The RE/MAX Associates Louisville Real Estate Blog

How to NOT Break Your Lease

No matter what your reason may be, breaking a lease is always a grave and nerve-wracking decision. Before you throw your money for last month’s rent, you should explore every option with the property owner.

Start with a conversation with them

If you are displeased with your rental, or you must leave for personal reasons, don’t assume your hands are tied. Call your landlord, and set up a time to meet with them. If you prefer to do it online, as millennials do, get over it and find your courage and go talk to them in person. Find your words carefully and let them know why you must change your living situation.

Before you meet with your landlord, take a good hard look at your situation and see if you absolutely have to break your lease.

If your issues concern a troublesome neighbor, or a roommate is leaving and rent is too expensive, your landlord will probably work with you to keep you there and settle your concerns. Your landlord wants to keep you (assuming you are a good tenant) so they will do what they can to keep you in their property.

You have options

After you have told your landlord your problems and moving is the best course of action, it’s time to consider your options. Your options will be dependent on the size of the management company, as well as the terms of the lease.

One option is to simply up-size or down-size into a different unit in the complex. This can be a great option if you need more space, or if your roommate is leaving.

You can also check to see if they have a sister company, and see if they have any units available. Management companies often times have their sister-companies in other states, so you could end up transferring.

Don’t be alarmed if they still come with fees to transfer units, or complexes. It should all be written in your lease.

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3 Ways to Protect Your Escrow Deposit

So you have finally decided to pull the trigger and make an offer on a home, the seller chose to go with your offer over everyone else’s, and signing the contract is days away. Now you have to show you are serious about it by putting a stack of money down.

The amount of money you put down is ultimately up to you, but some states have requirements, varying anywhere from 3 to 10 percent. This is a good-faith act signaling to the seller you are committed to following through on the deal. Once the money leaves your hands (or bank account) it can’t be touched without written consent from both the seller and buyer. The close of escrow, the earnest money deposit is applied to the balance of the down payment.

Your deposit is obviously negotiable, but if you try and go short, it may turn off the seller quickly. A lot can happen from the time you put down your deposit and close escrow, so here are a few ways to protect your deposit.

Know the property

Every home gets an inspection before it’s sold, and it’s your duty to make sure you protect yourself from buying a black hole home. Ask your agent to insert a contingency to make sure you are protected from these types of homes.

Older homes get special attention to roofs, foundations, and everything considered “major”. Specialized inspectors are an option if you so choose to go that route. They come in the form of HVAC inspectors, termite inspectors, pool inspectors, structural engineers, etc.

Small condos even warrant having expert inspectors from time to time.

If problems arise, you need to decide if it is worth it to you or not. How bad do you want this house? Inspection contingencies sometimes are as broad as the ocean and allow for buyers to sail away with their deposit. Most of these are known as “cold feet” contingencies.

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2018: Surge of Home Buyers!

Being a rebound isn’t the best thing to be when dating someone, but it’s never a bad thing when put into the real estate context.

There are plenty of people on the rebound that mortgage officers and realtor partners should be fancying.

Online information by RealtyTrac estimates that seven million people lost their homes across the country during the recession. Considering their circumstances and remembering that it takes several years to repair credit history and be eligible for a loan again. The home buying pool is about to get a bit more crowded now that enough time has passed.

People have come back from the dead and ready to buy homes again, and the peak is supposed to be in 2018 when a giant wave of 1.5 million people will be eligible for loans. Loan officers and realtors will be working overtime with this many new people in the market.

This influx of buyers will keep MLO’s and agents on their toes, so here are a few things for them to remember.

Reaching out to renters

The amount of inventory available for first time home buyers will be quite minimal. They simply won’t be able to afford bigger homes. Increased competition among home buyers has created bidding wars and drawn out the time it takes to close a deal with so many options for the seller to consider. Adding a giant number of people to the equation could intensify this already gritty process.  So the professionals need to make a plan, implement it the best way possible, and actually hold their feet to the fire.

Hailing homeowners

Taking a close look at equity position means they will have to contact current home owners and past clients. They should take a look at area appreciation and goals for the next decade. Reach out to the homeowners should spark them to start buying more real estate, so they should...

What is Dual Agency

Homebuyers and home sellers are two different sides of a home transaction. Should they have their own agent representing them? The norm says yes, but it isn’t always the case, so it depends.

The old adage “you can’t have your cake and eat it too” seems like the right thing to say here, but whoever said that never tried eating a little now and saving some for later. We sometimes have multiple options and have a difficult time choosing between two good ones. In real estate, dual agency breaks the cake rule. It may just happen that your agent is also the listing agent of the home you want to buy. If this is the case, you don’t need to find a new agent; you can keep your agent and get the house too!

More often than not in real estate each party has their own agent representing them. If it’s a dual agency case the agent gets both sides of the deal and keeps the entire commission. It also happens when agents from the same brokerage represent each party. There are surely pros and cons of dual agency, just like any scenario that is too good to be true.

Pro: Fast communication

If an agent represents both parties, they don’t have to wait to hear back from the other party every time communication needs to happen. Streamlined communication makes for a faster transaction because the agent is in control of both sides, and should know what each party is looking for. Motivated dual agents won’t be missing deadlines, or fail to perform their duties if they are looking at the entire commission check.

Con: No advice

This situation can often be a problem, conflict-of-interest. IF the seller wants the highest amount they can get, while the buyer wants the lowest amount they can spend, the agent cannot take sides, or give their advice. This situation is often like one lawyer defending both husband...

How Fast Will Your Home Stay on the Market

Remax has reported that on average, a home is currently selling three times faster than it did three years ago.

Remax National Housing Report, in the month of June looked at 53 metropolitan cities and saw that a home’s average number of days on the market was four days shorter in May of 2016 and June 2016. For the record, the new average amount of time a home spends on the market is 54 days. June was the 39th straight month with a days-on-market average of 80 days or less.

Cities with the least amount of inventory are Denver, Seattle, and San Francisco, and they averaged all in the low 20’s days on the market. Augusta, Maine, and Des Moines, Iowa had the most time on the market. Des Moines was rough 103 days, while Augusta was 143!

Markets across the country are still slowly rebounding from the great collapse in 2008. Sales are on the incline every year. Home prices are being moderated so they are affordable again, and no one is really being priced out of the market. There are a few inventory problems, but overall the entirety of the market is recovering quite well.

Summer of 2016 is one of the most anticipated seasons as home sales and prices are rising. Market demand moved June sales to 9.4 percent over sales in May, and the country’s median sale price in June was $299,900. This time last year, prices were 2.2 percent lower than they are now!

Inventory shrank a little as June home sales fell 15.6 percent.

The amount of time it will take for your home to sell is mostly dependent on your market. Having a good realtor helps as well. If your home is in good shape, you have a hard working, well connected realtor, and are asking a reasonable amount for your home you shouldn’t be on the market long at all. 

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Homeowner's versus Pokémon Go

Pokémon Go has taken the country by storm, and not everyone is as equally enthused. Homeowners aren't so fond of it as it's causing some people to wander on their private property. Police have gone as far as issuing warnings to Pokémon Go players to stay off private and public places where they don't have access to go. 

The New York Police Department has issued warnings not only to stay off private property, but to not play while driving a car or riding a bike.

Police reports have been a little stranger lately; one report contained information saying a man's house was a gym where Pokémon can be trained. The homeowner said people started parking in front of his house and karge clusters of people began waving cell phones in his yard.

Not all experiences are so friendly. There have been reports of people tresspassing at 1 AM. At that point it could be construed as criminal. The defense of, "I was catching Pokémon" isn't going to hold up well in court. SO be sure if you are a Pokémon catcher, you do it where you have permission.  

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Getting Your Home Ready for Appraisal

Deciding to put your home on the market and getting your appraisal next can be a scary experience. All your do-it-yourself projects will be judged for their weight in dollars, and it can determine thousands of dollars lost or made. 

But it doesn't have to be this way; with the proper tools and know-how, this experience can spring you forward into your next home. Gaining a little extra cash by making the proper improvements and repairs will be worth it in the end. Plus its a true test of your man skills

Here's what you want to do

Just like any other big life decision, you do your homework to better serve yourself. Find out the appraiser's market knowledge of the area. Having a local, well-rounded, veteran, state certified appraiser is who you want. They're good at what they do, they've been around the area long enough to see changes, and have a confident base of the market. 

Check the maintenance 

Your maintenance costs are your smaller costs. Anything like a chipped shingle, snagged rug, or broken mailbox; fix it before the appraiser comes. Any little defect could chip away at your home's value. 

Keep a list of updates/renovations done to the home, and keep the receipts that went with it. This is a sure way to keep track of what you spent on the upgrades, so you can figure out how much you've put in against what you expect to get back.

Maximize your curb appeal

An inspection is puting your home to the test, so it has to be the nicest one on the block. 

Landscaping is the first thing anyone sees when walking up to the house. it's the first impression, and it's the lasting impression....

As Borrowers Underestimate Equity, Their Confidence Turns to Confusion

Fannie Mae has been doing her research and has found as the prices of real estate continue to rise, borowers aren't realizing how much equity they actually have. Fannie Mae has reported that the uninformed homeowners are less likely to refinance mortgages, apply for home equity loans, or even buy new homes.

Since home values have risen since 2012, just as reductions in prices submerged some homeowners underwater, the rising home values would bring underwater homes afloat on top of raising a lot of home equity. A lot of homeowners are unware of this, seeing they now have the favor.

Every month Fannie Mae conducts new interviews with homeowners about where they stand on renting, buying, planning to buy and sell. 

What they have found during these interivews is suprising. The number of homeowners who believed they were underwater hasn't changed much, but the fact that home prices are rising has led to homes floating again without homeowners even knowing it. 

Fannie Mae asked homeowners to compare their total mortgage debt to the value of their homes in 2014, 23% of homeowners thought they were underwater. The next year in 2015 showed that the belief of being underwater bumped to 24%. In 2015, the true number of underwater homes was actually 7%!

The whole idea is to not misinform homeowners and lead them to take on crippling debt, but to inform them enough to make wise, and sound financial decisions. If you can remove the gap between perceived and actual home equity, the confidence bar would skyrocket. In turn, this would lead to a stronger market.

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New Mortgage Programs and Their Impact

America’s top home lending banks have made a ton of headlines lately as they have been dealing with non-Federal Housing Administration (FHA) low-down payment programs. The banks are JPMorgan Chase, Quicken Loans, Bank of America, and Wells Fargo. What are these programs? And do they change the game of credit availability for the next while?

Each bank has their own version of the same thing. Wells Fargo’s your First Mortgage, Bank of America’s Affordable Loan Solution, JPMorgan Chase’s Standard Agent 97%, and Quicken’s 1 percent down payment plans are essentially the same plan, just with minor variations of company policy. These are appealing to first time home buyers and low to moderate income borrowers who may not have enough for a down payment on a home, or have less than average credit scores. Each bank also has their own credit score minimum: Wells Fargo – 620, Bank of America – 660, Chase and Quicken – 680.

Borrower friendly features

The cool thing about these programs is they are friendly to the borrower. They come with features that allow the combination of down payments with gifts and grants, homebuyer counseling, consideration of nontraditional forms of credit, and no PMI under Bank of America’s program. Bank of America and Wells Fargo flirted with selling their loans to Fannie Mae and Freddie Mac, respectively. Self-help groups like Self Help Credit Union, which is a nonprofit, offers help for first-loss risk coverage in lieu of PMI, which saves the borrower a ton of cash. Quicken offers its clients 2 percent grants and then sells the loans to Fannie and Freddie under its Home Possible advantage program, which does require PMI. On the other hand Chase will sell to Fannie and Freddie, but it is unknown of they require PMI.

Not identical, but similar

The two most popular programs...

What's a Loan Modification? How Do I Get One?

Ever heard of a loan modification? It’s basically a lifeline for a homeowner who is at the end of their rope. Some people fall on hard times and have severe difficulty paying their mortgage. A loan modification gives them an alternative option other than foreclosing or selling their home. If they opt for a loan modification they are basically agreeing with the lender to change the terms of the loan.

There are several ways to change a loan. The lender could lower the interest rate, extend the life of the loan, or allow the borrower to skip a couple payments until they have landed the new job they’ve been after, but will add the skipped payments to the principal to pay down the road. This is all of course, circumstantial for the borrower, but the end goal is mostly the same: to financially relive the borrower whose mortgage payments are stressed.

You might be asking why lenders would agree to take less money. Pretty much the banks look at it like they’re keeping their business rather than losing it. Yes loan modifications require specific qualifications too, so don’t be surprised if not everyone gets one.

How to get a modification

If you are considering a loan modification, the best thing to do first is to decide if you absolutely need one or not. If you become desperate to pay your mortgage, chances are you need one.

In seeking a loan modification, you must apply through your current mortgage lender. You will be asked to fill out a Request for Mortgage Assistance form. You will need the following documents:

  • Your monthly mortgage statement
  • Two recent bank statements
  • A letter describing your current hardship and their circumstances
  • A utility bill with your name and address
  • Information about any other mortgages on your home
  • Two most recent federal tax returns
  • Documentation of any benefits you receive (disability,...

What Sellers Do to Drive Agents Crazy

Agents’ strategy is to get close to their clients, not just physically, but mentally and emotionally. The more they know about them, the better. Sellers are often in vulnerable situations when putting their house on the market, and it may stay that way for an extended period of time. During this time, bonds can form, or feelings can grow sour. The lines between business and personal space can become blurry, which can lead to the seller acting out in ways that drives the agent nuts.

Here are five ways in which sellers can get under their agent’s skin, and kill their chances for a smooth sale during their relationship.

Not keeping the home clean

When a home is on the market it needs to be in pristine condition at all times. Keeping it clean and tidy is part of the process that must be done continuously. Keeping furniture and counter spaces clean and organized is what this boils down to.

Before you put your home on the market, pack up all your belongings that you won’t need until you move into your new home. Make a space in a hidden part of the house for the typical day-to-day items that you will need. Doing this makes your agents not have to worry about cleaning your mess, and goes a long way with potential buyers.

Staying around during an open house

Agents rarely want their sellers lingering around during an open house, and the reason is that your presence can alienate your customers by making them feel uncomfortable without you even knowing it. Even if you are friendly and hospitable, this is still not appreciated.

Potential buyers want to walk through the house as if it was theirs to get the full experience. They will be opening every door they can, and poking around cabinets and making comments to their partners or kids that they would probably not make if you were standing in the room.

Your lingering self...

I Bought a Condo

I bought my own condo earlier this year, and some people (mostly my own age – millennial) think I am crazy. They have the idea that buying a home is what you do once you are ready to settle down. They would rather pay rent than own something, but the way I look at it, rent is money you will never see again. At least your mortgage comes back to you once you sell what is yours.

This is making the most of my money, by investing in a property and not wasting thousands of dollars by giving it to someone else.

Yes buying a home can be scary because the numbers are so big, but think of it as money sticking to the side walls of your house. It’s not really leaving, well a little of it is because it is interest for your loan, but you will reclaim most of it when you go to sell.

I never thought I would have the purchasing power in my 20’s to buy a property. Through a lot of hard work and sacrifice I managed to save enough for a hefty down payment. Now, to get a loan was the problem. There are several types of loans you can get. Traditional, government backed, secured, open-ended etc. I was lucky enough to get a private loan, meaning I didn’t have to deal with the banks and contribute to making them richer.

Depending on which type of loan you get determines how long you will (want to) stay in your new home. Some loans will have you pay an absorbent mount of interest, while others will have you pay little interest and more principle. Your best loan is the one that pays little interest, and more principle.

My condo was a fixer-upper from the start, and I knew it would require a lot of work. Having a roommate there will help with the cost of it all, but it also comes at a price of having less space.

Lessons learned

MY advice to you is to get yourself a quality, dependable real estate agent. You don’t want to go through the process feeling alone. Having a good agent makes things...