Problems Uncovered in Home Inspections

Problems Uncovered in Home Inspections

Even a house that seems perfect may not be so when it comes to a home inspection, which is meant to discover potential problems with the home’s systems, appliances, and structure.

“Depending on the age, location, and type of house, the potential for problems will vary,” according to an article by the Ferris Property Group. “It’s also important to note that all houses — even brand new ones — will have issues show up on the inspection. Certain issues may be a deal breaker, like a collapsing foundation, but many other issues can and should be repaired after negotiation with the seller.”

Here are some of the most common problems inspectors say they uncover:

• Defective plumbing: Leaky faucets or problems with the efficiency of pipes can greatly affect the cost of a home’s utilities.
• Water damage: This can be caused by any number of issues, such as erosion of external grading material that has caused a slow leak into a basement. Water leaks also can lead to damage in a foundation or mold growth.
• Faulty roofing materials: Variable temperatures can cause cracks in some roofing materials, while other materials may be prone to rots or leaks.
• Cracked foundation: Foundation problems can surface from any number of issues, such as water damage, termites, rotting, or structural inadequacy.
• Over-worked electricity system: This also can represent a big safety issue. Inspectors say when they find an overcrowded wiring system it’s typically due to previous owners making adjustments to the electrical wiring.

Source: “Common Issues Found During the Home Inspection,” Ferris Property Group (May 11, 2016)

Banks Rush to Offer 3% Down Payment Loans

Banks Rush to Offer 3% Down Payment Loans

As some banks veer from Federal Housing Administration loans, they’re offering their own low down payment mortgages to appeal to home shoppers struggling to save enough to buy a home. Wells Fargo made headlines this week when it debuted its 3 percent down payment loan.

JPMorgan Chase also announced its offering called the “Standard Agency 97%” program, a 3 percent down payment loan geared for first-time home buyers and requires a FICO score of 680. Chase also has a loan program called “DreaMaker Mortgage,” which offers a 5 percent down payment – 3 percent of which can come from the borrower as well as flexible funding options for closing costs and reduced mortgage insurance requirements.

Other banks have recently announced their low down payment offerings. Earlier this year, Bank of America began offering a 3 percent down payment loan that did not involve the Federal Housing Administration and does not require mortgage insurance. The bank requires a minimum FICO score of 660.

Wells Fargo’s newly launching lending program, “yourFirstMortgage,” requires a 620 FICO minimum score and minimum down payment of 3 percent for a fixed-rate conventional mortgage of up to $417,000. Down payment assistance also can come from gifts and community assistance programs. Customers who complete a homebuyer education course can earn a 1/8 percent interest rate reduction, although the course is not required.

Brad Blackwell, executive vice president and portfolio business manager at Wells Fargo, says the monthly payment for the loan will be less than a government-insured FHA loan.

“We’ve taken all the complexity of the home mortgage lending process, removed it from the front-line consumer, so that it’s easy for them to understand and Wells Fargo is taking care of all the capital markets and other types of complexities behind the scenes,” says Blackwell.

Bank giants have been leery of FHA loans lately, with JPMorgan Chase CEO Jamie Dimon’s calling FHA lending “too costly and too risky” to pursue extensively.

“We have dramatically reduced FHA originations,” Dimon wrote in his yearly letter to shareholders. “Currently, it simply is too costly and too risky to originate these kinds of mortgages. Part of the risk comes from the penalties that the government charges if you make a mistake – and part of the risk is because these types of mortgages default frequently.”

Dimon acknowledges Chase’s new low down payment lending program also carries some of those risks, but he believes it responds to customers’ needs.

“Mortgages are important to our customers,” Dimon wrote in the letter. “For most of our customers, their home is the single largest purchase they will make in their lifetime. More than that, it is an emotional purchase – it is where they are getting their start, raising a family, or maybe spending their retirement years. As a bank that wants to build lifelong relationships with its customers, we want to be there for them at life’s most critical junctures.”

Source: “Wells Fargo Launches 3% Down Payment Mortgage,” CNBC (May 26, 2016) and “Chase Quietly Launches Its Own 3% Down Mortgage Lending Program,” HousingWire (May 26, 2016)

New-Home Sales Surge to Post-Recession High

New-Home Sales Surge to Post-Recession High

Sales of new single-family homes climbed 16.6 percent in April, reaching the highest sales pace since January 2008, the Commerce Department reported this week. Newly built, single-family homes rose to a seasonally adjusted annual rate of 619,000 units in April.

“Builders remain optimistic about the housing market, and this month’s jump in new home sales is a positive sign that growing demand will keep the housing sector on an upward trajectory through the spring buying season,” says Ed Brady, chairman of the National Association of Home Builders.

The median sales price of new homes sold in April was $321,100. New-home sales saw the biggest jump last month in the Northeast, where sales of new homes surged 52.8 percent month-over-month. New-home sales jumped 18.8 percent in the West and by 15.8 percent in the South. The Midwest was the only major region to post a decrease in new-home sales in April, with sales falling 4.8 percent compared to the month prior.

Housing analysts expect new home sales to continue to climb in 2016. “Rising home sales combined with tight inventory will translate into increased housing production as we move onward in 2016, especially as job creation continues and mortgage rates remain low,” says NAHB Chief Economist Robert Dietz.

Source: National Association of Home Builders

Staging Tips to Up Your Listing’s Appeal

Staging Tips to Up Your Listing’s Appeal

The house has been cleaned from corner to corner, but now it may just need a few more finishing touches. Here are a few less-obvious, inexpensive ideas for staging your listing:

1. Repaint the walls. Of course painting isn’t anything new when it comes to staging, but focusing on repainting to match the wall and drapery colors can give the illusion of more space, especially if you repaint in a neutral hue. This gives the space an unbroken appearance an can make the decor look more smooth.

2. Re-imagine awkward spaces. An empty spot under the stairs? Stage it with a table to show a small nook for organization. Take advantage of odd, small nooks in the home and turn them into reading corners, a small office space, or use built-in shelves to offer up more organization.

3. Swap out the bathroom towels. Buy deluxe, fluffy towels in white. It’ll help give the restrooms more of a spa treatment.

4. Use mirrors strategically. In a cramped space, hang a mirror so that it reflects the light and gives the feeling of a more spacious area. In a dark room, hang a mirror to lighten up a space too.

Source: “7 Unique Staging Tips to Sell Your Home Fast,” ClarkHoward.com (April 26, 2016)

What Has Home Sellers Spooked?

What Has Home Sellers Spooked?

Inventory continues to be tight in many markets. So what has potential home sellers pulling back when buyer demand is reportedly so high? A recent article at CNBC suggests seller anxiety may be at the root.

“Trade-up buyers seem to be losing their mojo heading into the heart of the spring selling season,” Redfin Chief Economist Nela Richardson told CNBC. “Repeat buyers tend to list early because they are most often also looking for another home to buy in the near future. A slowdown in new listings reflects a lack of confidence on the part of the home owner that they can find a desirable home to purchase.”

The tight supply has, meanwhile, been pushing home prices higher. The median existing-home price for all housing types in April was $232,500, a 6.3 percent increase from a year ago ($218,700), the National Association of REALTORS® reports.

“Low mortgage rates, job growth and other drivers have stoked [buyer] demand, but the supply of homes for sale — especially in the low-to-middle price ranges — hasn’t kept pace, leaving many would-be buyers struggling with a thin and increasingly expensive inventory,” says Andrew LePage, research analyst with CoreLogic.

The tight conditions are causing more competition among buyers for the limited number of homes that are for sale. Nearly 78 percent of offers written by Redfin real estate professionals in Seattle involved a bidding war, the agency reports. In Denver and Portland, the bidding war share rose to 67 and 69 percent respectively.

Source: “Why homesellers Are Pulling Back in This Busy Season,” CNBC (May 19, 2016)