Real Estate Blog

Getting your Financing Together

admin — Wed, 10 Sep 2008 19:50:54 +0000

Financing a home purchase is a complicated process, and even someone who is in good financial shape may have difficulty with the details. When financing a home purchase, you will need to find out how much you can afford to spend, get together a down payment for your home, and get financing for the rest. In order to be ready for the home buying process, you will need to take a number of important steps, as detailed below.

First, you should look into your credit rating. Your Fico score is an analysis of each of the major credit monitoring companies’ numbers, and can be found through a number of services, including myfico.com. Your credit score is based on the amount of outstanding debt you have, whether you regularly pay bill late, etc. Your credit score will determine how much money you can borrow, as well as what interest rate you will be able to get. If your credit score isn’t good, the current loan climate isn’t exactly friendly for finding a loan, so keep that in mind when beginning your home purchase.

Once you know your credit status, you need to figure out what you can afford. This means you should start using online calculators, as well as calling credit organizations to determine what they would be comfortable loaning you. As well, you need to ensure you have a down payment ready. While you can get financing from Freddie Mac or Fannie Mae if you aren’t able to raise enough capital, it is extremely hard to get a good rate these days without a fairly high down payment. As well, you will have to pay insurance on your loan to insulate the provider from potential failure to make payments. By agreeing to such a condition, you will likely be paying a decent amount of money toward insurance each month.

Once you have cash lined up, and an estimate of what you can afford, you are ready to start working on your home purchase. Finding the right home is another matter altogether, but in the current market, altogether easier than a few years ago. The important thing is not to stretch your finances too far, after all, that’s what got the country into the mortgage crisis in the first place.

Taking Advantage of Seller Desperation

admin — Wed, 10 Sep 2008 19:02:53 +0000

The recent downturn in the housing market has created a climate that buyers are increasingly taking advantage of. Home prices are hitting lows, and it seems as though the bottom may be nowhere in sight. While this means investing in real estate is an extremely dangerous short term proposition, anyone interested in a long term investment or a home for the first time can get exactly what they want for a whole lot less than they used to be able to find. Sellers, many of whom have been holding out, waiting for a rebound, are starting to realize that they will likely lose more by waiting than they will by selling now. That desperation has led a lot of sellers to make accommodations that even a year ago would not have happened.

While the housing bubble lead to a market where buyers were at a severe disadvantage, the buyer has now reclaimed the position of strength in negotiating a home sale. A home inspection with guarantees to replace parts is just the beginning; you can now get a myriad of inspections covering environmental concerns like radon and lead paint, as well as inspections of home infrastructure. You can get a lot more out of a home buyer when they’re worried about whether the home they have invested so much into will be able to sell.

When negotiating a sale, look into any and everything you can get the seller to cover, anything about the house you want replaced. The home inspection process isn’t the only part of the sale where you can get serious concessions, these days most home sellers agree to pay closing costs up front in order to guarantee a home sale. Since these costs are substantial, this removes much of the upfront cost of a home purchase. Truly, there isn’t anything that is too far to ask for these days, but be careful, because if a home seller simply cannot meet a demand, you’re going to prevent a purchase that may already be a great deal. What’s the lesson? In this market, it never hurts to see how far a seller will go.

Finding the right contractor

admin — Tue, 12 Aug 2008 18:35:47 +0000

Finding the right person to do work on your new property or on a home you are about to sell is a complicated process. Finding a contractor is easy, there’s probably a couple dozen in your local phonebook, and even more if you look around online. Unfortunately, the large number of contractors means there are plenty who aren’t worth what they charge and whom you do not want to hire. The question becomes, how do you determine if a contractor is up to muster? One of the keys is meeting them beforehand to discuss the details of the project; this will give you the opportunity to see first hand if you are dealing with the kind of professional you want. But even before this, you might want to check out your hire, look into references, etc.

If you already have one or two specialists you trust, say for roofing or plumbing, you should start with them. Ask if they know anyone reliable, because their recommendations are going to be made on a much more professional basis than your neighbors. If you are hiring someone, you should look into references, which most contractors will provide if you ask. See some of their work, ask how the experience of their reference was, and you will get a better idea of whether you want them working on your property. You should also make sure you can easily get in touch with them at a storefront, and that they have a cell phone to stay in touch. Anyone without a physical address or a cell phone is sending out warning signs.

When you go to meet your contractor, watch out for a few other things. You want to make sure they drive a recent truck, kept in good repair. This may seem superficial, but a contractor’s truck is an important part of their business, and if their vehicle isn’t in good shape, it’s a bad sign about their business in general. They should take payment by check or charge, never hire a contractor on a cash basis, as this is unprofessional and a sign you are hiring someone unreliable and potentially unqualified. Finally, make sure your contractor is going to handle the permit process for any large repairs. There is a lot of paperwork involved, and it is required that such papers are filed with local authorities. If the contractor asks you to do it, or suggests not getting a permit at all, you should immediately start looking for someone else, you don’t want to work with someone who doesn’t want their work reviewed by an inspector.

By following these guidelines, you are much more likely to get a reliable and professional worker for your home improvement needs. That means your repairs will be of higher quality and last a long time, exactly what any home owner is looking for when making repairs.

Why its the best time to buy

admin — Tue, 12 Aug 2008 17:08:21 +0000

Investing in property is always a big decision, especially when the atmosphere surrounding the housing market is as gloomy as the one we have seen over the last year and a half. But just because the news reports are talking about a housing crisis, doesn’t mean there isn’t a silver lining. Housing prices have dropped to five year lows, down substantially from the peak just a few years ago. Suddenly the real estate market doesn’t sound so bad, does it? But there’s more, it turns out this isn’t so much a bad market as a bad time to be selling a home. That’s a good thing for those of us looking to invest.

Some may be leery of investing in real estate after the recent downturn, but the fact that so many homes are on the market and that interest rates are being kept at such low rates means that you are simply not going to find a better market for your investments. Consistently under 7%, interest rates are so low you’re even better off purchasing now than if prices continue dropping, since rates like these are guaranteed to go up soon! Of course that’s not all, the large number of homes on the market means you will get a better home for your price. Spend a little time looking around and you will realize that there are an increasing number of homes with great amenities dropping to lower prices, so your money will go a lot further than it used to.

If you want to play the foreclosed or short sale market, you can also get some great deals, but you may not need to with the rest of the market where it is, you’re going to get just as good an investment property for a bit more, one that will come with less of the risk and work involved in dealing with a foreclosure.

Real estate is consistently one of the best return investments available, so don’t listen to the hype, go out and look and you will realize its time to buy! There’s no reason not to start looking, all you need to do is contact a realtor and you’re on the road to investing in one of the most reliable and safe markets available.

How to save money when doing home improvements

admin — Tue, 08 Jul 2008 18:40:11 +0000

Improving the value of your home is important, whether or not you are loooking to sell in the near future. This is because making incremental improvements in your home’s amenities will gradually improve the value of your home substantially. But of course, you are paying for each new appliance, paint job, and remodeling work, so it’s important to make sure you get the best possible benefit out of each improvement. Saving money is probably the best way to ensure you get the most out of your improvements, so try to focus on some of the following ways to cut costs.

When installing new countertops, avoid the more expensively cut corners by going for square edges. You can get an even better deal if you purchase remnant pieces, allowing you to piece together your new countertop for a much lower price than the higher end, harder to produce counters. You can get granite at an amazing price this way, allowing you to greatly improve your home’s aesthetics and value at a lower cost! You can get a similarly good deal on large appliances like stoves and refrigerators by purchasing refurbished high end appliances. This will take a bit of research, as you need to find a reputable source, and will likely require having a repairman go over the appliance and replace any parts that look worn and likely to fail. You can easily save half the price of almost new appliances if you know where to look.

Using prefabricated improvements also helps. By installing an improvement with a general contractor rather than a specialist, you are going to save a lot of money, so looking into prefab options for roofs, patios, and any other large project. Salvaging classic décor is also a great way to save money. If you go to salvage yards and have pieces restored, you can save a great deal of money and find beautiful pieces that are unlike anything you can buy in stores. You’ll save money, and you will make your house more elegant and raise the sale price.

There are many other methods of saving money, so look into options for every improvement you do. If you are wise about your spending, you will ensure every improvement pays for itself in equity as your home’s value grows.

What is a Home Warranty and Why its Worth Getting One

admin — Tue, 08 Jul 2008 17:17:56 +0000

First time home buyers are often lost when it comes to the various details of purchasing a new home, so some important services could get missed if you don’t educate yourself. One such service is a home warranty. Buying a home is expensive, likely to be the largest purchase of your lifetime, so it is important to protect your investment. A home warranty is a bit like an insurance policy, only it is purchased at the time of sale and it provides a more limited kind of coverage. The warranty pays for repair and replacement of household problems, generally at least for the first year of ownership, with the possibility of extension. Getting your home serviced simply involves calling the company that services your warranty, they will hire a repair person and charge you a per service fee, generally less than $100.00.

Generally speaking, every home should have a warranty when it is purchased. If possible, you may be able to get the original owner to pay for the cost, as it ensures you will not be calling them if something breaks. The coverage provided is sufficient for most small issues around the house, but they do not cover accidents, code violations, improper maintenance and installation, and any damage that is outside of usual wear and tear. This means that you will still need a regular insurance policy for your home. As well, the more expensive appliances in your home won’t be covered, as well as outdoor pools and other outdoors items.

In the end, it would be a mistake to not take a home warranty. Filing warranty claims won’t affect insurance rates, and will only cost you a small fee per service. This benefit alone is enough to justify picking one up, and the fact that you can generally get a seller to pay for it means it isn’t even going to cost you anything! Home warranties provide an important service you’d be making a mistake if you passed by.

Why its important to get a home inspection

admin — Mon, 16 Jun 2008 21:41:58 +0000

Purchasing a home comes with many potential costs and problems, so when you are in the process of closing, it is important not to skimp on one of the most important parts of the home buying process: hiring a home inspector to examine the house for serious flaws. A full inspection is very thorough, and many contracts guarantee that their results are accurate; giving you recourse if an inspector missed something. While it might seem like you would notice common problems, it is essential to have a professional set of eyes examining for serious problems in advanced.

Inspections aren’t even that expensive in the scheme of things, the up-front cost of a few hundred dollars won’t seem like much if they discover serious problems that could have easily cost you thousands of dollars. It is always important to have a thorough investigation done by an independent inspector, so even if you are required to submit to an inspection for your loan, have someone give the house a second look.

Inspectors can also provide you with estimates of what repairs would cost, allowing you to factor these numbers into negotiations over the value of the home, as most home owners will eat the cost of serious repairs in order to close a sale. Just be sure to ask the inspector thorough questions and have them look over the entire home. By following these steps you can easily avoid running into major problems while in the process of buying a home.

Buying a home with resell value

admin — Mon, 16 Jun 2008 21:29:02 +0000

Purchasing a home is a serious commitment, and going into the process it is important to look for items that add fundamental value to a home. By focusing on these features you will find a home with a more sustainable value, even in times of weak markets. There are any number of factors that one could include in a list, but some of the most important are the lot a home is on, the surrounding neighborhood, the number of bedrooms and bathrooms, garages, fireplaces, and just about any other amenities that are fixtures in the home. Floors and windows are also helpful, although they are easy to replace, new ones will retain their value for a long time.

When looking at a home, first examine the surrounding area. Location is always extremely important, if a block appears dirty, run down, unsafe, or otherwise deters buyers, you are starting at a disadvantage when showing the home to buyers. Buy in up and coming or already established neighborhoods, this will ensure the surroundings of the home enhance its value. The lot the home is on is also important, remember more land is almost always better, but make sure landscaping is kept up to date; otherwise the home will appear run down. A driveway and garage add substantial value, especially in areas where parking is scarce. Inside the home itself, fixtures are key, look for homes with more bedrooms, and especially more bathrooms, this number is fixed, and more is generally better. The kitchen is easily one of the most important rooms, so look for a large room, preferably with new counters, although these can be replaced to increase the value of a home, as well as up to date appliances. Finally extra features like fireplaces, hot tubs, pools, etc. provide a small benefit to the value of a home, but only if it is something the buyer thinks they will use. Be leery of paying too much extra for these features.

Of course every home is different, and every real estate market has its quirks, so you can’t be sure what people will be looking for in the future. Thankfully things like garages, bedrooms, and kitchens are always in demand, so when buying a home focus on these fundamental features to ensure both long and short-term retention of value.

Advantages and Disadvantages of buying a foreclosure

admin — Fri, 16 May 2008 20:37:04 +0000

When purchasing a foreclosed home, a lot of buyers expect the process to be simple and a guaranteed way to make money. Unfortunately, there are a lot more nuances to the value of a foreclosed home, and in many cases buying a foreclosure can come with endless headaches. So just what are the up and down sides to purchasing a foreclosure? It depends on what stage of foreclosure the house is in.

If the original owner is still living in the home and has missed payments, but is trying to sell as quickly as possible, there are numerous advantages. The reality of this type of purchase is that you are going to get the house below market value, perhaps substantially so. But there is a problem here, if the market value of the home has fallen below the purchase price, then the seller may not be able to make back what they purchased the home for, which means the sell price may need to be approved by the bank. Still, overall the advantages for this type of purchase are high, the seller will often cover your closing costs, you will be able to get inspections done, making it only slightly more complicated than a normal purchase with a significant price incentive. You will, unfortunately, still have to wait for the individual to move out. If the property is being short-sold, you will also have to deal with processing time for the bank to approve the sale, which is all the more difficult with the increased number of these homes on the market.

Buying foreclosed properties themselves is somewhat more complicated. Your purchase will have to be made in cash at the auction, which helps reduce the number of people interested in such properties, but which is a challenge for someone without access to the capital. Buying at auction or after comes with a number of other problems, homes are sold as-is and the price does not include repairs. The paperwork can be a major problem, and the bank won’t be able to give you any history of problems with the home. Of course, you are generally getting the home at as low a price as possible, but don’t expect the house to be so cheap as to be worth the trouble, only a small portion of foreclosures are worth taking the added risk.

Top ten Reasons to purchase a home NOW!

admin — Fri, 16 May 2008 20:36:17 +0000

The housing market is currently involved in a significant correction, but that doesn’t mean it isn’t a good time to buy. The state of the current market may be abysmal, but the advantage of property is that it is and will always be a stable long term investment. Just because the situation has lead to a decrease in prices does not mean that purchasing a house now is going to lose you money. Onto the list:

1. Interest rates are low. Interest rates have been lowered substantially over the last year, making it easier for you to finance your purchase at a lower price, assuming you have a good credit score.

2. The surplus in houses is short-lived. Population grows, its just unavoidable, so the short term surplus of houses can be seen as a temporary sale that will end as soon as demand returns to its earlier levels.

3. Foreclosures will bring down prices in neighborhoods. While this problem may hurt those whose neighbors’ homes are foreclosed, it means that you will get a much better deal for your purchases. You can even purchase foreclosures if you want a little more risk and the potential for a lot more reward.

4. You can rent it out. A home is an asset that will keep giving back, so even if you purchase it as an investment the rent should help cover the long term costs. Rent has continued to go up even as the housing market has become depressed, this means money in your pocket!

5. You may get tax relief. The Congress is currently debating bills that would attempt to stimulate the housing economy, meaning you might get a tax break when purchasing a new home, making it an even better deal.

6. Property is always a reliable investment. Property will always earn back its value, making it a great way to safely invest.

7. You can start building equity. Equity means you will get lower interest rates on future loans and are generally considered a safe investment compared to others.

8. Home improvement is cheap. Or cheaper than it used to be, the turnaround on the housing market has shrunk the market of jobs for contractors, meaning you will likely be able to get them for cheaper and get more done.

9. You will have a greater voice in community affairs. Because home owners are more trusted to be sticking around and thus are listened to more. This is a great way to get involved.

10. You can decorate the house however you want. Having the freedom to decorate your house with a garden or a new paint job will allow you to live in exactly the space you want, instead of what someone finds acceptable to rent out every year.