Pros and Cons of Buying Repossessed Properties

Buying a house can be incredibly exciting and terrifying at the same time, especially if it’s your first or second home. For a lot of buyers today, the idea of getting a killer deal is the ultimate goal, one that you may have heard is possible with a bank-repossessed property (also known as a “real estate owned” property or simply “REO”). Real estate prices are only going up, after all, so what’s the scoop on these REOs?

Can You Get a Deal on Repossessed Properties?

It’s a tricky question with a lot of caveats. In some markets, it will almost certainly be easier to take advantage of REOs to find lower entry price points. Other markets may not offer a lot of financial benefit to the buyer. When market inventory is low in the property type and area you’re shopping for, prices will tend to trend higher, even for repossessed properties.

On the other hand, if you’re pretty flexible and aren’t overly concerned about neighborhoods, an area with a lot more inventory can be a difficult place for a seller, creating a super local buyer’s market. Even banks are sensitive to these pressures, and since they can be more flexible about their pricing, may discount REOs more sharply in order to unload them.

What Should You Know Before Making an Offer on Repos?

If you manage to find a steeply discounted property that you’re interested in, there’s still a lot to consider before making an offer. The caveats with repos are many, but they can still work for buyers who go into the transaction with their eyes wide open.

Be aware that:

  • REOs are almost exclusively sold “as is”. Yes, that means you get what you get, and since there’s unlikely to be a good history, it may be a lot worse than you imagine. You could get lucky and totally win the REO lottery, but remember that many repossessed properties have been sitting vacant for extended periods with little to no maintenance or human interaction, which can encourage insect and animal infestations on top of problems you’ve been made aware of.
  • Always get a home inspection with an REO. In most areas you can still back out of the transaction if the condition of the home is worse than you imagined, though be aware that these inspections are limited in scope, and surprises may still be hiding. Sold “as is” means just that, though. Banks aren’t generally interested in fixing anything, so if your inspector says the A/C is bad and the roof is leaking, you’ll need to figure that into your overall cost equation.
  • REOs can be very competitive. Investors often really like buying REOs, which means you’re going to be competing against other buyers who have a lot of cash on hand. Cash deals close faster and there’s less risk they’ll fail to close because of lending issues, which makes them pretty nice for a seller. A good REO is likely to be a competitive buy, so be fully prepared, fully qualified for your loan, and ready to make your highest and best offer out of the gate. You may only get one shot.
  • REOs can be difficult to finance. Some REOs and lending programs are meant to go to future homeowners, but most are not especially friendly to non-investor buyers. You’ll need a substantial down payment, high credit score, solid debt to income ratio, and reliable employment for a bank to take that level of risk on a home that may become a money pit. It can absolutely be done, but this is far from a basic first time homebuyer sort of process. Loans like the FHA 203(k) can sometimes be used, as well as conventional loans, depending on the condition of the property.
  • REOs can be difficult to close. If you have to borrow to buy an REO, expect the process to take months. Even if you don’t have to borrow, there are layers of red tape to cut through, because you’re dealing with a corporate owner rather than an individual. Allow plenty of time to get through all the steps of the process and be prepared to have to pivot into a different loan program if things get dicey.

Should I Buy a Repossessed Home?

If you’ve thoroughly prepared yourself for owning a home with a poorly documented history and a higher than normal risk of unexpected problems, as well as the stressful buying process that can go with it all, then absolutely buy the REO if it’s right for you. Sometimes REOs are the only way to get into the right neighborhoods or even find a home in your budget, so there are definitely reasons to pull that trigger.

Once you’ve closed, though, you’ll probably need a lot of expert help. Don’t forget to lean into your HomeKeepr community. Not only can you access all the best home pros in your area, they’re right at your fingertips, day or night. It’s the perfect place to be if you want to buy a project home!

A Letter to Homeowners

Dear Homeowner,

If you’ve been in your current home for a while, you may be thinking about making a change.

Since the current health crisis has altered our daily lifestyles, many buyers and sellers are reconsidering their situation and thinking about moving to a home with more or less space and to different in-state or out of state locations. Here’s why it might be a great time to make that happen.

Let’s look at the last 10 years. The real estate market has changed in many ways and current homeowners are earning much more equity today than in previous years. According to CoreLogic, in the first quarter of 2020 alone, the average homeowner gained approximately $9,600 in equity. If you’re considering selling your home, you might not realize how much equity you’ve accumulated.

Many homeowners locked in a fairly low mortgage rate 10 years ago. In 2010, the average rate was only 4.09%. This motivated some homeowners to stay in their houses longer than usual to keep their rate low. Rates are even lower now.

As a homeowner, you have a massive opportunity to move up right now. Whether you want to save more each month or get more home for your money based on your distinct needs, it’s a great time. Buyers are actively looking for homes to buy, and there’s not enough demand. You can win big by making a move if the time is right for you.

Please call, text, or email and I can help you understand the real value of your home based on its unique characteristics and location. I can also share with you homes, like yours, which have sold recently.

Top Lighting Options for Your Kitchen

Good lighting is important in many places in the home. When you’re working in the kitchen, though, having sufficient lighting to see what you’re doing is vital. Poor lighting in your kitchen can make cooking and other tasks a pain, especially if the lighting leaves shadows in areas that you use a lot. Fortunately, there are a number of options available when it comes to adding new lighting to your kitchen. Here are some of the best for you to consider.

Recessed Lighting

One popular lighting option for kitchens is recessed lighting. This is especially useful if you have relatively low ceilings, as you can have multiple light sources in the kitchen without having large fixtures hanging down. Recessed lighting can also be used to accent other lighting solutions as well, giving you more light where you need it while only taking up a small amount of space on the ceiling.

Under-Cabinet Lights

Cabinet space is a must-have in the kitchen, but if you have a lot of cabinets then they can actually block some light from reaching your countertops and stove. A great way to take care of this problem is to install under-cabinet lighting that can provide some extra light right where it’s needed. Similar lighting can also be placed under stove hoods or other overhead spaces to ensure that you have the light that you need in the parts of your kitchen that you use the most often.

Track Lighting

If your lighting needs change depending on what you’re doing in the kitchen, track lighting might be a good option for you to consider. As these lights are mounted on tracks and can be moved and turned as needed, they let you adjust the lighting to meet your current needs. While the concept of track lighting often brings to mind clunky light units that seem more like theater spotlights than a kitchen lighting solution, modern track lights for the kitchen can provide the light and adaptability you need while also creating some tasteful accents that match your personal style.

Oversized Light Fixtures

Sometimes you want more than just ensuring sufficient lighting in the kitchen. If you want to light things up while also contributing to the overall decorative look of your home, you might consider some oversized light fixtures to get the job done. These fixtures are designed to stand out and draw the eyes so that they become as much a part of your decorating style as a source of light for your kitchen area.

Pendant Lighting

Lighting can play a big part in your home’s look and feel, which is why there are so many different types of lighting fixtures available. If you have higher ceilings in your kitchen, you might consider installing pendant lighting to give you the light that you need while also adding a touch of elegance to your kitchen area. These fixtures are suspended from the ceiling by cables or pipes, bringing the light closer to where you’ll be working without the need for stronger bulbs or harsher light. There are a number of styles of pendant lights available to help you illuminate your kitchen while also customizing the overall look of your home.

Tube Lighting

A lot of people think that tube lighting is ugly and out of place in the home, but modern tube lights have come a long way from the fluorescent lights of old. Many of these lights have switched to LED lighting, providing more consistent lighting at a fraction of the energy cost. The tubes and enclosures themselves have also evolved, offering stylish accents that illuminate while still adding to the overall look of your home.

Installing Your Lights

Need to find a pro to help you get your kitchen lighting issues solved? It’s time to check out HomeKeepr. We can help you find the pros you need based on real recommendations from people you trust. Sign up for a free account today to get started.

Student Loans Versus Mortgages

According to the Brookings Institute, about 42 million Americans (one in eight) have a student loan, totaling about $1.5 trillion in student loan debt. Only 30 percent of Bachelor’s degree recipients graduating in 2011-2012 managed to escape without a student loan; another 30 percent accumulated $30,000 or more in student debt. All this adds up to a whole lot of potential borrowers who have to navigate the added complexities involved with buying a house with student debt.

What’s Your Student Loan Repayment Plan?

If you have student debt, you probably were initially given a standard repayment plan. Many students, however, found quickly that they weren’t able to pay those payments reliably and risked default. For 8.1 million borrowers, not quite 20 percent of all student loan holders, those standard repayment plans were traded in for income-driven repayment plans. Although income-driven repayment was meant to help students successfully keep their loans in good standing, they also can create complications for getting a traditional mortgage.

Calculated Student Loan Payments

For students in anything besides a standard repayment plan, it may be necessary for a lender to calculate an estimated loan payment as part of the debt to income calculation, rather than simply using the number from the student loan holder’s documents. This is where the rub really comes in.

For some loan programs, a $14 payment in an income based repayment plan is just that, $14 added to the calculation. However, in others, because the income-based repayment plans are only approved one year at a time, a calculated payment is substituted. This, in theory, sets up a worst case scenario for lenders when it comes to the risk of foreclosure due to housing affordability. For student borrowers, it can turn a long awaited home purchase into a huge disappointment.

Loan programs typically calculate the estimated payment in one of two ways:

  • By simply using the amount equivalent to one percent of the outstanding loan balance (if you owe $30,000, your monthly payment is figured at $300), or
  • Calculating how much of a payment it would actually take to pay your loan in full in the term that remains (if you owe $30,000 and your term remaining is five years, your calculated payment would pay that loan off in full at the end of the five years).

This also goes for loans that are in forbearance or deferment, so there’s really no way around it.

Student Loan Payments and Debt to Income Ratios

If you’ve never had a mortgage before, or you’ve only had limited exposure to the lending industry, it’s important to understand how debt to income ratios work. Lenders determine how willing they are to loan to someone not only based on their credit worthiness, but also on how much other debt they have. They want to see that borrowers have plenty of financial wiggle room for emergencies, since they really don’t want to get the house back.

For most loans, that means a debt to income ratio (DTI) under about 43 percent. Anything you’ve agreed to pay over a longer term, like your student loans, are added into this calculation and compared to your actual income. When your car loan, student loan, rent or current mortgage payment, and credit cards are all combined, does that or does that not exceed 43 percent of your income? This is the first and most basic question. Various loan programs will have ways to compensate for high DTIs, to a point, and there are different DTIs for different programs, though generally they’re in the same ballpark. So if your DTI is high, it’s not yet time to panic. However, you should be cautious about your next move.

This is why, if you have large student loans, it’s even more important to carefully consider the debt obligations you’re taking on as you take them. Student loans aren’t the only hurdle, but they are definitely a very large one for many students. Imagine having 10 percent or more of your income suddenly discounted because your deferred student loans are suddenly counted against you, even if you don’t have to make a payment! That’s the situation some borrowers find themselves in when they go to apply for a mortgage they believe they’re ready for.

All Isn’t Lost, Many Lenders Will Help

The good news is that lenders can help you sort your student loan woes out, even if it takes a little time to get you on the right path. Not only can they help you understand compensating factors that could help stretch your DTI a bit higher, they can also point to financial moves you can make to decrease your DTI, such as paying off those loans in their last legs or finding a co-borrower who can help even things out a bit.

If you don’t have a lender that you absolutely love, your HomeKeepr community can help! Just ask for a recommendation for a lender in your area who works with borrowers with student loan debt and you’ll be connected in almost no time to someone nearby!

Your Fall Planting Guide

Fall is a little bit like a reverse spring. Everything is starting to wind down as winter approaches, and for a lot of gardeners, that’s a sad time. It doesn’t have to be, though; fall can be a time for laying the groundwork for spring plants and creating dazzling garden displays.

What to Plant

Fall planting can be tricky, largely because the plants that prefer to be planted in the fall can vary widely depending on where you live. However, if you live where it gets cold enough to frost or freeze, you can bet on many of these being excellent candidates:

  • Spring bulbs. Tulip, daffodil, Crocus, Allium, hyacinth, lilies, and even Iris are awesome choices for planting in the fall. They don’t generally need to be lifted, so they can be planted in those short days before the first frost hits. You’ll reap the fruits of your labor when the ground starts to warm up again.
  • Perennials. A huge range of perennials do great when planted in the fall. Bleeding hearts, Rudbeckia, Sedum, Coreopsis, garden Chrysanthemums, Asters, Hostas, and many others are not only great for end of year color, but will reliably return year after year to put on a dazzling show.
  • Shrubs. Looking for some show-stopping fall color? There’s no better time to choose and plant these kinds of shrubs than in the fall, when they’re at their best. Look for shrubs that produce berries and sport lovely fall foliage like Nandina, Viburnum, Pyracantha, and beautyberry. These will provide your local neighborhood wildlife with a little extra forage, and give you some extra fancy natural holiday decorations.
  • Trees. Most trees thrive when planted in the fall; it’s their best season! Planting your young trees in the fall, well before your first frost, gives them time to establish their roots without risking drying out. Not only do you increase the odds that your trees will survive by choosing to plant them in the fall, you’ll skip all the major maintenance required to nurse a fresh, new baby tree through a hot summer. It’s really a win-win.

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When to Plant

Timing is everything when you’re planting in the fall. It’s not enough to ensure that the ground is unfrozen and workable; you should also give your young plants time to grow and spread their roots before they go dormant for the year. You can look up your first frost date on a reliable gardening site like The Old Farmer’s Almanac. Count back six to eight weeks and plan to plant your garden at that time.

Protecting Plants

For the most part, fall plantings won’t need a great deal of protection as long as they’re planted in a timely manner. What they will need is mulch, and lots of it. It doesn’t really matter what kind of mulch you use, so long as it’s biodegradable and can be piled on deep.

If your area sees snow and freezing temperatures, go for about four inches of mulch per planting, evenly distributed across the top. Wait to cover the crowns until you’re actually at risk for frost, but the root area of the plant can be covered the day you plant it. These kinds of mulches help the plant retain moisture and acts as insulation to keep the warmth from the sun in the ground longer.

As your plants die back for the year, mulch the entire area, making sure to carefully check tender plants for new growth as temperatures rise in the spring. When you see those little green sprouts popping up, uncover them (but leave the rest of the mulch) so they can continue on their upward journey.

Not Sure What to Plant This Fall?

It’s ok, your HomeKeepr community can help you find a landscaper or other plant expert to help you choose and install your fall landscaping. Log in today to get on your way to a lush and glorious garden!

WEEKLY LISTING ROUNDUP

New Price! $594,950

Click here for more information: https://bit.ly/320NCas

Welcome home to this gorgeous Brookstone resale in Tehaleh! You’ll love the dramatic open spindle staircase as you enter and then wowed with extensive wood flooring and a wall of windows in the great room that opens to the kitchen and dining! Kitchen features walk in pantry, quartz counters and a gas range. Covered patio with fireplace and no neighbors behind make this level yard a private oasis. Master suite is enormous with sitting room, 2 closets and a stunning 5 piece bath. Upstairs is the loft in addition to 4 more bedrooms.

For more information click here: https://bit.ly/2E8YY2K

Light and bright, move in ready home in Tehaleh is now available! This 4 bedroom, 2.25 bath home is sure to please with it’s open concept living and well appointed spaces. Kitchen features white quartz counters a a huge island overlooking the great room. 4th bedroom is on the main & can easily be used as an office or den. Upstairs you’re greeted with a spacious loft, large laundry room and all other bedrooms. Huge Master Suite features 2 closets and a bathroom with 2 sinks and an oversized shower. Covered patio, AC and so much more!

Pantry Organization for Preppers

With more people staying at home and avoiding crowds, a lot of homeowners are turning to home prepping as a way to cut back on trips to the store and avoid shortages. Unfortunately, many people find themselves overwhelmed. Sometimes it’s hard to know exactly what to stock up on. And once the pantry is fully stocked and prepped, maintaining it, and finding what you need among all the other things, can be difficult. Organization is a key part of successful prepping, so if you want to have an effective pantry, here are a few organizational tips to keep in mind.

What Should You Store?

First things first: What should you store in your pantry? Obviously, you want things that are shelf-stable and will last a while. Pick up or prepare staples like canned vegetables, canned fruits, crushed tomatoes and dry goods like pasta, rice and beans. Add cooking supplies like cooking oil, flour and cornmeal, plus sweeteners like sugar and honey. Beyond that, round things out according to your family’s tastes. This is where you add your taco shells, your pasta sauces, cereals, popcorn, condiments and dressings, canned meats and anything else that you know your family uses regularly. If you have pets, you can also set aside a section of your pantry for pet food as well.

Organizing for Easy Access

When you start organizing your pantry, don’t just stick things wherever you can find a space for it. Take everything out, clean the area so that you’re starting fresh, then put things back in a reasonable and organized way. Group similar items, like different types of canned vegetables, together so that everything is easy to find. Avoid just shoving a bunch of things together to make more room, since that will cause confusion and make some of your items a lot harder to find when you’re looking for them.

Label Everything

Place labels on your shelves once you have everything organized so you’ll know what goes in any particular space in the pantry. That doesn’t mean that you have to micromanage and label each individual type of item, of course; create categories like “Jelly” and “Vegetables” to simply mark the general area where those items go. If you want to be really efficient with your labeling, take the time (or recruit family members to help) and place an easy-to-read sticker or label on the top or front of each item, and write the expiration date on it for reference.

Remember FIFO

Where a lot of people run into problems is rotating stocked items as new items are bought or made. Keep the FIFO principle in mind as you restock your pantry: First In, First Out. New items should always go to the back, allowing the older items in the front to be used first. As you take items out of the pantry, move up the items behind them so that they’re closer to the front and you have room to place things behind them later.

Shelving and Storage Additions

If you need to add shelving or other storage types to your pantry area, try to do so in a way that makes stocking and access easier. Standalone shelves that you can walk behind or rollout shelves that you can pull toward you make it a lot easier to place new items at the back, while sliding shelves or rotating units make it easy to reach stored items that otherwise might be hard to get to.

Emergency Storage

In general, your pantry should be filled with items that you’re actually going to use and that will be rotated out over time. If you really want to make sure that you’re good in case of a disaster, though, you can set aside a space for some additional emergency storage as well. Consider this sort of a “backup pantry” and focus on items with very long shelf lives such as freeze-dried rations, vacuum-sealed grains and bottled water. You should check expiration dates at least once or twice a year and move items about to expire to your main pantry, or use them for activities such as camping trips, hiking excursions or other adventures.

Building Out Your Pantry

Building a new pantry or adding onto an existing one can be tricky. Fortunately, HomeKeepr is here to help. Sign up for a free account today and to find pros based on recommendations from people you trust so that you can find the right person to give you the pantry of your dreams.

What to Repair Before You List

When you’re getting ready to list your home, it’s of the upmost importance to ensure you are showing it in the best light. Taking time to highlight its strengths and fix up some of its possible weaknesses can make a big difference in how fast it sells. Here are our top five recommended repairs to make before selling your home.

Repaint walls.

Giving your home a fresh coat of paint is one of the most cost-effective ways to spruce it up, and generally, it can be a do-it-yourself project. Make sure cover any walls with scratches and chips and consider updating any accent walls with a more neutral coat.

Repair floors.

Hardwood floors are a very desirable feature in a home, so you want to ensure they look their best by fixing scratches or dull areas. If your carpet is worn or stained, consider replacing them. And don’t forget the tile in your kitchen or bathrooms. Re-grouting can go a long way in making dingy tile work look brand new!

Refresh the landscaping.

Show buyers your home is the full package by dressing up the outside as well as the in. Clean walkways and driveways, plant seasonal flowers and plants, trim hedges and trees, install outdoor décor pieces and fill in mulch and gravel.

Fix your fixtures.

Leaky faucet? Rusted drains? Loose drawer handle? Making these small fixes can make a big difference to potential buyers with detailed-orientated minds. Improve your kitchen. An outdated kitchen can be a real eyesore in a home. Updating cabinetry, repairing or replacing countertops, and installing new faucets and sinks may be worth the investment

Weekly Listing Round Up

Stunning HC resale in Tehaleh! This 6 bed 3.75 bath home has it ALL! Extensive wood flooring throughout main level welcomes you in to the great room w/ wood built ins & 2 sliders that lead out to the covered deck w/ fireplace & stairs leading down to the level back yard on greenbelt. Basement features a rec room, theater room, wetbar w/ wine fridge & icemaker & mini master. Kitchen is a chef’s dream & all appliances stay! Master suite w/ gas fp, huge 5pc bath. Surround sound, sprinkler system.

Trilogy lifestyle at it’s best! Step outside & take a short walk to Seven Summits Lodge for a workout or a meal w/ friends, take a short walk to The Post for a coffee, or just sit on your front porch & take in the view of the pond! This home has the unique feature of a 2nd Master Suite on the upper level which can also serve as a bonus room or additional office space if you wish. Every other well appointed space is conveniently on the main level. Club fee included w/ this home so move fast!

Choosing Interior Colors: An Overview

A home is supposed to be a sanctuary, a place where you escape the chaos of everyday life. But sometimes those sacred spaces get pretty chaotic almost on their own. Maybe it’s clutter that’s overtaking your space, or maybe it’s something far worse: room colors that fail to harmonize. Repainting can be a big job, but if you go in with a plan you can create the home you’ve always wanted.

The Key? Think Globally

It can be very tempting to think of your home as a series of rooms, each wholly independent of one another. The truth is something different, though. Houses are actually a series of rooms that work together to create an overall atmosphere (plus, you know, a place to give you shelter and to store your stuff). When you consider how your rooms actually work together, you can choose colors that are far more likely to play well together room by room.

Start with the obvious: the rooms that are literally connected to one another. Unless you have a teenager, the chances are high that the doors will stay open long enough for you to be able to spy one room as you’re going through another. And, of course, you may have rooms that are literally part of one larger space, such as a living/dining combo.

Before you even walk into a paint shop or start looking at samples online, take the time to map out how each room interacts with the next. For example, a living/dining combo are two spaces that work independently, but also together. You’ll definitely want to consider each when you’re choosing colors, even if those colors aren’t exactly the same. For example, you may want to paint your living area a light blue and your dining area a light gray. Carefully chosen colors can harmonize together.

Rooms Behind Walls

What about the not so obvious rooms in your home, such as the guest bedrooms, the bathrooms or the utility room? Can they act independently since there’s a transition?

Yes, but mostly no.

As you move through one space, say, that calm living/dining combo we painted in the section above, you want to maintain a similar feel in the next space. So if your kitchen sits behind the dining area, rather than painting orange, for example, look for a color that harmonizes with the grays and blues. After all, you’re going to see the colors of that kitchen from your dining room.

It may seem kind of silly to worry about clashing colors that literally only overlap through a doorway, but those colors are more than just colors. Those colors are attitudes, they’re sensations, they’re hints at how rooms are meant to be used and what kind of overall atmosphere you want your home to convey. When going through a room transition makes it feel like you’ve stepped into a whole different house, you need to address the biggest design element there: the paint.

Although contrasting colors have their places and certainly can work in transitional spaces, you want to maintain coordinated colors between rooms. To make that more clear, your first goal is to choose the palette, and therefore atmosphere, that your whole home should convey. That might be pastels or jewel tones or earth tones, or whatever works for you, as long as it’s consistent. Your second goal is to apply those colors in a way that maintains the emotional effect you have in mind.

Going back to that kitchen, since our living room and dining were light gray and blue, you might consider a light blue-gray, a light green, or even a light yellow, depending on the palette you’re working with.

Colors are Moods, Choose Wisely

Sherwin-Williams has been predicting popular color palettes for years. They’re a great place to start looking for your new “it” colors. Other paint companies will also offer palettes among their paint chips, giving you a lot of pre-designed options if you’re not sure you can handle the job alone.

If you’re scratching your head about how to birth the right mood in your own home, your favorite painter can also lend a hand. If you don’t have a painter yet, check out the HomeKeepr community for all the best painters in your area. Accounts for homeowners are totally free, so you’ve got nothing to lose and a whole lot of harmony to gain!