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|Posted on December 21, 2013 at 11:51 AM||comments (133)|
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|Posted on December 21, 2013 at 11:39 AM||comments (538)|
As published in the Savannah Morning News - 22 September 2013
Assisted Living vs. Staying at Home.
Are you considering the option of moving to an assisted living community or trying to stay at home? Most people I consult with tell me they are trying to stay in their homes for as long as possible. Here are some things to consider.
Assisted living adds a safety component to seniors living alone. It can be the difference of life and death. Falling is one of the most frequent accidents I see in the elderly, and falls can change your life in an instant. If you hit your head, or land so that you cannot push an emergency button dangling for your neck or on your wrist, you may not get the life saving help you need.
I just spoke to a woman who fell in her garage and lay there all day until a neighbor across the street came home from work and saw her as he was picking up the paper from his driveway. Another client fell while her husband was out of the house, and even with an emergency device hanging from her neck, she could not activate it. The “I’ve fallen and I can’t get up” device is good to have, but not always the answer. Having people checking on you frequently throughout the day, or living with you in your home, raises the odds that you will be saved.
Many times I am called in to do assessments, manage renovations, and stage homes for safety and maneuverability. Some homes are easily adapted to the physical capabilities of the client, and others are not. If not, assisted living is the beginning of a journey to a safer, healthier life, providing the support that you need.
Assisted living communities also provide a social setting to develop friendships, while living at home can be very isolating, a common cause of senior depression. Some see isolation as the lesser of two evils when compared to the fear of moving and the unknown. If you could only observe the positive changes I see in my clients (and my own mother) who have moved to new communities, you would think twice about staying at home. They are transformed - happier, healthier, and enjoying new friends and activities, with a full support system.
Additionally, seniors lose the energy and/or ability to properly maintain their homes, and when I come to list a property for sale, I discover a plethora of maintenance and repair issues that need to be addressed. Properties deteriorate without attention, and so does the value.
Don’t let the fear of moving paralyze you. This next step can be an exciting adventure...not the end, but a new beginning! It can boost your social activities, lift your spirits and provide a safe environment in which to enjoy your life. There are many communities to choose from; just take the first step.
|Posted on December 21, 2013 at 11:31 AM||comments (100)|
As published in the Savannah Morning News - 1 September 2013
Waiting to Sell? Some more great market news!
The market is hot, hot, hot! Last week I gave you 11 reasons why you should get off the fence and sell now. Now here’s another that is sure to inject a slew of new buyers into the market.
Friday, August 16, the Federal Housing Association (FHA) pulled a rabbit out of their hat, shortening the waiting period for homebuyers who are now “seasoning”. I have written several articles about these buyers, who must wait to buy again after experiencing a bankruptcy, foreclosure or short sale. The last six years, has been challenging, and many people have lost jobs, homes and their self esteem.
The FHA has realized that it needed to soften up its requirements for some of these buyers. This is for buyers who meet FHA approval, which make up a large percetnage of people stuck in watiting periods after bankruptcy, foreclosure or short sale.
The FHA is cutting the amount of time that homebuyers must wait after a bankruptcy, foreclosure or short sale to one year before they may qualify for an FHA-backed mortgage. Previously, buyers had to wait two years after bankruptcy and three years after foreclosure or short sale. But in order to qualify, borrowers will need to prove their household income fell by 20 percent or more for at least six months; that the income drop was tied to unemployment or another event beyond their control; that they have had at least one hour of approved housing counseling; and that they have had a full year of on-time housing payments, among other things.
“FHA recognizes the hardships faced by these borrowers, and realizes that their credit histories may not fully reflect their true ability or propensity to repay a mortgage,” said FHA Commissioner Carol Galante, in a letter to mortgagees announcing the changes. Dubbed the "Back To Work - Extenuating Circumstances Program", the
FHA removed the familiar waiting periods that typically followed a derogatory credit event.
If you've experienced any of the following financial difficulties, you may be program-eligible :
Chapter 7 bankruptcy
Chapter 13 bankruptcy
The FHA realizes that, sometimes, credit events may be beyond your control, and that credit histories don't always reflect a person's true ability or willingness to pay on a mortgage. Use the Q&A below to learn more about the FHA's Back to Work - Extenuating Circumstances program.
What are the minimum eligibility requirements of the FHA Back To Work program?
In order to qualify for the FHA Back To Work program, you must meet several minimum eligibility standards. The first is that you must have experienced an "economic event" (e.g.; pre-foreclosure sale, short sale, deed-in-lieu, foreclosure, Chapter 7 bankruptcy, Chapter 13 bankruptcy, loan modification, forbearance agreement). The second is that you must demonstrate a full recovery from the event. And, third, you must agree to complete housing counseling prior to closing. You must also show that your household income declined by 20% or more for a period of at least 6 months, which coincided with the above "economic event".
How do I document a 20% loss of household income for the FHA?
In order to document a 20% loss of household income, you must present federal tax returns or W-2s, or a written Verification of Employment evidencing prior income. For loss of income based on seasonal or part-time employment, two years of seasonal or part-time employment in the same field must be verified and documented as well. Income afterthe onset of the economic event, which should represent a loss of at least 20% for at least six months, should be verified according to standard FHA guidelines. This may include W-2s, pay stubs, unemployment income receipts, or other. Your lender will help you determine the best method of verification.
How do I document a "satisfactory" credit history since my "economic event" for the FHA?
Your lender will review your credit report as part of the FHA Back To Work approval process. All accounts will be reviewed -- ones which went delinquent and ones which remained current. Your lender will attempt to determine three things -- that you showed good credit history prior to the economic event; that your derogatory credit occurred after the onset of the economic event; and, that you have re-established a 12-month history of perfect payment history on major accounts. Minor delinquencies are allowed on revolving accounts.
Does the "20 percent loss of income" eligibility condition apply to me only, or to everyone in the household?
The "20 percent loss of income" eligibility condition applies to everyone in the household. If one member of the household lost income as the result of a job less but the household income did not fall by 20 percent or more for a period of at least months, the borrower will not be FHA Back to Work Extenuating Circumstances-eligible.
Nice to see FHA recognize that sometimes, bad things happen to good people. Economic events that were beyond a homeowner’s control were forcing millions of Americans to sit and wait before they could buy again. This policy change makes sense and should allow responsible borrowers back into the housing market.
|Posted on August 31, 2013 at 5:13 PM||comments (4)|
As published in the Savannah Morning News - 18 August 2013
Waiting to Sell? How Rising Interest Rates Will Impact You...
Summer is upon us and the buying season is well underway. We keep seeing reports of an improving market, and consequently, some sellers are convinced that if they wait to sell, their values will increase.
Maybe, but how long will it take, and what is the opportunity loss? As they say, “cash in hand…” If you sell for a little less than you might next spring, you have money in hand and can get on with your life.
Here are my reasons to sell NOW:
1. Locally, our market is bustling, although most families with children have already settled in their new homes for the start of the school year. While you are waiting (and the summer passed you by), those buyers have bought. Soon the holidays will be upon us and those that are left will retreat until next year. Don’t miss this window of opportunity.
2. With the economy improving, mortgage rates are rising. Many buyers believe the bottom of the market has come and gone, and they see housing prices rising. They are especially motivated to buy now while rates are still low and the market has stabilized.
3. For the last 6 years, buyers have been a fearful bunch, worried they would pay too much. It’s been a Buyer’s market, but not so today. With less inventory to choose from, and fewer distressed properties available, it has become a Seller’s market. Take advantage of it.
4. While higher rates are spurring sales and actually helping the housing market, they affect the buyers’ ability to buy the amount of home they could purchase a year ago. The upward trend of home values and mortgage rates directly affects the buyer’s ability to qualify for a home mortgage. This means the longer a buyer waits, the house they saw a few months ago may now be out of their price range. Coupled with the increased mortgage rates, the payment may now be out of their reach. It’s a double whammy that removes a segment of the buyers from the market. Rates have increased more than a percent since last year.
5. Rising mortgage rates are beginning to impact the housing market. Pending home sales declined in June after reaching the highest level in more than six years, according to the National Association of Realtors® (NAR). NAR chief economist, Lawrence Yun, noted that rates began to rise in May, taking some of the momentum out of the contract activity in June.
6. Following the onslaught of foreclosures and bankruptcies, there are many potential buyers who have risen from the rubble, now qualified to purchase a home. These folks have been renting for the last few years, but believe in the American Dream of home ownership. They are a determined bunch, and they will buy again…it could be your home.
7. Although foreclosures are on the decline, short sales continue to increase, with lenders arranging deals before they even process their first foreclosure filing on a delinquent homeowner’s property. Forbes real estate writer, Morgan Brennan, states that during the first quarter of 2013, short sales increased 79% versus a year earlier, thanks in part to the fact that short sale guidelines were loosened. It stands to reason short sales will continue to pull home values down, slowing market recovery.
8. According to Jed Kolko, Trulia’s Chief Economist, it’s 44% cheaper to buy versus rent. In fact, homeownership is cheaper than renting in all of America’s 100 largest metros. That’s because low mortgage rates have kept buying almost as affordable, relative to renting, as it was last year. Renters are making the shift into home ownership.
9. The old mantra was “Sell high, buy low”. Today, it’s “Sell low, buy low”. If you are buying, your perceived “loss” is minimized by the lower purchase price for your next home.
10. Both CoreLogic and Altos Research (real estate data trackers) predict this surge in home values won’t last. They say several variables, including increased inventory and higher mortgage rates, will slow the pace of growth and recovery. I say, there’s no crystal ball….is it worth it to wait?
11. We still have underwater homeowners, with mortgages higher than the market value of their homes. Until these properties appreciate, these owners are trapped in their homes, causing a drag in the market recovery. According to Daren Blomquist, vice president of RealtyTrac, an Irvine, Calif.-based foreclosure site, there are 11.3 million borrowers who are upside-down. He predicts it will take 2 to 3 years until they gain equity, allowing these buyers to re-enter the market.
Housing recovery is complicated and unpredictable. What we do know, is that locally, we have serious purchasers in the market NOW. My listings are selling quickly and inventory is in demand (that’s a GOOD thing!). Economists are predicting even higher rates this year, so while the buyers are hot, be IN the market. Who knows what tomorrow will bring?
Next week in Moving Mom…Buying a Short Sale in Today’s Market
|Posted on August 31, 2013 at 5:06 PM||comments (230)|
As published in the Savannah Morning News - 4 August 2013
The Truth About Gross Living Area
When listing a home, I am amused when my clients insist they have more bedrooms than I can count. These “bedrooms” don’t include a closet, or you must pass through the room to get to another room. They argue that when they bought the home, it was advertised that way, and they believed it.
“Not so”, I say, feeling confident that I am backed by appraisers everywhere. When financing is involved, appraisers are all about getting it right. Not only is a lender interested in how many bedrooms you have, but they want to know the true square footage of the home as well. Why? Because when they represent the lender, they don’t want to exaggerate the value, causing the lender to provide an excessive loan amount.
According to D. Scott Murphy, SRA, who writes for the Georgia Real estate Appraisers Board, he believes, in terms of value, that the overall living space, or gross living area (GLA), is one of the most important elements of a home. The American National Standard Institute (ANSI) gives appraisers a number of standards for calculating GLA.
Let’s start with the bedroom argument. According to the standards, a bedroom is defined as a room of “adequate size”, which has no less than 100 square feet, and must have a closet, window and door. It must be heated, cooled and finished to the same quality as the rest of the house. So folks, that walk-in closet (with the hidden closet/storage area inside) may have served as a bedroom, but the appraiser won’t count it.
The most common and unknown factor is that a bedroom must also have ready access to a FULL bath room, with a tub and/or shower, toilet and sink. Think about this: You may have a bonus room over the garage; it has a closet, window, and door, is heated, cooled, and finished to the same quality as the rest of the house, but you have to go down the stairs and across the house to use the bathroom. That does not function on the long-term basis as a bedroom.
Mr. Murphy states, “Another common scenario is that you might have four ‘bedrooms’ on the second floor of a house. Three of the bedrooms have private baths. How is someone in the fourth bedroom supposed to get to the bathroom?” He has a point. The most common scenario: “Bedrooms” serviced by a half bath do not function on a long-term basis as a bedroom. In both cases, these rooms are considered a den or office.
Now, let’s consider how gross living area is measured. As Realtors®, we often take the measurement from the county tax records, but occasionally, sellers will tell us they have added rooms to the house, enclosed a garage, or finished a bonus room. If the additional square footage is not included in the tax records, and there aren’t any notations on the records regarding the addition, it strongly suggests to us that there may not have been permits pulled when the work was done.*
When preparing a listing in the Multiple Listing Service, we must choose an option to indicate where we got the square footage information. Most listings reflect the square footage was found in the county tax records, but occasionally we see it was provided from an appraisal or the seller.
Sellers beware. You can be held liable for your information, so be accurate.
Realtors® usually assume areas that are heated and cooled should be included in the GLA. However, ANSI standards define “finished area” as “an enclosed area in a house suitable for year-round use, embodying walls, floors, and ceilings that are similar to the rest of the house.” So, without finished walls or heating and cooling vents, the porch you just enclosed is not going to measure up.
When measuring GLA, measurements must be taken to the nearest inch or tenth of a foot, and floor area must be reported to the nearest square foot. Garages are specifically excluded.
There is also the standard that says if any portion of the floor is below the grade of the ground, it is considered below grade space and CANNOT be included in GLA. Value is given to these below grade spaces; they are just handled separately. All appraisers use the same measurement standards as a basis for determining GLA; however, there may be some local exceptions, so it is important to use a local appraiser.
Misrepresentation by you and/or your Realtor® can have legal repercussions. It is critical that you recognize these factors and determine gross living area correctly, as this forms the foundation for the valuation of the entire property.
*Caution: Square footage added without permits will be counted by the appraiser, and can become an issue with the buyers. Additionally, it can resurface when they resell the house. After closing, buyers sometimes sue sellers when they discover undisclosed, non-permitted improvements. The new owner may suffer damages (they charge back to you) when City or County building inspectors force the owner to pay penalties, remove the addition, or bring the property up to code.
Next week in Moving Mom…Waiting to Sell? How Rising Mortgage Rates
|Posted on July 29, 2013 at 6:42 PM||comments (6)|
As published in the Savannah Morning News - 28 July 2012
Possession paralysis, surprisingly, is real.
David Ekerdt, a gerontologist with the University of Kansas, was in search of answers. He and his team wanted to know whether the sheer volume of possessions that seniors acquire over decades become an obstacle to late-life downsizing.
Specializing in senior move management and real estate services, I know how physically and cognitively daunting the process can be for my clients. Not only are they trying to assist with packing and sorting, but making the hundreds of small decisions required to sell their home and make a move just wears them out. To better assist my clients, I was especially interested in the outcome of Dr. Ekerdt’s study.
Dr. Ekerdt acknowledged that real estate closings and apartment leases create added deadlines and greater pressure. Coupled with the emotional element of moving, the need to unload possessions in the downsizing process can be particularly difficult for seniors. Nobody had really documented that the need to unload possessions affected seniors’ decisions about moving to more manageable quarters – until now.
Dr. Ekerdt was able to insert several questions into the continuing national Health and Retirement Study in 2010 and gathered data from almost 1,100 community-dwelling adults over age 60. “It confirms all the anecdotal things that lawyers, geriatricians and families tell us: Stuff can be a problem,” he said.
We’re not talking about hoarding, a disorder in which the inability to dispose of even useless objects becomes extreme. This is normal clutter: 60 percent of respondents said they had more possessions than they needed. The proportion didn’t vary by gender or bear much relationship to personality traits, but people who were married (more acquirers per household) and wealthier, with bigger homes, were more likely to feel “over-provisioned,” probably because they simply had more space into which to stuff more stuff.
Many of the folks I talk to claim their stuff has sentimental value and the associated memories make it difficult to part with it. But Dr. Ekerdt and his colleagues, who have conducted 100 interviews in movers’ households, learned that stuff may not even be particularly treasured. “We hear somewhat about special, cherished things, but we hear more about just quantities of generic possessions,” he said. “It’s a problem of volume as much as sentiment.”
I’ve experienced this with seniors who buy in great quantities. I might be packing their 30 rolls of paper towels, a case of liquid hand soap dispensers, loads of duplicate spices, pantry items, etc. I attribute this phenomenon to Depression Era babies, who may have experienced rationing, and may still fear that supplies will run out!
It’s not so important when people can’t park in their garages or close their closet doors. But when Dr. Ekerdt asked respondents how reluctant they felt about moving, considering the effort required to transfer or dispose of their belongings, he found that 48 percent felt “very reluctant” to move and another 30 percent were “somewhat reluctant.” That adds up to more than three-quarters of people over 60 feeling trapped, to some degree, by stuff.
Are people so afraid to leave their stuff that they forgo simplifying their lives and moving to smaller abodes? Do they choose to age in place because they feel trapped in a larger home? In the study, more than a quarter of these older people said their families or friends had urged them to downsize, and of those, half said that family and friends had offered to help.
Almost always, I hear from my clients that their children will want their things - their china, crystal, antiques, photo albums, etc. The truth is, in real life, their children are Baby Boomers who already have their own stuff and are beginning to shed what they have. Unless they are extremely sentimental (which is rare), I do not see Boomers loading up their cars and hauling Mom and Dad’s beloved treasures away. A few boxes of photos, maybe, but not much else.
Disposing of stuff is the hardest part of my job. Dr. Ekerdt found that the proportion of seniors who had methodically disposed of possessions was not high. Only 3 percent said they had sold “many things” in the past year. “People have these ‘Antique Road Show’ dreams, but many of our possessions are not very salable,” Dr. Ekerdt said. Only 14 percent had given many things away to family and friends, and 23 percent had donated to a charity or community groups, probably the simplest way (though still not simple) to get rid of stuff.
In fact, the study showed that lots of people hadn’t gotten rid of anything! Possession Paralysis was alive and well, and very, very real. Their families will not be grateful when a safer or simpler home is needed, especially in response to a health crisis, and the whole job of downsizing and disposal falls to them. Do you really want to leave this burden to your family? REALLY?
Next week in Moving Mom…Are you sure that’s a bedroom? The truth about Gross Living Area. Stay tuned!
|Posted on July 29, 2013 at 6:37 PM||comments (113)|
As published in the Savannah Morning News - 21 July 2013
Ditch the Lawn Mower! Is condo living for you?
At this time of year, many of my neighbors are toiling under 98 degree heat, and above the hum of the lawn mower, I hear them swearing they want to move to a condo. No more lawn mower…lots more golf!
Sound familiar? If the lure of a carefree, turnkey lifestyle appeals to you, then certainly a condo is a solution. So, how does condo ownership differ from the home you just sold?
First of all, know what you are buying. The term “condominium” is actually a legal type of ownership. People tend to use “condo” and “town houses” to describe a type of dwelling, when it actually applies to the type of ownership and/or type of dwelling and associated ownership rights. The big difference is whether you own the land underneath the dwelling or not.
Fee Simple ownership, as opposed to condominium ownership, includes the land under the unit. Town homes are often sold fee simple and a survey marks the boundaries of the property included in the sale. Many developments have common roofs and walls between units, and the owners are responsible for the maintenance of the exteriors and the landscapes within their boundaries. Common areas are maintained by the home owner’s association, but there may still be some maintenance required by the home owner.
Some important questions related to fee simple ownership:
Condominium ownership differs from fee simple ownership in that it is an estate in real property consisting of an individual interest in an apartment, and an undivided common interest in the common areas in the development, such as land, parking areas, elevators, stairways, exterior elements, etc. In effect, the condominium permits ownership of a specific horizontal layer of airspace as opposed to the traditional view of vertical property ownership from the center of the earth to the sky. In other words, you own the right to the space inside the unit.
Under individual state laws, the developer/owner of the condominium executes and records a master deed together with a condominium declaration. The declaration is recorded, and is accompanied by a copy of the bylaws, a condominium map, floor plans and elevations. It is important that you review these documents to make sure the rules and regulations are acceptable to you and your lifestyle. Whether buying a condominium or fee simple dwelling, these types of ownership require a bit more due diligence than buying a single family house. A carefree lifestyle is appealing to many and can be a great choice if you do your homework.
Understand resale rules. Resale of a unit may be subject to the right of first refusal of other owners. If so, it delays the sale of the unit for a specified time period until all owners have been notified and given the time to come forward to match or better your contract offer. If this right exists, check to make sure there are no financing pitfalls, such as the inability to obtain a mortgage for yourself or a future buyer.
Know your total costs. Condos are usually more reasonably priced than single family homes, but the lifestyle cost (mortgage, utilities, maintenance, and association fees) may be equal to or, in some cases, greater than those of your previous single family home. Sometimes there are two association fees, one for the condo or townhome, and one for the neighborhood surrounding the complex. Planned Unit Developments often include a mix of different types of dwellings, with common area maintenance required outside the complex where your unit is located. In that case, you may be responsible for two monthly fees, rather than one.
Can you rent out your unit? Check the association documents. Rental of units is often restricted by length of lease, or by how many times a unit may be leased within a year. This controls the transient nature of rentals, and keeps the full-time residents happy. Also, if a development goes beyond the allowable rented percentage of units, lenders will not approve mortgages, which affect re-sales and thus values. If home owners agree, diligent association managers can control the number of rentals permitted in order to comply with lender requirements.
Check minutes to Association Meetings. You’ll learn a lot. Check a few months back to know what the issues are with the association.
Are there any outstanding assessments? During your due diligence, make sure the seller of your unit is up to date on all assessments and ask the association manager if there are assessments under consideration. Outstanding assessments don’t have to be a deal killer, and should be negotiated with the seller before you close.
How many owners are past due on Home Owner’s Dues? Too many delinquent owners can bankrupt an association. Be sure to ask the question, and review the budget. Not a budget whiz? Ask your accountant to review it and give their opinion of solvency.
We, as Realtors®, can guide you through the process and help get you the information you need to make an informed choice. So, if you are ready to simplify your life, get rid of the lawn mower and let’s start packing!
Next week in Moving Mom…Possession Paralysis – Do You Feel Trapped by Stuff? Stay tuned!
|Posted on July 29, 2013 at 6:15 PM||comments (114)|
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