Real Estate Information

There was an article in the Sunday World-Herald this week about home valuations.  Here is the link for the entire article: http://budurl.com/HomeValuation

Assessed values of homes is a topic that often comes up when working with buyers and sellers.  The question I get most often is "Why is the list price for the home so much higher than the assessed value?"  The answer I provide is not a easy one.  The assessed value of the home is not the same as market value. 

The assessed value is supposed to be 92 to 100 percent of market value.  The county does the best they can with assigning assessed values to each home but it is a daunting task and it is not perfect.

The article in the Sunday World-Herald states that home valuations may not drop as much as homeowners are expecting.  During the month of June you can protest your valuation to your county board. If you believe your assessed value is too high, contact me.  I will be happy to provide you with information you can take to your county board.

http://budurl.com/HomeValuation

I tell my Buyers that Title Insurance is the best insurance policy you can buy. You only pay for it once and it protects you from a wide variety of possible ills. 

1. Property Titles: First, Title Insurance protects you from human error.  Titles to property were kept in book form for most of the history of the United States.  The grantors were in one set of books and the grantees in another set.  To trace back a title to its source, a human being had to haul out big dusty books.  Although most title information is now on computers there is still a lot of room for error because a title search has so many components.

2. Re-conveyances: These are proof that liens and encumbrances are paid off. These can be placed on a home by a variety of entities.  You want to make certain everything is settled and paid off before closing.

3. Easements and Right-of-ways that may exist on any given property.  These can be from the local public utility companies but can also be private entities. 

4. CC&R: stands for “Covenants, Conditions and Restrictions.  These can be put on a property by the developer, the builder or a neighborhood association. 

5. Title searches also examine marriage records, death certificates and tax sales. 

6. They also look for fraud, forgeries, and missing or incorrect signatures.

7. They look for defective record-keeping. 

8. Judgments against the property or owners of a property.  This comes into play most often when people have judgments regarding alimony or child support.  This affects judgments against Buyers as well as Sellers.

These are reasons to buy Title Insurance.  It protects you from, or identifies for you, all sorts of issues as stated above.  It’s best to buy extended title insurance.  It can be extended beyond the 2 year limit and it’s your best protection against human error.  In Omaha real estate, we at CBSHOME trust Nebraska Land, Title & Abstract (NLTA) for title work.  They get you to the closing table on time, accurately and work closely with agents and clients to get the job done.

An escrow officer is someone who handles all the money, which makes certain the title of the home is clear and gets you to the closing table on time. It is vital that the Buyer chooses a great escrow company.  Here are three things to consider when making your selection:

1. Reputation/Reliability: The escrow officer is the person who makes certain you get to the closing table successfully. There must be a very good relationship between your Realtor and the escrow company. In other words, the escrow company must have a proven record or success, cooperation and communication.  A good Realtor will check with the escrow officer frequently to make certain everything is happening on schedule. The escrow company will issue a document of instructions that you and your Realtor must review carefully. Make an outline of all the events, documents etc. that must be satisfied and get the escrow officer what is needed as quickly as possible.
2. Location: As I mentioned earlier, lots of contact with the escrow officer is critical to the process. It will be easier if your Realtor or you can meet face-to-face with the escrow officer when necessary. The Realtor’s access to the escrow officer is not to be taken lightly. A good Realtor has identified a “go to” escrow company they can depend on. Pay attention to who they recommend. 
3. Costs/Fees: Many fees are mandated by State law and are not negotiable.  However, there are fees which can be discussed and compared. Make certain you understand all the fees the escrow company will charge. If an escrow officer is reliable and the fees are reasonable when compared to other companies, then you have a winner.

A little research is always a safe bet. This is a big step for a Buyer and one you want to make with confidence. CBSHOME works with an in-house Title and Escrow Company with an A-one reputation. When it comes to Omaha real estate you can’t go wrong with our Team.

“My Uncle is in construction and I want him to do our home inspection.  We’re watching our up-front expenses and he won’t charge us.”  If I had a nickel for every time a Buyer said that to me I’d be a rich woman.  I can’t emphasize enough the importance of hiring a professional home inspector when considering a home. 

Here are some important tips when considering a home inspector:

• Is the inspector ASHI Certified (American Society of Home Inspectors)?  ASHI is the largest and oldest North American organization of professional home inspectors.  They have a rigorous certification process that can be trusted.
• How many home inspections has the inspector performed?  This is probably the single biggest investment of your life.  Don’t entrust the job to a newbie.
• Ask to look at an inspection report.  It should be detailed. It should have colored pictures or detailed drawings of problem areas.  An average report is at least 20 pages or more – many are much longer.  The inspection report should cover all the systems of the home, i.e. heating, cooling, electrical, structural, plumbing, roof, etc.
• Ask if the inspector charges for a re-inspection.  If the inspector has identified needed repairs and the seller has agreed to get them fixed then he should come out later to see if the repairs have been completed satisfactorily.  Most reputable inspectors do not charge for a re-inspection.

4 more reasons why a professional home inspector is so important:

1. A home inspection should last approximately 3 hours.  You may not have to be there the entire time but it is vital you be there at least 30 minutes with the inspector for a “walk-thru.”  A good inspector will take you through the house showing you what was inspected and what he has found. 
2.  A good inspector will also show you how things work in the house.  He will explain things such as types and installation of furnace filters, water shut-off valves, etc. 
3.  A good inspector will recommend you employ other inspectors if he finds something that is suspect such as roofs, heating and air conditioning, etc.
4.  A good inspector will tell you which repair items are major and which are minor.  This is critical when you are deciding on asking the seller for repairs. 

In Omaha, we at CBSHOME Real Estate are adamant that Buyers have good home inspectors.  Do not hesitate to email me at Marie.Otis@cbshome.com or just give me a call at 402-697-4251.

You have found a house you really want. Now it’s time to make an offer. Good for you! But heed this warning: Be sure you’re serious – it will cost you plenty!  Here are 7 things you should consider before submitting an offer to a Seller.

1. Ask your Realtor to make an analysis of what “like” houses are selling in that particular neighborhood. You don’t want to pay more than market value for the house. 

1. Figure in all your costs. Your mortgage lender can take the amount you are going to offer (and all the other variables you have already discussed and agree on) and plug the figures into a software program that will spit out a Good Faith Estimate (GFE). It will show all the costs you will be responsible for and how much your monthly payments will be.

1. The only time you may want to make your offer the highest you can afford is when the market is really hot and you have competition for the house. Then you want to make your offer as sweet as possible for the Seller. In today’s market, know your upper limit and base your bid not on the most you can afford but select a lower figure. This way you have room to negotiate. 

1. Expect to negotiate. If you are lucky the Seller may accept the first offer.  Experience has shown me that there is usually at least one counteroffer.

1. Serious offers come with an earnest deposit. I’m often asked how much the earnest deposit should be. There is no set amount but over the years I’ve learned the rule of thumb is 1% of the amount offered.

1. Be specific – put everything in writing. Don’t count on the goodness of others or assume items will be included. Have your Realtor include all items in the offer that are vital to you.

1. If your offer is accepted remember you must pay up front for all inspections.  Inspections usually have to be completed within 5 business days after acceptance of the contract and both parties have signed. Remember, the payments for all inspections are due the day the inspections are performed. If the inspection is unsatisfactory you don’t have to buy the house but you still have to pay the inspector(s).

 Research has proven that buying a home is an emotional experience. If you keep that fact in mind, then make certain you are smart and cover all your bases. Follow the steps above and you will usually come out a winner with your dream house.

CBSHOME has an in house lending program for Omaha home buyers.  Give me a call at 402-697-4251 or email me at Marie.Otis@CBSHOME.com and I’ll get you in contact with a mortgage officer.

The first thing I tell my Buyers is to visit with a mortgage loan officer (or 2) to determine how much they can spend on a property.  Most of my clients can’t afford to pay cash and so it’s imperative to learn their spending limit and how the house payment will impact their budget.

I encourage my Buyers to obtain a Pre-Qualification Letter rather than a Pre-Approval.  What’s the difference?

• Pre-Qualification means the information you provide to the mortgage officer has been verified with the appropriate documents and a credit check. 
• Pre-Approval is usually just talking for 20-30 minutes with a mortgage officer with no proof of income, credit score, etc.  With the limited information and with no verification the lender gives his/her “best guess” of what the Buyer can afford.    

I believe the first choice, Pre-Qualification, is the only choice for 3 important reasons.

1. The Realtor will be able to concentrate on finding homes in the real price range. It’s a waste of everyone’s time and effort for a Realtor to show a Buyer houses for $250,000 if their real limit is $150,000.    

1. When an offer is made on a home the Seller will know they have a serious Buyer if the Buyer is Pre-Qualified.  That makes a huge difference in the ever important negotiation process.                    

1. The most important reason is the Buyer can have the peace of mind they need when looking for and buying a home.  The Buyer now knows his/her top limit.  If the Buyer’s top limit is $150,000 they can look for a home up to $130,000.  That way they have plenty of cushion to pay fees, moving charges and closing costs. 

Why is Your Credit Score so important?  Why do credit bureaus exist and why do they keep score of your credit usage and history?  Here are three reasons that directly affect us all:

• Credit Cards – banks could not issue these without knowing their RISK
• Debit Cards - banks could not issue these without knowing their RISK
• Checks – stores could not accept checks without knowing their RISK

Risk?  Simply put, banks and creditors need to know how likely you are to pay back the money you owe.  The more likely you are to meet your obligations the lower percentage rate you will pay.  If you have a low credit score instead of denying you a loan or a credit card banks will charge you a higher rate of interest.  However, if your credit score is really low they won’t risk doing business with you.

For mortgage or car loans your credit score makes a huge difference in what you pay every month. There is a fabulous chart at http://www.myfico.com/Default.aspx .

It gives you a real life example of what you will pay for a mortgage or car payment with your current credit score. 

• A person with a credit score range of 760 to 850 will pay $750 dollars a month in principle and interest for a $150,000 mortgage. 
• A person with a credit score range of 620 to 639 will pay $905 a month for the same $150,000 mortgage.  This is a dramatic difference and can make the difference of living the American dream of owning a home or not.

Get smart.  Clean up your credit score.  You deserve to get ahead in this life.  This is an important step in getting your life on track.

I’m often asked by Buyers how to get the best rate when shopping for a mortgage.  My advice seems to differ from most of the gurus I read on-line.  I have helped so many people secure homes and have learned some really important realities when looking for a mortgage.

1. Most gurus advise you to “shop around:”

It’s vital to have two (2) lenders give you an offer.  One lender should be a recommendation from someone you trust - for example, your family, friends or Realtor.  The second offer should come from the bank where you do business.  Be certain to stay local with your mortgage lender and stay away from long-distance or Internet lenders.  Why?  Because when you have a problem (and problems are inevitable) it’s vital to have someone local you can talk to face-to-face.  Also, it’s so important to understand all the charges on the mortgage.  As a Buyer it’s not possible to know your Internet lenders’ concept of ethics; whereas you have plenty of sources to learn a local company’s ethical practices.  Finally, Internet lenders pull your credit information so many times it actually lowers your credit score.

2. Know how Credit bureaus figure your credit score:

Here is a good rule of thumb to remember about how credit scores are figured. 

• Payment history – 35% 
• Total Amounts Owed – 30%
• Length of Credit History – 15%  
• New Credit – 10%

Type of Credit in Use – 10% (This is a wild card factor such as the types of credit lines

3. Therefore, forewarned is forearmed.  It’s important to:

• Pay bills on time.
• If mistakes occur on your credit report – get them fixed!             
• Pay down your credit cards.  Lenders want you to owe less than 50% of the credit limit.
• Be careful applying for new credit when shopping for a loan

Use only a reputable local lender and clean up that credit report so you can get the best rate on your mortgage loan.  You can help yourself and get the best rate and the best deal.

Everywhere I look color is beginning to pop out of the ground.  The forsythia is in bloom with its cheery yellow flowers. The daffodils in my garden have bright yellow tips. Lavender “Bright Eyes” along the sidewalk make me smile every time I see them.

Early April is probably too early for planting annuals here in Omaha.  The suggested time for putting those tender new plants in the ground is May 15 when all fear of frost is gone but usually I can’t wait that long. If you have a vegetable garden then April is not too early to begin planting root vegetables. It’s best to wait on lettuces. 

If you’re a homeowner then you should know that the curb appeal of your home has so much to do with your landscaping. It is a wise decision to invest in a few carefully selected and attractive shrubs, trees and a healthy lawn.  Then fill in with the color of flowers. It’s best to pick flowers that are native to the area. The lawn and garden expert where you buy your flowers can help you with a good selection.

The latest trend is to plant flowers of the same type and color clumped together – much like flowers found in nature.  Patches of tulips, petunias or salvia can make a bold statement as well as add beauty to your landscape. We have beautiful spring times in Omaha. You can add to that beauty and to the value of your home by tending your yard and garden.

It’s Spring! Time to roll up those shirtsleeves and get to work. Many homeowners are looking for great projects designed to enhance their lives as well as their homes. One of the best improvements I can recommend is adding a deck. This is a terrific way to increase the living space and the value of your home. In these beautiful warm months a deck is a place to enjoy nature, entertain family and friends and work on that tan.

A deck also dramatically improves the appearance of your home and increases its value at the same time. For approximately $10,000+ most homeowners saw an 85% return on the total cost of the deck projects. Begin by doing some vital planning. Ask yourself a few questions: Where are you going to build the deck? How large is it going to be? What materials will you use? Are you going to do the job yourself or hire someone?

It’s so important to check with local authorities to determine what permits and safety inspections may be required when building a deck. Hiring a reputable, professional contractor can save you hours of research. They are usually equipped with the right tools, information and contact to get the job done right.

This is my favorite time of year. I feel so energized and ready to tackle those tasks I’ve left undone during the cold winter months. I hope you feel the same way – let’s flex those muscles.