Timeline for closing a home sale

Several factors can delay approval process

Some home-sale transactions close quickly, while others can take months. Two significant factors that affect most home sales are inspections of the property and financing the purchase.
Inspections should be done within the first couple of weeks after the offer is ratified, i.e., accepted by both buyer and seller. Usually, the day after ratification is day one of the contingency and closing time periods. This may vary from one location to the next.
When transactions fall apart soon after ratification, the cause is usually something discovered during the buyer's inspections. It's a good idea for sellers to get presale inspection reports so that the buyers have as much information about the property as possible before they make an offer.
Most home inspection reports make recommendations to consult other specialists such as a roofer, furnace contractor, drainage specialist or engineer. Few sellers have these additional inspections done. Even if they do, the buyers might want a second opinion.
Inspections are also somewhat subjective. One inspector might say a roof needs to be replaced; another might say it has a few years of life left as long as it is properly maintained. Transactions fall apart because the buyer and seller can't come to an agreement on inspections, which means the sale doesn't close, the house goes back on the market and the buyers renew their home search.
If the inspection issues are worked out satisfactorily, the next major hurdle that could delay your sale, or crater it, is the loan contingency. Cash buyers bypass this rigorous process; however, they do need to provide the sellers with evidence that they have sufficient liquid funds to close the sale.
All-cash deals can close whenever the buyers and sellers agree, after all inspection issues are resolved. Closing can occur in a week or two. Some all-cash buyers include an appraisal contingency in their contract to confirm that they're not paying over market value.
In this case, it would take longer to close because an appraiser would need to visit the property and work up an appraisal report. If the property didn't appraise for the purchase price, the buyer might be able to back out and have the deposit returned.
Both buyer and seller would start all over again. However, if they negotiated a resolution, the sale could close quickly and would take far less time than it does to close a sale involving a mortgage.
HOUSE HUNTING TIP: Purchase contracts include contingencies and time periods for them to be met. To avoid having to ask for extensions, make sure that the time periods you request are reasonable. An extension might not be granted if the seller has a backup offer for a higher price.
Buyers should get preapproved for the financing they need to close a home sale before their offer is accepted. This way, they are assured of what they can afford to pay. Preapproval can cut a few days off the loan approval process.
Loan approval can go relatively quickly if you present all required documentation promptly and your financial situation is not complicated. It can be more time consuming for buyers who are self-employed or are using other than W-2 income to qualify.
Part of loan approval involves an appraisal on the property by a licensed appraiser. This can slow the process down depending on the lender, how backlogged they are and the loan amount. A large loan amount can prompt the need for two appraisals, which adds more time to the approval process.
THE CLOSING: If you're buying in an area where homes are selling quickly, it may take 35 to 45 days from contract acceptance for final loan approval and closing.

Financial advice for women that goes beyond the basics

Book Review: 'The Seven Pearls of Financial Wisdom: A Woman's Guide to Enjoying Wealth and Power' By Tara-Nicholle Nelson

Book Review
Title: "The Seven Pearls of Financial Wisdom: A Woman's Guide to Enjoying Wealth and Power"
Author: Carol Pepper and Camilla Webster
Publisher: St. Martin's Press, 2012; 352 pages; $25.99
A number of notable personal finance experts have made attempts to share their knowledge, insights and experiences on money matters with women-friendly money books and courses. However, many of these are relatively narrowly focused on subjects like budgeting, investing, getting out of debt, real estate, or building a career or business.
Now there's a new entree into this genre by former Rockefeller money manager Carol Pepper and Forbes journalist Camilla Webster: "The Seven Pearls of Financial Wisdom: A Woman's guide to Enjoying Wealth and Power."
I read a lot of finance, self-help and other books from similar genres, and spend much of my time exploring and creating multimedia resources in the same areas. Against that backdrop, "Seven Pearls" at first glance came off as overly simple, and lacking, mmm, pizzazz. What you won't find in this book is a bunch of charts and graphs and links and bullets and short-attention-span gimmicks or cutesy phrases and acronyms. The paragraphs can run long, and the voice is less girlfriend-ey and more straight shooter.
What you will find in "Seven Pearls," however, is 300 pages of straightforward, substantive, visionary, step-by-step guidelines for creating a truly prosperous life, including clear advice for managing your money, business, career, family and romantic relationships, and professional advisers toward that end.
Pepper and Webster don't coddle or infantilize readers, nor do they assume that the average reader is mired in financial desperation or struggle just to believe they deserve to flourish. In fact, many women may not be emotionally ready to receive and execute on the advice it contains. Some will need to take a course like Conscious Bookkeeping or work through a book like Karen McCall's "Financial Recovery" or Julia Cameron's "The Prosperous Heart" before they can truly appreciate and act on the simple but serious wisdom contained in "Pearls."
Pearls provides Pepper and Webster's opinionated, yet ego-free, guidance on a wide-ranging, but interconnected, set of topics including:

• developing a set of investment guidelines for your portfolio.
• starting and managing a business.
• finding, vetting and selecting the right spouse.
• raising wise children.
• managing your wellness with DNA testing.

What I know from working with many women who want to use real estate to build their net worth and family futures is that what causes some to hesitate to take responsibility for growing their finances is the fear of the unknown territory of prosperity -- the fear that they will fail on the nuts and bolts of managing the more complex taxes, legal structures, adviser teams, business plans, financial statements and such that they might face if they do find financial success.
"Seven Pearls" neatly obliterates such fears and concerns, providing a nuts-and-bolts outline and action plan for women who do earn a good income -- and those who plan to in the future.
Pepper and Webster provide hundreds of pearls of financial wisdom in seven areas of their lives, carving out a vision for a prosperous life by doing some touching, some deep dives and lots of clear, actionable recommendations in the areas of:
1. Wealth building: business, career, investments and retirement planning, including how to manage your own emotions to avoid common (and costly) business, tax and investment mistakes, and select and manage your team of advisers.
2. Romance and marriage: managing the costs incurred while dating; financial red flags that prospective mates might raise; and how to handle the financial negotiations and disclosures that are necessary to minimize the too-common financial causes of marital strife.
3. Power: In this section, the authors coach women around many of the powerless beliefs and behaviors that happen so often even among educated career women -- like refusing to speak up for oneself or failing to -- and direct them to the image, social media and organizational tools for building and deploying their own powerful, personal brands, including everything from Twitter to seats on corporate boards.
Motherhood, crisis and loss, retirement and legacy building are also given intensive treatment in "Seven Pearls." For reader-friendliness, each chapter starts off with a set of questions that surface the problems that will be addressed within.
Many women now make more money than their husbands or prospective mates, yet many of these same women lack more than a basic understanding of financial tools. "Seven Pearls" is the first women's finance book I've seen that is tailored to take readers far beyond money crises and beyond the basics (though it does offer some crisis guidance and much advice for avoiding crises in the first place).
Rather, the authors effectively usher readers into a life season of wisely, assertively and knowledgeably using an advanced set of tools for managing their prosperity, their relationships and their futures, without fear, intimidation or unnecessary complexities.
In "Seven Pearls," Pepper and Webster offer successful women the logistics and structure on which they can construct a fully prosperous life, minus the fluff.
Tara-Nicholle Nelson is author of "The Savvy Woman's Homebuying Handbook" and "Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions." Tara is also the Consumer Ambassador and Educator for real estate listings search site Trulia.com.

Mortgage rates chart new lows

Economic growth seems to be slowing, inflation remains subdued

Mortgage rates hit all-time lows this week, but demand for purchase loans is only slightly higher than it was a year ago as tight lending standards and worries about what's been dubbed the "jobless recovery" continue to weigh on homebuyer demand.
Rates on 30-year fixed-rate mortgages averaged 3.84 percent with an average 0.8 point for the week ending May 3, down from 3.88 percent last week and 4.71 percent a year ago, Freddie Mac said in releasing the results of its weekly Primary Mortgage Market Survey. That's a new low in Freddie Mac records dating to 1971, breaking the old record of 3.87 percent set during the first three weeks of February.
For 15-year fixed-rate mortgages, rates averaged 3.07 percent with an average 0.7 point, down from 3.12 percent last week and 3.89 percent a year ago. That's also a new low in records dating to 1991, breaking the previous record of 3.11 percent set just three weeks ago.
Rates on five-year Treasury-indexed hybrid adjustable-rate mortgage (ARM) loans averaged 2.85 percent with an average 0.7 point, unchanged from last week but down from 3.47 percent a year ago. Rates on five-year ARMs hit an all-time low in records dating to 2005 of 2.78 percent during the week ending April 19.
For one-year Treasury-indexed ARM loans, rates averaged 2.7 percent with an average 0.6 point, down from 2.74 percent last week and 3.14 percent a year ago.
"Signs of slowing economic growth and inflation remaining subdued allowed yields on Treasury bonds to ease somewhat and brought most mortgage rates to new all-time record lows this week," said Freddie Mac's chief economist, Frank Nothaft, in a statement.
Nothaft noted that real gross domestic product rose at a 2.2 percent annual rate during the first quarter of this year, down from 3 percent during the final quarter of 2012 and below the consensus forecast of 2.5 percent.
Annual growth in the core price index of personal consumption expenditures (PCE) was 2 percent in March, which matches the Federal Reserve's implied inflation target, Nothaft said.
Although the Federal Reserve's Open Market Committee said last week that it expects to maintain "a highly accommodative stance for monetary policy" to support a stronger economic recovery, the committee announced no changes to existing policies.
Labor market conditions have improved in recent months but unemployment remains elevated, the committee said in a statement. Despite some signs of improvement, the housing sector "remains depressed," the statement said.
Mortgage broker and syndicated columnist Lou Barnes believes the Fed "has neither the intention nor capacity to inflate away our debt burden. With (PCE) above 2 percent, the Fed won't even embark on something as mild as QE3," Barnes said, referring to speculation over a possible third round of "quantitative easing."

Looking back a week, a separate survey by the Mortgage Bankers Association showed demand for purchase loans was up a seasonally adjusted 2.9 percent during the week ending April 27 compared to the week before. Purchase loans demand was up 3 percent from the same week a year ago
The National Association of REALTORS® last week reported that pending sales of existing homes jumped a seasonally adjusted 4.1 percent from February to March, to the highest level since April 2010. Pending sales were up 10.8 percent from the same time a year ago on a non-seasonally adjusted basis.

Trampolines are home insurance nightmare

Q: We are renting a house and we set up a trampoline in our backyard. The owner wants to remove it because of liability issues if there's an accident. Is that reasonable, or is there something we can do about this, like place a sign on the trampoline? --Marleen
A: It's noteworthy that you find yourself in the precisely opposite situation of most tenants who have an issue with their landlord about a hazardous condition. Most often, tenants complain that there is a dangerous situation on the property, and that their landlord refuses to fix it and eliminate the hazard. Though laws do vary by state, landlords do often find themselves held liable for the physical and monetary damages incurred by virtue of hazardous conditions on the properties they own.
In the final analysis, your landlord's insistence that the trampoline be removed is actually quite reasonable. Here are three factors I want you to consider as you try to wrap your head around this.
1. Trampolines are very dangerous. I suspect you may think your landlord is overreacting, and that you might not realize just how dangerous trampolines actually are. To get a sense for where your landlord is coming from, simply Google the words "trampoline" and "liability." You'll soon see that not only are trampoline injuries a very common cause of severe injuries to adults and children alike, they are also the source of a full-blown body of law around homeowners being responsible to cover the costs and other damages related to those injuries.
In fact, just last month, New York Yankees pitcher Joba Chamberlain suffered a career-pausing ankle dislocation, you guessed it, while jumping on a trampoline.
2. Your landlord has the legal responsibility to prevent hazardous conditions. Not only is it highly likely your landlord would become embroiled in a legal case that arises from the injuries a visitor to your home might incur on the trampoline, it's also highly likely that because your landlord is aware that you have installed the trampoline he'd end up being held liable. And that's just the beginning; many homeowners insurance and hazard insurance policies are actually voided by the installation of a trampoline on the home.
Your landlord needs to be able to maintain the home in insurable condition, and needs to make sure that an insurance policy is on the property and remains in force. This protects your landlord, but also may protect you in the event that you were to be injured or harmed as a result of a fire or some other insured-against event of that nature, which I hope never happens at your home. If having a trampoline in the backyard voids the insurance policy, which it likely does, that in and of itself renders your landlord's demands reasonable.
3. There's one way you can have 100 percent control over your backyard and what you put in it. Putting a sign up on a trampoline doesn't minimize the possibility of people getting injured, and it doesn't necessarily impact the specter of liability for your landlord, either. Possibly, having every single person who ever jumps on it sign a waiver might minimize the liability concern, but enforcing that and ensuring that the signer is competent and the form will stand up in court is completely infeasible.
When you rent someone else's home, they absolutely have the right to impose some basic health, safety and other conditions on the rental, like a ban on waterbeds and large dogs.
The one way you can get ultimate control over your home and how you customize it is this: Buy your own home. Problem is, as a homeowner, you need an insurance policy, too, especially if you have a mortgage. Your mortgage company will require that you either (a) obtain and maintain a policy or (b) they will put a very, very expensive policy on the property.
So, if and when you do buy your own home, I'd urge you to work with your insurance representative to fully understand the impact of having a trampoline in your backyard, before you do that.

4 ways to capitalize on shift to seller's market

Some see signs of the next housing shortage

It's the spring selling season and good news is popping up like wildflowers in many places. The rocky bottom may be behind us with a new challenge ahead: a seller's market with higher prices and not enough inventory.
"A seller's market? Are you serious?" the naysayers will say. "NAR just announced that prices declined again and that the current sales pace puts us on track for doing about 4.93 million home sales in 2012. That's less than the typical 5 million home sales that constitutes an average year."
Signs of the next housing shortage?
There's no question that many areas are still suffering from high unemployment and a glut of foreclosures. Nevertheless, there are rumblings on the lending side of the business about easing credit restrictions. This means more borrowers can qualify for loans. Increased demand will absorb the current glut of properties. This, in turn, will result in prices flattening and then beginning to inch up again.
Pent-up demand is also growing. The 80 million members of Gen Y (born between 1977 and 1994) are in their prime time for starting careers, getting married and having babies. These major life milestones are usually tied to changes in housing, most often a move from being a renter to becoming a homeowner.
Moreover, as inflation raises its ugly head again and the Federal Reserve ponders a third round of quantitative easing (QE3), investors are fleeing to tangible assets. While precious metals and commodities are certainly popular, real estate has almost always kept place with inflation over the long haul.
Couple these facts with the tremendous decline in new housing starts and you have the formula for a housing shortage in the very near future.
Reading the tea leaves
What does this all mean for your business? First, it's important that you are tracking how many months of inventory are on the market in the areas and the price ranges in which you work. The rule of thumb is that if you have six or less months of inventory, you are either entering or are already in a seller's market. If there are seven or eight months of inventory, your market may be flat or transitioning. If you have nine or more months of inventory, you are still in a buyer's market with too much inventory.
There are some important points to note here. First, sometimes you can have a seller's market and a buyer's market on the same street. For example, single-family homes under $250,000 may be selling well, but $180,000 condos are languishing with virtually no sales. Since most MLS systems supply this data, it's important to watch whether the number of months of inventory is increasing or decreasing. This will give you an idea about which way the market is trending.
What's especially fascinating about the shift from a buyer's to a seller's market is how far the prices actually lag behind the shift. For example, inventories began to grow back in 2004 and 2005. Nevertheless, prices continued to increase in many areas well into 2007.
You can expect to see the same thing now. Inventories are decreasing, multiple offers are occurring, and overall prices are still continuing to decline. The bottom of the market has already passed in terms of the demand, but hasn't shown up yet in terms of the price.
Capitalize on the shifts
What can you do to take advantage of this in your market? Here are four suggestions:
1. Fish where the fish are
Determine where the activity is the greatest and where there is the least amount of listings. This is a prime area for prospecting for new listings. You can call on FSBOs (for-sale-by-owner listings), owners of expired listings, or hold open houses where you invite the neighbors. The idea is to increase your visibility in the area so that when someone is thinking about buying or selling a home, they will contact you.
2. Use print marketing to get the word out
Many buyers have been waiting for the market to bottom out. You can use your print marketing materials including postcards, letters or newsletters to show people that the properties in their area have already bottomed out. A simple way to do this is with a graph that shows how many months of inventory were available over the last 12-24 months. Draw a line at six months. Your caption says, "When the inventory dips below six months, the market has already bottomed. Prices typically bottom out in the next 90 to 180 days after the inventory drops below six months. If you want to get the best price and the best financing, buy now."
3. Reach out through social media
If you have a Facebook business page or if you use Twitter, link to any data from your board of REALTORS® or other resources that show the state of your local market. Remember to remind recipients that different price ranges may be experiencing different market conditions.
4. Show buyers it's cheaper to buy than rent
A real shocker was recently released from Trulia showing that it is now cheaper to buy than rent in 98 of 100 large U.S. metro locations.
Is a seller's market around the corner in your area? If the months of inventory have crossed the "six months" threshold, it's time to load up on your listing inventory as well as dust off those unused multiple-offer forms. Also, don't forget to prospect first-time buyers, because it's the best time to buy since the Great Depression

5 tips to safely book a vacation rental

Image via CrunchBase

Online clues help weed out bogus listings

The Internet has made finding vacation properties faster, easier and cheaper. But not everyone is looking to relax at a charming seaside cottage or a rustic mountain cabin.
Some scam artists have been copying and pasting photos and details of popular destination properties on rental sites, charging unknowing customers large down payments (sometimes half of the entire rental period) and then running off with the cash.
Several recent cases of international rental properties not being available -- or booked to more than one customer for the same period -- have owners and longtime operators warning consumers to be wary of deals that look too good to be true.
"There are many wonderful rental properties out there that are completely legitimate and only a few scammers," said Christine Karpinski, author of "How to Rent Vacation Properties by Owner."
"To reject the whole concept of renting a great home instead of a hotel room because someone else had a bad experience is like deciding not to have children because you saw the movie 'The Bad Seed,' " Karpinski said.
One owner, "Barbara," who specializes in international properties, said four clients were scammed earlier this year when they booked waterfront Caribbean properties. Barbara found out later that crooks based in Nigeria hacked into her email system and diverted the reservation to another location.
"Most of the time, people can spot when something is wrong if they pay attention to the communication they are receiving," Barbara said. "The bad guys mostly have been tracked to foreign countries and their use of the English language has not been good. Also, call the phone number provided. It's not uncommon that it's disconnected or goes unanswered."
Scammers often use the fastest available method to post a bogus listing, which means they usually never build websites that appear legitimate.
"Craigslist is terrific, especially for long-term rentals," Barbara said. "But unfortunately it's one of the first places scammers go because they can get in and get out. Of course, the Craigslist people are doing all they can to prevent this, but stuff gets through. It's just another reminder to do all you can to speak with the owner."
Karpinski said the benefits of staying in a vacation rental home far outweigh the minimal risks. These properties are more spacious and often less expensive than hotel rooms. They're appointed with all the comforts of your home. They're private. They tend to be kid-friendly. Often, they're pet-friendly as well.
Her top tips to safely book your vacation home:
1. Beware of super-cheap rates. If it seems too good to be true, it probably is. The most common way scammers work is by enticing a large number of travelers in a short period of time. They do this by lowballing the rental rates.
"If one listing is, say, half the price of all other comparable ones for the same amount of time, beware," Karpinski said. "Put yourself in the owner's shoes: Why would he or she voluntarily forgo that much income? Five, 10, or maybe even 15 percent off, perhaps, but 50 percent? No way."
2. Cyberstalk the owner. Do some cross-referencing across various websites: Facebook, Twitter, LinkedIn, and so forth. Make sure the place of residence (where the owner lives -- not where the vacation home is located) is the same as the information the owner provided. Google the phone number listed on the advertisement. Many property owners and managers list their homes on many different websites. Check to see if they are the same.
3. Look for clues in the reviews. When you are reading the reviews of the property (either on the vacation rental website or on other sites such as TripAdvisor.com), there are sometimes references to the owners' names. A review might say something like: "Thanks, Tom and Christine, for allowing us to rent your lovely home. ..." If the names in the reviews do not match the name of the person renting the home to you, it could be a sign that something is not right.
4. Speak with the owner via phone. Sure, it's possible to be scammed over the phone. However, it's usually easier to fool someone when you're communicating online. Ask specific questions and listen carefully to the answers.
5. Pay only by credit card. Never, ever pay by wire transfer.
Most importantly, listen to your gut because it's usually right.
"There was a couple on a national TV show that said they went ahead with the rental even though it didn't feel right," Karpinski said. "What's up with that? Scammers usually count on people not paying attention," or heeding their intuition.
"Renting a vacation home is like anything else. It's not risk-free, but when you take steps to mitigate the risk, you can feel 99.9 percent confident that you're not getting scammed."

Mom....Before I was myself you made me, me

Before I was myself you made me, me
With love and patience, discipline and tears,
Then bit by bit stepped back to set me free,

 

Allowing me to sail upon my sea,
Though well within the headlands of your fears.
Before I was myself you made me, me

With dreams enough of what I was to be
And hopes that would be sculpted by the years,
Then bit by bit stepped back to set me free,

Relinquishing your powers gradually
To let me shape myself among my peers.
Before I was myself you made me, me,

And being good and wise, you gracefully
As dancers when the last sweet cadence nears
Bit by bit stepped back to set me free.

For love inspires learning naturally:
The mind assents to what the heart reveres.
And so it was through love you made me, me

By slowly stepping back to set me free.