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What’s Really Included In Closing Costs?

Expect property taxes, homeowners insurance, and lender’s costs to be part of your settlement-day tab.

With your house-hunting and lender searches now in the rearview mirror, you can start steering your way around the final bend that leads to the driveway of your new home: settlement day and closing. A few days before you meet with your real estate agent, a title company representative, and your loan officer for this joyous event, you should have received from the title company a copy of your closing documents. Read these documents carefully — they will include details on the closing costs that are due upon settlement.

  • What are closing costs?

    Closing costs are lender and third-party fees paid at the closing of a real estate transaction, and they can be financed as part of the deal or be paid upfront. They range from 2% to 5% of the purchase price of a home. (For those who buy a $150,000 home, for example, that would amount to between $3,000 and $7,500 in closing fees.) Understanding and educating yourself about these costs before settlement day arrives might help you avoid any headaches at the end of the deal.

  • What’s included in closing costs?

    Closing costs will cover both recurring and nonrecurring fees that are a part of your transaction. Recurring costs are ongoing expenses that you will continue to pay as a homeowner, with a portion due upon closing; nonrecurring fees are one-time fees associated with borrowing money and the services that were required to purchase the property.

    Recurring closing costs are placed in your escrow account, which you might view as a forced savings account for those upcoming home expenses you’ll be facing. They can vary, but the most common ones are property taxes (one to eight months’ worth, depending on when your home purchase coincided with the local tax billing cycle), homeowners insurance (the annual premium is typically due at closing, plus another two or three months’ worth of payments), and prepaid loan interest (for the number of days you’ll have the loan until its first payment is due). Also placed into escrow are costs for title insurance, which is considered a must because it protects you in case the seller doesn’t have full rights and warranties to the title of the property.

    Nonrecurring closing costs are fees paid to your lender and other professionals involved in the transaction. They include: any home inspection fees; any discount points you’re paying upfront to lower your interest rate; an origination fee, which is charged by the lender to process your loan; a document-prep fee, which covers the cost of preparing your loan file for processing; an appraisal fee, which covers the cost of a professional estimating the market value of the home; and a survey fee for verifying the home’s property lines. Also expect as nonrecurring costs: an underwriting fee for the cost of evaluating and verifying your loan application; a credit report fee for pulling your credit scores; title search and recording fees; and a wire-transfer fee for wiring funds from the lender to your escrow account.

  • How to prepare for closing costs

    The best time to study closing costs is when you’re shopping for a lender and can compare your desired loan amount with interest rates you’re offered (plus any discount points you might plan to pay upfront to lower those rates). Then use a closing-cost calculator to determine what your costs might be. The calculator will gauge your monthly mortgage payments, based on whether you’re financing the closing costs into your mortgage or whether you’ve decided to pay them upfront.

How to Design a Room Your Guests Will Never Want to Leave

A well-appointed guest room is the secret to becoming the host with the most.

Stick to One Style

Keeping each element of your guest room consistent with its overarching style is one of the easiest ways to design a space that feels well-thought-out and welcoming. Avoid picking up that clearance “bed in a bag” and instead find a few unexpected elements to create a space that feels like the ultimate retreat. This room nails the rustic chic look thanks to antlers, wood and faux fur pieces.

 

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Make it Feel Like Home

Homey details like a cozy chair and a tray for your guests morning coffee will make them feel welcome immediately. And leaving space in the cupboard for their wares encourages them to get comfortable and stay awhile.

 

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Don’t Forget the Entertainment

You never know if your guests have the same sleep schedule as you, so adding a television and plenty of books to their room ensures they have plenty to do if they’re an early riser or night owl.

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Let Your Location Shine

Whether you live by the beach, in a big city or in the middle of the country, your location can be used to inspire your decor. Stock the space with accessories that echo your surroundings, and let your guests truly savor their time in your home.

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Put Nooks to Use

If your home doesn’t have a dedicated guest room, you can always turn any little nooks into a space for friends and family to get comfy. Daybeds, murphy beds and even pull-out couches are all perfect places to put your guests up.

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Elevate Your Bunk Beds

Bunk beds may be synonymous with little kids’ rooms, but they can actually be quite chic. Go for a sleek, pared down look — think industrial frames and understated bedding — and any adult would be happy to get some shut eye in your bunk. Plus, you just can’t beat having space for additional visitors.

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When in Doubt, Add More Pillows

You can never have too many pillows, especially when you’re designing a room meant to make your visitors feel at-home. Stocking the bed with plenty of fluffy pillows gives your guests the option of crafting their perfect sleeping arrangement. A stylish throw, like this Moroccan wedding blanket, adds an extra dose of comfort that will leave your friends and family dreaming about your guest bed.

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Buying a Short Sale: 4 Tips to Make Yours the Winning Offer

Bargain shoppers know that buying a short sale can score you a sweet deal on a home. Since the sellers are set on avoiding foreclosure, buyers can jump in and nab a house below its market value. It might even sound like the easiest transaction ever: The seller is determined to sell a house and you have the means to buy it. It’s good as gold, right? Not necessarily.

Though they might appear simple, short sale transactions are different from traditional home sales. There are a number of pitfalls and extra costs that can arise with a short sale.

What is a short sale and how does it differ from other sales?

Simply put, a short sale is when a home sells for a price that won’t cover the cost of the outstanding mortgage.

Short sales are different from both traditional home sales and foreclosures. In a traditional home sale, you work with only the seller and the seller’s agent to make an offer. In a foreclosure, the lender has already bought the property, so you’ll make an offer directly to the lender, without a buyer involved.

In a short sale, the home is being sold at a loss. So, while the seller still owns the property, the lender must approve any offers.

Below are tips on what to expect and how to have your offer stand out from the crowd.

1. Have your finances sorted

Solid financing always makes an offer appear stronger, but this is especially true in a short sale.

According to Mark Ainley of GC Realty Investments in Chicago, “You can increase your chances of having an offer accepted by either being a cash buyer or having a pre-approval letter from a lender. The pre-approval will carry more weight than a pre-qualification letter because it shows that a lender has already vetted your finances and approved you for that loan amount.”

In addition to the pre-approval, being prepared to put down a sizable earnest money deposit can help move your offer to the top of the pile.

2. Be ready to wait for approval

The approval process is a bit different with short sales. The seller first has to approve your offer, as usual, but then it must be sent to the lender for review before the sale can move forward.

“Be patient. Banks take their time approving a short sale,” advises, Kathryn Bishop, a Keller Williams agent in Los Angeles.

Several individuals, including the lender, will need to look at your offer before a consensus can be reached. The lender must decide how much of a loss it’s willing to take on the loan and it’ll likely vet your finances to make sure you are financially sound enough to buy the home.

This process could take weeks, but in most cases, it will take three to four months.

3. Don’t expect contingencies

In a typical home sale, you can negotiate contingencies with the seller to reduce closing costs, cover fees, or make repairs before you finalize the deal. However, in a short sale, the lender also needs to be taken into consideration, and it is less likely to approve your contingencies.

Keep in mind that the lender is already taking a loss on the loan and won’t want to lower its profits any further.

The lender “is the one making the final decision on whether or not to accept your offer,” says Karen Hanover, a former short sale negotiator with a major lender. “They are going to look at the net after all costs of sale, not just the asking price. They also want to see the properties sold as is.”

4. Don’t navigate a short sale alone

The bank will be trying to recoup as much of its investment as possible, and the seller will be focused on unloading the property before it’s foreclosed. So who has your interest at heart? It’s important to have someone in your corner who can advocate for you and make sure you leave the negotiating table satisfied.

“The buyer must be able to control who does the short sale negotiation and have the legal right to communicate with that negotiator and receive status reports,” says James Tupitza, a real estate lawyer with Tupitza & Associates in West Chester, PA.

Before you even consider making an offer, make sure to bring on a real estate agent—or even legal council—who specializes in this type of transaction.

Post originally found on realtor.com

6 Apartment Upgrades That Landlords Hate (Bye-Bye, Security Deposit)

When you move into a place, it’s normal to want to make it your own, by hanging pictures or even painting an accent wall cherry red. But when you’re renting, you’d best remember: Any changes you make may be reversed by your landlord once you move out and with your money. That’s why renters have to walk a fine line between making themselves feel at home and making changes that will cost them their security deposit.

“If you decide to paint the walls while you are there, you must return them to their original color or the landlord is within their rights to use the deposit to pay for it themselves,” says Trent Zachmann of Renters Warehouse. He explains that many landlords treat modifications or improvements and accidental damages the same when it comes to taking money from your security deposit. “An owner can withhold all or part of the deposit to correct either type of issue,” he says.

But all is not lost: Sometimes modifications can be made with the owner’s approval. Just make sure you’re 100% clear about the stipulations of your lease before you pick up a paintbrush or hammer. Straight from the mouths of landlords, here’s a list of upgrades tenants have attempted that they hate—and will use your security deposit to fix.

1. Painting

This is the No. 1 alteration that landlords complain about.

Annmarie Bhola, a landlord in New York City, understands that for first-time renters especially, there’s an excitement with moving into a new home. And, to many, that means breaking out the paint.

“To feel at home, a fresh coat of personality-defining color is the icing on the cake,” she says. “That’s all cool, but know that if you paint the walls hot pink, it will be coming out of the security deposit! That was one of the most memorable colors I’ve had to repaint.”

Atlanta landlord Bruce Ailion describes creative painting projects as his biggest headache.

“You would think a tenant would pick a neutral color and have a professional paint,” he laments. “Instead they paint purple or black, get paint on the ceiling, on the trim, on the door knobs and outlets. Some will paint around the bed and pictures. It’s a mess.”

2. Hanging pictures

After repainting, filling in holes in drywall is one of the most common issues landlords have to deal with after a tenant moves out.

“Everyone likes to put up pictures, and fortunately new technologies have brought about alternative, less destructive hanging methods, which is great,” says Bhola. So then why don’t more people think to use Command strips instead of nails? “Nine out of 10 times, I always have to fill in the holes and bust out the spare bucket of paint.”

3. Installing window treatments

We know: Those white plastic vertical blinds are so ugly. Your impulse to put up a curtain rod or Roman shades is completely normal. But the holes you have to drill into the wall to mount the window treatments, like those for your pictures, will require patching once you move out. Landlords fume every time they see big screw marks around the window frame.

“Repairing the holes ends up being expensive and time-consuming,” says Zachmann. If you must hang curtains, use large Command hooks that adhere to the wall and don’t leave any stickiness behind.

4. Mounting a TV

What’s worse than hammering nails into the drywall to hang pictures or curtains? Drilling holes in the wall to mount your flat-screen TV.

“The screws have to go directly into the center of studs,” says Brian Davis, director of education at real estate service company SparkRental. “At best, the renter will have screwed 10 to 20 holes into the wall. At worst, the TV will crash to the floor [because it wasn’t mounted correctly], possibly injure someone, shatter the TV, and take a chunk of the wall down with it.” He recommends that renters use a TV stand.

5. Gardening

You would think that planting a few tulips would delight a landlord. But that’s not necessarily the case.

“As a landlord, I want the most maintenance-free rental as possible,” says Atlanta-area property owner and real estate writer Laura Agadoni. “In some cases, I pay for a landscaping service, but I would not want to keep up a garden.”

So, don’t make any changes to the landscaping without the landlord’s written permission. And if you do, don’t be surprised if your security deposit is used to return the yard to its previous state.

6. Updating appliances

If you’re not a fan of that noisy old refrigerator in your rental, it’s perfectly fine to swap it out with a new one of your own so long as you talk it over with your landlord first, and then reconnect the old one after you move out.

“What’s never acceptable is swapping out an appliance, throwing the old one away, and then taking the new one with you when you move out, leaving a gaping hole where there was once an appliance,” says Davis.

So if there’s something you’d like to update, just ask your landlord about it first. You never know.

“What some landlords will allow may be different than what other landlords allow,” says New York City broker Eric D. Rosen. “In some cases, it might even be possible that a landlord will share the cost.”

Article originally found on realtor.com

Fool-Proof Paint Colors That Will Sell Your Home

Selling a home with an electric, lime green living room in 2017 is going to be more difficult than you originally anticipated. In fact, your home might sit stagnant on the market for quite some time. The reality is that paint color packs a serious punch in the real estate game.

So, which colors are going to sell your home?

Armed with results from Zillow’s 2017 Paint Color Analysis, we’re dishing on the hues to use and the hues to lose before putting your house on the market. (Hint: Lime green didn’t make the list.)

The Front Door: Navy

Jacob Snavely

For a killer curb appeal and a lasting first impression, coat your front door in a neat, navy blue! This versatile, timeless shade looks beautiful with any exterior color. Bonus? Zillow reports that navy doors sold for $1,500+ more than any other hues on the market.

The Kitchen: Gray-Blue

Michael Hunter Photography

Zillow reports that homes with kitchens outfitted in soft, blue or gray hues often sold for a $1809.00 premium.

The Living Room: Warm Browns

Jenny Norris

Traditional beige, oatmeal and soft taupe reign supreme in living spaces for 2017. Zillow reports homes with warm brown living room walls sold for $1,900+ more than expected.

The Bedroom: Cerulean

Photographer: Christina Wedge

The report reveals that lively blues, such as cerulean or cadet blue, grants homes with a $1,856 premium.

The Bathroom: Pale Blue

Stacey Brandford

Fresh, clean and soothing – pale blue is the best-selling hue for the washroom. Not convinced in the power of paint yet? Zillow reports that light blue bathrooms sold for $5,000+ more (!!) than expected.

The Dining Room: Slate

Chipper Hatter

A sophisticated slate-blue hue for dining room walls will sell homes for more money. Zillow reports that slate dining rooms sold for nearly $2,000 more than plain, white dining rooms.

The Exterior: Greige

Light gray and warm beige marry to create the modern-day classic: greige. Zillow reports that greige-colored homes are outselling their brown or tan counterparts by $3,496.

Courtesy of zillow.com

5 Tips Real Estate Investors Need to Know to Find Good Deals

With real estate prices reaching ever-higher highs in large swaths of the country, the availability of deeply discounted properties is drying up. And that means it’s getting tougher for real estate investors and home flippers to find great deals worthy of their time and cash.

“There are fewer foreclosures to buy, but there’s more interest in buying foreclosures,” says Daren Blomquist, senior vice president at ATTOM Data Solutions, a real estate data firm. “Competition, even at the foreclosure auction, is pushing prices up.”

Bank-owned property sales, foreclosure auctions, and short sales still made up 16.9% of single-family home and condo sales in the first quarter of 2017, according to ATTOM. But that’s down from 20.3% of sales a year ago.

“Back in 2007, you were getting 20% off the actual value” on bank-owned property sales, Leland DiMeco, owner and principal broker at Boston Green Realty, told ATTOM’s Housing News Report. “Now you have them selling for 5% off, if that.”

So how can established and aspiring real estate investors and home flippers find a real deal?

Tip No. 1: Be proactive and look for off-market properties

Some landlords prefer to quietly shop around their properties to investors instead of listing them publicly. This way, the owners don’t upset any tenants currently living there.

“There is quite a bit of the pie that does get moved around, legitimately, but just off-market,” DiMeco told ATTOM.

So would-be investors shouldn’t wait for property owners to find them—they should find these folks themselves.

“If you like a neighborhood, you can go knock on doors,” Blomquist says. There might be “homeowners who may want to sell and don’t even know they want to sell yet.”

Tip No. 2: Act fast and pay with cash

There are still deals to be had—if you act quickly, says real estate investor Brandon Turner, author of “The Book on Investing in Real Estate With No (and Low) Money Down” and “The Book on Rental Property Investing.” He owns 52 rental units in 18 properties and has flipped about a dozen homes in Grays Harbor County in Washington.

“You have to work faster than everyone else,” he says. “I try to make an offer within 24 hours of a new listing coming on the market—the same day, if possible.”

Paying all cash can also sweeten the deal for sellers who might have multiple offers, he says.

Tip No. 3: Don’t ignore potential tear-downs

Real estate investors might not initially see the value of buying an overpriced, small, or run-down home within the city limits. But many of these homes in desirable locations can be sold to a developer to be torn down. Then a multifamily building or larger home can go up if the zoning permits it. And that can translate into some serious moolah.

It requires some vision and a bit of a leap of faith. With a potential tear-down, “it may not be a good deal to buy it as a single-family home. But if you can buy it for what it could be, it can be an excellent way to find value and deals,” Turner says. However, this approach is not without risks and obstacles.

“If you’re going to build a new house, it takes a good while to get all the permits,” he adds. “The danger is if the market begins to decline, you might be unable to sell it.”

Tip No. 4: Seek out nasty, smelly homes

Investors shouldn’t shy away from hardcore fixer-uppers and “nasty” homes, says Turner. That’s because there is not as much competition for these potential diamonds in the rough. Many lenders won’t issue loans on these properties if they’re in really bad shape.

“The stinkier the house, the better,” Turner says. “Smells are easy to fix. A good coating of oil-based primer, new carpet, and cleaning will take care of almost any smell.”

He typically looks for the “nastiest house in the nicest neighborhood,” he says. Even homes in need of serious TLC can be profitable if they’re in the right location.

“You can’t fix a neighborhood, but you can fix the house,” he says.

Tip No. 5: Look in another city or state

Many would-be property investors living in pricey parts of the country would love to become landlords—but can’t afford to do so in their own cities. So they can consider buying in lower-priced markets such as the Midwest.

“Look in other geographies that aren’t in your backyard,” Blomquist says. Focus on places that are growing “that still have a lot of lower-priced inventory available.”

But they should make sure to do their homework first to make sure they understand the neighborhood they’re buying in and who their potential tenants or buyers would be. This includes how much they can realistically charge.

Landlords might need to hire property management services if they can’t afford to get there quickly if something breaks. And that eats into profits.

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Remember, becoming a real estate investor is still risky

Despite the stinky homes, investing in real estate might seem like a glamorous way to make a little extra cash—just look at all of those home flippers on HGTV! But in reality, it’s not risk-free.

Landlords sometimes have tenants who trash homes or don’t pay the rent on time. Flippers might encounter permitting problems or find costly structural issues in homes that cost quite a bit more than expected.

“We’re in a booming housing market. Everyone’s confident if they buy a piece of real estate it’s going to go up in value,” says Blomquist. “That’s true for the long term.

“This housing boom is on a lot more solid foundation than what we saw 10 years ago,” he says. “But you have to be very cautious because, in the short-term, we have seen … that prices sometimes do go down.”

Courtesy of realtor.com

3 Common Moving Nightmares (and How to Prevent Them)

There’s no other way to put it: Moving is stressful. But it doesn’t have to be a waking nightmare. Here’s how to avoid a move from … you know where.

Nightmares aren’t supposed to take place in broad daylight, but some common life events bring so much tension, uncertainty and anxiety that they can easily rank as “quality nightmares.” Moving house tops the list of stressful experiences that can feel like a bad dream — and it can easily come true unless you take precautionary measures.

Problems can occur at every stage of the relocation process: A violent storm hits just when the moving truck is parking in front of your door. The elevator is out of order when you arrive at your new high-rise building. You lose the keys to your car on the morning of moving day. The list goes on.

However, the most common moving nightmares fall into three main categories. Here’s how they typically play out — and how to avoid them.

Bad movers

Many moving horror stories involve rogue or incompetent movers.

  • The movers are late or don’t show up at all. The agreed-upon time comes and goes, but you see no sign of an approaching moving truck. When you call the moving company to demand an explanation, your relocation nightmare begins. Regardless of the excuses you receive (a traffic jam, a breakdown, a delay on a previous job, a mistaken date, etc.), the inevitable result will be lots of stress and wasted time. Worst of all, you may not be able to reach the moving company at all: fraudulent movers may have taken your deposit money and disappeared with it.
  • The movers are careless or inexperienced. If your movers arrive late, in a smaller moving truck than needed, or lack the required know-how and the proper equipment to handle your items safely and efficiently, your relocation can quickly turn into a nightmarish experience. The amateur movers may drop your plasma TV, break your heirloom china, scratch your antique dresser, dent the floors, or cause other overwhelming emotional and financial damage.
  • The movers are scam artists. In the worst case scenario, you may fall victim to unscrupulous moving scams. Rogue movers will often request much more money than previously negotiated based on some alleged extra services. They may hold your belongings hostage until you pay a considerable extra “fee” as ransom, or steal your more expensive belongings and just discard the rest.

The good news is that there is an easy way to avoid such nightmares. All you need to do is carefully research your movers before hiring them to make sure you are dealing with licensed and experienced professionals you can trust. It’s also a good idea to purchase appropriate insurance for your belongings, just in case.

Traffic problems

Heavy traffic or road accidents can also turn your move into a real nightmare.

  • Traffic jams. The moving truck is delayed and there may not be enough time to proceed with your move as planned. You may have to postpone the relocation to another day, or you may miss your flight.
  • Traffic accidents. if there has been an accident on the road, the moving truck will have to wait until the damaged vehicles are removed and normal traffic is restored. However, the scenario could get much worse: You may lose all your possessions or receive them badly damaged if the moving truck crashes, catches fire, or gets trapped somewhere because of adverse weather conditions like heavy snowfall or torrential rains. It’s even possible that thieves could break into the vehicle and steal your goods.
  • Breakdown. If the moving truck breaks down on the road, you’ll have to wait for the moving company to send another vehicle. What’s more, your items can easily get damaged while being transferred.
  • Parking issues. The moving truck has to circle the neighborhood for hours until an appropriate parking space is vacated, or the movers have to park far away from the entrance to your home. In such cases, you’ll not only lose valuable time, but will also have to pay an extra fee for the delay or an additional long-carry fee.

Of course, there’s nothing you can do to prevent traffic accidents or breakdowns. But you can at least reserve a parking place directly in front of your old and new homes, and choose a moving company that has experienced drivers and several moving vehicles in good condition.

Poor organization

The only way to avoid problems when moving house is to plan each phase of your relocation adventure in meticulous detail and stay one step ahead all the time. Otherwise, you may find yourself facing any of the following all-too-common moving ordeals.

  • Packing chaos. It may turn out that you’ve packed more items than previously discussed with the movers; packed items that can’t be loaded onto the moving truck; haven’t labeled the boxes properly; or forgotten to prepare an “essentials box.” Worst of all, you may not be ready when the movers arrive. All these packing mistakes will result in lost time and money.
  • Furniture troubles. If your large furniture doesn’t fit through the doors, you may be forced to leave some treasured pieces behind, or request hoisting services that will cost you dearly and will delay your move considerably.
  • Paperwork problems. If you forget to transfer the utilities, you won’t have electricity, gas, and water on move-in day. If you forget to change your address, you won’t have your mail delivered to your new home. If you forget to update your driver’s license and car registration in time, you’ll be fined. Not taking proper care of your documents will most certainly get you in trouble.
  • Overspending. If you book your movers at the last moment, require too many extra services, fail to create a realistic moving budget, pack all your items without sorting them out first, or allow any other financial imprudence, you’ll end up paying much more than you expected.
  • Safety issues. Make every effort to prevent injuries and accidents on moving day, as getting hurt is one of the worst things that can happen during your relocation endeavor.

Post courtesy of zillow.com