Don't Kill Your Home's Value with Renovations
While not every renovation will hurt the value of your home, Gerri Willis of
Money magazine reports on
four renovations that will kill a home's value. Not surprising, a swimming pool is at the top of her list. While a lot of people love pools (I'd give up my old white jalopy van for one), some buyers are repelled at the idea of maintenance on a pool, and insurance and safety... you get the idea.
I was surprised to see an "addition" on the list, but I believe she targets the additions that are poorly done. Also a jacuzzi tub and trendy wall finishes made her list of no-no's. When you get ready to sell, I would advise you to just make sure that your walls are neutral and clean. Did I say clean? Yes. Clean. And clean the rest of your house while you're at it!
Your Home the Movie Star
I just read an article from the
Forbes-MSNBC partnership, titled
How to Make Your Home a Movie Star. While I'm pretty sure I don't want to volunteer my own home (except for the perk of having a free housekeeper), this looks like it would be cool. The owner(s) of the home in France where part of The DaVinci Code was filmed received $108,000 for nine days of shooting. Others I saw (
10 Homes that Have Hit the Bigscreen) received from $12,000 to $100,000 (the home where the Lindsay Lohan Parent Trap was filmed got $100G).
If you're interested in offering your home for films, the article advises that you "list your home with your local film commission as well as with location agencies. These agencies will aggressively promote your property, in exchange for a cut of 10 to 30 percent of the shooting fee."
Contact Tennessee's Film Commission here. Specifically, here's a link to
make your property available. How cool is that?
Energy Saving Tips
I saw this in today's Daily News Journal out of Murfreesboro. The writer provides tips on how to
reduce your electric bill while temperatures are HOT. One thing that people forget to do is to regularly change their air filters. The article also links to the Tennessee Valley Authority
Mortgage Rates Fall
For the fifth week in a row,
mortgage rates dropped last week - a sign of a slowing housing market. The average interest rate was 6.48 percent for a 30-year fixed loan. This is a good time to think about refinancing your home (if your interest rate is higher). Or if you're a first time homebuyer, you can get in at a more affordable rate.
And if you're in the market for a new home,
Martha Stewart has her home on the market.
Get a CLUE
When I took a class to become an accredited buyers representative, I learned something that is not often discussed in the real estate industry. The insurance industry relies on a database called the
Comprehensive Loss Underwriting Exchange (or CLUE) when they issue homeowners policies. The database of consumer claims was created so that insurance companies can see the claim history of a home when they are underwriting or rating an insurance policy.
How does a
CLUE Report impact the real estate industry? When you buy a home, the company holding your mortgage will require you to have adequate homeowners insurance on the home for your protection and for their protection (like car loans requiring full coverage). People will often put off ordering that insurance until closing time draws near (I had a person who once ordered their insurance while at the closing table). While having the ability to order homeowners insurance that quickly is highly convenient and sometimes necessary, this delay could be problematic later on.
My
ABR instructor told a story about his buyers who purchased a home that smelled a little smokey. He thought it was just the fireplace (heck, even the fireplace in my own causes my home to smell like a blackened log on occasion, depending on how the wind is blowing that day), so they wrote the contract and bought their beautiful home. Shortly thereafter, the gas man mentioned "the fire." They were unaware of a fire, so ordered their own CLUE Report. The CLUE Report showed a major claim had been paid. Unfortunately, the seller pocketed some of the money rather than making full repairs. The smokey odor was the burnt beams and insulation in the attic that the seller never replaced.
That example is pretty dramatic, but definitely worthy of a buyer's consideration. When a buyer doesn't order the insurance until the last minute, the insurance company may find problems several weeks later (e.g., water damage) and cancel the policy because of the history of the home. When a mortgage company learns that a home is no longer insured, they will find insurance for you. This is when it gets really scary.
One of my past clients lost their home for this very reason. They had let their policy expire and when the lender learned of this, they forced a policy on them. The new forced policy cost approximately $1,000 p/month. My sellers could no longer afford their home and were forced to sell because they got behind on their payments because of the forced policy.
So when you buy your home, order your insurance immediately after you get a binding contract. Because you don't have to pay for the policy until you close, you have nothing to lose on the front end!!
Selling in a Cooling Market
Today's Comcast featured an article titled
Selling Your Home in a Cooling Market that was very informative. The lead "what to do when selling" paragraph talked about price.
When you work with a realtor, make sure you ask about the inventory of homes in the neighborhood. You'll want to know how many homes sell per month in a neighborhood, then see how many are now listed. Using these numbers, your realtor should be able to figure out how many months of inventory your neighborhood is holding.
When you see that figure, your lightbulb should brighten because you'll realize that the home that's priced the best will usually sell more quickly. In addition to price, a buyer will look for curb appeal, no outstanding maintenance problems, and updated interior (new paint, flooring, and immaculate kitchen and bathrooms).
So have no fear if you're getting ready to list! Homes continue to sell in middle Tennessee, and sell QUICKLY when they are priced correctly or a smidgeon under.
Not Stagnant or Dead
If you live in a town in middle Tennessee that does not have a lot of housing growth, you are either "stagnant or dead" according to Candy Roberts, executive director of the
Middle Tennessee Association of Realtors.
Today's Daily News Journal published an article on the growth in Rutherford County called
"No Laid Back Country Place." Several Murfreesboro residents are interviewed, but the most interesting statistic to me is:
It is one of the fastest-growing counties in the nation based on the rate
single-family houses, townhouses and apartments are being constructed.
Rutherford County ranks No. 20 in the nation, increasing housing units by 6.4
percent from 2004 to 2005, according to data released Monday by the U.S. Census Bureau.
If you want to live in the country, you'll need to go farther out toward Eagleville, Rockvale, or head toward Cannon County. Wilson County is also a good option for country living, although Lebanon and Mt. Juliet seem to be absolutely taking off.
Map-Makers Are Busy, Investors Have Opportunities
Rutherford County mapmakers have a lot of job security! Because the county is growing so rapidly, mapmakers are having difficulty keeping up!
Read this article in today's Daily News Journal for more.Did you know our county planning commissions usually have population projection maps? For a fairly nominal fee ($35 in Rutherford County), you can pick one of these maps up and see where planners are projecting the most commercial and residential growth. Then if you have the money (and you can with 10-20% down and good credit), you can purchase homes or land in these areas and wait about five or ten years to resell at a really good profit!
I found this disturbing article online from Friday's Tennessean. It blows me away that there is discriminatory lending, especially when there are so many laws and regulations in place to protect buyers. When you get ready to buy a home, remember that you don't have to only call one lender. If you can keep your inquiries within a 10-day frame, check with several lenders to see what kind of interest rate they can offer. When you are told what your interest rate would be, make sure you ask for a "good faith estimate" of what your charges will be. Lenders should stick pretty close to this statement, however numbers may shift a little (remember, it's an estimate).
Just remember, the one person you can count on for consumer protection will always be you. Educate yourself. Ask questions.
Foreclosure Impact
In my first post, I promised more information on what happens when you go into foreclosure on your home. I found this interesting, helpful article on iParenting.com:
What to do if it happens to you.
Another website said foreclosures and bankruptcies
stay on your credit report for 10 years and always decrease your credit score. The older the bankruptcy or foreclosure account becomes, coupled with re-built credit history, the less of an impact they play on your credit score. As I continued my Internet search, I found a site that said
foreclosures stay on for 7 years. Both of these sites describe the FICO analysis formula, so I found
myFICO which provides good information. The site does try to sell you software, but I'm linking for the sake of information.
The bottom line is foreclosures are very bad for you. Your credit score will probably drop by 35%. So if your score was a solid 700 before a foreclosure, it will drop to a 455 after. That means you will not be able to purchase another home. If you score was a phenomenal 800 before a foreclosure, it would drop to 520. OUCH. No new home for you.
These drastic drops in your credit score will mean that if you are even able to purchase anything for on credit (e.g., cars) in the next couple of year, you will pay a much higher interest rate. In addition, if you lose your home to foreclosure and have to move to an apartment or rent a home, your credit will be checked! If your score is low, then you may be denied housing. Landlords are protecting themselves from renters who don't pay and if you didn't pay your mortgage enough so that you lost your home, then their risk is great that you may not pay your rent either.
If you are divorcing and sign a
quit-claim deed to the home, YOU ARE STILL RESPONSIBLE FOR THE MORTGAGE until the ex-spouse refinances and gets your name off the loan. Stay on top of this because if the ex doesn't do what the court orders, your credit and purchasing power will also be gravely hurt.
There ARE people who can help you. You can go online and search for "free credit score help" or you can call local lenders who would be willing to help. They can't fix it for you, but they can tell you who to contact and what to say. Here are a couple of very credible, professional people who I've had the good fortune to work with in real estate transactions:
Jodie Pelley,
Wilson Bank & TrustPhone (615) 443-6670
Scott Matuk,
Professional Mortgage GroupPhone (615) 907-0447
If you call either of these fine folks, tell them Kathy T. sent you!
Home Sales Slump
Here's an article I just saw on Comcast.net.
Homes sales are down in more than 20 states. Since I have a four bedroom, 2 bath house currently listed for under $130K in Smyrna and it hasn't sold in almost two months, it doesn't surprise me.
Let's fervently hope a recession can be avoided by this country. But with gas prices up and continuing to climb, WalMart posting the first non-profit quarter in over 10 years, and this home sale indicator, it is not looking rosy.
Middle Tennessee Real Estate BLOG
Welcome to middle Tennessee's real estate blog! My goal is to post real estate related information for middle Tennesseans. If there's a blog out there for eastern or for western Tennessee, give me a shout and we can co-link.
Let's start with a question that you think doesn't affect you:
Why are foreclosures up?
Foreclosures ARE up and that's not a good economic indicator! In my opinion, there's plenty of blame to go around. I know the American dream is home ownership (or winning the Powerball, but let's stick with home ownership for now). But if you can't afford to buy a home, then bide your time. Just deal with living in a rental or an apartment for a little bit longer until you CAN afford it. Otherwise, a predatory lender will find you. I promise they will. And they are not nice. They will pounce on you, roll you in doo-doo, and watch you lose your home to foreclosure later because they didn't do their job right. Here's a link to
Predatory Mortgage Lending from the
Center for Responsible Lending. They can give you the low-down. May the buyer beware!
To get a home loan, you have to meet certain
debt to income standards. Predatory lenders will help you find a way to fudge those numbers a bit. And with more than 1800 different loan products out there, they will find you something (declared income loan, for example). Of course that something may mean an interest rate one to four to eight points higher. The higher your interest, the more your monthly mortgage payment.
And if a lender finds you a loan with a LOW, but variable rate, you may think you're rockin' and rollin'. And you may be for a year or so. But after that golden period, that variable rate may start creeping up. We aren't talking a rate that would mean cutting that once-a-month-out pizza meal either. Just a little here and a little there may mean an extra $200 each month that you suddenly have to find. And when people can't afford to pay that, they get behind.
When people get behind, the snarling dogs come in and begin circling you. If you can't find the money and fix it, or refinance into a locked-in rate... welcome to foreclosure.
What happens to your credit score when you have a foreclosure? Stay tuned!
