FLIPPING A PROPERTIES - What you NEED to know!

The Department of Housing and Urban Development (HUD) issued new rules for FHA loans and house flipping

The full text of the new guidelines can be found in the new Single Family Housing Policy Handbook,  (page 145-146) which defines flipping as buying and selling a home at a significant profit in a short amount of time. In a nutshell, the rule states that buyers who wish to purchase a flipped property can't do so until 90 days have passed between when the seller purchased the property and when they are reselling. 

Guidelines for Property Flipping With an FHA Loan

Let’s start with a definition. In the new handbook, HUD defines house flipping as “the purchase and subsequent resale of a property in a short period of time.”

Time Restriction on Title Transfer: 90-Day Rule

In order for a home to be eligible for FHA financing, a certain amount of time must pass between (A) the date on which the seller acquired the title and (B) the sales contract execution date that will result in the FHA-backed mortgage loan. In other words, they will look at the length of time the investor or flipper holds the title, before transferring it to a buyer using an FHA loan.

In this context, the initial date of acquisition is when the investor or flipper acquired legal ownership of that home. That’s the first important date. The second important date occurs when the sales contract is signed and executed by “all parties intending to finance the property with an FHA-insured mortgage.”

The time between these two dates will determine whether or not an FHA loan can be used to purchase the flipped property. And this is where the all-important 90-day rule comes into play.

Generally speaking, a home that is resold 90 days or less after the first date of acquisition is not eligible for FHA mortgage financing.

Second Home Appraisal Required in Some Cases

In some flipping or quick-turnover scenarios, HUD will require a second appraisal on the home. Here again, the length of time between purchase and resale determines the course.

If the resale of a home occurs somewhere between 91 and 180 days after the seller acquired the property (and the resale price is 100% or more above the initial price paid), the lender must obtain a second home appraisal to determine the current market value.

According to the 12/30/16 recised handbook, if the second home appraisal shows a value that’s more than 5% higher than the first appraisal, the lesser of the two values will be used for FHA loan purposes.

Special Circumstances: Exceptions to the ‘No-Flip’ Rule

As with most FHA loan guidelines, there are a few exceptions to these flipping rules. For instance, the time restrictions mentioned above may not apply when:

• The home is being purchased by an employer or relocation agency to relocate an employee.
• The home is being resold by HUD, as part of its REO program for selling foreclosures.
• The home is being sold by a government agency, a HUD-approved nonprofit agency, a state or federally-chartered financial institution, or a Government-Sponsored Enterprises (GSE) like Fannie Mae.
• The home being sold was acquired through an inheritance.
• The property falls within a Presidentially Declared Major Disaster Areas (PDMDA), and has been issued a notice of exception from HUD.

The exceptions listed above aren’t true house-flipping scenarios. They are unique circumstances. That means the 90-day rule for FHA purchases applies to nearly all home flipping situations.

The more troubling and longstanding rule effecting the warrantability of flipped properties comes from Fannie May's regulation of conventional loans. This rule focuses on the seller's profit: if it's more than 20% from sale price to sale price, the 90 day rule is enacted here too. 

CONVENTIONAL LOAN 90 DAY DEED RESTRICTION

Here what is important is the deed's recording date--as in when the investor's deed was recorded. This date marks the start of the 90 day count. Within the 90 days, the property can be sold for anything less than 120% of the investor's purchase price, and has nothing to do with repairs or improvements. On day 91 and on, the property can be sold for any amount. 

FHA'S 90 DAY FLIP RESTRICTION

The same timing applies here: the 90 day clock starts with the transfer of title/deed record date when they initially purchased the property. From the transfer of title, 90 days must pass in order for a buyer to obtain an FHA loan. 

What does all of this mean? Short of finding the illusive cash buyer, investors will be waiting at least 90 days plus ~30 to 45 days for loans. My advice is to list the property when it's ready, and enter into an agreement with a buyer to execute a contract on day 91. This is really the only way to make the math amount to the 91 + 30 to 45, instead of potentially a whole lot more. 

Let's Talk -- MAN CAVE!

6 Things to Consider Before Finishing Your Basement

Is this winter’s bout of cabin fever got you dreaming of more space in your home? Do you find yourself fantasizing about a separate room where you can cloister the kids when it’s too cold for them to play outside? Your solution may be right beneath your feet. Here are few things to keep in mind if you’re considering refinishing your basement.

1. Water, water, anywhere?
Have a pro come in and investigate any evidence of water damage in your basement. You’ll need to resolve any moisture issues before you begin remodeling. 

2. Know the code
Before you design your dream basement, check the municipal code for any restrictions that may impact your project, such as the number of exits required or regulations about adding bathrooms and kitchens below the main floor of your home.

3. Kill the chill
Check with a contractor to find out if there are ways to adjust your home’s current ventilation and heating configuration to efficiently heat your basement. Installing quality flooring can help with insulation.

4. Light up your (underground) life
Avoid creating a well-decorated dungeon by installing adequate lighting, especially if there are no windows.

5. The right steps
Don’t skimp on the stairway. Carpeting on the stairs, bright lights and handrails make access safer and more inviting.

6. Turn down the volume
If you have plans for an entertainment center, consider installing sound insulation in the ceiling to help tone things down.

Not sure if turning your basement into an underground oasis is worth the investment? Talk to a local agent familiar with your particular market and find out which features buyers have been looking for. Find one here: www.remax.com/officeagentsearch/.

What is that smell?

7 Tips for Pet Owners Selling a Home

Lingering animal smells and fur can be a turn-off for would-be buyers. Be sure to remove all signs of your furry friends before showings. Here are some tips.

1. Holey backyard, Batman!
Does your dog bury more bones than they munch on? Start at the perimeter of your yard and circle inward to find your pup’s landscaping efforts and fill them in.

2. Scoop the ####
One misstep can ruin a buyer’s impression of your yard (and possibly home). Make sure your property is clear of any pet-related landmines.

3. Mend fences
Check your fencing, deck and porch for any marks from scratching or chewing. Most can be erased with elbow grease and a bit of sandpaper.

4. Stash the evidence
Collect your pet’s toys, bowls, beds and litter boxes and keep them out of sight. Hide pet photos for now, too.

5. De-scents-itize
Have a friend or Realtor come by to sniff out any animal scents you may have become accustomed to. Light candles, open windows or hire a professional carpet cleaning crew to deodorize your home.

6. Need a buffer?
Have claws scratched up your lovely hardwood floors? Ask your Realtor if professional resurfacing might be a good idea.

7. Don’t leave pets home during showings
Not only is there a chance they may bolt through an open door when strangers stroll around, there’s also a liability issue. It may be a good idea to temporarily relocate exotic critters, such as snakes or tarantulas.

Looking for a home with a bigger yard for Fido, or more naturally-lit lounging space for Fluffy? Your Realtor can help you find properties with features all members of your family will love. Start here.

Selling your home in the Winter

5 Things to expect when selling your home in winter

Winter is traditionally a slower time for home sales, but don’t despair. Here are a few ways the timing might play in your favor.

1. Buyers tend to be more motivated
Buyers looking for homes are doing so because they really must relocate due to job, family or other unavoidable circumstances. You’ll probably waste less time dealing with real estate tire-kickers.

2. Things move faster
Because there are fewer transactions during the winter, mortgage companies, home inspectors and appraisers have less on their plates. You should be able to schedule appointments sooner and expect faster turnaround for reports and approvals than in the busy warmer seasons.

3. You can leverage the smaller inventory
With fewer homes on the market, it can be easier to promote your property’s comparative advantages. Highlight your home’s unique features. Are you the only townhome within walking distance of downtown? The only split-level with a pool in your school district? Be sure to mention it in your listing.

4. Summer buyers are looking now
Not everyone looking in the winter must move immediately. Your Realtor may have ideas about how to market your home among local businesses and organizations with fluid populations, such as universities, or via school district websites that might attract families moving to the area.

5. You can remind buyers of warmer weather
Be sure to include images of your home during greener summer months, including lifestyle shots of your deck, patio, porch and/or yard. Feature these photos in a frame during showings to remind buyers how the home can come alive in the spring.

An experienced agent who knows your unique market and the current inventory can paint a more specific picture of what listing your property in the winter will be like. Find one here:www.wisconsinhoushunt.com

Stage for the Selling Season

Fall, Spring, Summer or Winter - Homes sell all season long.

Give your home some added seasonal curb appeal by decorating!

If you’re selling your home in today’s real estate market, you probably know that curb appeal is your first chance to make an impression on a prospective buyer. In the first few seconds a potential buyer sees your home, they decide if they want to drive on by or come on in. You can’t change the basic structure of the house or change the location, but you can make your home worthy of a deeper look.

Maintaining curb appeal is a year round job, with different challenges each season. For winter, decorate with wreaths and pine cone centerpieces. In spring, adding fresh-cut flowers and pops of color go along way. If selling in the summer, highlight decks and patios. For fall, display pumpkins and gourds by your entryway.

The impression your home creates is the magnet that first attracts viewers and turns them into buyers. Maintaining curb appeal is a year-round job, but it’s a vital part of selling your home.

Any season is the best season to call  RE/MAX Realty Center to help sell your home! 262-567-2455

RE/MAX Fit To Sell - Furniture Placement

Staging your home for sale can sometimes be as easy as the right lighting and furniture placement! You may have everything in your home to seal the deal!

You’ve spent days preparing your home for potential buyers to tour– now what?

7 Things Sellers Can Expect From Their Open House

You’ve stashed the family jewels, power-washed the porch, and packed up your family photos. Now that the prep work is done here are a few things you can expect when people start touring your home:

1. To leave.
Let your Realtor handle the open house. You want prospective buyers to envision themselves in your home and not be distracted by your presence as they explore.

2. For curious neighbors to drop by.
At least one set of nosy neighbors is likely to show up to snoop. On the bright side, they’ll be able to talk up the neighborhood to potential buyers.

3. To stay on the grid.
Wherever you go during the open house, be sure to remain reachable by cell phone in case your Realtor has a question.

4. To find a new place to park.
Park your car at a neighbor’s during the open house to free up space for buyers.

5. People to want details “to go.”
Be sure to have a flyer or brochure with the important information about your listing for potential buyers to take with them.

6. Feedback.
Your Realtor will solicit comments from the buyers and agents who visit. This feedback can be helpful in adjusting your expectations, your listing price, or your list of improvements to complete before the next open house.

7. To be patient.
Just because you don’t have an offer by the time you go to bed the night of your open house doesn’t mean the event wasn’t a success. It often takes 24 to 48 hours for foot traffic at an open house to translate into phone calls.

Thinking of listing your home? A RE/MAX agent can help you make sure it’s ready for the scrutiny of an open house, attract people to the event and show off your home’s best features.

Selling a Vacant Home

11 Tips for Selling a Vacant Home

You’ve moved to your new home but have yet to sell your former property. What should you do to ensure the safety and security of the vacant house?

1. Set the thermostat at no lower than 60 degrees to prevent frozen pipes. If necessary, your Realtor can turn up the heat the day before a showing, but not by much as sudden shifts in temperature can also damage pipes. If you have gas heat, check the level on your tank so it doesn’t run out.

2. Another tip to avoid frozen pipes: Leave faucets dripping ever so slightly.

3. Check the batteries on your smoke and carbon monoxide detectors. Some automatically send a signal to local authorities even if a home is empty.

4. Add a lock-bar in the pane of sliding windows for extra protection.

5. Install a timer on lights to give the appearance that the home is occupied.

6. Stop your mail and ask a neighbor to scoop up flyers, takeout menus or phonebooks that may accumulate on your porch.

7. Check your weather stripping for cracks or tears and replace worn-out strips. You’ll keep out mold-producing moisture and prevent critters from setting up shop.

8. Unplug any appliances. It saves energy and also prevents dangerous short circuits. Prop open freezer or fridge doors a crack to prevent potential mold buildup.

9. Let your neighbors know your home will be empty, and how they can reach you and your Realtor in case of an emergency or if things just don’t look right.

10. Clean the gutters. Clogs can cause water to freeze and tear away from your home.

11. Arrange to have your yard mowed regularly and weeds tended to during warmer months.

The right agent can help minimize the time your home sits vacant. Find a RE/MAX agent

Selling a Vacant Home

11 Tips for Selling a Vacant Home

You’ve moved to your new home but have yet to sell your former property. What should you do to ensure the safety and security of the vacant house?

1. Set the thermostat at no lower than 60 degrees to prevent frozen pipes. If necessary, your Realtor can turn up the heat the day before a showing, but not by much as sudden shifts in temperature can also damage pipes. If you have gas heat, check the level on your tank so it doesn’t run out.

2. Another tip to avoid frozen pipes: Leave faucets dripping ever so slightly.

3. Check the batteries on your smoke and carbon monoxide detectors. Some automatically send a signal to local authorities even if a home is empty.

4. Add a lock-bar in the pane of sliding windows for extra protection.

5. Install a timer on lights to give the appearance that the home is occupied.

6. Stop your mail and ask a neighbor to scoop up flyers, takeout menus or phonebooks that may accumulate on your porch.

7. Check your weather stripping for cracks or tears and replace worn-out strips. You’ll keep out mold-producing moisture and prevent critters from setting up shop.

8. Unplug any appliances. It saves energy and also prevents dangerous short circuits. Prop open freezer or fridge doors a crack to prevent potential mold buildup.

9. Let your neighbors know your home will be empty, and how they can reach you and your Realtor in case of an emergency or if things just don’t look right.

10. Clean the gutters. Clogs can cause water to freeze and tear away from your home.

11. Arrange to have your yard mowed regularly and weeds tended to during warmer months.

The right agent can help minimize the time your home sits vacant. Find a RE/MAX agent

Refreshen Your Home

Nothing transforms the look of a home as simply and inexpensively as paint. Whether you’d like to liven up a dated design or refresh your entire home to sell.

1. When it comes to paint, quality matters. Look for High-Quality Products and use the right supplies. Prep before painting!

2.  Explore, coordinate and experiment with different looks - infuse your personality into your home. Determine how you want to feel in your space first. Are you looking for fresh, serene, elegant, playful, regal?

3. Envision the color in your home is to see it in action - Purchase small samples of  your options first instead of relying on the pain cards. Often times when you are ready to select paint colors, you are looking at small paint chips or a fan deck at a paint or big box store. Looking at paint colors in the stores is the first mistake since the lighting is often fluorescent and not the same type of lighting you live with in your own home.

Tips for Beautiful Granite Countertops

FIVE TIPS FOR BEAUTIFUL GRANITE COUNTERTOPS

 

The interior design industry has been trying for years to break homeowners' addiction to granite counters. They've introduced stainless, concrete, glass, quartz, wood, marble and other ideas to wean people away, but the alternative surfaces just don't have the luxury look that granite does.

If you're getting granite countertops for the first time, here are five things you need to know:

Choose the right stone. Granite is a general term that describes a type of granular igneous rock formed by cooled magma and indigenous minerals. Depending on where the granite is quarried, it can be stunning with streaks of gray, pink, red, green, blue or gold. The rarity of the vein of granite can drive up the price considerably, as well as the thickness and the type of fabrication you choose.

When you shop for granite, don't choose from a sample. You're basically buying the whole slab so that's how you should shop. Look only at whole slabs, as the fabricators will use as much as possible to match sections and to minimize waste. Sometimes it's possible to buy two or more slabs from the same lot. They are sliced just like pieces of toast so they can accommodate large kitchens. If they're put back to back, they form butterfly or mirror images of each other.

The beauty of granite is the movement of color and the pattern of streaks and dapples, so choose wisely. A strong graphic pattern will be highly energizing, while a softer color and pattern will be calming.

Hold the Dumb End of the Tape. Granite is sold by the square foot. You can get an idea of the number of square feet you need by multiplying length by width for each section of the kitchen, such as countertops, backsplash, and an island. Then add the square feet of each section together.

But that's not all there is to measuring. There's an edge allowance, seam allowance, sinks and other things to consider. You can tell your salesperson how many square feet you think you'll need, and he or she can direct you to slabs and lots that are large enough to fulfill your order. Once you choose, the salesperson will "hold" the slab with a deposit, until the fabricator can come out to measure exactly.

Meanwhile, your cabinets should be installed before the fabricator comes out. Most appliances fit under the countertops, but if you're installing a new sink or cooktop, the fabricator will need those measurements, too. Let the fabricator take the measurements. That way the fit is guaranteed.

Be aware of slab thickness. Not all granite slabs are sliced the same, so expect to pay more for a three-inch thickness than a one-inch thickness. If you choose a thick granite, make sure your cabinets can support that much weight.

Next, you'll choose an edge that is bullnose, ogee or beveled, or raw-edged. The finish can also change the look of the granite. Polished granite is glossy and reflective. Honed granite is a smooth matte finish. Leather is a textured finish.

Ask for as few seams as possible. If you're doing a large area like a kitchen, you want to use as few seams as possible so that the flow of the granite pattern and color is less interrupted. A seamless slab in a kitchen looks beautiful and holds more value than seamed pieces because it's like a work of art. Ask the fabricator if any parts of the job can be done without a seam. Sometimes it's very possible, depending on the design of your kitchen.

To save money, you can choose granite tiles, which is like a tile, so there will be no seams, but they add little value to your home. You can also order from scraps the dealer may have leftover from other jobs, but they're only be suitable for small jobs where you don't have to match another granite, such as a powder bath or laundry.

Granite requires care. Granite is fairly heat-resistant and easy to clean, but you should keep in mind that it's also porous. It can crack, chip, stain and show scratches.

Don't put hot pans directly on the surface; use a trivet or hot pad. Use only granite-safe cleansers. Don't use bleach, ammonia products, scouring pads, or anything acidic such as lemon or vinegar to clean. Don't use dish soap to clean as it can leave a dulling film on the surface. Spills of wine, juice and tomato sauce should be cleaned up quickly.

Some finishes such as polish act as more of a seal, but you can also purchase granite sealers at your local market. Just wipe it on once a year or so to keep your countertops looking their best.

If you're wondering whether your countertop needs sealing, spill some clean water or the surface and cover it with a paper towel. If it leaves a stain, it will go away eventually, but you'll know it's time for sealant.

Looking to buy or sell?  Let me know how I can help.

 

Contact your local RE/MAX  Realty Center Agent Stacey Guzanick 262.490.3696, Guzanick@gmail.com,  if you have questions about buying a house or selling one. I can  guide you  toward your next home.

www.HomesWithStacey.com

See you at the closing!

Written by Blanche Evans

3 Reasons to Sell Your House Today!

 (Part I)

by The KCM Crew 

This week, we are going to look at three reasons to sell your house now instead of waiting: demand is strong, supply is low and new construction will soon be your competition. – The KCM Crew

Part I – Demand for Real Estate is Much Stronger This Year

When selling anything, owners can only hope there is a strong demand for that which they are selling. The great news for today’s home sellers is that the current housing market is experiencing a stronger demand than we have seen in some time.
The  spring housing market of 2013 is projected to be one of the best in years.

Home Sales

The National Association of Realtors (NAR) reports monthly on both pending sales (houses going into contract) and existing home sales (actual closed sales).
In the first quarter of 2013, pending sales have consistently outperformed the numbers reported in 2012. Contract activity has been above year-ago levels for the past 22 months. Before this year, the last time the index showed a higher reading was in April 2010, shortly before the deadline for the home buyer tax credit.
NAR also revealed that closed home sales have been above year-ago levels for 20 consecutive months and sales are at the highest level since the tax credit period of 2009-2010.

Impact on Sellers

This increase in demand has created bidding wars for properly priced homes across the country. This has resulted in two favorable changes for home sellers:

1. They are receiving offers closer to (if not greater than) the list price.
2. The average days it takes to sell a home has dropped by over 20% from last year.

If you are thinking about selling your home, don’t miss out on the strong demand that exists in the current spring market.
Tomorrow, we will look at the supply of housing inventory that is available.