Food For Thought

Halloween Tales

Question: You’ve been showing all kinds of home for years. Any spooky stories you can share?

Answer:  I always make a habit of knocking or ringing the doorbell, even if the house is vacant. My clients and I were standing on the porch as I rang the doorbell of a vacant house, and we all distinctly heard “Who is it?” in a gruff little old lady’s voice. We all looked at each other. I asked if they heard it, and they nodded their heads up and down. We went in and checked out the house (and all the closets) but found no one. Buyers did not want this home.

Years ago, a fellow Realtor said he had a listing that the seller said was haunted by a young boy. He said when his article came out in the newspaper for advertisement of the new listing, there was a young, dark figure of a boy standing in the doorway in the picture.

I was showing a home built in the 1800s. The kitchen was actually located in the basement. When I went to get the lockbox key, my client told me that the door to the basement/kitchen was unlocked, so we went ahead and went in that way. We pulled the door closed behind us but didn’t touch any locking mechanisms. We proceeded to preview the home. We decided to exit the same way we came in, but when we went to open the door, it was locked. That creeped us all out, fortunately were able to get out through the back door. No sale here.

I showed a house built around 1900. There was an attic area with a stairway. At the top of the stairway was an old doll, sitting in a rocking chair, staring at you. If you went all the way up the stairs, you were greeted by about 10-15 similarly creepy dolls sitting in rocking chairs. It was an eerie experience.

A local real estate agent justified the strange placement of the bed and several layers of blackout curtains with the fact that her client is a vampire. The home eventually sold. No further update, but, “When Black Cats prowl & Pumpkins Gleam, may luck be yours on Halloween!”

Question: I'm considering the purchase a home I cannot afford. At this time, I can afford around $80,000 -- basically a home that's in need of repair. The house that I want is $219,000. I do not know if either choice is acceptable. I obviously do not want to live at either choice for very long (no more than three years). Should I take the plunge and get in the game now, or should I save up money and do things the "traditional way."

Answer: There is no choice. You cannot buy a property which is three times beyond what you can afford. No legitimate lender will provide financing. Such a purchase has a huge chance of leading to foreclosure and bankruptcy. Even if you can make the mortgage payments, what about taxes, utilities and repairs?

What you should do is to work at saving more and increasing your income. Also, spend more time learning about real estate in general as well as the specific trends in your local community.

No less important, buying a home with the intent of selling in three years could be a disaster. It costs money to acquire real estate and money to sell, so even if you get a higher price you could have an actual cash loss on the sale.

E-mail us your Real estate questions at:  Cathyah@aol.com

Call Cathy & Jim Higgins for our opinion on your Home:

Ind: 219-865-4361  Ill: 708-828-3304.                         

Licensed Broker/Realtors in Indiana & Illinois

Coldwell Banker Residential Brokerage

Website: www.Cathyhiggins.com

Dogs Rule.the House

What happens to my mortgage payment if Interest Rates Rise?

If you wait to buy a Home for any reason, you stand the chance of interest rates rising. We do not have the economy for interest rates to fall, so I doubt that will happen.

Say you would be financing a $200,000 mortgage for 30 years.  You were quoted a 4.5% interest rate. 
Your Monthly Principal & Interest Payment would be: $1013.
Over 10 years you would have paid approx $82,000 in interest.

But, you wait a year, interest rates rise to 5.5%.
Your Monthly Principal & Interest Payment would now be: $1135.

Over 10 years you would have paid approx $101,000 in interest.

This guy created a problem!

Question: I am in the final stage of purchasing property. As a part of my purchase agreement, I inserted a contingency that the appraised value of the home must meet or exceed the selling price. The appraisal came in $14,000 less than the selling price, giving me the right to re-negotiate or to rescind the purchase agreement.

At this point, I allowed the seller to obtain a second appraisal of the property. The second appraisal came in at almost exactly the asking price. This $15,000 difference in appraisal on this property has me both concerned and confused. How do I determine which appraisal is correct?

Answer: You had an appraisal contingency in your purchase offer. It allowed you to back-out of the transaction in the event of a low appraisal. There was a low appraisal. Now the question is this: If you could buy the property how much would you pay? Either the seller will accept your revised offer or not. Be aware that the lender will only finance the transaction on the basis of the sale price or the appraisal, whichever is lower.

As to the two appraisals, you only needed one as required by your offer.  Not sure why you allowed a 2^nd appraisal? The second valuation has muddled the issues.