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Preferred Properties of Texas

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6 Things You Can Do to Prepare for a Home Appraisal

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It is important to get your home appraised before you put it on the market. The appraisal will also influence your asking price. You want to make sure your home is in the best condition possible so that it can be appraised for its highest value. There are other ways to increase the value of your house without undertaking major renovations.

Start Small with a little Spackle

If you have lived in your house for a while, you may have hung things up on the wall, installed shelves, or had an accident that caused minor damage. It’s time to fix those blemishes. Filling in these holes and crevices using a little spackle, and then painting over the area will make your walls look like new. This may not increase the value of your house, but it will prevent the appraiser from deducting the damage.

As long as you’re painting…

You might want to consider painting other areas after you have touched up your walls. Repainting worn-out borders and moldings can give your home a fresher look. Also, you can paint the trim around windows and doors. This will increase curb appeal and add value to your home. Retouch any area where the paint has peeled, chipped, or lost its luster.

Update Your Crawl Spaces

Crawl space encapsulation is a home update that is receiving more attention. Crawl spaces provide homeowners and contractors access to the deepest recesses in the home. These spaces are susceptible to water and moisture damage due to humidity, warmer temperatures and harsh weather conditions. To protect crawl space, homeowners are encapsulating or sealing the spaces with moisture-resistant materials. A polyethylene barrier, similar to a swimming-pool liner, is added to keep crawl spaces dry.

Do a Deep Clean

It is also a good time to thoroughly clean your house from top to bottom. You may not notice odors or damage, especially if you have pets and young children. Your appraiser will notice a strong pet smell or scuffs on a hardwood floor. Consider hiring a cleaning crew to do a thorough cleaning of your home, including shampooing the carpets and waxing the floors.

Other Repairs

You should at some point tour your house with the mindset of an interested home buyer. You will be able to see problems you may not have noticed before. Look for things that are in need of repair, such as a loose rail, dripping tap, or a shorted electrical socket. You will not lose money if you fix these problems before the appraisal.

Early Home Inspection

Consult an expert even if you believe you have done all you can to increase the appraised value of your home. A home inspection will help you identify issues that you might not be able to detect. This allows you to fix these items before putting the house on the market. It also ensures you can ask for a more competitive price. It’s better that you discover these problems now rather than have them impact the sale of your home in the future.

When selling your home, it is important to get a fair price, which includes the time and money you spent updating its features. You can increase the value of your home by thousands of dollars by taking the time to clean and spruce it up before the appraisal. These tips can be a good place to start. Your real estate agent will likely have more suggestions to help you maximize the value of your home.

Original Blog: https://realtytimes.com/archives/item/1027046-6-things-you-can-do-to-prepare-for-a-home-appraisal?rtmpage=

What to Tell Your Kids When They Want to Buy Their First Home

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When you buy your first house, it’s a thrilling time. It’s a little scary, but it’s still a lot of fun. You’ve probably bought your first home, second home or even third one. So you’re familiar with the process. There’s a new language in real estate and mortgages. Some words are only used within the real estate world. The word “mortgage” is a good example. Mortgage is also used in other contexts, but it is most commonly associated with real estate. You may remember when you bought your first house. You were probably excited and anxious, but as the business side of the deal begins to take shape it takes on an entirely new dimension.

What do you do when your eldest calls you at dinner and says, “I’m ready to stop renting, and I want to buy that house I saw on the street.”? There are many reactions, but the most common is to tell your child it’s more than just excitement. You’ll also find some boring things. For starters, there’s a lot of paperwork to sign.

Not only will they need money to pay for the down payment, but also for closing costs. The ‘hard’ costs, such as an appraisal or credit report, but also the’soft’ costs like property taxes and insurance. Prepaid interest can also be a cost. Prepaid interest may need a short explanation. When a monthly mortgage payment is made, the payment is applied according to the number days owned the previous month. If someone closes and sells a home on 31st, the first mortgage payment will include that day. If you close on the 15th of the month, 15 days’ interest will be collected. Rent payments are applied to the next month.

Your children also need to understand that a mortgage is an entirely different type of commitment. You can’t just walk away. Renting allows you to move on to another property after the lease period is over. You’re required to hold a mortgage until you sell the house or decide to refinance. There will still be a mortgage. Lastly, the responsibility for property taxes and insurance falls to the children and not the landlord.

Do not discourage your children from buying. Just let them know that there is more to it than the down payment.

Original Blog: https://realtytimes.com/archives/item/1022835-should-you-buy-a-home-warranty?rtmpage=

Should You Buy a Home Warranty?

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We’re buying our first home. It seems like a fairly tame query, right? Post it on Facebook or Nextdoor, and you’ll be amazed at the passionate responses. You could ask “What political party do I belong to?”

Who knew people were so passionate about home warranties? Expect to hear some people call them a “scam” or at least a waste. Some will tell you how a warranty saved their furnace from freezing in the winter because they could not afford to fix it without it.

The decision is ultimately a personal one and will be based on your comfort level with the cost of replacing an expensive item in your home like the air conditioner or hot water heater if it malfunctions. We’ll break down three key details so you can make a well-informed decision.

Know the cost

Money Talks News reported that a basic home warranty can cost between $350 and $500 per year. Angie’s list says that a warranty usually covers kitchen appliances, plumbing and water heaters, heating and electrical components, sump pumps, whirlpool bathtubs, ceiling and exhaust fans and sump pumps. “‘Enhanced’ plans can be purchased for an additional $100 to $300 and provide coverage for items such as a refrigerator, garage door opener, washer and dryer, and air conditioning system. You can add optional coverage, such as for pools and septic system.”

You can usually break the annual cost down into monthly payments, but that’s not the only thing you have to pay. You’ll also have to pay for service calls. If you need a professional to fix a broken tub or microwave, you’ll have to pay for that.

“Home warranty deductible or service call fees is an important concept that you should master if your goal is to find the best home warranty plan for your needs,” said Home Warranties. Most home warranties require a deductible, or service fee, with an average of $75 per visit. Some companies, such as American Home Shield and TotalProtect Home Warranty let their customers select the amount of the deductible, depending on the amount paid. The higher the premium the lower the deductible.”

Consider your peace of Mind

Many homeowners choose a home warranty to cover major “just in case” scenarios. Just in case your air conditioning unit burns out. Just in case your hot water heater fails. If you don’t have the money to pay for a costly repair, it is a good idea to keep supplemental funds in reserve. The cost of these items can be thousands of dollars. According to HomeAdvisor, the average price for a new AC unit and installation is $5,413.

“A home warranty can be a good buffer for a homeowner without an emergency fund or a homeowner that wants to protect his emergency fund,” said Investopedia. Home warranties are also a good idea for people who don’t know how to fix things or who don’t want the hassle of finding a contractor. Warranties are also a good idea for people who have expensive appliances.

But…understand not everything is covered

There’s always the chance that your warranty will not cover an item for some reason. “A home warranty does not mean that the homeowner will spend no money on home repairs,” said Investopedia. Some problems will not be covered by a warranty, either because the homeowner did not purchase coverage for the item or because the warranty provider does not offer coverage for the item. Home warranties don’t usually cover components that aren’t properly maintained. If the warranty company denies the claim, the homeowner is still responsible for the service fee, as well as the repair costs.

In our case, the limitations in our home warranty contract about the replacement of outdated components and refrigerant for our broken air conditioner meant that we had to pay $1,500 out of our own pocket. It’s important to read the fine print.

Original Blog: Should You Buy a Home Warranty? – Realty Times

Where Do Mortgage Rates Come From, Anyway?

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You might wonder who is responsible for the daily adjustments to mortgage rates and where they come from. There is a method. Lenders do not just set rates at random. You might also wonder why mortgage lenders A to Z all offer interest rates that are very similar, if they are not identical. Do they all decide in a Zoom meeting?

A lender can set rates of interest based on several factors. The rates for a rental home will be slightly higher than those of a home that is owned by the owner. Shorter term loans may have lower rates than a longer term loan. Rates may even be adjusted based on the amount of equity or down payment in the property. Credit scores are also a factor. Almost all lenders follow this guideline.

Why are rates almost the same everywhere, with only minor variations? They all use the same index to set rates.

No, they are not based on Treasury bills or bonds, although this is a common misconception. Close, though. Fixed rate loans are a type of bond. Lenders instead look at the price of a specific mortgage-backed security, or MBS. An MBS is a bond with a fixed return rate. Just like any other bond the yield (return), when the price of that bond increases, will also decrease.

In general, when investors choose between a bond or a stock, a bond provides security. A particular stock may offer a higher return. Investors know how much they will receive, and when. Investors have historically withdrawn money from bonds when the economy is doing well. A lower demand for bonds will result in a lower bond price. The method is pretty similar for mortgage-backed securities.

The rate of inflation is another factor that can lead to higher mortgage rates. As the Fed seeks to cool an overheated economy, higher rates will usually result from higher inflation. Or, as it is now, the price of commodities and consumer goods may also rise. We are currently in this cycle. While the Fed remained steadfast at their last round, they have indicated that they will be ready for the next round. It’s possible that the Fed has already planned another rate hike. We’ll see. But the betting money is on another Fed hike at their next meeting in a few week.

Original Blog: https://realtytimes.com/mortgage-advices/item/1048165-where-do-mortgage-rates-come-from-anyway?rtmpage=

What’s the Process to Buy a Foreclosure?

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Some analysts predict that the number of foreclosures is going to increase. While the housing market remains strong, the coronavirus shutdowns had a significant impact on the economy and unemployment is still high.

It’s important to prepare for the process if you’re looking to see if a foreclosure is a good deal. The process of buying a foreclosed home is similar to that of buying any other house. However, if you know what to expect you can streamline the buying process.

Types of Foreclosures

There are two types of foreclosed houses. There are two types of foreclosed homes: bank-owned and real estate owned properties (REO). In both cases, the lender is the owner of the home. The main difference between the two scenarios is the stage at which the foreclosure occurs.

In the middle of foreclosure, the homeowner has stopped making payments and the lender is taking action to remove them from their home. Foreclosed properties are bank-owned homes that go to auction. REOs are still bank-owned homes if they don’t sell. REO properties are those that have been auctioned but still haven’t been sold. The lender will try to sell the REO properties through their REO agent.

Foreclosures are often cheaper, and in some cases significantly less expensive, than comparable properties in the same area. Many foreclosures are priced well below the market value. You may also receive other benefits by purchasing a foreclosed house, such as lower rates of interest, reduced down payments and the ability to avoid appraisal fees and certain closing costs.

You can get a great deal on a distressed home that is not owned by a bank.

Pre-foreclosure is one example. The lender will let the borrower that they are in default. However, if they can sell their property, they may be able to avoid foreclosure proceedings. Short sales occur when a lender accepts less than the amount owed on a loan for a home. A lender can approve a short-sale even if you are not in default.

There are also properties owned by the government. When a property purchased with a government-backed mortgage defaults, the federal government will own it.

Buying a Repossessed Home

Here are the steps you should take if you want to purchase a foreclosed property:

Mortgage Preapproval

You should get a preapproval from a lender for a mortgage before you begin looking at foreclosed homes. Preapprovals show that you are serious about buying and will help guide your search.

Find a Foreclosure Agent with Experience

It’s crucial to have an experienced agent who is familiar with foreclosures on your side. They can help you find properties in your area if you don’t already have a property in mind.

Make a Competitive Offer

You don’t need to be competitive just because you found a property that is in foreclosure. You are likely to get a good deal, but making an offer that is too low can result in it being rejected.

Get an Inspection

You can buy foreclosures as-is. The seller will not make any repairs. If you purchase the property, any repairs that are needed will be your responsibility. You need to be aware of what you are getting into before you make an offer. If you are not comfortable with the property after an inspection, you should pass. The inspection is merely to help you decide. What’s found won’t be much of a bargaining tool.

You won’t be able to inspect the home you purchase at auction.

You can’t usually go inside a house before you buy it at auction.

The Risk to Buyers

A foreclosed house comes with a lot of risk. You may not discover hidden costs and problems until after the inspection. It’s a long process.

When buying a foreclosed property, there is a lot of paper work. Banks are slow to respond with these properties. If a bank is backlogged with foreclosures, they can take several months to respond to an offering.

All of this does not mean that buying a foreclosed property is not a good idea. You just need to be prepared for these obstacles.

Original Blog: https://realtytimes.com/consumeradvice/buyersadvice/item/1039976-what-s-the-process-to-buy-a-foreclosure?rtmpage=null

No Perfect Home Exists: What You Should Know About Home Inspections

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Many first-time home buyers find buying a house a frightening experience. They know that they will be maintaining or improving the home, but have little or no experience in maintenance. So they buy a house in perfect condition. They hire a home inspection company to find all the flaws.

There is no perfect home. Air conditioners break down, plumbing pipes leak, and roof tiles blow away in the wind.

When you are buying a house, set reasonable expectations about what the home inspector can do. Their job is to inform about the integrity and state of what you are buying, both good and bad.

An inspection of a home should last several hours. This is enough time to cover all the built-in appliances and all the mechanical, electrical, and gas systems.

An inspector does not test for pests, or sample the septic system. You need inspectors who are industry-specific for these tasks.

Here’s what you need to do.

1. Make sure that the inspector you hire has a license. Home inspectors’ responsibilities vary depending on state law and their area of expertise.

2. Ask what is covered by the inspection. Some inspection companies offer environmental services, including radon and lead-based paint. Be prepared to schedule and hire several inspectors to meet your lender’s needs and to pay hundreds of dollars for each type.

3. Some inspection reports only cover one building, the main house. If you are having a specialty inspection, such as a termite inspection, ensure that the inspection includes all buildings on the property, including guest houses, detached Garages, Storage Buildings, etc.

4. Attend the inspection, and follow along the inspectors. You will be able to see the problems yourself and determine what is important, what needs replacing now or in the future, and what is not.

5. Do not expect the seller to fix or replace all negatives found on the report. Some items are not negotiable if you’re applying for a VA or FHA guaranteed loan. You must let the seller know about them. Otherwise, you should be careful how you negotiate with the seller.

Home inspections not only point out the problems but also what is working well. You can use it to help you make a final decision on the home, whether to ask the seller to do repairs or offer a lower price, or buy the house as-is or not at all.

Original Blog: https://realtytimes.com/archives/item/1015714-20180308-no-perfect-home-exists-what-you-should-know-about-home-inspections?rtmpage=

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