The RE/MAX Associates Louisville Real Estate Blog

What is A Transaction Fee

One of the fees that comes along with buying a house is a “transaction fee”. This one is often forgotten, but it’s one of themes cubical ones. This is a sizable chunk of money that is used basically for processing all the paperwork involved when buying or selling a house. 

A transaction fee is also called a “broker service fee” or “admin fees”. It’s the cost of making the transaction happen, the two biggest ones are managing the deal itself, and keeping up with and storing the paperwork. It’s what the brokerage charges the buyers/sellers. Because it’s the buyers/sellers who are paying it, it’s the real estate agent’s job to pass this cost along to them, otherwise the agent will probably lose that out of their commission. 

Pretty much, the seller’s agent will pay the brokerage the fee, and pass the fee along to the seller. The fee can be anywhere from $300 - $650. The dime doesn’t stop here, here are a few other fees that are linked in with the transaction fee. 

Transaction fees can also involve escrow, title homeowners association, city and county transfer taxes, Some of these fees get sent straight to the city. Like in San Francisco, the buyer usually pays for the escrow, title, and whatever homeowners association move-in fees are involved in the transaction. On the other hand the seller will be paying the city and county transfer taxes, along with the HOA move-out fees. 

Some other places, those roles are swapped or changed slightly. 

Compliance fees

Sometimes when you buy a home it isn’t exactly in the best shape. You’ll need to spend some extra money on compliance fees, which are getting your home compliant with the local codes. Different states, cities, and counties have different compliance fees. 

Parts of the country that are more prone to droughts, earthquakes, and fires...

Changes to Come Within Credit Agencies

There’s going to be a new way o doing things at the credit agencies after the Equifax consumer data hack. The agencies Equifax, TransUnion, and Experian will be receiving embedded regulators to keep any breach, no matter how big or small, from happening again. Companies should be ready and willing to take on this new task-force. 

In order to gain the trust back of the consumer, and the marketplace, and create new ways of doing things and improving their standards, they will absolutely have to put 100% effort and commitment to this. The ways of old won’t protect us anymore and criminals have found ways to circumvent the firewalls. Whatever the new plan to protect us and our information will be, the agencies must welcome it and be ready to get to work. 

The Equifax breach reached 143 million Americans, which is 43% of the entire population. The scary part isn’t only the fact that all the information of almost half the country was exposed, it was when Equifax disclosed it six weeks later! 

In the wake of all this chaos, the CEO took an early retirement and investigations begun.  Keep in mind that this data breach was far worse than the Home Depot’s and Targets’s breach in the last couple years. 

Let’s all hope business leaders and Congress can get this figured out!

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Trump's Tax Plan - Maybe

Donald Trump and his Republican colleagues are still working on their tax plan. It’s expected to bring yuge changes to the housing industry. The details haven’t been released just yet, but lobbyists are expecting what is to come. 

One of the biggest changes to come is expecting the corporate tax rate to drop to 20% from 35%. 

During his campaign Trump promised tax relief for the middle class. In his plan he would be doubling the standard deduction that benefits this class. It would also attempt to pay for some of the tax cuts by eliminating the state and local tax deduction, most commonly used by the middle-to-upper-middle classes of the wealthier states like New York, California, etc. The tax break is worth $1 trillion over 10 years, and it’s supported by some representing the real estate market. 

They are still working on this, as the right wing has not quite figured out which tax deductions to cut in order to simplify the tax code. 

Groups are in the mortgage and housing industries are standing against increasing the standard deduction. They say is a huge threat to the mortgage interest deduction, and would decrease home ownership. 

Steven Mnunchin, the US Secretary of the Department of Treasury said the mortgage interest tax deduction won’t be touched during Trump’s time in office. Even though his administration isn’t eliminating it, doesn’t mean it cannot be altered. 

There’s fears among the professionals in the mortgage industry that changing the mortgage deduction could seriously hurt the ownership rate in America. 

Despite Republicans controlling the House and the Senate, changing these laws can be quite daunting and difficult to accomplish. A bunch of the housing organizations are responding to these proposed law changes. They are all writing letters to lobbyists exposing the detriments that will follow. We will see what is to come...

20% of Millennials are Homeowners

The national Association of realtors combine with the nonprofit American student assistance program surveyed a group of 2,203 millennials ages 22-35 and found that 20% of them own a home while also having student debt. Their debt was more than their income! They averaged a debt of $41,200, and an average income of about $38,800.

The other 80% who do not own a home, 83% of them included their debt has stopped him from buying a home. Another 84% said they are waiting at least three years to buy because of their student loans. They are of the belief that their debt is also hindering their ability to save for retirement. 

A shocking 61% of respondents said they haven't saved a single penny for retirement, and 32% say they save occasionally for their retirement.

The fact that millennials and younger generations are having to borrow thousands, and sometimes hundreds of thousands of dollars just to get an education is severely limiting their housing situations. Not only are their housing situations in jeopardy, but future life decisions too. 

First-time home buying sales have been at record lows and this is partially to blame for the debt. Even the older millennial who do make a decent living are putting off buying a home because the down payments are still too large.

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When to Call A Plumber

Plumbing is often a household chore that isn't thought about until it's obvious it needs to be done. Your basic homeowner can operate a plunger and some drain cleaner, but that's usually about as far as their skills go. 

When you know what warning signs to look for, you can save yourself some money and some major hassle, not to mention the mess.

  1. Gurgling

Can you hear gurgling when you run the dishwasher, laundry, or toilet? It could very well be clogged! If it's gurgling when you're not using it, it's trying to find air because the pipes are backed up. 

If you can hear it when you are using it, turn it off immediately because it's on the way to the top! It's backing up!

  1. Hearing water in your pipes 

If you can hear water chugging on through your pipes when there's no water being run in the house you probably have a leak.

Look up, look on the walls, and look on the floor. You were looking for water stains if the spots are warm the leak is in your hot water line. Knowing where the leak is coming from is excellent information to pass on to your plumber. 

Having the problem identified before the plumber comes over could save you some money too!

Look at your water meter, and if it's running when no water is in use, there's a problem.

If you can hear water running in your toilet, these are usually simple fixes. All you may need is a simple flap replacement. If you can hear a hissing noise your internal tank is probably old and needs replacing.

  1. Low water pressure

Low water pressure is often a result of calcium buildup in your faucet's aerator. 

A simple remedy for this is to unscrew the aerator and clean the residue and placing it back. If this doesn't solve the problem you may have a bigger one. 

  1. Slow drainage

Are the sinks taking a little bit longer to drain? You can...

How to Handle A Home Left in A Trust

If you're lucky enough to inherit a house from my home trust it will no doubt be a tricky situation. No matter if it's from a parent, sibling, or other benefactor you will need to know the ins and outs of this situation so you can best serve yourself. Most likely somebody has passed away and left you their property. This will not be an easy time and judgment can be clouded as your personal and financial life will be trying to make sense of everything that's going on.

If you and your co-beneficiaries decide that one person will keep the home and pay the others off you'll want to know how to do this right so you don't cost yourself in the long run. How does a person pay the others off? 

The perfect scenario is win the entire party agrees that one of them will pay the others off. Rarely is it this mood; everybody usually has their best interest in mind and is looking out for themselves. Someone may have an emotional attachment to the property, while another sees it as pure dollar signs. 

A lot of the time it is just like a divorce, both parties are fighting for the property and a settlement is not the easiest to obtain. Because this is a trust, lawyers and or a mediator will be necessary. Mediation is always the first option and if that does not find a solution then lawyers will battle it out in court.

Paying off the others

If everyone can agree that one person will pay off everybody else the situation needs to be looked at as an "arms length transaction", which is when the property needs to be sold for fair market value and not include any emotional attachment. This is business, and it should be treated as such.

An appraisal of the property will be the first thing that is done, and if for whatever reason the party won't agree to that, then a real estate agents opinion will suffice. Everybody in the party should have a real estate agent to represent their interest during the process. This way nobody gets left out...

Homeownership is Still the American Dream

The American dream has long been about a big loving family, retirement, and most importantly homeownership. Homeownership is still a top five priority in Americans mines at cording to ReportLinker. 

They conducted a survey in which priorities Americans value most, and homeownership dropped one spot from last year. Above them are academic goals, marriage, and obtaining your career goals.

On the flip-side, when they looked at long-term financial goals homeownership was at the top of the list, with 54% of responders believing that owning a home is of the utmost important financial goals, and 81% of them also said homeownership is the best long-term investment.

As bad as American’s want to become homeowners, they are still hurdling obstacles from 2008. The recession in 2008, higher home prices, lack of supply, and student loans. 

With all these obstacles in the way, 31 percent of homeowners have a mortgage, and 15 percent own their home without a mortgage. 28 percent of respondents rent from a private landlord, and 15 percent live with family or friends for free. 

When they do finally achieve the American dream, what will they spend their money on? 41 percent said maintenance and repairs are the biggest priority. A slick remodel for comfort came in around 21 percent, and a remodel for better style was at 19 percent, and energy conservation was at 16 percent. 

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Increase in Minority Income Spurs More Homeownership

Median income increased from 2015 to 2016 to the highest point it’s ever been. Income levels rose 3.2 percent to $59,039 from 2015 to 2016. These numbers are setting records; its the highest point ever reached, and it’s the second year in a row it’s been rising. The statisics below can be found here.

Asian homes continue holding the highest median income at $81,431, Non-hispanic white households were next with $47,675, which is also up 2%. 

The two households with the lowest median income didn’t come without loss. They experienced the most growth from 2015 to 2016. Black households climbed to $39,490 which is up 5.7 percent. And the second highest growth sector was the Hispanic households, up 4.3 percent to $47,675

Forgetting the rising home prices, this increase in income explains why Hispanic home ownership is rising as well.  

Up from 2015, 2016 saw a whopping 45.6 percent increase in homeownership among Hispanics. This  demographic was the only one that saw an increase, all others saw a loss of homeownership. 

Experts, and all of America is hopeful and rooting for Hispanics and other minorities continue the trend increasing homeownership.

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Foreclosure Alternatives

Let’s say you’ve missed a few mortgage payments and your lender finally sends a notice of default. Times are tough and you’re growing desperate. You fully understand that you’re about to lose your home and take a huge hit on your credit. If foreclosure seems like your only option, think again. 

The absolute very first thing you should do when facing foreclosure is contact your lender. This will make them want to fight with you because they know you are willing to fight for a solution. The earlier you ask for help the greater your chances of winning are. 

Once you tap to your lender, you will have a few options before you. Yes, one will be the foreclosure opportunity, and it could work in your favor if done correctly. 

  1. Sale or rent

If you are in line to pay your mortgage off traditionally, but anticipate there could become a problem you can hold on as long as possible for a buyer. 

You can also rent their home to pay for your mortgage until the home sells.

  1. Short sale

This usually happens when the value of a home is lower than the equity, and there's not enough to cover the mortgage. This is also known as being underwater. The lender will agree to accept less than the amount owed by the borrower by the sale of a third party. 

A short sale will work Like this. A deal will be brokered so that the lender can sell the property for what they can. If the sale amount is less than what is owed, the money goes to the lender and the remaining is relinquished. Typically the lender will pay the seller's closing costs. Expect this process to be about 90 to 120 days. 

The One thing the seller must prove is there a hardship. This means the loss of income, death of a spouse, etc. the point is they must explain why they cannot pay their mortgage anymore. 

  1. Deed in lieu of foreclosure agreement

What this does...

Commissions

A real estate agent typically makes 5% - 6% of the sale price of the home. Both agents will usually split that 6%. However, negotiations are what it’s all about. These are net predetermined numbers, but the average is 5% - 6% and the agents will divide their earnings between themselves. 

Who pays the commission?

The seller of the property is the one who is on the hook. They pay both agents commission. The buyer is never responsible for paying commissions. The buyer isn’t getting away scott free though, they pay the closing costs. 

Are commission fees negotiable?

The most common way this is done is when the agent represents both the buyer and seller. If this is the case they will often lower their commission fees. This is what is known as “dual agency”. 

How commission works for buyers

If the seller is clever, and truly feel it is justified, they can raise the listing price in order to pass the cost along to the buyer. This is done by the buyer pays closing costs, and they get a little pricer as the listing price is increased. Again, the buyer is mainly responsible for closing costs, which doesn’t allow them to pay nothing. 

Do you pay commission if you don’t buy a home?

No! Agents are paid once a transaction has taken place, so if you don’t buy a home, there is no commission to be paid to the agent. Agents can protect themselves by drafting a buyer’s agency agreement which is a contract binding you to them for whatever terms and conditions they may set. 

What if the home doesn’t sell?

Typically not. Again, agents are paid after a transaction has been made, so if the home doesn’t sell there’s no commission to be paid. 

But, read your contract and make sure you don’t end up owning them money after the home sits on the market for a long while. It has happened where agents state...

How to Best Work With An Agent

If you’re looking to be an active participant in the real estate market today, chances are you will be dealing with a realtor. What are their hours though and will they be flexible enough to work with yours?
We all have cray schedules between work, kids, family and friends plans, gym, etc. so when are a real estate agent’s hours available for you!

An agent’s hours depend on the individual. It depends on how committed they are to their clients. Will they open their schedule at a moment’s notice to show you a new house. They may work on certain days and not on others, or they may be available 24/7. It’s best to check with them to see their normal hours to best align your schedules. 

THere’s a thing called an 80-20 rule, and it indicates that 20% of the agents in the market and handling 80% of the sales. But what about the rest of the field? These agents mostly work part time around their home-life. This means they are taking kids to practice rather than showing you a house. Regardless, it’s always worth the ask to see which agent you get. 

If an agent is truly motivated they will always have open schedules for their clients. They should be working around their client’s schedule instead of their own. IT’s the mindset, of whatever it takes to get the sale.

Before you choose the agent you are going to be working with, it would be wise to communicate with them if you have a crazy-busy schedule. Let them know your day-to-day activities and when you can give your time. This will keep expectations at a certain level while avoiding any frustration. 

Sometimes emergencies comes up and can’t be predicted. In this case, the best thing you can do is give as much advance notice as possible. At times, an agent won’t always be available, but if they have a little lead time, the better your chances are. 

It’s also important to keep others’ schedule in mind when...

Trump Administrations Reverse Mortgage Change

Donald Trump's of ministration is in the works of raising premiums and putting more restrictive limits on loan programs that allow some seniors to supplement as their income. 

The US Department of Housing and Urban Development plans to reveal changes to the reverse mortgage program. That program lets borrowers take money out on the house they own. The Trump administration believes doing this will put it on a stronger financial foundation, because after all it is is paid by the taxpayers.

Ben Carson says there have been troubling loses in the program over the years, and he believes these changes are the right thing to do by the taxpayers. 

The changes won't affect those with existing mortgages, only those to take out new loans. More than a half 1 million borrow ours, 650,000 have outstanding reverse mortgages which are insured by the Federal Housing Administration. 

The changes to the program will make new borrowers pay higher premiums upfront, but lower ones throughout the life of the loan, which protects taxpayers if the seniors live longer than expected. Borrowers are set to pay 2% up front, and 0.5% throughout the life of the loan. 

Right now borrowers only pay 0.5% upfront and 1.25% annually during the loan. If someone wanted to borrow more than 60% of their homes value in the first year they're already paying 2.5% upfront, so luckily for them their premiums will be going down. 

To balance it all out, most seniors will be able to borrow less money. Right now the average borrower takes out 64% of their homes value, and at current interest rates, they'll only be able to borrow 58%. Keep in mind these numbers are not concrete, they are based on the average borrower. So for the average borrower who can only afford to borrow less, some may be able to borrow more depending on what happens to interest rates. 

The whole point of the reverse mortgage program is to help seniors take out money against their home to help...

What To Ask Before You Buy A Home

Everyone wants a nice house, and one of the best ways to get that is buying a flipped house. It's an exciting time, because the home is either brand new or gently used. There are risks involved with buying a flipped home though. The repairs and renovations need to be done correctly. So before you buy be sure to ask these questions.

  1. Who's selling it?

Is the seller a person or an LLC? Everyone needs to ask this question. It's happen that a renovator makes himself an LLC and right after the sale, he immediately liquidates the LLC. This is in hopes to get themselves off the hook in case any defects come up shortly after the sale. If the seller is an LLC, take some time to probe into how long the business has been around, and their reputation. 

  1. Whats the scope of the renovation?

This question will get the owner or agent talking. You'll find out if there were any walls removed, major plumbing or electrical work done. How long ago, etc. the smaller renovation jobs are usually bathroom jobs, new paint and floors, mostly cosmetic work. The bigger jobs are much bigger, and the new buyer needs to know what was done. 

  1. Did they get permits?

If there was any major electrical, plumbing, or structural work they need to have permits. Ask for a copy of them. You can also check the city records to see if permits were filed. If there aren't any permits this may mean the work could have been less than professional. 

  1. Who was the last owner?

There's always records of home ownership. If any issues are popping up, it's completely appropriate to ask the previous owner about them. Questions worth asking: when did you put on a new roof? Have there ever been any leaks anywhere? Has there always been this part of the home?

It's important to know every change that was made in the house because flippers get in a hurry sometimes and don't finish certain jobs.

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Cash Buying

Freddie Mac’s latest report showed housing charted lower than they originally thought for Q2, and this is making buyers pursue another route to buy a home. 

In the report the tight supply of homes was highlighted, and how cash deals are more attractive to the sellers. Back in the day, people would basically buy homes with a loan they received. This is still a popular route, but it’s getting increasingly difficult. Now sellers are preferring cash deals, which puts a lot of buyers out of the market. 

Some people aren’t fond of the idea of throwing their cash into real estate because it is illiquid and has extremely high transaction costs. But today, if a buyer walks up to a house they like with cash, they gain the upper hand quickly over their competitors. This way, the seller doesn’t have to worry about the buyer getting a mortgage, or if the appraisal will come in lower than they expected. Having one more cash sale means one less mortgage origination. 

Since Freddie Mac’s prime mortgage interest rates expected to stay under 4% for the rest of 2017, home sales should hit 6.2 million units for the year, which is a whopping 3% jump from 2016. Freddie would say the number is still stifled due to inventory constraints.  

For the year, home price appreciation is expected to be 6.3% due to high demand and incredibly low  supply. 

For the month of June, cash sales were 18% of all home sales. The historical average is 10%, but it was still less than the all-time high of 35%. 

We will have to wait and see what today’s market that sucks down cash has on the mortgage market. If the cash sales can hover around 20% for a while, that would equate to $172 billion less in mortgage originations than if the cash were steady at it’s historical norm.

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How to Make an Offer

After weeks, and maybe months you have finally found the house you want to spend your life in. Now you need to make an offer. But how does one make an offer to ensure they get what they want? Since this is one of the biggest items you may ever buy, you’ll want to know what you’re doing. 

You will have tools and professionals on your side to keep your finances in order, and make your offer stand out, while protecting your money. From down payments to contingencies, escrow accounts to counter offers, here’s how you can sift through each phase and get the dream home. 

  1. Do your homework

In order to find a fair price you’re willing to pay you need to mw the local market and the seller. The best tool here is your real estate agent, hopefully they know what they’re doing. The next thing you can do is go online to real estate sites and search by zip codes. 

You’ll look at comparable home sales and that’ll give you an idea where the market is. Inquire about the history of the property and if any major additions, repairs, or undertakings have taken place, and when. Find out when the previous owner bought it and for how much. 

Then after all this research ask your real estate agent what they think is a fair price. They may have the most accurate price. 

  1. Have a lender in your corner 

Not many of us can pay cash for a house, so we need to get a mortgage and the sellers want proof. You’ll need to get pre approved by a lender. They’ll write out a certain amount you qualify for, and certain terms and conditions. A seller will ALWAYS take an offer from a buyer is who pre approved over one who is not. 

  1. Bring in the pros 

Unless you are a genius, you’ll want some professional help in this process because of house difficult it is. There’s so many moving parts and confusing terminology. ...

Prices Rise Again in 2nd Quarter

Median homes prices are rising in 87% of markets, and it's setting records along the way. In the second quarter prices edged the record high from 2016, coming off a 6.2% jump even while the weak supply has been inflating prices higher. 

The national median price for a single family home from the second quarter was $255,600, which is up from $240,700 in Q2 of 2016. 23 metros saw double digits increases, and the price for a single family home rose a whopping 87% in markets across the nation.

According to the National Association of Realtors, The economy gained 2.2 million jobs over the past year, and that has really increased the buying trend; even more so with the tight supply. Homes in the market were being sold frequently, lasting only a month. Home prices rose due to the supply not being able to keep pace with the demand. 

If the supply could meet the demand, many more people could enter the markets and enjoy the wealth building opportunities of homeownership. They’re currently being priced out. 

Even though sales are still 1.6% higher than this time last year, the total existing home sales dropped 0.9% to a seasonally adjusted annual rate of 5.57 million for the second quarter. On the flip side, by 2nd quarter end in 2017, 1.96 million homes were on the market which is a 7.1% drop from 2016. The average supply was 4.2 months. 

The people are believing it’s a good time to buy because mortgage rates are down, their incomes are rising, but the supply of homes is still abhorrently low and it’ll pose problems for the second part of the year. 

The five most expensive housing markets in the second quarter were San Jose, San Francisco, Aneheim-Santa Ana, Honolulu, and San Diego. It’s no coincidence 4/5 are in California, and the 5th is even further west. You know what they say, “West Coast Best Coast”. Maybe not in affordability, but most other things yes. 

On the other side, the lowest-cost...

Weddings Can Be Expensive, Even If Your Not in The Wedding

The new American trend of destination parties has become quite popular. Across the country millennial's are flying to different cities and celebrating events with their friends, most common are wedding bachelor(ette) parties. These expensive trips add up fast over the years.

A study by Zillow has concluded that if a person travels to nine or 10 destination parties they will have spent almost $14,000. This is enough for a 35% down payment on a medium priced home.

Owning a home is a call to a lot of millennial's, but a lot of them struggle to save enough for an adequate down payment. 

The average destination bachelor party cost him $1500, while the average bachelorette cost $1100. This is all according to the wedding website, The Knot. If one person goes on a 10 of these destination trips they will have spent more than enough money for a down payment on a modestly priced home. 

And some markets this amount of money will get you as much as 50% down payment by Pittsburgh and Cleveland, while in other markets like LA and San Francisco you will only have 4%or 5%. 

Bachelor and bachelorette parties are not the only wedding expense. Hundreds of dollars are spent on clothes for the wedding, presents for certain party members, and travel costs to the wedding. On average, bridal party members spend an average of $888, and this is just to be in the party. 

Figure out how much you can actually spend on a home based on your income, savings, and your debts. Spend your money wisely and don't buy things you can't afford.

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Millennials and Gen Xers

Millennials aren’t taking everything over as we originally thought. They are not leading the industry in market share as believed prior. The Association of Mortgage Professionals did a recent survey that questions its members monthly collecting data trends. There were groups of all ages in the survey, millennials (< 35), Gen Xers (36-52), Baby Boomers (53-71), and the Greatest Generation (72+). 

It was discovered that Gen Xers make up most of the marketshare, at 36 to 75%. More than a quarter respondents comprised anywhere from 50 to 75%, in opposition to millennials, who were less than 25% in over half of the businesses surveyed. 

One thing that sets millennials apart form Gen Xers, are the willingness to throw down a fat down payment. Millennials were more partial to the 3% and under down payment, while Gen Xers were willing to throw down anywhere from 10%-20%. 

A piece of common ground all the groups could agree on was the need for the mortgage process to be streamlined. They all wished their was less paperwork, except for about 15% of them. They also felt the smaller mortgage companies weren’t in competition among themselves, but the big five banks.

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Why You Should Buy A Fixer-Upper

To buy a fixer-upper home or not to buy a fixer-upper home, that is the question. There are many home buyers out there who want to fix up their home and customize it to their liking. And on the other hand, there are those who would rather buy a home and leave it as is. 

Buying a fixer-upper isn't for everyone, but there are plenty of reasons to undertake the endeavor. Here are a few reasons invade you're on the fence.

  1. Always a deal

Most fixer uppers are usually sold for a great price, which is the biggest attraction for buyers. They usually sell for anywhere from 18% - 25% less than comparable homes in the area. 

Keep in mind fixer uppers will require you spend a lot of money on the renovations. Have a contractor give a thorough estimate of what each job will cost, and be sure to budget an extra 5% for the unexpected expenses, because they will arise. 

  1. Making it your home

Fixer-upper homes up allow the owners to customize the home exactly as they wish. What's also need about these, is they let the new owners live in them before they begin renovations. 

On the flip-side, living in a demolition zone can be less than enjoyable. Maybe you can talk to the contractor and see if it can be completed in corners; this can leave you a section of the home to live in while they build.

  1. Sweat equity

A good portion of fixer-upper homes are often older with a different layout than homes built today. The parts of the home that show age and personality may need to be remolded to fit your taste, so don't be afraid to add your own touch. 

Coloring the home to your taste will make you appreciate it that much more. 

  1. Because you are a DIY'er

For those who are quite handy and have a lot of know how, a fixer-upper house will put their skills to the test.and the payoff will be the bragging rights and compliments you hear on your work. ...

What is An Active Contingent'?

If you're searching for a home and you've found one you like, but the official status is "active contingent" is it still possible to get this home? 

What does it mean?

If a home's status reads "active contingent" all that means is the buyer has given their offer, but with contingencies. A contingency is an issue that needs to be resolved before the sale can be final. The contingencies that appear fairly often are a homes inspection, buyer getting approved for a loan, and the buyer being able to sell their home. Once all the contingencies are met, the sale process can proceed. 

What's the difference between active contingent and sale pending?

The active contingent means several issues are currently being resolved, while sale pending simply means there were no contingencies, or they have all been met. 

So does this mean you shouldn't put an offer in for an active contingent?

The odds aren't likely, but it still doesn't mean you shouldn't cast your line. Who knows, your offer may be more reasonable as attractive, and they decide to call a meeting. The only time you shouldn't is when the seller's agent says they are no longer accepting bids. 

So if you're going to submit an offer just to see what happens, you better make it one hell of an attractive offer. Stranger things have happened than seller's jumping ship to the backup offer. 

Offer a fair price, ideally zero contingencies, as is, and a local lender is about perfect.

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