To Sell Now, or Later?

You’re living in your first house, and it’s been a while. Maybe long enough that your family has grown, and now you need more living space. A few other “life” things may have happened since then. You might have two or three extra family members than you did when you first moved, and maybe you have a different job or have had an increase in income. Maybe those extra family members need to start school soon and now you’re looking at different school districts. The bottom line? Time to look for your next house.

The term “contingent” and “non-contingent” weren’t really brought up during your first home search. You were a first-time home-buyer back then, and had so much to learn. The question of whether you need to sell your home before or after you purchase your next house is being brought up by your real estate agent, and you don’t know how to answer…. The answer is pretty simple, and can be explained in two parts. One, do you need the cash from the sale of your first house, and two, can the bank qualify you for a new house while holding the mortgage for the first one?

There are clear advantages in a hot market for being able to offer “non-contingent.” Non-contingent generally means you can buy a new house without the contract contingency of your current home being sold prior to closing on the new one. When a home seller sees that you are “contingent,” that means that you are NOT depending on your house selling prior to them getting paid. The advantage for you as a buyer is clear; you are more competitive.

To elaborate on the two part answer of whether buying non-contingent is even a possibility for a second or third time home-buyer, having enough cash on hand for a down payment is key. If you have lived in your current home long enough, chances are you have built some equity and can bank on getting a good sized proceed check from the sale. That cash is usually used for the purchase of your next house. If you are buying your next house non-contingent, you might not have quick access to that cash. The main way I recommend people leverage that equity is by either taking a loan from their retirement, or getting a home equity loan to “bridge” the gap from the first home to the next. Either way, once your first home sells, either “bridge” loan can be paid off in entirety.

The second part is typically the bigger crutch. Qualifying for one mortgage can sometimes be difficult enough, but now we have to qualify you to make the payments on two mortgages. This is where the possibility of increased income comes into play. We have to make sure the debt-to-income ratio including both mortgages is within the guidelines of your loan product.

I realize the second part is a little less straight forward than the first. If you are thinking about the possibility of purchasing your second or third house, contact your local mortgage professional, like myself, and I’d be more than happy to help you gain a good understanding of your options.

Blog written by Lucas Hine and you can get prequalified with him at PreQualifyPro.com

 

 

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Decorating 101

Congratulations. You’ve decided to decorate your home. Now what?

Whether you’re furnishing your first place or redoing the house you’ve owned for decades, decorating can be a challenging task, filled with costly decisions whose outcomes could haunt you for years. How do you figure out what style is right for you? Should you tackle the job yourself or hire a pro? How much should you spend? And what steps can you take to ensure you’ll be happy with the results?

In this series I’ll take you through the entire decorating process, from initial inspirations to final floor plans. We’ll talk about choosing colors, shopping for furniture, arranging furniture, where you should scrimp and where you should spend.

But before you do any of that, look around you.

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Easy Ways to Save Money & Energy at Home

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5 Ways to Enhance Your Small Living Room

5 Ways Dabito Made His Small Living Room Awesome

 

Imagine fitting your entire living room and home office into one 100-sq-ft space.

Impossible? Dabito of Old Brand New makes it look easy.

He recently moved from Los Angeles to a shotgun home in New Orleans with a tiny living room, but Dabito styled his way out of a tight spot, transforming it into an astoundingly comfortable and multi-functional space.

Read on for Dabito’s 5 essential small living room decorating tips and make any little space feel bigger and better.

Awesome small living room transformation in New Orleans | west elmAwesome small living room transformation in New Orleans | west elm

1. Go low + leggy.

When you have a small space, pick furniture that sits low to the ground, like this coffee table. It will make your ceilings feel higher.

Choosing leggy furniture also makes any room feel airer, because pieces like these take-up less visual space.

Colorful entryway - Dabito's 100-sq-ft living room is fantastic small space design Dabito's 100-sq-ft living room is fantastic small space design.

2. Go BIG.

Even with a small space, sometimes you have to go big. Start with large pieces and work around them. Dabito went with an 8×10 wool rug which is almost the size of his entire living room. It grounds the space and actually makes it feel bigger.

Dabito's 100-sq-ft living room is fantastic small space design.

3. Walls are your best friends.

Dabito uses a modular system to store his books, cameras and tchotchkes all the way to the ceiling. He added a small desk component to make the system more functional, and painted the brackets gold so it doubles as an eye-catching statement peice.

Modular storage in @oldbrandnew's amazing New Orleans homeModular storage in @oldbrandnew's amazing New Orleans home

4. Art and mirrors.

Add art and mirrors, and you create visual interest in your small space. The only problem is that art can be expensive and hard to find. Dabito turns to magazines to discover frame-worthy art.

So much great design by @oldbrandnew in this tiny New Orleans living room.

5. There’s always room for plants.

There is always room for plants in any space. No worries if you don’t have a green thumb. Dabito buys single palm leaves from the floral shop and puts them in vases like this one. These stems can last for a few months if you change the water and snip the ends weekly.

http://blog.westelm.com/2015/01/20/small-living-room/

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Call The Doctor, My Temperature is 101.8!

Actually it’s not but 101.8 is a great number when it’s the percentage return on investment (ROI) on a home project.  I always get asked, “what can I do to enhance the resale of my home? What return will I get on my investment?”  We all focus on the principal selling points of a home – kitchens and baths and then other features like, overall size, bedrooms, finished and walkout basements, proximity to neighborhood features just to name a few.  But according to a recent report from the National Association of Realtors and Remodeling Magazine, replacing the front door has a 101.8% return on investment.  Not a bad return for a relatively inexpensive upgrade.  And it makes sense! A new door dresses up the home and helps with the curb appeal.

front door

If you are thinking about selling your home sometime soon maybe replacing that front door would make sense for you.  Oh, and don’t forget to call us for a free market and staging consultation before you get too far.  Sometimes we find that sellers spend money and effort on items that really do not dress up a home or enhance its value and not enough on some very simple and inexpensive items like fresh paint, replacing the light fixtures and worn and dated kitchen and bath fixtures.  It doesn’t always require a full blown rehab!

It you would like a copy of the 2015 Remodeling Cost vs Value Report From the National Association of Realtors let me know and I will be happy to send it to you.

 

 

Posted in Comprehensive Market Analysis, Home Curb Appeal, Home Improvement Projects, Home Staging, Home Value, Pot Luck, Remodeling Costs, Selling a House, What's My Home Worth? | Leave a comment

Why you should use an engineer instead of a regular home inspector

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Why you need a Real Estate Attorney!

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Seven additional costs every homebuyer should be aware of:

Seven additional costs every homebuyer should be aware of:

1) Private mortgage insurance
If your down payment is less than 20 percent, your lender will likely require that you carry private mortgage insurance (PMI). Premiums vary depending on the size of your down payment and your loan. Your lender can tell you how much the PMI premium will increase your monthly payment –and for how long. When your loan-to-value ratio reaches 80 percent, you no longer need it.

2) Property taxes
Property tax rates vary state-by-state, even county-by-county or city-by-city. To get an upfront idea of the tax rate in your state and county as a percentage of home value, check an online resource such as Tax-Rates.org. (One bright spot: property taxes are deductible on your federal income tax return, subject to alternative minimum tax (AMT) adjustments.)

You can also compare tax rates across the country. For instance, New Jersey, Texas and Nebraska have some of the highest property taxes; Hawaii, Alabama and Louisiana have some of the lowest. How much your property taxes can be raised year-to-year also varies depending on your location.

If you carry PMI, your property taxes may be included in your monthly payment; otherwise they’re due twice a year.

3) Homeowners insurance
This is not a place to cut corners. If you finance your home, your lender will require a minimum level of insurance, but to really protect yourself, it’s important to insure your home’s replacement cost, not its current market value. In other words, you need enough coverage to rebuild your house in case of a disaster.

Also understand that damage from a flood or an earthquake is not covered by standard insurance; you need a separate policy to cover these. Water damage is especially tricky. Most general policies cover damage from things like a burst pipe or a leaky roof. But only flood insurance will cover damage from surface or below ground water.

Liability insurance is also a must in case someone is injured on your property. You may also want to purchase an umbrella policy for additional protection.

Finally, don’t make the mistake of believing that all insurance companies and policies are the same. Before you purchase a policy, it’s important to do some comparison shopping for pricing as well as research on consumer satisfaction. Websites such as insure.com or jdpower.com can provide basic information and ratings.

4) Association fees
Are you buying a condo? Is your home part of a community that includes extras such as a pool, recreation facilities or grounds maintenance? If so, you may have to factor a monthly condo or homeowners association fee into your budget.

5) Major repairs
If home inspections are a condition of purchase, you may be able to negotiate major repairs with the seller. But be realistic about repairs down the road. Will you need to replace the roof? Repaint the exterior? What about windows, doors, or the deck? When the house honeymoon is over, these things may seem more serious both aesthetically–and financially.

6) Routine maintenance
Even if you’re not hit with major repairs, a home requires regular yearly maintenance. You’ll hear rules of thumb that suggest you budget 1 percent of your home’s value or $1 per square foot annually for maintenance. While it’s fine to have a benchmark, the amount of actual yearly maintenance depends on factors like location, weather, initial condition and age of the house.

Costs will vary year-by-year, depending on what needs to be done, but best to be financially prepared. Keeping your house in good condition not only helps maintain its appearance and functionality–it helps maintain its value.

7) Upgrades
If you’re buying low with the idea of doing lots of improvements, start planning for those now. Whether it’s a new kitchen, a remodeled bath, or an added room, the costs can be substantial; it’s best to know the price tag upfront.

Ways to cover the essentials — and the extras
The first thing I suggest is to include monthly deposits to a home-maintenance fund in your budget. (This is above and beyond your emergency fund, which covers you in the event of job loss or illness.) Setting aside a monthly amount is the easiest way to ensure you’ll have the money for repairs and maintenance when you need it.

You might also look into a Home Warranty if one wasn’t included in your purchase agreement. This generally covers repair and replacement of appliances and other in-home systems. Annual premiums vary as well as fees for service calls. Again, best to comparison shop.

Another option is a home equity line of credit (HELOC) — especially for larger expenses like a roof or kitchen remodel. To qualify, you’ll need at least an 80 percent loan-to-value ratio as well as low debt and good credit. But if you qualify, a HELOC offers several pluses: you have immediate access to the money; you only pay interest on the money you use; and interest payments may be tax deductible.

Owning a home is an ongoing financial commitment, so dig into the details before you buy. Knowing upfront what your expenses may be–and planning for them in advance–will help keep your dream house from becoming a financial nightmare.

 

This article originally appeared on Schwab.com

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Yay the snow is melting! But now I have a damp basement!

We’re getting our wish.  A snowy cold winter is coming to an end.  All the snow is melting.  It’s all good, right?  The only problem is that melting snow and the coming Spring means that it’s wet basement season.

Basement moisture and dampness tends to be most pronounced when weather conditions are wet or when there has been recent snow melt.  This tends to greatly effect the amount of water in the soil, commonly know as the “water table”.

Most basements will experience some level of dampness, moisture penetration, or even leakage and seepage. The amount that is experienced depends on weather, soil conditions, the age and type of the foundation, etc. Old stone foundations tend to seep more than the more modern block foundations. However, even modern foundations can show signs of dampness and moisture penetration.

Water on a basement floor resulting from seepage

  

Seepage through foundation walls

 Homeowners should take steps to ensure that excess water is channeled away from the house. Where possible, grading should slope away from the house. If there are low spots adjacent to the foundation, water can saturate the soil and noticeably seep through the foundation. Gutters and downspouts should also channel water away from the foundation. An appreciable amount of water runs off of a roof. If this water is discharged at the foundation it can result in water infiltration. Usually these steps are somewhat easy and inexpensive ways to help control seepage.

Standing water next to foundation and in window well will contribute to basement seepage

Modern homes are typically equipped with “Floating Slab” basement floors. These types of drain systems have been in use for 35+ years in the Rochester area. The basic principle of the floating slab is that ground water and water that seeps through the foundation will be channeled to drain tiles (perforated pipes) beneath the perimeter of the basement floor. These pipes carry water to a crock and sump pump. The pump will then automatically pump the water to the exterior or to separate storm sewers. It is common for some water to accumulate in the crock. As long as water is not accumulating on the floor or in the drain trough, the drain system is probably operating properly.

Drainage crock with sump pump

In most cases sump pumps should not discharge to sanitary sewers. This is the case for most townships. The City of Rochester may allow sump pumps to discharge to sanitary sewers, but this would need to be confirmed with the city building department.

The concern for power outages has increased greatly since we have experienced a few extended power failures in more recent years. Obviously, most sump pumps will not operate if the electric service in the house is off. Some homeowners have chosen to install battery power sources for their sump pumps, while others choose pumps powered by water pressure. Extensive generator systems are also gaining popularity, but they are costly. Whether such steps are justified will depend on the degree of wetness that is normally experienced in a  basement.

      

Water powered pump as emergency back-up.              This crock drains by gravity.  no pump needed.

Some homeowners tend to experience wet spots on a section or sections of their foundation, even after steps are taken to channel water away. This is not unusual. In these instances, “weep holes” can be drilled into the cores of the blocks at the floor level. This helps to drain the block to the drain system, preventing water from building up in the block.

Finished basements are becoming more and more common. A basement that does not normally experience water “problems” can be finished, but steps should be taken to help prevent water damage. The perimeter drain trough should be kept open and clear, there should be a space between the foundation walls and the finished walls, vapor barriers should be installed, etc. If you experience noticeable dampness or wetness in a basement even after taking steps to keep water away from the house, and you want finish your basement, you should consider the installation of a perimeter drain system.

Basement waterproofing contractors routinely prescribe extensive perimeter drain systems. These systems can be very effective but they are costly. Whether such a system is justified or necessary will depend on the amount and frequency of seepage experienced, the desired use of the basement, etc. This means that each homeowner must evaluate their particular needs. Some contractors will greatly exaggerate the severity of seepage or water problems and they can also greatly inflate their prices. It is important to only utilize reputable waterproofing contractors, and also to obtain a number of estimates prior to any work being performed or contracts being signed. A ploy that is often times used by some waterproofing contractors is to entice a homeowner to sign a contract on the spot, while offering a small reduction in the cost for the job. This tends to lock a homeowner into an agreement for an expensive job that may not be justified.

It is rare that basement moisture penetration causes significant structural concern. This is another ploy that is utilized by some waterproofing contractors. They can tend to overstate the effect that seepage can have on the structural integrity of a foundation. Please see our newsletter regarding foundation cracks and distress for more information in this regard.

The use of dehumidifiers in basement spaces can be beneficial. This is especially true if a basement is noticeably damp. However, it is important to understand that dehumidifiers will not prevent moisture penetration or seepage. The purpose they serve is to reduce moisture levels in the basement air.

Painting the interior of a foundation can also have of benefit. However, this does not “waterproof” the basement. Painting or coating the inside surface of the foundation can help to prevent moisture from seeping to the inside surface of the foundation, but water will still seep into the foundation to some extent, and tend to build up in the masonry block. This is where weep holes can be beneficial.

Most modern basements have blankets of insulation installed on the inside of the foundation. This is part of the energy saving package for modern construction. In that regard it is beneficial. However, the lower portions of the insulation can tend to trap moisture seeping through the foundation walls. Also, sections of insulation that are well below the level of the ground surface do not serve a significant purpose. Trapping moisture behind insulation should be avoided. Sometimes it is justified to trim insulation. Once again, the installation of weep holes in the lower most section of the wall can be beneficial in those areas where the inside surface of the foundation becomes damp or wet.

   

Seepage being trapped behind insulation

    

    

Saturated insulation dripping on floor             Foundation wall after insulation removed

Moisture problems in a basement can create a concern for potential Mold growth. This is another reason to control dampness and moisture penetration. Any questions or concerns associated with the presence of mold should be directed to a reputable specialist who is fully qualified for such analysis.  Care should be taken to avoid opportunists who may overstate this concern, but it is important for any homeowner who is concerned about mold to be diligent in this regard.

In summary, it is important for homeowners to understand that most basements experience at least some degree of moisture penetration or seepage. This tends to be most pronounced in older homes, and in areas where soil conditions are such that the soil does not drain well. In most cases basement moisture does not cause significant structural problems. In those cases where the basement floor becomes wet, a homeowner would need to decide whether it is justified to take steps to rid the basement of such occurrences. Regardless, homeowners should take steps to ensure that excess water is channeled away from the house.

Please feel free to call our office if we can be of any assistance. We are happy to help!

Your friends at Warren Engineering:
533 West Commercial St.
East Rochester, NY 14445
585-385-4766
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Dont Let Your Credit Score Scare You Away from Buying a House!

Posted in Applying for a Mortgage, Buying A House, Buying vs Renting, Home Buying Guide, Investment/Income Property, Mortgage Rates, Mortgage/Finance, NY, Penfield | Tagged , , , , , , | Leave a comment