According to the Community Associations Institute, more than 56 million Americans’ homes were governed by a homeowners’ association last year.
If you’ve never lived with a HOA before, an “association” can be a strange and even scary concept.
An association is a legal entity that takes care of what you and your neighbors own in common such as roofing, garages, entry halls, and guard desks.
It’s usually run by a small group of owners in the building with titles like President, Secretary, and Treasurer.
If it sounds like an association is a small corporation, that’s because it is.
In the business of running the association, each property owner is responsible for annual dues called “assessments” that pay for services and features within the building(s). These may include doormen, landscaping, maintenance, utilities and/or cable television.
Typically, the annual bills for the services are added up and each owner pays a percentage equal to his percentage ownership in the building. A 2.176% owner, for example, will pay 2.176% of the overall fees of running the building.
The fees paid by the owners are determined by the association’s board and any prospective buyer of property governed by the association should ask very specific questions during their home search process.
It’s important to know what the assessments are and what services they cover. Like everything in life, you may find that the cost outweigh the benefit of the service.
Your real estate agent can help identify potential strengths and weaknesses of an association so be sure to ask for his/her insight. When buying in a building governed by its owners, it’s important to inspect more than just the unit — the association itself stands for inspection, too.
Online home information is becoming a competitive business.
Thought they try, none of the automated valuation services can be 100% accurate. This is because the automated home values rely on public information in city, county, and other databases and that data is not always 100% accurate itself.
For example, if a database shows a home’s square footage to be inaccurate, the online valuation engines will generate an inaccurate value. The same is true if the home was remodeled and permits were not filed as appropriate.
The Web sites are a rough guide for evaluating a home’s worth, but the only way to learn the “true” value of a home is to have it appraised by a licensed (and human!) real estate appraiser.
Home warranties are increasingly popular with both buyers and sellers of real estate. Buyers get some peace of mind, knowing that home defects are insured even if the inspection doesn’t reveal it.
For the seller, a home warranty is an extra “add-on” to offer to buyers and to help a home stand out from the competition.
Most home warranties last for one year. They cover all of the fixed home appliances such as climate control and water heating. They usually have a deductible that makes them attractive only for worst-case scenarios.
If something goes wrong, you can call up the warranty provider and make an appointment to have items repaired.
Home warranties usually cost in the range of $500 for the first year.
To find a home warranty provider, look in the yellow pages, check a search engine, or ask for a referral from your real estate agent. Most agents have a trusted provider in their Rolodex and that can make the shopping process more simple.
“Curb appeal” can make all the difference when selling a home in a tough market.
Just like the people that live in them, homes never get a second chance to make a first impression. When a person looks at your home from the street, the hope is that they “feel good” about it.
This is what curb appeal is and home owners exert omplete control over it.
Just as you might get a haircut or wear your best suit for a job interview, your home can receive the same kind of treatment to increase its curb appeal and help it appeal to as many people as possible.
To improve your home’s curb appeal, start with the obvious things, such as the parts that need repainting and the hedges that need to be trimmed.
Then, a little trick!
Take a series of color and black and white photos of your home and upload/develop them. Examine the photos hard. Look at your home by photograph gives a new perspective and will help you see what you overlooked, or what may need more work.
The black and white photos can be especially useful for showing details that color tends to hide.
The appraisal of a home can be a bit frightening. After buyer and seller have agreed on a price and signed a contract, a mortgage lender will send an independent professional to verify that the price is “reasonable” and fair.
The appraisal process begins with a licensed appraiser making a thorough inspection of the home, its dimensions, and its fixtures. Aside from measuring square footage and counting rooms, the appraiser also looks for structural integrity and home quality.
He ignores the dirty dishes that may be in the sink, or the unmade bed — they have no bearing on a home’s value.
After inspecting the home, the appraiser uses databases to find the prices at which similar homes have sold in the immediate area.
For example, if comparing to a 3-bedroom, 2.1-bathroom home, the appraiser will look for other 3-bedroom, 2.1-bathroom homes to compare against. Once identified, the “comps” are adjusted for features. A finished basement may add $10,000 of value; a new roof may add $10,000; a detached garage may decrease a home’s value by $15,000.
The process is called “gridding” and it’s all up to the opinion of the appraiser. This is also the step that determines how good the appraisal is.
A poor choice of comparable properties, or out-of-the-ordinary gridding adjustments will doom an appraisal in the eyes of a mortgage lender. The lender, of course, has its own in-house appraisal department that performs a quality review on most appraisals that come through the door.
If your home’s appraiser uses bad comps, ignores a recent sale that should be a comp, or doesn’t account for the local market conditions, the home appraisal will get flagged.
Aside from introducing time delays — the appraised value of the home may be cut to something less than the purchase price.
Regardless if you are buyer or seller, this is an unwelcome event. As a buyer, an appraisal may reveal that you paid more for a home than what other similar homes have sold for. As a seller, your buyer may walk away from the deal because they feel “cheated”.
The best way to avoid appraisal issues is to price your home appropriately at the start and use your real estate agent’s help in determining fair market value.
There aren’t many better ways to declutter a home than with a garage sale.
This goes hand in hand with the real estate selling season, so if you are planning to sell your home any time within the next year you might want to clean it out now.
To get started, ask your neighbors if they are thinking of moving, or having their own garage sale. A lot of garage or yard sales on one block makes it easier to lure in people to move out the stuff you don’t want anymore.
Check your local papers, including any community papers, for advertising. Many newspapers like to offer garage sale listings for cheap (or free!) so that when a person will feel comfortable listing with them when “something bigger” comes along.
This could stretch your lead time out by a month or more, but it will be worth it.
The US Government Accountability Office has issued a report recommending changes to the way title insurance is sold.
These include informing consumers of their options because of two things:
- The complicated relationships between title companies and real estate companies
- Title costs are often overlooked by home buyers
The report says that consumers find it difficult to comparison shop for title insurance because it is an unfamiliar and that consumers deem the relatively small savings to be not be worth the hassle of shopping.
Title insurance is typically purchased at a real estate closing, and is one of many small line items found on a large stack of documents. Most buyers have done little research on the topic in advance and then just go along.
Buyers of real estate should understand titles, title insurance and how it can affect them. Asking your real estate agent is a terrific place to start.
Looking for a special “fixer-upper”?
Many home buyers whose energy exceeds their checking accounts are doing just that. Buying homes in need of some TLC is a great way to get a lot of house for a relatively small amount of money.
“Sweat equity” isn't for everyone, but if you know you are going to be particular about repairing your home just the way you like it, starting with a home in need of some help can save you a lot of dollars.
One method of finding fixer-uppers is to look for homes that are already under repair, either by local non-profit agencies or by individuals.
This can be a signal that the neighborhood is either on the upswing or is in the process of getting a lot of attention.
Then, look for nearby homes that are for sale. That will assure you that you are moving in at the right time, and may even qualify you for additional financial assistance. Plus, your neighbors and you can swap stories and tools as you get to know each other.
Pets are an important part of any home. Sometimes, the “fur children” are treated just like any other child.
No matter how important they are as a member of the family, though, their presence may not be appreciated when it comes time to sell your house.
The problem is that pets leave fur and smells that their families get used to with time.
While cleaning the house in time for a showing is the job of the seller, anyone with pets may be too used to the problems to deal with it adequately. The most important thing is to get an outside opinion when cleaning a house with pets to sell.
A friend without pets can be the difference between a house that smells with pets and one that is fresh, clean, and inviting.
That alone may not be enough, however. Persistent odors may remain. Keeping the windows open can help a lot, but an ozonating air cleaner run for a few days often takes care of the last whiff of little fluffy.
Then, prospective buyers will have an easier time imagining their own family buying the home and moving in.
The Mortgage Bankers Association reports that while mortgage refinance applications are declining, the applications for purchasing homes are increasing.
Overall, the applications for mortgages fell slightly. They are up over 10% from the same period last year, however. This is attributed to the increasing strength of the real estate market.
More than half of all mortgage applications are for purchasing new homes, and growing. This trend is expected to continue as the real estate market picks up. Less than one in five new mortgages is an adjustable rate mortgage (ARM).
The Mortgage Bankers Association is the national association representing the real estate finance industry, and is based in Washington, D.C..