Adventures in Homeownership

Add A Personal Touch When Submitting Your Offer

Business women hands working writing notebook on wooden desk, lighing effect

Business women hands working writing notebook on wooden desk, lighing effectJust because you have your eye on a property and have been shown around the premises by a professional real estate agent, it does not mean that you will be the only person interested in submitting an offer. In fact, there could be multiple people making an offer at the same time, which is why it is imperative that your offer really stands out!

It is rare for a buyer to offer the seller the asking price, with most buyers putting their haggling skills to the test in order to land their dream home for a desirable price. So, how can you peak the seller’s curiosity and improve your chances of receiving a positive response?

Capture the seller’s attention with a personal letter. A traditional tactic that has not lost its touch, personal letters can make you stand out among a sea of bidders.

How to Write the Perfect Personal Letter

Including a personal letter with your offer is known to help get an offer accepted. Below, we discuss the three main points to include in your letter:

  • Personal Information - Opening up to the seller will strike a chord with them. It will help them to get to know you, without even meeting you. Furthermore, it will allow them to make a choice based on who they would (ideally) like to transfer home ownership to. Including personal information in your offer letter that is related to your profession, your pets (if any), and your family size will make your offer stand out. Plus, the inclusion of personal information will prove to the seller that you are a serious and honest buyer.
  • Express Emotion - Connecting with the seller on an emotional level can be a challenge, but if you accomplish it, the chances of your offer being accepted are far greater. Perhaps you have decided to buy a new home so that you can use the leftover expenses to fund a relative’s surgery or a child’s college education? Maybe you want to relocate as a way of feeling safer in the neighborhood? Whatever your reason(s) for wanting to buy a particular property, don’t be afraid to express emotion in your letter.
  • Show Appreciation - It is nice to be nice! Even if the seller already has someone else in mind, this doesn’t mean that they don’t deserve some gratitude. After all, they invited you into their home and took the time to read your letter, right? Be polite and you never know – the seller could change their mind and accept your offer over someone else’s.

When you realize the difference a personal offer letter could make to your chances of being accepted for a property purchase, you won’t want to approach a seller without writing a letter ever again! A well-written letter that demonstrates your suitability for the house can be read over and over by the seller, thus enabling them to make an informed decision. After all, it is their pride and joy they are selling, so they won’t be willing to hand the keys over to just anybody.

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How to Understand the Impact of your Debt-to-Income Ratio and How It Affects the Loan Process

Businessman's hands with calculator and cost at the office and F

Businessman's hands with calculator and cost at the office and FGearing up for a loan application can stir up a mixture of emotions, from euphoria to anxiety about the entire process. All that is required for a plain sailing experience is knowledge on the subject and in particular, on the topic of debt-to-income (DTI) ratios. Many loan applicants will be unaware of the fact that this is considered by a lender before the applicant is accepted for a loan.

What is considered a good debt-to-income ratio?

Dividing your total gross income with your recurring monthly debt is the easiest way to understand what your DTI income ratio is. Once you are aware of this, you can take a step forward and arrange a meeting with a lender. By doing so, you can discuss your loan options and talk about whether your DTI is good or could do with some improvement.

The Negative Impact on Financing

Put it this way: if a lender looks at a borrower who has a DTI of 50% or above, you are instantly in the red. In many cases, they will not give you a second look since you will be deemed “dangerous” in their strict book of lending. This can make it a struggle to obtain financing. On a brighter note, there are multiple lending options out there now that consider applicants with a poor credit history and DTI.

Tips for Being Approved for a Loan

Fear not if you fall into the red category when it comes to calculating DTI because it does not mean that your chances of loan approval have gone completely out the window. In fact, the following tips could actually teach you how to handle your finances overall:

– Pay off any debts you have accrued.

– Reduce your DTI by paying in affordable amounts.

– If you are able, settle high-interest debts.

– Stop spending so much and start saving more.

– Write a monthly budget and stick to it.

– Cut off direct debits or subscriptions that you no longer require.

Improving the Debt-to-Income Ratio

Sit down and really get stuck into your finances. It will be worth it when you get one step closer to being accepted for a loan, despite having a low DTI at the beginning. Pay attention to the higher debts on your list, if possible. Paying off larger amounts faster will ensure that your credit rating boost at a quicker rate. This will also lift that credit rating arrow from the red spot to the amber or, if you really commit, close to the green.

There are plenty of ways in which you can improve your DTI, prior to applying for a loan. This will boost your chances of acceptance and will have a positive effect on your credit score as a whole. Take it upon yourself to perform a recalculation of your DTI every month, as this will paint a clearer picture of how your financial situation is changing, for the better!

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What Closing Costs does the Buyer and Seller Pay?

Couple meeting financial advisor

Couple meeting financial advisorThe real estate market provides huge profit potential for sellers, as long as the seller takes the right approach. According to the 2016 National Association of REALTORS Profile of Home Buyers and Sellers, 51% of homebuyers will use the Internet to find their ideal home, whereas 34% will use the services of a real estate agent. The remaining percentage of buyers will make an investment move after seeing a yard sign, hearing about the real estate listing from a family/neighbor/relative, or will know the seller directly.

No matter how you intend on attracting a buyer (if you are a seller) or searching for the ideal home (if you are a buyer), it is important that you are aware of the fees involved once a selling price has been determined. Unless you understand what the typical closing cost includes, there is a chance you may be left surprised with unexpected costs.

Familiarize yourself with the process of closing a real estate transaction to eliminate surprise once the home ownership is shifted from the seller to the buyer.

Typical Buyer’s Closing Costs

  • The Down Payment - This is the initial payment a buyer will make to reserve the home. A larger down payment means reduced loan interest, so aim to put down as much as possible.
  • Loan Fees – A lender will assess your credit score and charge a fee to process the loan application.
  • Prepaid Interest - When daily interest builds on your loan, this must be paid at the time of closing. Once again, the amount depends on your credit report and financial situation.
  • Inspection Fees – A property inspector will charge this fee to assess the condition of the property. This service is valuable since it aids the buyer in making a final decision.
  • Appraisal - The fee charged by a qualified appraiser to determine a property’s market value.
  • Mortgage Insurance – Should a mortgage loan default, mortgage insurance will cover it.
  • Hazard Insurance – Damage caused by Mother Nature, vandalism, theft, or unintentional circumstances can be repaired, with costs covered by this insurance policy.
  • Title Insurance – A kind of indemnity insurance that shields a buyer and lender if the seller is unable to transfer home ownership.
  • Documentary Stamps - Documents that transfer real estate interest must be stamped, so that the excise tax can be imposed properly.

Typical Seller’s Closing Costs

  • Broker’s Commission – Every realtor will charge a different percentage of commission on the final property sale value. This will be deducted at the time of purchase.
  • Transfer Taxes – Consider this a transaction fee for transferring home ownership from you to the buyer.
  • Documentary Stamps on the Deed - This is a tax on documents detailing the transfer, sale, acceptance, or loan agreement for a property.
  • Title insurance – Indemnity insurance is equally as important for the seller to pay, as it is for the buyer.
  • Property Taxes – Property expenses must be divided fairly to ensure the buyer is only paying from the moment he/she claims home ownership. This is guaranteed when property taxes (a proration) are paid.

Calculating the closing costs prior to making a property purchase or agreeing to a sale will ensure you are satisfied with the outcome. Use the Internet to your advantage at this time, by estimating the costs with an online calculator. A few influential factors include the condition of the house, its size, and the features (interior and exterior).

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Tips to Get Your House Ready to Sell this Summer

Nice curb appeal of American craftsman style house.

Nice curb appeal of American craftsman style house.Is it time to relocate and begin making memories in a new house? If so, consider putting your property on the market this summer. Not only will you be able to present your home in the best possible way but competition won’t be as fierce in the warmer months. Real estate investors will see your house in a different light if it goes on the market when Mother Nature is looking her best. With better moving conditions and children out of school for the summer, there really is no better time to present your property to potential buyers.

The stages of selling property involve setting your sale price and staging the home to give it that lived-in look. The sooner your potential buyers can envision themselves settling into the place that you once called “home”, the faster you can expect to make a sale. Furthermore, you can guarantee that the offers you receive will be higher if you focus on enhancing curb appeal.

In order to accomplish this, your real estate game needs to be on point. Take a moment to enlighten yourself on the top tips to get your house ready to sell this summer:

  • Clean Entire Home – Put yourself in the shoes of a buyer and think about what you would expect when you are looking around a property of interest for the very first time. Cleanliness is a must! You can’t cut corners when it comes to dusting, sweeping, mopping, and everything in-between. Some buyers can be more particular than others, so put a bit of elbow grease into it and make your property sparkle!
  • Get Rid of Any Clutter – Not only will a de-clutter clear your mind, it will also give the illusion of a bigger space. You should leave some furniture in place to paint a picture of a “home”. Too much clutter will can distract the potential buyer and make the space feel cramped.
  • Take Care of Landscaping – The garden and grounds on which your property stands are the first thing a potential buyer will see. Maintain the area well with professional landscaping services or, if you have time, cut the lawn, remove weeds, and trim foliage to ensure your property is a sure-fire seller.
  • Fresh Air and Sweet Scents – Don’t forget about setting the mood with the right aroma. An incense stick, air freshener, or scented candle that smells of lavender or chamomile will instill a feeling of calm. The more relaxed the potential buyer is, the easier it will be for them to imagine themselves living in the property. Open the windows and scatter bowls of baking soda around the home to absorb foul smells.

Don’t underestimate the importance of “staging” your home for a sale. Consider keeping decor simplistic, so as not to distract from the overall design of the property, from its flooring to its ceilings. Professional home staging services might come in handy if you don’t consider yourself much of an interior designer!

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Mortgage and Fixer Uppers – Pro and Cons

Businessman's hands with calculator and cost at the office and F

Businessman's hands with calculator and cost at the office and FPeople from all walks of life will wander into the world of real estate without the initial intention. The urge to invest in a property that you could call your home for life is hard to resist. Not only this, but more and more homebuyers are looking into what are known as “fixer-upper” projects. These projects are unique in the sense that they provide the buyer with the freedom and creativity to do what they want with the property.

Once they have fixed it up and restored it into a condition that neatly slots into the real estate market, the financial gain opportunities will begin to transpire. If you are to succeed in this type of property investment as a newbie or simply want to educate yourself more on the subject, there are a few things you ought to take note of.

Fixing Up a Home for Financial Gain

Well, why not, right? A lot of people are seeing an opportunity and grabbing it with both hands. By opportunity, we mean securing a low interest rate on a property with a fairly low net worth and capitalizing on that opportunity to restore, renovate, and reap the financial rewards. It is possible to make thousands, if not hundreds of thousands depending on the type of “fix-up”, of dollars by selling the property on when interest rates peak.

Selecting a Mortgage for a Fixer Upper Project

A project of this kind is not just like any other. There is some risk attached in the sense that you may struggle (which is highly unlikely in a market where millennials are house hunting in their millions), or that you may not rake in as much of a profit as you would have initially hoped.

Nonetheless, the prospect of having something fun to work on and more importantly, something that you are passionate about, is exciting to say the least. In the event that your funds are not exactly prime for investment purposes, there are a few things to consider mortgage-wise.

Here are the most popular financing options for property purchases of this kind:

Standard 203(k) loan - Suitable for most types of home repair and improvement.

Limited 203(k) mortgage – If your home repair project is limited to minor improvements, such as repairing gutter pipes, this type of mortgage will be best suited.

Things to Consider with Fix-Ups

Don’t let yourself fall into a financial pitfall unnecessarily. If you discuss your mortgage financing options with an expert, you can better understand if you would suit a loan that is flexible or one that has a fixed interest rate. Remember that the home improvements will be assessed by the lender to ensure everything is being dealt with fairly and professionally.

The method of “fixing and flipping” a home is one that property buyers have been gaining profit from for years. Doing it successfully requires proper financial planning. On that note, it may be worth considering your financing options to ensure your financial stability for the future.

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Successful Garden Tips for Summer

Hydrangea House

Hydrangea HouseAre you thinking about selling your property? If so, it is your job to make the residence appeal to potential buyers. The exterior of a property is the first thing that people will see when they are pursuing the real estate market and so, it is crucial that the grounds on which your property stands are well-maintained. A flawless garden will complement the facade and will indicate that you take pride in ensuring your home is in good condition, from the inside out.

While you could hire a professional gardener to water the plants, de-weed the grounds, and take care of the landscaping in general, it is not entirely necessary. By sparing a little bit of time to maintaining your garden, you can feel confident that your real estate listing will attract more buyers.

The following tips, when put into action, will not take up much time. They will, however, make a big difference to the appearance of your garden. So, let’s dig deep into the ways you can keep your grass and plants looking good throughout the summer months:

  • Water in the Morning - There are numerous benefits associated with watering plants in the morning, rather than in the middle of the day or at night. The sun is at its strongest between 12:00 pm and 3:00 pm therefore avoid watering your plants at this time. Direct sunlight absorb moisture from the soil and leaves, causing it to die. Aside from the fact that the sun will not be as strong during the morning, the water will absorb deeper into the soil if you take the time give your plants a good drink in the morning! Once absorbed into the soil, the water will make its way to the roots of the plant, which will encourage deeper rooting. As a result of this, the plant will thrive, and appear healthier and brighter, even when exposed to the sun at the hottest parts of the day.
  • Keep Potted Plants in the Shade – The main reason why you need to keep your plant out of the sun is to preserve moisture. A dry plant will not live as long a life as a moist plan, so try to find or create a shaded spot where the plant can grow and blossom with a simple watering in the morning. Of course, this depends on what type of plant you are growing (we will go into this next) however; shaded gardens require much less maintenance.
  • Research Plants to Grow – Fertilization methods differ for various plants, as well as the preparation methods and maintenance. So, how do you know what will transform your garden into a vibrant natural oasis? Well, every little helps, from reading a gardening book to researching online. Alternatively, you could participate in a gardening class and learn about plant growth, germination, and tissue culture.

Aside from the garden, dedicate some time to maintaining the paintwork on the property’s exterior, as well as the interior. Property value will soar when the home is cared for properly, therefore the time you spend preserving its appearance will be more than worthwhile. Since your buyer will be inspecting the house during the primary visit and final walk through, preparation is key to ensuring you receive the best offer.


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10 Steps to Becoming More Water Efficient

California is currently in the midst of one of the worst droughts in recorded history. Everyone’s working to conserve. But water conservation is important no matter where you are. How can you do your part to save water? Here are 10 tips you can follow.

Take Shorter Showers. This is the first step everyone lists, and with good reason. Your bathroom in general accounts for around 75% of your home’s water usage. And a typical shower uses 2.1 gallons of water per minute. So showering for 10 minutes can waste over 20 gallons. Keep showers to around 5 minutes or so, and you’ll cut your water usage considerably.

Check for Leaks. Have a plumber check your toilets, faucets, hoses, and any other water sources in your home for leaks, and repair them. Depending on the severity of the leaks, this can save you up to 200 gallons of water per day. (more…)

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Transform Your Backyard into BBQ Headquarters

For some people, barbecuing is just an occasional thing you do in the summer: haul out the grill and the charcoal, throw on some burger, and call it a day. But for others, it’s a way of life. Your barbecuing is legendary—and so are your barbecue parties. But if you really want to throw some parties this summer, you’re going to have to do some landscaping. What can you do to turn your backyard into the top spot for outdoor parties? Here are a few ideas

Fix Up Your Lawn. The first thing you need to do before you invite people over is make sure your lawn looks good. If you’ve got brown patches, or bare patches, you might want to reseed. Also consider bringing in some potted plants, to add to the atmosphere. You can even have a potted herb garden, and impress your guests by picking fresh thyme or rosemary and bringing it straight over to the grill to season the meat. (more…)

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