REAL ESTATE BLOG
You have an accepted purchase agreement, but you’re concerned about
the appraisal. What can you do to make it go smoothly? While you can
control outside factors such as other home sales in your area, there are
a few things you can do to put your home in the best light possible.
- Create a detailed list of the recent improvements, which should include the following: when completed, cost of the improvement, before and after pictures if available.
- The appraiser is required to inspect each room so make sure each room is accessible.
- If there is a crawl space, this area will also have to be made accessible for inspection for an FHA appraisal.
- Make sure there is a clear pathway to the attic and that it is also accessible such that the appraiser can do a visual inspection for an FHA appraisal.
- Give the appraiser room to do their job. Errors are more likely to occur when the appraiser isn’t able to concentrate on their inspection.
- Keep all pets restrained.
- Have the name and phone number of the contact person available from your HOA if applicable.
- Make sure your home is clean just as it would be for a showing. The appraiser will be taking pictures and the underwriter will be looking at them.
- Complete any unfinished projects-most appraisals are done “as is”, and any projects that haven’t been completed, will have to be adjusted for within the appraisal report.
- A copy of any agreements regarding easements (shared driveways and/or garages,etc.) should be made available.
Once the appraisal is complete there is little you can do but wait. If your Realtor has given you proper guidance on pricing and you listened, then most likely the sale will continue forward without a hitch. So do your best to be ready before the appraisal, controlling what you can, and you’ll eliminate most if not all known and unknown obstacles.
Jack Lugar is the Principal Broker with Lugar Real Estate, LLC located in Fishers, Indiana. Lugar Real Estate, LLC serves, Fishers, Carmel, Noblesville, Geist, Lawrence, and parts of Indianapolis. Lugar is also a licensed attorney in Indiana.
Give Your Children the Building Blocks to Home Ownership
Give Your Children the Building Blocks to Home Ownership
7 Steps to a Solid Beginning
By Elizabeth Rose, CMPS, Speaker, Coach and Trainer
Owning a home is not only the American Dream, it is considered the strategic piece of a personal financial portfolio. According to the Federal Reserve Bank VIP Forum, people who own homes have greater net worth than those who rent.
As they grow older, kids often assume they will own a home without giving it much consideration. Sometimes they imagine they will own a home just like Mom and Dad’s, not realizing it took their parents many years of hard work and financial discipline to become homeowners.
Homeownership requires discipline, effort, commitment, responsibility, and accountability, and yet our educational system does not always provide our children with the knowledge and skills necessary to navigate the process, much less lay the groundwork in advance so they are mortgage-ready when the time comes. This begs the question: What can we, as parents, do to help our kids avoid some of our own mistakes and prepare them for the largest financial transaction in their adult life?
The Latin derivative of the word “education” means “to bring forth from within,” which is predicated on the idea that we all have it within us to learn and grow. But where do we start helping our children learn and grow in the area of homeownership? What exactly do our children need to know now, especially as teenagers and college students, so they’ll be prepared and financially-able when they want to buy a home?
The following suggestions will help you start a dialogue with your children, and provide them with the tools they need to get a jump-start on the path to “mortgage-readiness.”
- Think about the timing. Tell your children to really be sure about when they want to own a home, and then advise them to work toward it. If they’re not intentional about getting there someday, they won’t. Simple as that.
- Get a job. Tell your children to consider getting a job during school, even a part-time job. They will need money to buy a house, but they also need a steady employment history, so they should start building up their resume as soon as possible. This will also be helpful when the time comes to secure a permanent position in their field of study. FHA loans, in many circumstances, will accept a college transcript as a component of employment history. However, your children will need the “ability to repay” which comes from steady fulltime employment.
- Create a budget. And stick to it! Explain that their budget should be detailed enough to account for all the income and outflow each month…even the Friday night date or pizza night with friends. Also, remind them to be careful with the debit card and don’t forget to record the entries into their log. The challenge with using a debit card is that we feel good since we are paying with “cash.” However the convenience of the plastic cash leads to temptation to spend money you might not otherwise spend. Last, tell them to include an emergency cash fund in their budget for unforeseen expenses. Many people fail to do this and it is a great practice to begin early in adult life. The key here is for your children to be conscious of their spending.
- Build up your credit score. Suggest that your child get a credit card or two, but no more than that, and stick to a Visa or Mastercard. Also suggest that they avoid department store cards as they can be hazardous! They often carry higher interest rates and tempt people to buy things they don’t really need. Your children should routinely charge small transactions on their Visa or Mastercard to keep the account reporting as “active.” However, stress to them the importance of paying off the balance monthly when possible, and being cautious in carrying a balance over an extended period of time. Other advice to pass on: Strive to keep your balances below 18% of the credit limit at all times. Maintain tight control over your spending and your accounts. When you make your payments, be sure they are on time as a late payment can hurt you. Ignoring your financial obligations will always get you into trouble and will lower your credit score. The purpose of the cards is not to build up debt–that’s the opposite of what you want. Your goal is to create a history that will indicate to creditors your degree of responsibility in managing your debt. Responsible use of the cards over time will provide you with a healthy credit score, which is critical if you plan to purchase a home.
- Minimize student loan borrowing, if possible. If it is necessary for your children to obtain student loans for their education, borrow the smallest amount you can get by with. Paying back student loans can help build their credit as well, but the monthly payments (which are initially deferred) will come due when they graduate. The monthly payments will be calculated as liabilities when qualifying for a mortgage, which will reduce their purchasing power. Also, remind your children not to use their loan money to buy a laptop, new phone, or pizza. They should keep themselves financially lightweight.
- Learn about home finance and real estate. Obtaining a mortgage and purchasing a home are not simple things and can be emotional and stressful. There’s a lot to learn and many questions will arise, such as: What is involved in qualifying for a mortgage? What kind of down payment is required? What other money is needed for the transaction? How long should I keep the house before I sell it? Are property values increasing or decreasing in my area? Tell your children to learn about the process and the lingo. You could even suggest they talk to your mortgage professional to learn some great things they can do now so they’re in a good position when they are ready to buy a home. You could even work with your children to stay up-to-date on the industry, and consider reading a book or two on the subject together. It will help them immensely down the road.
- Learn basic maintenance. One of the costs associated with homeownership is maintenance. Keeping a home well maintained is vital to keeping expenses down in the long term and will make it easier to sell later. Help your children learn how to make minor home repairs, which will save them a hefty amount of money as a homeowner.
And last but not least…tell your children to save, save, save! Whether they buy used books, drive an older car, or skip spring break, they should save a percentage of what they earn (for instance, save one out of every three dollars). Also, be sure to model that savings behavior for your children, as kids often mimic what they see rather than just do what they’re told.
A great guideline for saving can be found in one of the greatest financial books of all time, The Richest Man in Babylon. Author George S. Clason says, “Gold cometh gladly and in increasing quantity to any man who will put by not less than one-tenth of his earnings to create an estate for his future and that of his family.” This timeless classic reminds us to pay ourselves first and sock away ten percent of our earnings for the future.
The bottom line is that the American Dream is still alive and well. There is no secret recipe. It’s a matter of spending and saving wisely and learning the necessary steps to mortgage readiness. If you have any questions about selling your home, contact Elisabeth Lugar, your Central Indiana Realtor. Take the first step now to set your children on the path to home ownership.
Elizabeth Rose is a Certified Mortgage Planning Specialist and self-proclaimed economic enthusiast. As a national speaker, she provides training and mentoring to mortgage professionals across the U.S.
Republished with permission from Jon P. Knight Mortgage Banker and Branch Manager at Primary Residential Mortgage, Inc. located at 11976 Fishers Crossing Drive in Fishers, IN 46038. You can contact him at 317-567-2307 or visit his website at www.jonknight360.com or www.primeresindy.com.
Elisabeth Lugar, Realtor and Co-Owner
beth@lugarrealestate.com
317-448-3785 Elisabeth’s cell
Lugar Real Estate, LLC
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6 Selling Tips When Downsizing Your Home
Is
your home too big? Do you want to sell it and find something smaller
and more manageable. What do you need to do to make this happen? Here
are a few things to consider.
1. Fix up – Depending on how long you’ve lived in your home, it may need a few fixes to make sure it shows like a model home. While you may not want to put any more money into your home than you have to, updating fixtures, wall coverings, and flooring may go a long way toward enticing a buyer to make an offer. One of the best ways to avoid a major fix up surprise is to hire a home inspector. A professional home inspection will give you an opportunity to fix all the habitability and safety issues before an offer comes your way.
2. Declutter – Years of accumulation can be make both selling and moving very difficult. And while most of the objects around your house have sentimental value to you, to a buyer they are distractions. A house filled with clutter can scare buyers away. Clutter also makes it hard to get packed once you have that offer. Therefore, the more you can get rid of or put in storage before you start showing your home the easier it will be to sell and consequently move.
3. Paint – A fresh coat of paint can do wonders for a home. You may love the colors you chose to cover your walls, but often they are not the most trendy colors. Sometimes the best thing to do is have your walls painted in a more neutral color. It also may be beneficial to remove dated wallpapers and boarders.
4. Modernize – Does you home still have a chandelier from 1977? What about green shag carpet? Quite often we don’t recognize the things that time has left behind, so it may pay to hire an expert who can give you the hard truth about what furnishings and decor need to go. Sometimes simple changes to fixtures, hinges, and door knobs are all the changes you need.
5. Sell or Store? – Along the same lines of decluttering, you’ll want to do an exhaustive inventory of what things you need to put in the garage sale or give to Goodwill, and what things you need to put into storage. If your plans are to move to a much smaller home, you’ll not only want to remove these items while showing your home, but you’ll need to make some of these hard decisions on what to get rid of permanently. So the sooner the better.
6. Comparative Market Analysis - What has recently sold in your neighborhood and for how much? You’ll want to get a realistic idea of what the current market value is for your home. It doesn’t matter what you paid for it ten years ago. It matters what like homes have sold for in the last six months to a year. So even though you’d like to get a certain amount for your home, the market may not support that number. Make sure you are realistic about your home’s value so you have an idea about what you’ll be able to afford in purchasing your downsized home.
Downsizing is a challenging task. It’s hard enough just buying a home and moving all your belongings. When it comes to actually having to make decisions on what to do with a lifetime of accumulation, there’s no easy answer. The best thing to do is start early. Start removing items from your home. If the kids don’t want the things you are considering getting rid of, then rent a storage facility. You can move the items there for a short period while you get used to the idea of living without them. Next thing you know, you’ll probably feel more comfortable with giving them away, selling them, or putting them in the trash.
If all else fails, hire an expert to help you organize and make some of these decisions. In the long run you’ll be happy you unloaded all the figurative and literal weight.
Lugar Real Estate, LLC is a full service boutique residential real estate firm with a combined $60,000,000 in sales and mortgage business experience. If you are considering a move in the Central Indiana area, contact us at 317-572-5033 or by email at beth@lugarrealestate.com.
Homes Sales: The Key to a Better Economy
With gas pric
es at an all time high and the real estate market under
performing by 20 percent, we need to take a hard look at how to resolve
the economic crisis facing our country and how to turn it around to
start creating jobs and reducing prices that gouge the American public’s
pocketbook. How do we go about that? Looking at the past to see what
programs and businesses facilitated growth and economic security is the
most obvious way. Yet, it is not only the “what” but the “why” that
needs to be addressed. Why did these programs and businesses facilitate
growth and economic security and would they work in today’s economic
climate?
This morning I heard that Indiana’s legislature is going to vote on a bill to reduce the state sales tax at the gas pump. However, they reported it most likely won’t be passed for many different reasons. Why? I would suggest that Indiana should reduce the state sales tax and advertise that as an additional advantage to living in Indiana. This will give yet another reason to live and work in Indiana. It’s both attractive to the individual and the prospective business considering a move to Indiana. So, what will be lost by the state at the gas pump will be made up by the incentive for businesses to stay and/or move to Indiana. This will increase the housing market which will in turn provide economic security to Hoosiers (those who call Indiana their home) and the state as a whole.
Jobs and housing are important to one another. Whether you live in Indiana or another state, building business and the housing market are important to the economic security of the state and ultimately our country. I was reading an article by Ronald Phipps the president of the National Association of Realtors (NAR) this morning and was reminded that you can’t have one without the other. Jobs and housing are like the chicken and the egg. Phipps states, “According to an NAR calculation that looks at a real estate transaction’s contribution to gross domestic product, for every two transactions, one job is created.”
One real estate transaction is responsible for the creation of many jobs: movers, painters, landscapers, construction, attorneys, lenders, title professionals, and remodelers. Yet, it extends beyond these professional services to the services used by these individual professionals. It’s the trickle down effect.
Phipps said it best, “Think about what this would do for our country: 1 million additional homes sales this year. Taking sales from 5 million to 6 million could generate 500,000 jobs, reducing the unemployment rate by nearly half a percent. that’s doing something for our country, our industry, our clients, our families, and ourselves.”
Economic security and job growth is so important to our country. The real estate industry is important to both economic security and job growth.
