Deck Building Tips

Every summer, you find yourself saying the same thing month after month: “Boy, it’d be nice to have a big deck…” So far, one hasn’t spontaneously manifested in your backyard, no one has shown up offering to trade a deck for some magic beans, nothing like that. It’s high time you get out there and put your dreams into motion!

Building a deck can be an intimidating project for any homeowner, but if you’re going to attempt it, you might as well be completely prepared for the job. Attention to detail and careful craftsmanship are the most important skills needed for deck building, it’s definitely a project you can nail (see what we did there?) if you have the time to spend.

Your First Steps Toward Deck Ownership

One of the very best things about building your own deck is that you’ll be intimately familiar with every fastener and board in the structure. You’ll also know if you cut corners, so don’t do that. Building a deck is a process that can’t be rushed if you dare to hope it’ll stand and remain in decent shape for the long run.

Every deck is unique due to a combination of your needs, the geological profile of your soil, the size of your house, overhanging trees and the local climate. You’ll need to be prepared for surprises along the way, so leave a bit of slack in the budget for those just in case moments. If you don’t need to spend it, well, you were wanting a new grill anyway, right?

Building a Better Deck: Tips to Keep in Mind

There’s no single way to build a deck, but there are lots of things that can help you build a better deck anywhere. Here are a few tips to get you started!

Take advantage of pre-cut deck parts. You can make most of what you need for your deck from scratch, but if you’re only building the one deck, why? Check out your local home improvement store or lumberyard to see what they offer in pre-cut items like stair stringers and spindles. These convenience building supplies will save you huge headaches and speed your project up tremendously.

Choosy deck builders choose their lumber carefully. Even though most decks today are built with pressure-treated lumber, yours doesn’t have to follow the crowd. If you have the budget, composite decking is often under warranty for 20 years or more. It costs more than pressure-treated lumber, but if you’re not looking to sell your home any time soon you’ll get a lot of years of virtually maintenance free deck ownership using composites.

Keep your posts out of the dirt. Sure, lots of decks have been built with the posts encased in concrete, or even just backfilled with rocks and soil, but time has proven that this is a really bad practice. Instead, pour a level concrete pad for the post to sit on, then seal the post end and use post bases to prevent moisture wicking.

Beg, borrow or rent the right tools for the job. A basic homeowner’s toolkit with a circular saw, table saw, power drill or nail gun (or hammer, but it’s slow going) and line level can get you started, but if you need to fasten your deck to concrete or have any sort of interesting problems crop up, you’re going to need more. For concrete installations, for example, an impact driver is really required equipment and easy to rent for the day.

Don’t neglect flashing! Sandwiching boards on boards is super basic, but if you want to protect the structure next to your deck flashing is a requirement. Just like with a valley in a roof, flashing redirects water so it goes where it should, rather than creating a rotten mess between the deck and the structure you’ve attached it to. Use ledger flashing all across the top of boards that are in direct contact with any sort of building, then apply flashing tape over it such that about half of the width overlaps the flashing and half overlaps the structure.

Seal the invisible bits. It’s easy to forget that the hidden parts of your deck will need longer term protection. After all, once you’ve covered them with lumber it’s kind of an out of sight, out of mind situation. Instead of opening your deck’s structure to rot and other moisture related problems, seal the joist tops with flexible flashing (a lot like what you’re using for the ledger that’s against your house). There’s a peel and stick version that makes it really easy to get the job done.

More of a Deck User Than a Deck Builder?

If you’re more about sitting on your deck with a cool drink than building it from scratch and taking a nap, ask your Realtor to recommend a great carpenter from your HomeKeepr family. Only the best home pros are invited to be members of the community, you can be sure that not only will your deck go up fast, but that it’s built to the highest standards.

August 2018 Newsletter

Well...sadly summer is about over for many kids around Indianapolis with school starting within the next two weeks. If this is your situation, we hope that you have enjoyed some down-time with your family and could enjoy some time together. For us, this meant flying over 4,500 miles to see Ana sing in Europe.

You may recall from past newsletters, that Ana was accepted into the International Choir for Blue Lake Fine Arts Camp located north of Grand Haven, MI. She has been rehearsing on her own, with a vocal coach, and via several trips up to camp to practice with her group. This all culminated in a final intensive week of practice in June, a send-off concert at the end of the week for the families and then off to Europe for 3-weeks.

Ana returned about 3 weeks ago and this weekend we returned to camp one final time for a Homecoming concert and a final goodbye to Blue Lake and her choir. Ana had an absolutely AMAZING time touring France, Germany, Italy, & Belgium over 3-weeks and 7 stops with local host families. We met her in a small town about an hour east of Brussels named Genk. She stayed with us for 3-days and we were able to see one of her local concerts. The kids sound really, really good! Check out the following two links for a couple of their favorite songs they performed in Genk, Belgium. Click here to hear a spiritual. The soloist is nothing short of unbelievable. Click here to hear a selection from the musical Dear Evan Hansen. Here is a photo at Versailles for their Summer Spectacular with some guests wearing period closing in preparation for a costumed ball starting at midnight in the Palace. Here is a photo of Tali and Brigid in the gardens of Versailles. We stayed a week in Paris and then headed to Belgium with a day trip to Cologne, Germany. Absolutely beautiful weather our entire trip. The only negative was the train strike, but we were mostly able to avoid major disruptions.

During our trip to see Ana, Kylie and Julia were here working their butts off. Really, I couldn't ask for more from our team. They make me so proud!!! We work so well together. Their commitment to our clients and extremely high-quality work is unrivaled. I receive compliments weekly about them. If you are one of the sources of compliments-THANK YOU!! They love being recognized for going above and beyond.

If you haven't been to Europe, we highly recommend making plans to go there. So much history, architecture, & culture there. It gives Americans a different perspective, to be sure. Have you been to Europe? What was your favorite trip and why? We would love to hear about it and see some of your favorite photos.

Jack & Mary Anne are settling into their new home in Fishers and are still working their way through unpacking boxes. It seems to be an unending chore! They would love to show you their new home if you are ever in the neighborhood. Having a much smaller house and yard for which to care has been a real blessing.

The real estate market continues to sizzle. Inventory continues to be our biggest issue and the big reason why some people are talking about a recession. We need more houses to satisfy the demand. Employers need more qualified employees to fill literally millions of open jobs. Here are the latest stats that are available from MIBOR comparing June 2018 to June 2017

New Listings-UP 0.9% to 4,761 units
Pending Sales-UP 8.5% to 3,811 units
Closed Sales-DOWN 2.5%
Median Sales Price-UP 8.6%
Average Sales Price-UP 7.6%
Percent of Original List Price Received at Sale-UP 0.8% to 97.5%
Total Active Listings Available at Month End-DOWN 21.5%
Months Supply of Inventory-DOWN 22.6% to 2.4 months

It is interesting to note that all of the numbers here are shrinking from prior months. In other words, the gaps are narrowing, indicating that the economy is cooling a bit. So, if you haven't put your house on the market yet and are thinking about it, stop procrastinating as your unprecedented seller advantage may be coming to an end.

Enjoy your final weeks of summer and, as always feel comfortable contacting us whenever we can help you or someone you care about.

Click here to read our August newsletter full of fun and interesting articles and information.

Click here to watch our builder-series videos on how a home is built.

Click here for coupons & discounts at stores you shop every day.

Click here for the most powerful real estate app available.

Click here for a quick 60-second market update.

Click here to read what some of our clients have to say about us.

Click here to read about our Senior Advantage Program.

Your Friends in Real Estate,

Steve, Jack, Kylie, & Julia

P.S. Please don't keep us a secret.

Buying Land with A Mortgage

Sure, owning a house is pretty cool, but sometimes you feel like you could do better. Take your hall closet, for example. It’s small, there’s no place to put linens and barely enough room for heavy winter coats. What’s it even good for? Your house has served you well, but you had no idea how awkward the little (and almost impossible to fix) things, like that closet, could be.

Maybe it’s time to consider buying some land and starting over.

Borrowing Money for a Land Purchase

Strictly speaking, buying land is rarely done with a traditional mortgage. Instead, a commercial loan, in one of many forms, is utilized. From where you’re sitting, though, the two will look nearly identical. It all depends on what kind of land you’re buying and what it is that you intend to do with it. The kind of land that homeowners tend to choose will likely fall into one of these categories:

Raw land, that is, land without any major improvements like electricity, water, sewer or gas lines, is the most difficult to borrow against. The reason is simple: it’s generally pretty easy to walk away from this kind of property if you get tired of making payments or suddenly develop a serious allergy to oak trees. The bank’s left with a parcel of land that may take years to resell. It’s a big bummer for them.

Improved land has many or most of those above-listed improvements already installed on it. There may even be a potential building site already prepped and ready to go. It’s important to note that land that has a mobile home without a permanent foundation is also considered “improved.” Because mobile homes are considered personal property, that specific land configuration is still just a land transaction.

Home on an acreage. A permanent, safe and liveable home on an acreage is treated like a home sale, so you could theoretically buy a reasonable sized home on a small acreage using an FHA loan or a mansion on a hundred acres with a jumbo. It’s basically just a house with a really big yard. This is only the case for private homes, not for farms. That’s a whole other blog.

Examples of Loans Based on Land Usage

Again, the type of loan you may be able to secure depends heavily on the type of land and what you plan to do with it. Here are a couple of examples:

Example 1. You’re an avid bird watcher and want to buy an extremely rural, 40ish acre parcel to turn into your own personal campground and bird paradise. You don’t plan to add any utilities to the raw land.

This is the hardest of situations, which is why we started with it. Because an undeveloped piece of land like this is likely to have a smaller purchase point, your local bank may be willing to write a 10 or 15 year portfolio loan for for the buy, with the land as at least part of the collateral. You may need to bring as much as 50 percent down, however, to mitigate the risk you represent. Qualifying won’t be a cake walk, but if you have ample income and seem like a good risk, a local bank will loan to you at their own discretion. Same song applies to a credit union you may belong to.

Other options for financing your bird paradise include asking the owner to finance it (you’ll still need a downpayment, usually 10 percent is plenty) or borrowing against something else you have that has enough value. This might mean you’re taking out a home equity loan or borrowing against your retirement plan.

Example 2. That hall closet has finally driven you far enough out of your mind that you’re hatching a plan to build your own home, with the help of a professional contractor. As soon as the land is acquired, you’re going to start on the construction phase of your life.

This is the kind of land transaction that lenders like. Using the plans for that future home, the value of homes like it nearby and detailed information about the materials you want to use, your bank can determine a reasonable final value for your construction project. This is where they start when determining how much to loan out.

Usually, you have to bring 10 to 20 percent to the table at closing, but these types of land loans are considerably easier to get than a raw land loan. This type of loan usually starts out as a construction loan that you or your contractor can treat like a credit line, taking out money for specific parts of the project as you go. When it comes time to lay the tile in the house, you or the contractor need only request the funds that it takes to cover supplies and the bank will cut you a check.

Once the house is totally done and a certificate of occupancy (where applicable) is issued, your bank will convert the loan into a true mortgage, per the terms you discussed when you applied for it in the first place. You won’t see most of this stuff happening, but it’s definitely going on in the background. With a loan of this sort, it’s good to understand what’s happening when that much money is at stake.

Do You Know a General Contractor…?

If you’ve decided to build a house, the relationship you have with your general contractor is really important. You don’t want someone that’s hard to get along with or can’t be counted on to complete work on time. That’s why your HomeKeepr community only recommends the best of the best.

Did you know you can find both a building contractor and a loan officer within the HomeKeepr system? It’s true! Your Realtor has really set you up for success with their recommendations — maybe you should send them a muffin basket…

Mortgage Brokers vs. Mortgage Bankers

You’re just swinging in your hammock on a sunny summer day when an ad pops up on YouTube for home equity loans. It sounds like a pretty good deal and you have been wanting to put a pool in for years, but it’s a bank you’ve never heard of, and a quick message to your group chat reveals that no one you know has, either.

What you might have witnessed was an advertisement for a mortgage broker. Like a mortgage banker, a mortgage broker can find a mortgage loan for your situation, but that’s where the two start to diverge.

Brokers and Bankers and Mortgages, Oh My!

Let’s start with some simple explanations just so we’re all on the same page.

Mortgage Bankers are people who work for a specific bank, like Main Street Bank USA, and help customers of the bank (and potential customers) apply for mortgages that Main Street Bank USA funds. They only write loans for their employer, except in a few special cases. They’re typically paid a salary by the bank they work for, whether your loan is $50k or $500k.

Mortgage Brokers, on the other hand, have permission to sell loans from a portfolio of wholesale investing clients. These may be traditional banks like Big Bank USA (these are fake banks, just so we’re clear), or they may be investment groups like In It For The Interest, LLC. There’s nothing inherently wrong with this, but because a broker makes their money solely on commission, unscrupulous ones may be tempted to put their own interests above yours. Always vet any type of lender, for peace of mind, if nothing else.

How Mortgage Bankers Work

Mortgage bankers may have a more limited product line they can use to finance your home-related loan, but they have a great deal more control over them because all the underwriting is done within the bank itself. Your local branch might not originate loans, but there’s someone nearby that your banker can call to check status and collaborate with to solve problems like a loan that you’re all by a hair’s width from being able to qualify for.

When a banker takes your application, they may literally forward it to the next room, where local people get to work to verify your income, length of employment and so forth. If you have your checking account with the same bank, you can often skip the tedious submission of income document after income document, since they can pull a lot of information from that checking account.

When the underwriter is comfortable that you’re able to qualify for the loan you’re seeking, they call the title company that you (or you and the seller, in the case of a purchase) agreed to use. They probably already have a relationship with this company since it’s nearby. When they send documents over, the title company doesn’t wonder what to expect from your closing.

How Mortgage Brokers Work

Mortgage Brokers take your application up front, then shop their lenders to see who can make you the best loan based on your credit history, income and desired loan amount. Often, brokers can do things that bankers can’t, even though a banker knows the loan originator by their first name. For example, helping people with troublesome credit is sometimes an area of specialization for brokers. They have access to all sorts of unusual loans that can turn a hopeful into a homeowner, or at least a pool owner.

This is both bad and good. On one hand, you got a loan — woohoo! — but on the other, you’re going to pay for it. These kinds of loans are rarely cheap because the broker’s fees have to be figured into the equation somewhere. Remember, they get paid on commission, not on salary. A normal broker fee can be as much as two percent of your loan amount.

When a mortgage broker pulls off a miracle you were really counting on, though, that two percent seems pretty cheap. Really, it’s all relative to your needs and what’s realistic for your financial situation. Before you choose a broker, make sure that you’ve really vetted them because each company and broker can be as wildly varied as the portfolios they have to sell. Ask around, check online reviews, ask your Realtor their opinion. Chances are good that someone knows a reputable broker that they can set you up with rather than letting you jump in blind.

Which to Choose… and Where to Find Them?

If you’ve decided that you’re absolutely committed to putting in that pool this summer, you’ll need a reputable lender to help you finance all the cement and whatnot. Luckily, both mortgage bankers and mortgage brokers are members of the HomeKeepr community! Log in to see who your Realtor recommends and then give them a call. You’ll save time in lender meet and greets, letting you trade that hammock in for a pizza slice shaped raft sooner.

Is A Home Warranty Worth It?

Whether you’ve recently purchased a home or are considering renewing the home warranty that came with your home, chances are good that you’ve got questions. Big ones. You’ve probably heard a lot of different things about home warranty programs, ranging from really awful to crazy and near lifesaving. Like anything that remotely resembles an insurance program, there’s a lot of nuance behind individual experiences.

What is a Home Warranty?

You can think of your home warranty as a type of insurance if that makes it easier to understand. It’s technically a service agreement, kind of like what you’d get with a new car. Individual warranty programs have contracts with individual service providers who will come out and diagnose your problem, arrange for parts and then return ready to fix it. The quality of any single home warranty program, then, is only as good as the contracts that the company has with its service providers.

The yearly costs involved range widely, with very basic plans with limited coverage starting around $300 and comprehensive plans that include things like pool repair pushing the $1,000 mark. There’s also typically a service call charge and there can be an upper limit on the costs the warranty will cover.

Depending on the age, size and complexity of your home, that $1,000 plan still may look pretty good next to actually making needed repairs out of pocket. It’s all a matter of perspective.

How Does a Home Warranty Work?

It cannot be stressed hard enough that you should read the entire document before agreeing to a particular home warranty. Although they may seem the same, what one company will cover may be completely excluded by another. Your Realtor should be able to guide you toward a product that they have had a good experience with and consistently delivers good results. If they can’t, call the Better Business Bureau and read reviews online to be certain the company you choose will deliver the goods.

Working with a reputable warranty company is a simple process. It goes something like this:

You notice that the sink is backed up unexpectedly. Running the disposal doesn’t help and you’re not a plumber. You don’t even play one on TV.
You call the number to your warranty company.
An operator answers and asks for identifying information, along with a brief description of the problem.
You explain that your sink is full of water and you’re worried you may soon drown if someone doesn’t come to help.
Your operator collects all the necessary information, triages the case as either emergency or not, and does one of two things: gives you the number to a service provider OR promises to contact one on your behalf.
No more than a day later (depending on your urgency level), the provider calls you to arrange an appointment.
The appointment is set, the service provider comes out and figures out what the problem is. If it’s an easy fix, they may deal with it right then. If it’s a costly repair, they’ll need to go back to the warranty company and try to figure out how much is your responsibility and how much the company will cover.
You authorize a costly repair, it’s made, you pay your part and go on with your life. Or you decline it, kick the dirt and call the warranty company back for a second opinion, then go through the steps above again.
Warranty programs can be hit and miss, there’s no doubt about it. Sometimes the things they cover versus the things they don’t seem completely arbitrary. But, there’s plenty of competition in this arena that will allow you to get into a program you can afford and will be able to use if need be.

The Biggest Warranty Program Con

This has already been touched on, but bears repeating. The biggest drawback to a home warranty is the very thing that leads some people to believe that they’re cons: they don’t cover everything. Again, this is highly dependent on the program and service level you select, but you have to remember that a home warranty is not the same as homeowner’s insurance.

Acts of Nature, shifting foundations, broken sewer lines and broken windows are among the biggest pain points for home warranty users. These items are often not included because of the massive expense they represent, as well as the fact that many are already covered under your homeowner’s policy.

There’s absolutely every reason to read your warranty paperwork thoroughly so you know what will be and won’t be covered. That way you’ll be armed to fight a refusal to pay thoughtfully and efficiently should it occur in error.

Intangible Benefits Come With Warranties

There are a few people who end up winning the lottery with their home warranties. They move in and everything they touch just starts breaking. These are items that showed no sign of serious wear and were installed correctly, their breakdowns were wholly unexpected. But suddenly, that homeowner has a new furnace and air conditioner, the pool pump’s been replaced and so on. This really does happen, and even at $800 a year and $75 a piece for service calls, it represents an incredible savings.

However, most people don’t get that lucky and if they use their warranty at all, they only need it once or twice during their ownership. This is why it’s important to consider the intangibles with these programs. Sure, your breaker box seems fine today, but would you know what to do if it started malfunctioning? That’s where the home warranty really provides a powerful value.

People don’t buy home warranties to save money on home repairs. They do it to control their repair costs over the long term. Usually, they will spend a lot more on the home warranty than they would just hiring their own contractors, but these same people admittedly don’t know who to call or how to vet a potential service provider.

Service provider vetting is a service that the warranty company provides with their yearly fee. Peace of mind, at a cost, is the thing that many home warranty buyers end up choosing. For the highly risk averse, it’s a total win — these people can go on with life and not have to give home repair another thought.

What If You Could Find Vetted Service Providers and Still Save Money?

If you’d rather have a relationship with your plumber, roofer or other service provider rather than have one with a call center, a home warranty might not be right for you. Instead, you should connect with a referral community like HomeKeepr where you can get to know your people on a personal level, thanks to your Realtor’s recommendations.

There’s just something about telling your friends that “my electrician Greg came right over and fixed the faulty wiring,” rather than “I called the warranty company and some guy showed up” that can give you a huge feeling of security in homeownership, whether these are your first steps or you’re well on your way to your next address.

12 Pool Maintenance Tips

When the sun is high in the sky and the wind feels like a blow dryer on your face, there’s nothing like the blessed cool blue of your private pool. If you’ve only just recently become a pool owner, you may be weighing your options: should you hire someone to juggle your pool chores or can you do this one yourself? Taking care of a pool isn’t hard, provided you’ve got a checklist to follow (just so you don’t miss a step).

Your Pool Maintenance Attack Plan

Most pools don’t require a lot of care, but if you don’t keep up with a regular maintenance schedule those tiny jobs can easily snowball into a giant one — or a big pile of broken pool equipment. Neither one is an awesome future prospect.

Instead of a looming disaster, you can look forward to plenty of happy years floating without a care in the world while drinking pink lemonade on your unicorn raft with a simple checklist that looks like this:

Daily Chores

Scoop out floating debris. Grab that long-handled glorified fish net and scoop out anything that’s floating in your pool without authorization. That may include leaves, tree bark, insects or your neighbor’s menacing little YorkiPoo.
Check water level. Pool water isn’t special, it evaporates in the heat just like other water. If it’s been raining a lot your water level might be too high for your equipment to run properly. Either way, a quick visual can help you tell if the water’s in the right place. Adjust as needed.
Clean out the basket. You can’t just sweep all the pool debris into the basket and hope no one notices. When the basket is full, your water circulation is limited, just like when a filter is dirty. So, grab it, shake it out, spray it clean, stick it back in. Bada-boom, bada-bing.

Weekly Chores

Vacuum the pool bottom. Remember that debris you were supposed to scoop out most every day (and may have neglected a bit)? Well, you get one more chance at it today. Pick one day a week to really clean your pool with the pool vacuum. It’ll help prevent staining and keep your water cleaner.
Swab the deck. The grime and dirt on your pool deck isn’t magic dust that just stays on land. Oh no, it’ll end up in your pool, in your pool filter and in your fruity drinks if it’s just left to its own devices. Keep your deck clean!
Check pool chemistries. Your pool is a complicated stew of H, O and lots of impurities. Some of these are not awesome for you and your health, others are just really not great for your equipment. Regular chemistries can tell you the situation when it comes to pH, total chlorine, alkalinity, calcium and cyanuric acid. Don’t forget to figure in the saturation index (or grab an app that can do it for you).
Shock the pool. Just like Peter Gabriel had to Shock the Monkey, you need to shock your pool water on the regular. Since it’s not an actual free-flowing water source like a stream or even a lake, it’s easy for algae, bacteria and other microscopic critters to grow. Raising the chlorine level to 5 or 10 ppm will kill off what ails you. A DPD test kit can help detect levels of combined chlorine — you can break it up by shocking the water to a level 10 times the tested level when combined chlorine exceeds 0.3 ppm.

Monthly Chores

Look for tears in the liner. A torn liner is not a great time for a pool owner. You’ll be leaking water if you don’t fix it up straight away. Vinyl pools can be a great option for many homeowners, but they come with a hidden cost — the effort it takes to patch them and keep ahead of any holes that may appear.
Clean your filter. This may need to be done more often than once a month, but cleaning that pool filter is everything. When your pressure gauge is 5 to 10 psi higher than normal, it’s time to improve the water flow by getting all the debris out of the filter. How you clean it will depend on the type of filter you have.
Clean the pump room. Your pump room is where all the real action takes place. Whether it’s part of a pool house, a kitchy cabana or under a plain little cover, keep it clean and free of debris in case you have to take the pump or other equipment apart in a hurry.
Clean your skimmer. Using a scrubbing sponge and soap, clean the scum and dirt out of the skimmer’s throat and well. Keeping the skimmer sparkling clean means your pool’s water line will stay cleaner, too.
Check all pump seals and safety equipment. Your pump, filter and safety equipment like ladders and railings all need to be in good working order all the time. Check each item, tightening bolts or replacing parts when wear begins to show. While you’re at it, make sure your pool gate latches properly to avoid potential future issues.

Would You Rather Be Using the Pool or Cleaning It?

Some people are cleaners and some people are floating around in the pool-ers. If you’ve tried to keep up with pool maintenance and simply can’t, or just don’t want to use your limited leisure time scooping dead bugs out of your glistening waters, stop by for a visit with your HomeKeepr community. Your Realtor knows a pool guy — and he’s awesome! All you have to do is let him know you need a hand.

5 Secrets to Success with Your First Rental

You’ve been a homeowner for a while now and overall, everything’s gone pretty well. Your home is a comforting, safe place that has given more than it has taken — you’re pretty happy with how that purchase has gone, really.

That’s why when your friend was talking about the frightening amount of rent he’s paying for his place, the wheels started to turn. Owning a rental or two just might be a great way to bring in some extra income without having to really work for it. Plus, there’s all the equity you’ll gain as those renters pay down your note. What could be better?

The Road to Rental Success is Paved With Good Intentions

There’s nothing ethically wrong with being a landlord and there’s nothing wrong with not being a landlord, but either way, you should go in with your eyes totally open. Rentals are hard work, even if you only have one or two single family homes. Before you buy your first rental, take some time to ponder these finer points of landlordship:

1. New tenants should always be considered carefully. Even your closest pal might have some really negative feelings about how a rental and the landlord attached deserve to be treated. You’re obviously not going to make a million bucks on your one house, but it would be good to cash flow. Always do a background check and ask probing questions to learn more about the people who will be living in your house. Bad renters can be enough to sink your entire rental empire before it’s really taken off. If you have to gut the house and start over between tenants, there’s no way you’re going to win at landlording.

2. Think about rent collection now. How do you plan to actually get your money? Now is the time to think about this, before you have a tenant that can’t or won’t comply with your wishes. In this day and age, it’s not unusual for a landlord to require electronic payments. They’re simple to set up using one of many systems available online, depending on just how large you hope your rental empire becomes, and easy for tenants to use. When it’s electronic, there’s no question about that check that’s in the mail. One click and it’s done.

3. Get comfy with the legal stuff. Do you know what your obligation is to your tenants were your rental to be made uninhabitable through no fault of their own? Does your state allow them to withhold rent with no penalty if you don’t get that property fixed up fast enough? Can they crash in a hotel and charge it all to you during said repairs? There’s a lot of legal stuff to cover, it definitely helps to have a real estate attorney in your corner. Real estate attorneys can also help you draft a rental agreement that protects both you and your renter.

4. Planning repairs and upgrades. Repairs and upgrades are best made before anyone moves in, that way you have full access to the property and can move a lot faster not having to remove furniture and personal objects. Repairs of a rented unit sometimes can’t be helped, so have a plan for how to handle them. Calling a home pro in can speed up the service and ensure the problem is fixed right the first time. Always check that your pros offer 24 hour service, in case of an emergency — otherwise you’ll be the one called in at 2 am to fix that busted pipe.

Upgrades also require plenty of forethought. Choose materials that are going to be easy to take care of and durable, even if they cost a little more. If you keep this rental house over the long term, making those choices early will mean not having to replace things like carpet every time a tenant moves out. Unlike your personal home, this house is an investment, so set it up in such a way that you get the most for your money across your entire anticipated ownership.

5. Dealing with eviction. This is a worst-case scenario scenario, but have you considered what you’d do if a renter stopped paying rent? Do you allow one missed payment, then start the eviction process? More importantly, can you stomach the idea of eviction? Even the best renter can turn into a financial drain when there’s been a death in the family, they’ve gotten laid off or new debt is making it harder for them to make ends meet. If you can’t see yourself evicting a family whose breadwinner died, making it too hard to keep up with the rental payments, rentals might not be for you. A workable compromise could be to immediately hire a property manager to deal with the dirty details.

Ready to Become a Landlord?

Being a landlord has its ups and downs and it requires a lot of general knowledge that’s hard for any one person to really maintain. That’s why HomeKeepr is such a handy community for new landlords like yourself. You can meet home pros with every kind of skill you might need, from legal to property management. Just log in and you’ll be given a list of recommended pros in your area that are ready to help!

Four Mortgage Programs to Consider

Whether you’re thinking about buying your first home or you’ve been contemplating an upgrade, you probably already know that there are several different kinds of home mortgages, some that seem pretty much alike at face value. FHA, VA, USDA — what does it all mean?! We’re about to take all the stress out of choosing the mortgage that’s right for you and your family (even if that family is just you and Spot the cat).

Mortgage Basics in a Nutshell

There are a few different elements of a mortgage that are important to understand before we move forward in this process. You already know stuff like interest rates and what your payment and interest payments are, but there are other things that might not be quite so well settled in your mind. Most homeowners have questions about the following mortgage related definitions:

Loan features. When you get a mortgage, it often has other stuff that comes with it. After all, this isn’t the same as borrowing money from your mom, banks have fancy lawyers who make sure they earn their keep. You may notice features like “assumability” and “prepayment penalty” listed on your initial loan form.

Assumable loans are loans that you can literally transfer to another person when they buy your house. This is useful when interest rates are climbing, sometimes people will pay more for a lower interest rate mortgage they can take over.

Prepayment penalties are very bad and you don’t want this. Basically, you’re punished for paying your loan off early. Typically, they’re part of subprime lending, but you never know when one might pop up elsewhere. Since “prepayment” includes the payoff from selling your home, there’s no winning with this one.

Mortgage insurance. There’s been a lot of talk about mortgage insurance, both for better and worse. To put it simply, mortgage insurance makes it possible for you to bring a downpayment as little as about three percent to closing with FHA or conventional type mortgages. It’s a type of insurance that you pay for in case you were to default on the loan. If you do, the insurance company pays out your coverage to your bank, reducing the amount you may be responsible for if the house can’t bring enough at the foreclosure sale to cover your remaining note.

Down payment. Down payments are your initial investment in your home. Many times, home buyers are surprised to see that they have to bring both closing costs and a down payment, having assumed the two were the same. The down payment goes to the bank as proof of your commitment. We’ll get to closing costs.

Closing costs. Closing costs are the bane of buyers everywhere. They can seriously mount as things like appraisals, title insurance, fees to the bank (separate from your down payment) and prepaid items like taxes and homeowner’s insurance add up. Some programs will allow you to ask the seller to pay these on your behalf, but the amount you can ask for is limited to a percentage of the sales price and based on the program you’re using. For many homeowners, closing costs will be similar in price to their down payment, which is where the confusion typically starts.

Pick Your Poison: The Four Basic Home Mortgage Types

Understand that these are not the only mortgages out there, but they are the ones that you’re most likely to use in order to buy a home. Each has its own set of benefits and drawbacks, which we’ll discuss briefly.

Conventional Conforming

If you’ve heard of Sallie Mae or Freddie Mac, you know the family of conventional loans. These loans are written by a wide range of banks, from your hometown locally owned to the fanciest mortgage broker. “Conforming” loans meet Sallie and Freddie’s high requirements, including maximum sales price.

Pros: Generally, you’ll get a better deal on mortgage insurance that automatically drops off (meaning you no longer have to pay it) once your home reaches a 78 percent loan to value ratio. Also, you’ll pay less in closing costs and your debt to income ratio can be somewhat flexible as long as look really good on paper.

Cons: These are generally the hardest loans to qualify for. Even though there are now three to five percent down payment options, your credit score will need to be around 700 (better is better) and your other ducks should be lined up nice and straight. Consistent employment, savings that can be designated as “reserve funds” and few to no scabs on your credit report are helpful.

Federal Housing Authority

The FHA started insuring loans after the Great Depression as a way of helping people get back into owned property. It basically created the 30 year fixed interest mortgage and continues to carefully oversee which homes can and cannot be purchased in its name.

Pros: Good option for first time buyers because of low down payment and credit requirements. FHA will accept “soft” credit lines for people who haven’t established credit yet or have very little, so keep that utility bill paid on time. The program allows up to six percent of your closing costs to be financed into your loan, as “seller paid items,” which can help reduce the actual cash you need to close.

Cons: FHA requires a lot more in closing costs because of the additional upfront mortgage insurance deposit. In addition, if you have less than a 10 percent down payment, under the current programs you’ll be forced to keep paying mortgage insurance for the life of the loan, giving you no options but to refinance or sell down the line if you want rid of it (it’s costly, you want rid of it). Not every banker wants to deal with FHA loans because they can be time consuming to write, so you may have to shop a bit to find a good bank.

Veterans Administration

As part of the benefits that active military members and veterans receive from the government, VA loans are built on a merit-based system. Career military and those honorably discharged early are generally eligible, but short-term members or Reserves may have to meet additional requirements. Anyone who can get this loan will need to bring a Certificate of Eligibility in order to get the ball rolling with an approved lender.

Pros: Favorable interest rates, extremely flexible guidelines and absolutely nothing required as a downpayment (often little to nothing required at closing!) There’s no mortgage insurance, just a one time “funding fee” that varies with your service type, downpayment and times you’ve used your Eligibility.

Cons: Really, there aren’t any. You can’t get this if you’re not military, though, so that could be a con if you really wanted this most excellent loan type.

US Department of Agriculture

In rural areas, the US Department of Agriculture will offer mortgage lending as a way of helping to keep the local economy flowing. Homes don’t have to be on an acreage, but they do need to be located in communities with under 35,000 inhabitants.

Pros: Like VA, USDA are fairly easy to qualify for as the buyer. They can also be zero down loans, though the more you can bring to closing the better. Payment assistance and other types of help are sometimes available for very low income borrowers.

Cons: The house you’re buying will undergo significant scrutiny in order to be approved for the program. In all loan programs, your house has to qualify, but the hurdles USDA puts in front of the building are much larger than most other programs. This is good for you, because it means you’re getting a great house, but it makes the process take a lot longer and can be scary for sellers. In addition, there’s a cap on income for potential borrowers.

Need a Mortgage? Who Ya Gonna Call?

HomeKeepr! Wait, that’s a different thing. But, seriously, whether you’re looking for more answers to your burning lending questions, need a plumber to fix your leaky faucet or a party planner to celebrate your finally closing on that loan, your HomeKeepr community has contact information for them all. Just log in and check out all the specialties your HomeKeepr family has to offer — they’re recommended by your Realtor, so you know you can count on these experts.

Should You Jump into The Real Estate Market?

Deciding you’re ready to buy a house is a big moment in your life, whether it’s a first time purchase or you’re snatching up yet another investment property. The home buying process is fraught with dangers, both real and imagined, as well as very real financial risks.

That’s why there are so many pieces of advice about when to buy a house. The truth is that there’s no one answer for anyone. Because market conditions can vary dramatically, there’s no way to safely predict if or when the neighborhood you’re looking at will be ripe for the picking. These are the times when having a really knowledgeable Realtor comes in handy.

Today’s Real Estate Market: An Overview

You should have some idea of what you’re walking into before you jump in the real estate market. Sometimes, there’s way too much supply (too many houses for sale) and not enough buyers — this is a “buyer’s market,” and that’s who has the upper hand in negotiations. Sometimes there are too many buyers and not enough supply — a “seller’s market.” Often, there are roughly balanced parts supply and buyers, which makes for a very healthy and predictable market.

We’re not in a healthy and predictable market at the national level. There are currently way too many buyers who want to buy at any price and not nearly enough new homes being built, nor are there enough existing homes to meet demand. Generally, this would push prices up. However, since interest rates are increasing, some buyers are starting to get squeezed out of the market entirely, which should be pushing prices back down, but doesn’t seem to be.

What we seem to have right now, as of the writing of this blog, is a market that’s sort of stalling. Normally, the summer is the craziest time of the year for Realtors — no one wants to pull their kid out of school mid-year to move across the city. And although many Realtors are reporting that they have plenty of potential, well-qualified buyers, they’re fighting over scraps as the supply continues to shrink.

Should You Be Trying to Buy Right Now?

Depending on who you are and where you are in your life journey, the competitive, weirdly stalled market we have this year may be as good a time as any for you to buy. Below is a brief breakdown of major buyer types and how the market could affect them if they were to buy today:

First time homebuyers. Jumping into the real estate market as a first timer is always a little terrifying, but the current market may give you a serious complex. If you’re buying a house to live in, not one that you expect will make you a bundle down the road, and your life is fairly settled, there’s no time like the present to go down the home purchase road. Just bear in mind that you will probably have to write several offers before you land that starter home — give yourself plenty of time for houses that will get away.

Maturing family. When you’re looking for that last house, the one you’re going to send your kids away to college from, the most important thing is finding a house that’s suitable for your family. There’s no time that’s better or worse for this purchase, especially if your plan is to hold it indefinitely. Sure, you may end up paying a little bit more now than you would have a couple of years ago, but the value you get from living in the house, as well as natural appreciation, generally ensure you come out a little bit ahead. It beats renting, anyway.

Empty nester. Aging in place is the thing these days, and for good reason. That just creates one big problem: not enough inventory that will accommodate mobility equipment like walkers and wheelchairs that you may ultimately need. Housing starts are really rising, though, so you might as well visit a few Open Houses to see if there’s a builder out there that you can picture building the home where you’ll retire. Although existing homes can work for your needs, new construction gives you the option to create an age in place friendly universal design from the foundation up.

Investor. Investors! You are literally the only group on this list that should be seriously concerned about the timing of your purchases. Since owner-occupied homes tend to be held for the long term, the risk to those buyers is minimal, but you’re looking to buy and almost immediately start making money.

Finding a good price on a listed home may be tricky right now, but switching gears to the building of new homes will introduce a lot of competition. Buying and holding properties as rentals could pay off, but only if you really buy them right. Now may not be a great time for you to buy if you have investments that are already paying for themselves. It would, however, be a pretty good time to unload properties that you’ve fully depreciated or those that just really don’t fit in with your portfolio.

When it comes down to it, the biggest factor you should be considering when purchasing real estate that you intend to occupy is whether or not you’re really ready for homeownership. A close second, of course, is whether or not you can really afford a house, but your Realtor and mortgage lender will help you with that part.

You’ll have to decide for yourself if today is a good day to buy, there’s no way to know what the market will look like in five to 10 years when you may want to buy again.

Let Your Realtor Be Your Guide…

Just like the HomeKeepr community helps you find home pros that can fix just about any problem you might have related to your current or future home, your Realtor is the best person to go to when it comes to the question of timing your real estate purchase. If they tell you to punch it, then all systems go.

Don’t forget your HomeKeepr family as you move through the various buying stages, from securing your mortgage to having your home inspected and appraised. Finding the experts you need is as simple as logging in to HomeKeepr!

Outdoor Kitchens

Your new house has an awesome outdoor kitchen, or maybe you just had one installed, either way you’re all set to grill outside all summer (and maybe into the fall and winter, too). Have you stopped to consider all the things that it takes to keep an outdoor kitchen running smoothly? Remember there’s live electricity, gas lines, appliances and other things that are going to require regular effort.

An outdoor kitchen can be the best investment you’ve ever made, but you definitely should be considering how an outdoor kitchen is different from an indoor kitchen.

Outdoor Versus Indoor Kitchens: The Big Differences

There’s nothing wrong with an outdoor kitchen, they’re not inherently dangerous or troublesome, they’re just different than an indoor kitchen. Heck, some of the early pioneers had outdoor kitchens before it was cool. At the end of the day, though, the two are fairly different, so let’s take a look at the biggest stuff.

Exposure to the Elements

Your indoor kitchen is around 72 degrees Fahrenheit or so all the time, day in and day out. Depending on where you live, your outdoor kitchen could be exposed to some really extreme weather, swinging from below freezing in the winter to above 100 degrees F in the summer. It’s a lot for gaskets, plumbing and wiring to bear.

Maintenance and regular health checks are vital for your outdoor kitchen, otherwise you could have catastrophic failures without warning. In addition, ensure that all your outdoor kitchen components are approved for outdoor usage — if anything is not, replace it right away or plan for it to have a shortened lifespan.

Levels of Cleanliness

Look, no one is judging you here, but your outdoor kitchen is a lot dirtier than your indoor one. It’s partially because your indoor kitchen is inside, protected from blowing pollen, dust and the various types of insects and animals that happen to run around at night in your backyard. But, there’s also the fact that you neglect to clean your grill as often as you should and you leave the grease catch full.

You can’t keep an outdoor kitchen squeaky clean, but you should always, always, always clean that grill from top to bottom. Not only does grease left in the catcher underneath attract mammals that you’d not normally invite into your kitchen, but the dirtier the grill is, the worse it will perform when it’s time to cook.

Counters and Floors

Inside kitchens are pretty easy to maintain. You clean the tile, vinyl or hardwoods with a regular household floor cleaner and wipe the counters with a wet sponge. No problem! Your outside kitchen, as you may have guessed, is a bit more complicated. So many outside kitchens use stone like granite for counters because of this material’s ability to withstand heat and, of course, because they look amazing next to the pool. The “floor” of that kitchen is often concrete or stone. Not exactly the kind of thing you just mop and go with.

First, make sure your granite counters are sealed every three to five years to protect them from the worst the sun can deal out. Next, make sure you always sweep your patio clear of grass clippings, blown dirt and other plant materials to prevent weeds from popping up where they can find footing. Lastly, make sure to power wash that patio at least once a year to remove stains, grease and mildew.

Winterizing

Obviously, your indoor kitchen should need little to no winterizing since it’s both serviced by a modern heating system and protected from the cold by at least one wall and the insulation therein. Even in a very old house, the most you might need to do is turn on heat tape that’s wrapped around plumbing to prevent frozen pipes. Your outdoor kitchen, though, will need a lot of care ahead of the cold.

Remember to disconnect all your appliances from their various services. Turn the gas off to the grill, empty and disconnect the fridge, drain and winterize the water lines running to the sink. Cover your patio furniture or bring it inside. Cover the grill and other appliances, too, if your outdoor kitchen lacks a permanent roof (a sail or solar cloth isn’t the same thing). If you’re lucky enough to live in a place that only freezes once in a while, you can wait to disconnect everything until just before the storm comes, provided you’re still using the kitchen regularly.

Having an Outdoor Kitchen is Amazing…

…until something breaks or is severely damaged because of a lack of maintenance, that is. Keeping these items in mind can help extend your period of trouble-free enjoyment, but even the best kitchen will need to have a thorough professional inspection every now and again to remain reliable.

When that time comes, just log into your HomeKeepr community. Plumbers, electricians, patio-builders and even pest control experts are at your fingertips, just waiting for a call from their HomeKeepr family. Your Realtor recommended them, so you know you can trust that they know their stuff.

Five Features of A Fantastic Flip

Now that you’ve bought a home of your own, you might be thinking that you’re kind of good at handywork and you want to give flipping a go. It’s certainly one way to make money in today’s somewhat volatile market, provided you know what to look for in an optimally flippable property. Of course, the house that flips best in downtown Newark probably won’t be the same one that flips amazingly in Dallas, but there are some general things you can look for in a fantastically flippable house.

Five Focal Features of a Flippable Find

Buying a flip should be a numbers game. You’re not buying your own place to make memories, you don’t have to live there, so the house that you have in mind for your first flip should be one that’s not needing too much repair work, but is seriously undervalued.

This happens frequently when an older person goes into a medical facility long-term or they pass away. It’s much more common for children that inherit a property to want to move it as quickly as they can, rather than fight over who gets to live in mom’s house. That’s why you’ll often see several promising properties in neighborhoods that are more than 30 years old — many of those owners bought when they were early to mid-career, all at the same time, and, well, time makes fools of us all.

Your ideal flip looks something like this:

It’s structurally sound. Unless you are absolutely stealing this property, there’s no substitution for structural soundness. You can’t flip a house that’s on a crumbling foundation. You can do a preliminary assessment yourself by carefully looking at the roofline. If it’s straight and sharp, the chances are good that the rest is, too, but don’t skip a professional structural inspection. If the roofline is wavy, the roof itself is cupped or it’s doing anything except being a good and proper roof, keep on looking.

The systems are solid. You can drop some serious money on updating or replacing electrical, HVAC, plumbing and roofing, so make sure that your flip has most of these in good, working order with long life expectancies. Your home inspector can give you an idea about how much time each should have remaining. Most flips can absorb one of these items, so don’t pass on a great deal just because it needs an electrical update — unless, of course, there are other big issues.

The house just doesn’t look like much. Even when the market is highly competitive, small changes can make all the difference. The plain little house tucked behind that bushy tree is not going to be on anybody’s short list, unless they’re looking to flip. Get a tree crew in there to groom or remove that monster, add some shutters in a contrasting color, dress up the landscaping with perennials and bam! Instant (almost) curb appeal.

There are a lot of memorable cosmetic items. If you look at a house and your brain keeps trying to sort out what it is that you’re seeing, you might be in a fantastically flippable property. Bright green carpet, fuschia backsplashes, mirrors on the bathroom walls? Nailed it! These are often the real gems, provided that the cosmetic stuff is what’s scaring buyers away. That cosmetic stuff is a serious turn-off for so many people who can’t see beyond the ugly to that potential house under the surface. Obviously, that homeowner cared about their place or they’d not have added so many personal touches, so chances are good that you’ll find most everything that costs a lot to be in good working order.

It’s a fine representative of the overall neighborhood. Ok, so the walnut paneling and the bright orange carpet have to go, but in terms of the architectural style, size, age and general upkeep, a good flip is the one that looks like it fits into the neighborhood. Not too big, not too small, not too weird. Especially not too weird.

Ready to Start Flipping Houses? You’re Gonna Need Some Pros…

Even the best flippers — especially the best flippers — have a team of experts at their disposal. Whether you’re acting as a general contractor or just directing the person who is, your main role is to pick out materials and coordinate the repairs to come. But don’t worry, you already have access to the best network of home pros in your area in your HomeKeepr community. Connect with the experts you need, any time, and make your first flip a total success.

Assumable Mortgages

It’s the little things that really matter sometimes. The cherry on top of a sundae, the light scent of gardenia on a warm spring breeze and a mortgage that’s assumable are each all about the details, and are sometimes overlooked by people who are in a hurry to get from Point A to Point B. But that assumable mortgage may make your home more competitive if you’re a seller or save you a bundle if you’re a buyer.

What is an Assumable Mortgage?

All mortgages are structured uniquely, such that the majority of any payment made before about halfway through the loan is interest (depending on your down payment and rate), so it would naturally follow that some people would want to shortcut this early period and get on to paying on the meat of the loan. The buyer would then take over the payments from the seller, without the loan changing terms at all. This is, in essence, how an assumable mortgage works. The buyer will also have to bring some amount of money to closing, either in the form of cash or a secondary mortgage loan, to compensate the seller for the remaining value not covered by the assumed loan.

Assumable mortgages can be of any variety, depending on the age of the loan, but the ones you’re most likely to see today are FHA, USDA or VA-type mortgages. To qualify, a buyer still has to meet all the same requirements that the seller had to meet in order to get their mortgage. This wasn’t always the case, but is today.

And although rates are still fairly low right now, in the 4.5 to 5 percent rage, over the next few years several rate increases are anticipated. That means that your mortgage terms themselves might be worth something when you go to sell your home. Provided your buyer can qualify for your loan and come up with the cash it takes to make the total meet your home’s value at the point of sale, you could find yourself with a more than full price offer, or even multiples, just by making it known that your loan is assumable and you’re ok with letting someone take advantage of this feature.

Why Would a Buyer Want an Assumption?

This is a bit of a trickier question, which will require a chart. Let’s say that your mortgage rate is 3 percent on a 30 year fixed note. You’ve had this loan for five years, but it’s time to move on to a bigger home, you had no idea you were going to have triplets when you chose this house! A buyer comes along when rates are at 4.75 percent and wants to assume your mortgage and pay you a total of $250,000 for your place. So far, so good.

This is what the picture looks like for the buyer:



Assuming the buyer’s first payment on the assumed note is number 61, they’ll immediately pay almost $500 of the principle down. If they had taken out their own note, totally ignoring the additional mortgage insurance and upfront mortgage insurance that an FHA would require, they’d only pay down about $400 at this same point (which is five years down the road, remember). They’d also pay almost $350 more in interest.

Keep in mind that the payment at 4.75 percent interest is also higher, but when the higher payment is paying less of the note off each month, there’s nothing about that that makes it a good financial move. If the buyer did manage to pay their note all the way off, they’ll find that they paid $68,552.79 more in interest alone by choosing to get a new loan.

Provided the additional funding required to secure this home wasn’t cost prohibitive, it just makes good sense for a buyer to want to assume a loan. Beyond the savings mapped out above, their closing fees will be considerably smaller, making the net gain even larger.

Of course, both buyer and seller should discuss this with your lender or financial planner to be sure that it’s the right decision for them and their financial pictures.

The Seller’s Side of the Assumption Equation

For a seller, the picture is a little different. Although it doesn’t cost you anything to start the assumption process, it can get ugly if a seller doesn’t know to protect themselves and a buyer ends up defaulting on their assumed loan. You must make certain that you’ve signed and received back a fully executed (all parties have signed it) copy of a release from liability form. Remember, the bank has to also agree to these terms.

Beyond that, it can be a good deal for you as the seller, too. You’ll get a big chunk of cash, you’ll be free of your mortgage so you can buy something a bit roomier or closer to work. Assumptions can be tricky to close, but the more that are closed in the coming years (and there are likely to be a few), the easier they’ll get because everyone will be on the same page.

Note: If you’re a veteran with a VA note that you’re trying to sell to a buyer who wants to assume, the mortgage will retain your entitlement. This is why it’s important to only sell with an assumption to another veteran. With another vet in the equation, the bank can exchange your entitlement for that of the new borrower, allowing you to buy again using a VA loan.

Assuming I Want to Assume, Who Do I Call?

If you’re interested in talking more about assumable loans, as a buyer or a seller, just log into your HomeKeepr community. The lenders and financial planners in our little family come highly recommended by your Realtor and they know their assumptions.