Back in the old days, most deals were sealed with the contractor’s word and a handshake. Back then contractors seemed to be fairly honest and hardworking with the customer’s satisfaction in mind. In today’s world, where there are contractors out there who take advantage of what customers they can, or just simply fraudulent contractors wanting the money up front and then never seeing them again. The significance of having all agreements in writing is so important, the verbal contract has become obsolete. There are too many contractors out there that hear one thing while the customer is explaining something completely different.

All agreements should be drawn up in the form of a contract and signed by both parties, the contractor and the customer. Without a contract, if any defaults are declared, like work unfinished, work done poorly or not at all, nothing can be presented in the court of law besides he said/she said. The contractors words and the customers words mean nothing unless it is all in a written contract.

As the customer, you can visualize exactly what you want your kitchen to look like, but contractors can not read minds and share your visualization. You as the customer must get together with the contractors and list the details in writing of what work should be done. From listing what items will stay and what items will go, to listing who will be responsible to hauling away the debris. Always be as specific as possible in the written contract, listing all the details of how you want the work to be done and what should be the outcome.

Before entering into any contract for home improvements or home repair, there are two steps that should be completed: Scope and Specs. Scope out the work in writing and a write detailed list of specifications. These two should be recorded in detail prior to speaking with a contractor. This will help the customer get a better idea about the amount of work involved in a particular home improvement or home repair project.

As the customer approaches the contractor with these recorded details in hand, it will be easier to show the contractor what they need or expect more quickly. This will also be an easy starting point to discuss the project at hand and so that the project can become more visible to the contractor. For any home improvement or home repair projects that may be complicated, most contractors may have comments or questions as they look over the proposal. Working together, the proposal may have to be edited or re-written as the terms, conditions and procedures may need to be negotiated before the contract is complete and ready for both parties to sign.

Keep in mind that there are no free estimates or any kind of free labor for that matter. Many companies or independent contractors may advertise free estimates or free labor as a way to attract business. There are no freebies, only estimates and labor fees that are not billed directly as such. Most of the so called free estimates and labor have fees worked into the costs of other work that is done. This way the customer is none the wiser.

Each time a home improvement project or a home repair project is under contract, most customers end up paying a portion of the overhead of the company or person doing the work. That overhead involves everything from the time the contractor spends looking at other possible projects in the house to preparing the actual estimate. Most estimates have some additional amount added in to cover any contingencies, if and when they occur. The better organized and knowledgeable the customer is about the project, the less likely it will be for those contingencies to come up.

Customers should refrain from asking the contractor about the hidden fee’s or contingencies that are figured into the total cost of the contract. This isn’t something that a customer can ask the contractor directly and expect an honest response, but the customer may choose to save a fair amount of money while completing any home improvement or home repair project by spending a little time on it first.

The art of negotiation is the procedure of communicating back and forth in order to come to a mutual agreement. Negotiation is done when two parties have different expectations and must come to a mutual agreement before a contract can be signed. The most experienced negotiators will bring an attitude of high expectations to the negotiation table. They work hard to solve the problems and are easy on the people. It’s more effective to remain cooperative and efficient in order to preserve a civil relationship between the buyer and the seller, so they can work together to solve any problems and to complete the transaction as painlessly as possible.

When negotiating a contract over buying a home you want to get the lowest possible price and close on the house within a reasonable amount of time so you can move in.

1. Let the seller know what you need or expect in a clear and reasonable manner. Sometimes a buyer may submit a letter to a seller depicting why the property is not worth the asking price and pointing out the faults. This is a sure way to start the negotiations off with a defensive seller. It would be best to anchor a reasonable price, while continuing to remain polite and respectful of the sellers’ home.

2. Be prepared to solve any repair, title, survey or loan problems fairly; so there are no future problems to be addressed at closing.

3. Never respond to offers emotionally. This combative style of negotiating can turn the seller angry or defensive and can escalate into negative comments, table pounding and threats to walk out on the offer.

4. Keep your cool. Never argue. Arguing can sometimes make the seller want to work against you instead of working with you.

5. Do not be too quick to respond. Do not ignore or respond to the sellers’ arguments or statements immediately. Make it known that you are listening carefully and considerately, but do not reject or accept any offers until you have had time to carefully consider them.

6. Have any unclear portions of the proposals clarified completely.

7. Never discuss personal issues that involve the seller or buyer, such as an urgency to move in or a financial status.

8. Let trust increase the buyers leverage by: listening and understanding what the seller has to say; convey an appreciation or admiration for the sellers home decorating and gardens; and respond to counter offers within a reasonable time frame.

9. Find a common ground with the seller. This can be a very powerful tool used to the buyers’ advantage in the event of multiple offers. Sometimes a seller may select a buyers’ contract for personal reasons, like if the buyers’ family reminded the sellers of themselves when they bought a home with their young children, or just by sharing the same religion.

10. Understanding your leverage as the buyer. The more the buyer can find out about the seller’s needs, the better chance the buyer has to find solutions in negotiation. The buyer must be able to appeal to the seller’s concerns. For instance, if the house has been on the market for over 300 days, the seller will have a lot more leverage than they would have with a brand new listing. If the sellers time frame is forthcoming, then the buyer can meet it with some leverage, unless the seller’s have multiple offers.

Most buyers usually offer less than the listed price of the house. So, how much under the listed price should you offer? That all depends if the house is listed in a strong seller’s market and the market analyses of the recent sales in the neighborhood from where the house is being sold. The buyer should do their homework before submitting an offer so low, they might risk offending the seller and have their offer rejected immediately.

If there are multiple offers on one property, disclosure is favored among all parties. However, the seller or agent representing them will make the final decision as to how the offers will be handled. The seller may disclose the terms of one offer to stimulate another buyer to submit a better offer. Normally the procedure for multiple offers is to notify each party of the multiple offers that have been received. Each of the parties is then given an opportunity to amend their offer and submit it within a certain amount of time. After all offers are on the table, the seller is once again free to review the amended offers and select a buyer to negotiate with. Sellers are in no way obligated to accept the first offer that comes in. Any offer selected may be countered, negotiated, or accepted as is.

When accepting a loan for a specific purpose, you are obligated to use it for that intended purpose. Using the loan for other reasons is actually illegal. The lender will not be happy and may even file a legal action against you. Here we will have a look into what some of the outcomes are and what you should really do if you need a loan, but truthfully.

Usually when you apply for a loan the lender will want to know how you are spending the money and they will usually put a restriction on the use of the loan. This is all done for a good reason. They need to know that their money isn’t going to be wasted. Depending on what the loan is, you will have a variety of fees and interests rates that usually go up when the loan has a high risk borrower. Borrowers who do not have collateral are considered high risk. But this does vary from lender to lender. These terms of what the loan can be used for will be stipulated in the contract you will need to sign when you are approved for the loan. If you are going to use a loan for something other than its initial purpose be aware of the repercussions. These consequences usually include things like having to give back the loan money or if you have spent it you will have to pay it back straight away as well as facing penalty charges. Fees are also applied that resulted in your breaking the agreement that was written out in the contract’s terms and conditions. The lender could even take legal action against you, such as filing a law suit and other related options, which in the end will cost you even more money. You will need to pay your lawyers fees and possibly the lenders lawyer as well, not to mention this will also take up a lot of your time.

To make matters even worse was if you applied for a loan and used it for something other than what you told the lender you were going to use it for, is found to be lying on the application form. Lying about information like your income and assets so you could increase your chances of getting the loan in the first place will only lead you into legal trouble. When you are caught doing this, you could be charged and prosecuted with several counts of fraud as well as other charges. You will also face having a criminal record as well as the possibility of receiving fines, community service, jail and the ruination of your credit record. The lender can also take other legal actions against you.

If you are in need of a loan you are much better off applying for a personal loan. These loans are available through any bank for almost any amount. With a personal loan you have the pleasure and ease of being able to do anything that you please with it. You can buy that stereo you’ve always wanted, a big screen television, a fast car, pay your over due bills, go on a fantastic holiday, move to a new house or practically anything you want, without being restricted and it is a completely legal and up front. No need to lie when applying for a personal loan. Sometimes personal loans can come with higher interest rates since there is a degree of risk involved, but you have the freedom and flexibility to shop around for such things such as lower interest rates. Personal loans usually have a lot more flexibility in their repayment options.

When you really look at it, is it worth putting your clean credit record at risk or even being denied the chance to apply for another loan in the future by lying about what you are using the loan money for? Remember there are plenty of other loan options available that you can apply for and use in absolutely any way you’d like and for anything you want. Do the right thing and tell the truth about what you are going to use your loan money for. In the end, a few extra dollars for the higher interest rate will out weigh any court matters.

Home loan fraud is not an item of the past, but it is still costing people their homes, if not more today than ever. Home loan fraud has been on the rise since the 1990's despite the most recent federal disclosure laws. Take into consideration these two examples of home loan fraud that occurs when lenders misrepresent themselves or the terms of a loan to trick homeowners into default.

Bill is a 75-year-old widower who receives a notice that he is about to default on his mortgage. Soon after he receives this notice, he is visited by a man who represents himself as a foreclosure advisor and convinces Bill to sign a loan contract with him in order to save his home. The loan payments will me much higher than Bill can afford to pay and before long he has accepted more loans from the same lender. Once Bill is unable to meet the payments, he will default on the loans and the advisor will foreclose on Bill’s property and force him out of his home and sell all of his possessions.

In Florida, a door-to-door contractor convinces Maggie, a 62-year-old woman into taking out a second mortgage on her house in order to be able to afford repairs after a flood damaged her home. The contractor tells Maggie that she qualifies for a federal grant that will help her repay the loan. Unbeknownst to her, the federal grant does not exist and Maggie will default on the loan and lose her home.

Home loan frauds can be presented in many ways, ending in the same results, with somebody misrepresenting themselves and lying to you for the purpose of taking your home from you.

You can avoid being a victim of home loan fraud and the nightmares that follow by conforming to these simple rules:

1. Be cautious of people representing themselves as lenders who call you up on the phone or who show up at your door uninvited. These people will be very friendly and talkative and try their best to convince you how great and caring they are. Do not take the bate.

2. Never sign a document that you don’t understand. Some fraudulent lenders will quickly go over a document, by summing up some of the details to save you the time of reading it yourself, or to move the process along more quickly. If you don’t read or understand the document, consult with an attorney or other financial advisor of your choice to look over the document and to clarify any details.

3. Never let anyone pressure you into signing a document you are suspicious about or that has blank spaces that can be filled in later. An honorable lender will allow you time to think over the offer before you commit.

4. If your home is in dire need of repairs or improvements and you are strapped for cash, there are many programs available to help you with these without the risk of losing your home. These fraudulent lenders will try to convince you that their offer is the best way to go if you want to save a lot of time and money. They may also partner with a contractor just as deceitfully as they are in order to convince you that you are getting a great deal.

Although most senior citizens make prime targets for home loan fraud, it can happen to anyone, anywhere. These deceptive lenders will even target homeowners with poor credit, minority communities and low-income neighborhoods. Wherever there’s a homeowner, there is the possibility of coming face to face with a fraudulent lender.

These fraudulent lenders will reach their targets in a number of ways, such as: sending out mail to a certain zip code or area, searching public records to find homeowners who are behind or their taxes or mortgage, and for those homeowners who are in the process of filing a bankruptcy. The most common way these deceitful lenders reach their target is by phone. Offering their wonderful services to you with no obligation, if you allow them to come by your house and speak with you for a few minutes. Over the phone, they may make you feel like this is your lucky day, when in fact, they are wolves in sheep clothing.

Over the past decade, thanks to a real estate market that has been performing consistently well, home equity financing has become a viable option. This in turn has made the credit or loan option for home equity financing for consumers worth considering. Since everyday Americans realize the value of owning one’s own home to raise capital and refinance debt, home equity as a solid foundation is a powerful financial base to build on.

The year 2003 was a rollercoaster ride for the American stock market, but was consistently steady for the real estate market. Though the prices of homes continued to soar, it proved to be a happy trend as it proved that people still saw a home as a smart investment. This is good news for you, house owners—it signifies that despite the economic outlook, the value of your home continues to appreciate. This perhaps should give you the impetus to consider taking a financing option such as a home equity loan or line of credit.

Why consider home equity: Take for instance the rising worth of your own home and the boom in the real estate market—two solid reasons for you to seriously consider taking home equity financing. For one, home equity financing comes with a lot of tax advantages for you. You might also be able to reduce your taxes by claiming the interest you pay on your home equity credit as a deduction. Speak to your tax consultant about this. If you want to borrow money or secure your debt, you’ll find home equity products a smart choice since they carry a lower interest rate than other loans and may, therefore lower your monthly payments.

How to leverage your home equity financing: If you want to get the best out of your home equity financing, you could choose to do it as most people do: use it to refinance your debt and pay back higher-interest loans. But if you are fortunate enough not to have loan balances to repay, you can further raise the value of your house by improving it.  Perhaps you want to give a facelift to your kitchen or garage? Perhaps you need to add a second storey? These projects can easily be financed by home equity credit. Take a look at just how fellow-Americans get the most out of their home equity. And then, put it down to the boom in the real estate market.

Your kind of home equity plan: You can choose from either a home equity loan or a home equity credit line—something that largely depends on your needs. But to set yourself into estimating how much financing you require, you should consider a home equity loan. If you do, you will need to borrow only as much as you need for your home improvement project. But if you can’t estimate your needs, your best bet is a home equity line of credit might be a better choice. This is also helpful if you have more than one need such as reducing your credit card out standings and debt, besides also paying for a big purchase—both of which will demand ready access to huge sums of cash.

If your need is for stability or flexibility, yet again, home equity loans give you a steady payment plan. This means that your interest rate and monthly payments remain fixed over time. On the other hand, a home equity line of credit is as flexible an option as a credit card with your payments being judged against how much you borrow and the interest rates varying proportionately with a change in Prime Rates. And, if you need financing all together or once in a way, think again because a home equity loan can give you all the money you need all at once too! Besides, with this, you can borrow as much as you like when you want it, just so long as you remain within your prescribed credit limit.

Financing your home is a big decision for you. True, there are very many home equity loan products available today, but you need to think well about the home equity line of credit that suits your financial goals.