Have you ever received multiple bids for a remodeling project, only to find that the length and detail in each bid varies greatly?  Have you noticed that some contractors overload you with paperwork such as material lists, legal sounding forms, and contracts to sign, while others … sometimes the lowest bidders … have submitted their bid on one page?  If they all seem trustworthy, but you are not sure if you feel comfortable conducting business on a one-page document … your instincts are correct!

When it comes to hiring a contractor and signing a contract, it is important to make sure your home and finances are protected.   Each contractor presents their bid in a different manner indicating what they will be doing and how much it will cost.  There is much variability in what is included and how they are written, and yes … some contractors are more detailed than others.  Beware of contracts that are brief … too little information leaves a lot to be interpreted … or misinterpreted.

A contract should be written using simple language to avoid any confusion.  Characteristics and specific information recommended to be included in any remodeling contract are as follows:

Project Scope and Specifications
Ensure all contractors bidding on your job are bidding off the same information. The scope of work should be very specific as to the remodeling you want done.  It should include drawings and dimensions, the kinds of materials to be used, brand names, colors, grades, styles, and model numbers.  A brief bid leaves too much room for interpretation, and you have nothing to protect yourself in the event the contractor does not construct what you had in mind.

Building Permits
Whoever obtains the permits is required to ensure that the work meets all building codes.  The contractor should be the one to obtain the permits so that they are responsible for the work. 

Starting and Completion Date
Construction delays are to be expected, however they should be limited.  A general statement establishing a starting and completion date while allowing for reasonable delays should be included in any contract…as well as the consequences.

Change Order Clause
A change order clause requires that all changes be in writing to protect all parties involved.  Any changes made to the contract must be approved and signed by both you and your contractor.

Names of Subcontractors and Suppliers
The contract should include the names of all subcontractors and material suppliers so you can obtain lien waivers indicating all subcontractors and material suppliers have been paid before you issue final payment to the contractor.  This will protect you from any action against you by the contractor, subcontractors or suppliers.

Schedule of Payments
Avoid any contractor who requires a large percentage of the payment up front.  It is customary to make a “good faith” down payment of a small percentage of the total job and set up a payment schedule based on completed stages of the project.  The total project price or how the price will be calculated should also be clearly defined in the contract. 

Holdback Clause
This states that final payment will be withheld until sometime after job completion. This will allow you time to inspect the work, provide an incentive for the contractor to remedy any problems, and obtain lien waivers from the contractor indicating all sub-contractors and suppliers have been paid.

Cleanup 
Construction and remodeling projects make a huge mess!  Be sure to establish who will do the cleaning, how often, and to what level of cleanliness. 

Home Warranties
Ask your contractor to provide you with a written warranty for their labor and the materials used to complete your project.  This will protect you if the work performed begins to fail after the contractor has received final payment.

This is a list of the basics that should be included in a contract; there are many other items that can be included, depending on the type and size of job.  If your contractor is not incorporating these items, you may want to take it upon yourself to ensure the following issues are documented and signed by both parties.  And if you have any questions regarding your interest, you may want to have an attorney review the contract before you sign anything.

Remember, ultimately the contractor works for you, you are the boss!  Do not sign anything until you are absolutely comfortable with the contractor and that the terms of the contract are meeting your needs. 

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This story was submitted by one of our readers and may have originally appeared HERE
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The Iowa Finance Authority’s REOHome Program can help hard-working Iowans purchase the home of their dreams! The unique new program offers up to $10,000 in down payment/closing cost assistance to qualified Iowans who are purchasing a home that is Real Estate Owned. (Real Estate Owned properties are in the possession of a lender as a result of foreclosure of forfeiture.)

 
Eligible Home Buyers:
•Household income is restricted to 80% area median income per county.
•Must be purchasing an Iowa, foreclosed property for primary residence.
•Must qualify for IFA’s FirstHome Program.
•Must participate in pre-closing home buyer education.
•Eligible home buyers may also use IFA’s FirstHome Plus Program, which can offer an additional $2,500 for down payment assistance/closing costs.
Eligible Property:
•Home buyers must purchase foreclosed property or one that is in imminent foreclosure process.
•Limited to one unit, residential property on five acres or less,
•The property must be the home buyer’s primary residence.
Other Details:
•At closing, a lien is placed on the home equal to the amount of the REOHome assistance. The amount of the lien is reduced by 20 percent each year that the home remains the borrower’s primary residence. After the five years, the lien is eliminated entirely.

To learn more contact Pat (515.577.6040) or Beth (515.537.9922)

1. The pending marriage scenario:

If a single person qualifies for the FTHB credit at the time he/she buys a home with someone that is not a FTHB and then later that year they marry each other, is the credit still allowed?

Eligibility for the FTHB credit is determined on the date of purchase. If a FTHB buys a house and then later marries taxpayer B, not a FTHB , the credit is allowable at the maximum credit.

2. The Cosigner scenario:

Taxpayer A is a single first time home buyer – Taxpayer B cosigns for A and does not qualify for the credit – but both names are on the mortgage – can Tax payer A claim the credit?

Yes. Taxpayer B is not a FTHB and cannot claim any portion of the credit, but A may claim the entire amount if the home was purchased as Tax payer as primary residence.

Just a side note on this one: Remember the Credit doesn’t apply if the buyer purchases the house from an immediate relative.

3. The community property scenario

If a husband and wife wanted to sell the home the wife owned when they got married and the husband had  not owned a home within the last 3 years, could he qualify as a FTHB for the credit even though the wife wouldn’t?

No. The purchase date determines whether a person is eligible for the FTHB credit. Since the wife had ownership in a principal residence within the last three years, neither can take the credit. IRS tax code requires that the taxpayer and the taxpayers spouse not have an ownership interest in a principal residence in the last 3 years. The husband can’t take the credit even if filing a separate return.

4. When will the buyer get their money?

If the return and the 5405 were filed electronically – the IRS rule of thumb is 10 days from the filing

5. Will they get the entire 8K?

Remember the credit will be applied against any tax liability. So if the taxpayer owes taxes – the amount owed would be subtracted from the 8K credit leaving the taxpayer with the difference in a refund – or 8K less in liability.

6. Can a buyer qualify using any lender?

Qualification is not tied to the lender – so technically yes you may use any lender. However, the credit eligibility can be tied to certain products such as bond funded programs that would not allow the credit.

7. What are the terms to file an amended return?

To file an amended return you can electronically file form 1040X. Form 1040x must be filed within 3 years from the date of your original return or within 2 years from the date you paid the tax, whichever is later.

8. How about – would a buyer be considered a FTHB if they owned a primary residence outside the US within the last 3 years?

Yes – property outside the US isn’t used against the qualifications.

9. If two unmarried people buy a house together – how do they determine how the credit will be applied?

IRS Notice 2009 – 12 outlines allocation methods for those not married.

10. If I claim the credit – and stop using my house a principal residence before the 36 months is up – do I have to pay the credit back – is it prorated?

The entire amount of the credit would be required to be paid back and is due at the time you file the income tax for the year in which you ceased usage as a principle residence.

11. I buy a primary residence and qualify for the credit – but decide to rent out two bedrooms and report rental income on a schedule E – will I still qualify for the credit as a principal residence?

Yes – if you meet all other FTHB criteria.

Many people – especially singles and young couples who are just starting their careers – have mixed feelings about purchasing a house. They worry about getting tied down and taking on a lot of debt.

Here are 10 compelling reasons why anybody who can afford it should consider buying a home:

1) House prices tend to rise over time, so a house is one of the best investments you can make. Home prices in the U.S. have risen three percent to six percent a year for the past 20 years. That trend is likely to continue. So if you buy a home now, you’ve put your capital in a safe investment where it is likely to grow.

2) You’ll pay less tax. You can deduct the interest you pay on your mortgage from your taxable income. The value of this tax break depends on factors like your personal tax bracket, the size of your mortgage, the rate of interest you pay on it and how long you’ve held the mortgage. As a rule, the newer the mortgage, the greater the amount of interest you pay each month and the bigger the tax break. Therefore, recent buyers with young mortgages tend to get the greatest benefit.

3) You’ll be buying a piece of real property rather than putting money in a landlord’s pocket each month. The real cost of renting is higher than the monthly payment. There is also an opportunity cost equal to the amount you would gain by using the money to purchase a home instead. Even if the house you purchased did not appreciate in price, you would be able to sell it and recoup some of the money you put into it.

4) Interest rates are still historically low. This makes it relatively inexpensive to take out a mortgage. The lower the interest rate, the less you actually pay for your house and the sooner you can pay the mortgage off. Our loan calculator can show you how different interest rates affect the total cost of your mortgage and the time it takes to retire it.

5) You’ll be able to use the equity in your home for low-cost loans for other purposes. You can access the paid-up equity you accumulate in your home in the form of a home equity loan or a home equity line of credit. Because they are secured, home equity loans and lines of credit generally carry a lower interest rate than other types of consumer loans, such as auto loans. The interest on them is generally tax-deductible, as well.

6) You’ll have the stability and emotional security of owning your own home. No more worrying about dictatorial or negligent landlords, rent increases or the possibility your building will be sold and redeveloped or turned into a condo. You’ll be able to live in your house as long as you like, fix your monthly payments for as long as 30 years and you’ll be in charge.

7) You’ll be able to redecorate and renovate any way you like, any time you like. Rules about the paint colors you can use will be a thing of the past. And you’ll be able to tear out walls, install a powder room and make any other improvements you want. Best of all, if you decide to sell, you’ll recoup at least part of the cost of the improvements.

8) You can have a garden. This is one of the big pluses of ownership – a little piece of land you can call your own, where you can grow tomatoes or roses, barbeque, and play with your kids and pets.

9) You’ll be able to put down roots in a community. When you’re a homeowner, you’ll get to know your neighbors, participate in street sales, meet potential baby-sitters and play Saturday-morning touch football in the park. Renters tend to live more insular lives.

10) You’ll have a greater voice in community affairs. Local homeowners generally have more clout – individually and through ratepayer’s associations – when it comes to development proposals, school issues, changes to traffic control and routing and the like. Because renters tend to be more transient than homeowners, they have less influence on policymakers.

This story was submitted by one of our readers and may have originally appeared elsewhere
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Twists in state laws and consumer-hostile warranties make it doubly hard for owners to fix construction defects. Here’s how to protect yourself when your new home is not up to snuff.

By Marilyn Lewis of MSN Real Estate

Few thrills compare to the joy of moving into a brand-new home. Few nightmares match tales of misery told by homeowners who have tried and failed to get builders to repair problems in a new home. And as concerns about hidden defects grow, homeowners are finding it increasingly difficult to get builders and insurance companies to stand behind their products.

Traditionally, a good builder gives customers a year — and many states require it — to report and let them fix any problems with new homes. Many builders do this willingly. But an increase in construction-defect lawsuits has resulted in rate hikes in builders’ insurance. Now, consumer advocates say builders are under pressure from insurers not to respond to homebuyers’ reports of problems unless a lawsuit is filed.

A builder who acknowledges liability under "right-to-cure" laws risks losing insurance coverage, says William F. Cloran, a Portland, Ore., attorney who has represented both builders and consumers in defect arbitrations and lawsuits. Thirty-one states have these laws, which prevent owners from filing lawsuits before following a prescribed complaint procedure. In theory, right-to-cure laws encourage both sides to settle disputes out of court and give a builder the chance to fix problems before getting sued.

In fact, the laws just complicate things and put a bigger burden on consumers and builders to meet precise deadlines and amass lots of documentation, says Carol Smith, author of "Building Your Home: An Insider’s Guide."

Cloran says insurers hide behind these laws and "take the position that they don’t have a claim and they’re not going to part with money until a suit is filed."

Double whammy
Step two in the double whammy for consumers is the growth of new-home warranties with provisions that make it much harder for consumers to sue. Warranties typically require homebuyers — who often neglect reading the fine print on their contracts when they buy — to settle complaints through private arbitration and waive the right to trial.

Advocates of arbitration say it’s fair, quick and less expensive. But with many of the private arbitrators depending on builders and insurers for repeat business, it’s hard for a homebuyer to get a fair shake, according to Consumers Union, publisher of Consumer Reports, and other consumer advocates.

Some warranties even specify that the insurance company representing the builder can choose the arbitrator, says Nancy Seats, national president of Homeowners Against Deficient Dwellings, a volunteer group of homeowners with construction-defect complaints. There’s no public record to document the arbitration process, so complaints or judgments against a builder are not visible to prospective customers trying to research the builder’s track record.

When claims do go to court, settlements are typically confidential, further limiting public access to the track records of problem builders. In Seats’ experience, even when a consumer wins an arbitration judgment, the award is unlikely to cover all the costs involved — and in some cases the loser has to pay all costs for both parties, she says.

Arbitration costs vary greatly. An arbitrator who is an attorney or engineer charges $2,000 to $3,000 a day (usually split by both parties). Add your own attorney’s fees and expert-witness fees and your case can easily run $5,000 to $10,000, Cloran says. Consumers who sign a warranty waiving the right to a trial cannot, in most cases, challenge an arbitrator’s decision.

The ‘warranty bouquet’
New homes come with a “bouquet of warranties” of various durations and from many sources, Smith says in "Building Your Home: An Insider’s Guide." You can avoid problems by studying all warranties carefully before signing a contract to build. (State laws may add certain provisions.)

In addition to warranties on appliances and products used in your home, there are three kinds of warranties on the house itself. The one with the strongest consumer protection provisions will typically prevail in court, Smith says:

Implied warranties, based on state laws and case law, aren’t written out but may be invoked in a court dispute. These assure a homeowner the right to a home fit for habitation. Builders also must meet local and state building codes, manufacturer installation instructions and their own specifications for materials to be used.

Builder limited warranties. About 90% of builders give buyers a written commitment to stand behind the materials and workmanship in new construction, usually for a year. A "builder-backed" warranty usually means that the builder pays for any repairs or that the builder is self-insured, Smith says. She estimates that 8% to 10% of new homes have problems serious enough to be called "defects"; in 2004, Consumer Reports put that at 15%. The limited warranty includes three types of coverage:

• Materials and workmanship coverage, the most frequently used part of a warranty, usually lasts a year. It guarantees that a builder and subcontractors installed materials correctly and that the materials will hold up to normal use. An incorrectly installed window, for example, or a leaky faucet, is covered. A broken window or faucet that’s your fault, though, is not covered. Most complaints are over relatively minor fixes — a garage door that makes a funny noise, a cabinet door that won’t close correctly.
• Systems coverage usually lasts a year and includes the parts of the heating, plumbing, air-  conditioning and electrical wiring behind the walls — the pipes but not the toilet, for example.
• Structural coverage may last from one to 10 years and protects against problems in the load-bearing portions of the home — the walls, the floors, the roof trusses and foundation but not, for example, the shingles. Only about 2% of new homes ever suffer structural damage, Smith says.

Insured warranty policies often are purchased by a builder from an insurance company, giving the builder additional protection from claims. These may also extend the length of your warranty. Policies give the homeowner recourse if the builder can’t or won’t fix a problem. The cost is included in the price of your home.

The responsibility is yours
Each warranty spells out the procedures and deadlines for making a claim. You need to follow these to the letter. It’s your responsibility to read and follow all the instructions you’re given on maintaining the home. Just like with a new car warranty, your failure to do the proper maintenance — cleaning gutters, for example, or changing furnace filters — could void your new home warranty.

A warranty also defines standards under which the home is insured, and these may be different from your personal standards. For example, Smith says, if your driveway develops a fine crack and the warranty says, "We cover cracking in cement that’s one-quarter inch or more," that’s the standard. You may want a new driveway, but the warranty doesn’t provide for it.

A builder may, on occasion, go above and beyond the warranty standard, but you can’t count on it. Also, disputes can develop over gray areas, because not every eventuality can be spelled out ahead of time. That’s why, Smith says, it’s so important to carefully research your builder, choosing someone with integrity, a strong reputation and a track record of customer satisfaction.

This story was submitted by one of our readers and originally appeared HERE

Get this and other real estate news from www.LotInvestor.com

By MP Dunleavey

So you want to buy a place of your own but can’t figure out how to pull together the necessary cash and financing? If you’re willing to think creatively, there are several offbeat ways to buy your first home.

The fixer upgrade

When you can’t afford what you want, look for what you can afford and use it as a steppingstone.

Case in point: Jamie Carroll, 46, and her husband bought an $80,000 two-family house several years ago. They renovated, sold it and invested in a $200,000 two-family place in a nicer town. In a few years, they’ll repeat that process and buy their dream house in the woods of Massachusetts.

Their first house was far from ideal, but the down payment was only $5,000, and the rental income allowed them to pay for repairs without incurring more debt. After the sale, they walked away with more than $30,000. Ditto in their new home, but the rental income is higher, so they’ll save more toward their next purchase — enough so that they can buy the new house and keep the rental property as an investment.

Pros: There are plenty of lower-priced houses out there in need of repair, and the income from a tenant can help both with repair costs and mortgage payments. Even in overheated markets, there’s little likelihood that the value of homes at the low end will suffer in a slump.

Cons: This method isn’t for the impatient or the status conscious. To save money, the couple did many repairs themselves, and it will be several years before they can settle into their dream house. Just be careful not to buy a place where the cost of repairs will eat up any profits you might make when you sell.

The shared load

If buying your own property is prohibitive, consider buying into a dwelling with shared ownership. There are several options here, with varying levels of complexity and commitment. One of the most common uses a legal form of ownership called "tenants in common."

Case in point: In 1991, when the average San Francisco one-bedroom apartment was selling for about $250,000, Sharon Fisher paid $170,000 for a one-bedroom in a tenants-in-common building with five other units. "I couldn’t have bought real estate without this," she says.

Fisher eventually sold her TIC share for a tidy $420,000 when her building went condo. However, she says it would have sold for less if it had remained a TIC, and she would most likely have had to pay the buyer’s legal fees.

Pros: Buying into a TIC is less expensive, and this form of joint ownership does a better job of protecting the rights of individual owners (as in the case of unmarried partners who want to buy property together).

Cons: Joining a TIC can be legally and financially complicated, and the details vary from state to state. Some TICs may restrict when you can sell and impose other conditions. And though you own your own place, you need people skills: Tenants negotiate noise, repairs, who puts out the garbage, etc.

Find out more about tenancy in common here.

The friendly option

If you don’t want the legal hassle of setting up a TIC, it’s possible to buy a property with a friend you trust, sharing the mortgage and the title. This form of ownership is called joint tenancy, and it’s the way most married couples hold property.

Case in point: In 2003, Bryan, 34, bought a three-bedroom house with a buddy for $299,000. They each put down $10,000, and they rent out the third bedroom to a friend, which helps cover costs.

Pros: The two are only paying slightly more than they would in rent, while they’re building equity and the house is appreciating.

Cons: The legal particulars of joint tenancy vary from state to state, so you’ll need to check with a lawyer. Under joint tenancy in many states, any owner can force the sale of a house or transfer ownership rights without the permission (or even knowledge) of the other owners. The costs and all decisions about maintenance and financing are shared equally, which is fine so long as everyone agrees.

Find out more about joint tenancy here.

The instant neighborhood

Cohousing has its origins in Europe and is practically like buying a neighborhood along with your house. Residents own one of a group of small homes clustered together and share ownership of the land.

In 1992, Tom Moench and his family bought a small (1,150-square-foot) 3-bedroom house for $157,000 in a cohousing development on Bainbridge Island, Wash. A similar private home would have cost about $185,000 then, or 17% more, Moench estimates.

Pros: In many cases, property prices are lower than market. And though houses tend to be smaller, residents share ownership of the common facilities. "We had a 5,000-square-foot common house, with guest rooms and dining rooms where you could entertain large groups," Moench says. Residents may cook meals together or swap baby-sitting time.

Cons: Cohousing is largely a blue-state phenomenon with vaguely utopian overtones, but it’s slowly spreading throughout the country. You need a high tolerance for meetings, because many decisions have to be made jointly by the owners. When selling your property, there may be some restrictions, and the buyer has to want to join a communal setting.

Find out more about cohousing here.

The parental plan

Saving enough for a down payment usually requires some kind of a sacrifice, so don’t rule out living with family.

Case in point: Saddled with hefty school loans and about $25,000 in credit card debt at the end of their medical residencies, Sonya Cottone, in her late 30s, and her husband decided to move in with his parents for a year to pay off their plastic and save for a down payment. "People thought we were crazy," she says. "But it worked out really well."

Pros: Can you say super savings? Within 15 months, the Cottones had paid off their credit cards and saved enough to put $50,000 down on a four-bedroom colonial in Long Island, N.Y. "And we’re all still speaking to each other," she jokes.

Cons: Mixing family and finances can be a stress cocktail. To diffuse tension, Cottone says, discuss money and expectations up front (everything from paying rent to doing chores). And though your savings will make you feel flush, "don’t see it as extra," Cottone says. Stick to your savings strategy or you’ll be living with Mom and Dad for years.

The no-money-down Hail Mary

It can be tough to save enough cash for a down payment, but in certain circumstances you can finance your way around it.

Case in point: Kerrie, late 30s, bought a small two-family home in Brooklyn for $560,000. "I didn’t put any cash down," she says. "I did an 80% mortgage and a 20% second loan. I used my $30,000 in savings for renovation."

It’s a risky strategy, but it worked for Kerrie because a) the property was undervalued and b) she knew that a basic overhaul would bring it up to market value, which it has. Her upstairs renter offsets part of her costs.

Pros: You can buy a house without any upfront cash.

Cons: You need to have nerves of steel (in case property values drop) and be willing to live in contractor hell for a few months. And if your credit is less than stellar, this may not be an option at all.

The susu-super saver

This simple saving strategy goes by different names in different communities, but the method is the same. Members of a "susu" contribute a fixed amount each week or month for a certain period (e.g., $200 a month for 10 months). At regular intervals, one member gets a specified payout in cash.

Case in point: Laverne, a single mother in her 50s, has participated in over a dozen susus over the last 20 years.

Pros: Although the amounts are small, usually under $10,000, a disciplined saver could participate in several susus to fund a down payment.

Cons: Only communal pressure and the honor system ensure that everyone gets their turn (and that folks don’t default). And your money doesn’t earn interest.

But wait, there’s more

In the course of excavating all these options, I came across a wide array of federal, state and local programs designed to help first-time buyers and low-income buyers purchase a home. For example, you may be able to borrow from your 401(k) or take money from an IRA (you escape the 10% early withdrawal penalty, but not income taxes). The Federal Home Loan Bank sponsors programs that match savings, $3 for every $1 put aside. There are loan subsidies for buyers in rural areas and in inner cities, too.

The best place to start is with your state’s housing finance agency. Find out more about what these agencies offer here. To find your own state’s housing finance agency, click here.

Get this and other real estate news from www.MyDesMoinesrealty.com first time home buyer Des Moines Iowa purchasing a home in DSM or Jordan Creek or Clive or Urbandale? you need www.mydesmoinesrealty.com

By Elizabeth Weintraub, About.com

If you’re like most first-time home buyers, you’ve probably listened to friends’, family’s and coworkers’ advice, many of whom are encouraging you to buy a home. However, you may still wonder if buying a home is the right thing to do. Relax. Having reservations is normal. The more you know about why you should buy a home, the less scary the entire process will appear to you. Here are eight good reasons why you should buy a home.

Equity Loans

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home’s equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.

Get this and other real estate news from www.MyDesMoinesrealty.com

By Elizabeth Weintraub, About.com

American home owners sell and move, on average, every five to seven years. Why do home owners move? People who have lived in the same home for the past 30 years have a hard time understanding this phenomena. They are shocked that people move so often, but I know one thing for certain: Their day to sell and move will come as well.

Here are the top 15 reasons why people sell and move:

• 1) Home is too small. First-time home buyers often outgrow their "starter" homes. Increased family size is the main reason home owners say they need a larger home.

• 2) Upgrade. The grass is greener on the other side. People often want what they don’t have and long for a bigger, more expensive and grander, upscale home. It’s the American way.

• 3) Fix purchase error. Owners might believe they made a mistake when purchasing their present home and want to rectify that mistake. Maybe they thought they could get by without a back yard but yearn to garden, or the dining room in the center of the house annoys them, or they no longer enjoy the underbelly of planes flying overhead within inches of their face.

• 4) Job transfer. Relocation makes it necessary for many to pull up roots and move. If the commuting distance exceeds an hour, most people would prefer not to spend two hours in traffic every day.

• 5) Personal Relationships. Moving in with a partner or getting married can mean one of the parties will need to sell, especially if both owned homes prior to the commitment. On the other hand, break-ups cause owners to sell as well for three basic reasons:
  1. One party may need to buy out the other and not have the cash available.
  2. The home may not be affordable to sustain on one person’s income.
  3. The home holds bad memories, making a fresh start desirable.

• 6) Neighborhood changes. The neighborhood might have changed for the worse, economically, socially or physically. For example, maybe a freeway was constructed nearby. Maybe the next-door neighbors receive visitors who arrive wearing striped pajamas at 2 AM. Or they have hung sheets over their windows while a skunk-like odor permeates the air.

• 7) Empty nest. The kids have grown up and moved out. The owners want a smaller home. The older you get, the harder it is to keep a big house clean.

• 8) See family more often. Some people want to be closer to their family as they age and will move to be near relatives. Parents want to be near children. Grandparents, near their children and grandchildren.

• 9) See family less often. To put more distance between the home owners and relatives. Some might move out of state to keep harmony within the family. Dysfunctional and fractured families have been known to blossom being separated.

• 10) Retirement. Active-adult communities are attracting many buyers over the age of 55. These planned communities have golf courses, club houses, workout facilities, week-end social gatherings, back-yard barbecue parties and more, all designed for people over 55.

• 11) Health problems. Physical ailments such as knee or back problems make it difficult for an aging population to climb stairs in a two-story, so a one-story home may be more practical. A trade-off solution for many elderly people who don’t require round-the-clock care is to buy a condo or move into assisted living housing.

• 12) Deferred maintenance. Some people don’t want to put on a new roof, replace the siding or buy a new furnace, so it’s easier to buy a newer home. When you figure the life of most home systems is about 15 years, it could make sense to get out before everything goes haywire.

• 13) Home improvement perfection. A small segment enjoys fixing up and selling, spending time, money and effort on remodeling, and once the work is completed, these people become restless because there is nothing left to do. Some of you may call these people obsessed, but for some, it’s a way to maintain balance while mastering a hobby.

• 14) Cash in equity. Some home owners can’t stand the fact their home is worth all that money because that money is not in their pocket. These people would prefer to stare at their passbook savings than stare at four walls with empty pockets. They. Just. Want. The. Money.

• 15) Lifestyle change. Others are simply tired of owning a home and would prefer to travel, pursue a hobby or be less responsible. We used to call these people misfits or boomers, but many past a certain age want to find a calling that is meaningful to them. So, for these people, home ownership loses its priority status and turns into the ticket for realizing dreams.

Find this and many other real estate tips and news at My des Moines Realty www.mydesmoinesrealty.com 

Just like buyers who get cold feet, sellers can also feel remorse, have second thoughts. Seller’s remorse often happens because the seller was not really motivated in the first place. Sometimes sellers think they want to sell, but they don’t really have good  reasons to sell.
What is Seller’s Remorse?

Sometimes sellers want to "test" the market, to see how much a buyer will offer, to figure out if a home is priced right. That is a wasted effort and pointless.

Real estate agents spend money to advertise and market. Agents receive no return on that investment and earn no money when sellers are not serious about selling.

Seller’s remorse means the seller has decided it was a mistake to list a home for sale and no longer has a desire to sell.

A seller of a Victorian fourplex in Sacramento decided to put his home on the market because he felt the market was declining. He thought if he waited a few more years, the value would fall so low that he would lose his opportunity to make a reasonable profit.

After his Realtor brought him an offer, he panicked. He came to the conclusion at midnight that he could not part with his home of 16 years at any price. Suddenly, the reality of the situation hit him. It was all fun and games when buyers came through to tour. But when the time came to sign on the dotted line, the seller froze. It’s a common reaction when a seller is not truly motivated.

How to Prevent Seller’s Remorse

Owners can prevent seller’s remorse by thinking through the entire process and having a plan — a relocation goal — including strong reasons for selling.

    * A real estate agent can help a seller plan for the future and walk the seller through options. Discuss wants and needs with your agent.

    * Draw up a Ben Franklin list, sorted by benefits and drawbacks to selling. If the benefits outweigh the drawbacks, then you should sell. If the drawbacks exceed the benefits, don’t put your home on the market.

    * If a seller is worried about not being able to find a suitable replacement home, the seller can sell on a contingent contract. Contingent contracts give the seller a period of time to locate another home without an obligation to sell to the buyer if that home is not found.

How a Seller Can Cancel a Listing

    * A listing agreement is a binding contract between the seller and real estate broker.

    * Exclusive right-to-sell listings are the most common and entitle the broker to a commission if a ready, willing and able buyer makes a full-price purchase offer.

    * Sellers who get cold feet can cancel the listing but may end up owing the broker a commission if the broker performed.

    * Do not sign a six-month listing agreement if the agent will not agree to cancel the agreement at your request. Ask about the length of the listing and if you can shorten the term.

    * Many real estate agents enjoy a good reputation in the community and would be willing to cancel a listing, but you should ask about it before you sign a listing.

    * Before you fire your agent, talk to the agent, the agent’s broker and your real estate lawyer.

What Happens if a Seller Gets Cold Feet at Closing?

    * Although there have been a few court cases that have ruled against the seller, generally the court will not make a seller sell.

    * However, buyers often retain the right to pursue damages and sue the seller.

    * Moreover, the brokers will have likely earned a commission and be entitled to demand that payment.

Find this and many other real estate tips at My des Moines Realty  www.mydesmoinesrealty.com 

You’ve heard mortgage rates are falling. Currently dipping below 35-year lows, this is arguably the best time to purchase or refinance a home in history.
If you haven’t yet, it’s a really good time to consider re-evaluating your current mortgage plan. You could potentially save thousands.
The question is, are you waiting to lock in because you think rates are headed lower?
If you ask me if I think rates are headed lower, my response will be "possibly." However, there are a lot of moving parts in the background that impact your ability to even lock in a lower rate if it happens. Let’s take a minute and be less emotional about rates and logically look at what could happen.

A few reasons why holding out for lower mortgage rates could be a bad idea:
Banks could tighten guidelines. You’re pre-approved today. However, if a lender changes guidelines (sometimes overnight), you could lose your loan approval and have no course of action against them.
Your income could unexpectedly get cut. We’ve seen it happen already locally. If you’re approved today, and your income gets reduced tomorrow, you may no longer qualify for the loan you’re looking for.

You could unexpectedly lose your job. It’s a worst case scenario example, but it happens. The days of getting a mortgage without a job are gone.
The value of your home could decrease. Appraisals play a big part of any refinance. If a house down your street is a foreclosure that sells for a huge discount, it will impact the value of your home. If your home can’t appraise, you can’t refinance.
Your credit score could fall. Behind the scenes, your credit score changes every day. So your credit score could fall, resulting in a higher rate or even worse, disqualifying you from being able to refinance. With credit card companies reducing credit limits, this is a very real concern.

You could get sick or injured. Think of the unexpected medical expenses that would come up. Health issues are one of the top causes for bankruptcies and foreclosures. Nobody ever expects to get sick.
Your home could get damaged in a storm. It’s Iowa, and it’s a real problem. If the wind blows your shingles or siding off, you’ll have to repair it before you can get a new mortgage.
Instead of rates decreasing, they could increase. If you’re waiting for 4 percent and watch rates climb over 5 percent, you’re going to miss out on a chance to lock in a loan that will save you hundreds, over the goal of trying to save an additional $50. In uncertain times, many homeowners are looking at ways to reduce their expenses and save some cash. If this is your motivation, you need to consider life’s curve balls before holding off on locking what your parents would say are bargain basement interest rates.

Remember, there is much more to the mortgage process than just rates.
For the most current real estate and mortgage news, visit Tyler’s blog at wealthwithmortgage.com or e-mail him at tyler@tylerosbyteam.com.

Additional Facts

Your Money:

Tyler Osby, 24, is a certified mortgage planner and wealth creation specialist at Four Legacies Mortgage in West Des Moines. He’ll answer your questions about everything from personal and home finance to credit scoring and investing every other week in Juice. Send questions to Tyler@TylerOsbyTeam.com.

How to Avoid Costly Housing Mistakes During and After a Divorce

Divorce is rarely easy and often means a lot of difficult decisions. One of the most important decisions is what to do about the house.

In the midst of the heavy emotional and financial turmoil, what you need most is some non-emotional, straightforward, specific information and answers. Once you know how a divorce affects your home, your mortgage and taxes, critical decisions are easier. A neutral, third party can help you make logical worthwhile decisions, with useful information, rather than making emotional ones.

Probably the first decision is whether you want to continue living in the house. Will the familiar surroundings bring you comfort and emotional security, or unpleasant memories? Do you want to minimize change by staying where you are, or sell your home and move to a new place that offers a new start?

Only you can answer those questions, but there will almost certainly be some financial repercussions to your decision process. What can you afford? Can you manage the old house on your new budget? Is refinancing possible? Or is it better to sell and buy? How much house can you buy on your new budget? We can help you to determine what you can afford.

You also need to consider do you have a Separation Agreement in place?

Items to Consider:

Review your tax withholding status at your job. If you become ’single’ again you will have to determine if you’re having the correct amount withheld from your paycheck by your employer. If you have too much taken out of your paycheck, you’ll lose the use of that money until you get your tax refund. However, if you have too little withheld, you might have to pay a penalty.

You also need to update your insurance needs. Perhaps you need to increase or decrease or coverage depending on your situation, or consider a different type of insurance. Perhaps you can consolidate your policies with the same company to save money. Call your Insurance Agent for more information.

Update your will, emergency contact list, and beneficiaries. Keep your legal documents up to date with every change in your family situation. You don’t want your ex-spouse to inherit your house. Besides updating your will, review the beneficiaries you declared on all your retirement accounts and insurance policies.

This information is not intended to offer legal advice. Please consult a lawyer for legal advice.

Getting Your Home Ready Inside

CLEAN!
Look at your home as though you are seeing it for the first time. Is every room neat, spotlessly clean, dusted and uncluttered? Steam clean carpets and wax floors. Wash walls, windows and light fixtures. Liquid Gold all trim and wood surfaces. Tighten loose stair railings. Call us if you would like a recommendation of a professional cleaning service or repair person.

KITCHEN and BATHS
These rooms should gleam! Clear off counters. Clean all appliances and fixtures. Replace chrome burner plates on the range. Scrub floors and walls – repaint if necessary. Recaulk tubs and showers. Clean thoroughly and be sure these rooms smell fresh.

FURNITURE
Rearrange or remove furniture to make your rooms look more spacious. Pack away knick-knacks from end tables, coffee tables and shelves – one or two items per surface is plenty.

CLOSETS
Remove out-of-season clothing. Take those things to charity that you’ll have to discard anyway when you move. Organize shelves, straighten shoes. Be sure sliding doors operate smoothly in their tracks and knobs on drawers are secure.

UTILITY ROOM
Dust/wash off lint from washer and dryer. Remove stains and mineral deposits from furnaces, even dust/wash off the furnace and hot water heater.

AMBIANCE
Do everything you can to brighten the interior. Replace dim bulbs with bright ones, replace wallpaper with off-white paint, repaint shabby or dark walls. Open the blinds, replace broken windows and window seals. During winter, maintain a comfortable temperature even if you are away for an extended time. There is no music that soothes all beasts, so play it safe by turning your stereo off.

Getting Your Home Ready Outside

YARD
Look at your exterior as though you were driving up for the first time. Remove any debris, repaint/restain where necessary, park any stored car/motor home somewhere else. In summer, trim bushes and mow/weed-whack the grass around your home. In winter, be sure your drive and walk to the front entry are free of snow.

DECKS/PATIOS
Clean, straighten and repaint if necessary. Tighten loose railings. Arrange the patio furniture and toss old or rusty items.

FRONT ENTRY
First impressions really do count. Be sure the front door and screen are in good repair. Sweep away pine needles and cobwebs. We tend to overlook this area when we don’t enter our home through the front door.

PETS
The presence and/or odor of a pet should be avoided. Even a friendly dog’s barking may frighten a buyer. If you can’t remove your dog, can you confine him to the garage or dog run? Cats and cat boxes may bring tears to the eyes of a buyer (due to allergies, not fond feelings.) Be sure litter boxes are clean and out of the way.

IT’S IMPORTANT
Do these things now and get the benefit of enhanced appeal to buyers. Since buyers tend to magnify every minor flaw, minor repairs performed now will deter niggling later on. The dollars you spend will repay you tenfold.

Preparing for Showings

PICK UP EVERY ROOM
Check counters, floors, closets, halls, stairs, and make beds. Straighten or remove newspapers, magazines, mail, toys, clothing, recreation gear, snack glasses and dishes.

TURN ON LIGHTS
Even during the day, especially in halls and dark areas. Don’t forget closets and utility rooms.

OPEN THE BLINDS
Be sure they are open all the way to promote views and allow more sunlight in.

KITCHEN
Clear all counters, wipe down counter and appliances, put all dishes in the dishwasher. Clean the sink and run the disposal. Best to smell fresh or like chocolate chip cookies were just baked.

BATHS
Straighten wash cloths and towels, even replace with fresh, attractive ones if possible. Clean and wipe down counters and sinks. Air out if mist lingers from a recent shower. Must smell fresh, not like deodorant.

LEAVE
It is best for you not to be present during showings. Buyers talk and look more freely when you are gone, they feel like intruders and are uncomfortable when you are there. If you get caught at home during a showing, don’t attempt to show your home: you may inadvertently disclose a compromising fact or you may bore the buyers with information they are not interested in and lose their enthusiasm. Let the agent sell your home. Even though it sometimes seems the agent couldn’t sell ice water in the desert, bite your tongue. Agents sometimes find that buyers wish to discover the ambiance of homes on their own rather than have amenities pointed out.

MATERIALS
The purpose of our marketing materials at your home is to answer questions a typical buyer asks. Please review the profiles when they first come and let us know about any inaccuracies. If you run low (don’t wait until you are completely out), let us know. And if the sign begins to lean, let us know. We will attend to your requests right away.

PRICE

Price should be the first item to address when you want to sell your home quickly in a Buyer’s Market. In a Buyer’s Market, listings tend to take longer to sell. If your home is overpriced it will take even longer to sell and most likely you will have to reduce the price eventually.

When deciding the price to list a home, it is imperative to review what similar homes have sold for in your neighborhood for the past 6-12 months. Jodi and I always stress that in a Buyer’s Market, you need to give the potential Buyer a reason to view your home. That is why is important to price your home around the same price as the competition or even slightly less. If you over price your home, you run the risk of potential Buyer’s totally skipping over your home.

 The First Impression

The average Buyer takes less than 7 seconds to make an unconscious decision about the home they are viewing. That is why it is important to ensure that your start with the outside of your home and ensure that is clean and tidy.

Always ensure that the grass is cut, weed free, or that snow is shoveled.

Ask yourself the following questions:

· Is your doorbell in good shape and operational?

· Is your front door clean and nicely painted?

· Is your home tidy? Are there dishes in the sink, clothes on the floor?

· Are the beds made?

· Do you smoke or have pets? These 2 odors alone will turn off potential Buyer’s.

In conclusion, the condition of your home and pricing are the 2 major factors that Sellers should consider in a Buyer’s Market.

get this and other Des Moines, Clive, Urbandale, DSM and West Des Moines real estate news and information from www.MyDesMoinesRealty.com

When you are considering selling your home, and it is time for the open house, or potential Buyer’s are viewing your home, the threatening bark of your dog, can make the potential Buyer uncomfortable, and possibly discourage them from purchasing your home.

By temporarily removing pets from the home, you are also taking into consideration the best interests of your pet, as potential visitors may accidentally lock your pet in a room, or worse, accidentally let your pet outside.

There are many options. Consider asking a friend, or family member to take your pets when you are having a showing or open house. Another option is to visit the local kennel.

Most pet owners may not realize that pet odors do exist. Although even something as simple as the odor from your cats litter box, or the smell of a wet dog can leave an impression on a potential Buyer, jeopardizing the sale of your home.

Another reason to remove any evidence of a pet is allergies. Today more and more people are developing allergies, especially to pet dander.

If you have pets, ensure that you steam clean the carpets, and give your home a thorough cleaning, including baseboards, and change the filters in your furnace.

Consider removing your pets food, toys, and beds from the home. This will reduce odors, as well as clutter..

Lastly, review your lawns. Ensure that all “droppings” are removed and that your grass remains green and not “scorched” from the pet urine.

In conclusion, a pet-free home which is clean, absent of odors, and clutter will help to increase the chances of selling your home.

get this and other Des Moines, Clive, Urbandale, DSM and West Des Moines real estate news and information from www.MyDesMoinesRealty.com

by Phoebe Chongchua

Looking for a new home can be exciting and frustrating. You can help alleviate the frustration by paying close attention to five key areas of the homes you’re considering buying; it may save you money in the long run.

Don Walker is an inspector and owner of Ace Home Inspections. He says there are five areas in homes that he frequently reports problems with. They are electrical, foundation, plumbing, the attic, and landscaping.

Electrical Walker says sometimes homeowners assume with newer homes that all will work just fine but that’s often not the case. "I [inspected] a brand new house — four years old but the electrical was all done incorrectly," says Walker.

Having a complete home inspection will help to rule out any problems and point out any areas of concern. However, even as you’re browsing homes, buyers can start to make note of the key areas that Walker mentioned, such as the foundation.

Foundation Walker says a four-year-old home he inspected recently was already showing trouble signs which could result in a costly repair project. "It was a model home. What [the homeowners] did was plant trees for shade to make it look really nice, but they planted the wrong trees and they’re going to crack the foundation and it’s going to cut the property value down by $50,000," says Walker.

Walker says in the case of that home, the trees were causing micro-fractures in the tile in various locations of the home. "As you walk through the house, 21 feet in and 30 feet deep, there’s just too much root invasion and it’s going to ruin their tile," explains Walker.

He says some tell-tale signs with this home were the minor cracks in the foundation that were causing a lifting and separation of the foundation. Also, the windows were not opening and closing properly, "which means the foundation is moving."

However, just because you see cracks doesn’t mean there is a foundation problem. "Most people don’t understand that there are natural cracks in a house. That’s why when we do an inspection report we have to look at it and say ‘Okay, this is a typical crack and this one is an untypical crack,’" says Walker. He says some cracks may lead to other problems while others won’t.

Plumbing Walker says another big area of concern is the plumbing. It’s an area that you can’t always spot as easily but it can create expensive repairs if plumbing issues go either undetected or are not properly fixed. "Mold forms underneath sinks when people have a leak and they fix the pipe but they don’t take care of the mold," says Walker.

He says things like caulking the sink can help prevent mold. "That’s my number one thing I always find — bad sinks," says Walker.

He says that when you look at the sink, look behind it and most of the time you will discover a little crack. "What happens is, when you wash dishes or you wash your hands in the bathroom or the kitchen, the water gets in that crack and seeps down. Once the water gets behind the cabinet it’s in a perfect position to create mold," says Walker. The dampness, humidity, and lack of light can turn that area beneath the sink into a mold-breeding ground.

Attic "You can tell everything about the house by the attic," says Walker. He says other areas of the home can be covered up if a repair had occurred. For instance, if there was a leak and it damaged a wall, with the right contractors and repairs it can be made to look like new and, hopefully, function like new. But Walker says the attic is sort of the eyes to the soul of the home. "In the attic you can tell where all the damage has been," says Walker.

"If you’re in a 20-year-old house and you see that the insulation is brand new, you know that there was a water leak because it had to be replaced," says Walker. He adds, "You can tell if the roof is good because you can look right at the wood."

Landscaping "There should not be moisture or plants next to your house," says Walker. He says there should be a 12 inch barrier between the landscape and the house. Walker says otherwise you run the risk of having the foundation crack and affect the home. What happens is, as the landscape that is too close to the home is watered, the foundation and soil expand. Then, when no watering occurs, the foundation dries up and shrinks and this can cause it to crack.

Remember, knowledge is power, so learning about the home before you close the deal on it will keep you from making a mistake that may cost you extra out-of-pocket money later.

Published: September 26, 2008

Phoebe Chongchua is an award-winning journalist, an author, customer service trainer/speaker, and founder of Setting the Service Standard, a customer service training and consulting program offered by Live Fit Enterprises (LFE) based in San Diego, California. She is the publisher of Live Fit Magazine, an online publication that features information on real estate/finance, physical fitness, travel, and philanthropy. Her company, LFE, specializes in media services including marketing, PR, writing, commercials, corporate videos, customer service training, and keynotes & seminars. Visit her magazine website: www.LiveFitMagazine.com.

Phoebe’s articles, feature stories, and columns appear in various publications including The Coast News, Del Mar Village Voice, Rancho Santa Fe Review, and Today’s Local News in San Diego, as well as numerous Internet sites. She holds a California real estate license. Phoebe worked for KGTV/10News in San Diego as a Newscaster, Reporter and Community Affairs Specialist for more than a decade. Phoebe’s writing is also featured in Donald Trump’s book: The Best Real Estate Advice I Ever Received and The Complete Idiot’s Guide to Buying Foreclosures. She is the author of If the Trash Stinks, TAKE IT OUT! 14 Worriless Principles for Your Success.

Contact Phoebe at (858) 259-3646 or phoebe@livefitmagazine.com. Visit PhoebeChongchua.com for more information.