Finding A Capable Agent To Meet Your Real Estate Needs

The task of buying a new home, or relocating to a different part of the country will require the knowledge and assistance of an experienced real estate agent. With the help of a professional agent you will find the process of selling your home, buying a new property and shifting out so much less tedious..

The best way to start your search for a reputed sales associate or broker is look around your neighborhood. The local agency with the largest number of listings and sales figures is the right way to go. Speak to previous customers about the quality and integrity of the service provider. Most successful real estate agencies rely on customer's references hence they will ensure the best provision in customer care and satisfaction.

One of the best ways to find the ideal agent is to conduct an interview quite like one where an employer is meeting with a prospective employee. You will be required to enquire about training, work experience, agency policies and listing contracts. Another important aspect to look into is their sales figures; their body of listings and the number of homes they have successfully sold in the last one-year. Most of all their knowledge of the area will play a key role in the sale of the property. Check out all the references provided. The objective is to determine how knowledgeable the agent is. Make enquires about the closing costs, the current market conditions depending on whether you are a prospective buyer or seller. If he is well informed he will be able to answer all your questions without difficulty.

If you are looking to sell your home then you will have to figure out the provisions they can make if you list under them. What marketing strategy will they adopt for your lot?

Will you be provided the market analysis to determine an effective listing price? Will you be given regular updates on the progress of your home on the real estate market?

In case you are relocating to another state of the country, does the agency have a national relocation service? Such a service should assist in selling your current home and also help locate a new home.

The best way to guarantee that they provide all the required service is to take it down in writing. Make sure you have all the points in print, including all the contract details. This way, as the seller you can be sure of the marketing plan they adopt, and also terminate a contract in the case of insincere service.

A reliable and qualified agent can be the best bet you take while in the process of selling your home. This may take a certain amount time and patience on your behalf, but the end result will be worth the good sale.

http://www.choiceofhomes.com/capableagent.htm

Location, Location, Location

Location, location, location - known as the 3 most important factors when buying a property, and it is easy to see why. The location of your property dictates how much yield you get, and how much capital growth, which ultimately decides how well you do.

And yet people still get it wrong...

Most investors only consider location within the area they live ... rather than asking themselves where else they may gain even better and higher returns. It may seem to make sense to invest in a location near to you - you can pop in to check on it, help fix any problems, and keep eye on local market better.

However, this approach to property investment could be costing you thousands, or even tens of thousands of pounds, euros or dollars in lost opportunities in the long term. Compare this to professional property investors, who own property all around the country they live in, or even all around the world. By asking themselves "Where can I buy property that will give me a great return?" instead of asking "What's available down the road?", they stack the odds in their favour.

Investing in property is all about the numbers, this is something I realised very early on - forget about whether you would like to live there or whether the property is down the street from you. Instead, what I pay attention to is:

The likely return - yield, and capital growth
Buying costs and selling costs, including taxes
Cost to borrow money, ie interest rates
How attractive the property will be for likely tenants/buyers
So how do you recognise a great location?

To build wealth through investment property, you need a location where there will be capital growth ie where the property will rise in value, which builds wealth, which can ultimately allow you to purchase additional properties, and build up a portfolio.

Factors that suggest growth include:
1. Growing, developing economy eg Countries entering EU, regenerated towns
2. Demand outstripping supply ie more people want property than can be supplied, usually due to increased numbers arriving which could be due to higher birth rate, high numbers of jobs created, lower prices than similar properties else where, immigration laws being relaxed.
3. Low cost of borrowing – if interest rates are very low, people are more likely to buy, in particular for buy to let, as they will be confident can cover all costs and make good yield. It is for the above reasons that UK investors have started to look overseas recently, and why international investors target developing countries, and growing cities when deciding where to invest.

It is for the above reasons, why UK investors have been looking overseas over the last year or so, and why international investors target developing countries, and growing cities when choosing where to invest. Remember the location of your investment will dictate how well your investment performs.

Alan Forsyth is a full time property investor and developer with 10 years experience in UK and overseas. He is managing director of http://www.property-investment-tips.com which offers free independent advice and tips on property investment, courses, countries, strategies, mortgages and much more - with a free newsletter every 3 weeks giving latest tips and offers to over 500 investors. Sign up today at the site for free independent advice!


http://www.choiceofhomes.com/propertylocation.htm

How Much Should I Pay For This House?

We probably answer this question for someone a couple times every week. The problem is that they don’t have a good formula for determining the most they can pay and still make a profit – so they’re scared to make any offer. Here’s what we use for single family homes:

The (MAO) Maximum Allowable Offer is calculated by first determining what the house will be worth after renovation - the ARV (After Repaired Value); less the rehab dollars required; less the Buy/Sell/Hold (B/S/H) costs; less profit margins.

MAO = ARV – Rehab – B/S/H – Profit

So let’s break that down a little further. To determine the ARV, study comparable sales data. Comparable sales are those properties which sold in the last 6 months to 1 year, and within ½ to 1 mile from the subject house. But other factors must be considered as well. The more characteristics between the properties that are similar, the more valid the data. Make sure that the house itself is similar in square footage, bedrooms and baths, age, style, and architecture. Don’t worry about condition except as it will affect the amount of rehab dollars required. Next, look at the neighborhood and the individual street. Do they look the same? Or is the comparable property on a beautiful street while the subject property is on a street riddled with empty littered lots and boarded up houses? The point is to view the potential investment as your end homeowner occupant will. If they could buy your completed investment on the bad street, or a house on the beautiful street – either for $150,000 – which would they choose? The other house of course. Which means your house is not worth the same – it must sell for less to attract a buyer.

Rehab dollars differ from renovator to renovator depending whether they do the work themselves, or use cheap subs, or use an expensive general contractor. The scope of the work should be the same – it is whatever is required to make the investment look like the comparable houses (unless the plan is to sell well under market value). We do not attempt to obtain all of the various contractor bids when we are making offers. All the real deals would be sold before we’d ever have an offer together! Instead we’ve developed ranges of rehab dollars based on the overall condition of the home. Is it an exact science? No, but neither are the bids – there will always be something missed. So why not work with a guide that is probably 90% accurate and allows for quick offers?

Buy/Sell/Hold costs include expenses such as appraisals, attorney fees, title search & title insurance, loan origination fees, debt service, utilities, insurance, taxes, real estate commissions, and closing fees paid on behalf of the end buyer. Again, these costs vary depending on each investor’s individual situation. In the Atlanta area, 15% of the ARV seems to be a good average allocation for B/S/H costs. If you are the renovator, calculate your specific B/S/H costs, then utilize that percentage for future offers.

Profit margins are the fun part of the equation. How much do you want to make? If you’re wholesaling the property, you also want to consider how much you should leave in the deal for the investor buyer to make the deal attractive.

That’s it. That’s how you calculate the most you’ll pay for a property. But that’s not what you SHOULD pay. It is the maximum you’ll pay. It is the deal-breaker. You will not pay one penny over the MAO. Your negotiations should lead you as far below the MAO as possible. The difference in amounts is additional profit in your pocket. What you SHOULD pay is the minimum price below the MAO that the seller will accept.

We call this the MIN-O.

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http://www.choiceofhomes.com/housefairvalue.htm

What is a Foreclosure?

A foreclosure is an action taken against a property owner by seizure of his/her real property. It can be for many reasons. The main cause is delinquent payments on a mortgage. The mortgage company or second and even third mortgage holders contact the owner, then the trustee (usually an attorney) to begin the process. If it is VA guaranteed or FHA insured, many times they offer assistance or alternatives. Then the appraisal is ordered to determine fair market value.

It can also be for medical bills, delinquent taxes and other liens, even credit cards. "The purpose of this foreclosure is for collection of a debt" is usually printed in the legal section of the newspaper as well as some other publications, such as local business papers and law papers.

Many people feel that they can purchase these properties for almost nothing and sometimes that is the case, especially tax sales. If the property is " free and clear" of other liens then it is solely based on the taxes, penalties and interest due. I know of some that have sold for less than a few thousand dollars.

The owner has the right to cure the default right up to the very last minute before the sale. A pay off statement is prepared including the delinquent payments, trustee fees (usually 5 % of the remaining balance of the loan), processing fees, property inspections, appraisal and any other thing the mortgage company can think of. The problem is not only coming up with the funds but knowing what charges are and if they are legitimate. I have only heard of lawyers and accountants challenging mortgage companies on over or false charges.

Suzie has been in the business twenty years as a licensed real estate agent, broker and certified residential appraiser who majored in real estate and architecture. She hopes to improve the industry one step and one person at a time. Other professionals in the same fields as well as educators have contibuted.


http://www.choiceofhomes.com/foreclosuredefinition.htm

How you should deal with Dual Real Estate Agents?

Dual real estate agents represent both buyer and seller. The concept of dual agency is legal in most U.S. states. However, most consumer advocacy organizations recommend against using a dual agent - reason being the existence of an inherit conflict of interest for the agent. Real estate agents receive a commission based on the selling price of the property. The higher the price, the higher the real estate agent's commission, so the reasoning of these organizations is that dual agents never really have the buyer's best interests at heart. The case could also be vice-versa - the agent could be in a position to manipulate his seller into selling the property at a given price because he has a buyer ready to buy at that price.

Given the drawbacks of using a dual agent, should you even consider using the services of one? Well, there are laws governing the practices of dual agents. In spite of the disadvantages mentioned, if a dual agent is able to get you a good deal there shouldn't be a reason to stop you.

A dual agent needs to disclose to both the buyer and seller that he is representing both parties and both have to agree, in writing. Dual agents are bound by law and ethics to treat both buyers and sellers honestly, equally, and fairly. Dual agents can be prevented from divulging confidential information about each party to the other as it could adversely impact negotiating positions.

When you're dealing with a dual real estate agent, you need to remember that the agent's primary objective is to close the deal - a difference in price margin to you is not going to impact his real estate commissions as much. It's very difficult for a dual agent to truly and equally represent both parties, since the conflicting interests make that inherently impossible. As a buyer or seller, you would need to be more alert and be in a position to make the right decisions for yourself.

Be sure the exact nature of your relationship with the dual agent is clear and have him mention what services he will be performing for you, how he will be paid, and how any conflicts of interest that arise during the transaction will be handled.



http://www.choiceofhomes.com/dualagents.htm

Home Buying: Things to keep in mind

So you’ve decided you want to own a home and now you want to begin your search for one. Before jumping into a home search, there are a few things you should keep in mind when going about buying a home.

First things first, you cannot buy a home if you can’t afford it! Don’t assume how much you can afford, find out your loan eligibility. If you’re planning on purchasing a car or any other high-priced item on a loan, then please stall such purchase until after you get your home as your eligibility reduces with every other loan you hold at the time of a mortgage application.

Next, when you go in to see a home, don’t let an unkempt / untidy house put you off. Try and visualise the house in its best condition and see if it would suit you then. In fact, an unkempt house may put other buyers off and by some chance this may lead you into a better position when negotiating for the home, as the seller may find it difficult finding a buyer for his place.

If the home you decide to purchase is being sold by the home owner himself, don’t deposit any earnest money with him directly. Such earnest money should be deposited in a trust account as some owners mistake such money to be theirs and hesitate in refunding the same if the deal falls through for valid reasons, such as financing or repair issues.

Once you’ve finalised on a home and go to get an appraisal of the home done by a professional appraiser, do not panic if the appraisal value comes below the actual price you decide to pay for the home. There are options you can consider in this case. You would have to consult your agent or your mortgage broker for some advice.

Some other factors you may want to consider are listed below:

* Any signs of leakage in the house near the roofs and the foundation walls
* Problems with the sewer drainage system, if any
* Neighborhood by daylight and night. Drive by and see for yourself before making a decision.
* Natural light. Are the rooms dark without artifical light? Does that concern you?
* The amount of property taxes that has to be paid every year
* Any structure on the property which may overlap into an adjoining property.
* Is the home located in an airport's flight path?
* Any planned roadways, which may eat into the property's front yard.

So, don’t rush into buying a home without considering some of these factors. Wish you the best of luck in finding your new home!


http://www.choiceofhomes.com/whenbuyingahome.htm

What To Expect In Closing Costs On A Home Purchase

Many are taking advantage of this year’s low mortgage rates to purchase a home. Pent up with excitement, many families, who have scrimped and saved for a down-payment, jump for joy when the mortgage lender finally approves their application. But, they should realize that there’s a whole new set of expenses that must be covered before actually closing on the sale.

New homeowners are often taken aback by up-front closing costs such as mortgage and title insurance, attorney fees, recording fees and loan points, which can run into the thousands of dollars. But there is no need to be afraid of these charges. With a little background on their purpose and shrewd financial foresight, closings can be a breeze.

A lender’s charge for processing the loan can be determined at the beginning of your buying process. Referred to as “points,” these charges are expressed as a percentage of the total loan. For instance, three points are equal to 3 percent of the borrowed amount. “Points” can also become a tool for negotiation with the lender and seller. In a buyer’s market, home sellers will often agree to pay mortgage fees in order to close a deal.

Title insurance can be a substantial expense. The one-time title fee, including search and examination, averages around $430 for a $100,000 home, but it’s recommended that you check with a local title insurance agent ahead of time to effectively determine what you’ll owe before closing.

Additional costs, such as attorney charges, and recording, transfer and inspection fees, can also be predicated ahead of time by the buyer. Most often pest and survey inspections, although included in the official closing statement, are conducted and paid for long before the closing date. However, buyers should consider them as additional up-front costs.

Some closing costs, such as “points,” are fully tax deductible that tax year if you show proof of a separate lump sum payment. They are not deductible in a few cases when the loan is the result of re-financing rather than a home purchase. Application, appraisal, documentation and broker fees can not be deducted.

Some states require payment of property taxes at closing. In some instances, buyers and sellers are asked to put money into an escrow account that will cover any past and future tax obligations. Be sure to check with an attorney or real estate agent before the closing to determine your property tax commitments.

Also, be prepared to pay any assessments if buying a condominium or into an association-governed property. Fees for credit reports, notary public seals and assumptions, which includes the processing of official documents, may also arise.

Knowing what total closing costs will be before starting your home search can help you better understand what price range is right for you. In the end, the process of closing on a mortgage will be easier than you think, leaving more time to plan for your new home.

About The Author
W. Troy Swezey is the author of “WHAT TO EXPECT IN CLOSING COSTS ON A HOME PURCHASE." As a Realtor at Century 21 Paul & Associates, he has helped many individuals with their real estate needs. Visit his web site to download his free e-book, “REAL ESTATE SECRETS EXPOSED.” http://www.TroyIsMyRealtor.com or mail to: TroyC21@usa.net

Tips to First-Time Home Buyers

There is no doubt that every American holds a vision to acquire a home of their own. This article gives you an insight on how to go about acquiring that home you've always wanted. This is a guide that may be of use to many first time home buyers.

Now some of us know that for many, home buying may be a complex and a daunting job. Home buying involves a whole lot of procedures which require some amount of research. Here below are a few helpful tips on buying a home for the first time:-

Using Available Resources

You need information in hand before going out scouting for homes in the market – information with regard to the prevailing market rates, taxes, neighborhood, etc. There are many sources from where you could obtain such data but the most effective and useful is the internet. The internet not only assists you in understanding the prevailing market conditions without the services of a real estate agent but also provides as a useful resource for locating homes on your own.

Budgeting for Costs

This emphasizes on the willingness and ability to spend. It’s wiser going about your home purchase with a pre-approved loan as it not only helps in your home negotiations but also keeps you in check with your spending ability. It is also advisable for you to try and pay at least 20% as down payment as it would avoid you from having to shell out more on what is known as PMI - private mortgage insurance – (an additional cost incurred on the mortgage to protect the lender incase you default on the loan).

Purchase Season

It is more advantageous in searching for a home during the winter season as people are busy during this holiday period and hence there is less buying demand. This is where one can utilize the opportunity to pick a home and also underbid on the asking price.

Smaller Mortgage Companies

It is very important that one takes into mind the profile of the specific mortgage company that one is handling with. Most people end up with the big companies only because of its image and popularity created, where in fact the smaller companies are more efficient in terms of customer service as well as their rates. This is due to their minor investment in advertising and such related expenditure. Hence it is advisable to go for smaller mortgage companies instead of bigger ones.

Home Inspection

Lastly and most importantly one must have a look-over the house as a final check before making the big decision. Last-minute inspections are always required just to avoid any later discovery of damages or leakages in the house. There have been some who after investing millions of dollars later uncovered the damages that came along with the house. Therefore inspection is a must!

Conclusively, it may be noted that the complexities involved in purchasing a home for the first time would be much simpler if one were to take heed of the advice mentioned above. All in all, here’s wishing you wishing you a happy home buying experience!

http://www.choiceofhomes.com/firsttimehomebuyers.htm

Out-Of-State Investor's Check List of Questions

Buying a Home is the American Dream. It is more than a place you put your hat at the end of the day. It defines you, protects you, and prospers with you. Yes, Home Ownership is a noble pursuit, but it always starts with this first, important question: Should I buy or Rent my Home? The answer, surprisingly, is not so obvious.

Now the question of “affordability” is an important one, but that’s not the subject of this article. We have a free calculator at our website. You’re welcome to use it. The subject of this article, however, deals with the questions that must be answered, before a renter can migrate into the magical realms of HOME OWNERSHIP.

Here are 5 MAGIC POINTS that you need to examine, on whether or not to BUY or RENT your next Home:

EXPENSES

COMMITMENT

MONTHLY PAYMENTS

TAX RETURNS

WEALTH

1. EXPENSES:

Renting a home requires that you give a check to the landlord each month. That’s it. You’re done. Everything else is simply taken care of for you. When you OWN a home, you are in business for yourself, and this means that you must handle all of the expenses yourself.

You are responsible, of course, for the monthly mortgage payment to the bank...

You must pay all your utilities, including phone, gas, electric, cable, trash, water, etc.

Don’t forget your responsibility to take care of maintenance. Not having enough money in the bank account is not a good enough excuse. If it’s broken, ya gotta fix it!

Don’t forget your Homeowners Association Dues, your Membership Fees, Property Taxes, Special Assessment taxes, insurance…yada, yada, yada.

When you rent a home, you give the landlord a check. When you buy a home, you must ensure that all expenses are met and managed every single month, forever...

2. COMMITMENT:

Renting and Buying have different financial commitments.

To rent a home usually requires a lease. Sometimes it’s month to month; sometimes it’s a 12 month lease. But, no matter what, there’s always a way out. Your commitment is limited to the time you choose to stay and reside there.

When you buy a home, you usually sign a 30 year mortgage, which most people would argue, is like forever. You are committed to ensuring that the payment is delivered to the bank or lender every single month, on time. They don’t care if you want to move at some point. You can sell your home of course, but you can’t just break your mortgage, like you can break your lease.

Buying a home requires a long-term, financial commitment. Renting a Home simply requires that you cut a check each month you reside at the home of choice.

3. MONTHLY PAYMENTS:

It always appears that a renter will pay less each month on monthly payments. Let me shed some light on this subject. Examined closely, this is as far from the truth as the moon to the Earth. Let’s use an example:

As a renter, you pay $800 a month, let’s say, that increases 5% each year. The math may differ with you and your landlord, but you get the idea. Barring rent-control, this is inevitable. Simple enough.

As a Homeowner on a fixed rate loan at $1000 Principal and Interest per month, the payment never changes…Never…Not ever…

In other words, the renter’s monthly rent will eventually SURPASS the homeowner’s mortgage payment…Much faster then you might expect.

In this example, our Renter’s Monthly Payments will exceed our Homeowners Mortgage Payment, in about 6 years.

4. TAX RETURNS:

A renter usually does receive a tax benefit from the State and Federal tax boards each year, sometimes referred to as a “renter’s credit”. But the Homeowner receives a deduction on the Interest paid on their loan. This is a huge benefit to the homeowner.

Let’s use the same example with our $800 renter. At the end of the year, our renter might receive a $600 renter’s credit on their 1040EZ form when doing their taxes. Simple enough.

Our Homeowner, on the other hand, paid a total of $12,000 in mortgage payments, of which about $11,500 went towards INTEREST. This INTEREST is a write-off.

Let’s see…$600 versus $11,500. Hmmm. I like that math. That equates to a nice healthy tax return for most of us, come April of next year.

Take those thousands of dollars in tax return, and go on a nice Cruise around Jamaica!

5. WEALTH:

It’s arguably much, much harder for a renter to build wealth. There is no built-in mechanism for appreciation, whereas the homeowner has postured themselves wisely for the future.

Let’s say we have a renter that wants to get wealthy. Great! They must go find a business to run, or a stock to invest in, or come up with a great invention, or be the next rock star, or follow a family friends “tip”, and go do Cattle Futures from August to September (just an example, folks…I don’t know anything about cattle…). In any event, most people would be concerned that our renter is following the proverbial “pipe dream” towards wealth.

But let’s say we have a homeowner who wants to build wealth. Great! What do they need to do? Simple….Nothing…Pay the mortgage…Live in the house…Go work your job. That’s it. Real Estate appreciates in value, on average, over the long haul, like no other financial vehicle. It is a virtual certainty, and it is automatic. The homeowner controls the total value of the home. That’s the magic of leverage.

Let me drive the point home: Someone might buy a house at $150,000, let’s say, and over the course of 7 to 10 years, it is completely reasonable to suggest that this very same house could be worth around $600,000.

Renters do not have a built in advantage for building wealth, whereas Real Estate appreciates in value as a virtual certainty. They don’t call home-ownership the “American Dream” for nothing!

SUMMARY:

The subject of deciding on whether to Buy or Rent, is not simple. In the end, it boils down to a question of complexity. Being a Renter is simple. Being a Homeowner is more complex, and yet, that does not mean that it is not within your grasp. It IS!!! There are so many people that are just waiting in the wings, yearning to help you get there. Real Estate Agents, Mortgage Brokers, Friends, Family, etc.

With all of these resources around you, just about anyone can own a home, and in this great country, the American Dream of Home Ownership is completely within all of our grasps!

But do me a favor. Give yourself the time to examine these important questions first. Look within. As we all get older in life, we yearn for more. Buying versus Renting is a common theme in this journey. As we wave goodbye to the younger years, we say so long to the simplicity of life, and we say hello to the promise of prosperity, wealth, and a better tomorrow. We also say hello to higher, more complex things. Often times, it’s simply the willingness to accept complexity that will get you to the understanding you need.

Best of luck on your journey, from Renting to Owning your next Home!

We’ve enjoyed providing this information to you, and we wish you the best of luck in your pursuits. Remember to always seek out good advice from those you trust, and never turn your back on your own common sense.

About The Author
Tom Levine provides a solid, common sense approach to solving problems and answering questions relating to consumer loan products. His website seeks to provide free online resources for the consumer, including rate-watch, tips and articles, financial communication, news, and links to products and services. You can check out Tom's website here: http://loan-resources.org , or you can email Tom at info@loan-resources.org .

How Best To Negotiate A House Deal

In almost all our business dealings, negotiating is a key process. In clichéd terms, its the art of making sure that you get the best deal in the best manner possible. Whether you are buying or selling a house, in the real estate business, negotiations are inevitable.

When you've finally found the right buyer or the right house you want to purchase, its time to get all your hidden tactics out to settle the deal on terms that are suitable for you.

However, there are some basic pointers you should keep in mind to ensure that the deal falls through smoothly.

Comparative market analysis of homes in the area- Get your agent to check the selling prices of the other houses in your area. Since location is one of the thumb rules of real estate, its important to check the value of your house with respect to those in your locality. While negotiating, this piece of information will prove to be beneficial to both the buyer and the seller. You can use your facts to justify the rate at which you're selling or to prove that you are actually offering a lesser rate. Or if you're the buyer, you can use the numbers to validate the lower price you are asking for.

Play poker - You don't have to actually bluff but you have to learn to keep your emotions in check while negotiating a deal. Displaying your extreme eagerness to settle quickly, may be the easiest way to have someone take advantage of you. It is essential to conduct yourself calmly during the negotiation process.

Mention your other options- Speaking of other prospective buyers or other houses you're looking at will play to your advantage. It always helps to let others know that you have other alternatives during negotiations.

Time factor- Proposing to settle as soon as possible will play a major role in clinching a deal. If you're willing to buy a house immediately and settle all formalities at the earliest, odds are that the owner may favor you over his other options. On the other hand, if you're the seller, offering to close the deal sooner may give you the advantage of negotiating on the price.

Including items - If there's a major hitch while trying to settle on the price, just include some movable items or appliances. This will help in settling for the price you want.

The above are all crucial and must be kept in mind. But it all boils down to your understanding of the other party and being creative in your negotiating style. Make sure you don't put the other party in an uncomfortable position and drive them away entirely. But once you've reached a settlement, make sure that all the terms and conditions are documented to prevent any misunderstanding later.

http://www.choiceofhomes.com/negotiatehousedeal.htm

Buying a House: Single Family Homes

By far the most common form of housing in North America is the single family detached home - ranging from 600 square foot bungalows to 6000 (or more) square foot sprawling mansions. The most important distinguishing factors that determine a single family dwelling are that it sits on its own piece of land (which is sold part and parcel with the home) and it is not attached to anyone else's residence. With single family homes, your home pretty much is your castle. Subject to neighborhood and subdivision regulations and ordinances, you can do with it as you wish. Want a different exterior color? Usually you can accomplish that (taking into account the fact that the neighbors may not be receptive to a purple house with ecru trim). Need more room and want to add on? Subject to the codes of your jurisdiction, you may be able to expand your living space.

You will probably have a yard of some sort - from "postage stamp" size up through multiple acres, and your ownership will include all of it. In effect, when you buy a single family home your purchase will be of a parcel of land (your lot) on which sits a structure (your house).

Advantages of Single Family Homes

• To a large degree, "your space" is your own. You can modify or improve it as you wish.
• Re-sale value is generally the highest on single family detached homes.
• If you need more room, you can usually add on to the existing house.
• Generally there are no property management fees as there are in condominiums and many townhouses.

Disadvantages of Single Family Homes

• All maintenance and repair costs - interior, exterior and everything in between - are yours.
• Lack of amenities (for example, pools, playgrounds, etc.) that you may find in other types of housing.
• You are responsible for landscaping and lawn upkeep costs.
• In most areas, single family homes are more expensive than townhouses or condominiums.

Is a Single Family Home for You? It is if...

• You like your "space." The idea of apartment living gives you the willies.
• The prospect of cutting the lawn, trimming the bushes and shoveling snow excite you (or at least don't send you headed for the nearest bridge.)
• You like the idea of modifying your home - changing the color, the appearance, the size. Having someone tell you that you couldn't do that would bother you.

http://real-estate-agents.com/tips/buying-house/single.shtml

Buying a House: Negotiation

Real Estate is one of the few places (along with the automobile business) in North American life where some form of negotiation is the rule rather than the exception. Just because it is the norm, however, does not mean that most people are proficient at it. Sure, most folks feel they are the best negotiators in the world, but in reality, it is a learned art. To be good at it takes a keen understanding of the process -- and you want that understanding before you begin making offers on homes.

When it comes to Real Estate matters, the 3 most important aspects of an effective negotiation are:

1. Information
2. Preparation
3. Realism

Recognizing that being a good negotiator does not come naturally to most people--it must be worked at--is the first step in becoming one.

1) Information

CMA's--Comparable Market Analyses

Once you have found a home that you are prepared to buy, the first step in your process of negotiation is to determine the fair value for the home. Your Agent can be of great help here, since Real Estate Agents have access to the information that you need: Comparable Market Analyses (CMAs). A CMA will show exactly what properties similar to the one in which you have an interest have sold for. These analyses are based on fact, rather than opinion, and that information will always be of more value to you. Generally, CMAs will list houses in a particular location that are currently on the market, have sales pending on them, have expired from the market, and have sold. Be forewarned: it is primarily the SOLD properties that you need to be concerned with. What houses are on the market for is not always a good indication of what their value is, those that have pending sales will only tell you what the listing price is (not what it is going to sell for) and those that have expired because they haven't sold may indicate that they didn't move because they were overpriced.

The CMA which you obtain will most likely give you some general information about the houses that will be compared: Number of bedrooms and baths, square footage, the listing price and the sold price. It is important that the CMA focuses on houses similar to the one you have selected. If you are interested in a 4 bedroom, 2 1/2 bath 2 story, a CMA that lists only 3 bedroom 1 bath homes is of little or no value. Likewise, a CMA that includes a number of properties from a neighborhood 2 miles away will have limited value. To have a good CMA you must have all of the similar sales in the neighborhood in the last year. Obviously, the fresher the data (the more houses sold in the last few months), the better the CMA.

Note: In all likelihood, if you are dealing with the Selling Agent instead of a Buyer's Agent, you will not have access to a CMA. This is one of the many reasons that it is vitally important to consider Buyer's Representation.

Condition

Once you have the information in hand, it is important to drive by all of the properties that are listed in the SOLD column. Why? Because condition has so much to do with the ultimate selling price of a house. Does the home in which you are interested shine above or fall below the others that have sold. Size, number of rooms, and lot size can only tell you so much. Your eyes will be able to tell you a lot more. Make a realistic comparison between the condition of your chosen house and those that have recently sold. Then adjust your thinking up or down from what you have seen.

Extra Amenities

Does the house you have chosen have more or less amenities than the comparable homes? Although amenities will not affect the value as much as location or condition will, they still can be a factor. Be wary, though. An outdoor hot tub may have been a major motivating factor in your choice of a house, but it will not add a great deal to the value of the property.

Motivation

An effective negotiator will gather as much information as is available on the house and the sellers. Obviously, one of the most important pieces of information you can have is the seller's reason for selling. Is it a case of having to sell or wanting to sell? Or, is it a case of "lets throw it on the market at a goofy price, and if somebody bites, we'll move?" If your Agent represents you in the transaction as a Buyer's Agent, they may or may not be able to secure this information for you (it depends on what the seller and the Seller's Agent want to reveal). If you are working with an Agent that represents the seller in the transaction (or in a Dual Agency position) they cannot disclose this information without the seller's consent. Even if this information cannot be revealed to you, a friendly discussion with one of the neighbors may give you a feel for the situation.

2) Preparation

Just having the right information is not enough. You must prepare yourself in order to use it effectively. The most important factor in your preparation is your emotional frame of mind. Buying a house is emotionally charged enough, without adding more fuel to the fire by letting your emotions override your common sense. It is not unusual to be excited--in fact, it is normal--but you must keep your excitement in check or you will lose the value of all the information you have gathered.

In addition to your emotional frame of mind, your financial frame of mind should be in order. An offer to purchase will carry a lot more weight if there are no dangling financial problems and if you have been pre-qualified for a mortgage.

"You can't be afraid to let it go." You must convince yourself that if the price is not to your liking (or worse, above your budget), you will be able to walk away. It is important for you to set a realistic limit and then stick to it. Overpaying for a house is epidemic among buyers who let their emotions rule their better judgment. It becomes very easy to regret paying too much for a house when you make a mortgage payment every month. Unlike a product that you overpay for once when you buy it, a house reminds you every 30 days that you made a mistake!

Finally, plan your work and work your plan. Organize your information and have it quickly available. When it comes time to make an offer, you don't want your "ammunition" scattered on scraps of paper in the back seat of your car.

3) Realism

Don't throw away all the information gathering and preparation you have done by making a ridiculous offer on a well priced home. Nothing will turn a seller off more than a low ball offer on a house that has been realistically priced. Often, negotiations will stop, rarely to be revived again. If they are re-opened, the sellers generally will show their displeasure at the initial low offer by locking at or near the listing price.

An example: Mr. and Mrs. Buyer have been looking at houses for months. Finally, they find the perfect house, which is an ideal match for their needs and wants. The house is listed at $155,000. Mr. and Mrs. Buyer have a CMA in hand that shows average selling prices in the neighborhood to be in the $148,000 to $153,000 range. Ignoring the information they have, they make an offer of $120,000. Mr. and Mrs. Seller, annoyed at the low offer, counter offer at full selling price, $155,000. The Buyers, still convinced that they can "steal" this house, make a 2nd offer of $125,000. The Sellers, now very frustrated, do not move from their $155,000 price. Suddenly, there is word that another offer is forthcoming, this time from Mr. and Mrs. Smith. In fear of losing the house, Mr. and Mrs. Buyer up their offer to $154,000 (still needing some concession) and the Sellers accept. Consider, though, that a realistic first offer in the $150,000 range (remember, the CMA showed $148,000 to $153,000) may well have been accepted by the Sellers. If this were the case, the Buyer's paid $4000 more than they had to.

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Buying a House: Sales Contracts

Once the perfect home has been found, it is time for the house buyer to take the step that makes so many of us tremble with fear: the sales contract. To take some of the mystery out of the house sales contract, we will discuss what the contract involves and the components of most housing sales contracts.

First, remember that what you are signing is a legal contract. No matter what anyone says, you are not just making an "offer". Most sales contracts will have some paraphrase of the following: "This is a legally binding contract. If not understood, seek competent advice before signing." To put it simply, if what is written on the contract regarding selling price and provisions is accepted by the seller, you have bought a home. Unlike other negotiable businesses, such as the automobile business, "would you take?" is defined in Real Estate by a legally binding contract backed with a monetary deposit.

Although there will be some variance based on the location of your residence, most Real Estate contracts contain most or all of the following items:

What

A legal description of the property as well as the street address.

How much

The selling price.

Mortgage contingency

Subject to obtaining a mortgage (if applicable) and the specifics of the mortgage - amount, rate and term. Application to be made in X number of days.

Deposit

How much money accompanies the contract and who will hold it.

Closing

When and where.

Inclusions and exclusions

What is and is not included in the sale of the property.

Home inspection

Contingency for and to be done in X number of days.

Warranties

Any that are included with the house and description of the warranty.

Condominium

If the property is a condo, other provisions will apply.

Well and Septic

If applicable, they must be tested (and pass).

Termite and Pest inspection

Who will pay and if there is infestation or damage, who will repair.

Possession Date

When the buyers take possession of the house--before, at or after closing.

Acceptance

How long the sellers have to respond to the offer with either acceptance or a counter-offer.

Arbitration

Any provisions for arbitration of disputes.

Insurance

Whose insurance covers the property up until the closing date.

Property Disclosures

Notices of any property disclosures concerning the house.

The exact wording of the sales contract will vary from locality to locality (and sometimes even within localities), but by being prepared to see at least the items listed above, you will be in a better position when it comes time for the Agent to ask for your signatures!

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Buying a House: Mortgage Prequalification

Why get prequalified and then preapproved for a mortgage before you begin your search for a home? Because there are three people who will benefit from your preapproval: You, your agent, and the seller from whom you eventually buy a home!
You

The most important beneficiary, of course, is you. One of the most common questions new homebuyers ask goes something along the lines of "Please let us know how much house we can afford." We're stumped! Why? There are simply too many variables--credit history, income, debt, special mortgage programs and variations in qualifying guidelines between different mortgage types--to answer that question. The only sure way of getting the question answered is through prequalification. The mortgage prequalification step is a relatively simple one, but it is an important one. It begins the process of formally applying for a mortgage, and it gives everyone involved--especially you--a clear sense of the direction they should be headed.
Your Agent

By knowing what your financial parameters are, your Agent can spend more time looking for houses that "fit" and less time pursuing dead ends. No matter how much you might want a 4000 square foot home for $275,000, if your qualifications say $125,000, your qualifications say $125,000. When it comes to mortgages, "yes, but" doesn't carry much weight!
The Seller

Want to strengthen your bargaining position? Get prequalified. Want your offer to stand out in a case of multiple offers for the same house? Get prequalified. Look at it from the seller's perspective. If you had two offers on the table for your house, one from a fully prequalified buyer and the other from an "I'll get around to that soon" buyer - to which offer would you devote the most attention? Even if the prequalified buyer's offer was $1000 less, would you take the chance on the buyer that perhaps may not be qualified? When it comes to a seller evaluating offers, "a bird in the hand..." definitely applies.

It is important to remember that the amount of mortgage you will qualify for is the maximum. It is the amount that the lender feels you can afford, but it is not necessarily the amount that you want to pay. It sometimes is advantageous to be conservative here. For example, if you qualify for a $100,000 mortgage and you have $15,000 available in cash for downpayment and closing costs, you are qualified to buy homes with a maximum selling price of $115,000. So as to not push yourself to the limit, you may want to look at homes that sell in the $100,000 to $110,000 range. Too many buyers simply rush off to the $115,000 level and some find themselves strapped when it comes time to purchase necessary items (such as draperies, additional furniture and lawn and garden tools, for example) or when they forget to factor in increases in monthly expenses (for example utilities and maintenance and repair costs).


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Buying a House: Mortgage Hints

Don't build yourself a mortgage mountain

It's fine to want the best home you can afford, but be certain that it is comfortable affordability. Although you may find certain mortgage lenders who will stretch your qualification ratios (the ratio of your total mortgage payment to your total income) the traditional ratios - the mortgage payment as 28% of your income and the total of your mortgage payment plus your monthly debt payments as 36% of your income - are good basic guidelines.
Get your budget under control

Spending some time reviewing your budget (or developing one if you don't already have it) and sharpening your money saving skills can bring big rewards later. A coordinated budget allows you to get the most home for your money without strapping yourself while eliminating wasteful spending.

Prepare to pay off small debts

Having three credit card balances, for example, one with a $125 balance, a second with a $165 balance and a third with $275 balance will only cloud the picture. Even though the total is only $565, all 3 will have minimum payments, credit lines, etc. If possible, pay them down to $0 balances.

Begin to gather documentation

It is not necessary that you have all items on hand before you apply, but there are a number of documents you will need eventually and the approval process will go more smoothly if you begin to gather them now. Examples: W-2's and income tax returns from the last few years (especially if you are self-employed), copies of pay stubs, a copy of your credit report (you can get a free copy of your credit report here), records of any child support or alimony (either going out or coming in) and bank statements for all accounts (checking and saving) for the last several months.

Don't forget about closing costs

In addition to your down payment, you will need to reserve funds for closing costs. Depending on the type of loan and your location, these costs can range from 3-5% of the mortgage amount, will be paid in cash at the closing and cannot be borrowed funds.

Compare

There are lots of sources for mortgage funds - be sure to make comparisons. Your local bank or credit union, mortgage brokers and Internet resources are all available. Be certain to compare equal terms, downpayments and loan types.

Consider points when comparing

Your total mortgage cost will be determined by three factors: The interest rate, the term and the amount of points.

Consider a 15 or 20 year term

Many home buyers assume that a shorter term will boost their payments out of reach. Unless you make the comparison, though, you may never know if a 15 or 20 year (if available) term could have been affordable. See a comparison of a sample loan. If you are concerned about committing to the higher payment of a shorter term, try this tactic: Mortgage the home with a 30 year loan but have the lender develop a 15 and a 30 year amortization sheet for you. Then, do your best to pay the mortgage at the shorter term payment. It will do wonders for your equity position!


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Buying a House: House Inspections

Depending on the type of financing you choose, there should be either two or three separate inspections of the home you want to purchase. The first should be your own basic inspection (see the bottom of this page for what to look for), the second should be a professional whole-house inspection by a reputable person. Should you select a government loan (FHA or VA), the third inspection should come at the time of the appraisal, which to some degree amounts to a "mini-inspection." Do not, however, rely on this appraisal as your only inspection of the property!

We cannot emphasize enough the value and necessity of an extensive home inspection. Many home purchasers, either in the desire to save the $200 to $500 that a good inspection costs, or due to simple ignorance, have spent enormous sums of money repairing items that any good home inspector would have pointed out. Any offer to purchase you make should be contingent upon (subject to) a whole house inspection with a satisfactory report. Do not let anyone--not the agent, not your family or friends, and especially not the seller - dissuade you from having the property thoroughly inspected! Not only will you sleep much sounder after you have moved into the house, a professional inspection can give you an escape hatch from a contract on a defective house. If the contract is written contingent on an acceptable inspection, any defects in the home must be either repaired or monetarily compensated for. If you are not satisfied, you have the option to cancel the contract.

Inspections are designed to disclose defects in the property that could materially affect its safety, livability, or resale value. They are not designed to disclose cosmetic deficiencies (for example, an interior wall that needs paint touch up). You will need to determine on your own those type of items that will need attention: don't expect a whole house inspection to reveal them to you.

Don't wait until you have placed an offer on a house before you begin the search for a home inspector. There will be a time limit in the contract designating when the inspection must be completed (typically between 7 and 14 days). If you start trying to find an inspector at that point, and cannot find an acceptable one to schedule it in that time frame, you will only have two choices: go with an inspector that is not your first choice, or run the risk of running past the deadline for the inspection (which could void any chance of having the seller take care of repairs). Neither is an acceptable alternative!

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Buying a House: The Final Walkthrough

At some point (shortly before the date of final closing) it will be necessary for you to make a final inspection of the house that you are purchasing - a final walkthrough. In all probability, you will be accompanied by your Agent, who will help you examine the house. This is to verify that all items which you have contracted to buy are there, and items that you have not contracted to buy have been removed.

For example, you do not want to arrive at your new house after closing to find that the beautiful chandelier in the dining room has somehow been replaced by a cheap overhead fixture, or that the draperies and window treatments that were specifically referenced in the contract have been packed and moved away. Additionally, you do not want to move in to find that numerous items have been left by the sellers because they did not want to move them or take them to the dump.

When you do your walkthrough, pay particular attention to attics, crawl spaces or basements, and garages. If the sellers have not moved yet, you still may get a clear picture that there are certain items (since they may not be boxed or appear to be ready to move) that they have no intention of taking with them. Bring this to the attention of your Agent to avoid the hassles that can surface on moving day.

Take your time when you are doing your inspection. Be as calm and focused as possible. Many a buyer has been so busy dreaming of themselves in the new home that they neglected to take a good look and missed an important item that was contracted to convey upon Closing. Have a copy of your Sales Contract with you so you can review any items that should be included with the house.

Here are a few points to review:

* Check the house from bottom to top: basement to attic.
* Pay articular attention to expensive items and those that are of importance to you.
* Watch for areas where furniture or rugs may have been when you originally looked at the house. Many times defects in carpeting or floors that were covered are now visible.
* If an item is missing, or if there is trash or discarded items left behind, deal with it now. Assume that if it is gone, the sellers intend for it to be gone, or if it is still there, they do not intend to remove it.
* Leave your emotions outside the door. You will have plenty of time to swoon over your new home - now is the time to make sure the house is as you expected it to be.

This is the time to deal with any potential problems. If you see an item that needs to be addressed, let your Agent know so that they can get it handled before closing.


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