Wallingford homes for sale

The Sun Does Not Always Shine

April 4, 2011 by admin

: Check Out A House In The Rain!

Water in the basement, a leaky roof, unwanted water anywhere in a home is a big concern for any potential home buyer. When is the best time to see a home and ascertain whether or not there are any moisture issues – during the rain! Do not cancel an appointment due to inclement weather if you have interest in a property. Visiting a home while it is raining the best way to check out issues that are created by water intrusion, leaky roofs or windows, and drainage issues. It is the best time to determinewhether a house is water proof. Now that Spring has arrived there should be plenty of opportunities to visit your dream home in the rain.

Items you can verify during an appointment in the rain:

– If the house has a sump pump – is the sump pump doing its job? Is water being drained out of the sump pit? Is the sump pump discharge pipe directing water away from the foundation, or is it pooling near the house?

– If the property has a sloped lot is the water being directed away from the foundation?

– Are the rain gutters directing the water away from the home? Is there any pooling of water near the foundation? Is there water overflowing the gutters?

– Is there any evidence of water intrusion in the basement? If the basement has an outside exit, are the exit doors water tight?

– How is the roof holding up? Go up in the attic – are there signs of any leakage?

– Check for any evidence of moisture around the nearby wall under the windows for blemishes or peeling paint possible evidence of intrusion.

– Check the bottom of the doors for moisture and or leaks. Check the point where the flooring meets the threshold.

You may get a little wet going from house to house but it is worth it. House hunting in the rain reveals things that you would not be able to notice when the sun is shining.

Real Estate ABC’s – Seller Assist

February 4, 2011 by admin

One of the biggest obstacles many home buyers face is the ability to fund closing costs. Closing costs typically account for approximately 6% of the price of the home. With a minimum down payment of 3.5%, using FHA guidelines as an example, a buyer of a $100,000 home must have funds of approximately $9,500 – a down payment of $3,500 and approximate closing costs of $6,000 order to seal the deal.

Along comes was is known as a seller assist. A seller assist is a feature of many loan programs that is used to help a buyer pay for a portion of their closing costs.

With a seller assist each lender and program has it’s own specific guidelines as to how much assistance from the seller the lender will allow. One lender may allow the seller to contribute 3% towards your closing costs, while another lender may allow 6% to be contributed from the seller. For example under current FHA guidelines, a seller assist of up to 6% is allowed. Your mortgage lender will advise you on the assist limits of your specific loan program.

A seller assist must be written into the original contract. Few lenders will allow that to be written in later, unless the selling price remains unchanged, and the seller is simply paying toward your closing costs out of that amount. If you need the seller to assist with closing costs, be sure it is a part of your discussion and planning from the beginning

A seller assist is a great feature that allows the seller to pay some of your closing costs. In a market where sellers find it difficult to sell their home, a seller assist can be an attractive lure to a prospective buyer.

Let’s use an example of a purchase price of $100,000 and a 6% seller assist. The sale price of the home will be recorded as $100,000 and the seller will credit the buyer 6%, $6,000, at the settlement table. Thus the sellers net proceeds will be $94,000. Yes it is true that the buyer will be financing the additional $6,000 over the life of the loan, but the assist is often the only way the buyer can purchase the property.

If a seller assist is part of the transaction the total purchase price, including the assist, the property must have enough value to justify the sale price. The price of the home must appraise with the seller assist included. In the past it was common practice to add the assist to the price of the home and “bump up” the sale price to cover the assist, but that practice today can cause unwanted issues with appraisers.

Another form of seller assist is a seller paid buy down. This is where the seller assists the buyer with a cash concession that is used to buy down your interest rate. This is useful for many first time home buyers because the lower rate helps reduce their monthly mortgage payment and allows them to stretch their buying power.

In our local market a seller assist was recorded in 48 out of 125 transactions in 2010, this translates to 38.4% of last year’s sales. Seller assist amounts ranged from $200 to $15,800, with an average assist of $5,241.

Wallingford PA Real Estate – Wallingford, PA 19086

Buy Gold Rather Than A House?

February 2, 2011 by admin

Reading the Philadelphia Inquirer is a part of my daily morning routine. Perhaps it was the debut of the new format this week that spurred the fanciful article that appeared in the February 1 Business Section entitled “Why Buying Gold May Be Beter Financially Than Buying A House”.

The crux of this article is due to the downturn in the real estate market over the past several years it may be wiser to invest some some of your down payment in the one of varied methods of gold speculation. Perhaps it would be wiser to continue renting rather than make a real estate purchase the article infers.

Given the fact that most home buyers have limited cash to invest in a new home, and pundits advising that you should only have 5% to 10% of your portfolio in precious metals, the prescribed investment at the max of 10%would only amount to $2,850 for a person who had the necessary 3.5% down payment and closing costs on a $300,000 house. How much could you expect to make on a $2,850 investment – at 10% it amount only to a gain of $285.

On the other hand what do you get for your investment in a new home? That’s right you get a home, a place to build memories, to raise a family, to be a member of a community, a mortgage interest deduction, and a modest return on your leveraged invesment when the market recovers. Given the abundant inventory and continuing low interest rates you may even get a deal.

On a $300,000 house, say, the cost of maintenance, property taxes, and insurance add up to roughly $20,000 a year

That quote from the article really got me going. I can not imagine a homeowner ever spending close to that on the maintenance, taxes, and insurance for a $300,00 home on a yearly basis. If you are spending that type of cash on a yearly basis for those 3 items you have some serious issues. What are you doing – replacing your roof on a yearly basis? A more realistic expectation of expenses would be:

Taxes – For Wallingford Real Estate approximately $6,800
Annual maintenance – expect 1% to 2% of the home’s value – so at 2% that amounts to $6,000 – $3,000 on the low side
Insurance – $900 a year will get you very adequate coverage

Added up the total ranges from $10,700 to $13,700 per year – that is a far cry from $20,000.

Have you ever seen a gold bullion box that would make a good home?

Real Estate ABC’s – Short Sales

January 29, 2011 by admin

Real estate has it’s own terminology and acronyms. In this and future Real Estate ABC’s posts I will discuss some of the commonly used terms and vocabulary.

A short sale is a sale of real estate in which the sale proceeds fall “short” of the balance owed on the property’s mortgage loan. It often occurs when a borrower cannot pay the mortgage on their property, but the lender decides that selling the property at a moderate loss is better than the alternative – foreclosure. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and poorer credit report outcomes for the borrowers. This agreement, however, does not necessarily release the borrower from the obligation to pay the remaining balance of the loan, known as the deficiency.

In a short sale, the bank or mortgage lender agrees to discount a loan balance because of an economic or financial hardship on the part of the borrower. The home owner sells the property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender. Neither side is “doing the other a favor;” a short sale is simply the most economical solution to a problem. Banks will incur a smaller financial loss than would result from foreclosure or continued non-payment, and borrowers are able to mitigate damage to their credit history. A short sale is typically faster and less expensive than a foreclosure. It does not extinguish the remaining balance unless settlement is clearly indicated on the acceptance of offer.

Short sales are different from foreclosures in that a foreclosure is forced by a lender, whereas both lender and borrower consent to a short sale. However, this consent may change at any time, and negotiations may be ongoing between the lender and borrower even while the short sale listing is on the market. The borrower may decide to remain and refinance their house, or become obstinate and force foreclosure. The bank may renege as well if they decide to stick with the current borrower, or if they disapprove of the sale price. A short sale contract includes a contingency where the bank must approve the sale – also know as 3rd party approval.

Multiple levels of approval and conditions are very common with short sales. Secondary mortgage lenders – as the result of home equity loans – will likely need to approve the terms of the sale as well. The possible wide array of parties to the sale can complicate the process and account for substantial delays in the sale.

The Satisfaction Of Home Ownership

January 29, 2011 by admin

A recent survey conducted by the National Association of Realtors showed that a substantial majority of both homeowners and current renters believe that owning a home is a smart decision over the long term. The American Attitudes About Homeownership survey of 3,793 adults found that even in today’s challenging economy, 95 percent of owners and 72 percent of renters believe that over a period of several years, it makes more sense to own a home.

Other findings of the American Attitudes About Homeownership survey include:

• A large majority of homeowners are happy with their decision to own a home. In fact, 93 percent of the owners surveyed would buy again.

• Homeowners are more satisfied with both the overall quality of their family life and with their community life than renters are.

• Of the renters surveyed, 63 percent said that it was at least somewhat likely that they would purchase a home at some point in the future, with young adults 18 to 29 years old having the strongest aspirations for homeownership.

Read more of the National Association Of Realtors American Attitudes About Home Ownership.

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S. Clark Kendus