Posted by
admin on Oct 31, 2008 in
Announcements,
Buying,
Finances,
Misce4llaneous 
The $7,500 home ownership tax credit that the federal government created earlier this year as part of the Housing and Economic Recovery Act (H.R. 3221) is another tool at your disposal to encourage potential buyers to jump off the fence and get into the real estate market.
When you combine the tax credit with today’s low interest rates, wide selection of for-sale inventory, and affordable home prices, many of the pieces are in place for your customers to buy now. But tax credits can be confusing.
Here are 6 things you should know about the tax credit:
- Buyers have until July 2009 to make a purchase that qualifies.
The tax credit was passed in July of this year as part of the Housing and Economic Recovery Act (H.R. 3221). It’s worth up to $7,500 and can be taken in a single tax year. Authorization for the credit ends July 1, 2009, so if you wait to buy in the first half of 2009 you can take the credit on your 2009 tax return. You can take the credit on your 2008 tax return if you bought your house this year after April 9.
- Buyers don’t really have to be “first-timers.”
The tax credit is actually available to any individual or household that hasn’t owned a home for at least three years. And the NATIONAL ASSOCIATION OF REALTORS® has asked Congress to expand the credit to all buyers, not just those who haven’t owned a primary residence in recent years.
- Even if buyers exceed the income limit, they can benefit from the credit.
The actual credit amount is set as a percentage of the home purchase amount. That percentage amount is 10 percent, so your customers can get 10 percent of the home price credited against their tax liability, up to a maximum $7,500. Sounds like a great deal. But what if you make more money than the income limit of $75,000 for individuals and $150,000 for households? Good news: Individuals whose income exceeds the $75,000 limit but don’t make more than $95,000 can still take the credit but on a reduced basis. The same thing applies to households earning up to $170,000. By the way, any house is eligible as long as it’s a primary residence and is in the United States.
- Think of it as an interest-free loan.
The federal government requires the tax credit to be paid back in small, 6.67-percent increments over 15 years, although repayment will be no more than $500 yearly and payments will not start until 2011. For that reason, some analysts have likened the credit to a 15-year, interest-free loan to help make home buying affordable. NAR is pushing congress to remove the repayment provision, making this tax credit a true tax credit rather than an interest-free loan.
- You don’t have to be authorized before making a home purchase.
There is no pre-purchase authorization, application, or other approval process. Eligible buyers simply have to claim the credit on their IRS Form 1040 tax return and/or any form that the IRS might devise.
- New-home construction qualifies.
For a home that a buyer constructs, the purchase date is the first date the buyer occupies the home. However, any home that is not a primary residence, such as a vacation home or income property, does not qualify.
NAR Asking Congress to Expand Credit
As mentioned above, NAR has asked Congress to do away with the repayment provision of the first-time buyer tax credit and expand the credit to all home buyers, not just first-timers. The proposals were part of a four-point housing stimulus plan the association submitted in mid-October.
“Housing has always lifted the economy out of downturns, and it is imperative to get the housing market moving forward as quickly as possible,” said NAR President Richard F. Gaylord. “It is vital to the economy that Congress take specific actions to boost the confidence of potential homebuyers in the housing market and make it easier for qualified buyers to get safe and affordable mortgage loans.
Tags: buyers, Finances, first time buyers, first time home buyers, homes sales, tax credit
Posted by
admin on Oct 31, 2008 in
Announcements For Immediate Release:
WASHINGTON, October 01, 2008
The following is a statement by National Association of Realtors® President Richard F. Gaylord:
“The National Association of Realtors®, on behalf of its 1.2 million members, commends U.S. Department of Housing and Urban Development Secretary Steve Preston and the entire oversight board for quickly implementing the Hope for Homeowners Program. This program will permit families to refinance into safer, more affordable mortgages, in many cases helping those families avoid a devastating foreclosure. Hope for Homeowners will significantly contribute to stabilizing local home prices across the country. The program also protects the investment of the government and taxpayers by allowing them to share in the homeowner’s equity and appreciation.
Careful implementation of the program will ensure lender participation while protecting the FHA fund. We appreciate HUD for reaching out to government agencies, lenders, and other interested parties before implementing the program. Realtors® work to build communities, and by participating in this program, we can do our part to help many families to keep their piece of the American dream.”
Tags: Finances, financial, homeowners, HOPE for Homeowners, relief
Posted by
admin on Oct 31, 2008 in
Buying,
Real Estate If you do not think that a home inspection is important, you are wrong. While some buyers make a purchase without having an inspection, nobody would recommend this. The fact of the matter is that you never know what is wrong with a home. And guess what? If you do not order a home inspection, you may never find out. If you do, it could be several months later.
Here are three of the best reasons to consider ordering a home inspection.
- Many people think that a home inspection will cost them a lot of money. But all in all, this is not true. For the most part, you should be able to order a home inspection for right around $300 or so. Of course, this will differ based on the type of property, area, and much more. But this is a small price to pay for finding out what could potentially be wrong with the home that you are buying.
- If you do not pay for a home inspection now, you may end up paying for it later. In other words, a problem that is not caught before you buy is one that you will have to pay for on your own when you discover it at a later date. And if the problem is a big one, such as a leaky roof, you are going to bet out quite a bit of money. When you pay for a home inspection you will give yourself the chance to learn about all the problems you are buying, or maybe even have them fixed before you move in.
- A home inspection will give you peace of mind. You may not think that you need to order an inspection, but after you move in you will begin to worry about any problems that may be haunting you. It is much better to pay for an inspection before buying so that you can live stress free after moving in. It is no fun to always be worrying about something going wrong.
These are three great reasons to order a home inspection. If you are on the fence about whether or not to pay for an inspection, let the three tips above sway you towards doing so.
Tags: buyers, home buyers, home buying, home inspections, home ownership
Posted by
terryriw on Oct 24, 2008 in
Announcements I just received the following from NAR and wanted to post the information here for everyone to view.
WASHINGTON, October 24, 2008
Existing-home sales increased last month as buyers responded to improved housing affordability conditions, according to the National Association of Realtors®.
Existing-home sales – including single-family, townhomes, condominiums and co-ops – rose 5.5 percent to a seasonally adjusted annual rate¹ of 5.18 million units in September from a level of 4.91 million in August, and are 1.4 percent higher than the 5.11 million-unit pace in September 2007.
Lawrence Yun, NAR chief economist, said more markets are seeing year-over-year gains. “The sales turnaround which began in California several months ago is broadening now to Colorado, Kansas, Minnesota, Missouri and Rhode Island,” he said. “The South was hampered by much lower home sales in Houston in the aftermath of Hurricane Ike.”
NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said low home prices and low interest rates have been attracting buyers. “This is the first time since November 2005 that home sales have been above year-ago levels,” he said. “Credit tightened at the end of September, but the improvement demonstrates that buyers who’ve been on the sidelines want to get into the market to make a long-term investment in their future.”
According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to 6.04 percent in September from 6.48 percent in August; the rate was 6.38 percent in September 2007.
Yun said there may be market disruptions. “The credit markets are not settled yet, although the mortgage market stabilized with the government takeover of Fannie Mae and Freddie Mac. Inventory remains high, and price declines are pressuring owners,” he said. “Additional housing stimulus would stabilize prices more quickly, which in turn would bring faster stability to Wall Street. Removing the repayment feature on the first-time buyer tax credit and permanently raising loan limits would bring more buyers into the market and further reduce inventory.”
Total housing inventory at the end of September fell 1.6 percent to 4.27 million existing homes available for sale, which represents a 9.9-month supply² at the current sales pace, down from a 10.6-month supply in August. This marks two consecutive monthly declines since inventories peaked in July.
The national median existing-home price3 for all housing types was $191,600 in September, down 9.0 percent from a year ago when the median was $210,500. “Compared to a fairly small share of foreclosures or short sales a year ago, distressed sales are currently 35 to 40 percent of transactions. These are pulling the median price down because many are being sold at discounted prices,” Yun explained. “The current market is not being dominated by speculative investors. Rather, 80 percent of current buyers are purchasing a primary residence, which is a bit higher than historic norms.”
Single-family home sales increased 6.2 percent to a seasonally adjusted annual rate of 4.62 million in September from a pace of 4.35 million in August, and are 3.8 percent above the 4.45 million-unit level a year ago. The median existing single-family home price was $190,600 in September, which is 8.6 percent below September 2007.
Existing condominium and co-op sales were unchanged at a seasonally adjusted annual rate of 560,000 units in September, but are 15.7 percent below the 664,000-unit pace in September 2007. The median existing condo price4 was $199,400 in September, down 10.2 percent from a year ago.
Regionally, existing-home sales in the West jumped 16.8 percent to an annual rate of 1.25 million in September, and are 34.4 percent higher than September 2007. The median price in the West was $253,600, down 18.5 percent from a year ago.
In the Midwest, existing-home sales increased 4.4 percent to an annual pace of 1.19 million in September, but are 2.5 percent below a year ago. The median price in the Midwest was $152,500, which is 7.9 percent lower than September 2007.
Existing-home sales in the South rose 2.2 percent in September to a pace of 1.90 million but remain 7.8 percent below September 2007. The median price in the South was $167,200, down 4.1 percent from a year ago.
In the Northeast, existing-home sales slipped 1.2 percent to an annual pace of 840,000 in September, and are 7.7 percent lower than a year ago. The median price in the Northeast was $246,800, down 5.4 percent from September 2007.
The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.
# # #
NOTE: References to performance in states or metro areas are from unpublished raw data used to analyze regional trends; please contact your local association of Realtors® for more information.
¹The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.
Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – more than 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.
²Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases.
³The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.
4Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.
Terry Iwaniw
Foreclosure Prevention Consultant
First Time Home Buyer Specialist
REALTOR Associate
RE/MAX Home Team
609-417-1086
Tags: existing home prices, existing home sales, NAR
Posted by
terryriw on Oct 24, 2008 in
Uncategorized In the last few weeks there’s been quite a bit written about the power of social networks that are online. I even posted a message previously asking the best way to use these social networks. The key questions is to let everyone know of any new networks that you joined or have created.
Specifically, I created a social network that deals with real estate issues in Southern NJ. The biggest challenge is to be able to get the word out about this new network. Additionally, I’d like to set the tone of the network group so that it is NOT just a forum for other agents to sign up and try to recruit other members as buyers. This, I think, would be the biggest turn-off for any real estate consumer that joined and would pretty much destroy the network.
I’m trying to establish a forum for consumers to join where they can feel comfortable and safe in discussing and asking questions about real estate issues. I’d like to see them do this without having to worry about being deluged with solicitations from other agents.
As I posted before, I am a member of so many different online social networking sites that I’m seriously thinking of putting a database together in order to be able to keep track of all of them. But most importantly, I’m beginning to see these social networks as the very same communities that were started during the MLM heydays of the mid 90’s, where members within the industry are trying to sell their product or service to each other and the few select people.
In that the vast majority of real estate consumers tend to register/join anywhere from 5-8 agent’s sites when they are looking for a home. They do this as if each agent has some special information or inside track on properties that no other agent does. But how can you educate the consumer? You need to start interacting with them. And you can’t interact with them if when they join any kind of community they are deluged with solicitations from every real estate agent that is registered with that community.
I, on the other hand, look forward to discussing in detail the specifics about any real estate issues as they pertain to the Southern NJ area. Be they foreclosures, home prices, or 1st Time Home Buyer issues, as a real estate professional I feel that it is my obligation to educate the consumer about all issues pertaining to real estate and not just try to sell them a house or my services.
So, in conslusion, I’d be interested to hear from others as to which online social networks that you belong to and your opinion of that network.
Terry Iwaniw
Foreclosure Prevention Consultant
First Time Home Buyer Specialist
REALTOR Associate
RE/MAX Home Team
609-417-1086
Tags: education, Real Estate, real estate agents, real estate consumers, real estate issues, social network, social networking
Foreclosure filings-default notices, auction sale notices and bank repossessions-were reported on 265,968 properties in September, a 12 percent decrease from the previous month but still a 21 percent increase from September 2007, according to RealtyTrac. One in every 475 U.S. housing units received a foreclosure filing in September. As distressing as this sounds, New Jersey is still more sound in terms of the housing market then other states.
Foreclosure filings were reported on 765,558 U.S. properties during the third quarter, up more than 3 percent from the second quarter and up 71 percent from the third quarter of 2007. “Much of the 12 percent decrease in September can be attributed to changes in state laws that have at least temporarily slowed down the pace at which lenders are moving forward with foreclosures,” said James J. Saccacio, chief executive officer of RealtyTrac. “Most significantly, SB 1137 in California took effect in early September and requires lenders to make contact with borrowers at least 30 days before filing a Notice of Default (NOD). This will cause more delays in foreclosure filings and skew some of the numbers for that month.
In September we saw California NODs drop 51 percent from the previous month, and that drop had a significant impact on the national numbers given that California accounts for close to one-third of the nation’s foreclosure activity each month. Another example is North Carolina, where legislation was signed into law in August that requires lenders to provide homeowners and the state’s commissioner of banks a 45-day notice prior to filing a Notice of Default. We saw NODs drop 66 percent in North Carolina in September.
“On the other hand, initial foreclosure filings in Massachusetts jumped 465 percent from August to September after being much lower than normal in June, July and August. That temporary lull happened after a new law took effect in May requiring lenders to give homeowners a 90-day right to cure notice before initiating foreclosure. But in September, about 90 days after the law took effect, initial foreclosure notices jumped back up close to the level we were seeing earlier in the year.”
Nevada, Florida and California continue to post the top state foreclosure rates. New Jersey doesn’t make the list. As much as the current news about foreclosures seems to smack of doom and gloom for the housing market, in New Jersey the housing market is still quite stable and has lower number of foreclosures. This not to say that there are no foreclosures in the state, but those foreclosures do not have as much of an impact on the market here then in other states.
Are there the so-called “bargains” to be had in this state? Possibly. But not as much as in Nevada, California, or Arizona. Even with the housing market trending with the national trend of declining markets, New Jersey and many of the state in the Northeast are having the least amount of decline in the market prices. As posted on here before, Pending Sales are much better in our area then in other areas of the country and home prices are beginning to stablize.
So, all of this information is fine and dandy, but if you’re one of the distressed owners in Southern NJ, what do you do? We know you don’t want to have your home foreclosed. You do have other options, but to be able to better understand them and to better determine which ones would be to your best interest, a Foreclosure Prevention Consultant would need to discuss your situation with you in detail and review each option with you.
If you are looking to avoid foreclosure, please contact us directly.
Terry Iwaniw
Foreclosure Prevention Consultant
REALTOR Associate
RE/MAX Home Team
609-417-1086
Tags: buyers, homes for sale, housing market
Posted by
admin on Oct 20, 2008 in
Buying,
Real Estate Avoid 10 Common Potentially Devastating Mistakes First Time Home Buyers Make.
Buying a home can be a “hair-raising” experience. It can be a roller coaster of emotions… finding the right place… securing the loan… moving in. And if you’re like most of us, your home will be your largest investment. The emotions over such a large and personal purchase can often cloud good business judgment.
Many home buyers do very little research before “diving in” and investing their hard-earned money. Before doing that, doesn’t it make sense to be as informed as possible? That’s what this posting is all about. It’s designed to help you avoid 10 common, critical mistakes many home buyers make. If you follow these 10 suggestions, with the help of the right real estate professional, you’ll make a good sound business decision that you’ll be happy and proud of for years to come.
1. Inspect, Inspect and Inspect- Go over the inspection report with a fine tooth comb. Make sure the report was done by a professional organization. For condo purchases, go over the by-laws, and association fees. Don’t take anything for granted… inspect everything!
2. Imagine the Property Vacant- Your furnishings and decorations will be the ones filling this new residence. Don’t be swayed by beautiful furniture … it leaves with the owner.
Be Columbo – check out all expenses. Taxes, utilities owner dues… everything!
3. Income Plus Lifestyle Equals Mortgage Payment- Sit down with a competent real estate professional and honestly discuss your income level and living expenses. Take into account future considerations like: children, add-ons, amenities or fix-ups. Your dream home is certainly worth a sacrifice but don’t mortgage your entire future.
4. View Several Homes- See at least 3-5 properties. Don’t move on the first property you see but… don’t move too slowly either. With your agent’s help, you’ll be able to view enough properties to get a good overall perspective of your market. And when you find the right property, all the leg work will be worth it.
5. Utilize Your Team- By aligning yourself with the right real estate professional, you’ll have an entire team working for you. Top real estate professionals have lenders, title reps, inspection teams – an entire group of trained professionals to make the whole buying experience simple and easy for you.
6. Be Columbo- Check out all your costs and expenses before you sign: utilities, taxes, insurance, maintenance and homeowner dues, if applicable. Make sure all utilities are on (gas, electricity, and water), so you can inspect everything in working order. Ask lots of questions and be very detail conscious.
7. Do a Final Walk-Through- Visit the property after all the furnishings have been moved out to be sure there are no surprises. Be absolutely positive the property was left exactly as you had agreed upon in the contract. Many times, things are unintentionally overlooked that could have been spotted in a final walk-through.
8. Plan For Flexibility- Closing dates are not written in stone. Allow for contingencies and have a back-up plan. If you or the sellers need a little more time to conclude the final arrangements, don’t let these delays upset or frustrate you. These types of circumstances are not uncommon in a real estate transaction.
Before you sign do a final walk- through and be sure the property was left per contract.
9. If It’s Not In Writing, It Doesn’t Exist- All promises and discussions are to be in writing. Don’t make any assumptions or believe any assurances. Even the best intentions can be misinterpreted. Have your real estate professional keep an ongoing log (in writing) of all discussions, and get the seller’s written approval for all agreements.
10. Loyalty Breeds Loyalty- Be open, honest and up-front with your team. Hard feelings and disloyalty will cause headaches, delays or may even keep you from getting into the home you worked so hard to locate. Take the time to select the right team in the beginning and your first home purchase will be a simple, easy and profitable experience you’ll have fond memories of… for years to come.
Tags: buyers, first homes, first time home buyers
Posted by
admin on Oct 20, 2008 in
Real Estate,
Selling Mistake #1 — Pricing Your Property Too High
Every seller obviously wants to get the most money for his or her product. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property. Also, it may lead other buyers to expect more than what you have to offer. As a result, overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price.
Mistake #2 — Mistaking Re-finance Appraisals for the Market Value
Unfortunately, a re-finance appraisal may have been stated at an untruthfully high price. Often, lenders estimate the value of your property to be higher than it actually is in order to encourage re-financing. The market value of your home could actually be lower. Your best bet is to ask your Realtor for the most recent information regarding property sales in your community. This will give you an up-to-date and factually accurate estimate of your property value.
Mistake #3 — Forgetting to “Showcase Your Home”
In spite of how frequently this mistake is addressed and how simple it is to avoid, its prevalence is still widespread. When attempting to sell your home to prospective buyers, do not forget to make your home look as pleasant as possible. Make necessary repairs. Clean. Make sure everything functions and looks presentable. A poorly kept home in need of repairs will surely lower the selling price of your property and will even turn away some buyers.
Mistake #4 — Trying to “Hard Sell” While Showing
Buying a house is always an emotional and difficult decision. As a result, you should try to allow prospective buyers to comfortably examine your property. Don’t try haggling or forcefully selling. Instead, be friendly and hospitable. A good idea would be to point out any subtle amenities and be receptive to questions.
Mistake #5 — Trying to Sell to “Looky-Loos”
A prospective buyer who shows interest because of a “for sale” sign he saw may not really be interested in your property. Often buyers who do not come through a Realtor are a good 6-9 months away from buying, and they are more interested in seeing what is out there than in actually making a purchase. They may still have to sell their house, or may not be able to afford a house yet. They may still even be unsure as to whether or not they want to relocate.
Your Realtor should be able to distinguish realistic potential buyers from mere lookers. Realtors should usually find out a prospective buyer’s savings, credit rating, and purchasing power in general. If your Realtor fails to find out this pertinent information, you should do some investigating and questioning on your own. This will help you avoid wasting valuable time marketing towards the wrong people. If you have to do this work yourself, consider finding a new Realtor.
Mistake #6 — Not Knowing Your Rights & Responsibilities
It is extremely important that you are well-informed of the details in your real estate contract. Real estate contracts are legally binding documents, and they can often be complex and confusing. Not being aware of the terms in your contract could cost you thousands for repairs and inspections. Know what you are responsible for before signing the contract. Can the property be sold “as is”? How will deed restrictions and local zoning laws will affect your transaction? Not knowing the answers to these kind of questions could end up costing you a considerable amount of money.
Mistake #7 — Limiting the Marketing and Advertising of the Property
Your Realtor should employ a wide variety of marketing techniques. Your Realtor should also be committed to selling your property; he or she should be available for every phone call from a prospective buyer. Most calls are received, and open houses are scheduled, during business hours, so make sure that your Realtor is working on selling your home during these hours. Chances are that you have a job, too, so you may not be able to get in touch with many potential buyers.
Tags: 2 - Listings, home selling, marketing, real estate marketing, sales
Posted by
admin on Oct 20, 2008 in
Buying,
Real Estate by Brandon Cornett
In the last few years, the process of buying a home has been altered by the so-called mortgage crisis and the continued evolution of online real estate tools. So in this article, we will take a fresh and modern look at the process of buying a house. More specifically, I will outline the general process in twelve clear steps.
1. Check Your Credit
Credit scores have always been important for home buyers, but they are more in the wake of the mortgage meltdown of 2007 – 2008. According to industry experts, home buyers in 2006 needed a credit score of at least 620 to qualify for the best interest rates on a loan. Two years later, borrowers needed a score of 760 or higher to get the best rates. That’s a much stricter requirement!
So your first step should be to review your financial situation. Order your credit reports from Experian, Equifax and TransUnion, and check them for errors. Order your credit score (different from your reports) to see how you stack up against the national average. If necessary, focus on improving your score by paying down credit card balances, making all future payments on time, etc.
2. Determine Your Budget
Don’t make the mistake of letting a mortgage lender tell you what you can and cannot afford, in terms of a monthly mortgage payment. In reality, the only thing a lender can tell you is the amount you qualify for — not the amount you can realistically afford. In other words, you should determine your home buying budget for yourself. There are a lot of free mortgage calculators online that can make this process easier for you.
3. Research and Choose a Type of Mortgage
Do you know the difference between a fixed-rate mortgage and an ARM? This is just one of the things you need to understand before applying for a mortgage loan. Because of increased competition in the lending industry, there are more types of home loans today than ten years ago. The key to success when choosing a mortgage is to consider your long-term plans and find a loan that matches those plans. To do this, you must learn the pros and cons of the primary loan types.
4. Get Pre-Approved for a Loan
Pre-approval is a process in which the mortgage lender reviews your financial and credit history to determine your “creditworthiness” … an industry term that means: “How much of a risk is this person, and how much are we comfortable lending?” When you get pre-approved for a certain loan amount, there’s a good chance that you’ll receive final approval for that amount as well, when the time comes.
Having a pre-approval letter in hand also shows sellers that you are serious about (and capable of) purchasing their home. This can make a big difference in hotter real estate markets, where the seller may receive multiple offers from competing buyers.
5. Find a Real Estate Agent
If you are buying a home for the first time, or in a new city you’re not familiar with, it’s wise to hire a professional real estate agent. When you compare the amount of money you’ll pay for a new home with the size of the agent’s commission, you’ll see that it’s worthwhile to hire an agent. Choose an agent who specializes in helping buyers, as opposed to sellers.
6. Narrow Your Search
The neighborhood you choose is nearly as important as the house itself, because both have a direct bearing on your quality of life — not to mention the future resale value. For these reasons and more, it’s always best to live in a city for a while before buying a home, even if it means renting an apartment for a while. That way, you can discover which areas you like best before committing to an area.
7. Begin House Hunting
This is where you and your agent visit properties in order to find one that matches your needs. Here are some helpful tips. Take a digital camera with you to get pictures of each home. This will help you recall the details later on. Bring a notepad as well, and for the same reason. While you’re at it, you might want to bring a friend along for an unbiased opinion of each property — you know, that outspoken friend who calls it like it is.
8. Evaluate the Asking Price
It’s referred to as the “asking price” for a good reason. Just because a property is listed at $250,000 doesn’t necessarily mean it’s worth that amount. This is another area where it helps to have a real estate agent. Most agents are expert at validating sale prices against recent sales in the area, and that’s the best way to find out if the price is realistic or inflated.
9. Make an Offer
Once you’ve determined that the price is fair and reasonable, you are ready to make an offer on the property. Always make the offer contingent upon the home inspection (see next item). That way, if the inspector uncovers an issue that you consider a deal breaker, you have a way out of the contract. Ask your agent about contingencies.
10. Get a Home Inspection
Most inspections only cost a few hundred dollars. That’s a small price to pay for the peace of mind you get in return. A home inspector will review the structural and mechanical aspects of the house, including (but not limited to) the roof, foundation, electrical, and heating / cooling system.
11. Attend the Closing / Settlement Process
So, you’ve made it through all of the inspections and the process is still on track. Great! The next step will be the closing / settlement process (it goes by different names in different parts of the country). Actually, you can prepare for this process early on by putting extra money aside. This is when the title to the property is transferred from the seller to the buyer. You’ll also be signing a lot of paperwork and paying any other fees that are due.
12. Tie Up Loose Ends
After your move, you’ll have a few more things on your task list. Transfer your utilities if you haven’t done so already. Complete a change-of-address form with the post office. Get a safe deposit box for your home insurance policy and other important documents. Set up a mortgage payment schedule or an online auto-pay system. And give yourself a pat on the back … you’re now a homeowner!
* Copyright 2008, Brandon Cornett. You may republish this article if you retain the citation notes and hyperlink below.
Citation Note: This article was created by Brandon Cornett, publisher of the Home Buying Institute. HBI offers consumer advice on mortgage loans, home buying, credit information and more. Learn more by visiting: http://www.homebuyinginstitute.com
Tags: advise, buyers, guide, home buying
Posted by
admin on Oct 20, 2008 in
Finances,
Misce4llaneous,
Mortgages Housing and Urban Development Secretary Steve Preston has a message for prospective home buyers -
You may have heard that the credit markets were “frozen,” but FHA has been open for business throughout the credit squeeze, and so are Fannie Mae and Freddie Mac. In fact, FHA’s volume has tripled and the agency is now insuring well over a hundred thousand new loans a month.
In an exclusive one-on-one interview with Realty Times, the country’s top housing official said that FHA, Fannie and Freddie (who have accounted for a combined 90 percent plus share of the whole U.S. mortgage market) have kept liquidity alive for home buyers and have virtually unlimited funds for new mortgages.
The fact of the matter is that there is no credit crisis for home buyers that have at least 3 percent to put down, have documentable employment, and at least a moderately good credit record. Business loans and various other types of credit may have been more difficult to obtain in recent weeks but, according to Preston, thanks to the government’s backing of the three biggest sources of mortgages tthe buyers and refinancers of homes have had no unusual problems.
HUD is playing a key role in the $700 billion financial system bailout plan now getting underway. Steve Preston is one of just five members of the Financial Stability Oversight Board that oversees the entire effort and HUD’s main task in the weeks ahead, he said, will be to either refinance or help work out thousands of delinquent subprime and underwater homes financed by private lenders during the boom years.
HUD’s new “Hope for Homeowners” program, which started October 1, will allow it to cut the principal debt, monthly payments and interest rates of delinquent loans through refinancings into fixed-rate FHA mortgages. During an interview, Steve Preston emphasized the importance of a new, $3.9 billion program that has received virtually no attention in the press. This program could have huge positive impacts on neighborhoods and communities struggling with large numbers of foreclosures.
Congress has authorized HUD to provide funds and other assistance to local governments in order to buy, resell, rent out, or fix up foreclosed houses that are bringing down local property values. Known as the Neighborhood Stabilization program, it offers not only roles for local governments to fight housing blight, but also provides opportunities for alert realty agents, rehab contractors, builders and investors to be involved — profitably — in the turnaround efforts.
If you’re interested, contact your local city or county housing and community development officials for more details. Even though HUD will be providing the funds, your local officials will be calling the shots and making the decisions.
So, with all of this said, why do mortgage rates seem kind of high?
One answer is that in order to fund the rescue and the new government guarantees, the Treasury Department must sell more new Treasury securities in order to raise more money. In order to attract buyers for these securities the Treasury has to offer higher interest rates to sell them.
Now, on top of that, mortgage related bonds always trade at a slightly higher yield due to the prepayment and delinquency risk. And lastly, the cost of financing mortgages has increased for Freddie Mac and Fannie Mae due to the plan for the FDIC to back the newly issued, unsecured debt of some banks. This obviously makes that debt more attractive for investors by having the government guarantee the bank debt and consequently creating more competition for Fannie Mae and Freddie Mac when they sell their own securities. So, in order to compete for those security buyers, these mortgage giants will have to raise their own yields on their securities, and to pay for that they’ll have to charge borrowers higher interest.
The Federal Housing Finance Agency (FHFA) expects to announce 2009 conforming loan limits for Fannie Mae and Freddie Mac by November 7. The limits define the maximum loan size of mortgages that can be purchased by these entities. To determine high-cost area limits under HERA for 2009, FHFA will use median home values estimated by the Federal Housing Administration (FHA) of the Department of Housing and Urban Development (HUD). The FHA median prices will be calculated in the coming weeks by FHA for the purpose of determining its 2009 loan limits.
Watch here for updates to this issue and others pertaining any changes.
Tags: buyers, Finances, financing, home financing, home mortgages, mortgages
Stumble It!