Flickr photo by Charlie Brewer.

Many of my fellow real estate brokers and I have clients who have been house hunting, it seems, since time eternal. OK — well, since last summer. These hardy homebuyers have experienced competing with 30 other offers over the summer months, maybe got into and out of a contract or so when an inspection or appraisal went south during the fall, and have had their eye on the emaciated inventory throughout the holiday season.

Sellers have experienced the same exact thing, from the other side. While the best-priced, best-dressed homes in the best neighborhoods (and super-cheap homes everywhere) are now flying off the market, the middle of the market seems much more stagnant — especially if you happen to be a home seller whose home has been on the market for more than a couple of months.

So, here we are. Stuck, it seems. All flailing about for ways we can bring these house hunts to a close, for the sake of what remains of both our sanity and our (or our home’s prospective buyers’) eligibility for the homebuyer’s credit. Taking a deep breath and powering through it — which is a tried-and-true strategy for getting unstuck in so many other areas of our lives — just doesn’t work for homebuying.

There are just too many other people involved who are entirely out of your control — not the least of which are the seller, listing agent, appraiser, underwriter and even other competing bidder/buyers.

The things we can’t control are so many that it brings to mind the first line of the serenity prayer: “… grant me the serenity to accept the things I cannot change.” And there’s the rub: So many of the strategies resulting from our brainstorming on buying are subject to unilateral veto from someone we don’t know that it can be very frustrating to do anything but resign ourselves to repeat the cycle of frustration and rely on luck.

But, besides praying to your deity of choice (not an ineffective strategy, in my experience), what else can you do to give a jump-restart to your stalled-out house hunt, while maintaining a Zen sense of calm (or at least not strangling anyone)?

Inspired by Charlotte Kasl’s “If the Buddha Got Stuck,” one of my favorite books for getting unstuck from anything, whether it be a column or a lifelong endeavor, here are my five tips for unsticking your home purchase or sale:

1. Extract the lessons from past glitches, snags and failures. I call this tuition — time or money you’ve already spent to learn a lesson. Don’t let all the tuition you’ve already paid be in vain. It will be, unless you scrape the bad experiences you’ve had in the past to get all the lessons out of the corners, and apply them in the form of a revised strategy going forward.

To be frank, what you’ve been doing isn’t working. If you’re trying to buy a home, you may need to change your house hunt (and online listings search-engine criteria) to a lower price range, so you can afford to be more competitive with your offer prices. If you’ve been offering less than your max, you might need to offer more — saving money on the purchase is meaningless if you never get a house you like!

Sellers might need to drop their list price (and please don’t shoot your agent/the messenger, for delivering this news), do more intensive property primping or staging, or even offer some incentives to get buyers to bite.

2. Revisit your “whys” — your Vision of Home. In my practice, my clients and I work a lot with their Vision of Home — a written document they prepare, in my absence, that vividly illustrates the “after” picture of the life they want to lead afterthey buy, sell, move up or whatever.

For it to be a useful tool, the Vision of Home must be detailed, vivid and, most importantly, holistic: It needs to cover everything from what they envision themselves doing in their spare time, to who they will live with, what they will live near, how they will get to and from their work and family visits, etc. You can see how this, then, fuels the more drilled-down specifics of how many bedrooms, bathrooms and square feet they need.

If your house hunt or home sale is stuck, consider drafting your own Vision of Home document. You might need to get excited about homebuying or moving again — your passion for the after, when reignited, will literally energize your efforts and direct your decision-making as you go forward.

3. Detach and let go. Vision is critical — it creates the excitement and commitment to targeted action needed to fuel your not-always-fun journey. But detachment from that vision is just as critical to staying sane throughout the journey. Remember — you’re not in control, and you know what they say about the best-laid plans.

So let go of the idea that your envisioned outcome is the only one that will ever work. Be flexible where you can with your house-hunting or home-selling criteria — limit your deal-breakers as much as you can. Stay open to suggestions for alternative ways you can achieve an approximation of your desired outcome.

4. Take a hiatus. Take a short break from viewing properties or showing your house. But set up your time frame in advance and be especially careful about taking a break if you’re trying to get the tax credit (you must be in contract by April 30, 2010). Even a weekend or two can allow you the mental battery recharge and detachment from getting outbid, for example, that allows you to re-up your efforts with a positive outlook.

5. Adopt a ‘beginner’s mind’ when you restart. When you get back in the saddle, let go of the list of “must-haves” and “deal-breakers” you’ve been working with. Hold on to the basic lessons you’ve learned, but let go of the prejudices and preconceptions of your jaded perspective. Start afresh, and you might see and be open to properties and offers you would never even have considered before your break.

Tara-Nicholle Nelson is author of “The Savvy Woman’s Homebuying Handbook” and “Trillion Dollar Women: Use Your Power to Make Buying and Remodeling Decisions.” Ask her a real estate question online or visit her Web site,www.rethinkrealestate.com.

via Shutterstock.

The case for 15-year fixed-rate mortgages has never been stronger because, in the post-crisis market, the rate advantage over the 30-year has never been larger. The rate advantage is about 0.875 percent, whereas prior to the crisis, it was 0.375 percent to 0.5 percent.

Consider two $100,000 loans, one a 15-year at 3.125 percent and the other a 30-year at 4 percent. The respective payments are $696.61 and 477.42. After 15 years, the borrower with the 15-year loan has paid $39,454 more but is out of debt whereas the borrower with the 30-year loan still owes $64,543.

But there is a counterargument. A disciplined borrower can choose the 30-year loan and invest the difference in payment between the 30- and the 15-year loans, in that way offsetting the higher interest rate on the 30-year loan. Some financial planners recommend this approach to their clients as part of a program to build wealth faster.

The challenge in making such a program work is that the rate of return on the invested cash flow must exceed the rate on the 30-year loan by an amount that depends on how much higher the 30-year rate is than the 15-year rate.

For example, in 2006 when I first looked into this issue, I used rates of 6 percent and 5.625 percent on the 30- and 15-year loans. I found that over a 15-year period, the cash flow savings had to yield 7 percent, or 1 percent more than the rate on the 30-year loan, to just offset the higher interest rate on the 30-year loan. This can be termed the break-even return on the cash flows. To come out ahead, the borrower has to earn a return above the break-even return.

I recently repeated the exercise using rates of 4 percent on the 30-year loan and 3.125 percent on the 15-year. With these rates, the break-even return is 6.15 percent, or 2.15 percent higher than the rate on the 30-year loan. The larger rate spread between the 15- and 30-year loans increases the difficulty of developing a profitable reinvestment strategy.

The challenge looms even larger if the borrower holds the mortgage for less than the 15 years I assumed. The break-even rate is higher over shorter periods because the difference in the rate at which the 15- and the 30-year loans pay down the balance is largest at the outset and declines over time. The shorter the period, the higher the reinvestment rate must be to offset the larger difference in balance reduction.

Average mortgage life today is somewhere between five and 10 years. At 10 years the break-even rate rises to 8.02 percent, and at five years, it jumps to 13.69 percent — a whopping 9.69 percent above the rate on the 30-year loan.

These calculations assume that the borrower makes a down payment of 20 percent or more. If the down payment is less than 20 percent, the borrower must pay for mortgage insurance, and the premiums are higher on the 30-year loan.

For example, if you put down 5 percent and pay standard insurance premiums, the break-even rate rises from 6.15 percent to 7.01 percent over 15 years, from 8.02 percent to 9.56 percent over 10 years, and from 13.69 percent to 16.88 percent over five years. Note: All the break-even rates shown above are derived from calculator 15b on my website.

These required returns are forbiddingly high for any borrower who would invest the cash flow savings by acquiring financial assets. There is no way a borrower can earn such returns without taking very large risks. Most borrowers probably fall into this category.

But there are some borrowers for whom the cash flow reinvestment strategy might make sense. One is the borrower who is eligible for but not currently utilizing IRA, 401(k) or other qualified tax-deductible or tax-deferred plans. Borrowers who use their cash flow savings to invest in these vehicles, who would not do so otherwise, can earn a very high rate of return because of the tax benefits. If the borrower’s employer makes matching contributions, the return is even higher.

A second category of borrowers who can earn a very high rate of return are those with high-cost debt. A borrower paying 18 percent on credit card balances earns a return of 18 percent by paying down the balances.

In my 2006 article on this topic, I argued that borrowers who have not fully exploited all tax-advantaged investments, or who have high-rate credit card balances, are unlikely to have the iron discipline required to invest the cash flow savings on their mortgage month after month. But the financial planners who wrote me argued that they have developed special plans for borrowers in such situations that provide the discipline that is required. But until I see such plans along with evidence that they work, I will remain skeptical.

The writer is professor of finance emeritus at the Wharton School of the University of Pennsylvania. Comments and questions can be left at www.mtgprofessor.com.

Consider before you ignore or outright refuse a very low purchase offer for your home. A counteroffer and negotiation could turn that low purchase offer into a sale.

Check your emotions

A purchase offer, even a very low one, means someone wants to purchase your home. Unless the offer is laughably low, it deserves a cordial response, whether that’s a counteroffer or an outright rejection. Remain calm and discuss with your real estate agent the many ways you can respond to a lowball purchase offer.

Counter the purchase offer

Unless you’ve received multiple purchase offers, the best response is to counter the low offer with a price and terms you’re willing to accept. Some buyers make a low offer because they think that’s customary, they’re afraid they’ll overpay, or they want to test your limits.

A counteroffer signals that you’re willing to negotiate. One strategy for your counteroffer is to lower your price, but remove any concessions such as seller assistance with closing costs, or features such as kitchen appliances that you’d like to take with you.

Consider the terms

Price is paramount for most buyers and sellers, but it’s not the only deal point. A low purchase offer might make sense if the contingencies are reasonable, the closing date meets your needs, and the buyer is preapproved for a mortgage. Consider what terms you might change in a counteroffer to make the deal work.

Review your comps

Ask your REALTOR® whether any homes that are comparable to yours (known as “comps”) have been sold or put on the market since your home was listed for sale. If those new comps are at lower prices, you might have to lower your price to match them if you want to sell.

Consider the buyer’s comps

Buyers sometimes attach comps to a low offer to try to convince the seller to accept a lower purchase offer. Take a look at those comps. Are the homes similar to yours? If so, your asking price might be unrealistic. If not, you might want to include in your counteroffer information about those homes and your own comps that justify your asking price.

If the buyers don’t include comps to justify their low purchase offer, have your real estate agent ask the buyers’ agent for those comps.

Get the agents together

If the purchase offer is too low to counter, but you don’t have a better option, ask your real estate agent to call the buyer’s agent and try to narrow the price gap so that a counteroffer would make sense. Also, ask your real estate agent whether the buyer (or buyer’s agent) has a reputation for lowball purchase offers. If that’s the case, you might feel freer to reject the offer.

Don’t signal desperation

Buyers are sensitive to signs that a seller may be receptive to a low purchase offer. If your home is vacant or your home’s listing describes you as a “motivated” seller, you’re signaling you’re open to a low offer.

If you can remedy the situation, maybe by renting furniture or asking your agent not to mention in your home listing that you’re motivated, the next purchase offer you get might be more to your liking.

More from HouseLogic

6 Tips for Choosing the Best Purchase Offer for Your Home

6 Reasons to Reduce Your Home Price

Marcie Geffner is a freelance reporter who has been writing about real estate, homeownership and mortgages for 20 years. She owns a ranch-style house built in 1941 and updated in the 1990s, in Los Angeles.

Income Items:

1. Gather your documents. Today, many people will have to produce 2 years’ complete tax returns, including W2′s, 1099′s, K1′s, and all the schedules, as well as a month’s worth of pay stubs.
2. Be prepared to explain them. Deductions in your returns and your pay stubs may impact the income your lender will use to qualify you which, in turn, has a big impact on the loan you will get.
3. Have a breakdown of base pay versus overtime for both your pay stubs and 2 years’ W2′s. Lenders treat overtime (and bonus income) differently than your base pay. Be prepared to explain any changes over the last few years because your loan officer will ask you about it.

Asset Items:

1. Start accumulating your bank statements. Lenders look back 3 months from when you sign your contract of sale.
2. You will have to explain any and all large deposits (which are defined as deposits greater than your regular pay check) because lenders want to make sure you haven’t taken out any new loans that aren’t on your credit report.
3. Avoid any significant cash deposits. However, if you did have a cash deposit, understand that the lender will have you source it (a bill of sale and DMV receipt for that motorcycle, for example).
4. If you will be receiving a gift, consult your loan officer on how to document it (from the donor’s ability to how you deposit it).

Credit Items:

1. Ask your loan officer to run your credit and go over it with them. Believe it or not, most credit reports contain errors. Best to identify them and get working on correcting them as early as possible.
2. Do what you can to pay down your balances to under 30% of available credit to help you get the best score possible.
3. Do NOT close accounts or pay off collection accounts without discussing it with your loan officer. Either one of these logical moves can actually have a negative impact on your score.

When buying a home, remember the Boy Scout motto, “Be prepared”. Following these suggestions will make your loan approval easier and less stressful.

A. Even if your house hasn’t been featured on “Hoarders,” making an effort to clear out clutter and to ensure that your home is as neat and tidy as possible before opening your door to buyers is common advice in real estate circles. And for good reason, said Jeffrey Stockwell, a senior vice president with Stribling & Associates in Manhattan.

“It’s vital, because most real estate is aspirational, and buyers want to see themselves someplace better and more beautiful,” he said. “They want the feeling that if they move in there, it will be organized, clean and attractive. If they walk into a cluttered, messy space, there’s none of that feeling that life will be better.”

Even if your home is in good condition, Mr. Stockwell said, “if it’s cluttered, people will think it needs a renovation, and that lowers the value.”

But cleaning up isn’t always easy. “You’re parting with things that have emotional value, and that’s very difficult for people,” he said. “They understand the need to do it. It doesn’t cost much, if anything, and yet it’s really hard to get clients to do it.”

Packing personal belongings into boxes that remain in the apartment isn’t much of a solution. “If I go into an apartment and see a lot of boxes, even if they’re attractive boxes,” he said, “I immediately think there’s not enough storage space.”

Jeffrey Phillip, a professional organizer in New York, agreed that the boxes need to go.

“In Manhattan, you’re working with a very limited amount of space, and any space is prime real estate,” Mr. Phillip said. “Even if you shove boxes into a closet thinking you’ll make the living space look good, you’re detracting from the storage space, which is another valuable asset.”

You could move those things into a storage unit, he said, but “better yet, take that time to get organized.”

Gearing up for a move is a “perfect time to really edit yourself down,” he said. There are a number of advantages to doing so: “You’re going to spend less money for someone to move you, and you’re also going to spend less money on storage.”

Just “don’t expect to do it all in one weekend,” Mr. Phillip said. Give yourself a few weeks — or even months — to complete the task.

“It’s all about doing small projects, one at a time,” he said, rather than trying to tackle the entire home in one shot, which could be overwhelming.

Some areas where you can get quick results include wardrobes, kitchen pantries and drawers, and collections of CDs and DVDs. For the latter, even adding the discs to a binder and doing away with the cases can clear a substantial amount of shelving.

As Mr. Stockwell put it: “The rule of thumb is, be ruthless.” If you’re unsure about something, he added, “Get rid of it.”

Homebuyer incentives can be smart marketing or a waste of money. Find out when and how to use them.

When you’re selling your home, the idea of adding a sweetener to the transaction—whether it’s a decorating allowance, a home warranty, or a big-screen TV—can be a smart use of marketing funds. To ensure it’s not a big waste, follow these dos and don’ts:

Do use homebuyer incentives to set your home apart from close competition. If all the sale properties in your neighborhood have the same patio, furnishing yours with a luxury patio set and stainless steel BBQ that stay with the buyers will make your home stand out.

Do compensate for flaws with a homebuyer incentive. If your kitchen sports outdated floral wallpaper, a $3,000 decorating allowance may help buyers cope. If your furnace is aging, a home warranty may remove the buyers’ concern that they’ll have to pay thousands of dollars to replace it right after the closing.

Don’t assume homebuyer incentives are legal. Your state may ban homebuyer incentives, or its laws may be maddeningly confusing about when the practice is legal and not. Check with your real estate agent and attorney before you offer a homebuyer incentive.

Don’t think buyers won’t see the motivation behind a homebuyer incentive.Offering a homebuyer incentive may make you seem desperate. That may lead suspicious buyers to wonder what hidden flaws exist in your home that would force you to throw a freebie at them to get it sold. It could also lead buyers to factor in your apparent anxiety and make a lowball offer.

Don’t use a homebuyer incentive to mask a too-high price. A buyer may think your expensive homebuyer incentive—like a high-end TV or a luxury car—is a gimmick to avoid lowering your sale price. Many top real estate agents will tell you to list your home at a more competitive price instead of offering a homebuyer incentive. A property that’s priced a hair below its true value will attract not only buyers but also buyers’ agents, who’ll  be giddy to show their clients a home that’s a good value and will sell quickly.

If you’re convinced a homebuyer incentive will do the trick, choose one that adds value or neutralizes a flaw in your home. Addressing buyers’ concerns about your home will always be more effective than offering buyers an expensive toy.

More from HouseLogic

Setting the right home price

Using an appraisal to set your home price

Choosing the right offer on your home

Other web resources

More on homebuyer incentives

G.M. Filisko is an attorney and award-winning writer who gritted her teeth and chose a huge price decrease over an incentive to sell a languishing property—and is glad she did. A regular contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

While you’d like to get the best price for your home, consider our six reasons to reduce your home price.

These six signs may be telling you it’s time to lower your price.

1. You’re drawing few lookers

You get the most interest in your home right after you put it on the market because buyers want to catch a great new home before anybody else takes it. If your real estate agent reports there have been fewer buyers calling about and asking to tour your home than there have been for other homes in your area, that may be a sign buyers think it’s overpriced and are waiting for the price to fall before viewing it.

2. You’re drawing lots of lookers but have no offers

If you’ve had 30 sets of potential buyers come through your home and not a single one has made an offer, something is off. What are other agents telling your agent about your home? An overly high price may be discouraging buyers from making an offer.

3. Your home’s been on the market longer than similar homes

Ask your real estate agent about the average number of days it takes to sell a home in your market. If the answer is 30 and you’re pushing 45, your price may be affecting buyer interest. When a home sits on the market, buyers can begin to wonder if there’s something wrong with it, which can delay a sale even further. At least consider lowering your asking price.

4. You have a deadline

If you’ve got to sell soon because of a job transfer or you’ve already purchased another home, it may be necessary to generate buyer interest by dropping your price so your home is a little lower priced than comparable homes in your area. Remember: It’s not how much money you need that determines the sale price of your home, it’s how much money a buyer is willing to spend.

5. You can’t make upgrades

Maybe you’re plum out of cash and don’t have the funds to put fresh paint on the walls, clean the carpets, and add curb appeal. But the feedback your agent is reporting from buyers is that your home isn’t as well-appointed as similarly priced homes. When your home has been on the market longer than comparable homes in better condition, it’s time to accept that buyers expect to pay less for a home that doesn’t show as well as others.

6. The competition has changed

If weeks go by with no offers, continue to check out the competition. What have comparable homes sold for and what’s still on the market? What new listings have been added since you listed your home for sale? If comparable home sales or new listings show your price is too steep, consider a price reduction.

More from HouseLogic

How to ready your home for sale at little cost

How to review offers on your home

Other web resources

More on setting the right price

G.M. Filisko is an attorney and award-winning writer who made strategic price reductions that led to the sale of a Wisconsin property. A frequent contributor to many national publications including Bankrate.com, REALTOR® Magazine, and the American Bar Association Journal, she specializes in real estate, business, personal finance, and legal topics.

The “Right” home without financing will never have the Buyer’s address!

Editor’s note: This article is reposted with permission ofZillow. View the original item: “Problems With Flipped Houses“

By Reuben Saltzman

Home flippers often buy dilapidated houses, fix them up, then sell them again as quickly as possible with the intention of making a tidy profit. Flipped houses look shiny and new inside, but what’s going on underneath all the new drywall, carpet and paint?

Very few homebuyers seem to trust flippers, and with the cheesy “repairs” or “cover-ups” done over the years, it’s easy to understand why. Some home flippers take the same shortcuts. Here are the telltale signs of a flipped house:

Interior

The interior of the home looks great. The kitchen has all new or repainted cabinets, stainless steel appliances, granite countertops and a tiled floor. The first-floor bathroom has been completely redone, and a second-floor bathroom was recently added, or possibly a basement bathroom. They look great — all new carpet, paint, light fixtures, outlets and switches throughout the house, and possibly all new windows, too.

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When looking at flipped houses, you might notice poorly designed kitchens (i.e., cabinet doors and drawers that are blocked by other cabinets), nail holes that aren’t filled, appliances installed without an accessible outlet, and loose/unsecured countertops or base cabinets.

Bathrooms will often have vanity cabinets that are way too small for the space because the flipper bought the “special buy” vanity, top, and faucet combo on sale at the nearest home improvement store.

The handrails are new, but they might come right out of the wall if you pull on them. Sometimes they are attached only to drywall.

Electrical

There is a brand-new circuit breaker panel installed in the basement, which replaced the old 60-amp fuse panel. The new panel has a state electrical inspection sticker on it, and everything looks great.

Actually, there aren’t many electrical problems on flipped houses. Even the worst home flippers usually know better than to mess with the electrical; they don’t want their houses to burn down.

Heating

The home has an old, unsafe heating system at the end of its life expectancy. The flipper has documentation from “their guy” saying the heating system is safe. You should be suspicious.

Many times, heating safety check forms aren’t worth the paper they were written on. Furnaces and boilers can create high levels of carbon monoxide that the heating contractors say are fine. Make sure you have the gas company do their own test on the systems.

Another possibility is that the heating system was completely replaced. If so, that’s great, but check the furnace’s blower fan for drywall dust.

There’s a good chance that the flipper had the blower fan running while they were doing their drywall sanding, and the interior of the furnace is completely caked in drywall dust. The photo below shows a close-up view of a furnace’s blower fan blades covered in a thick layer of drywall dust.

If the home was originally heated with a boiler, the flipper most likely pulled out all of the pipes and radiators and converted the system to forced air; this is usually far less expensive than repairing or replacing the existing system.

Air conditioning

If the house is being sold during the winter, the air conditioning may be very old and may not be functional. If the house is being sold during the summer, the air conditioning may be brand-new and keeps the house very comfortable. You won’t typically find much in between those two extremes.

Structure

This is the item that homebuyers are most concerned about, especially on a flipped house, but honestly, there aren’t more structural problems on flipped houses than with any other house.

Plumbing

The water distribution pipes will either be in acceptable condition or they’ll all have recently been replaced, so you’ll likely have no issues there.

There may be major problems with the drains, though; nobody has lived in the house yet, so nobody knows about whether there are leaks and clogged drains. The old steel drain lines are often clogged at the kitchen sink, and possibly at other locations.

New plumbing fixtures often leak when they’re filled with water and then drained; it’s not unusual to find several leaking drains at flipped houses.

Sometimes floor drains, basement showers, or even basement sinks back up with water when the plumbing fixtures at the upper levels are filled and then drained. That’s exactly what was happening with this new basement bathroom sink at a flipped house (video below).

Tiled shower floors are also notorious leakers at flipped houses. Be aware.

Roofs

The shingles on the roof are in bad shape. You’ll find patched sections of shingles or shingles that are badly deteriorated and at the end of their life expectancy. Replacing the roof covering is an expensive project, but it won’t make the house sell for any more money, so flippers leave the roof alone if it’s not leaking. I can’t say I blame them.

Insulation

The insulation in the attic hasn’t been touched for a long time — it might even be original, and it will need improvement. Flippers don’t get any return on their investment for new insulation, so don’t expect anything to be done here.

Exterior

Shoddy workmanship abounds at the exterior. The original wood windows were replaced with vinyl inserts, but the old wood at the exterior is still rotting away and has been freshly painted, or someone did a quick-and-dirty job of wrapping the windows with aluminum and left a lot of rotted wood still exposed.

The basement windows have been replaced with whatever size window was close, and the flipper used clear pine or plywood to make up the difference in size. This is sloppy workmanship, at best.

Some of the siding repairs may even be comical; during a recent home inspection, we saw a hole in the siding that was repaired with a coffee can lid.

There is a thin layer of new wood chips surrounding the house, but nothing has been done to correct improperly pitched soils around the house that can lead to a wet basement. You’ll want to regrade right away.

The chimney has a lot of missing mortar and cracks in the crown. You’ll need to hire someone to repair the chimney to help prevent the deterioration from getting worse.

Conclusion

If you just finished looking at a flipped house and you didn’t find any of these issues, buy the house! But, make sure to take a closer look. These are the defects often found at flipped houses, but keep in mind these are broad generalizations.

Some flipped houses exhibit far worse conditions than the examples presented here, while others are pristine. There are plenty of good contractors who do excellent work, but it’s the rest of ‘em that give flippers a bad name.

If you’re buying a flipped house, the items you should pay the most attention to should be the exterior, roof, insulation and drains. Individual results will vary.

Reuben Saltzman, of Structure Tech Home Inspections, Minneapolis, Minn., is a second-generation American Society of Home Inspectors-certified inspector whose experience with home remodeling and construction began at age 4 when he helped his father steam wallpaper. He has worked for Structure Tech since 1997 and joined ASHI in 2004. Visit his blog at www.structuretech1.com/blog/.

Note: The views and opinions expressed in this article are those of the author and do not necessarily reflect the opinion or position of Zillow.

More from Zillow Blog:

• Bulbs To Bowls: Ways To Go Green At Home
• Zillow Rent Index Shows Rentals Continue to Outshine Purchase Market
• Noisy Neighbors? Solutions for Creating Sound Barriers
• 6 Tips in Negotiating a Lease Agreement
• The Secret to Creating a House That’s Easy to Sell

Copyright Zillow 2012

Editor’s note: This article is reposted with permission ofZillow. View the original item: “Problems With Flipped Houses“

The first task is to clean out the beds. I get out any accumulated leaves and broken branches by raking or blowing, then get ready to do the most important cleanup job, which is removing all the old mulch from the beds. If you don’t remove old mulch, it can build up over time and smother plants.

Removing the mulch is easier if you start by edging the beds. I use a tool called an edger, which has a half-moon-shaped metal blade and a wood or metal handle. Go along the edge of the bed and cut down 4 or 5 inches, kicking up all the dirt and roots into a pile in the bed. You can also use the edger to expand a bed to accommodate plants that have gotten too big for the existing bed.

Once the bed is edged, I use a steel rake to collect all the edgings and as much of the old mulch as I can from the bed. Rake everything up, then scoop it out with a square shovel and mulch fork, put it in a wheelbarrow, and dump it in your compost pile.

Be sure to clean out the beds around the bases of trees, too. Old mulch can cause rot in the trunk or prompt the tree to grow a secondary root system — which steals from the primary roots but dries out quickly.

Once the beds are cleaned out, it’s time for the lawn. I power thatch all my lawns in spring. There are manual thatchers available, or if you have a small lawn a brisk raking will do. But you can rent a power thatcher to make the job easier. Collect all the debris and put it in the compost heap.

Don’t put down any pre-emergent crabgrass control until you rake or thatch. If you put it down first, it will be rendered useless by the thatching.

Now you’re ready to mulch. Wait until you see what I have to say about that next month!

With home affordability at the highest rate seen in decades, now is prime time to make a purchase.

Many renters are wanting to turn over a new leaf by investing in a starter home. Current homeowners are wanting to take advantage of low prices and buy the home of their dreams.

The key to buying in today’s market is having the funds and financial stability needed. How can you go about saving to buy a home?

Financial wiz Suze Orman tells her readers and viewers all the time about the benefits of homeownership, but also the importance of being financially ready for this move. She writes, “Never buy a home or piece of real estate if you do not have at least 10% to 20% to put down. While buying a home is a great investment, if you do not have at least 10% to 20% of the purchase price to put down, then you can’t afford the home and are buying before you have demonstrated the ability to save, which is a bad idea in the current market.”

How do you get to that point? The first and most important step is to commit to the goal of homeownership. This requires a change in habits. Many households today spend every penny that they make each month. Instead of saving 10, 20, or 30 percent of their monthly income like they should, they strategically make minimum payments. Still others spend further beyond their means and slip further into debt with each purchase.

Both of these habits are incredibly risky in an economy that sees a near 9 percent unemployment rate and slowed growth in most cities. In order to change old habits you must replace them with new habits.

Start by working out a budget. It can be very sobering to see the real numbers on your spending. Keep track of your spending for a month. See how much you are truly spending on dining out, entertainment, household spending, clothes, and all those little extras that add up. This goes double for cash purchases. Be sure to keep every single receipt.

Now that you have the facts, it’s time to come up with a new budget. Set aside money for all of the necessities first (rent, mortgage, car payment, food, medical, etc).

Cut out the unnecessary items. Do you have to have cable? Perhaps you can change over to a smaller package that costs less each month. Do you need to go out to dinner multiple times a week? Instead choose to cook at home as a family.

Now that you’ve cut out the unnecessary and refocused your spending (or not spending) towards buying a home, it’s time to funnel those extra funds into a savings account. Some people new to the savings game find it easiest to set up an automatic savings transfer each month that transfers a set amount. This keeps you obligated to your goal.

You’ll have some wants that will be part of this budget. Some people like to dine out, shop for clothes, see movies, or go to concerts. This is fine if you can afford it, but in a real down and dirty savings game you might want to consider alternatives.

Rent movies instead of taking the whole family out for new releases. Play staycations in your own city instead of paying traveling and hotel costs. Finally, pack that daily lunch instead of dining out.

When you go shopping, including the grocery store, always go armed with a list. This will help reduce impulse shopping. Only buy items that are truly needed, not that simply catch your eye. Give bigger purchases some time and thought. Do you need that new TV? Wait a week or two and do comparison shopping and decide on what you really can afford.

Ultimately, learning to save is about learning to follow your own instincts. Our gut tells us when we’re making an impulsive buy or spending more than we should. It tells us when we could easily bring lunch from home instead of going out to eat. It just takes listening.

Published: April 11, 2012

We report on Fannie Mae’s QuarterlyNational Housing Survey every ninety days. Fannie Mae also does a monthly survey covering different aspects of the housing market.

Here are some record numbers we found interesting in Fannie Mae’s March report(emphasis added).

• Thirty-three percent of respondents expect home prices to increase over the next 12 months, the highest level over the past 12 months.
• The percentage of respondents who say it is a good time to buy rose to 73 percent,the highest level in over a year.
• Forty-eight percent of respondents think that home rental prices will go up, the highest number recorded to date.
• On average, respondents expect home rental prices to increase by 4.1 percent over the next 12 months, the highest number recorded to date.

Doug Duncan, chief economist of Fannie Mae, capped the report off by stating:

“Conditions are coming together to encourage people to want to buy homes. Americans’ rental price expectations for the next year continue to rise, reaching their record high level for our survey this month. With an increasing share of consumers expecting higher mortgage rates and home prices over the next 12 months, some may feel that renting is becoming more costly and that homeownership is a more compelling housing choice.”

If you’d like to use your smartphone to manage home maintenance and improvement projects — you guessed it, there’s an app for that.

HomeZada, a new online service and app, available on iPhone, Android and iPad platforms, helps homeowners track various home projects including maintenance, home improvement and home inventory.

“Do you remember when the furnace needs cleaning?” a spokesperson in a promotional video asks. “Are the gutters on the roof clogged?”

Ostensibly, HomeZada will help a homeowner plan, remember and get needed home maintenance jobs like those done. The app also helps homeowners keep track of cleaning, yard work and other projects. The app’s alerts notify users when a certain task must be performed.

There’s a function that allows homeowners to document all their possessions via photo.

This cloud-based home management tool is free in its “Essentials” version, which includes the inventory tool, property documents management, news and alerts, and access to the mobile versions of the app.

A premium version is available for $9.95 a month or $99 per year that adds tracking functionality for the home improvement project tool, including budget and shopping info; the paid version also offers the ability to integrate the app’s calendar with others and to coordinate email reminders.

HomeZada screenshot.

Despite the fact that key market indicators released in recent weeks have shown declines in home sales, anecdotal reports from real estate agents in the field suggest “better days are ahead for the industry,” according to commentary released Monday.

Even builders – who’ve endured possibly the steepest drop-off in business over this downturn – are optimistic heading into the spring, the economists note.

As a result, Wells’ economic team has nudged its forecast for home sales slightly higher, as the spring selling season appears to have gotten off to a strong start. They are now expecting sales of existing homes to top out at 4.50 million in 2012 and rise to 4.65 million in 2013. These annual projections compare to 4.26 million existing homes sold in 2011.

“While employment conditions have clearly improved and consumer confidence and spending have risen, we remain concerned about the lack of real after-tax income growth.

That said, the anecdotal evidence is hard to dismiss,” the economists write.

Most real estate agents are reporting “significant gains in buyer interest and sales,” and these gains are organic rather than incentive induced, according to the Wells Fargo economic team.

Unfortunately, they note that conservative appraisals and tight mortgage underwriting continue to undermine a large number of deals, however, they “suspect that the undertow from these two hindrances will subside over the course of this year, as the fog surrounding shadow inventories lightens up a bit and more lenders come back to the market.”

Unseasonably warm weather led to upticks in existing-home sales in December and January. Those gains were paid back with a 0.9 percent decline in February, but the economic group at Wells says the underlying trend remains positive and they expect to see further improvements as the spring homebuying season kicks off.

Distressed transactions still make up a considerable portion of overall sales activity and will continue to pressure prices through at least the first half of 2012, they note in the report. Real home prices are now back down to 1999 levels, as are price-to-rent ratios, according to the economists.

“We expect home prices to definitively bottom by the middle of this year, as the backlog of foreclosures finally begins [to] clear,” writes Wells Fargo’s economic team. “For properties not in foreclosure, prices have probably already bottomed, but should remain relatively low” given the competition from foreclosures.