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Ask the Patch Pro: Answering Real Estate Questions

Our panel of experts are waiting in the comments to answer all your questions about real estate in the latest installment of Ask the Patch Pro.

It's time for another edition of . Every week we'll tackle a different topic and open up the comments section for questions. Our team of experts will then stop in to help you out and answer your questions. 

This week we're going to take a look at real estate. Whether you're thinking about buying or selling the process isn't easy. There's so much unknown in the world of real estate that many people have many questions. What are we looking for? People who know about real estate. Where's the best place to buy? When is the best time to sell? Should I put in that pool? 

We at Patch don't have the answers to those (and your) questions, but not to worry. We've compiled a crack team of experts to help us out. Meet the experts: 

  • Kyle D. Weaver: USA Mortgage
  • Pierce Conley: P J Conley Real Estate L.L.C.
  • Rich Loughridge: Trademark Real Estate, Inc.

Got a question? Ask below!

Joe Barker August 01, 2012 at 02:12 PM
I'll start things off. What's the one question as first-time home buyer should always ask when thinking of buying a house?
Kalen Ponche August 01, 2012 at 04:12 PM
In St. Charles, I've noticed a pretty big price difference between an historic home that's been upgraded and an historic home that's still got wallpaper and an older kitchen or bath -- sometimes as much as $100,000 difference. I'm wondering whether you'll save more money in the end buying the un-updated house and having it upgraded, or just buying one that's ready to go.
Lorri Conkin August 01, 2012 at 06:06 PM
According to comps in my Lincoln Co. neighborhood I'm about 20K underwater. I have been trying to wait this crisis out, but I really want to sell my house and move to another county. What are the options in this situation?
Rich Loughridge August 01, 2012 at 06:47 PM
Kalen, Several variables would factor into a specific answer to this question, but let me try to answer in a general way: In most cases you can end up with a better purchase when you dig in and earn some "sweat equity". I would identify that as items like painting, minor repairs/improvements, as well as removing that 100 year old wall paper. Having said that, renovating a home, especially historic homes, can often leave an amateur overwhelmed and having bitten off more than they can chew. Generally a home listed with a Realtor is priced according to local marketing trends and will stand up in comparison to it's competition. If you are comparing two homes with a price difference of as much as $100,000, my gut tells me there is more going on at the lower priced home than minor repairs. In all cases, I would advise the use of a Realtor, and getting a throrough inspection of the home through an ASHI certified building inspector. Thanks, Rich Loughridge Broker/Owner Trademark Real Estate, Inc. 636.541.3978
Rich Loughridge August 01, 2012 at 06:51 PM
Lori, If your financial situation allows, one option for you may be property managment. Either of your own efforts, or in conjunction with a professional, you can rent your home out to a qualified candidate until the market comes back for your current home. In essence, that qualified candidate will be making a rent payment monthly and contributing to you paying down your current mortgage. Since a typical lease is 12 months, you can re-visit your comps on a yearly basis and analyze your ability to sell the home. Before you went down that road, it would be a good idea to consult with Realtor who can help you understand the true current market value of your home and what you stand to "net" on the sale of your property when considering all expenses. Thanks, Rich Loughridge Broker/Owner Trademark Real Estate, Inc. 636.541.3978
Rich Loughridge August 01, 2012 at 06:57 PM
Joe, A first time buyer should be asking SEVERAL questions - many just as important as the next. Some questions in no particular order of importance: How much home can I comfortably afford? (not max approval) What are my buying motivations? (stop paying rent, new school district for kids, downsizing an empty nest) How much high interest debt do I have, and is it a good idea to make a home purchase before eliminating that? Do I see myself living in this area 2+ years from now? (If not, a home purchase may not be the best idea) Have I discussed my purchasing goals with a credible lender and Realtor? These are just a few important questions to ask yourself. Thanks, Rich Loughridge Broker/Owner Trademark Real Estate, Inc. 636.541.3978
Kalen Ponche August 01, 2012 at 07:00 PM
Thanks Rich. I have been looking at houses in StC downtown area for about a year and found a cool brick 4 bedroom house with a finished basement and carport for about 175,000 but it did need a lot of work- every room had wallpaper, bad carpet, etc. Then I spotted a similar style, brick house, no garage or carport but totally updated and listed for 275,000. My instinct would be to buy the cheaper one, but man... that's a ton of work to do! Anyway, thanks for sharing your thoughts.
Joe Barker August 01, 2012 at 07:01 PM
Thanks for that detailed response ... and reminding me how unprepared I am. Good advice!
Rich Loughridge August 01, 2012 at 07:15 PM
You're quite welcome. I'm pretty well-versed in dealing with the options of fix-up vs buying finished. If you'd ever like to discuss your options in detail please feel free to call at any time. Best of luck. Thanks, Rich Loughridge Broker/Owner Trademark Real Estate, Inc. 636.541.3978
Sara Beth August 01, 2012 at 08:10 PM
As Rich said, I'd guess it's more than wallpaper and carpet between those 2 brick houses (and 275k may be overpriced!). I love my 1929 bungalow, and *really* took my time finding it - got a couple minor roof leaks fixed and new hvac, but it still needs electric work upstairs, which I knew when purchasing and it can wait. I've seen a LOT of things when house-hunting in old homes. During my first home-buying experience (50s ranch, also 63301), one listed with a Realtor actually had obvious electrical issues not on the disclosure sheet! Many things were wrong with the house but it was priced about right for that (maybe) and in a good location. After much pondering, I decided not to deal with that much "sweat equity" and settled for a sightly smaller one a few blocks away that required hiring a roofer (price adjustment before closing), but otherwise, the work was all me and my parents -painted every wall and ceiling and even bathroom vanity, pulled up carpet everywhere -hardwood was good enough without refinishing. And we got 'easy' new things: treatments on 6 windows, switchplates and doorknobs in all rooms, flooring and cabinet hardware in kitchen. Amazing what that cosmetic stuff can do!
Kyle Weaver August 07, 2012 at 05:21 AM
Doing the rehab of a historic home can be an amazing transformation. There are high end decorative painters and key restorative techniques to really bring out the originality of the home and spice it up with a contemporary balance. A large spread of $100k would almost certainly be an increase in rooms or sq footage. The lower priced home may have some structural issues that would cost thousands to reconstruct but maybe not visible to the naked eye. A structural engineer can evaluate the "stability" of the home foundation. An Appraiser determines the "value." The Inspector goes through the home with a fine tooth comb and reports to the Buyer the potential and existing problems. You should always start small when getting the "rehab bug." Buy a nice little bungalow and fix it up, rent it out using Section 8 or try and flip it. Make $7-$10k and get your confidence up. If you have a spouse or partner, it is crucial you are on the same page otherwise rentals and rehabs can be marriage busters! I guess the easy answer is if you can do the un-updated house the right way...you will always win. Otherwise you are paying someone else's profit. Kyle D. Weaver, www.kylehaslowrates.com USA Mortgage 636-399-1692 NMLS 235637 210 Triad West, O'Fallon, MO 63366
Kyle Weaver August 07, 2012 at 05:41 AM
The one question would be.....AM I READY? Realtors love to sell houses and Lenders love to loan $$...granted after a thorough evaluation of income, debts, assets, job and credit history....But in the end, you are the one licking that stamp to send the house payment off to the great big mortgage company in the sky... I love it when a potential Buyer says they want to buy in 6 months...That is the exact right time to be sitting in front of me!! (Your Lender). Being proactive prepares you mentally. It's like practice for the real game. The Cardinals get to the ballpark 4 and 5 hours before the game starts. You should too. By the time the first pitch comes, you want to be READY! But how do the players look just getting out of bed, straggling into the ballpark? You don't want to go from the bed to the closing table. You want to learn, absorb, then learn more. Buying a home is a game of preparation, like a marriage. It takes time to delve into all of the myriad of unique situations. People have job changes, salary + overtime, salary + commission, different pay grades, complicated personal credit history and the stuff you're not so proud of!! Good news...none of us are perfect and even the perfect one...never bought a home! Are you Ready? Not for me to say...But I would love to serve you... Kyle D. Weaver, 636-399-1692 Licensed Mortgage Loan Officer USA Mortgage, www.kylehaslowrates.com NMLS 235637 MLO: 1639
Kyle Weaver August 07, 2012 at 05:52 AM
As Rich said, you could rent out the current residence. However, in order to use this income for qualifying to buy another home you will need a 2yr history of being a landlord. You cannot short sale without detrimentally affecting your credit. You would need to wait for 2-3 years from a short sale before you buy. You could look into refinancing under the government's HARP program. The value of the home is not an issue but other "qualifiers" apply. We could lower your payment for you potentially and alleviate some of the burden of being "underwater." You could also look into a 15yr term and that would reduce your principal quicker. At Your Service, Kyle D. Weaver, 636-399-1692 Licensed Mortgage Loan Officer USA Mortgage NMLS 235637 MLO 1639 MO

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