by Matthew Denton
Why it’s difficult to own a home for some people.
Can housing affordability still be a possible solution to the growing demands of home ownership of the less privileged? That seems to be a dream among those whose incomes don’t qualify them for a home purchase. According to the Center for Housing Policy’s “Paycheck to Paycheck: Wages and the Cost of Housing in America” last year’s workers had a harder time making ends meet to afford a house. The report states, “While more workers can afford typical housing costs in their community in 2009 compared with 2008, a substantial gap remains between many workers’ salaries and the income needed for housing. Despite lower interest rates, relatively low home prices, and moderate rent increases, many workers are still unable to affordably buy a median-priced home or rent a typical apartment in the communities they serve.
The somewhat higher-paid workers in the green economy – people who make the nation’s homes and businesses more energy efficient and who help to produce clean and sustainable energy – are better able to afford housing than other working families but still struggle with housing affordability in many markets.”
All the while we thought that we’re in a buyer’s market considering the bargain prices in key areas are creating frenzy among hunters. But the report presents the fact that not everyone is keen to shop around mainly because their incomes spoil their dreams of homeownership. It further states that “For many U.S. workers the median-priced home is unaffordable even at today’s relatively low prices. Even many workers in the growing green economy cannot afford to purchase a home of their own. For workers in more expensive areas, renting a typical two-bedroom apartment is also unaffordable.”
And many would highly suspect that aside from income, there are many factors that can limit one’s chances of owning a home. For example, a first time buyer may have found a home that suits his taste but if a competing big time investor can match his deal with a down payment higher than 20 percent, there’s no way that a very eager seller would refuse the investor’s tempting offer.
Second, low credit scores still discourage many interested buyers from pursuing what they want because most banks have already raised their qualifying scores for borrowers. Underwriting requirements are generally stringent these days and improving one’s credit score remains a tough challenge.
Third, the first quarter’s dismal employment figures sent laid off workers into more woeful conditions. Although we’ve had slight improvements since April, the job market still has to provide a ray of hope for more than 9.9 percent who are out of work.
Finally, the government can only do s home tax credit program may have been successful but it was costly according to the New York Times . In a report, it says, “many tax policy experts say it has been singularly cost-ineffective: most of the $12.6 billion in credits through end of February was collected by people who would have bought homes anyway or who in some cases were not even eligible… real estate agents say there are at least three others who collected the credit even though they would have bought without it.
That means for each new buyer who was truly lured into the market by the credit, the federal government paid more than $30,000.” And you thought that it was good enough to spur significant economic activity!
Realty.com is a real estate search portal, dedicated to connecting home buyers and sellers to trusting real estate services. Follow the Realty.com blog for up to date housing news and trends. And monitor local mortgage rates at RealtyGadget.com.
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Solving wet-basement problems is one of the most important things you can do to protect the value of your home and health of your family.
Nothing poses a greater long-term risk to your home’s value than a wet basement. If left unchecked, basement moisture can ruin floors and walls, encourage mold, even damage roofing. Some wet basements are easy to cure, simply by making sure gutters stay clear and by diverting gutter water well away from the foundation. But if the problem comes from other sources—water flowing toward the house on the surface, seeping in from underground, or backing up through municipal storm drains—you’ve got to take more aggressive action. Here’s help with figuring out what may be causing your water trouble, and eight basement waterproofing strategies to try, from the simplest and least expensive to the most challenging and costly.
1. Add underground piping
If downspouts are dumping too close to the house, you can get water the recommended five feet or more away from the foundation by adding roll-out plastic or metal gutter extenders. But they aren’t the neatest or most effective long-term solution, especially if you’re likely to trip on them or run over them with a lawnmower. Permanent underground piping is invisible and capable of moving large quantities of runoff much farther from your house. For about $10 a foot, a landscaper or waterproofing contractor will dig a trench and install piping to carry the water safely away.
2. Plug gaps
If you see water dribbling into the basement through cracks or gaps around plumbing pipes, you can plug the openings yourself with hydraulic cement or polyurethane caulk for less than $20. Plugs work when the problem is simply a hole that water oozes through, either from surface runoff or from wet soil. But if the water is coming up through the floor, or at the joint where floor and walls meet, the problem is ground water, and plugs won’t do the trick. For that, see Solutions #5 though #7 below.
3. Restore the crown
If the gutters are working and you’ve plugged obvious holes, but you still see water dribbling into your basement or crawl space from high on the foundation walls, then surface water isn’t draining away from the house as it should. Your house should sit on a “crown” of soil that slopes at least six inches over the first 10 feet in all directions. Over time, the soil around the foundation may have settled. All you need to do to build it back up is shovel in more dirt. One cubic yard of a water-shedding clay-loam mix from a landscape supply house costs around $30 (plus delivery) and is enough for a two-foot-wide, three-inch-deep layer along 57 feet of foundation.
4. Reshape the landscape
If you can’t add soil without bringing it too close to the siding—six inches is the minimum safe distance to protect against rot and termites—then you may be able to redirect surface water before it reaches the house by creating a berm (a mound of dirt) or a swale (a wide, shallow ditch). In small areas, berms are easy; a landscape contractor can build one for a few hundred dollars. On bigger projects, berms make less sense because you’ll have to truck in too much soil. In that case, dig a swale (about $1,000). Once landscaping grows in, berms and swales can be attractive features in your yard.
5. Repair footing drains
If water is leaking into your basement low on the walls or at the seams where walls meet the floor, your issue isn’t surface water, it’s hydrostatic pressure pushing out water within the ground. The first thing to do is check whether you have footing drains, underground pipes installed when the house was built to carry water away from the foundation. (Look for a manhole or drain in the basement floor or a cleanout pipe capped a few inches above the floor.) The drains may be clogged, in which case you can try opening the cleanout and flushing the pipes with a garden hose. If that doesn’t work, a plumber with an augur can often do the job for about $600.
6. Install a curtain drain around the house
If you don’t have footing drains or can’t get the existing ones to function, there’s one more thing you can try before you invest in a costly interior or exterior basement waterproofing system: Install a curtain drain to divert water that’s traveling underground toward your house. A type of French drain, a curtain drain is a shallow trench filled with gravel and piping that intercepts water uphill of your house and carries it down the slope a safe distance away.
7. Pump the water out from the inside
If you can’t keep subsurface water out, then you have to address it on the inside. To create an interior drain system, crews saw a channel around the perimeter of the floor, chip out the concrete, and lay perforated pipe in the hole. The pipe drains to collection tank at the basement’s low spot, where a sump pump sends it away. Starting at about $3,000, an interior system may be the least expensive and disruptive option if you have an unfinished basement with easy access, or a lot of mature landscaping that digging for an exterior system would destroy.
8. Waterproof from the outside
Installing an interior drainage system gets the water out but doesn’t actually waterproof the walls. For that, you need an exterior system: a French drain to relieve hydrostatic pressure and exterior waterproofing to protect the foundation. It’s a big job that requires excavating around the house, but it may be the best solution if you have a foundation with numerous gaps where water is getting through. It also keeps the mess and water outside, which may be your choice if you don’t want to tear up a finished basement. The downside, besides a price tag that can reach $20,000, is that your yard takes a beating, and you may need to remove decks or walkways.
Jeanne Huber is the author of 10 books about home improvement and writes a weekly column about home care for The Washington Post. She solved her first drainage mystery when her family’s frequent sneezing attacks led her to discover mildew coating the underside of their house’s roof.
French Drains: When You Need Them
If you have a soggy yard or a wet basement, the solution may be an exterior or interior French drain, a channel that collects water and diverts it safely away.
How a French drain works
French drains work by providing an easy channel for water to flow. Surface and subsurface water runs through the spaces between the round gravel and into the perforated pipe at the bottom of the trench. (Installers place the pipe with the holes facing down so the perforations don’t get clogged.) Water then travels freely through the pipe, which empties a safe distance from the house. The trench bottom should be sloped about one inch for every 10 feet in the direction you want water to flow. Depending on the situation, the water can be diverted to a low-lying area of the property, a drainage ditch, a dry well, or the street.
Use a shallow curtain drain to divert surface water
A shallow French drain, called a curtain drain, is a useful when you have a problem with surface water—a lawn that’s always soggy, for instance, or a driveway that keeps washing A French drain extending horizontally across your property, uphill of the area you want to dry out, skirts water to either side.
This type of drain doesn’t have to be very deep. To divert water around a house, a common size is 2 feet deep and 1.5 feet across. If the drain passes through an area with trees or shrubs, consider switching to solid pipe there, to reduce the risk of roots growing into the piping and clogging it.
Cost: $10 to $16 per linear foot.
Add a deep French drain to keep water out of the basement
If your yard is flat, or if a curtain drain across the top of the lot doesn’t keep water out of the basement, you may need a deep French drain. This type, often called a footing drain, runs around the perimeter of the house at the footing level. It’s easy to install during house construction, but much more difficult and expensive to add later. You might want to consider this option if you have a finished basement that you don’t want to disturb, but weigh that against the landscaping, decks, and walkways that will have to be ripped into to access the foundation.
Since French drains depend on gravity, on a flat property you may need to pipe the collected water to a basin in the basement, where a sump pump can lift it and send it to the storm drain system.
Cost: $12,000 for a 1,500-square-foot basement 6 feet deep; $4,000 for a crawl space with footings 2 feet deep.
Add an interior French drain to remove water where it enters
If you can’t keep water out of your basement, you can build an interior French drain to intercept the water where it comes in. Crews cut a channel around the perimeter of the basement floor, chip out the concrete, and install perforated pipe all the way around. Solid pipe then carries the water to a collection tank sunk into the floor, and a sump pump sends it out to the yard or a storm drain. The channel is patched with a thin layer of concrete, except for a small gap at the edge to catch any water that dribbles down the wall.
Cost: About $3,000
Build a French drain into a retaining wall
If you’re building a retaining wall on a hillside, incorporate a French drain behind the first course of stones or blocks. Otherwise water moving down the hill will build up behind the wall and undermine or even tip it. The pipe should rest on the same compacted gravel base or concrete footing that supports the wall. To protect the drain from clogging with silt, drape landscape cloth across the base or footing and up the slope before you add the pipe and drain gravel. As you near the top of the wall, fold the cloth over the top of the gravel, and topwith several inches of soil.
Cost: The added cost to do this while building is very little—just the price of drain gravel ($25 a cubic yard) and pipe (50 cents to $1 a foot, depending on type).
Before beginning any digging project:
· Ask your planning or public works department if you need a permit.
· Call 888-DIG-SAFE to locate buried utility lines.
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You may have heard the term but are not clear on what is a short sale in real estate investing. The newest way to purchase or sell property by negotiating a discount with a mortgage company isn’t very new at all.
To sum it up, a realtor, investor or homeowner contacts the mortgage company of a homeowner who is behind on payments in an attempt to negotiate a discount. The lender either accepts or rejects an offer to purchase the property lower than current amount owed.
Another accurate and in depth description can be read by clicking the below link.
Wikipedia.com’s definition of a short sale
Being reasonable when requesting a discount is the best way to get a short sale approved. If you request 20-30% off of what is currently owed on the property, your chances of acceptance are pretty good.
If a property is in need of many repairs or has some serious defects you may have luck negotiating as low as 50% of what is owed.
Banks have been loosening their policies as of recently, making it easier to get an approval.
Since the sub prime mortgage meltdown and decline in real estate values, many people are overleveraged and need to sell. When there is little or no equity in a home and a homeowner must sell, a short payoff may be the answer.
Short sale is when a bank or mortgage lender agrees to discount a loan balance due to an economic hardship on the part of the mortgagor. The home owner/debtor sells the mortgaged property for less than the outstanding balance of the loan, and turns over the proceeds of the sale to the lender in full satisfaction of the debt. In such instances, the lender would have the right to approve or disapprove of a proposed sale.
Extenuating circumstances influence whether or not banks will discount a loan balance. These circumstances are usually related to the current real estate market climate and the individual borrower's financial situation.
A short sale typically is executed to prevent a home foreclosure. Often a bank will choose to allow a short sale if they believe that it will result in a smaller financial loss than foreclosing. For the home owner, the advantages include avoidance of having a foreclosure on their credit history. Additionally, a short sale is typically faster and less expensive than a foreclosure.
In short, a short sale is nothing more than negotiating with lien holders a payoff for less than what they are owed, or rather a sale of a debt, generally on a piece of real estate, short of the full debt amount.
Lenders have a department (typically called a loss mitigation department) which processes potential short sale transactions. Typically, lenders do not accept short sale offers or requests for short sales until a Notice of Default has been issued or recorded with the locality where the property is located.
Lenders have a varying tolerance for short sales and mitigated losses. The majority of lenders have a pre-determined criteria for such transactions. Other distressed lenders may allow any reasonable offer subject to a loss mitigator's approval. "Red tape" is very common in short sales, similar to REO and HUD properties, requiring potentially multiple levels of approvals and conditions. Junior liens, such as second morgagees, HELOC lenders, and HOA (special assessment liens), may need to approve of the short sale. Frequent objectors to short sales include tax lieners (income, estate or corporate franchise tax - as opposed to real property taxes, which have priority even unrecorded) and mechanic's lien holders. It is possible for junior lien holders to prevent the short sale.
While it is frequent if not common for a lender to forgive the balance of the loan in question, it is unlikely that a lien holder that is not a mortgagee will forgive any of their balance. Further, it is common for a lender to omit updating the zero balance and settlement option on the mortgagor's credit report, or even flat refuse to do so "due to their financial loss."
When the lender decides to forgive all or a portion of a borrower's debt and accept less, the forgiven amount is considered as income for the borrower and is liable to be taxed.
However, after the signing of The Mortgage Forgiveness Debt Relief Act of 2007 by President Bush, amendments have been made to remove such tax liability and allow the borrower and lender to work freely together to find a common solution that is beneficial to both parties. This protection is limited to primary residences so consultation with a tax advisor is necessary ensure that a borrower qualifies.
A short sale does not adversely effect a person's credit report beyond documenting the short sale as "foreclosure proceedings started". But it does count against a person's credit to about the same degree as a foreclosure by similarly remaining on the report for 7 years and, most often, prevents the issuance of any mortgages for the same period of time.
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