5 Sticky Situations You Can Avoid If You Have A Real Estate Title Insurance

When you buy a home, you don’t only buy the land, the house, and any other physical structures that come with it. The most important thing is that you are also buying the legal rights of ownership to the property, which is referred to as “title.”

This title is indicated in the “deed” — an official record of your rights and ownership of the property that states that it has been legally transferred to you by the previous owner. When you sell your home in the future, you will also transfer this rights to your buyer.

Before officially taking this title and completing the closing of the real estate transaction, a title search will be required to find any defects in the title. Chances are, there could be one or more issues that could emerge in the title. These title defects could cause you to lose your property, or make it impossible to you to sell when the time comes.

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This type of insurance offers protection against any defects with the title or legal ownership status of a property. It covers financial loss from these problems or from any existing property liens. Title insurance may come in a bit hefty amount, but it is a one-time expense and does not carry with it additional monthly premiums. It will also cover the homeowner until the property is sold.

Is it worth it?

Because every property has a history, any defects in the title could hinder you from enjoying your ownership rights. But having a title insurance serves as your protection against possible title problems that may surface and could cause property loss or damage. Remember, any competing claim of ownership could seriously jeopardize your financial stake on your biggest investment. Because unfortunately, these problems may be discovered even after an initial title search was done on your property.

Title insurance is vital especially in purchasing rural property, since aside from any title claim, it will also advise you if the property has previously been used for non-residential purposes.

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There are generally two types of title insurance coverage: a lender’s title insurance and the owner’s policy. Most lenders require a buyer to purchase a lender’s policy as part of investor requirements. But this policy will not protect you but covers only the lender, hence its name.

It is the owner’s insurance policy that will protect your property — your biggest financial investment — against anyone who has a claim against your home.

 

So you think you really own your property? Here are the most common title problems that could arise and dispute your rights to ownership:

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1. There’s more than one home seller (or homeowner)

At the time of your purchase, you may not know that there’s another seller or homeowner, maybe a relative or an ex-spouse. This third party may surface with a claim that they actually own all or a part of your property. They would insist that the seller had no right to sell the home to you in the first place.

In this situation, a judge could confirm and favor this third party’s claim to the house, which could leave you with a huge financial loss (and no home to live in). Fortunately, your own insurance policy could cover this loss. Your title insurance will pay for expenses such as attorney’s fees and court costs, while the lender’s insurance policy will pay for court costs incurred by the bank. The sale, on the other hand, will be deemed null and void.

2. Property liens for delinquent taxes, unpaid contractors, and other debts

There are circumstances where, unfortunately, the former homeowners were not diligent bill payers. This is worrisome because even if the debt is not your own, banks or other financing companies can place liens on your property to cover for those unpaid debts.

These property liens can slow down the closing because your title won’t be considered clear until you pay the existing debt. Sometimes, even though a tax search hadn’t tracked down any unpaid taxes on the property, it’s still possible that you would get notified for any of these delinquent taxes after closing. It’s also a common issue if the property was foreclosed on or the home was bought in an online foreclosure auction website.

Fortunately, if you have an owner’s title insurance policy, it will cover for it and will give you documentation that the indicated debts are paid.

3. Survey or boundary disputes

Conflicts concerning the boundaries of your property may arise if, despite several surveys before closing, there are other existing surveys that show different property lines. This may lead to dispute especially when a neighbor or someone will claim ownership to a part of your property.

Likewise, if your neighbor happened to put up a fence or a driveway on a portion of your new property right before closing, you can count on your title insurance to settle the dispute. The policy will pay for the cost of any legal efforts to settle the issue out of court and have any of your neighbor’s item removed from it.

4. Clerical or filling errors in public records

When it comes to homeownership rights, a simple typo can lead to devastating title claim problems. These clerical errors in public records and/or courthouse documents could affect the deed or survey of your property. And while it isn’t impossible to resolve them, it can take an emotional and financial strain to any homeowner. Your title insurance serves as a cushion for this kind of problem.  

5. Undisclosed or missing heirs to the property

Imagine this scenario: the former property owner died. So, the ownership of the home may fall to his heirs or to anyone indicated in his/her will. However, those heirs were missing or unknown at the time of his death, so the state sold the property, together with all of the assets.

When you purchase this kind of home, despite assuming the rights as the new owner, family members of the previous owner could come forward and claim ownership of the property. This claim could seriously jeopardize your rights to the home, even if it happens years after you bought the property.

Bottom Line

With these situations, the last thing any homebuyer or homeowner would want are hurdles that will cripple their ability to purchase the home and claim full ownership to it.

Even if there’s a slim chance that past owners or unpaid property tax bills might emerge, the risk is still huge considering what is at stake — your beloved home. If you are still contemplating on whether you will allot money for it, just think how you will be affected if you’re suddenly faced with any of those title-related nightmares. Remember that you are entitled to choose the title company where you will get yours, so gather recommendations from your trusted real estate agent, lender, or family.



Make Your Home More Energy-Efficient With These Green Home Improvements

Whether you are a homeowner planning a major remodel or a seller preparing to put their home on the market, an important factor you have to consider is the products and materials you will use. This time, why not try to become more environmentally conscious when remodeling your home?

You can incorporate eco-friendly and energy-efficient products into your home renovation ideas, especially those green solutions that are easily available and affordable. One benefit is that there are certain tax incentives for homeowners who installed alternative energy upgrades, stated in the Residential Energy Efficient Property Credit.

According to the REALTORS® and Sustainability 2018 Report by the National Association of REALTORS® Research (NAR) Group, 71% of respondents said energy efficiency promotion in listings was very or somewhat valuable. Many MLS has green data fields that real estate agents typically use to promote green features, energy information, and green certifications. Likewise, 56% of these REALTORS® find that clients are at least somewhat interested in sustainability.

Here are the major reasons to take on eco-friendly home improvements:

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  1. Lower utility bills - In the same report, 28% of REALTORS believe a home’s utility bills and operating costs is one of the home features that are most important to their clients. Energy-efficient upgrades can help reduce your water and energy bills — a significant return on investment that any homeowner will appreciate.

  2. To reduce your carbon footprint and help the environment - Tackling these environmentally friendly projects promotes healthy living for you and your family, while helping to save the planet.

  3. Higher ROI when it’s already time to sell your home - Eco-friendly home improvements, especially in the kitchen and bathroom, add value to the home itself. They will be more prominent when it’s time to put your home on the market. Likewise, for buyers who are interested in an energy-efficient home, they can connect to a lender who provides lending products that encourage energy efficient improvements to existing homes.

Yes, there’s more you can do as a homeowner aside from using LED bulbs for your lighting fixtures. Here are some of those green home improvement projects that are relatively low-cost and easy to add or install:

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1. Using low-VOC paint for better air quality

Adding a fresh coat of paint to any room is a surefire way to transform it and make it look new. It’s also one of the minor fixes that home sellers can do before listing their home for sale. However, many paints contain high levels of volatile organic compounds (VOC), which can cause several respiratory problems and contribute to ozone pollution.

So next time you want to apply a fresh coat of paint to renovate a room, opt for low-VOC or non-VOC paints. These are water-based paints that are generally more environment-friendly than oil-based paints with high VOC content. You will end up with a room that looks not only fresh but also has better air quality.

2. Installing water-saving fixtures and appliances

Whether you are planning a kitchen or a bathroom remodel, it’s a good idea to replace your regular fixtures and appliances with their water-saving counterparts. Installing low-flow fixtures and appliances like faucets, shower heads, dishwasher, and even high-efficiency toilets, can help lower your water consumption. It’s a great way to conserve water without compromising your daily usage and comfort. Eventually, it can offer big savings in your wallet by trimming your water bills — an advantage that you and the future owner of the home can both enjoy.

Toilets, for example, account for nearly 30 percent of an average home’s indoor consumption. Switching your older, inefficient toilet with a low-flow model can lower your water bills by about $110 a year, according to the Environmental Protection Agency (EPA). Think about it: you can save your wallet and the planet at the same time.

3. Electric Tankless Water Heater

Another great option you can add on your next bathroom remodel is a tankless water heater, which is a great way to save water, money, and energy. Tankless water heaters either use gas or electricity and are generally more cost efficient. They heat water you only need to use in just seconds and there’s no need to wait for the water to heat up while wasting more water in the process. It’s another eco-friendly bathroom improvement that can add value to your home.

4. Programmable, Smart Thermostat

Compared to manual thermostats, this smart home technology is a great investment to help make a home more eco-friendly. Smart thermostats, such as the Nest Learning Thermostat, can help you save energy and lower your utility bills since you can control your heating and cooling needs.

The technology will also allow you to program your temperature preferences on the areas where you need it most. You can set up these thermostats (through their mobile apps) to turn on when you wake up and turn off when you leave the house, contributing to bigger savings.

5. Energy-efficient Windows

Energy-efficient dual pane windows made from vinyl, metal or wood offer better insulation for your home compared to older, single-pane models. They can reduce your energy usage during both hot and cold climates, helping you save money while also lowering your environmental footprint.

Double-paned windows also have great soundproofing qualities. They can significantly reduce outside noise, which can be a valuable investment if you live in the city or in a busy urban area and don’t want to wake up to the blaring car horns or sprinklers early in the morning.

6. Energy Star appliances

Replacing your dated appliances with new and high-efficiency models, especially those with an ENERGY STAR certification, will not only allow you to reap the benefits of energy savings but also help sell your home for top dollars. ENERGY STAR is an initiative of the U. S. Department of Energy that identifies energy-saving appliances and products. Its ceiling fans, for example, are 50% more efficient than conventional fans because they use less energy to operate.

Since the kitchen is a focal point in any house, home buyers will want it to look at its best. If you’re planning a major kitchen renovation, upgrading your washer, dryer, dishwasher, and refrigerator will enable your kitchen to stand out in terms of energy efficiency, design, and functionality.

On the other hand, here are some big-ticket renovation ideas if you feel you’re up for it:

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  • Eco-friendly wood flooring and using other renewable wood products - Options include bamboo flooring, marmoleum, and other eco-friendly wood flooring substitutes.

  • Solar roof panels - Homeowners who install solar panels, especially when installing a new roof, can receive rebates and credits from the solar power owner or utility company.

  • Sustainable landscaping using native plants - One eco-friendly alternative to improve your home’s curb appeal is landscaping using native species of plants. These plants are easier to maintain, and won’t be a risk to the surrounding ecosystem.

  • Improved home insulation - Homeowners can switch to alternative types of insulation that are environmentally conscious, such as insulation made of wool, cotton, or other recycled materials.


Tips on how to effectively sell your energy efficient home:

  1. Find a real estate agent with an extensive background in selling green homes or energy efficient homes. Clear communication is important for selling these upgrades to potential buyers. They have to see for themselves what they will buy and benefit with as the homeowner. This is why finding the right real estate agent who understands the benefits of your energy-efficient home is paramount. He/She should be able to advertise it appropriately, marketing it to the right buyers. The agent should also be able to explain those green upgrades to those interested buyers effectively.

  2. Documentation can help you sell faster. It’s important to not only feature the upgrades you made but to also highlight the benefits of those projects for you as a homeowner. Compare your water and energy bills before and after the remodel and emphasize how much you saved. The difference in your utility bills will be a good selling point your interested buyers will look forward to.

  3. Consider getting an appraisal from a certified appraiser who knows how to properly evaluate green properties to determine the value of your energy-efficient improvements. This is a good first step to help you decide how much you should list your property, aside from the list price you and your real estate agent will come up with.

5 Things You Must Do To Prepare For A Hurricane

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Here are five steps you must take to make sure you are ready for this hurricane season:

1. Create an evacuation plan and discuss it with your family

Create an evacuation plan and discuss it with your family to make sure they know the evacuation routes and destinations. Also take note of the local emergency shelters or evacuation centers and make sure that your plan includes the latest emergency contact numbers. Pet owners should also have an emergency plan for their pets.

2. Prepare an emergency supply kit

Assemble a basic storm kit and keep them in a safe spot so they’re available in case you need them, especially once you evacuate. Your emergency supply kit should get you and your family for three days even without electricity and other basic services. It should include necessities like water and food, flashlight, batteries, a first-aid kit, extra cash, blankets, clothing, and others. Also, consider the special needs of your family members and add them to your kit.

3. Collect and secure important documents and other valuables

Store your home insurance policies, ownership or mortgage documents, other important papers, family pictures, and other valuables in waterproof containers or a safe-deposit box. That way, they won’t be damaged if a hurricane causes flooding and you can carry it with you if you need to evacuate. Once disaster strikes, remember that you will need your insurance papers as proof for claims and assistance. You will also have to prove that the affected property is yours. Likewise, make sure you know what types of damage your policy will cover and confirm that it is up to date.

4. Shut off utilities once authorities told you so

Turn off water, gas, and electricity once local officials told you to do so to prevent damage to your home or within the community. You should also unplug all small appliances in case there’s a power surge. Moreover, set the freezer and refrigerator in the coldest setting. That way, your food will stay cold a little longer and you can preserve perishable items you will need in case there’s a power outage.  

5. Bring in all outdoor objects and furniture

Once a hurricane warning is issued, bring inside all your outdoor objects — backyard furniture, toys, garden tools, bicycles, garbage cans, etc. These things are not tied down and can be moved by high winds, cause additional damage, or possibly hurt someone. Secure them in a safe place in your home but away from stairs and exits.


The Tax Benefits That Homeowners Can Enjoy

Is this your first year filing your taxes as a homeowner? If yes, then you’re in for some sweet treats. There are certain deductions you are entitled to and can take advantage of to lower your tax bill. Some of these tax breaks can be a one-time deduction or recurring on the life of your mortgage.

For buyers who are still contemplating whether owning a home is worth it, this is another good reason that might help with your decision. Aside from building wealth through home equity, owning a home can pay off at tax time.

And while itemizing tax deductions can be very complicated — homeowner or not — they are worth remembering so you can avoid missing out. Here are the latest tax credits brought by homeownership after the federal tax law was signed on December 2017:

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1. Property Taxes

Back in 2017, the deductions for property taxes were unlimited. All of your property taxes are deductible so if you live in an area where the property taxes are high, you could wind up deducting thousands of dollars.

But for tax year 2018 and beyond, state and local taxes are capped at a total of $10,000 combined. This includes property, income, or sales taxes.

Likewise, this tax deduction can still be helpful for your finances, although it can be tricky in the year you bought the home. You as the buyer and new homeowner will only get to deduct the property taxes you owed for the portion of the year you owned the home. The seller gets the rest of the deduction, regardless if you offered to pay the full year of property taxes during negotiations.  

 

2. Mortgage Interest

Many homeowners can deduct the interest portion of their monthly mortgage payments each year. It remains as a deductible under the new tax plan but with a new cap. Taxpayers are now allowed to deduct mortgage interest on loans of up to only $750,000, compared to the previous $1 million. The maximum mortgage debt on which you can deduct the interest also applies to secondary or vacation homes.

 

3. Tax credits from renewable energy products and upgrades

Homeowners who have installed alternative energy upgrades in their homes may qualify for tax credits as long as the products installed are also eligible. Most of these deductions are still available through December 31, 2021, such as the credits for solar electric and solar water heating equipment.

Homeowners are allowed to take a tax credit of up to $500 total for all energy efficiency upgrades. However, that $500 is already a lifetime limit for all qualified improvements combined.

The products used must meet the ENERGY STAR requirements, which are certified to save energy, money, and help protect the environment. Upgrades may include installing energy-efficient windows, doors, skylights, and others.

 

4. Mortgage Points or Prepaid Interest Deduction

If you itemize your deductions on Schedule A of IRS Form 1040, the prepaid interest you paid when you took out your mortgage is deductible in the year you paid it. Paying the prepaid interest or points makes more sense if you plan to stay longer in your home as they can bring down the interest rate on your loan or help with origination fees. This is a one-time deduction that many homeowners can take advantage of — just remember that it is often deductible in the first year.

Typically, a point is equal to 1 percent of your loan amount or $1000 for every hundred thousand borrowed. Tip: Mortgage points can be found on the Closing Disclosure and are often labeled as “loan costs.”

The rules for this deduction will only differ if you refinance your mortgage to get a better rate or shorten the length of your mortgage, or to use the money for other things rather than for home improvements. If your situation falls under one of these conditions, you will need to deduct the points over the life of your loan.  

 

5. Deductions for certain home improvements

  • Home Office

If you are using a part of your home regularly and exclusively for business, you may qualify for some tax breaks. With the new tax law, the home office deduction remains available for independent contractors or self-employed people whose home office is their primary place of business. However, if you’re an employee who has an office to go to but occasionally works from home, this deduction has been repealed.

  • Modifications needed for medical reasons and to age in place

For older homeowners who have medical concerns and plan to age in place, their home remodeling projects could involve modifications to support these needs. The projects may vary but could include installing wheelchair ramps, non-skid floorings, adding stair lifts, widening doorways, and even putting grab bars, shower seats, and anti-slip coating in bathrooms. The good news is that the cost of these modifications can be deductible.

However, there are specific conditions for you to qualify for this sweet tax break. For an instance, you will need a letter from your doctor that will certify these improvements were medically necessary. The modifications also need to exceed at least 7.5% of your adjusted gross income.

 

6. Home Equity Loan Interest

Home equity loans or HELOC allow you to get a tax break on the interest you pay. However, the deductible is applicable only if you’re planning to use it for major home improvements, like remodeling a bathroom or renovating a fixer-upper. It also has a maximum amount for all mortgages, which is $750,000.

The tax benefits of this credit will be most significant to any homeowner for the first years of the loan since most of the payments are going towards interest.

 

7. Capital Gains Exclusion

Any homeowner who has lived in their primary residence for at least two of the five years before they sell it may qualify for this tax break. The IRS may exempt up to $250,000 if you’re single, or $500,000 if you’re married filing jointly, of that gain from your income. This is to lessen the tax hit on taxable capital gains from the sale of your property. This advantage stays the same under the new tax law, and there’s no restriction on how many times you can use it.

 

8. Moving Expense Deductions for Military Homeowners

The moving expenses you pay out of your pocket for a job relocation, especially if it’s over 50 miles farther from your house than your current job, are also deductible.

Understanding Real Estate Commissions

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Whether you’re planning to buy a home or sell your current one with the help of a real estate agent, it is important for you to understand what commissions are and who pays for them.

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A real estate commission is a fee typically paid by the seller for the services of both the listing agent (also known as the seller’s agent) and the agent that represented him (known as the buyer’s agent). This commission is usually 6% of the paying price and is given once the deal has been closed and the payment, whether they be in full or partial, has been given by the buyer. It’s not directly given to the agents but instead passes through the brokers they work for.

Listed below are certain factors that influence how much a real estate commission is:

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Experience - agents who have only been in the real estate industry for a short while will get lower rates than those who have been in it for long. Meanwhile, top agents may get 100% of the commission fee and just give their broker a desk fee.

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Locality - the real estate market may either be moving slowly or fast-paced in different states or localities, and the agent’s commission sways with the state of the market. Another thing is that it’s common for the listing agent to be paid more than the buyer’s agents in some states. Buyers should acquaint themselves with local co-brokerage fees so that they would know if the agent working for them is paid less than the local custom.

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Agreement between parties - the percentage of the split in commission is based on the discretion of the real estate agent parties. There are also instances when the seller or the agent will negotiate on the percentage of the commission.

 
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1. Familiarize yourself with the different people you will have to transact with - Whether you’re a buyer or a seller, real estate agents are the ones who you would most likely interact with the most during the process because they act as your representative to the other part. it’s good to know each person and their specific role during the sale of the property. Here is a brief description of each type:

  • Broker - Brokers rank higher than agents in that they take an exam for licensure with stricter requirements such as completion of eight-level and at least two years of real estate experience. They can choose to either operate on their own or hire agents and they are responsible for the actions of the agents they hire.

  • Agent -  Agents are also licensed by the state, but unlike brokers, they cannot work independently and must be employed by a broker. There are agents which work exclusively for each party in the transaction -- listing agent for the seller, and buyer’s agent for the buyer. It’s important to note that it is not legal in the 50 states for a dual agent, or an agent who represents both the buyer and the seller, to operate.  

     2.  Know the local rates - As what’s stated beforehand, there are several factors that affect commission. But just to arm yourself with more knowledge, it’s best to acquaint yourself with the standard rate of the area where you wish to buy or sell your home.
     3. Know what a buyer’s agency agreement is - This is an agreement between a buyer and a licensed brokerage firm or a real estate agent that stipulates both of the parties’ commitment to the sale and to assure the agent or the firm that they will be duly paid after closing. Standard forms of agreement vary per market and brokerage firms.

The 7 Worst Things To Do When Remodeling Your Bathroom

Remodeling a bathroom is nothing like a piece of cake or a walk in the park because it’s an essential part of the house that involves complicated plumbing. You have to make sure that the new fixtures you choose will not only fit the design but also the bathroom’s layout. You also need to measure out everything even if you’re only rearranging things and adding a few items. If you’re planning to sell your home, the bathroom may not be the first thing that potential home buyers will see but it’s a crucial element that can always make or break the sale.

In the 2018 Cost vs Value Report by Remodeling Magazine, a mid-range bathroom remodel costs an average of $19,134 and has a resale value of $13,422, which recouped the costs by 70.1%. Moreover, the National Association of Home Builders Remodeling Market Index or the RMI survey always includes bathroom and kitchen remodeling as the two most common remodeling jobs.

So for homeowners and sellers alike, here are some of the biggest mistakes when renovating a bathroom you need to take note of:

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1. Not planning according to space and layout.

Experts refer to this mistake as the lack of “spatial awareness,” which could lead to bigger problems later on once renovation starts. What many homeowners don’t know is that spatial planning is the key towards a successful bathroom remodeling. It means you have to fit something in your design without losing its function and still maximizing the space. You need to consider whether you will have enough space to comfortably open the shower without squeezing yourself out of the door, get on and off the lavatory without hassle, or easily open the cabinet doors. It also includes making sure that all elements are in their right places and are close enough to function (Yep, make sure the toilet paper is within your arm’s reach!). Remember that you will use the bathroom every day, so you need to plan your remodel according to your bathroom’s space and layout to maximize convenience.


2. Ignoring ventilation.

While it’s more fun to install a new shower or vanity, never make ventilation the least of your priorities. Don't underestimate its importance especially if you don’t have a window that provides natural ventilation.

Poor ventilation can cause pervasive mold or mildew to grow that can cause you potential headaches. It can also make the bathroom uncomfortable during and after someone took a shower. Install a quality and powerful exhaust fan that can handle the size of your bathroom. Heat lamps can accompany those fans as well since they can reduce moisture.


3. Incorporating improper lighting.

For most of us, bathrooms are our little haven where we get ready and pamper ourselves before facing the world every day. Just as how proper lighting is a key factor to getting a good shot, it is also important in the bathroom. Anyway, no one would enjoy using the loo if it’s poorly lit. If you have plans to sell your home, the last thing you’d want is for buyers to find out your bathroom has unflattering lighting.  

The trick to solving this mistake: plan your lighting fixtures before starting the renovation. Because while these fixtures will be installed last, you need to decide firsthand the lighting that will best accommodate your space and design. You may also have to consider your preferred shower style to help you decide whether you need lighting above the shower or tub.

LED and recessed lighting rarely work well in bathrooms as they can create shadow lines (not good if you’re applying makeup in the bathroom mirror). This is also why vanity lighting is a top consideration. According to experts from This Old House magazine, halogen bulbs set the gold standard to be used in bathrooms. They cost a few dollars more than standard incandescent lights but can last three times as long and also fit most fixtures.


4. Not considering whether there’s enough storage space.

Storage may not be written on your list when you’re planning the remodel. But it shouldn’t be ignored as well if you already couldn’t store most of the things you need in your bathroom. It’s important to give plenty of thoughts on your storage options right from the start.

As much as possible, incorporate plenty of storage space in your design depending on how many people will use the bathroom. There should be plenty of space where you can store the much-needed toilet paper, makeup, cleaning products, and other items. Consider it a game-changer as well if all the family members wanted to have their private bathroom storage. You may opt to install a larger vanity or add recessed shelves to achieve this.


5. Getting the wrong materials.

Remodeling can be an endless battle between functionality and design. Remember that a bathroom deals with more moisture than any other part of the house, so you have to take into consideration the right materials you will use for the job. Avoid using porous materials that are highly susceptible to mold, distortion, and will keep moisture.

Remember that as a homeowner, you may also have to use the strongest cleaning products to clean your bathroom surfaces. Make sure that the materials you use in remodeling your bathroom can also withstand such harsh cleaners.


6. Using mismatched fixtures and unbalanced decor.

Aside from choosing the right materials, don’t be pressured to get the same brand for all your fixtures and furnishings. Just make sure that whatever you use will have the same finish. And while there are countless heights, sizes, and styles to choose from, you only need to know how all those designs will fit and work together.

Remember to follow the “rule of threes” when selecting specific colors and patterns to decorate your bathroom. If you have a smaller bathroom, the last thing you’d want is for it to feel overcrowded or worse, cluttered. Select decorations with unique patterns, textures, and colors that mix well together for that lovely finish.


7. Not knowing when to do DIY and when to seek professional help.

Poor DIY can be the arch-enemy of any remodeling work. It might be tempting to do the tiling yourself or try to get your hands dirty to fix the plumbing, but DIY isn’t always a good practice. Always seek professional help if you want a major bathroom renovation that includes installing a new shower stall or fixing the wiring. Avoid thinking that hiring a professional bathroom remodeler can be expensive because they can actually save you more time, money, and frustration in the long run.

Watch Out! These Neighborhood Features Can Drag Down Your Home’s Value

While there are certain home improvements you can add to your home to boost its resale value, there are also many external factors that can devalue your greatest investment. This is why the real estate cliché saying “location, location, location” will never be debunked or even grow old. Many of the things that can dampen your home’s value can actually be found in your neighborhood.

These factors are already outside the homeowner’s control and what appraisers refer to as external obsolescence. Understanding how these external factors can influence the long-term value of your home is paramount because decreasing property value can pose a challenge when it’s time to sell your home. In the worst-case scenario, you may have to sell it for less than what you purchased it for, causing you to lose money on the table.

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Bad Schools

Proximity to good quality schools is one of the most desirable factors for most home buyers. It is because neighborhoods near top-quality school districts almost always benefit when it comes to property values. However, the disastrous opposite of this is living in a bad school where there is a slim graduation rate.

Neighborhoods near low-ranking schools are less attractive to many buyers and have lower property values. According to realtor.com, the median home price of areas with schools that received a 1 to 3 GreatSchools.org Summary Rating is only $155,000. Repeatedly, there will always be a better demand for homes in good school districts.

 

Disruptive Neighbors

Don’t be surprised if noisy and disruptive neighbors can significantly reduce nearby home values. According to The Appraisal Institute, the nation’s largest professional association of real estate appraisers, a home’s proximity to a bad neighbor can impact the rate of potential decline in property value. Those “bad neighbors” include homeowners with unkempt yards, homes with unpleasant odors and poorly maintained exteriors, or own annoying dogs that are barking at night. Living near a troublesome neighbor can devalue your home by as much as 5-10%. If you’re a home buyer, it’s important to learn what is going on in the neighborhood before you sign the dotted line.

 

Excessive noise pollution—especially if your home is near an airport, train tracks, or highway

Ah, noise pollution. While you can learn to live with it, it is not a desirable factor for most buyers. If you live near an airport, train tracks, a highway, a loud factory, or near an industrial area where there is constant noise and you need to endure it every day, it can be a negative factor when it’s time for you to sell your property. The louder the noise and the more inconvenient it is, the more negative its impact could be on your home’s resale value.

If your home is located next to train tracks, it can deter buyers from purchasing it because they have to deal with the noise at various hours of the day. You will have the same scenario if your property is located on top of a freeway. While it is ideal to live near commuting routes, homes located adjacent to major highways have lower values compared to identical homes far from freeways. Ask your local real estate agent how much of an impact those nearby transportation facilities have on reducing your home’s market value.

 

Proximity to power lines and power plants

Having a power plant in the neighborhood is generally associated with lower property prices because of safety concerns. Likewise, having power lines near your home is also not a good thing. They are vital, yes, because they bring much-needed electricity that helps us live our modern life. But they are also unattractive and imposing. The perceived negative health effects of living near power lines can also make people worry so they may not purchase a home near one.

However, if you’re still planning on buying a home near power lines, it’s best to consult with your local real estate agent to know how much impact it will have on your home’s market value. There may be a reason for the low price so think carefully if it will be a good bargain.

 

Proximity to a cemetery

A graveyard next door can make many people uncomfortable. Some may even find the prospect of living near a cemetery downright terrifying. It isn’t surprising since cemeteries represent mortality so living next to one may not be ideal to many. And while there are certain pros and cons of living in proximity to those graves (just think how quiet your neighbors are), not all people can accept that. Research by realtor.com that used a list of federal and state cemeteries operated by the Department of Veterans Affairs, they found out that the median home price in ZIP codes with a cemetery is about 12% lower than similar homes in other neighboring areas without a graveyard. Many people also find it disturbing to witness a handful of funerals each year and see the road being lined up with cars of mourners.

 

Near a shooting range

While having a gun range nearby can be beneficial to some people because they can take part in such a hobby, a shooting range right next door can actually drag down your home’s value by 3.7%. If you’re looking to buy a home, think twice about purchasing one near shooting ranges. The noise of gunfire, especially from outdoor gun ranges, can be loud and disturbing. There are also environmental and safety concerns since the lead that leached out of spent shells might poison the soil and water. If you’re considering a home near a gun range, research the shooting schedule of the place and figure out whether you can tolerate hearing gunshots now and then.

 

Billboard/s near the home

Studies have shown that billboards also impact real estate prices. In urban areas where billboards stood near residential homes, the closer the billboard is to your home, the more it can lower its value. This is why many communities are implementing a no-billboard policy or enforcing strict billboard controls to protect home values and promote higher median incomes and lower home-vacancy rates.

 

Multiple foreclosures in the area

Multiple foreclosures in your neighborhood can also affect the resale value of your home. Foreclosures imply that something is wrong with the area, so they can be eyesores that can easily drag down the average home values. And since a bank-owned home is less likely to be properly maintained, they can also translate to unsightly yards with stubborn weeds taking over the lawn and poorly maintained exteriors prone to vandalism and deterioration.

According to studies have shown that living within a quarter-mile radius of a foreclosed home can cause a 4% decline in property values. A report by The Alliance for a Just Society also found that aside from a significant decline in the value of surrounding properties, areas with foreclosures also experienced an increase in property taxes.

Understanding The Roles Of Different Real Estate Experts

There are all sorts of questions that arise when you need to start seeking the help of a real estate professional, and one of the most common is: Who does what? The real estate industry is a complex system comprised of different key players, and the role of each person can sometimes be a little challenging to tell apart--which is why you should never feel embarrassed if you get a little confused!

Though many people use the terms "agent," "Realtor," and "associate" interchangeably, these are actually different titles for real estate professionals. We hope to eliminate the confusion by explaining the different types of real estate agents and the different titles that real estate professionals may have.

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Real Estate Agent

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Real estate agents are licensed salespersons who have passed a state-administered exam in order to qualify for the profession. Real estate agents are legally allowed to sell property, but they must act under a real estate broker’s authority and are in no circumstances allowed to work independently.

Requirements for a real estate agent license vary depending on where he/she wishes to be a practicing agent, but in most countries you must be at least 18 years old and have successfully completed college-level courses in real estate. This educational prerequisite must cover the specific state’s real estate laws and practices.

Real Estate Broker

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In the industry’s professional hierarchy, a real estate broker is one level above the real estate agent. The licensure exam for real estate brokers is generally longer and more difficult than a salesperson's exam, as brokers are held to higher standards of real estate knowledge. Without a broker’s license, a person is not allowed to act as a broker, run his or her own firm, or manage a team of agents.

Real estate brokers can choose to work independently, or employ real estate salespersons to whom they could distribute tasks and assign the legwork. And because they are the ones qualified to manage the agents, they generally hold bigger responsibilities. For every firm, there is only one principal broker.

REALTOR®

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The title “REALTOR®” is given to real estate agents or brokers who belong to the National Association of REALTORS® (NAR), subscribe to its extensive Code of Ethics, and pays annual dues. NAR members also belong to state and local trade associations, which means that complaints against REALTORS® can be taken to the local board.

Listing Agent

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A listing agent (also known as a seller’s agent) is a real estate agent or broker who works exclusively with the home seller, represents him/her in negotiations with potential buyers, and operates based on the seller’s best interests.

Listing agents owe a fiduciary responsibility to the seller under a listing agreement, and must guide the seller through every step of the way--from marketing to closing.

The listing agent’s responsibilities generally include the following:
- Helping you prepare and stage your home for selling
- Listing your home in the MLS
- Being on top of the open houses and private home viewings
- Negotiating with potential home buyers

Buyer’s Agent

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A buyer’s agent is a real estate agent who works in the best interests of the buyer, and is expected to help him/her navigate the process of home buying. The duties of a buyer’s agent begin as early as in the pre-approval phase, and should be carried out until closing.

Some buyer's agents never work for sellers, and offer their services exclusively to buyers. Many agents still choose to work with both sellers and buyers, although not always in the same transaction.

The responsibilities of a buyer’s agent generally include the following:
- Helping you find the best home that fits your needs AND your budget
- Negotiating with the home seller on your behalf
- Providing reliable home inspectors
- Completing and processing the necessary paperwork

Broker Associate

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A broker associate is a licensed real estate broker who chooses to work for another real estate broker. This usually happens when a broker wants to work with a larger firm to widen his or her real estate network. Some broker associates pay a flat fee to their employing firm/broker, and others earn a share percentage from each transaction.

Dual Agent

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A dual agent is a real estate agent who represents both the buyer and the seller in the same transaction. If you decide to work with a dual agent, he or she will also represent the home seller or buyer you’re negotiating with. However, dual agency is not legal in all 50 states, so you may have to check if this is a possible option in your case.

Transaction Agent / Transaction Coordinator

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In states where dual agency is not allowed, listing agents who are left with the task of writing an offer for the buyer may choose to act as a transaction agent. This means that he or she does not represent either party but simply facilitates the transaction. They assist in processing the administrative items for a real estate transaction, including gathering and sorting out all the necessary paperwork, opening an escrow account, making sure contingencies are met and disclosure forms are properly signed and filled out, and managing timelines.

What Is A Comparative Market Analysis And How Can It Help You Sell Your Home?

When you’re trying to sell your home, you have to be extra mindful about how you price it. Whether done intentionally or not, overpricing your home is a dangerous move that may cost you a great deal. If you want your home to sit on the market for the shortest time possible without compromising your sale price, you will have to come up with the fair-market value of your home.

Some sellers fear that pricing their home at fair-market value is a lost opportunity to get more from the sale, but professionals guarantee that this isn’t the case. The most competitive price of your home is it’s appraised/fair-market price, and you’re more likely to get multiple offers on your home if you follow it. This will then create competition, and will inevitably drive up the value of your home, which you can then sell at a higher price.

Of course, figuring out the right price of your home isn’t something you have to do alone. In fact, it is highly advisable that you hire a professional to help you locate the perfect amount. Most listing agents will advise you via a comprehensive market analysis or CMA. And, if the CMA is done right, it eliminates the dangers of overpricing, and can ensure that both you and your future buyer can agree on a fair deal.

What is a Comprehensive Market Analysis (CMA)?

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A CMA is a report containing useful data on recently sold properties within the geographical area of the home being sold. The length of the report can vary widely — some being a concise 2-3 page list of comparable home sales, and others reaching up to 50 pages that include comprehensive analyses and guides.

Although the complexity of the report would depend on the agent’s business practice, an accurate and well-researched CMA will show a detailed comparison of properties in the area, as well as give you an estimate of how much your house is justifiably worth.


What does a CMA usually contain?

A CMA usually contains the following data:

  • Active Listings - These are homes that are currently for sale within your area. They are included in the report only for you to be aware of what you’re up against in the current market. If you’re in a buyer’s market where it takes longer than usual to sell a home, it is important to know how high or how low your competition is pricing their homes. The prices of active listings in your area are not indicative of market value, since sellers can ask whatever they want for their homes. Offered sales prices do not dictate market value UNTIL they sell.

  • Pending Listings - These are homes in your area that are currently under contract but have yet to be sold. And since they haven’t closed, they still cannot be considered as comparable sales. However, pending listings do indicate how the market is moving. If your home is priced above these homes’ average list price, you may be looking at more time in the market. But if your home is priced competitively within their range, you could expect to get offers after the same amount of time these homeowners have waited for theirs.

  • Sold Listings - Typically, these are homes in your area that have closed within the past three months (“comps”), and are the homes that an appraiser will use as basis for appraising yours. These are what you have to look at closely when determining the right price for the home you’re selling. Just remember that these comps are going to vary based on the kind of market you are in. In fast moving markets, for example, sales that are more than two months old aren’t considered a reliable basis anymore. On the other hand, if the market has been slow for a while, comps could include homes sold in the past six months.

  • Off-Market / Withdrawn / Canceled Listings - These are homes that have been taken off the market due to a variety of reasons. Most cases are a result of overpricing, but it can also be because of a case of seller’s remorse, unmet contingencies, or seller-agent disagreements. Usually, the average price of homes in this category will almost always be higher than the average price of comparable sales.

  • Expired Listings - Expired listings show a list of overpriced homes. Some of them could be grouped with active listings, which means that they’ve probably been taken off the market for a time and listed as a new listing with a new agent.

How are comparable sales determined?

To create an accurate comparison of homes in the market, a real estate agent or appraiser must include all homes in your area that are similar to yours in size (square footage), age of construction, condition, upgrades, and features. Unless your property is in a rural or very low-density area, you may have to check homes that are outside the usual mile radius.

However, not all for-sale homes on the same street can be considered as comps, as some may actually be in a different school or tax district. These nuances can either make them cheaper or more expensive than yours depending on which area is more desirable.

Also, a house that is the same size as yours can be sold for 10 percent more than yours if it has specific features that address a particular need of the buyer. Modern additions such as green “eco-friendly” updates can also affect the value of the sale. Keep in mind: To “compare apples to apples,” you must closely examine the reason why a particular house is priced as it is.

What You Need To Know About Real Estate Purchase Contracts

One of the most important documents in purchasing property is the purchase contract, also known as a purchase and sale agreement. It stipulates the agreement between the parties, and prepares the transaction for closing.

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What is a real estate purchase contract?

A real estate purchase contract enumerates the participating parties’ -- could be two or more -- responsibilities during the period the property is taken off the market. It must be signed by both parties (buyer and seller), and it’s required by the United States Statute of Frauds to be enforceable. In essence, a real estate purchase contract is a binding, bilateral agreement with legal capacity to buy, exchange or transfer real property. Take note that the contract is based on a legal consideration, meaning that consideration is a medium of exchange for the property being purchased, which in most cases is money. There are other forms of consideration such as a promise to pay, or a property in exchange.

 

What does a real estate purchase contract contain?

  • Identification of the parties and details of the real estate property (the exact address of the property and a clear legal description)

  • The agreed upon purchase price and corresponding terms

  • The amount of the deposit

  • The essential details, rights, and obligations of the contract

  • Real estate taxes and special assessments

  • The condition of the property, what is included, and what is not included

  • Closing date and costs (and who shoulders them)

  • Terms of possession and contingencies that must be met

 

What is a contingency and what should be listed in this clause?

Contingencies serve as a preparation for the possibility of operational problems. The more thorough and defined a contingency clause is, the more it minimizes the potential loss for both parties. In the case when a contract is already in the works, a settlement contingency is used. This protects the buyer if the sale fails since the property is not really sold until the settlement or closing is finalized. In most cases, this type of contingency forbids the seller from accepting other offers on the property for a specific period. If the buyer’s home closes by the specified date, the contract remains valid. If the home does not close, the contract can be terminated.

Here are the common items listed in the contingency clause:

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Mortgage - A contract will usually require that the transaction will only be finalized if the buyer’s mortgage is approved on the same terms and numbers as are identified in the contract.

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Appraisal - This may be required by the mortgage company and the deal should be contingent upon an appraisal for at least the amount of the selling price.

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Professional Inspection - There are instances when upon initial negotiation prior to the handing out of contracts, the buyer agrees to taking the property “as is,” which is common in foreclosure deals when the property has been subject to neglect, and would most likely be torn down and rebuilt after purchase. But there are also contingencies in which a professional inspection is needed to negotiate repairs with the seller. But if the damages are so bad and/or the seller refuses to shoulder repairs, the sale can fall through.

2 important tips for getting the purchase contract right:

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1. Know your terms and adapt language and terms as needed. Take note that the standard language of a contract may vary in different situations, and real estate laws vary between states--which means standard forms are not the same in every location. Given that condition, you can go over the agreement, check for changes, and adjust accordingly.

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2. Consider getting professional assistance from a real estate attorney or real estate agent. If it’s your first time to engage in this kind of transaction (or even if it isn’t), it’s advisable to get help from the professionals. They can guide you through the whole process of either making or doing the contract, and will point out important things to consider that you might miss.