Preparing for a Home Inspection, What should sellers do to help?

By David R. Leopold

We see it every day. Sellers who don’t take the time to ensure a smooth home inspection and who pay for it in the long run. A little preparation can ensure sellers have great home inspections.

Home inspectors typically arrive 30-45 minutes early to the home inspection appointment so that they are professionally set up and ready to go when you arrive. I can’t tell you how many times I’ve been greeted at the door a half hour before everyone is set to arrive by a person who looks as if they’re freshly out of bed.

If a seller does this, he’s about two hours late for his presentation. On inspection day, the house should be empty of the owners and their presence. In fact, everything should be just like it was on the initial viewing day. Be ready for inspection day by getting up and out of the house an hour before the appointment. The home should also be clean and pets should be removed or crated.

If something isn’t working properly, don’t try to hide it. We will find it. Buyers get very suspicious when sellers deliberately try to conceal defects. They immediately see you as dishonest and wonder what else you’re hiding. It’s not worth losing their confidence over a trivial defect. Just leave a note: “We know about it and we’re getting it fixed.”

In addition, make sure the location of attic and crawlspace hatches are identified and are easily accessible, as home inspectors hate moving your stuff.

If the hatch is in a closet, remove any clothing that is hanging directly under the hatch as well as anything on the floor. Your home inspector doesn’t want to move your smelly sneakers.

It’s also important to check every area of the house for blown light bulbs. This includes the crawlspace, attic, garage and furnace room. We don’t want to waste time determining if a fixture is inoperable or simply has a blown bulb.

Do you have a septic system or a well buried in your yard? If so, make sure you leave a sketch of the locations. There’s nothing worse than a group of contractors, home inspector, buyers and their REALTOR® wandering around a yard needlessly, searching for something you know the exact location of.

Lastly, please don’t leave your dirty laundry in the washing machine or dryer. We have to test these appliances and we don’t want to pull your dirty underwear out of the washer in front of everybody. Also, make sure your oven and stovetop are clear and clean so that we can easily test them without setting off the smoke alarm.

Some of these items may seem like REALTOR® 101, but I’ve noticed over thousands and thousands of home inspections that only the most successful REALTORS® pay attention to these details. Help your seller help themselves—and you—get ready for inspection day.

By David R. Leopold is the owner of Pillar To Post Home Inspection located in Fairfield County, Conn.

For more information, visit www.pillartopost.com

Do you need a checklist for your Home Inspection

New Home Sales: Cash Purchases on the Rise

 

New Home Sales: Cash Purchases on the RiseThe onset of the housing crisis in 2007 led to a decline in the share of new home sales due to conventional mortgage financing and increases in the shares due to mortgages backed by the FHA and the Department of Veteran’s Affairs (VA), as well as cash purchases.The second quarter data from the Census Bureau’s Quarterly Sales by Price and Financing indicates that count of cash-based new home sales rose to 10,000 for the quarter, matching a cycle high. During the 2002-2003 period, cash sales made up only 4% of purchases. In contrast, cash purchases constitute a considerably larger share of the existing home market – 32% of sales in June 2014 for example.

It is worth noting that another measure of cash sales for total new construction from CoreLogic shows a higher level of cash sales than the Census: 17% in April 2014.

New home sales due to FHA-backed loans fell to 11% of the market during the second quarter. This is down from 28% in the first quarter of 2010 and is closer to the 10% 2002-2003 average. As the conventional mortgage financing share has risen, the share of new single-family home sales due to FHA-backed mortgages has declined. Falling FHA loan limits will likely place additional downward pressure on this share in 2014.

VA-backed loans were responsible for about 11% of new home sales during the second quarter of 2014.

These sources of financing serve distinct market segments, which is revealed in part by the median new home price allocable to each. For the second quarter, the median new home price due to FHA financing was $212,500. The median price for VA-backed loans rose to $274,800.

Conventional mortgage financing had a median price of $289,500.

Finally, the median price for cash purchases for the fourth quarter was $303,500.

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Consumer Confidence: Highest in Nearly Seven Years

Consumers are feeling much better and more confident in recent months: the consumer confidence index in August rose to the highest mark in nearly seven years. Such a trend could lead to improvement in home sales and boost demand for retail commercial spaces.

Numerically, the index hit 92.4. The last time it was that high was right before the financial market crisis in October 2007 when the unemployment rate was very low at 4.7 percent (versus today’s unemployment rate of 6.1 percent). The index, however, is still shy of 100, where at least half of Americans would be saying that the economy is generally moving in the right direction.

For home buying, it is not only about financial capacity and mortgage rates. Confidence also matters. People need to feel they will be better off in the future in order to make a major expenditure. The index that captures only the future expectations was 90.9, also nearing the crucial 100 marker.

The very strong, high stock market has driven total household net worth to an all-time high. However, only about 10 percent of Americans have meaningful exposure to the stock market. Therefore the stock market is not the best gauge of economic sentiments of the middle class. In contrast, the consumer confidence index covers a whole swath of people across all income spectrums and therefore this index is much better in assessing the mood of normal Americans.

Confidence can change the world. In fact, when the Portuguese first circumnavigated the lower tip of Africa on their way to Asia for spices, the very stormy area with constant violent sea waves near the tip was given the scary name of Cape of Bad Storms. The King of Portugal immediately changed the name to Cape of Good Hope in order to encourage more sailors to make the trip. Portugal and subsequently Spain rose in economic power while the old trade route cities of Venice and Genoa lost economic power.

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How young tech millionaires invest

 

As soon as the sale of his company was announced in 2012, Mike Zhang, who was barely above the legal drinking age at the time, started getting a flood of phone calls.

Mike Zang Picture

Wealth managers from some of the largest Wall Street firms — including Goldman Sachs, Merrill Lynch and Credit Suisse — started pursuing the freshly minted millionaire. Some even sent him gifts in an effort to woo his business.

But Zhang, now 23 years old, was turned off by their approach.

“When I have a rainy day, I don’t want to talk to an opportunist,” he said.

Zhang instead turned to Andrew Palmer, a managing director at Bel Air Investment Advisors. The two had met in the summer of 2011 at an event where Zhang was being honored with an entrepreneurship award for his success as the founder and CEO of Airsoft Megastore, an online store for lifelike toy guns and plastic BBs used in simulation combat competitions known as airsoft games. It’s sort of like paintball.

He started the company in 2004, when he was just 14, after returning from a trip visiting relatives in China. Zhang found that the airsoft guns and gear were selling for much less in China than they were in the U.S. He convinced his parents to let him import products from China and sell them online.

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Are you looking at buying or refinancing? Do it before rates rise.

rising-interest-rates

Below is an snippet of what one of the leading lenders is saying about current interest rates.

While the federal government contemplates increasing home-financing rates, the Fed has stated that it will likely raise rates when unemployment falls below 6.5%, so now is the time to refinance your home. There’s a program the government created a few years ago called the Home Affordable Refinance Plan®, commonly referred to as HARP, which enables Americans to save big on refinancing when they otherwise could not due to a decline in their home’s value. It provides you the opportunity to refinance at surprisingly low rates, which could reduce your monthly payments. The average reduction was a savings of about 33% last year. On a $200,000 loan, that translates to an average savings of $4,100 in the first year. With the low rates, 39% of homeowners were actually able to shorten their loan terms as well.

Homeowners are becoming increasingly savvy, and many are surprised to learn how much they’re able to save on their mortgage while refinancing. The program started in March of 2009, but is set to expire at the end of December 2015, so it’s vital to act fast. We recommend using our lending-finder service at LendingTree, which has a proven track record of helping consumers save money by comparison shopping for lenders.

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Mortgage rates hit 2014 low

 

The government’s stimulus program has helped keep borrowing costs down. The Federal Reserve has been purchasing Treasury Bonds and mortgaged-backed securities for years, providing a steady market for mortgages.But the Fed has cut back on its purchases, and plans to end the buying program entirely in October, reducing demand for mortgage bonds. That should eventually cause rates to climb.

Low mortgage rates and home prices that are climbing more slowly should boost the housing market, said to Keith Gumbinger, spokesman for HSH.com, a mortgage information company.

“That should provide a solid foundation for home sales this fall,” he said.

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