I know no one wants to think about this but it's possible that in 6 weeks we could see the first snowflake fall. Even if the snow does not stick, it soon will. And when it sticks, it may stick for 1-3 months!
FHA loans have become the preferred product in many markets and Cleveland Ohio is no exception. You may wonder why this is relevant. When an FHA appraiser appraises a home for value, he/she can also call out certain violations that will need to be repaired before the home can transfer title. If the required repairs are on the exterior it becomes a problem in the winter especially, because driveways, roofs, and/or peeling paint, including on detached garages, cannot be repaired in the dead of winter.
The lender will likely require 3 estimates for the repairs. It is likely they will take the middle repair figure. As a seller, you will be required to escrow 1.5 times the amount of the repair. So if you have a $2000 concrete estimate, you will be required to escrow $3000 until the repair can be done when weather permits.
If you think your home will be on the market through the winter or that you will put it up for sale in the winter, here are some tips that may make it just a little bit easier to sell.
*Take exterior pictures of your home both front and back. Even if your home may not be in need of exterior repairs like the ones mentioned above, it's a very good idea to have pictures without snow. It's generally much more appealing for a prospective buyer to see the home when it is not snow covered, but surrounded instead by lush landscaping and flowers. Make sure the garage doors are down and there are no cars/bikes in the driveway. Always make a note of when the picture was taken. So while other agents are posting pictures with snow all around, yours will be one of late summer or early fall!
While the picture on the left is "picturesque" you cannot see the roof, gutters driveway, landscaping (or lack thereof), or the foundation. The picture on the right is much more appealing and shows significantly more about the exterior. I took these pictures in late winter/early spring. If I were taking pictures of my home I would take several shots of the outside and much closer ones as well.
*Inspect your home for some of the above mentioned FHA items and consider getting quotes regarding the repair. Doing this in advance may help you sell your home during the winter. Estimates are only valid for a limited time, so you will need to take that into account.
*Better than just getting quotes would be to actually have the item(s) repaired. Again, take pictures after it has been repaired, and of course keep a copy of the paid invoice showing the work that was done. With pictures in hand you will be able to show that your contractor did an acceptable job on the repair.
If you would like to buy or sell a home in the southern communities of Cleveland Ohio, please call me at 440-263-7496, or you may want to visit my website for more specific information on the communities I service: Brecksville Ohio Real Estate, Broadview Heights Ohio Real Estate, North Royalton Ohio Real Estate Independence Ohio Real Estate, Seven Hills Ohio Real Estate, Parma Ohio Real Estate, Parma Heights Ohio Real Estate and Middleburg Heights Ohio Real Estate. Information is obtained from Neohrex (Northeast Ohio Real Estate Exchange) and is deemed reliable but not guaranteed and should be independently verified. Properties subject to prior sale, rental, or other status changes. All properties that are advertised as being listed or sold by Barb Szabo are in conjuntion with ReMax Trinity.
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You are right now is the time to be preparing for Winter it is not too far away. It is good to get repairs done now not later.
I hope that many sellers do just that because fha loans truly are the norm around here.
Barb - good advice. I always recommend sellers provide seasonal pictures (and the agents keep the photos current) and get a pre-sales inspection.
Barb, Your suggestion of photos during the seasons is great. Yes, FHA does rule in todays market and the FHA 203K rehab loan in a great option in the Point of Sale communities, Short Sale Situations or when the seller does not have the time or money to complete the repairs before listing the home. Finally because of the $8,000 stimulus, I would suggest that sellers get the home on the market sooner versus later. The Stimulus has and will bring more buyers to the market. IF and HOW it might be extended is the question.
Tim, The deals I have closed have almost all been fha so it is important to be educated and prepared. Thanks for the reminder regarding the 203K rehab loan.
I believe strongly in the 203K program and because I can use the OHFA Program Ratebased program. Ohio Hero, Police, Fire, Paramedics and Teachers qualify for a .25% improvement in the rate. There is also an option for a 2.50% Grant, so the buyer could purchase with only 1% down as long as the seller agrees to pay the buyers closing costs. I almost forgot to say the buyer could still qualify for the $8,000 stimulus and might even qualify for a Grant/Loan from a number of cities.
Sellers - List that home today
Buyers- Start Looking for that home for your family and if it is not exactly as you would like it to be consider using a 203k Loan to make it your dream home.
Barb, this is such great advice, but I hate to think of winter being so close! I'm not ready yet.
Barb... I agree, this is good advice... but be careful on the part of escrowing 1 1/2 times the amount of repairs. Many companies are cutting back on allowing escrow related items. Sure, if it's weather related, that makes sense and follows the point of your blog. But I have heard some lenders won't even allow this... just a FYI... again, some good points to be made aware of.
Pat, I know. Right now there is a beautiful summer breeze blowing through my window..heavenly!
Jeff, You are absolutely right. I had a seller willing to escrow funds this summer for some interior repairs and fha would not allow it.