Fixer Up Value assesment

Trying to decide whether to buy a fixer-upper house? Follow these seven steps, and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.

1. Decide what you can do yourself

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house.

  • Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.
  • Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the cost of repairs and remodeling before you make an offer

  • Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.
  • If you’re doing the work yourself, price the supplies.
  • Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

3. Check permit costs

  • Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it’ll cause problems when you resell your home.
  • Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.
  • Factor the time and aggravation of permits into your plans.

4. Doublecheck pricing on structural work

If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems.

Get written estimates for repairs before you commit to buying a home with structural issues.

Don’t purchase a home that needs major structural work unless:

  • You’re getting it at a steep discount
  • You’re sure you’ve uncovered the extent of the problem
  • You know the problem can be fixed
  • You have a binding written estimate for the repairs

5. Check the cost of financing

Be sure you have enough money for a downpayment, closing costs, and repairs without draining your savings.

If you’re planning to fund the repairs with a home equity or home improvement loan:

  • Get yourself pre-approved for both loans before you make an offer.
  • Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.
  • Consider the Federal Housing Administration’s Section 203(k) program, which is designed to help home owners who are purchasing or refinancing a home that needs rehabilitation. The program wraps the purchase/refinance and rehabilitation costs into a single mortgage. To qualify for the loan, the total value of the property must fall within the FHA mortgage limit for your area, as with other FHA loans. A streamlined 203(k) program provides an additional amount for rehabilitation, up to $35,000, on top of an existing mortgage. It’s a simpler process than obtaining the standard 203(k).

6. Calculate your fair purchase offer

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a radon mitigation system in its basement.

The cost to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your bid for the house should be $160,000.

Ask your real estate agent if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair.

7. Include inspection contingencies in your offer

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

  • Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.
  • Radon, mold, lead-based paint
  • Septic and well
  • Pest

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.

If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

 

 

For Sale By Owner

Yard signFor sale by owner” (FSBO) is touted as a great way to save thousands of dollars when you sell your home. The standard real-estate agent’s commission is 6% – that’s $15,000 on a $250,000 home. Even after cutting that savings in half so you can pay the buyer’s agent, acting as your own seller’s agent will surely be worth the savings, you think. Here are eight reasons why you should think again.

1. Buyers’ agents may not want to show your property to their clients. 

In a for-sale-by-owner deal, the buyer’s agent knows there won’t be a professional on the other end of the transaction, which can mean numerous headaches. Even if a client insists on seeing your home, the agent might discourage making an offer, citing the hassles and risks of trying to close the deal without a professional representing the seller.

“There are only two reasons why I show an FSBO: There is no other inventory available or the price is ridiculously low,” says Bruce Ailion, a realtor with RE/MAX Greater Atlanta. Every experienced broker has been burned by an FSBO transaction where the seller did not pay the full commission, or any commission at all, to the agent who brought the buyer, he says. In addition, he says, “FSBO sellers are viewed as unrealistic, unreasonable and difficult sellers whom professional realtors have rejected.”

But there are buyers’ agents who will show your property under the right conditions. Philadelphia realtor Denise Baron of Berkshire Hathaway HomeServices Fox & Roach says that as long as she has a signed buyer’s agreement stating that when she shows an FSBO her agency gets paid, she is confident.

“I also have an agreement signed beforehand by the owner who is selling their own property or home,” she says. The agreement states what percentage fee the seller will pay the agent. The agreement also clarifies that the agent is only working on behalf of the buyer, and that as a buyer’s agent, she has a duty to disclose to her client all information the seller provides to her, such as the need to sell by a certain date.

2. It’s harder to keep your emotions out of the sale.

Selling your home is typically an emotional process. Having an agent keeps you one step removed and makes you less likely to make stupid mistakes such as overpricing your home, refusing to counter a low offer because you’re offended or giving in too easily when you have a deadline for selling your home.

“A realtor can follow up without communicating a sense of eagerness or desperation; following up is their job,” Ailion says. Example: “When a seller repeatedly checks, it signals rightly or wrongly the willingness to accept a lower price.”

If you forgo an agent, you’ll also have to deal directly with rejection every time a buyer’s agent tells you her clients aren’t interested. “As the homeowner, it can be quite upsetting hearing some of the comments that are made by buyers and oftentimes their agents,” says David Kean, a realtor with Teles Properties in Beverly Hills, Calif.

An agent can take the sting out of the rejection and put a positive spin on any negative feedback. “It is more difficult for them to keep their emotions out of the sale because there’s no third party to bounce anything off of,” says real estate broker Jesse Gonzalez, owner of Archer Realty in Santa Rosa, Calif. “For instance, if the property sits on the market, the homeowner doesn’t know the reason the home is not selling. The emotions will always be there for the seller, but constructive criticism can become easier to digest for the seller when it comes from a broker who is on their side, trying to get the best for them.”

3. It’s not your full-time job.

Can you rush home from work every time someone wants to see your home? Can you excuse yourself from a meeting every time your phone rings with a potential buyer? At the end of a long work day, do you have the energy to take advantage of every possible opportunity to market your home? Are you an expert in selling homes? Do you have any experience doing so? Your answer to all of these questions is probably “no.” An agent’s answer to all of these questions is “yes.” In addition, by going through an agent, you’ll get a lockbox for your front door that allows agents to show your home even when you aren’t available.

4. Agents have a larger network than you do.

Yes, you can list your home yourself on Zillow, Redfin, Craigslist and even the Multiple Listing Service (MLS) that agents use. But will that be enough? Even if you have a large personal or professional network, those people will likely have little interest in spreading the word that your house is for sale. You don’t have relationships with clients, other agents or a real-estate agency to bring the largest pool of potential buyers to your home. A smaller pool of potential buyers means less demand for your property, which can translate to waiting longer to sell your home and possibly not getting as much money as your house is worth.

“A good real-estate agent should have a Rolodex of names and contact information so he or she can quickly spread the word about the property they just listed,” says real-estate broker Pej Barlavi, CEO of Barlavi Realty in New York City. “I have a distribution list of over 3,500 contacts that get an email blast from me within 48 hours that we listed a property. Then I start to market the property in every available website, MLS and marketing site for real estate to keep the momentum and [to keep] showing consistently.”

5. You subject yourself to needless showings.

An agent can find out whether someone who wants to view your house is really a qualified buyer or just a dreamer or curious neighbor. It’s a lot of work and a major interruption every time you have to put your life on hold, make your house look perfect and show your home. You want to limit those hassles to the showings most likely to result in a sale.

“Realtors are trained to ask qualifying questions to determine the seriousness, qualification and motivation of a prospect,” Ailion says. Realtors are also trained to ask closing questions about how long buyers have been looking, whether they’ve seen any other homes that would work for their needs, if they are paying cash or have been prequalified, what schools they are looking for and so on, and can move a qualified and motivated person to the point of purchase. FSBO sellers lack this training and skill set, he says.

It’s also awkward for buyers to have the seller present, rather than the seller’s agent, when they’re touring the home.

“When showing a house, the owner should never be present,” Kean says. “Nothing makes a potential buyer more uncomfortable than the current owner being in the house. When a seller is present, most buyers will rush through a house and won’t notice or remember much about what they saw.”

6. Negotiating the sale is tricky and awkward. 

Even if you have sales experience, you don’t have specialized experience negotiating a home sale. The buyer’s agent does, so he/she is more likely to win the negotiation, meaning less money in your pocket.

“An experienced selling agent may have negotiated hundreds of home purchases,” Kean says. “We know all the games, the warning signs of a nervous or disingenuous buyer.”

Not only are you inexperienced, you’re likely to be emotional about the process, and without your own agent to point out when you’re being irrational, you’re more likely to make poor decisions. Kean says an agent can turn an emotionally charged, inappropriate response from an offended seller to a buyer into, “The seller has declined your initial request, but has made the following counteroffer.”

Sellers who go solo also typically aren’t familiar with local customs or market conditions.

“Agents know the pulse of the market and what’s driving demand, which gives them an advantage by knowing what terms are worth negotiating for and which are worth letting the other party win,” says Rob McGarty, co-founder and designated broker with Surefield, a residential real-estate brokerage headquartered in Seattle.

And agents know the local customs for selling a home, such as whether the buyer or the seller typically pays fees such as transfer taxes and closing costs, Gonzalez says.

7. You can’t see what’s wrong with your home. 

Agents are experts in what makes homes sell. They can walk through your home with you and point out changes you need to make to attract buyers and get the best offers. They can see flaws you’re oblivious to because you see them every day – or because you simply don’t view them as flaws. They can also help you determine which feedback from potential buyers you should act on after you put your home on the market to improve its chances of selling.

“Anyone who’s determined to sell their own home should hire an interior designer or property stager to assess the current condition and market appeal of the home,” Kean says. “All sellers need to hire a professional cleaning service to give a home a deep cleaning before putting it on the market. A good cleaning will help remove any distinct odors such as pets that the inhabitants can’t smell since they live with it every day.”

8. You put yourself at risk of being sued.

A lot of legal paperwork is involved in a home sale, and it needs to be completed correctly by an expert. One of the most important items is the seller’s disclosures. “A seller of real estate has an affirmative duty to disclose any fact that materially affects the value or desirability of the property,” says Matthew Reischer, an attorney and CEO of LegalAdvice.com. The seller can be held liable for fraud, negligence or breach of contract if he/she does not disclose properly. “The issue of whether a fact is material or not is generally established in the case law of the state in which you live,” he says.

Unless you’re a real-estate attorney, your agent probably knows more about disclosure laws than you do. If you fail to disclose a hazard, nuisance or defect and the buyer comes back to you after they’ve moved in and found a problem, they could sue you. Agents can make mistakes, too, but they have professional errors-and-omissions insurance to protect themselves and to give the buyer recourse so the buyer may not need to pursue the seller for damages.

The Bottom Line

Selling your home will likely be one of the biggest transactions of your life. You can try to do it alone to save money, but hiring an agent has many advantages. Agents can get broader exposure for your property, help you negotiate a better deal, dedicate more time to your sale and help keep your emotions from sabotaging the sale. An agent brings expertise, which few home sellers have, to a complex transaction with many financial and legal pitfalls. 

History of Veterans Day

 

 

 

 

Dwight D. Eisenhower, official portrait as Pre...

Dwight D. Eisenhower, official portrait as President. (Photo credit: Wikipedia)

 

History of Veterans Day

 

World War I – known at the time as “The Great War” – officially ended when the Treaty of Versailles was signed on June 28, 1919, in the Palace of Versailles outside the town of Versailles, France. However, fighting ceased seven months earlier when an armistice, or temporary cessation of hostilities, between the Allied nations and Germany went into effect on the eleventh hour of the eleventh day of the eleventh month. For that reason, November 11, 1918, is generally regarded as the end of “the war to end all wars.”

 

Soldiers of the 353rd Infantry near a church at Stenay, Meuse in France.

 

Soldiers of the 353rd Infantry near a church at Stenay, Meuse in France, wait for the end of hostilities.  This photo was taken at 10:58 a.m., on November 11, 1918, two minutes before the armistice ending World War I went into effect

 

In November 1919, President Wilson proclaimed November 11 as the first commemoration of Armistice Day with the following words: “To us in America, the reflections of Armistice Day will be filled with solemn pride in the heroism of those who died in the country’s service and with gratitude for the victory, both because of the thing from which it has freed us and because of the opportunity it has given America to show her sympathy with peace and justice in the councils of the nations…”

 

The original concept for the celebration was for a day observed with parades and public meetings and a brief suspension of business beginning at 11:00 a.m.

 

The United States Congress officially recognized the end of World War I when it passed a concurrent resolution on June 4, 1926, with these words:

 

Whereas the 11th of November 1918, marked the cessation of the most destructive, sanguinary, and far reaching war in human annals and the resumption by the people of the United States of peaceful relations with other nations, which we hope may never again be severed, and

Whereas it is fitting that the recurring anniversary of this date should be commemorated with thanksgiving and prayer and exercises designed to perpetuate peace through good will and mutual understanding between nations; and

Whereas the legislatures of twenty-seven of our States have already declared November 11 to be a legal holiday: Therefore be it Resolved by the Senate (the House of Representatives concurring), that the President of the United States is requested to issue a proclamation calling upon the officials to display the flag of the United States on all Government buildings on November 11 and inviting the people of the United States to observe the day in schools and churches, or other suitable places, with appropriate ceremonies of friendly relations with all other peoples.

 

An Act (52 Stat. 351; 5 U. S. Code, Sec. 87a) approved May 13, 1938, made the 11th of November in each year a legal holiday—a day to be dedicated to the cause of world peace and to be thereafter celebrated and known as “Armistice Day.” Armistice Day was primarily a day set aside to honor veterans of World War I, but in 1954, after World War II had required the greatest mobilization of soldiers, sailors, Marines and airmen in the Nation’s history; after American forces had fought aggression in Korea, the 83rd Congress, at the urging of the veterans service organizations, amended the Act of 1938 by striking out the word “Armistice” and inserting in its place the word “Veterans.” With the approval of this legislation (Public Law 380) on June 1, 1954, November 11th became a day to honor American veterans of all wars.

 

Later that same year, on October 8th, President Dwight D. Eisenhower issued the first “Veterans Day Proclamation” which stated: “In order to insure proper and widespread observance of this anniversary, all veterans, all veterans’ organizations, and the entire citizenry will wish to join hands in the common purpose. Toward this end, I am designating the Administrator of Veterans’ Affairs as Chairman of a Veterans Day National Committee, which shall include such other persons as the Chairman may select, and which will coordinate at the national level necessary planning for the observance. I am also requesting the heads of all departments and agencies of the Executive branch of the Government to assist the National Committee in every way possible.”

 

President Eisenhower signing HR7786, changing Armistice Day to Veterans Day.

 

President Eisenhower signing HR7786, changing Armistice Day to Veterans Day. From left: Alvin J. King, Wayne Richards, Arthur J. Connell, John T. Nation, Edward Rees, Richard L. Trombla, Howard W. Watts

 

On that same day, President Eisenhower sent a letter to the Honorable Harvey V. Higley, Administrator of Veterans’ Affairs (VA), designating him as Chairman of the Veterans Day National Committee.

 

In 1958, the White House advised VA’s General Counsel that the 1954 designation of the VA Administrator as Chairman of the Veterans Day National Committee applied to all subsequent VA Administrators. Since March 1989 when VA was elevated to a cabinet level department, the Secretary of Veterans Affairs has served as the committee’s chairman.

 

The Uniform Holiday Bill (Public Law 90-363 (82 Stat. 250)) was signed on June 28, 1968, and was intended to ensure three-day weekends for Federal employees by celebrating four national holidays on Mondays: Washington’s Birthday, Memorial Day, Veterans Day, and Columbus Day. It was thought that these extended weekends would encourage travel, recreational and cultural activities and stimulate greater industrial and commercial production. Many states did not agree with this decision and continued to celebrate the holidays on their original dates.

 

The first Veterans Day under the new law was observed with much confusion on October 25, 1971. It was quite apparent that the commemoration of this day was a matter of historic and patriotic significance to a great number of our citizens, and so on September 20th, 1975, President Gerald R. Ford signed Public Law 94-97 (89 Stat. 479), which returned the annual observance of Veterans Day to its original date of November 11, beginning in 1978. This action supported the desires of the overwhelming majority of state legislatures, all major veterans service organizations and the American people.

 

Veterans Day continues to be observed on November 11, regardless of what day of the week on which it falls. The restoration of the observance of Veterans Day to November 11 not only preserves the historical significance of the date, but helps focus attention on the important purpose of Veterans Day: A celebration to honor America’s veterans for their patriotism, love of country, and willingness to serve and sacrifice for the common good.

 

From: VA affair

 

 

 

For Sale By Owner, Pocket Listing

Have you ever tried changing your oil?
I think over the many years of loving cars and wanting to be hands on, I have only done that once. I had to buy a container to hold the used oil, buy a wrench and the oil and take the time of researching and etc etc …
To be honest I didn’t think it was worth saving the money and I doubt if I did. I only did it once and the wrench that I used rusted after a few months, living in Canada had its bonuses. Well I don’t think I ever did that again, I don’t even remember what I did with the used oil and I think I learned a couple of lessons.
1. It’s not worth the time or the effort
2. I didn’t save money, overall it cost me more.
Well if a simple oil change is that complicated, time consuming and troublesome, what do you think selling your home involves?    I am amazed as why would any seller take that risk and would want to let complete strangers into their home, not to mention the legal impacts of selling a home. Years ago, I knew of a person that was going around in Toronto and buying homes from private seller, and then holding their title hostage and locking up their property with liens against their homes until he was compensated. YES it’s not legal and eventually the police and the RCMP (our FBI) got involved and did find the person and knowing the legal system, it took so long and I am not even sure how much time he spent in jail.  The point is that there are many people out there trying to take advantage of others and why anyone would take such a huge risk, is something to ponder.
In the latest research of all For Sale By Owner (FSBO) the following results were discovered:
The share of home sellers who sold their home without the assistance of a real estate agent was 9% of which 40% knew the buyer prior to home purchase.
The primary reason that sellers choose to sell their home without the assistance of a real estate agent to a buyer they did not know was that they did not want to pay a fee or commission (46 percent).
Approximately one-third of FSBO sellers took no action to market their home, and 64 percent did not offer any incentives to attract buyers.
The typical FSBO home sold for $184,000 compared to$230,000 among agent-assisted home sales
Considering this stats, why would anyone risk and want to make only 80% ???  If someone was to ask you, would you give me 6% and I get you almost double what you pay me? I think that’s a very decision to make for most. This is such an important issue that now it’s become a part of our listing agreements, whereby the Realtor has to explain the consequence of not utilizing MLS. A pocket listing is almost as putting your home for sale yourself. I doubt if anyone realizes the numbers or the risks, would still consider taking this on their own, especially when as a Realtor we only get paid when we perform and get you results. There aren’t many professions where the person working for you has a clear vested interested in performance and actually invests in trying to achieve results. It’s important to understand that using a Realtor does not protect you from liability or guarantee that there will be no after-sale consequences. They can happen whether or not you use an agent. The Realtor will take precautionary steps to lessen the chance of something going wrong that will result in an after-sale issue.  We have to maintain a large liability insurance just to make sure that we keep doing what we do properly and ethically and that’s what you really have to use a professional Realtor .
Bobby Bahmanpour
Luxury Specialist
Rodeo Realty Inc. bobby bc_002
Posted on November 8, 2013 by 
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