Homes For Sale Logan UT

Cheap And Easy Tips To Make Your Utah Home Greener

by Lisa Udy on September 2, 2010

Who isn’t searching for ways to save money today? I know I am. So, I did a little research on how to make my Utah home greener to save some greenbacks. Here’s some things I found that you can try too:

1. Install more energy efficient lighting. This is probably the easiest way to go green. Take all of those crappy incandescent light bulbs and replace them with CFL’s (compact fluorescent bulbs). Doing this can save you $20-$30 over the life of the bulb. Be sure to get the energy star certified bulbs, these are warranted for up to 2 years.

2. Play the thermostat game. You could save up to 10% on your heating and cooling costs if you kept your AC at 78 degrees when you weren’t home, and your heating in the winter at 63 degrees. If you have one of those smart thermostats, you should be able to program it to do it automatically. You won’t even know what’s going on until you see the reduction in your energy bills at the end of the month.

3. Plug any air leaks. One of the easiest ways to make your home greener is to do a little caulking and weatherstripping around doors and windows. It’s so cheap and easy that anyone could do it. Stop by your local hardware store on your way home from work one day and stock up on some caulk and stripping. :)

4. Replace filters and tune up your HVAC. Changing filters is super easy. If you don’t know how to, just ask a manly man. That’s what they’re for right? J/K! Also, you should have a professional perform routine maintenance once every 2-3 years. It will save you money, so it’s worth the $100 or so.

5. Install low flow faucets and showerheads. I know how much you love your elephant shower head, but it’s in your pocket books best interest to replace it with the kitty flow. With a family of four, you could save over $250 a year, and they are super easy to install. Just unscrew the old ones and screw in the new ones.

6. Throw some insulation on your water heater and pipes. If you don’t have your water heater and pipes insulated with a jacket, now is the time to get it done. Their really cheap, somewhere around 10-20 dollars, and can save you some money on your water bill. Keep the temperature on your water heater at 120 degrees or below to increase your savings.

7. Plant some more trees around your home. Who doesn’t love a good tree? The shade provided by trees can keep your home cool in the summer so much so that it could reduce your cooling costs by 25%. Great tree placement can also stop the cold wind from hitting your house in the winter reducing your heating costs by up to 20%.

8. Buy energy star when you can. If you need to replace any appliances around the house, always go for the energy star products. If they cost a little more, remember that over the long term, they will save you money.

These are all very simple steps you can take to make your Utah home greener, save some money, and do your part to keep our environment in better shape for the future.

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Lower Down Payments To Boost Housing Recovery?

by Lisa Udy on September 1, 2010

I recently read an article on CNBC where the author talked about Bill Gross’s recommendation to lower the down payment requirements for people to purchase homes.

He states that in order for housing to play a role in the recovery, it’s paramount to ease the up-front cash requirements.

This article brings many questions to mind, and I wanted to discuss what would happen if Bill Gross had his way.

Yes Reduced Down Payments Would Increase Housing Demand, BUT

If we lowered the down payment costs to purchase a home, indeed housing demand would increase. The less it costs to purchase a home, the easier it makes for people to purchase. Pretty simple logic.

BUT, and this is a big but, wouldn’t we be stuck in the same situation as we were during the bubble?

Putting people in homes without any money down has shown how that can backfire. If prices start to decline, people become underwater, they panic, and will walk away from their obligations. People that didn’t have money invested into a home were much more likely to walk away than people with 20% or more in equity.

These walk aways set off more foreclosures and increased inventory; which reduced demand causing home prices to decline further. If these buyers were required to put 20% down, two things would be completely different today.

First – The housing boom wouldn’t have been so enormous as they wouldn’t have been able to purchase a home in the first place.

Second – People with equity tied up into a home would be more reluctant to just walk away.

If your house was worth 10-15% less yet still had 5% equity, wouldn’t you do everything you could to salvage that money? You bet you would. You wouldn’t gut the home and walkaway leaving it to foreclosure.

Purchase A Home You Can Afford

Little to no down payment gives someone the opportunity to purchase a home they can’t afford. Someone making 40k a year should not be able to afford a $350k home. It’s just not reasonable.

Instead, if they had to save up a 20% down payment, they wouldn’t even think about purchasing that home. They would think about purchasing a home they could afford.

If banks were to remove the down payment requirement for a home many people would overextend themselves purchasing a home they wouldn’t be able to afford. This is the number one reason the bubble got so big so fast and fell so hard so fast.

Many people have blamed the bubble and the burst on the sub-prime loan fiasco and loans with complex terms with low initial interest rates. But an article in The Wall Street Journal indicated that there’s more to the story.

According to the article, 51% of all foreclosed homes in the last half of 2008 had prime loans with no equity. Which brings me to my next point:

What Is The Real Reason For The Market Decline?

(Graphic From Wall Street Journal Article)

This graphic shows that the majority (415,319 compared to 393,086) of the foreclosures in the second half of 2008 were directly related to how much equity a homeowner had.

The data clearly shows that the reason the housing bubble got so big and crashed so hard, was because of the ease in which people were able to buy homes with “no skin in the game.”

If we take away the amount of borrowers who bought a home with little money down or without equity, we would decrease the foreclosure rate by 47%.

Keep Lending Standards Tight Even Though It Hurts

If we want to see a true recovery we must learn from the past. People like Bill Gross don’t have a clue.

The suggestion to allow people to put less money down when purchasing a home would throw us into another steep bubble followed by another steep decline in the near future.

It’s absolutely absurd to think lower down payments would be beneficial long term to the housing recovery. Instead, we need to keep down payments as the #1 requirement for purchasing a home. If this would have been the case pre-collapse, we may not even be in this mess.

It hurts right now, trust me I know, but incomes and credit scores will change over time. Just because a borrower has the income one year doesn’t mean they will the next. Equity provides a real incentive for a homeowner to do whatever possible to keep from going into foreclosure.

Instead of gutting the home then walking away letting the home go into foreclosure. A homeowner with equity would try to sell and retain as much as they can. This would reduce the amount of foreclosures, which would reduce the decline.

I am not saying the whole reason we are in this mess is because of no down payment loans. What I am saying is: This all happened because people, banks included, all thought they could get away with it with very little consequence if things went bad. Foreclosure is not a sufficient deterrent if they were starting from nothing in the first place.

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Stop Making Payments During A Short Sale?

by Lisa Udy on August 30, 2010

I was asked by one of my clients who is thinking about doing a short sale if they should just stop making their payments. This is a very difficult question to answer for anyone, and I can’t answer this question as a real estate agent.

This question should be asked when talking to your bank, a financial advisor, or your attorney. What I can do is, give you some scenarios that can happen if you stop making payments during a short sale.

Should You Stop Making Payments During A Short Sale?

This question should be answered with another question. Are you willing to go through a foreclosure? A short sale is not a guaranteed sale. Your home selling in a short sale is based upon many factors and you never know what the bank will do.

If you receive an offer on your short sale it doesn’t mean the bank will approve it. If the bank denies your buyers offer and the short sale is denied, this will leave you with backed up payments if you stopped making them.

If you can’t come up with the money to pay these payments, you will go into foreclosure. So, this is a personal decision. Are you willing to face foreclosure if your short sale doesn’t work out? Which could be very likely considering that only 20-25% of all short sales around the country close.

Short sales are difficult, emotionally draining, and time consuming. When you decide a short sale is the only way out, you need to be prepared for a foreclosure at anytime. It’s the nature of the beast.

Why You Should Keep Making Payments During Your Short Sale

If at all possible, making your payments during the short sale could be advantageous for a few reasons:

If your short sale doesn’t work out, you can cancel without any penalties. If the bank doesn’t accept an offer you submit, you don’t get an offer, or the bank denies your short sale for any other reason. You will be in a much better situation then if you had stopped making payments.

Making payments will protect your credit. Although your credit may not be the most important thing for you to worry about during financial hardship, your score will not reflect late payments. However, the bank may report your short sale and the short sale itself could have an affect on your credit. It’s called a Credit Factor Score #22, and it could drop your FICO.

It is possible to purchase a new home directly following a short sale if you stay current. Both FHA and Fannie Mae have guidelines allowing a short sale seller who is current on payments to purchase a home directly following a short sale. Why would anyone do this?

If your home is worth dramatically less than what you paid for it, selling it short may be your only option. You may have to move for any number of reasons such as divorce, employment, or many other reasons. If your payments are up to date, you could purchase a new home when you move if you stay current.

Reasons To Stop Making Payments During A Short Sale

You may not have a choice in the matter. If you don’t have the money to make payments than you can’t make payments. Plain and simple. Other’s decide to not make payments by choice, and here are their explanations:

To save money for a move. It’s no secret that many homeowners are under water and feel they need to get out from under their current situation. They will stop making payments during the short sale process to save up money to move when the short sale goes through.

Lenders may not force you to make up the payments. Many times during a short sale, all missed payments are forgiven, but not all the time. If your situation allows you to not make payments and you don’t have to pay them back, you may consider not making payments. Banks still may file a deficiency notice however.

The short sale could be moved to a more critical time frame for approval. If you aren’t making payments, it would be in the banks best interest to close on your short sale as soon as possible to start recouping their losses. You don’t have to be in default in order to short sale, but someone who is making payments compared to someone who isn’t making payments may take priority.

If You Miss Payments You May Face Default

Many short sales do not get approved, never find a buyer, or are screwed up by inexperienced real estate agents. There is a very good chance that you may end up facing foreclosure if you stop making payments. Here are some of the drawbacks if you go into foreclosure:

Although both short sales and foreclosure affect your credit, a foreclosure is much worse. After short selling a home, even if you miss payments, you can purchase a home again within 2-3+ years.

If you go into foreclosure you won’t be able to purchase home for 7-10+ years. Seven years if you don’t have any other credit issues, pay off all your delinquencies, and stay up to date on all future payments. Ten years or more if you face delinquencies or other credit issues related to your foreclosure.

If you’re facing financial hardships, please do not avoid the situation. It will not go away, and a short sale may be the best option. If you can’t make your payments, you can still sell your home in a short sale and avoid foreclosure. Be sure to talk to a lawyer, an accountant, and seek out an experienced short sale agent to give you advice on your personal situation.

Related Posts:

How To Avoid Foreclosure

What Is A Lease Option And What Are The Pro’s And Con’s

Choosing A Realtor To Sell Your Home

Common Short Sale Questions Answered

Common Short Sale Myths

The Full Short Sale Process

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Struggling Home Sellers Should Consider Lease Options

by Lisa Udy on August 27, 2010

Before I get into why you might want to consider a lease option, let me give you a little background on market statistics.

The other day, the National Association of Realtors (NAR) released a troubling statistic. In July, home sales across the nation dipped 27% year over year from July 2009. This was due to many buyers purchasing before the home buyer tax credit expired, but it’s still an ugly statistic for home sellers.

Obviously, the tax credit had a major impact on home sales. Everyone who would have bought a home in July or August this year, that qualified for the credit, moved up their purchasing dates to get the credit.

The credit didn’t increase sales, rather it made buyers move up their purchase to qualify for it. Waste of tax payers money? Most likely, but that’s a story for another day. Back to my post:

What Is A Lease Option?

As home sales slow moving into the fall selling season, a lease option might be something that could work for you, especially if your home is vacant. What is a lease option you say?

A lease option allows someone to lease your home with the option to purchase it. It’s like a glorified rental, in that the renter of your home has the option to purchase the home at the end of their lease agreement; usually 12 months. Here are some basic principles to a lease option:

The lease option binds the seller to sell and not the buyer to buy. The option gives the buyer discretion to buy or not. This is why lease options usually come with a larger deposit than a months rent. This deposit usually ranges from 2-5% of the home price. Of course this is negotiable between buyer and seller.

How do you determine price? Price can be dealt with in two ways. The buyer and seller can agree to a price when the contract is signed, or they can agree to price by when the date the option is exercised. Either way, it’s usually still based on an appraisal. The monthly payment is determined by buyer and seller, and it can be applied to the cost of the home or not.

It all depends on the terms of the agreement. If the payments are applied to the purchase price of the home, if the buyer decides not to purchase the home, the seller will not have to pay that back. Basically, a lease option is the same as a lease, with the option at a determined time period for the buyer to purchase the property.

Advantages Of A Lease Option For Home Sellers

A lease option opens you up to more buyers. A lease option allows you to sell your home where you otherwise wouldn’t have been able to sell it.

For example, there are many people right now that don’t qualify for financing with the increased regulations in the lending industry.

Many of these potential buyers have been taken out of the market, and a lot of times all they need is more time to qualify. They may need to pay off some debt, raise their credit scores, or save up a larger down payment. Many of these buyers are very close to purchasing, but can’t quite get over the hump.

For you the seller, this gives you an advantage in an otherwise strong buyers market. When I deal with sellers looking for lease options, I like to tell the buyers they get price or terms, pick one. Meaning, they can either get a better price with terms that are more strict, or they can pay more and get more lenient terms. As a seller, both will work in your favor. You either get a better price on your home, or you will get some great terms with a nice non-refundable down payment.

If the buyer doesn’t exercise the option to buy your home at the end of the agreement, they forfeit all rent paid, and usually forfeit their down payment. And once this happens, you go into landlord-tenant relations, giving you the right to evict and retain your home. You may also work out another agreement, either way the ball is in your court.

Another advantage is; if you have to move fast or your home is sitting vacant, you get someone to pay your mortgage payment for you. They may also do some upgrades that could add value to the home, and you get people to in your home to maintain it.

Disadvantages Of Lease Options For Home Sellers

A lease option has it’s disadvantages. One of them being having someone in your home that may not take care of it. They may trash it and leave you holding the bill, just like any renter.

Also, the buyer may not exercise the option to purchase your home and you’re left with another mortgage payment when the lease runs out.

If you are unable to make payments on two homes, if that is your situation, you might not be able to find another renter. And if you try to sell the home again, you may not be able to sell it either.

The real estate market is still declining here in Logan. If you sign a lease option today, in 12 months from now when it’s time for the buyer to purchase, your home may be worth less. If you take if off the market today, you won’t have the chance to sell it for today’s prices. You’re locked into the agreement unless the buyer defaults.

Interest rates may go up. If interest rates go up, the buyer who could afford your home today may not be able to afford it tomorrow. Even if interest rates go up only a point, it could disqualify many buyers from purchasing your home.

Why Should Struggling Home Sellers Do A Lease Option?

If you’re home is sitting vacant, there are many renters right now in the Logan UT real estate market. These people are calling my brokerage everyday asking for lease options or rentals. I can’t speak for other markets around the country, so I would talk to a local Realtor about markets where you live.

If you’re tired of showing your home, a lease option could help you get out of the market, out of your home, and get someone who will pay part of your mortgage for you.

If your not getting any showings and you can’t reduce your price, a lease option is a great way to wait out the market. Even if the buyer doesn’t buy your home at the end of the option period, you still have someone paying you rent, and you can negotiate keeping a nice down payment. Plus, you could always try to sell when there is less inventory and get a better price.

All in all, if your a home seller, I truly understand how difficult it is right now. A lease option may be something you could try if your home isn’t selling and you’re struggling to make ends meet. If you do a lease option, be sure to consult with an attorney about terms of a contract, or talk to a Realtor about the options we can provide.

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Short Sale Agents And Investors Committing Fraud?

August 26, 2010

We all have our bad apples in our industries, and Realtors are no exception. With the uprise in the amount of short sales in today’s real estate market, there is more and more short sale fraud being committed by unsavory agents. A very good friend and colleague of mine Bill Gasset, a Massachusetts Realtor, recently wrote a blog [...]

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How To Avoid Going Into Foreclosure

August 25, 2010

Facing a potential foreclosure? Well, in today’s real estate market, you are one of many. Ever since the job market started going south, foreclosure rates all across the country have continued to climb. Let me give you a few tips to try before the bank takes away your home. Don’t Feel Embarrassed And Put Your Head In [...]

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Buying Logan Utah Foreclosures At Public Auction

August 24, 2010

Yesterday I discussed buying a foreclosure during the pre-foreclosure process, and today I wanted to move along in the series to the public auction phase. Once a homeowner is foreclosed on, the banks will hold an open auction for the home. The public auctions in Logan, UT are held at the Logan justice court located [...]

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Contacting A Distressed Homeowner To Buy A Pre-Foreclosure

August 23, 2010

Earlier, I wrote a post on the Logan Utah foreclosure process, and in that post I discussed negotiating with a home owner on purchasing their home while it’s in pre-foreclosure. In this post, I wanted to discuss this tactic in more detail. Contacting The Homeowner When Purchasing A Pre-Foreclosure A home is in pre-foreclosure when [...]

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Logan Utah Foreclosures Process And Overview

August 23, 2010

This post is going to be one of many posts on the foreclosure process here in Logan UT that I will be writing over the next couple days. First of all let’s discuss what a foreclosure is. A foreclosure is a process that allows the lien holder, or lender of a mortgage, to recoup the [...]

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The Complete Guide To Buying A Home In Logan Utah

August 20, 2010

Most real estate markets around the country are considered to be a buyers market. The Logan real estate market is no different. We are in a very strong buyers market, and it only makes sense to me to give you buyers as much information as possible to ensure that a great home for a great [...]

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