Hidden Fees When Buying a Home

August 7th, 2010

I often get asked how much it really costs when buying a home. What expenses do I need to plan for?

Well obviously there is the purchase price of the home, generally put into a 30 year loan. Your lender will explain the interest rate, tax and insurance escrows, appraisal fee, PMI, and closing costs. These fees are expected.
What isn’t always expected are the extra fees involved in home ownership.

When you write an offer on a home, you need to give an earnest deposit with your offer. A typical earnest deposit is about 1% or more of the price of the home you are writing an offer on. It’s your money and will be applied to your closing costs at closing unless you decide to walk away from the offer for no reason. In that case, the Seller gets to keep that money.

A home inspection is another cost that is well worth the money. As the Buyer, you will pay for your own home inspection. They can range from $250 to $500 depending on the size of the house. Once you receive the report from the inspector you may ask the seller to make repairs to the property, but they may or may not make those repairs. At that point it is all negotiable between you and the seller. In some instances repair costs are split between the seller and the buyer.

Another cost might be a Radon inspection. This costs about $125 and is done at the time of the home inspection. If Radon levels are found to be high, then you can ask the seller to install a radon mitigation system. Sometimes the cost of the system (about $800) is split between the seller and the buyer.
Home Owner Associations (HOA) charge another annual fee. A lot of subdivisions have these associations in place to make sure that their neighborhoods are well maintained. HOA fees can range from $30/year to several hundred a year, depending on the neighborhood. So this is something you definitely want to ask your Realtor about once you decide on a home. If you are considering a condo, townhome or villa, then there are monthly association fees that pay for lawn care and snow removal as well.

Of course once you get into your home you have your monthly utilities. You will be paying for electricity, gas, water, sewer, trash removal and most likely cable and telephone services. All of which can add up to several hundred dollars per month.

Of course there may be many other little things that come up in the course of buying a home, but being flexible with negotiations helps things move along smoothly. I also strongly recommend working with a buyer’s agent who knows your market and can help guide you through the entire process.

So is it worth it? Absolutely! There is nothing like owning your own home.

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Rethinking Recycling with Rewards in mind

June 21st, 2010

There is a lot of talk about “going green” in our communities and a lot of action taken through recycling. Whether you acknowledge global climate change or not, most people don’t want themselves or their children to grow up in a landfill; and an easy way to prevent this is to start recycling.

One of the biggest reasons people don’t recycle is because it’s not convenient. Many communities do not offer an accessible way to recycle and instead of residents looking into how they can overcome the inconvenient challenge, they just throw everything away.

Fortunately, the Omaha-metro area does offer home pick-up of recyclables – like aluminum, plastic and paper – and stations around the city to recycle glass. Papillion Sanitation and Apple Trash are both going an extra step to ensure that the residents they service have accessible recycling that also offers rewards.

Papillion Sanitation and Apple Trash are both taking part in RecycleBank, a program which offers recyclers rewards by partnering with cities and haulers. By recycling electronics, furniture, clothes hazardous material and day to day waste, people can earn points redeemable at over 1,500 local and national retailers. Along with your weekly recyclable pickup you can call to schedule junk removal from your home.

Even if your community doesn’t offer these kinds of rewards for recycling, there are other “rewards” that can come from recycling.

According to the National Recycling Coalition, the average American discards 4.6 pounds of garbage every day. This garbage, the solid waste stream, goes mostly to landfills where it’s compacted and buried. As the waste stream continues to grow, so will pressure on our landfills, and our resources and environment will suffer.

At some point there will be nowhere else to keep our garbage. Here is a list of specific items and the pressure they cause on our landfills –
• banana – 3 to 4 weeks
• paper bag – 1 month
• cotton rag – 5 months
• wool sock – 1 year
• cigarette butt – 2 to 5 years
• leather boot – 40 to 50 years
• rubber sole (of a boot) – 50 to 80 years
• tin can (soup or vegetable can) – 80 to 100 years
• aluminum can (soda pop can) – 200 to 500 years
• plastic 6-pack rings – 450 years
• plastic jug – 1 million years
• Styrofoam cup – unknown? forever?
• glass bottle – unknown? forever?

There are 309,533,720 people living in the United States, a little over 800,000 of which live in the Omaha-metro area. If half of the people in Omaha discarded 1 tin can per day in the garbage that is 400,000 tin cans per day and 146,000,000 cans per year sitting in a local landfill. And at a decomposition rate of 100 years… that’s a lot of garbage.

Your recycling effort can start with even that one tin can per day. When you consider how many recyclable items you throw out each day, you can truly understand the personal impact you can have on changing the world by just recycling!

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Home Inspections give Sense of Security

June 14th, 2010

When buying a home, an inspection is a critical step when deciding if a home is right for you. A home inspection will give you a sense of security by knowing exactly what you are getting in a home, both good and bad. This is not to say that, as the buyer, you should complain about the pink fuzzy wall paper in the master bathroom or the orange shag carpet. The issues looked for in an inspection include those that are health and safety concerns, or major repairs.

Home inspections require a professional – not your best friend who once re-did their kitchen. I would recommend an ASHI (American Society of Home Inspectors) certified inspector to do the job. They’ve gone through training and have to adhere to specific guidelines when performing home inspections.

Here is a short list of things that are of high importance when inspecting a home –

Roof and attic – construction, structure and gutters

Furnace and Air Conditioner units – age, condition, lifespan expectancy

Structural – construction of walls, ceiling and foundation

Plumbing – drainage, waste and vent pipes and water heater

Electrical – main panel, circuit breaker and types of wiring

Appliances – dishwasher, smoke detectors and garbage disposal

Again, this is a brief list and a home inspector would know all the specifics and details of what needs to be looked over. The best idea for a buyer is to hire their own home inspector and have the inspection done within a few days of an accepted offer on a house. If safety issues arise, or major repairs are needed, the buyer can ask the seller to make the repairs, or the buyer and seller can negotiate the cost of repairs together.

It’s important to remember that no home is perfect and each buyer and seller should expect to have to repair something when purchasing a home. Buyers can also ask sellers for a home warranty to ensure that any major issues will be taken care of, at least for a short period of time.

So even for you do-it-yourselfers, a professional home inspection is highly encouraged when purchasing a home. A home shouldn’t be an impulse buy and should be handled by taking each necessary step to ensure a quality and comfortable purchase.

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The Reality of Realtors’ Commissions

May 19th, 2010

Many people have been asking me lately how a Realtor is paid, and I’ve learned there are a lot of misconceptions. People think all Realtors are rolling in the dough; because after selling, $150, $200, $300 homes they should be, right?

Wrong.

Commission for Realtors varies, everything is negotiable and they take on all of their own expenses. So let’s look at a basic and rough breakdown of the commission for most Realtors.

Take a commission of 7-percent on a $200,000 home, which would be $14,000.

That $14,000 paid by the seller is then split between the Selling Brokerage and the Buyer’s Brokerage.

Each $7000 is further split down to pay franchise fees (Prudential, ReMax, etc.) – about 7-percent on average.

Then, that $6510 is further split down between the Brokerage and the real estate agent – a percentage agreed upon at the time of hire – say a 75-25 percent split with 75 percent going to the agent and 25 percent staying in house at the brokerage.

At the end of the day, this leaves the Realtor with $4883 to take home.

Like I said earlier – everything is negotiable for a Realtor. The fore-mentioned 7-percent commission is variable, the seller’s and buyer’s brokerage do not normally have a 50-50 split and the end result does not consider the cost of open houses, fliers, signs and advertising that go into the sale of a home.

It is often a misconception that a home sold by an unrepresented seller (For Sale By Owner) will be less expensive and the entire sale will make the seller more money in the end. Often, for sale by owner properties are valued above market value and will not sell at all.

A Realtor values the property at a fair market value and does not raise the price based upon the fact that they need to incur commission, so a buyer will not pay more than the home is worth. In fact, every lender requires an appraisal in order to get a loan, and if the home appraises for less than the purchase price, the buyer can go back to the seller and demand the appraised value.

Each Realtor is an independent contractor and gets paid only when they close on a property. That commission check is a gross payment, before taxes. Independent Contractors pay quarterly taxes on their own to the IRS. This, on top of office fees, MLS fees, Board of Realtor fees, continuing education classes, vehicle expenses and errors and omissions insurance can add up to a big chunk of money directly out of a Realtor’s pocket.

So sure it SOUNDS like we make a lot of money, but at the end of the day after business expenses, taxes and splits with our brokers, we work hard for our money just like everyone else.

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Fresh Scents for a Fast Home Sale

May 10th, 2010

People selling their home often spend a significant amount of time cleaning and decorating for a showing, making sure everything LOOKS great. But just because they’ve vacuumed up all the dust bunnies and washed all the dishes doesn’t mean there isn’t a lingering odor that could deter a potential buyer from closing.

According to the Sense of Smell Institute, odor recognition is linked to memory and moods. So while a seller cannot make every potential buyer fall in love with a home based on a freshly baked chocolate chip cookie scent that reminds them of grandma, it is sure worth a try.

Here are a few basic tips to keep a home smelling fresh for a showing –
• Take out the trash
• Definitely don’t smoke in your house, but avoid smoking outside the house, as well
• Avoid cooking anything that may leave a lingering smell
• Set up a couple potpourri pots around the house or heat some apple juice in a pot on the stove and throw in apple slices, orange slices, lemon slices or lemon juice, cinnamon and nutmeg
• Run some lemon wedges down the garbage disposal
• Odor eliminators are good to just cover-up smells, but consider investing in carpet, furniture and drape cleaners
• Burn a candle or use an electric ceramic crock to keep the scent without the flame
• Smear a drop of real vanilla extract on all the light bulbs – this will smells like cookies
• Use a dehumidifier in the basement to eliminate a damp smell
• Open the windows and let the air circulate

These are just a few short suggestions; a detailed list is at the National Realtor Magazine.

Your Realtor, of course, will be more than happy to help you set up a successful home sale. However, these small, often overlooked, details you can do personally are what can really make the difference for a fast home sale.

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Nebraska Property Tax – Why is it so High? What are you paying for?

April 23rd, 2010

One of the biggest concerns for people moving into Nebraska from out of state is the high property taxes. Many current Nebraska residents even consider property taxes a huge burden and the excessive costs are often considered unreasonable.

The biggest question is why? Why are Nebraska’s property taxes so much higher than everywhere else?

Essentially, towns collect most of their operating revenue from property taxes and, therefore, establish a local rate, determining the tax levy.

Just to give you an idea of the Omaha property taxes, a $146,000 home, which was recently sold, will include a yearly payment of $3,258 per year in property taxes. And a $200,000 home in West Omaha has a yearly property tax of $4052.88 attached. In Council Bluffs, Iowa, a similar $200,000 home would cost around $500 less per year in property taxes.

In comparison, a house on the North Fork of Long Island in the Town of Riverhead, priced at $200,000, would have an approximate $3,705 property tax. Meaning, you will pay around $300 less per year in taxes for a home on the coast.

The catch here, however, is that in on Long Island, $200,000 would get you something equivalent to a tool shed. The cost of living is certainly a factor when purchasing a home. You’d have to consider how much more or less the market value of the home is, what your cost of groceries would be and even the possible cost of insurance.

The question of “why?” still remains. Consider the services you receive from the town in which you live. Are you satisfied with the fire department, community colleges, school districts and the work of your town employees? Essentially, this is what your high property taxes pay for.

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Sunshine Kids Fundraiser

April 14th, 2010

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Create Curb Appeal for a Quick Home Sale

April 9th, 2010

The warmer weather has finally melted the 46-plus inches of snow and is now exposing the matted-down grass, sand covered driveways, snowplow-mangled curbs and rusted garden decorations.

And if you’re trying to sell your home you may not have even considered the fact that your curb appeal could be driving prospective buyers away; and a touch of Miracle Grow and a pink-flowering bush may increase the chance of selling your home 100-fold.

In all seriousness, you probably need more than flowers to give your house that little extra pizazz to sell, but sprucing up your yard can make all the difference. After all, springtime is a sellers market.

Let’s start with grass –
You first need to start with a consistent effort to cut it – obvious, yes, but difficult for many. If all you have is a push mower and time is an issue, then get little Johnny down the street to do it for $20. Also, mow diagonally and edge the lawn along driveway and sidewalks – this shows you pay attention to small details. Early spring is also a great time to begin the first round of fertilization and to begin weed prevention.

Yard Debris –
Don’t let overgrown vegetation block the windows or path to the entrance. By cutting bushes and tree limbs and cleaning out all the soggy leaves you can showcase the exterior of your home.

Planting –
Though perennials are best planted in May through June, it’s never too early to start planning. When the ground is warm enough, start planning by removing large rocks, old roots and dead plant material from your garden. Then loosen the soil and add two to three inches of well-composted organic matter to get your beds ready for planting. Spring is also a great time to plant rose bushes, berry bushes or fruit trees so they can begin their spring growth.

Driveway and sidewalk repair –
Primarily, you want to start by repairing any cracks or uneven cement that may cause potential buyers to trip as they are coming in for your open house. But small potholes and numerous patchy repair jobs in your driveway won’t flatter the exterior of your home.

If need be, calling a landscaper to improve the appearance of your home is always an option. However, these are just a few easy tips you can do yourself. So grab your kids and some gardening gloves and get your yard in shape for a quick sale!

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A Testimonial from Mark & Michelle Myers

March 26th, 2010

Here is what Mark and Michelle had to say about their experience…

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Congratulations to Prudential Ambassador Real Estate!

March 22nd, 2010

The Omaha office for Prudential Ambassador Real Estate is one of the top two offices in the Prudential Network for the 4th year in a row! Prudential Ambassador Real Estate was named the winner of the Pinnacle Office Award and Round Table Award. The Pinnacle Award goes to the Top 10 offices for closed residential units out of approximately 2,000 offices in the Prudential Real Estate Network. Prudential Ambassador won the Round Table Award for the Top Office in both residential units and residential gross commission income in the Central Region, which consists of 17 states.

Vince Leisey, president of Prudential Ambassador Real Estate, said: “Our organization is extremely excited to be one of the top two most productive offices in the Prudential Network. It is an honor to be recognized for the achievements this past year. I’m extremely proud of all of our agents. It is a tribute to all of the agents for helping our Omaha office to continue to out-perform the Omaha area marketplace, which helped lead us to be one of the top 2 offices in the Prudential Network four years in a row.”

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