The RE/MAX Associates Louisville Real Estate Blog

What Is A Lien? What Kinds Are There?

A lien is bad, but it's not the worst thing that can happen. It happens from time to time, and they must be dealt with.

Getting behind on your mortgage, bills, other payments, and diving further into debt by borrowing money to pay those debts will eventually end up as a lien against your property. 

When the creditors start calling and you ignore them, you're probably thinking what can they do when I have no money. Well the lien is in heir power. 

Creditors power

when creditors have been ignored long enough and they want you to know they mean business, they will place a lien against the largest asset you have, which is most likely your house. In the event a lien is placed on your home, your actions will be severely limited. Taking out a second mortgage or a home equity loan will surely be off the table.

If you're thinking of selling your home, the lien needs to be paid off in full by the closing date, or use the proceeds of the sale. 

Common liens

There isn't only one type of lien creditors can place on you. Here are three more common types of liens.

Mechanics lien: these arise when general contractors work on your home, or repair man, or any labor with skilled crafts. They may place a mechanics lien on your home as insurance to make sure they get paid.

Judgment lien: if you are in court for any reason, and lose the lawsuit, the wedding party can file a judgment lien against your home until the payment is collected. These are usually imposed by lawyers if you neglect to pay your lawyer bills.

Tax lien: neglecting to pay your federal, state, or county taxes results in the government placing a tax lien on your home.

The best thing you can do for yourself if you have a lien is get that taken care of as quickly as possible. You do this by talking to the lienholder and negotiate the payment. ...

HomeBuyer's Believe Wrong

Genworth Mortgage Insurance recently conducted a survey and they concluded that potential first-time homebuyers are hindered from joining the real estate market because they cannot meet the 20% down payment rule-of-thumb. Homebuyers may think they are required to have 20% in a down payment, but this is not the case. It's totally possible to put down far less and still get a house, but your chances diminish. 

This survey took place at the 2017 Mortgage Bankers Association Secondary Market Conference in New York City. 

The survey found 28% of the respondents believe that a 20% down payment is a requirement to buy a home. On top of that, 41% of industry executives were surveyed and found they believed potential borrowers who know 20% is not a requirement believe it's far more difficult to buy a home without it. 

A whopping 39% of mortgage industry professionals believe that consumers' lack of knowledge of the process is what is actually hindering them from joining the market.

Another aspect behind this was a lack of inventory at 28%, and crazy student debt at 27%. The rising interest rates showed up at around 6%. 

A lot of first-time home buyers are passing on buying a home because they mistakenly believe they need 20% down, even though this category of buyers is leading the purchasing market. There are many options available to allow homebuyers to become a homeowner without coming up with a lump of cash. There needs to be more education so we can get people into homes.

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Investment Property Steps

Jumping into the real estate industry can be frightening, but if you do your homework and put an honest effort into learning, it will all be worth it in the end. Before you buy your first property, here’s what you should know. 

Prepare yourself for the downpayment and interest rates

Buying an investment property is not the same as buying an owner-occupied home. What’s different is mortgage insurance isn’t an option any longer. They do not offer mortgage insurance for properties that are intended to be rented. They will also want a down payment of no less than 20%. 

Another difference is interest rates. The investment property rate is usually a bit higher than owner-occupied home rates. 

Know if you want to rent or flip the property

Renting a home versus flipping it will require a different game plan. You’ll need to know what you want to do before so you can organize and plan your strategy accordingly. 

When you flip a home, you’ll need a lot of cash for repairs, energy to do the work, and a plan to sell it. Renting doesn’t need as much money but you will see your investment coming back in a longer period of time. Renting is more of a marathon, unlike flipping which is a sprint. 

Understand the local market

Knowing even a little bit about your local community and market can take you a long way. If you plan on renting this home, you’ll need to know if the city/town is growing, stagnant, or dying. Is the city seeing a population growth, or are people moving out because of dying industries? You’ll want a market that is attracting young entrepreneurs, and hopefully they can afford your price range in rent. 

Research the market

If you have been eyeing a property, do some research and check to see what similar buildings in the area are selling for. Look at the...

Renovating Mistakes

Everyone likes to renovate their home, because we all like the finished product. But renovating a home is not so simple. The upgrades can be crazy expensive, leaving you wondering if moving would have been a better choice. Here are the mistakes most commonly made while renovating your home.

Never smooth sailing

Always assuming your renovations will go according to plan will leave you disappointed. There's always something that is obstructing your plan from being executed flawlessly. There's always obstacles you never anticipate. The lesson here is to prepare for the worst.

Don't cut corners

Sometimes people are in a hurry and just want the job completed as quickly as possible. This leads to rushed work, which is always sloppy work. There is often spillover effects when the work is rushed. The lesson here is to get the job done right. This will save you a headache and money down the road. Trust me.

Make plans

During a renovation you will lose some, if not all of your appliances for a certain amount of time. Maybe you lose your stove and oven, or your washing machine. In this case you'll have to find another way to cook your food and or wash your clothes. If you plan on eating out or using a microwave for the rest of the duration of your renovation, you may leave a big hole in your wallet and put on a few extra pounds. Not to mention finding a laundry mat to go to weekly. The lesson here is to plan ahead and make accommodations for the lifestyle change you are undertaking. 

Do it at your own risk

When deciding to take on your projects yourself, just know that you are on your own and no one is coming to help when you make a big mistake. Just because you...

Why Renters Shouldn't Reconsolidate Their Debt

Like most Americans, we have bills to pay and balance loans to meet. With debts coming in from almost every direction, consolidation of those debts may appear to be a smart move. It's looked at as one payment instead of several, and even perhaps get yourself a better deal. This works for some of us, but not all.

It typically doesn't work for those who rent. If a renter wishes to consolidate their debt, a lender will group your debts into one pile and now you owe them, instead of multiple different companies. Here's why it's a bad idea.

1. Consolidating debt affects your credit score

Let me guess, you're renting now to save up for a down payment on a house soon. Oh, and you'll also need a new car in the future, and you plan on going back to school. 

Getting a debt consolidation loan will show a huge red flag on your credit report, which also takes two years to be removed. This will hurt your credit score, and that's a fact. That will probably push your future plans of getting a house and a new car back a ways. 

Having a less than desirable credit score will impact your interest-rate's, potentially costing you way more than you originally planned. 

2. Consolidation can be expensive

While it seems like a great idea to have one payment instead of me, it will do you no good if you can't make the payments. Missing payments can increase your interest rate, as well as incur additional fees. 

Renting is a different game. Landlords and lenders sometimes are very unforgiving. Don't put yourself in the position to have to choose which payments will be made this both. Missing either one can be costly.

3. Consolidation isn't going to help your bad financial habits. 

Be honest with yourself and acknowledge...

Home Warranties & Why You Need One

Owning a home is a pricey endeavor. It requires attention and upkeep simply because things get old a need to be replaced. Having a safety net will make the joys of homeownership a bit better, but be prepared to shell out some cash for those repairs. 

For the first-timers, it's always a rude awakening when they wake up to a broken hot water heater, or come home to a busted AC unit. This time around, it's your problem, not your landlords! What's a first-time home owner to do when crises strikes?

What's a home warranty?

Home warranties are just like any other warranty you buy for any other appliance, like a dishwasher or TV. They cover nearly every running system in your home, and cost anywhere from $300 to $1,000 per year.

The beauty of home warranties is you don't have to go shopping for repair men, nor do you have to pay out of pocket for the repair itself. 

All you need to do is call your home warranty provider and explain your situation. From there, the company will contact the repairmen they're partnered with and send them over. Your warrant premium will cover the cost, but  expect a co-pay in the ballpark of $50.

Who should buy home warranties?

These are well suited for first-time home buyers. They are used to calling the landlord when problems arise, and this is similar just a little different. 

Homeowners who are used to working long hours and don't have the time to tinker with repairs really benefit from these warranties. Those who also benefit are owners who don't have the know-how to fix things on their own. 

In many cases, one big disaster can show how important these warranties are and can pay for themselves quickly. 

Warranties don't just belong to first-time home buyers or the busy, they're made for everyone. People who buy homes and pay attention...

Real Life Lessons When Buying a Home

Buying a home can be one of the biggest events in your life, so make sure it's one of the best choices you make. They can be pleasant experiences, or they can be complete disasters, or maybe somewhere in the middle. The best way to make sure you don't end up in the disaster category is by avoiding the most common life lessons among first-time home buyers.

Clever staging? Or Excellent hiding?

When homes are listed on the market they are staged as best as possible and are expecting multiple showings where potential buyers walk through and inspect the house. Buyers often see the home once or twice and commit to buying it. Once they've bought it and the stage is taken down they can see what they've really purchased. It's even recommended you walk along with the inspector and check everything they are looking at. Ask for receipts of new improvements or repairs.

In the disaster case the staged home shows flawlessly, and you end up buying a POS.

The lesson to learn here is to visit the home multiple times before you commit to buying it. Inspect the home each time and look for flaws you may have missed the previous visit. This will lessen the likelihood of buyer's remorse.

The home is great but...

Sometimes buyers will buy a home just for the home itself. It's important to choose the right home that is surrounded by the perfect neighbors, and community. If you don't fit in with your neighbors due to age differences, and the surrounding communities don't interest you, you'll wish you would have chosen a different place to call home.

The lesson here is to look for all the amenities that you can, and will enjoy once you buy a certain house. Once you can see yourself living with in the community, you know that is the right house for you.

Power lines where......

3 Things You Never Tell A Seller's Agent

When visiting an open house and you begin talking to the seller's agent, it's important to say as little as you can, while still being charming. Less is always more. The buyer's agent is the light to guide you through your real estate purchase. They should know your needs, wants, and how much house you can actually afford.

When it comes to the seller's agent they are a completely different story. You won't be in contact with them much because that is your agent's job, but if you are in contact just lay low. Play it cool and do not talk about these three things.

1. How much you like or dislike the house

Here is where you want to show the seller you are interested, but not too interested. They don't need to know you're jumping at the bit to make an offer, or that this is your dream house. 

You also don't want to open your mouth too much and be too critical of the house. By having too many harsh comments you could place yourself in a shady light and you become a less-than-viable buyer. When markets have become as competitive as they are, you need to show the image that you are rocksolid.

2. How much you are willing to spend

It's always taboo to talk about your finances. By talking about the money you can and may spend, you might dig yourself into a hole and place your offer at a disadvantage. The first thing you want to do is have your offer accepted, and the second would be at the best price.

You won't be doing yourself any favors by giving the sellers an idea of your financial limits. A little mystery can go along way. As a seller, they should feel they set a fair price for the home they're offering and if you think that house is worth that price, but it may just be the house at the right price for you.

3. Use your head and let your agent do the work...