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Before You Buy a Foreclosure

Monday, September 23, 2019
by Scott Darling


While looking through real estate listings, you might be curious when you see a property up for auction or one that is “real estate owned,” and wonder if the price is too good to be true.  There is a process of buying a foreclosure house, and you need to prepare yourself, so read on for some pointers on what’s involved before you make your decision: 

 

  • - A “Bank-Owned Home” is just that:  the owner stopped making payments, and the lender is in the process of auctioning the home to try and recover the money they loaned.  Houses that are “Real Estate Owned” mean that the bank’s auction didn’t result in a sale and is being sold through a real estate agent. 

  • - Vacant homes can have all sorts of issues: mold, vandalism, pest issues, stolen copper piping, and neglected landscaping are just a few.  Before you make a bid, go and see the home for yourself, and decide if you can afford the sale price plus the cost of repairs. 

  • - Hire an inspector to go to the house with you so you’ll have an idea of exactly what needs to be done.  You don’t want to underestimate renovation costs. 

  • - When considering the asking price, and you have taken steps to get a contractor bid on all the rehab, use this formula to calculate your offer:  80% of the appraised value minus the cost of repairs. 

  • - Investing in a foreclosure as a rental will require less trendy but rugged materials and flipping to resell might be more expensive (and more headache!).  Moving into the home yourself can keep initial costs in check if you’re willing to do what’s necessary before moving in and holding off on upgrades. 

  • - Some foreclosure purchases must be made in cash, and that can put investors at an advantage. In case cash isn’t a requirement for the purchase, have proof of pre-approval from your lender when you make your offer. 

 

Whatever your reason for your interest in buying a foreclosed home, make sure you do your research, and talk to your bank as well as an experienced REALTOR®.  Search for foreclosures by locality and beware of anyone offering to sell “their property” that is in foreclosure.  Con artists are smart enough to find vacant properties to pass off as their own, sell them, and take the money and run. Educating yourself on the foreclosure purchase process will make for a smoother process, less stress, and hopefully an investment that will pay off for you! 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: ballennetwork.com

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Understanding a Home Appraisal

Monday, July 1, 2019
by Scott Darling


During the selling/buying process, after the purchase agreement contract is signed, lenders order a home appraisal.  They want to be sure that the property is worth the mortgage they are getting ready to issue to the buyer, or in case of refinancing, the owner.  An appraisal is different from the home inspection, which should have already taken place.   

 

  • - The lender typically schedules the appraisal with a licensed professional, who contacts the homeowner to schedule a time.  Some appraisers don’t mind the owner being present, but usually work alone. 
     

  • - Sellers should have a few things readily available:  recent tax information, property survey, a list of what is being sold with the house, any addition construction information, including cost and construction date. 
     

  • - The assessment can begin before the appraiser even steps onto the property, as they do market information about the house, as well as research comparable sales in the neighborhood, much like the listing agent did for setting the price for the house. 
     

  • - Like someone viewing the house for purchase, the appraiser takes in the exterior appearance, curb appeal, looks for upgrades or additions, as well as the appearance of surrounding homes. 
     

  • - The appraiser takes note of how many rooms are in the house, as well as size, building materials and finishes. 
     

  • - Condition of everything is taken into consideration, including the foundation, exterior finishes, wear on flooring, what shape the windows are in, and all home systems. 
     

  • - The appraiser will also access the basement, attic and crawlspace to check for water or insect damage. 
     

  • - Most of the time, the appraisal fee is set in the loan agreement, but in case it is not, the buyer pays the fee in the closing costs. 

 

Although the actual property inspection may take a few hours, the appraisal itself is normally given to the lender in an average of seven business days. Appraisers commonly use the Uniform Residential Appraisal Report. If everyone has done their homework, literally and figuratively, the value of the home will meet the selling price, and the new buyers will soon be on their way to home ownership! 
 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: thebalance.com

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Checklist for New Home Buyers

Wednesday, June 26, 2019
by Scott Darling


Closing day has finally come and gone - you’re almost finished packing for your move, and let's face it you are BUSY! But, it is important to slow down to take note of a few things that should be done before and soon after you move in.  Go down this list of must-do’s so you’ll be safe, secure and happy in your new home: 

 

  • - Change all of the entryway locks, keypad codes, and make plans to get a security system set up. 
     

  • - Have utilities turned on in your name, as well as television provider and internet.   
     

  • - Deep clean the new house, even if it looks clean.  This job can be hired out, or you can DIY if time permits.  Keep in mind costs involved with renting any necessary equipment, as well as cleaning product expenses. 
     

  • - Plug in/turn on all appliances, to make sure they’re in working order. 
     

  • - Walk through the house to check for minor things that didn’t warrant repair by the seller. Having your copy of the home inspection in hand will help you find the problem areas that may need to be addressed before they get too big and too costly. 
     

  • - If you want update the home’s color palette with a fresh coat of paint, or do any other small improvement jobs consider getting them done before move in day. This will allow for the painting and repairs to be finished easier and faster before settling in with added obstacles. 
     

  • - Typically sellers leave the window treatments, but in case they didn’t be sure to measure the windows. Allow for time and budgeting to purchase and install shades or blinds until curtains or shutters can be hung. 
     

  • - Let everyone know your new address:  relatives and friends, of course, but also medical offices, your employer, schools, and other important people that communicate by mail. 
     

  • - Create a homeowner folder to keep all of your important papers. Be sure to store it in a safe and easily accessible place. 
     

  • - Meet your neighbors!  Once you’ve moved in, introduce yourself and your family by hosting a front porch social, with light refreshments.  Slip invites in mailboxes and simply ask them to stop by to say hello.  
     

Once you get settled in, you’ll need to get into a homeowner frame of mind.  You will have things to keep an eye on and maintain on a regular basis. Bob Vila’s home checklist gives you an idea of what you’ll need to check regularly. 
 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: community.homeaway.com

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Sprucing Up Your Curb Appeal in Just a Weekend!

Thursday, May 30, 2019
by Scott Darling


Most home sellers work full time, and getting the house prepped to be put on the market can be a second full-time job, depending on their to-do list.  As most every seller knows, curb appeal is vital for a great first impression, and carving extra time is a luxury, but with these tips and ideas, it can go from zero to fabulous in a weekend! 

 

  • Cleaning Pressure wash the exterior siding, fencing, the porch floor, concrete walkway and driveway, and as dreadful as it may be, clean out gutters. 
     

  • Painting These exterior items may need paint:  front door, shutters, window sills, exterior trim, garage doors, porch floor and railings, mailbox and address numbers. 
     

  • Replace Lighting fixtures that are dated or weathered should be replaced, and put up new address numbers, or mailbox if paint doesn’t improve their appearance, and get a new welcome mat. 
     

  • Inspect Go around the house and look closely at exterior trim, shutters, and window sills.  Examine concrete for damage, and make sure walkway pavers are stable and in perfect condition.  Make certain that all landscape lighting or irrigation systems are in working order. 
     

  • Lawn Care Not only should the lawn be mowed but using an edge trimmer to neaten up the walkways, driveway and planting beds makes a big difference.  Seed any dead areas of the lawn. 
          

  • Landscaping Weed flower beds, add seasonal easy-care plantings (annuals are best for season-long blooms!) and new mulch.  If a tree needs more than minor pruning, call a tree specialist. 
     

  • Decorative Remove personal yard flags, add some potted plants on the porch, highlight a shady spot with a simple outdoor bench and a few plants, and clean up outdoor furniture cushions or replace them. 

 

Much like the interior of the home, the outside should be clean, in working order, and clutter-free.  Before you get outside, go online and search recently sold homes in your market for some curb appeal inspiration, then put in a weekend’s time, and get that house sold!  

 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: talktotucker.com

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Open House Etiquette

Tuesday, April 23, 2019
by Scott Darling


The house you’ve had your eye on has advertised an Open House, and though you haven’t started your official house hunt, you’re dying to see it.  If you’ve never been to an open house, there are a few things you need to know before you visit--you want to make as good an impression as the house! 

 

  • - Dress casually, and maybe even wear slip-on shoes, as some homeowners prefer guests to remove their shoes.  

  • - Be on time (maybe even early so you can be the first ones there):  unless there’s an absolute emergency, you don’t want to get there when lots of others are in attendance, nor do you want to get there as the agent is locking up to go home. 

  • - Let yourself in!  An agent may greet you at the door, or they may be waiting for visitors in a central room.  Remember that different agents have a different method, so be prepared for a self-tour, or an agent who would like to give you a tour. 

  • - Signing in is sometimes optional, but some homeowners require it for their protection, and if you’re ready to start looking for a home, the attending agent can have your contact information so you can talk with them about your needs. 

  • - If you already have a buyer’s agent, the polite thing to do would be to let the attending agent know who your agent is. 

  • - While others are looking around, wait until they’re out of a room before you go in, giving them space and privacy. 

  • - Most houses on the market don’t have closed access, but if you come to a closed door at an open house, ask the broker if it’s okay to go in and look around.  Sometimes another guest has mistakenly closed a door. 

  • - At the same time, don’t open medicine cabinets or anything else that could have the seller’s sensitive personal items, and make sure it’s okay to check out closet space before you go into the bedrooms. 

  • - Only take photos with permission.  Most of what you need to know is already provided in the open house flyer and online. 

 

Take the brochure or flyer the agent has available and take notes on it as you tour the house. Once you’re finished with the walkthrough, stop and ask the agent any questions you may have about the house, and write those answers down. This is especially helpful if you’ve taken a day to visit several houses and will make any discussions with your significant other or your agent much easier. 

 

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: bankofthewest.com

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For Sale By Owner for Sellers and Buyers

Tuesday, March 12, 2019
by Scott Darling


Some homeowners think they’ll be saving a ton of money by choosing to sell their home themselves, and unless they’re a real estate agent, that may be so.  If you are interested in a house that is offered for sale by the owner (FSBO) what’s the risk for you?  Read on to find out why it’s not a good idea for seller or buyer: 

 

Sellers 

  • - According to realtor.comⓇ, the listing agent and buyer’s agent split about 6% of the home’s sale price.  You’ll need to calculate how much it costs you to stage and photograph your home, get an MLS number, market the house, take time from work to schedule showings as well as host the showings, do all of the paperwork involved, and contact and pay attorneys and others who are involved in a home sale, and compare it to the commission you believe you’ll give up to an agent.   

  • - To be fair, the seller should offer a 3% commission to the buyer’s agent.  Otherwise, most agents won’t bring anyone who’s interested to your home for a showing. 

  • - Sellers are responsible for any mistakes that have occurred once the transaction is in motion.  If you don’t purchase errors and omissions insurance, you may end up paying out of pocket in court or settle out of court for those mistakes. 

  • - Pricing your home takes more than just an online search for sold homes in your area, and not only can you overprice your house, but you can lose thousands by underpricing. 

  • - Scammers abound and can cost you in many ways.  These criminals target FSBO homeowners, because the scammers are savvy enough to make their offer look legitimate.   
     

Buyers 

  • - Beware the owner’s asking price.  Since the majority of FSBO sellers don’t have the experience to set a good market value on their home, their quote will likely be too high. 

  • - Be prepared to wait some time to see the home.  Most homeowners have full-time jobs, and you’ll have to view the home on their time, with them as your host. 

  • - If a seller tells you their house is in perfect condition, and you can save money by not hiring an inspector, walk away.  Every house even brand-new houses should be inspected before changing hands. 

  • - Ask the seller what fees they plan on paying, and in the case that they ask to share the costs with you, it’s time to find another house. 

  • - Do your own research on the house, make sure the person you’ve talked with is the actual owner, and proceed with caution.  There are scams that involve an empty house, FSBO signs, and scammers who will take your money and run, because they aren’t the rightful owner. 

 

The best advice: hire a RealtorⓇ.  Not only are they the ones taking the risk in selling your home (or not), licensed real estate agents know everything you don’t know about selling and purchasing, devote all their working hours to home-buying, and can protect your investment as well as a buyer’s interests.   

 

Courtesy of Chester County PA Realtor Scott Darling.

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Terms First-Time Home Buyers Should Know

Friday, February 1, 2019
by Scott Darling


The time has come to begin the steps of buying your first home and looking around the internet and other real estate-related media, you’re finding there’s a lot more to know than finding a house, getting a loan, and signing papers.  There are some key words that can be unfamiliar to a first-time home buyer, so familiarize yourself with these lesser-known terms so you’ll have fewer questions and stumbles along the way: 

 

  • - In order to be certain that the home is worth the amount of the loan, there will be a home appraisal performed by an unbiased inspector of the lender’s choosing. 

  • - At the final paper-signing, the buyer is required to pay closing costs, which normally include attorney fees, surveyors, inspections, and title insurance, among other things.  Be prepared to have 2-5 percent of the purchase price for closing costs. 

  • - If you’d like to pay less interest over the time of your loan, you can purchase discount or mortgage points.  To learn more about this option, check out these tips from the Nerd Wallet website. 

  • - Earnest money is money that will be paid to the seller to show good faith of the buyer towards the home purchase.  It will be applied to your down payment. 

  • - When you have funds in escrow, you will have given funds to a third party to hold until they have verified that inspections, disclosures or any disputes have been resolved.  Keeping it in escrow protects your deposit before you sign the final contract to buy your new home. 

  • - Pre-approval is very important and differs from being pre-qualified.  If you’re pre-approved for a loan amount, you have a realistic expectation of what you can buy. 

  • - If your down payment is less than twenty percent of the purchase price, you will pay private mortgage insurance typically until that amount reaches twenty percent of the loan or home value. 

  • - Your lender will require the purchase of title insurance, which protects real estate owners and lenders against any property loss or damage for whatever reason.  Learn more about what title insurance is and what it covers from the CFPB. 
     

There are other terms and abbreviations you may find in your search for a house in their descriptions and about real estate in general that you won’t be familiar with.  Here’s a longer, more comprehensive list from realtor.comⓇ.  The more you know before you get started, the smoother the home-buying process will be!

 

Courtesy of Chester County PA Realtor Scott Darling.

 

Photo credit: realtor.com

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Utilize Your Space

Friday, December 28, 2018
by Scott Darling


The large dining room, family room or bonus rooms was one of the things that sold your house to you.  Despite our good intentions, though, those rooms sometimes end up being used for storage, folded laundry, or just not being used altogether.  Use these ideas to inspire you to get these rooms ready to spend more time in: 

 

Extra Bedroom 

Most extra bedrooms end up being the guest room, whether you have guest often or not.  Turn that room into a dual-purpose room; use a daybed with trundle or a wall bed so you’ll have more space in the room for other things. 
 

  • - Set up a home office or study space for the kids. 

  • - Add a small double-leafed or card table, use stackable or folding chairs, install some shelving, and have the room serve as the game/play room.   

  • - If your children like to invite friends over for video games, hang a flat screen on the wall, a small shelf for their game console, lay a cushy area rug on the floor, and purchase bean bag chairs, slip chairs are large floor pillows for seating. 

  • - Create a reading room with a small bookshelf, a comfy chair, blanket, small side table and lamp. 

 

Bonus/Flex Room 

You couldn’t wait to start decorating and using your extra room, but you’re stumped on exactly what to do. 
  

  • - Get the television out of your living space, get some affordable seating, and create a home theater.  

  • - Do you have a musician in the family?  Soundproof the walls, add extra electrical outlets, and clear the floor for your own concert hall. 

  • - Give your workout equipment a home in the extra room, use a small television for workout entertainment, install a comfortable bench, hooks for small towels, and include a small fridge for water and smoothies when you’re finished with exercising. 

 

Not Just for Dining 

Busy families don’t always have time for a sit-down meal at the dining table, but there’s no need to use it for special occasions. 
 

  • - Use one end of the table for office space.  A dining room is less busy than other rooms, and you can get more done there without distractions.  Use a laptop for the space, take advantage of wireless printing, and use part of a china cabinet for supplies so you won’t fill the room with office clutter. 

  • - Consider using a smaller table or remove the leaf from a large table.  Place some comfortable seating at one end of the room, add a sideboard to use for a coffee/tea bar, and have an after-dinner seating area. 

  • - If your home lacks an extra living area, why not use it for family time instead of a dining area?  Treat the space as you would a den, and furnish it with sofa, chairs, and television for a cozy family room. 

 

There are no rules that say a room must be used for what the blueprint says.  Your home is just that--your home.  You know best how you and your family can use a space.  It doesn’t have to cost a lot; shop thrift shops and tag sales, or use what you already have.  You can add extra space to your home without picking up a hammer and nail!

 

Courtesy of Chester County PA Realtor Scott Darling.

 

Photo credit: livingroomideasq.blogspot.com 

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Real Estate Disclosures and You

Friday, December 7, 2018
by Scott Darling

Zillow.com defines the term disclosure as “...the buyer’s opportunity to learn as much as they can about the property and the seller’s experience in it.”  In most states, this simply means that the seller must let the buyer know about problems that they are aware of.  Whether you’re selling or buying a house, disclosing issues with the house is an extremely important part of the process.  

 

What Disclosure Means for the Seller 

  • - Your listing agent will provide a form for you to fill out, answering questions with either yes, no or I don’t know about different aspects of the house.  This form should be filled out truthfully and to the best of your knowledge. 

  • - Items that most states ask you to disclose to the buyer:  lead paint or asbestos, previous repairs or additions, mold or water damage, pest issues, drainage problems, foundation cracks, problems with HVAC and other appliances, and if the roof is leaky. 

  • - If you think there might be a problem, say possible mold in the crawlspace, have an inspector come and have a look.  It’s better to be safe than sorry here. 

  • - While you’re going over the disclosure form, if you’re not sure if you should report something, report it anyway.  It’s best to err on the side of caution. 

  • - Have the disclosure ready before you’ve accepted an offer for your own protection. 

  • - Your listing agent will be aware of all government disclosure requirements--federal, state, and local--so be prepared to report all that these laws ask of you. 

 

Disclosure and the Buyer 

  • - Once you receive the disclosure statement, go over it carefully and ask questions if you’re not sure about anything listed, because you must sign the disclosure. 

  • - The extra expense of having an official inspection done on the house is vital to this part of the sale.  Have the disclosure form information with you when you meet the inspector at the house, so you can go over the problem places with a pro. 

  • - In the case of any additions to the home, check the local government building permit and zoning information to make sure the addition was done the legal way by licensed people. 

  • - If you have any issues with the seller’s answers on the disclosure statement, and don’t want to make the repairs, and can’t come to an agreement with the seller, it may be best to walk away and look for another house. 

  • - Once you are satisfied with the disclosure and have the peace of mind that the sale should go through, sign off on the disclosure. 

 

A disclosure should be a seller’s protection plan, and smart sellers will be completely honest, and maybe even over-disclose.  Also, be aware that some states even ask sellers to disclose things like traffic noise, and even paranormal activity!  Your Realtor will know everything you need to provide to buyers, so the sale of your home goes smoothly.

Courtesy of Chester County PA Realtor Scott Darling.

Photo credit: nestiny.com

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How To Select An Elder Law Attorney

Tuesday, November 13, 2018
by Scott Darling

When you are confronting a difficult life issue, you routinely seek guidance from someone who can help you to solve the problem.  So, it stands to reason that when you or a family member are confronting the potential or immediate need for long term nursing care, you will want someone experienced with the related planning opportunities on your side.  Elder Law attorneys counsel the elderly and their families through all of the important legal considerations they encounter through the phases of the aging process.  Elder Law attorneys typically handle legal matters related to preparation of estate planning documents, health care, nursing care planning, and asset protection, guardianship and Medicare/Medicaid.

It is important to select an attorney with a practice that focuses on issues confronting older adults.  This should not be a general practice attorney who dabbles in “preparing simple wills” or even an estate planning attorney who does not regularly deal with your specific concerns on a regular basis.  Don’t be afraid to interview a potential Elder Law advocate to make sure they have the proper experience and can help you to obtain the best result.

Not only should an Elder Law attorney be able to handle all of the technical and legal needs of the family, but they should also be experienced in dealing with “real people” and their emotional needs.  Protecting and providing for the family are central goals for all of us.  That being said, much of the planning for protection of assets in the face of the rising cost of long term nursing care involves emotional decision making for all people involved.  You need to have an advocate who is calm and comforting, but who is also willing to lay out the hard facts of the situation so you can have a full array of options and consequences.

What Are Some Of The Jobs Of The Elder Law Attorney?

An Elder Law attorney’s role can involve some or all of the following:

  • Working with clients to prepare properly drafted estate planning documents such as wills, revocable trusts, general durable powers of attorney, medical powers of attorney and living wills.
  • Working with clients to prepare and implement a plan to protect and preserve their home and financial assets so that they are not lost to long term care spending.
  • Working with clients to integrate estate and inheritance tax planning and savings into the overall approach.
  • Working with clients to select an appropriate assisted living, continuing care or nursing care facility.
  • Working with clients to review admissions agreements for care facilities.
  • Working with Agents under power of attorney documents to make sure they do not incur personal liability.
  • Working with clients to apply for Medicaid.
  • Working with clients to apply for Veterans’ Benefits such as Aid & Attendance.
  • Working with the family to make sure that all of the parties understand the plan and agree with the way it will be implemented.

Elder Law Attorneys Will Charge For Their Services.  What Are Their Fees?

The legal fees associated with assisting the elderly client will vary significantly depending on the tasks that need to be completed.

For aspects of the representation that involve work with an uncertain time commitment, an attorney is likely to charge on an hourly basis.  In these cases, you should ask for a good faith estimate on the time expenditure and hourly rate.  You can also provide the attorney with a cap at which point he or she must report to you before spending more time/charging more.

For more comprehensive plans, like the protection of family wealth through the use of a Medicaid Asset Protection Trust, flat fee planning is best for the client.  This allows you to know the fee upfront without the uncertainty of hourly billing.  Additionally, a flat fee structure creates an open sense of collaboration and communication without concern for hourly billing.

In the end, the planning done by the Elder Law attorney can result in tens or hundreds of thousands of dollars of savings for the family.  The return on investment in an experienced Elder Law counsel should be significant and well worth the effort once you have located the right advocate.

What Do You Need To Know About Your Elder Law Attorney?  Here Are Some Questions To Ask:

It is important to find an attorney who is experienced in dealing with your exact legal issue.  “Elder Law” does encompass a broad range of legal issues.  It is possible that a single attorney has not covered every issue in the Elder Law universe.  Just check with them to make sure your case fits within their wheelhouse.

Additionally, you will want to “like” the person you hire.  You should be able to get a sense from the attorney and all of the people you talk to at the law firm that their team will be a good fit for you and your family.  You will want someone you feel comfortable calling and a staff of individuals who are willing to go the extra mile for you.

Here are some questions you should ask:

  • Is your practice focused on the Elder Law related issues?
  • How long has your practice been focused on Elder Law?
  • What percentage of your practice is presently devoted to Elder Law?
  • Is there an aspect of Elder Law that you would consider your forte?
  • Do you have a client intake form that I will need to fill out in advance of meeting?
  • What is your fee structure?

Generally, you have to view hiring your Elder Law counsel to be the same as entering into a relationship.  You have to trust your attorney to help you and your family through delicate issues and to provide advice that could ultimately protect hundreds of thousands of dollars.  This selection will be a key to achieving a successful completion of your goals.

Once you have selected the proper Elder Law attorney, some of the other most common planning considerations are:  Creation of Last Will & Testament, Creation of a Medicaid Asset Protection Trust, use of a Medicaid Compliant Immediate Annuity, qualification of the Family Caregiver Exception, creation of the Caregiver Agreement, Irrevocable Burial Reserve, Monthly Gifting Exception, Elder Law Friendly Financial Power of Attorney, Medical Power of Attorney, Living Will.

Check out our other great articles throughout this site that more specifically address the different ways to protect and preserve your assets.  Click here:  Access to More Blog Articles

For PA Residents:  To request our informative Elder Law Guides click here:  Request Elder Law Guides Today!

To keep up-to-date with changing laws and new planning options sign up for our free newsletter by clicking here:  Subscribe to our Newsletter Here!

By and photo credit: https://www.paelderlawsolutions.com/2017/04/how-to-select-an-elder-law-attorney/

Courtesy of Chester County PA Realtor Scott Darling.

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