FREQUENTLY REPEATED ANSWERS...

                                                                                                                                                                           

 

 

Today's mission is all about repetition. I am going to go over some ground that I have been  over in past blogs. Not only frequently asked questions but situations that occur due to potential clients not knowing the rules of the road where mortgages are concerned. And to be totally fair-the rules have changed substantially.

 

 

nhsdesigns.com

 

 

 

  * Large deposits of cash going into bank accounts are a no-no. By and large I am talking about 25% of gross monthly income.  If mom and dad want to help and give you money for closing costs and down payment it is considered a gift and will have to be documented as such. Which also means getting information about the donor's bank account and what's in it.

 

*Insufficient funds checks or debits are never a good thing.  Every once in awhile we all have the balance of our bank accounts get away from us-but it shouldn't be a habit. Overdraft protection is not the same thing as not over drafting. Protection is great-saves you a few bucks in penalty fees but writing more in checks than you have money to pay them out of your checking account results in NSF posting which lenders don't like to see. When the payment is due, they want the money. Inability to manage your bank account isn't the most endearing thing an underwriter is going to want to learn about you.

 

 

* Even if your loan is VA or USDA and has no down payment requirements, you still need to have some money to obtain your mortgage loan. Usually around $1000 for inspections, appraisal, and earnest money. I also suggest that you take the time to try to build some savings for emergencies. When you own a home, the repairs are on you.

 

* How soon can I close? Every borrower wants to know the answer to that question as for their purposes, the sooner the better.  Unfortunately, mortgage processing does take some time.  While consumers may wish that the lender, appraiser, and title company would all work faster, the fact remains that the Federal Government in its attempt to ensure that loans are as transparent as possible has stepped in to slow the process down.  There are currently required periods of time after financial disclosures are made, appraisals are disclosed and the final settlement statement is issued. For an uncomplicated conventional, VA or FHA loan, typically 30-35 days is enough time to process the loan-assuming no appraisal, title or credit issues that have to be resolved. USDA closings are all over the map-USDA is seriously undermanned which means they tend to get backed up during the portion of the selling season.  Further issues can occur due to the fact that generally speaking there is no "staff up" times for lenders during the busiest period of the year. Training, educating and licensing industry professionals such as appraisers, loan originators, underwriters and processors takes time and a considerable financial investment. Lenders won't makes those investments only to lay people off in September when the flow of transactions slow down.

 

 

* Documentation requirements- these seem excessive to some people, and if compared to what was required just 6 or 7 short years ago they are excessive. But given the world of hurt that lack of documentation got us into, I suppose having to prove where you work, how much is in your bank account, that negative credit accounts have been settled and where your money is coming from is not such a bad idea. 

 

 

* Pay your bills on time. This sounds pretty basic but it is not at all uncommon to have folks turn up that haven't met a bill they ever paid and still think it is unfair that they won't be approved for a mortgage. 

 

* You must have a job. Again-basic information. And I don't talk to many people that are actually unemployed at the time they wish to purchase a home...but some have only been on the job a couple of weeks. Not that a new job means you can't get a loan-as long as it is in a line of work that you have been doing, all probationary periods have been fulfilled, and your job history is fairly solid. 6 months here, 2 months there probably won't work if you have just begun a new job.  Schooling counts as experience so if you have a two years technical degree in mechanical design let's say-and your new job is in mechanical design-your course work counts as work history.  With employment there aren't one size fits all rules. It can vary program to program and lender to lender. 

 

  As an addendum to 'you must have a job' if you receive child support, disability, social security or retirement income that counts as income-so there are some situations in which you do not have to have a job. However, unemployment compensation does not count as income that can be used as qualifying income.

 

 

 

 

 

* Pre-Approval-if you don't want to waste valuable time be sure to become pre-approved prior to beginning your home search.  Once pre-approved you know you will be shopping in the right price range, have a good shot at actually being approved for your loan and will have the ability to provide your real estate professional with a letter from a mortgage originator (preferably one from Tippecanoe Mortgage) that a lender has at least reviewed your financials and your credit. Sellers will not consider your offer without it.  

   That's for today's review.  It all goes a long way to assist you in being ready for a complicated process. And, once prepared makes things go much easier.

 





APPRAISALS-THE HIGH AND THE LOW OF IT

                                                     woodlandsappraiser.com

 



  A critical component of any real estate transaction is the appraisal report.  The appraisal functions as the eyes of the lender, letting the lender know if the home is worth the sale price as well as giving the investor insights into the basic condition of the property. The appraisal report serves to assist the borrower in disclosing important information such whether values in the area are declining, appreciating, or remaining level, discusses neighborhood characteristics, as well as placing a value on the property. I can assure you, no one wants to pay more than a property is worth.  

 

  It is important to note that an appraisal is a snapshot of what property value at a given time. It is also a somewhat subjective document-all the appraiser can do is look at properties that are hopefully within close proximity with similar features to the subject property, using standard deduction and additions, bring the values of the comparable properties as close as possible to the subject property in assessing the amenities.  In other words, an appraisal is not a scientific endeavor. There is no agreed upon formula that if you plug A (say the value of a three car garage) subtract B (an in ground swimming pool) that you will equal C-the value of the property being evaluated.  There is room for differences in opinion. The tools the appraiser has to use are properties that have sold and have a real price. Not properties that are on the market-though they may be cited in the report, but are not used to determine value, nor properties that sold a year or two years ago.                                                            

  When an appraiser is given the task of establishing value on a property they must search sales in a particular neighborhood to ensure that the sale price is indeed within the range of established values. It is not the appraiser's job to create equity for the buyers within the context of the appraisal. I have had buyers tell me they are disappointed with their appraisal reports because the home's value was established at the sale price.  The two comments that come to mind with regard to that are that it is the appraiser's job to determine that the home is worth the sale price, nothing more-so he or she isn't necessarily looking to find extra value.  The second point is that competent real estate agents are going to market properties at approximately the value they are worth-not try to run up the score so to speak. A good realtor has a pretty good grasp of what a listing is worth.  So the best one can hope for is no negative surprises on value.  If you are awarded a bit higher price in value-that is a bonus.

 

  I would also caution people that the property tax assessment records are not an accurate estimation of true value. In Indiana values for property are determined by a process called "trending" which involves assessing all the recent sales for a given area, feeding them through a computer program and chunking out the results.  While there are areas in which most of the homes are within a particular price range and very similar, there are also areas where the homes are wildly disparate-so property tax assessments are not normally the best method of determining value of a specific home.

 

  A good buyer's representative should be able to obtain sales information supporting the listing price of a property.(Or if the listing price is too high.)  In any case it is a good idea to request this from your agent prior to placing an offer on a property.  The agent has access to much of the same information that the appraiser is going to use, so this is an excellent service that can be used on your behalf with making an offer.

 

  95% of the time homes appraise at or about the purchase price.  If listing agents have done their work, they will want a property they are listing to reflect the value of the neighborhood.  Since the listing agent is the one who pays for marketing the property, it is a losing proposition to list overpriced homes-though it happens if a seller is particularly resistant to the price range that is suggested.  Sellers are emotionally involved in their properties and that emotion can color what they perceive as the value. During my tenure as a real estate agent when I encountered a seller that was absolutely firm on the price they wanted to list at, regardless of what my analysis showed, I would write the first price reduction into the contract for a particular time so I could take it automatically and not be coupled to an over pricing listing that I knew I couldn't sell. If the seller refused to do that I often walked away.  And to be perfectly fair, I wasn't always right either. But those occasions occur less frequently these days since the crash in home values in 2008.

 

 

                                                                    topguns.com

 

  So what happens if the appraisal comes in lower than the sale price? Can you still buy the house?  That depends...

 

  The bank will only loan you x percentage of the appraised or sale value of the home, whichever is lower.  So if you are putting 5% down and your home appraised for $100,000 instead of  $105,000, your loan will be for $95,000 not $99,750.  So you can still purchase the home for $105,000 if you can come up with the difference between the $95,000 and the $99,750.  Most buyers can't or don't want to do that. If you still want the home, often another negotiation will have to occur based upon this new information that was not available when you made your offer. If both you and your seller really believe that the home is worth the $105,000 you can ask for the lender to review the appraisal-but to do so you will have to provide proof that the appraiser missed something or didn't consider some available comparable sales. It helps if you can provide those additional sales to the appraiser-sometimes they will revise the report sometimes not. The lender can't be involved in any of this as we are not allowed to contact or speak with the appraiser. We can provide the appraisal dispute forms and we will send the information to the Appraisal Management Company who will in turn dispense the information to the appraiser but the Federal Government has drawn a huge red line between appraisers and lenders. No interference is allowed. This is one (of many) areas where having a real estate agent involved in your transaction becomes key. Real Estate agents will have access to recent sales as well as data regarding the specifics of the home such as square footage and amenities in case the appraiser made an error.

 Other possibilities that can occur with a lower appraisal is that the seller may agree to sell the home at the lower price or sometimes buyer and seller meet in the middle. The price is reduced some and the buyer pays extra.

 

 

 

  Appraisal reports are also used to assess the general condition of a property and it is within the appraiser's scope of responsibility to cite repairs that need to be made to bring the property up to average condition. Structural concerns may be cited. If a property is built on a slab and there is no floor covering on any portion of the slab the appraiser will not that fact for instance. The loan will not close until that situation is corrected. All types of loans are subject to that type of appraiser remark. Remember, the appraiser is the eyes of the lender and the reason for the report is to give the lender information they need in order to make a sound judgment on whether or not to loan money on a specific property.

LET'S CHAT ABOUT CREDIT...AGAIN...

                                                                careerrocketeer.com

  This is what we are talking about when you borrow money for a house. You are promising to pay the bank at a future date (actually many future dates) for the home you want today.  Credit may be the most important factor in a loan application.  Or a better way of saying it is how you use credit.  Your credit history and payment patterns go a long way to determining whether or not a lender is going to approve your loan application.

 It is true that credit restrictions are beginning to thaw a bit.  The FHA program is now allowing credit scores down to 580 as acceptable credit scoring for a mortgage loan.  But there are a couple of big ifs with that pronouncement. One of the if's is whether or not the lender you are applying through will allow the score. Lenders can put their own rules on credit score levels, so just because FHA says it is okay with them, doesn't mean you will be able to obtain the approval. The second if is a subject to why the credit score is 580.  Was it due to past credit issues that have been resolved or is it because of ongoing problems?

  Let's say the reason that you have the lower score is because there was a bankruptcy or a foreclosure in the past.  And if that is the case you would be among many other folks who had the economic earth shift under their feet in the past few years and fell into the chasm.

  If your response to that traumatic financial event was to decide that you aren't using credit cards any more that decision is going to make it tough to buy a house.  Qualifying for a mortgage is a bit more difficult than qualifying for other types of credit.  The loan amounts are significantly more so the risk the lender is taking is higher. Not to mention that the new federal rules and regulations set out by the government after the mess of the past few years won't allow banks to play loose and free with folks who have a questionable payment history.  If you haven't reestablished credit after a bankruptcy, you need to do so. Up until this year the requirement has been three credit lines that have been open for 12 months or more. This isn't written in stone, but is a good rule of thumb-but...you may get by as long as the credit lines that are in existence are being paid on time. Typically three is still a good number but one that has been in existence for 18 months, one at 12 and one that is newer generally will work. In conjunction with that the borrower must without fail be paying rent on time. Derogatory credit after a bankruptcy indicates to a lender that the borrower still does not have things under control.

  The USDA loan is being offered in some circumstances down to a credit score of 580-but...if the credit score is under 640 a couple of new rules apply. 

  Well, I suppose we could use the the shalts and shalt not for these USDA rules-I will give it a try:

IF your credit score is under 640 and you want a USDA loan;

1) You shalt not have open collections unless they have been in repayment for 12 months and you can produce a payment history.

2) You shalt not have more than one thirty day late payment on any current credit lines without a compelling story as to why the late payment happened and what has changed since it occurred so that it will not occur again.

3) You shall have 12 months rent checks available to produce for verification of rent if you rent from an individual rather than a rental management company.

  It is fair to say that if your credit score is below 640 for either of these loans the burden of proof is on you to show that you can be a reliable borrower. What that means is producing documentation to prove what you say is true-for instance-compensating factors.

  What is a compensating factor? A compensating factor is something you can show that shores up your credit worthiness such as guaranteed overtime at your job, the ability to save money, length of time at your job, good rental history, a retirement account, the ability to put down more money than required by the terms of the loan-sometimes a non borrowing but working spouse's income will count as a compensating factor.

                                                         infiniteunknown.net

  Lately I have been running into folks who pay cash.  That's great. I believe in paying as you go if you can.  But not using credit doesn't give a mortgage lender a baseline to judge how you will handle paying off a mortgage loan.  So once again, begin establishing credit if you think you want to buy a home in the next year or two. Plan ahead. The time to buy a home is not at the moment the thought enters your head. Buying a home is a process that ideally is mapped out for success.

                                                                   boscoanthony.com

STAYING IN THE COMFORT ZONE

                                                     trishryanonline.BlogSpot.com

  One of the first  pieces of information  I want to know from  a potential borrower is what they consider  a comfortable payment.  We all want to be comfortable with our mortgage payment.  No one wants the pressure of never being able to go to a movie, take a vacation, or attend a sporting event because the house payment is so high you can't do anything but pay for the house.

  What constitutes a comfortable house payment depends on the person.  Many people consider what they are paying in rent the sweet spot of their comfort zone. Some feel their rent is too high and they can do better buying, which is often the case. While lenders do look at rent VS the proposed house payment to be sure the buyer won't experience "payment shock" with a payment that is significantly higher than what they are used to paying, this isn't the only factor that determines an acceptable payment from the lending perspective.

  The lender wants to look at the total consumer debt picture.  What do your credit cards cost you every month? How about other loans? Typically your minimum payments on consumer credit debt (credit cards, car payment, student loans, and any other installment debt) is added to the house payment.  A rule of thumb is that this total debt can't be more than about 43% of your gross monthly income and about 33% of that amount can go to housing. For some people the payment allowed by the lender is too much. That' fine, no one is going to force you to buy more than you feel you can afford.  In more than a few cases your rent may exceed the ratios that I have outlined here so you might feel you can take on a higher payment than what the lender will allow you. The argument that you are paying all your bills now, so there is no reason you can't do the same with a house payment doesn't go far with the investor.  Houses have other issues that attach to them that rental properties don't such as repairs, taxes, home owner's association dues etc. I don't see much of that these days, but every once in while someone's eyes are bigger than their stomach-or  in this case I would have to say bank account.

                                                                      clipartbest.com

  Assuming your rent payment falls into acceptable debt ratios, it is a good starting point-unless of course you think your rent is too high.  In either case, we calculate your price range-i.e what the lender will allow you to buy.  It is up to you to choose what priced house you are going to buy as long as you stay in the range.

  Taxes and the cost of insurance also affect the payment. If you are a regular reader of this blog you know that in Indiana taxes are paid a year in arrears and that you receive credits that reduce the property taxes for having a mortgage and living in a property.  In the case of a home that is not occupied, it is very likely that the discount for living in the home (which is a large amount-$45,000) may have fallen off the property. What that means is due to paying the taxes in arrears, you will have much higher taxes the first year. That increase in the payment might be enough to put you off of a specific property.

  In order to avoid an ugly surprise with your house payment I always suggest that you have me figure the house payment prior to writing an offer.  Maybe even choose a few homes that you are getting ready to tour with your agent so you have an idea of what the payment could be.

 
                                                         "The Scream" Edvard Munch

  For many people taking on a mortgage payment that is higher than their monthly rent payment is realistic. But it is also important to take a look at how you spend your money.  If you spend money every month on eating out, movies,  and shopping for items that are desirable but perhaps not necessary making out a budget is a good idea. What of those discretionary items would you be willing to give up or limit to make a house payment? How much of your income goes to what is necessary as opposed to what is nice. While none of us cares to give up all our extras, sometimes we spend a surprising amount of money on what seem to be small purchases that have a significant impact over time. For instance, do you stop by Starbucks every day? That $5.00 latte costs you $1825 over the course of a year. Divide that by 12 and you get $152 per month more dollars towards a house payment.

                                                                   womansday.com

  I know- like Starbucks too...maybe carry your lunch to work more often-cut down on non essential services.  Either way, it puts more money into the budget.

  In any event, those of us who work at Tippecanoe Mortgage want you to feel good about your house payment.  Buying a home is an important event.  It is an item that can't be exchanged or returned easily.  It is important that you feel good about your payment.

ALPHABET SOUP

                                                                 makeitmissoula.com


  It seems to me that the English language is going through a change.  We are all speaking in shorthand-a verbal onslaught of acronyms.  Some have to do with everyday conversation-LOL, BTW, and BFF.

  More and more I am noticing that business professionals are throwing out the acronyms of their trade to be absorbed and sorted through by industry outsiders-in other words, people who would have no idea what those scrambled letters mean. For example here are some of the acronyms of the mortgage industry:

  APR, CFPB, DTI, PITI, MIP, PMI, AMC, GFE, TIL, RESPA, ARM, HELOC, and of course my personal favorites the "Vee" triplets, VOR, VOD, and VOE. 

  OMG indeed.                  private-person.com

  I have seen the glazed look come over the faces of people who are being acronymed by other mortgage loan professionals. Really people-why would anyone outside of this crazy industry care to learn a VOE from an AMC.  But-just in case you get caught in an acronym windstorm let me translate the ones you are most likely to run into in a mortgage transaction in case you run into a mortgage loan originator who has forgotten how to speak their native tongue.

  AMC-this is a new one that has come out of the mortgage melt down.  It stands for Appraisal Management Company.  AMC's are the government's way of keeping appraisers, lenders, real estate agents and title companies from colluding on the value of a home. Each lender has an association with an AMC. Appraisers sign up to accept assignments for appraisals from the AMC. Lenders place the order and an appraiser can choose to accept the appraisal or leave it for the next guy. (Which is why in our area, counties outside of Tippecanoe can have a longer wait time for appraisals.) By law the lender is not allowed to choose the appraiser or communicate to the appraiser directly. All communication must go through the AMC so no undue pressure can be placed on the appraiser to establish a value that is inflated.

GFE- This means Good Faith Estimate. Often real estate agents toss this acronym around. When they tell a buyer to get a GFE what they really mean is to get a worksheet with the closing cost breakdown of the loan they are considering-which is an excellent idea.  The actual Good Faith Estimate can only be presented once the property has been identified, credit has been pulled, income has been documented,  employment has been presented and an interest rate is used to create the payment-so essentially you get the official Good Faith Estimate once you have a property under contract. What can be given to a potential borrower is a worksheet upon which the GFE is based. For the most part, the fees should not change appreciably. Third party fees are allowed a 10% shift, all lender related fees such as underwriting, lender compensation, processing and administration fees are fixed. Typically I find borrowers can follow the worksheet much better than the GFE but the GFE was put in place as an attempt for transparency to try to alleviate buyer confusion on the total cost of fees. In my opinion and apparently also the opinion of the Consumer Financial Protection Bureau (CFPB) it is more confusing than what it replaced. The CFPB has recreated the forms for the GFE as well as the Truth in Lending form (TIL)into an easier format to be used beginning next year.

TIL-Truth in Lending. This is a form that expresses the lending fees in another manner-evaluating the interest rate plus some of the finance costs as a percentage rate-the APR-annual percentage rate. The APR takes the note rate or the interest rate you will receive on your loan and adds in certain finance fees then does a calculation and expresses these fees as a percentage over 12 months time. It is a complicated, confusing process, but the upshot is the APR is a comparative number-not the actual rate you pay on the mortgage. I often have buyers call asking what our APR is that day.  The have confused the interest rate with the comparative number. Often people are told to try to get a lender's APR but that is dependent on the type of loan, loan amount the rate and the closing costs. A lender can produce one but it may be incorrect if the borrower hasn't been fully prequalified for the loan type and loan amount.

DTI-this means debt to income ratio. There is Housing DTI and Total DTI. Most loans use the two ratios-housing typically being not more than about 33% of total gross monthly income and total DTI is the ratio for total consumer debt plus the housing cost. What is commonly referred to as the bottom ratio typically is acceptable up to about 43% thought FHA loans will go higher with good credit and or assets. If you are figuring your own DTI you need to be sure to add in an estimate for taxes and insurance. In Indiana real estate taxes that have no exemptions can make the DTI too high so caution should be used when consdiering vacant properties.

VOR, VOE, VOD-these abbreviations represent verifications-of rent, employment and deposit. The lender verifies all these items during the processing of your loan. But I have heard mortgage loan originators tell clients-all we are waiting on is the VOE before you are fully approved. If you don't know what that stands for you are being told nothing.

PITI-this is an acronym for Principal and interest, taxes and insurance. In other words your total payment with everything in it.

HUD- The department of Housing and Urban Development. You may not hear this in the context of your loan but you will hear it in the context of housing. HUD is the agency responsible for implementing many of the requirements of the Dodd/Frank Financial Reform Act. They also oversee VA and FHA mortgage lending. 

HUD-1-this is the settlement statement that you will receive upon closing your loan.  This form was established by HUD-which is why it has HUD in the title. The CFPB (this is a quiz-quick what does that stand for???) Which now is overseeing lending rather than HUD will implement a new settlement form which compliments the new combined GFE and TIL next year.

                                                          defininghopes.com

 There are other acronyms of course-we seem as a society to be heading in that direction, but hopefully I have given you enough information that you will be able to translate what you are hearing during your mortgage transaction.

blog.themarketinganaylyst.com

A LITTLE HELP FROM MY FRIENDS

                                                                     fwcventura.com
  We all can use a little help from our friends from time to time.  And I can think of no other time when more friends come out of the woodwork with sage advice and stories of their own experiences than when you are buying and financing a home. (The only other event that even remotely comes close is when a baby is expected.) Once you decide to purchase a home you will hear from everyone you ever knew who has been down that road giving you direction on what you should do, shouldn't do and suggestions about what you woulda, shoulda, and coulda done.

  I truly believe that most of these folks have your best interests at heart and there are some areas of this venture that they can be of great assistance (packing up the kitchen, anyone?) but there are areas that even the most fervent of your fans are not qualified to give you counsel.

  If you want a referral for a real estate agent or a lender for that matter, by all means go to your friends or family (and see how often my name or that of Tippecanoe Mortgage comes up-ha!) In any event, one of the best resources at your disposal for a good real estate agent and a lender will be your friends and family.  But once you have been united with those two trusted principals in the transaction-it is time for friends and family to bow out-other than to support you in your decision to purchase a home.

                                                              minney.org

 Because even though your friends and family no doubt are concerned about you in this biggest of big decisions, they aren't in most cases real estate and mortgage professionals.  They haven't done the education, been licensed by the state, gone through the endless rounds of classes on all the Federal and State laws on how to conduct their business legally and protect the buyer, who, after all is you.

 I can't count the number of times that a borrower at the behest of someone near and dear has asked me to do something that is well, er, no better way of saying it than just plain illegal. For me and for them.  And since I don't look very good in orange jail jammies...the color doesn't do justice to my eyes...

    

                                                  www.nashville.com
I just may not be able to do what it is that your advisor has suggested. Please don't misunderstand, when most people make these requests or suggestions they don't realize they are asking you or me to do anything wrong. They just don't know how tightly mortgage loans are controlled by the Federal Government these days. We are regulated with a capital R. (Such as we can't pay fees on your behalf or pay out money for referrals.)

   Your real estate agent is also a professional in their field. Agents are educated in negotiation, marketing, real estate law, and are continually informing themselves of market trends and updating data.  What was true about the local market even six months ago may not be true today. So looking at the reports that your agent gives you about neighborhood pricing patterns, customary closing costs, and explanations of the process are probably quite a bit more relevant than when your parents bought their home twenty years ago. Things have changed.

   Since the advent of the large foreclosure market many people on the advice of family and friends come into my office thinking they want to purchase a foreclosure because they will have a teeny tiny mortgage. Just think how small your payments will be if you buy a thirty thousand dollar home.  What they don't know is that due to Federal and State regulations on lending fees it is almost impossible for a lender to loan on a mortgage amount that small. The basic required fees of lending-appraisal, credit report, and title fees will exceed the state and Federal limits that lenders can charge. And, nothing against you Pork Chop, but lenders are in business to make money, not pay for your mortgage loan out of their own pocket. That is just a rude hard fact of life. And by the way-have you ever walked through a house that was for sale for $30,000?

                                                     pavementpieces.com

        Oooph.  Kind of rough-don't you think?

  If you are working with an agent who has been referred to you, trust that they are trying to do a great job finding you the house with the amenities you want at a price that you can afford to pay.  Your lender is also navigating the way through the process and is trying to obtain the best financing situation for you based upon your payment requirements, and credit and financial profile.  Keep in mind that your financial picture may be very different than that of your best friend so your loan type may not be identical.

  Let the real estate professionals do what they do best and allow your friends to contribute in other ways such as pointing out great schools, neighborhoods, paint colors, and music...

youtube.com

 

And you too will get by with a little help from your friends.

OUT IN THE COUNTRY...

 

 

Before the breathing air is  gone

Before the sun is just a bright spot in the night time

Out where the rivers like to run

I stand alone and take back somethin' worth remembering...

 

 

 

  The lyrics of that old Three Dog Night song describe it exactly-the yearning for a home out in the country. I hear it every day when I ask potential borrowers what they are looking for in a home-a very large percentage want to live in the country.  That's most people's dream-right? The patch of ground that is our own, where we can plant a garden, have a goat or two-where it is quiet and peaceful.

 

www.trails.com

 

 And if you live in a rural state such as Indiana, a home in the country is something that many people grew up in-so it is not so unlikely that as they reach the time to purchase their own home that is what they want. The folks that grew up in the country or small communities are not the ones I am writing this blog for (though you are welcome to hum along and agree when I get it right.)

 

 I am writing on this topic for the folks who grew up in the city or larger communities that don't know a rooster from a hen. It is you folks I am speaking to-so listen up.

 

 

                                                             georgehancks.com

 

  For the uninitiated-that is a rooster.  A hen looks more like this:

 

                                                               emmabridgewater.co.uk

 

 Oh no-that's not it-that is what my city friends may envision as a hen-let's try this:

 

                                             boldtgallery.com

 

That's more like it.  Anyway-all this talk about chickens brings me to a point: If you have never lived in the country you probably should do some research on what that means. Many times when people talk to me about a home in the country this is what I think of:

 

 

                                                        theartofilmblogspot.com

 

 For those who weren't raised on 1960's situation comedies or are students of such-the conversations I have with city people describing the idyllic country vision they have should take a gander at this show in reruns-Green Acres-wherein the city slickers move to the quaint town of Hooterville and mad-cap chaos ensues.

 

  In any event having lived in the country for thirteen years, I don't consider myself an expert, but I do know a couple of things about owning a country property.  Here are the negatives you can expect:

 

1) Mileage on your vehicle-any time you are out of bread or need to take a child to an after school event you will be behind the wheel. If you have multiple children at multiple schools the mileage will add up quickly.

 

2) Be prepared if you live in a northern climate to be snowed in. This may only be for a day or it could be a week or more depending on how remote your place is.

 

3) Consider medical emergencies and the additional time to get help if you need it.

 

4) Likewise fire protection. There are no hydrants out in the country. Our credo was always, "If it is on fire, it's gone. Get the kids and pets out."

 

5)  

 

                                                            1800srecycling.com

 

Bugs. You get bugs. No municipality sprays for insects in the country.  You get these little guys swarming in June, whacking you in the head as they fly by. In the spring and fall you will be visited by a plague of Asian Lady bugs trying to get into your house.. By the way those pretty little bugs bite and when you chase them with the vacuum they smell bad. A natural defense I am told. I am an expert at those, having spent hours with the vacuum only to have hundreds more crop up where I began. You also get mosquitos, ticks, spiders and other not so pretty insects that bite, eat your garden and other wise create havoc.  But you see, the country is where they live.

 

6)

 raccoonfactshub.com

 

 

 

Awwwww....raccoons....very cute. But not when pooping in the kiddie wading pool. They also carry rabies so outdoor pets may be at risk.  You will probably run into some snakes too. Not so cute.

 

 

7) Mowing-if you want to keep your property useable you will have to also invest in a large riding mower. Mowing a couple of acres can pretty much kill a Saturday. And get a blade on that puppy-so you can get out of the drive in the winter.

 

 

8) Vacation paradise.  My extended family thought that our house was the place to go for family reunions and vacations. Maybe yours won't. But if you have a picturesque property there is the chance that everyone you are related to will camp out at your place during their vacation if you let them. So unless you are prepared to become a bread and breakfast, you might want to consider how well you get along with the in-laws.

 

9) And speaking of those chickens...if the farm down the road has roosters everything you have ever heard about roosters greeting the new day is true. They make a lot of noise. Early. In. The. Morning. If you choose to live in the country you have to get used to roosters and perhaps being downwind of a pig farm. There really is no odor like that which our little porcine piggy friends exude, totally unique. Where are you going to keep farm animals if not on a farm? They had a claim to the country before you did. So there is that.

 

10) Trespassers.  People who come on your property without permission to hunt deer, birds or mushrooms.  There are those that just don't understand that your yard is not for picnickers.

 

  So have I talked you out of this yet? No? Okay-then let's take a look at the positives.

 

 

1) Quiet.  Or I should say, a different kind of noise.  I always used to tell my children that they should listen to the summer music-the chirping of crickets, and the whirring of cicadas-which can actually be quite loud in July and August.  But it is a beautiful sound. You might hear a barking dog, coyote, or owls making a din at night. But those are wonderful noises in my opinion.

 

2) The night sky.  At night you can actually see the sky, the constellations and the weather rolling in. I spent one August housebreaking a puppy during the Perseid Meteor Showers-the only time I have ever been happy to be awake and outside at three in the morning.  I also had a grandstand seat for the comet Kohoutek when it made it's close to earth run. Breathtaking!

 

3) Gardening-if you are a gardener and like to grow and put up vegetables living in the country is great. Be aware that the deer, cabbage moths, raccoons, and rabbits also really enjoy and appreciate what you are growing as well.

 

4) I am a wildlife lover.  So I always enjoyed watching the variety of wildlife I saw in my yard. The birds at the feeder in the country are spectacular. Watching hawks hunt is also amazing.

 

5) Not having to put up with neighbors.  That is a nice advantage. On the other hand if you need help quickly it is not so nice.  It took me a long time after I moved into town to adjust to looking out my kitchen window and seeing a house directly behind me.

 

6) Space for kids to roam.  Letting the kids out into the backyard to run off a bit of steam is a great feature of living in the country. What they bring home from these rambles sometimes isn't. ( The skeletal remains of a possum anyone?)

 

7)

ohio-nature.com

 

Bugs! Yes, the bugs are an advantage of being in the country as well as a disadvantage. We used to watch the milkweed pods for the cocoons of Monarch Butterflies and hatch the adults in canning jars. They were beautiful as they flew away for Mexico upon release.

 

Would I say there are more advantages to living in town than in the country? Not necessarily. Each situation is unique and has to be evaluated by every individual buyer. If you have an busy young family that is engaged in many activities, you might consider a more suburban setting.  What is important is that you know that life in the country is different and has its own advantages but then so does life in town. Just be sure you evaluate each based upon how you want live.

 

 

 

 

 

 





 



 

 

 



 





OPEN HOUSING IT

  In a past life I was a real estate agent. I would have loved one of the above type signs to advertise my open houses-that baby would really bring them in-don't you think?

  But no matter what method of marketing draws you to an open house, if you are interested in entering the real estate market as a buyer or seller, touring open houses can provide you with a lot of information.

  For the first time buyer, I would highly recommend becoming pre-approved first so that you don't wander through a home you can't possibly afford and then all others pale by comparison. However, that isn't the way it works in the real world. In the real world people begin to consider that they want to purchase a home and want to see what it out there. The exciting part of the process is viewing properties-not figuring out how you are going to buy one. That process is dry as dust.

                                                oklahomafarmreport.com

 Most people have an idea whether right or wrong, about what they can afford and will select properties based on that assumption. Going through open houses is a non threatening way of getting a feel for what is available in what price range without the pressure of committing to purchasing.

 Of course the down side of this is that someone may find a home that they believe is perfect and not be in a position financially to purchase it. While they are running around trying to become pre-approved someone else may buy the house out from under them, or because of the pressure to buy THAT house RIGHT now, may make a quick decision that is better thought through.

                                             thefiscaltimes.com

  Since the purchase of real estate is the most important financial investment that most people make it is important that one looks before taking the leap. The opportunity to go through open houses is just the type of preparation that may work to begin the preparation to buy.  In fact most home buyers begin looking at open houses a full nine months prior to purchasing a home.

  All types of folks come through open houses. Some are pre-approved buyers who are seriously looking, some are folks from the neighborhood who just wish to snoop  a little because they always wanted to see the house or get an idea of what their own home is worth. It is also a chance to learn more about the particular house and the real estate market in general because the real estate agent that is hosting the open house is there for a reason-to give open house attendees information that might interest a potential buyer.

 There is no reason to fear the agent hosting the open house. They may ask you to sign in as a service to the seller-most people like to know who has been in their home. They may ask you what you think of various aspects of the home and the price. This is a way of obtaining first hand information for the seller.  And most agents are alert to the possibility that there are folks coming through who are getting ready to buy who haven't selected an agent yet-that is true. But here's the thing...good agents are very busy people. They have multiple clients-both buyers and sellers that currently need their services. A busy agent doesn't have the time to chase a potential buyer down to get their business. So that is something you don't have to worry about. The truth of the matter is-no one can sell you anything you don't want to buy. You are either ready to buy a home or you aren't. And if this isn't the home for you, you aren't going to buy it.  What you can do if you are in the preliminary stages of looking for a home, is get a feel for agents that are working the open houses.  See how they treat people and dispense information. If you like the style of the agent you may want to engage them when you are ready to begin your serious search for a home.

  If you are going through an open house you will get a feel for the neighborhood and, if there are neighbors going through the house you will have an opportunity to ask about the neighborhood, schools etc. I often attend open houses myself with my realtor partners.  This enables me to get a feel for the market, how busy it is as well as speak with people about various financing options for the specific home or figure payments for potential buyers.

  Open houses do move properties. It is a terrific tool to bring buyers to a property that might overlook it for any number of reasons. It is a no risk opportunity to test the waters, find an agent if you need one, and preview a neighborhood and its amenities. It is all part of the preparation process to buy a home. Take advantage-it is free after all!