Iowa City Real Estate Blog: December 2009

Another icy cold day in Coralville and Iowa City again today. Always looking for new ideas to keep my heating bills down I stumbled over a good one at the weekend at Build it Solar.

I'm sure you all know that a large amount of your heat is likely to escape through the windows. Of course if you've upgraded your windows recently to take advantage of the Government's tax credit promoting energy efficiency you may be in pretty good shape.  If you're like me though and have that on your "to do" list.

Anyway, to use a common saying around here. It is what it is... It's icy cold, I haven't updated the windows in the home I moved into in May 2009 and the windows are leaking like a sieve.  Now you've all heard about lining your windows with plastic film, right? A pretty cheap solution that requires a small time investment and works well. Freezing as I was this weekend and too tight to turn up the heat I found an even cheaper solution that takes almost no time to install and it works too... I have two words for you bubble wrap. Yes, plain old bubble wrap will do the trick.

Now of course I'm sure you're wondering how you attach it to the window. Easy, you spray the window with water, attach the bubble wrap (bubbles towards the window pane) and presto you're done. Told you it was easy, didn't I?


As you can imagine, this is not the prettiest solution in the world, so you may not want to use it in "high profile" areas. It's great for bedrooms, bathrooms and kitchens though. Also, perfectionist as I am, I'm thinking weather stripping is probably necessary around the frame to make the whole endeavor truly worthwhile. Guess who's off to Lowe's later to put that plan into action?

North Liberty is one of the fastest growing towns in Iowa and yet at the moment home buyers can still qualify for a USDA Rural Development Loan when they buy a home there. This is something I like to tell people every opportunity I get. Right now with banks looking so hard at credit conventional loans are tougher to get and the USDA Rural Development Loan has become even more lucrative than ever. Where else will you get 100% financing on a home loan AND a low interest rate AND no PMI (Private Mortgage Insurance?)

Below are some FAQ's put together by a very knowledgeable loan officer in the area, Jessica Greving, VP at Residential Mortgage Network in Coralville. She definitely knows her way around specialty loan programs like the USDA Rural Development Loans, FHA and VA Loans.

What are the basic eligibility requirements for a USDA Rural Development Loan?

Homes financed through the USDA Rural Development Loan must be in a rural area.  That would include North Liberty, Solon, Tiffin, Oxford, Williamsburg, Amana and other communities with less than 20,000 residents. The buyer should make less than the RD income guideline (example: 1-4 person family in Johnson County should make less than $87,400 and a 5 or more person family should make less than $115,350. If a buyer pays childcare they can reduce their income by the childcare amount. Visit USDA Rural Development Website for a detailed itemization of income qualification.

How long will it take to process and close a RD loan with RMN, Inc.?

Since RMN, Inc. has the authority to approve the RD loans and is familiar with the process, it is just as quick as any other financing. If you do request something faster than the average approval time, please contact Jessica directly to determine appraisal time frame.

What is the difference between a Guaranteed loan and a Direct loan?

The Guaranteed loan is offered through a participating lender like Residential Mortgage Network, Inc. There are no prepayment penalties, no recapture tax and income is not checked periodically after closing.

A Direct loan is offered directly through the local USDA office (most counties in this area are served by the USDA office in Tipton) and is designed to help very low income borrowers. Borrowers receive a subsidized interest rate and their income is checked every 2 years.

Do I need a pest inspection?

Yes, a pest inspection is required on all RD transactions unless it is a 2nd floor or higher condominium purchase. It can be paid by buyer or seller.

What issues are there with appraisals?

The appraiser is required to note the following: Chipped/peeling paint on the exterior of the home if built prior to 1978, less than 2 years remaining life on the roof, positive draining around the exterior foundation of the home (especially if the basement appears moist), waste pipe relief valve on the water heater to be extended to within 8" of the floor. These are the most common occurrences.

Is the interest rate higher?

No, RMN does not charge a higher interest rate. Though rates from one program to the next can vary a bit from day to day, the RD rate is generally in line with the FHA, VA and conventional rates. Additionally, there is not a charge for credit scores down to 620.


Are there higher fees?

The standard closing costs are approximately $1200. USDA charges a 2% fee that is added to the buyer's loan. A buyer purchasing a home for $100,000 will borrow $102,040. The program does not charge monthly PMI.

Are condominiums eligible for the RD loan program?

Yes! There is still 30-year fixed condominium financing available! If you have already identified the property you'd like to buy, your agent should contact your lender for an approved condominium list.


Getting pre-approved is the first order of business when you buy a home and talking to a few different lenders about the different options is a good idea. Make sure you get a good faith estimate (GFE) while you're there too. You want to know exactly how much the loan will cost you before making a decision. Choosing a home loan is one of those times when the devil is in the details...

Need some help navigating your way through the home buying process? Give me a call or drop me an email. I'm here to help!

Recipe For Rich Chocolate Fudge - A Classic Holiday Treat

I included this recipe in my December Newsletter and after hearing back from an appreciative reader on just how easy it is to make decided to share it here today.

Prep Time: 20 Minutes

Ingredients:
3 cups semi-sweet chocolate chips
1 14oz can SWEETENED condensed milk - (NOT evaporated)
Dash salt
1 cup chopped walnuts
1 1/2 teaspoon vanilla extract

Preparation:
Over low heat, melt chocolate, sweetened milk and salt. Remove from heat, stir in walnuts and vanilla.

Pour into an 8 or 9 inch foil-lined square pan, cool for about 2 hours. Turn onto a cutting board, peel off the foil and cut into little squares.


Holiday Tip: Maybe you're out of ideas on a gift for someone. Make them some of this fudge and put it in a pretty tin - quick, cheap and highly appreciated for sure...

Safety in the home. How often do you think about it? My guess is probably not that often, it's one of those things that just gets taken for granted. It was the same for me until about a month ago when I had a fire in my home. Now I'm somewhat sensitive on the subject and am likely to be writing more frequent posts on this subject that until recently I took for granted.

Let me just give you a little background info on my fire. It was an electrical fire that started in the attic. Finding out exactly how it started was a real eye-opener - Very CSI like I have to admit. After several hours of examining the scene the fire investigator established that a wire that led to an overhead light had in all likelihood been the source of the fire. (And believe me the nick in the wire was so tiny it was barely visible without special glasses!) Was there any way I could have known I had a problem with that wire? If the light switch had been grounded it's possible that it would have tripped when I switched the light on and off. It wasn't grounded, so of course I had no idea and it was just an accident waiting to happen.

It happened and a month later I'm writing a post on signs you should watch out for to avoid an electrical fire or electrical shock in your home.

If you notice any of these danger signs in your home be sure to call a qualified electrician to check them out:

• Recurring problems with blowing fuses or tripping circuit breakers
• Tingling sensation in the fingers when you touch an electrical outlet
• Discolored wall outlets
• Sizzling sound at wall switches or outlets
• Lights that flicker
• Unusual odors coming from appliances (I'm not talking about new appliances, they often have an unusual odor during the first few times of use)

For more safety tips in the home visit www.midamericanenergy.com

Don't miss out on the $5000 grant for eligible Veteran homebuyers.

The information below comes directly from Jessica Greving, loan officer and VP of Residential Mortgage Network, Inc. in Coralville. RMN specializes in VA Loans, FHA Loans and USDA Rural Development Loans. These are all specialty home loans that are not offered by too many banks in the area. Jessica is very familiar with the nuances of these specialty home loans and definitely someone you should visit with if you're thinking of buying a home in Iowa City, Coralville or any of the surrounding areas in Johnson County and need a home loan.

Getting pre-approved is the first order of business when you buy a home and talking to a few different lenders about the different options is a good idea. Make sure you get a good faith estimate (GFE) while you're there too. You want to know exactly how much the loan will cost you before making a decision. Choosing a home loan is one of those times when the devil is in the details!

Now to that info on the $5000 grant for Veteran homebuyers:

The money can be used towards closing costs, prepaids and/or down payment.

The program is available to service members who at the time of applying for a grant under the program:

- Have served 90 days active duty since September 1, 2001.
- Is a federal status injured service person having served in active duty since September 11, 2001 OR
- Is a surviving spouse of said eligible service person, all who have served honorably.

The eligible Veteran must use a participating Iowa Finance Authority lender.

The Veteran is allowed to combine the grant with a VA loan at 100% financing and no PMI (regular market interest rate).


Too many Veterans are missing the opportunity for this $5000 grant. Let's see if we can get the word out. For more info on home loans and financing options for your new home, Jessica will be happy to answer your questions @ 319-330-1502.

For more info about buying a home in the Iowa City area, I'm here to answer all your questions @ 319-400-0268.

Sunny Skies and Freezing cold in Iowa today. Ten years in Iowa and I still have trouble figuring out how cold it is based on the temperature. -3° Fahrenheit gets a quizzical look from me. -19° Celsius on the other hand, man that's cold! Our first storm of the season left us with a very pretty snow scene. This is in front of my house in Coralville.

Couldn't resist posting a pic of my cat, Tigger too. Looking especially cute as they do when they're asleep.This is in our hotel room, in case you're wondering about the sparse decor. Just a couple more days and we can move back into our home again. (Just in case you're confused with the different locations of these photos, I drive home every day and check in with the guys working on my house and of course to pick up my mail).

We're in the middle of our first winter storm of the season. This photo was taken about an hour ago in front of my house in Coralville. In the meantime it's started snowing again. It seems the chaos is not going to end just yet. Everything has come to a complete standstill - Even Coral Ridge Mall has closed. (A rare occurrence indeed!) The winds are very high and we have a blizzard warning until midnight. More details at kwwl.com

Not my son's favorite job, but he's a good lad...

I have seen 2 posts recently sharing Mike Parker's (negative) view on social media. Here's a link to an article of his on the BrokerAgentSocial network. (Note the irony of posting this article on a social networking site - Hmm??)

Let's check out whether he is qualified to state his opinions as facts on the subject of social media: First of all, Mike Parker is the Principal for Compass Internet Systems, an SEO Company that charges mega bucks to optimize agents websites and get them on the first page of Google. Part of Compasses pitch is to assure you that you will get leads from your optimized website. I'd suggest he has zero interest in you getting your leads for FREE on twitter or Facebook - Reason enough to slam the "competition" I'd say...

Okay, so now lets look at the attack itself: Does Mr Parker know what he's talking about? Probably not. As far as I can tell he has no actual proof that social media doesn't work, he's just stating an opinion. Has he tried using either Facebook or twitter for business purposes? I think not. I'd say what he's basically doing is telling us that the Chinese restaurant down the street sucks, although he's never actually been to that restaurant... A reliable source? Again, I think not!

Let me just say that SEO, (search engine optimization) and social media are BOTH important when it comes to creating a strong online presence. I believe we need to embrace the different technologies and platforms to achieve our goals.

What I think is the strength of social media is that we have an opportunity to show our authentic selves. People can "get to know us" before they call or email. You need to "get" social media to know what I'm talking about here. If you do get it you'll know that twitter and Facebook offer the perfect opportunity to "connect" with the buying and selling public in a way that was not possible before these platforms came to be.

Having said that, SEO has not become redundant through the arrival of social media. We still need to optimize our websites and our blogs. They work in tandem with one another. Anyone who can't see that is short sighted and missing out on the huge opportunities the different technologies and platforms give us.

Now in case you're wondering, I have no first hand proof that social media works yet. I have been an ActiveRain member for just over 4 months. A couple of weeks later I started a Facebook Fan Page and became active on twitter. AR is a great community where you learn A LOT. Through professionals I have come to trust on this network I know that blogging and social media is a marathon not a sprint. Just like any other form of marketing, this will take time too.

And by the way, getting back to Mr Parker at Compass. That's what they told me too. SEO is not an overnight sensation, it takes time to optimize a website, that's why they only do annual subscriptions (!) One year later I was $3500 lighter and NOT on the front page of Google... I think I'll take my chances with social media.... It's not a sinkhole, or a magic bullet - And it may be time consuming, but it is FREE.

Peggy Chirico wrote one of the posts I mention in the first paragraph. It's a members only post, which is why I haven't linked to it directly.

Last week FICO released information on just how much your credit score is affected by negative activity.

Times are tough when it comes to getting a home loan and the banks are looking ever more closely at home buyers credit scores. Maybe that's the reason why FICO has had a change of heart in its policy of keeping its points system under wraps.  Whatever the reason, they are now sharing some information with us on how many points you are likely to lose for common credit mistakes. It's not that they're sharing all their secrets, but as you can see from the table below they do cover the most common credit mistakes like late payments, debt settlement and foreclosure.




The interesting thing about this table is that it seems folks with good credit get penalized more when they mess up than those who have average credit. Go figure!



I think it's a good thing that FICO has released this information.  I think it will help home buyers to better assess their situation and maybe take away some of the "angst" they have from talking to a lender.  I know I have often talked to people who imagine the worse when they have credit problems. This table will help them in that it takes away the shrouds of secrecy and gives a good idea of what will actually happen.

While I'm talking about credit, you can get a free credit report once a year at annualcreditreport.com. If you're thinking of buying a home in the spring, now might be a good time to do that. That way you if you do find something unexpected you can work on it before you get down to the business of getting yourself pre-approved for a home loan.

Iowa City Police Department's interactive map shows the crime rate in Iowa City neighborhoods 

What's the neighborhood like? Folks relocating to Iowa City ask me that all the time. This week I came across an article with info about a really cool interactive map that I think will be helpful to you if you're in the process of relocating to Iowa City and looking for information on crime stats in the area. I'm pretty sure if you live here in Iowa City already you'll find it interesting too, especially if you're thinking of moving anytime soon. I love collecting data, so it impressed the socks off me!

The map can be found on the Iowa City website and merges the Iowa City Police Department's Daily Activity Log and the Community Policing Map into a really helpful online tool that gives information on how many calls were made and the neighborhoods they were made from. Keep in mind, these calls are not always crime related, so you will need to click on the map to read the activity log carefully to properly assess a neighborhood.

Iowa City Police Department's Webpage. With a strong focus on community policing you will find our Police Department to be very helpful and can reach them with questions at 319.356.5275.