What Counts as a Comp for Your Home?

From replacing a rusted out bathroom sink to laying laminate flooring, Americans are hooked on the DIY craze. Some things, however, are better left to professionals. Establishing your home's current market value before putting it on the selling block or pursuing a refinance is one of those things.

To determine its value, appraisers and real estate agents will compare your home (the "subject property") to those that have recently sold in the area (known as "comps"). They will adjust the comps' prices up or down, according to how similar each home is to yours.

Read on to learn how a home qualifies as a comp for yours.

Status
The market value of a home is, simply, what a knowledgeable and willing buyer will pay it. This figure is reflected in the sales price of recently sold homes.

Appraisers and real estate agents use the local Multiple Listing Service (MLS) database in their research, to look for homes that have sold within the past six months. Only real estate licensees that pay an MLS membership fee will have access to this database, so a DIY consumer will find it challenging to locate a full and accurate list of sold properties.

Location
Since location is one of the principal indicators of property value, appraisers and real estate agents seek sold homes that are in close proximity to the subject property. Some lenders give strict location requirements to appraisers, for example a comp in an urban or suburban area must be no more than one mile away, and rural comps no more than five miles away.

Real estate agents, on the other hand, have a little more leeway and will typically begin their research close to the subject property and then widen the area until they've found three comparable properties that have sold in the past six months.

Neighborhood characteristics that influence a home's value include:
Nearby parks
Proximity to shopping
Neighborhood condition
Traffic, airport or other noise
The quality of the school district
Number of distressed properties in the neighborhood
Declining values or oversupply of homes in the area

Price Per Square Foot

You may see sold homes or homes for sale that list the price per square foot in addition to the price of the home. This figure takes into account only the home's square footage and nothing else. Because it fails to account for the diverse aspects and special features of the house, it isn't an accurate reflection of value.

That said, with all other aspects being equal, a larger home will most likely sell for more than a smaller home. 

Condition

Deferred maintenance will drag down the value of a home. Deferred maintenance includes all of the items you have been meaning to fix, but never got around to. Examples include:

Leaky faucets

Cracked windows

Loose or missing hand rails

Structural damage

Overgrown landscaping

Dirty or damaged carpets or other flooring

The Process
Since it is unlikely that your agent or an appraiser will find a home that's identical to yours, he or she will need to make adjustments to the sold prices of the comps to account for the differences.

If the comparable home is inferior to the subject property, value is added to bring it up to par. Conversely, if the comparable is superior to the subject, value is removed.

Here's an example of how this works:

The subject property has three bedrooms, two bathrooms and a pool. The comparable property, located three blocks from the subject, sold three weeks ago for $387,500.

The comparable property has three bedrooms and two and a half bathrooms, but it doesn't have a pool.

The appraiser or agent will deduct value from the comparable for the lack of a pool and add value for the extra half bathroom. The amount to deduct or add depends on the value the local market places on items such as a pool or a half bathroom.

The adjusted price range of the comp will reflect the current market value of the subject property.

Determining a home's market value isn't rocket science, but it does require current, accurate information and some experience with the process. A professional real estate agent will not only determine the current market value, but will also give you tips on how to get top dollar for the home.

*** For all the real estate tools and the only Realtor you will ever need, visit TulsaHomeGuru.

Flood Insurance Rates Going Up? Here’s What to Do

By: Dona DeZube
Published: July 22, 2013

If you live where floods happen, you may see an increase on your next flood insurance bill. Here’s why rates are changing, plus tips to help you figure out if you’re affected.

(On March 21, 2014, President Obama signed into law a bill to provide relief from high flood insurance rates. Read about it here.)

Why Are Rates Going Up?

Two reasons:

1. The Federal Emergency Management Agency is updating its flood maps to be more accurate, which could change your flood risk designation. If your risk is higher, your premiums will go up. If it’s lower, your premiums could go down.

2. Last year, a new law took effect that requires the National Flood Insurance Program (NFIP) to phase out subsidies for some older properties to reflect the full risk of flooding.

Phasing out the subsidized rates and discounts over the next five years will help the NFIP stay solvent.

Some subsidies have been given in the form of “grandfathering.” A grandfathered rate is a discount given to homes built in compliance with then-existing standards in a flood-mapped community where the flood risk has since increased.

Congress and FEMA are reviewing these properties to determine whether to phase out these grandfathered rates. FEMA won’t make a decision on this until late 2014. By then, Congress could pass a law delaying the increase indefinitely.

Do You Have a Subsidized or Discounted Rate?

Only 20% of NFIP policies are subsidized. Most hom eowners already pay the full rate and won’t see an increase.

If your property isn’t your principal residence, is in a special flood hazard area, and was built before the first flood insurance rate map was implemented for your community, you may be getting a subsidy for being what’s called Pre-FIRM (pre-flood-insurance-rate-map).

TIP: To find out if your home is Pre-FIRM, look up your area in the Federal Emergency Management Agency’s (FEMA’s) Community Book.

1. Click your state.

2. Look for the date in the “Init FIRM Identified” column for your area.

If your home was built before that date and it’s in a special hazard zone, you probably have subsidized flood insurance.

If Your Premiums Aren’t Subsidized or Discounted

It’s possible you still could see a change in your flood insurance premiums if your home is in a community that adopts a revised flood map after July 6, 2012. If that revised flood map puts you in a different zone, your rates could go up or down.

When Will the Rate Changes Take Effect?

If your home is Pre-FIRM and it’s a second home (rental or vacation), you may already have seen your rates change. A 25% increase was implemented for policies renewing after Jan. 1, 2013. Increases will continue each year until they reach full-risk rates.

In October 2013, more subsidized homes will start seeing rate increases of 25% each year:

Severe repetitive loss properties


Business properties


Properties with previous flood claims for more than the market value of the property
If you have a Pre-FIRM home, and it’s your primary home, and it doesn’t fall into the above-mentioned categories, (lucky you!) you get to keep your subsidized rate until:

You sell your home.


You let your policy lapse.


You have severe, repeated flood losses.


You buy a new policy.
Can You Get a Better Rate?

You may be able to get a lower flood insurance rate by changing your home’s flood risk. Congress appropriated a large sum of money for property owners to raise their homes onto piers, posts, columns, or pilings. Check with your local community to see if grant money is available to help you do that. Talk to your insurance agent about how elevating your house will change your flood insurance premium.

There’s also a Community Rating System that could reduce flood insurance rates by up to 45%, depending on which flood plain management regulations your community adopts.

Check with your local officials or insurance company to see if your community participates and if you can get a discount for that. If your community doesn’t participate, write a letter to local officials urging them to join the Community Rating System.

Other things you can do to trim your flood insurance premiums:

Opt for a higher deductible on your excess insurance policy if you have one.


Convince local officials to put more money into community flood mitigation projects to lower your flood risk.
It won’t lower your premium, but having a flood cleanup kit on hand will make your life easier if you do have a flood.

By the way, NFIP is the best deal. Without it, you have to take your chances in a virtually nonexistent private market for flood insurance at rates only the wealthy can afford.

Some of the same companies that provide private flood coverage also sell “excess coverage” flood insurance. Excess coverage pays to rebuild homes valued at more than the NFIP limit of $250,000.

Mistakes in Flood Insurance Premiums

It’s possible the rate you’re quoted for flood insurance is wrong. If you disagree about whether your home is in a particular flood zone or the insurer didn’t take into account the pilings that raise your home 12 feet in the air, you can appeal your home’s flood zone determination.

An elevation certificate from a surveyor or engineer can lower your premium if it proves your home sits above the predicted flood level.

You’ll also want to correct insurer mistakes that lower your premium. For example, if your policy says your home doesn’t have an elevator or crawlspace and it does, tell your agent, even if your premium will rise when those are included. That ensures your property and possessions are fully covered and recoup what you’re owed.

Think the FEMA map itself is wrong? Check with local zoning officials, your builder, prior owners, a local surveyor, and FEMA to see if anyone has filed a Letter of Map Amendment asking for a map review.

If no one has filed, you can do your own appeal.

Read more: http://members.houselogic.com/articles/flood-insurance-rates-going-up/preview/#ixzz3RGv5kr3w
Visit HouseLogic.com for more articles like this. Reprinted from HouseLogic.com with permission of the NATIONAL ASSOCIATION OF REALTORS®.

*** For all the real estate tools and the only Realtor you will ever need, visit TulsaHomeGuru.

Tips For Buying A Foreclosed Home

Homebuyers in the market for a deal on their dream home need two things: lots of patience and the stomach to do battle with investors. Any home that is in a decent area and priced right is facing keen competition in today's market.

Homebuyers in the market for a foreclosure need those qualities tenfold. Buying a foreclosure is a lengthy process, and, although most investors prefer pre-foreclosure sales and auctions, you will face your share of competition for bank-owned homes.

Let's take a look at some foreclosure-buying options and how to participate.

Buying a Foreclosure at Auction

Homes that are sold at auction, typically carried out at the county courthouse, are those that homeowners have lost because they failed to bring the mortgage current during the reinstatement period.

The lender's representative, known as the trustee, will be on hand to receive the money from the winning bidder, if there is one. The opening bid is typically equal to the loan balance, trustee's fees, accrued interest and other costs incurred by the lender during the foreclosure process.

Can you get a bargain at auction? That depends on how much the homeowner owed before defaulting on the loan. The opening bid must be met or the trustee purchases the property and it then becomes an REO, or "real estate owned" by the lender.

You may have seen foreclosure auction shows on TV. If so, you know it isn't the place for a novice to get a good deal. Most of the bidders are highly experienced flippers and investors offering up fierce competition.

You will also not be able to view the inside of the home or perform inspections. Plus, if you're the winning bidder, you may have to evict the current occupants. Depending on the state in which you live, eviction may be costly and time-consuming.

Finally, many foreclosures have additional liens against them, which you will take on if you purchase the property. Recorded liens are public information; you can search for them at the county clerk's office, the county recorder or the assessor's office. But not all liens are recorded.

One way to ensure you're protected is by purchasing an owner's title insurance policy.

Buying an REO

Purchasing a bank-owned property is much easier than buying a home at auction and much like a conventional purchase.

You'll need a loan preapproval letter from your lender, unless you're paying cash, and the services of a real estate agent.

Most REO properties are vacant and somewhat cleaned up. Although the bank won't supply you with property disclosures as sellers in a conventional transaction are required to, you will be allowed time for inspections.

Many experienced REO buyers perform extreme due diligence, such as checking the city planning office for permits that may be on file for any work the previous owner performed. Have anything that looks the slightest bit suspicious inspected, from the roof to the foundation.

Your buyer's agent should be able to assist you in learning as much as possible about the home's history. And, since real estate brokers are required to hold on to transaction files for a number of years (varying according to state), if the home sold in the past few years, your agent may be able to track down a past disclosure.

Banks typically don't pay for repairs to the property, so you'll need to take on that expense. Ultimately, although it may seem that you're getting a bargain-priced home, once all is said and done, it may be worth it to purchase another home in turnkey condition.

*** For all the real estate tools and the only Realtor you will ever need, visit TulsaHomeGuru.

How To Design A Kid-Friendly Backyard

One of the pleasures of having a home is the space that a backyard provides for activities with family and friends. A backyard can be a great place for kids to burn off energy, explore the outdoors, and simply relax.

When children are small, care should also be taken to ensure their safety. The following are things you can do to design a kid-friendly backyard that is both fun and safe.

Maximize Exercise Space

It's tough these days for children to get enough exercise, but an area dedicated to lawn makes a more kid-friendly backyard. Provide enough space to run around, play tag, or throw a ball. The shrubs around this activity area should be tough, thorn-free, and able to withstand occasional abuse from balls or kids running into the beds.

Plant Fruits and Vegetables

Getting kids to eat their fruits and vegetables can also be a challenge. Why not make eating colorful, nutritious food more interesting by letting children grow their own fruits and vegetables? Tomatoes, potatoes, carrots, raspberries, and blueberries are all easy to grow. When children see fruits and vegetables go from seed to plate, they are more likely to eat them.

Create Interesting Garden Spaces

Is there anyone who hasn't played hide-and-seek? Providing a lawn isn't the only way to ignite a child's sense of play and creativity. Gardens can be divided into "garden rooms." Think of the lawn as the living room of the backyard, but you can also create a cozy nook with a bench surrounded by shrubs. This kind of space might provide a great kid-friendly place to read a book or the perfect hiding place for that next game of hide-and-seek.

Provide Protective Fencing

Designing a kid-friendly backyard is also about safety. When young children are present, it's important to provide protective fencing that not only keeps them from wandering off, but also keeps strangers and stray pets from coming into the backyard.

Provide Guardrails on Decks and Site Walls

Generally, building codes call for guardrails on any raised surface, deck, or wall that is 30 inches above the ground or adjacent surface. Handrails are needed on any staircase with four or more steps. The openings on guardrails and handrails must be sized so that a 4-inch sphere cannot pass through in any direction. This is also true for fence pickets.

Don't Plant Poisonous Plants

Babies and toddlers are always putting things in their mouths. Leaves, bark, colorful flowers, and berries can all look very enticing to curious, young children. Before planting any plant in your backyard, do a little research. Look the plant up in a plant encyclopedia or online and see if it is poisonous. Some very common plants are poisonous: daffodils, daphne, foxgloves, and rhododendrons, just to name a few.

Don't Allow Unrestricted Access to Pools and Water Features

Babies and small children can drown in a surprisingly small amount of water. Therefore, it's important to supervise children around swimming pools, hot tubs, fountains, and water features. These water-based amenities can provide hours of enjoyment, but their location and access to them should be carefully planned to prevent accidental drowning. Provide locked doors or gates where appropriate to prevent small children from playing in water unsupervised.

Designing a kid-friendly backyard involves finding ways to inspire creativity and play within a safe environment. It's as easy as that. Now go outside and play!

*** For all the real estate tools and the only Realtor you will ever need, visit TulsaHomeGuru.

Is Your Garden Really Green? Creating an Eco-Friendly Landscape Design

You may have the greenest lawn on the block, but is your garden really "green," meaning ecologically friendly? Often the answer is a resounding "NO."

Just the fact that you have a lawn at all can be an indicator that your landscape is not as green as it could be. Lawns generally need more water and fertilizers than other plantings. Plus, they need to be mowed approximately once per week in the summertime, and if you don't have an electric or reel mower, you're burning fossil fuels every time you mow.

What are some ways you can create a garden that is really green? How can you create an eco-friendly landscape design?

Be Water-Wise

When it comes to an eco-friendly landscape, being water-wise means not only reducing the amount of water you use, but also managing stormwater - water that falls during a rainstorm, on site. Stormwater often gets directed to a pipe as soon as possible and then directed to a river, pond, or sewer. But, it is possible to capture it, store it, and redistribute it to be used again. For example, direct the downspout from your rain gutters to a rain barrel and then use the captured water to irrigate your landscape.

Reduce Impervious Surfaces

Another way to create an eco-friendly landscape design is to reduce the amount of impervious surfaces on your property. Impervious surfaces are areas like concrete, asphalt, and stone pavers where water cannot penetrate the surface. The water that used to soak into the soil has to go somewhere. When water can't infiltrate the soil surface, it causes problems downstream and has detrimental effects on rivers and streams. Pervious concrete and asphalt have come on the market and offer an alternative to impervious surfaces.

Use Drought-Tolerant Plants

This tip is related to being water-wise. If you want to create an eco-friendly landscape design, use drought tolerant plants.

Go Native

Native plants are well-adapted to live in the area in which you live. Plus, they typically will provide a food source or some sort of ecological input that supports local insect and animal species.

Build and Protect the Soil

In most suburban and urban areas, the soil is terribly depleted of minerals and nutrients. By amending the soil with organic fertilizers, cover crops, and compost, you can support an eco-friendly landscape design and help protect the soil structure. This creates a more nutrient-rich soil in which your plants can grow.

Grow Your Own Food

From farming methods to transporting food, we rely on fossil fuels to feed everyone in the United States. You can do your part to reduce the use of fossil fuels, reduce food miles, and provide nutrient-rich vegetables to your family by growing your own food. You can grow a surprising amount of food in a small space, and wouldn't it be nice if you could simply walk out your back door and harvest some lettuce for dinner?

Get to Know Beneficial Insects

Many gardeners mistakenly think all insects are bad. If they don't recognize a particular insect, they go get the sprayer and shoot the insect with a chemical pesticide until it dies. This is one of the worst things you can do. Why? There are many insects in the garden that help keep the "bad bugs" in check.

Have you ever noticed a rose bush covered in ladybugs? They're probably there because they're eating the aphids. If you look closely you'll see them. However, if you see the ladybugs, mistakenly think they are hurting your roses, and decide to kill them with pesticides, you're actually creating more work for yourself. The next time the aphids come, and they will, there will not be ladybugs there to defend your roses. You have just inherited the ladybugs' job. To create an eco-friendly landscape design, you must understand your ecosystem. That means getting to know the beneficial insects in your garden and learning how to support them in their work of defending your garden.

These are just a few of the many ways in which you can create an eco-friendly landscape design. The bottom line is that you must work with nature, not against it.

*** For all the real estate tools and the only Realtor you will ever need, visit TulsaHomeGuru.

Designing with Your Teen: Bedroom Décor

It's time to put away the beloved character comforters and sheets - your little girl or boy is no longer a child. The switch from cartoon characters to a more mature bedroom décor can be a smooth experience for both parent and child.

When tweens enter the full-fledged teen years they yearn for independence. They want control and decision-making privileges. It might be scary to imagine teenagers choosing their own paint colors, furniture, and decorations, but with a strong design plan this process doesn't have to be intimidating.

Get Inspired With a Design Board

Teen bedrooms can be mature but still have an element of fun. Their décor can reflect their interests in sports and hobbies in a stylish, organized way. Creating a design or inspiration board is the perfect way to find a happy medium between what parents want and what teenagers want. Choosing the perfect design elements will create a space that fosters confidence and self-expression while avoiding clutter.

The design board should include everything that will go into the bedroom. Not only should it have pictures of furniture and paint and fabric swatches, it should also include details like lighting fixtures and accessories. One to create the board is to cut out pictures from magazines and glue them to a paper poster board. Your teens can also search online for pictures that can be printed out and affixed to the board. Another option is to copy and paste pictures from websites like Pinterest and Tumblr to a blank document on your computer. Once the design board is made, parents and teens can go over it together to be sure both parties agree on the design plan.

Choosing Colors

Don't be caught off guard if your teen chooses an outrageous color like bright pink or black. Bold, funky colors can be a fantastic outlet for their personalities. If you can't deal with all the walls being drenched in an over-the-top color, use the wild color as an accent on a single wall, a border, or as a pattern throughout the room. Another option is to use a more subtle color for the walls and brighter or bolder fabrics and accessories throughout the room.

Bedroom Furniture

Beds, dressers, entertainment centers, desks, nightstands and bookcases are often part of a teen's bedroom décor. If all of these pieces are too much for the size of the space, then consider picking dual-purpose furniture, like a workspace that includes shelving or an entertainment center that houses a television and has shelves for books and accessories. You may want to forego the dressers for under-bed drawers to keep clothing neatly stored. Installing a closet organization system is another way to store everything from clothes to shoes, bags, coats, and accessories.

One thing you don't want to skimp on is shelf space. Shelves are great places to display books, but they are also perfect for displaying trophies, photo frames, and more. When purchasing basic furniture like the bed and nightstand, consider the future use of each piece. Will the furniture be staying long after your teen graduates from college, or will your child be using the furniture to fill a college dorm or first apartment? This will help you decide how much money to invest in the furniture as well as what style options are most appropriate.

Lighting and Accessories

Overhead lights and lamps come in every style imaginable. A simple overhead ceiling fan with lights can provide circulation and bright light when needed. Matching or coordinating small lamps are good for desk areas and nightstands. Dimmer options on all lights are practical features that will allow optimal lighting for any situation.

Framed wall art can give teen rooms a grown up appeal without going overboard. Buying art from a local artist or encouraging your teen to create their own art can make these accessories affordable. Words and geometric designs that adhere to the walls are fun ways to allow teens to express themselves without ruining wall paint.

*** For all the real estate tools and the only Realtor you will ever need, visit TulsaHomeGuru.

Are You Ready to Buy a House?

Cue Michael Buffer yelling, "Are you ready? Let's get ready to rumble!"

Buffer's is a fitting soundtrack for the homebuyer in a seller's market, trying to prevail in catching the seller's attention. The better equipped with knowledge you are, the better your offer will look to the current owner of what you long to possess: the home of your dreams.

Let's take a look at a few ways to get prepared to purchase a house.

Check Your Credit

The highest credit scores garner the lowest down payment requirements and lower house payments. Homebuyers with scores under 620 will find it a challenge to obtain financing and, if they do, they'll pay a higher rate.

You are entitled to a free copy of your credit report once a year. Make sure you order the reports at AnnualCreditReport.com, the only site authorized by the federal government.

When you get your reports, either online or in the mail, go over them, looking for mistakes or anything else you can challenge. It is not at all unusual to move your score up dramatically by disputing and having the agency remove even one negative entry from your credit report.

Pay Your Bills

Lenders determine how much they will loan by using what is known as a debt-to-income ratio (DTI). To determine where you are right now, add up all your monthly payments, including auto loans, credit card payments and any other debt. Don't forget to add in your current mortgage or rent payment.

Divide the sum of your monthly debt payments by your monthly gross (before tax) income and then multiply that result by 100. This is your DTI, expressed as a percent.

What is considered an acceptable DTI varies by lender, but they typically want to see it no higher than 36 percent.

If you find that your DTI is on the high side, pay off some bills or increase the amount you pay each month to bring down the balances. Also, don't take on new debt as this will negatively impact both your DTI and, possibly, your credit score.

Save Your Money

Loans from the Veterans Administration and USDA have no down payment requirements. FHA, on the other hand, requires 3.5 percent of the purchase price as a down payment, unless your credit score is between 500 and 579, in which case expect to put 10 percent down.

For a conventional loan, you'll need at least 20 percent of the purchase price as a down payment on the house. Again, more is better – the more cash you put down, the better the interest rate. The amount of the down payment may also determine whether or not you'll have to pay for private mortgage insurance.

Don't forget about closing costs as you save – those are all those fees that can pack quite a wallop at the closing table. Some of the fees are negotiable, and the total varies. Use 3 to 4 percent of the loan amount as a ballpark figure

Arrange Your Financing

In many parts of the country investors are snatching up any house that's in decent condition and reasonably priced. Because they typically offer cash, their offers are the cream of the crop to home sellers looking for a clean transaction and a quick close.

Investor offers are mighty hard to compete against – especially if you go into the process unprepared.

When you look over a standard purchase agreement you'll notice a section regarding financing. It will typically state that the buyer has so many days to obtain a mortgage at specified rates and terms. If the buyer hasn't been pre-approved by a lender for a mortgage, there is always a chance that he won't qualify for a loan.

A savvy home seller knows this. Faced with multiple offers on his home, he isn't about to go under contract with a buyer who is a gamble.

Rule number one, then, when considering the purchase of a home, is to see a lender to get your mortgage preapproved. No, this doesn't put you ahead of an investor with cash, but it puts you in front of other buyers who don't have their financing arranged.

Make up Your Mind

As you get closer to finalizing the first steps toward buying a home, it's time to determine just what it is you want. One story or two? Condo or single-family home? Urban or rural? Determine how many bedrooms and bathrooms you simply must have and any other features that you can't live without.

Hire a Real Estate Agent

There is absolutely no reason to not hire an agent when purchasing a home. The commission is paid by the seller at the close of escrow, so the services cost you nothing. Not a bad price to pay for expert representation by someone who is legally required to protect your interests.

A good real estate agent is, overall, available to show you homes at your convenience. He or she is also familiar with the areas you've chosen for your house hunt. The right agent will follow your wish list to the letter, not wasting your time showing you homes that don't fit your criteria.

Congratulations on your decision to buy a home.

*** For all the real estate tools and the only Realtor you will ever need, visit TulsaHomeGuru.