Rexburg Real Estate Blog

Understanding real estate terms like home appraisal and home inspection can get a little confusing at times. They are very different in their approach and what they are used for in real estate. We hope that if you need a Rexburg home appraisal in the future, this information will help you understand what it is.

What Is A Home Appraisal

Unlike a home inspection, which is usually ordered by a home buyer to protect against costly maintenance and defect mediation, a home appraisal is ordered by lenders. When a bank considers giving you a loan, they want to know the value of the property you are going to buy with their money. It is only natural that the bank would want to make sure that you aren't paying someone $200,000 for a property that only has a value of $100,000. Why? Because the loan is secured with the property as collateral, meaning if at some point you default on the loan, the bank can sell the property to recoup their money. The house is held as collateral against the loan.

What Is An Appraiser

Lenders need a way of coming up with a value for a property so they can determine how much money they will loan. Since most of the decision makers for lending are usually far from the properties they are lending money for, they need local people who are trained in real estate appraisal to go out and create an appraisal for them. In most cases today, lenders will contact an appraisal management company who will then send out an independent appraiser. Lenders used to contact the appraisers directly, but due to new laws, lenders are prohibited to contact appraisers directly in most cases. This is a much contested process, but for the time being, anybody that want to work with Fannie Mae or Freddie Mac lenders must play by the rules.

After the Appraisal

You can sit back and relax on this one. This is all in the hands of the lender you choose for your loan. They will order the appraisal, evaluate your financial strength, and then determine how much they are willing to loan you to purchase the property. If the appraisal comes in at or near the offer price of the house, most likely your deal is going to go through and you will be a happy home owner. On the other hand, sometimes the appraisal comes in lower than the offered price. In this case, the seller either needs to lower the price or you will need to come up with a larger down payment to make up the difference.

Doing a property valuation in southeast Idaho is one of the preliminary steps that any home seller should take prior to listing. These valuations can help you get an idea of what your property will sell for in the market. Understanding how instant property valuations are done on Idaho property is important, because the numbers you get are estimates. Idaho does not make creating estimates easy. Why? Because when a house is sold in Idaho, nobody is required to report the amount the house was sold for. In addition, many homes in Idaho have been in the same family for over 100 years, so there is not a lot of information on some properties.

Factors In Home Valuations

There are many factors that go into a home valuation. Most people know the basics. You need to know the square footage, how many bathrooms, how many bedrooms, and how many acres there are. In addition, some consideration has to be given to whether the home is in poor, fair, good, or excellent condition.

Other factors that influence the value of a home are assessed value, location, water rights, out buildings, stables, whether the home is in the city or county and so on. All of these "other factors" can sometimes have a big influence on price. For example, if you are trying to sell a 5,000 square foot home near a major highway with a potato processing facility less than 100 feet away, your home value is probably not going to be as high as the same house on rolling hills near the river. The point is that there are many factors that go into the true value of a property. We help people evaluate value.

Getting A Broad Estimate of Property Value

RexburgLiving.com utilizes a property valuation tool that takes many factors into account, but not all. Because there are many factors that are not quantifiable, we rely on the available data to give us a broad range and target price, but we ultimately depend on doing a true market comparison before setting a sell price.

Setting A Price

There are two philosophies on price setting. The first is to list a house for sale well beyond the comparative market value price and then progressively lower the price if home buyers do not respond with offers. The other method, which we believe is better for everyone involved is to do a very good market analysis and set the price at market. This does several things. First, it creates an environment where real estate agents and buyers want to come and see the property because it is priced right. Second, it attracts buyers early in the process, which means that there is a good possibility that, depending on the overall market, you may get several offers at once. Some of the offers may be above asking. We use both methods, but prefer to use the second.

Finally, setting the price right can have an effect on the long term prospect of selling in a timely manner. The longer a home sits on the market, the harder it becomes to sell. Doing it right the first time is important.

You are not alone if you are confused about the difference between a mortgage pre qualification letter and a loan pre approval letter. They appear to be similar, but are actually very different tools. Lets go over the basics.

Pre Qualification Letter

When you begin the process of looking for a house, it is important to start the process of getting a loan at the same time. Nothing can be more disappointing than spending hours looking for a new house, only to discover that your current financial status does not allow you to qualify for a loan that is equal to, or greater than the purchase price of your dream home. So the first step in the mortgage loan process is to get a pre qualification letter from a loan officer indicating what your estimated buying power is.

Gathering Financial Information

The loan officer will ask you for full names, addresses, phone numbers, emails, financial institutions you bank with, and other debt related information to create your borrower profile. Based on this information, you should be able to obtain a pre qualification letter indicating the estimated amount of money you can borrow toward a property.   Once the pre qualification letter is in hand, you can start looking for properties that are consistent with your buying power.

Narrowing Down the Choices and Getting a Pre Approval Letter

The time will come when you begin to narrow down what house for sale you would like to make an offer on. As the list gets short, you should work with your lender to create a Pre Approval letter. Unlike a pre qualification letter, which is just an estimate of what you may be able to afford, the pre approval letter is a document you can present to sellers when you make an offer. The pre approval letter gives the seller a greater degree of confidence that you can make good on your offer. It is still not a commitment from a lender to give you a mortgage, but it is close.

Loan Application

Once a seller has accepted an offer with its associated pre approval letter, your loan agent will wrap up any last minute details about your financial status and submit a loan application for underwriting. When the loan is approved, the transaction can go to title and be processed.

In summary, a pre qualification is mostly for you and is an estimate of what your buying power will probably be. A pre approval letter is for your sellers. It tells your seller that the lender has researched your financial situation and they feel confident they can loan you up to a specific amount. When an offer is accepted, a loan application is submitted and funding is committed, at which time the title company can move the transaction toward recording and disbursement of funds.

Why talk about curb appeal ideas or how to improve the curb appeal of your property? Because you never get a second chance to make a first impression with people or real estate. Once a home buyer sees your home they will have a picture in their mind that will stay with them. So, when you improve curb appeal of a home, condo, or other property, you are proactively setting the stage for greater success. Home buyers have incredible technology at their fingertips. Curb appeal is critical because most home buyers will view a home online and then drive-by. If you don’t have curb appeal, they will most likely lose interest and move on.

Power Wash Everything

Rent a machine from your local hardware store and power wash everything. Start with the outside of your house, you’ll be amazed at how dirty it is. Power washing your house will rid it of spiderwebs, bug casings and of course dirt. Then move on to the driveway and finish up with all the sidewalks. You may also need to kill the weeds creeping up in between the cracks. Clean is the key to improving curb appeal and selling your home for top dollar.

Add Some Pop!

Fun, bold colors create interest and drama. Paint your front door yellow, turquoise or red. Plant colorful flowers along the walkway or place potted flowers near the front door. Just a word of caution, fun, bold colors do not distract from weeds, untrimmed shrubs or overgrown planter boxes. So put on your garden gloves and head outside. Pulling a few weeds and trimming some shrubs is well worth the no cost investment of your time. Then add a splash of color that will welcome home buyers and give a great first impression.

Let The Sunshine In

Clean, shiny windows will not only enhance the curb appeal of your home but they can actually help you sell it. Clean windows on the outside invite the buyer to look inside. Despite what you may think, first impressions are crucial when selling a house. The buyer will form an opinion within the first few minutes, so it’s important that the outside draw the buyer inside. Clean windows on the inside make every room brighter and seem more spacious. It highlights details that may otherwise be overlooked. When you let the light shine in it creates a feeling of warmth in the home. If you have a lot of windows to clean and you “don’t do windows”, you can always take the easy way out and try Honestly Clean. They will leave your house sparkling clean!

Increase Curb Appeal By Cutting The Grass

Potential buyers have no desire to trudge through tall grass to look at your home. This is a house showing not an African safari, so cut your grass at least once a week while your house is on the market. This gives the home buyer the feeling that everything is clean, tidy and well maintained. If you don’t want to do the yard, call Lawn Buddies. We have worked with them in the past and they will make your yard look great.

A final comment. Curb appeal can directly effect the value of your home. Take the time to find out what your home is worth and then do all that you can to make it look appealing to home buyers.

In Rexburg and southeast Idaho, it goes without saying that you need to do everything you can to reduce home energy costs. Winter months are notorious for high energy consumption. Rexburg Idaho temperatures can dip down as low as -25 degrees, so saving energy can be a bit daunting. Here are a few simple things you can do around your house to prevent your energy bill from spiraling out of control.

Checklist To Reduce Home Energy Costs

• Change the filter on your heating unit. Clean filters improve air circulation which can dramatically reduce home energy costs related to heating.
• Keep the thermostat at 68 degrees or lower during the day. If its a bit chilly, just throw on a cozy sweater or hoodie. There is no need to heat the whole house when few people are home.
• Schedule routine system maintenance on your furnace, water heater, and other appliances to insure they are operating at maximum efficiency.
• Reduce your home energy costs at night by turning your thermostat down by 10 to 15 degrees for 8 hours. This one suggestion could save you up to 10 percent on your annual energy costs. You can throw an inexpensive IKEA comforter on each bed and everyone will be toasty warm.
• Wash all clothes in cold water and only do laundry when you have a full load. Also, make sure that you are doing laundry during evening and weekend hours when electric rates are often much lower.
• Keep the cold out by hanging curtains in your windows. Curtains reduce home energy costs by reducing cold drafts which may cause your heating system to come on more often. If you don’t want to use curtains, consider taping heavy duty plastic on the inside of your windows to get the same effect.
• In the daylight hours, open the south facing window curtains and let the sun shine in. The sun is free heat for your home and allows your furnace to work less during the day. But don’t forget to close the curtains when the sun goes down.
• A major way to reduce home energy costs is make sure that all of your doors, windows, vents and other parts of your home have been properly caulked, sealed, and insulated from the outside and from leaks. A one inch gap in the insulation on a doorway can create a steady stream of cold air coming into the house. It’s worth it to be detailed on this one.
• Keep heating registers clear. Remove rugs, baskets, furniture, and other items from heating registers to maximize heating efficiency.
• Unplug appliances and electronics when not in use. Using a power strip can make this as easy as flipping off one switch. You can also install motion sensor light switches in rooms that tend to have the lights left on.

How Do You Reduce Home Energy Costs

There are a lot of ways to reduce home energy costs that we haven’t mentioned here. We want to know how you reduce your energy costs. If you have something you have been doing that has reduced your home energy costs, please share it with us below. In the mean time, you may want to read our Saving Money at Home tips too.

If you’re looking into Rexburg home loan options, you need to understand the different kinds of income verification required, which vary, depending on whether you are self-employed, receive a W2 from an employer, or a combination of both. The mortgage underwriter is required to create a 24 month average income for you, to calculate what you will be able to repay. In general, a debt to income ratio of 43% is the most allowed.

Here is quick rundown of forms to provide, depending on your employment status.

• W2:This is the form an employer issues stating an employee’s gross income
• 1040: This is the personal federal income tax return.

Someone applying for a self-employed home loan will also have to provide some of the following:

• 1120 for a corporation
• 1120S for an S corporation
• 1065 for a partnership
• K1: this form shows business expenses and income that are passed on to you through the business. It also shows your ownership share, which is very important when considering a home loan in Rexburg.

Employment Matters When Securing a Home Loan in Rexburg

The reason your share in the business matters so much is that those who own a share of 25% or more will apply for a self-employed home loan, while those who own 24% or less will not be counted as self-employed. People researching Rexburg home loan options should keep this in mind if they are employed in a business in which they also have a share of ownership.

The other aspect of income verification to keep in mind is income stability. If you’re considering home loans in Rexburg while considering starting a new company, you should be aware that a two year income history is necessary to secure a home loan. This means you either have to have at least two years continuous employment, or your business license must be at least two years old. Typically your options are to either buy your home before you start your business, or to be on the safe side, wait until your business is at least two years old and stable before going house hunting.

Saving money at home can be fun and easy. Years ago I learned how to make my own laundry soap. The recipe is easy and requires only 3 ingredients. Easy peezy lemon squeezy, as my kids would say. I can make a years supply, (family of 4) for $25.26 . That’s is roughly $2.10 a month. Pretty incredible for the amount of laundry I do. I just times the following recipe by 10 and in about 30 minutes I’m done for a whole year.

Saving Money At Home With Home Made Laundry Soap

These items can usually be found in the laundry section of your local grocery store. You can also order them online.

• 1 bar Fels Naptha soap-grated (I use my kitchen aid attachment)
• 1 cup Borax
• 1 cup Washing soda

Directions

Mix the grated soap, Borax and Washing Soda, then store in an air tight bucket or old plastic container (clean, large ice cream container works great.) Use 1 tablespoon per load of laundry. You may need a little extra if the clothes are heavily soiled.

Just a note: I do not use this soap on whites as I find it makes them dingy.

Saving Money At Home With Vinegar

I use vinegar and water to clean mirrors and windows. This solution costs pennies to make and it does a great job. Seriously, after trying this you’ll never spend money on window cleaner again. Measure equal parts water and white distilled vinegar in a spray bottle, shake well. Spray onto windows or mirrors and simply wipe off. It’s best if you wipe it with a lint free or microfiber cloth. For dirty jobs, I clean the surface first with a small amount of soapy water, dry it, then use the vinegar and water mixture.

Double UP Meals To Save Money At Home

I double or triple the recipe every time I make a meal. We eat a portion of it for dinner then I freeze the rest in containers or Ziploc bags for another day. Its so easy and doesn’t require any more time. It’s the perfect solution for those days when I feel tired or we’re trying to get to an activity. Instead of fast food or ordering pizza, which can add up fast, I just pull out a freezer meal and heat it up. It saves time and money, and as an added bonus its much healthier! What could be better than that?

These are Rexburg facts. Rexburg Idaho is a beautiful city nestled between several mountain ranges. It is the gateway to the Grand Tetons and Yellowstone National Park. It’s the home of BYU Idaho, a private University devoted to academic excellence in a religious environment. And of course we can’t forget Big Judd’s, where the farmer down the road delivers potatoes to the restaurant, which are then cut, fried and served to the customer. These are things you may already know, but here are 3 Rexburg facts you may not know.

Rexburg Facts #1: It Is Totally Safe

Did you know that Rexburg is safe, ranked as the second safest city in Idaho? Ranking was based on FBI data collected from cities with 5,000 or more residence. The data included auto theft, violent crimes, rape, burglary etc.. Statistics revealed that Rexburg has some of the lowest incidences of crime in the state and all categories were well below the national average .

Rexburg Facts #2: Rexburg Sits On Top Of A Volcano!

Rexburg and BYU Idaho sit atop a shield volcano! Its true. Thousands of years ago magma flowed continuously from an active shield volcano. This continuous flow of magma over an extremely long period of time resulted in a gradual build up of an enormous edifice shaped like a warriors shield lying on the ground. Today that edifice is the enchanting city Rexburg Idaho. Shield volcanoes are created by magma coming out of the earth and spreading across the ground over time. An example can be seen in this video of the Pahoa volcano in Hawaii.

Rexburg Facts #3: There Is A Reason We Grow GREAT Potatoes

Did you know that Rexburg is perfect for growing potatoes? The dry dessert like climate, clean water and cool summers create the ideal environment to grow big, tasty potatoes. Potatoes need warm, not hot, days. If the temperature gets above 80 degrees the plant shuts down. Potatoes need cool nights. When nights are cool the sugar from the leaves travels down into the potato. The soil in Rexburg is enriched with volcanic ash. This makes the soil light and airy and also provides a supply of trace minerals. These conditions are ideal for growing the world’s best potatoes.

When you buy a home in Rexburg you get all of the seasons with it, including winter. Anybody that has lived through a Rexburg winter knows that it is not for the faint of heart. Temperatures can get down into the negative teens and with the wind blowing the wind chill factor can easily be -20 to -30 below. All that cold comes with snow. Lots of snow. Buying a property with easy snow removal is one thing anybody looking in Southeast Idaho should consider. The problem is most people don’t buy a home in the winter in Southeast Idaho. They usually buy in the spring or summer. Not understanding what the winters can be like can lead to buying property that can keep you busy all winter long shoveling, snow blowing, and plowing snow.

Landscaping Effects Snow Removal

One major consideration for buying a house in a place where it snows half the year is landscaping. Landscaping should be done in a way that allows you to freely blow snow without the risk of rocks snapping the shear pins on a snowblower. Look for walkways and driveways with boarders on them. Do they have dirt, wood chips, or rocks as a covering? If they have large wood chips or rocks, you better be prepared to change your shear pins often or change the ground cover to something less threatening to machines. This type of landscaping can get in the auger and really cause problems. This type of ground cover can also break plastic snow shovels and bend metal shovels. If you have a lot of ground to cover, look for homes with landscaping that has grass borders along driveways and anywhere snow needs to be cleared.

How Many Feet Need To Be Cleared

Idaho has a really diverse range of property sizes. In downtown Rexburg or Rigby, you will find homes with driveways that may only be a single car wide and maybe two cars deep. Other homes may be on one or two acres with the home being set back on the property that needs a long driveway and walkways. As you look at property these characteristics matter. Homes that are closer to the street usually have less driveway to clear of snow and a smaller opening for the snowplows to seal off with their sometimes massive wall of snow that they plow across the front of your property. Walkways from the street or across the front of the property all add footage to your snow removal work. The less you have, or the less that is vital for use in the winter, the less work you have to do each time it snows and you have a property with easy snow removal.

A Property With Easy Snow Removal Doesn’t Include Salt

One way to make life easier when removing snow from a home is to use ice melting salt. It really does work. Basically salt lowers the freezing temperature of water. When the water cannot freeze, the cold dry air quickly cause the water to evaporate, leaving your walkways clear of ice when the temperatures get really cold. But there is a downside to using salt. Living things do not like salt in great quantities. Salting your walkways and driveway in the winter may lead to dead shrubs, trees, and grass in the spring when the snow melts and the salt is deposited in the ground. There are many companies selling ice melting solutions, some that even say friendly to “nature”. But don’t take their word for it. Nature doesn’t necessarily include your shrubs, flowers, and grass. All of this is important when you are looking for a house to buy because not being able to use salt directly equals more work for you.