Suburban Dollar » Real Estate

The Foreclosure Process

Kyle — Thu, 17 Dec 2009 14:01:09 +0000

The foreclosure procedures differ from state to state, however there are some commonalities which can be discussed. Foreclosure is the process by which a lender regains ownership of your property after you fail to make payment. This process allows the lender to recoup their loan amount through the sale of your property. One thing to keep in mind is the mortgage company isn’t going to take your home from you as soon as you miss a payment.

Your mortgage contract has typically has a grace period clause built into it giving you 10-15 days to pay past your due date penalty free. After that grace period is up the lender will typically charge you some kind of late charge. Failure to pay by the grace period, in most cases, isn’t going to affect your credit or otherwise negatively affect your finances. If you fail to pay within the first 30 days of your payment due date the delinquency will be reported to credit reporting agencies and the lender will begin to more aggressively try to collect the debt.

Usually around 90-120 days past due the mortgage company will start to consider foreclosure proceedings. This time frame has been stretched out during the current economic situation so it may take longer for your bank to actually start the foreclosure process. When the bank has decided to start the foreclosure process they will issue you a “Demand Letter.” The demand letter will state the amount your are delinquent and advise you you have 30 days to bring your account current or make arrangements to bring your account current. Typically the company will require you to pay it completely current once they have issued the demand letter.

If you fail to make arrangements your account will be handed over to the lenders attorney’s to be processed for foreclosure. Specific laws vary by state but typically they will make arrangements with the sheriff and the county for a foreclosure sale. A notice will be posted on your property and in some cases in the newspaper. Auctions typically occur on the steps of your county courthouse. If you are still living in the home the lender or purchaser will have to go through your states eviction process to have you forcibly removed from the home. Typically a Sheriff’s deputy will come to your door and require you to vacate the premises immediately.

If your home is in the foreclosure process and you manage to bring it current you are going to be liable for the legal fees the bank incurred up to the point where you brought it current. This amount is usually in the thousands of dollars. Their attorney’s have to be paid for the work they did to process the foreclosure and the bank will expect you to pay it. This is a good reason to keep in contact with the bank and make arrangements to avoid the foreclosure process from being started.

A couple of things to keep in mind, the bank DOES NOT want your home back. They don’t want to go through the hassle and pay the legal fees to foreclose and evict you from your home. Your best bet is to keep in constant contact with your mortgage company and keep the apprised of your current situation. There is a house across the street from me that has been vacant now for over a year. The owner has not made any payments during that time and the house still has not been foreclosed on. My second point is to not move out of the house until you are forced to move out. If the guy across the street from me was living in the home all this time he would have been able to live and just be paying utilities.

Additional References on Foreclosure
Foreclosure Law by State (http://www.foreclosurelaw.org/ )
Housing and Urban Development (http://www.hud.gov/foreclosure/index.cfm)

Photo: (Doc1)

Create a Home Inventory and Save Your Stuff

Kyle — Tue, 03 Nov 2009 14:02:53 +0000

You have home insurance to cover the costs you may incur in the event something happens to your home. Fire could ravage your home and render it and all the things inside it worthless and in most cases gone completely.

If something like this were to happen to you would your insurance company give you the accurate value for the contents of your home or just what they think you deserve. If someone broke into your house and ran off with your TV would you be able to claim it if the police recovered it? An even better question should be whether or not the insurance coverage you have will even pay enough to replace everything if you knew what you had.

For these reasons it is imperative that you create a home inventory. The home inventory is essentially a listing of everything you own and where possible how much you paid for it. The more detailed information you can provide the better off you are going to be. For the items you can’t find the exact purchase price it helps to have model and serial numbers on record. These details will not only help to determine replacement cost they will also aid you identifying any stolen items from your home.

You can choose to create your inventory based on the category your items are in or the room where the item resides. Either way you want to make a complete listing of the items for future reference. Include the DVD’s the furniture, HDMI cables, etc. Every item of value. Accurately listing out your items ensures you will get appropriate compensation in the unfortunate event it needs to replaced. I would suggest starting by room and listing each and every item you own. If possible take photos of each of the items and include the date of purchase and where it came from. Some typical items, by room, might include:

Living Room

Sofa
Coffee Table
End Table
Lamps
Panasonic 52″ TV Serial XFDET3 HDTV

Dining Room

Grandma’s Fine China (Photo’s)
Dining Table
Eight Chairs
China Cabinet
Buffet Table
Kitchen

Anyway you get the idea. The key here is to make your inventory complete and include as much information about each of the items as you can. If your desk is made of exotic zebra wood make sure you include that tidbit of information. I can assure you that desk would cost a lot more than the one I am using right now.

There are plenty of options for entering and maintaining your home inventory. One of the simplest, and most affordable, options is to utilize a simple spreadsheet and digital photgraphs. There is also an abundance of home inventory software on the market. Quicken offers a Home Inventory Manager which will set you back around $30. Whether you choose to purchase home inventory software, or utilize some of the free home inventory software options like Know Your Stuff from the Insurance Information Institute the most important thing is to store your inventory off site. If you happen to be an iPhone owner there is an iPhone App I reviewed called Home Inventory you could utilize as well.

Maintaining a perfect inventory of your belongings won’t do you any good if it is in the filing cabinet or on the hard drive of a computer that were in the home that was just destroyed.

Get out there and get inventorying.

Sleeper Costs of Buying a Home

Kyle — Tue, 27 Oct 2009 13:09:52 +0000

Purchasing a home is one of the most rewarding times in many people’s lives. It can also be one of the most stressfull. The build up to buying a house is huge, you have to scrape and save to get the money together for the down payment. The search then starts for the best rates on your impending mortgage and figuring out what you will qualify for. Then you enter the hunt for the perfect house, the home to meet all of your wants and needs. Buying my first place was probably the proudest moment, aside from the birth of my sons, in my entire life. I had achieved something no other child in my family had, I bought a house. At the age of 23 I was now a home owner to say it was amazing was an understatement.

Once I closed escrow and took ownership the fun started. You move in and start to arrange furniture the way you want and get things situated exactly right. Then once the couch is perfectly positioned you go to plug in the cable box only to realize there isn’t a cable, there is no wall plate, and all you have is black box that flickers. This is when the sleeper costs start to really add up. Something has to be done to get your perfect TV, in the perfect place, in your perfect house. Guess what that is going to cost you money. If you do it it won’t be that bad but to pay the Crapcast guy to do it you are out like $100. This is just an example of the sleeper costs that you don’t think about or take into consideration before you buy a home, here are a few more.

Cable/Phone Installation – If you are buying a new home you are going to have to pay to have the cable hookup’s initially run from the street to your home. They generally don’t wave this fee, even if they will wave other installation fees. The fact is the cables aren’t buried to your house, just out by the street. In some cases they have to hire a contractor to bore under the road to your yard, that costs them and they pass it on to you. Used homes can sometimes get away without it as it is already “connected”.
Utility Connect Fees – Similar to cable if the home has never had electric, gas, or water service you may have to pay an initial connect fee. The same fee applies if you fail to transfer over utilities from a previous owner. Make sure you coordinate with the sellers so utility responsibility transfers on the day you close escrow so you avoid unnecessary fees.
Home Owners Associations – Commonly referred to as the busy body club, the HOA is usually responsible for upkeep of the neighborhood entrance and generally causing disdain amongst neighbors. Hopefully you were made aware of any HOA fees prior to purchasing your home. In some unfinished developments there may not be a fee until the developer actually completes the hood and turns it over. Watch out for situations like this because they could cost you in the end.
Paint – My first house was 1100 sq ft. I think it took me all of 3 gallons of paint to make it my own. That was a lot more than I expected. My current house is 3044 sq ft. and painting it is going to bankrupt me. Paint ain’t cheap and don’t pretend it is. If you get the cheap stuff it will probably take you ten times the coats to make it look decent and it will even out with the expensive stuff. Builder beige is only good for so long.
Landscaping – The Jones’ are some mean SOB’s. Their lawn is always greener, their bushes are always thicker, and their flowers are always prettier. Keeping your yard from looking like that creepy house from The Burbs costs cash. You are going to need at least three things; a lawn mower, a weed eater, and a blower. Without these essential lawn maintenance tools you will quickly be known as “that guy.”
Utility Bills – The amount you are going to spend on utilities is directly proportionate to the age and size of the home you are buying. The older and bigger the home the more it is going to cost you to heat and cool it. Don’t discount the number of people who are showering either. All of these factors contribute to higher utility bills. If you can I would ask to see a sample utility bill for the home you are purchasing.
Tax Increases – The amount you pay into escrow correlates to the amount of taxes and insurance you are required to pay on your home. If the taxes on your property haven’t been reassessed in several years you can almost count on the county/city coming out and doing an assessment. They generally disregard the actual real estate market so you can expect your property taxes to go up.
Air Filters – No one ever thinks about an air filter when they are buying a house but these things can be pretty damn expensive. Both my oldest son and I have sensitive allergies and require pretty clean indoor air. What this means is we have to be diligent about replacing our furnaces’ air filters regularly. When we replace them we use high quality low allergen filters. These things are freaking expensive, I am talking around $20+ a piece and I need three.
Light Bulbs – Yes I really said light bulbs. It would seem there are thousands of these things in my home and they were forever burning out. We have since replaced most of the incandescent bulbs with flourescent. The rule of thumb is that if it is a oddly shaped expensive bulb it lasts 1/1000th the time as a regular 60 watt bulb. In my house this stands for any bulb that requires an extension ladder to change.

The Recession Isn’t Over Everywhere

Kyle — Mon, 26 Oct 2009 13:06:43 +0000

I have been lucky and so far the recession itself hasn’t hit me personally but I have certainly seen it hit all around me. With two foreclosures in my neighborhood I am reminded everyday of what the current economic situation has meant for many people.

The U.S. Government has tried to stem the tide of foreclosures and break the fall of real estate prices with their First Time Homebuyer Tax Credit. Many people speculate the failure to extend or otherwise expand this credit could result in a secondary fall in real estate prices. I am no economist but I think that is a pretty good bet. In spite of this people still seem to be throwing around the idea that the recession is over and we are on the upswing.

While it may be the case that the recession is over in some areas of the country, many are painfully reminded that it still isn’t over for the areas of the country hit hardest by the recession. A recent article I read over at Yahoo! News shows just how painful it has been for the city of Detroit. The settings was a ballroom where 9,000 abandoned properties were up for sale. According to the article the homes were “in various states of abandonment and decay from the tidy owner-occupied to the burned-out shell claimed by squatters.” They further put the properties in perspective:

Taken together, the properties seized by tax collectors for arrears and put up for sale last week represented an area the size of New York’s Central Park. Total vacant land in Detroit now occupies an area almost the size of Boston, according to a Detroit Free Press estimate.

That is a lot of land up for grabs, the craziest thing about it was the price some of these properties were up for:

Despite a minimum bid of $500, less than a fifth of the Detroit land was sold after four days.

Less than 1/5th. Now they don’t talk much in the article about how many of the homes were actually habitable. What they did say was the habitable homes were snatched up by investors and bankers instead of real people trying to find a place to live. The investor owned properties aren’t going to help the run down areas as much as an occupied home by a proud owner.

A soldier trying to buy a home before heading back out to war summed it up:

Why am I competing against a bank?” he said later. “It would be common sense to have a separate process for people who want to move back to the city or it’s going to stay empty.

The process itself lends to investors being the prime purchasers of these types of properties which leaves a lot of people wondering where the benefit is? I am not a fan of speculators in any market. Look at what oil speculators did to the price of oil not that long ago. Of course homeowners would love it if the real estate market would rise like that, but I don’t see that happening. I think the quickest way to recovery is through the people. The people that built this country are going to be the people responsible for effecting a real recovery.

What are your thoughts on real estate speculators, are they good or bad for these faltering areas of the country?

Prepare Your Home for Winter

Kyle — Mon, 19 Oct 2009 13:08:25 +0000

I am not sure what happened but damn it was cold today. We went to the pumpkin patch with the kids and had to bundle up — we severely underestimated the level of cold. I checked the weather to be sure of the temperature and there is a freeze warning. I wasn’t expecting it to get this cold this soon and there is still a lot I haven’t done to be ready for Winter. Luckily the forecast for the rest of the week is pretty promising with temperatures expected to be up in the mid 70’s again. That break in the weather is going to be the perfect time to get my winter prep done. What follows is just a few of the things you need to make sure you take care of to be ready for the winter.

Inspect caulking – Inspect the caulking around the windows and doors to make sure it hasn’t separated or broken down. If you find caulking is pulling away or broken down you need to clean it away and replace with new exterior grade caulking.
Disconnect and Store Your Hoses – Hoses left connected to your house could be the most expensive and dangerous thing. Water expands as it freezes and when that happens inside a copper pipe it will burst and you won’t know it until it heats up enough to thaw and floods your house.
Clear your Garden and Prep it – Your garden is most likely toast at this point. Clean it up and throw the left overs on the compost pile. Prepping your garden now will save you time and energy in the spring.
Bleed your water heater – Drain a couple of gallons from the lower valve on you water heater. This will clear any sediment which has settled in the base of the heater.
Prepare you Mower for Storage – Mow that one last time and then either drain or run the last of the gas out of your mower. Go ahead and sharpen you blade and change the oil as well to be ready for spring. If you have any gas left over use it in your car or add a fuel stabilizer. Gas goes bad.
Winterize you boat – If you have a boat you need to put it up for the winter. Change the oil, change your lower unit oil, fill it with gas and add a stabilizer, and flush your coolant system with an environmentally safe antifreeze.
Fertilize for winter - If it isn’t to late in the fall go ahead and aerate and fertilize using a winter fertilizer mix. This will help you lawn stay healthy through the hard winter ahead.
Check Your Heating System – Have a qualified HVAC technician come out and inspect your heating and air systems and perform any required maintenance. If necessary clean your ducts.
Replace Your Air Filters – Replace the air intake filters on your HVAC system. Replacing the filters regularly improves the efficiency of your heater as well as the air conditions in your home.
Replace Smoke Detector Batteries – For the safety of you and your loved ones make sure the batteries are fresh in your fire detectors.
Clean the Gutters - If you have a lot of trees in your area you are going to have to do this again but get up on the ladder and clean out the gutters.
Install a Programmable Thermostat – If you haven’t already get yourself a good programmable thermostat and set your program for winter heating. They are a great way to save on your heating and cooling costs.
Inspect Driveways and walkways for cracks – Again water expands when it freezes. If you have cracks in your drive or walkways it will make those cracks bigger as the water seeps in and freezes. Now is a good time fill those cracks and prepare for the freezing temperatures ahead.
Replace Screen Door with Storm - If you are like me and have a replaceable screen door pop it out and put in the storm door version. Be careful though if your house faces south, my metal front door is warping from the heat build up between the storm and front door.
Seal any holes in your exterior – Walk around the exterior of your home and note anywhere where cables or pipes puncture the exterior of your home. In all of these places you will want to seal the space with expandable foam or exterior caulk. Holes will let the cold air into you house and increase your heating costs.

First Time Home Buyer Tax Credit Ends Soon

Kyle — Wed, 14 Oct 2009 12:59:44 +0000

The First Time Home Buyer Tax credit was authorized as part of the American Recovery and Reinvestment Act of 2009. The credit is not a deduction, meaning you get the money straight off the your tax bill. If you owe $8,000 and you get an $8,000 tax credit you owe nothing.

The bill authorizes up to an $8,000 tax credit for qualified people who happen to pick up a home between January 1, 2009 and December 1, 2009. If you have been thinking about buying a home you should jump on the bandwagon soon or you could miss out on this credit.

Who Qualifies

Anyone who has not owned a primary residence in the last three years.
Married couples where both spouses have not owned a primary residence in the last three years
The qualifying individual on a joint purchase when not married. If one of the two of you qualifies you get the credit.
Someone who owns/has owned a vacation property but not a primary residence in the last three years.
Someone who owns/has owned a rental property but not a primary residence in the last three years.

Limits on The Credit

The credit is 10% of the purchase price up to $8,000
If you are applying individually the income limit is $75,000
Married applicants must make less than $150,000
You could still qualify above the income limits for a reduced credit

Additional Facts

Home must close escrow no later than November 30, 2009
Credit can be claimed against 2008 tax filing
If you aren’t a U.S. Citizen you may qualify if you are not a nonresident alien.
If you are building a house the date of first occupancy counts as the close date.

Why you Should Hurry

The tax credit is only good for purchases which close escrow by November 30, 2009. There is a lot that goes into buying a house and it can take a good bit of time, for instance you are going to need to:

Get approved for a mortgage
Find house to buy
Make an offer on the house
Haggle over the price
Get a home inspection
Have the issues corrected
Work through any additional contingencies
Get through underwriting
Hope your broker is ready
Close on the loan

You need to get the whole set done by the end of next month if you want to capitalize on the $8,000 credit. If you are waffling on your home but want the credit now is the time to pull the trigger. The only reason I could see to wait is the potential for housing demand to fall like a rock after the credit expires. If that happens home prices are going to start to falter again and you may be able to get a better deal. Don’t count on this assumption though, if you want a house go ahead an get it houses are on sale and you get an extra $8,000 to help get it on the straight and narrow.

First Time Home Buying: A Chronicle of Stress

Gu3sts — Tue, 01 Sep 2009 12:00:48 +0000

This is a guest post from my sister JP. She was kind enough to help me out by sending an article for while I am in the hospital. In fact when you read this I will have a new baby, I hope anyway.

When my husband and I found out we were pregnant with our second child, we knew that we would quickly outgrow our small, two-bedroom townhouse. We resolved to make it work for as long as we could…and then Obama offered us $8,000 to buy a house. We didn’t have to pay the money back, and with the housing market and interest rates supposedly in a downward swing, it seemed silly not to take advantage of the deal.

We did our best to be smart about the whole process. We set up a separate bank account and started putting money aside every month towards the 3.5% down payment required by FHA (some banks require as much as 20% down on a traditional loan, and that certainly was not going to happen with two kids and two car payments). Although our lease was not up until mid-August 2009, we decided to start looking in April just to ensure that we had plenty of time to find the perfect house.

And we did find the perfect house. At least, we thought we did.

In August of the previous year, we had started looking at houses and eventually decided that we weren’t ready to buy. At that time, we’d fallen in love with a house – or, more specifically, a neighborhood. By April of the following year, the house had just sold, but there were two more houses for sale in the same neighborhood. One was out of our price range, and the other was a short sale and well within our budget. We looked at the short sale, loved it, but decided it was too soon to put in an offer. In the meantime, we kept looking, and nothing else measured up. In spite of the supposed state of the housing market, it seemed like every house that had the square footage we needed was either out of our price range or a total dump. Granted, our price range was not very high ($150,000 max with closing costs paid), and I insisted on staying in West Knoxville. It still seemed, however, like there should have been more options.

When we found nothing that measured up to the short sale by mid-May, we decided to put in an offer with the stipulation that we couldn’t close until July (to keep our mortgage payments from starting until September). Only then did we find out that not only was the house a short sale, but it was also a living trust. We had officially bid on the most complicated house ever.

Everything seemed to be going well. We came in at $135,000 with $5,000 in closing – over $10,000 lower than the asking price after closing costs. The manager of the living trust countered at $138,500 and $5,000 in closing. We accepted. The manager of the living trust sent the offer to the bank for approval, and the bank approved everything…verbally. We started the mortgage process and ordered the inspection, which went very well. After the house passed inspection, we met the homeowners and went ahead and paid them $150 for their fridge, as it was not included in the sales contract. A few days later, the house underwent and passed the FHA appraisal (by this point, we had $700 invested in the house). We were down to the title work, and after that, all that remained was the underwriting phase.

And then, when I was picking up my kids one afternoon, we received a bombshell.

The homeowners had a judgment against them. The house and all of their belongings were being seized by the bank, and they had conveniently moved to Florida. Because of that, we lost the house.

On a more positive note, because we lost that house, we ended up finding another one. Enough time had passed that the other house in the neighborhood had lowered in price to where it was within reach. We bid, we haggled, and eventually we got the other house for $144,000 with $6,000 in closing costs.

Our trials didn’t end there. In fact, we didn’t officially own a house until July 22nd – 4 months after we started looking. I could go on all day about the crack in the basement foundation of that second house, the structural engineer that had to be called out, and the enormous mess when it came time for the underwriting (caused by the government buying up my husband’s student loans).

Instead, I will close with this: Be careful. Have your title work done first, even if you have to pay for it yourself. And don’t give up – the right house (and, for another few months, $8,000) is out there waiting for you.

Pay Your Mortgage Off Early

Kyle — Wed, 08 Jul 2009 13:59:00 +0000

Once you have paid off your consumer debt, built up your emergency fund, and started saving for retirement you might be thinking about the best way to tackle that last major hurdle, your mortgage. Mortgages have become what most people see as a necessary evil and just accept it, why not it pay it off, think about what you could do if you didn’t have a mortgage. An important thing to understand when you start thinking about how to pay off your mortgage is that the amount of interest you pay every month is directly proportional to the outstanding principal balance. You will only achieve your goal by reducing the principal balance above and beyond the scheduled amount in your amortization schedule.

Every Two Weeks

This is one of the most popular methods people use to pay off their mortgage early. Essentially you just pay one half of your mortgage payment every two weeks. With 52 Weeks in a year that is 26 half payments or 13 full payments. You get one extra payment every year because two months out of the year you actually make 3 half payments. If you have a $200,000 mortgage financed for 30 years at 5.8% you would pay a total of $222,460 in interest. Using a biweekly scheduled payment you save a total of $44,996 in interest and pay your loan off in 24.8 years with bi weekly payments.

Extra Every Month

Unlike the bi-weekly payments this method would allow you to reduce the principal balance of your account every month. Take your mortgage payment and divide by 12, then pay that amount extra at the end of every month. This would seem to provide the same result as the biweekly method, you pay 13 payments every year, but it doesn’t really work out that way. Because of the way you pay interest on the outstanding principal you actually are going to save more by paying extra every month. Using the same $200,000 example from above you end up saving $52,428 and pay off your mortgage in around 24 years. You end up saving yourself over $7,000 in interest by paying extra monthly.

Other Ideas

In addition to the two main ideas I covered above you can use some additional methods to decrease your interest and accelerate paying off your mortgage.

Found money: I consider found money to be anything you weren’t expecting to get, like gifts, bonus’ and that $20 you found laying in the street. Take any of this found money and throw it at your mortgage, every time you reduce your principal balance beyond a regular payment you are decreasing the interest and moving that payoff date closer.

Raises: If you are lucky enough to get one of these increasingly elusive perks at your job, look at it and see if you really need it. If you don’t need it go ahead and start paying that increase straight to your mortgage and get rolling to true financial freedom.

Side Hustles: These are those little side jobs you do that earn you some extra money. Anything from CashCrate to blogging or more traditional side hustles like hanging Christmas lights or mowing yards can earn you extra cash you can use towards paying off your mortgage, or any other debt for that matter.

Additional Thoughts

Obviously with both the biweekly and monthly methods you aren’t limited to just paying 1 extra payment per year and the more you can pay the quicker you are going to get get it paid off. If you combine these methods with the found money and raise theories you are going to kick your mortgage companies ass. Be careful though and watch out for those payment plans with the mortgage company they usually are going to charge you extra for anything other than the single monthly payment.

Photo: (vauvau)

3 Things that Could Cost You Your Dream House

Kyle — Tue, 23 Jun 2009 13:58:00 +0000

People looking for their dream home or their first home always seem to expect things to fly right along and go smooth as silk. I am living in my second home now and I have yet to see a completely smooth process from sale to purchase, something just always seems to crop up. There are three major pitfalls which could possibly cost you your dream house.

Title Work

This is the true sneak attack in the real estate market. The title to your home is usually owned by your bank but that doesn’t necessarily mean they are the only ones who hold it hostage. There are several things that could affect the title to your future home and you may have no idea. If someone fails to pay for a debt the creditor could sue to have a lien put on their property to secure repayment of the debt. When the lien is placed on the home the title becomes “dirty” and the selling price of the home would have to both cover the amount of the lien as well as the outstanding mortgage on the home. This could potentially make the sale of the house impossible because either the creditor with the lien or the mortgage company is going to have to accept less then they owe on the property.

This recently affected a friend who was trying to purchase a short sale house. The sellers failed to disclose a lien on the property, they claimed they didn’t know. The mortgage company accepted the short sale, the home inspection was completed, the appraisal was done and then it all blew up because a of a lien on the property. The sellers had already moved to Florida and sold my friend their fridge. My friend is now out close to $600 and has nothing to show for it.

Home Inspection

Home inspections are extremely important when buying a home. This goes just as much for new homes as older homes, you need to have an inspection. The good thing about the inspection is it will allow you to identify things wrong with the home that you otherwise may not have identified. The home inspector is trained to identify problems both major or minor with your prospective property. Most of the time your realtor will write into your purchase agreement that the sale of the home is contingent on the inspection. Following the inspection you can ask that the seller fix the items or you can walk away and in some cases it may be best to just walk away. Major structural issues with a home are expensive to fix and are not anything you want to deal with. It is always possible that you could lose your dream home because of termites or foundation issues, but at least you knew about it before hand because you got an inspection.

Underwriter’s

I first wrote about these mysterious creatures of the mortgage industry in my post what is a mortgage broker. Essentially they are the actual people responsible for determining whether or not an individual is worthy of receiving the loan quoted by broker/loan officer. It is unlikely that a loan would fall through in underwriting but the possibility exists. For all intensive intents and purposes you are not actually approved for a loan until you have been approved by the underwriters. The bad thing about it is that this usually one of the last things to occur and it occurs closer to the closing of the loan. If the mortgage broker or loan officer failed to do their homework your loan could fall through in underwriting and you could lose your dream house. So make sure you pick a broker you can trust not just the one that promises you the best rate.

Have you ever had a deal fall through because one of these problems, or do you know of one I missed, let me know in the comments.

What $10,000 Buys Near Me

Kyle — Tue, 16 Jun 2009 13:58:00 +0000

Jim with Bargaineering wrote a great post yesterday about How Much House you can buy with $10,000. This inspired me to see what I can find in my neck of the woods for that price. In an effort to achieve a little bit of anonymity I have chosen to highlight the four major metropolitan areas in my state, not where I live. I would also like to note that in Jim’s article he used the phrase a monster of a home when referring to a 2,500 square foot home. In Knoxville, TN $400k is could get you a 4,000+ sq ft home in a prominent country club setting, My house is over 3000 square feet, of course I didn’t pay anywhere near $400k either. Enough of that though here is what $10,000 will get you in Chattanooga, Knoxville, Memphis, and Nashville, TN.

Chattanooga, TN

In the nice little city of Chattanooga, home of the ever famous Chattanooga Choo Choo, you can pick up this gem of a house for $8,900. This puppy is located downtown and is a classic case of don’t judge a book by its cover. The outside looks pretty decent but the inside looks like a pack of feral cats had their way with it. $8,900 though is a pretty good steal for this 2 bedroom, 1 bath 952 square foot bungalow. That is like $9.35 per square foot, at that rate $400,000 would get you a 42,780 square foot mansion

Knoxville, TN

This delightful little shanty is going to run you $9,900. Pretty close to that $10k threshold. I was only able to find two properties though between $5,000 and $10,000 in Knoxville so maybe the economy is a little bit better there. Either way this house looks like they kept the feral cats on the outside at least. The carpets, or the angle in the photo anyway, looked clean and the walls looked freshly painted. It is a 2 bedroom, 1 bath at 784 sq ft or $12.63 per sq ft. Again your $400,000 would get you a 31,671 square foot home at that rate.

Memphis, TN

Mmmm Barbecue… There were a ton of listings in Memphis. In fact where I only found two homes in Knoxville between $5k and $10k, I found 64 in Memphis. Guess things are rough in Elvis’ home town. This was the only house with Square footage listed. this 2 bedroom, 1 bath house weighs in at a whopping 1,078 square feet for a meager $8,000. Doing the math that is $7.42 per square foot giving us 53,908 sq ft with our $400k. Damn that is cheap.

Nashville, TN

Oddly enough Nashville was the only location I searched where I was unable to find a single home between $5,000 and $10,000. The best I could do was this little patch of weeds in Nashville. I even expanded my search to include the 20 miles surrounding Nashville and still came up blank. So while housing prices have plummeted around the nation it looks like Nashville might still be a little better off than some other places out there. Either way $10,000 will get you a 40′x100′ lot in Nashville, TN.

So while the economy sucks and the housing market blows, there is still opportunity out there for people willing to pick up some pretty high risk properties, or those who are desperate for a place to live. I hope you enjoyed this low cost housing tour across the state of Tennessee and just remember, cheaper is definitely not always better.