Updated: Saturday, January 16, 2021

Ask the HOA Expert: Vendor Interference, Adjoining Decks, Quorum

Question: Our HOA has a resident that interferes with vendors. Our landscaper has threatened to quit due to the harassment. The resident has been advised in writing to cease and desist but it continues. Suggestions?

Answer: Its not uncommon for certain residents to engage contractors in conversation, usually trying to be sociable or helpful. This is particularly true of landscape contractors. Most landscapers know this and should be instructed not to respond or instruct the resident to "talk to the Board."

If this has been done without success, I suggest someone on the Board meet with this person and discuss the reasons for his interference. Some of his concerns may be legitimate. If so, address them in writing with the landscaper and send the owner a copy of the letter. But if the interference is unjustified and just meddling, other tactics need to be used.

Try one more letter stating that the previous courtesy letter has been ignored so the landscaper will bill for additional time in dealing with him if he continues to slow them down. Add that if the HOA is billed, he will be charged for it. Then, ask the landscaper to monitor the situation and to journal when interference happens. If it does, ask him to submit a bill to the HOA for the time at his normal rate. Bill the owner. This usually stops the meddling. If not, have the landscaper submit another bill and charge him again. Make sure to enforce collection if it goes unpaid. Some folks can be pretty stubborn but most come around.

Question: Our townhomes each have a rear deck. Two adjacent owners submitted a request to add a brick patio in between their two decks. Besides the fact that there is a utility easement buried cable where they want to install the bricks, it seems inappropriate to allow this installation since future owners might not be so neighborly. Thoughts?

Answer: This was probably a cost sharing scheme to develop additional patio space for half the cost. There are several approaches to responding to the request. If the expansion area is common area, the Board has no authority to permit individual owners using it for private space. Case closed. If the space is limited common area, the utility line easement access would be compromised. Case closed. Your observation about how this would impact future owners of this property is also valid. Again, case closed.

Question: I recently ran for and got elected to the board. I was reading the bylaws and it occurred to me that we didnt have a quorum so the election was illegal. I did further research and discovered that weve never had a quorum in the three years that the HOA was turned over from the developer. Im concerned that since none of the board members were legally elected, their acts have not been legal either. I believe all the liens, contracts and other approved actions should be redone. Our property manager believes Im overreacting, stating that most of the annual meetings she coordinates lack a quorum for elections. Am I making too much of this?

Answer: Your concerns about the quorum are valid. While its true that many owners dont choose to attend the annual meeting, using apathy as the reason to run roughshod over quorum requirements is a lame excuse. The Board is responsible for proper and advance promotion of the annual meeting. There are a number of ways to attract greater numbers and accomplish a quorum. Holding a potluck following the meeting often attracts greater numbers and ensures the meeting doesnt drag on.

One essential component of holding an annual meeting is issuing proxies to all members. A proxy is a form which authorizes another person to act on behalf of the proxy giver. All owners should complete and return one before the meeting to guarantee a quorum. Any member that attends the meeting me>

Your concern about redoing past Board actions is unrealistic and would be a nightmare to accomplish. Opening up this Pandoras Box would allow challenge to anything and everything the Board has done. While its possible a member may raise the issue to justify violating some policy or rule, its unlikely. Its better to let sleeping dogs lie and strictly adhere to proper quorum requirements in the future.

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2021’s Hottest Home Décor Trends

Most of us were more than happy to say goodbye to 2020, but we could still be spending a fair amount of time at home early on in 2021.

With that in mind, the following is a roundup of some of the dcor and design trends that are popular right now.

Comfort and Functionality

2020 was a year when most of us spent more time at home possibly than ever before. We were not just spending our free time at home, but perhaps cooking more at home, working from home, and working out from home.

That made comfort and functionality top priorities in home design.

Instead of the unused guest room or formal living room, the focus of home design right now is on creating spaces that work for our life>

Think about the overstuffed furniture >

There is likely to be a move toward softer and more traditional dcor >

For a lot of us, home design right now is also about utilizing all of the spaces in our home and maximizing what were able to do from home. That might mean revamping your home office or adding a gym. nbsp;

Lighter Wood

If youre thinking about buying new furniture or installing new floors, lighter wood will be popular in 2021. Think about blonde and light oak woods. They can keep a space still feeling airy and modern, even if the furniture is more traditional.

Light wood can open up a space and make a small room appear much larger.

Grandmilllennial

The term grandmillennial is one being used by some designers. What it means is that you might see a move toward those traditional >

There are elements of history and nostalgia in these >

Whats great is that you can also buy antiques or use pieces handed down through your family, which is valuable from a sustainability standpoint.

Dont Count Out the 80s

Everything old is new again, and 2021 is the year the 80s dcor >

Bar>

Another way the 80s is inching back into home design?

Wicker and rattan furniture.

Made from woven twigs and palm stems, this furniture is chic, lightweight, and versatile.

Goodbye to Shiplap

What about those trends that we might say goodbye to in 2021?

Shiplap may be one.

For years, shiplap was the go-to wall trend made popular by Joanna Gaines.

It was everywhere, and it did offer an easy way to incorporate texture into a space, but for many of us, were feeling a bit tired of shiplap.

Shiplap might take barn doors with it as it exits.

To continue with texture, shiplap could be replaced with plaster walls, which are once again growing in popularity.

No More GrayBuy Maybe Green?

Finally, in kitchens for years gray cabinets were coveted. Now, we may see a move away from that and instead we could see green cabinets becoming popular. Indigo blue is another bold choice that could become increasingly utilized in 2021.

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Where Do I Go From Here?

Where do you go from here?

Interest rates are at all-time lows.

Pivoting into a new life and life>

Working from anywhere, including home, is a viable and valued career option.

Home is the new headquarters, representing security and freedom.

Life used to be super busy, hyper accelerated. We navigated a continuous stream of must dos, deadlines, and responsibilities. Eating out was where the money went.

Now weve adjusted to a less frantic pace of life with time to think and to sleep. Cooking-in has saved us a lot of money. What really matters has become clearer to many people.

Marketing pitches will rev up again and lead us back into that spending-buying frenzy unless we take this rare opportunity to consider where wed like to end up and how we can reach a new, valued destination.

In the midst of this awakening of new possibilities, success may be linked to the way you think about home. Which of the following perspectives on home are >

Not a Burden but a Partner

The pandemic proved home can be a partner: A safe haven, a workplace, a school, an entertainment center, a technology hub, shelter from a virus. Stop thinking of your home as a nest egg to look after passively until you cash it in to retire to a rocking chair. That type of retirement is long gone. Hurrah

Home has many different roles to play. Treat home as a partner and look for ways to put it to work for you and your family.

Not an Expense but an Enterprise

When it comes to home and money, most people are their own worst enemy. The fact that home buyers automatically expect to be poor when they buy a home is the root of the problem. Buyers often buy more house than they need or can comfortably afford. They overlook the importance of location to value, buy in peak markets and sell in slumps, and overlook real estates tax and investment advantages.

Having home and money too involves adopting a money-management attitude, not a get-rich-quick philosophy or a passive caretaker role. This may include managing built-in apartments, rental out-buildings, or short-term holiday rentals to generate income seasonally or annually. Operating a business from home has many financial and life>

Not a Fixed Asset but a Flexible Environment

The life cycle of home ownership for a newly-married couple traditionally started with a small bungalow. They later moved into a larger home when children arrived and then eventually into an even larger home, with amenities like a pool, where each teenager had their own room. The ownership cycle ended for the original owners when they retired and moved into a small rental. Their house was often taken over by one of their adult children and their family as the ownership cycle began for them.

Variations on this cycle included a divorce at some stage when the home was sold to buy two or a renovation to accommodate adult children moving back home, perhaps with their young children.

Now, the traditional family has changed dramatically and, along with it, the cycle of home ownership. Now, a rental unit may be added to help pay off the mortgage and removed when children arrive.

Homes are often dramatically renovated to accommodate a growing family rather than up-rooting school-age children in a move. A preferred life>

Home is seen as a flexible environment which can be renovated to fit the current and every-changing needs of owners.nbsp;nbsp;nbsp; nbsp;

Not a Monster Home but All Thats Needed

Growing concern for the environment increasingly sees many buyers searching for more compact, environmentally-friendly housing instead of massive energy-hog houses that reflect keeping-up-with-the-Jones life>

At the other extreme, moveable, compact tiny homes have become popular with home buyers who want adventure and a cost-effective life>

Condominium units exist in a range of sizes from a few hundred square feet to multiple floors, enabling buyers to purchase as many square feet as they need or can easily afford.

Not Safe but Climate-Change Impacted

Rising sea levels and raging wildfires are two common natural disasters attributed to climate change. Are climate change and environmental degradation, like contaminated drinking water or poor air quality, factors to take into account when buying?

Not a Short-term but a Long-term Home

The search for my forever home is now a common one. A building and land that are so beloved and sustainable that the owners will not want or need to move again is a high priority for many buyers. Unique properties like farms and waterfront homes and amazing urban or rural locations often lead buyers into long-term attachments.

Not a Solo Venture but a Group Investment

Real estate prices have risen dramatically in many areas. Pooling resources with friends, >

Not a Single Place but a Variety of Life>

Wealthy families are not the only ones who can own multiple properties. Those with more modest incomes can become savvy real estate buyers and build a portfolio of income-earning residential or commercial properties:

Individuals can partner with friends, family, or colleagues to share two or three properties around the world.
When businesses are involved, owning properties in several locations may be financially feasible and even necessary.
Buy multiples in one location for life>

Not Isolated but Connected

Where do you want to live? What do you want to have access to? What climate do you >

Let go of the past and reach out to explore the variety of housing options and life>

With all this flexibility, theres no end to what you can achieve, even on a modest income. Technology is going to open up more and more options. What variations on home ownership can you add to the list above?

During research for one of my books, Have Your Home and Money Too no longer in print so skip Google, I was dazzled by the amazing ingenuity of home owners from all walks of life and income levels. Now, weve settled into a follow-the-leader pattern of home buying and ownership which may not provide all the life>

Are you ready to think way outside the box of home ownership in a year that already has us thinking way out there about so many things?

Lets make 2021 a year celebrated for the return of safe hugs

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What Exactly is a ‘Government Backed’ Mortgage?

One may or may not be familiar with the term government backed but it might be a bit confusing at first. First, what its not, isnt a guarantee someone is going to get a mortgage because its backed by the federal government. These types of mortgages are differentiated from so-called conventional mortgages. A conventional mortgage is one where the individual lender assumes all the risk of issuing a particular home loan. A government backed mortgage has degree of a guarantee should the loan ever go into default.

Most conventional loans issued today are those underwritten to Fannie Mae or Freddie Mac standards. When a lender makes a loan based upon these guidelines, the loan is typically sold to either Fannie or Freddie individually or in bulk. Most conforming conventional loans make up nearly two-thirds of home loans issued today. The rest fall into the government backed category while a still smaller percentage are called portfolio loans where the lender has no intention of selling the mortgage but instead keeps it in-house.

There are three prominent types of government backed mortgages and they are those underwritten to standards issued by the VA, FHA and USDA. But while these loans do carry some sort of guarantee, the guarantee is issued to the individual lender, not the borrower. This is where some get confused thinking a guarantee is a promise to issue a home loan. Instead, the guarantee compensates the lender for part or all of the loss sustained during the instance of a default.

VA loans are guaranteed at 25 of the loss. If a VA loan goes into default and the loan amount is 200,000, the guarantee to the lender would then be 50,000. This guarantee is financed with the VAs Funding Fee. This is in essence an insurance policy with the lender as the payee. The funding fee can vary based upon the number of times the borrower has used the VA program to buy a home. Currently, the funding fee is 2.30 of the initial loan amount but is not paid for out of pocket but instead rolled into the final loan amount.

The Federal Housing Administrations FHA home loan program also carries a guarantee but instead of partial compensation to the lender the lender is compensated for the outstanding loan balance. There are two such fees for the FHA program, an upfront fee and an annual fee paid in monthly instalments along with the regular mortgage payment. The upfront premium is 1.75 of the base loan amount and the annual premium is based upon the original down payment amount and the actual term of the loan. Each year, as the mortgage balance is paid down, the annual premium is recalculated for the coming year.

The last of the three is one developed by the United States Department of Agriculture, or USDA. The USDA loan also provides full compensation to the lender in the instance of default and like the FHA program has two separate fees. The upfront fee is based upon 1.00 of the initial loan amount and the annual premium is 0.35 of the outstanding loan balance.

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Pros and Cons of Buying a Tiny Home

What was once written off as a short-term trend has proven to have staying power. And, tiny homes are no longer being associated primarily with millennials, either. There are plenty of stories of families choosing to live leaner. Tiny homes are now increasingly the choice of seniors, as well.

Tiny houses can be an attractive option for retirees who want to downsize after the kids leave the nest, said TODAY. For one thing, they can come with major financial advantages. One retired woman TODAY profiled paid 65,000 for her tiny house, an incredible bargain compared to Portlands median home sale price of 394,100."

But that doesnt make tiny living a breezeespecially for those who are used to more space. Here were breaking down the pros and cons.

Pro: Yes, theyre affordable

The price is right for tiny homes regardless of location.

A tiny house costs a lot less to build than a full-sized one. According to The Tiny Life, its possible to build a tiny house for 23,000 on average. The average price for a full-sized house, by contrast, is 272,000more than 10 times as much, said Money Crashers. Cutting back on housing expenses enables tiny house owners to put more money toward luxuries such as travel, save for retirement, or simply work less.

A tiny home also often means no mortgage, which, if the buyer can swing it, means they dont have to pay interest and can own their home outright. The Tiny Life reports that 68 of tiny house owners own their homes free and clear, as compared to just 29 of all homeowners.

Con: Yes, theyre small

Technically, this could also be a pro for those keen on tightening up their footprint, but, for most people, the idea of living in 100 to 400 square feet the average size of a tiny home, is a deal-breaker.

Living in a tiny home means youll have to do a lot of sacrificing in order to downsize, said Little House of Four. More often than not youll have to give up your private office, art studio or home gym. Your washer and dryer will more than likely end up in your bathroom or kitchen and youll have to do some serious compromising when it comes to what you bring into the home. There are ways to remedy these sacrifices, but youll still be giving up your privacy and downsizing no matter how creative you get with storage.

Pro: Theyre portable

If you buy a traditional house, youre not likely going to load it up on a truck and move it somewhere else when you desire a change of scenery. But, with a tiny home, thats part of the allure. A tiny house can easily be fitted on a flatbed truck, which makes delivering them to buyers, as well as future resettling really easy, said Millennial Magazine. Whether they are stuck with a bout of wanderlust, seeking new job opportunities, or just want to spend a season living close to a beachmillennials are sure to appreciate the fact that they can simply pack-up their house and go on their way.

Con: Lack of personal space

Forget about that man cave or even a she shed. If you need a little space to yourself, thats going to be hard to achieve in a tiny home. Living in a tiny home by yourself might be easy, but sharing a small space with one or more people can be a challenge, said Little House of Four. Theres no personal space to spend time alone or even roll out an exercise mat and get in a workout. Those of you that are extroverts may have no problem being in tight quarters with others, but introvertsmay miss the alone time that a larger house can offer.

Pro: Theyre clever

You think you have some smart storage solutions in your home? Imagine what youd need to fashion if you lived in 200 square feet There are tons of great ideas out there. Were digging the smart storage under the stairs here nbsp;and the cabinet walls here.

Con: They still lack storage because they lack space

No matter how many witty ideas you come up with, youre never going to have an ample walk-in closet and tons of kitchen cabinetsboth of which are ingrained in the typical vision of the American dream.

Pro: Theyre greener

Tiny homes are, by their very essence, more environmentally friendly simply because, Their size means that they require substantially fewer building materials to construct, which makes it viable to use more expensive, eco-friendly components and still keep costs down overall, said Millennial Magazine. Plus, >

Con: Zoning Rules

Although a tiny house doesnt require much land, many towns make it difficult to build one, said Money Crashers. Zoning laws often include a minimum size for dwellings, and a 200-square-foot tiny house isnt usually big enough to make the cut. To get around these rules, some tiny house owners buy a full-sized house, rent it out, and then park their tiny houses in the backyard as either outbuildings or vehicles. Trailer parks can also provide a home for a tiny house.

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Moving? Avoid Making These Mistakes

Whether moving across town or across the country, packing up and moving can be stressful, costly and full of surprises. From shady movers and inaccurate price quotes, to overpacking or not allowing enough time to get the move set up, every step of a move has the potential for mistakes that can make a move a nightmare.

These tips will help anyone preparing for a move, whether they currently live in a house, an apartment, a dorm, with friends or with mom and dad.

1. Hiring a shady mover.

Weve all heard horror stories about moving scams, and perhaps maybe youve been the victim of a moving scam yourself. You can steer clear of a less-than-upstanding mover by doing your homework. The Better Business Bureau, Angies List, your state transportation regulator and the U.S. Department of Transportation -- and even your >

If youve done your research and still arent confident in the movers youve come across, you always can go the DIY route -- just be sure youre up for the task.

2. Messing up the quotes.

If you hire a mover, you should be able to have someone from that company come to your place for an in-home moving estimate. If a moving company wont do an in-home estimate, you should think about shopping around for another mover.

Along those lines, dont >

3. Packing too much stuff.

Do you really need those old boxes of baby clothes that you havent laid eyes on since your 6-year-old was in diapers? Before you move, you need to "edit" your belongings. Think about whether you can trash some of your possessions, donate them to charity, or give them away to friends and >

4. Failing to schedule your move well in advance.

During the summer months, good moving companies are booked up quickly. Rather than waiting till the last minute, make sure your move is scheduled weeks -- or, better yet, months -- in advance. You dont want to be scrambling to find a mover the day before youre supposed to head out. Moving already is stressful enough without adding that frustration.

5. Ignoring the need to pack ahead of time.

Youll find very few people wholl say that packing is fun. In fact, a survey commissioned by SpareFoot found that people whod moved in the past year identified packing and unpacking as the biggest hassle in the process.

You can lessen the load by beginning to pack well before moving day comes along. Start by boxing up stuff that you wont need right away -- for instance, if youre moving in the summer, pack up your winter clothes so that theyre out of the way. Also, be sure to carve out time in your schedule to check items off your packing to-do list.

If you get down to the wire and need help with packing, enlist friends, neighbors, >
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Vacancy Factors Explained

When the rental income from a prospective unit is 2,000 but the lender tells you they can only use 1,500 of thatwhat gives? That is if youve been a landlord before with at least two years of experience. First time real estate investors can expect to have the new mortgage on the unit be counted 100 against their debt ratios even though theres 2,000 worth of rent coming in each month. That can be a challenge for first time investors but when it comes to the second rental, lenders will in fact use the income from the rental to help qualify. Lenders want to see you can properly manage and maintain the rental unit for two years. With two years experience, the income can be used. But not all of it for qualifying.

If you think about it that does make sense, but maybe not in the way youre thinking. One of the lenders qualifying guidelines is there be at least two years experience of being a landlord. Once that milestone has occurred, it becomes much easier to qualify as in most cases the income from the rental outpaces the costs of ownership including the principal and interest amount, taxes and insurance. A positive cash flow is needed, otherwise its an expense, not income.nbsp;

Yet the 25 discount lenders apply when qualifying means that a 2,000 rent means 1,500 in usable income. The difference is that yes, there will be maintenance involved. Carpet needs to be replaced, a water heater goes out or the stove in the kitchen goes on the blink. These expenses must be borne by the landlord in most cases, anyway and not the tenants. These expenses help account for part of the 25 discount.

The other, and the primary explanation for the discount, is the unit wont be rented 100 of the time. Every month for the entire year with no exceptions. It doesnt happen. Yes, even in a hot rental market where rental units simply dont stay on the market for very long there will be times when its not occupied with cash paying tenants.nbsp;

There can be lag times to list the property on the local MLS for rent. The property is listed, and it takes a couple of months to find the right tenant. Thats two months worth of no income from the unit. No 1,500 much less 2,000. Thats common. Whats uncommon and really doesnt happen very often is someone moving in the day after the old tenants have moved out. Yes, that can happen but in all practicality it doesnt.

When tenants move out the landlord will need to update and repair the unit before the next set of tenants. Even things such as new coats of paint and shampooing the carpets take some time. Fresh paint, polished appliances and brand new flooring is appealing to potential tenants. Making these changes takes some time, albeit >

Both listing the unit and preparing to put the unit on the market takes time. But the rental income will be discounted from the actual amount when it comes to time head to the lender for financing.

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When is the Best Time to Sell a House?

When youre planning to sell your house, timing is important. You want the most people to see it and be interested, and you, of course, want it to go for the highest possible price. So when is the right timing? When is the worst time to sell a house, alternatively?

The Local Housing Market

We often think about seasonal trends when determining the best time to sell a house, and those are >

While there are national trends, real estate is often much more localized. For example, following the coronavirus pandemic, many big urban markets are dealing with stagnant or declining real estate sales. New York and San Francisco are examples. However, suburban markets are thriving.

You do need to think about the local condition where your home is, and also even more specific factors, such as what the appreciation for homes in your neighborhood looks like and how this compares to where youll buy.

Seasonal Trends

June tends to be the best time to sell a house. The summer months in general are often more favorable for sellers, from May to August. These months make up 40 of annual home sales volume according to the National Association of Realtors. With that being said, that then makes summer the worst time to buy. In the summer, theres a sellers premium, so you have to think about how that will balance out if youre planning to both buy and sell.

Summer is a popular time in real estate because of the good weather and daylight savings time and the longer days. Its somewhat simple when you think about itthere are more daylight hours, meaning more potential exposure for your home. A lot of families with children look in the summer months so they can get their kids enrolled in school by the fall.

December tends to be the worst month to sell a home. Theres not a lot of inventory, and buying activity is limited. Again, this is logical. People are thinking about the holidays and theyre traveling. Plus, the days are shorter and the weather isnt great.

Some general pros of selling a home in spring include:

Many people get their tax refunds in the early spring so they can make renovations or repairs as-needed during this time.
Theres more curb appeal when your lawn is in full bloom.
If you plan ahead during the spring, youre more likely to be well-timed for the summer rush.

The big con is that there will be more competition in spring and heading into summer, and buyers will have more choices.

Pros of selling in summer include:

Theres more flexibility for both you and potential buyers if school is out.
Buyers tend to feel an urgency to get their kids settled before school.
If buyers feel urgency, they may make a more competitive offer.

The cons are similar to selling in spring. Namely, theres more competition.

If you have to sell your home in the fall, theres typically less competition and inventory. Also, buyers may be more serious if theyre looking in fall because they may be up against a certain deadline, such as needing to >

If you need to make repairs, professionals are less likely to be busier and may be cheaper than they would be during the busy spring and summer.

Regional Seasonality

In the West and the South, temperatures stay milder in the winter, so there may be less of a dip in home buying and selling activity in the winter. In the Midwest and the northeast, where there are extreme winters, theres a more pronounced seasonal difference in the real estate market.

Theres no perfect time to sell a home, but there are considerations to keep in mind.

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HOA Volunteers: Pick Me! Pick Me!

When it comes Board elections or need for a committee member, are volunteers scarcer than snowballs in hell? This is a common frustration in homeowner associations where the same few good women or men seem to shoulder the responsibility for life. So, how do you get others to raise their hand and step forward? Some suggestions:

Communicate Regularly

Uninformed owners are uninvolved owners. If you dont tell them whats going on and give them a reason to get involved, they wont. A newsletter and flyer distribution box is an inexpensive and convenient way to get the word out.

Put Them on a Pedestal

Most people love recognition. Turn a "thankless" job into a position of honor. Hand out kudos and certificates, praise and congratulations. Do this at every opportunity ... at meetings, in newsletters. Volunteers are attracted to uplifting environments.

Socialize

People like helping people they know but easily dodge commitment to strangers. The HOA should sponsor several socials each year to break the ice. Consider a spring clean-up party, pool party or just plain old potlucks. It will help create a real sense of "community" and desire to join in.

Encourage

Volunteers need to know they are doing the right thing. Remember to build them up and ask if they need help. Value their opinions.

Remember as a kid waiving your hand wildly to be recognized by the teacher? Age tempers that need to stand up and stand out. It takes someone to get the ball rolling. Pick me, pick ME

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What to Expect from An Appraisal

When youre buying or selling a home, you are likely going to face a home appraisal contingency. It can be anxiety-inducing on either end of the situation. Knowing what to expect can prepare you and reduce a bit of that anxiety.

What Is an Appraisal?

During an appraisal, someone who is licensed to conduct appraisals will do an inspection of a home to determine its actual worth. This is not always the same as the listing price. An appraiser will create a report of their findings, and then theyll generate the appraised value of the home.

If youre a buyer and youre making a purchase with a loan, your lender will likely order the appraisal.

The lender doesnt want to give more money than what a property is worth. Lenders often require buyers to include appraisal contingencies if they make an offer.

The appraisal usually happens after you sign a purchase agreement and before your lender approves your loan.

The appraiser is someone who is a neutral third-party and who is unbiased. They dont represent a buyer or a seller.

Who Pays for An Appraisal?

Appraisals can cost hundreds of dollars. If its for a loan, a buyer or seller cant order one directly from the company they choose. Rather, the lender goes through a third-party appraisal management company. The buyer pays for the assessment. The lender sets the fee, not the appraiser.

Why Do Appraisals Come in Under Contract?

There are a few main reasons a home might fail to appraise. The first is simply that the contract price is higher than market value. This situation is especially common in hot markets, where buyers might be competing for the same house.

There may be an issued identified during an appraisal that could affect its value. For example, maybe a room was added to a home without the proper permits.

There can also be problems on the part of the appraiser. The appraiser might not know the area well, for example.

What Do Appraisers Look for?

Most appraisers use a universal form called the Uniform Residential Appraisal Report. It includes questions about housing trends in the area, demographics, property condition, utilities and how the house is a fit within the neighborhood.

An appraiser is unlikely to put a lot of stock in upgrades. Their entire objective is to create a comparison of the home to similar properties nearby.

As a seller, the most important thing you can do to prepare for an appraisal is to keep your home in great shape. You want it to look clean, clutter-free and well-maintained. Anything otherwise is going to give off the impression you havent taken care of the home, and thats going to lower the appraisal which can derail your deal.

What Happens After You Get a Valuation?

The report from an appraiser will include a valuation. The report will outline the methodology used by the appraiser and will include the photos they take. You and your lender receive a copy.

Then, one of three things could happen.

If the appraisers valuation matches the price agreed upon by you and the seller, then your lender can proceed with underwriting your loan. A match with the appraisal and the price is the last step of getting a loan.

If the appraiser gives you a valuation higher than what youre paying for the house, then you have instant equity. This isnt common, however.

Then, theres the third thing that can happen. The appraisal is less than what youve agreed to pay. Your lender wont give you a loan for more than the appraised value. At that point, there are a few different ways you can proceed. Your agent should be able to help you figure out the best path.

The best option tends to be convincing the seller to lower the sales price or perhaps to split the difference with you.

You can also appeal the appraisal or ask for a second one. You can also pay cash for the difference yourself, but that might be from a buyers standpoint one of the worst options.

If you want to take none of those options or they dont work out, then an appraisal contingency gives you the chance to walk away from the deal and still get your earnest money deposit.

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What are the Pros and Cons of a HELOC?

A home equity line of credit is a type of financing that pulls value from your home.

Youre accessing your equity, and some of the reasons you might tap into it include:

Home improvements
Debt consolidation
Long-term investments
Emergency expenses
Business expenses

Home improvement is largely the main reason people get HELOCs. You can upgrade your home or make it more functional for your needs. You might use your home equity to finance a large, value-increasing home project like a kitchen remodel. Strategically the idea is using your homes value to boost its value.

A home equity line of credit is like a credit card. You have a certain limit up to which you can borrow. Then, you take it as you need it, and you only pay interest on what you draw.

This is compared to a home equity loan. With a home equity loan, youre still borrowing against your equity, but youre getting a sum of money all at once. You pay it back in fixed, regular payments.

So, what are the pros and cons of a HELOC?

Pros of a HELOC

Some of the upsides of a home equity line of credit include:

There are no closing costs if your credit is good. That means you dont have to pay application fees or appraisal costs either. You typically have to pay those with most standard home equity loans.
There are no fees for a cash draw. If you were going to use a credit card for a project, as an example, you would have to pay a fee for a cash advance.
HELOCs offer very low interest rates. Theyre secured by the equity in your home, which is one reason that lenders offer competitively low rates. Theyre adjustable-rate loans, which may also help you get a lower initial rate, but this can go up over time.
Some HELOCs include the option to convert to a fixed-rate loan if you want locked-in rates. If youre in the repayment phase of a loan, it may happen automatically.
You have flexibility in how you repay your HELOC balance.
A HELOC is a type of mortgage, meaning your interest is tax-deductible.
There arent restrictions on how you can use the funds with a HELOC. Youre getting a line of credit with significant flexibility. You dont have to have your lender approve changes either.

Cons of a HELOC

What about the downsides of a HELOC?

With a HELOC, since your home is your collateral, youre putting it at risk if you default. You could lose your home if you become unable to make your payments on-time.
There may be various penalties or fees to be aware of, such as annual fees or inactivity fees.
Any new loan you get is added to your total amount owed on your home. When you have more equity, you also have more options. If you dont have equity and the value goes down, you might have to keep your property until theres a change.
Perhaps one of the biggest downsides of a HELOC is the fact that they are adjustable-rate loans. This means that while your rate could go down, it can also go up. With that being said, as was mentioned, some lenders will convert a HELOC to a fixed-rate loan eventually.

There are pros and cons of any loan, and deciding which is best for you is based on your personal financial situation and what you want to finance. Overall a HELOC provides flexibility but also risks since your home is your collateral and rates are adjustable.

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Top Three Reasons to Sell Your Home for Cash

If you were to mention to a homeowner that they could sell their home for cash nearly instantly a decade ago, people would have laughed.

The average time it takes to sell a home has been why selling a home for cash is no longer something to fear. With an average of six months, depending on the state and market, selling a home may be cumbersome and expensive for people looking to move away as soon as possible.nbsp;

Are you in this category of people, or are your reasons to sell fast different? Whether selling your home because of a divorce, job >

Here are three reasons why.nbsp;

Speed

It can take anywhere from eight weeks to two years before a home can sell. This may be due to various cancellations and repairs that need to be conducted, the market just not giving you the price you want, or not having an attractive property.nbsp;

If you need to move away, say to a different state, this could mean you have to incur costs to keep the home in good order.nbsp;

A cash sale, on the other hand, can be concluded in as little as seven days. You get to skip many processes, such as inspections, credit checking, repairs, etc. You can get the prospective buyer on to the negotiating table and hammer out a quick transition deal.nbsp;

No Fees

Lets face it. The services of a real estate agent can be costly. Not only do you have to pay them a commission, but you may have to pay to stage the home, conduct inspections, and cure any other issues that may arise.nbsp;

You may also have to spring for things like repairing or replacing the roof, which is not cheap, and conducting general repairs around the home.nbsp;nbsp;

By selling your home for cash, you only have to worry about closing the sale with an amount commensurate with the homes value, as-is. You wont have to worry about things like repairs or inspections.nbsp;

Close With Minimal Effort

The one thing that distinguishes traditional home sales from a cash sale is how many negotiations one has to conduct before a deal is agreed to.nbsp;nbsp;

With a traditional sale, there may be many headaches to go through, and then one thing that you disagree on might be the deal-breaker in a very long and tiring process. The worst part is, you may have to endure several such sessions before you get the person to buy the home.nbsp;nbsp;

Cash sales are quick, which means you invest less in the process and the outcome. With sales getting concluded in seven to 10 days, you wont have to worry about going through multiple meetings to get a buyer.nbsp;nbsp;

Conclusionnbsp;

There are many reasons why you may want to consider working with home buying companies.nbsp;We buy houses in NJnbsp;and can help you close fast. If youre looking to sell your house fast in NJ, Quick Home Buyers NJ can help.

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What You Can Expect Your First Year In A New Home

Moving can be exciting, and it can also be scary. It can be smooth sailing or so wrought with silly or serious issues that your cat peeing in the box of towels because you havent unpacked his cat dish yet sends you into the kind of rolling-on-the-ground, slapping-your-leg, crying-big-fat-tears laughter that makes your family wonder if you need medical intervention. And thats just the beginning of the adventure.

In the first year in a new home, youll likely experience the full spectrum of human emotions, sometimes in the span of a few minutes. And while you cant know everything thats going to happen, you can prepare yourself for some of the inevitabilities, of both the good and not-so-good variety.

Somethings going to break

It could just be a sprinkler head or itnbsp;could be your air conditioning unit in the heat of summer, but knowing that something will eventually break in the house is the best reason of all to be proactive. Being able to quickly deal with a leaking water heater or a roof thats been damaged in a hail storm is key to minimizing the damage to your finances, and your sanity.

There are four main keys to being prepared:

Saving your money

"Owning a house doesnt change the rule of thumb that its wise to have approximately six months worth of income in a rainy day fund, and more experts are now recommending that you build up nine months to a year," said Zacks Investment Research. "What changes is the amount of your monthly expenses that will be consumed if you need to tap into the fund. If your mortgage, tax, insurance, utilities and other payments rise with a new mortgage, you could use your savings up more quickly. With this in mind, if you were saving less than the guideline, intending to tighten your belt, the increased bills that come with homeownership makes skimping on your rainy day fund a dangerous business."

Knowing where everything is located

You dont want to get caught in an emergency situation and be scrambling around trying to figure out how to shut off your gas.

Finding a trustworthy handyman

Unless someone in the house is handy, and actually does the stuff they say they are going to do in a timely manner, youll want to find a handyman. Having someone you can call in a pinch to repair the doggy door or the garage door opener or add a ceiling fan to a room that stays five degrees warmer than the rest of the house is clutch. Next Door is a great place to find a handyman, as well as a babysitter, dog walker, and lost cat.

Getting a warranty

In many cases, you can buy a home warranty after youve purchased your home. If you have an older home, are someone who could be sunk by a broken air conditioning unit that costs several thousands of dollars to repair or replace, or just want to make sure youre covered for all those things that could bust, a warranty might be a good thing to consider. "A home warranty is a contract between a homeowner and a home warranty company that provides for discounted repair and replacement service on a homes major components, such as the furnace, air conditioning, plumbing and electrical system," said Investopedia. "A home warranty may also cover major appliances such as washers and dryers, refrigerators and swimming pools. Most plans have a basic component that provides all homeowners who purchase a policy with certain coverages. Homeowners can also purchase one or more optional components that provide additional coverage at additional cost."

Junk mail city

Expect to see a full mailbox for months after you move. A lot of it will be junk, but there will also be some valuable stuff in there, like coupons from local stores that can save you money on furniture and housewares. Dont forget to also take advantage of the coupons that are part of the U.S. Postal Services change of address package.

Youll probably also get some refinancing offers. If your home happens to gain equity during the first year and rates dip, you might be able to refi and lower your payment.

Youre going to make friends

Unless youre a total hermit who never exits the house even to take a walk, get the mail, or water the flowers, youre bound to make some new friends in your new neighborhood. Maybe even lifelong friends. But, if anyone in the household is nervous about this aspect of moving, there are ways to increase the friendship-making quotient for kids, and adults.

The updates you knew you needed when you moved in will become a priority

That ugly floor and those outdated countertops are just staring at you, taunting you, even. When you just cant take it one more minute, consider this: You dont have to shell out a bunch of cash for them. Use interest-free credit at Home Depot or Lowes and you can break up the spend into manageable monthly payments over a period of time. Just make sure to make your payments by the due date every month. Missing one, being late, or not paying the minimum due for even one month will void your agreement and add a whole bunch of interest to your total.

Need furniture or electronics more than you need floors? Lots of stores like Rooms To Go and Best Buy offer the same type of interest-free deal.

Youre going to have big dreams and big realities checks

Unless youve bought a brand-new home, there are a few things youre going to want to change, beyond furniture and furnishings. It may just be carpet in the bedrooms and a splash of new paint, or it might be ripping out your entire kitchen.

Budget concerns will probably keep the renovations in check for many people. But youll also want to assess the return on investment for the renovations you have in mind. Even if youre not planning to turn around and sell your home in a year or two, knowing that the updates you make are valuable and will be a good investment is always important. Remodeling Magazines Cost vs. Value Reportnbsp; is a great guide to see which items pay you back.

Its going to cost more than you thought

This ties back to the saving your money thing, because there will always be stuff that needs to be fixed and updated. But there will undoubtedly also be surprising costs. For instance, if youre going up in square footage, you may not have considered the extra heating and cooling costs.

There are tactics you can use to address some of these costs:

Do an energy audit

"A home energy audit, also known as a home energy assessment, is the first step to assess how much energy your home consumes and to evaluate what measures you can take to make your home more energy efficient. An assessment will show you problems that may, when corrected, save you significant amounts of money over time," said Energy.gov. "Items shown here include checking for leaks, examining insulation, inspecting the furnace and ductwork, performing a blower door test and using an infrared camera."

Research utility options

In many cities, you have options for your energy providers, and some may cost significantly less than the traditional providers youve gone with in the past. Be sure to check out solar options, too, especially if youre interested in green living. The newest advancements in solar energy for residential homes make it possible to use the suns energy without having to purchase expensive systems and pay thousands of dollars upfront.

Check out alternative credit cards

If youre looking for creative ways to save money, check that junk mail again. There may be some valuable credit card offers in there with lower interest rates or an interest-free balance transfer option.

You might have to do some things you never thought of

You probably werent thinking about cleaning out your ducts when you were envisioning your new life in your new home. But you probably wont know how long its been since the last cleaning, and dirty ducks can can cost you money if youre HVAC system isnt running efficiently. Thet can also be dangerous because of the accumulation of dust and dirt inside. Poor indoor air quality can worsen allergies and asthma.

A clogged dryer vent can also cost you money because it makes your dryer work harder. But, more importantly, it can be dangerous and even deadly. "Lint is highly flammable and can pose a severe fire hazard when dryer vents are not cleaned regularly and properly," said Barineau Heating and Air Conditioning. "According to the U.S. Fire Administrations National Fire Data Center, clothes dryers are responsible for more than 15,000 structure fires around the country each year, and 80 percent of those fires start with clogged dryer vents."

Youll get woken up in the middle of the night by a fire alarm

Because batteries only die at 3am. Every. Single. Time. You can avoid this nuisance and keep your family safe by changing your batteries when you first move in. While youre at it, change your filters, which will help your HVAC to work more efficiently.

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What Does The Home Seller Owe?

Buyers are looking for ways to get an edge over sellers. One way is to find out how much sellers owe their lenders on homes for sale. With this knowledge, they can gauge how much negotiation room the seller might have.

In a sellers market, knowing what the seller owes can help the buyer formulate an offer the seller will accept, avoiding an expensive bidding war with other buyers.

In a normal market or a buyers market, the buyer hopes that the seller will accept an offer that is lower than current market value, but high enough to allow the seller to get out of their mortgage debt without bringing money to the closing table.

Short sales are a little different. Short sales are more common in areas with high foreclosures or job losses. Banks have a lot of inventory on hand and are more willing to negotiate but they put the deal under a microscope.

The buyer has to understand and be prepared for a deal to take much longer, perhaps as much as three weeks longer than normal. The seller must prove hardship for the lien holder to agree to take the loss.

There are three ways buyers can find out what the seller owes -- public records, real estate professionals and asking the seller directly.

The amount owed on any mortgage is a matter of public record and can be found at the County Recorder. Buyers can search in person or online, where county records are available. Once they identify the property and lienholder, buyers can see the most recently recorded mortgage information. This may or may not reflect the most current amount the seller owes, but it may reveal new liens that could impact a sales transaction.

Sellers who advertise their homes as short sales may be willing to share information on their liens with the buyer. Because getting a lender to agree to a short sale is in the interest of the seller, the seller is motivated to give the buyer all the information possible to allow a sale to go forward. Many times, a short sale will be advertised with the price the lender has agreed to accept.

Buyers can also learn what sellers owe through real estate professionals. Once a buyer is ready to make an offer, the buyers agent can research the buyers selection for more information. Realtors can access public records quickly and easily through the industrys local multiple listing service MLS, where they are subscribers. Again, the MLS shows only information that has been recorded from the County Recorder, and it may or may not be up-to-date.

Buyers should know that what the seller owes on the home has nothing to do with market value, or what the seller will accept as an offer. Just as buyers wish to make wise investments, so did the sellers when they purchased their homes. But the information can suggest a negotiating range.

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Homeowners' Advice: Toasty Tips for Winter

Baby, its cold outside Keep your home warm and toasty this Winter by following these simple expert tips.

Every homeowner should start their Winter by tackling the "oh so fun" task of checking their home for leaks. Leaks can not only drain your pocket of money, but also drain your home of precious heat.

The U.S. Department of Energy energy.gov knows how important it is for homeowners to stay warm and to save money. This is why they offer up prime tips for what and where to inspect. Lets start on the outside of your home.

Visually inspect:

All exterior corners
Outdoor water faucets
Where siding and chimneys meet
Areas where the foundation and the bottom of exterior brick or siding meet.

Next, take the inspection inside. Look for drafts and gaps around:

Electrical outlets
Switch plates
Door and window frames
Electrical and gas service entrances
Baseboards
Weather stripping around doors
Fireplace dampers
Attic hatches
Wall- or window-mounted air conditioners.
Cable TV and phone lines
Where dryer vents pass through walls
Vents and fans.

After filling gaps and repairing cracks its time to consider upgrading your insulation. Insulation is literally your defense against cold air and Winter elements. Old homes are notorious for their meager amounts of insulation. Many of todays products were simply not available at the time of the homes construction. If you have an old home, especially one that has not been updated or been subject to todays building codes, its time to see where improvements can be made. nbsp;

Several options are available. If youre a green-minded homeowner, then be sure to check out the latest advances in recycle paper, cellulose, and denim insulations. Yes, you can insulation your home with "old jeans" nbsp;

Recycled denim insulation is VOC and formaldehyde free, as well as 100 recyclable. Cellulose is made from at least 75 percent post-consumer recycled content newspaper and takes as much as thirty percent less energy to make than traditional insulation. Cellulose also has no effect on indoor air quality. nbsp;

Be sure to research the best "R" value of insulation for your area. The "R" value is a measure of thermal resistance and there will be a recommended amount from the Department of Energy for your particular zone.

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December Real Estate Roundup

Freddie Macs results of its Primary Mortgage Market Survey shows that "The housing market is poised to finish the year strong as low mortgage rates continue to fuel homebuyer demand and refinance activity. Moving into 2021, we expect rates to hold steady but the key driver in the near term will be the trajectory of the COVID-19 pandemic and the execution of the vaccine."

30-year fixed-rate mortgage FRM averaged 2.66 percent with an average 0.7 points for the week ending December 24, 2020, down from last month when it averaged 2.72 percent. A year ago, at this time, the 30-year FRM averaged 3.74 percent.

15-year FRM this week averaged 2.19 percent with an average 0.5 points, down from last month when it averaged 2.28 percent. A year ago, at this time, the 15-year FRM averaged 3.19 percent.

5-year Treasury-indexed hybrid adjustable-rate mortgage ARM averaged 2.79 percent this week with an average 0.2 points, up from last month when it averaged 3.16 percent. A year ago, at this time, the 5-year ARM averaged 3.45 percent.

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10 Easy Solutions for Creating More Storage at Home

Take a new look at your house

Dont have enough linen space? Maybe theres a corner or niche that could be turned into a closet. It might just take an open mind and a fresh outlook to reimagine a space.nbsp;

Pick the right furniture

A hardworking family needs a hardworking living area, one that uses every inch of space available, said Better Homes and Gardens. Built-in cabinets stash books and media and provide a bonus display surface. Find or design and build furniture that serves more than one purpose.

Ottomans are a great option for living spaces because: Theyre small, easily movable, can act as a coffee table or an extra seat, and can hide remotes, blankets, and a bunch of other stuff that could otherwise be cluttering up your space.nbsp; nbsp;

Spin the bookcase

IKEAs KALLAX is one of our favorite finds because it has tons of storage space and you dont need a ton of wall space to use it. Its finished on both sides, so you can also use it as a wall divider. If KALLAX isnt your thing but you want to crib this idea, find two bookcases and use them back to back.

Grab some Space Saver Bags

Not everything you see on a late-night infomercial is a waste of money. Space bags are great for off-season clothes, jackets, and bedding because you can compress them to a fraction of the size. According to Amazon, the jumbo size is More than big enough to fit bulky bed linens with pillows, favorite big winter jacket, entire wardrobes of a season.

Roll it out

Theres a better use for the space under your bed than dust bunnies. All you need are a few rolling storage tubs to reclaim this square footage for your stuff.

Recycle your coat closetnbsp;

Unless you live in a cold climate where lots of jackets, coats, scarves, and boots are needed, your coat closet may be able to serve better uses. Add some basic wire shelving, which you can find in tons of sizes and configurations, and now youve got a place to store linens, Costco goods, or anything that doesnt currently have a place to go.

Go above and beyond

Closets typically have a shelf above the hanging rod, but that space above the shelf may go quite high. Make it easier to store items up there by installing another shelf at the top. That way you dont have to worry about your stuff teetering or toppling, and you can use all the space available, all the way up to the ceiling.

Hang from the ceiling

Like Forbes said, garage storage is critical. But if your garage doesnt have muchor much room in which to fit ityou can still make it happen. SafeRacks are hanging garage storage shelves you can buy online or at Costco. They get your stuff up off the floor so you can reclaim the space for your cars.nbsp;

Organize your pots and pansnbsp;

Maybe it isnt that you dont have the space, but its just not well-organizedespecially in the kitchen if you have giant, shelf-less boxes for cabinets or a small pantry with shelves that dont allow you to see clearly to the back. The right organizer can change your life. Check out this and this, and your kitchen will never be the same.nbsp;

DIY yourself a solution

If youve got a good imagination and a few good tools, you can make something that will help meet your storage needs. Youre going to want to put Bob Vilas secret compartments in the fireplace trim, pull-out drawers in the banquette, and definitely the under-the-stairs trick on your to-do list.

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Overlays: What They Are and Why Lenders Apply Them

There is a term lenders refer to as an overlay and can be applied to most any conventional or government-backed mortgage. What exactly is an overlay? An overlay is an additional approval requirement beyond what is required by the secondary market. The secondary market is where lenders go to sell loans theyve made to consumers. Selling a mortgage can upset borrowers who thought the lender they picked out was their lender for the life of the loan. Thats ra>

If lenders didnt have the ability to sell loans theyd soon run out of money to lend. Theyre lenders no more. But being able to sell a loan replenishes the lenders line of credit enabling it to make still more loans. Before a lender can sell a loan, or a bulk of loans, the loans must meet these secondary market requirements.

Most conventional loans made today are those approved using guidelines set by either Fannie Mae or Freddie Mac. Government-backed mortgage loans must also follow specific guidelines. But an overlay is one more guideline beyond the secondary market requirements. Why do lenders set overlays? An additional approval requirement means the loan is even more secure.nbsp;

A good example might be for credit score requirements. While a secondary requirement might ask for a minimum 680 credit score, a lender can place an overlay and require the minimum score be 700. Or, a minimum down payment requirement for an investment property could be 20 but an additional overlay might ask for a 25 down payment. Overlays decrease the risk in a lenders portfolio.

Further, different lenders set their own internal overlays. An overlay at one lender can mean another lender doesnt ask for the very same requirement. This gives consumers choices. Many consumers however might falsely think that overlays are universal. For instance, someone applies for a mortgage and discover the qualifying credit score is 700 and their score comes up to 690. Unfortunately, some consumers can make the determination they cant qualify for a mortgage because they discover their scores are 10 points lower than what is required. When all they needed to do was find another lender that asks for a minimum 680 score.

Overlays can be issued to decrease some of the risk lenders acquire issuing a mortgage but what overlays cant do is issue an overlay that makes the loan easier to qualify for. Maybe an overlay might say a minimum score required is 670. While a lender can certainly authorize such an overlay the loan will then be ineligible to be sold in the secondary market. This would then mean the lender would be forced to keep the loan internally and collect the monthly payments. This is called portfolio lending and very few mortgage companies keep mortgages for the life of the loan but instead arrange for a sale. This liquidity keeps the mortgage industry running.

Lenders can also reverse an original overlay at their discretion. A lender might decide to increase its minimum credit score requirement to 700 but a year later decide the market has stabilized and the risk of defaults are very low and lower the required score back down to 680. A lender has the ability to issue an overlay but has the authority to change its mind at any time.

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