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Is an FHA-Insured Mortgage Right for You?

by Jon Smith, CRB, CRS, GRI

The days of putting little money down to buy a home aren’t over.

After years of risky mortgages backed up by small down payments, most lenders aren’t underwriting mortgages without a significant sum up front and a high credit score. But a decades-old loophole can still put home buyers in a house for next to nothing. Mortgages insured by the Federal Housing Administration (FHA) allow borrowers to get approved with a down payment as small as 3.5% of the agreed selling price of the house and don’t require a high credit score.

As millions of Americans have come to realize, getting into a house for little money down has its disadvantages. Borrowers who’ve pumped little equity into their home are often more willing to walk away from it during lean times that keep them from making payments; this risk is further elevated when home values are in decline and troubled borrowers are unable to refinance or sell the home at a price that covers their losses.

Still, FHA-insured mortgages are far less risky than the subprime mortgages that lenders originated before the housing bust. FHA-insured mortgages require documentation and verifiable proof that the borrower is capable of making their monthly payments. (Most subprime mortgages didn’t require such proof.)

The looser terms of FHA-insured mortgages have helped make them more popular. Today, FHA-insured mortgages make up about 25% of the mortgage market, up from 3% in 2006, FHA commissioner David Stevens said in a speech earlier this month. In June, the FHA insured 194,000 loans – the highest monthly total in the agency’s history, according to Stevens. For fiscal year 2009, the dollar amount of FHA-insured mortgages is likely to reach 30% of mortgage originations, up from around 4% in 2005 and 2006, says Stu Feldstein, the president of SMR Research, a mortgage-data tracking firm.

“FHA-insured mortgages are one of the only games in town, especially if you can’t qualify for a traditional mortgage,” says Gibran Nicholas, the chairman of the Ann Arbor, Mich.-based CMPS Institute, which trains and certifies mortgage lenders and brokers. “Now that the subprime market is gone, FHA is filling the gap.”

Ten Tips To Make Your Small Room Appear Larger

by Jon Smith, CRB, CRS, GRI

When deciding to sell your home it is important to take the steps necessary to ensure that the rooms in your home are properly “staged” to appeal to prospective buyers. This may harder than expected as we all have rooms in our home that may be on the smaller side and hard to decorate. What can really be done with a small room?

 

Below is a list of ten tips to help you open up the small spaces in your home to appear larger and inviting to prospective buyers.

 

 

  1. The use of light colors such as pastels, neutrals and white are a better alternative to “bright” or dark colors.
  2. For your furniture, rugs, etc. you should select different shades and textures of the one color you select from above.
  3. Lighting is critical when trying to create an illusion of a larger space. Recessed lighting is ideal for smaller spaces. In the event that this option is too costly, torchiere lighting is a viable alternative as the light bounces off the ceiling and back into the room.
  4. Declutter the room.
  5. A light colored floor and ceiling will open up the room and make it appear larger.
  6. Mirrors are a must as they add dimension to the room by reflecting images, light and colors. Mirrors provide a “see through” feel to the room.
  7. Remove large bulky furniture from the room. One or two smaller pieces placed closer to the walls are better than one large piece of furniture in the middle of the room.
  8. Don’t clutter the walls with a collection of pictures. Replace the many pictures with one larger picture or painting.
  9. Take advantage of the view of your yard and bring the outside in by allowing prospective buyers to see out into your flowerbeds or gardens.
  10. Glass tables such as a dining table, end table or coffee table will maintain the “open” and airy feel in a small space.

Garage Sale Organizational Tips

by Jon Smith, CRB, CRS, GRI

We find that many families use a change of residence as an opportunity to dispose of many outgrown and no-longer-wanted items. It beats taking the items with you and can even put several hundred dollars in your pocket toward buying furnishings for your new home.
As Realtors®, we are expected to be wise in all matters relating to a change of residence. Even though garage sales are far from our primary field of expertise, allow us to pass on the best advice we have picked up over the years.

Planning

Allow plenty of time – three to four weeks – to prepare. Choose a date that will not conflict with holidays or other events that might lure prospective customers away. More people are likely to show up on weekends than weekdays. Your sale is likely to attract more customers if you join together with neighbors in a larger effort with more merchandise – some homeowner groups sponsor neighborhood sales that are proving popular.

What to Sell
Practical household goods, bicycles, children’s toys and clothes, sports equipment and garden tools are popular. Adult clothing has less appeal – price accordingly. All items should be clean, polished and in good repair.

Display

Merchandise your items attractively in neat, clean surroundings. Paper tablecloths offer a pretty setting for glass and ornamental items. Cluster things in categories. Place more desirable items toward the back so browsers can notice other merchandise on their way to the most popular items. Have a 25-cent miscellaneous table for young shoppers. Clothes should be sized accurately and hung on a temporary rack.

Logistics

Locate your appliance table near an outlet so customers may try before they buy. Set aside adequate parking and a place to load large items. Have plenty of bags and boxes on hand for packing and newspapers for wrapping glass items. Ideally, a place for trying on clothing should be provided.

Promotion

Place a classified ad in the local papers – include three or four of the more tantalizing items for sale, directions and other pertinent details (you may or may not want to include your phone number). Take advantage of free publicity provided by bulletin boards in grocery stores and other public places. Provide directional signs to your property using an indelible pen. If your house is listed for sale, have your Realtor® hold an open house on the same day, thus increasing traffic for both the house and the sale.

Pricing

Visit other sales to get an idea on how to price things. Remember that garage sale shoppers are looking for deals, so be prepared to bargain and lower your prices. Really valuable items such as antiques should not be sold at a garage sale; they are not likely to bring the desired price from bargain hunters. Nothing is too worthless to be valuable to someone, so have a giveaway box for old magazines and other assorted odds and ends.

Staging

Post a notice that all sales are final and payment must be in cash. Keep ample change in a cash box in a protected spot. Keep a record of sales, especially when there are several sellers. One recording method that is simple and efficient is to use small adhesive stickers to price items, then transfer the sticker to the name of the seller when the item is sold.

Know Your Buyer Responsibilities

by Jon Smith, CRB, CRS, GRI
Your role during the escrow process should be an active one. Don’t wait for the seller to volunteer information – stay on top of it yourself and take reasonable care, along with me, your agent, to protect yourself.

For example, when you review the Transfer and Disclosure Statement, TDS, keep an eye out for questions answered "unknown" or left unanswered. Ask about them until you are satisfied with the answers.

Let's talk about your specific concerns or plans for the property. Concerned about the open parcel behind the house? Ask about it!

You may also wish to investigate the following non-physical conditions, including:

  • Governmental zoning, requirements and limitations
  • Governmental permits, inspections or certificates
  • Limitations, restrictions and requirements affecting use of the property
  • Rent and occupancy control
  • Schools
  • Proximity and adequacy of law enforcement, crime statistics, proximity of registered sex offenders (see section on Megan’s Law) and other criminals
  • Proximity to fire, police and other services
  • Proximity to commercial, industry or agricultural activities
  • Existing and proposed transportation, construction and development, which may affect noise, view or traffic, airport noise, or odor
  • Wild and domestic animals, other nuisances, hazards or circumstances
For Further Protection – Home Warranties: Home warranties have become a more popular option on homes for sale. For protection you may wish to have a home warranty that either you or the seller pays for. (It’s negotiable.) Warranties range in price from $300 - $600 and, for a fixed rate, generally cover limited aspects including plumbing, electrical, pest control and a host of other related areas. If you have a problem, generally you’ll pay $35-$50 to have a professional come out inspect and fix problems that are covered. Warranty agents typically are on hand 24 hours a day, 7 days a week to take your calls in emergencies.

Keep a Grateful Journal and Give Thanks

by Jon Smith, CRB, CRS, GRI
The point of Thanksgiving is to remember the things we have to be grateful for. It's our special time to give thanks... not just for the obvious, like food, but for the thousands of fortunate moments, the multitude of blessings that we receive each year.

That's not always as easy as it sounds. We tend to remember the bad things much more easily than the good. That's where this article comes in. using the tips below, you can make thankfulness an everyday habit. It's a skill that will benefit you throughout the year.

Begin by keeping a gratitude journal. Don't write down negative things; only positive ones. For example, "I'm grateful that I made it through that heavy rush hour traffic safely." "I'm grateful that I got to see a beautiful sunset." "I'm grateful that I have a class at school that I really like."

Think of all the good things that happened because something bad happened first. For example, "If that slow driver hadn't pulled in front of me, I would have gotten a speeding ticket." "If I hadn't tripped on the playground, I would never have met such a nice person." "If I hadn't experienced unemployment, I would never have acquired the skills that got me a more fulfilling job."

Don't focus on what you don't have. Focus on what you do have. For example: "I'm so fortunate to have a warm place to sleep in the winter." "I'm so fortunate to live in a safe neighborhood where I can take walks." "I'm so fortunate to be able to see the beauty around me."

Think about people you've known that have made you thankful for their existence. They can be family, friends or simply people that you've read about or seen on television. Imagine how many other people there are who might be equally as wonderful. You just haven't met them yet.

Think about people who have made life hard for you. Now think about the things you accomplished because of them. Did you finish something because they said that you couldn't? Did you get better at something because they made fun of you when you did it badly? Did their cruel actions make you vow never to treat others that way? Even the negative forces in your life can be hidden blessings, worthy of your gratitude.

Think about the animals that have given you joy: Dogs that love you with every inch of their hearts, cats that think your lap is the best place to nap in the whole world, birds whose songs uplift your spirit, squirrels whose antics put a grin on your face and so on.

Think about the places that make you smile: A favorite hangout, a wooded trail, an exciting city, a great spot from which to view the sky, a hill that you once rolled down. Give thanks for all these things.

Now pass it on. True gratitude involves action. Lend a hand. Pitch in. Make a gift. Give your time. Listen. Give back as often as you can. Even a friendly greeting can make all the difference in the world.

Create your own opportunities for gratitude. Do you know someone who never seems happy? Be ready with a smile and a kind word each time you see them. It may require patience, but eventually, they'll smile first when they see you. Your interactions with them will be much more pleasant. Guess what? You'll have a new reason to be thankful!

Let others know when they've done something that you're thankful for. For example, "I'll never forget how you stuck up for me. It meant a lot." "That email you sent really made my day." "You make shopping here a pleasure." An attitude of gratitude spreads like ripples from a tossed pebble, benefitting all it touches.

Remember that hard times make good times sweeter. Also keep in mind that obstacles and challenges not only make you stronger, but they force you to explore outside of the comfortable routine that you've settled into. Without challenges, there can be no progress. Without obstacles, there can be no achievement. Be thankful for the opportunities that they provide.

In conclusion, giving thanks is a powerful tool that can dramatically improve your life and the lives of those around you. Start by embracing gratitude's special day, then make it a habit!
   

The Silent Killer-Radon

by Jon Smith, CRB, CRS, GRI
Many people are unaware of what exactly what  Radon gas is and what are the dangers associated with it. Radon Gas is a tasteless, odorless, invisible gas that It is formed from the radioactive decay of uranium. Uranium is found in small amounts in most rocks and soil. It slowly breaks down to other products such as radium, which breaks down to radon. Radon is a serious potential health threat that most people don’t even consider.   According to the EPA reports, “Radon is the leading cause of lung cancer among non-smokers. Radon is the second leading cause of lung cancer in America and claims about 20,000 lives annually.”  With these serious statistics you might wonder where Radon comes from, how it gets into your home and how to  test for it and most importantly remove it from your home.

How to tell if you have Radon

Radon testing is only way to find out if you have a radon problem in your home, the good news is that it is very easy. Since you cannot see or smell radon, special equipment is needed to detect it.  When you're ready to test your home, you can order a radon test kit by mail from a qualified radon measurement services provider or laboratory.  You can also hire a qualified radon tester, very often a home inspector, who will use a radon device(s) suitable to your situation.   As new testing devices are developed, you may want to check with your state radon office before you test to get the most up-to-date information

What to do if you have Radon

 It is estimated that one in 15 homes are threatened by Radon gas.  Companies like Safety Siren market a Radon detector not unlike a carbon monoxide detector. While the threat is real, the good news it it can be corrected if the gas is found in your home. If your house has failed a radon air to/or water test, you have options available to you to reduce radon levels to an acceptable level. There are companies that specialize in the reduction of Radon.  For Information on Radon Removal and various techniques, the EPA has published an on-line booklet called  "How To Reduce Radon Levels in Your Home"

Get This Week's Market Snapshot of Your Property.

by Jon Smith, CRB, CRS, GRI

Do You Qualify for a Moving Expense Deduction?

by Jon D. Smith
Have you recently moved or relocated as a result of a new job or job transfer? If yes, you might like to know that some of the costs associated with a move of this type may be used as a moving expense deduction on your income taxes. A few of things to keep in mind that help in determining if you would qualify for a moving expense deduction include:

  • The distance between the old home and the new job must be at least 50 miles
     
  • If you move within a year of taking the job at the new location
     
  • If you work full-time for at least 39 weeks (the total is 78 weeks if you are self-employed)

Whether a homeowner or renter, you can deduct the cost of moving household goods and the direct cost of moving you and your family. You can also deduct expenses for lodging during the move but not meals.

It is important to keep detailed records of all expenses during a move and
consult a tax expert to make sure that you take all the lawful tax deductions allowed by the IRS criteria for expenses related to selling your old home or buying your new one. For additional reading regarding moving expenses, the IRS publication No. 521 entitled "Tax Information on Moving Expenses" is also a great resource.

Displaying blog entries 1-8 of 8

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Photo of Jon Smith, CRB, CRS, SRES, SFR Real Estate
Jon Smith, CRB, CRS, SRES, SFR
Iowa Realty
3521 Beaver Ave.
Des Moines IA 50310
515-240-2692
Fax: 515-453-6404
 

 

 

Licensed in the State of Iowa