If you've been waiting to get through the holidays and closer to warmer weather before beginning the search to buy your first home, you're not alone. The traditionally busy spring real estate season is just around the corner, meaning heavy competition looms. But there are things you can do as a potential homebuyer to get a head start. The number of home sales in 2002 shattered records with 5.56 million existing and 979,000 new homes sold throughout the country, according to National Association of Realtors chief economist David Lereah…
Would you spend $650,000 for a beachfront home with sagging shutters, no landscaping, peeling paint, old appliances, outdated wallpaper and a generally drab exterior? On paper, the house sounds less-than-desirable. But before you answer, consider that this potential fixer-upper is located in California just steps from the Pacific. Drab as it may be, could this home sparkle one day? With a coat of paint, some "sweat" equity, and thorough revamping inside and out could this property be an investment gem? All homes are different, but there are certain criteria which can help you spot a fixer-upper with good potential. Here are a few basic questions to ask: What needs to be changed? There are some homes which are structurally sound that require only cosmetic changes -- say that worn carpet from the 1960's, the historic appliances, or that inefficient heating system which consumes more fuel than a high school. It makes sense to inventory a home to see what can remain and what must go…
Who needs seller financing? Most people think that it's for those who have damaged credit, or could not otherwise obtain conventional financing. That may be the case, and if indeed you have some credit issues that require seller financing, be prepared for the following terms…
There is no guarantee that real estate will continue to escalate in value as it has been doing over these past few years. Just ask anyone who purchased at the peak of the real estate market in the late l980's. Many owners found that their mortgage was greater than the depreciated value of their house, and it was not until the mid l990's that they were back in the black. How would you feel if you purchased a condominium unit today for $275,000, obtained a mortgage for $247,500 (i.e. 90 percent loan to value), and suddenly your unit was only worth $245,000? Make no mistake: while I unconditionally encourage everyone to be a homeowner, it may not be your greatest investment. Having dampened your enthusiasm, let's now turn to the other part of your question…
If you're one of the growing numbers of homeowners opting for a condo, you shouldn't consider the buying process any different than if you are buying a single-family home - especially when it comes to the home inspection. With condo sales on the rise and buyers gravitating toward higher-priced units, putting the condo - and yourself - through the rigors of a home inspection will always be worth the investment. In April, May, and June this year some 831,000 existing condos and co-ops were sold, according to the National Association of Realtors. A co-op is an apartment building in which you own a share of a corporation whose main asset is the building in which you live…
Couples today are breaking away from the typical crystal, China and silver gift registries when it comes to asking for wedding gifts. Since a new marriage can often mean time for a new house, many couples are throwing tradition to the wind and asking for extremely practical gifts -- like money toward a down payment or tools to keep their new house humming. Money has always been a popular wedding gift, and now some couples are making it clear it would be the gift of choice. They're going to their brokers to set up special joint accounts that are targeted toward a down payment…
If you're preparing to buy a house during what is typically the busiest buying and selling time of the year, then offers may be flying, loans may seem confusing, and everything may be moving way too fast. This is why it's important to do everything you can to protect yourself throughout the entire home buying process. Low mortgage interest rates and a strong underlying demand for housing drove total state existing-home sales to a new record in the first quarter of 2003 with 34 states experiencing sales increases over the first quarter of 2002, according to the National Association of Realtors. According to the NAR, many states that saw sales decline actually had a shortage of homes for sale - and the biggest price increases…
There's no question that men and women are different. Even when it comes to their housing choices, men and women are often profiles in contradiction. According to the National Association of Realtors' latest profile of home buyers, three of every ten single females purchase either a condominium or townhouse. Only two in ten males make the same choice. Part of that, of course, has to do with money. Rookies who are women earn significantly less than their male counterparts. The median for women is $35,500 vs. $44,800. So it's not surprising that women spend far less than men -- $88,900 vs. $101,700. Still, previously-owned houses of the single-family variety are the overwhelming choice of both men and women. Men were more likely to buy single-family houses, 74 percent to 66 percent, though. But at least that shoots holes in the theory that women prefer townhouse or apartment living…
While the thought of paying a mortgage is more enticing than paying rent, it's important to understand all the costs involved in buying and owning a home as you determine whether you can afford to join the ranks of homeowners. Potential buyers sometimes forget to factor in the down payment, homeowners insurance and the possibility of depreciation, as well as the costs associated with closing the transaction, moving, purchasing major appliances, and home, landscape and pool maintenance, not to mention furnishings and design accessories once you move in…
Looking for a home in a community that's adapting well to the new economic order? Seek a region teeming with knowledge-based jobs and global trade. Look for a dynamic, fast-changing economy steeped in competition. And ferret out a digital economy built on an infrastructure of technological innovation. And don't forget, while regions that operate out of the economic box can be boons for your personal goals and global progress, they can just as quickly become outposts of economic volatility that wreak havoc on the best laid plans. Silicon Valley is a prime example. Ground zero for the new economy, Silicon Valley led the nation into its longest economic expansion ever. The region also led the nation into dot combustion when the bubble began to burst. The area emerges from recession fraught with economic uncertainty leaving it short of the top of the economic pecking order, according to "The 2002 State New Economy Index: Benchmarking Economic Transformation in the States"…
The largest numbers of second homes are in states with large populations. The greatest percentage of second homes is in smaller and less populous states. The most popular locations for second homes are near bodies of water and mountains and second home buyers prefer rural settings to those more urban, but in most cases, second homes are within less than a day's drive from the primary residence. Second homes are everywhere. Among the 359,000 second homes sold last year, second homes were found in every state and in every region, according to the National Association of Realtors' "2002 Profile of Home Buyers and Sellers"…
James and Michelle Rigdon purchased a new $427,000 Gilroy, CA home with a conventional $282,500 first mortgage, a $25,000 deferred payment California Housing Finance Agency second, an $85,000 third from South (Santa Clara) County Housing, a $6,500 fourth from the Housing Trust of Santa Clara County and a $6,000 grant from a non-profit agency. That's what it's come to in Silicon Valley, CA an area where single family home prices have fallen nearly $40,000 in recent months but the median price of homes remain higher than a half million dollars. Instead of the traditional first and second mortgage to finance a home and cover the down payment, buyers are piling on more mortgages to acquire the American Dream…
A couple have been looking for the right house to buy for the last year or so. Property values have skyrocketed so we have been searching for well-priced "handyman specials", figuring we could buy at a good price and make improvements ourselves, over time. They found the perfect house in a great neighborhood for $230,000…
Each year more than 40 percent of all homes are purchased by first-time buyers according to the National Association of Realtors, a percentage which should offer some comfort if you're about to buy a first home. Others have done it, others are doing it, and you can too. But like most things, there are ways to make the process easier. Here in capsule form are 10 baseline strategies to make that first purchase a good experience…
President Bush has signed a funding bill for the Department of Housing and Urban Development that gives life to a housing program first proposed by then candidate Bush during the 2000 campaign. The measure also authorizes the Federal Housing Administration (FHA) to begin backing hybrid adjustable rate mortgages and increases the loan ceiling on FHA-insured multi-family mortgages. Under the "American Dream Down Payment Assistance" program, Uncle Sam would match $3 for every $1 contributed by a bank or other private lending institution or individual towards a down payment, closing costs or a "soft" second mortgage that need not be paid back as long as the borrower meets certain conditions. The appropriations bill earmarks $50 million for the program, enough by Administration estimates to get 30,000 potential buyers over the hump and on their way towards home ownership. Assistance of up to $1,500 would be available to first-time buyers with incomes at or below 80 percent of the median for their areas…
What hurdles are out there in a seller's market that a buyer may have to contend with besides the common problems with a seller's market? There's not enough inventory and too many buyers? There's also the problem that a house can actually sell for too much. This can happen when a contract price exceeds an appraisal from the bank. When this occurs the buyer must come up with the difference or the seller must reduce the sales price down to the appraisal. Apart from taking the above noted actions, buyers can beef up contracts without going over the appraised value of a property and having to renegotiate the contract or resulting in a failed contract altogether. These strategies may include using monetary and non-monetary offers in the contract…
Since Sept. 11, more and more Americans have pushed safety and security high on their list of requirements for the community where they might buy a home. Some are reconsidering the allure of big city urban living, especially when a greater use of technology can permit them to live virtually anywhere and telecommute to the city for work. Based on largely anecdotal evidence obtained from real estate agent interviews Forbes.com recently produced "The Best Houses in the Safest Places," a survey for luxury homes off the beaten path. The magazine found 16 cities in 11 states it deemed as "conceivably" safer than big cities…
House hunting for first-time homebuyers- It's an exciting, albeit nerve-wracking, experience. If you're like others in the market for their first home, you probably have in mind exactly how your soon-to-be home will look. But it's important not to fall into the bad decorating, dingy walls, and dirt-bare back yard equals bad-home trap. If you don't see past the hideous wallpaper, funky light fixtures, and avocado green carpeting, you may miss out on a home with great potential. And, if you're looking for a home in a seller's market where homes are being snatched up as soon as they go on the market, you'll come to realize you can't be choosy if you want to make a competitive offer…
What is PMI? Although the borrower pays the monthly (or annual) premium, this insurance is solely for the benefit of the lender. It is designed to protect the lender should they have to foreclose on your property, and the price that the property is sold at a foreclosure sale does not equal the outstanding balance on your mortgage loan. Unfortunately, although many lawyers believe that the monthly PMI premium can legally be deducted as "mortgage interest", the Internal Revenue Service takes a strong position that such payments are not deductible…
Don't be discouraged about this scenario, however. Keep in mind with 30-year fixed rate mortgages going for under 6 percent right now, high interest rates in today's market, means 8 - 10 percent. My first mortgage was a 2-1 buy down with perfect credit and my interest rate started at 10 percent and went up a percentage point per year for the next two years - interest rates are really all a matter of perspective. Should you wait to sell/buy property? I get this question a lot. Real estate is a great investment no matter when you buy - if you're willing to let time work in your favor. Obviously, there are peaks and valleys in the real estate market just like any other investment…
Once those formalities have been resolved, here are some suggestions. Let's assume your parents currently have $150,000 in liquid assets. Your purchase price is $150,000. Your parents can lend you the entire purchase price, and you will take title to the condominium in your name only. You will sign a promissory note, agreeing to repay this money over an agreed upon period of time. To secure payment of this note (and to allow you to deduct the mortgage interest for tax purposes) you will also have a deed of trust (the mortgage document) recorded against your property in favor of your parents…
Your boyfriend will be paying half of the mortgage and half of the utilities. Does he have any interest in obtaining half of the property in the future - whether or not you stay together as a couple? Does he believe that he will be obtaining any ownership rights because he is making these payments? What about furniture? Will you be furnishing the entire house, or will your friend share in these expenses? What happens should you decide to split? Will you be able to afford to carry the house on your own, or will you need to get a roommate to assist you financially? If both of you were to go on title, the law is universal in the United States…
You've finally found the perfect - or near-perfect - house. You've haggled, negotiated, and appear close to finalizing the deal. But first you'll want to hire a professional inspector - and then you'll want to do some inspecting yourself, including the home's major systems. An inspection involves a qualified professional who will take an objective look at the condition of the property and prepare a report. But it's also important that you, as the buyer, carefully inspect every foot of the house for things that might not be included in the professional inspection, as well as the things that are, like the systems - heating, cooling, plumbing, electrical service, and the water heater…
In the Southern U.S. it is not unusual to pass by many mobile home parks on the way to an everyday destination. They were - and still are - considered a vital part of many communities across the country and may offer a viable alternative to traditional housing for households seeking an affordable home of their own.. For some, a manufactured home can fulfill their dream of homeownership. Fortunately, the industry has gone through many changes in the last 25 years to assure quality and safety in the construction of manufactured houses…
A buyer who finds that one special home may wonder why the present owner is selling. The reason could be as benign as a job transfer, or as nasty as a divorce with arduous negotiations. Can buyers ask why a home is being sold? Or are such questions somehow unfair, something that goes in the "MYOB" (Mind Your Own Business) category? As a buyer, you should know more about the home than the number of bedrooms and baths…
Yearning for a brand, spanking new home but don't have any cash for a down payment? That may no longer be a problem under a new "strategic partnership" announced recently between the Nehemiah Corp. and the Homebuilders Financial Network. Under the terms of the alliance, Nehemiah will offer down payment assistance to cash-starved buyers who have their eyes on houses built by any of the 20 builders throughout the nation whose in-house mortgage operations are run by HFN…
Home buying with no money down is a wonderful concept, something that can make ownership available to huge numbers of people who otherwise are unable to buy. And yet there has not been a rush to buy homes with nothing down, in part because such financing has sometimes been promoted as a get-rich-quick device. But now we have a well-known lender entering the no-money-down market, something which should greatly help both the concept and its image…
If you're close to buying a home in the coming year, then you'll want to keep a close eye on your holiday spending. You don't want to hamper your chances of getting a loan, and you'll want to be sure you have plenty of cash on hand in your first year of homeownership. The International Mass Retail Association in a late October survey estimated that holiday shoppers will spend an average of $863 on gifts this year. However, they ultimately end up spending some 15 to 30 percent more, the association says. Because your credit history is so important in obtaining a loan, you'll want to refrain from opening any credit accounts for major appliance or electronic purchases. You'll also want to avoid running your existing credit cards to their limits. Why? When you apply for a mortgage, the lender may request a credit score as well as a credit report…
When you're in the market for a home, it seems as if there are millions of questions to ask -- and no doubt plenty more. As buyers you may become so wrapped up in the physical aspects of the house -- the rooms, amenities, and structure -- that you give less attention to quiet issues which may strongly impact your ability to enjoy a home. What kinds of factors will affect your quality of life? The obvious ones are the first to come to mind: the distance to work, the special programs available through the local school system, and neighborhood shopping and recreation. Those factors, while important, may not touch the issues specific to your situation. Consider the thousands of families who have an aging parent residing with them…
If you're in the process of searching for or buying a home, you've probably been advised to have a home inspection. But there's another test that you'll want to make sure your potential home -- or, if you don't have plans to move, your current home -- passes - the radon test. Radon, a colorless and odorless decay product of uranium that occurs naturally in soil and rock, has been identified as a leading cause of lung cancer in the United States. It causes 15,000 to 22,000 deaths a year. Radon can enter your home from the ground through cracks in walls, basement floors and foundations, and the risk of exposure increases during colder months when we keep our windows and doors closed and spend more time indoors…
I am currently in escrow on a house. We had the inspection done yesterday. There are a few major concerns of which we were unaware. The largest is a faulty shower pan, which has been leaking for several years and has caused substantial damage to the sub-flooring. What is the best way to handle this? Allow the seller to choose the method and company to repair this? Or should I have a professional estimate the costs, then ask for cash from the seller so as to allow myself control over the work? I would like to know the best way to negotiate an allowance (or discount off sales price) for these items. I don't expect the house to be restored to perfect condition for me, but I've heard of parties negotiating on such items…
Periodically you may hear from individuals who want to make $1 million in real estate -- quickly and with no money down. Usually they want to know more about real estate foreclosures -- how to buy them and how to profit from such homes. Foreclosure properties can be a good place to invest for exponential growth (or loss). There are some deals out there for little or no money down, but potential investors should take precautions because foreclosed properties can involve significant risks…
Many would-be home buyers are dismayed at the ever-increasing price of their rent and housing in general. In addition, they just can't seem to make enough money top afford the purchase of a home. They are in industries that will not provide them more opportunity than what they have now. As an example, someone who's salary was at $15,000 and though there are houses priced about $50,000, their debt to salary ratio knocks them out of the buying arena at this time. They can't see homeownership as a part of his future. For people in this situation there is hope.. Someone making $15,000 could purchase a house in several markets with today's interest rates…
Thinking about a second home? In 2001, nearly 6 percent of the record 6.2 million sales of single-family homes were of second homes. According to the most recent data, there were 3.6 million vacant seasonal homes in the third quarter of 2002, up from 3.1 million in 1990 and only 1.7 million in 1980, the U.S. Census Bureau said. "That category often is cited as the total number of vacation homes," David Lereah, chief economist of the National Association of Realtors, says. "However, we believe that assumption misses many recreational properties that are not vacant." Other census data show there are 9.2 million homes held by owners in addition to their primary residences…
As an increasing number of Americans are snatching up new homes at record levels and technology's role in the home-buying process continues to mount, many homebuyers are thrust into the position of buying their homes site unseen. The National Association of Home Builders reports that new-home sales in August reached a record 996,000 units on a seasonally adjusted annual basis. "Very low interest rates and the widely held view that housing is a very good investment are largely responsible for the surge in new home sales," said NAHB President Gary Garczynski, a builder/developer from Woodbridge, Va. In addition, many home shoppers are relying on the Internet to conduct virtual tours of new-home plans and research home prices, availability, and options…
The description on a piece of property may read "diamond in the rough." Which means either it needs lots of work or perhaps just a little TLC. But exactly how "rough" can a house be before a lender decides the collateral is not healthy enough to issue a mortgage? And what happens if you want the seller to fix something before you'll close the deal? Upon contract, one of the first things you'll want to do is have the home inspected for structural integrity, defects and potential problems. Note this is not the function of a licensed appraiser who determines the market value for the home…
Most of the time, people have good intentions, but as a buyer, you need to protect yourself from mistakes the seller may make in giving you proper disclosures. This is especially important when it comes to environmental issues such as water damage that can lead to mold. While Realtor organizations are attempting to make it more difficult for sellers to conceal defects from buyers, state-mandated disclosures are often still a matter of interpretation. Some sellers may intend to provide proper disclosure, but may leave off material facts because they don't realize the significance…
Private Mortgage Insurance (PMI). PMI is a monthly fee that the borrower pays if the first trust loan exceeds 80 percent of the purchase price. Since a lower down payment results in a statistically higher risk to the lender, PMI insures a portion of the loan to reduce the risk to the lender. Thanks to creative lenders, however, a borrower can still put as little as no money down and avoid PMI by taking out two loans. Ask your loan officer about loan packages with no PMI, sometimes called "piggy-back" financing…
Escrow has closed, the title is in your name, and the hassle of moving is finally over. While you may feel like the home buying process is behind you, it's not. Now the onslaught of mailers, solicitations, and tempting offers geared toward new homeowners, who are typically trying to rebuild their finances. How has your mailbox become a receptacle for these solicitations? Your home purchase is a matter of public record. There are many things you can do - and not do, for that matter - to get back on solid financial ground. There are the obvious things: stay on top of your mortgage payments; try to avoid any major purchases, like a new vehicle; and make sure you have adequate homeowners insurance. In their book, Home Buying for Dummies (Hungry Minds, Inc., 1999), Eric Tyson and Ray Brown outline everything a first-time homebuyer would ever want and need to know about buying a home, including how to get your house in financial order…
"Facts, m'am. Just the facts" was the constant refrain of Sergeant Joe Friday of the television series "Dragnet" in the 1950s. More than fifty years later in the real estate industry, a very special type of sergeant, the buyer's agent, performs an equally valuable service -- dispensing and interpreting facts for his buyer/client. The buyer' agent's mission? To provide the client with a high-level of interpretation, even if it means walking away from the bulk of compensation should a sale not be consummated?…
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