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7 Home Improvement Ideas That Stretch Your Dollars the Most

by The Schnoor Team

Enjoy your home more today — and sell it for the best price tomorrow.

When it comes to home improvement ideas, some are more financially savvy than others. And if you’re on a limited budget, it becomes even more important to be savvy.

Here are seven affordable home improvement projects that’ll help you enjoy your home more today and provide excellent financial return in the future.

#1 Add the Finishing Touch of Molding

Crown molding makes rooms seem both bigger taller. It's an elegant addition to any home.

Plus, wood moldings come in hundreds of options -- from simple to ornate -- that you can stain, paint, or leave natural.

You can also find moldings in flexible materials, such as foam, that make installation a whole lot easier. Some moldings even include lighting that casts a soft, ambient glow. 

And at $1.50 per foot if you DIY it, or $8 per foot if you hire, it’s a no-brainer in terms of personalizing your home while adding value. (Although we don’t recommend DIY unless you’ve got above-par mitering skills.)

A few tips about molding:

Be careful about proportions. If your ceiling height is 9 feet or less, go with simpler styles to avoid overwhelming the room.

Place a chair railing at one-third the distance of the ceiling height. Chair railing placed incorrectly can make a room seem out of proportion.

Don’t forget entryways, doors, and windows: Bump up the trim around these areas to give rooms a completed and expensive feel.

#2 Hang Quality Ceiling Fans

If your ceiling fans are old and outdated, new ones (coupled with a fresh paint job and crown molding) could give your rooms a refreshing update while saving money.

Some tips about ceiling fans:

  • Hang 7 to 8 feet above the floor.
  • If you’ve got a low ceiling, buy a hugger ceiling fan that’s flush-mounted.
  • Go for the biggest Energy Star-rated fan that will fit the space.
  • Choose quality. You’ll get better cooling results, less noise, and good looks at a digestible price point of $200 to $600.

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#3 Plant Some Trees

Say what? Adding trees doesn’t instantly pop into your head when you think of adding value to your home. But trees are moneymakers that get better with age.

A mature tree could be worth between $1,000 to $10,000, says the Council of Tree and Landscape Appraisers. A 16-inch silver maple could be worth $2,562, according to a formula worked out by the Purdue University Cooperative Extension Service.

In urban areas, money really does grow on trees. A recent study of home sales by the Pacific Northwest Research Station of Portland showed that street trees growing in front of or near a house boosted its sale price by an average of $8,870 and shaved two days off its time on the market.

There’s more. Trees also:

  • Save $100 to $250 annually in energy costs
  • Lower stress
  • Prevent erosion from downpours and roof runoff
  • Protect your home from wind, rain, and sun

#4 Install a Deck or Patio

But don’t go crazy and trick out your outdoor space with high-end amenities, like an outdoor kitchen — especially if you’d be the only one on the block with one. When it’s time to sell, you won’t get back much — if any — of your investment on outdoor kitchens and other high-end amenities. Instead, keep it simple and functional to see a return on investment.

A professionally installed deck costs about $10,000 to install, but if you DIY it, you'll save more than half that while adding to your equity.

Don’t skimp on deck lighting. It can make all the difference in functionality and beautification.

#5 Upgrade Your Insulation

It's not as sexy as a kitchen remodel, but it doesn't cost as much either ($65,000 vs $2,100).

Plus, you'll save all year long on your utility bills. Win-win!

#6 Add Some Creative Storage

We don’t have to sell you on the value of storage and built-in organization. Since when have you heard someone complain about too much storage? Never, we bet.

Adding storage is a no-brainer, but it does take a little brainpower to find your home’s hidden storage.

Here are a few ways to think outside of the toy box:

  • Open drywall to create storage cubbies between your wall’s studs.
  • Install platform storage that hangs from your garage ceiling.
  • Even stairs can give you more storage. One clever mom repurposed an old chest of drawers and created storage within a basement staircase.

#7 Install Landscape Lighting

Exterior lighting makes your home shine in the evening, accents features you like most about your house, and helps keep burglars away. Installing motion-detecting lights can even lower some homeowners’ insurance premiums.

Landscaping lighting tips:

  • Place accent lights under your favorite trees to show off your landscaping’s top earners.
  • Put them on a timer so you don’t waste energy running them during the day.
  • Choose a warm, white light. It'll make your home look and feel welcoming.

Source: "7 Home Improvement Ideas That Stretch Your Dollars the Most"

8 Simple Rules for Negotiating Your Offer and Getting That House

by The Schnoor Team

You and your agent are going to use everything you’ve learned to seal the deal.

Here’s the dream: Your offer is perfect, you don’t need to negotiate, and you can spend the next few weeks addressing more pressing home-ownership questions, like “Why is it called wainscoting?” and “Do I want a new couch in blush or emerald green?”

And it could happen. Many sellers accept the best offer they receive, and for a variety of reasons.

But sellers are also known to reject offers for a variety of reasons. Or make counteroffers. This is especially likely if you bid low, or when you’re up against multiple competing offers.

If you do receive a counteroffer, it’s up to you to decide whether you want to accept the new contract, negotiate the terms, or walk away.

In cases such as these, look to your agent. He or she is your spirit guide. If you decide you want to negotiate — that is, make a counteroffer to the seller’s counteroffer — your agent will use their negotiating skills to help get you the best deal. This is what agents do every day.

But you’re not just going to sit there. If you understand what negotiating tactics your agent may deploy — they depend on the local market and your position — you can back them up. And cheer them on.

Here are eight rules every buyer should know before they — and their agent — start negotiating:

#1 Act Fast — Like, Now

When you receive a counteroffer, you should respond quickly — ideally within 24 hours. The longer you wait, the more space you leave for another buyer to swoop in and nab the property. Also? If a seller senses hesitation, they may decide to withdraw their counteroffer before you even have a chance to respond.

#2 Raise Your Price (Within Reason)

While you obviously don’t want to overpay for a house, you may have to up the ante — especially if you initially made a lowball offer. Lean on your agent’s expertise to determine how much money you should add to the sales price to make it more enticing to the seller.

Then, through their powers of persuasion, your agent can make the counteroffer look even more attractive by pointing out similarly priced “comps” — recently sold homes in your area that are comparable in terms of square footage and features.

As your agent negotiates, it can feel like things are escalating quickly. It’s stressful. You may feel a sudden urge to do whatever it takes to win.

Before you go overboard, there are two things you must keep in mind:

  • You can’t exceed the monetary confines of the pre-approved mortgage you received from your lender.
  • You shouldn’t overextend your budget.

Because your counteroffer has to be an amount you’re comfortable spending on a home. You want that new house and to keep living your life. Plus: You’re not out of options yet.

#3 Increase Your Earnest Money Deposit

Increasing your earnest money deposit (EMD) — the sum of money you put down to prove to the seller you’re serious (i.e., “earnest”) about buying the house — is another way to show the seller you have more skin in the game. A standard EMD is typically 1% to 3% of the sales price of the home. Making a counteroffer with a 3% to 4% deposit could be what you need to persuade the seller to side with you.

#4 Demonstrate Patience About Taking Possession

Depending on the seller’s timetable, changing your proposed possession date — the date you take over the property — could butter them up, too. If the seller wants to stay in the home for a few days after closing, try offering a later possession date. You could also draw up a “rent-back” agreement, meaning the seller pays you rent for staying in the home for a set period of time after the closing date.

#5 Let Go of a Few Contingencies — With Care

Want to give your counteroffer an even bigger boost?

Reduce the number of contingencies you’re asking for. It’s your way of saying, “Hey, look, I have fewer ways to back out,” which gives the seller more reassurance that the deal will close.

But be selective: Some contingencies are too important to give up. A home-inspection contingency — the right to have a home inspection and request repairs — gives you an out if you spot major problems with the home (and protects you from buying a total money pit).

You might waive a termite inspection if you’re in a state where the risk is lower.

But ultimately, waiving contingencies depends on your market, your loan program requirements, your risk tolerance, and the circumstances of the house in question. And if you waive contingencies and then you find a problem, the seller isn’t responsible for fixing it.

#6 Ask for Fewer Concessions

At a mortgage settlement, home buyers have to pay closing costs for taxes, lender’s fees, and title company fees. Closing costs vary by location, but you can expect to shell out between 3% and 4% of the home’s sales price. The seller pays an additional 1% to 3%. (Smart Asset and Nerdwallet have simple calculators you can use to get a rough idea of what your closing costs might be.)

When making an initial offer, you have the option to ask the seller for concessions — a settlement paid in cash to help you offset your share of the closing costs. (This move is less feasible if you’re going up against multiple offers.)

Concessions effectively lower the seller’s net proceeds from the sale. Making a counteroffer that removes the concessions you would have otherwise received at settlement puts cash back in the seller’s pocket — and can improve your bid.

#7 Pick Up the Cost of the Home Warranty

Sometimes sellers offer prospective buyers a home warranty. This is a plan that covers the cost of repairing major home appliances and systems, like the air conditioner or hot water heater, if they break down within a certain period (typically a year after closing).

A basic home warranty costs about $300 to $600 a year, according to Angie’s List. If it seems like waiving the home warranty can sweeten negotiations, but you still want the peace of mind of having one, tell the seller they don’t need to cover it — then buy it yourself.

Just keep in mind, whether you or the seller buy the warranty, you’ll need to pay the service fee (typically between $50 and $100) if something does, indeed, need to be repaired while under warranty.

Also, FYI: A home warranty is entirely separate from homeowners insurance. Homeowners insurance — the security blanket that covers your home's structure and possessions in the event of a fire, storm, flood, or other accident — is required if you take out a mortgage. It can cost anywhere from $300 to $1,000 per year.

#8 Know When to Walk

When negotiating with a seller, trust your gut — and your agent. If he or she says a deal is bad for you: Listen.

And if you don’t want to make any more trade-offs — and the seller won’t budge — it’s smart to walk. That can be a tough decision to make, and rightfully so! Negotiating is tough. It’s draining.

And losing something you’ve worked hard to get can be disappointing. But don’t worry. There’s a better deal for you out there. And after those strong feelings of frustration pass, you’ll realize: Now I know how to do this.

Source: "8 Simple Rules for Negotiating Your Offer and Getting That House"

 

A Checklist for Moving Into a New House

by The Schnoor Team

Peace of mind begins with changing the locks.

It's easy to get super excited about moving into your new house. But for your own safety and security, be sure to cross these tasks off your checklist before you call it home. (And also, be sure to buy these new home essentials).

Here's your new home checklist:

#1 Change the Locks

You really don’t know who else has keys to your home, so change the locks. That ensures you’re the only person who has access. Install new deadbolts yourself for as little as $10 per lock, or call a locksmith — if you supply the new locks, they typically charge about $20 to $30 per lock for labor.

#2 Check for Plumbing Leaks

Your home inspector should do this for you before closing, but it never hurts to double-check.

Keep an eye out for dripping faucets and running toilets, and check your water heater for signs of a leak.

Here’s a neat trick: Check your water meter at the beginning and end of a two-hour window in which no water is being used in your house. If the reading is different, you have a leak.

#3 Steam Clean Carpets

Do this before you move your furniture in, and your new home life will be off to a fresh start. You can pay a professional carpet cleaning service — you’ll pay about $50 per room; most services require a minimum of about $100 before they’ll come out — or you can rent a steam cleaner for about $30 per day and do the work yourself.

#4 Wipe Out Your Cabinets

Another no-brainer before you move in your dishes and bathroom supplies, especially if the house has been vacant. It's not uncommon for mice and other pests to move in quickly. Make sure to wipe inside and out, preferably with a non-toxic cleaner, and replace contact paper if necessary.

And if you do find traces of unwanted roommates, take the next step.

#5 Invest in Pest Control

That includes mice, rats, bats, termites, roaches, and any other uninvited guests. There are any number of DIY ways to get rid of pests, but if you need to bring out the big guns, an initial visit from a pest removal service will run you $100 to $300, followed by monthly or quarterly visits at about $50 each time.

#6 Introduce Yourself to Your Circuit Breaker Box and Main Water Valve

It’s easier to do with two people: one to stand in the room where the power is supposed to go off, the other to trip the breakers or fuses and yell, “Did that work? How about now?

You’ll want to know how to turn off your main water valve if you have a plumbing emergency, if a hurricane or tornado is headed your way, or if you’re going out of town. Just locate the valve — it could be inside or outside your house — and turn the knob until it’s off. Test it by turning on any faucet in the house; no water should come out.

Source: "A Checklist for Moving Into a New House"

 

5 Things That REALLY Will Put a Serious Dent in Your Energy Bills

by The Schnoor Team

Stop sending so much money to your utility company with these simple strategies.

Your Mexican beach vacation was great, but, man, those margaritas sure can put on the pounds. It’s been two months, and you’re still carrying around an extra tenner — despite a new running routine and a lot of #&*&@$ kale. So why isn’t your weight dropping?

It’s like that with energy bills, too.  Eighty-nine percent of us believe we’re doing the right things to lower energy costs, and almost half of us think our homes already are energy efficient. Yet, 59% of us say our bills are going up, not down, despite our efforts to economize.

Suzanne Shelton, CEO of the Shelton Group, a marketing agency that specializes in energy efficiency and that did this research, says we’re rationalizing: “I bought these [LEDs] so now I can leave the lights on and not pay more. I ate the salad, so I can have the chocolate cake.” Denial much?

Her research also shows consumers, on average, made fewer than three energy-efficient improvements in 2012 compared with almost five in 2010. It looks like we’re giving in to higher utility bills. But it doesn’t have to be that way.

You just need to know what improvements really will make the biggest difference to lower your bills. There are five, and the good news is that they’re really (seriously) cheap. You can go straight to them here, but there’s also another thing you can do that doesn’t cost a dime — and will drop your costs:

Be Mindful About Your Relationship With Energy

Think about it. Energy is the only product we buy on a daily basis without knowing how much it costs until a month later, says Cliff Majersik, executive director of the Institute for Market Transformation, a research and policy-making nonprofit focused on improving buildings’ energy efficiency.

With other services you get a choice of whether to buy based on price. With energy you don’t get that choice — unless you intentionally decide not to buy. You can take control by making yourself aware that you’re spending money on something you don’t need each time you leave home with the AC on high, lights and ceiling fans on, and your computer wide awake.

That mindfulness is important because your relationship with energy is getting more intense. You (and practically every other person on the planet) are plugging in more and more. Used to be that heating and cooling were the biggest energy hogs, but now appliances, electronics, water heating, and lighting together have that dubious honor, according to Lawrence Berkeley National Labs, based on data from U.S. Energy Information Administration (EIA), the research arm of the Department of Energy (DOE).

Being mindful means it’s also time to banish four assumptions that are sabotaging your energy-efficiency efforts:

1. Newer homes (less than 30 years old) are already energy efficient because they were built to code. Don’t bank on it. Building codes change pretty regularly, so even newer homes benefit from improvements, says Lee Ann Head, vice president of research and insights with the Shelton Group.

2. Utilities are out to get us: They’ll jack up prices no matter what we do. It might feel cathartic to blame them (Shelton’s research shows consumers blame utilities above oil companies and the government), but to get any rate changes, utilities must make a formal case to public utility commissions.

3. Energy improvements should pay for themselves. Nice wish, but it doesn’t work that way. When the Shelton Group asked consumers what they would expect to recoup if they invested $4,000 in energy-efficient home improvements, they said about 75% to 80%.

Unless you invest in some kind of renewable energy source like geothermal and solar, you won’t see that kind of savings. (Sorry.) Even if you do all the right things, the most you should expect is a 20% to 30% reduction annually, says Head, which is still significant over the long term.

What does 30% translate into? $618 in savings per year or $52 per month, based on the average household energy spend of $2,060 per year, according to Lawrence Berkeley and EIA.

4. Expensive improvements will have the biggest impact. That’s why homeowners often choose pricey projects like replacing windows, which should probably be fifth or sixth on the list of energy-efficient improvements, Shelton says.

There’s nothing wrong with investing in new windows. They feel sturdier; look pretty; can increase the value of your home; feel safer than old, crooked windows; and, yes, offer energy savings you can feel (no more draft).

But new windows are the wrong choice if your only reason for the project was reducing energy costs. You could replace double-pane windows with new efficient ones for about $9,000 to $12,000 and save $27 to $111 a year on your energy bill, according to EnergyStar. (The savings are higher if you replace single-pane windows.)  Or you could spend around $1,000 for new insulation, caulking, and sealing, and save 11% on your energy bill, or $227.

The 5 Things That Really Work to Cut Energy Costs

1. Caulk and seal air leaks. Buy a few cans of Great Stuff and knock yourself out over a weekend to seal around:

  • Plumbing lines
  • Electric wires
  • Recessed lighting
  • Windows
  • Crawlspaces
  • Attics

Savings: Up to $227 a year -- even more if you add or upgrade your insulation.

2. Hire a pro to seal ductwork and give your HVAC a tune-up. Leaky ducts are a common energy-waster.

Savings: Up to $412 a year.

3. Program your thermostat. Shelton says 40% of consumers in her survey admit they don’t program their thermostat for energy savings. She thinks it’s even higher.

Savings: Up to $180 a year.

4. Replace all your light bulbs with LEDs. They’re coming down in price, making them even more cost effective.

Savings: $75 a year or more by replacing your five most frequently used bulbs with Energy Star-rated models.

5. Reduce the temperature on your water heater. Set your tank heater to 120 degrees — not the 140 degrees most are set to out of the box. Also wrap an older water heater and the hot water pipes in insulating material to save on heat loss.

Savings: $12 to $30 a year for each 10-degree reduction in temp.

NOTE: Resist the urge to total these five numbers for annual savings. The estimated savings for each product or activity can’t be summed because of “interactive effects,” says DOE. If you first replace your central AC with a more efficient one, saving, say, 15% on energy consumption, and then seal ducts, you wouldn’t save as much total energy on duct sealing as you would have if you had first sealed them. There’s just less energy to save at that point.

Bonus Tip for More Savings

Your utility may have funds available to help pay for energy improvement. Contact them directly, or visit DSIRE, a database of federal, state, local, and utility rebates searchable by state. Energy Star has a discount and rebate finder, too.

Source: "5 Things That REALLY Will Put a Serious Dent in Your Energy Bills"

 

7 Smart Strategies for Kitchen Remodeling

by The Schnoor Team

Follow these seven strategies to get the most financial gain on your kitchen remodel.

Homeowners spend more money on kitchen remodeling than on any other home improvement project. And with good reason: Kitchens are the hub of home life and a source of pride.

A significant portion of kitchen remodeling costs may be recovered by the value the project brings to your home. A complete kitchen renovation with a national median cost of $65,000 recovers about 62% of the initial project cost at the home’s resale, according to the "Remodeling Impact Report" from the National Association of REALTORS®.

The project gets a big thumbs-up from homeowners, too. Those polled in the "Report" gave their new kitchen a Joy Score of 10 (out of 10!), a rating based on those who said they were happy or satisfied with their remodeling, with 10 being the highest rating and 1 the lowest.

To help ensure you get a good return on your kitchen remodel, follow these seven tips:

#1 Plan, Plan, Plan

Planning your kitchen remodel should take more time than the actual construction. If you plan well, the amount of time you’re inconvenienced by construction mayhem will be minimized. Plus, you’re more likely to stay on budget.

How much time should you spend planning? The National Kitchen and Bath Association recommends at least six months. That way, you won’t be tempted to change your mind during construction and create change orders, which will inflate construction costs and hurt your return on investment. 

Some tips on planning:

Study your existing kitchen:
 How wide is the doorway into your kitchen? It’s a common mistake many homeowners make: Buying the extra-large fridge only to find they can’t get it in the doorway.To avoid mistakes like this, create a drawing of your kitchen with measurements for doorways, walkways, counters, etc. And don’t forget height, too.

Think about traffic patterns: Work aisles should be a minimum of 42 inches wide and at least 48 inches wide for households with multiple cooks.

Design with ergonomics in mind: Drawers or pull-out shelves in base cabinets; counter heights that can adjust up or down; a wall oven instead of a range: These are all features that make a kitchen accessible to everyone — and a pleasure to work in.

Plan for the unforeseeable: Even if you’ve planned down to the number of nails you’ll need in your remodel, expect the unexpected. Build in a little leeway for completing the remodel. Want it done by Thanksgiving? Then plan to be done before Halloween.

Choose all your fixtures and materials before starting: Contractors will be able to make more accurate bids, and you’ll lessen the risk of delays because of back orders.

Don’t be afraid to seek help: A professional designer can simplify your kitchen remodel. Pros help make style decisions, foresee potential problems, and schedule contractors. Expect fees around $50 to $150 per hour, or 5% to 15% of the total cost of the project.

#2 Get Real About Appliances

It’s easy to get carried away when planning your new kitchen. A six-burner commercial-grade range and luxury-brand refrigerator may make eye-catching centerpieces, but they may not fit your cooking needs or lifestyle.

Appliances are essentially tools used to cook and store food. Your kitchen remodel shouldn’t be about the tools, but the design and functionality of the entire kitchen.

So unless you’re an exceptional cook who cooks a lot, concentrate your dollars on long-term features that add value, such as cabinets and flooring. 

Then choose appliances made by trusted brands that have high marks in online reviews and Consumer Reports.

#3 Keep the Same Footprint

Nothing will drive up the cost of a remodel faster than changing the location of plumbing pipes and electrical outlets, and knocking down walls. This is usually where unforeseen problems occur.

So if possible, keep appliances, water fixtures, and walls in the same location. Not only will you save on demolition and reconstruction costs, you’ll cut the amount of dust and debris your project generates.

#4 Don’t Underestimate the Power of Lighting

Lightning can make a world of difference in a kitchen. It can make it look larger and brighter. And it will help you work safely and efficiently. You should have two different types of lighting in your kitchen: 

Task Lighting: Under-cabinet lighting should be on your must-do list, since cabinets create such dark work areas. And since you’re remodeling, there won’t be a better time to hard-wire your lights. (Here’s more about under-cabinet lights.) Plan for at least two fixtures per task area to eliminate shadows. Pendant lights are good for islands and other counters without low cabinets. Recessed lights and track lights work well over sinks and general prep areas with no cabinets overhead.

Ambient lighting: Flush-mounted ceiling fixtures, wall sconces, and track lights create overall lighting in your kitchen. Include dimmer switches to control intensity and mood.

#5 Be Quality-Conscious

Functionality and durability should be top priorities during kitchen remodeling. Resist low-quality bargains, and choose products that combine low maintenance with long warranty periods. Solid-surface countertops, for instance, may cost a little more, but with the proper care, they’ll look great for a long time.

And if you’re planning on moving soon, products with substantial warranties are a selling advantage.

#6 Add Storage, Not Space

Storage will never go out of style, but if you’re sticking with the same footprint, here are a couple of ideas to add more: 

Install cabinets that reach the ceiling: They may cost more — and you might need a stepladder — but you’ll gain valuable storage space for Christmas platters and other once-a-year items. In addition, you won’t have to dust cabinet tops.

Hang it up: Mount small shelving units on unused wall areas and inside cabinet doors; hang stock pots and large skillets on a ceiling-mounted rack; and add hooks to the backs of closet doors for aprons, brooms, and mops.

#7 Communicate Clearly With Your Remodelers

Establishing a good rapport with your project manager or construction team is essential for staying on budget. To keep the sweetness in your project:

Drop by the project during work hours: Your presence broadcasts your commitment to quality.

Establish a communication routine: Hang a message board on site where you and the project manager can leave daily communiqués. Give your email address and cell phone number to subs and team leaders.

Set house rules: Be clear about smoking, boom box noise levels, available bathrooms, and appropriate parking.

Be kind: Offer refreshments (a little hospitality can go a long way), give praise when warranted, and resist pestering them with conversation, jokes, and questions when they are working. They’ll work better when refreshed and allowed to concentrate on work.

And a final tip to help keep your frustration level down while the construction is going on: plan for a temporary kitchen along with the plans for your new kitchen. You'll be happier (and less frustrated) if you've got a way to have dinner while construction is ongoing.

Source: "7 Smart Strategies for Kitchen Remodeling"

Before You Choose a Mortgage Lender, Read These Tips

by The Schnoor Team

Someone out there wants to help save you time, stress, and money. Here’s how you find them.

Everyone in the market for a house has different wants — pre-war charm, a lush backyard, a welcoming front door in Pantone Ultra Violet, perhaps — but at the end of the day, they all share a need in common: money. Lots of it.

That’s where your mortgage lender comes in.

The right lender can save you time, anxiety, and loads of cash. And the right loan officer — the professional who represents the lender — can be a powerful ally when you close on a mortgage. As with any potentially life-altering partnership, it’s important to choose wisely.

Only You Know Which Lender Is Your Type

There are three types of mortgage lenders — retail banks, credit unions, and mortgage banks — as well as mortgage brokers, who compare loan products via a coterie of potential lenders to help you, the client, find the right one. Before you start narrowing down the candidates, you have to know what you’re looking for, and where to find it. Let’s talk about your options.

Retail Banks

What they are: These are your Chases and Banks of America, plus your local banks. They do their own underwriting (in a nutshell, investigating your finances), so retail banks, especially the smaller ones, can sometimes offer lower fees and less-stringent credit requirements. If you like to have your accounts all in one place, you may want to use your own bank or credit union.

Who you’ll work with: You’ll be assigned a loan officer, who will receive a commission or bonus for writing your loan.

Credit Unions

What they are: They’re not-for-profit and customer-owned, so they’re not beholden to shareholders like a bank. Because of that and their not-for-profit tax status, they typically offer more personal service and lower fees. The flip side is less convenience: They have fewer branches and ATMs.

And to apply for a loan, you must be a member of the credit union’s community, which could be faith-, employment-, interest-, or union-based, among other things. That said, it’s typically not difficult to become a member; the National Credit Union Administration’s Credit Union Locator is a tool for finding credit unions near you.

Who you’ll work with: As with a bank, you’ll be assigned a loan officer, who will receive a commission or bonus for writing your loan.

Mortgage Banks

What they are: These banks, such as AimLoan and PennyMac, only offer home loans. Many online lenders, like Rocket Mortgage by Quicken Loans, operate as mortgage banks.

Who you’ll work with: A mortgage bank will assign you a loan officer, who will receive a commission or bonus from the lender’s gross fees for writing your loan. An online lender is going to offer less hand-holding.

Mortgage Brokers

What they are: Mortgage brokers are essentially personal home loan shoppers — they act as liaisons between home buyers and mortgage lenders to help people find the lowest rates and the best mortgage terms. They’re able to get home buyers the best mortgage rates because they leverage their existing relationships with lenders — something individual home buyers can’t do. By doing the heavy lifting for the borrower, the idea is that they make loan shopping more convenient — and perhaps a bit faster.

Who you’ll work with: A mortgage broker can be an individual agent or a group of agents, who act as independent contractors. In exchange for their services, mortgage brokers typically charge a 1% to 2% fee of the loan amount, which is either paid by the borrower or the lender at closing.

Now that you’re armed with the basics, you’ll want to give yourself time to weigh the options about which lender, exactly, to work with.

It Pays to Shop Around Before You Commit

Over the life of the loan, seemingly subtle differences could add up to tens of thousands of dollars. That money belongs to future you and all your dream vacations, renovations, and remodeling #goals.

So before you choose your specific lender ...

  • Thoroughly research any retail bank, credit union, mortgage bank, mortgage broker, or online option you’re considering. Make sure you’re clear on what they can offer you. About one in five (21%) home buyers said they regret their choice of mortgage lender, according to a recent J.D. Power survey. You’re doing your homework so that won’t be you.
  • Interview lenders. You’re aiming for a shortlist of three. (You’ll see why it’s three in a minute.) If you’re thinking about selecting an online lender, make sure you take into account these tips and tricks.
  • Don’t be shy about seeking advice. Survey your family, friends, and coworkers —  especially the ones who are nerdy about money.
  • Ask your real estate agent for a second opinion. They have experience with reputable lenders, particularly in your city or town.

Now, let’s say you’ve narrowed your list of potential lenders to at least three candidates. The next step? Finding out whether they will give you a loan.

You Should Seek Out a Lender’s (Pre-)Approval, Too

There’s a world of difference between being pre-qualified for a loan and being pre-approved. Pre-approval means you’ve got skin in the game. It means you’re a boss. And it’s proof that you can buy.

Besides being the grown-up thing to do, pre-approval puts you in a better position when you make an offer. Everyone takes you more seriously. Pre-approval provides evidence to your real estate agent and the seller (or seller’s agent) that a trusted financial institution is willing to finance the purchase.

In most housing markets, sellers are going to expect your to be pre-approved when you make your offer. And when you’re pre-approved, you’re more likely to have your offer accepted — or at least, you won’t lose out on a bid because you have to go back to the bank to get approved for a loan.

As for pre-qualification, it’s an approximation and not necessary unless you have no clue about your creditworthiness and just want a snapshot.

By contrast, with a pre-approval, a lender typically goes deeper and tells you more specifically how big a loan you can get. Caution here: Just because the lender says you can take out a loan for an amount, doesn't mean you should. Consider your lifestyle and monthly budget to decide on the responsible loan amount for you.

Keep a Lid On Credit Pulls

Lenders pull your credit to pre-approve you, which can ding your score. But don’t let that hinder your comparison shopping; credit bureaus cut mortgage shoppers some slack. Still, this isn’t the time to apply for a car or furniture loan.

To get pre-approved, you must also authorize a lender to pull your credit.

  • Borrowers with credit scores of 760 or higher can typically qualify for the lowest interest rates.
  • Borrowers with credit scores below 650 may need to apply for a non-conventional mortgage, such as a Federal Housing Administration (FHA) loan — a government-backed loan that requires a minimum credit score of 580 but lets borrowers make as low as a 3.5% down payment.
  • Borrowers with credit scores below 580 can still qualify for FHA loans, but they’ll have to make at least a 10% down payment. The lower the score, the tighter the requirements become.

When you’re pre-approved, you’ll receive a Loan Estimate. This three-page document is about to be your new best friend.

It Makes Good Sense to Get Pre-Approved by at Least Three Lenders

A Loan Estimate spells out a future loan’s terms, including:

  • The interest rate
  • The length of the loan
  • Estimated costs of taxes and insurance
  • How interest rates and payments might change over time
  • Other important financials

By comparing loan estimates, you can effectively size up your loan options and decide which lender is best for you — and your future. (If you need help navigating the details, the Consumer Financial Protection Bureau offers a sample Loan Estimate with helpful tips and definitions.)

Getting pre-approval early in the process also gives you an edge over other buyers. Here’s why:

  • The amount you’re approved for can help you determine your price range, and thus save time and frustration when shopping.
  • It sends a signal to your agent and sellers that you’re serious about buying a home.
  • It’ll help you move quickly to make an offer when you see a home you like.

And it’s an excuse to celebrate! You now have everything you need to move ahead with that one special lender — and, at the same time, connect with an officer or broker who can help you select the home loan product that’s best for you.

So have a cocktail. Do a dance. Lay back and relax in one of those fancy sheet masks. You’re a (huge) step closer to getting a new house.

Source: "Before You Choose a Mortgage Lender, Read These Tips"

 

Cancel Your Private Mortgage Insurance

by The Schnoor Team

Private mortgage insurance is unavoidable for some homeowners, but don’t pay PMI premiums a day longer than required by your lender.

Private mortgage insurance provides protection to a lender in case you default on your home loan. Unless you make a 20% downpayment on a house, you'll most likely be required to purchase PMI. PMI premiums on a median priced home ($170,600 in 2010) can run between $50 and $100 per month, according to the Mortgage Insurance Companies of America.

PMI might be unavoidable, but it isn't eternal. Knowing exactly when you're entitled to cancel coverage can save you a bundle. If you own a median priced home, you'll pocket between $600 and $1,200 for each year's worth of premiums you can avoid. That extra cash can be used to pay down your principal instead.

When PMI Is Cancelled Automatically

Though often maligned, PMI plays an important role. Many aspiring homeowners, especially first-time buyers, simply can't afford to put down 20% on a house. Without the safeguard offered by PMI, lenders would be reluctant to extend mortgages to low-equity purchasers.

For many borrowers, the coverage is short-lived. The Mortgage Insurance Companies of America, the industry trade group, estimates that 90% of homeowners are done paying PMI premiums, which are tax-deductible for some, within five years.

If you purchased a house since 1999 and are still paying PMI, you probably fall under the Homeowners Protection Act (HPA) of 1998. Your lender is required to automatically cancel your insurance once you've paid down your mortgage to a 78% (0.78) loan-to-value ratio, or LTV. Put another way, once you have 22% equity built up. Many lenders will treat pre-HPA loans in a similar fashion. Call to confirm.

To calculate your LTV, divide the outstanding loan amount by the original price of your home. If you have a $190,000 mortgage on a house you purchased for $200,000, the LTV is 95%. You'd need to get the mortgage balance down to $156,000--78% of the original value--to qualify for automatic cancellation of PMI.

When You Need to Request Cancellation

You don't necessarily have to wait for automatic cancellation. When your LTV hits 80%, you can petition your lender to end its PMI requirement. The process can take several weeks. Your lender isn't obligated to grant your request, but you'll bolster your case if you have a good payment history.

Start by calling your lender, not the PMI provider. You'll probably need to make a formal request in writing and pay out of pocket for an appraisal. The average cost of an appraisal is $362, according to a 2009 Bankrate.com survey. Your lender will usually select the appraiser.

Although an appraisal is conducted primarily for the benefit of the lender to confirm that your property hasn't declined from its original value, a high appraisal can work to your advantage. As your property value increases, whether due to a general uptick in real estate prices or specific home improvements, your LTV decreases.

Justine DeVito Tenney, a CPA and financial planner with Weiser LLP in Lake Success, N.Y., points out that even if you don't meet the 78% or 80% milestones, you can get PMI cancelled when you hit the mortgage midpoint. On a 30-year fixed-rate mortgage, that would occur after 15 years of payments. This can come into play for certain high-risk loans that call for a longer PMI period.

A Way Around PMI Premiums

In search of a PMI loophole? Look for so-called piggyback loans, also known as 80/10/10 or 80/15/5 loans. Basically, the home lender finances 80% and immediately gives you a second loan for 10% to 15%. You put down 5% to 10%. No PMI is required.

This alternative has traditionally been available for homebuyers with minimal capital but excellent credit. In tight lending environments, however, this arrangement is harder to come by. And even when piggyback loans are available, the extra interest you usually pay on the second mortgage may actually cost more than PMI premiums. Do the math.

This article provides general information about tax laws and consequences, but is not intended to be relied upon by readers as tax or legal advice applicable to particular transactions or circumstances. Readers should consult a tax professional for such advice, and are reminded that tax laws may vary by jurisdiction.

Source: “Cancel Your Private Mortgage Insurance"

 

How to Get Your Home Show Ready

by The Schnoor Team

Keep your home in stunning shape throughout the listing period.

Everyone knows that selling your house is a big decision, and there are so many emotions involved, not to mention all of the work it takes to get your house ready to sell! 

Well, having been through the process multiple times and having to sell homes super quickly, I thought I’d share my simple tips for getting your home ready to show. You ready?

To make this as clear and easy to follow as possible, I broke down the process into three categories: things to do before listing, things to do consistently during the listing period, and things to do the day of a showing.

Things to Do Before Listing Your House

1. Enlist a real estate agent! You can interview several and choose the one who you feel the most comfortable with. Having an agent you trust and respect is crucial for a happy selling experience.

2. Give your agent a house tour. Have your agent walk through your home and advise if any remodeling work is warranted before you list the house. You might be surprised at the things that they will tell you to leave alone.

For example, in one of the houses I sold, I had this adorable little girl’s room with large floral wallpaper (pictured above). It was clearly catered to a young girl, so prior to listing our home, I was worried we would need to remove the wallpaper or paint over it.

However, our agent advised us to leave it alone because the room showed well with the decorative style. It turns out one of the first guests who toured the house had a two-year-old daughter who fell in love with that very room! For them, the room was a big selling point of the house. However, even if someone with boys walked through, they might have thought, "No big deal, we can repaint that one wall."

3. Dejunk your house. Go through each room in your home to remove clutter. Throw away or donate belongings that you no longer need, or use and box up items that you won’t need during the listing period. Too much stuff can crowd your space and make it feel smaller than its actual size.

Even though dejunking an entire house can seem totally daunting, it’s actually my favorite step! Getting rid of all the excess we've accumulated over the last years always feels so liberating. Plus, it means less for you to pack up, move, and unpack later.

Once you've done these steps you’re ready to move onto the next phase of preparations!

Things to Consistently Do During the Listing Period

1. Maintain the best possible curb appeal. While this tip might seem obvious, you would be shocked at how many open houses I went to where sellers put no effort into their home's outside appearance. In fact, when I worked in a real estate office, I heard plenty of stories of agents pulling up to houses with clients and having the clients want to drive away before even going inside!

First impressions are crucial, and your home's front is no exception. During the listing period, you should take extra care to make sure your lawn is mowed, your garden is weeded, and flowers are planted. At the very least, make sure your porch is swept and you've sprayed for bugs; nothing turns someone away on a house tour like staring spiders in the face while waiting for the agent to unlock the door.

In the fall and winter, make sure leaves are raked, stray branches are picked up, and sidewalks are shoveled and salted.

2. De-Personalize. While prepping for house tours, take out anything that is super kitschy or specific to your tastes. The goal here is to make your home appeal to as many different people as possible. Don't worry, this doesn't mean you have to go crazy and eliminate everything with personality. For instance, if you have a nice focal gallery wall of family photos, leave them as it might give potential buyers decorating ideas. Plus, it looks more appealing than a big empty wall.

3. Stage your home. Staging your home means rearranging furniture and decor, or even repainting,  to make it look most pleasing to the eye. For example, your side tables might typically not be decorated because you’re worried about little people breaking things, but for the tour, it’d be nice to place little plants and candles on them (like pictured above).

You don't have to spend a ton of money doing this; sometimes just rearranging items from room-to-room or shifting around furniture can make a huge visual difference.

You're almost done, time to move on to the last phase!

Things to Do the Day of a Showing

1. Make sure your home is clean and shown in it's best light. When we sold our first home, our agent instructed us to turn on all of the lights, open the blinds, and keep all bedroom doors open before any showing. Basically, do anything to make your home feel brighter or bigger.

Don’t worry, you don't need to freshly vacuum before every showing if you aren't able to, but make sure to make the beds, stow away toys, and generally ensure everything is neat and tidy!

It’s especially important to ensure your bathrooms are clean --  make sure toilets are flushed, seats are down, towels are picked up and counters are wiped. This can be especially difficult if you have a baby, but it’s worth it! I had a friend who threw all her baby's belongings (chair, changing pads, bassinet, etc.) into the back of her trunk before each listing.

2. Try to use all of a potential buyer’s senses. I have a vivid memory of the time I walked into our first home (before it was ours). The woman who lived there had just baked cookies and left a plate on the counter for us. The smell of cookies was in the air, and the house was clean and homey.

Now, I can't say for certain how much that impacted my final decision, but I still think about it eight years later. It was the feeling of "this could be our home" that was comforting. You obviously don't have to bake cookies before every showing, but you can light a candle or burn incense. And minimize distractions by turning off TVs and electronics. 

3. Disable alarms, gather your pets, and get out! Last step in the process: Leave your house. I know some people stay in their home for various reasons during showings, but honestly, I don’t believe it's the best idea. It makes potential buyers feel uncomfortable or want to leave more quickly.

Often, homeowners want to give tips about the house or gush about the neighborhood, then unknowingly say the wrong thing and turn off prospective buyers. Even if you have a house full of kids and nowhere to go, ask a neighbor if you can hang out in their backyard for a bit, or load everyone up in the car and go get yourself a treat. (You've earned it!)

Well, there you have it friends! I hope these tips will make you feel a little more comfortable throughout the listing process.

Good luck!

Source: "How to Get Your Home Show Ready"

6 Creative Hacks to Put a Shoe Organizer to Work

by The Schnoor Team

Simple over-the-door shoe organizers are brilliant hacks when it’s time to tame the clutter in your home.

Bulk shoppers and anyone with more stuff than storage, rejoice: You can reclaim your home from clutter with hanging shoe organizers. Sure, they're amazing tools for wrangling homeless sneakers and ballet flats. But there's another reason pro organizers adore them: Their numerous cubbies are perfect for containing odds and ends that drive homeowners mad. You know, that mass of knotted cords, your messy cabinet full of cleaning goods, that one disappearing mitten.

Pick up a few of these genius inventions and let your inner neat freak take over. Here are six shoe organizer ideas to get you started.

#1 Keep Bulk Buys in Check

Instead of piling up towers of paper towels or toilet paper, hang a cloth shoe organizer from your basement or bathroom closet rod and store each roll in its own individual cubby to free up floor space. As a bonus, you won't have to fumble around trying to extract a roll from its plastic covering — just open the closet, grab, and go. (This tip applies to all kinds of bulk purchases, from canned goods to seltzer water.)

#2 Corral Gift Wrap

Not sure where to tuck away your collection of festive wrapping paper? Don't waste precious floor space by stuffing those awkward tubes in a box. Homeowner Angie Holden used a standard over-the-door organizer to keep her gift wrap in order after her under-the-bed storage system grew "too cumbersome to get out when I need it."

Reserve three rows of the organizer's slots for the long wrapping paper tubes. The rolls will sit in the lowest one. To keep those puppies upright, attach elastic bands to the organizer, between the upper two rows of slots, and slide the tubes down through the elastic before they reach their resting place in the lower row. Make it a complete gift station by sewing a catchall bag to the bottom of the organizer for ribbon, tape, and bows.

#3 Cut the Cord on Clutter

Don't let tangled tablet chargers and extra iPhone cords rule your home. Instead, use a shoe organizer to keep your electronic accessories out of sight and ready when you need them. Organization blogger Stefanie Sliger divided her various cables by type, stuffed each set into its own pocket, and labeled accordingly. (Think "iCables," "outlet adapters," and "HDMI.") "It's definitely easier to see, grab, and store cords using the shoe organizer," Sliger says. If you have extra space, those additional pockets are perfect for batteries and lightbulbs.

#4 Feed Your Kids

Tired of your little ones leaving a trail of displaced soup cans and sideways pasta boxes as they dig through the pantry in search of something to snack on? Using a shoe organizer to sort your snacks "makes it easy for kids to snag grab-and-go snacks," like granola bars, applesauce, raisins, and juice boxes, says personal organizer MaryJo Monroe. Hang it over the pantry door for easy access.

#5 Tame Winter Garb

As fall becomes winter, figuring out how to keep your endless collection of mittens, gloves, and extra fluffy socks organized and accessible can be a nightmare. After a basket storage system failed to keep her family's winter accessories under control, blogger Jamie Rannila turned to a shoe organizer — a solution that has been particularly popular with her triplets. "This way of organizing makes it so easy for them to reach and put their items in their own compartment," Rannila says.

#6 Create a One-Stop Cleaning Station

Is your under-sink space cluttered with myriad sponges and half-empty spray bottles that needed to be pitched months ago? Stop digging through the dark to find the glass cleaner. A hanging shoe organizer in your pantry can make life so much easier — just stick each product and cleaning accessory in its own pocket. Voila! No more hunching and hunting.

Source: "6 Creative Hacks to Put a Shoe Organizer to Work"


6 Ways to Lose at Negotiating a House Price

by The Schnoor Team

Real estate negotiation tips so you can buy your dream home — and not overpay.

You've looked at enough houses to fill an entire season of House Hunters and finally picked one to buy. Now you're ready to make an offer.

Your agent can help guide you through this nail-biting phase of negotiating a house price, but ultimately, you call the shots. Here's how to negotiate like a boss.

Fail #1: Thinking House Price is All That Matters

That house with a price point $15k below your budget? It may seem like a deal — until you add on the costs of maintenance and replacing the aging appliances.

Planning on repainting, remodeling, or landscaping, too? Suddenly the price looks a whole lot higher.

When developing your offer, calculate in the costs that will go above and beyond a mortgage payment. Then you can negotiate with an eye on the total cost of owning the house, not just the sticker price.

On the flip side, the price may not be all that matters to the seller, either.

She may have to start a job on the other side of the country in a month and value a quick closing. Or she may be looking to rent from you for a bit after the sale until her next home is ready. Sometimes being accommodating is negotiation gold.

Fail #2: Refusing to Back Down on Small Repairs

Before you draw a line in the negotiation sand over, say, a deck with some rotten boards, ask yourself if it's worth losing the house over a repair that would cost less than a thousand dollars.

Say the house price is $250,000, which makes that deck repair less than half of one percent of the cost of the house. There's a lot of emotional energy at this point in the process, so give yourself a break rather than dickering over it.

A house negotiation is not about winning for the sake of winning. It's about getting the house you want at a fair price on good terms.

Fail #3: Waiving Formalities Because You're So in Love With the House

Don't be so blinded by house love that you do something silly like skip some of the formalities of home buying, such as the home inspection or the appraisal, in an effort to close the deal.

Those steps, and others like a termite or septic inspection, are known as contingencies. They're there to protect you from ending up with a six-figure money pit.

Imagine how quickly the house-honeymoon would end if you found a termite colony or that the identical house across the street sold for much less?

Besides, if you're taking out a mortgage, your lender won't let you skip an appraisal because they don't want to loan money on a house that isn't worth the loan amount. So even if you want to make it easy for the seller, your lender may stop you.

There are other ways to sweeten your offer and get that house:

  • Pay some of the seller's closing costs.
  • Offer a fast close.

If this is your first house, speed is an ace up your sleeve because you can move faster than someone who can't buy a new house until they sell the old one (another type of contingency).

And remember, while there's a lot of emotion tied up in choosing a house, it's still a business deal.

Fail #4: Getting Hung Up On a Few Grand

You offered $198,000. The seller won't budge from $200,000.

Before you walk away, consider this: Two grand is a lot of money, but in the house-buying world it's not so much. At an interest rate of 4%, with 20% down on a 30-year mortgage, that additional $2,000 will add just $8 a month to your payment.

If you can swing it -- maybe you can cut a small thing out of your budget each month -- it could be worth it.

Fail #5: Folding Because the Inspection Turned Up Issues

A good home inspection is going to turn up something. Usually several somethings. That's good. It means the inspector is doing their job. It's a rare day when a home passes inspection with no problem at all.

Plus, many things that turn up on an inspection are easily handled. You can ask the seller to do the repairs or knock some off the price so you can pay for repairs.

And while some problems may seem scary at first, like a roof leak or plumbing problem, they're almost always fixable and negotiable.

Fail #6: Offering Less Because the Decor is Hideous

The faux-Tiffany swag lamp and trippy orange-and-brown wallpaper make your eyes itch. So you're planning on offering less — way less.

Before you do that, know the market. If it's a seller's market, your offer may be seen as an insult especially if the home's in good shape. And just like that, you've lost your dream home.

When you're ready to make that offer, look past the little stuff that you can easily change, and focus your negotiations on what matters, like the location and the bones of the house.

Source: "6 Ways to Lose at Negotiating a House Price"

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