Quality of Product- Get your answers by asking more than one present homeowner about how they feel about their home. Look for flaws in the display models. If you see any, remember this: the display model is the builder’s showcase.
Follow up by builder after closing- A new home has not been tested. The issue is not if problems normally occur, It’s how responsive the builder is to the problems which will occur. Again, talk to past clients of the builder. There is normally a 30 or 60 day follow up by the builder’s representative to solve issues.
Call the BBB- Call the Better Business Bureau to see how many complaints have been filed and their resolutions. Remember: you can’t please everybody, so don’t be frightened if a few complaints have been filed.
Company Solvency – Unfortunately, builders do go under-just like any other kind of business. Liberman Brothers and Mason Homes are two large building companies that ended up in bankruptcy. To avoid undo concern, have your REALTOR® contact a reputable title company and find out if they are hesitant to issue title insurance for that builder. If they are- be very careful! If a builder goes under and the subcontractor bills for that home are attached as liens against the property, they are now your bills. Title insurance is the coverage that protects you against this problem. If the title company of your choice is reluctant (again, not the builder’s choice) you need to find a new development.
The bonds have been issued for the new MHDC. This is for Missouri buyers only. A first-time home buyers program closing can begin as soon as May 11, 1998. This program allows you to get into a home for as little as $800 out-of-pocket. Call 878-2300 and we’ll get you in touch with a lender who participates in the funds so you can get pre-qualified.
- If I paint the basement floor will people think I’m trying to cover something up?
- I have a 15 year old furnace and air conditioner- do I need to replace them?
- What about cracks in my foundation?
- What about the cracks I have in my patio?
A. I can’t express emphatically enough the value of cosmetically cleaning the place up when you’re selling your home. The effect on a potential purchaser in terms of paying for your home is great.
The basement and crack in the foundation:
Most women cannot stand basements for a few simple reasons. They are dark, dreary, dirty, and there are “things” down there that they don’t like. By painting the walls and floor and increasing the wattage of your bulbs, you’ve taken a ____ to the home and turned it into a “re____” place. If they think that you’re covering something up, remind them the building inspector will address any problems they may have. If anything needs to be disclosed, make sure you do!
The plumbing stack:
Knock off any barnacles and sand the stacks. If necessary, put a rubber clamp around the portion of the stack that leaks and paint that area black.
Furnace and air conditioner:
An older furnace and air conditioner could create some expenses for you. The common cause for concern with the furnace is a cracked heat exchanger. The solution costs between $500 and $800. Air conditioners may need additional Freon, which costs $100 to $200. One way to avoid problems is to offer the purchaser a home protection warranty. For approximately $400, all of the main systems of house are covered for the first year. If problems arise, the deductible for the purchaser is normally $50 to $100.
Cracks in the Patio:
Fill any cracks in the patio with sealer or patch them.
- I think a multi-family unit, whether it be a 2 family flat, duplex, or 4 family flat, is an excellent way to get into a home. The good news is you live for free and your tenant picks up the bill. The better news is that being the owner and living at the property drastically reduces tenant problems and abuse to the building. The downside is that you’re a landlord! The key to your success lies in screening your tenants for past good pay history. When you purchase a multi-unit, the lender usually credits you with 75% of the rent received from the other units if and only if they are under 1 year leases. The easiest and cheapest type of financing is an FHA Loan up to $100,000. Above that do a conventional loan. Your limit as an owner-occupant is a 4 family unit. Larger units are considered investment property. Now, let’s look at some numbers:
4 family flat
$250 rent per x (3) units
Sale price $70,000
Total cost to get in = $3500
Deposit from Tenants 3×250 = $750
Total cost = $2750
House payment= 550
Rents (3×250) = 750
Extra each month to prepay on note = 200
If $200 is used each month prepaying on note, the loan will be paid off in 12 years.
You cannot use first-time buyer funds on this type of property, but as you can see, they’re still a great deal. Even better for higher rent units.
- The biggest concern you have is making sure that if a lender quotes you a low interest rate, that they’re not making up for it somewhere else. The way to insure you’re not being taken advantage of is to ask each lender to provide you with a good faith estimate of the loan program they are suggesting to you. These estimates list each charge the lender is requiring you to pay for them to grant the loan. These costs can vary by hundreds and even thousands of dollars.
Some standard required items are:
- Credit report
- Pre-paid interest
- Hazard insurance
- Escrows for taxes and insurance
- Closing fees
- Title search and insurance
- Flood letter
- Recording and notary fees
Extra costs are:
- Loan discount fees
- Origination fees
- Mortgage insurance
- Processing fee
- Underwriting fee
- Commitment fee
- Document preparation fee