
Rising rents at a time when the prices of homes for sale are low and, in some places, falling? One more signal that now might just be the time to buy. (Of course, where foreclosures are high, the chances of continued depreciation are, too – to offset this risk, have a long-term plan, to minimize the possibility that you’ll owe more than your home is worth when you need to sell. Read on for more on how to plan for the long term and minimize your homebuying risk.)
Your income and career are stable for the foreseeable future. The smartest homebuyers look to their lives, not just the market, for signals about when the time is right to buy. Homebuying is a long, long-term endeavor these days. The goal is to be able to commit to staying in the same place, geographically-speaking, for 7 to 10 years before you buy (more in a foreclosure-riddled market, less in an area that has been more recession-resistant). Most lenders will require that you’ve been at your job – or in the same general field of work – for at least two years before you buy. But that’s the bare minimum – beyond that, you don’t want to be barely beginning a career in which you think you may need to move sooner than that, nor do you want to buy when you’re advanced in your career, but in an industry which is dying or downsizing the workforce in your region (unless you have a strong Plan B).
When you get to the spot in your career where you can realistically project a stable income 7 to 10 years out, life might be giving you a green light to move forward on your homebuying dreams.
You can reasonably predict the home you’ll need in the years to come. Since successful homeownership requires that you be ready to be in the place for a good number of years, best practice is not just to buy a home with the space and number of rooms you need right now – rather, you should aim to buy the home you’ll need 5, 7 or even 10 years down the road (to the best of your ability to predict, of course). You might be a newlywed with no kids now, but you plan to have them in a few years. Or maybe you’re a newly minted empty nester right now, but can project that you’ll want to retire - and might not want to climb two flights of stairs to get to and from your bedroom - 10 years down the road. Before you buy, you should be in a position to buy the home that meets your future needs – not just your current ones; and that requires that you have a reasonable idea of your life vision and plan for the future.
If you’re able to predict – and afford, at today’s prices – a home with the space, amenity and geographic location you’ll need 7 to 10 years from now, you might be in a good phase of life to get off the rent vs. buy fence.
With that said. . . buying a home is a massive decision and includes multiple, long-term financial and lifestyle obligations, so if one or more of these signals are present for you, that doesn’t mean you have the green light to run out and buy a home tomorrow – rather, it’s a good sign you should begin down that path, if you’re so inclined. You’ll still need to do the work to make sure your personal finances and holistic life picture are also in alignment before you buy, as well of the work it takes to ensure that your real estate and mortgage decisions are sustainable and smart, over the long-term.
It’s not overkill to check in with a mortgage pro, a tax pro, a local real estate broker or agent and a financial planner to make sure all your ducks – not just one - are in a row before you make your move.
Wednesday, May 04 2011
If your house is on the market then you might be at the point of tearing your hair out. After all, some sellers have had their home up for sale for years at this point. It can be maddening, and the competition is only getting more intense as prices continue to fall and more foreclosure homes flood the market.
So what, exactly, are buyers looking for this spring? In short, they're looking for homes that are going to save them money. And when you think about it, it just makes sense. Mortgage loans are harder to come by, and thanks to an uncertain economy, people are less likely to splurge on a McMansion they're going to have to pay to heat and cool for the next five years (i.e. save money on utility bills).
[See the best personal finance stories from around the Web at the U.S. News My Money blog.]
Even if you're planning on staying in your home the next few years, it's still helpful to know what people are looking for because you're likely going to make changes and home improvements over the years. Knowing what potential buyers are interested in can help you invest your money wisely, so you have a better chance of selling when you're actually ready. So what are people looking for?
1. Homes in Good Condition
Buyers aren't interested in fixer-uppers right now. They don't have a lot of cash, and they don't want to spend money on home repairs immediately after they move in. They're looking for homes that are in great condition and that are absolutely move-in ready. They don't want to have to repaint, clean carpets, or cover up cracks in the ceiling. And they especially don't want to spend money on major repairs. To increase your chances of an offer this spring and summer, make sure you do everything you can to get your home in tip-top shape. Utilize a house spring cleaning checklist and make your home spotless before showing it off.
2. Homes with Green Features
Saving money and living green are trends that aren't likely to disappear anytime soon. Buyers are now looking for features which are going to cut down on a home's operating costs, as well as lessen its impact on the environment. Tankless water heaters, high-efficiency furnaces, energy-efficient appliances, energy-efficient windows, adequate insulation, and solar panels are just a few that are making it on to buyers' wish lists.
Basically, any "green" upgrade that's going to save money on utility bills will be highly appealing to people looking for a new home. You probably don't want to splurge on solar panels, a geothermal furnace, or other expensive green energy technologies, but there are some small changes you can make that will help potential buyers save money in your home. For instance, you could install a rain barrel or two against the house, add insulation, upgrade any old appliances to Energy Star rated models, and plant some trees to help with shading during the summer months.
[In Pictures: 10 Smart Ways to Improve Your Budget.]
3. Outdoor Living Spaces
In an uncertain economy, people travel less. This means that our homes are truly becoming our castles, no matter how small they are! Outdoor living spaces have always been popular, but they're especially appealing now since so many people are taking staycations, and choosing to relax at home instead of going out at night and on weekends. If your backyard leaves a lot to be desired, then do whatever you can to turn it into an oasis. Build a deck, plant flowers, add a fountain, and turn it into an escape for potential buyers.
If your home is currently on the market, it's important to do everything you can to remove any concerns buyers might have about your house. Sellers sure don't want to continue spending money on their homes, but small changes such as planting flowers, repainting, and cleaning can go a long way towards getting you an offer. Remember, you don't want to give people any reason not to buy your home!
Have you had any success selling your house in this market? What are some of the best methods that worked for you?
Heather Levin is a regular contributor to the Money Crashers personal finance resource site and is also the creator of The Greenest Dollar, a blog focused on green and frugal living.
Saturday, May 15 2010
The recession has changed the consumer’s approach to remodeling and appliance shopping as well as how to pay for those improvements, says Mark Karas, president of the National Kitchen and Bath Association.
“Any remodel now is budget-driven,” Karas said. “You really have to take a look at what the client is looking at overall.
“I just sold a kitchen to a relative. We’d been trying to plan for five or six years. Just before the holidays, first the oven went, then the microwave, then the dishwasher—those were the signals.”
With the real estate market still in turmoil, Karas said, consumers are taking a more careful approach. He said emphasis is still on kitchen and bath remodeling (“You always get your money back no matter what you spend on a kitchen or bathroom”) but now, in addition to pricing fixtures and contractors, consumers are pricing the home equity loans they’re using to finance them, with some banks offering financing as low as 3.9 percent.
“The rich are always going to be rich so can they do (a remodeling job) out of pocket, maybe. Middle-class homeowners are more likely to go to home equity loans,” said Karas, who also is the general manager of Adams Kitchens in Stoneham, Mass.
“It’s funny. A very good friend of mine is a banker. He just told me people used to come in and they would be told the rate is X and they would go for the loan. Now people are shopping for home equity loans just like they shop for a car. Even bank loyalty is gone.
“Interestingly, we’re in a totally different mindset when it comes to money, projects, and buying. Everybody just takes a totally different approach today.”
At the recent Kitchen and Bath Industry Show in Chicago, Karas said the feeling was the economy is coming back, but coming back slowly. Nonetheless, there’s a cautious optimism out there, he said.
As for trends at the show, there was much more emphasis on Energy Star appliances.
“More people are trying to get their products out there,” he said. “Everybody has Energy Star in their lines but not everything is Energy Star. The emphasis now is on looking good, working great and still being Energy Star efficient.”
For example, General Electric introduced its new Hybrid Water Heater, which is billed to cut residential energy usage by more than half. The unit “talks” to the utility grid, powering down or delaying operations during peak periods when prices are highest. GE plans to expand the technology to refrigerators, microwaves and ranges.
Another emerging trend, Karas said, is greater use of LED lighting, both in appliances and for general use. He acknowledged the bulbs are much more expensive than incandescent or compact fluorescents, but they last 20 years and produce no heat. Karas estimates the reduced energy costs pay for the bulbs in three to five years.
“I’m converting my own showroom to LED. … The basic cost is 20 percent higher,” he said. “I just replaced xenon bulbs which were putting out 150 watts; the LED is putting out 30.”
He said you get the same amount of light from a 75-watt hallogen bulb that you get from a 22-watt compact fluorescent and a 16-watt LED. And LEDs have the added advantage of not having the environmental concerns associated with compact fluorescents.
A service of YellowBrix, Inc. http://www.houselogic.com/news/articles/new-remodeling-approach-Careful-Shopping/