Homes for Heroes – How VA Home Loans Pave the Way for a Great Future for these Folks

*Note you don't have to be 50% disabled to waive the funding fee. See below for a list of all exempt from paying funding fee.


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What a great honor to be able to return the favor that so many service men and women give us every day as they continue to put their lives on the line for our safety.  Whether active in duty, someone that has experienced disability as a result of military service or any veterans who have been honorably discharged – there are homeownership benefits out there for you!

NO DOWN PAYMENT!

This used to be something that we would see a lot in television and billboard ads, talking about how easy it was to obtain a loan of any sort. But with lending practices even tighter than they used to be, we hardly see the phrase “NO DOWN PAYMENT” anymore.  One of the very few loan types still available that requires no money down, the VA home loan is a great way for our heroes to reestablish their lives without the typical down payment needed. At one time the average down payment was about 20% down, and with an FHA loan there is a really low down payment of 3.5%, which is significantly lower.  But zero down mortgages free up much-needed cash flow for other costs associated with a new home.  Another great benefit of VA home loans is that they do not involve mortgage insurance expenditures as with typical loans.

VA Funding Fee Reduced or Waived

To obtain a VA guaranteed home loan, the borrower must pay the VA funding fee but the good news is that depending on where you stand with the military – that fee can either be reduced or even eliminated from your mortgage application process.  The one-time fee is typically rolled into the mortgage amount and ranges from 1.25% to 3.3%.  The amount of down payment made plus also whether the borrower is on active duty or reserve impacts the exact percentage required.

Two other ways to reduce or eliminate the VA funding fee are either by putting down at least 5% down on the property, in which case the fee will be dropped to 1.5% for active duty personnel -- or if the person borrowing is disabled the fee is reduced.  There are no extra funding costs associated with the loan for veterans that are 50% or more disabled as a result of their service.

Loan Guaranteed by the VA

If you are a military veteran, personnel activity serving on duty, a veteran with a partial of total disability or an honorably discharged serviceperson – the Veterans Administration guarantees your loan.  In case the bank comes to a point of needing to foreclose on the home, the VA will come in and pay the bank a certain percentage of the loan as part of their guarantee.  This added protection is what allows lenders to comfortably approve loans to military personnel with the additional benefits offered.
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The thing to keep in mind if you are considering obtaining a home loan that is guaranteed by the VA, is to mention this to your Realtor or loan officer as soon in the process as you can.  The earlier they know of your potential eligibility for this type of loan, the better they will be able to serve your needs and calculate what your costs will be, including the VA funding fee. This is especially applicable if you are a veteran with a disability. Since VA home loans can be originated through any qualified lender, your choice of Realtor will be able to refer you to their VA loan experts so that the process can begin in expert hands.

*The following persons are exempt from paying the funding fee:

• Veterans receiving VA compensation for service-connected disabilities.
• Veterans who would be entitled to receive compensation for service connected disabilities if they did not receive retirement pay.
• Surviving spouses of veterans who died in service or from service connected disabilities (whether or not such surviving spouses are veterans with their own entitlement and whether or not they are using their own entitlement on the loan).
• Veterans who are rated by VA as eligible to receive compensation as a result of pre-discharge disability examination and rating.
• Veterans entitled to receive compensation, but who are not presently in receipt because they are on active duty.

FSBO - Your Advantages and Disadvantages - Why Shouldn't I Try to Sell My Home by Myself?

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Many homeowners think about selling their home on their own by very few actually attempt it, and you have probably asked yourself, "Why is that?"
The reason why is that it is an extremely time-consuming and often exhausting process, especially if you are also working a full-time job. It's my job to take that burden off your back. I am not discouraging you for attempting to sell it yourself, in fact, in some instances I’ll even recommend it to sellers, but before you do it, I want to encourage you to be sure you understand the advantages and disadvantages of each side.

The main advantage is that you do not have to pay a commission to a realtor and you will have complete control of the transaction.

The disadvantages are that it is a tremendous amount of work and having complete control of the costly and delicate transaction process can result in a deal that falls through or costs you a considerable amount of lost time and money.  Yes, you can get a purchase agreement from the title company and go it alone, however remember this, the title company does not represent you and isn’t responsible for guiding you through the process.  Have you ever wondered why their purchase agreement is only three pages long and ours is eight?  Give me a call and I’ll explain to you why, but before I leave you, consider this news…

Founder and former CEO of ForSalebyOwner.com, Colby Sambrotto listed his 2,000 square foot New York condominium on his own through online classified ads and FSBO sites, but after six months, he opted to hire New York broker Jesse Buckler who immediately advised a price change as the listing was not attracting the right buyer.

After giving up on the DIY route, Sambrotto’s decision to hire a broker led to attracting multiple offers, closing for $150,000 over the original asking price. The Wall Street Journal reports the listing sold for $2.15 million including a 6% commission.

Below are the advantages and disadvantages of FSBOs. Read it carefully and then make your decision!

Advantages of Selling Your Own Home

Of course, the biggest advantage a FSBO is that there's no commission to be paid to a Realtor. You get all the proceeds from the sale, minus any marketing costs you incur.

A second advantage is that you have complete control of the transaction. You don't have to rely on anyone else. You're totally independent.

A third advantage concerns your equity. If it's low, you have the possibility of selling your home without having to write a check.

A fourth advantage is that you don't have to rely on a realtor to schedule showings, answer inquiries, etc.

Disadvantages of Selling Your Own Home

Perhaps the greatest disadvantage is the tremendous amount of time you have to put into the sale.

It's a time-consuming process to do all the paperwork, the marketing and advertising, the showings, etc. by yourself - not to mention the hours it takes to get acquainted with all the legal, financial, and other issues. You must be prepared for this.

A second disadvantage is the costs in terms of marketing and advertising. If you don't exactly what you're doing, this can be very expensive! We spend an enormous amount of research and marketing dollars to invest in the latest technologies that are not available to the average homeowner.

A third disadvantage is that you won't have access to the Multiple Listing Service (MLS). The Multiple Listing Service is only available to licensed Realtors who are MLS board members.  Without access to the MLS, you’re left with few options that will actually get a significant amount of potential buyer traffic and can lead to a very inefficient, ineffective, and frustrating process. 
The fourth disadvantage relates to your knowledge of the market. If you're not knowledgeable about it, you may not price your house correctly.

That is, you may underprice it or overprice it. If you underprice your home, you lose money. If you overprice it, you lose buyers. By the same token, if you do find a buyer and you're not experienced at contract negotiations, you could be taken advantage of.
In Fairbanks, there are many pitfalls throughout the transaction process that can spell disaster for real estate transactions: home inspection requirements and repairs, specific lending requirements, challenging appraisal processes, well and septic inspections, etc.

A fifth disadvantage relates to a belief of some buyers. They believe that since you're selling the house by yourself and not paying a commission, then they're the ones who should get the savings instead of you! There is also a perception that if you’re not using a real estate professional, you may be hiding something with the home and that’s not the perception you’d want to convey. 

My Advice: Do your homework before considering selling your home by yourself! And, if you do decide to go the FSBO route, be fully prepared in all aspects of home sales!
If you'd like more information and advice on selling your own home as well as my real estate services, contact me.

Energy Conservation In Your Home This Winter – Protecting the Environment AND Your Wallet

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One of the most significant money mongers is the heating bill in a home – especially during the coldest winter months.  And one of the best ways to address the heating efficiency in your home is to take a few measures that will ensure efficient running, ending up in less waste and more money in your pocket.  We’ve put together some tips to help get you started this year on the winterizing energy kick you and your house can benefit from:

Seal Gaps In Doors, Windows and Access Points

Many people underestimate the power of proper seals in windows and doors and how keeping a bit of draft out can make all the difference in keeping the home warmer all winter long.  For a few dollars, you can buy a caulking gun and some caulk to re-caulk the draft spaces – plus you can replace door seals if they are corroded. You will be surprised at how much of a difference this change makes.  This is something that should be checked every year, though it may not be necessary to do it each year. The savings can add up to several hundred dollars year-round and also positively affects cooling efficiency during the warmer months.

Get An Energy Audit Performed

Depending on where you live, you can request a free energy audit from agencies that come out and perform a thorough check on your home and its energy use. If you are in the Fairbanks area contact the Golden Valley Electrical Association or GVEA or follow that link for the GVEA's Home$ense Program. You will also benefit with a pack of energy saver light bulbs (usually up to $100 worth of bulbs).  You can find a list of reputable agencies to perform free energy audits here.  All in all, the savings can pile up quickly when you take a few steps to actively reduce energy use in your home.

Have Regular Maintenance and Service Checks Done

By having the major heating and cooling appliances in your home regularly checked and serviced, not only can you prevent major expenses from occurring by catching problems before they surface but you can also preempt any issues from developing.  Keeping your appliances in good working order will result in them running better, producing better results and spending less energy to accomplish these results.

There are many functional and financial advantages to getting energy efficiency upgrades for your furnace system as well.  Minor changes can have a major impact on the amount of money it costs to heat (and cool) your home since fuel costs are significantly reduced.

Harness the Sun’s Energy

Since grade school we have learned about the power of the sun’s energy and this could not be truer in practical life.  A lot of homeowners have no idea of how much warmth they can generate in their home just from the heat from the sun’s rays.  Depending on the position of your home, you can heat up a room quite a bit by keeping the shades open.  Skylights also have a good deal of impact on the heat (and light) of a room.

Cut Back on Excessive Energy Usage

When possible, turn extra lights off, use electrical appliances only when necessary, turn the TV off when it is not being viewed, and set your thermostat on an automatic timed schedule.  These measures and other similar things will reduce the expenditure of energy in your home and you will notice a sizable reduction in your electric and heating bill.  For even more success, get the entire household involved so that it is a collective effort.
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There are myriad ways to conserve on energy.  On the Internet you can find many resources for tips and tricks on how to make adjustments that end up helping to save money while protecting our environment as well.

Why Having a Home Inspection On Your Property Prior to Selling Is a Good Idea

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It goes without saying that before someone decides to finalize a sale on a house an inspection is an important part of the equation. But did you know that if you were to have an inspection performed on your own property prior to listing it, you would reap several time and money-saving benefits? That’s right – for homeowners who have decided to invest a few hundred dollars in advance of selling, there are several avenues through which they end up saving.  In this article, we shed light on the reasons why a few hundred dollars now can go a very long way later, most likely leading to a successful sale.

Advance Notice of Safety, Structural and Sanitary Issues

No homeowner wants to be faced with additional and unexpected expenses while in the midst of a pending sale transaction.  By taking the proactive measure of having a professional thoroughly review the structure, any concerns that could come up later as a red flag to buyers or a means to negotiate your selling price down – can be identified in advance and dealt with.  Concerns about safety, structure or sanitation are primarily required to be resolved prior to sale and with advance notice of any problems in these areas you can avoid costly last-minute surprises.

Added Value To Potential Buyers 

During a buyers’ market especially, buyers are savvy so they know that inventory levels are high and prices are low and they use that to leverage their influence on a sale.  When they come across a home that has been pre-inspected, not only will they be less inclined to skip over to the next property on their shortlist, but they will also appreciate the fact that any necessary repairs will have been done.  This allows buyers to focus on the more important aspects of the transaction without wondering if there are any unresolved issues lurking behind the scenes.

Dodge Replacements and Have Repairs Done As Needed

The last thing a seller wants is to have to shell out large amounts of money prior to selling their home.  With a home inspection done in advance of listing the home, major issues can be preempted with manageable repairs rather than needing complex repairs or expensive replacements.  Not to mention that buyers love to come into a move-in ready home with all repairs and issues taken care of.

Leverage At Negotiation Time

Having had a detailed and comprehensive inspection by a qualified home inspector in advance, allows the seller an edge when it comes time to negotiating a selling price. In situations when a buyer is aware of things that are not completely up to par they would use that to lower the selling price, repairs done to resolve outstanding issues in advance make that step unnecessary.  From a seller’s standpoint, it is a huge benefit knowing up front what the financial outlook is for the transaction.

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Nowadays, sellers need all the push they can get to stand out in a crowd of other sellers, all vying for the few buyers out there at the moment.  Whether offering extra concessions, coming far more than half way on sharing some expenses or demonstrating the willingness to accept a less-than-optimal price on the property – one thing is certain right now: sellers are the underdog.  With a home inspection on the table however, it is just one more thing that makes the sale more attractive than others, hopefully translating to a successful sale.

Why Would A Seller Get a Warranty Policy On a Home? Protection, Peace of Mind and Preservation

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Most of us have heard about a homeowners’ insurance policy and we know that the coverage on those usually encompasses things like fire, theft and vandalism plus storm, wind and lightning damage.  It doesn’t necessarily end there either but the general consensus is that a homeowner’s insurance policy covers unavoidable and circumstantial situations.  But did you know that a home warranty takes care of a different scope of coverage in a variety of circumstances?  In this article, we go through the differences so you can decide which one is better for you of if you would be best served to get a policy of each on your home.

Advantages of a Home Warranty

The most obvious reason a warranty on anything is advantageous is because there is coverage in case the items listed on the policy are affected in the way identified on the policy.  Who does not want extra protection?  A home warranty is no different, though most often it entails warranting a “used” space and the things in it.  Unlike a home insurance policy, a warranty covers things that may go wrong, without being tied to natural disasters (like storms) or catastrophic occurrences (like fire, theft or vandalism).  A home warranty will provide coverage on this like maintenance and repair on things in your home plus other related issues such as the plumbing and electrical systems, flooring.  Also covered by a home warranty is regular wear and tear incurred by the homeowner on things such as furnace, electrical systems and plumbing.

Benefits of a Home Insurance Policy

Required on most FHA loans, a homeowners’ insurance policy is not the same as a home warranty in that the policy covers basic replacement value in general in case of calamities such as fire, theft, vandalism, personal liability, storm damage and more.  Not only is the home structure itself covered under homeowner’s insurance but contents of the home are also included.  The biggest advantage of a home insurance policy, other than the blanket replacement coverage that applies to all or most of the home, is the personal liability protection.  Anyone visiting, as long as they are not a hired contractor on site (they would have to have their own protection) or those residing at the property are covered for any injury and corresponding medical bills, etc.

Overlaps Between the Two

As with anything, the extent of coverage largely depends on the individual policy drawn up and the riders included for which you pay a premium.  For example, a homeowner can choose to purchase additional glass protection, tree removal (after a storm and subsequent damage) or jewelry coverage on items stored in the home. There will be some overlaps, but in general each covers the home in a different capacity.  One, the insurance, from the perspective of a catastrophic coverage and the second, a warranty, as a blanket of protection against wear and tear plus normal aging.

Advantage of a Home Warranty in a Real Estate Transaction

A common feature on many home warranties is free seller coverage.  An example of this benefit. Benefits is through a policy offered by Home Warranty of America, a company that supplies a 13-month home warranty on the day a seller lists their house.  The most striking advantage is that for 180 days, the seller enjoys free coverage on the house.  When the home closes, only then is the policy paid for.  Better yet, the liability continues even after the sale transaction is complete, which means that if your buyer is in the home after the sale and discovers that something is not working as expected, most likely it would be covered under home warranty (assuming the item is listed on the policy).

A study conducted by an industry association demonstrated that warranted homes sell faster and more money – sometimes within 3% of the listed price.  In today’s buyer’s market this is an excellent tool to help sellers during real estate transactions.

Three Critical Things That Can Enhance the Price of Your Home

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Let’s face it, it’s a competitive economy and we all want to get the most bang for the buck. This especially applies to real estate. It’s true that the real estate industry is picking up now and people who made investments in property some time ago can expect some returns at some point in the near future. But the fact of the matter is that today it is still a buyers’ market and therefore it is essential that you prep up your home before putting it on the market.

In this article we share three critical success factors that can bring about a significant change in the eventual price that you get paid for your home.

EASY AS 1-2-3

Curb Appeal 

The first important factor that has a direct bearing on the value of your home is how well maintained it looks from the outside. In real estate terms we tend to classify it as curb appeal. The term “curb appeal” refers to the façade of the house that greets the buyer as he walks up to the front door. This includes the lawn, any lawn fixtures, the shrubbery, the patio and all the other things that the buyer can see at first glance.

In order to get a good value for your home you must ensure that all these are in tip top condition. Keeping in mind that first impressions are lasting impressions, take time out to work up your grassy areas – use fertilizer, hire outside help and really make the lawn look green and grand.  Next comes the entryway. The front entrance area is very important. You can easily dress it up with flowerpots, a swing or some good quality patio chairs. Patio sitting space is a great way to indicate a good neighborhood as it shows that people are comfortable with spending time out in the open amongst neighbors.

Another small thing that can add value is the welcome mat. Make sure you dust it well or replace it altogether.  An old rickety door will give a very poor impression of your home so replacing it with a new one is a great addition to the space. You may want to replace the old door with a nice new one that shuts properly and is inviting.

Kitchen Aroma

The kitchen serves as the gathering place for every family. Therefore upgrading the kitchen is an excellent step towards increasing the value of your home. If your budget allows, upgrade appliances like the fridge, microwave and oven. Also make sure to check the handles on cabinets. Often these small things tend to get missed out but a savvy buyer can easily identify these seemingly innocent gaps. A good-looking kitchen sets a very good impression for the rest of the house. People generally believe that if the kitchen and bathrooms were well maintained, the rest of the house would definitely be in impeccable condition.  Make sure you clean off the appliances and counter tops to give your kitchen a more polished look.  Also make sure to put dishes away and dry off the sink before those crucial visits from potential buyers.

Lighting is another tool to make your kitchen stand out. Kitchens often give the impression of being under lit and under lit kitchens imply poor focus on house maintenance. Don’t let a simple thing as lighting destroy the value of your home. Lighting is probably the cheapest upgrade, especially under cabinet lighting. Adding under cabinet  lighting to your kitchen is extremely easy and is readily available at your local store.

A Bathroom Facelift

As mentioned above improved bathrooms are another factor that can help enhance the value of your home. Give your bathrooms a facelift by changing the fixtures, blinds and accessories like the mirror or towel bars. Sometimes a simple thing like changing the color can really make a big difference. Bathrooms are also the one space where the color white is acceptable. White bathrooms give off a sterile, clean look. If the mirror does not have a frame, adding one can give it a brand new feel, potentially yielding valuable extra dollars to the sale price of your home. Another great tip is to match the colors of your bathroom’s fixtures with the walls.
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So the next time you have a buyer coming in to see your house, be sure to use these great tips to spruce up your home and bump up the success factor. These top three areas form the crust of what buyers look for when evaluating a house and can really contribute towards enhancing the value of your home.