| 815-235-2111 | 815-616-5311 ask@choicerealtyfreeport.com

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

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

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

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

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

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

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

Pin It on Pinterest

Share This