Buying Land: 5 Things to Consider

Whether you're building a residence, need extra storage, or are purchasing as an investment or farm property, the time to buy land has never been better.

It's still a buyer's market in many areas, yet many sources claim the housing market is turning a corner. In fact, due to the election year and historically low interest rates, many areas are experiencing bidding wars that have not been seen since before the economic recession. Combined with an aging existing home inventory, this new flurry of activity has prompted many homebuyers to consider land for their next purchase.

While the decision to buy land may be easy, the process is certainly not.  Here are five tips for buyers interested in purchasing land:

1. Walk the property line. Request a plot plan of the property and walk the entire border line. Make sure your agent and the seller are clear with you about where the property begins and ends and where the site setbacks are. Many first-time land buyers are not familiar with judging acreage and may not always immediately know what land is included in the listing. Alleviate any confusion from the beginning by having the seller or agent walk the property line with you.

2. Research the neighborhood. Get to know the surrounding neighborhood. What does the property line border? Another lot, a farm, a subdivision? What is the nearby land being used for? If you're planning to build a home on the property, be sure to check the surrounding properties for potential noise or construction. If you plan to purchase farm or horse land, you'll want to be sure you don't have any ground contamination or runoff issues from surrounding properties that could impact your future crop or livestock.

3. Check for utilities. Does the property have any utilities set up? Was there any soil or percolation testing done for sewer or any cost estimates for installation of utilities? Is the property zoned for horses, and do you need any permits? In most instances, your real estate agent will be familiar with these issues and will ask the seller on your behalf. However, the buyer should be aware of them and any possible costs that may arise after the sale so he or she can work them into the offer price.

4. Ask about taxes, HOAs and assessments. Do you know how much the property taxes are? Are there any existing assessments on the land? Does the lot or land reside in a common interest community with a homeowners association? All of these factors should be considered when buying property and should determine your price when making an offer.

5. Get the right help. Use an experienced real estate agent and lender. Land sales are different than home sales, and agents who primarily sell land are more difficult to come by. An experienced agent will know the right questions to ask and can help narrow your search significantly. You may also find that your loan options are more limited than if you were buying an existing home. If you're planning to build, you may want to consider a lender who specializes in construction loans and can finance the entire project. Be advised, though, that many lenders shy away from offering full financing for undeveloped land or unfinished construction. In these cases, because there is no collateral and greater risk to the lender, you may find you need a larger down payment or have to settle for a higher interest rate on your loan.

With the right amount of research, preparation and support, buyers should have no difficulty finding the property of their dreams at a reasonable price.

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

Lead-Based Paint: Keep Your Family Safe

Lead is a metallic element found in rocks and soil virtually everywhere in the world. Tiny lead particles can be toxic if individuals inhale or swallow them. Over time, those inhaled or ingested lead particles may accumulate in blood, bones and soft tissue. The lead can cause permanent damage to the central nervous system, kidneys, brain, and red blood cells. This is lead poisoning, which can ultimately lead to death.

Infants and small children are particularly vulnerable to the effects of lead poisoning. The Environmental Protection Agency (EPA) reports that lead can harm children more readily for three reasons.

First, "babies and young children often put their hands and other objects in their mouths. These objects can have lead dust on them." Additionally, "children's growing bodies absorb more lead," according to the EPA, and "children's brains and nervous systems are more sensitive to the damaging effects of lead."

Lead-Based Paint Dangers

Lead-based paint is one of the biggest sources of lead poisoning. "The federal government banned lead-based paint from housing in 1978," reports the EPA, while "some states stopped its use even earlier." While lead's toxic effects were understood early in the 20th century, it took decades before it was phased out of use in the United States.

Lead-based paint in good condition typically doesn't pose a risk. Trouble arises when the paint ages and chips or flakes. Small children might eat those paint chips and run the risk of lead poisoning.

Also, if lead-based paint is scraped, sanded, or heated with an open flame (as it would be in the process of paint stripping for the purpose of renovating or remodeling), then lead particles can become airborne and inhaled. Just as bad, those particles can land in carpet fibers and fabrics where they can gradually recirculate.

Be particularly mindful about using a vacuum to clean up paint chips; lead can penetrate your vacuum's filter system and recirculate through the air exhaust stream.

Government Efforts to Reduce Lead Exposure

Fortunately, the government has come to understand the potential dangers of lead-based paint. By 1960, lead-based paint was used in only one-third of all American homes. By 1977, the United States government banned lead in many household products as part of its Lead-Based Poisoning Prevention Act. Since then, federal and state agencies, including the Center for Disease Control and Prevention (CDC), the Department of Housing and Urban Development (HUD), and the EPA have taken additional steps to get lead out of paints, drinking water, automotive fuel, and other products and to minimize the dangers to people living with lead in older homes.

The EPA passed a rule in April of 2010 requiring renovators of 1978 and older homes to obtain training (for individuals) or certification (for firms) for "lead-safe work practices." Renovators aren't the only people with a legal responsibility to help prevent lead exposure:

• Landlords must share lead-based paint information with potential tenants of structures built before 1978. They must disclose "known information" about lead in the building prior to leases becoming effective.

• Sellers of 1978 and older homes are required to include a disclosure of lead-based paint hazards on sales contracts and to disclose "known information."

• Buyers of 1978 and older homes are entitled to have a check for lead performed within 10 days of being notified of the potential for exposure.

A pamphlet detailing some ways to minimize lead exposure in the home is available from the EPA. For more EPA recommendations, you can call 1-800-424-LEAD.

Testing for Lead-Based Paint

If you have reason to suspect lead-based paint is in your home, have it tested by a qualified laboratory. Contact local, county or state health and environmental services for information or referrals to certified testing laboratories. Home testing kits can be unreliable, but the government works hard to make testing affordable and accessible to residents of older homes. A booklet about how to test for lead is available from the EPA.

Lead Paint Removal

If you have lead paint in your home, and if it's peeling, chipping or excessively aged, have it removed immediately (if it's still in good condition, it's probably still harmless). Lead paint removal can be a costly and time-consuming process, but you might have to endure much dearer costs by leaving it alone and exposing yourself and your family to its very real dangers.

Call on a qualified, experienced professional to handle your lead paint removal. If you insist on doing it yourself, consider these important tips:

• First, conduct all testing for lead-based paint thoroughly and accurately.

• Be sure you meet the EPA's requirements for training before you begin.

• Move your family (pets, too) off the premises for the entire procedure. Do not move back home until the job is finished and the area is cleared.

• Make sure any pregnant (or soon to be pregnant) women are out of the house long before you start the paint removal process.

• Do not use belt sanders, propane torches, heat guns or dry sandpaper. These tools will spread lead particles into the air, creating an inhalation risk.

• Note that lead dust can remain in the air and throughout your house long after the procedure is completed.

Removal Alternatives

If your paint is still in good (intact) condition, you may be able to eliminate any potential dangers by covering it with wallpaper or simply repainting the surface with safe (non-lead) paint. Another alternative is to install a layer of wallboard over the surfaces painted with lead-based paint. Consult with a qualified professional for evaluation or paint removal.

The long-term danger of exposing growing children to lead is very real, but avoidable. With care, you can protect yourself and your family from lead by having your home tested for lead-based paint if it was built before 1978, undertaking any renovations only after obtaining EPA-certified training, and using trained professionals for lead-paint removal. If you think there's been lead-based dust or chipping paint in your home, have a blood test performed on any vulnerable family members. Therapies are available to help patients with acute lead poisoning, but the safest thing to do is avoid exposure in the first place by making the home safe.

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

Is a Debt Consolidation Home Equity Loan Right for You?

Maybe you've indulged in impulse shopping one too many times or actually found yourself in an emergency where paying with a credit card was the only option. Either way, if you're a homeowner who is struggling to pay those monthly bills, debt consolidation could make sense for you.

Homeowners who have equity in their homes but whose debt load has become difficult to manage are good candidates for debt consolidation loans. A debt consolidation loan allows you to pay off high-interest consumer debt, such as credit cards, by centralizing those balances with one lender in one loan. This means that you can merge a home mortgage payment, a car payment, a student loan payment and credit card debt into a single larger loan. One way to consolidate is through a home equity loan.

What is a Home Equity Loan?

Equity is the difference between the value of your home and the money you still owe on your mortgage. Sometimes referred to as a second mortgage, a home equity loan allows you to borrow against the equity you have built up in your property. With a home equity loan, your home is used as collateral for your debt consolidation loan. This type of debt consolidation allows you to benefit from mortgage interest rates that are typically lower than rates for other types of debt.

Another benefit of a home equity loan is that in most cases, interest paid is fully tax deductible.

Uses for Consolidation Loans

A debt consolidation loan lets you lower your monthly payments by combining your debt into one loan. With lower monthly payments, you can strengthen your cash flow, which will free up money for other uses. The surplus can be used to pay down your mortgage principal, allowing you to pay off the total amount owed in a shorter period of time.

Also, debt consolidation loans often have longer terms than other loans, giving you more time to pay off the money you borrowed.

People get home equity loans for a variety of reasons, including making home improvements, paying for college education or medical expenses, or buying a new car. However, home equity loans should not be used to pay for clothing, entertainment or minor repairs, according to Kathy Sweedler, consumer and family economics extension assistant with the University of Illinois.

Costs of Refinancing Home Equity Loans

While you might hear a lender advertise for "no-cost refinance," often no-cost refinancing simply means the costs have been included in the amount of the loan.

Home equity loans usually have the same costs and fees applied to them that buying or refinancing a house does. When you refinance your home equity loan, you will often pay closing costs, application fees, attorney review fees, appraisal fees and more. Some lenders will waive these fees. However, some costs may still apply.

Disadvantages of Debt Consolidation Using Home Equity Loans

Because you're using your home as collateral with a home equity loan, the primary disadvantage of debt consolidation this way is that, if you can't make the payments, your house may get foreclosed. According to Sweedler, being 60 or 90 days late on a payment can put your home into foreclosure.

Transferring all of your debt to one lender can have some drawbacks. Consolidation loans can keep you in debt for much longer periods. Additionally, if the value of your home decreases and you need to sell it, you may end up owing more on your home than it's worth.

Before signing on the dotted line, be sure you know the terms of the loan, the interest rate and payment amount, the points and fees and what the penalties are for late or missed payments. Also, check with your lender to find out if your home loan has a balloon payment - a large sum of money due all at once. If you feel you've made a mistake, you have up to three days to cancel the loan after signing. This can be done for any reason and must be done in writing.

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

Swimming Pools: Do They Add Value or Turn Buyers Off?

Sparkling blue water, especially when it's lit up at night – what's not to love about a swimming pool in your backyard? If you have one, you may feel blessed. If you don't, and are considering adding one, hang on a minute.

Who Wants a Pool?

According to Better Homes and Gardens Real Estate, middle-aged buyers with teenagers at home comprise the biggest market segment for homes with swimming pools. This makes sense when you consider how dangerous an unfenced pool is for families with toddlers.

Another segment of homebuyers who may find a pool desirable are younger couples who entertain frequently. There has been a lot of emphasis over the past few years on outdoor entertainment areas, including outdoor kitchens, fire pits, fireplaces and seating areas. A swimming pool frequently figures into these plans.

Location Always Counts

"Location, location, location" may just be a trite real estate mantra, but it is important nonetheless. If you live in Hawaii, Florida or the Southwest, a pool is far more in demand than for homes in Minnesota, Alaska or North Dakota.

Then, drill down your location even further. Even if you live in the desert climate of the Southwest, if there's a community pool a block away, installing a pool at home may be a waste of money. On the other hand, if your neighbors all have pools, you should probably consider putting one in.

How Big is Your Lot?

Lot size is a huge factor in deciding whether or not to have a swimming pool installed. Remember, if you have a small lot and the pool takes up the entire backyard, you are removing your home from consideration by buyers with small children and buyers who garden or entertain. Pet owners and young families typically want grassy areas where their pets and kids can play safely. Many seniors like to putter in the yard. If there is no room for any backyard activity other than swimming, you narrow the buyer field dramatically.

What is the Home's Value Right Now?

One of the most important factors to consider when thinking about adding a pool as a home improvement project is to not over-improve for the neighborhood. If you own a modest tract home in a neighborhood of similar homes, a pool may be overkill. The value of your home can only rise to that of the most expensive home in the area.

Owners of luxury homes in higher-priced neighborhoods with roomy backyards that appeal to buyers looking for a certain lifestyle may be able to justify the expense of installing a swimming pool. In fact, if you own a luxury home without a pool, you may lose buyers.

Type and Condition of the Pool

It should probably go without saying: If the pool is in poor condition or dirty, it will not add value to the home. If the pool is outdated, it won't add value. If the pool hasn't been maintained, the appraiser may even deduct from the home's value, according to Tim Page, owner of Appraisals by Page in Spokane, Washington. He suggests that if your pool is of the above-ground variety, it is considered personal property and it won't factor into the home's value. Be that as it may, if it is in poor condition it may turn off buyers, so take it down.

Factor in the Ongoing Cost of a Pool

Ongoing home maintenance costs are a turn-off for many buyers, and a pool may be a maintenance nightmare for them. Aside from the cost of pool installation, ongoing maintenance tasks such as heating and cleaning the pool, as well as the ongoing cost of a swimming pool, may be prohibitive to many buyers.

Does a Pool Add Value?

Most real estate agents will tell you that pools do not add value to a home, and for the most part this is true. What value a pool may add is small – typically about 8 percent of the home's value, according to the National Association of Realtors® National Center for Real Estate Research. The margin of increase is larger for homes in the southern U.S., Florida and Hawaii.

The decision to install a swimming pool should be based on your personal lifestyle and desire, not whether it will add value to the home.

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

Sell My Home Fast: Should I Sell My House and Carry the Contract?

In slow markets, when homes just don't seem to move as quickly as we'd like them to, offering seller financing may be the key to getting a home sold. With the sluggish real estate market of the last few years, seller financing has been dramatically increasing in popularity, but is it a smart move for you?

If you just can't bear to let your home go for a fraction of what you paid for it, or you really need to sell quickly, then it may be a great option for you. Offering to carry the contract makes it easier for interested buyers who simply can't get a home loan in today's tough lending environment. Owner financing could help you avoid the nasty consequences of a foreclosure or allow you to trade up and take advantage of a great deal on a better home while prices are low, without juggling two mortgage payments.

Offering any form of seller financing can instantly make your home more attractive and stand out in the sea of properties on the market. It can also allow you to set a far higher price than you could get if you sold it to a cash buyer today. Just make sure you are aware of all your options and how badly it could turn out if things go wrong.

How Dangerous is It?

People have been selling their homes like this for decades, and real estate investors have used the process to make millions, so what it there to worry about?

There are three main threats to those who are considering offering some type of creative financing to prospective buyers.

Your Home Just got Demolished.
Until your contract or seller-held mortgage is paid off, any damage to the property could devalue it further, leaving you with a pile of rubble you can never sell. The last thing you want is someone smashing up the place or a hoarder getting your home condemned!

You Just Gave Away Your Home.
Depending on how you put your documents together, and your state laws, you could be giving up "equitable rights" to your property or creating a shared ownership arrangement. If your buyer defaults, this is going to make it even more of a mess to evict him or her. Get ready to take a number and step to the back of the line behind the banks waiting two years to foreclose on their deadbeats.

No, Those Aren't Pandora Bracelets the Nice Man in Uniform is Bringing You.
No, the sheriff didn't just get a part-time job as a jewelry delivery guy. If you are underwater on your mortgage, and you can't keep up on payments, selling and carrying the contract may be difficult. Obviously, you can't sell the home for less than you owe without your lender's approval, and if the incoming rent or mortgage payments aren't enough to cover your home loan, you could find yourself in big trouble. If your new resident gets a foreclosure notice, you can bet they will be contacting an attorney, the local news, and demanding a warrant put out for your arrest for defrauding them out of their money.

If this is you, get a loan modification or ask your lender about a short sale.

How do I Sell My House and Carry the Contract Safely?

Be extremely wary of signing any document that shady guy with the beat up truck and "We Buy Houses for Cash" magnet sign tries to shove in front of you.

There are a number of ways to offer seller financing, including:

Land contracts
Trust deeds
Seller held private first or second mortgages
Lease options
Rent-to-own

Each has its own pros and cons. What is right for you really depends on your local laws and current situation. All of these choices essentially allow you to demand a higher price tag than the current market would allow and can provide you income as well as a big cash payday later. However, seriously consider consulting an attorney for help drafting the agreement before signing away the deed to your home.

Tip: You may have an assumable mortgage, which a new buyer can simply take over, relieving you from the debt and accelerating the transaction while making your home far more attractive. VA loans closed before March 1, 1988 are typically assumable (lender approval is required for loans closed after that date), so check your loan paperwork carefully.

Know Someone Who Badly Needs to Sell His Home?

Finally, whether or not this is a good move for you, if you have any friends or family members wondering if they should sell their house and carry the contract, suggest that they take the time to vet any potential buyers carefully before entering into a contract, and of course seek the advice of an attorney.

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

Can I Keep My House if I go Bankrupt?

Bankruptcy is never an enjoyable process. And in some cases, yes, you will not be able to stay in your house. But not in all of them, say experts. Sometimes, filing bankruptcy could be just the ticket for keeping your home.

Exempt vs. Non-Exempt Assets

Bankruptcy is either the liquidation or reorganization of a person's or business's assets in order to pay the claims of creditors. But not everything you own gets treated alike in bankruptcy courts. Federal law exempts certain kinds of assets from seizure to satisfy creditors, including 401(k) plans, pensions, a limited amount of home equity, a limited amount of life insurance, and the like. However, each state has the option to accept the federal limits, or adopt their own. Each state, therefore, has different rules on how much of your home equity is protected from the reach of creditors in a bankruptcy, according to Corey Vandenberg, a bankruptcy attorney in Provo, Utah.

Why Going Bankrupt can Help You Keep Your Home

If you are drowning in debt, and your home is only one of several outstanding balances, and you want to keep your home, filing for bankruptcy may actually help you. Once you file, the court orders what is known as an automatic stay, meaning all collection activities must cease, pending a hearing before a bankruptcy trustee in a federal court. This means most of your payments could be suspended for a while – which could give you the breathing space you need to save some money to get current on your mortgage.

How Badly do You Want It?

First, consider your overall financial situation. Why did you get pushed so far into a corner that you needed to consider bankruptcy in the first place? In some cases, the root causes of a bankruptcy have little to do with the home. If your monthly outlay for shelter – including mortgage payments, property taxes and utilities – is well within your budget, or is not significantly more than you would pay anyway if you gave up the home and went back to renting, then a tactical bankruptcy may make decent sense.

On the other hand, if you simply have too much house for your income, or if your home will shortly need repairs that are beyond anything you can afford – even after you declare bankruptcy and have other debts discharged, you may not want to try to keep the home. It may make better sense to take the foreclosure (or a short sale), and rent for a time while you get a fresh start.

Furthermore, you may want to let the house go if you are simply hopelessly underwater on the home. If you are making $40,000 per year and you owe $200,000 on a home that's now worth $120,000, it doesn't make much sense to commit the after-tax income of over three years of your life just to come back even. Especially in non-recourse states, where lenders have no claim on borrowers' personal assets in the event that a foreclosure sale does not cover the outstanding mortgage balance. You may be better off letting the house go, saving the $80,000, renting for a while, and starting over by eventually buying another home at a more current market price. If your home has no equity, you can keep it in Chapter 7 bankruptcy. The lender still holds the security interest, although the note is wiped out.

Do I Qualify?

Although bankruptcy hearings occur under the purview of the federal court system, states are generally free to set their own limits on what bankruptcy filers are allowed to keep. In Florida and Texas, for example, you can keep an unlimited amount of home equity in a Chapter 7 proceeding. But you may also have to meet strict limits on your income to qualify for a Chapter 7 full discharge. Other states limit the amount of equity you can retain. For example, in Illinois, you are allowed to keep your home if you have $15,000 or less in equity in your house ($30,000 for married couples.) If you have more than this amount, your creditors could demand that bankruptcy trustees sell the house and pay them off with the proceeds.

If you have at least some income, it is much easier to qualify for a Chapter 13, which is an individual workout. Chapter 13 allows you to restructure your debt and pay at least some of your debt off over about three to five years.

Because state laws vary substantially, it's important to consult with an attorney licensed in your state prior to declaring bankruptcy.

Work out a Deal

Frequently, you can still work out a deal with the lender, depending on the circumstances and whether it makes sense for you to fight to keep the house. With Chapter 7 – a full discharge – filing for bankruptcy only halts the foreclosure process temporarily, until the bankruptcy proceeding has run its course. At the end of the process, the lender will continue with the foreclosure – unless you enter an agreement with the lender, reaffirming the debt. Which you may be in a better position to do, once your other payments – business loans, bank loans, credit cards, even a second mortgage - are wiped out. This provision can help you keep a home, car or other vital asset.

A chapter 13 filing halts the foreclosure permanently – provided you keep making the payments agreed to during your chapter proceedings. If you're worried, don't panic, advises Vandenberg. The bankruptcy court system doesn't want you living in a van down by the river, he says. "There's usually some way to figure out a solution."

In most cases, you can keep the house under the following circumstances:

• You are current on the mortgage.
• Your equity in the home is below the exemption limit allowed by state law.
• You reaffirm the debt.

If you are behind on the mortgage payments, or if you own more equity in the house than your state exempts, Chapter 7 might not allow you to keep the house. In that event, if you want to keep the house, you'll need to file under Chapter 13. This chapter will halt the foreclosure process, restructure your debt, and possibly allow you to make payments on the past-due mortgage amount.

Bear in mind, though, that even this will not permanently forestall foreclosure if you can't make the payments. Bankruptcy doesn't eliminate a lien – your lender still maintains their collateral, and the right to foreclose if you default – even after you declare bankruptcy. If you can't make the arrears payment, plus the ongoing mortgage, you may well have your home foreclosed on, anyway.

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

How Your Credit Score Affects Your Mortgage Rate

Credit checks are a necessary part of applying for any loan, but they are especially important during two stages of the loan process: on the day you apply for a mortgage and shortly before closing on the loan. The first credit check is to ensure that you pay your bills on time and have sufficient income to purchase the property. The last credit check before closing is the lender's last assurance that you are, indeed, creditworthy.

Knowing what lenders look for on your credit report and in your FICO® score is important information and can help you prepare to get the best mortgage possible.

Mortgage Lenders

Mortgage lenders take your credit score very seriously. Even though studies show that applicants with high FICO® (Fair Isaac Corporation) scores are more likely to strategically default on a mortgage loan (walk away from it), applicants with low scores are still considered a greater risk by lenders.

Generally, the better your score, the more options you have. You'll be able to buy with a lower down payment, access a wider variety of loan types, and pay fewer points for a lower mortgage interest rate.

Good Score? Lower Mortgage Interest Rate

How much lower will your interest rates be if you have a good credit score? This will vary from individual to individual.

Keep in mind that the FICO® scoring range runs from 300 to 850. Let's say you're applying for a 30-year mortgage and your FICO® score is 760, which is a very good score. Your interest rate may be among the lowest on the market.

Now, let's assume your FICO® score is quite a bit lower: only 620. Suddenly your interest rate is dramatically higher. If your score falls between 500 and 520, you will have much higher interest rates and you'll find fewer lenders willing to work with you.

Borrowers with scores between 300 and 500 are generally not considered creditworthy. If you're interested in learning more about how your score impacts the interest rate on your new mortgage loan, see the chart at MyFico.com.

My Score was Fine. Why Wasn't I Approved?

Even with a sterling FICO® score, you may still be turned down for a mortgage loan. If you are unemployed or have been within the past two years, you may not be approved for a loan. If you don't make enough money to cover the monthly payments, you may be denied a loan. There are any number of reasons a lender may not want to work with you, even with a high FICO® score.

Credit Checks and Life

Your financial history will not only affect your chances of buying a house, but may impact your ability to receive financing for a car, a vacation or for home renovations.

Insurance rates may also be affected by your rating, as poor ratings usually mean higher premiums. Many colleges will consider your financial history before they approve student assistance programs. Even employment may be affected, as many employers require a credit check as a character reference before offering a position.

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