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If you are thinking of buying a bank owned or foreclosed property. You may want to follow this checklist during the walkthrough of the house.

1. Close all the doors to see if the doorframes are square. Most of the time the doors will remain square, but frames will not.
2. Check the windows to see if they are original windows or replacement.
3. If there is a basement, check to see if there is a water line on the basement walls – this could indicate if the basement has been flooded.
4. Look in the toilet tank, this could show if there is rust in the water, there may also be a smell of sulfur thus indicating sulfur water.
5. Check the electrical panel – electrical panels with breakers are better than electrical panels with fuses.
6. Check the water supply lines, many houses have had the copper waterlines removed. Also some houses have had copper wire pulled out of the walls.
7. Assume the water heater, furnace, water softener, garbage disposal, garage door opener do not work. Once the electric is turned on and they work, that would be great, but don’t depend on them working.
8. Do not assume the drains work in the house, many different items have been found in clogged drains.
9. Look for water stains on the walls and ceiling. This could mean the roof leaks or an upstairs bathroom leaks.
10. If there is evidence of animals living in the house they will need to be moved out before you move in.
11. Check the date when the house was winterized. If it was winterized after the weather turned cold there may be some busted water lines.

These are a few items to look for when checking out a bank owned property or foreclosed property.

Hint:Always dress warm, empty houses are very cold. Take a flashlight, many do not have lights. And some empty houses are not safe, do not go alone.

Let’s try to clear up some misconceptions about real estate agents in Ohio

1. If I am interested in seeing a property, I must contact the agent listed on the sign out in front of the property.

Actually – Real estate agents can represent you in most any real estate transaction in the state of Ohio.

2. If I have my own agent I will need to pay more commission.

Actually – The seller pays the commission, buyer does not pay commission.

3. Why do I need an agent in a deal where I am the buyer?

The listing agent or selling agent is representing the seller’s best interest. He will market the property for them.

4. A real estate agent cannot be involved in a “for sale by owner” (FSBO) transaction.

Actually – The real estate agent can help a buyer involved in a FSBO. This can be important because real estate agents are involved in many real estate transactions and know what needs to be done for the transaction to go smoothly. The seller must agree to pay the commission to the buyer agent before the transaction starts.

If you are planning on selling or buying property, it is important to establish a relationship with an agent you feel comfortable with and can trust. Your agent will be glad to work with you and answer your questions.

For Sale by Owner

So you think you want to sell your home and you want to make the most money from the sale. Your first thought is I can sell this house without a real estate agent. What does a real estate agent do that I can’t do? They just stick a sign in the yard and show the house right?

Before you go to the store to buy a sign here are some items to consider.

1. Per an article that appeared in the NAR (National Association of Realtors) website in 2006 of all the homes sold only 12% were for sale by owners. The seller knew the buyer in 5% of their sales and transactions and where the seller did not know the buyer, it was 7%.
2. In another article that appeared in the Massachusetts Real Estate News titled “Why Most Real Estate For Sale By Owners (FSBO) Fail” it stated that 80% of all “for sale by owner” end up listing with a realtor.
3. The NAR (National Association of Realtors) reports that in 2006 the average sold by a real estate professional sold for 32% higher than a for sale by owner. The average price for an agent-assisted transaction was $247,000 while a “for sale by owner” average price was $187,000.
4. The price must be set to the current market trends. If set too high, it will scare buyers away and if the price is set to low, you will not receive the true value of the house.
5. Can you or your spouse take the criticism of potential buyers? Many buyers comment on color of the walls or carpet and while these comments may be understandable, they can still hurt the one that chose the colors.
6. Real estate agents look at many different houses. They see trends in the decor of houses. The agents can pass this information on to the sellers to make possible changes that may help their house sell.
7. Do you have time to show your house? Some buyers can only look at houses during certain times of the day. A seller could miss a sale because they cannot show the house at the buyers requested time.
8. Quickly think to yourself of people that you know who are looking for a house. Selling houses is about contact and networking. Most real estate agents compile lists of individuals looking for a house or property and the type they are looking for and call them when a property appears on the market that they might want. This is another aspect of real estate “for sale by owners” do not do.
9. Showing a house can have scaring moments. Many real estate agents can tell of uncomfortable moments when they felt it was not safe for them because of persons they were showing a house. Someone showing their own home may be putting himself or herself in an unsafe position.

While this may not be an overwhelming argument to persuade someone not to try to sell their own home, they should see that it is not as easy as putting a sign in the yard.

For all the homebuyers sitting on the fence. Asking should I buy now or wait until later? Shown below is a study concerning interest rates from a local banking institution in west central Ohio.

Date 15 year 30 year

11-15-10 3.5% 4.25%

11-17-10 3.625% 4.375%

12-2-10 3.875% 4.625%

12-3-10 3.75% 4.5%

12-8-10 3.875% 4.625%

12-14-10 4.0% 4.750%

12-21-10 4.0% 4.875%

chart int

The monthly payment for 15 year $100,000 loan with an interest increase from 3% to 4% will increase $49.11 per month. This will amount to $8839.80 for the entire life of the loan.

The monthly payment for 15 year $100,000 loan with an interest increase from 4% to 5% will increase $51.10 per month. This will amount to $9198.00 for the entire life of the loan.

The monthly payment for 30 year $100,000 loan with an interest increase from 3% to 4% will increase $55.82 per month. This will amount to $20,095.20 for the entire life of the loan.

The monthly payment for 30 year $100,000 loan with an interest increase from 4% to 5% will increase $59.40 per month. This will amount to $21,384.00 for the entire life of the loan.

The conversation between renting a house and owning is an on-going discussion. While there are some that believe renting is the best for them, others believe that owning a home is the only way.

Let’s look at the numbers with owning a home.

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  • The average 3 bedroom home sold in the past year in west central Ohio was priced at $82,517.00 per the West Central Association of Realtors. With 10% down the loan amount would be $74,265.
  • The mortgage rate for a 15 year and 30 year loan are around 3.64% and 4.26% respectfully.
  • The mortgage payment for the 15 year loan would be $536.03. The loan payment for a 30 year loan would be $365.77. These loan payments do not include taxes, insurance, or PMI.
  • 3 bedroom rental homes in the west central Ohio area rent for between $300 to $1200 per month depending on the area and condition of the home.
  • The utilities may be the same on renting a house and buying a house depending on number of factors.

Lets look at the numbers with renting a home.

As one can see buying a house at the current interest rates can be cheaper than renting and buying a house can give equity in the house. This equity will be nice when you are looking to buy your next house (it could provide the down payment).

During this time when many people have seen the need to sell their home, as a real estate agent I get asked many questions on how a house should be prepared to sell. While I cannot guarantee a sale, I can tell you what can be done to sell a house quicker.

The first item that may need addressed is the outside appearance of the house. The seller should understand that as a potential buyer drives up to a house the first impression is important. The buyers look at the house like a first date. Would you go out on a date with someone that needs a haircut or sloppy or messy in their attire. The buyers look at the house and want to see good curb appeal. This does not mean the homeowner needs the yard landscaped. It may mean the homeowner needs to cut the grass and trim the bushes. Pick up the branches in the yard and sweep the driveway and sidewalks. Make the yard look neat and tidy. This can improve the curb appeal and not cost the homeowner a lot of money.

Wash your house and paint the window trim. The best method is to power wash the house with a soap designed for the house. If you don’t have a power washer use a sponge, soap and a hose. The outside of your house gets as dirty as your car and you wash your car.

After the outside of the house is clean paint the window trim. New paint on the window trim makes the house looks complete and sharp.

The inside of the house also can be improved upon with little or no cost to the homeowner. A common problem in many houses is that there is too much clutter in the house. There are many great looking houses on the market, but they cannot be seen because they are full of clutter. Do not be afraid to move furniture to the garage or a storage locker. Buyers expect to see messy garages when people are in the moving process.

The next item that helps sell houses is the house needs to be clean. Potential homeowners don’t want to look at dirty kitchens and bathrooms. Don’t be afraid to scrub and use cleaners. Many potential buyers will comment that a house smells clean.

They also don’t want to smell your pets. Ask someone that can be honest with you and tell them to describe what they smell when they enter your home. Homeowners cannot smell the odors in their own home.

While these items will not guarantee your house will sell, it will make the house show better and give the potential buyer the impression you take pride in your home and the best about these suggestions is they are cheap or free to do.

One question I continually ask myself is why are there so few homes being sold? As a real estate agent I study the housing market and mortgage rates regularly and this same question keeps coming up as to why the housing market is slow? There are a few points to ponder with this thought process

• The mortgage interest rates are the cheapest they have been in 40 years. Currently the 15-year rate is less than 3.5% and the 30-year rate is less than 4.25%. The mortgage interest rates on a 5/1-year ARM is less than 3.3%. The rates are different depending on different banks, but still remain very low.
• The fair market price of a home in West central Ohio is very low. Many of the home prices have dropped to a 4-year low. There are many homeowners accepting any respectable offer.
• The selling price of REO homes are crazy low with some offers being accepted at $.50 on the dollar of the asking price.
• The selection of homes on the market is unbelievable. In some cases a buyer can sit down with a real estate agent and create a wish list for their dream home and find the home in a very short amount of time.
• The monthly payments on a home mortgage in some cases are less than the monthly rent payments on the same type of home.

The latest forecast for the mortgage interest rate are projected to increase and while the house prices are projected to bottom out within the next year one needs to consider that the moment to buy a house is now.

     While doing research an interesting report came up from the NAR (National Association of Realtors).  It did not say who wrote the report or where it might appear, but the report is titled “U.S Economic Outlook : October 2010″.   The report covers many different subjects ranging from the U.S. Economy as a whole to Unemployment, Interest Rates, Mortgage Rates, Housing Indicators, and Median Home Prices.  As with many reports of this type, they look at the country as a whole so you must consider this in reading the report. 

     The interesting points in the report indicate that the mortgage rates will start to climb and during the second quarter of 2012 the rates should be about 5.8%.  Another item in the report shows that existing home prices will bottom out in the first quarter of 2011 while the new home prices will bottom out the third quarter of 2010.  The prices for these homes will fluctuate, but the 2 year trend will remain upward with the existing home median price at $180,100 and new home price will be $234,000 in the second quarter of 2012. 

     This report shows that the mortgage rates are going up  and home prices going up, the serious home buyer should be considering that  purchase in the near future.

As of Oct. 13, 2010 there are over 1200 listings in the Limaland area.  With so many listings, what area the buyers looking for.  Is it location first or price of the property.  Are the foreclosures the hot item or the fair market home the first option.