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How To Evaluate A Home You Want To Buy For Potential Problems

By Ron McCarthy – A Dubuque Realtor at American Realty

Purchasing a home is a huge investment and a major decision. You want a home that fits your budget and meets the needs of you and your family. You also want to do your best to make sure there aren’t issues with the home that will result in expenses later.

In addition to being a Realtor for five years, I’ve been involved in the construction industry much longer. I owned a roofing company and also worked in the state of Iowa in the soil conservation department.

When visiting a home these are issues to look for

Touring Open Houses

Over the years I’ve learned to know what to look for when showing a client a home. From the moment I pull into a drive I’m taking in everything – from the roof to the siding and even the homes curb appeal.

Your Realtor will often provide suggestions as you go through a home, but if you’re out going through open houses on a weekend you might be on your own.

When touring a home, you’re not just looking for potential issues, but also trying to get an idea of what homes are like in the price range you’ve set.

The greater the budget, the more you should expect from a home. If your budget is limited, then you can expect some flaws. You just must decide which flaws you can live with.

Here are some suggestions on what to look for when touring a home.

First Impressions

Start paying attention to features of the home from the moment you open the front door. Does it open freely and do the locks open smoothly?Doing a home inspection in Dubuque

Look at the flooring, whether its carpet, wood, or vinyl, it doesn’t matter. Does it show a lot of wear, meaning it might have to be replaced soon?

Are there cracks in the drywall? Do all the windows and doors open freely? If not, it could be a sign of the house settling, something we’ll talk about more later.

Are the windows original or vinyl replacements? A 20-year-old home with original windows will soon need to have them replaced.

In the kitchen look at the conditions of the appliances.  Look at the condition of the counter and cabinets especially. Are they old junk cabinets that just got painted over to put a new face on them or are they quality cabinets?

In each room check the lights. Look at all the receptacles. Are they grounded, meaning they have three holes?

Remember that your home will be inspected before you close, so all of these will be examined by a professional. Yet, it doesn’t hurt knowing in advance of any potential problems, either small or large.

The Living Space

One of the things you have to evaluate on your own is if the home has enough space for your family.

You can put your family in any room, but the seller can only list a room as a bedroom if it has a window that meets the requirement of a conforming window. Its 42 inches off the floor 19 inches tall and 24 inches wide minimum. This is so a fireman can get through with an air tank on. It also must have a closet.

You might consider turning a room such as a den into a bedroom even if it doesn’t meet the requirements. You have that option as a homeowner, but its not something I’d recommend, for safety concerns.

Still you can look at a home and see if it has the potential for another room to be added or for the requirements to be met.

The Basement and the Garage

Going down into the lower levels look at the mechanicals. Look at the electrical box. Is it old fuses, or does it use breakers?

Is there a radon system in place? It’s not required, but it would be beneficial.

Does it smell damp and musty which might indicate water issues? Even though the disclosure might say there is occasional water you can tell by looking at the edges of the walls and the smell to know how serious it really is.

Garages are what you expect. Does the door seal properly when it closes? Does it clatter a lot when the door operates?

There should be a steel fire door between the garage and the house. That is part of the building code. That doesn’t mean you can’t buy a house that doesn’t have one. An inspector will call it out. It’s his recommendation that you fix it, but you can still buy it.

The House Is Settling

In walking in the upstairs rooms, you might have found them to be uneven. Or that doors are hard to close. These could be signs that the house is settling.

You can confirm this by looking around the basement at the posts. Are they metal posts or old wooden ones?  You might even see a mixture of each. This tells you there has been some settling and that someone did some work to jack it up to try to straighten it up.

If it’s an old house you can expect some settling. You don’t need to be scared away, but at least be aware of it.

Driveways are the most obvious signs of settling.

During construction, the whole basement is excavated out. Plus 3 or 4 feet on the outside of the walls to set forms and waterproof walls. Unfortunately, that seldom gets backfilled properly. The dirt often just gets pushed back in the trench and it will settle for several years.

When they pour the driveway, it will start to settle away from the garage. That has nothing to do with the quality of the house. It just makes for a nasty bump when you try to pull into the garage.

This can be fixed by getting the concrete pumped up, it’s actually raised. Or it can be removed and replaced.

The settling that is more serious is foundation settling and interior posts settling. There is no minimum or maximum, it’s just basically when it becomes an issue and things aren’t fitting good, then something must be done to get it back to its original state.

The Exterior

The lawn is the lawn and not something you need to give a lot of importance to. The lawn could be great, but if you neglect it after moving in it won’t matter. Likewise, if the lawn isn’t in the best of shape, you can rectify this in a year or two.  So, don’t put a lot of importance on the quality of your lawn.

It’s more important to determine the property line. Is that shed on the back corner of the lot completely on the property line or is it on part of your neighbor’s property? If it is, you need to make sure everyone is aware of that. If there’s not an easement you may need to obtain one.

Easements are recorded documents that stay with the property and normally will avoid lawsuits. It’s something to get resolved before closing.

This is especially a problem out in the county, where property lines can sometimes have a tendency to change, due to stream changing and other things.

Trees are another thing to be aware of. Look for ash trees on the property. There is a special form that sellers must fill out on which they report if their property has ash trees. Yet, most homeowners mark this as unknown as they don’t know what types of trees are actually on their property.

Iowa State University reports that the emerald ash bore will kill all the ash trees so if you have one on your property it will have to come down at some point and that will be an expense down the road.

Read Over the Disclosure

When going through an open house, look for the disclosure statement that the Realtor should have sitting out. Read the disclosure carefully and if you have questions, make sure the Realtor really knows the house and answers your questions.

In looking at the disclosure form, wherever there is an unknown checked, read it carefully.

The seller is asked to answer yes or no to a question, or unknown if they’re not sure. This can be a red flag especially if they’ve lived in the home for a while, such as five or more years.

If they check unknown, it indicates they haven’t done any maintenance on it. For example, if they don’t know the age of the furnace and they’ve been there long, then they haven’t replaced it. And you might soon have to.

If they do reveal issues, it’s not necessarily a bad thing. It shows they’re aware of their maintenance and taking care of things. They don’t just let things go. If something needs to be replaced they’ve taken care of it.

Rely on Your Home Inspector

When I go through a home I have a lot of experience in what to look for. But I’m not a home inspector. A home inspector will check all the receptacles, the plumbing. Are there handrails where they’re supposed to be?

I’m looking at just the overview of the home to get an idea of the general integrity of the home. Don’t get caught up in looking at all the small things as the inspector will do that. Read carefully the report the inspector provides when the inspection is completed. Your Realtor will help you determine what is reasonable to ask to be fixed or replaced.

You should rely on the professionalism of a Realtor to walk you through the home buying process all the way through closing. Feel free to contact me or any of the experienced Realtors at American Realty to get the help you need to find the home you want and can peacefully live in.

Ron McCarthy

Ron McCarthy is a Realtor with American Realty of Dubuque. He can help with the buying or selling of homes, commercial property as well as agricultural and recreational listings. To read his bio click here.

Your Abstract – What Is It and How Important Is It For a Home Sale


When buying or selling a home in the state of Iowa, there is a lot of paperwork involved for both the seller and the buyer. It might be confusing when you hear all that needs to be done and what paperwork you’ll need, particularly if you’re a seller.

Among the words you’ll hear is abstract. It’s not something you might be familiar with, but you should. Especially if you’re the seller.

So what is an abstract anyway!!  An abstract is a history of the title of a property.  In essence every property (in the state of Iowa) should have an abstract. All things of a legal nature that affect a particular property will be documented in the abstract – not at the time the event occurs but before a property is resold.

Abstracts are typically identified by a properties legal description. If a properties legal description is

A home abstract is often a rolled up document

Example of a home abstract

“Lot 1, of Lot 2, of Nottingham Estates” you should see that written on the front of the abstract jacket.

Abstracts are written on legal size paper and are usually rolled up and rubber banded together. They can sometimes consist of over 100 pages. The first entry in an abstract is usually a description of the property and the second entry is usually (but not always) the transfer of the property from the United States to an individual. Most of these entries were made in the mid 1800’s

So what kinds of entries would you expect to find in an abstract? As we said above, anything of a legal nature that affects a property. An example would be when one person transfers (usually by sale but not always) their interest in a property to another. So when one person sells a property to another an entry will be recorded in the abstract for that property identifying that transaction. Or maybe when one person dies and their interest in their property is transferred (inherited) by another an entry will be noted in the abstract.

Other entries you may see in an abstract might be when a property owner borrows money on their property and gives their bank a mortgage, or when someone files a lien against the property for some reason.

An example of what a Dubuque home abstract looks like

Home Abstract Sample Page

So here is how it works. You bought a property 10 years ago. You plan to sell and move up. Before you close the sale of your existing property you will need to have the abstract “updated” to show all of those “legal” things that might have happened over the last 10 years you owned the property. For instance maybe you mortgaged your property a couple times or maybe there were some liens filed against your property you were unaware of.

So the abstractor updates the abstract and delivers it to the buyers attorney so he/she and :”read” the abstract and render an opinion as to the quality of the title. The examining attorney will point out defects to the title – unpaid taxes, liens, mortgages, etc.

In many cases when an abstract is updated the seller (owner) is very surprised to find out that there are defects to the property title that they were not aware of. Regardless, the defects pointed out in the attorney’s opinion will need to be dealt with. This can be a confusing and frustrating process – and sometimes expensive. Buyers can but rarely do accept title defects.

  1. If’ you’re thinking of selling your home, make an effort now to locate your abstract. If you have to have a new abstract made it will on average cost, you between $400.00 to $600.00. Where might you find it? Try you lock box if you have one or call your lender & or the attorney who read your abstract when you purchased your home. If that does not work for you ask your Realtor to check – there are some abstract holding companies who might just have yours.
  2. When you get the buyers attorneys opinion, if there are defects that need to be cleared up, ask your Realtor to look the opinion over to see if there is anything they can do to help clear them up. No need to pay your attorney to do that if your Broker can.
  3. Do not be alarmed by defects that show up on the opinion. In me 48 years in business I have never seen a transaction that could not close due to title defects.
  4. Since Iowa is the only abstract state left in the country, and the person buying your house is using an out of state lender, don’t be surprised when that lender requires title insurance and appears to be somewhat confused when you start talking abstract to them.
  5. If need be rely on your attorneys advice in the event you have to ask them for assistance.

You won’t be able to transfer title to your property to the buyer until all title defects have been cleared up. This is a task that 99.9% of sellers will be unable to accomplish themselves. Rely on the people you hire to represent you in your real estate transaction.

If you’re thinking of selling your home, an abstract is one of many things a Realtor can help you with. They can suggest who to contact if you can’t find your abstract or who to get in touch to get it updated.

At American Realty our Realtors are very familiar with abstracts and how to ensure your information is correct. We work with home sellers in Dubuque, Cascade, Dyersville, Peosta, Asbury and other communities in the surrounding area.  Call us today to begin the home selling process.


Getting Ready to Move? Tips on Making the Moving Process That Much Easier

If your planning to sell your home, it can be both an exciting and a stressful time. There can be a number of reasons for selling: you need something bigger, you need something smaller, or maybe you moving to a new location. Whatever the reason, there will be a lot to do.

In previous articles we’ve talked about what to do to get your home ready to sell. In this one we talk about you need to do to get ready to move.

Getting ready to move and what to do

Moving Day

Some of these suggestions are specific for people moving out of a home they’re selling, but many apply even if you are just moving to an apartment.

What To Start Early In The Process

Even if you don’t plan on moving for a few months, there are some things you should do as soon as you’ve decided it’s in your future.

Contact Realtors

Even if you aren’t sure you’re going to be selling, you might consider contacting a few Realtors. Get a feel for how they will be to work with and how knowledgeable they are on the current market. They can advise you if it’s a good time to be selling and give you advice on the process.

Once you decide that you’re moving, then commit to a Realtor. This way they can offer suggestions on what to do to make the home more saleable. They might point out things that you could be doing before the for-sale sign goes up. Rely on their experience to help you make the moving process easier.


You’ll need to provide your Realtor or Mortgage company with paper work when it’s time to close. Make sure you have access to everything. You might have been living in the home for a while and lost track of the abstract. Make sure you have this or begin the process to get a new one made by an abstract office. A new one can take time and you don’t want to delay proceedings

Start Boxing Items Up Early

It can never be too early to start boxing up items. This will be the most time-consuming process so if you can get a jump on it right away it will make things easier. Start with the attic or the basement on things you might not have used in a while. Box and label these items so that when the day draws nearer you can just focus on the everyday items you’ll still be using.

Start collecting boxes so that when you are ready to box everything up, you have what you need. And have plenty of packing tape and paper to wrap up valuables. You want enough not just for now, but towards the end when you’ll start packing up your dishes and knick knacks.

Think About Getting Rid of Old Items

If many of the items you’ve tucked away have no real use anymore, then have a garage sale or donate items to a local charity. Any items that are broken or have no value to anyone, bag up and haul to the curb. If there is a lot to haul away, see if your city has a special pickup like Dubuque does. Or load up a vehicle and haul it to the local landfill.

Anything you can get rid of is one less item to box or haul away later.

Know How You’ll Be Moving Your Belongings

Are you hiring professional movers or doing it yourself using a rental truck? In either case you want to begin researching costs and availability. This is especially true if you’re moving at a popular time, such as the summer. Once you’ve settled on a company, try to give them a date as soon as you can. You might find they don’t have movers available that day or the truck rental company is fully booked. Then you’ll have to go with your second or third choice.

In the Last Couple of Weeks Leading Up to the Move

Take Care of Your Mail

Whether you’re moving into the new home right away or a temporary location, you want your mail forwarded.  Contact your post office and they’ll get you the proper forms or Google U.S. Post Office and check on U.S. address change.

Cancel or Change Service Providers Such as Cable, Satellite, Utilities

Contact your gas company, electrical office, and water and trash pickup to either have it cancelled or transferred to your new location. The same with things like wi-fi and cable or satellite providers. With many of these you can do it early in the process as long as you know your moving out date. Don’t forget the newspapers, as well.

Finish Boxing

Some items like your dishes and silverware may have to wait until almost the day to move. These are also items you’ll need right away. So mark them clearly and make sure they aren’t buried under other boxes when you unload. And try to keep similar items together. Small items like the remote for your TV are hard to find in your living room. Group them with other essential items in a box you want to open soon after your move.

Clean Out The Refrigerator

Try to empty out the freezer as soon as you can, so you have time to defrost and clean. In the refrigerator look at dates on food products. If they’re out of date, then toss them. If you’re traveling a long distance to your new location, make sure you have plenty of ice to keep your food items safe.

On the Eve of the Move

If you’re doing the move yourself, then start getting items close to the door. You’ll be doing a lot of lifting and carrying on the day of the move, so make things easier for yourself in advance. Having as many items cleared out of the attic or basement in advance will mean fewer trips on the day of the move.

Moving out of your home, particularly if you’ve been living there a long time can be a lot of work. Not just getting all your belongings in order, but also getting your home ready for selling. If you live in Dubuque or surrounding communities such as Dyersville, Cascade,  and Peosta and looking to move, then contact American Realty. We can make the selling process much easier for you, so you’ll have plenty of time to pack. Contact us today.

First Time Home Buying In Eastern Iowa – What Buyers Need to Know

There are few milestones that are bigger in a person’s life, then buying their first home.  It’s a decision that impacts not just their lives, but also their families. Making the wrong decision isn’t like buying the wrong item at Target that you can take back in 30 days. It’s something you’ll have to live with for years, if not decades.

This is why it’s so crucial for first time home buyers to understand the process and to understand what choices they’ll have to make.

In Eastern Iowa you have one advantage over first time home buyers in many markets. You have a lot of good opportunities whether you’re looking in Peosta, Dubuque, Asbury, Dyersville or any of the surrounding communities. There are excellent school systems in the area and not a lot of crime.

First time home loans in Dubuque

First time home buyers

Also, you have more advantage because you’re in Iowa, then in many other states. Owning a home is cheaper than renting in Iowa. So, the time to buy is now.

There are, however, things you have to consider and here are some of the more important ones you’ll face.

Improve Your Credit Rating

If you’ve been thinking about getting a home for a while, then hopefully you’ve been working on improving your credit score from the beginning.  This means paying off as many credit cards as you can and making all your payments on time.  Remember the better credit rating you have the better your loan opportunities are.  It doesn’t mean if you have a lower score you’re not eligible. Many people think that they need a credit score of 780 to get a loan. Yet, a recent survey showed that over half of all recent borrowers had scores between 600 and 749.

Robin McEnany, Loan Officer, Collins Community Credit Union, advises people to check their score.

Robin McEnany, Collins Community Credit Union

“An excellent way to monitor your credit is by downloading two apps. Credit Karma will give you access to the credit report and credit scores of Transunion and Equifax. The Experian app will give you access to the third credit bureau. “

“Remember though these are consumer scores and they often report differently from lending scores. Still they give you an idea of what your credit score is and what you can do to improve it.”

Setting Aside Money for a Down Payment

It is a myth that you need 10-20% down payment in order to purchase a home. This is good to know since you may be working on paying off some of your debt. No money to low down payment options are available to homebuyers. “First time and even repeat homebuyers have many options to choose from,” said Robin McEnany, Loan Officer Collins Community Credit Union. “It is essential to speak with a loan officer who will listen to your home buying goals and lay out mortgage programs for you to choose from. Don’t hesitate to get a second opinion. Buying a home is the biggest investment you will ever make. ”

First Time Home Loans

One advantage for first time homebuyers is that there are some excellent programs available for you.  Not only do they offer you favorable rates, down payment assistance but also require you to put little money down when you find your first home.

Get Pre-Approved For a Home Loan

Before you even start looking to get a home, you might want to reach out to some of the local mortgage lenders. This will allow you to know exactly what you can afford and in what price range you can search for a home. They can also answer any questions you might have about the lending options. Having a preapproval will make your offer more appealing when your Realtor presents your purchase contract to a seller.

Decide What You Can Really Afford

Once you know your budget range, sit down and really decide what you are willing to pay each month. Remember the mortgage is just one of the monthly costs you’ll be paying. Maybe you can afford the top of the price range, but you really want to be comfortable with what you’ll pay each month. Figure out what all the expenses are going to be and then add that to your monthly mortgage payment. Is that a number you’re comfortable with? If so, then begin looking for home in that range. If not, lower your price range.

Don’t Forget Closings Costs and Prepaid

One of the issues you should discuss with your lender is your closing costs and prepaid items. Closing costs can vary from lender to lender so it is important to shop around. Prepaid items include homeowner’s insurance and property taxes.  Closing cost and prepaid items can be negotiated in the purchase agreement.  Your Realtor can help you negotiate that possibility.

Shop Around For Homeowners Insurance

Another expense will be homeowner’s insurance. This can vary dramatically between agencies so get a few estimates. This might be something you have to wait on until you have your offer accepted, but you can start asking around before then. Again, there are many excellent insurance agents in the area who can help.

Meet With a Realtor

Now that you know your budget, it’s time to begin the home buying process. This means getting a Realtor. You might think you can do it on your own, but even experienced home buyers can be overwhelmed with all that is involved in home buying.  A Realtor can also let you know immediately when a house that meets your requirements comes on the market.  More importantly, they can help you with the negotiations that will take place.

Ask a Lot of Questions

Once you have a Realtor, feel free to rely on their experience and ask questions throughout the process. Not just about the home buying process, but also the communities you’re looking at. If you’re new to Eastern Iowa, then have them take you on a tour of the area.

Deciding on the Home Features You Want

One of the questions the Realtor will be asking is what features you want in a home. It could be a specific type of home style or a set number of bedrooms and baths. Have a wish list, but know you might have to make compromises along the way. Especially if you want one thing and your spouse or partner wants something different.

Plan For the Future

Whether you already have a family or are planning on one for the future, you want to make sure the home meets your needs in the future.  You don’t want to move in and in a few years, find yourself cramped. Have something you can live with for a while.

Don’t Rush Your Decision

You have been waiting a long time to buy your first home, but don’t rush into deciding on a home to bid on. Take some time to go to open houses or to tour homes with your Realtor. Get a feel for the market. Only after you carefully weighed the decision should you talk to your Realtor about putting in a bid.

Don’t Procrastinate With Buying the Home You Want

Not rushing into buying a home is one thing, but if you do find the home you love, then talk to your Realtor about putting in a bid.  Depending on the market you might want to get something in as quick as possible. Your dream home could also be someone’s else’s dream and by the time you bid their offers been accepted.

Be Prepared For Disappointment

It would be nice if you could find the home of your dream, that you can afford it, and that your first bid is accepted. This isn’t always the case, unfortunately. The seller may come back with a counter offer. Or worse, another buyer might have provided a better offer. It can be disappointing to lose out on a home, but it’s just a setback. It’s not the end of the world. Start the process all over again. You’ll find a home that you’ll love, but it can take time and there can be miscues along the way.

Having a Bid Accepted Is Only the Start

One would think the time to celebrate is when your bid is accepted. Yet, its only the start of the final chapter. There are inspections to be done and these could reveal issues with the home you weren’t made aware of.  These could be small things that can be resolved before the closing, but it could be more serious. Or there could be issues that come up with the seller. Most likely, you won’t run into problems, but be aware that there could be some.

Read The Inspection Reports

As mentioned you’ll be required to get an inspection of the property. Your inspector will prepare a report that you should read, even if it comes back mostly positive. You might want to talk to them when they are completed and actually go over it while touring the home. Don’t be afraid to ask questions. Any issues you find in the home you need to have worked out before closing. When all is said and done, you’ll finally be moving into your home. Things have changed and now the money your paying each month isn’t simply going to a landlord. You’re building up equity in your home. And you’re free to decorate it as you please. It’s an exciting time.

If you’re looking into buying your first home in Eastern Iowa, then contact American Realty. We have offices throughout the area and agents experienced with each market. Meet with one of them to go over what you’re looking for a home and they’ll help you reach your goal.

Additional Resources



10 Questions To Ask Your Mortgage Company Before Buying A Home

Purchasing a home is one of the biggest decision a person can make. It’s not just that they’re picking a home they will love, but they’ll also be taking on a lot of debt. People will spend hours and hours looking at different homes before deciding on which one they ultimately make an offer on. Yet, when it comes to getting the mortgage for the home, they’ll go online fill out a form and then spend some time on the phone talking to an agent about what they can afford.

If you’re planning to purchase a home, you want to put as much thought and research into the mortgage you’re going to get for your home. That company that you found online might be quoting some nice numbers, but their could be fees included you’re not aware of. Or their could be better

home mortagage advice for Dubuque home buyers

Getting a Mortgage in Dubuque

options because of your credit history and financial situation.

There are a number of excellent mortgage lenders in the Dubuque area. They’ll be glad to sit down with you to review your finances and go over your options for a mortgage. In fact, going in you might want to have questions in mind to ask them. To truly know what all your costs will be and what you can do to get the best possible deal. Even if you’re satisfied with the first one you meet, you want to talk to at least 2 or 3 lenders to compare what they’re offering.

Buying a home often means taking on a lot of new debt. So put the time and effort into researching the mortgage as you do on the features of the home you want to buy. Here are 10 potential questions you might want to ask your mortgage agent when you decide on who your lender should be.

How much can I afford to spend on a home? This is the big questions for most people as then they’ll know the price range they can look for homes in. One of the first things you should do is to get preapproved for a home mortgage even before you begin looking for a home. This way you’ll know the price range you can afford when looking.

What types of mortgage should I choose? Mortgages are available with either fixed rates or adjustable rates. There are advantages to each and your potential lender can go over these and help you decide.

What interest rate will I pay? Interest rates fluctuate. You want to know what the current interest rate is and how that impacts your costs.

Can I lock in the current interest rate? If the current rates are excellent, you might want to lock them in, in case they increase while you’re still house hunting. Your lender can tell you whether this is possible.

What is the minimum down payment I can make? If you’re putting down less than 20% then you’re likely going to have to take out PMI insurance. This is an insurance you’ll pay until you reach that 80% equity threshold.

How does my credit rating impact my costs? Your credit ranking will have a definite impact on your loan, particularly if you’re having to pay PMI insurance. This is why you should do what you can to improve your score before even beginning the house hunt. Hitting certain thresholds could help lower your costs.

What are points, and do I have to pay them? A point is 1% of your mortgage. There are two types of points you might pay, origination points and discount points. One of these might benefit you, while the other could result in additional costs. Your lender will go over both and how they impact your specific loan.

What documents will I need to provide you? You’ll likely have to show proof of income and your assets to your lender. This may include bank statements, tax returns, W-2 forms and recent pay stubs. They may also require additional information about loans and other costs you have.

What other costs will I have to pay at closing? There are fees associated with purchasing a home and your lender and Realtor will be glad to go over these. You don’t want to be surprised at some fees you weren’t aware of as you get ready to close on a home.

How long will it take before my mortgage is finalized? Even if your pre-approved before you start looking for a home (which you should consider doing), the actual loan process can take time. Your potential lender can give you an idea of how long this might take and if it will delay you getting into the home of your dream.

If you’re ready to start searching for home and don’t know where to begin, contact one of the experienced Realtors at American Realty. We can give you the names of a number of local lenders who will be glad to answer any questions you might have and help you get the loan that best works for you. Then you can begin working with your American Realty Realtor to find the home of your dreams.

Call us at Call us today at (563) 556-4577 if you’re looking to buy a home in the Dubuque area or contact agents at our Dyersville (563-875-9455) or Cascade (563-852-7653) office if you’re looking in those communities.

Why the Fall and Winter is Still a Good Time To Buy A Home

Why Buyers In Eastern Iowa Might Want To House Hunt in the Fall or Winter

Most people think of fall and winter as bad times to buy a home. Many prefer to move in the spring and summer when the temperatures are warmer. It can also be an easier time to relocate children who are in school. Yet, despite this, the fall, and even the winter, might in fact be the best time for you to look for a house.

Here are some reasons you might want to look for a home in the fall and winter in Eastern Iowa, even if it means putting up with the cold and even a little snow, while you house hunt.Buying a home in the fall or winter in Iowa might be a good idea.

Waiting To Buy Continues to Cost You Money

If you currently live in an apartment than each month you’re paying a landlord money is another month you’re not seeing any return on your investment. Waiting six months, might seem a short wait, but that’s a lot of money that you could have been put toward a mortgage.

Home interest rates are still low

Home interest rates are still low, but there is no telling when they might go back up.  They very well could be low in a few months, but there is no guarantee. Again, it might be a savings to you to buy a home sooner rather than later.

Fewer Buyers To Compete With

Since many people don’t like to house hunt in the cold, then it means there is less competition for many homes in your price range.  In Dubuque and surrounding communities, houses at certain price range often sell very quickly in the summer. Meaning you must make a decision quick or risk losing out on a property. And even then you might find yourself in a bidding war with someone. In the fall and winter houses can sell slower, meaning you can dictate your price more.

You Don’t Have To Settle

Since homes are often sold faster in the summer you might be tempted to bid on a home that doesn’t quite meet all of your requirements. In the fall, however, with the lower competition, you might be able to hold off making an offer until you’ve looked at a few others. And if your plan is to wait until its warmer you can at least keep an eye on what’s on the market. You might find the home of your dreams has suddenly appeared on the market and might be gone by the spring.

People Might Be Motivated To Sell Quicker

One of the main benefits of looking for a home in the off season is that you have a chance to get a better deal on a property. As mentioned, there are fewer buyers, which means less competition to buy a home.  At the same time, homeowners might be even more motivated to sell.

Some of the homes on the market might have been listed for a while. As a result, the homeowner might have dropped the price on their property a few times already. They just want to get the process over and move onto their next home.

If the home is a new listing, the homeowner might be motivated by time.  They could be moving out of the area and need to sell their home quickly in order to relocate. They might have preferred to wait to sell, but because of circumstances, can’t. So they list their home at a lower price they might have, if they’d had more time.

Finally, they might be motivated by the tax benefits of selling their home before December 31. They’ll see the tax benefits a lot sooner if they close before that date.

Whatever their motivation to sell they might also be willing to move out quicker. You might be able to take possession a lot sooner because of this.

Tax Advantages

Just as the buyer will benefit from selling their home by the end of the year for the taxes, so too will you.  Property taxes and any mortgage payments you make before the end of the year will help to lower your tax bill.

End of year furniture sales.

This may seem like a small thing, but if you’re a first-time home buyer than every little bit of savings can help. According to Consumer Reports, December is the best month to find deals on major appliances. If you’re moving from an apartment you might need a few appliances, even if the home comes with things like refrigerators and microwaves.

If you’re looking for a home, whether it’s in the fall, the winter, the spring or summer, then contact American Realty. Our agents will help you to find your ideal home, all the much sooner. Contact us today and one of our agents will be glad to assist you in the process.

Understanding Real Estate as an Investment Opportunity in Dubuque

Real estate has always been considered a good investment (provided you don’t overpay for a property).  For some people that investment might also be their home. For others the sole purpose of the purchase is to make an investment they’ll see a return from later. If you’re considering real estate as investment, you might want to learn more about what is involved.

One of the first things you’ll do when sitting down with a real estate agent

Commercial Real Estate Investments in Dubuque Iowa

Understanding Commercial Real Estate Investment

to talk about investment properties is to decide what your objective is. Some investors want immediate return and some are willing to settle for long term return; i.e. an investor who is investing to pay for his kids (or grandkids) college education as opposed to an investor who makes his/her living by operating investment properties.


Terms Associated With Investment Properties

When meeting with a real estate agent, it might first be handy to understand some of the terms you’ll hear.


You will see/hear this term used when analyzing a real estate investment. CAP RATE is nothing more than the relationship of the net operating income a property is capable of producing to the value of the property. Value is usually considered to be what a willing buyer, in the current market, is willing to pay for a particular property.


I = R X V or Income (net operating income) = Rate (cap rate)  X Value (value of property). This is typically the formula used to calculate cap rate. Cap rates will differ by market location. For instance, the cap rate for a 4-plex in New York may differ from the cap rate for a 4-plex in Dubuque, Iowa.

If you would like an explanation on how to calculate a cap rate for your area please ask. So, if an acceptable cap rate for your market for a particular type of investment property is say 10% and you find a property that has a calculated cap rate is 8% you (and your agent) may want to address that issue. REMEMBER, cap rate is only one indicator of value. A decision to buy or not buy should not be made on cape rate alone.

What we are discussing here is a method to help you determine if a particular real estate investment might be suitable for you. It in no way is an in-depth look at how a particular investment might perform over the life of the investment. They can never give you a specific rate, however. They’ll present the numbers (facts) and discuss with as to whether or not it is prudent for you to purchase a particular  property. They may in fact tell you that a decision to buy a specific piece of property is not well founded.

There are basically 4 ways you can profit from, or experience a loss from, a real estate investment.  They are:

  1.  Cash flow – calculated based on operating data
  2. Equity build up – Paying down your loan. This is called leverage, or OPM (using other people’s money)
  3. Tax savings/obligation – If when an investor files their income tax for the year the property shows a taxable loss the investor will pay less taxes on his ordinary income than if he did not own the property – but the reverse holds true also.
  4. Appreciation – If the property increases in value due to market conditions this will have a positive effect on the investment return but not until the property sells. Remember, what goes up today may come down tomorrow.

OWNER’S STATEMENT- Usually when analyzing an investment property, you will look to the seller for numbers – i.e. income, operating expenses, etc. You will find that many sellers do not keep good or accurate records – the numbers you get from them may not be reliable. An example might be “upkeep”. When you ask the seller for those numbers they might respond they do all their own maintenance and therefore there are no upkeep expenses. Really?? What about an investor who can’t do or elects not to do his own maintenance and has to pay others for that service. The amount paid for that service becomes an operating expense

BROKERS RECONSTRUCT- Because the owner’s statement on operating data may not be reliable you may have to do what we call a “Brokers Reconstruct”. You will need to verify the sellers numbers and if they fail to provide reliable numbers you will have to verify those numbers and maybe even estimate some of the numbers. When you have all the numbers you are ready to complete your analyses.

CASH FLOW – As a potential investor you will want to know if the property produces a “positive” or “negative:” cash flow. Here is how you calculate cash flow.

SCHEDULED RENTAL INCOME- $  12,000.00 (annual rents as  if rented 100% of the time)

VACANCY RATE –                        $    – 600.00 (5%)

GROSS OPERATING INCOME –   $ 11,400.00 (the actual dollars you have to operate the                                                                                                 property)

OPERATING EXPENSES –              $ – 2,500.00 (taxes, insurance, upkeep, etc.)

NET OPERATING INCOME –         $   8,900.00

DEBT REDUCTION (P&I) –             S  -6,300.00 (annual principal & interest payments)

CASH FLOW –                              $   2,600.00 (this is before paying any taxes which may be due                                                                                     as a result of operating this investment)

So- if all of the above numbers are accurate you can expect to put $2,600.00 into your pocket the first year of operating this investment — IF you do not have a tax obligation as a result of owning  this property. If a property does not have a positive cash flow (as above – $2,600.00) then it either has no cash flow or a negative cash flow. If the cash flow is negative then you’re going to have to inject that amount of your money into the investment just to make the mortgage payments and operate the property – something you may not want to do.

NET OPERATING INCOME (N0I) – Net operating income (see above) is what an investor is taxed on by Uncle Sam. But as an incentive for investing in Real Estate the IRS says that an investor can offset his NOI (for tax purposes) by the amount of interest he pays on his loan (if he has a loan on the property) and depreciation.

So, let’s say in the above example you have made interest payments on your loan of $7,100.00 and that depreciation for the year is $3,500.00. This means you can offset the NOI of $8,900.00 by those two amounts ($10,600.00) giving you a taxable loss on this investment of $1,700.00. For talking purposes let’s say your taxable income from all other sources for this year just happens to be $1,700.00 (ordinary income). Since you can apply the tax loss from your income property against your ordinary income from other sources you will not have to pay any taxes this year. So, in our example here you get to keep the entire $2,600.00 cash flow produced by your real estate investment.

But what if the interest you’ve paid on the loan this year is only $3,000.00 (instead of $7,100.00) and the depreciation remains at $3,500.00 and your ordinary income is the same  ($1,700.00)? In this case NOI of $8,900.00 could only be reduced by $3,500.00 and $3,000.00 ( $6,500.00) so you would have taxable income of ($2,400.00) as a result of operating this investment property. This taxable income from this investment will be taxed as ordinary income. So you add the $2,400.00 to your other ordinary income of $1,700.00 and your taxable income on your tax return will now be $4,100.00 and you will have to pay tax on that amount at whatever tax bracket (rate) you are in.

Here is another way of looking at it strictly from the investment standpoint. . If your taxable income from operating this investment property is $2,400.00 (see above) and you’re in the, let’s say 30% tax bracket, then you will owe Uncle Sam $720.00 in taxes as a result of operating this investment ($2,400.00 x 30%). So from an investment analysis standpoint you really aren’t going to pocket the $2,600.00 CASH FLOW on this investment because you will have to take $720.00 from that cash flow to pay his Uncle Sam. You can only pocket $2,528.00 of the $2,600.00 CASH FLOW. Thank you Uncle!!!

So NOI( NET OPERATING INCOME) and CASH FLOW are two pretty important numbers to consider when analyzing a real estate investment. So what affects those numbers? What might make them higher or lower? It is really pretty simple. If your (revenues) typically rent, increase or decrease, or your vacancy rate increases or decreases, or your operating expenses increase or decrease your NOI (and your CASH FLOW) will change accordingly. Remember, NOI is the number you are taxed on; so higher- more potential tax, and lower- less potential tax. BUT it also affects cash flow; so the higher the NOI the more cash flow the investor will realize (everything else being equal) and the lower the NOI the less cash flow the investor will realize (everything else being equal)

This can be a little overwhelming and if you’re like many people; confused with just reading this, no worries. Your agent is there to give you advice and guide you through the process. Doing some homework on your own is good, but don’t be afraid to ask questions. Real estate investments of any type are a big deal and you want to know you’re making the right decision.

Is there any way to eliminate the risk of making a real estate investment? Not really!! Being informed and relying on the advice of professionals in the area of investing such as your accountant, your lawyer and your realtor will help you manage that risk.

If you live in Eastern Iowa and looking to make a real estate investment in Dubuque or the surrounding communities, then give American Realty a call.  We have agents experienced in real estate investments who will be glad to talk to you about your needs and help you find an investment that works for you.

How To Sell a Home In Dubuque and Eastern Iowa During the Winter

Sometimes you can’t control when you put your home on the market. It might be that you have a new job that you need to move for. Or you might simply didn’t get enough done on the property to get it listed earlier. Now it’s getting to be the cold months  of winter and you worry that you won’t get as much as you would in the summer or sell it as quickly.

Yet, just as you can’t control when you sell, there are always people looking to buy, even in the cold winters of Eastern Iowa. Granted, you’ll likely have fewer showings in the winter and the weather might not always cooperate with open houses, but people looking at this time might be more Selling a home in Dubuque during the wintermotivated to buy. There’s a reason they’re going out into the cold and snow to look at homes and it’s not just to occupy their time.

There might also be less competition in the market when your listing, which, depending on your price range, might be a good thing. With fewer options people interested in your home might act more quickly.

All this means is that you have to make the most out of the visits you do have to your home. It might mean a little extra work, but if you want to sell quickly and get a good price on your home it’s worth doing.

Here are some things you can do to make sure you get your listing price and not wait around all winter for it to sell.

Have Photos From The Summer On Display

With snow on the ground and no leaves on the trees, the outside can look a little depressing. Have some photos from earlier in the year when the grass was green and trees full of leaves. This way they can envision what it will be like when the weather turns warm. So if you know you might be putting your home on the market later in the year, take a number of pictures. Especially of nice features such as a deck or a pool.

Clean the Driveway and Sidewalk Completely

Especially on days when you have an open house you want to make sure the sidewalks and driveway are clear. The last thing you want is someone slipping when they’re coming in or out. Since your Realtor might be scheduling visits all throughout the week you’ll want to be prepared at all times. And if you’ve had to put down salt, make sure you vacuum well if it’s been tracked into the house.

Keep the Home Nice and Warm

No matter the temperature outside, keep the inside well heated. If they come inside from the cold and find the home nice and warm it will make a good first impression. If you have a gas fire place, then have it on to not only add warm, but ambience as well. If you have an older home you especially want to make sure all the rooms are warm. This means even before the snow falls, make sure your windows and doorways are caulked to prevent any cold air from getting in.

Have the Lights On

If it’s dreary outside you don’t want it to seem gloomy inside.  Have all the lights on. If you’re dealing with an older house that doesn’t have a lot of lights installed, then try to bring in some extra lighting brought in.

Staging the Home For Sale

Staging your home is always beneficial no matter the time of year, but especially in the winter. Since the outside might be cold and dreary, you want them to come into a place with color and style. If it’s near the holidays, then have some decorations up, just don’t go overboard. And do what you can to make the home look roomy. Often you’ve had to bring some things in from the outside for the winter, but don’t have the garage look like it’s overflowing and the home lacks space for storage. See if you can find somewhere else to put some belongings if necessary.

Don’t Have The House Smell Stuffy

With the windows closed the home can start to smell musty. Feel free to add some inviting smells to the home.  This is especially true if you have pets. It’s hard enough to control their smell in the summer, but it’s doubly difficult in the winter. Do what you can to cut down on their odors by having air fresheners throughout the home.

Utilize the Services of a Dubuque Realtor

You might be considering doing home for sale by owner, but in the winter time especially this might be a mistake. The main thing you want is to get as much exposure for your property and a Realtor can help with this. One of your biggest markets might be people moving to the area, so a Realtor will get you maximum exposure online. They can also get the word out on your home to other Realtors in the area. Finally, they can also help you determine the right price to list your home at. You don’t want you home sitting on the market for months. This is never good, no matter what the temperature outside is.

At American Realty we have experience with selling homes in the winter. We have Realtors who have served Dubuque and surrounding communities like Dyersville and Cascade for years and know what it takes to get home sold no matter what the time of year. Call us today at (563) 556-4577.

8 Questions To Ask Before Buying Your Dream House in the Dubuque Area

What To Consider Before Looking To Buy Your Dream House

by Theresa Neuhaus – Broker Associate, American Realty

Whether you’re going to be a first-time home buyer or your looking to move from your current home, deciding if now is the time to start searching for your dream home can be a tough decision. There are a number of factors involved before you start going to open houses or making an offer on a property.

Here are some questions you should ask yourself before committing yourself to buying a new home.

Finding Your Dream House in the Dubuque Areafactors involved before you start going to open houses or making an offer on a property.

Here are some questions you should ask yourself before committing yourself to buying a new home.

  1. Why Am I Buying A House

This is the first question you should ask yourself. Is it that you’re tired of paying rent each month with little to show. Or has your current home become too small or in some cases too big for you to live in. Whatever the case, remember that there will be a lot of work involved. Not just searching for the home, but later moving in. Are you motivated enough to go through with it, or is just something you started thinking about without having a real plan in mind.

  1. What Can I Afford

The problem with wanting to get the home of your dream is that you can’t always afford it. Figure out what your budget allows and use this to determine your price range. One of the first steps you should do is to meet with mortgage lenders so that they can sit down with you to go over your financials. They’ll help you determine what you can afford. And don’t just talk to one lender. Meet or call a few to determine what you’re closing costs will be. Getting pre-approved for your home will make home buying that much easier.

  1. What is My Credit Score Like

One of the things your lender will discuss with you is your credit score and that of your spouse if you have one. They may take the lower of the two scores so even if one is good, it might still be a factor. Even with a lower credit score you might be able to get a loan, but you might have additional fees and a higher interest rate. Your lender can advise you on whether you should wait to borrow and what to do to improve your scores.

  1. Where are Home Values Going

Housing prices in the area have been going up over the last couple of years, part of an overall trend in home buying. This means the prices for homes this year, might be higher next year. This could be motivation for you to buy sooner, rather than later. There is always a chance they’ll decline, but the economy in the Dubuque area has been pretty strong, thanks to tourism and to businesses moving into the area.

  1. Where are Home Mortgages Going?

Home mortgages are at a great point right now, making it an ideal time to get lower interest rates on homes. There is no guarantee they’ll remain that way, however. The Federal Reserve could always increase them, making now one of the best times to buy. This is again something a mortgage lender can help you decide on, even if they can’t predict what rates will be like in a few months or even a year.

  1. Where In Dubuque or Eastern Iowa Do I want to live

One of the motivations for moving might be to move to a different part of the city or the area. You might have decided you want to live in a smaller community like Peosta or Dyersville. Or maybe your job is closer to Cascade or Bellevue. Do you want to live in Dubuque or nearby Asbury? If you have no preference, you might have more opportunities, but chances are that whatever area you want to live in, you’ll be able to find something you like. Just in some cases, it might take longer or when a property opens up you might have to act fast. This is one of the first things to discuss with a Realtor if you’re working with one.

  1. What Kind of Home Do I Want

What style of home you want could also be a factor in your home buying. Do you prefer a ranch style home with fewer steps. Do you want a newer home or something older, with a little character. Your budget may influence what you can look at, as well as the size of your family. This is something you’ll want to discuss with your Realtor so that they know which types of properties to alert you to.

  1. What Can I Get For MY Old Home

Obviously, this isn’t something a first-time home buyer needs to concern themselves with. For most, however, it will come down to how much they can get for their current home and also is your buying contingent on your home being sold first. That home of your dreams won’t wait around while you try to get your sold. This is another thing to go over with your Realtor. It might be better to start searching after you’ve received an offer on your home. Or maybe you can set up a bridge loan so that you don’t miss out on your dream property.

If you’re wondering whether now is the time to buy a home in the Dubuque area, then contact one of the Realtors at American Realty. They’ll be glad to go over your options and listen to what you’re looking for in a home. We have offices in Dubuque, Dyersville and Cascade with agent’s ready to serve you.

To learn more about Theresa visit her bio.

What To Disclose About A Home When Your Selling Including Any Recent Damage

When a storm recently passed through the area, it did a lot of damage. Trees were knocked down, roofs were damaged, and some homes had issues with water in the basement. And some of these homes had for sale signs out in their yard.

It happens to many homeowners that just as they are thinking of listing their ho

The Home Disclosure Process

me, or even as they have it on the market, something unexpected happens. Or maybe they’ve had some issues a couple years ago and now wonder if it could be a factor in selling their home. It’s easy to say that this will affect your listing price or even your ability to sell it, but only if you take the wrong approach.

If the problem has just happened, then first get it taken care of. Get a contractor to take care of the roof or any other damage to the home. It doesn’t’ mean you have to take your home off the market or hold off on listing.  But it will be something you must disclose, even if you already completed this part of the selling process.

The Disclosure Process.

Most states have some sort of disclosure requirement when it comes to selling a home and Iowa is no exception. In Iowa “Sellers” are required to make a disclosure (see chapter 558A of the Iowa Code)  which consists of 21 questions. If any of the answers are “yes” there is a place on the disclosure form for an explanation. Health issues such as Radon, Lead Paint, etc. are covered on the disclosure. It is interesting that “mold” is not covered. However, the instructions on the form require the seller to “disclose all known conditions materially affecting the property”, and requires “additional” pages be attached to the disclosure if necessary.

With most of the questions you simply answer yes or no. If you do answer yes to something you do have the opportunity to answer the question in more detail. For example, if you had a leaky roof in the past you can mention the date it was repaired/replaced and that it has not been a problem since.

There are health risks you need to disclose as well such as:

  • Lead paint
  • Asbestos
  • Radon
  • Mold

It doesn’t mean you can’t list your home or that you can’t sell it as is.  It’s simply something that needs to be disclosed.  It’s up to the potential buyer whether these issues impact their buying the property. For many homeowners this won’t be an issue if it’s a property they love and that fits their budget.

Issues with Water A Major Problem to Disclose

If there is a major issue with many homes it is most often related to water. One question will be if your roof has ever had problems. Another if you have had water in the basement or any other part of the home. Even if it was just a trickle in the basement, then you still disclose it.

The good news is that if you’ve had a problem and resolved it, there is room to put that on the form.  In many older homes water might still seep into the basement, but if you have a sump pump then you can disclose that, as well.

Some older homes in the area may have older basements that aren’t completely finished. This could mean they may have some seepage of water. Again, this doesn’t mean you can’t sell the house, you just have to make sure potential buyers are aware of it.

Emerald Ash Borer

There is one additional form you need to provide information on and it relates to the emerald ash borer. As the form states, having trees on a property adds to its value. If the trees are ash and have been infected by the emerald ash borer, it can be expensive to have those trees removed.

Many people might not even know what type of tree is on their property, let alone if they have a problem with the emerald ass borer. This is something your Realtor will review with you.

Lead Based Paint

There is a federal law that requires sellers of certain properties (built in 1978 or prior) to disclose the presence of lead paint or if the seller has any documentation concerning lead paint on the property. There is a hefty fine for not making this disclosure properly.

Will Any Issues Impact My Listing Price?

If the problem has been resolved and everything repaired or replaced it shouldn’t impact your price.  Even such issues as water seeping into the basement, might be overlooked by some buyers who like your home and are satisfied that the water won’t prove to be a risk for their belongings.

When you meet with your Realtor disclose any issues that you think might impact your listing right away. They can thus do the research to determine how much impact, if any it might have on your listing price.

You Must Disclose Any Issues Or it Could End Badly

When you’re Realtor is preparing to list your home or property you need to be truthful. You might think about hiding some potential problems, but if they come to light later it could have serious consequences. First, your home will be inspected so the issue might be discovered then. If something is found, then the buyer can ask you to take care of it before the sale is final or they simply could walk away from the deal without any repercussions.

If something is discovered after the sale of the home is complete that was intentionally not disclosed, it could result in expensive litigation.

If you think you might be able to disclos

e something at the closing, it simply gives the potential buyer a chance to toss aside the agreement and walk away from the table.

What Happens If Something Happens After the Disclosure is Signed

As in the case of the recent storm, something could happen with your home after you’ve signed the disclosure. This will trigger a requirement to amend your original disclosure. If it’s something you can get repaired, then take care of it. Whatever the case you’re still responsible for anything that happens to your home until the moment you hand over the keys.

If you’re considering selling your home and have questions about potential issues with your home, then contact American Realty. Our Realtors can answer any questions you might have and what impact any issues might have on the sale or the listing price. We have been serve Dubuque and surrounding communities such as Peosta, Dyersville, Farley, and more for over 45 years. Call us today at (563) 556-4577 to speak to one of our experienced Realtors.