Gunning Daily News
June 5, 2012 5:10 pm
A: Yes. Among the most popular:
• Title 1 Home Improvement Loan. HUD insures the loan up to $25,000 for a single-family home and lenders make loans for basic livability improvements – such as additions and new roofs – to eligible borrowers.
• Section 203(k) Program. HUD helps finance the major rehabilitation and repair of one- to four-family residential properties, excluding condos. Owner-occupants may use a combination loan to purchase a fixer-upper "as is" and rehabilitate it, or refinance a property plus include in the loan the cost of making the improvements. They also may use the loan solely to finance the rehabilitation.
• VA loans. Veterans can get loans from the Department of Veterans Affairs to buy, build, or improve a home, as well as refinance an existing loan at interest rates that are usually lower than that on conventional loans.
• Rural Housing Repair and Rehabilitation Loans. Funded by the Agriculture Department, these low-rate loans are available to low-income rural residents who own and occupy a home in need of repairs.
Funds are available to improve or modernize a home or to remove health and safety hazards.
June 4, 2012 6:02 pm
Buying a home will probably be the largest and most significant purchase you will make in your life. It also involves the law of real property, which is unique and raises special issues of practice, and problems not present in other transactions. A real estate lawyer is trained to deal with these problems and has the most experience to deal with them. Some states certify lawyers as "Real Property Specialists" as a result.
In the typical home purchase, the seller enters into a brokerage contract with a real estate agent, usually in writing. When the broker finds a potential buyer, negotiations are conducted through the broker, who most often acts as an intermediary. Once an informal agreement is reached, buyer and seller enter into a formal written contract for the sale, the purchase agreement. The buyer then obtains a commitment for financing. Title is searched to satisfy the lender and the buyer. Finally, the property is transferred from the seller to the buyer, and the seller receives the purchase price bargained for in the contract. This seems simple, but without a lawyer, the consequences may be more disastrous than purchasing a car that turns out to be a lemon, or a stock investment that was unwise.
A lawyer can help you avoid some common problems with a home purchase or sale. For example, a seller may sign a brokerage agreement that does not deal with a number of legal problems. This happens quite often; realtors often use standard forms, expecting that they will cover all circumstances or will be easily customizable for unusual circumstances.
In the absence of an agreement to the contrary, the seller may become liable to pay a brokerage commission even if a sale does not occur, or to pay more than one brokerage commission. If the agreement allows the seller the right to negotiate on his or her own behalf, for example, you may avoid this problem. A lawyer can explain the effect of multiple listings. He or she can negotiate the realtor's rights if the seller withdraws the property from the market, or can't deliver good marketable title.
The seller should have the advice and guidance of an attorney with respect to a brokerage agreement. Even if the agreement is a standard form, its terms should be explained to the seller and revised, if necessary. An attorney should also determine if the agreement was properly signed.
Even if a lawyer is not needed during the course of negotiations, the buyer and seller each may have to consult with a lawyer to answer important questions, such as the tax consequences of the transaction. To a seller, the tax consequences may be of critical importance. For example, the income tax consequences of a sale, particularly if the seller makes a large profit, may be considerable. An attorney can advise whether the seller can take advantage of tax provisions allowing for exclusion of capital gains in certain circumstances.
The purchase agreement is the single most important document in the transaction. Although standard printed forms are useful, a lawyer is helpful in explaining the form and making changes and additions to reflect the buyer's and the seller's desires. There are many issues that may need to be addressed in the purchase agreement; below are some common examples:
• If the property has been altered or there has been an addition to the property, was it done lawfully?
• If the buyer has plans to change the property, may what is planned for the property be done lawfully?
• What happens if a buyer has an engineer or architect inspect the property and termites, asbestos, radon, or lead-based paint is found?
• What if the property is found to contain hazardous waste?
• What are the legal consequences if the closing does not take place, and what happens to the down payment? This question raises related questions: Will the down payment be held in escrow by a lawyer in accordance with appropriately worded escrow instructions? How is payment to be made? Is the closing appropriately conditioned upon the buyer obtaining financing?
Most buyers finance a substantial portion of the purchase price for a home with a mortgage loan from a lending institution. The purchase agreement should contain a carefully worded provision that it is subject to the buyer's obtaining a commitment for financing.
Again, it is important to remember that printed contract forms are generally inadequate to incorporate the real understanding of the buyer and seller without significant changes. In addition, there are many kinds of mortgages that may be available. Mortgage loan commitments and mortgage loan documents are complex. Lawyers can review and explain the importance of these various documents.
After the purchase agreement is signed, it is necessary to establish the state of the seller's title to the property to the buyer's - and the finance institution's - satisfaction. Generally, a title search is ordered from an abstract or title insurance company. In some states, and in outlying areas of others, title insurance is not typical. In such cases an attorney is essential to review the status of title and render an opinion of title in lieu of a title policy.
Assuming you are in an area where title insurance is customary, an attorney can help review the title search and explain the title exceptions as to what is not insured, and determine whether the legal description is correct and whether there are problems with adjoining owners or prior owners. He or she can also explain the effect of easements and agreements or restrictions imposed by a prior owner, and whether there are any legal restrictions which will impair your ability to sell the property.
The title search does not tell the buyer or seller anything about existing and prospective zoning. A lawyer can explain whether zoning prohibits a two-family home, or whether planned improvements violate zoning ordinances.
The closing is the most important event in the purchase and sale transaction. The deed and other closing papers must be prepared. Title passes from seller to buyer, who pays the balance of the purchase price. Frequently, this balance is paid in part from the proceeds of a mortgage loan. A closing statement should be prepared prior to the closing indicating the debits and credits to the buyer and seller. An attorney is helpful in explaining the nature, amount, and fairness of closing costs. The deed and mortgage instruments are signed, and an attorney can be assure that these documents are appropriately executed and explained to the various parties.
The closing process can be confusing and complex to the buyer and seller. Those present at the closing often include the buyer and seller, their respective attorneys, the title closer (representative of the title company), an attorney for any lending institution, and the real estate broker. There may also be last minute disputes about delivering possession and personal property or the adjustment of various costs, such as fuel and taxes. If you are the only person there without a lawyer, your rights may be at risk.
Perhaps the most important reason to be represented by an attorney is conflicting interests of the parties. Throughout the process, the buyer's and seller's interests can be at odds with each other, and even with those of professionals involved in the sale. The broker generally serves the seller, and the lender is obtained by the buyer. Both want to see the deal go through, since that is how they will get paid. Neither can provide legal counsel. The respective lawyers for the buyer and seller will serve only their own clients' best interests. Seeking the advice of a lawyer is a very good idea from the time you decide to sell or to buy a home until the actual closing.
June 4, 2012 6:02 pm
Homeowner’s insurance policy. Packaged insurance policy for homeowners and tenants that cover property damage and public liability, such as fire, theft, and personal liability.
June 4, 2012 6:02 pm
A: According to the Millennial Housing Commission created by Congress, few lenders are willing to administer home improvement loans. Most prefer to make home equity loans or unsecured consumer loans because they are easier to manage. Home improvement loans usually require inspections and irregular draws on the loan amount as work is completed, which requires regional or national lenders to find local partners to provide oversight.
Financing repairs and improvements with home equity is okay for most homeowners, but it is difficult for many first-time buyers. They have lower-incomes, smaller savings, and have made lower down payments on their homes than first-time buyers a decade ago. So they have little equity to borrow against. Unfortunately, it is often lower cost older homes purchased by first-time buyers that need the most work.
Unless you have a cash reserve, you will have to shop around for the best borrowing terms. In addition to the options listed above, you can ask relatives for a loan. Borrow against your whole life insurance policy. Refinance your existing mortgage. Get a second mortgage. Contact the government about home improvement programs. And – only as a last resort – borrow from a finance agency, which generally tend to charge high rates.
June 1, 2012 12:30 pm
(ARA) - Buyers are still clamoring for real estate deals in this turbulent market. Foreclosures and short sales offer some of the best bargains, but also have a higher risk level. Still, more than four in five adults think foreclosures and short sales can be good deals, according to a recent American Society of Home Inspectors (ASHI) survey.
Some analysts say the rebound has begun and home prices may rise by the end of 2012. This means now may be buyers' last chance to take advantage of affordable properties and low interest rates. If you want to score a bargain before the housing market recovers, you'll need to follow a few rules to invest with certainty.
Make a wise investment by adhering to these five rules while shopping distressed properties:
Rule 1: Position yourself for success
Before starting your search, get preapproved for a mortgage so when a good deal presents itself, you're positioned to submit a bid right away to be the first offer on the bank's desk. Work with an experienced real estate agent who can help guide you through the daunting sea of foreclosures and short sales. Bidding can be complicated and time-consuming, especially when working with a home sale needing bank approval. A good agent will know how to navigate through the paperwork and red tape.
Rule 2: Do your research
A real estate agent can help you with research, but it's wise to do some on your own. Are there any undisclosed liens on the property? Is the seller behind on his property taxes? What permit records does the city have on file? This information will be critical during decision-making. Work with your agent to ensure the contract requires any delinquent taxes, liens or assessments will be paid prior to you taking ownership of the property.
Rule 3: Always get a home inspection
Eighty-four percent of adults surveyed by ASHI said they would be more likely to purchase a distressed property after a home inspection has determined its condition.
A home inspection gives you the confidence to move forward with your purchase because you'll have as much knowledge as possible about the condition of the property. An inspector will visually examine the condition of the home's roof, attic and insulation, foundation, basement and structural components, as well as interior plumbing and electrical systems. Be sure to find an ASHI-Certified Inspector (ACI) to ensure your inspector is experienced, as many states have minimal licensing requirements. To find a local ACI, use ASHI's "Find an Inspector" tool on www.ASHI.org.
Rule 4: Budget for repairs
When looking at short sales and foreclosures, remember price is only one aspect to consider. A home will almost always require some type of repair. After receiving your inspection report, you can estimate costs associated with necessary repairs, maintenance or energy-efficient improvements.
Rule 5: Assess the neighborhood
Location should be a top consideration when purchasing real estate, and in a tough housing market, it's even more important. A home has limited worth if it's located in a less desirable neighborhood. High foreclosure rates can turn a once-desirable neighborhood into one many might likely avoid. These locations are likely to see a slower recovery than more populated or favorable areas less affected by the economy. Make location as important as price when making a purchase decision.
Protect yourself with knowledge and expert advice to make a confident, smart decision about your largest investment.
June 1, 2012 12:30 pm
An essential aspect of landscape maintenance is insect control. Problem insects can affect the vigor of plants and landscapes, either through disease, insect feeding or other destructive activities. Insects can also invade the interior of a home in search of food, water and shelter, becoming a general nuisance. With the recent mild winter across the U.S., insect activity is occurring even earlier this year. This means there is a greater chance that homes and landscapes will be infested by pests this summer.
Here are some tips to make your home and landscape less of a target for infestation:
Choose plants wisely: Many insect and disease issues can be prevented by selecting plants that are less prone to insect problems. For example, native plants are less inviting to pests when planted where sun and soil are right for them.
Combat insects with essential nutrients: One of the best defenses from problem pests is a strong, actively growing, well-maintained plant. Proper fertilization is essential to maintaining landscape beauty and plant development, helping sustain optimum plant growth and resistance to insects, diseases and environmental stresses. When fertilized properly, plants are supplied with the essential nutrients (i.e. nitrogen, phosphorus and potassium) they need for strength and growth.
Know the symptoms: Often, the evaluation of plant symptoms can provide an effective indication of the insect type. There are three common types of problem insects:
• Sucking insects and mites cause damage by removing a plant's life-sustaining sap from plant tissues. Symptoms include: the wilting of plant tissues; the stunting, curling or distortion of new plant growth; a rust coloration of the upper leaf surface; or a sticky substance followed by a black sooty appearance on the upper leaf surface.
• Chewing insects consume plant tissue, such as leaves, stems and roots, or burrow into plant tissue. Symptoms include: silvering of leaf tissues; complete removal of leaf tissues; and holes in and around plant leaves, stems, branches and trunks.
• Boring insects target the trunks, stems, bark, buds and roots of woody ornamental shrubs and trees. These insects damage plants through their tunneling activities. Symptoms include: holes in the bark; tunneling activity in leaf tissue; dead terminal growth on a plant; or the complete removal of strips of bark.
Create a line of defense: Use a bait formulation to create a barrier around your home. The bait kills a range of ant species outside so they are unable to infest interior areas. Foraging (worker) ants bring the granules back to their mound, resulting in the entire colony, including the queen, being destroyed.
Clean up debris: Along with applying bait, you should also remove loose debris from around the home and at the foundation of plants. This includes fallen leaves or dropped fruit. Pests often use these types of debris for nesting and feeding.
Protect beneficial species: Within every landscape and garden, there are pest predators that are beneficial to the health of plants -- either by feeding on problem pests or by helping with soil aeration and drainage. Examples include: earthworms, spiders, ladybugs and praying mantises. Attract beneficial insects to your landscape with plants that provide nectar, pollen and other food sources.
June 1, 2012 12:30 pm
The way you light your home is changing, starting with how you shop for light bulbs. In addition to new choices in technology -- state of the art LEDs or CFLs, for example -- you have a variety of options in terms of brightness, as well as how long you want the bulb to last. In addition, you have the option of spending more money up front on an energy efficient bulb that can save you money in the long-run.
The good news is you don't have to be an Edison to find the right bulb. Use these tips and resources to pick the perfect bulb for your home:
Calculate Your Savings
Before you hit the stores, do your homework. Determine what lighting attributes are important to you, whether it's long life, instant-on, dimming capabilities, bulb shape or luminosity. Different bulb technologies offer different benefits. To boil down how much switching to a more efficient bulb means for you, look for resources like the savings calculator GE offers at www.gelighting.com/lighttransforms. It shows consumers how much they'll save with a simple switch from incandescent bulbs to GE's Energy-Efficient Soft White bulbs, which operate much like incandescent bulbs but are up to 28 percent more efficient.
Check the Facts
The back of every new light bulb package now includes a "Lighting Facts" label that is similar in form to the nutrition label on the back of food boxes. The Lighting Facts label provides information about lumens (brightness), energy cost, life expectancy, light appearance (warm versus cool light), wattage and mercury content. Mandated by the Federal Trade Commission (FTC), the label is meant to standardize how companies in the lighting industry convey light bulb features, helping you to quickly make comparisons between bulbs and bulb technologies.
Look for Lumens, Not Watts
In addition to the Lighting Facts label, some light bulb packaging is placing more emphasis from classifications by watts instead classifications by lumens. While you may have equated watts with brightness every time you made a bulb purchase, in true lighting terms, this gauge isn't accurate. Watts are merely the measure of electrical energy used to light a bulb. A lumen is a measure of the bulb's brightness. Simply put, the higher the lumen number, the brighter the bulb. So, if you are looking for a brighter light, look for a higher lumen number on the box. The same isn't necessarily true for watts. In fact, a 13 watt CFL may be brighter than a 60 watt incandescent bulb.
Examine New Packaging
Along with the Lighting Facts label, some manufacturers are going one step further in helping consumers decipher differences in bulbs by changing their packaging. For example, GE Lighting has implemented a color-coding system to help you better understand the light that will be emitted from each bulb. Color selections are modeled after the natural cycle of daylight, from sunrise to sunset. For example, yellow boxes represent bulbs with strong, vibrant light ideal for home cooking, cleaning and grooming, while purple boxes represent subtle and reassuring light for use at night.
June 1, 2012 12:30 pm
Historic structures. Buildings of historical or architectural significance, perhaps landmarks, that are designated by federal, state, or local historical commissions.
June 1, 2012 12:30 pm
A: Opinions vary about which professional to call first. Some say the architect comes first because “you have to design it before you can build it.” The architect, who is trained to resolve problems creatively, can help define the project in ways that provide meaningful guidance for the design. The architect can also do site studies, help secure planning and zoning approvals, and perform a variety of other pre-design tasks. On the other hand, a contractor will be the one you interact with on a regular basis and the person who will likely be in your home every day, possibly for an extended period depending on the scope of your work. Many contractors have in-house design services, or design/build firms, and can possibly offer better price and integration between design and implementation. Others may have several architects with whom they work directly, which could also provide a smooth integration between design and implementation.
May 31, 2012 5:14 pm
If you are planning to sell your home this year, I want to bring you up to speed on an important responsibility—to present your home in as positive and honest light as possible.
Joy Watts, a real estate professional in Kalamazoo, Mich., recently blogged about 'nondisclosure' and why consumers need to be fully educated about this important piece of terminology, which is also referred to as “Silent Fraud.”
According to Watts, if you are a seller, you will be asked by your real estate professional to fill out a Sellers Disclosure form. This form is used to give potential buyers additional information regarding your home and property they would not know by looking on the Multiple Listing Service (MLS) or the printout given to them by their buyer’s agent.
As the seller, you need to fill out the Sellers Disclosure Form to the best of your ability. You may not know the answers to all of the questions but Watts advises you to do the best you can.
You do not want to commit “Nondisclosure” or “Silent Fraud” on this form or at any time throughout the process of selling your home. The following are ways you can commit fraud:
• Your home has a defect and you purposely do not disclose the defect
• You disclose the defect but you understate the severity of it when questioned
• You become aware of a defect during the selling process and you do not correct a statement made previously to a buyer or you do not make a change to the Sellers Disclosure Form
You may think that if you state that the property is sold in “as is condition” this eliminates the risk of fraud. Unfortunately, you would be wrong. Watts says even if you are selling your property in “as is condition” and you are aware of defects you still must disclose those defects even if you have no intention of correcting those defects.