Friday, October 29, 2010

10 Steps to Establish a Frugal Home Remodeling Budget

We all have those one or two or in my case, half a dozen things that you really want to do to your home. You may have some needs that are more pressing than others and yet you may also find yourself in a quandary as to what to address first based on your budget and the potential expenses involved. Does this sound familiar or like you? :)

Before you go and tackle a home remodeling project be sure to first start with a plan of attack. The most important step is to establish a realistic and affordable budget. You'll need this so that you don't overspend and so that you also have some guidelines to follow for materials and labor needed for your project.

First things First:

1) Recognize Your Cash Flow - Do you currently know what your monthly budget consists of and what expendable money you may have to work with each month? If you have not set up a budget to track your monthly expenses, now is a good time to do that. Once you know what your typically spending against what you typically make, you'll better be able to assess what you can put towards a project without jeopardizing your finances.

2) How will you pay? - Its important to determine if the project will be paid for in cash/checks or on credit. Credit has its advantages if there are cash reward programs and if your strong at paying back the balance on a monthly basis. If you don't fall into that category and have not been great with credit then try to avoid it. Paying additional interest on items purchased compared with paying cash isn't a great way to save money!

3) Establish the scope of the project - In order to create a reasonable budget, you have to carefully set the scope of the project and stick to it. If you add additional tasks or projects as you go, then you won't be able to stick to your budget and run the risk of not finishing what you started due to finance shortfalls.

4) Consult a Pro- If your not a handy person and would like some guidance don't be afraid to contact a friend or a professional that can offer advice and can even possibly help with the planning and estimating.

5) Estimates - Are you doing this project yourself? If so then know your material costs but if that's not the case, then get your labor estimates in order. Rule of thumb is often to get 3 estimates but at least 2. You'll be surprised how much one may charge compared with another. Another tip would be to never pay in advance for the work. Its not uncommon to pay half once its half done but then the balance once the work is finished. Also, be sure they sign off on a time-line of when they feel they can complete this work.

6) Measure Carefully - If making measurements for backsplash, tile, etc... or any number of projects its vital to be very accurate with your measurements. You won't want to be wasteful for one, but more importantly you'll need to be in line with your budget and mis-calculating can throw your budget off significantly.

7) Cut Costs and Economize - It can be easier to stick to a remodeling budget if you can cut costs where possible. It's often possible to cut costs by simplifying designs and substituting less expensive materials.

8) Do Some Work Yourself - Many projects have a part to them that may not need the help of a professional that you can complete yourself. By doing so, you'll save money and labor costs. By doing some work where you are able by yourself, you can save money that you can possibly put towards additional work that you'll need help with.

9) Budget Cushion - You can be the best planner in the world, but you better prepared for surprises as they often come up. If you are going to plan a project that is $1000 for example, be sure that you expect to pay $1250. If you never need to dip into the extra amount, great! However, if you needed to but didn't plan for it then you'll wish you had!

10) Be Realistic - Be realistic and careful when planning for your home improvement project. If after careful estimates and budget planning it appears that you can't yet afford the project, either find ways to cut costs or delay the project until you can afford it!

Happy remodeling and don't forget to pass this along to your friends & family looking for great advice on a weekly basis!

Tuesday, October 26, 2010

Chicago Area Home Sales Down.....NOW IS TIME TO BUY!!

Today the most recent reports updating us from the Illinois Association of Realtors has given us another opportunity to look at the glass as half empty or half full.

As for me, while not always successful but given the chance will 9/10 times find myself seeing the glass as half full.

Here is the latest news; Despite record low mortage rates, home sales and median home prices tumbled in the Chicago area during September. According to the Illinois Association, September sales were down 22.4% from a year ago and down 5.4% from August. The median sales price was down 12.1% to $175,000.00

This Chicago "area" defines 9 counties in Northeastern Illinois and may not be a reflection on your area.

For Chicago, home sales fell 26.9% compared with last year and the median home price is down 20% from last year this time.

The forecasts for the remaining months of 2010 suggest more of the same. Other realtors and I can vouch for this, suggest that distressed properties, including foreclosures and short sales, dominate the market and are driving down prices.

Statewide numbers appear similar with home sales down 23.4% from a year ago and the median home sale price down 8 percent from a year ago to $145,983.

What can we take from this? Well if you are a "GLASS IS HALF EMPTY" type, then you'll say the market is terrible. Don't buy a home, don't invest in real estate and wait until things improve. Well, this may in fact be decent logic and based on past history one may conclude that things will not get any better for some time and we may not have seen prices hit the bottom yet.

I however would rather paint a better picture for you all to reflect on this news. Lets read between the lines.....The majority of all my clients and those other realtors are reporting that the majority of all sales have been foreclosures and short sales. Now think for a moment...Do you suppose all those buyers, who have recently purchased homes with prices as low as they are, coupled with interest rates at all time lows will see a great move in property value north of their investment when the market returns? Of course! If 9 out of 10 homes in any subdivision were purchased prior to the market slide then its a matter of economics that once distressed homes are no longer much of an option, home values will spike higher to that of a common ground that all home sellers once had. This means an opportunity people for you to purchase homes or investment properties as prices now that will see great returns in future years!

Don't sit on the sideline and wait for a recovery. It may be too late and interest rates may not be as low as they are today.

The best opportunity for anyone that has been renting and may qualify for a home is to act now. If your looking to invest in property above and beyond your home, act now. If you are in a financial position to sell your home and upgrade, do it now!

If you need help and would like to speak with a great lender, contact me today and I'll put you in touch with a couple of the best in the industry to discuss options with you. If you are already approved and ready to start your search then contact a local agent or if your in the Dupage/Will County area, contact me today, you'll be glad you !

Thanks as always for reading my blog and please feel free as always to forward this on to friends or family that you feel may benefit from hearing the most up to date news in real estate or tips for your home:)

Friday, October 22, 2010

How to Purchase a Home on a $100,000 Discount

Passing on this great article that i read today on Yahoo Finance! If you are in the market to buy or sell, contact a professional at the top of the game today like myself and take advantage of this great purchasing opportunity!

To pare down their growing inventory of properties, Fannie Mae and Freddie Mac are scrambling to unload nearly 150,000 foreclosed homes. And that means 2004-esque deals — like requiring as little as 3% down, offering to pay a portion of the closing costs and arranging special financing and warranties for repairs and renovations.

It's another option for home owners who want to trade up — and an easier way into the market for first-time home buyers, says Dean Baker, co-director of the Center for Economic and Policy Research who studies the housing market.

The best bargain might be the home's price. A SmartMoney analysis revealed that buyers could save $100,000 by buying a Fannie or Freddie home instead of similar fair-market properties just a few blocks away.

And while many of Fannie and Freddie's homes are at the lower end of the market and in less-desirable areas, a search of Fannie Mae and Freddie Mac listings revealed that buyers could find properties in good neighborhoods — and for $100,000 less than comparable houses nearby. For example, a five-bedroom, three-bath with a backyard, deck and two-car garage in tony Alexandria, Va., was listed for $445,000, $100,000 less than the average listing price in the area, according to Four blocks away, a similar non-foreclosed colonial is listed for $639,900.

Or how about a three-bedroom, two-bath in Bergen County's leafy River Edge, N.J for $359,900 -- $85,000 less than the average listing in the area. One avenue over, a non-foreclosed similar home is listed for $474,888.

The downside: Angry neighbors. These types of listings are devaluing nearby properties, says David Howell, realtor and executive vice president at McEnearney Associates, which sells homes in the metropolitan Washington D.C. area. That means in some areas where Freddie and Fannie homes are on the market, buyers could find a better deal on a nearby market-rate home that doesn't require repairs, he says.

Buying a Fannie or Freddie home can be more complex than pursuing an open-market real estate listing — or even a commercial bank foreclosed property. There's a smaller selection of appealing properties — there were just six higher-end homes listed on a recent day in Alexandria, for example — and those tend to sell the fastest. And there's little room to negotiate price.
"Our goal is to recover as much as we can to offset our loss and not to be low balling properties just to move them," says a Freddie Mac spokesman. "We absolutely have no motivation to be leading a downward spiral in home prices."

The three best features of Fannie and Freddie foreclosures that make digging for these deals worthwhile:

  • Small Down Payment
    For its foreclosed properties, Fannie Mae will accept down payments as low as 3% on 30-year mortgages at the same interest rates banks are currently offering. And Fannie Mae doesn't require private mortgage insurance. Compared to a typical bank mortgage, which requires 10% down, plus PMI for buyers with less than 20%, that's a huge savings — an estimated $51,000 up front and upwards of $2,500 per year PMI on a $300,000 mortgage.

It's a tradeoff, though. For buyers with 20% down, mortgage payments on a 30-year mortgage loan at 5% would be $1,288 a month. With just 3% down, the buyer would need to borrow $291,000 and make a $1,562 monthly payment.

  • Help with Renovations
    Fannie and Freddie have fixed big flaws like leaky roofs and damaged electrical work, and they often handle small projects like replacing appliances that are broken or missing, tearing up old carpet, or fixing other damage left by former owners or vandals.

Now, to entice buyers who want to update or upgrade, many of Fannie Mae's properties come with an optional mortgage that includes extra financing up to $30,000 for repairs and improvements. But with a little down payment and the extra amount tacked on, the buyer could end up owing more than the house is worth — especially if home prices continue to drop.

  • First Dibs
    Buyers who plan to live in their Freddie Mac-purchased home will get to see properties for at least the first 15 days they're on the market — before the listing opens to would-be landlords. Many bank-owned foreclosure properties are snatched up by cash-stocked investors who can wait out the downturn to sell later at a profit.

And Fannie and Freddie homes can be seen inside and out — unlike some regular foreclosure listings. Consider bringing along a contractor when you view the home to help spot areas that need repairs and provide pricing. (Most contractors will do this for free.)

"It gives families who want to buy a home to live in the opportunity to look and bid without competition from cash-rich investors," says a Freddie Mac spokesman

Looking to purchase a home or want further information about opportunities near you? Contact me direct and you'll be well on your way to taking your first step towards a great new home or investment property!

Wednesday, October 20, 2010

Facing Foreclosure?....7 Options To Consider

Here is some information that many of you may find useful when trying to determine your options if you find yourself or a friend/family member facing the challenge of losing your home.

According to, 1 out of 84 homeowners received at least 1 foreclosure filing during the first half of 2009, and for the 4th straight month, more than 300,000 foreclosure filings were reported nationwide.

The FDIC reports that the 2 most common reasons for foreclosures are job loss and health crisis. Despite the media seemingly blaming a subprime loan program that affected 3-5% of the population for our foreclosure woes, the reality is that the combination of job loss and dropping home values have created a perfect storm of financial disasters for many normal families. Now with a slower real estate market translating into falling home values, more homeowners who opted for adjustable rate mortgages are finding that their mortgage rate is rising as their home value is lowering. Therefore, unfortunately, the foreclosure crisis in America is likely to continue.

In years past, if you lost your job, couldn’t pay medical bills, or moved out of state, you had a decent chance of selling your home for a profit, or at least breaking even. Now, many people are tens of thousands of dollars upside down on their loan and are unable to downsize to a smaller dwelling without suffering a foreclosure.

According to, a foreclosure will damage a consumer’s credit score, lowering it on average 200-300 points and making it difficult to get another home for 5-7 years. Bad things happen to good people, and the purpose of this article is to provide people with options available to them during the foreclosure process:

Option 1- Bring loan current. According to the FDIC, most homeowners in foreclosure have no savings and no available credit. And since the number one reason for foreclosure is due to job loss, there may be no way for the homeowner to catch up the loan. However, if you as a homeowner struggling with a foreclosure have the reasonable expectation of income coming in sometime in the near future, it may benefit you to talk to an extended family member or friend about a short term loan.

• Option 2- Loan modifications. According to a Freddie Mac / Roper Poll, most homeowners fail to contact their lender because they are embarrassed, don’t believe the lender can help, and/or believe it would cause them to lose their home more quickly. However, this option may be a viable. Loan modifications occur when the bank agrees to reduce principal, interest, and/or payments. Unless you have experience with the Loss Mitigation Dept. at banks, I would recommend working with a legitimate, experienced loan modification company who can prepare an effective argument for the banks because loan modifications do not have a high success rate. According to the Office of Comptroller Mortgage Metrics report of April 2009, “…In 2008, only 41.85 percent of all modifications reduced monthly principal and interest payments for homeowners. For delinquent borrowers - - a loan modification resulted in an INCREASED or EQUAL payment amount 58.15% of the time!!” As stated earlier, the number one reason for people going into foreclosure is due to job loss. If no income is coming in from a traditional job, then there is little chance that a mortgage company will reduce your loan principle, interest rates, or payment.

Option 3 – Forbearance. Forbearances are when a mortgage company allows you to delay your payments or spread your missed payments over the next specified number of months until you are caught up. Again, if you have a reasonable expectation of revenue coming into your household within a certain number of months, then this may be a solution for you. However, keep in mind that until your past amounts are brought current, you will have a negative mark against your credit, even during months when you are paying more than your requirement! Also, some programs may allow the banks to immediately foreclose on you if you fall behind on payments again. Read the agreement you receive from the bank diligently and weigh the pros and cons carefully.

• Option 4- Deed in Lieu of Foreclosure. According to, “with a deed in lieu of foreclosure, you give your home to the lender (the “deed”) in exchange for the lender canceling the loan. The lender promises not to initiate foreclosure proceedings, and to terminate any existing foreclosure proceedings.” This option, if accepted by the bank, is a quick and easy way to walk away from the house, doesn’t require a sale, and may look better on a credit report than other options. Also, some banks may accept this option as it is less expensive than the foreclosure process. This process will not work if you have multiple liens on the house. Also, banks are in the business of collecting cash, not property. And the banks are holding onto more property than they would like so this options very seldom works. Plus, in many mortgage agreements, it is stated that if the buyer goes into default, the bank will only take the property back through foreclosure.

• Option 5 – Bankruptcy. This option is widely misunderstood and possibly the worst option for homeowners. Bankruptcy will only pause a foreclosure, not eliminate it. As stated earlier, most mortgage agreements state that if the property goes into default, the bank will take back the property through foreclosure. Then, you will have both a bankruptcy and foreclosure on your credit history for the next 10 years! Plus, you may still be required to work out a repayment plan for the house. Seek legal counseling prior to deciding on a bankruptcy.

• Option 6 – Foreclosure. Do nothing and let the bank take the house back. The foreclosure process will negatively impact your credit by dropping your score 200-300 points and preventing you from purchasing a house again for another 5-7 months. Plus, you may be sued for deficiencies by the bank for the difference between what the house sold for at auction and what you owed. Or you may receive a 1099 from the bank, stating that the difference is income and you can be taxed upon it.

• Option 7- Short Sale. A short sale occurs when a third party negotiates with the mortgage company to accept a discount on what is owned and release their interest in a property in exchange for a cash payment. The seller is not allowed to financially benefit from the transaction. For a short sale scenario, it is better to utilize the services of a Real Estate Investor rather than a Realtor. First, an investor has more experience with these types of creative transactions than a Realtor. Second, the investor will agree to purchase the house, providing the bank with a signed Purchase Agreement. This Purchase Agreement increases the likelihood of a bank accepting a discount. Most Realtors try to negotiate with the bank and then find a buyer after the negotiations. This strategy leads to a very low success rate. Some of the drawbacks of a short sale are similar to a foreclosure, as your credit score will be negatively impacted but you may be able to purchase a house again after 24 months.

Also, you may be sued and taxed as well, although if you have a knowledgeable investor working your short sale, he or she can negotiate with the bank a ‘satisfaction of the loan’ result, meaning that the accepted short sale would satisfy the loan and no remedies would be needed.

Doing nothing or declaring bankruptcy is probably your worst option. Homeowners facing foreclosure today are going through enough misery and stress and deserve options other than these.

Friday, October 15, 2010

Federal Tax Credits Expiring Soon - Find out what Qualifies Here!


Federal tax credits for buying an energy-efficient product or renewable energy system for your home are available. Here are some examples of what's covered by the various credits. For more information, go to

The tax credit gives you 30% of the cost up to $1,500 for:

  • biomass stoves

  • heating, ventilating, air-conditioning

  • roofs (metal and asphalt)

  • water heaters (non solar)

  • windows and doors

The credit expires Dec. 31 and applies only to existing homes and principal residences. A tax credit of 30% with no upper limit is for:

  • geothermal heat pumps

  • small wind turbines

  • solar energy systems

The credit expires Dec. 31, 2016, and applies to new and existing homes. Principal residences and second homes qualify, but not rental properties.

Be sure to keep up to date with all the latest news that is both relevant for real estate and life as it pertains to your wallet, living conditions and the economy by following my blog weekly for some informative articles published by yours truly, Ben :)

Feel free as always to please forward my blog onto any friends or family that may benefit from it!

Wednesday, October 13, 2010

Voice your Opinion - Survey: Economy Driving People Out of the Housing Market

Today I wanted to share with you an article that was published by RISMEDIA that I thought was interesting and worth sharing. Please read and share your opinions as I will at the end of the article:

RISMEDIA, October 12, 2010--Nearly two-thirds of Americans say the current economic situation is making them less likely to buy a house, according to a new national survey by (, a popular legal information website.

Sixty-three percent of American adults say they are less likely to buy a house because of the current state of the economy. Despite record-low mortgage rates and an abundance of houses available on the market, only 8 percent of people say the current economic situation makes them more likely to buy a house. About a quarter of people – 28 percent – say they are neither more likely nor less likely to buy a house because of the economy.

In particular, the current economy is driving lower-income individuals and families out of the market. People with annual incomes less than $50,000 were significantly more likely to say they are less inclined to buy a house than people with higher incomes.

"The current economic situation has greatly changed the dynamics of the housing market," said Stephanie Rahlfs, an attorney and editor with "Although mortgage rates are near record lows, stricter lending requirements are often making it more difficult for many people to obtain mortgages. High unemployment rates are raising concerns about housing appreciation, affordability and foreclosures. Together, these factors are causing many people to shy away from the idea of buying a house. Buying a home, selling a home and owning a home are all becoming more complicated, and it's important to know the ins and outs of contracts, finances and your rights as a buyer, seller or owner."

Well there you have it.....the reason many are choosing to wait to purchase a home. How do you feel about what you've read? Does this rationale make sense to you?

Here is a quote from Warren Buffett one of the most wealthy and savvy businessmen on earth.."We simply attempt to be fearful when others are greedy and to be greedy only when others are fearful."

In essence as an investor in businesses he is simply saying that when most people are fearful as witnessed by this article, they sit back and do nothing and have paralysis to do anything when in fact that is often the best time to act. Comparing this to the housing market, now more than ever is the time to purchase. The general public spend so much time seeing through the rearview mirror and less from the windshield.

My take on the above article is that while people need to be cautious with their money and careful in how they spend it, making an investment into a home may have never been a better option. Put it this the end of every night, you can either rent your pillow or own it. In other words, you either pay someone elses' mortgage or you pay your own. Interest rates and home prices as they stand today present one of the best one/two punch opportunities for people that we may ever see.

When the stock market hit a tremendous low in March of 2009, if the average person threw a dart at a board of stocks that was listed on the DOW or S&P, he/she would have seen in most cases no less than 60% growth or more. Why? They hit a bottom and for those who didn't take money out of the market but put it in the market they capitalized tremendously.

The housing market doesn't have the capability to rebound as quickly but one day soon, some will look back and say....I WISH I HAD.....while others will say...I'M GLAD I DID...

Which one will you be?

Wednesday, October 6, 2010

Downsizing? Living Large in a Small Space

Today I came across an interesting article that many of my followers may be interested in reading. Hope your haBoldving a fantastic week and be sure to forward this and any of my past blogs to friends and family!(Also, don't forget if your buying or selling to contact me today for a free consultation!)

Downsizing? How to Live Large in a Small Space By Jaclyn Banash

RISMEDIA, October 6, 2010--(MCT)--It's a constant battle: Small versus big. Less or more? There are arguments to support both sides.

Having just downsized to the smallest apartment I have ever lived in, I was intrigued by the idea of small being the new big. The challenge of storage and saving space is usually the No. 1 problem for most small-home dwellers. Organization is key, as is making the space work for your lifestyle.

I have been racking my brain for months over how to make my new 656-square-foot apartment work best for me. I have found some great new ideas to integrate with some of my old tricks of the trade.Creative use of furniture is essential in small spaces or even in larger spaces that might need to be multifunctional.

Take, for instance, a guest bedroom that doubles as an office. Instead of crowding the room on a daily basis with a bed that only gets used a few times a year, why not use a sleeper sofa or a chair and a half with a twin sleeper sofa? This will free so much space for day-to-day activities in the office.A daybed is another good-looking piece of furniture that multitasks.
A daybed is a great way to divide a large space, but in a small space, if positioned against the wall, it doubles as a sofa with pillows across the back and an extra sleeping spot when the pillows are removed.
Lots of furniture pieces are known for their great multipurpose and space-saving qualities. The ever-popular pouf, for example, can double as an ottoman, become a small table for books, computers and drinks to rest upon or even turn into extra seating.

Nesting tables also provide options for tiny spaces because they are small and easily moved. Storage ottomans are an obvious choice for doubling as a bench or coffee table that can house toys, blankets and extra bedding.In dining room/eating areas, a custom-built bench/banquette with storage underneath is a great option for tight spaces.
If your budget does not allow for custom, then good-looking storage boxes fit nicely under most pre-made banquettes. If you are not looking for more storage but are just short on space, a breakfast nook can be created with a small table and stools that can tuck underneath when not in use.Simply by pushing a dining table against a wall or window you can save at least three feet. All you have to do is pull the table out for dinner parties. And don't forget, an old or unattractive table can always be put to use and instantly jazzed up with a custom table skirt in a fabulous fabric. Voila, another spot for hidden storage!

One of my recent favorite small-space solutions is installing built-in top-to-bottom mirrors on the inset of closet doors. How brilliant! No longer are you taking up precious wall space in the room with a floor-length mirror.
As for the actual layout and decoration of a small space, conflicting theories abound. Some say not to fill a small room with over-scaled furniture, as it eats up the space and feels cramped. Others say big furniture makes a small room seem grander.I gravitate toward the middle.

In general, I stay away from large, overstuffed furniture and do find that too many small pieces can feel cluttered. But I need enough seating for entertaining and recently purchased a set of Lucite folding chairs (clear furniture is another small-space trick) that can be stowed when not in use.I have never subscribed to pure minimalism, although I admire those who can.

I find it almost impossible to not surround myself with lovely items that I find along my travels, antiquing or shopping. The key is rigorous editing. I have seen many small, successful spaces that have a plethora of mementos or objets d'art.But once you get to a certain point, it becomes necessary to do the practice of one thing in, one thing out.

After all, no matter what size your space is, you need the room to enjoy it.

Monday, October 4, 2010

Why Fall is a Great Time to Buy a Home!

Everyone knows that the spring market can be hectic and often seen as the peak of the real estate in terms of annual activity. Buyers are chasing to find a great home to purchase and close during the summer, get acclimated to the new home in time for a new school year to start in the fall.

What most don't realize is that Fall isn't far behind in terms of activity and is a great time for buyers and for sellers. For many agents, this is the second busiest time of the year and its a great time for buyers to purchase and for sellers to move a home prior to winter.

Summer has passed an so has what appears to be a perfect time to have sold your home. Now Fall is here and if you won't sell your home in the next few months then old man winter is here with the prospect of selling your home greatly dimished. What does this mean? For many sellers it means lowering the price and doing their best to meet the demand of any buyers that are in the market.

For a buyer, this means that competition is heating up! If you find a home that your interested in buying, don't wait to make an offer, but do so quickly! Sellers are often willing to move more heading into a long winter on price as their motivation may be at an all time high during the selling process. As a buyer, make sure your agent keeps you abreast of all hot buys and when you find the one that fits your needs, act on it! Multiple offers are not extinct and are common place on homes when they are listed aggressively this time of year. This however is not an open suggestion to overpay for any home during this buyer's market. Don't let emotion cloud better judgement if you do find yourself in a mutliple bid situation. There will always be another home that will come on the market and fit your needs.

If you are in the market to purchase, contact an agent today and you'll find some amazing opportunities await! If your a seller, now is the time to put your home up for sale, not a few months from now when fewer buyers are available, demand is down and competition is high amongst all others that couldn't sell.