The WPJ

Q & A with Dottie Herman

» Featured Columnists | By Dottie Herman | October 30, 2009 8:00 AM ET



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Dottie Herman

Q1 - My wife and I fell in love with a home in New Jersey. Next door is an abandoned house that is not visually attractive. We are very torn as we assume that would decrease our resale value should we decide to sell. We just don't know what to do.

A - I understand your worry.  You should consider the block as a whole, are there other attractive homes on the same street?  Also, it is worthwhile to explore the ownership situation in the abandoned home.  Is title still in the name of a person, or is it owned by a bank?  If you can find out who owns it, perhaps you can discover what their plans are with the house.  If you plan to live in this house for a long period of time, you increase the odds that the abandoned home will be renovated, which may ultimately help you.



Q2 - My husband and I just got word our offer was accepted. How should we pick our engineer to ensure we are going to avoid any problems if we move forward with this transaction?

A - Experience counts.  Find someone in your community with a solid reputation.  When you speak with an engineer ask him to provide you with references.  Speak with his past clients to ensure that the engineer is highly competent.  You may also want to ask your attorney or real estate professional if they have any engineer references for you.



Q3 - My wife and I are buying our first home. Many of the homes we have seen have a pool. We have young children and are unsure if we want a pool but have heard it decreases the value. Is that true?

A - While it is true that some buyers will not want a home with a pool, there is also a group of buyers who would love a pool in their backyard.  For your situation, I would recommend doing what works best for your family.  It sounds like you are unsure if you want a pool or not.  Your first order of business is to make the decision that is best for your family; the rest will take care of itself.



Q4 - My husband and I would like to buy a condo. My wife had some loans and her credit is not in the best shape. We have been contacted by some people to repair our credit; however, their fees are tremendous. Are there some steps we can take to fix our credit? Where do we start?

A - Unfortunately unless you work with a good credit repair person it becomes very difficult to understand exactly what you can do and how much time it will take to fix the problem. Here are a couple of pointers that could assist you with this.

  • Revolving debt: Credit cards should not contain balances over 30% of their credit limit. (The best is 10% or less). Any balances carrying over that are more then 30% will greatly impact your credit score.
  • Keeping all of your payments on time. Lateness's within a 12 month period for credit cards, car loans or leases and any installment debt will negatively impact your credit scores.
  • Closing credit cards with zero or low balances: If you have credit cards with "0" balances people feel they should close them. You should not do this as it is a major misconception.  It will negatively impact your score as reducing available credit is a negative.



Q5 - My parents are both retired and I think it is time I move them back to NY from Florida. They don't have a lot of money and people keep telling me to look into a reverse mortgage. What are some pros and cons?

A - Reverse mortgages are for people who own their homes with or without a mortgage. It will allow someone to take equity out of their home and they will receive a lump sum of monies or monthly installments. If they have a mortgage, the payments will go away and the interest on this loan gets added on to the backend when the home is sold. This in many cases will help someone who needs assistance to maintain a life style that they might be struggling to keep as their cash flow is low. Before anyone entertains a reverse mortgage, I suggest they meet with an estate and tax planning attorney or an elder law attorney.



If you have a real estate question for Dottie, please send it to; Dottie@RealEstateChannel.com.
 
NOTE: Due to high volume of questions, not everyone can be answered, but she'll do her best.



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