Small improvements make most of utility room

Call it what you will -- utility room, laundry room, mud room -- the names say it all. It's a place for the washer and dryer to live, a place for wet and dirty clothes to hang out, a landing point for muddy boots and chore jackets, you name it. If you have one of those multipurpose rooms and you'd like it to do even more, or at least do it more efficiently, here are a number of suggestions that allow a hardworking room to work even harder.

Deal with your hang-ups: Adding a clothes pole will give you a place to hang damp clothes while they finish drying, which saves dryer time and helps prevent clothes from shrinking or wrinkling. Clothes poles can be hung on the same brackets used for closet installations, and also offer an easy way of adding another shelf above the pole.

You can also make a simple and decorative clothes rack from piece of wood with pegs or metal hooks. Attach it to the wall near the door for convenient storage of coats and umbrellas.

Kick your shoes off: If you're fortunate enough to have a larger utility room that's accessible to the outside, add a bench to make it easier to sit down and remove wet shoes. Leave the bench open underneath, and add a shoe rack to provide a convenient spot for drying and storing shoes.

Don't hamper your laundry day: By installing some convenient hampers, you can make laundry day a little easier. One solution is to install roll-out hampers in base cabinets, which better utilize the cabinet space and also free up floor space. Use at least two hampers, so clothes can be sorted as they're tossed in. If cabinet space is at a premium, there are a number of compact hamper units available at home centers, both freestanding and wall hung.

Iron out the wrinkles: If you have an old, space-hogging ironing board that always looks ugly and is always in the way no matter where you put it, consider the addition of a folding ironing board that hides away inside the wall. Ironing board cabinets come completely preassembled, and simply slip into a recess in the wall between the studs. After installation, the only thing visible is the face frame and door, which are available in several door styles and wood types to match any home.

Basic models of folding ironing boards house the board only, and are the easiest to install. Some of the upgraded versions have an interior electrical outlet with a timer that lets you plug in the iron and then shuts it off again after a predetermined interval, and therefore require an electrical connection as well.

Add some flat space: The addition of a flat table or counter for folding clothes can be a real time and work saver. Clothes can be dealt with as soon as they come out of the dryer, and the wide, flat, solid surface is a whole lot easier to work on than folding clothes on the bed. Plastic laminate counters work best here, being durable, water-resistant, smooth, and easy to clean.

If space is limited, you might consider a folding table. Attach a laminate counter to the wall on hinges, with legs underneath -- secured either to the wall or to the underside of the counter -- that fold out to provide support and fold back in to let the counter lie flat against the wall when not in use. It also keeps your counter from getting piled high with junk, which kind of defeats its original purpose.

Paws for more help: If you're fortunate enough to have a pooch or two sharing your home, the utility room can be an ideal place to handle some of their storage needs as well. A wall-hung hook or peg rack can hold leashes, collars and a towel for those damp, after-walk cleanups. There are a number of sturdy and sanitary bins available to store dog food, and a dedicated shelf or small cabinet is ideal for storing grooming supplies, medications, toys and other items that need their own home.

For those of you with larger utility rooms, you might be able to dedicate a corner to a dog-wash area and eliminate the need for those messy bathtub encounters. Some possibilities for this include installing a small bathtub on a raised platform -- the elevated height makes dog-washing a lot easier on your back -- or having a spot for a portable wash tub that can be stored away when not in use. Booster Bath is a great, affordable wash tub that breaks down easily for storage when not in use.

Most of the items you need for a utility room makeover are readily available at any home center.

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source: lendinguniverse.com

Seller refuses to make agreed-upon repairs

Q: We were supposed to close on a house a week ago. The day before the scheduled closing, we went out to the house and noticed that the seller did not fix the heating system as we agreed in the contract.

We gave the seller a one-week extension. It is now the day before the revised closing date and he has not yet fixed the problem. Our lease is up, we have been packed and ready to move, but we don't really know how to handle this situation. What should we do?

A: If you are represented by an attorney, you should discuss your options with him or her. You need to review the terms of your contract to determine what you can do at this point.

If the seller fails to make the repairs, does the contract allow you to deduct from the purchase price the cost of the repairs? If you don't close, can you sue the seller for your damages? If you do close and he has not made the repairs, can you sue him after the closing for the repairs?

Some of these questions can be resolved by looking at the terms of the contract. If the contract provides that the seller can return your earnest money in case the seller defaults and that is your only remedy, that won't help you much.

A better option might be to determine what the cost is to fix the heating system and have the closing agent or title company hold back the cost of the repair plus some extra money. The money would be deposited into an account that would provide that you get reimbursed for the cost of the repair.

By using a holdback of the funds, you could close and then get the system fixed. In some ways, if you get to choose the company that makes the repair, you might have a higher level of trust that the work was done properly by a qualified repair company.

If the seller refuses to make the repair and refuses to agree to the holdback, then you'll have to determine what the cost is for the repair and assess whether the house is worth it if you have to pay to fix the problem.

If the repair cost is small, you may decide to close anyway and make the repairs yourself. If the repair cost is large, you might decide it's not worth buying the home and demand that the seller give back any money you paid upfront.

Whether you can get anything more than the money you put down originally is questionable without, perhaps, employing the services of an attorney to force the seller to pay up for the seller's failure to comply with the terms of the contract.

Whenever you look at issues like these you have to first assess the potential cost to you of the repair against the cost of pursuing the seller. If you hire an attorney and the cost of going after the seller outweighs the cost of the repair, it might not be worth hiring the attorney.

At that point, you'll have to decide to move ahead and foot the bill yourself, or move on and find another place to live.

You need more information to make an informed decision. You need to evaluate the potential cost of the repair. Determine how invested you are into purchasing the house, including what you have paid your lender for fees and what other expenses you have incurred in connection with purchasing the home, and what it would cost you to hire an attorney to assist you in this matter.

But don't let your mind be swayed from making a rational decision simply because your lease is up and you're ready to move. You can always find an inexpensive short-term or month-to-month rental that will give you the flexibility to find another home that will be a good long-term purchase.

If you already have hired an attorney, you should discuss these matters further with him or her.

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source: lendinguniverse.com

Parents shouldn't place kids' names on real estate

DEAR BENNY: Twenty years ago my mother placed my name on the deed to avoid issues when she passed on. Will the IRS treat this as inherited property or consider it investment property? Did I inherit her half of the property? --Theo

DEAR THEO: Why, oh why, do parents do this?

For example, let's say your mother and father bought their house years ago for $20,000 (sounds great but that was a lot of money then). For tax purposes, your parent's tax basis was $10,000 each. Your father died 20 years ago, when the house was worth $40,000. Under a legal concept called the "stepped-up basis," the market value on the date your father died was added to your mother's basis. Thus, her basis would be $30,000 (her original $10,000 plus half of the $40,000).

Did your mother add you to title or are you the sole owner? I did not understand your question. A very strict tax rule is that the basis of the person giving the gift (the donor) becomes the basis of the receiver (the donee). So, if my calculations are correct, if you are on title with your mother, your tax basis for half of the property is $15,000. On the other hand, if you are now the sole owner, your basis is $30,000.

Why is this a problem? Because unless you have lived in the property for two out of the previous five years before it is sold -- in which case you can exclude up to $250,000 of any gain or if you are married and file a joint tax return you can exclude up to $500,000 of gain -- you will have to pay a lot of capital gains tax.

If you are now the sole owner, the IRS looks at the difference between the tax basis and the sales price. Any profit that you make is taxable.

If the property has been rented out, then you may want to consider doing a 1031 (Starker) exchange. You will have to discuss all tax issues with your own accountant.

If your mother is still on title, upon her death you will receive the stepped-up basis for her half. But your half is still, unfortunately, the basis described above.

DEAR BENNY: In a very weak moment, we bought a timeshare, which we have decided we absolutely don't want, realizing they are next to impossible to sell. What happens if we stop paying the yearly maintenance fees and accept the whole experience as a total financial loss? Any other suggestions? --Gail

DEAR GAIL: Unfortunately, you are not alone. Too many people have been lured into buying timeshares by sales pitches from good-looking salespersons offering free room, board and gasoline if you will spend an hour or two listing to the "benefits" of timeshare ownership.

If you stop paying the yearly fees, the timeshare management people may want to start legal action against you, which will impact your credit rating. You should talk with the appropriate management people and see if they have any suggestions. Perhaps they will be willing to take it back at no cost.

You may also want to donate the property to a charitable organization, assuming that they want it.

Get a list of other owners; perhaps someone will be willing to take it off your hands. Perhaps readers have other suggestions, which I would welcome.

DEAR BENNY: I hold a $120,000 promissory note backed by a first deed of trust in Virginia. The borrower paid back $60,000 in principal in 2001, and I subsequently loaned him back $60,000 in 2004. My thinking was this second advance was covered by the recorded deed of trust and if any dispute ever arose, I could produce the cancelled check and refuse to sign the certificate of satisfaction. Opposing counsel says the 2004 advance is not secured by the deed of trust and is a personal, unsecured loan. Is that correct? --Bob

DEAR BOB: There is an old saying that where there are two attorneys there are three opinions. I do not practice law in Virginia, so you should really get a specific opinion from your own attorney -- or at least ask the other lawyer for his or her legal opinion.

Is there any language in your promissory note and deed of trust that would cover the situation? The problem is simple: Creditors of the person who borrowed the money from you are put on notice of your security interest because it is recorded among the land records in the county where the property is located. However, these creditors want to be paid also, and if they can find a "legal loophole" they will exploit it. And while they are on notice of the original loan, they have no way of knowing that you advanced additional moneys -- even though the amount is the same as reflected in the original note and deed of trust.

The issue of future advances -- sometimes referred to as "dragnet clauses" -- is a very complex area of law. State law -- and the specific terms and conditions of your legal documents -- will determine whether the additional moneys are secured.

The courts will also look to the intentions of the parties. Did your borrower intend that the new loan would, in fact, be covered under the original deed of trust?

I must caution you, however, that in a number of jurisdictions, if any one gets a judgment against your borrower (or a contractor files a mechanic's lien) the second advance that you gave would be junior in priority to those new creditors.

DEAR BENNY: I have placed a bid to buy a home with a contingency that I sell my house in order to purchase the new one. The Realtor who showed the house to me said the house may be going into foreclosure, but they did not know when or why it had not gone yet. Can I get out of the offer that I made, even if my house does sell? --Cynthia

DEAR CYNTHIA: Getting out of a real estate sales contract is not easy. A contract is a legal document, binding on the parties who signed it. If your only contingency is based on the sale of your house and if your house does sell, then I am not sure how you can cancel your contract.

You ask if you can get out of your "offer." In order to have a binding contract, there has to be (1) an offer, (2) acceptance of that offer and (3) valuable consideration. Usually, the earnest money deposit is the consideration. So, you are asking to get out of the contract -- not the offer.

Because you have a sales contract, you have what we lawyers call an "equitable interest" in the property. If the house is, in fact, sold at foreclosure and a third party buys the house, that may solve the problem. Other than some super-priority state or federal lien, a foreclosure generally erases all interests that attach to the property after the foreclosing party's deed of trust (the mortgage document) was recorded.

I suggest that you, your real estate agent or your attorney talk with the lender that is foreclosing and find out more details. If you still have any interest in buying the property, you may be able to cut a deal with the lender.

DEAR BENNY: I have worked the REO market as a selling agent. In my state (Georgia), when you purchase a foreclosed property the warranty deed given to the purchaser is "limited." Does the "limited" stay with the warranty deed at the time of the next transfer? --Tom

DEAR TOM: I don't know Georgia law, so my response will have to be general in nature.

Oversimplified, there are three kinds of deeds: general -- which means that I am warranting title to the house going all the way back in history; special -- which means that I warrant that the title is good only from the time I purchased it; and quitclaim -- which states that I convey the title that I have only to you. If I do not have any interest in the property, neither will you. I often joke that I am willing to give you a quitclaim deed to the Washington Monument.

It is my understanding that in some states -- including Georgia -- a limited deed is the same as a special warranty deed.

Let's say that I originally took title by way of a special warranty deed. That does not stop me from conveying the property to you by any of the other forms of title. I probably would not want to give you more benefits than I have, but that's my choice.

So I suspect that unless local custom in your state requires a general warranty deed, when the buyer of the foreclosed property resells he or she would convey only by way of a limited warranty.

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source: lendinguniverse.com

Tailor open house to market conditions

People attend Sunday open houses for all sorts of reasons. There are curiosity seekers; neighbors might stop by to see a house if it hasn't been on the market in years; and some come in search of decorating ideas or to check out prices in the neighborhood. In other words, most people who walk through an open house aren't really buyers.

This fact infuriates some sellers who feel that public open houses are a waste of time for everyone except perhaps the agent holding the house open who might pick up a client. However, in an area where listings are in high demand, public open houses can be an effective way to drum up buyer interest.

When there aren't enough homes for sale to satisfy the need, buyers gravitate to the limited supply that is available. An active open house can create a sense of urgency. This is particularly the case when a listing is new on the market in a sought-after neighborhood.

During the hot seller's market of a couple of years ago, public open houses were a useful marketing tool. In some cases, listing agents held off letting any buyers preview the home until the first public open house, thereby forcing buyers to attend the grand opening en masse.

In most markets around the country, these frothy days are over. Some markets that didn't heat up a couple of years ago are doing well now, like Raleigh, Austin and Salt Lake City. But, generally, the market has softened in most markets that were previously hot.

Even in a soft market, some buyers find the house they buy at a public opening. However, a sale is much less likely to occur this way. In a soft market, buyers are more reticent, as there is less impulse buying than there is when prices are increasing.

In a slow market, there are fewer buyers and it takes longer for listings to sell. Buyers usually have more to choose from. A listing that's held open often in a market like this can send the wrong message. It can telegraph a sense of desperation. Or, it may indicate that the price is high, or that there is something wrong with the property.

HOME SELLER TIP: A strategic use of open houses is recommended in a buyer's market. You might have your home open when it's new on the market, and periodically during the marketing period so that the prospective buyers and their agents are aware that you are still actively searching for a buyer. But, it's generally not a good idea to have your home open every weekend. You might overexpose it to the market.

It's not absolutely necessary to have a public open house to sell your home. The Internet has made it possible for buyers to preview listings without even getting into their car. A good Internet presence for your listing on well-attended Web sites like www.realtor.com, which includes quality photos of the property, is critical. Eighty percent of today's home buyers use the Internet to find a home. When buyers see a listing they like, they request a showing.

There's another aspect of public open houses to consider. If there are a lot of listings on the market, an open house can give buyers an easy opportunity to run through the house and cross it off their list.

THE CLOSING: The most productive showings are the ones where the buyers are accompanied by their agent who can help them work through any objections they might have to the property.

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source: lendinguniverse.com

House bill targeting payments to brokers unenforceable

YSP abuse, as explained in my first column, arises when mortgage brokers steer borrowers into high-rate loans on which the broker collects a rebate from the lender, without the knowledge of the borrower. To eliminate it, I suggested a simple and easily enforceable rule that would help the naive as well as the informed borrower. The rule is that lenders must credit all rebates to borrowers. The borrowers would then have to authorize the payment to brokers.

One of the important objectives of The Mortgage Reform and Anti-Predatory Lending Act of 2007 (HR 3915), which passed the House of Representatives Nov. 15, is to prevent YSP abuse. Will it?

The first version of the bill that I looked at would indeed have prevented YSP abuse, but it also would have eliminated mortgage brokers. The version passed by the House, modified after inputs were received from brokers, would not put them out of business, but neither would it prevent YSP abuse. Section 123b1 reads as follows:

AMOUNT OF ORIGINATOR COMPENSATION CANNOT VARY BASED ON TERMS - No mortgage originator may receive from any person, and no person may pay to any mortgage originator, directly or indirectly, any incentive compensation, including yield spread premium or any equivalent compensation or gain, that is based on, or varies with, the terms (other than the amount of principal) of any loan that is not a qualified mortgage. …

Let's start with the clearest part of this statement, which is the last phrase. Whatever restrictions are called for, they will not apply to qualified mortgages. A qualified mortgage, as defined elsewhere in the bill, is one with an interest rate that is no more than 3 percent above the comparable Treasury rate, or 1.75 percent above the average conventional rate.

This indicates that the framers of the bill believe that YSP abuse is a problem only for the highest-rate loans, which is absurd. The problem cuts across the entire market. Indeed, high-rate and high-cost are not the same thing -- a loan with a rate only 2 percent above the average could be loaded with superfluous fees and charges.

Will the restriction on incentive payments at least eliminate YSP abuse on the high-rate loans to which it applies? The bill says that originators (which include loan officers employed by lenders as well as mortgage brokers) cannot be paid more on high-rate loans than on low-rate loans. Since YSP abuse is exactly that, this provision is right on target. It defines YSP abuse accurately, and declares it to be illegal.

Unfortunately, this provision is unenforceable. The standard for determining whether compensation on a high-rate loan is excessive is the compensation received on a low-rate loan, which is unknown and in many cases unknowable. Originators collecting YSP on high-rate loans don't report what they would have charged on low-rate loans.

To enforce this rule, regulators would have to do a statistical analysis of the originator's charges on different loans so as to determine whether or not compensation is higher when a loan involves YSP. This is not feasible because there are too many originators and not nearly enough regulators. Even if it were feasible, it won't work for brokers who get paid only from YSP, which is very common, and it won't work for loan officers employed by lenders who originate at their own risk, for whom there is no YSP.

Indeed, the only originators who would leave a trail for the enforcement police would be the brokers who give their customers the choice of whether they want to pay the broker out of pocket or have the broker paid with YSP. Because these brokers offer borrowers a choice, fees will be shown with and without YSP, allowing a statistical analysis of whether there are any differences. There won't be, because these are the good guys. The bad guys will be beyond reach.

In contrast, a rule requiring lenders to credit rebates on high-rate loans to borrowers, who would have to explicitly authorize its payment to the brokers, would impact all brokers alike, and impose no onerous enforcement burden on regulators. Indeed, because wholesale lenders would welcome such a rule, there would be no regulatory burden at all. Poof, YSP abuse would disappear overnight. To level the playing field between lenders and brokers, a comparable rule is needed that would prohibit loan officers from charging prices above those posted by the lender.

Real Estate Designers offers totally innovative solutions for your software development, Internet programming, real estate web design and hosting needs. Our service includes domain name registration and real estate web design. Real Estate Designers provides the complete solution including design, application development and marketing.

source: lendinguniverse.com