FHA Property Requirements for Appraisal

FHA PROPERTY REQUIREMENTS

FHA appraisals require repairs for conditions that rise above cosmetic defects, minor defects, or normal wear and tear.   Appraisers must report ALL deficiencies.  This information will assist your confidence that when a contract is accepted, property condition should not be a deal-breaker for you in terms of the appraisal.

What Does the Appraiser Look for?

So, what does the FHA appraiser look for during this process? The primary areas of inspection are the roof, the foundation, lot grade, ventilation, mechanical systems, heating, electricity, and crawl spaces (when present). Continue reading “FHA Property Requirements for Appraisal”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Do You Need to Buy and Sell Your Home at the Same Time – Don’t Stress.

 

buy sell home

Do you need to buy and sell your home at the same time? The process of buying your new home is way more complicated when you must sell your current home too. Many homeowners are either intimidated or confused about the process, but you can avoid some of the stress.

The ideal situation, of course, is to be able to purchase your new home first and then deal with selling down the line.  However, for most people, that is not realistic. Unless your current loan is paid off, you would be responsible for paying two mortgages.  In addition, outside of the financial burden, two mortgages are also likely to kick your debt to income ratio above acceptable levels for mortgage qualification.

Many buyers will need to buy and sell simultaneously.  This is doable with some advance planning.

Know the Market First

Before you start, make sure you have a solid understanding of both the local housing market where you live and where you are planning to buy.  Is the market weighted toward buyers or sellers? This will affect both the pricing strategy for selling your home and set expectations for buying in the new location. You’ll also want to have a market analysis or appraisal done for your current home so that you have an estimate of the market value and expected proceeds from the sale of your home.  You’ll want to be sure that the proceeds from the sale of your home can not only pay off your existing mortgage but leave enough for the funds needed for the down payment for your new home (if that’s needed).

Talk to a Lender

Mortgage guidelines have likely changed since you bought your current home.  Your credit score and income might be great but if you bought during the housing bubble, you’ll find the process and guidelines much tighter than before.  Income documentation, debt to income ratios, impact of student loans are all things that may have changed and may impact your loan qualification. The lender will also be able to let you know the loan amount that you qualify for.

Decide Whether You Will Buy or Sell First

Should you buy first, then sell – or vice versa? Both options have their pros and cons.  Selling first makes getting a mortgage easier, but it also means you may need to find a temporary place to live.  Buying first means moving will be easier but you’ll be carrying two mortgages. This may not be financially feasible and it may make it harder to you to qualify for a new loan. Whichever order you decide, figure out how you will handle any wrinkles that may arise.

Know Your Solutions

If you are selling first, you’ll need to plan for the storage of your stuff and find options for a short-term rental. One possible option to avoid two moves is the inclusion of a post-close possession clause in the contract.  With this option, you would make an agreement with the buyer of your home that allows you to stay in your home after closing.  You would pay rent to the buyer for the time needed for you to close on your new home. This option may be less likely to succeed in a buyer’s market where the greater supply of available homes gives buyers less incentive to make this compromise.

If you are buying first, you may be able to include a contingency in the purchase contract where there is an agreement that the purchase of your new home is contingent on the sale of your existing real estate. This is more acceptable to the seller if you already have an accepted contract on your current home.  The option may be a challenge in a seller’s market where the stricter supply of homes favor sellers and make them less likely to make the compromise. However, I’ve had success with this option even in a seller’s market. Everything depends upon supply in that immediate area and seller motivation.

Don’t Let Fear Push You into a Bad Decision

Some of the uncertainty in this process can be managed by planning carefully.

As stated above, know your market so you can price your home appropriately. This should reduce the time on market. An overpriced home will generally take longer to sell.

  1. Prepare your home before putting it on the market. This will increase its appeal to buyers and may also help in getting it sold at the asking price.
  2. Take the extra step of getting pre-approved for your home loan rather than just pre-qualified. This takes some of the uncertainty out when you purchase the new home.
  3. Plan upfront for the potential of things not going smoothly so that you won’t be forced into making a bad decision.  You may want to know your options for a short-term rental (or staying with family) in case you end up selling before taking possession of your new home.
  4. Finally, have more than one home in your basket of alternatives for purchase in case there is a problem with your first choice.

If you don’t plan, you may feel forced into accepting a lower bid on your current home or compromising on the things you want in your new home.

Selling and buying a house simultaneously can be stressful – but careful considering and planning can help mitigate the stress.

If you are considering a move in the Chicago area, please give me a call so we can discuss.

 

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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The Perils of Over Pricing Your Home

are you planning to sell

“I Don’t Want To Give My Home Away!”

In almost every conversation I have with potential sellers, the conversation begins with the line “I’m not going to give my home away!!”   Despite comparable sales that clearly show a lower market value, there is a reluctance to lowering the price.  However, you have to price your home to sell.

Market valuation is determined by what buyers are willing to pay.  The price that buyers are willing to pay is primarily based on the asking and sold prices of alternate choices.  If a buyer can buy a similar home in the same neighborhood for less, they will choose the alternative. Continue reading “The Perils of Over Pricing Your Home”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Are You Financially Prepared to Buy Your New Home?

are you financially prepared to buy

Are you financially prepared to buy your new home?  There is a lot of emphasis put on the credit score when discussing financing qualifications. However, this is not your only concern in being financially qualified to buy.

Down payment

Most loans will require a down payment (except for VA and USDA loans).  Know, however, that although VA loans don’t require a downpayment they have a funding fee.  You will want to compare the expected monthly payment of the VA loan to other mortgage options to see what works best for you.

FHA loans require a minimum 3.5% for down payment.  Conventional loans will require down payments ranging from as low as 3-5%.  Of course, a higher down payment will reduce the anount of your monthly mortgage payment.  Continue reading “Are You Financially Prepared to Buy Your New Home?”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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How to Avoid a Bidding War

home bidding war

How to Avoid a Bidding War

As a buyer in today’s market, you are likely to encounter at least one multiple offer situation when presenting your offers.  In many neighborhoods and community in the Chicago area, the supply of homes is tight in relation to the number of buyers.  Even in those communities where the supply of homes is less tight, you may run into multiple offers for homes that have been rehabbed or have unique features.  There is also the phenomenon where a home has been on the market for a while and then all of a sudden 2 or 3 people suddenly decide to buy at the same time. Continue reading “How to Avoid a Bidding War”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Are You Planning to Sell Your Home This Year?

 

are you planning to sell

 

Are you planning to sell your home this year?  Market conditions are great for sellers.  Chicago continues to experience a seller’s market.  A seller’s market indicates more buyers in relation to the supply of homes available.  The median sales price is higher and the days on market is lower.  Of course, market conditions vary for the different neighborhoods and suburbs in the Chicago area but overall it’s a great time to sell. Continue reading “Are You Planning to Sell Your Home This Year?”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Tax Advice for Chicago Homeowners 2018

 

2018 is well underway and tax season is here! Tax deductions are definitely one of the benefits of homeownership that you don’t want to miss.

If you have any questions on what items are deductible regarding your real estate transaction, my best advice is to consult your tax advisor or accountant. However, the most common deductions for homeowners are as follows: Continue reading “Tax Advice for Chicago Homeowners 2018”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Are You Planning to Buy in Spring 2018?

 

planning to buy

Are you planning to buy in spring 2018?  There are some steps you can take  now to be ready to buy in the spring.

Speak to A Mortgage Lender

Speak to a mortgage lender now to see if there are any issues with your credit, debt levels or income. A good loan officer will outline any “tweaks” needed and give you a loan amount you should qualify for if everything is in order.  Continue reading “Are You Planning to Buy in Spring 2018?”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Is Your Landlord in Foreclosure?

foreclosure trends

Is your landlord in foreclosure? Tenants are often taken completely unaware that the home they are living in is in foreclosure.  One would hope that a landlord with an imminent foreclosure sales date would give notice to their tenants but ….

Foreclosure Process in Illinois

Each state has its own specific laws regarding foreclosure. Some require judicial process and some don’t. Illinois is a judicial foreclosure state meaning that the lender must file suit against the borrower in order to foreclose on the home.  A mortgage borrower is considered in default once he misses at least three payments.  At this point, the lender will initiate foreclosing proceedings Continue reading “Is Your Landlord in Foreclosure?”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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Easy Home Improvements That Add Value and Appeal

inexpensive home upgrades

Many sellers don’t have the funds or inclination to do major renovations when selling their home.  However, there are  easy improvements that add value and appeal.  These improvements are fairly inexpensive but still make a difference in terms of market value and buyer appeal.

Repairs may only cost you hundreds of dollars to fix but not done cost thousands in terms of an offered price.  Simple improvements can move your home from “needs work” to “move-in” ready.  Again, these improvements may cost you hundreds (especially if you do the work yourself) but give you thousands more in terms of an offer price.  It can also mean that your home moves off the market quicker. Continue reading “Easy Home Improvements That Add Value and Appeal”

Millie C Lumpkin
Realtor
Stages Real Estate
Phone: (312) 217-5644
Email:     millie.lumpkin@gmail.com
Website: ChicagoSouthHomes.com
Blog:       ChicagoSouthRealEstateBlog.com

 

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