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Updated: Saturday, April 18, 2015

Are You Present When Viewing Real Estate?

Why do you want to go inside the house or condo unit youre considering as your next home?

Seems like an obvious question, but buyers who do not think before they act, cannot act in their own best interest.

This real estate question should be answered before buyers step inside a property to ensure that the time spent on the premises is completely enlightening, practically informative, and highly experiential of space functionality.

Most real estate viewings last less than an hour. If youre not mentally present and sure what you are specifically going inside to accomplish, you may miss the "value" point and either disregard a poor-showing property or overvalue a professionally staged one. First-time and first-time-in-long-time buyers are particularly disadvantaged because they have little experience visualizing how someone elses home, a vacant property, or a set of builders drawings could be transformed into their dream home.

Digesting all that a property has and has not got to offer in less time than you usually spend over a cup of coffee has always been a challenge for buyers. That challenge has become greater since smartphones arrived.

Our screen-time obsessions with message checking, picture taking, video making, and trophy sharing keep us habitually distracted. This is a problem for too many smartphone-carrying property viewers, too.

A recent VitalSmarts survey reported that 91 of the more than 1600 people involved had seen tourists miss out on an important moment by trying to capture it on social media.

Since buyers are "tourists" in someone elses real estate, this research may be extrapolated to explain why so many buyers spend more time looking at rooms through a lens rather than experiencing dimension and detail first hand.

How photogenic is any interior without the right lens, lighting, and staging? Shots of 3D rooms end as 1D grainy depictions that tell you what?even when viewed on a big TV screen? Invest time walking each room, standing where youd stand, looking out windows to judge sunlight and noise, and measuring to visualize your furniture positioning. This information gathering can be backed up by a couple of pics, but not replaced by photos.

Can a video tell you how uneven or creaky flooring is or how slippery bathroom or foyer tiles are?

Practical information gathering should include testing how loudly flushing upstairs resonates in the kitchen and downstairs living areasparticularly in new homes. Capturing this on video may be a greater distraction than deciding if noise levels are liveable.

Taking phone photos to show family members is not be as useful as having them on the tour to add more pairs of eyes to the search for value and cost.

Professional Staging sets the stage for positive reactions which may not occur without decorative preparation and strategic furniture placement or absence. Part of staging ensures buyers obtain good phone photos, but what is being hidden or downplayed? Walking through rooms and viewing rooms from different angles should help you discover the true utility and functionality of the space >

Fear of being left out on social media can distract us from what is going on in front of us. Checking for messages during a property viewing means youre missing out on what you may have to live with for years. While youre glued to the screen, what issues and problems will you overlook?

Looking through a camera lens keeps you reacting to cosmetic aspects that can be altered while ignoring value factors like location, square footage, functionality. Concentrate on being fully present when viewing a property that could be your new home. Keep your complete attention and top-level observation powers engaged and intent on the task at hand. Dont make your mind up about a property when youre on the sidewalk. Reserve judgement until you thoroughly check out the real estates potential and value.

You understand whether the professional showing you properties works for you or the seller, and how this will determine how the real estate is presented. Ask for details specifically >

  • Why did you select this property to show me?
  • Where does any unrealized value in this property lie?
  • What concerns do you hold about this propertys location?
  • Based on your [the professionals] local knowledge, what might inspection reveal or miss about this property that should concern me?

For more on the VitalSmarts survey "Societys New Addiction: Getting a Like over Having a Life", read PJs blog:

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Federal Court Upholds Arbitration Award Over Commissions

Suppose an arbitration award is based on the arbitrators erroneous understanding of the law. Then you appeal the award and get it reversed, right? Probably not. Courts are extremely >

Sothebys was the listing broker of a property that had been placed in the Greenwich MLS. A cooperative commission was offered. Meanwhile, The >

Prior to closing, >

The listing broker then filed a lawsuit, seeking a judicial determination of the disposition of the commission. Shortly thereafter >

Sothebys then filed an action in federal court challenging the arbitration award. The federal trial court overturned the arbitration award on the grounds that the award constituted "a manifest disregard for the law." Naturally, >

The appellate court noted that the manifest disregard of the law standard is "a seve>

Hence the judgment of the trial court was reversed. The arbitration award was allowed to stand.

This was a broker-to-broker case and, I would guess, most agents and brokers are more concerned about the trends in consumer-broker cases. In the matter of arbitrations, the trends do not differ.

When arbitration began to gain traction as an alternative method of dispute resolution, most in the real estate community welcomed it. It offered the appeal of shorter time lines, less expense, and better decisions than one could expect from a jury. But it hasnt exactly turned out that way. Sothebys v. >

Many real estate firms have come to the conclusion that they would prefer the court system to arbitration. Their defense lawyers, and those of the Eamp;O insurance companies, are schooled in real estate law. On the other hand, the plaintiffs attorneys may not be. Frequently they are general practice or business lawyers, but not real estate specialists. Brokers and agents may stand a better chance in the courtroom than in an arbitration proceeding.

Bob Hunt is a director of the California Association of Realtors. He is the author of Real Estate the Ethical Way.

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Whats The Best Type Of Mortgage Loan For You?

Question: We are first time home buyers. We have signed a contract to purchase an older home in a nice neighborhood, and the purchase price is 400,000. We have 45 days in which to obtain financing, and have started shopping around with different mortgage lenders. We have two questions. First, the contract states that we will put down 20 percent and obtain a mortgage loan of 80 percent i.e. 320,000. However, we have begun to realize that there will be significant closing and moving costs, and we would prefer to put down less money. Are we committed to a 20 percent down payment, since that is spelled out in the contract? Second, what kind of loans are available and whats best for us?

Answer: Your first question is easy. Technically or legally speaking, you are bound by the terms of the sales contract. You must put down 20 percent -- or 80,000. However, as a practical matter, I suspect that you and your sellers can sign an addendum to the contract which modifies these terms. So long as the amendment 1 will not create any delay in the time you have to go to settlement and 2 will not cause the sellers to spend any more money than was originally called for in the sales contract, this addendum should cause the sellers no problem and indeed it can probably be signed when you actually go to settlement. I suspect that your lender will want to have this addendum in its files.

Your second question is quite difficult to answer, since I do not have any financial information about you. You should discuss these issues with your potential lenders. Ask them to qualify you based on the highest and the lowest loan which you are seeking. For example, a "conventional" loan is where you put down 20 percent and borrow 80 percent. In your case, this will require that you put down 80,000. Since you have indicated that this will create a financial strain for you, you can also consider the following options:

an 80-10-10 loan. Here, you will be obtaining two loans. One in the amount of 80 percent i.e. 320,000 and a second loan in the amount of 40,000. Under this arrangement, you will only have to put 40,000 down when you go to settlement. The 80-10-10 loan was designed to help homeowners avoid the necessity of paying private mortgage insurance PMI. Lenders want to be sure that should you become delinquent on your mortgage payments, and the lender has to foreclose on the property, that there will be some equity left in the property. The typical benchmark is 20 percent. If you borrow more than 80 percent of the value of the house called "loan to value ratio" you will be required to pay private mortgage premiums for a long period of time. This PMI is insurance coverage for your lender, which will cover any loss which it incurs should the house be foreclosed upon and the foreclosing price does not cover the entire mortgage balance.

However, since the lender in an 80-10-10 loan is only making a first mortgage deed of trust in the amount of 80 percent, no PMI is required. You should understand that you will have to sign a second deed of trust in the amount of 10 percent of the value of the house. This second trust will carry a higher mortgage interest rate than you will get for the first trust. Additionally, the second trust will probably have a shorter due date perhaps 10 years than your first trust.

a 90 percent loan. Here, you will borrow 360,000, and sign only one mortgage document. You will still need 40,000 cash at settlement. And private mortgage insurance will be required.

a 95 percent loan. Again, private mortgage insurance will be required, but you will only have to put down five percent i.e.20,000.

This is but a small sample of the various loan which are available. There are also variations on these various mortgages. For example:

1. Fixed thirty year. Here, the loan will be amortized over 30 years. Each and every month, you will make the same monthly mortgage payment although if the lender escrows for taxes and insurance, the amount may change on a yearly basis depending on whether taxes and insurance premiums are increased.

2. Fixed fifteen year. Here, the loan will be amortized over 15 years. This means that although the interest rate will be lower than for a 30 year loan, your monthly payments will be much higher, since you will be paying off the loan in half the time. While some people like the idea of paying off their mortgage early -- and thus saving a lot of interest payments -- I am personally opposed to a 15 year loan. If you have the right to pay off the loan in whole or in part without penalty, a thirty loan gives you the right to make payments as if they are based on a 15-year amortization, but you are not obligated to make these higher payments should you decide that your money can be used for other -- and better -- purposes.

3. Finally, there are a number of adjustable rate mortgages -- called "ARMS" -- which carry different rate adjustment periods. These adjustments can be made on a yearly basis, or once every three-five-seven or even ten years. Keep in mind, that the smaller the adjustment period, the lower the interest rate will be.

4. Balloon notes. Here, your loan may require that you pay monthly mortgage payments based on a 30-year amortization. However, at the end of a fixed period for example 7 or 10 years the entire balance then outstanding will become due and payable. This kind of loan is typically more common for commercial or investment loans, but you should be aware that balloon loans do exist -- and you should make sure that your loan will not suddenly become due i.e. balloon after a number of years.

You should contact two or three mortgage lenders and ask the following questions:

  • what kinds of loans do you have available?
  • what are the rates for each loan?
  • based on our financial situation, can we qualify for any or all of the various loans?
  • is there a pre-payment penalty if we decide to refinance early, and if so, how much is the penalty?
  • can we pay our real estate taxes and homeowners insurance premiums directly, or will you require that we escrow. This means that the mortgage lender will collect, on a monthly basis, one-twelfth of the real estate tax and one-twelfth of the annual insurance premium. When the tax and the insurance comes due, the lender will make these payments on your behalf. However, when a lender requires these escrows, this means that your monthly mortgage payment will be higher. This is referred to a PITI payments of Principal, Interest, Taxes and Insurance.

You are entitled to get information giving you an estimate of what you will have to pay when you go to settlement. You are also entitled to get full disclosures of the mortgage interest rate for your loan. For more information, go to the Consumer Financial Protection Bureau CFPB website and search "Know Before You Owe".

Shopping for a mortgage loan is time-consuming, tedious and often confusing. However, it is your money at stake and you dont want to make a drastic mistake which will haunt you for years to come.

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You Cant Sell Your Home If It Stinks

As you live in your home, you get nose-blind to odors that can hit your buyers on the honker harder than a right cross. Were not talking about forgetting to change the cat box. Some smells are so pervasive that they could signal real trouble to a buyer. And that means no sale for you.

Here are five smells that could turn your home into a stinker.

Stuffiness. To make our homes more energy-efficient, weve caulked, blown insulation, weather-stripped and sealed our way to greener utility bills. But for every action, theres a reaction. The result of making your home airtight is that you lock all odors in.

Homes are more comfortable when they breathe. Open a window and reintroduce yourself to the aromatic delights of fresh-mown grass and flowers and the light undulating touch of natural breezes.

Dusty, musty odors linger in rooms that arent used much or arent updated like old tile bathrooms. Sniff out culprits like guest bedspreads, long curtains that are ra>

Pets. Poop and pee are part of the deal when you have pets. From goldfish to iguanas, you have to deal with feeding and cleaning up after pets. When youre selling your home, you have to really keep on top of it.

And if you have pets with fur, you have to groom them. Dogs need baths, and most need brushing. If you let them get on the furniture, they slobber on their toys, scratch themselves, shed piles of fur, and so on. Febreeze is one idea, but you might have to do a thorough steam cleaning of all fabric surfaces in your home.

Food, smoke and grease odors. If you have a preference for stinky foods like cabbage and fish, you may need to go on a different diet while youre marketing your home. And if you cook a lot, its a good idea to clean your oven, burners, and any other equipment that may have burned on food or spills.

Dampness, mold and mildew. Over the years, pipes leak, tubs overflow, and gutters clog. If you can smell moisture, it wont be long before you smell rot. Damp spaces can grow mold anywhere that contains cellulose, poor light, and little to no air circulation. So if your bathroom always smells like a wet, dirty dog and you dont have a dog, youve probably got a leak or mold in the walls or under the floor.

Your raging hormones. We saved the best for last because who doesnt like to talk about sex? Like all animals, humans have secretions that make them attractive to sex partners, but those same aromas can be offensive if theyre too strong. The biggest trouble spots are bathrooms, bedrooms and laundry rooms.

As a seller, you may have to lay down the law for household members who let their bedrooms smell like locker rooms or who use so many hair and body products their rooms smell like a 900 call center.

You may also have do a little more laundry than youre used to. Wash towels frequently, especially the love towel. Change bed linens at least once a week. Dont leave dirty gym clothes in the bag or on top of the washing machine. Bag up feminine disposables, baby diapers, and adult diapers and get them out of the house as fast as possible.

You could really get OCD with this and wash or throw out dirty hair and make-up brushes. A good rule of thumb is -- if you cant remember when you washed it last, wash it now.

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The Refinance That Sounds Too Good To be True But Is 100 Real

Have an FHA loan with a rate thats beyond what youd pay today? Have yet to refinance because you think youre not a candidate? Youre paying too much, plain and simple. And the streamline refinance may be everything you didnt know you needed to improve your loan - and your bank balance.

"The FHA Streamline Refinance is a special mortgage product, reserved for homeowners with existing FHA mortgages," said The Mortgage Reports. "FHA streamline refinances are the fastest, simplest way for FHA-insured homeowners to refinance their respective mortgages into todays mortgage rates."

Lenient Approval Process

In a nutshell, a streamline refi can lower your rate, and therefore your payment, without going through any tedious approvals. Its a simple process with little effort needed on the part of the borrower, and it applies to those who may not qualify for other refinancing programs because of a change in job status or a poor credit score.

"A streamline refinance offers several advantages for homeowners who are looking to save on their mortgage," said smartasset. "With no credit check or employment verification required, its >

Many people with an FHA loan may not have received the most favorable rates when they purchased because of their combination of credit score and down payment. In a typical scenario, a borrower could lower their initial interest rate from 4.75 to 3.75 after a minimum of six months by doing a streamline refi and save hundreds of dollars per month. In addition, a streamline refinance can help borrowers take advantage of a new rule for 2014 and beyond that reduced Private Mortgage Insurance PMI fees; this will lower their monthly payments even further.

"Your existing loans MIP is 1.35 percent of the loan amount each year, while your new loan will have an MIP of just 0.85 percent thanks to the recent rule change," said The Mortgage Reports. "That change saves you about 500 per year for each 100,000 of your loan amount."

Home Value

There is also no appraisal needed for a streamline refi, so the value of your home today is essentially ir>

"The FHA streamline refinance programs defining characteristic is that it does not require a home appraisal. Instead, the FHA will allow you to use your original purchase price as your homes current value, regardless of what your home is actually worth today," said The Mortgage Reports. "In this way, with its FHA streamline refinance program, the FHA does not care if you are underwater on your mortgage. Rather, the program encourages underwater mortgages. Even if you owe twice what your home is now worth, the FHA will refinance your home without added cost or penalty."


While there are no approvals and appraisals, there are a few qualifications:

  • You have to be current with your loan payments.
  • You have to wait six months from the date of your home purchase
  • You cant take cash out.
  • "The streamline refinance must reduce your mortgage payment by at least 5 percent," said

Costs of the loan

Like any mortgage, streamlined refis have closing costs; these can range between 1,500 and 4000, according to My Mortgage Insider. But that doesnt mean the borrower has to pay for them out of pocket.

"Lenders want your business," they said. "Loans with streamlined processes are in high demand. They take lenders less time and manpower to get through the system compared to other loan types." Because of this, lenders will often negotiate/

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P-A-I-N-T to Perfection In Your HOA

No two painting projects are alike. Types and conditions of materials to be painted, complexity of architectural features, types and degree of weather exposures, impact of landscape features, and shade configurations all make a big difference in a well-conceived painting program. Even the purpose of painting can vary from one project to the next. Painting may address preventive maintenance, aesthetics, waterproofing program or all of the above. Regardless of the variables, following the acronym "P-A-I-N-T" will enhance your chances of success:

Plan. Inventory every paintable item and decide when it needs to be painted. Prioritizing is particularly important if the painting budget is inadequate to paint everything at once. You can concentrate on the short-term needs, and accrue money in reserves for future painting.

Ask. The paint industry changes rapidly so make no assumptions. All paint companies offer free expert advice on the latest and best products for your particular needs. In addition, they can provide specifications to use for bidding the project and actually do inspections on the project to ensure the product is being applied properly. This is also the time to update your color scheme. Ask the paint company to prepare a color board with three different trim and body options usually a free service but worth paying for. Let the owners vote on their favorite.

Inspect the Work. In the planning process, walk the site completely. Notice which areas are fading faster than others typically south, southwest exposures. Determine the condition of the underlying materials to be painted they may need to be refurbished or replaced.

Note the detrimental effects your sprinkler system may be having on your painted surfaces, and make necessary connections to avoid premature failure of the new paint. Know what unavoidable damage the painting process may cause to landscaped areas, and plan accordingly.

During the job, dont >

Each product has a recommended "mil" thickness which can vary depending on method of application brush, roll or spray, ambient temperature and dryness of the surface. It is critical that the right product be applied in the right way.

After the job is done at least according to the painter, do a walk-through inspection of your project before you pay the final painting bill. There are always, always, always did I repeat myself? always corrections and additions to every job. Get them done before you make final payment while the painter is motivated. Once paid, its off to the next job and motivation plummets.

After six months, and especially after the first rainy period, inspect the whole job to see how its holding up. There are often areas that begin to flake or crack. In particular, look for painted rails and other exposed horizontal surfaces that get direct rain. All significant failures should be touched up immediately. Do not wait

Negotiate. Get competitive bids from qualified contractors whose references youve checked. All bids should be based on identical and clear specifications provided by the paint manufacturer. Do not automatically choose the low bid. All bids are negotiable and you may get the price you want from the painter you like best just by asking. Youve got nothing to lose.

Timing. All your planning and painting needs should take into consideration that most painting is done usually within a >

There are few homeowner association projects more important than painting. Remember the acronym P-A-I-N-T as you venture into your next round and it will turn out A-O-K.

For more innovative homeowner association management strategies, subscribe to

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Why Older Homes Rock

Youre ready to buy a home, but there hasnt been a new home built in your area in 10 years, leaving you no choice but to buy an older home. You could appreciate older homes more if you know a little about their history and why they were designed the way they were at the time.

You can trace expansions and contractions in the economy easily by home sizes and standard features. In the 1950s, suburbs grew quickly because of new highway systems that allowed homeowners to commute to their jobs. Yards grew larger and homes sprawled on single-story foundations because land was cheap.

Post-war parents gave birth in record numbers to the baby boomers and decorated their homes with space-age Sputnik Formica, luxurious wall-to-wall carpeting, built-in cocktail bars, and furniture-quality black and white TV sets.

In the mid 1970s at the height of the oil embargo, new homes got smaller and closer together. They began to advertise innovations such as "zero-lot-lines" which is a fancy way of saying lands too expensive over traditional homes with front, back and side yards.

Skylights helped get light from above as common townhome walls and lack of side yards in new communities limited natural light. "Great rooms" were introduced as a spacious but smaller square footage alternative to separate living and den areas. And the "Jack and Jill" bath became the norm to provide kids with some privacy while sharing a bathroom.

By the 1980s, the economy was moving from a single wage earner in the household to DINKS -- dual income, no kids. As fortunes improved, McMansions grew like mushrooms, featuring third living areas, three-car garages and private en suite baths for every bedroom. Eat-in kitchens joined palatial dining rooms as must-haves for every homeowner.

By the 1990s, a strong movement in favor of natural materials crowned hardwood floors and granite countertops as the new luxury standard. In-home computers became more popular and affordable and the Internet changed reading and information access forever. Recessions were still six month affairs and CEO pay rose to several hundred times that of ordinary workers.

By 2005, McMansions were everywhere, boasting four or more bedrooms, media rooms, master living areas, private studies, flexspaces, island kitchens, mud rooms, and exercise rooms. Then the housing downturn hit, and very little new construction was being built.

Now it takes two incomes just to tread water, but hard-working families dont want to compromise. Theyre conscious of operating costs as well as purchase costs. Energy-efficiency has steadily moved up the ranks of most important considerations for homebuyers. Homes that have been well-maintained, regardless of age, are desirable.

When you look for an older home, consider the advantages. The neighborhood is established, so what you see is what you get. An older home might work best for a decorating >
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Updated: Saturday, April 18, 2015

You Cant Sell Your Home If It Stinks

As you live in your home, you get nose-blind to odors that can hit your buyers on the honker...
> Full Story

The Refinance That Sounds Too Good To be True But Is 100 Real

Have an FHA loan with a rate thats beyond what youd pay today? Have yet to refinance because...
> Full Story

P-A-I-N-T to Perfection In Your HOA

No two painting projects are alike. Types and conditions of materials to be painted, complex...
> Full Story

Copyright © 2015 Realty Times®. All Rights Reserved

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