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November is a good month to move some maintenance efforts indoors. This month also provides an opportunity to see if your hard work during earlier months paid off — nothing tests waterproofing efforts like a hard November rain.

Maintain large appliances

As the holiday season begins, make sure your appliances are prepared for the demands you will place on them. Pull your refrigerator from the wall and clean the condenser coils in back with a vacuum cleaner with a brush attachment. Also, vacuum dust from the front lower grille and clean the drip pan and the drain leading to it (if your unit has one). Clean the oven and stove drip pans on your electric range. Clean the surface burner on your gas stove to ensure proper flame level. De-stench your in-sink garbage disposal by packing it with ice cubes and 1/4 cup of baking soda; then turn it on. After the ice-grinding noise stops, pour a kettle full of boiling water into the sink. Check the dishwasher strainer and washer arm; clean if necessary.

Clean and maintain closets

Go to your closets and perform these two simple tests: Can you see floor space, and can you easily close the door? If the answer to either one of these questions is no, clean your closet. Cramped closets can provide haven for pests, too-full racks can break free from walls, and sliding doors can be derailed by too much stuff. Add compartments and hanging racks at different levels to utilize more space.

Maintain woodwork

November is a good month to repair and reglue woodwork, since indoor air is at its driest. If you are regluing wobbly dining room chairs, clamp during drying by wrapping a rope tightly around the perimeter of the legs. Be sure to protect wood surfaces with cardboard before tightening rope. Try using toothpaste on white water stains on wood surfaces. Once the stain is removed, polish with furniture polish. Use paste wax and elbow grease to put a new sheen on wood furniture.

Clear leaves from gutter

Cleaning gutters is a slimy job, but the task will protect your siding and basement from expensive water damage. Don long rubber gloves, grab a gallon bucket and scoop leaves into the bucket by hand. Trying to use a garden trowel or other device just makes the task more cumbersome and can damage gutters. Blast the scum from the bottom of the gutter with a hose equipped with a pressure nozzle. If it doesn’t drain well, feed your running hose up the pipe to knock loose the clog. Dump the contents of the bucket on your compost pile and pat yourself on the back for a dirty job well done.

Speaking of leaves …

Check some other places where accumulated leaves can be a problem. If leaves are piled in the valleys of your roof, they can retain water and initiate leaks. Walk your property with a shovel and clear drainage ditches and culverts of leaf buildup. Also, a moderate amount of leaves on a lawn can provide a natural mulch, but if large amounts are left to soak up winter rains, they will smother the grass beneath them.

Have problem trees trimmed

Now that you’ve cleaned your gutters, you know which trees are dumping leaves on your roof, shading it enough to encourage moss, and close enough to cause serious damage should they lose a branch in a storm. Trees are dormant this time of the year and can withstand extensive pruning. Decide which ones need cutting back and hire a professional to do the job. This is not a do-it-yourself task if the trees you are looking at are high enough to affect your roof. Trimming large trees is a dangerous job that should be left to an expert.

Maintain moisture

Heaters, especially forced air and wood stoves, can rob a home of humidity. A touch of moisture in the air makes heated air feel warmer, so you can keep the heat at a slightly lower temperature if your humidity is balanced. If your woodwork is cracking or your skin seems excessively dry, you need more moisture in your home. A furnace-mounted humidifier is likely the answer if your home has central forced-air heat and other measures don’t moisten things up. If you have a wood stove, put a nonwhistling teakettle on it and add water regularly (check it daily to make sure the water hasn’t evaporated). If you prefer not to go by feel, buy an inexpensive instrument called a hygrometer that measures humidity.

Maintain pools down south

For most of the country, pools are out of sight and out of mind during November. But if you live in sunny southern climes, this month marks the beginning of the dry season and the time to begin any pool maintenance job that requires emptying the pool. If a pool is emptied when groundwater levels are high, it can “float” and damage itself. So if you’re fortunate enough to live in a place where you can actually enjoy your pool in December, consider having major maintenance like replastering done this time of year.

Check your sump pump

Some unfinished basements in wet areas have sump pumps installed. These pumps switch on automatically when groundwater levels rise, eliminating basement water before it becomes a problem. If you have one, make sure it is in good working order before the rainy season starts.

Buy foam-cup covers for outdoor faucets

Be prepared to protect your spigots when the weather gets chilly and flirts with going below the freezing level. The foam cups are commonly sold at hardware stores and provide a cheap insurance policy that will help keep exposed pipes from freezing.

Read at: http://realestate.msn.com/article.aspx?cp-documentid=13107890

1. Wrecked credit

Regardless of whether a foreclosure is because of a strategic default or other circumstances, it damages a consumer’s credit score. “A foreclosure is one of the stronger predictors of future credit risk,” says Craig Watts, public-affairs director of FICO, a credit-rating company. Foreclosures remain on a credit report for as long as seven years, with the impact gradually lessening over time. Watts says FICO scores “generally begin to recover after a couple of years,” assuming the consumer stays current on all payments and other credit accounts. He says the impact of a foreclosure on a credit score depends on other factors in the borrower’s credit history. The ABA says a foreclosure drops a FICO score by 100 to 400 points.

2. Difficulty getting new mortgage

A voluntary foreclosure also can affect a homeowner’s ability to qualify for a new mortgage for years to come. Peter Fredman, a Berkeley, Calif., consumer attorney, says Fannie Mae and Freddie Mac will not approve a mortgage for four years after foreclosure, while the ABA says it can take three to seven years to qualify for a new mortgage. In addition, Fannie Mae this past summer announced a tough new sanction on people who deliberately default on their mortgages. These borrowers will be ineligible for a new Fannie-backed mortgage for seven years after the foreclosure date.

3. Taxes still due

Tax liability is another potential danger of defaulting. Although the Mortgage Forgiveness Debt Relief Act of 2007 offers protection from federal taxes after a foreclosure through 2012, state taxes still may be due on unpaid debt.

4. Deficiency judgment

A lender can also pursue the remaining debt from an unpaid loan by obtaining a deficiency judgment against the delinquent borrower, or it may work with a collection agency to recoup losses. Ethical questions also surround strategic defaults. A survey by Trulia.com and RealtyTrac found that 59% of homeowners would not consider defaulting, no matter how much their mortgage was underwater, although the other 41% of homeowners said they would consider a default.

Less risky in some states

Despite the potential negative consequences of a strategic default, the move is less risky in some states than in others. “The first question for anyone considering a strategic default is whether the homeowners will be liable for the debt anyway,” Fredman says. “Each state has different rules.” Nonrecourse laws protect homeowners in some states. According to research from the Federal Reserve Bank of Atlanta, the 11 nonrecourse states are Alaska, Arizona, California, Iowa, Minnesota, Montana, North Carolina, North Dakota, Oregon, Washington and Wisconsin. When a borrower defaults in one of these states, the lender can take the home through a foreclosure but has no right to any other borrower assets. Home-equity loans are ineligible for this protection unless they were used as part of the home purchase. In some areas, lenders are so overwhelmed with defaulting customers that homeowners can live in their homes for free for a year or longer before the foreclosure is complete. The average length of time from default to eviction is 400 days in California, Fredman says.

Price of freedom

The potential consequences of strategic default cannot deter some homeowners from taking the plunge, says Frank Pallotta, executive vice president and managing director of the Loan Value Group in Rumson, N.J. “While everyone understands the credit-score impact of a strategic default, most borrowers don’t seem to care,” Pallotta says. “They think a 200-point hit on their credit score cannot offset the benefit of living for as long as 18 months rent- and mortgage-free. They see strategic default as a form of financial freedom, especially if they live in a nonrecourse state and know someone who has done this.” Fredman, who developed the Should I Pay or Should I Go online calculator to help consumers evaluate a strategic default, says homeowners considering a strategic default should research tax laws and state regulations about loan defaults. Even nonrecourse states’ laws can affect defaulting borrowers, he says. “I also think everyone should consult an attorney and probably an accountant, too, because the relative cost of these professionals is not nearly as high as the potential cost of making a mistake,” he says.

Read at: http://realestate.msn.com/article.aspx?cp-documentid=25923795

This market a ‘baby’ compared to days past

Johnson wasn’t always a real-estate guy. He was born to a farming family in South Dakota on Dec. 22, 1912, and moved to Seattle at the height of the Great Depression to attend college and pursue a teaching career. To make ends meet, Johnson juggled three jobs at one time. He delivered milk for a while. “Whatever you could do to get by with, you did it.”  Then, in 1936, he started dabbling in real estate. Unemployment hovered around 30%, soup lines stretched around blocks, homelessness was rampant. “You could have bought the best house in (the Seattle neighborhood of) Ballard for $3,500.” Times were tough. The current real-estate market, Johnson says, is “a baby” by comparison. “In addition to the Depression, we had the drought at the same period, so it was just compounded. You wouldn’t believe the things that happened during that period.” Johnson, a natty dresser who drives himself to work every day — including Saturdays – managed to carve out a niche as a service-oriented agent. When the economy turned at the end of World War II, he opened up his own shop in Ballard, north of downtown. He and his sons have run George W. Johnson Realtors ever since, weathering the ups and downs in the market with confidence that profits are there for the making.  “I’ve lost a lot of money in a lot of things, but I’ve never lost in real estate,” Johnson says. He remembers selling his first house in the 1930s for about $1,500. “It’s probably worth $300,000 now.”

4 real-estate tips from Johnson
You can’t thrive in the real-estate industry for this long without learning some useful lessons along the way. Here are some of Johnson’s pearls of wisdom:

Beware one-company towns: Cities dependent on a single company or industry are more vulnerable to jarring downturns if the economy goes south. The Rust Belt’s old factory towns have made that abundantly clear. The Seattle market turned particularly grim in the late 1960s and early ’70s when Boeing, the aerospace giant, laid off more than 60,000 people in the Seattle area. “Boeing was about the only major company we had other than (the University of Washington),” he recalls. “Now we’ve got a much broader base to help out … it is altogether a different proposition.” Johnson counsels homebuyers to look beyond real-estate values and investigate an area’s fundamental economy before making a purchase.

Don’t get greedy. Johnson blames “plain old greed” for the latest real-estate downturn — people got caught up in the enthusiasm of the moment and banks egged them on with cheap loans. “Everybody was out to buy a house, raise the price, double it and make a quick buck,” he says, shaking his head. “People signed up for stuff that they knew they shouldn’t have and they couldn’t pay (for) and of course the banks helped them.” Johnson is old-school in that way. At the heart of his real-estate philosophy is his fundamental belief in personal responsibility. “You’ve got to be able to hang onto a house until conditions are such that you can make a little money,” he says, emphasizing that each and every potential homebuyer should make an honest assessment of his or her financial potential and should be wary of offers that seem too good to be true. “People aren’t as dumb as the media is making them out to be. They knew what they were getting into,” he says. But he is compassionate for those who have run into honest trouble. “It’s tough on people who lost their jobs and are now losing their homes and that type of thing. It always is,” he says. Their pain, however, is the buyers’ gain.

Timing is everything. “In this market, any young person that hasn’t bought a house ought to buy one,” Johnson says. “A buyers market doesn’t come along that often … you just can hardly help but make money on whatever you buy today at the prices they are.” Johnson says rates are only going to go up over the long term, so borrowing will cost more.

If you don’t have to sell, hang on. Unfortunately, Johnson expects sellers to continue to suffer, at least for now. Buyers, on the other hand, “know it’s a buyers market – they are going to come in with offers below what we’ve appraised it at just because they know a lot of people have to sell,” he says. Despite the continued housing-market struggles, Johnson is confident that the latest downtrend is largely over. ”We are headed up,” he says, “but like I said, I think it is going to be slow. It will take a year or two at least.” And as the market heads up, Johnson hopes to be there helping his customers buy and sell homes just as he has for most of his life – out of a small, family office dedicated to service with a smile. “We’ve done a good job,” he says of his business. “We’ve been careful and honest and thorough and it’s been good service, and I think that will always produce, no matter what business you’re in.”

Read at: http://realestate.msn.com/article.aspx?cp-documentid=25369084&GT1=35006

Faced with plunging property values and rising defaults, lenders are charging borrowers higher mortgage rates and adding fees. Not all of these added costs are set in stone, however. If you’re looking for a loan, vigilant shopping and a little haggling can go a long way toward landing a better deal. Here are five fees to watch out for and how to avoid paying them:

Application fees

Just because an ad says “no application fee” doesn’t mean there’s no fee at the time you submit a mortgage application. Each lender gives different names to its fees, which makes it hard to comparison-shop. Fees paid outside of closing — meaning at the time you submit loan paperwork — typically include an application fee (an average of $252, according to HSH Associates, a mortgage-information company in Pompton Plains, N.J.), an upfront property appraisal ($331) and a credit check ($33). They may be listed separately or lumped together as a “document-processing fee.” To avoid overpaying, ask lenders for a good-faith estimate of mortgage costs. Though lenders are under no obligation to provide one, most will.

The yield-spread premium

One dirty little secret of the mortgage industry is the yield-spread premium. In return for arranging loans with inflated interest rates, some brokers receive fattened payments — referred to as the yield-spread premium — from lenders. Even a slight difference in rate — say, 6.779% instead of 6.495% — amounts to nearly $17,000 in extra interest over the life of a 30-year, $250,000 loan. To avoid getting suckered, ask your broker whether the lender pays a flat rate or a percentage commission based on loan terms. Also, obtain a copy of your credit score and use Fair Isaac’s MyFICO.com to get a realistic estimate for a fixed-rate mortgage based on your score.

Risk-adjusted rates

Getting deemed a risky borrower is no longer just a matter of a low credit score. Lenders now consider other risk factors. Buy in an area that has seen values drop precipitously — such as Florida or Las Vegas — and you can expect a higher rate. The good news is that each lender gives different weight to individual risk factors. So make sure to collect bids from various lenders.

Down-payment penalties

The days of zero down on a mortgage are over. Without a down payment of at least 20%, prospective homebuyers will undoubtedly get hit with a higher interest rate and need to pay for more points. (Each point usually amounts to a fee of about 1% of a mortgage.) Also, if buyers can’t put 20% down, they’ll need to get private mortgage insurance, which typically costs 0.5% of the loan. Shopping around for lenders with more-favorable points and insurance charges can help lessen the blow.

Closing costs

The way closing fees are disclosed is, frankly, quite bad. That’s problematic, considering closing fees amount to 2% to 5% of a home’s price. Location plays a big role, as taxes and other requirements vary by state. Some states require expensive attorneys to oversee the closing process, while others allow a title agent or escrow officer. Ask potential lenders for a good-faith estimate of closing costs. Then check in weekly with whoever is handling the closing to see whether there are any changes in either lender or third-party fees. Here’s how to keep these fees under control:

• Lender fees. Ask which expenses go into each fee, and challenge anything that seems unnecessary or inflated, such as overly high charges for faxing documents or overnight delivery. Be particularly cautious about fees prorated based on the closing date. Such fees are easily miscalculated, especially if the closing date changes.

• Third-party fees. Home-buyers also have to deal with title insurance companies, surveyors and inspectors, all of whom have their own fees. Comparison-shop at other local companies to ensure you’re getting a competitive bid. If you find a better rate, ask the lender to use that vendor instead.

This story was reported and written by By Kelli B. Grant for SmartMoney. Published Oct. 2, 2008