Muhammad Ali’s Former New Jersey Home Offered at $750,000

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Michael Wohlfarth of Sky is the Limit Photography via ZillowThe 6,688-square-foot home has five bedrooms and sits on 1.5 acres, but it was built in 1965 and is in need of updates.

By Melissa Allison

The home Muhammad Ali owned during some of the most dramatic years of his boxing career — including the era when he lost and regained the World Heavyweight Championship — is on the market outside Philadelphia for $750,000.

The place needs more than a little TLC before it wins any prizes.

“The home needs some work, we are told by buyers. However, you’re not just buying any old home here. It’s legendary!” says listing agent Cheryl Dare of Keller Williams.

“We need the unique buyer that appreciates architecture and values the story that comes with it. You’re buying part of history. It’s hard to put a value on that,” she said.

AP Was There Ali Liston Rematch
ASSOCIATED PRESSAli stands over Sonny Liston during their 1965 bout.

A glass chandelier in the dining room remains from the time Ali and his family lived in this 6,688-square-foot home. It was built in 1965 on a 1.5-acre wooded lot and has five bedrooms, five baths, heated marble floors, a pool and tennis court.

The home boasts a large glass atrium, a center courtyard and a kitchen with a Sub-Zero refrigerator, double ovens and a counter that never seems to end. The master suite features a walk-in closet and a bathroom with a sunken Jacuzzi tub, plus a shower, bidet and double sinks.

The lower level includes a 45-foot-long bar, a catering kitchen and a walk-out to the yard.

Hat tip to Curbed Philly for finding the listing.

 

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Too Much Debt? This Loophole Could Help You Buy a Home

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By Scott Sheldon

It’s not impossible to buy a home when you have existing debts. Homebuyers do it every day, in fact. But you have to know how your existing debts are affecting your standing with the lender and the ways you may be able to exclude some debts from your loan approval process.

When you apply for a mortgage, the lender takes into consideration your credit score, the cash you plan to use on a home, your ability to pay back the loan, and the amount of expenses you have (including a proposed mortgage payment) against your monthly income. They’re the four Cs of lending: credit, collateral, capital and capacity. Each plays a key role in your ability to obtain a mortgage.

Liabilities, such as monthly payments on other loans, take away from your capacity to handle a mortgage payment. If all of your income is going toward debts (with or without a mortgage payment included), loan qualifying can quickly become very problematic. Installment loans typically carry the largest monthly payments and hurt your chances of qualifying the most.

Installment loans have a set payment schedule with the loan amount being repaid over time. The most common forms of installment loans include car loans, personal loans and mortgages.

Picture this scenario: You have a car loan with a monthly payment of $400 per month and there are just 12 months left on the loan. This will hurt your debt-to-income ratio when trying to qualify for a mortgage. This obligation will count against you in determining how much house you can buy or how much mortgage you can handle. The payment associated with this installment loan obligation is what the lender uses to determine how much or how little the liability affects your borrowing power. That $400 per month may seem small to you, but it can sway purchasing power by as much as $40,000 depending on the terms of the mortgage, so it does matter. If you have just nine months left on the obligation, this is where the wheels begin to turn and more leniencies may be granted with conventional financing, however.

How to Get a Loan Excluded From Your Debt-to-Income Ratio

An installment loan with less than 10 months of payments due may be omitted from the debt-to-income ratio on a case-by-case basis. Your overall financial strength determines whether your lender will exclude the loan. Case in point, if a borrower had an installment loan payment as high as 25% of their income, before the housing payment is calculated, that would almost certainly cause the lender to take a more conservative approach and include the liability in the debt-to-income ratio even if there are less than 10 months of payments left on the loan.

An additional factor the lender would look at would be the amount of reserves the borrower has after the fact. If, for example, this borrower had an entire year of income in savings, that’s called a compensating factor. That factor may potentially allow a loan approval with an installment loan of less than 10 months, even if the payment is relatively high compared to the mortgage payment.

Does This Loophole Work for FHA Loans?

Conventional loans are different beasts than Federal Housing Administration (FHA) loans. For an FHA loan, all liabilities must be included in the borrower’s debt-to-income ratio with one exception. Installment loans can be omitted from the debt-to-income ratio if the obligations will be paid off within 10 months, and the cumulative payments of all such debts are less than or equal to 5% of the borrowers gross monthly income. So, for example, if you took out a personal loan a while back to consolidate some credit card debt, and your monthly payment on that loan is $100 and will be fully paid off in nine months, you would need to make at least $2,000 a month in gross income in order to be able to have this liability excluded from the debt-to-income calculation.

Before You Apply

How do you decide which mortgage loan program makes the most sense if you’re trying to qualify for the maximum amount of affordable house? A mortgage professional should be able to guide you through conventional, FHA and any other loan programs you may qualify for and help pick the right one for your situation.

But before you apply for a loan, be sure to look over those four Cs of lending: credit, collateral, capital and capacity. Review your free annual credit reports at AnnualCreditReport.com to spot any errors that may be bringing down your credit scores. (You can also check your credit scores for free on Credit.com every 30 days to see where you stand.) And start thinking about your down payment, debts and income to determine how much house you can afford.

 

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Preapproved for a Loan? Don’t Blow It With Holiday Shopping

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By Kayla Albert

After receiving the preapproval on your home loan — the anxiously awaited first big step toward homeownership — you likely breathed a sigh of relief that the official “proving yourself” part of the process was over.

Not so fast, if you’re searching for a home during the holidays.

Before you get swept up in the tide of frantic holiday shopping, it’s important to know that going overboard on gifts for friends and family can impact the total loan amount you’re ultimately approved for, and it could even kill the approval entirely.

Here are a few ways you can ensure you make it all the way from preapproval to purchase with no hiccups en route.

1. Don’t apply for new credit or rack up new debt.

When you reach the cash register with your arms full of holiday gifts, it’s easy to entertain the idea of opening a store credit card. Just fill out the application, add your John Hancock, and you could be walking away with a significant amount off your total purchase.

However, opening this line of credit requires a hard credit inquiry — one that could ding your credit in the process. In addition, you could impact your debt-to-income ratio or signal to the lender that you are a greater risk than they previously thought.

Tammi Robson, a mortgage broker at Metro Lenders in Denver, tells her clients about the importance of being debt-free or keeping debt levels stable during the home-buying process. This means avoiding major purchases such as a car or that new dining-room set until the entire home-buying process is complete.

“Most lenders do ‘debt monitoring’ during the loan process, meaning they pull internal credit reports,” Robson says. “If new debt shows up or credit scores go down, it will affect loan qualification.”

2. Don’t move around large amounts of money.

While constantly shuttling funds back and forth might be how you manage your money, it can create a huge headache for lenders, who must be able to track the movement of funds from account to account. If they cannot track the funds, the money movement could appear suspicious — a red flag signaling undocumented funds or money troubles they hadn’t seen before.

In addition, if your family is all about doling out the cash for the holidays, you could be putting yourself in a precarious position. Lenders will also be scouring your accounts for any unusual deposits — those that are 50 percent or more of your monthly income — or any unusual cash withdrawals. These will need to be thoroughly explained to maintain your approved status.

It’s all about keeping the status quo between preapproval and closing — something that can be more challenging during the holiday season.

3. Don’t ignore your bills.

A recent study by Neighborworks determined that one in three American adults has no savings on hand. Pair this with an expected holiday spending rate of $805 per person, and it’s no wonder bills become a heavy burden to bear come January.

Unfortunately, even if your holiday spending gets out of hand, loan preapproval isn’t a pass to be less diligent about maintaining a spot-free bill payment history. In fact, it’s more important than ever to make sure all bills are paid on time and in full.

Payment history makes up 30 percent of your credit score, and even one late payment can have devastating effects. How much exactly? According to Credit.com, if your payment is over 30 days late (the typical grace period given by lenders), it could lower your score anywhere from 60 to 110 points — a substantial amount even if you’re starting with a high score.

If that late payment is on an existing mortgage, a lender could opt to deny your loan altogether. Even if it’s not a complete denial, you’ll need to explain in writing why the late payment occurred.

Here’s the bottom line.

If you’ve been preapproved for a mortgage, you’ve successfully cleared one substantial hurdle — a bank or lender has looked at your overall financial health and stamped you as a qualified candidate.

But preapproval is not the same as approval, and now, as holiday sales are calling, it’s important to keep the finish line in sight. After all, you wouldn’t want a few financial missteps to make your dream of homeownership come to a crashing halt.

 

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What You’re Doing That Annoys Your Real Estate Agent

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By Devon Thorsby

Real estate agents see and hear a lot, and while shockingly few things surprise them, there’s a fine line between need-to-know and TMI. But the more transparent a client is during the buying or selling process, the better the broker can meet his or her needs.

Luis D. Ortiz, associate broker at Douglas Elliman Real Estate and star of Bravo’s “Million Dollar Listing New York,” equates the nitty-gritty details of a seller’s personal life to a doctor visit. When the doctor asks how often you drink, “everybody says ‘socially’ when really they drink every night,” Ortiz says. “The more transparent you are of a person, the more they can get to the core of the problem.”

To get the most out of your relationship with your real estate agent, avoid these red flags that can end up landing you with the wrong agent or the right one running for the hills.

Telling an Agent You’re Not Sure About Selling

Agents typically don’t collect a fee until their client either sells his or her current home or purchases a new one. Any time and money spent before then on marketing and other services is out of the agent’s pocket. Simply dipping your toes in the water to see if your house generates interest — and then pulling back — isn’t going to be very enticing for a broker.

“I’m not sure I’m going to take that seller on as a client,” says Greg Cooper, manager and broker at Berkshire Hathaway Home Services in Indianapolis. “The process costs everybody time and money, so why waste it unnecessarily?”

And as Ortiz points out, putting your house on the market experimentally can have adverse effects on other homes that are actually for sale. “It gives the buyers [a] perception that the apartment is not sellable [or] that the market may be turning into a buyer’s market,” Ortiz says.

Saying You Don’t Have a Time Frame

Not having a deadline can leave brokers unsure of your commitment. Agents understand when their clients have a strict time frame, and can appreciate a few extra days or weeks to close a deal on the right home. But being told they have no target date to sell or purchase a home will leave them wondering if they’re wasting their efforts.

Cooper says serious homebuyers will typically have a reason, such as a growing family or moving for a job, that brings about the change in living situation. A lack of deadline puts up a flag that you may also lack commitment to carrying out a deal. “My question for them would be, ‘Why do you have all the time in the world? What are you trying to accomplish?’ That goes back to, ‘We’re not really sure what we want to do,’ and that’s just not a situation, in all candor, that’s beneficial 98 percent of the time to the client and the broker,” Cooper says.

One of the first questions Ortiz asks on any listing appointment is why the homeowners is selling. “You have to know if this person is real or not,” Ortiz says. “I want to know because that sets the conversation and what my expectations should be.”

Lying About Your Motivation

Your real estate agent will have to know a lot about you — your financial health, your needs and wants in a living space and any life-changing events that could cause you to buy or sell at a specific time — to do his or her job properly. In order to work successfully with your agent, honesty is the best policy.

Cooper says one of the first questions he asks potential clients is why they are looking to sell, primarily to get a full understanding of the clients’ needs and how he can best fill them. “If I’ve got a seller who is changing jobs or who is going through a divorce, those things clearly affect the motivation level they have to sell the home,” he says.

An agent you’ve carefully selected and can trust will keep your personal life private. And by knowing your reason for moving, he or she can better meet your needs. Joe Manausa of Joe Manausa Real Estate in Tallahassee, Florida, says full disclosure can also help prepare agents for what they may face down the line. He gives the example of spouses left in the dark: “There are times we’ve been hired to sell a home, and after they sign the documents I get a call from one of them saying, ‘Hey, he doesn’t know it, but we’re getting divorced, and that’s why we’re selling.”

Overpricing Your Home

You’ve hired a professional to help you throughout the process, and it’s important to give the agent enough breathing room to be the pro, particularly when it comes to pricing. Starting the process with nonnegotiable expectations is a good way to get off on the wrong foot.

Manausa explains that overpricing your home will often leave it on the market longer because the right buyers won’t see it. “People go online and the first thing they do is they shop by price range. If you’re overpriced, the people that do see your house [are] comparing it to nicer houses — they don’t want to see yours,” Manausa says.

Asking Your Friends What They Think Your Home is Worth

The only thing worse than coming up with your own unrealistic number could be having friends come up with the number, especially when they’re not in the real estate business.

Ortiz says a friend’s pricing recommendation often show how kind the friend is but has nothing to do with the actual value of the home. “They’re all your friends and they’ll tell you for the sake of telling you your house is worth $20 million [when] it’s only worth five dollars,” Ortiz says.

Rather than have the agent compete with other opinions, keep your friends’ kind valuations of your home to yourself.

 

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Love it or Hate it: What to Do After Every Open House

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By Paula Pant

Even if you didn’t fall in love, every open house is an opportunity to learn still more about what you’re really looking for in a home.

You can learn a lot from a visit to an open house, from whether a home is really as amazing as it looks in photos to whether the street noise is tolerable. But one thing that isn’t always so clear after visiting an open house is what to do next.

Whether you’ve fallen in love or never want to set foot in a certain neighborhood again, how do you best put that information to use? Here are the key steps buyers should take after an open house.

You’ve Fallen in Love? Do This

You’ve fallen in love with that Florida home for sale in Boca Raton, and you’re ready to make an offer: Huzzah! Here are your immediate next steps.

1. Determine your best offer. Talk with your real estate agent to figure out your initial bid. Kimberly Ehardt, a Texas real estate agent, says your agent can help you find comparable home sales in the area, look up facts such as how long the property has been on the market, and help you factor in any repairs the property may need. “Don’t make a move without an agent,” she says.

2. Be prepared to hurry up and wait. Accepting an offer is a big decision for the seller too, and as soon as your agent hears something, you’ll be the first to know. The waiting is the hardest part, so try to find ways to distract yourself.

3. Don’t jump the gun. When in doubt, listen to your gut. If you’re worried you may be offering more than you’ll be comfortable with, scale down. It’s better to lose the property and find another that fits your budget than to win the bidding war and be house-poor.

4. Don’t forget the inspection. Getting your bid accepted is only the first step. If the home inspection reveals any major problems the sellers aren’t willing to address, you could still find yourself needing to walk away.

If You’re on the Fence

When you’re feeling lukewarm about a home, sometimes a little thoughtfulness can help sway you in one direction. Here are some tips to help you determine whether a home is right for you.

5. Sleep on it. Don’t let a false sense of urgency push you into making a decision you’re not 100 percent sure about. If the thought of sleeping on it and potentially losing the home to a more aggressive buyer leaves you brokenhearted, that could be your answer right there. If not, give it a good night’s rest and see how you feel in the morning.

6. Know your must-haves. Writing out a list of qualities you consider non-negotiable and deal breakers should definitely be on your home-buying checklist. Compare this property with this list. What matches up? What doesn’t?

7. Schedule a personal tour. Open houses can be misleading. The sellers’ agent (or the seller himself) is extolling the home’s best features, there’s mood lighting and fresh-baked cookies, and you hear other buyers ooh and ah. If you’re really not sure about a house, make an appointment with your agent to take a second look. “Bring a friend or family member who can offer a fresh perspective,” Ehardt says.

8. Consider your lifestyle. If you’re a light sleeper and the home is on a busy, noisy street, it probably won’t work for you in the long term. If you have a big, active family and there’s a tiny backyard, no amount of great rooms inside will keep everyone happy. Imagine yourself living in the home and ask yourself if the fit is right.

9. Consider the add-ons. The cost of a home is often more than just the final closing price — you’ll also want to tally any additional costs you’ll incur, such as fixtures and appliances you want to upgrade, items that need repair, and your maintenance costs. (Read: That vaulted ceiling in the main living area can drive up your energy bills.) After considering all these extras, does buying the home still feel like a good deal?

10. Come back at different times of day. That quiet neighborhood you loved on a Sunday afternoon could become mayhem during rush hour or on a Friday night. Make sure you like the property at all times of day.

11. Trust your instincts. Indecision is rarely a 50/50 split. There’s often a gut reaction or a little voice in the back of your head pulling you in one direction or the other. Listen to these instincts for a clue into what you’re really thinking.

When You Hate the Open House, Learn From It

If you absolutely could not wait to get out of that open house, don’t give up just yet. It’s OK. There are lots of things you can apply to your house hunt even if you feel as if every house you’ve seen so far isn’t even in the ballpark. Here’s the key to following up after an open house you didn’t love.

12. Identify the issues. Knowing what you didn’t like about a property, and why, can help you hone your search so you have success in the future. Whatever your turnoffs with this home — location, layout, style — remember these qualities as you consider visiting new listings.

13. Expand your horizons. Maybe you thought you wanted a ranch-style home, but you’re beginning to realize a Tudor or split-level might be a better fit for you. Maybe you’re running out of solid options in your target neighborhood, so it’s time to broaden your search into similar areas you hadn’t yet considered.

14. Don’t settle. It can be frustrating to visit home after home that just isn’t doing it for you. But don’t let frustration tempt you to settle for something that isn’t right for you. While no home will be “perfect,” there’s a difference between making a few small compromises and making a big mistake you’ll have to live with for many years to come.

 

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How to Help Your Adult Kids Buy Their First Home

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By Susan Johnston Taylor

As families gather for the holidays, some adult children or their parents will broach the topic of real estate and how to make that first home purchase.

For parents who have the funds and desire to help adult children buy a home, gifting a down payment is one of the most common ways to help. But it’s not the only option.

Here’s a look at several ways parents can assist their children in becoming homeowners.

Gifting a Down Payment

For an owner-occupied property (not an investment property), mortgage lenders typically allow borrowers to use money gifted from a family member as a portion of the down payment. However, if it’s a recent gift, the borrowers must be able to prove the origin of those funds and provide a letter affirming that the money is a gift and does not need to be repaid.

Bob Collins, a mortgage broker with Signal Hill Mortgage in California, says parents gifting a down payment often treat it as “here’s your inheritance in advance,” so they can see the benefit of that money during their lifetime.

This approach puts the gift-giver under some scrutiny with the lender, but not nearly as much as other options. “All we have to do is verify that they have the funds to give, and we get a gift letter,” says Greg Cook, a mortgage consultant in Southern California. “Then they send the money to the settlement agent, and as long as it matches up with the gift letter, we’re good to go.”

If the gift exceeds the Internal Revenue Service’s annual gift tax exclusion of $14,000 per recipient per year, then it may require extra tax paperwork. However, a married couple could each give $14,000 to a child and a child’s spouse, for a maximum of $56,000 in four separate gift checks.

Offering a Family Loan

Given the current low interest rates on savings vehicles such as certificates of deposit, or CDs, relatives with cash to spare might choose to loan money to a family member to buy a home in lieu of the buyer getting a traditional mortgage. “It’s a win on both sides,” says Dan Yu, managing principal of EisnerAmper Wealth Advisors in New York. “If Mom and Dad went to the bank and said, ‘What will you pay me for a five-year CD?’ If the son or daughter went to the bank to try to borrow on a 30-year mortgage, they might have to pay 4 percent. Both sides of the family win, and mom and dad are earning a higher interest rate [than they’d get from a CD].”

However, as Yu points out, “it’s not just Mom and Dad, but rich aunts and uncles do this as well.” Assuming the lending relative has the liquidity to make the loan and is prepared to do so, the homebuyer would be able to make an offer not contingent on financing and potentially offer the seller a quicker closing, which could be an asset in competitive markets where all-cash offers are the norm.

One thing to remember with family loans is that it still needs to be at arm’s length, meaning it follows the IRS’s proscribed interest rates based on the term of the loan.

If earning interest isn’t the goal, the relative giving the loan could choose to forgive up to $14,000 in interest per year under gift tax exclusions ($28,000 if they’re lending to a couple). Otherwise, lenders have to report interest payments as taxable income, just as they’d report interest from CDs or money market accounts. Borrowers can deduct mortgage interest (assuming they itemize their tax deductions) just as they would with a traditional mortgage.

Co-signing the Mortgage

In cases where an adult child’s income is too low to qualify for a mortgage on the home they want, having a parent co-sign the mortgage might help. If they can afford to take on the obligation, some parents may prefer this option if the alternative is their child buying in an area they consider unsafe or undesirable.

However, co-signing is a bit of misnomer in this case. “They’re really a co-borrower, and they’re in the deal as much as the kids are,” Cook says. “They’re under the lender’s microscope to the same extent: income, credit, current debt load, all the things that we look at for the kids.” If the child’s income is sufficient to qualify for the remaining balance on their own in the future, the loan might be refinanced in just his or her name to relieve the parents of liability.

One potential downside for parents is that the mortgage will show up on their credit as an outstanding loan obligation, which could complicate refinancing or buying another home in the future. “They’ve created an obligation for themselves that could limit anything they might want to do moving forward,” Collins says. Also, if the child misses mortgage payments, that will also impact the parents’ credit.

With all these options, you should consult a financial advisor first to make sure you can comfortably afford to help without jeopardizing your financial security. You may also want to consult your tax preparer about potential tax implications, and, depending on the circumstances, ask a lawyer how to structure the legal paperwork in case your child divorces or defaults on the loan. Nobody plans on things going awry with real estate transactions, but it can happen, so it’s best to be prepared.

 

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True Horror: How Much Would ‘The Exorcist’ House Be Worth?

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Ever wonder how much the home from “Poltergeist” or “The Amityville Horror” would set you back? We did the research to find out what these classic horror homes are worth.

Love ’em or loathe ’em, horror movies take center stage leading up to Halloween. But how much attention have you really paid to the horror movie homes behind the on-screen supernatural events?

In honor of the scariest season of the year, Trulia dug up the locations where some classic horror movies were filmed or where the events that inspired the scary scripts took place. Then we looked at home prices (including lots of Los Angeles real estate) for similarly sized homes in the same city, neighborhood, or ZIP code. From the instantly recognizable house in “Insidious” to the unassuming suburban home from “Poltergeist,” each of these horror movie homes has a (terrifying) story to tell — and a corresponding real estate value.

Are the prices as shocking as the horror movies themselves? You be the judge.

Trulia

 

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Floods, Crimes and Disasters: Is Your Home in a Danger Zone?

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AFP/Getty ImagesA local resident in Charleston, S.C., surveys the water surrounding a home during the October floods.

By Blake Miller

With the recent news of catastrophic flooding in South Carolina to other stories of homes blowing up because of broken gas lines or vanishing into a massive sinkhole, you might be ready to Google your address to find out if your little abode is all that safe where it is.

“A lot of property owners wait until it’s too late [to figure out if their home is in a safe location],” says Peter Di Natale, president of Peter Di Natale & Associates Inc., a general contracting and construction management firm in Cold Spring, N.Y. “You have to think top to bottom, from the roof to the basement.” (And don’t overlook these neighborhood details, either.)

Here are the top ways to ensure your new home is out of the danger zone.

Check the Flood Map

In addition to the all-important flood zone map, which your real estate agent can provide, “keep in mind that flooding from storms or water main breaks will hit homes the hardest that are on a ground pitch angled downhill,” says Di Natale. “Check how level the ground is. It’s not difficult to have the dirt and grass regraded so it slopes gently away from the house towards the yard instead of into the house. You can imagine how preferable that would be to a flooded basement or first floor of a home.”

Check the Crime Rates

“I know it sounds silly and maybe too simple. However, knocking on the neighbors’ door is sometimes like opening the floodgates to information,” says Justin Udy, a real estate agent in Midvale, Utah. “Ask about the property, the neighborhood, and any issues they are aware of. Typically, neighbors are an open book and love to talk about their area, the good and the bad.” Including crime.

Not feeling chatty? Check out Trulia’s maps, which feature neighborhood guides that identify high-crime areas as well as flood plains and natural disaster probabilities. Adds Heather Leikin, a real estate agent in Los Angeles: “Consider the type of crimes [as in burglaries versus DUIs], rather than if there is crime.”

Check the Trees

Think that towering oak tree won’t cause your home any harm? Think again. “I once had a tree fall on a gutter that created Niagara Falls down the side of the house when the next rain came,” says Di Natale. How do you know if your trees could be a problem? Call in an arborist or tree specialist, who oftentimes will provide free consultations to homeowners and potential homebuyers.

Check for Gas

Not if the home has natural gas but, rather, where those dang gas lines are actually buried, says Leikin. “If you are concerned about proximity of the larger gas lines to your house, contact your local gas utility,” she adds. “There should be a map of your area that shows how close major gas lines are to your new home.

“This is especially important to know after numerous pipeline explosions in the United States.” Enough said.

Check for Natural Disasters

Californians aren’t the only ones who need to know if they live in an earthquake-prone area. To be in the know about just which natural disasters — tornadoes, hurricanes, earthquakes, etc. — could wreak havoc on your potential new home, Patty Brockman, a real estate agent in Portland, Oregon, suggests checking with your insurance carrier. “Have them investigate whether or not the property is in a flood plain, earthquake, or slide area,” she says. “It’s always best to seek out the experts, rather than rely on someone’s opinion.”

Check the Sellers’ Disclosure Carefully

Legally, sellers have to disclose if their home’s basement, for example, tends to flood. Which means that sellers’ disclosure form can be a valuable tool in detecting what hazards may await you when you purchase your new home.

“If there is any area of question, consider going back and asking more questions,” suggests Udy. “It’s routine for me to ask, ‘Tell me more about that’ or ‘What did you mean when you mentioned XYZ?'”

Check with the City

Some of the most valuable information about your home’s danger probability can be found with the city government. “I always recommend owners be involved with their city planning office and code enforcement,” says Udy. “Depending on the size of your city, a seasoned planner or code enforcement officer may be able to tell you what projects people are doing, what is in process, and things to be aware of [such as planned neighborhoods, which could cause potential flooding to your backyard].”

 

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How to Lose the Bidding War But Still Get the House

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By Michael Corbett

If your offer is rejected, a little patience (and a backup offer) may pay off.

When there are more buyers than available homes in your area, real estate competition can get fierce. Chances are, not every offer you make will win the deal. But don’t despair. It’s possible to turn that next rejection into your dream home.

Here are seven reasons why your initial unaccepted offer may eventually close the deal.

1. A backup offer is a secret weapon.

You made your best offer, but it wasn’t strong enough to secure the home — maybe your competition offered more money, or their terms were slightly better. All is not lost. Ask the seller to accept your offer as a backup offer. There is no cost to you, yet you are in line to get the property if the deal goes sour.

2. It’s all so close, they can taste it.

Once a seller has an offer and it’s progressing, they are already psychologically moving from their home. They’re picturing closing day and the moving trucks in the driveway. If the deal abruptly comes to a screeching halt, the seller is much more willing to move forward with a backup offer just to keep that momentum going.

3. Your chances improve after the inspection.

I have been successful in backup situations where an inspection has uncovered more issues than the first buyer wants to deal with and the buyer walks away from the house. The good news for you is that those issues won’t go away. The seller may realize he or she can no longer play hardball and be more willing to accept your offer, rather than lose the deal a second time.

4. We’re in an era of tougher loan qualifications.

As loan qualifications become tighter and more scrutinized, some homebuyers may not qualify and will have to back out of the deal. In this situation, you have the advantage of jumping in to save the day.

5. Set a 30-day time limit.

The longer the current transaction takes, the greater the chance the two parties are struggling to come to an agreement. Set an expiration date of 30 days for your backup offer. If the two parties are unable to close the deal, it may force the seller to settle for the next best thing before it’s too late.

6. Get first right of refusal.

Ask for a first-right-of-refusal clause in your backup offer. In this case, you’re not bound to purchase the property, but you’re first in line if the other deal falls through.

7. Get the terms of the backup in writing.

Once the seller agrees to accept your offer as backup, get a fully executed detailed agreement, in writing. Be sure they are obligated to sell to you within a certain period at the agreed-upon terms if the property becomes available.

Here’s one more bonus for the backup buyer.

Legally, the sellers have to disclose any problems the first-position buyers uncovered, even ones that made them bolt. As a result, you’ll know the property’s flaws in advance, saving you time and money on your own inspections.

 

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Mortgage Rates Remain Low as September Ends

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ZillowThe weekly mortgage rate chart illustrates the average 30-year fixed interest rate in six-hour intervals.

By Lauren Braun

Mortgage rates for 30-year fixed loans remained low this week, with the rate borrowers were quoted on Zillow Mortgages at 3.73 percent, unchanged from last week.

The 30-year fixed mortgage rate rose on Friday, then hovered around 3.76 percent before falling to Tuesday’s rate.

“Mortgage rates are almost unchanged from last week despite some volatility in response to mixed messages from incoming data and Fed commentary,” said Erin Lantz, vice president of mortgages at Zillow. “Despite a number of important speeches and data releases this week, expectations for the first Fed rate hike are firmly focused on December. We expect rates will remain roughly flat in the absence of exceptional global events.”

Additionally, the 15-year fixed mortgage rate was 2.92 percent. For 5/1 ARMs, the rate was 2.74 percent.

Check Zillow Mortgages for mortgage rate trends and up-to-the-minute rates for your state, or use the mortgage calculator to calculate monthly payments at the current rates.

 

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