Your Neighbor's Home

If you are trying to sell your house but your neighbor's house is a disaster, that's going to cost you too in terms of a reduced price for your home.

A neighbor's overgrown yard, peeling paint and clutter can easily knock 10% or more off the value of your home. A true disaster - a home in deplorable condition and a yard packed with debris - could cost you even more. It might even make your home unmarketable because most potential buyers will not even look at it.

So, what can you do?

Keep in mind that your goal is to get the neighbor's property cleaned up. It's going to take some work and possibly some expense on your part to accomplish that. You may be upset with the neighbor but that will not help get the job done

An adversarial approach, such as reporting them to the authorities or a homeowner's association, usually does not work and may make you more frustrated. All it does is make people mad and angry people can cause a lot of problems. You'll also have limited success if you ask them to personally do the work that needs to be done.

You'll have a much better chance of success by offering to do the work yourself. This can mean your labor and possibly some expense but given the effect on the value of your home, spending some money to improve the neighbor's house may be money well spent.

You can minimize the task by organizing a crew of your family and friends to help. Plan what needs to be done and pick a day to do it. Assign jobs to your crew and fortify them with food and drinks. Once your neighbor sees what you're doing they'll often feel guilty and pitch in and help.

Taking Care of The Roof on Your Head

Tile roofs are made to last the life of your home. Tile roofs leak due to waterproof barrier (tar paper) failure. At about 20 years the waterproof barrier becomes brittle then starts to crack which will cause leaks. Repairs are a short term solution and leaks will continue in new locations where cracks continue to spread.

The good news is your tile roof can be reset with two new waterproof barriers and metal flashings to add 30 plus years to your existing tile roof. Resetting your existing tile roof saves thousands off the cost of a new roof. Resetting saves on the cost of new roofing material, disposal fees and costly interior repairs from leaks. Resetting is also good for our environment due to less roof waste in our landfills.

Improvements should be made to the roofing system. Two layers of moisture barrier should be installed for extended waterproof protection, new metal flashings installed, drip edge metal and antiponding foam to prevent water damming on the edge of the roof. This is an excellent time to replace damaged wood from dry rot or termite damage at a much lower price than when the roof is covering the damaged areas.

Also, foam Insulation can be installed under your tile roof to save up to 24% on utilities. Foam Insulation qualifies for special Government Financing to help homeowners bring their homes up to new energy standards.

Home Warranty

First of all, a home warranty is not the same thing as homeowners insurance, nor is it a replacement for homeowners insurance. Homeowners insurance covers major perils such as fires, hail, property crimes, water damage, etc. that could affect the entire structure and/or the homeowner's personal possessions. A home warranty does not cover these perils. Rather, it covers specific components of the home.

A home warranty provides for discounted repair and replacement service on a home's major components, such as the furnace, air conditioning, plumbing and electrical system. It may also cover major appliances such as washers, dryers and refrigerators.

Home warranty companies have agreements with approved local service providers. When something breaks down, the home warranty company sends one of its service providers to examine the problem. If he determines that the needed repair is covered by the warranty, he completes the work. The homeowner pays a service fee.

A home warranty costs a few hundred dollars a year, paid in advance and can vary according to the type of residence covered, the state you're in and the level of service desired. Often they are offered by sellers as a buyer's incentive to the sale of the home.

In addition to an annual premium, home warranties charge a service call fee every time the warranty holder requests that a service provider come out to the house.

There are many companies that sell home warranties and the specifics of the policies they sell can vary greatly, so it pays to shop around.

Disclosure of Defects in Your Home Revealed by A Previous home Inspection

Do you have to disclose that a previous home inspection revealed a defect in your home?

The short answer to that question is a definite yes. Regardless of how much it might hurt to disclose a prior inspection report, sellers and brokers should always weigh on the side of full disclosure. It is well-documented that prior inspection reports constitute material facts concerning the property and a purchaser is entitled to know them in making the decision whether to buy the property.

This has been tested in many court cases and court decisions in favor of buyers have made it clear that sellers have the duty to disclose information from prior inspection reports obtained by buyers.

Even if a subsequent inspection report contradicts the original report, both reports should be provided to any potential buyer. And, if you have corrected a problem indicated in the report, that should also be provided.

A good way to look at it is to ask yourself how you would feel if you found out that the seller of a property you bought had withheld known material facts about the condition of the home - things that ended up costing you a lot of money to repair.

In addition, your real estate agent will also be held liable if they have knowledge of the negative report and you instruct them to keep quiet about it. Any reputable agent will not be a party to such an act because it could end up costing them their license to practice.

Honesty is always the best policy and the best way to avoid any problems is to fully disclose everything you know that affects the condition of your home.

What Are Home Warranties?

First of all, a home warranty is not the same thing as homeowners insurance, nor is it a replacement for homeowners insurance. Homeowners insurance covers major perils such as fires, hail, property crimes, water damage, etc. that could affect the entire structure and/or the homeowner's personal possessions. A home warranty does not cover these perils. Rather, it covers specific components of the home.

A home warranty provides for discounted repair and replacement service on a home's major components, such as the furnace, air conditioning, plumbing and electrical system. It may also cover major appliances such as washers, dryers and refrigerators.

Home warranty companies have agreements with approved local service providers. When something breaks down, the home warranty company sends one of its service providers to examine the problem. If he determines that the needed repair is covered by the warranty, he completes the work. The homeowner pays a service fee.

A home warranty costs a few hundred dollars a year, paid in advance and can vary according to the type of residence covered, the state you're in and the level of service desired. Often they are offered by sellers as a buyer's incentive to the sale of the home.

In addition to an annual premium, home warranties charge a service call fee every time the warranty holder requests that a service provider come out to the house.

There are many companies that sell home warranties and the specifics of the policies they sell can vary greatly, so it pays to shop around.

Choosing a Neighborhood

Choosing a neighborhood to live in is different for everybody depending on what their needs and wants are. For couples with kids, schools are a priority. Others want to be close to shopping and public transportation. Still others seek amenities, such as swimming pools and parks.

The neighborhood you choose will impact on your day-to-day life, so think carefully before you choose. Here are some tips to consider when you're considering a move.

School Districts: If you have children, it's important to research what local school district you wish your children to attend. Make a personal visit and talk to school officials.

Noise Factor: Visit your potential neighborhood during different times of the day and varied days of the week. Also check for train tracks, subways, roads, and airports!

Distance to shopping and entertainment: Do you want a short drive or be able to walk to restaurants, grocery stores, doctors' offices, parks, churches and other recreational activities?

Safety: Check with local law enforcement about the crime rate for the area that interests you. Some have higher levels of thefts and violent crimes than others.

Resale: Check on the resale potential of a home that you may not be planning to stay in indefinitely. Will you be able to easily sell a home in this neighborhood in 10, 15, or 20 years?

Paint Your Home To Get It Ready To Sell

Painting is one of the easiest and cheapest ways to get your home ready to sell. You'll also enjoy a big return on investment. Surveys show that the average price to paint interior walls is $500 to $750, but that can increase a home's value by an average of $1,500 to $2,000.

But the colors you choose are critical. A bright red accent wall, or your teenager's black-walled bedroom, needs to be painted over in order to sell. Beiges, warm beiges and yellows are the best choices for wall color and making a space look more impersonal. These colors will also make smaller rooms appear larger.

It's necessary to remove all the personal touches you've made within your home in an effort to make it as neutral as possible. This enables potential buyers to better envision how their personal taste can be implemented into the house. The right paint job helps accomplish this.

The last thing you want is to have a buyer's interest in your home derailed by wild, off-putting paint colors on the walls.

Patterned wallpaper is also a deal-breaker. The point is that you do not want any attention called to the color of your walls. The more neutral the color palette throughout the home the better…and neutral doesn't mean white.

Surprisingly, white is a color to avoid. Interior design experts say that the color white is too bright and "institutional" looking and this can make people feel uncomfortable. Stick with softer, light colors and you'll be better off.

One good rule of thumb is to pick a couple of basic colors and then use different shades of that color throughout the house.

Call 811 Before You Dig

Before you begin any type of digging, it is important to know what lies beneath your feet.

Pipelines may be located anywhere, including under streets, sidewalks and private property, sometimes just inches below the surface. Excavation, planting, demolition and other forms of digging are a major cause of pipeline damage.

Whether you’re planning to build a major development or just landscaping your yard, protect your safety and the safety of those around you by calling Underground Service Alert agencies at 811, at least two business days prior to excavating. You may call Underground Service Alert agencies between 6:00 a.m. and 7:00 p.m., Monday through Friday (excluding holidays). Underground Service Alert will coordinate with various utility owners in the area to mark the locations of buried utility-owned lines. This is a FREE service and it can help prevent injury, costly property damage and loss of utility service.

Here's a list of all Call811 agencies by state:
http://www.call811.com/state-specific.aspx

Rent a Home to Buy

'Rent a home to buy' is quite a old idea. It's a plan that is not right for everyone and may not be right for most.

Here is how it works. You agree to rent the property for a period of time normally for several years allowing sufficient time to build the down payment. A portion of the rent being paid by you is applied to your down payment for an agreed-upon price. The amount to be applied to your down payment is based on what the seller's current monthly mortgage is, with an added option fee for the seller. The option fee varies, 1% to 5% of the price, which is credited to the purchase price. The borrower also pays an additional rent premium that is also credited to the purchase price.

Any repairs required during the rental period and made by the seller will come from the amount of funds that are being accumulated, or you can make the repairs yourself.

You cannot claim the property on your income tax until you actually have title to the property. Repairs made during the rental period may not be deducted from your income tax (please discuss your individual case with your tax consultant). You are also responsible for maintenance of the grounds.

Last but not the least, in case you don't proceed with the purchase, any money that may be held towards the down payment (option fee as well as the rent premium) is relinquished to the seller. Also, beware that normally there is no negotiation for the asking price. In most cases, it is kind of take it or leave it when it comes to the asking price.

Tax 2007: New Benefits for Homeowners

Foreclosure Benefit: Before 2007, taxpayers often owed income tax on the value of their home loan after that loan was cancelled through a foreclosure proceeding, otherwise known as "cancellation of indebtedness income." But now homeowners who went through foreclosure in 2007 have Congress to thank for the Mortgage Forgiveness Debt Relief Act of 2007. So, for 2007 tax return, if you had cancellation of indebtedness income on your principal residence (Note: Not investment property), the first $2 million goes income-tax free. For more details, visit IRS webpage on this topic.

Mortgage Insurance Benefit: If you purchased mortgage insurance contract for a home loan in 2007, you may be able to deduct your premiums. You must itemize to take this perk. If you qualify, the value of your insurance premiums is treated as deductible mortgage interest. The benefit starts phasing out if adjusted gross income exceeds $100,000. For more details, visit IRS webpage on this topic.

Home Purchase with Seller Financing

Due to the demise of many marginal mortgage lenders, many feel that there would not be any possible way for them to fulfill the dream of home ownership. You may, however, explore a few other alternative ways. We recently discussed how you may explore the possibility of renting a home to buy. Today we discuss another possibility -- that of seeking financing from the seller so that he/she can carry the loan for a limited period of time.

It is possible to find such homeowners through Multiple Listing Service (MLS) but your own choices could be limited. So, do your homework first.

First step is to obtain your FICO credit score (read our past postings on 'credit') because you would want to show the potential seller that you are qualified. If your FICO score is under 670, try to clear that up to bring the score as much above that as possible. Remember, you need to do that anyway even if you were to obtain a loan from a conventional lender.

Next, have a look at your future income and ascertain how much of monthly payments you can make keeping your other payments aside (like car, credit card etc). It should never exceed one-third of your monthly income (more preferably, of your take-home income).

When you are armed with these two information, you are already a much better buyer and the seller could find more confidence in working with you. Still it would not be easy, so don't expect miracles to happen.

A home seller that would be willing to carry a loan generally would ask for slightly higher interest rate than what could be obtained from a conventional lender. On average, a seller may carry a loan for 5 years, amortized over 15 years. So, when the monthly payment is figured, it would appear as if the loan was to be for 15 years, but there would be a balloon payment at the end of 5th year when the loan is actually due to be paid in full.

So, no matter what, even if you manage to find a seller financing, start saving immediately to accumulate a down payment so that you can qualify to obtain a loan from a conventional lender.

Safe Holiday Celebration

Attention to safety can go a long way toward keeping your holiday celebrations festive. Whether you're installing decorations or planning to do so, following these tips can help prevent injuries and damage:

Keep sidewalks and walkways clear of decorations. Repair any cracks in walkways or loose steps and make sure walkways aren't slippery.

If you host a party, serve plenty of appetizers and provide juices, non-alcoholic mixers, and sodas for designated drivers and non-drinking guests. Stop serving alcohol an hour before the party ends. Arrange alternate transportation for any guests who has had too much to drink.

At holiday gathering, remember that dogs pose risks for small children and may make some adults uncomfortable. Consider confining dogs to areas that won' t be used by guests. If you're visiting a home with a dog, don't leave your child alone with the animal.

Check each set of decorative lights for frayed wires, broken bulbs, or loose connections. Discard damaged sets. String no more than 3 sets of lights per extention cord. Never place cords or lights behind drapes, under carpets, or across walkways. Always turn off the lights before you go to bed each night.

Use a screen to keep embers in the fireplace. Extinguish candles when they burn down to 2 inches above the holder.

If you're buying a cut tree, check the needles to make sure it's fresh, and water it daily. Keep the tree away from heat vent and the fireplace.

Remodeling Projects Under $10000

You do not necessarily have to add another room to get more bang for your buck. Simple things like windows and landscaping may also do the same job. Here are 5 such remodeling projects:

New Windows: It's amazing what new windows can do for your perspective and for your home's curb appeal. In recent years, vinyl models have dramatically improved in quality while falling in price. Although they come in only a few basic colors, they never need repainting, and their double and even triple-pane glass makes them vastly more efficient than older windows.

Basic bathroom makeover: Start by upgrading your old toilet to a low-flow model. Then add new tile, such as glass varieties that can give you the illusion of depth in a small space. Starting at about $5 a square foot, these popular tiles can also be used to accent lower cost ceramic tiles.

A garden: Landscaping is perhaps the cheapest and most under-rated way to improve the home's curb appeal. But instead of simply resodding a weed-infested yard, consider planting an English garden of flowers, trees and stones. It usually takes a weekend or two to install a medium-size garden and the impact is almost immediate.

A deck to add space: Adding an outdoor deck is a an affordable way to expand your home's footprint. With the arrival of weatherproof composite materials like plastic-and-wood Trex, the days of warped timbers and messy annual costs of sealant are long gone. These decks cost more than wood (about $14000 for 16-by-20 foot finished deck) but, by cutting back on square footage, you can easily stay under $10,000.

Vacation & Home security

The winter holiday season is the peak period for U.S travel and also for break-ins, with about 400,000 burglaries each year. But there are simple steps you can take to boost your defenses.

Delete old voice mails and call home while you're away to collect messages. If your voice mail gets full, that's a sign you're traveling.

Advertise your alarm system. Yard signs are far more effective than window decals. Burglars can't see decals from the street, and once they approach your house, they're far more likely to attempt a break-in.

Never put your home address on luggage tags. You're announcing the location of yur empty home to everyone in the airport. Use a business address or P.O. Box number instead.

Don't stop deliveries. Information left with the post office may fall into the wrong hands. Instead, enlist neighbors or friends to collect the mail -- and to take out the trash. You may not beieve it but would-be intruders really look for garbage cans that aren't by the curb on collection day.

Last but not the least, count your children before boarding an aircraft. Make sure you are not leaving one of them in 'home alone'!

Conforming Loan Limit

Currently, for most of the country, the maximum limit for mortgage loan is $417,000. This limit is typically increased each year by the level of home-price inflation. The conforming loan maximum is the largest loan that can be purchased by mortgage giants Fannie Mae or Freddie Mac. Loans larger than the maximum, known as jumbo loans, typically carry higher interest rates by one-quarter to one-half a percentage point.

The Office of Federal Housing Enterprise Oversight (OFHEO) announced previously that the maximum conforming loan limit for U.S. mortgages will be frozen at current levels for a year, if home prices show a decline from October 2005 to October 2006. The data released yesterday showed that, from October 2005 to October 2006, a decline of $501, or 0.16%, was reported in the average price -- the first decline reported since 1992-1993. The average price was $306,759 in October 2005 and $306,258 in October 2006.

For mortgages on two-family properties, the loan limit will continue to be $533,850. The limit will hold at $645,300 for mortgages on three-family properties and $801,950 for mortgages on four-family properties. Properties in Alaska, Hawaii, Guam and the U.S. Virgin Islands are eligible for higher limits.

Victims of Weird Mortgages

Many home-owners are at risk with their adjustable-rate mortgages (ARM) or its variants. Rising interest rates and falling home values are creating an atmosphere of panic among some borrowers who had extended their ability of purchase by selecting such ARM or interest-only mortgages and are now finding their monthly payments at unaffordable level.

But not in all cases the borrowers' greed of possessing a larger home was the sole reason for them to end up in such a miserable state. In many cases, due to heavy-handed salesmanship originating from too much of competetion among loan brokers, inconsistent loan representations regarding the benefits or terms of the loan were made by the brokers. In some cases, unnecessary disclosures which were not required by the law were asked from borrowers at the time of loan origination.

If you feel you might have been led to such a situation for such wrongful business practices, you may consider consulting a consumer-protection attorney. Most consumer-protection attorneys offer a free consultation. If you have a case, you may be charged up to one-third of any benefit obtained through the lawsuit. Some state and federal consumer protection laws provide that the lender, if it loses, pay attorney fees. To find a consumer protection attorney in your area, visit the website of National Association of Consumer Advocates (NACA), a nationwide organization of more than 1000 attorneys who represent and have represented hundreds of thousands of consumers victimized by fraudulent, abusive and predatory business practices.

Standby Energy Wastage

According to the Environmental Protection Agency, about 10% to 15% of the energy load of a state is consumed by standby power. This wastage takes place through many electronic devices in your home that are always on, even when you think they're off. These "miscellaneous" devices include computers, digital video recorders, power tools and chargers for cellphones--which drain even when not charging. Some of these adapters can draw as much as 5 to 20 times more energy in standby mode that is actually stored in the battery. Most stay plugged 24 hours 7 days for their entire lifetime.

For example, computers are a huge standby drain. Traditional computers average 35.5 watts in standby, while laptops average 16.5 watts. Screen savers actually make things worse, using 28% more power than normal. Other large standby drainers include ink jet printers, which can use from three to 20 watts, and mini-stereos, which can consume from one to 25 watts.

In June 2001 President Bush required the government to purchase appliances, and chargers, that used the least standby power. At the time, the White House estimated the U.S. could save from $1 billion to 2 billion in energy bills if standby settings used one watt or less. The EPA estimates that there are 1 billion chargers in the U.S. and predicts that number will grow. In January, Energy Star began a major campaign to make chargers at least 35% more efficient. By doing this, the EPA believes it can save more than 1 million tons of greenhouse gas emissions, equal to that generated by 150,000 cars.

Avoid Remodelling Rip-off

After you buy your new home, you may want to further invest in it by completing some remodeling projects to increase the value. If the projects are extensive enough, you may decide to hire a professional to do the work. When hiring someone to work on your home, it is important that you make your selection carefully and choose someone whom you know is reliable.

According to the Federal Trade Commission, there are some telltale signs for spotting an unreliable contractor. A less than reputable professional will probably do things such as:

• Ask for payment only in cash
• Pressure you into making an immediate decision
• Ask you to pay un full for work that has not been done
• Offer exceptionally long guarantees
• Use materials that "Just happen to be leftover"
• Ask you to obtain the required work permits
• Not have a business listing in the phonebook
• Suggest that you borrow money from a lender the contractor knows, which could make you the target of a home improvement loan scam.

Tree and Home Value

Did you know trees and shrubs can dramatically increase the value of your home? Many specialists now say not to remove any mature tree or shrub before considering its worth today and tomorrow.

What to Consider: Trees are the most valuable plants in landscape because they are the most useful. For example, they may function as energy savers, air conditioners or wildlife havens. Shade trees can reduce the cost of heating and cooling your home by 10 to 50%.

Values: Landscape appraisers are in the best position to determine the most accurate value for the trees and shrubs in your yard. When seeking the value of your landscaping, take these into account:

Size: A mature oak is more valuable than a fast-growing poplar because it is more difficult to replace. Generally, large trees provide more benefits (and have more value) than small ones
Type: Some kinds of trees have a higher value due to their hardiness, durability, adaptability and overall desirability (sturdy, low-maintenance or attractive). Japanese maples and dwarf conifers are among the most highly valued trees.
Condition: Healthy, well-formed trees and shrubs have more value than malformed, poorly maintained or storm-damaged plants.
Location: The Plant's value to the property arises from both functional and aesthetic considerations. Trees and shrubs that form a focal point, frame the house or stand in a hedgerow represent high-value specimens.

Public Insurance Adjuster

Even with the downtrend observed in recent weeks, home prices throughout the nation are at all time high and so is your stake in your home. If any catastrophe strikes your home, your home insurance would be the key to your new life. Most people do not face such a situation, but in case such a thing happens like it did in New Orleans a few months back, you will have the unfortunate recourse to facing and negotiating with your insurers on all kinds of clauses that bind your insurance policy. That's where Public Insurance Adjusters may step in.

They know the ins and outs of filing a large claim against a homeowner's policy. They take inventory, hire appraisers and engineers and negotiate with the insurer over your policy provisions. In short, they fight for a bigger settlement from your insurance company and provide peace of mind when you're most vulnerable. In return, they take a percentage of the total insurance settlement, usually around10%, depending on the size and difficulty of the claim. Their percentage may also depend on state insurance regulations, which sometimes cap the public insurer adjuster's fees.

To hire an adjucter you need to check with your state insurance department for the names of licensed firms (40 states license the profession) and ask for references. You may also visit the website of the National Association of Public Insurance Adjusters (NAPIA) which lists its member firms.

We must also point out that some people see public adjusters with lot of skepticism. The insurance industry (obviously!) points out that your insurance company provides its own adjuster free of charge. Some consumer advocates call them a waste of money that could be better spent on a lawyer in the event you are not satisfied with your insurers. However, it's a choice that you can exercise depending on your situation and the amount of your claim.