Reno-Time!

I will post what renovations I did (most everything), what prices I compared, and what stores, brands, companies had the best deals!

ForeCLOSURE

Once your offer has been accepted and you have gone through a home inspection to discover all of the problems with the home that need to be fixed you can CLOSE on the house and will no longer have to deal with the pesky lockbox on the front door!

Closing on a house is when you become the official owner. You will meet with your real estate agent, the seller, the seller's agent, and most likely an attorney. During this meeting you will sign the closing documents, receive the keys to the house (or be told just to take them from the lockbox) and hand over the big check or mortgage documents. Unless your accepted offer included closing costs you will have to have a certified check payable for all of the additional costs.

The additional costs that are typically included in "closing costs" are:

• Real Estate Sales Commission - this percentage of the purchase price of the home can be anywhere from 7% on down. If both parties, the buyer and seller, are represented by an agent, then the commission is divided between them. If only one party has an agent, the party without an agent will typically ask for a reduced payable commission so that the only agent in the deal doesn't get the entire 7%!
• REO Compliance Fee - some purchase contracts will include this fee, usually a few hundred dollars, because the sale price of the home is so low. This fee ensures that the listing real estate agent will make at least a certain fee on the sale.
• Taxes and utilities - if these items were prepaid for the year or period then you will owe to the seller a pro rata amount of taxes or utilities equal to the time that you now own the home for the rest of the year, or period. If taxes or utilities are owed on the home then the seller will credit the amount due up to the closing date to you so that when you pay this bill you are only paying the amount due from the date that you took ownership of the home.
• Additional Agent Fee - some real estate sales agents will charge an additional fee in addition to the commission they will receive
• Legal Document Preparation - fees for the purchase agreement, closing documents, and land transfer documents
• Land Record Recording Fees - fees that the county and state charge to record the transfer of ownership for the property

Also presented at the closing meeting should be the deed to the property signed by the seller and a certificate of title insurance. Title insurance can be agreed to be purchased by the seller or the buyer. It is important to have because it basically states that no one else has a claim of ownership to the property that you are buying and if someone ever does assert a claim to your property the insurance company will pay to defend your claim to the property as insured.

You should also check with the city of wherever you are buying your home to ensure that there are no liens on the property. A lien is a legal claim that entitles the lien holder to money from the sale of your property. Liens can prevent you from refinancing or obtaining any future mortgages or using your property as security for some other debt. Most liens come in the form of taxes or water bills that were never paid or a special assessment from the city. Special assessments occur when the city makes an improvement to the city's land that is for the benefit of the community and the cost is divided up so that each home owner pays a portion, an example of this would be new sidewalks. A lien can also appear in the form of a construction lien - this lien is placed on a house when a contractor performs work improving the home and is not paid. All of these expenses should be taken care of by the seller before passing the title of the property to you.

Once you leave the closing and hand over the check, the house is yours! Before you get started on all of the work that needs to be done check with your city. More and more cities are requiring buyers of foreclosed houses to register the house with the city. This includes paying a fee and providing information about yourself and your home, and having a city inspection before any work is done so that the city can keep track of the work you are doing to repair the house. Many different repairs and replacements require permits from the city. A permit usually costs around $50 for each renovation or repair. The permit document is required to be displayed in the front window of the home and when the work is complete the city will perform an inspection to check to see if the work was done correctly to meet the safety code.

Some cities, like St Clair Shores, MI, require a permit for almost everything - new cabinets, drywall, gutters, siding, windows, plumbing, electrical - everything except carpet and paint. Other cities like Dearborn and Ferndale actually send a city inspector out to estimate the cost to bring the house up to code standards and require you to deposit whatever that sum may be into an escrow account and draw money for the repairs from that account. You will not receive any left over money from the account until the inspector returns and gives you the approval that you have done everything correctly and made all necessary repairs.

If you do not comply with the foreclosed home rules or permit rules for your city you may be fined. Most cities have a city employee whose sole job is to drive around and look for people doing home renovation without a permit. They will also look for trash or brush around your house and issue violations. I once found a man from the city snooping around my backyard and was issued violations twice - once for having branches out at the road to be picked up (I had them out a few days too early) and the second time for not getting my gutters up quick enough! If the city snoop doesn't catch you, there is a chance your neighbors will report you so always be sure to make a great first impression on new neighbors!

I have to admit, one of the most stressful parts of my home renovation was worring I would get caught doing all my work without the required permits!