Urban and rural property
After Dismal Year, Homebuilders See Hope in 2012
Home Sales Rise to 11-Month High
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Home Sales Sunnier as Spring Buying Season Approaches
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Economists: Housing Recovery Finally Here
Home Prices Increase in Most Major U.S. Cities
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Housing Recovery Officially in Full Swing, Data Suggests
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Trulia Housing Barometer: Housing Market 52% Back to Normal
Home Prices Post Best Yearly Increase Since 2006
Tom Roeser Buys Up Town's Foreclosure Stock to Keep It Thriving
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Trulia: Housing Recovery Marches on in March
Are Real Estate Commercials Skirting Realities of Homebuying?
Trulia: Housing in 'Early Stages' of Multiyear Recovery
Obama Proposes Fundamental Overhaul of U.S. Mortgage System
Trying to Buy A Diamond In The Rough?
The paper said "diamond in the rough." Which means either it needs lots of work or perhaps just a little TLC. But exactly how "rough" can a house be before a lender decides the collateral is not healthy enough to issue a mortgage? And what happens if you want the seller to fix something before you'll close the deal?

Upon contract, one of the first things you'll want to do is have the home inspected for structural integrity, defects and potential problems. Note, this is not the function of a licensed appraiser who determines the market value for the home. A home inspection helps to ascertain the overall "health" of the house you're about to buy. A bad roof, leaky plumbing or wood rot can usually only be found when a house doctor crawls through the attic, under the house and on the roof. If there are major problems found, potentially it can stop the deal dead in its tracks. That's why most lenders won't order appraisals on properties until an inspection has been performed.

But what if there are no major problems but minor ones? What if the carpet, while not in dire straits, is definitely worn and could use an upgrade? Or perhaps the deck needs a good workover. Maybe the home you're about to buy has been inhabited by a trio of kindergartners with a penchant for drawing cartoon characters on the walls? New paint job?

Such minor, perhaps cosmetic concerns may not be strong enough to kill the entire transaction or scare away even the heartiest of lenders but may lead the way for some good old-fashioned negotiations between buyers and sellers. And unless you've done this before, you need to have a good agent to help negotiate around these hazards. If not done properly, even agreed upon negotiations won't fly when it comes to the lender's table.

If you want the deck painted and the mailbox fixed, and it's in the contract, the seller must perform. If the fence needs repair and you want it fixed, spell it out in the contract. The appraisal may then state that the value is based upon the fence being fixed. This may lead your lender to require the fence being fixed before you close, after all, you and the seller agreed on the fence repair. But what if the seller doesnt' agree to do anything until after closing?

Let's say you want new carpet throughout the house and while the seller agrees, also doesn't want to pay for wall to wall carpeting before the deal closes. The seller has a good point. Why spend $5,000 before the deal is done? There's the possibility that brand new carpeting would be installed, at the seller's expense, then to have the buyers not qualify for the mortgage.

All too often at this stage a "seller concession" is made, but made incorrectly. Using the example above, instead of installing new carpet the seller agrees to a $5,000 carpeting allowance to be settled at closing. No new carpet, just $5,000 to the buyer to go and buy new carpet from the seller's funds. Makes sense, right? Wrong.

A lender won't let a seller pay the buyers $5,000 at closing. Paying $5,000 in buyer closing costs, fine. But not hand over cash. Install $5,000 in carpet before closing, fine. But not hand over cash. Even though the buyer and seller have agreed, in writing and in the sales contract, to give $5,000 cash at closing for a carpet allowance, the lender won't allow the seller to hand over cash at closing.

Cash allowances written in the contract can't happen and you should be aware of this before you get deeper in buying process. Your real estate agent will help steer you in the right direction and help construct a sales contract that will please both the buyer and the seller. But expecting to come home with a $5,000 check in your hand won't happen. No matter how rough the diamond is.

Shopping for a Home in Winter
Secrets to a Successful Move
Saving the Best for Last
Renting to Own
New House or an Old One?
Make Them An Offer They Can't Refuse
Lifestyle Choices Affect Bottom Line
Inspecting Your Home Inspector
In Love With Two Houses?
How to Track Down Foreclosure Properties
Home-buying With Others
Five Keys to Successful Negotiation
Five Key Areas to Pay Attention to When Buying a Home
Finding a Good Home Inspector
Find the Perfect Neighborhood
Don't Overlook a Home's Potential
Do You Have Buyer's Paralysis?
Debt Reduction Not Required to Buy
Debating Between a Condo or a House
Contingencies Your Home Offer Should Include
Can You Afford to Buy a House?
Buying a Home With Loans from Family and Friends
Buyers, Get an Edge During The Busy Spring Season
Affordability Options for First-time Home Buyers
14 Things to Consider Before Buying a Home
12 Red Flags That Should Raise Concern
10 Summer Moving Tips
Experts Predict Annual Home Value Appreciation to Exceed 6 Percent in 2013
Housing Starts Rise in July but Fall Short of Forecasts
Giants Masking Billions in Losses for Overdue Mortgages
Home Sales in July Rise to Levels Last Seen in 2009
Rise in Rates Reduces Demand for New Mortgages
Mortgage Rates Rise to Their Highest Levels in 2 Years
The 5 Best States to Buy a Home - If You're a Banker
Home Prices Rise in June at Slightly Slower Pace
Pending Home Sales Slip in July but Remain Solid
Foreclosures Fall 25% in July from a Year Ago
Home Prices Climbed 12.4 Percent in July
Mortgage Applications Rise, as Interest Rates Slip a Bit
Mortgage Rates Edge Up to Near Yearly Highs
What You Should Look for When House Hunting
What is PMI?
Trying to Buy A Diamond In The Rough?
Trouble Pulling the Trigger on Your First Home?
Title Insurance: Who Needs It?
Title Insurance
The Hidden Costs of Homeownership
The Art of House Hunting
The Appraisal Contingency
Sometimes Smaller Is Better
Signs That You're Ready to Buy
Should You Pay Discount Points?
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