Thursday, March 1st, 2012

 

By Karen Haywood Queen • Bankrate.com
The price of neglect

In this economy, you may be tempted to delay or even skip minor home maintenance repairs, cleaning jobs and inspections in your home. But don’t be penny-wise and dollar-foolish. That $200 or $300 you save today could result in expenditures of $3,000 or even tens of thousands next month or next year if hidden problems in your home go unnoticed and become worse.

Consider coughing up a little dough to take care of these small jobs before they morph into gigantic, expensive jobs later.
Annual HVAC inspection

Cost: $200-$300, depending on where you live.

How often: at least once a year.

When: spring or fall. Heating, ventilation and air conditioning, or HVAC, companies aren’t as busy, and you’re not in dire need of heat or air conditioning.

What an inspection might find:

The furnace blower is not working properly. Cost to repair or replace: $100-$150. Possible consequence of letting it go: a broken heat exchanger. Potential savings down the road: $300-$1,000 to replace the heat exchanger or $750-$3,500, depending on the energy efficiency, to replace indoor or outdoor furnace components.

The reversing switch in the heat pump is broken. Cost to repair or replace: $100-$300. Letting it go results in no heat from the heat pump, and the system switches to a more expensive auxiliary heat. Potential savings: lower heating bills.

Bottom line: “Things that happen often happen at the worst possible time in the worse possible conditions and you’re looking at the maximum rate,” says Terry Townsend of Townsend Engineering in Chattanooga, Tenn., and former president of the American Society of Heating, Refrigerating and Air-Conditioning Engineers. Remember, continual maintenance prolongs the life of the equipment. “You’re sitting there with an investment of thousands in your HVAC system and you’re investing a few hundred dollars in maintenance.”
Chimney inspection

Cost: $65 for an inspection; $150 for inspection and cleaning, including removal of creosote buildup, which may lead to a chimney fire.

How often: once a year.

When: before your first fire in winter.

What an inspection might find:

There’s no chimney cap. Cost to add: $150. If you let it go, rain water can get into your chimney, damage the chimney liner and damper, and even saturate mortar joints — causing mold. Potential savings: $2,000-$4,000 to replace the chimney liner.

Other problems may include: a cracked chimney crown, which can be repaired for $300-$500; chimney flashing that needs caulking, which can be done for $80-$100; and waterproofing the exterior brick, $350-$600. All these fixes will prevent rainwater from getting in and mold from forming.

Bottom line: “A simple chimney cleaning can prevent chimney fires and damage to your entire house,” says Ray Gessner, a licensed professional engineer and owner of A Step in Time Chimney Sweeps, with offices in the eastern U.S. “Water is the No. 1 problem with chimneys. With water damage, you might need to have your whole chimney rebuilt.”
Cost: $75-$200 for an inspection; $200-$300 for a termite protection contract for qualifying homes with no current evidence of termites to cover treatment and repairs for any later infestation.

How often: once a year.

When: any time, although termites are more active in spring and early summer.

An inspection might find subterranean termites that come from the ground or flying termites. If left untreated, these bugs damage framing, trim, drywall, furniture, carpet, copper and other soft metals. Termites cause more than $5 billion in damages a year in the U.S., says Paul Curtis, director of quality assurance for Terminix in Memphis, Tenn. The average homeowner loss for termite damage is $3,000, but losses can be as high as $30,000 or even $80,000, Curtis says. Most homeowners insurance does not cover repair of termite damage.

Bottom line: “Termites eat the wood from the inside out,” Curtis says. “A typical homeowner would not be aware they are even in their home until months or years after they get in and start causing damage. A lot of people don’t realize that termites don’t just feed on the home. They’ll eat flooring, insulation, books — I’ve even seen them penetrate through swimming pool liners.”

Power washing and sealing wood deck

Cost: $100-$300 for a 200-square-foot deck, more for a larger deck.

How often: every one to three years, depending on the amount of traffic, moss and mold.

When: any time in sunny weather.

Power washing gets rid of stains, algae, mold, mildew and moss. Algae and mold can make your deck slippery and dangerous, says Justin Lee of JL Power Washing in Williamsburg, Va. Sealing your deck after it is cleaned helps prevent water damage. Wood soaks up rain like a sponge, expands and then shrinks, Lee says. Sealing makes the water bead up and roll off. And let’s not forget — your deck will look nicer, too.

If you let it go, your deck will warp, nails will pop out and the deck won’t last as long.

Potential savings: $4,000 to $20,000 or more to replace your deck, depending on size.

Bottom line: “A properly cleaned and sealed wood deck can last 20 to 30 years,” Lee says.

Dryer vent cleaning

Cost: $120-$200.

How often: every year.

When: a sunny day.

The purpose is to get rid of lint buildup. If your dryer is not on an exterior wall, it’s likely that the vent leading outside is clogged up, says Gessner of A Step in Time Chimney Sweeps.

If you ignore it, the result could be a disastrous fire. “Once the vent gets clogged, the dryer starts overheating and it can catch on fire,” Gessner says. “Dryer fires are very dangerous.”

Potential savings: your home, your furnishings, your belongings and your life.

Bottom line: “I had been airing a radio commercial talking about the importance of dryer vent cleaning for about a month when three people (in our area) died in a fire caused by a dryer vent fire,” Gessner says.

Carpet cleaning

Cost: about 50 cents per square foot for hot water extraction cleaning, or $500 for 1,000 square feet of cleaned carpet.

How often: every 12 months; more often for high-traffic areas and homes with small children, pets or smokers. Manufacturers’ warranties may require cleaning every 18 to 24 months. You can save money by focusing on regular cleanings for high-traffic areas and waiting up to two years for the entire carpet.

When: any time.

If the carpet looks dirty, you’ve waited too long because some soil can’t be removed with vacuuming. This soil will bind to your carpet and dull the texture, shortening the life of the carpet.

Your home also will be healthier with pollen, bacteria, insecticides and dirt removed, says Howard Partridge, founder and president of Clean as a Whistle, a cleaning company outside Houston.

Potential savings: extending the life of your carpet. Replacing 1,000 square feet of medium-grade carpet, including padding and installation, costs about $3,000.

Bottom line: “One of my neighbors had to replace his carpet in less than four years,” Partridge says. “And his carpet looked terrible the whole time. I’ve been able to keep my carpet for 12 years now.”

Thursday, March 1st, 2012

By Polyana da Costa • Bankrate.com
More to short sales than getting the lender’s OK

Short sales have become the only way out for some sellers who owe more on their mortgages than their houses are worth. For struggling borrowers, it’s a chance to avoid foreclosure.

While helpful, short sales can be stressful, time-consuming and may lead to harsh consequences if not done properly.

Many sellers think the biggest challenge they face in a short sale is persuading the lender to take a haircut and allow the property to sell for less than the mortgage balance. That’s only the first step.

Here are five tips you must know when short selling your home.

Choose an agent experienced in short sales

If you needed heart surgery, would you put your life in the hands of a surgeon whose first surgery would be on you? Probably not.

The same applies to your financial life. Hire a real estate agent experienced in short sales, says Daniel Gomez, a board member at Neighborhood Housing Services of the Inland Empire in San Bernardino, Calif. He also is a real estate agent.

Ads of real estate agents who claim to be short-sale specialists are widespread these days. But some of these agents have closed only a handful of short-sale deals, says Gomez. Many have taken short-sale courses and are certified in selling distressed properties. That’s not enough; certifications help, but nothing counts more than experience, Gomez says.

“Interview agents, ask how many short sales they’ve closed and ask to talk to some of their clients,” he says.

A short sale is a time-consuming transaction and can take months to close. You want an agent who will stay on top of the game until the deal is closed.

Understand potential consequences of short sale

Underwater sellers are so anxious to get rid of their mortgage payments, they often don’t think about what comes after the sale. Then, months or even years later, they receive a collection letter for the difference between what the house sold for and what was owed on the mortgage.

Laws vary by state, but many states allow lenders to go after that balance once a short sale or foreclosure is completed. That’s why it’s crucial for borrowers to understand whether the lender agrees to waive the deficiency, or the balance that will be left on the loan after the sale, says Howard Ullman, an attorney at Family Counseling Law Firm in Deerfield Beach, Fla.

“This needs to be discussed verbally and represented in documents,” he says. “It shouldn’t come as a surprise.”

One way to avoid a deficiency judgment is to do the short sale through the Home Affordable Foreclosure Alternatives program, or HAFA. Lenders who approve short sales through this federal program have to release the borrower from a potential deficiency judgment.

Lenders are not obligated to approve HAFA short sales. They may choose to do the short sale based on their own internal rules and the guidelines set by loan investors. In that case, it’s really up to the lender to decide whether it will pursue the deficiency against the borrower.

You can negotiate your way out of deficiency

When negotiating a short sale, many lenders don’t voluntarily offer to release you of liability on the remaining balance of your loan — at least not for free. But you can ask to negotiate a waiver.

“I’ve never had a lender refuse to negotiate a settlement” to waive the borrower from deficiency, says Patty Da Silva, a real estate agent certified in distressed property assets and owner of Green Realty Properties in Davie, Fla.

Some lenders may ask you to sign a promissory note for at least a small portion of the balance, usually cents on the dollar, or they may ask for a lump sum. Sellers often are outraged when first presented this settlement offer, Da Silva says.

“The sellers sometimes forget they actually borrowed that money,” she says. In many cases, it is usually worth paying upfront to avoid future headaches.

“There is a price attached to the waiver of deficiency, but most of them are very tiny,” she says.

Talk to an attorney

Real estate agents who are experienced in short sales can coordinate the transaction with the bank and tell you what to expect of the process, but remember they are not lawyers.

“Most of the people who do short sales are doing it through the Realtors or people who claim to be short-sales specialists,” Ullman says. “But there are many issues that borrowers need to discuss that cannot be discussed with a short-sale specialist.”

Those issues range from potential tax implications to protecting other assets the borrower may own if the lender tries to collect the balance of the loan in the future.

If you don’t understand the contract you are signing or the potential consequences of a short sale, you should consult with a lawyer.

Keep up with HOA payments

If you are thinking about short selling your home, don’t stop paying your homeowners association dues. The fees can turn into a snowball and kill the sale, even if the buyer is willing to pay for the delinquent dues at closing.

“In short sales, there are a few problems that money cannot fix,” Da Silva says. In a regular sale or even with foreclosures, the seller or the bank pays any past dues owed to the HOA at closing so the buyer gets clear title of the property. But in a short sale, the seller’s lender wants to get every penny out of the transaction, Da Silva says.

She says it is so crucial for the seller to stay current on HOA and condo dues that she refuses to represent a seller who won’t keep up with the payments.

“Plus, you want to make sure the association is able to maintain the common areas so your house is saleable,” she says. “A short-sale property needs to be maintained. The power needs to be on; the grass needs to be cut. You don’t want your home to look like a foreclosure.”

 

Monday, February 27th, 2012

The week left yet another trail of evidence leading back to a housing market on the mend. This time, the encouraging signs were even less clandestine. Nationally, both new and existing home sales enjoyed improvements. Even some December numbers were upwardly revised. New home sales have real and noticeable impacts on GDP, thus generating jobs and driving down unemployment. The overall bias for the entire U.S. is firmly toward balance. Locally, market activity was mostly positive. Spring will still be the major tell.

In the Twin Cities region, for the week ending February 18:

  • New Listings decreased 7.1% to 1,256
  • Pending Sales increased 28.6% to 899
  • Inventory decreased 23.2% to 17,756

For the month of January:

  • Median Sales Price decreased 3.4% to $140,000
  • Days on Market decreased 8.5% to 142
  • Percent of Original List Price Received increased 3.4% to 91.2%
  • Months Supply of Inventory decreased 34.6% to 4.7

Click here for the full Weekly Market Activity Report.

From The Skinny.

Posted in The Skinny, Uncategorized |
Wednesday, February 22nd, 2012

The National Association of Homebuilders index recently rose to levels not seen since 2007. Historically, it’s been a great leading indicator of housing starts. We lead with this information because it is just the latest in a series of testimonials toward a market with some wind in its sails. In as few as four months, the residential real estate scene could look quite different than it has in recent years. That’s not to say that we’re wave riding our way to a national housing boom, but market fundamentals could be steering the rudder in the direction of calmer waters. For sellers eager to get out but unwilling to take capital losses, that’s more relieving than the usual threat of hull breach.

In the Twin Cities region, for the week ending February 11:

  • New Listings decreased 0.4% to 1,313
  • Pending Sales increased 28.9% to 928
  • Inventory decreased 23.5% to 17,690

For the month of January:

  • Median Sales Price decreased 3.4% to $140,000
  • Days on Market decreased 8.5% to 142
  • Percent of Original List Price Received increased 3.4% to 91.2%
  • Months Supply of Inventory decreased 34.6% to 4.7

Click here for the full Weekly Market Activity Report.

From The Skinny.

Posted in The Skinny |
Wednesday, February 22nd, 2012

Posted in Monthly Skinny Video |

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