Pros and Cons of Buying a Foreclosed Home

If you’re in the market for a new home, perhaps you’ve browsed listings and come across a foreclosure or two that you like. Maybe you’ve even noticed that some of these homes have listing prices that are below the typical market value in your area.

Buying a foreclosed home can be a great investment – but it also comes with its own set of risks and challenges. Here’s what you need to know if you’re thinking about purchasing a foreclosure.

What is a foreclosure?

First, it makes sense to understand exactly what a foreclosure is. A foreclosure is a property that has been repossessed by a lender because of nonpayment. These lenders, typically banks, then sell off the property to recoup their losses.

Pros of buying a foreclosure

One of the biggest reasons that homebuyers purchase foreclosures is the potential to score a great home at a discounted price. Generally, banks are eager to get these properties off their books and are willing to let the home go for a price below comps in the area. Other potential advantages to buying a foreclosure include:

• Potential to get a better house for the price – Since lenders often price foreclosures for a quick sale, buyers may be able to score a larger or nicer house than they otherwise would be able to afford. Foreclosures can be found at every price point, from starter homes to luxury mansions.
• Upgrades can pay off big – If you’re willing to put some sweat equity into your foreclosure, the return you’ll see on the property’s value could be significant.

Cons of buying a foreclosure

While scoring a great house at a low price seems like enough motivation to buy a foreclosure, there are certainly some disadvantages you should consider. These include:

• You may have to pay cash – Some foreclosures are sold at auction to the highest bidder. If you want to guarantee you win the bid, be prepared to pay all cash on the spot.
• You may not get to inspect the house – Most foreclosures are sold as-is, meaning that the buyer absorbs any responsibility for repairs, liens or back payments on utilities. You may not have an opportunity to inspect the home before the purchase, so you will assume the risk for whatever you may find once you get inside.
• You may not qualify for a loan – Some lenders have restrictions on distressed properties, making financing a foreclosure a challenge.
• The property may need serious repair – If the home has been vacant for any period of time, serious issues could have occurred. It’s possible that the property has been vandalized or looted. The previous owner may not have kept up maintenance because of financial hardship. With the utilities shut off, pipes could have frozen, pests could have invaded and cracks may have formed in the walls and foundation.

Is a foreclosure right for you?

The pros and cons listed above are just some of the issues you should consider when buying a foreclosure. If you’re serious about purchasing a distressed property, make sure to do your research and prepare for a closing process that can be more stressful and complex than a traditional sale.

HOW TO WIN A BIDDING WAR

Buying a home is an emotional, complex and often stressful process. This is doubly so if you’re buying in one of the country’s hottest real estate markets, where there are more buyers than there are houses available. It’s quite likely in these situations that you’ll find yourself in a bidding war with other buyers. If you want to ensure your bid is the winning offer, follow these strategies.

Pay with cash

This won’t be possible for everyone, but if you have the cash, make an all-cash offer. In a particularly hot market, cash will always win out. Sellers prefer buyers who pay cash because the deal will not be dependent on whether or not the buyer can secure financing.

Get preapproved for a mortgage

If paying all cash is not an option, you must get preapproved for a mortgage before making an offer. You’ll get a letter to submit with your offer that shows the seller how much money you qualify to borrow. In a scenario where a seller receives multiple bids, you’ll automatically count yourself out if you are not pre-approved.

Study the market

Before you begin your search in earnest with the intent to make an offer, spend some time researching online listings for the neighborhood. Know what kinds of houses are available, what the inventory is like, and what the prices tend to be.

Submit the first and best offer

In a tight market, it pays to be aggressive. When you find a house you like, be the first to make an offer. Not only that, but make sure your offer is the best. If the seller has listed the home at an appropriate price, be prepared to offer what they are asking.

Include an escalation clause

If you’re willing to go higher with your offer, consider including an escalation clause. This gives you the option to increase your offer should another buyer bid more than you. It also signals to the seller that you are serious about your offer. However, you should know what your price ceiling is, and stick to it. Otherwise you run the risk of the appraisal coming in for less than your offer, which could affect your ability to secure a loan.

Limit contingencies

Contingencies let a buyer out of a contract if certain issues aren’t addressed. Sometimes buyers want to include a contingency that the sale only goes through if their own house sells first, or if certain items are repaired. If you know a house is going to net multiple offers, you must limit the number of contingencies if you hope to win a bidding war. Sellers will generally choose offers with the fewest contingencies.

Get personal

Do you really love the home? Can you imagine your kids enjoying that backyard tree house, or see your dog loving the enormous backyard? Then write a letter to the seller explaining your reasons for wanting the house. Appealing to a seller’s emotions can be incredibly persuasive, and you may be rewarded with the winning bid.

HANGING CURTAINS 101

Hanging curtains seems like a no-brainer, right? Install the curtain rods, pop on the window treatments, and you’re done.

While it really can be that easy, there are some tricks and tips to keep in mind if you want your curtains to go from average to amazing. Keep reading to find out what you need to know.

Determine their purpose

Are the curtains going to be decorative or more functional? If you just want to add a little pizzazz to the room without worrying about filtering the light or maintaining privacy, then lightweight, unlined curtains will do the trick. However, if you want to block out the light or create privacy, you’ll need heavier or lined curtains.

Measure, measure, measure

Before you rush out and buy your new curtains, be sure to measure the windows, taking into account how you want the curtains to hang. There’s nothing more frustrating than having your project stalled by having to return curtains and rods that are the wrong size.

Speaking of size…

A great trick if you want your windows to appear larger than they really are is to hang the rod higher and wider than the window. Hang the rod at least four inches from the frame, but consider hanging it as close to the ceiling as possible. Just make sure the curtains reach the floor or even puddle a little. If you’re hanging cafe curtains they should skim the sill.

Go for fullness

Curtains should be hung so that they extend between 8 – 12 inches wider than the window. Choose panels that give you the most fullness, especially when completely closed. A good rule of thumb is to buy panels that are 2.5 times the width of the window.

Consider the hardware

The curtains are the main attraction, but don’t forget about the supporting players – the hardware. If you’re buying heavy curtains, make sure to purchase a rod that can handle the weight. Also think about the style of the room and choose finials and tiebacks that complement.

Get creative

Don’t feel you have to limit yourself to the selection of curtains you find in the store. There are many items you have around your home that make excellent curtains when repurposed. Vintage tea towels, silk scarves and even sheets can all take on a second life as curtains. You can even skip the sewing machine by purchasing curtain hooks that clip onto the fabric.

Don’t forget the iron

Now that you’ve put all this time and effort into making sure your curtains do your room justice, don’t diminish the effect by hanging them wrinkled or dirty. Wrinkled curtains look like an afterthought and can take away from an otherwise beautiful window treatment. Before you hang them, be sure to bust out the iron and give them a good once over. Also be sure to iron anytime you take them down to have them cleaned.

While hanging curtains may seem a little daunting, by following these tips you’ll turn otherwise boring window treatments into brilliant additions to your room!

HOW TO LOAD YOUR MOVING TRUCK

If you’ve decided to save some money on your move by packing the moving truck yourself, you’ll want to make sure you maximize the space available while minimizing the damage to your belongings. Take these tips from the pros to pack your truck the right way.

Items you’ll need

Before you even begin loading those boxes onto the truck, gather all the supplies you’ll need. These include:

• Moving blankets or paper padding for furniture
• A dolly
• Plastic stretch wrap
• Plastic sheets or tarps
• Packing tape
• Tie downs like bungee cords, rope or ratchet straps
• Gloves
• Step ladder

Before you load the truck

If you take a little time to make a game plan before you start loading, you’ll save yourself time and more than one headache.

• Make sure all your boxes are properly packed to safeguard against damage during the move.
• Defrost refrigerators and freezers at least 24 hours ahead of time.
• Prepare washing machines.
• Label all your boxes with what’s inside and where they go in the new place.
• Disassemble furniture that can be taken apart.
• Wrap furniture and other unboxed items with plastic wrap, paper padding or furniture pads.
• Pack an overnight bag.
• Take very fragile items and electronics like computers in the cab or car with you.

Packing the truck

There is a strategy to packing a truck, and following these steps will make the job much easier.

• Park the truck as close to the entrance as possible and make a clear path to it.
• Lay the tarp or plastic sheets on the bottom of the truck to keep items clean.
• One person should stay on the truck to organize all the items, while the others bring the items from the house to the truck.
• Move as much furniture as possible outside so you can better see what order it should go into the truck.
• The first things onto the truck should be the heaviest and largest items like appliances, mattresses and couches. Start with the appliances, then load sofas, chairs and entertainment units.
• Don’t place an item with sharp edges against a fabric piece, as it could cause damage.
• Place wrapped mirrors or glass in between mattresses or cushions.
• After all the furniture and appliances are loaded, then load the heaviest boxes.
• Stack items floor to ceiling, using every available space.
• Pack the truck in tiers, and tie down each tier with ropes or ratchet straps.
• Think of packing like putting together a jigsaw puzzle. Pack items tightly into every crack. This will help ensure that items don’t shift while en route.
• Make sure heavier boxes are on the bottom and lighter boxes are on the top.
• The lightest boxes, awkwardly shaped items and fragile pieces should go on last. Rolled up rugs and other odds and ends can be placed on top.
• Don’t forget to tie down the last tier to prevent the whole load from shifting backwards while driving. Make sure you leave enough room for the door to open and close.

While moving can be a real pain, if you take some time to plan ahead, packing your moving truck won’t be as difficult. Happy moving!

HOW TO REDUCE HOME BUYING STRESS

There’s no two ways about it – buying a home is stressful. Whether you’re doing it for the first time, or have several purchases under your belt, it’s a complex process that brings up lots of emotions – both good and bad.

Let’s face it – there’s a myriad of things that could go wrong during the sales process. Your loan could be rejected. The inspection could reveal that costly repairs need to be made. The appraisal could be lower than the selling price, which could affect your mortgage. The seller could be unpleasant or argumentative. There are plenty of things to worry about.

One of the best ways to deal with potential home-buying stress is to be prepared. Here’s what you can do to make buying your home as stress-free as possible.

Be clear about what you’re looking for

It’s frustrating for both you and your agent if you’re looking at house after house that just doesn’t suit your needs. Before you even begin scheduling appointments to view homes, take some time to define what you’re looking for. What type of house? How many bedrooms? What size? What kind of neighborhood? The clearer you can be, the more likely you’ll find a home you like sooner.

Be realistic about what you can afford

Getting swept up into the dream of owning the perfect home can be intoxicating, but having a mortgage that is not within your financial means is a nightmare. A good rule of thumb is to look for homes that are two or three times what your annual income is. Anything more than that, and you’re inviting excess stress into your life, worrying about how you’ll pay the bills each month.

Be ready with a mortgage pre-approval

By getting your financial life in order and getting pre-approved for a mortgage ahead of the buying process, you are signaling to sellers that you’re serious about making a purchase. You’re also alleviating a potential pitfall should you not qualify during the deal. In addition, getting pre-approved will help should others also make an offer on the same house. If not, you’ll be one of the first crossed off the list.

Be willing to make compromises

It’s rare to find the absolute perfect house at the perfect price. And if you are dead set on it, you’re going to stress yourself and your real estate agent out.  Unless you can build your home from scratch, you’ll probably need to make some compromises. Determine beforehand what you must have versus what it would be nice to have, so that you know where you can be flexible.

Be gentle with yourself and take breaks

Whenever possible, schedule relaxing things to do while you’re going through the process of buying a home. Get a massage. Go out to dinner with friends. See a movie. Take a nap. Visit with family. Go for a drive in the country. Listen to some guided meditations, or take a yoga class.

You don’t have to let stress get the better of you when you’re buying a home! If you take some time to get prepared, be clear about what you really need, and allow yourself some time to decompress, you can minimize the adverse effects it has on your well-being.

REFRESH YOUR GARDEN FOR SPRING

Do you hear that?

It’s the first breathy sigh of your spring garden, waking up from its winter’s nap. Longer days, warmer temperatures and dreams of lazy afternoons spent lounging among the flowers is enough to get any homeowner motivated to get their garden ready for the coming months.

If you long to get outside and get your hands dirty in preparation for spring, here are some great ideas to get you started.

Trim and tidy

The end of winter is an excellent time to prune and cut back the plants, bushes and trees in your garden before they get new spring growth. However, it’s a good idea to wait until any danger of frost has passed before wielding those pruning shears, as cutting back during a freezing spell can mean doom for some plants. Remove any annuals from the previous season and compost them.

Remove weeds

While most homeowners don’t love the idea of spending an afternoon pulling weeds, it goes a long way right now – not only does it reduce the number that are propagating in your garden, but it also makes your yard look clean and tidy. Weeds are generally easier to remove at this time of year, as they have shallow roots that can easily be pulled from moist soil. Try to get as many as you can while they’re still small – it’ll save unnecessary back strain down the line.

Divide and conquer

Some varieties of perennial plants do well when they are divided and transplanted. It’s also an easy and inexpensive way to add new plants to your landscape. Dig up perennials to be divided just as they are starting to grow, and transplant into new spots that have been amended with compost to give the divisions the best possible start.

Fertilize

All your plants and flowers enjoy a healthy dose of fertilizer in the spring as they begin to grow. If you have compost, add a layer of it to existing beds to give the soil a boost, or apply organic or synthetic fertilizer as new growth appears.

Add mulch

Mulch does wonderful things for your garden. It acts as a barrier to keep weeds from sprouting, it helps soil retain moisture and it gives the garden a polished look. As mulch starts to break down it also adds beneficial nutrients to the soil. So go ahead and give your garden beds a nice thick blanket of mulch – just be sure to keep it away from the trunks of trees and stems of tender plants.

Prepare feeders

Any garden can be made more magical with the addition of bird feeders and baths that attract local and migratory birds. If you have any in your garden, now is the time to clean them thoroughly to avoid build-up of bacteria or mold.

Get the lawn ready

If you have grass, take time to give it a good raking to remove any dead growth and debris that has accumulated over the winter. This allows air and light to penetrate the soil, stimulating all that glorious new green growth for spring.

If the promise of spring has you yearning to get outside, go ahead and give in to the urge. Taking a little time now to get your yard ready for the coming warm weather can be beneficial to your garden – and to you!

MAKE YOUR WOOD FLOORS LOOK LIKE NEW

Did you buy an older home because you fell in love with its character? Many homes built in previous decades or centuries feature details that often aren’t prevalent in new construction, such as Dutch doors, transom windows and even dumbwaiters or laundry chutes.

One of the most attractive features in many older homes are the hardwood floors. But years of wear and tear can leave them looking dull, scratched or dingy. If your home’s hardwood floors need a makeover, follow these steps to have them looking like new.

Sweep and repair

After emptying the room of all its furniture, give the floor a good sweep and vacuum to get rid of all the dirt and grit. This is also the best time to deal with repairs, such as sinking nail heads, filling in scratches or patching holes.

Clean with appropriate cleaner

Next, you’ll want to clean your floor with an appropriate cleaner, such as Murphy’s Oil Soap or Bona Floor Cleaner. It’s important not to use regular soap or harsh chemicals on your hardwood floor, as they can leave a residue or damage the wood with too much moisture. Let the floor dry.

Polish and seal

After the floor is dry, apply a thin layer of polish evenly around the room. The polish will help to moisturize the wood and leave it shiny. Polishes can be purchased with either a satin or glossy finish, depending on your tastes. Some floors benefit from a second coat; follow instructions on the label to determine how much time should elapse between applications. Be sure to give the floor plenty of time to dry before moving furniture back in – in some cases up to three days.

Buffing and waxing

Sometimes cleaning and polishing just doesn’t give your floor the love it needs to restore its luster, especially if it is already finished with wax or shellac. In this case, you can use a floor buffer to remove the top layer of finish off the floor. Buffers can be rented for around $50 a day, just be sure the buffer has a sanding screen so you don’t remove too much of the surface of the floor. Clean the dust and follow with a floor wax, which can be buffed to a shine once it dries.

When to call a professional

If none of the above techniques give you the results you desire, it may be time to refinish your hardwood floors. This technique requiresmore time and know-how, so even though you can rent a sander to do the job yourself, it might be best to hire a professional. Not only will they properly sand your floor, they will also re-stain and seal it, restoring your beautiful floors to their former glory, which, with the proper care, will last you for many years to come.

Nothing gives a home warmth and character quite like a well-cared for hardwood floor. It is worth the investment to refresh your floors; not only does it renew your home’s energy, it can evenincrease its value.