Top Things You Should Do Before Buying A Rural Home

If you’re planning to move away from the city and live a more simple life in the country, take note that it does not come without its unique set of challenges. Here are a few tips to help you when you decide to buy a rural home.

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1. Specify your needs and wants.

Before you plan to buy a home in a rural area, it’s best for you to check with yourself what your reasons for buying are. What are you going to make out of this property? Are you using it as a vacation home or a primary residence? Are you going to use the land for agricultural purposes? Do you need your lot to be arable? One way to do this is to make a list of what you need and want your living conditions to be. Include your non-negotiable conditions and nice-to-haves. What you put into this list will help you narrow down the rural areas and properties that would suit you, and would also be of useful information to your real estate agent.

 

2. Familiarize yourself with the area.

Unless you’ve lived in this area before and decided to move back, the ideal action when you’re moving to an unfamiliar location is to rent in the area first. However, time and other resources can sometimes make that impossible—leaving you with the option to simply do your research on the area. If the agent you hired happens to be from there, you can ask them to give you information but make sure to still do YOUR homework. Here are some items to cover:

  • Climate and weather

  • Prevalence of natural disasters

  • Accessibility to hospitals, fire station, police station, veterinary clinic

  • Proximity to the town proper or urban center

  • Food resources native to the area

  • Local customs of the people

 

3. Consider the costs of maintaining the property.

The cost of maintaining the property depends largely on the size of the house and the land. The more acres you have, the more you'd have to spend. You're also going to need bigger tools in place of the ones you have, or you may need ones you may not have while living in the city such as a 4-wheeler truck or a tractor. And remember that the costs are not just limited to the monetary one; you also have to include the cost of your labor in cleaning waste, mowing the lawn, etc. Under certain circumstances, you may also need to consider if you could afford an extra hand in the maintenance. Take all of these into account and deliberate if you could afford and sustain all those expenses for the next 5 years and more.

 

4. Review utilities.

Utilities in a rural area will differ greatly from those used in suburban areas. An important thing to note is that rural utilities are not tied to commercial systems. Check for each of these utilities and if anything happens to not be within your preference, negotiate with the seller (and the community) how it could be made to suit your needs.

  • Septic systems - rural areas depend on septic systems for waste disposal. If the house you’re planning to buy is hooked to a septic system, it lowers your taxes because municipalities would only bill those who are connected to a public sewer system. The catch from this is that you may have to replace the system should it break down, and that would be costly. A way to address this is to include a contingency on the septic system requirement of inspections and a septic pump on your contract with the seller.

  • Power supply - power lines in rural areas tend to be flaky due to weather disturbances

  • Well water systems - some rural homes could only utilize well water systems instead of  a public water source. The advantage to this is that you could cut down on your water bill as water from this is free, and you would only have to pay for electricity that keeps it running. But the downside to this is that it comes from groundwater, and would require tests and routine maintenance in order to make sure that the water is safe for use.

  • Heating systems - Homes in suburban areas are heated by natural gas, while those in rural areas use either oil or propane. If the house uses oil, the BTU is higher than with gas, and it usually costs less than a gas-fired furnace. But take note that it’s more costly to purchase oil instead of natural gas, and it requires more routine maintenance. Alternatively, if the house uses propane, the average life expectancy is higher than with a gas fired furnace. The drawback to it is minimal compared to the others in that its tank is a sight for eyesore. But that could easily be remedied if you opt to have the tank buried.

 

5. Clarify what’s included in the sale.

Specify in the contract what feature, building, and structure of the home you think are included in the sale because it could be taken down or away by the seller. At the minimum, and if applicable, the sale should include these:

  • Existing farm or hunting leases that give (or restrict) other people legal access to be on, farm, graze, hunt on, or camp on your property

  • Fencing and fence posts

  • Benches

  • Bridges

  • Feeders

  • Livestock panels

  • Sheds, which could either be movable or portable

  • Miscellaneous equipment such as shovels, plows, tractor, etc.

 

6. Acquaint yourself with local resources.

Ask assistance from local offices regarding issues that you need help on such as property maintenance, ecosystem conservation, etc. Here is a list that could help you with your specific needs:

  • County USDA Farm Service Agency (FSA) office - After purchasing the property, you have to take the deed to the FSA office to register it and be informed and consequently transfer any Conservation Reserve Program (CRP) or base acre payments to you. They educate rural homeowners through a variety of programs on matters regarding conservation such as erosion control, wildlife habitat, pond construction, and the likes.

  • Southern States - It’s an established farm co-operative that may help you with guiding you through your concerns regarding agriculture -- what the best feeds are, what fertilizers to use, etc. Check if Southern States has a cooperative in your location, or find another supplier if they are not within your vicinity.

  • Local rural lender - Primarily, they can give you contacts to local lawyers and other service providers such as farming managers and dozer operators. They are also equipped with vital local knowledge that may help you with your concerns.

 

7. Know your boundary lines.

The step to guarantee how many acres of land you’re buying (and will be taxed on) is to visit the county’s assessor office. They could present you information on the property with a description of its metes and bounds. Check if there is a difference from the original listing and ask the assessor to explain.

 

8. Check the title insurance.

Inspecting the title insurance lets you know of the issues associated with the property that may not have been disclosed such as the property being recorded as a toxic dump site. There are also other issues that could be attached to it such as unknown or unresolved liens. The county’s recorder can pull up this document for you as it is available to the public.

6 Misconceptions About Selling Property That You Should Know About

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There are several misconceptions that you might fall trap to when it comes to selling property. If you’re planning to put your house in the market, make sure that you don’t make the following mistakes.

 

Misconception #1: Organizing multiple open houses will surely bring in more buyers.

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Having open houses can be laborious for you as a seller; all that prepping, moving furniture, and showing strangers around can be overwhelming and time-consuming. But that’s no reason to skip it altogether! It has been proven time and again that conducting several open houses could really draw in serious buyers. However, sellers must be wary of some “interested buyers” who go just to open houses as voyeurs: wanting to know how people live, and getting ideas for home decor. The best way to do this is to have a strategy so that your time, energy, and resources don’t go to waste.

Open houses are usually held during weekends, but you can make time for it during the weekdays, as most serious markets are inclined to peak during the week. Also, have your agent make good use of technology to put up your open house dates in apps and websites where homebuyers are set to look for listings.

 

Misconception #2: Home inspection on your end is a waste of time.

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Buyers will most likely subject the house to a home inspection once they’re serious about buying it. But just because buyers are set to do this doesn’t mean you can skip this for yourself. Having your house inspected by a professional before putting it up for listing will help you address issues in the house you might have missed. Also, presenting the home inspection report to prospective buyers will make room for transparency in the transaction -- which is always a good thing.

 

Misconception #3: It is best to decline an offer given right after putting your house on the market.

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Sellers normally get overwhelmed after getting a first offer on their home, which then leads to the decision to decline and wait for better offers to come in. However, this is not always the optimal choice in real estate selling, especially in slow markets where it could take weeks or even months to get another offer. If the first offer you get is reasonable and is not below your listing price, then it would be wise for you to consider it.

 

Misconception #4: Overpricing the home will drive up its value.

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As a seller, you want to safeguard your asking price, so it may seem logical to mark it up to make room for negotiations should the prospective buyer ask for a price reduction. Keep in mind that your goal as a seller is to not keep the house in the market for too long, and having it unreasonably priced may do just that. Buyers could be intimidated and may not look at the house in the first place. Be realistic in how you price your home -- consider the home’s location, the surrounding properties, and current market conditions.

 

Misconception #5: It is good to let the house sit in the market for a long period of time to give way for better offers.

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There are several factors that keep a property in the market for too long such as poor location or shoddy housing condition. But one common factor is related to the above number: property is not competitively priced, and the seller may be too unrealistic with the asking price that they’re unwilling to level it with market conditions. Remember that having your home sit in the market too long can depreciate it. The longer you persist in selling an overpriced home, the more you’ll encounter buyers with lowball offers.

 

Misconception #6: Lavish home improvements will increase the value of your home.

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While a home improvement can increase your home’s appeal to buyers, keep in mind that doing it does not assure a complete return on investment as you may only recoup a percentage of your expenses. Keep the home improvements practical and minimal; improving your lighting and mowing your lawn can already make a difference without to spend too much.

8 Of The Most Unexpected Things US Homeowners Found In Their Properties

The process of selling, buying, and moving into a new home can be very complicated and overwhelming. But on the lighter side, it is also a journey full of fun and exciting discoveries. Part of a homeowner’s discovery and realization is finding their ideal neighborhood, their dream backyard, their perfect kitchen, and a wall full of snakes... Wait, what?!

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Yes, you’ve read it right. As bizarre as it sounds, homeowners from around the world have discovered many strange and unexpected things on their properties. Some may have lived in their home for a couple of months before encountering weird things, while others already owned their home for years before finding things that are impossible to anticipate. Here we reveal some of the strangest discoveries that happened in our own backyard. Well, you may consider them to be a fun and interesting part of real estate—just don’t forget the hard-earned lessons you can pick up along the way.

1. Some serious cash

Well, the first word you can think of is: lucky, isn’t it?

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Artist Josh Ferrin discovered the treasure stashed away in the attic of his home in Bountiful, Utah. When he brought up the discovery—a total of $45,000 in cash and coins—to his family, there was some disagreement on whether they should keep it or return it to its original owners. To teach his two boys the value of honesty, Ferrin returned the money to the previous homeowners despite the thoughts of car and house payments in his head. He says it was a “teachable moment” for his kids that he would never get back again. How cool and sincere was that?

 

2. World War II love letters

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In this digital day and age, sending and receiving handwritten love letters is a practice that can really make your heart melt.

When Zac and Shannon Carter bought a renovated 1970s house in Pensacola, Florida in 2016, the home inspector informed them he discovered a stack of old letters in the original cabinetry. It wasn’t until the Carters moved in that they realized the letters, postmarked from 1948 to 1949, contained a blossoming love story between a World War II veteran and his sweetheart.

They couldn’t help but read the vintage letters and understood that the letters belonged to the original homeowner, veteran William Middleton. Middleton wrote them while he was in school in Georgia after serving in WWII and sent them to a woman named Doreen in Canada. The Carters later learned that the two eventually got married and had children, so they passed on the letters to them to let them read their parents’ wonderful blossoming story.

 

3. An old cemetery

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While the first two discoveries were pleasant surprises, not all homeowners were fortunate enough to encounter such things. This one is quite a good setting for any ghost or haunted story.

Of all the things homeowner Helen Weisensel can find in her century-old home in Jefferson County in Wisconsin, nothing can be as disturbing as unearthing a child’s skull in the basement while they were doing much-needed repairs on its foundation.

They soon found out that her home was built atop an old, long-forgotten cemetery. Archaeologists and local historians even estimated it to be among the earliest burial ground in the county, and more human remains were uncovered.

Subsequently, Weisensel’s nightmare started. She was flooded with pertinent inquiries from her neighbors asking her if she’d experienced weird things happening in her home. And since her remodeling project involved her trying to fix her house and do some serious foundation work, it all became impossible the moment her home was discovered to be an official historic burial ground.

 

4. Mammoth bones

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Unearthing something of a prehistoric significance is already a delight of its own. Well, more so if you made the discovery in your own backyard. When Iowa man John and his two sons went blackberry-picking near a creek on their property in Oskaloosa in 2010, one of his sons noticed what he believed to be a ball in the creek.

That piqued John’s curiosity and interest in archaeology when he realized that the “ball” was no toy—it was actually a 4-foot-long femur of a mammoth dating back as far as 100,000 years ago. That started a historic archaeological event as John’s backyard has become an excavation site, with the University of Iowa’s Museum of Natural History leading the search.

Besides the mammoth’s femur, they had found its feet bones and thoracic ribs. Experts say while it is not unusual to find mammoth fossils in Iowa, it’s a rare find to discover so many bones belonging to the same animal in the same place.

 

5. A wall full of snakes

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Here we have Ben and Amber Sessions, who found what seemed to be their picture-perfect five-bedroom rural home in Rexburg, Idaho. It seemed like a real deal since it was listed for just over $100,000.

Until they found a snake in their yard, which is no big deal since they help keep mice away. But soon after moving, they found dozens more every day. Ben even found over 40 snakes in his yard in a single day. Soon, they also spent sleepless nights listening to what seemed like slithering noises on the walls.

When Ben removed a panel of siding it revealed dozens of snakes living in their crawlspace. Their new dream home was in fact what’s known by locals as “The Snake House.” It was sitting atop an enormous snake hibernaculum, a kind of den where the snakes gather in large numbers to hibernate in winter. What’s more troubling is that they also found out that their tap water (which has a curious taste and smell) was infested with snake musk and feces, a good way for anyone to catch salmonella and other diseases. The Sessions also referred to their home as the “Satan’s Lair.”

The home also had a distraught history of owners leaving in haste after finding out the snaky problem. It turned out that the only way to neutralize the issue of a snake den beneath the home was to raise the entire house off its current foundation and lay down a new concrete foundation beneath it. But that job would cost a massive amount, even more than $100,000 at that time. So in 2009, the Sessionses also ended up abandoning their home and had to file for bankruptcy.

According to real estate experts, the Sessions’ story is a valuable lesson for all home buyers to give importance to due diligence when searching for your dream home.

 

6. A hidden room full of toxic black mold

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Back in 2005, young couple Jason and Kerri Brown with their 2-year-old daughter found a sweet deal in a form of a five-bedroom, two-bath house that was in foreclosure for $75,000 in the cozy town of Greenville, South Carolina.

As they started renovations on the fixer-upper, they removed bookcases in a bedroom when it revealed a passageway that led to a hidden room—a secret corridor!

Well, it can be an exciting discovery for any new homeowner especially if it looks like a passageway towards a hidden world like Narnia. However, it turned out the secret room has a serious mold problem and that the house is contaminated with toxic black mold. What seemed to be a pleasant surprise turned into a nightmare for the young couple.

Inside the room, the first thing they found was a chilling note from the previous owner saying: “You Found It! Hello. If you're reading this, then you found the secret room. I owned this house for a short while and it was discovered to have a serious mold problem. One that actually made my children very sick to the point that we had to move out." It was from George Leventis, who’d lived there for a while. After discovering the problem, since he has little money and was unwilling to take the matter to court, he stopped paying the mortgage and moved out. But not without leaving the note to serve as some warning.

The Browns have taken it very seriously and hired an environmental engineer to do further testing. The house’s toxicity levels turned out to be so high they have to permanently cancel their move-in plans and took the serious matter to court.

 

7. A live artillery shell

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There’s the story about our love letters dating back in WWII. Then there’s this real bomb scare for a family who lived in Goshen, Indiana. Wally and Linda DeForests found a live mortar round in their basement as a kind of a housewarming gift after moving into their home in 2010.

Linda initially discovered the approximately foot-long military-grade weapon sitting in a cubby space while she was hanging things on the wall. She even told her husband she found a “torpedo.”

The DeForests have had help identifying what it was from their consulted family friend and army veteran Joshua Blackenship, who kindly explained that it was either a round for a mortar or a lightweight anti-tank weapon.

The family contacted the Elkhart Police Department’s Explosive Ordnance Disposal Unit to come and take it away. Some police officers discerned the old mortar round may have been from the Korean or Vietnam War. Well, it’s a quite a unique way for the DeForests to be introduced in their new neighborhood and be welcomed in their new home.

 

8. Faberge figurine

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Since we started with finding some hard cash, let’s cap off this story with another amazing find. It’s a common thing for many homeowners to display porcelain figurines in their homes, but do you have any idea how much does one figurine cost? A particular figurine was found stashed in an attic in upstate New York of descendants of a gallery owner who bought it in 1934. The tiny statute was unlike no other because it was one of only 50 in existence and was crafted by renowned Russian jeweler Faberge. It was studded in precious jewels and diamond and was sold at an auction for a whopping $5.2 million! Dated to 1912, the particular figurine depicts a personal bodyguard to royalty and was given by Russian Czar Nicholas II to his wife.

 

Bottom Line

Let’s incorporate the lesson we mentioned in the Snake House story: remember the importance of due diligence. Home buyers should “do their homework” before buying what they’d like to be their dream home. While it can be a time-consuming process, you can ensure that you’ll get the most out of your biggest investment. Many unwanted surprises can be avoided by asking the right questions, hiring an experienced local real estate agent, and giving importance to a home inspection. Following many of those established pieces of real estate advice can help lead you to your ideal property and avoid ending up in a house full of snakes (Yikes!)

The Things You’ll Love and Hate About Living in an HOA Community

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Love: Offers a range of amenities and recreational areas

You can have access to a range of amenities being offered by the HOA, such as swimming pools, gym or workout stations, and tennis court. There are also recreational areas for residents, like walking trails, jogging paths, playing fields, and community center.

Hate: Restrictive rules and covenants

While they differ from community to community, each HOA has its own declaration of “covenants, conditions, and restrictions” or CC&Rs. These are the rules that residents have to follow while living in the community. The goals of these rules are not to meddle but to maintain the attractiveness of the neighborhood and the value of the properties. However, some homeowners may find the covenants to be too restrictive or unreasonable since it prevents them from enjoying the freedom they want to have over their home.

Love: Less work and maintenance

Living in an HOA community could mean less work for you as a homeowner. HOAs handle services such as exterior home repairs, lawn care, snow removal, and pest control. They are also responsible for the upkeep of common areas, buildings, and shared amenities.

Hate: You can’t paint, decorate, or renovate your home in the way you like it

Those CC&Rs mean the modifications you can do to your home is limited. Before you can push through with painting your home in your chosen colors, installing a play area or swing set, decorating for the holidays, or adding a new room, you may need to first seek approval from the HOA. If you don’t like someone telling you what to do with your beloved home, an HOA may not be right for you.

Love: The community’s uniform look helps keep home values

The appearance of homes within an HOA must meet the association’s standards, which helps maintain the neighborhood aesthetic and higher home prices. Those desirable amenities can also help increase your home’s value.

Hate: All those associated and mandatory fees

HOAs charge a monthly, quarterly, or annual fee that primarily goes to the maintenance and handling of the common areas and buildings. The fees vary depending on the neighborhood’s location and the amenities being offered.

Love: Handles disputes between neighbors

Rather than getting into a nasty confrontation with your neighbors about their unkempt lawn, noisy dogs or loud parties, you can ask the HOA to handle the dispute on your behalf. The HOA can send them a notice or a warning for any activity that well violates the rules and regulations.

Hate: The threat of foreclosure after missed payments

While laws vary by state, an HOA can move to foreclose on your property if you fail to pay the monthly dues or have delinquent assessments by placing a lien on your property. So make sure your budget can handle those fees so you won’t fall behind on payments and risk losing your home.

Love: The community newsletters

The regular news, tips, and reminders can keep homeowners updated and equipped with valuable information.

Debunking The Most Common Misconceptions About Mortgage Refinancing

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Refinancing a mortgage can provide lots of advantages for homeowners. They can lock in a lower interest rate or shorten the term of their loan that can help them save thousands of dollars in their monthly mortgage payments. However, there are still lots of confusion about the refinancing process that hinder them from reaping its benefits. If you’re one of those who have been contemplating if you’ll jump at the opportunity, we debunk the most common refinancing misconceptions to help you decide whether it is a smart choice for you.

 

“I’m afraid I won’t qualify.”

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While there are specific eligibility requirements, many homeowners do qualify for a refinance. Even those who haven’t built up a lot of equity in their homes or are struggling to get their credit back on track might qualify. The guidelines have now loosened up that homeowners who thought they couldn’t refinance before because of credit or employment issues just need to approach a lender to know the process. Don’t let your ‘low financial self-esteem’ stop you before you even get started.
For an instance, government programs such as the Home Affordable Refinancing Program or HARP can help you refinance as long as Fannie Mae or Freddie Mac own your loan; it was originated on or before May 31, 2009, and your current loan-to-value ratio is greater than 80%.


“There’s no reason for me to refinance.”

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Believe it or not, there are many reasons for you to refinance. The primary reason for many homeowners is to have a lower mortgage rate, which leads to lower monthly payments. It’s also applicable if you want to shorten the life of your loan and save money in interest paid over the life of the loan. Refinancing is also possible for those who have an adjustable-rate mortgage (ARM) and now want to have a low fixed-rate. Homeowners who are planning to stay in their homes for a while can also refinance to fund home repairs and other major purchases.


“It will take too much time and effort.”

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Sometimes just the thought of providing the paperwork can be the most daunting part of any real estate transaction. Refinancing is no exception. Many homeowners may find it a burden to provide the documents needed, including pay stubs, tax returns and proof of income (W-2 forms and/or 1099s), credit report, statement of assets and debts, and even title insurance. But if you will think about it, you can easily access most of these requirements anyway if you’ve safely stored them for verification.

If you really cannot locate your copies of those documents and/or you’ve lost them at some point, you can still find that refinancing is worth the hassle. Streamlined refinancing is being offered for homeowners who have government-backed loans such as the FHA, VA or USDA loans. It’s an option that can save them time and money by expediting the refinance process. If you apply for a streamline refinance to simply reduce your interest rate, there may not be a need for a new appraisal or an income verification.

Just remember that while it might not be the case for most conventional loans, the extra time and paperwork can be worth it when you eventually see your monthly payments come down and finally save more cash.


“I can’t refinance with another lender.”

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Refinancing is a great opportunity for you to search and compare lenders and mortgage rates so it's a great opportunity to get a better deal with a new lender. It’s also important to shop around and compare loan options from different types of lenders, such as from a local bank, an online lender, or a mortgage banker. You can also venture out of your town or county when seeking lenders.


“Shop around for rates, and don’t rely on banks in your area," said Bryan Marsden, editorial coordinator of FatWallet.com.


“I’m waiting for mortgage rates to drop.”

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This is a common misconception that most homeowners have about refinancing. Yes, refinancing when mortgage rates are low can be a very smart decision. And yet, there’s no way to know when rates will go lower so it’s quite a gamble to wait every day for it to drop. Opt to refinance depending on your situation, your goals, and whether it makes sense for you.



“I’ve missed my chance to refinance.”

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And speaking of waiting for the “right” time, many homeowners think they might have missed their chance to refinance because of rising interest rates. However, experts are saying otherwise. As long as you’re sure on the costs associated with refinancing and confirm that it will lower your monthly payments, it’ll be an appropriate choice for you regardless.

If you think you are moving soon, a refinance isn’t a smart move because you may not recoup the closing costs you spent to save cash on your mortgage payment. Experts recommend that you look for the break-even point of the loan—your total closing costs divided by monthly savings—where you’ll start saving money in your mortgage payments.

 

Bottom Line

Refinancing may sound complex and overwhelming, but once you know what you’re getting into, you’ll understand that it’s a great opportunity for you to save some serious cash before it’s too late. Remember to choose the right refinancing product depending on your time frame, goals, and plans.




7 Reasons Why Buyers and Sellers Shouldn’t Ditch The Home Inspection

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The biggest mistake that both home buyers and sellers could make is skipping or waiving the home inspection due to various reasons, like during a bidding war. And while a home inspection contingency clause is almost always included in a purchase contract, some buyers agree to waive the vital inspections to win their dream home in a competitive market.

Often, sellers skip it to save time and money, not knowing it may leave them little to no time to address any important concerns before they put their home on the market. However, it’s a common ingredient for regret and unexpected costly repairs that could’ve been avoided.

Here are seven valuable reasons why both buyers and sellers shouldn’t skip the home inspection:

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Remember that there’s always more to a home than what meets the eye. It may look beautiful and something that exists in a storybook, but the truth is it’s almost impossible to know all about its details and issues. There are ugly homes with problems that are only “skin-deep,” while there are great-looking homes that have bigger problems like termite infestation and mold. These issues can be missed even after multiple showings. Even new construction homes can have issues unknown to buyers that only a home inspection can uncover.

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Even after years of living in your beloved home, a home inspection can reveal unexpected flaws that you didn’t even know existed. When did that hole in the kitchen ceiling become so big? Was my dog responsible for all those scratches on the walls? Hidden problems in the foundation, roof, or wiring you didn’t even notice as the homeowner could lead to larger issues.

 
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A home inspection ensures that there won’t be any unwanted surprises in the form of serious safety issues. Through a thorough investigation, both parties can make safety their number one priority. If serious safety issues were found, the seller can promise to make the necessary repairs to guarantee that the home is safe and habitable.

 
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The results of a home inspection can be a great tool for transparency and future planning, especially in estimating future expenses. Buyers can use the detailed findings to plan for future upgrades, calculate for repairs, and carefully prepare their budget once they become homeowners. Meanwhile, sellers can use it to plan for renovations and deal with them as soon as possible. That way, they can continue with the home sale with fewer contingencies and minimal setbacks.

 
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Having a home inspection performed can give you the power to make negotiations with the seller to offer a lower price for the home. Depending on the information gathered, you can include words in your purchase contract requesting the seller to make the repairs. Or if they are unwilling to do so, you can ask them to estimate the costs and take that amount off the final purchase price.

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You can use the home inspection report as a leverage when negotiating for a better selling price. By knowing the true condition of your property, you can deal with any problems on your own terms and fix them beforehand. You won’t have to deal with any of the buyer’s request to lower the price or arrange for repairs, which could cost you a huge amount of money or even the sale itself.

 
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While a home inspection can cost a good sum of money, it’s a significant investment that will save you from any costly repairs down the road. Things like safety hazards, pest problems, or water leakage in the basement can end up costing you a lot more money once you already own the home. And all those issues and defects could have been revealed by a home inspector if you only allowed an inspection to push through.

 
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The home inspection phase can be a huge pitfall for both parties in a real estate transaction. Sometimes a transaction doesn’t move forward because the buyer and seller couldn’t agree on the repairs requested from the inspection. A buyer may not feel entirely comfortable with the findings while the seller may refuse to accept more requests. Having a home inspection ahead of time can help expedite the process for both the buyer and seller.

Worst case scenario: a buyer can get cold feet and will not proceed anymore with the transaction if they’re not satisfied with the negotiations after the inspection.

 
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The inspection eliminates all the possible “doubts” and “what ifs” of both parties. Buyers will feel certain and satisfied with their purchase, eliminating buyer’s remorse and giving them a peace of mind. Sellers can also feel confident once the real estate transaction was completed because they can avoid the threat of any legal action due to improper disclosure. A home inspection is a great way to make both the buyer and seller feel positive that they have reached a fair deal in the transaction.

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.