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Things You Shouldn’t Overlook When House Hunting

Looking for a house can be an exciting time full of possibilities. You have your list of needs and wants and you are hoping to find your dream home that checks all the boxes. When you are touring potential options, whether at an open house or at a showing with your Realtor, don’t forget to look past the beautiful décor and focus on some important things that are often overlooked. When a home is on the market, the seller tries to present it in the best possible light. Hopefully, it has been well cleaned and decluttered; sometimes freshly painted and even professionally staged. It is easy to be distracted by the furniture and décor that probably won’t stay with the home anyway and forget to look at the “bones” of the property. If you are having a home inspection, many of these issues will probably be covered during the inspection. If they are visible at the time you make an offer, a home inspection is not the time to negotiate items you could already see were problems. These things should be addressed at the time you make the offer. If you aren’t having a home inspection, then you really need to pay attention to these areas before you make an offer. The first red flag during a home tour is heavy air freshener scent. Some people just like heavily scented home fragrances but it may be covering up an underlying problem. The two biggest offenders are stale cigarette smoke and pet odors. Both of which can be very hard to remove. If the problem is extensive you may have... read more

Why You Need An Attorney When Buying or Selling A Home

Buying or selling a home can be a complicated venture. Laws and requirements have changed significantly over the last several years and most people can benefit from hiring professionals to help them through the process. Hiring a Realtor will allow you to access local market knowledge that can be invaluable in your buying or selling process. Likewise, hiring a home inspector or radon inspector can give you knowledge about the property condition and peace of mind that comes from professional inspectors. Mortgage lenders and appraisers also lend their expertise to the transaction. Most people never question their need for these professionals when engaging in a real estate transaction, but what about hiring an attorney?   Do you really need an attorney when you have all these professionals involved already? The answer is YES! None of the other professionals we have already discussed can replace the expertise of an attorney. Your attorney is the only person that can give you legal advice. For most people buying or selling a home is the biggest financial transaction of their lives. When the investment in your property is tens of thousands or maybe hundreds of thousands of dollars, why would you not have an attorney involved to safeguard your investment? The legal fees involved in most real estate closings are a very small percentage of the overall transaction but can end up saving you a lot of money and headaches in the end. What does a real estate attorney do exactly? Generally, the attorney will review the contracts and disclosures, help negotiate any inspection issues that may arise, check over the title work, mortgage... read more

What to Expect From a Home Inspection

What to Expect From a Home Inspection by Anne Sadler If you are currently house hunting you will probably be faced with the decision of whether or not to have a home inspection. Before you make that decision, you should know what a home inspection is and what to expect if you have one. First, it is important to know that a home inspector must be licensed by the State of Illinois. They must take 60 hours of pre license education and pass a state test in order to get licensed. The fee for the home inspection can cost around $275 and up depending on the size of the home, the actual type of inspection being done and the inspector you choose. A basic home inspection covers the structure and systems within the home and is what most people opt for when hiring a home inspector. There are also inspections available for lead paint, mold, radon, pests and other environmental hazards. All of these inspections will be an additional fee if you would like them done. It is important that you are there with the inspector during the inspection. One of the things that will happen is the inspector will give you a live “owner’s manual” tour of the home. He will show you things like where to shut off the water and gas, where the electrical panel is and how to shut off the power. He will also give you a maintenance schedule for items like the furnace and air conditioner and give you tips on how to prolong the life of the systems in the home. This... read more

How to Balance Wants with Needs

When you decide it’s time to go house hunting, you probably imagine finding your perfect house. Let me give you a reality check- there is no such thing as a “perfect” house. The challenge in finding a home is to strike a balance between what you need in a home and what you want in a home at a price you can afford. Before you embark on your home search, you should sit down with your partner and each make a list of the 10 things that are most important to you in a home. Compare lists and see how many of those things you have in common. The items that made both your lists should be a priority when you combine them to make a master list. Next, decide what items are “deal breakers”- things you just can’t live without. If you absolutely will not consider a home that doesn’t have at least 2 bathrooms, then all homes with less than 2 bathrooms should be off your list. Those non-negotiable items should be at the top of your list. Next should be the things that you both agree you would like in your next home and finally the things that would be nice to have but you could live without. When you are editing your needs and wants list it may be difficult to separate the two. You may think you need granite countertops and stainless steel appliances but that shouldn’t take priority over something like your child’s school district. You can always update a kitchen but you can’t change a school district. You need to look at... read more

Tax Tips for Homeowners

Tax Tips for Homeowners It’s everyone’s favorite time of year again-tax time! This is my annual column about tax deductions for homeowners so if you are a procrastinator and have not yet completed your taxes, here are some deductions you can use. Let me start by saying that you should always check with your accountant or tax preparer to make sure you can use these deductions as everyone’s tax situation is different. I am just giving you the information on what deductions may be available to you. If you have a mortgage on your primary residence you may be able to deduct the interest portion of your mortgage payments. This can amount to a very large deduction for most people and is one of the benefits of being a homeowner. In most cases, you can also deduct your property taxes. Again, if you own a home in Freeport or Stephenson County your property taxes are a significant tax deduction. Both of these deductions are being debated in Washington as part of income tax reform but for this year, you can still deduct them from your taxes. If you purchased a new home in 2016, you may also be able to deduct your origination fee and any discount points you may have paid. Check with your tax preparer to see if you can qualify for these deductions. Also, if you have a home improvement loan or home equity line of credit (also known as HELOC) the interest on those payments may also be tax deductible. Making your home more energy efficient may also provide you with some tax deductions. Installing... read more

What You Don’t Know CAN Hurt You

Back in September of 2014 I wrote a column about radon. At that time, most people had never heard of radon unless they had bought or sold a home recently and were asked if they wanted a radon test done. Even then, most people didn’t really know what the big deal was. I recently attended a training session on radon and even though I knew what radon was and the potential health threat it caused, I was surprised at how much I had under-estimated the dangers of radon. What is radon anyway? Radon is a colorless, tasteless, odorless radioactive gas that comes from uranium in the soil. Radon enters your home through openings between your house and the soil underneath. It doesn’t matter if you have a basement, a crawl space or even a concrete slab, the only way to tell if you have a radon problem in your home is to test for it. Why should you worry about testing your home for radon? Radon is the 2nd leading cause of lung cancer after smoking. It is estimated that over 1100 people in Illinois will develop radon related lung cancer every year. Elevated levels of radon have been found throughout Illinois and we are located in the “high potential” area of the state. Think about how much time you spend in your home, how much time your children spend in your home and the possibility that the radon level in your home could potentially be causing cancer. I can’t urge you strongly enough to get your home tested. What you don’t know can be killing you. Homeowners can... read more

Get To Know HomeStart

It is the beginning of a new year and many people are setting goals for 2017. If your goal is to become a homeowner in 2017, I want to let you know about an organization that might be able to help. HomeStart is a HUD approved non-profit housing counseling organization located right here in downtown Freeport. It just might be the best kept secret in town! HomeStart is part of the National NeighborWorks Network and they work with people to help them attain their housing goals. They accomplish this in two ways. They help people become homeowners by providing support, guidance and education about the home buying process. HomeStart also helps connect people to down payment assistance for those that qualify. Since the organization merged in 2013, they have assisted almost 700 first –time homeowners achieve the Great American Dream. Studies have shown that people who receive homebuyer counseling and education are statistically more successful than those who don’t. HomeStart also helps people with sustainable home ownership when there is a foreclosure pending. They have several options available in this situation, the newest being the Illinois Hardest Hit Program. This program focuses on home owners that have lost income through no fault of their own such as unemployment, underemployment, death of a spouse or divorce. If you are eligible and have not received these funds in the past, the program provides funding for mortgage assistance to help people keep their homes. HomeStart is a sponsoring organization and helps with completing and submitting applications for assistance. HomeStart also assists people with accessing the USDA (United States Department of Agriculture) rural... read more

Preparing Your Home For Winter

We have had the luxury of enjoying a very long fall this year but it is December and winter is here. If you haven’t already winter-proofed your home, here are somethings to do to keep your home safe and comfortable throughout the winter. Starting with the exterior, disconnect your outside hose from the spigot and drain it. Invest in a faucet protector to keep the cold air from getting into the pipes. You can buy one for under $10 at the home improvement store. If you have exposed pipes in your basement or garage, make sure you wrap them with insulation to keep them from freezing. Make sure your gutters are cleaned out and free from leaves. Gutters that are clogged will cause water from melting snow to freeze and expand causing them to crack or worse yet, forcing the water in through the foundation. Fixing that problem can be very expensive. If you are unable to clean the gutters yourself, hire it done. It may cost 100 to 200 dollars but it is much cheaper than repairing your foundation or having to buy new gutters. Walk around your house and look for any cracks or gaps around windows and doors. Caulk can close the gaps very inexpensively and can save heat loss and save on your heating bill. If you have old or ill- fitting windows that requires more than a tube of caulk. If replacing them is not in the budget, you can get plastic wrap kits at the home improvement store that can help keep the heat from escaping and cold air from coming in. They... read more

Renew Your Lease or Buy a Home-How Do You Know It’s Time?

It’s almost time to renew your lease and you have been watching a lot of House Hunters on HGTV. It looks easy enough on TV to buy a house and you think you are ready to take the big step, but how do you know if now is the right time? The very first thing you need to consider is your financial situation. Make an appointment with a local lender to get pre-qualified for a home loan. Resist the urge to jump on a website and get a quick pre-approval on line. This is usually not a complete pre- qualification with a credit check, but rather you plug in a few numbers and they spit a number back at you of how much house you can afford. This is seldom reliable and you certainly won’t be able to ask the questions that you need answered. Local lenders will pre- approve you free of charge and take the time to explain the different loan products that are available and how the process works. This is critical if you are serious about trying to buy a home. It will let you know how much house you can afford so you know you are looking in the correct price range. There is nothing more discouraging than finding your dream house only to discover you can’t afford it. A pre-approval letter also tells Sellers you are qualified to buy their home and puts you in a much better negotiating position. When you speak with a lender, they will look at your income, your current debt load and your credit score. Make sure you... read more

I Bought a House, Now What Do I Do?

You just closed on your first house. Congratulations! You are now a home owner! After all the excitement of finding your perfect home, navigating the paperwork for the Realtor, the lender and the title company and the exhaustion from packing and moving, now what? Owning a home is a big responsibility and a big investment. You want to protect your investment and get the most out of your new home. Here are some things you should now about home ownership and maintenance. The very first thing you should do after the closing is change the locks. You will get keys at the closing to get you in the home, but how many other people might have keys to your new home? Especially if the home you are buying was a bank owned property or foreclosure, there could be lots of people out there with access to your house. Former owners, landscape people, cleaning people, contractors, realtors or just about anybody else could have keys to your property. For the price of some new locks and a few hours’ time (or better yet, call a locksmith to do it for you), you can have the peace of mind of knowing the only person with keys to your house is You. The next thing you should do is locate your main electrical box and the water main shut off. If you have had a home inspection, the inspector showed you where these things are located and how to shut them off, but if you didn’t have an inspection or need a refresher, locate them now. You should change the furnace filter... read more

Update on “Know Before You Owe “Mortgage Regulations

If you have bought or sold property with a mortgage since October of 2015 you probably noticed some things have changed. If you are in the process of buying or selling right now, there are some things you should know. The new mortgage rules that the government put into effect last fall have changed the way borrowers compare loan products and fees and regulates the timing of loan disclosures. The law that went into effect in October of last year is called the TILA-RESPA Integrated Disclosure rule or TRID. The idea behind this change was to allow consumers to shop around for a loan and have time to compare payments and fees. The new disclosure form has all the closing costs and estimated cash to close in a standardized format which makes comparing loan products easier for the consumer. There are benefits to the buyers with these new disclosures which not only give them a clearer picture of the costs, but a period of time to go over the figures and ask questions before they commit to the loan. The government felt that one of the reasons for the lending crisis was that consumers were not given adequate time to read the loan documents and ask questions before they had to close on the property. These new rules require waiting periods before final loan documents can be signed. There is also a low threshold for any changes in costs from the initial disclosure period. The new regulations require the buyer to be given the Closing Disclosure form at least 3 days before the closing so they have time to... read more

Priced to Sell

One of the most difficult parts of putting your home up for sale is determining the listing price. Price it too high and it won’t sell, price it too low and maybe you are leaving money on the table. If you are like most homeowners, you are somewhat emotionally attached to your home. You loved it enough to buy it right? You have family memories there, you have it decorated just the way you want it and you know it’s the best house on the block! Do you really think you can be objective when it comes to setting a sale price? The answer, if you are being honest, is probably not. One of the things a professional Realtor does is help the homeowner arrive at a listing price. This is a delicate combination of part math, part skill, part experience and part timing. The Realtor has no emotional attachment to the property and can be completely objective. They will look at the “comps” or comparable sales and listings to help establish a price range. This process is called a Comparative Market Analysis or CMA. It is not an appraisal, which can only be done by a licensed appraiser, but a study of market activity of similar properties. After looking at what comparable properties have recently sold for, your Realtor will look at the active listing competition you will be facing. These two studies will help establish a range of value for your home. That range will then be adjusted up or down for condition and amenity differences between your home and the comparable properties. If your home has... read more

Is Your Home Ready to Sell?

There are a lot of things to consider when putting your home on the market. You need to find the right Realtor and the right price. You need to make sure your home is in top condition for potential buyers. Most sellers will fix obvious problems that they are aware of before putting their home on the market and clean and de clutter, but what else can they do to make sure their house stands out from the crowd? Staging may be the way to do that. If you have the ability to hire a professional to stage your house for you, then that may be a good investment in getting top dollar for your home. Stagers are trained to organize, de- personalize and decorate your home to show its full potential. A professional stager can be expensive and what can you do if you can’t afford to hire a professional? Here are some tips that may help you stage your own home without breaking the bank. Staging involves more than just a thorough cleaning and de cluttering. A professional knows exactly what is needed to showcase the space you have. They will often bring in pieces of furniture, art and accessories to make your space look like a model home. Not everyone can afford to hire a professional or re decorate their entire house before putting it on the market. Here are some inexpensive things you can do to freshen up your spaces. Great lighting is very important. If you have dark rooms, get more light on the subject. Bring in more lamps, add higher wattage light bulbs... read more

Earnest Money 101

What is earnest money? Earnest money is the amount of money a buyer puts down to accompany an offer to purchase real estate. Basic contract law requires “consideration” as an element of a valid contract. The earnest money deposit is that consideration when a buyer makes an offer. It is used to show the seller that the buyer is “earnest” in his desire to purchase his property. Without earnest money deposits, buyers could make offers on multiple properties leaving the sellers with little recourse if the buyers back out of the contract. The amount of the earnest money deposit is negotiated between the buyer and the seller but is usually between 2 and 5% of the offered price. Who holds the earnest money is also negotiable, but in this area it is common practice for the listing office to hold the earnest money in their trust account. The escrow or trust account is a non interest bearing account where earnest money deposits are held until the property closes or the contract is terminated. At closing, the earnest money deposit becomes a credit to the buyer for any closing costs they may have, or it is subtracted from the purchase price of the property. This process sounds easy enough but what happens when the property doesn’t close? Who gets the earnest money then? That’s where things can get sticky. Earnest money is not like a security deposit. The buyer does not automatically get their money back if the property doesn’t close. The seller doesn’t automatically get to keep the money of the property doesn’t close either. How this situation gets... read more

Illinois Realtors Celebrate 100 Year History

This year marks the 100th anniversary of the founding of the Illinois Association of Realtors. Illinois was among the first in the country to form a state Realtors Association and is now the 6th largest in the U.S with 44,000 members. The Realtor association represents one of the largest trade associations in Illinois. The name has been changed to Illinois Realtors but its mission remains the same: “to serve as a collective voice and committed advocate for the state’s real estate industry and the issues it faces”. The association was an early proponent of real estate license law in Illinois as well as promoting the highest standards and ethics in our profession. The licensing and training center facilitates training and continuing education so that our members may better serve the public. The government affairs division is a leader in the industry and fights for the best interests of Realtors and property owners throughout the State. The governmental affairs program includes the Realtors Political Action Committee or RPAC, which was formed in 1969. The purpose of this committee is to promote and elect bipartisan candidates that support Realtors interests and protect private property rights in Illinois. Realtors contribute voluntarily to RPAC, the donations are not part of the dues Realtor members pay annually. Last year, Illinois Realtors raised more than $1,000,000 for RPAC and many of our local Realtors contribute money every year to help our politicians protect private property rights. Here are some of the ways RPAC has protected your property rights recently: stopped a proposed statewide mandate that would have added a $500 pre- sale video sewer inspection... read more

Buyer Agency Options

In my last column I explained what agency is and why it is important to sellers. This month I would like to explain the different types of agency available to buyers and what you should know about each of them. When you decide to buy a house you will probably work with a Realtor. You will also probably assume that that Realtor is working to represent your best interests. That may or may not be true based on your agency agreement with them. According to our license law, you will be presumed to be represented by the agent you are working with unless you have a written agreement otherwise. That seems pretty simple but what if you don’t have any agreement with your agent? Are they working on your behalf or not? All clients should have a written agency disclosure with their agent when they start working with them so there is no misunderstanding about their level of representation. That is also the reason why you want to work with one Realtor that is representing you, not a different agent for every house you look at. Since our new agency laws went into effect in 2000 Buyers now have the right to their own representation. There are several different types of agency available to buyers. Probably the most common type of buyer agency is non-exclusive buyer agency. This means that you will have a designated agent representing you as a client and assisting you in finding and purchasing a property. You can terminate the relationship at any time and you usually will not have to compensate your agent for... read more

FHFA proposed rule for GSES to offer mortgages to three underserved markets

According to an article in the DS News magazine; FHFA proposed rule for GSES to offer mortgages to three underserved markets: A rule that was introduced last December requires FHFA by federal law to implement a “Duty to Serve” requirement as specified in the Financial Safety and Soundness Act of 1992 and amended by HERA in 2008.  The proposed regulation will require the manufactured housing, affordable housing preservation and rural markets to be served. The rule would require an adoption of plans to improve the distribution and availability of mortgage financing that will serve very low, low and moderate income families in these three specified markets. For manufactured housing market: Duty to Serve credit would be provided for eligible activities related to manufactured homes financed as real property and blanket loans for certain categories of manufactured housing communities. For affordable housing preservation market:  Credit would be provided  for eligible  renters and homebuyers and also be provided for activities related to existing small multifamily rental properties, energy efficiency improvements on existing multifamily rental and single family first lien properties, shared equity homeownership programs and the HUD’s Choice Neighborhoods Initiative and Rental Assistance Demonstration program. For rural markets: Duty to Service credit would be provided for activities related to housing in rural areas, high-needs rural regions (such as Appalachia, Mississippi Delta ad Native American... read more

What You Should Know About Designated Agency

What is Designated Agency and why does it matter to you? Licensed Illinois Realtors are governed by the Real Estate License Act of 2000. According to Section 15-10 of that Act, “Licensees shall be considered to be representing the consumer they are working with as a designated agent for the consumer unless there is a written agreement” stating otherwise. That means that unless you are given a written disclosure that you are not being represented by the Realtor you are working with, you are a client of that Realtor and are owed certain duties. These laws were put in place to protect the consumer and to make sure they are being properly represented in real estate transactions. It used to be that all agents worked for the seller and no one represented the buyer in a home purchase. It was the “let the buyer beware” model for a very long time. Because the seller paid the commission or compensation to the Realtors involved, it was thought that the Realtors’ owed duties only to that seller and the buyers were on their own. Our industry has evolved past that thinking and now buyers and sellers both have the right to representation by their Realtor. Even when the seller is paying the compensation to both Realtors, the buyer is allowed to have their own Designated Agent representing their interests in a purchase. When you begin to work with a Realtor, you should be given a written disclosure telling you who your designated agent will be and what kind of representation you will have with that agent. Depending on the type of... read more

Income Tax Tips for Homeowners

Its tax time again and if you are a homeowner there are some things you should know before you file your taxes this year. If you are not a homeowner yet, what are you waiting for? Interest rates are not going to get any lower and there are some great loan programs like Rural Development Loans that don’t require a down payment. If you are getting a tax refund this year, put it towards buying a house so you can reap the benefits of home ownership next year at tax time. For those of you that do currently own a home and have a mortgage, mortgage interest is still tax deductible. Congress has tried several times to repeal this deduction but thanks, in part, to the National Association of Realtors they have been unsuccessful. Mortgage interest is most people’s largest deduction if you are able to itemize your taxes. If you have a mortgage, more than likely you will have enough mortgage interest to itemize and be able to deduct what you paid in interest on your taxes. Real estate property taxes are also deductible in most cases. If you live in this area, your property tax bill is probably sizeable and will also give you a nice tax deduction. Make sure you check with your accountant or tax preparer for advice on your own tax situation as everyone’s circumstances are different. If you are paying PMI (Private Mortgage Insurance) on your mortgage those premiums are no longer tax deductible. The premiums were deductible in some situations previously, but sadly that ended in 2015. If you have taken out... read more

Home Décor Trends for 2016

If redecorating is on your to- do list for 2016, here are some of the top trends in home décor for this year and some ideas on how to use them in your home. Some of these trends may be especially useful to you if your house is on the market or you are going to be selling this year. Some inexpensive updates can help you sell your house quickly and for top dollar. Today’s buyer is interested in move in ready, up dated homes which is why incorporating some of these ideas may increase your bottom line when selling. The color palette for 2016 is fresh and calming. The Pantone colors of the year are Serenity  ( a pale blue) and Rose Quartz( a blush pink) which will instantly refresh a tired room when used correctly. Paint is one of the most inexpensive ways to update your home and by choosing colors in this modern palette you can have a big impact for a small cost. You want to keep your living room from looking like a nursery so the key is to use these wall colors with furniture and accessories in the correct palette. Rose quartz walls should be paired with furniture in jewel tones like sapphire or burgundy and metallic accents to keep the look fresh.  Serenity can be paired with neutrals like camel or gray and pewter accents for an understated elegant look. One of the top colors for bedrooms in 2016 is lavender. Choose a lavender with gray undertones for a relaxing backdrop to steel blue, charcoal gray, antique  white and metallics.  Master baths... read more

Are You Ready For A Second Home?

It’s winter in northern Illinois and you have been thinking this might be the year to start looking to buy that second home.  Whether the warmth of the Florida beaches, the Arizona golf courses or the mountains of Colorado are calling you, there are some things to consider before you take the plunge. The first item on the list should be the financial aspect of buying and owning a second home. Aside from the purchase price of the property, you need to factor in the costs of actually owning the home.  Taxes, insurance, utilities, maintenance and HOA (home owner association) fees need to be budgeted just as they would be for your primary home. Even though you may only be living there several months out of the year, remember you will have these costs 12 months out of the year. You may be able to rent out the home for the months that you are not using it which can help offset the cost. Don’t forget to consider the transportation costs to and from the property, especially if it is a great distance away from where you now live. If you will be getting a mortgage to pay for the home talk to your lender about the loan costs involved for a second home. Typically the down payment will be higher because it will not be your principle residence and there may be other additional costs as well. Property taxes and homeowner’s insurance may cost more too since you this is not your primary home. Don’t forget to talk with your accountant about how owning a second home could... read more

How to Burglar Proof Your Home

September is Realtor Safety Month and that got me thinking about how most of us don’t give enough thought to safety.  Your home should be your refuge and the place where you feel safe. Having your home burglarized is a traumatic occurrence that we would all like to avoid. Here are a few simple things you can do to discourage break- ins and give you piece of mind. Keep your shrubs and landscaping trimmed back by windows and doors. These areas are prime hiding places for would be burglars, so make sure access to windows and doors is unobstructed. Overgrown landscaping, un-mowed grass or un-shoveled walkways are all signs that the house is vacant. If you are going to be away for any length of time, make sure someone is maintaining your yard as well as bringing in mail and newspapers. A pile of newspapers on the front porch is a dead giveaway that no one is home.  Install motion sensor lights which come on if anyone gets too close to your house. Having your home well-lit will deter thieves.  If you are going to be traveling consider putting lights on timers so rooms are lit up at different times of the night. On trash day, don’t advertise to thieves that you just got a new 60 inch TV or state of the art computer by leaving the boxes on your curb. Take the time to break down the boxes and conceal them in the recycling bin. Also, don’t leave ladders outside and easily accessible to someone looking to break in. Burglars don’t usually carry their own ladders around... read more

Fall Home Maintenance Tips

Ready or not fall is here and that means winter isn’t far behind. Take advantage of the beautiful weather now to get your home ready for winter. If you are a new homeowner, you may not know what you need to do to get your home ready for winter.  If you have owned your home for a while, this will be a good refresher. Let’s start with the exterior of the house. Take a walk around the outside of your home and see if you notice any peeling paint. This is a sign that your paint’s finish is failing and can no longer protect the wood underneath. Scrape and re-paint now before it leads to a bigger problem. Look up at your roof from all angles. Do you see any loose or missing shingles? This may be a sign that it’s time for a new roof and you should have a roofer inspect it now before it is covered in snow and ice. Don’t forget to check your gutters and downspouts. They probably need a good cleaning to get rid of built up leaves and debris. Clogged gutters can lead to ice jams and roof leaks, so if you can’t clean them out yourself, hire it done before winter. Check the caulking and weather stripping around doors and windows.   Replace any loose or missing areas which can lead to drafts and heat loss. Don’t forget your garage door. Make sure there are no gaps when it is closed. If your home has storm windows, remove the screens and put the storms up.  Leaving just the screens on all... read more

New Website for Illinois Property Owners Launches

The Illinois Association of Realtors Real Property Alliance has launched a new website for Illinois property owners: www.realpropertyalliance.org The Real Property Alliance is a non-profit educational foundation for consumers that was founded in 2015. Their goal is promoting growth and limiting taxes and regulations while providing a voice for establishing sound real estate policy. The Real Property Alliance provides services for Illinois property owners and those who are interested in owning property in Illinois. They keep the public up dated on state and local ordinances which have an impact on property owners. They also provide resources for all areas of the buying and selling process. Through a partnership with houselogic ™, information is available on home improvement, home financing and tax tips. The Illinois Association of Realtors provides updates on Illinois real estate trends and market statistics. Realtor.com has mortgage calculators, nationwide real estate listings and a wealth of other real estate information. Links to all these sites can be found on www.realpropertyalliance.org. This new website has information on laws that relate to property owners such as the Illinois law requiring carbon monoxide detectors. A free download for a brochure explaining the law can be found here. Information on other laws affecting Illinois property owners as well as other free downloadable brochures are also available on this website. Are you interested in what the housing market is doing in your area? Market statistics for all of Illinois can also be found here. Is this a good time to buy or sell? Up to date market statistics and current trends are all available here. Wondering what mortgage rates are doing?... read more

FICO Score Message From MICHAEL W ERWIN

The trend now is that if a potential buyer does not have perfect credit they are less likely to even try getting preapproved.  If you know of someone who might be in this boat please forward this communication to them to let them know, it’s ok to try!  They might get a more favorable response than what they thought… The reason there are more buyers out there right now – here is the mortgage credit availability. This is right from the MBA – the Mortgage Bankers Association. “The higher that number is, the more credit is available.” Now obviously, this number would be skyrocketing in, you know, 2004 and 2005, where anyone can get a mortgage. It’d be much higher than it is right now. But I took a look over since April 2013 all the way through this past month, and what we can see is that the availability of credit through a buyer is becoming easier and easier. Meaning even though, you know, we’re hearing things to the contrary, the actual mortgage that are available to a buyer coming in, the chance of them getting that mortgage is dramatically increasing. As a matter of fact, let’s break down some of the numbers. Here are the average FICO scores on conventional purchase loans – people bought a house – this is the average FICO score. What was the 2012 average, the 2013 average, and what was last month’s average? What this graph shows us is that the average FICO score has steadily dropped from 2012 to 2013 to just last month. That’s important. What we’re showing is that... read more

What is a fixture?

One of the biggest sources of misunderstanding in the sale of a home is what stays with the home and what goes with the seller. At the time of sale, fixtures transfer to the new owner with the property unless they are specifically excluded in the purchase contract. Sounds simple enough but just what is a fixture? Look at this list of items and see what you think is a fixture and should stay with the house: dining room chandelier, furnace, dishwasher, window air conditioner, refrigerator, area rug, water heater and countertop microwave. The items that should stay with the house are the dining room chandelier, the furnace, the dishwasher and the water heater. The window air conditioner, refrigerator, area rug and countertop microwave are all considered personal property of the seller and he is free to take them out of the house. So just what is a “fixture” in real estate? A fixture is personal property permanently attached to the structure or land. For example, a dining room chandelier new in the box is personal property but once it is installed and wired into the ceiling it becomes a fixture. A pile of lumber in the backyard is personal property but once it is used to build a deck attached to the house it becomes a fixture. Area rugs are not usually permanently attached and are considered personal property but wall to wall carpeting would be considered a fixture. A window air conditioner can be easily removed and is personal property but a central air conditioner unit is attached to the home and is a fixture. You can... read more

Can You Afford To Buy A Fixer-Upper?

First, some good news: If you read my last column about the new mortgage disclosure laws going in to effect on August 1, the Consumer Financial Protection Bureau has delayed the start date to October 1. This means the banks, title companies, Realtors and consumers will get 2 more months to get ready for all the changes. Are you thinking of buying a “fixer-upper”? Here are some things to consider before putting in an offer. How much of the work can you do yourself? Some of the fixes may be relatively easy like painting, stripping wallpaper and tearing up carpet. Other repairs such as electrical & plumbing take more skill and knowledge. Be honest about your abilities because mistakes can be dangerous and costly to fix. You also need to ask yourself if you have the time to devote to a large remodeling project. Everything takes twice as long as you think it will and living in a construction zone can have it ís own set of challenges. You will also need to estimate the cost of the repairs needed and add that to the price of the home. If you are using a contractor, have him do a walk through before you make an offer to give you a sense of what needs to be done and how costly it will be. If you are planning on doing the work yourself you will save on labor costs but you will need to price out supplies. Either way you go, tack on an additional 10 to 20% for those surprise costs that always arise in any remodel . Don’t... read more

Big Changes Are Coming

Beginning August 1, major changes are coming to mortgages. Any real estate transaction involving a mortgage will use new disclosure forms created by the Consumer Financial Protection Bureau (CFPB). This new disclosures will change the timing requirements for disclosures that lenders make to consumers. What does this mean to you? The strong possibility that your closing may be delayed. If you have taken out a mortgage in the past, you probably were able to close on your purchase within 30 to 45 days. Because of the new requirements beginning August 1, closings will take a minimum of 45 days and may take as long as 90 days or more. Through the Dodd-Frank Act, Congress has ordered the creation of a new form called a TRID. This form contains many intricate requirements for how and when disclosures are made to the consumer. Because of this new timing requirement, a missed date or a change in any of the financial components of the transaction can trigger a delay. A new loan estimate document that will replace the Good Faith Estimate and the initial Truth in Lending Disclosure must be given to a consumer within 3 days of submitting a loan application.. The final loan estimate must be given 7 days prior to the closing. The customer has 10 days then to decide whether to proceed with the transaction. A Closing Disclosure must be given to the consumer 3 days prior to the closing. This disclosure will include all costs related to the transaction. Any changes made after initial receipt will require a new 3 day waiting period. What do all these... read more

5 Common Real Estate Myths Exposed

I’m sure most of you have heard some of the common real estate myths out there. Although they may contain some truth, they tend to be fairly black and white instead of the gray area that lives somewhere in the middle. Here are some of the more frequently heard myths and the real truth about them. 1. The first offer is always the best. This one is usually true. When a home first goes on the market, it has the most appeal to buyers. It is usually when you will have the most activity and hopefully generate an offer. Generally, the longer the home is on the market the less the offers tend to be when they come in. Buyers assume if your home as been on the market awhile the seller is desperate to sell or there is something wrong with the property. Either way, the offers tend to get lower the more days it has been on the market. 2. If your house sells quickly, it wasnít priced high enough. This is usually not true. If your home sells quickly, it was priced correctly. Buyers are smart these days and do their homework. A buyer knows when a home is priced competitively and will choose this home more often than one they know is overpriced. A home that is priced correctly will usually sell for closer to asking price and in a shorter amount of time as opposed to an overpriced home that will take longer to sell and will usually have to settle for a much lower price. 3. I donít have to fix anything, I... read more

Tips on Buying Investment Property

Since the housing market crash has made home ownership difficult for many people, the demand for rental property has increased. If you are thinking about becoming a real estate investor there are some things you will need to consider. Before you start looking for property to purchase, you will need to get qualified for financing unless you are paying cash. If you are not going to be occupying the property yourself you will need a 20-40% down payment depending on your lender. Decide on an area where you would like to invest. If you are looking to invest in single family homes pay attention to school districts, proximity to parks, shopping and locations which would be desirable for families. If you are looking at multi unit buildings which tend to attract more singles than families, then schools and parks may not be that important. Develop a relationship with a Realtor that has experience with investors. They can keep you informed of the inventory and can help you decide which properties would be good investments. Look at as many properties as you can in your price range. That will help you determine market value for the properties you are interested in purchasing. Most properties that are priced to appeal to investors will need some rehab. Be familiar with construction and remodeling costs so you know if having to put a new roof on a house is cost effective or not. If you can do a lot of the work yourself, the costs will be much less than if you have to hire contractors. When considering properties to purchase, foundation issues,... read more

Thinking of Going it Alone?

It ís already March and Spring is just around the corner. Time to think about getting your house on the market. You may be thinking of trying to sell it yourself to save some money. How hard can it be, right? Here are some things to consider before you stick that For Sale By Owner sign in your yard. The most difficult part of the process is pricing your home correctly in todayís market. Price it too high and it will sit on the market for months. Price it too low and you are potentially leaving money on the table. Most homeowners have an emotional attachment to their home, which is natural, but it can make it very difficult to establish the correct asking price. A local Realtor is an expert in our current market and has access to both current and sold listings to use in correctly pricing your home. They are a neutral party and can look at your home with an objective eye. Homeowners tend to base their asking price on emotions rather than actual market data. The National Association of Realtors statistics show that homes sold with the aid of a Realtor actually sold for 19% more on average than those sold by owners. Trying to decide what to do to get your home market ready can also be difficult. You think your home is perfect just the way it is. You did all the decorating and you love your lime green bathroom and your completely wall papered kitchen. You may be lucky enough to find a buyer that shares your enthusiasm but in todayís... read more

Foreclosure Inventory

According to an article written by Brian Honea along with data from Black Knight Financial Services: There is some good news concerning foreclosure properties as of the end of January 2015, foreclosure inventory year over year in January fell by 31.4%–as good as that sounds, the foreclosure starts were 5.5% increase month over month. The starts were 94,000 for January which was the highest number since December 2013. The number of nationwide properties in pre-sale inventory for January was 815,000 with the 31.4% decline which amounts to 316,000. The delinquency rate (% of loans 30 days or more past due but not yet in foreclosure) was 5.56% in January which is a decline of 1.4% from December and 11.3% from December 2013. The number of delinquent Mortgages in January was 2.8 million which was a decline of 55,000 from December 2014 and 327,000 from January one year ago. The number of properties that were 90 days or more past due but not in foreclosure was 1.12 million, down by 20,000 month over month and 177,000 year over year. In another article from Brian, he states that JWB Real Estate Capital (Florida) has published an online investment property short sale guide which provides information for property owners on foreclosure prevention. Although the legal process varies state by state this guide may be used by property owners who are behind on their payments to help them understand the options and hopefully prevent a foreclosure on their own home. http://www.jwbrealestatecapital.com/can-you-short-sale-an-investment-property/ Thank you Brian for sharing your information with us. Teresa... read more

Demystifying Property Taxes

As a Realtor, the subject I hear most about seems to be property taxes. No one likes them and everyone thinks they are too high, but they arenít going away. From talking with clients about property taxes I have discovered that there are many people that donít understand how property taxes are calculated. I canít tell you how many times I have heard ì I donít want to look at houses in that neighborhood because taxes are too high thereî. Please pay close attention to this: THE TAX RATE IN FREEPORT IS THE SAME ALL OVER FREEPORT!! Shocking isnít it? Property taxes are based on the assessed value of the property. A $100,000 house in the City of Freeport will have the same tax amount no matter where it is located within the city. Once the market value has been established on January 1 of each year, the assessed value will be 1/3 or 33.33% of the market value for that year. The assessed value is multiplied by that yearís tax rate and that is how your property tax amount is calculated. If the property owner is eligible for certain exemptions ( Owner Occupied, Senior Freeze or Disabled Veteran for example) those exemptions are subtracted from the assessed value. As a result, the property taxes are reduced. Obviously, there are areas in Freeport where the assessed value of properties will be higher than in other areas, but the assessment determines the amount of the tax. The actual tax rate does not vary from neighborhood to neighborhood. As long as it is in the city, the tax rate is the... read more

Tax Time is Coming

The hustle and bustle of the holidays is behind us and 2015 is here. Before we know it, tax time will be upon us and if you are a homeowner there are some things you will need to think about before you file your income taxes for 2014. In January or February you will receive information in the mail that you will need when you do your taxes. If you have a mortgage you will receive a statement showing the amount of mortgage interest you paid to your lender in 2014. In most cases this amount is tax deductible and can be significant since interest makes up the majority of most peopleís mortgage payment. Property taxes are also deductible in most cases. In order to take advantage of these deductions you will most likely need to itemize your taxes which takes some extra effort but is usually well worth it. Besides the mortgage interest and property tax deductions, there are other deductions which you may qualify for as well. If you have made modifications to your home for a medical condition, some or all of the expense may be deductible. For example, installing a ramp, modifying a bathroom or adding handrails may be deductible as medical expenses. The amounts must be reasonable and medically necessary in order to qualify. Any of these improvements that are done to increase the value of the home will probably not qualify as medical deductions. Another area you may be able to get a tax credit for is installing a qualified energy generating system. There is a tax credit available until December 31, 2016... read more

Should I List My House In The Winter?

It ís December and you need to sell your house. You are probably wondering if you should try to put it on the market now or wait until Spring. Houses do sell in the winter and there may be some benefits to listing your house this time of year. Everyone knows that the prime buying season is during the Spring and Summer months, but just because there is snow on the ground doesnít mean that the buyers have disappeared. People need to, or decide to move all year long. Itís true that the buyer pool dwindles in the winter but life happens, circumstances change and people need to move. Re-locating for a job, growing families, divorce, marriage and death are all reasons people may be in the market for a home and these things can happen any time of year. Obviously, the weather is a disadvantage during this time of year. Cold temperatures, snow and ice are not what most people consider ideal moving weather. Thatís just the reason most people delay listing their house until Spring. The housing inventory is significantly lower during the winter months, which means buyers have less to choose from. If you list your house this time of year you have significantly less competition. Listing your house at holiday time can be a little tricky. Should you put up your Christmas decorations? What if someone wants to see your house and you are in the middle of your holiday baking? Itís ok to decorate your home for the holidays as long as you donít go too crazy. Remember, people need to see your home... read more

REO industry

On November 20, 2014 I was included in a webinar that was hosted by the President and CEO of The Five Star Institute regarding the REO industry. Mr. Delgado has vast knowledge of the REO industry and his take on REO’s for 2015 is that they will increase 2%-4% nationally from where they are today. Right now according to his figures at the end of the 3rd quarter of this year the delinquency rate was 6.9% and he sees it decreasing to 6%. The normal rate of delinquency is 3%-4%. In March of 2013 it was projected by some that the immediate danger of foreclosures would be 7.4 to 9.3 million, the actual shadow inventory in Jan 2013 was 2.2 million and in Jan 2014 it was 1.7M, down 23%. As you can see by the two HAMP charts (courtesy of Special Inspector General Troubled Asset Relief Program) the HAMP program had good intentions but it’s not working; Once the year six comes the payment starts to climb due to the adjustable rate mortgage—then you pay the taxes, insurance etc besides. Ouch! Right now according to the chart furnished by the Mortgage Bankers Association, the foreclosure starts are close to what they were in 1995 so they are not going away but hopefully will not rise back to what they were in the recession of 2009-2011 and the chart from the National Association of Realtors show that the reported foreclosed sales this year continues to slide. Finally the chart showing the supply and demand seems to be slowly improving over the recession years but not enough yet to breathe... read more

My Listing Expired…Now What?

Having your listing expire is frustrating to say the least. The way the Freeport IL area real estate market is right now, there are a lot of homes that don’t get sold by the end of their listing period.    The unfortunate fact is that there are about 342 homes and condos for sale in Freeport.  On average about 25 or so get sold each month.  I wish the news was better, but it is what it is.  The homes that sell are the ones that are correctly priced for the market, area, and condition and that are marketed aggressively by the listing agent.    Ok, your home listing has expired so now what do you do. Option A:  Re-List the House If you feel that your agent did a good job, by all means re-list with your original agent.  If they gave you good advice (did you take it?) and worked hard to market the home, you’re better off staying with them and extending your listing.  They already know your home, your financial situation, and your personal goals. If you feel that your real estate agent is partly to blame for your house not selling, then find a new one. Get the real estate agent that you feel will do the best job marketing your home, not based on what they say they will list it for. We don’t decide what houses will sell for.  Buyers do.  Reaching the right buyer is critical, and marketing is how that happens. Speaking of listing price, whichever agent you choose to re-list you’ll need to take another look at your bottom line and your asking price.    With the market... read more

Seller Tip #1

I get so many questions from home sellers – from what repairs they should make, to what to do with the dog during showings, that I’ve decided to begin a series on seller tips… Tip #1 – Depersonalize Your House When talking with real estate agents, have you noticed that when they talk to you about selling your home they refer to it as a “house”, but when talking to you about buying a home they refer to it as a “home”?   Well, there’s a reason for this. Buying real estate is often an emotional decision, but when selling real estate you need to remove emotion from the equation. You need to think of your house as a marketable commodity. Property. Real estate. Your goal is to get others to see it as their potential home, not yours. If you do not consciously make this decision, you can inadvertently create a situation where it takes longer to sell your property.   The first step in getting your home ready to sell is to “de-personalize” it. The reason you want to “de-personalize” your home is because you want buyers to view it as their potential home. When a potential homebuyer sees your family photos hanging on the wall, it puts your own brand on the home and momentarily shatters their illusions about owning the house. Therefore, put away family photos, sports trophies, collectible items, knick-knacks, and souvenirs. Put them in a box and store them away…far, far away…. Stay tuned – more tips to... read more

Thinking of Selling By Owner? Here’s What An Agent Can Do For You

A lot of people try to sell their homes as For Sale By Owner, and some do get the home sold.  Staticstics show, however, than in many cases the sellers would ultimately have been better off in the end to have listed their homes with an agent from the start. Top 9 Reasons For Real Estate Representation: To Optimize Asking Price.Properly pricing your home is perhaps the most crucial factor in making a sale, and without access to all the data it can be really difficult.   They’ll compare your home and your asking price to similar homes on the market. If your price doesn’t stack up, they may reject it and move on to the next listing. And the longer your property sits on the market, the less marketable it becomes because buyers begin to wonder if something is wrong with it. Pricing your home too high may increase the time your home spends on the market. That’s why your first step in determining the right price for your home is to have an experienced real estate professional prepare a comparative market analysis (cma) report for your home. The report provides details on recent sales of homes similar to yours, as well as the asking price of homes currently on the market. Your agent will then balance that information with other factors such as location, condition of your home, special interior or landscaping features, age of the house, and your time frame to determine a fair and competitive asking price. To Get Your Home Ready to Show.  Is part of an agent’s job to know what buyers want to... read more

Are Home Warranties Worth the Money?

If you own your home or are considering purchasing a home you might want to consider buying a home warranty. Home repairs can often run thousands of dollars and a quality home warranty could save you from having to pay costly repair bills. What is a home warranty? Home warranties are a protection plan for certain components of your home. You buy coverage for a year at a time for between $370 and $650 depending on the company and the coverage selected. The coverage can vary between companies so read the policy carefully to determine what is being covered. Typically, a home warranty will cover appliances, water heaters, furnaces, air conditioning, some electrical and some plumbing. Additional coverage can be purchased for such things as garage door openers, water softeners, freezers, well pumps, swimming pools and roof leaks. Some companies now offer options for such things as improper installations, pre-existing conditions, code violations and removal and disposal of old equipment. After the initial purchase of the home warranty you will pay a deductible for each service call you have. The deductibles can range in price from $55 to $150 depending on which company you use. If you have a need for service you call an 800 number and the warranty company will send a repair person to your home. You cannot just call a repair person yourself and expect to get reimbursed for the repair. Home warranty companies have contracts with local repair people all over the country and you must use the repairmen that they send out. Some companies are better than others when it comes to response... read more

Why Does A Short Sale Take So Long?

Contrary to what the name implies, a short sale is usually a very lengthy process. A short sale is the sale of a home for less than the amount owed on the mortgage, and the lender agrees to give clear title to the new buyer. This means that the lender is forgiving the additional debt owed by the borrower and releasing their lien on the property. A short sale is generally less damaging to the sellerís credit than a foreclosure, but it will still have a negative effect on your credit score. If you own a home thatís market value is less than your mortgage balance and you are having difficulty making your mortgage payments, a short sale maybe the answer. The first thing you need to do is contact your lender. Since the housing crisis of 2006, most banks now have loss mitigation or short sale departments. You will need to fill out a short sale packet which your lender can send you. As part of that package, you will need to write a ìhardship letterî explaining why you are unable to make your mortgage payments and that the situation is unlikely to improve in the future. This is the most important step in obtaining short sale approval because the lender needs to believe that you are unable to meet your financial obligation to repay the loan. You will also need to provide financial records showing proof of income and assets to demonstrate that you do not have the ability to repay the loan. They will also want a preliminary net sheet that shows the sale price you... read more

Which Home Improvements Really Pay Off?

If you are thinking about tackling a home improvement project this summer, you might be wondering which up-dates will give you the highest return on your investment. Contrary to what you may see on HGTV, you can generally recoup the most value on projects that improve your curb appeal. Remodeling your kitchen and adding granite countertops and stainless steel appliances can improve the salability of your home but the percentage of return on your investment is relatively low. According to Remodeling Magazines 2014 Cost vs. Value report the best return on your investment dollars is replacing your front door. Installing a steel entry door with a glass panel and new hardware can yield up to a 96% return on your investment. Other projects that increase your curb appeal and have a high return on investment include adding a deck, replacing windows and siding and installing a new garage door. At the bottom of the list for projects that have the least return on your investment are roof replacements and back up generators. Obviously, if your home needs a new roof you will have to replace it but buyers look at this as a maintenance issue and you only recoup a small percentage of your expense when it comes time to sell. Similarly, a generator can provide necessary piece of mind for the owners, but most buyers do not consider this to add significant value to the price of a home. Somewhere in the middle are interior improvements such as kitchen and bathroom remodels. Both generally yield about a 67% return on your investment. Kitchens and bathrooms sell homes so... read more

What to Expect at a Real Estate Closing

The final step in a real estate transaction is called the closing. When you are buying a house, this is when all the papers are signed and the ownership transfers into your name. If all goes well, you walk out with the keys to your new home! If you have never purchased property before, the closing process can seem a little intimidating. If it has been awhile since you bought property, a lot has changed. After all the contingencies have been met ( all inspections completed satisfactorily, the appraisal completed and your financing has been approved) you are ready to schedule your closing. Your closing will be scheduled on or before the closing date you agreed to in your contract. Until that time, the seller still owns and will probably retain possession of the property. Keep in mind that you are usually unable to move anything into the house until after the closing. When you are preparing for your move, make sure you have scheduled movers for sometime on after the closing date. Besides scheduling the movers, you will also need to have all utilities put in your name. This includes gas, electric, water & sewer, cable, phone and internet, if you wish to have them. Usually, you need to have all the utilities put in your name as of the date of closing. Make sure you allow enough time for the transfer to occur- at least a week before you should have this done. Also, some companies may require a deposit if you have never had service in your name. You will also need to have homeowners insurance... read more

How to Make a Winning Offer

Once you have found the house you want, you need to make a written offer to buy it. There are many things to consider before you write the offer. You will need your pre-approval from your lender, an earnest money check( an amount of money you put down when making an offer to demonstrate your good faith, usually $1000 or more based on the price of the home) and a written offer to purchase that you will complete with the help of your Realtor. Obviously, the price you wish to offer is an important consideration but there are many other factors that may affect whether or not your offer is accepted. These other factors are called contingencies and they may sometimes be as important to the success of your offer as the price. If you are obtaining a mortgage to purchase the property then your Realtor will want to include a financing contingency. The bank will normally also require an appraisal of the property to be completed and therefore you will also need an appraisal contingency. If you are paying cash, you will need to decide if you wish to have an appraisal done, since it is not required. In the financing contingency, you will need to include the type of mortgage you are obtaining( conventional, FHA, VA, etc.) and the date by which you will be providing the seller with your final loan approval (typically 30 days or so). If you have already been pre-approved, the bank should have all the required documentation from you and will just need a copy of the final purchase contract and the... read more

The House Hunt

In my last column I discussed the first step in the home buying process: getting pre-approved with a lender. Once you have been pre-approved you will know what price range to focus your home search in and what type of loan you have been approved for. If you are getting a government backed loan product(FHA, VA or USDA Rural Development to name a few) your home search should be focused on properties that meet the criteria for that type of loan. Typically, foreclosure properties will not meet the standards that these loans require their properties to meet, so keep that in mind when doing your home search. Your lender can tell you what types of issues you need to stay away from but typically they are health & safety concerns. Peeling paint, broken windows, mold, un-safe wiring and in-operative furnaces are some examples of items that would affect your ability to obtain a mortgage on that property. Now that you have been pre-approved for a loan and know your price range, where do you start to find a home? According to the National Association of Realtors 90% of todayís homebuyers start their home search on the internet. With the popularity of such real estate websites as Realtor.com, Trulia and Zillow, home buyers can search a specific price range and location and immediately see what is available for sale from the comfort of their living room. These websites are useful tools for getting a market overview and a feel for what is available in your price range, but they are no substitute for touring a home in person. Before you... read more

So You Want To Buy A House?

Spring is just around the corner (really, it is) and youíve been thinking it may be the time to start looking for a home. If you have been on the fence about buying, itís a good time to make that decision. There are many reasons why now is a good time to start your home search. Interest rates are still very low, home prices have not rebounded here yet as they have with some bigger cities and spring is typically when most sellers list their homes. Aside from the obvious tax advantages of home ownership ( mortgage interest and property tax deductions to name a few) in many cases it is actually less expensive to own a home than to rent. Instead of paying monthly rent to your landlord, you could be building equity in your own home with every mortgage payment you make. Ok, so Iíve convinced you itís time to think about buying a home, but where do you start? This is the first in a four part series examining the steps to purchase a home. The very first step is to get pre-approved with a lender for your mortgage. Many people think they know what price range they are in and start looking for a house before talking to a lender. Big mistake! More often than not, you think you will qualify for more than you actually do and you find that the house you fell in love with is out of your price range. Rather than risk disappointment, make an appointment with your local loan officer and get pre-approved. You will need to bring some... read more

Is a Reverse Mortgage Right For You?

If you watch TV, you have probably seen one of the recent commercials featuring a celebrity touting the benefits of reverse mortgages for senior citizens. It sounds too good to be true, right? Actually, it can be a valuable tool for senior homeowners struggling financially, if used properly. A reverse mortgage, called a home equity conversion mortgage (HECM), originated in 1988 and is a special type of home loan that lets seniors convert a portion of the equity in their home into cash. Unlike a traditional home equity loan or second mortgage, payments are made directly to you. No repayment is required until the last surviving homeowner permanently moves out of the property or passes away. These payments do not interfere with Social Security or Medicare benefits and are tax-free until you sell the property. In order to eligible for a reverse mortgage, all homeowners must be at least 62 years of age and the home must be free and clear of all liens. If there is a mortgage balance, it must be paid off completely with the proceeds from the loan. There are generally no income or credit score requirements, unlike traditional mortgages or home equity loans. Title remains in the homeownerís name but the bank adds a lien to the property for the amount of the debt. Almost all types of homes are eligible for a reverse mortgage including FHA approved condominium units. The amount you can borrow is based on the homeownerís age, current interest rates and the propertyís appraised value. You can receive a lump sum payment, monthly payments or a line of credit. Prior... read more

Grant money still available for Freeport homebuyers

If you are considering purchasing a home in the city limits of Freeport, you may be able to qualify for a grant. In order to be eligible for the grant money, the home must be unoccupied. You must be able to meet the eligibility requirements, including income limits. Depending on your income, the grant includes $3,000 to $5,000 in down payment assistance and up to $20,000 in rehabilitation money. The home must be in reasonably good condition so the repairs do not exceed the money available for rehab. If the home needs a roof or new furnace and new floor coverings and paint, you may be able to do all that for under $20,000. If the home needs new windows, a new furnace, new plumbing, new wiring, a new roof or a new kitchen, it probably is not a good candidate for this program. You do not have to be a first-time homebuyer to qualify for the grant, but you do need to occupy the property. If you live in the home for at least five years, and the loan will be forgiven. This is not the program for someone that is looking to flip a property. It is intended to encourage owner/occupants to purchase vacant inventory and upgrade them rather than have them remain empty and fall into disrepair. There are a good number of vacant homes on the market right now, and not all are foreclosures or bank-owned properties. Sometimes the owner has bought another home before his or her current one sold, and it is sitting empty. These types of homes would still qualify for the... read more

Preparing your home for sale

It only takes 15 seconds for a prospective buyer to decide how they feel about your house. That is how long your house has to make a good impression and capture that buyer. If you are getting ready to list your house, here are some tips to make yours stand out from the crowd. The first thing a potential buyer notices is your home’s exterior or “curb appeal.” If the outside of your home looks unappealing you will never get that buyer in the door. Make sure the lawn is mowed, the bushes are trimmed and all the “stuff” — kids toys, garden equipment and junk — is put away. Landscaping is important in the spring and summer months. Plant some colorful flowers and hang a few baskets with flowers and a new welcome mat by the front entrance. Make sure there is no peeling or faded paint on the exterior of your home. Paint your front door a stand-out color to make your entry pop. Moving on to the interior, the front entryway is the first impression buyers will have of the inside of your home. Again, de-clutter, you don’t want prospective buyers tripping over 10 pairs of shoes when they walk in the front door. Pack up unnecessary knickknacks and personal family photos. You want buyers to be able to picture their family living there. Make sure every room is clutter free. You may love your collections displayed throughout the house, but to a potential buyer they are distracting so pack them away to take to your new home. Most buyers are looking for a move-in ready... read more

Anne Sadler: Should my home be tested for radon?

If you have bought or sold a house in the last several years, you were probably asked if you wanted the home tested for radon. The first thing you need to know is what radon is. Radon is a colorless, odorless radioactive gas which comes from uranium in the soil. It is classified as a Class A carcinogen by American Medical Association, American Lung Association and other health organizations. Radon is the second-leading cause of lung cancer after smoking. Northwestern Illinois has elevated levels of radon in the soil according to the Illinois Emergency Management Agency. The only way you can know for sure if there are elevated levels of radon in your home is to have it tested. The United States Environmental Protection Agency recommends that the indoor radon level be below 4.0 Pico Curies per liter of air. Any measurement above this amount would require steps to be taken to mitigate, which would reduce the level of radon present in the home. If you would like to test your own home, you can obtain a test kit at the county health department, or home improvement stores. You can get more information about home test kits and radon at radon.illinois.gov. If you are purchasing a home and you would like a radon test done, you will need to hire a licensed professional tester. The actual test takes 48 hours, and the monitor is set up in the lowest level of the home. For 12 hours before the test and the 48 hours during the test, closed house conditions must be followed. This means doors and windows must be... read more

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