What Buyers Should and Should Not Request to Be Fixed

When you find a home you want, it is important to pick your battles when it comes to repairs requested from a home inspection. While it would certainly be nice for the seller to fix every little home inspection issue before you put your money down, there are only so many repairs most sellers are willing to commit to – especially in a seller’s market.

Electrical, plumbing, roof, HVAC – these are repairs that you can reasonably expect a seller to take care of under most circumstances, as long as the problems are significant enough to impact your use of the house negatively. But there are some repairs that sellers will push back on in many cases, repairs that you should avoid asking for if you want to make it through to closing.

Unfortunately, on occasion, some buyers can lose sight of the purpose of a home inspection. For those that don’t buy and sell homes every day, the purpose of a home inspection is to find out if there are severe structural or mechanical defects.

The issues should be large enough that they could have a significant impact on the use and enjoyment of the home now and in the future. A home inspection should not be to create a punch list that itemizes every minor defect with the home you expect the seller to fix. Remember you are not buying a new home!

The home inspection should not be explicitly used for renegotiating the offer to purchase with the seller either. In other words, if you have noticed defects before making your offer that is clearly visible, don’t expect the seller to fix them. An excellent buyer’s agent should be able to counsel you on what is worth focusing on and what should be considered trivial.

One of the questions I often get from my clients is what reasonable requests from the home inspection are? There really is no standard for what is reasonable and what isn’t, however, below you will find a bit of guidance.

If the real estate agent you have hired just submits your requests to the seller or their agent, without giving you any advice, there may be a problem. This is not the kind of agent you want representing you. A “yes” man or woman is not a good thing. You want someone who will give you an informed opinion.

The best real estate agents understand how to negotiate home inspection problems. There is usually a give-and-take where both parties feel like the conclusion is a reasonable one. If you have found a home that meets all your needs, consider being a reasonable buyer when it comes to home inspection requests.

Below you will find some of the more common home inspection repair requests that a buyer should not make. Use some common sense and focus on the repairs or improvements that really matter to you and your family.

Home Inspection Repair Requests To Avoid

1. Cosmetic issues

Cosmetic problems like a deck that needs staining, touching up the paint or repairing a cracked tile may catch your eye and bother you a bit, but they are not the kind of problems that need dealing with right away. Cosmetic issues are at the top of the list to avoid asking a seller to fix.

Many of these problems are relatively easy to handle and can be taken care of without spending too much money.

Frankly, real estate agents often advise owners what to fix before selling a home and it often boils down to what makes a property more salable. This puts more money in their pocket but some sellers don’t listen or don’t have the budget to do it.

Even if the repairs are somewhat expensive, if they are the kind of issues that other buyers may be willing to overlook, you will need to be flexible if you want to get the house and beat out the competition.

When I am advising my seller clients on what they should agree to fix and what they shouldn’t, there is one line of thinking when determining what’s reasonable. If the sale fell apart and the home went back on the market would it be sensible to assume the next buyer to come along would also have the same request? Would the problem with the home stop the customer from getting financing?

These are two tried and true methods for determining what is reasonable and what is not. There is, of course, the possibility that there are things that should be repaired that don’t fall under either of these categories. These things can be assessed on a case by case basis.

2. Anything under $100

Minor issues under a hundred dollars to fix are definitely home inspection repair requests a buyer shouldn’t make! Problems that arise from repair requests are not always about the financial cost, however, this is taking being nit picky to the extreme.

There may be a hundred little things that need to be fixed on a home, but both you and the seller only have so much time to close a deal. When you hit a seller with multiple little repair requests, he or she may feel overwhelmed simply due to the time required to make the repairs.

The seller’s agent may encourage him or her to pass on your offer if the requests become ridiculous. If the repair is going to cost around $100 or less, just plan on taking care of it yourself after you buy the home.

If you are purchasing a home in a seller’s market, be especially careful not to piss a homeowner off to the point that they look to cancel the deal and go with a different buyer. Over the years there have been plenty of occasions where a seller has terminated the contract and moved on to a backup offer due to a buyer being completely unreasonable.

3. A window with a failed seal

Failed window seals are quite common in homes. Glass that has become fogged is almost always visible when viewing a home unless you are not paying attention. This falls into the category of something you should be paying cognizant of when viewing properties. Most home inspectors will tell you that a failed window seal is purely cosmetic. The is very little energy lost through a failed window seal. The insulating value loss is extremely minimal.

Keep this in mind when making your offer. If there are a significant number of windows that need replacement, account for that in your offer up front. Explain to the agent that the window failure is why have made the bid at your number. Don’t ask for something to be fixed that you clearly noticed before making your offer or was disclosed up front.

4. Renovations you are planning

You may look over the house and imagine some improvements that will make it perfect for you and your lifestyle. However, it is important to remember that the seller is not responsible for preparing your dream home. He or she just wants to sell the home for the best possible price and be done with it.

Avoid asking for repairs that relate to your planned renovations. Doing so will put the sale at risk, which is unnecessary since you are just going to renovate anyway. This is the kind of home inspection request a buyer should never make and will just piss off everyone involved in the transaction.

5. Cracks in a basement floor

Concrete by nature is a very porous substance. It absorbs water and naturally settles. Cracks in concrete floors are entirely expected and not a structural problem. A concrete floor does nothing to hold up a structure. The cracks are purely aesthetic. In fact, if you are purchasing a home that doesn’t have a few cracks you’re lucky. Cracks in the basement walls, however, is a different story altogether.

If you are purchasing a home that has cracks in the cellar wall, it is important to determine if they are structural or not. Most of the time they are not a concern unless the wall has shifted, or the size of the crack has opened up a significant amount.

Typical “spider” cracks should not be anything to worry about. If you find, however, that either type of crack is letting water into the building, it would be reasonable to ask for a repair. Some companies can seal a crack with an epoxy injection that is fairly reasonable in price.

6. Loose fixtures, railings, and similar issues

A loose doorknob, light fixture or railing on a deck or stairwell may be annoying, or even potentially unsafe, but these problems are also often fixable with basic hand tools and a little effort. If you can’t tighten the screws yourself – such as if they are stripped out, or if the material involved is old and worn out – you can hire a contractor to fix the problem for a reasonable price.

Obviously, if there are vast areas of rot or decay or major safety concerns, the inspector with say so, and you can demand a repair. But if the issue is minor, avoid stressing about it for the moment.

7. Minor water damage

When water saturates interior building materials, like drywall, it can look pretty bad. You are unlikely to miss such damage as you wander through the house. Fortunately, the home inspector is not going to miss the signs of water damage either, and he or she can tell you the severity of the problem. If the water has caused significant damage, the inspector will let you know, and you can request appropriate repairs. But if the water damage is merely cosmetic, don’t stress about it. You can fix cosmetic stuff later.

One of the more common water stains you will see in a home is in the ceiling over a bathroom. This condition is often caused by either a toilet that has overflowed at some point in time or a kid who left a shower curtain open. Water stains are usually easy to discern whether they are ongoing and still an issue.

8. Non-functional light switches and sockets

Avoid requesting repairs for minor electrical issues. The electrical system in a house can be quite finicky. If wires come loose, or a part wears out, like with a switch or a socket, it may no longer function. Flipping a switch that fails to turn on or off a light can be annoying, as can dead outlets, but they are not necessarily signs of the large electrical problems. Your inspector will inform you if the electrical system in the home is safe to use and up to code.

One of my big pet peeves is buyers who make a big deal about older homes not having GFCI outlets in kitchens and baths. Relax people; we have lived in homes for decades without this being a big issue. The chance you are going to drop your blender in the sink and electrocute yourself is minimal. You have a much greater chance of getting hit by a car crossing the street!

9. External buildings – sheds, garages, etc.

If you are in a competitive market, you are going to have to be able to let some things go when it comes to other buildings on the property. Sheds are prone to rot; garages tend to get dirty. Owners are prone to let external buildings get run down more often than they are the main house.

If there are serious issues, it may be reasonable to ask for a fix, but if the shed or the garage looks like every other shed or garage in the neighborhood – that is, less than perfect – it may just be something you are going to have to deal with yourself. It is also likely you were aware of the sheds general condition before submitting your offer to purchase.

10. Cosmetic landscaping or minor yard problems

You can’t expect the seller to plant the flower beds and install a fountain just for you. The seller also won’t be too keen on making minor landscaping repairs that you can just do yourself after you have bought the home. A missing rock from the border of a flower bed, leveling a few bricks in a walkway, trimming the tree in the backyard – other buyers may not care at all about these things, buyers the seller will be happy to work with if you insist on minor landscaping repairs.

What Inspection Items Should Be Fixed?

As mentioned previously, the issues a buyer should focus on asking a seller to repair or replace are significant structural, mechanical, or environmental defects.

These are also the substantial home inspection problems. It is reasonable to assume that any buyer would want these items fixed if discovered after a home inspection has taken place. Some of the major home inspection items worth addressing are:

• Termites or other wood destroying insects.
• Wildlife infestation like bats or squirrels in the attic.
• Major drainage or ongoing water problems.
• Mold problems.
• Major electrical defects that cause safety issues.
• Significant plumbing problems that interfere with the use of the home.
• Lead paint. It should be noted that it is a federal requirement for sellers to disclose the known presence of lead paint in a property.
• Major structural issues such as a leaking roof or substandard building violations.

The above items are a condensed list of possible issues worth asking a seller to address. There certainly could be others but these are without question reasonable repair requests that any buyer would have.

Final Thoughts

If you are a buyer and are in the midst of negotiating a home inspection above all else be reasonable, especially if you want the home.

Building, Buying, or Beefing Up a Home? Watch Out for Annoying Deed Restrictions

The day I planned to close on an acre lot where I hoped to build a brand-new house, my real estate agent turned up a deed restriction that limited the number of garages I could construct. I had intended to build three, but according to the deed, I could have only two.

This seems like the ultimate First World problem, I know. But it was the first deed restriction I, as a new developer, had encountered, and I didn’t understand why this rule had come out of nowhere to block my progress on land I was paying good money for.

It turns out, the restriction was more than 50 years old and created by a neighborhood association that long ago ceased to exist—and therefore couldn’t enforce it. I ended up closing the deal, but I had to consider all the dreamy-eyed buyers who longed to build their own home and were thwarted by rules—archaic or not.

And here’s the rub: Deed restrictions affect more than would-be home builders. You can be restricted by anything from the number of bedrooms in your house to the types of vehicles in your driveway. It’s best to know about deed restrictions before you buy, so let’s take a look at what they’re all about.

First, find out if your property has any deed restrictions
First, let’s back up for a second. Deed restrictions often called “restrictive covenants” (especially in the context of homeowners associations), are restrictions contained in a deed that limits how a property can be used and what can be built on it. Most often, developers include restrictions not covered by local zoning regulations. The property doesn’t even have to be part of an HOA to be limited by some rule a developer included in the deed decades ago—as I discovered.

Deed restrictions turn up during title searches and a careful reading of the current deed. They “run with the land,” which means that anyone who buys the property in future is supposed to abide by the restrictions, whether they were attached to the property 20 years ago when the neighborhood was developed, or 100 years ago when the land was a farm.

“When building a new home, or even doing an addition to your current home, it’s vital that you check your deed for any building restrictions,” says Bill Golden, an Atlanta-area Realtor®.

Deed restrictions aren’t HOA rules
Don’t confuse deed restrictions with regular HOA rules. An HOA can decide one day that no home in the association can string up Christmas lights. But if all the homeowners object, the HOA board can easily change its mind.

Deed restrictions, on the other hand, are difficult to change. Usually, it takes a judicial ruling to invalidate them. In the worst of all worlds, a property’s use can be limited by both deed and HOA restrictions.

Types of deed restrictions run the gamut

And deed restrictions aren’t just about construction. Zachary D. Schorr, a Los Angeles real estate attorney, says he’s seen deed restrictions that require exterior paint colors to match colors found in nature, or even restrict rental properties.

“With the rise of VRBO and Airbnb, we are even seeing restrictions on nightly rentals and the minimum rental period for a house,” Schorr says.

Today, HOAs and developers create restrictions that, in theory, provide the greatest good for the greatest number of people. Some common deed restrictions can cover the following:

* Number of bedrooms (an attempt to prevent overwhelming sewer and septic capacities)
* Building height, width, and sitting (to prevent obstructing views, especially in scenic and vacation areas)
* Number of vehicles allowed in the driveway or in front of the house, intended to keep the neighborhood from looking cluttered and junky
*Type of vehicles allowed in the driveway, like motor homes, boats, and motorcycles
*Type of fencing allowed (e.g., chain-link fences or very high privacy fences might be restricted)
*Type and number of trees you can remove from the property (Some restrictions protect a percentage of trees on a lot, which may have been put in place years ago by neighboring farmers and still are attached to the land.)
Style, color, and construction materials used in a renovation (an attempt to limit architectural variations in a neighborhood)
*Pools, sheds, detached workshops, and extra garages can be forbidden or restricted
*Use of your home as a business (to prevent a lot of strangers from coming and going)
*Types of animals allowed on the property (Many deeds restrict livestock like chickens and goats; some also restrict breeds and number of pets.)

Who enforces deed restrictions?

Before World War II, property owners often wrote deed covenants that restricted the race and religion of future owners. However, in 1948, the U.S. Supreme Court ruled that covenants that impose racial or religious restriction cannot be enforced.

Today, some title companies that research deed restrictions don’t even include these restrictive covenants in their reports, fearing a potential buyer might misconstrue their existence with their enforceability, leaving the title company open to discrimination charges.

Many covenants, in fact, exist in limbo because no ruling body still exists to enforce them—just like the garage covenant on the deed to my property. Your real estate agent and title company can help you determine if the ruling body still exists or is actively enforcing the rules, an important piece of information to know before you buy.

How to change a deed restriction

Modifying a restrictive covenant isn’t easy, but it’s not impossible, either.

First, go to your county courthouse and obtain a copy of the covenant, which often contains provisions for changing it or, if you’re lucky an expiration date. Sometimes, you can seek special permission from the governing body, like your HOA. Sometimes you can violate the covenant if you obtain permission from your neighbors.

Some states maintain laws that allow property owners to modify covenants if they follow certain steps.

If all else fails, you may be able to persuade a judge to invalidate a covenant if it’s vague, impractical, illegal, or has been widely disregarded by neighbors.

What if you can’t change the restriction?

This is why we say investigate all restrictions before buying. You may not want the hassle of begging enforcing groups or judges to allow you to build a work shed or park your boat in the driveway.

It’s often easier to adjust your expectations or find another property when deed restrictions prevent you from building your dream home.

From Realtor.com
Posted by cjames on Mar 31, 2017 in News

A credit score at the lower end of the range can make it difficult to get a mortgage at today’s competitive interest rates—or to qualify for a mortgage at all. But there are several ways you can help improve your chances of qualifying for a mortgage at the best rates, including building a stronger credit history before buying a new home and focusing on non-traditional mortgage options.

How you may be able to buy a home with bad credit

First, you need to know what information is in your credit report and how it’s impacting your credit score.

“A lot of times, people have no idea why their credit score is so low,” says Myra Boggs, a housing counselor at Working in Neighborhoods Cincinnati, a Department of Housing and Urban Development (HUD)-Certified Housing Counseling Agency. Boggs says an in-depth credit review is vital to figure out where you stand.

Many buyers don’t know what their credit score means.

The Equifax formula, based on the FICO credit-scoring model, breaks down as follows:
Poor: 280-559
Fair: 560-659
Good: 660-724
Very Good: 725-759
Excellent: 760-850

Start by reviewing your credit report thoroughly. You should make a list of your unpaid debts and ensure that all the information that appears on your credit report is correct. Each year, you can pull a free copy of your credit report from each of the three credit reporting agencies (CRAs) through AnnualCreditReport.com. You can also purchase a copy of your credit report and your credit score through one of the CRAs directly. CreditKarma.com is a free site to monitor your credit. They pull equifax & Transunion reports.

Before buying a home develop a budget, practice responsible credit behavior, and add money to savings.

Explore your loan options

If you have a lower credit score, you may be able to qualify for a government loan, which is a mortgage insured by the Federal Housing Administration (FHA). In order to apply for an FHA loan, you will have to work with an FHA-approved lender who may have additional qualification requirements.

The benefit of an FHA loan is a lower down payment—usually about 3.5 percent of the purchase price of the home. Some FHA loans also allow sellers and lenders to pay some of the borrower’s closing costs, which can lower the overall cost of the home. However, the lender might tack on a higher interest rate for this service. Bear in mind that not all FHA lenders offer the same terms and interest rates, so it’s important to shop around.

FHA loans also carry some disadvantages, such as required insurance payments. Borrowers must pay an up-front premium, usually due when they get the loan, as well as an annual premium, which is paid monthly.

If you are a veteran or an active military member, you may be able to qualify for one of the loans guaranteed by the U.S. Department of Veteran’s Affairs. VA loans typically do not require a down payment or mortgage insurance, but there may be some additional fees attached.

Other ways you may be able to qualify for a mortgage

Make a larger down payment. The more money you are able to put down, the more equity you will have in the house and the less risk the lender will be taking in extending you a mortgage. A lender may look more favorably on your application if you can make a down payment that is larger than the FHA requirement of 3.5 percent of the sale price. Many local and state housing agencies offer down payment assistance to help homebuyers afford a mortgage.

Pick a specific lender. Some lenders may be more flexible than others. For example, if you are a member of a credit union or a small bank, you may be eligible for a specific mortgage program or product if you can prove you have a stable income and demonstrate your history of on-time rent payments. Many national banks also offer special payment programs, Boggs says.

Work with a housing counselor. HUD offers counseling resources to consumers who want to buy a home or are struggling to make their mortgage payments.

If you have a low credit score, working toward homeownership may be a long process. But if you are serious and ready to put in the hard work, it’s not impossible.”

I’m here to help!

Christopher Knox Loan Advisor

NMLS #129636
CKnox@rpm-mtg.com
253-905-4810
Click here to apply:http://rpm-mtg.com/CKnox

Buying a Home With a Not-So-Great Credit Score

If you’ve put a lot of work into establishing good credit habits—you’ve been making sure to pay every bill on time and you’ve been paying down your credit card debt—you might be wondering just how long it’ll be before you see these actions reflected in your credit score. The time between when you exhibit positive credit behavior and when credit for that behavior shows up on your report depends on many factors.

While there are some basic timelines for certain items on your credit report, every consumer’s experience is different. What follows are some things to think about if you’re wondering how long it might take to see your actions impact your credit score, and how long certain items might remain on your report.

Why wait? RPM logo RPM Mortgage has tools to help you improve your score quicker and get the best rate. Call Chris Knox today or apply online Click Here! You can provide documents to support what your credit reports should say or receive guidance on what you need to do to improve your score quicker.

Understanding your credit behavior

“Establishing a timeline will be unique to each consumer and dependent on what shape their credit report is in,” says Jo Kerstetter, spokesperson for Money Management International.

The reason behind this individual variation lies with your lenders—the credit card companies, banks, and mortgage companies who report your data to the CRAs. Lenders track and share your payment history, including a record of whether your payments were made in full and on time, but there is no universal date for when they share this information with the CRAs. Additionally, while some lenders may report behavior to all of the CRAs, others will report to only one CRA or to none at all, which accounts for the variations seen between your three credit scores.

Tom Coates, director of Consumer Credit of Des Moines, agrees. “Nothing significant is going to help you overnight,” he says, but adds that positive behaviors may add up over time.

Regularly reviewing your credit report may help you gain a better understanding of your past and current behavior and how your payment history may already be impacting your score. You are entitled to one annual free copy of your credit report from each of the three major CRAs. To request a copy of your report, visit Annualcreditreport.com.

Healthy credit habits

Your credit score may change daily, weekly, or only a few times throughout the month depending on how often your lenders report data to the CRAs. The important thing is to make sure you have been consistent in meeting payments.

“The key is to pay your bills on time every month,” says Kerstetter. Your payment history accounts for around 35 percent of your credit and is the largest factor in determining your score. While there are many factors that determine your score, one of the most important things to consider is to pay your bills on time, everytime.

“Positive information usually stays on your record as long as the accounts are open and in good standing,” Kerstetter says.

The next biggest contributing factor to determining your score is the amount owed across each of your accounts. Amounts owed account for about 30 percent of your score, which means that paying down a debt or carrying a lower total balance on your various lines of credit may also impact your score.

Late payments or bankruptcy

Negative information, such as late payments or a bankruptcy, may impact your score just as often as positive items, but where positive behavior is unlikely to fall off of your credit history, negative credit behavior has the opportunity to disappear—but only after varying lengths of time:

Hard inquiries

Hard inquiries typically fall off of your report after two years, but it may impact your score for even less time.
Late payments or similar negative behaviors are likely to remain on your credit report for up to seven years. An account left in collections can stay on for even longer, usually seven years and 180 days from the start of the payment delinquency, and unpaid tax liens can remain on you report for up to fifteen years.
Bankruptcy, generally remains on your credit history for up to 10 years however the exact amount of time will depend on the type of bankruptcy.
While it can be difficult to pinpoint exactly how long it may take for certain behaviors to impact your score, by establishing positive credit habits and maintaining them consistently, you may be in a better position to better understand your entire personal financial picture.

“Sometimes people get so lost on trying to get a better score, they don’t have their basic finances and their budget where they ought to,” Coates says.

Written by Equifax Reporter

Down payment gift rules: 
(1) the gift must be documented with a formal “gift letter”
(2) a paper trail must be shown for the gifted monies as they move from the gifter’s account to the home buyer’s account. *No Cash deposits, no more money out of the can in the backyard.
(3) the gift may not be a loan-in-disguise. Home buyers are permitted to accept up to 6% of a home’s purchase price in the form of a cash down payment gift.
(4) The gifter has to have a relationship with the buyer (examples relative, spouse or fiance). Bottom line, it has to make sense that they would just give you money with nothing in return.

Mortgage lenders allow cash gifts for down payment on a huge array of loan programs including FHA loans, VA loans, USDA loans, conventional loans, and jumbo loans, too.

However, if you’re getting a cash gift for down payment, you’ll want to be sure that you “receive” your cash gift properly. Should you receive your gift improperly, your lender is likely to reject your home loan application.

It’s imperative, therefore, that you follow the rules of cash-gifting for a home.
Following the Gifting Rules:

Step 1: Write Your “Downpayment Gift Letter”

When you accept a down payment gift, remember that there’s a right way and a wrong way to do it. For example, you cannot randomly deposit your cash gift into a bank account. Doing so will get your loan denied.

There’s a 3-step process when accepting a cash down payment gift and no matter what your loan type — Conventional, FHA, VA, or other — the 3-step process is the same.

Follow the rules to the letter.

First, write a gift letter that follows the includes the following information:* The amount of the gift

* The amount of the gift
* The subject property address
* The relationship of the gifter to the giftee
* A note that the gift is actually a gift and not a loan and will not be repaid
* The gift letter should be only as long as needed and should not contain “extra” information. * * Have all parties sign and date the letter. Set the letter aside — you’ll come back to it in the section below.

 

Step 2: Document The Gift From The Giftor

With your mortgage down payment gift letter written, you’ll want to make sure you don’t violate the rules of “taking a gift”. In order to do that, make sure to keep an extra-strong paper trail for the money being gifted.

If you are the person who is gifting funds to the buyer, for example, and you sell your personal stock holding as part of the down payment gift process, you will want to make sure that you document the sale of your stock as well as the transfer of funds from your brokerage account into the account from which you’re making the gift.

Do not make the transfer without a proper paper trail.

Next, you’ll want to write a check to the home buyer for the exact dollar amount specified in the gift letter you’ve written. Photocopy the check. Keep one copy for your records and give one copy to the buyer — the lender will want to see it as part of the process.

Note that writing a check will require more steps and will require more effort than simply wiring funds to the buyer. Be okay with these extra steps. It’s simpler for a lender to document and track a personal check than it is to track a wire, and it’s good to make things simple for the bank.

Note: Make sure you’ve gone over this with your giftor.  It is very common that we get to underwriting and the giftor is uncomfortable providing all pages of documentation needed to show the giftor had the money to gift.

Example: It won’t work if the giftor pulls money out of their 401K and has a repayment plan for that money because that would be considered a loan.  The buyer or giftor can’t take out a loan for the down payment. The giftor has to show they have money to gift.

Step 3: Document Receipt Of The Down Payment Gift

Now that the gifter has handed, in the form of a check, a down payment gift to the buyer, the following steps are required.

First, with the gift check in hand, the buyer should physically walk into a preferred depository bank (e.g.; Wells Fargo, Bank of America, Chase, Huntington) to make the deposit in-person.

Do not deposit the check online using an iPhone or Android app; or at an ATM machine.

In addition, into whichever bank account you deposit your gift money, make sure it’s the same bank account from which all of your money at closing will be drawn. You do not want to bring money to closing from multiple savings accounts. This, too, can complicate your paperwork for the lender at a time when your goal is to keep things simple.

When you get to your branch, then, do the following:

Deposit the gift funds into a bank account
End your transaction
Collect a receipt for your deposit
Under no circumstances whatsoever should you “co-mingle” your gift deposit with other monies, nor with other gifts. The amount specified on your teller receipt should match exactly the dollar amount on the certified down payment gift letter.

If the amount is off by even a penny, the lender will likely reject your letter and the funds that came with it.

Note that if you are receiving multiple cash gifts for down payment, you should follow this process for each gift independently. Again, do not co-mingle your gifts. Be guided by your gift letter.

Take the time to go over all of this with your lender when applying for a loan.  Whether you’re a first-time buyer or seasoned, the process is emotional.  The last thing you want to deal with is if you will be able to close on the home due to gifted money.

Beware of credit repair services which promise to remove negative information from your credit report
No one can legally remove negative information from a credit report that is accurate. This information must remain on your report for a set amount of years; most information stays on your report for up to seven years, while bankruptcy information can remain for ten years. You can remove credit report errors by following certain steps (1) yourself for FREE.

Beware of credit repair services that request fees in advance
A legitimate company will not demand payment before the service is provided. Money Sharp does not charge you in advance. Remember that improving your credit can be done, it just takes time.

Beware of credit repair services that don’t disclose your rights as a consumer

Consumers have the right to attempt credit repair on their own.

Beware of credit repair firms that advocate “new” identities
It is illegal to create a “new” identity by applying for an employer identification number to replace one’s Social Security Number. File segregation is a serious crime which could result in imprisonment and fines. You should report this kind of fraud to the Federal Trade Commission (FTC) immediately.
Beware if the credit repair firm asks you to sign blank forms and provide personal information so the company can act on your behalf with your credit problems
Never sign blank paperwork. Never give out personal information without knowing the reason and with whom you are dealing.

Removing Credit Report Errors
Checking your credit report every year can help you prevent identity theft. You’re entitled to one free credit report each year from each of the nationwide consumer credit reporting companies (Equifax, Experian, Transunion).
If you find errors on the report, you can have them removed so they won’t affect your credit score. Follow the five easy steps below to correct credit report errors.

1.Make a copy of your credit report and highlight every item you believe is incorrect.

2.Write a letter to the credit reporting agency (e.g., Equifax, Experian, Transunion) about the information you believe is wrong and include copies of supporting documents as proof. For example, if you paid back a $5,000 loan to John Smith Company, but your credit report says you didn’t, send a copy of the letter you received from John Smith Company confirming that the loan was repaid in full.

3.Send a similar letter to the creditor you believe reported the incorrect information.

4.Send all materials by certified mail, return receipt requested, so you have proof the information was received.

5.The credit reporting agency will conduct an investigation, contacting the appropriate creditors to verify the accuracy of the information. If the creditor cannot verify that the reported information is correct, it must be removed from your credit report. There are two possible outcomes of the investigation:
If the investigation proves an error was made, you have the right to receive a free copy of the corrected report and ask that the corrected version of your credit report be sent to everyone who received it within the past six months.

If the issue remains unsettled even after the investigation, you can ask that a 100-word statement of the dispute be included in your file and in future reports. The credit-reporting agency must include this statement in your report each time it sends it out.

Keep in mind that when negative information in your report is accurate, it cannot be removed. Most negative information generally stays on your report for seven years.

One of the hottest topics in housing is whether it’s better to rent or buy a home. The answer always changes based on market conditions, so it’s handy to use a rent vs. buy calculator to do
comparisons on the fly.

But you should also know how rent vs. buy calculations actually work so you can feel confident

in deciding what’s right for your budget and your family. Here are two easy ways to do this.

Checking the numbers

The first thing you need to understand is how rent vs. buy math works for you personally. You do this by calculating the monthly costs of home ownership, subtracting tax benefits, then comparing the final figure to the rental cost of a similar home in the same neighborhood.

Let’s assume you have a credit score of 750, and a $300,000 home purchase price with 10 percent down (that’s $30,000) for a 30-year fixed mortgage. Current rates are around 3.25 percent.

In this scenario, a mortgage calculator quickly tallies your total monthly housing costs as follows:

Mortgage payment of principal and interest $1,175
Property taxes $300
Private mortgage insurance (PMI) $133
Homeowners insurance $67
TOTAL monthly housing cost $1,675
Next you calculate your tax benefit. As a homeowner, you get to deduct your mortgage interest and property taxes.

To calculate annual mortgage interest, you multiply your $270,000 loan amount by your 3.25 percent rate to get $8,775. To calculate annual property tax, you multiply your $300,000 home price by a national average of 1.2 percent property tax to get $3,600.

The sum of $8,775 in mortgage interest and $3,600 in property tax is $12,375 in deductible costs. Based on the income needed to qualify for a $300,000 home, your tax bracket is likely around 28 percent.

To get a quick estimate of annual tax savings, we multiply $12,375 by 28 percent to get $3,465.

Next we divide $3,465 by 12 months to get a monthly estimated tax savings of $289.

Then we subtract $289 from your total monthly housing cost of $1,675 to get estimated after-tax cost of $1,386.

Finally, you compare this estimated after-tax housing cost of $1,386 to market rent for a comparable home in the same city. Be sure to compare properties of the same size, quality, and location to ensure your analysis is accurate.

How long before owning is cheaper than renting?

The second thing you need to understand is how long it takes for buying to become more financially advantageous than renting. The threshold you cross when buying becomes more favorable is called the break even horizon.

This is a calculation Zillow’s team of economists created to incorporate all possible buying costs and benefits such as the down payment, closing costs, mortgage payment, property taxes, insurance, utilities, maintenance, and tax benefits, as well as all renting costs for the same home. Calculations also incorporate home value and rental price appreciation.

Break even horizon is the year when buying costs become less than or equal to renting costs, when accounting of all of the factors noted above.

According to the most recent quarterly data, the break even horizon is less than two years in 72 of America’s 100 largest markets. When it comes to making an investment as large and as long-term as a home purchase, this is a very compelling break even period.

The latest report allows you to look at local markets so you can see what the break even horizon is for you, and the tables also include median rents for quick reference.

Take all this data into consideration when making your rent vs. buy decision.

from Zillow Porchlight http://www.zillow.com/blog/compare-renting-vs-owning-home-201408/

Appraisal management companies have been around for decades, but they became more important after the subprime mortgage crisis of 2007 and 2008, when new federal regulations limited the amount of direct contact that lenders could have with appraisers. The U.S. federal government created appraiser independence requirements to prevent lenders from influencing appraisers to inflate property values. Thus lenders would be prevented from issuing mortgages based on inflated appraisal values, a problem believed to have contributed to the housing crisis.

Neither mortgage brokers, loan officers nor homeowners may select the appraiser for the property on which they want to lend/borrow funds. Since the former parties have a financial interest in the transaction, there is a risk they might attempt to influence the appraiser to assign a higher value to the property than market conditions support so the transaction will go through. When the system works correctly, the AMC chooses an appraiser with local knowledge of the market for the property being appraised.

For federally-related transactions, which most mortgage loans are, AMCs must select state-licensed or state-certified appraisers. In addition, federal regulations require AMCs to register with their respective state appraisal boards and require AMCs to follow the Uniform Standards of Professional Appraisal Practice (USPAP). AMCs are regulated under the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Truth in Lending Act.

Here are some items in that process in my opinion that need improvement:
• The lender has to supply disclosures up front on costs for the loan. The lender reaches out to AMC (referenced above) whom puts the appraisal out for big. ACM then provides the lender with an idea on cost for the appraisal. The appraisal then ends up sometimes being higher by $100-$200.
• In addition, the appraisal company might state they are backed up and if the lender pays $199 more they will have the appraisal in a week. What if the buyers’ lender doesn’t want to pay the additional fee’s and the loan expires or drags out? Shouldn’t AMC monitor how long it takes for an appraisal who accepts a bid to stick to their quote and complete in a timely matter.
• Other cost associated are possible field reviews of $300-$800+ if AMC scores the appraisal of anything over a 3 out of 5. Should AMC or the appraisal firm pay for field reviews?
• If the appraiser notes a condition that needs to be completed before lending (such as CO2 monitor or hot water heater straps) the buyer has to pay sometimes $100-$175 for the appraiser to come back out to verify those conditions have been meet.  Conditions that should have been followed up on by the seller or listing agent.  But why the added cost to “stop in”?
• I’m finding appraisals up front to average about $800 in Thurston County. On a high level an appraisal could come out to be about $1800. The good news is the person purchasing the loan still only pays their disclosure quote but the lender is out $1200+ sometimes in addition. Where is the consumer protection act on this one?
• I’m looking at 4 FHA buyers right now for Thurston County Washington. 2 rural bids came in at $640 & $600. Their actual order cost came in at $690 & $735. Why $50 to $135 more? I have 2 in town appraisals (4 miles apart), both around the same loan amount, houses similar. One quote was for $890 and the other for $920. In my opinion it seems Dodd-Frank Wall Street Reform and Consumer Protection Act and the Truth in Lending Act need to re-evaluate this process.

Overpricing your house in the belief that you can reduce the price back later is a strategy that can backfire badly. For example, by the time you reduce your price, you may miss out on a surge of interest in properties like yours. Also, if prices are lowered, buyers may wonder if there’s something wrong with the property that kept other buyers away. So to keep from selling your property at below market value and from wasting valuable time, don’t fall into the overpricing trap.

Setting the Price
This chart highlights the importance of pricing correctly at market value.

When setting a price for your property, the listing level must strike a balance between the seller’s need to achieve the best-possible return and the buyer’s need to get good value. With many years of experience, a professional Real Estate Agent can help you set a price that will accomplish both objectives.
Establishing market value
The market value of your property is determined in exactly the same way as any other commodity – what a buyer is willing to pay for it in today’s market. Despite the price you paid originally, or the value of any improvements you may have made, the value is determined by market forces.
Look at the competition
Buyers look at about a dozen properties on average before making an offer on a property. As a result, they have a good overview of the market and will compare your property against the competition. If it’s not in line with similar properties that are available, buyers won’t consider it good value for money.

This is the average percentage difference between the Selling and
Asking Price by the length of time the home was on the market.

– Put your best foot forward immediately
– Establish a competitive asking price
– Keep your home in top showing condition
– Offer favorable financing terms