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Vicki Dimmich
Vicki Dimmich

Let's buy a house!

We are trying to buy a "short sale" this week. That is where the owner owes more than the house is worth. We think we are buying it at a good price and we hope to close tomorrow. This particular house has heat, air conditioning, electric, gas, and water. The last house we bought had none of these so we are excited to be starting in the middle instead of the beginning. We thought we would take everyone along on our journey with the new house. We are hoping to not have the same amount of frustration that we had with the last house so you won't have to listen to us discuss all the things that can go wrong on a very large project where we bit off more than we thought we had. That may still happen but we are hoping to have less problems with this one. We think we are buying a house in south St. Louis city that is all brick with a 3 year old roof, old HVAC and a one car garage. The owners on a short sale often are out of money and can not fix those small things that go wrong. When you buy a short sale, you often find that there are a lot of small things that are broken or don't work. If they couldn't make the payments, they couldn't afford to fix things. We have roof repairs that need to be made. Flashing is that layer between the roof and other things such as chimneys. That has to be properly installed and often wears out before the roof does. In our case, the flashing around the turret is not properly installed and we have a leak into the house. We have already contacted roofers and asked them to put us on the schedule. We also have a few electric issues and those people are coming on Wednesday. We know what we can and can't do and roofing and electric boxes are beyond us.

The first thing we want to do is clean. Did I say we want to clean? Anyone who knows Kathleen and I knows that we don't want to clean, but that is our first task. Then we start the painting. Every room will eventually be painted and freshened. In the meantime, we will ask Don to take down the shelves in the kitchen that we want to change and change out the faucets in the bathroom. Everyone has a job. Stay tuned next week to hear if we actually own the house and have started the work.

Kathleen Dimmich
Kathleen Dimmich

Open Houses in South St. Louis 3-13

Trying something new: Every week, we're going to try and post a list of open houses for the weekend up here. Most of the time, it will be South City, and if you feel like wandering through these as comparibles for your own home, or just to see what the neighbors are doing, or going as an architectural tourist, use how you will. After browsing, if you want to list your house or buy a new one or drag one of your friends to see this great house down the street, give us a call.

Open House List 3-13

However, if you want to see *us* this weekend, we are both available to show houses or help you list your house. On Sunday, we are holding open 2118 Woodland Fields, Chesterfield

Our greatest privilege is to serve you, your friends, and family.

Kathleen Dimmich
Kathleen Dimmich

Goodbye Google Real Estate

Well, it looks like Google has gotten out of the real estate business, citing "low usage". Now if you want your fix, you might want your local realtor to set you up with a listingbook account. Just email us and ask. (Hey, I search my neighborhood at least once a month, because I'm curious. I understand the addiction.)

Kathleen Dimmich
Kathleen Dimmich

Philidelphia man gets back at Wells Fargo

This came across my desk yesterday, and it made me laugh. My advice to this gentleman: How fast can you refinance?

http://articles.philly.com/2011-02-15/business/28536236_1_mortgage-fees-...

 

Frustrated by a dispute with Wells Fargo Home Mortgage and by his inability to get answers to questions, the West Philadelphia homeowner took the mortgage company to court last fall.

When Wells Fargo still didn't respond, Rodgers got a $1,000 default judgment against it for failing to answer his formal questions, as required by a federal law called the Real Estate Settlement Procedures Act.

And when the mortgage company didn't pay - does something sound familiar? - Rodgers turned to Philadelphia's sheriff.

The result: At least for the moment, the contents of Wells Fargo Home Mortgage, 1341 N. Delaware Ave., are scheduled for sheriff's sale on March 4 to satisfy the judgment and pay about $200 for court and sheriff's costs.

Vicki Dimmich
Vicki Dimmich

Title Insurance Woes

Our title company sent out an email this week talking about changes in the way title insurance policies work. This is important, since this policy both states that you have title to your property and insures against the title company having missed someone who has previous claim to your property. Many of you have heard us tell our story of the young man who bought a house in the city to rehab for cash, through a reputable title company with title insurance. The previous owner's estate (and the house) was then foreclosed upon by Fannie Mae. The title company had missed this and had to make good on the insurance policy. This is why the policy is important! Make sure you own your house! (There's a lot more going on here, and it's currently in litigation as to who owns what where and for how long and who is paying, which we can/will not go into.)  

 

Title Underwriting: Has it changed?:

The recent refinance boom brought about many questions regarding clearance of title issues.

The sins of the past rose up to haunt us once again.  Unreleased deeds of trust from many years ago showed up on title once again, however, this time the automatic move to "insure over" the problem was not always an option.  

 When title commitments are produced, whether it is for a refinance or purchase transaction it is always a good idea to read through it to make sure there are no surprises listed.  One of the most common surprise that is found is an old deed of trust that has presumably been paid off but not released.  The first course of action should always be to try and secure a release of that deed of trust.  Regardless of whether that lender is still in business or not, someone has an obligation to release that loan.  While it may take a little research and energy- you can often get releases on old liens in enough time for closing.  That being said, there are still times when obtaining the release (even after numerous attempts) is not an option.  In these cases, there are times when the old Deed of Trust may be able to be insured over.  However, the underwriter of the new title policy will be the one to determine what evidence it will require in order to make that decision.

Vicki Dimmich
Vicki Dimmich

Moving costs

I recently read an article from a moving company explaining fees and found it very interesting. It covered items that I had not thought much about, such as which services cost extra fees.

It makes sense that if personal goods need to be unloaded from a truck to a smaller truck because of small driveways, weak bridges, etc. there will be an extra charge. They charge an hourly fee for the moving of goods twice-from the big truck to a smaller truck to the house/condo/apartment. It also makes sense that if goods need to be moved in or out using an elevator that it is going to take longer and be more complicated. There is an extra charge for that too. However, if the move in or out has excess stairs (no elevator) you will still probably have an extra charge for the extra work.

Most of us expect that if the movers pack and/or unpack the boxes, we are going to be charged for that, in addition to the actual move. If the movers have to move your property into and out of a warehouse, this, too will add another fee. In addition, if the mover has to pick up from or deliver to more than one location, there will be a charge. Movers charge an extra fee for “bulky articles” such as boats, snowmobiles, and cars. They are harder to move and add more volume than weight.

All of these things can change your costs and need to be taken into account when you hire professional movers for your household goods.These people are professionals and charge for their services, unlike your college friends who used to help you move for beer and pizza. Life does get more complicated and we get older.

Vicki Dimmich
Vicki Dimmich

Tax Credits

The Federal government has just extended some of the tax credits for energy efficiency that were to expire last year. If you are about to purchase new appliances, such as refrigerators, dishwashers, and washing machines,  you might want to check for the new rules on tax credits for that specific item. The credit is tied to the degree of efficiency based on government standards, so I won’t try to give you exact amounts but can range from $30-150.

They also extended credits for some types of home improvements, building materials, windows, insulation, etc, but the amounts are less than last year. It is still worth checking out, so that you are rewarded for doing good!

Vicki Dimmich
Vicki Dimmich

I want to buy a house that I can fix up.

 

When you buy a potential rehab house, there are a lot of things that you need to think about before you sign a contract. We’re very familiar with many of the joys, headaches, and pitfalls of taking on a project like this.


1. Decide what you can do yourself


TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper house. 

  • Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.
  • Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, will you be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the cost of repairs and remodeling before you make an offer


  • Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.
  • If you’re doing the work yourself, price the supplies.
  • Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper house.

3. Check permit costs


  • Call City Hall and check if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money in the short term, but it *will* cause problems when you resell your home and probably cost more than the permit fee to fix.
  • Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.
  • Factor the time and aggravation of permits into your plans.

4. Doublecheck pricing on structural work


If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in an offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems. 


Get written estimates for repairs before you commit to buying a home with structural issues.


Don't purchase a home that needs major structural work unless:

  • You’re getting it at a steep discount
  • You’re sure you’ve uncovered the extent of the problem
  • You know the problem can be fixed
  • You have a binding written estimate for the repairs
  • You are planning on living in the home for at least 5 years.

5. Check the cost of financing


Be sure you have enough money for a down payment, closing costs, and repairs without draining your savings. 


If you’re planning to fund the repairs with a home equity or home improvement loan:

  • Get yourself pre-approved for both loans before you make an offer.
  • Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.
  • There are several programs out there to help fund renovations and repairs. Some of them are only available on HUD-owned homes or Fannie/Freddie-owned homes, some are dependent on the area or the city. St. Louis City has some funds and tax incentives available, as does the state of Missouri. We can put you in touch with people in these programs.

6. Calculate your fair purchase offer


Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs and the costs of reselling.

 

For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

A comparable house in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently recarpeted, and has a radon mitigation system in its basement. 

 

The cost (with cushion) to remodel the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Factor in about 7-8% of your target sale price as the cost of selling. From there, it is easier to figure out what your top offer for the property will be. 

 

7. Include inspection contingencies in your offer

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire pros to do common inspections like:

  • Home inspection. This is key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a trained eye to usually find the water leak behind them.
  • Radon, mold
  • Sewer line. A collapsed sewer line can ratchet your remodeling costs way up if you have to repair or replace it. Make sure you know before you buy.
  • Pest inspections - Termite and other wood-eating insect damage may make what seems like a cosmetic update into a gut-rehab.
  • Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or negotiate money towards closing costs to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.


If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.




This article was edited from a publication of the National Association of Realtors.




 

Vicki Dimmich
Vicki Dimmich

Renting for fun and profit

While most of us agree that renting is not necessarily fun, it can be profitable to be the owner of rental property. It can also be the answer to the problem of slow sales in real estate. This year we have had three different owners that could not sell for various reasons and all three of them elected to offer their property on the rental market. We were surprised and pleased that all three were rented within less than a week. Two were condos and one was a single family house, but all three were nice properties that you could be pleased to call home. And believe me, we had people calling from everywhere about these rentals.

This week we are looking for a suitable rental for a young man who wants to be in the loft district and the properties are renting so fast, that we have had to change our list of units we are showing, several times.  Most of us are unaccustomed to such a fast rental market. If it is priced correctly, it will rent in any of the west county locations and also in other desirable areas such as downtown,Kirkwood or Webster Groves.

If you think you would like to rent a property that you own, give us a call. We think we can help.

 

Kathleen Dimmich
Kathleen Dimmich

Tamper resistant outlets

One of our articles this month is on Tamper Resistant Outlets. Here are some links to more information:

http://www.youtube.com/watch?v=pV8GHN5U1Qs&feature=search

 http://www.childoutletsafety.org/

http://www.homedepot.com/webapp/wcs/stores/servlet/ContentView?pn=KH_PG_...

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