Trying to decide whether to buy a fixer-upper house in Palm Beach? Follow these seven steps, and you’ll know how much you can afford, how much to offer, and whether a fixer-upper house is right for you.

1. Decide what you can do yourself

TV remodeling shows make home improvement work look like a snap. In the real world, attempting a difficult remodeling job that you don’t know how to do will take longer than you think and can lead to less-than-professional results that won’t increase the value of your fixer-upper Palm Beach property.

• Do you really have the skills to do it? Some tasks, like stripping wallpaper and painting, are relatively easy. Others, like electrical work, can be dangerous when done by amateurs.
• Do you really have the time and desire to do it? Can you take time off work to renovate your fixer-upper house? If not, you will be stressed out by living in a work zone for months while you complete projects on the weekends?

2. Price the cost of repairs and remodeling before you make an offer

• Get your contractor into the house to do a walk-through, so he can give you a written cost estimate on the tasks he’s going to do.
• If you’re doing the work yourself, price the supplies.
• Either way, tack on 10% to 20% to cover unforeseen problems that often arise with a fixer-upper property.

3. Check permit costs

• Ask local officials if the work you’re going to do requires a permit and how much that permit costs. Doing work without a permit may save money, but it’ll cause problems when you resell your home.
• Decide if you want to get the permits yourself or have the contractor arrange for them. Getting permits can be time-consuming and frustrating. Inspectors may force you to do additional work, or change the way you want to do a project, before they give you the permit.
• Factor the time and aggravation of permits into your plans.

4. Double-check pricing on structural work

If your fixer-upper home needs major structural work, hire a structural engineer for $500 to $700 to inspect the home before you put in the offer so you can be confident you’ve uncovered and conservatively budgeted for the full extent of the problems.

Get written estimates for repairs before you commit to buying a home with structural issues.

Don’t purchase a home that needs major structural work unless:

• You’re getting it at a steep discount
• You’re sure you’ve uncovered the extent of the problem
• You know the problem can be fixed
• You have a binding written estimate for the repairs

5. Check the cost of financing

Be sure you have enough money for a down payment, closing costs, and repairs without draining your savings.

If you’re planning to fund the repairs with a home equity or home improvement loan:

• Get yourself pre-approved for both loans before you make an offer.
• Make the deal contingent on getting both the purchase money loan and the renovation money loan, so you’re not forced to close the sale when you have no loan to fix the house.
• Consider the Federal Housing Administration’s Section 203(k) program, which lets qualified purchasers wrap up to $35,000 into their mortgages to upgrade their home before they move in.

6. Calculate your fair purchase offer

Take the fair market value of the property (what it would be worth if it were in good condition and remodeled to current tastes) and subtract the upgrade and repair costs.

For example: Your target fixer-upper house has a 1960s kitchen, metallic wallpaper, shag carpet, and high levels of radon in the basement.

Your comparison house, in the same subdivision, sold last month for $200,000. That house had a newer kitchen, no wallpaper, was recently re-carpeted, and has a radon mitigation system in its basement.

The cost to model the kitchen, remove the wallpaper, carpet the house, and put in a radon mitigation system is $40,000. Your big for the house should be $160,000.

Ask your Palm Beach Realtor if it’s a good idea to share your cost estimates with the sellers, to prove your offer is fair.

7. Include inspection contingencies in your offer

Don’t rely on your friends or your contractor to eyeball your fixer-upper house. Hire professionals to do common inspections including:

• Home inspection. This is a key in a fixer-upper assessment. The home inspector will uncover hidden issues in need of replacement or repair. You may know you want to replace those 1970s kitchen cabinets, but the home inspector has a meter that will detect the water leak behind them.
• Mold, radon, lead-based paint
• Septic and well
• Pest

Most home inspection contingencies let you go back to the sellers and ask them to do the repairs, or give you cash at closing to pay for the repairs. The seller can also opt to simply back out of the deal, as can you, if the inspection turns up something you don’t want to deal with.

If that happens, this isn’t the right fixer-upper house for you. Go back to the top of this list and start again.

Adapted from Houselogic

How To Assess The Real Cost of A Fixer-Upper House is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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Elegant, old-world charm describes this enchanting three bedroom, two-and-a-half bath Mediterranean-style home with great back-service alley, garage, two-bath guest house and cabana.  Magical gardens with specimen palms and Juliet balconies surround the glorious pool and patio.  This thoughtfully detailed home features a Florida room with Pecky Cypress ceilings and seven sets of tortoise-shelled Palladian French doors.  The living room is graced by a lovely shell-mosaic fireplace and beautiful, original mantle.   Formal dining room has built-in display wall and lovely lighting.  Crown moldings and lovely, original floorings throughout.  Again, French doors lead to the garden, giving the house great “flow” for entertaining.  The gourmet chef’s kitchen has a cheery breakfast nook with bright bay window overlooking the pool and fountain.  One of a kind, this In-Town, walled retreat is within close walking distance to great schools and the Palm Beach Tennis and Recreation Center, restaurants, and Worth Avenue.  World-renowned seashell designer and artist has enjoyed the home for more than 30 years.

343 Seabreeze Avenue is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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Homeowners underwater on their mortgages could be getting relief through a government program designed to encourage principal write-downs for responsible borrowers, according to a Department of Housing and Urban Development news release issued Aug. 6.

In an effort to help responsible but struggling homeowners, HUD has detailed adjustments to its refinance program, which the agency hopes will enable lenders to provide additional refinancing options to homeowners who owe more than their home is worth.

Starting Sept. 7, the Federal Housing Administration will offer certain underwater non-FHA borrowers who are current on their existing mortgage and whose lenders agree to write off at least 10 percent of the unpaid principal balance of the first mortgage, the opportunity to qualify for a new FHA-insured mortgage, according to the HUD news release.

“We’re throwing a life line out to those families who are current on their mortgage and are experiencing financial hardships because property values in their community have declined,” FHA Commissioner David H. Stevens said in the HUD news release. “This is another tool to help overcome the negative equity problem facing many responsible homeowners who are looking to refinance into a safer, more secure mortgage product.”

The FHA Short Refinance option is one of several Obama administration initiatives introduced as part of an administration plan to help stabilize residential markets by helping 3 to 4 million struggling homeowners through the end of 2012.

To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth, be current on their existing mortgage, qualify for the new loan under standard FHA underwriting requirements, have a credit score equal to or greater than 500, and the property must be their primary residence. Also, the borrower’s existing first lien holder must agree to write off at least 10 percent of the borrower’s unpaid principal balance, bringing that borrower’s combined loan-to-value ratio to no greater than 115 percent.

Existing FHA-insured loans cannot be refinanced, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent.

To facilitate the refinancing of new FHA-insured loans under this program, the Treasury Department will provide incentives to existing second lien holders  who agree to provide principal write-downs. To be eligible for the program, servicers are required to execute a Servicer Participation Agreement with Fannie Mae on or before Oct. 3.

FHA Launches Refinance Opportunity for Underwater Homeowners is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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These fabulous In-Town properties also sold this summer (since May 2010):
430 Brazilian – a 2006 Benitz Construction Mediterranean sold for $3.975m.
346 Brazilian – a 2004 Paul Wittmann Mediterranean sold for $4.13m.
310 Dunbar – a charming Bermuda on a large lot sold for $1.9m.
65 Root Trail – a lovely 1977 home that was restored to perfection sold for $1.1m.

There have been 18 In-Town Palm Beach condos sold in this period, including 389 South Lake #1C – a lovely garden condominium in a full service building sold for $657,500. A unique “collector’s suite” at the historic Palm Beach Biltmore sold for $3.5m, and Unit 103 at L’Ermitage sold furnished for $4.2m.

There are 7 In-Town sales awaiting closing, and the Season is not quite here yet!

Today, another beautiful home is sold to a happy new owner, and your shot at that fabulous home is gone.  There are others available, and new listings pop up all the time. Contact us today so your dream home doesn’t pass you by!

Check out these Hot In-Town Palm Beach properties that are still available.

In-Town Sales Are Hot This Summer!!! is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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$150 million – Spelling Manor – Holmby, Hills, CA

$125 million – Fleur de Lys – Holmby Hills, CA

$100 million – Tranquility – Lake Tahoe, NV

$100 million – Versailles – Windermere, FL

$80 million – Kaiser Estate – Honolulu, HI

$75 million – Hummingbird Nest Ranch – Simi Valley, CA

$75 million – Porcupine Creek – Rancho Mirage, CA

$75 million – Gilbert Townhouse – New York, NY

$72 million – Le Belvedere – Bel Air, CA

$72 million – Madison Ave. Townhouse – New York, NY

At first glance at this list – Not a Palm Beach property among them, but digging deeper into the article, we uncover some information about the connection between Palm Beach and the most expensive homes ever sold. Five years ago, the list was started, with the highest priced home on the market at $75 million. The next year, Donald Trump’s Palm Beach oceanfront estate broke the $100 million ceiling at an asking price of $125 million. The home quickly sold after a price reduction to $100 million.

Of these ten properties, seven are still on the list since 2009. The homes on the list are all currently available for sale, but there are other homes that did not make the list because they are not currently listed with any particular real estate office. A French chateau on South Ocean Boulevard in Palm Beach will be available at a reported price of $84 million. This waterfront estate is just nearing completion, but was not ready in time for the 2010 list.

Call us if you would like more information about the waterfront French chateau, or any other Palm Beach properties.

Ultimate Homes – From the Editors of Unique Homes is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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When a mortgage loan foes into default, a foreclosure action will be commenced by your lender in the absence of a resolution. A foreclosure action begins when the lender files a lawsuit seeking the forced judicial sale of your property.  This process takes a number of months. Before the property is sold at a foreclosure sale, you have some options. However, once the lender receives a foreclosure judgment in its favor, the property is sold thirty days thereafter at a foreclosure sale under the supervision of the court.  The proceeds of the sale are then used to satisfy the lien holders in their order of priority. If the lender’s mortgage is not fully paid at the sale, then you may be liable for the deficiency balance.

One option to save the property is a “short sale” in which your lender agrees that you may sell the property for market value, even though it is less than the outstanding balance of the loan.  A short sale is merely a negotiated resolution between your lender and you in order to avoid foreclosure.  However, a short sale will only release the remaining deficiency balance if this is clearly indicated on the lender’s acceptance of the sale offer.

If you are selling investment property in a short sale, it is important to keep in mind that the IRS considers forgiven debt to be taxable income, which means if your lender forgives the deficiency balance, it may issue a Form 1099 to you in the amount of the deficiency.  If you are contemplating selling investment property in a short sale, then you should consult a tax attorney or CPA to discuss any tax consequences.

Another option is to try to persuade the lender to agree to a “deed in lieu of foreclosure.” In this process, you convey all interest in the property to your lender.  Any deficiency balance due is often forgiven. The lender usually requires you to have to have the property listed for sale for a certain period of time and meet other specified requirements.

A short sale or a deed in lieu has some advantages over foreclosure. Both will adversely affect your credit report, but the impact may be less than a foreclosure. While it’s possible to work out one of these solutions with your lender on your own, you may have better luck with the help of someone who specializes in the process and who can help you understand the remedies available to you.

A third option is a Bankruptcy proceeding to cure the past payments over a five year term or surrender the home and be discharged from all liability. Another benefit of the Bankruptcy is that it is usually easier to re-establish your credit after a bankruptcy than after a negotiated resolution.

~ Craig Kelley, Esq

Abstracted from Simply the Best Magazine, july/august 2010.

Foreclosure…. and ways to avoid it! is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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Who’s Who of Luxury Real Estate is a compendium of the finest real estate firms from around the world. Inclusion is by invitation only.  Our affiliation with Who’s Who allows us to bring to you the finest international estates – with over 65,000 for-sale multimillion-dollar mansions and properties from around the world.  Our site enables you to search and browse unique properties from across the globe, including California, Nevada, Florida, Hawaii, Mid-Atlantic, New England, North Atlantic, Pacific Northwest, Rocky Mountains, Southeast, Southwest, Africa, Asia, Australia & New Zealand, Canada, Caribbean, Central America, Europe, Mexico, Middle East, South America, Tuscany, Italy.

Our Global Reach is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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Barbara Corcoran is a real estate expert from New York City.  She is known for her real estate contributions to NBC’s TODAY Show, ABC’s Shark Tank, and is a national best-selling author.

Barbara Corcoran and her think tank have developed a website for fans to ask her questions, and to bring together some of the best minds in real estate.  She has featured homes listed on the site, as well as a list of her favorite brokers from around the country. We are honored to have been invited to join her exclusive network.

Please click here to learn more about Linda Olsson.

Linda R. Olsson, Inc., Realtor joins Barbara Corcoran’s List of Favorite Brokers is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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Use these quick and easy kitchen fixes to add interest and obtain top dollar for your property without breaking the bank.

Lighten Up. Older homes frequently suffer from low-light conditions, ugly light fixtures and power-hungry appliances. Replace unappealing tungsten bulbs with energy-efficient LED lights for an instant update that looks great and saves money. Invest in up-to-date appliances that improve performance and save money with energy efficient settings, antibacterial wash modes and enhanced water filtration.

Counter-offer. Replacing countertops and freshening cabinets can be a relatively low-cost way to update your kitchen. Many hardwood cabinets can be easily restored with a cost of paint or quick varnish. Combine this with a new countertop, you can achieve a totally refreshed appearance without the high price. Add some stylish knobs and pulls to complete the look.

Don’t Throw Money Down the Drain. Here’s a quick and easy do-it-yourself job that just about anyone can tackle. Replace that ugly, worn-out faucet with a shiny new fixture to instantly update a focal point of any kitchen. It takes very little time, ensures a sleek new look and eliminates drips and other common faucet problems.

Quick and Easy Fixes to Spruce Up Your Kitchen is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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Contact us if we can be of real estate assistance to you, your friends, or associates.  We look forward to hearing from you.

Palm Beach In-Town Condominium Quarterly Sales Market Report (Q2) is a post from: Linda R. Olsson Inc. Palm Beach Realtor

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