You’ve got the whole world in your hands. You are young and on the upswing. Earning more than Rs. 20K. Maybe just about married or thinking about it. You want to live the your life to the fullest. Your colleague who joined the company after you and is a year younger has put a down an initial payment in an upcoming construction. It makes you sit up and look around. Three months ago, so did your old school chum. Is this a good time to buy a home? Are you ready to take on the responsibilities of home ownership, including regular maintenance?
Should the swingers put down roots?
Young professional are mobile geographically. They move as their job requires. You may not want to buy a home where you are currently based but may want to buy it in your hometown or a city of your choice. “Most young, well-educated professionals are likely to be doing short stints in several cities. The most important parameter when buying the first home should be ‘Is this the city I want to live in?’” advices Devang Shah, MBA (IIM Ahmedabad), CFPR (U.S.A. & India) Right Returns Financial Planning.
Harsh Roongta, CEO, Apna Loan.com comments, “Do not buy a home until you want to live in it. For a young person, the hassles or renting out a home are too many. For investment purposes there are many more attractive avenues”
Yeh hi hai right choice
Once you have decided on joining the breed of home owners, the next step is to decide on what home should own you…oops should you own. Some factors to keep in mind:
· How much house can you buy? Being young means you are (hopefully) not at your peak income-earning level and you have not had much time to save. So, if a dream house is out of the question right now, what is affordable? “He should be looking at a property in the range of Rs.11-15 lacs with a loan component of about Rs.10 lacs” says, Pankaj Desai, Head – Retail Assets, Kotak Mahindra Bank.
· Remember the three ‘L’s of choosing a home – location location location. Do you purchase that newer, larger and more aesthetically-pleasing home that requires a longer commute, or do you opt for something which is perhaps smaller but closer to a metro core? Gaurav Mashruwala, financial consultant says, “Stretch yourself. A home is a long term purchase and it should fulfil your requirement for the next 7-8 years. So do not scrimp on the money”
· Do not go by the logic of rent v/s buy. The comparison between renting and buying is often done on faulty assumptions. If you rent, you do not mind a small cramped apartment, you do not spend on furniture and you do not pay stamp duty. If you buy, you want to buy something that atleast takes care of your near future needs and often end up paying a price for a specific location because you are not going to be able to change your home often. That rarely happens with rented property. So choose carefully.
Raising the finances
You may think you know quite a lot about financing your home from the dipstick survey you have done but here is what the experts have to say … so pay heed.
ü The development of a household budget is a desirable activity before you buy a house. By preparing a budget while you are looking at homes, you can better focus on loan payment goals and how the new house will affect your total expenses. “When budgeting for your purchase, even if you are taking a loan you will have to consider payments such as your own contribution, the fees charged by all the financial institutions, the amount required to be paid upfront, broker’s fees, new furniture etc.” says Rajiv Sabharwal, COO ICICI home Finance Ltd
ü Assuming you are one of the self-righteous individual who will not want to dip into his father’s money for buying a home, you will take a housing finance loan. Most financiers lend upto 85% of the property value for the rest you can beg borrow and save. “Given a ‘ball park’ figure of Rs. 800/- per lac as equated monthly installments towards repayment of loans (varying with the tenure of loan), its for the individual to take a calculated budgetary decision” says, Jaideep De, Sr. Business Development Manager `Narains Corp' - Property Consultants & Realtors.
ü You budget for buying your home should be based on your household budget and how much money you can afford put in an EMI of the loan. Mashruwala advises, “For a single person, the EMIs should not exceed 60-65% of your net income and for a married person, EMIs should not exceed 35-40% of your joint income”
ü A few financiers have products that assume a certain level of salary increases every year and arrives at a higher eligibility. It could be an amount higher by 30%.
ü Enhance your eligibility to get the maximum loan amount. This will give you leg room to manoeuvre and choose your home from a wider range. “To increase the loan amount that you can get, take a loan jointly with your spouse so that both the incomes are clubbed to determine the gross repayment capacity. Generally, an HFC will permit up to 35 to 55 per cent of the gross monthly income to form the monthly repayment amount. Another option - opt for a longer repayment tenure so that the EMI amount gets reduced. I.e. opting for a 20 year loan compared to a 15 year loan will make you eligible for a higher loan amount”, advices Sabharwal.
ü A step-up loan is a great idea. Here you will make lower repayments in the initial years and higher ones as your income increases. This, of course is available to a professionally qualified person. It gives you the advantage of making lower EMI payment initially and higher ones as your income increases.
ü Just when your budgeting looks like it has been beaten into shape, you are hit by the unforeseen costs. Stamp duties, transfer charges, parking charges, clubhouse membership, interiors, etc. Get the best out of your loan by combining cost with your property cost for the purpose of taking a loan. The good news is that banks are now offering to cover at least some of these costs. You should check with your bank if they can finance the extra costs too.
ü Which bring me to the next important piece of advice – compare loans. Do not go by the bank your best friend took a loan from. Take quotes from several banks, do your maths and narrow it down to the two best quotes and take a sanction from both of them. This way you will have a back up plan if there might be some additional administrative cost thrown up by the financer which could mess up your interest calculation
There is life after buying the home
Hope that your search for your home goes well. After buying a home some more loose ends have to be tied up so that you can sleep in your new bed peacefully.
Buy term insurance: It would be irresponsible to leave your loved ones with a liability if God forbid you are no more. Most insurance companies will give you term insurance which will stagger down as the amount of the loan decreases.
Buy a householder’s policy: A general insurer will sell you a basic householder policy which is a must. After the devastating Mumbai flood surely we should wake up to the benefits of insurance.
Keep a check: Keep a regular check on your home loan account. Request for a monthly/quarterly statement and develop a friendly relationship with your account manager.
Take the tax breaks: If the principal component on your housing loan is Rs 1 lakh and you make no other investments; you will get the full advantage of it. You may end up getting a double benefit; a deduction of up to Rs 1 lakh on the principal amount and Rs 1.5 lakh on the interest component.
Conservative V/s Aggressive
Choosing between an aggressive and conservative repayment plan can be tough. Here are some pointers.
Conservative
Aggressive
Pros of being conservative
Low burden to repay EMI. Even under tough circumstances, one will be able to pay EMI.
Additional disposable income in case of excess earnings can be used to make part-prepayment with no additional fees for pre-payment.
Pros of being Aggressive
Higher loan amount, hence one can buy a better house
Shorter loan tenure, hence one can repay faster
Cons of being Conservative
Lower loan amount
One could have bought a better house with a more aggressive budget
Longer loan tenure
Cons of being Aggressive
Under tough circumstances, it can become tough to repay EMI leading to defaults
Poor credit history due to default might affect other bank offerings
http://news.moneycontrol.com/india/news/property/homeloan/buyyourfirsthomeat25/14/27/article/180567
Tuesday, July 17, 2007
Buy the same house for less: Bargaining tips
Property prices in India are on fire. Prices are moving up faster than ever before. In such times, how does one identify the right price for a property? What are the checks to ensure that the property is not overpriced? Moneycontrol spoke to Ramesh Nair, Associate Director with global real estate advisory firm Jones Lang LaSalle to find answers.
Q. How does a person who is planning to buy a house be sure that it is not overpriced?
The success (in identifying the right price) lies in identifying at least two hours in a week to analyze the various opportunities by driving around the neighborhood, learning market values, checking competing projects and making appropriate offers. It will also be worthwhile for the investor to review relevant articles and gather information on deals in the market at regular intervals.
Q. Is there any thumb rule, which can be used to arrive at a ‘reasonable’ price of the house?
Typically the annual investment yield should be 5% to 7% for residential properties in India. The formula to calculate investment yield is:
Investment yield = Expected net annual rent
Total Purchase price
The buyer should deduct property tax from the annual rent to arrive at the net annual rent and add stamp duty and registration charges to the purchase price to arrive at the Total Purchase price.
Q. Are property rates negotiable? How should a person go about bargaining?
In most property transactions, prices are negotiable. A buyer should never feel uneasy to make an offer on the property. If he has spent enough time pre-qualifying the property and looking at it, then he should go ahead and make the offer, even if the seller is asking much more than what the buyer wants to pay. He should never feel concerned of the seller being offended by the price or terms quoted. He should let the seller know why the offer is what it is, highlight if the property needs any refurbishment, prices of competing projects or that it is located in a bad area etc.
Q. Under what circumstances is a rate higher than market rates justified?
If the builder or developer is providing any of the following extra amenities, then a slightly higher price is justified:
· Swimming Pool
· Fire fighting and detection
· Unique view
· Air-conditioned lobbies
· Clubhouses
* Gymnasium
* Intercom services
* Back up generators
* Videophone
* The quality of tiles
Q. How does one equate carpet area to built up and super built up areas?
Carpet area is usually 75-85% of super built up area. That means, if the super built up area were 1,000 square feet, the carpet area would be around 750-850 square feet.
Q. While buying a second hand flat, how does one know if its owner has factored in the price of any renovations/repairs to the cost?
The buyer should preferably take an architect to analyse the refurbishment/repair cost. The architect should analyse the structural aspect the building, interior fit outs, electrical fittings, plumbing and woodwork to work out the refurbishment charges. The buyer should then make an offer to the seller after keeping in mind the refurbishment costs.
http://messageboard.moneycontrol.com/mccode/news/article/news_article.php?autono=190359
Q. How does a person who is planning to buy a house be sure that it is not overpriced?
The success (in identifying the right price) lies in identifying at least two hours in a week to analyze the various opportunities by driving around the neighborhood, learning market values, checking competing projects and making appropriate offers. It will also be worthwhile for the investor to review relevant articles and gather information on deals in the market at regular intervals.
Q. Is there any thumb rule, which can be used to arrive at a ‘reasonable’ price of the house?
Typically the annual investment yield should be 5% to 7% for residential properties in India. The formula to calculate investment yield is:
Investment yield = Expected net annual rent
Total Purchase price
The buyer should deduct property tax from the annual rent to arrive at the net annual rent and add stamp duty and registration charges to the purchase price to arrive at the Total Purchase price.
Q. Are property rates negotiable? How should a person go about bargaining?
In most property transactions, prices are negotiable. A buyer should never feel uneasy to make an offer on the property. If he has spent enough time pre-qualifying the property and looking at it, then he should go ahead and make the offer, even if the seller is asking much more than what the buyer wants to pay. He should never feel concerned of the seller being offended by the price or terms quoted. He should let the seller know why the offer is what it is, highlight if the property needs any refurbishment, prices of competing projects or that it is located in a bad area etc.
Q. Under what circumstances is a rate higher than market rates justified?
If the builder or developer is providing any of the following extra amenities, then a slightly higher price is justified:
· Swimming Pool
· Fire fighting and detection
· Unique view
· Air-conditioned lobbies
· Clubhouses
* Gymnasium
* Intercom services
* Back up generators
* Videophone
* The quality of tiles
Q. How does one equate carpet area to built up and super built up areas?
Carpet area is usually 75-85% of super built up area. That means, if the super built up area were 1,000 square feet, the carpet area would be around 750-850 square feet.
Q. While buying a second hand flat, how does one know if its owner has factored in the price of any renovations/repairs to the cost?
The buyer should preferably take an architect to analyse the refurbishment/repair cost. The architect should analyse the structural aspect the building, interior fit outs, electrical fittings, plumbing and woodwork to work out the refurbishment charges. The buyer should then make an offer to the seller after keeping in mind the refurbishment costs.
http://messageboard.moneycontrol.com/mccode/news/article/news_article.php?autono=190359
Home buying guide
Till about 4-5 years back owning a home was a dream for many of us. The real estate prices were fairly steep as compared to our income levels. Finance, though available, was both cumbersome to avail and quite expensive.
Since then and at least till last year, the scene in the real estate and home loans have been nothing short of dramatic. While the real estate prices were subdued, the average income levels rose sharply, making purchase of a home quite affordable. And, so called adding fuel to the fire, was the home loan bonanza - sharp drop in the interest rates, increased tax benefits and easy availability. This has resulted in a huge growth in the purchase of property.
But the scenario seems to be changing. In last one year or so, while the real estate prices have gone up quite appreciably, the home loans interest rates are also rising. Therefore, the situation today warrants exercising caution.
Real estate
The supply of housing has not kept pace with the demand. Also, in the interim the prices of steel, cement etc. have also increased leading to higher construction costs. This has resulted in a jump in real estate prices from anything between 20-100%.
The question one is, therefore, forced to ask is – Is this a bubble? Will it burst soon? Where are the real estate prices headed?
While the local factors – city to city, location to location - will be important to look at, it can reasonably be assumed that with the continued good economic growth, the demand is likely to remain strong. But the prices have already run-up sharply, which can affect the demand. Hence, while it may be difficult to comment on how much further the real estate prices can go up, the likelihood of any significant reduction in prices look doubtful.
To a getting caught on the wrong foot, we need to first decide on the need for investment in real estate – Is it for personal use or is it an investment?
In case the home is to be purchased for personal use then it is more important to look at whether you can afford it or not. Since the prices in the near future do not seem likely to come down, the decision to buy or not will be more governed by ‘need’ and ‘affordability’, rather than the future price trend. As long as one has to stay in a particular house, it doesn’t really matter if its’ price is Rs.1 lakh or Rs.1 crore.
However, if the purchase is purely from the point of view of investment, it is important to do a thorough analysis. Have the prices in the area already increased appreciably? Is any development expected in the future which may increase/sustain the demand and hence the prices? Etc. This analysis becomes more critical if home loan is being taken to finance the purchase. Fall in real estate prices, together with increasing home loan rates, could put one in a spot of trouble. It is important not to be tempted by the past price increases or overextend oneself on the home loan.
Home Loans
And how does the interest rate scenario on the home loans look like? Should one go in for a floating or fixed interest rate? How much loan should one avail?
Is it still cheap?
While the home loan interests have started moving up, they still are quite affordable. And the tax benefits make it still more attractive. Further, though the monetary situation today indicates that the interest rates may move up, the increase is not likely to be very steep.
Fixed or floating?
It is difficult to take a call on the interest rate scenario beyond a year or so. But on the other hand a home loan is of typically 15-20 years tenure. Therefore, it will not be correct to base one’s decision to go in for a fixed or floating option, solely on the developments of the last 6 months to 1 year.
Let us decide on the issue from a slightly different perspective. The fixed interest rates today are around 8-9%. In a best case it could go down to say 5-6% depending on how the monetary situation pans out over the next 10-15 years. But, if things go bad, it could increase to say 12%, may be even 15%. Who knows? Therefore, while the benefit from the downside movement seems limited, the upside movement in interest rates can prove disastrous.
Hence, a person should opt for a floating rate interest if (a) his financial position is such that he can afford to bear the interest rate volatility and (b) he is in a position to prepay the loan out of his investments if the interest rates become too high.
If you are a fairly affluent person then you could go in for a floating rate home loan and invest your own funds in options where you can earn much better returns. This way one is in a net surplus situation. The day this situation reverses, one can pay off the loans.
But, on the other hand, if someone is not in a position to pay higher interest charges and not comfortable with the interest rate fluctuations, he may be better off locking himself in a fixed rate option.
How much is enough?
As regards the maximum loan amount one should avail, financial prudence suggests that the annual EMIs + Property Tax + other costs should not exceed 30% of the annual income, even though one may be eligible for a higher amount.
Today, there is no one solution applicable to all and each one of us has to weigh the pros and cons very carefully and see how it meets one’s individual profile.
http://messageboard.moneycontrol.com/mccode/news/article/news_article.php?autono=202251
Since then and at least till last year, the scene in the real estate and home loans have been nothing short of dramatic. While the real estate prices were subdued, the average income levels rose sharply, making purchase of a home quite affordable. And, so called adding fuel to the fire, was the home loan bonanza - sharp drop in the interest rates, increased tax benefits and easy availability. This has resulted in a huge growth in the purchase of property.
But the scenario seems to be changing. In last one year or so, while the real estate prices have gone up quite appreciably, the home loans interest rates are also rising. Therefore, the situation today warrants exercising caution.
Real estate
The supply of housing has not kept pace with the demand. Also, in the interim the prices of steel, cement etc. have also increased leading to higher construction costs. This has resulted in a jump in real estate prices from anything between 20-100%.
The question one is, therefore, forced to ask is – Is this a bubble? Will it burst soon? Where are the real estate prices headed?
While the local factors – city to city, location to location - will be important to look at, it can reasonably be assumed that with the continued good economic growth, the demand is likely to remain strong. But the prices have already run-up sharply, which can affect the demand. Hence, while it may be difficult to comment on how much further the real estate prices can go up, the likelihood of any significant reduction in prices look doubtful.
To a getting caught on the wrong foot, we need to first decide on the need for investment in real estate – Is it for personal use or is it an investment?
In case the home is to be purchased for personal use then it is more important to look at whether you can afford it or not. Since the prices in the near future do not seem likely to come down, the decision to buy or not will be more governed by ‘need’ and ‘affordability’, rather than the future price trend. As long as one has to stay in a particular house, it doesn’t really matter if its’ price is Rs.1 lakh or Rs.1 crore.
However, if the purchase is purely from the point of view of investment, it is important to do a thorough analysis. Have the prices in the area already increased appreciably? Is any development expected in the future which may increase/sustain the demand and hence the prices? Etc. This analysis becomes more critical if home loan is being taken to finance the purchase. Fall in real estate prices, together with increasing home loan rates, could put one in a spot of trouble. It is important not to be tempted by the past price increases or overextend oneself on the home loan.
Home Loans
And how does the interest rate scenario on the home loans look like? Should one go in for a floating or fixed interest rate? How much loan should one avail?
Is it still cheap?
While the home loan interests have started moving up, they still are quite affordable. And the tax benefits make it still more attractive. Further, though the monetary situation today indicates that the interest rates may move up, the increase is not likely to be very steep.
Fixed or floating?
It is difficult to take a call on the interest rate scenario beyond a year or so. But on the other hand a home loan is of typically 15-20 years tenure. Therefore, it will not be correct to base one’s decision to go in for a fixed or floating option, solely on the developments of the last 6 months to 1 year.
Let us decide on the issue from a slightly different perspective. The fixed interest rates today are around 8-9%. In a best case it could go down to say 5-6% depending on how the monetary situation pans out over the next 10-15 years. But, if things go bad, it could increase to say 12%, may be even 15%. Who knows? Therefore, while the benefit from the downside movement seems limited, the upside movement in interest rates can prove disastrous.
Hence, a person should opt for a floating rate interest if (a) his financial position is such that he can afford to bear the interest rate volatility and (b) he is in a position to prepay the loan out of his investments if the interest rates become too high.
If you are a fairly affluent person then you could go in for a floating rate home loan and invest your own funds in options where you can earn much better returns. This way one is in a net surplus situation. The day this situation reverses, one can pay off the loans.
But, on the other hand, if someone is not in a position to pay higher interest charges and not comfortable with the interest rate fluctuations, he may be better off locking himself in a fixed rate option.
How much is enough?
As regards the maximum loan amount one should avail, financial prudence suggests that the annual EMIs + Property Tax + other costs should not exceed 30% of the annual income, even though one may be eligible for a higher amount.
Today, there is no one solution applicable to all and each one of us has to weigh the pros and cons very carefully and see how it meets one’s individual profile.
http://messageboard.moneycontrol.com/mccode/news/article/news_article.php?autono=202251
Location Location Location! Get the Scoop On Neighborhoods Before You Buy
Location, Location, Location! The Jones’ family found their dream home and moved into it with all of the excitement and enthusiasm of a kid on Christmas morning. After a long and hectic day of unpacking, they collapsed into bed anticipating a good night’s rest. Unfortunately, they were shocked and dismayed when they began to hear the very obvious noise of trucks roaring along the inter-state highway situated less than a half mile to the rear of their home. Too late!
This unfortunate situation exemplifies the need to focus on location when contemplating the purchase of a home. A ten million dollar mansion isn’t worth a dime if it’s sitting next to a toxic waste dump. This example is far-fetched and outrageous, but it makes the point that finding the right location is certainly as important as finding the right house.
How do you investigate a potential neighborhood? There are a number of factors and issues to be considered in your evaluation. Some of them can be covered merely through visual observation; others will have to be explored with the assistance of community and government organizations.
One of your first and most significant concerns should be the crime rate. If every other house on the block is being burglarized every other month, you might want to look elsewhere. Talk to a spokesperson of the local law enforcement agency. Ask for a listing of their monthly crime stats and a copy of their year ending report.
When talking to the spokesperson about crime rates, ask about their response times in your area. If it’s over five minutes, ask why. If the community has a neighborhood watch group or a neighborhood citizens’ security patrol, attend one of their meetings or speak with their group representatives.
How far is your new neighborhood from your place of employment? How far is too far? Bottom line: check the driving time and traffic patterns, both coming and going, by driving the route you’ll take. Are there any activities or facilities in the area that will make the trip more unpleasant or time consuming on specific days of the week? As an example, is there a bridge that backs up on Friday afternoons as people rush to their weekend retreats?
If you have children, or anticipate having them, you’ll want to check out the schools in the area. Visit the schools and talk to the Principals or school counselors. Ask about class sizes, bus service, curriculum and even school menus. If your child is a gifted student, you’ll want to inquire about accelerated courses. If your child needs special Ed opportunities, ask about them. Knowing about your child’s school is one of your primary responsibilities as a parent.
This may sound a bit picky, but you should visit and evaluate your local markets, shops and restaurants. Do they sell quality products? Is there a convenient place to purchase daily necessities such as milk, luncheon items, coffee, etc.? Do the local restaurants suit your taste? The answers to these questions may not factor substantially into your moving decision, but they are part of the equation and should at least be recognized and considered.
Availability of community services should not be overlooked. Is there a good hospital in the immediate vicinity? Do they have an emergency room? How about parks and a library?
You should visit the neighborhood at various times of the day and night to check for sounds, smells, heavy traffic and the presence of any activities that you might find offensive as a resident. Sometimes the complexion of a neighborhood changes at night. Drive around after dark and look for the presence of undesirables lounging about in public places. Try to get a sense and feeling of the neighborhood.
Finally, you will want to find out if the community has a community association. If so, visit the association and ask about membership dues, restrictions and covenants. If the representative is forthcoming, ask if there are any problems in the area that you as a prospective new resident should consider.
You are about to make one of the biggest financial decisions of your life. Don’t be timid. Ask questions, make notes and weigh all the pro’s and con’s before deciding.
http://www.real-estate-marketing-talk.com/location-location-location.html
This unfortunate situation exemplifies the need to focus on location when contemplating the purchase of a home. A ten million dollar mansion isn’t worth a dime if it’s sitting next to a toxic waste dump. This example is far-fetched and outrageous, but it makes the point that finding the right location is certainly as important as finding the right house.
How do you investigate a potential neighborhood? There are a number of factors and issues to be considered in your evaluation. Some of them can be covered merely through visual observation; others will have to be explored with the assistance of community and government organizations.
One of your first and most significant concerns should be the crime rate. If every other house on the block is being burglarized every other month, you might want to look elsewhere. Talk to a spokesperson of the local law enforcement agency. Ask for a listing of their monthly crime stats and a copy of their year ending report.
When talking to the spokesperson about crime rates, ask about their response times in your area. If it’s over five minutes, ask why. If the community has a neighborhood watch group or a neighborhood citizens’ security patrol, attend one of their meetings or speak with their group representatives.
How far is your new neighborhood from your place of employment? How far is too far? Bottom line: check the driving time and traffic patterns, both coming and going, by driving the route you’ll take. Are there any activities or facilities in the area that will make the trip more unpleasant or time consuming on specific days of the week? As an example, is there a bridge that backs up on Friday afternoons as people rush to their weekend retreats?
If you have children, or anticipate having them, you’ll want to check out the schools in the area. Visit the schools and talk to the Principals or school counselors. Ask about class sizes, bus service, curriculum and even school menus. If your child is a gifted student, you’ll want to inquire about accelerated courses. If your child needs special Ed opportunities, ask about them. Knowing about your child’s school is one of your primary responsibilities as a parent.
This may sound a bit picky, but you should visit and evaluate your local markets, shops and restaurants. Do they sell quality products? Is there a convenient place to purchase daily necessities such as milk, luncheon items, coffee, etc.? Do the local restaurants suit your taste? The answers to these questions may not factor substantially into your moving decision, but they are part of the equation and should at least be recognized and considered.
Availability of community services should not be overlooked. Is there a good hospital in the immediate vicinity? Do they have an emergency room? How about parks and a library?
You should visit the neighborhood at various times of the day and night to check for sounds, smells, heavy traffic and the presence of any activities that you might find offensive as a resident. Sometimes the complexion of a neighborhood changes at night. Drive around after dark and look for the presence of undesirables lounging about in public places. Try to get a sense and feeling of the neighborhood.
Finally, you will want to find out if the community has a community association. If so, visit the association and ask about membership dues, restrictions and covenants. If the representative is forthcoming, ask if there are any problems in the area that you as a prospective new resident should consider.
You are about to make one of the biggest financial decisions of your life. Don’t be timid. Ask questions, make notes and weigh all the pro’s and con’s before deciding.
http://www.real-estate-marketing-talk.com/location-location-location.html
House Hunting
House Hunting. It has been said that moving and divorce are the two of the most stressful events a person or family can experience. Divorce is a subject for another time, but for now let's consider the event of moving and look at some ways to make your house hunting trip less stressful and more effective.
Location is the first factor to consider when planning a move. If you have children, or are planning a family, you will want to know about the schools in the area. How about shopping centers, medical facilities, recreational opportunities and of course how far will you be from your place of employment.
If you require public transportation, is there any within walking distance of your prospective new home. What about the crime rate? A check with the local law enforcement agency can either put your mind at ease or give you reason to look elsewhere.
And finally, try to assess the quality and character of the people who live in the area. This is obviously difficult to do without interviewing them, but you can get a rough impression from the condition of their homes and properties and from the activities you might observe.
As an example, if your prospective neighbor has discarded appliances all over the front yard and their son is roaring around the neighborhood on a mini-bike with no muffler, you might want to take all that into consideration. And remember, a poor location will definitely be a negative factor when and if you attempt to resell the home at some later date.
Once you've zeroed in on your preferred location, you can start to think seriously about searching for your dream home. Rather than spin your wheels by looking at houses randomly, you should determine what you really want in a house and let those things help you focus your search.
Make a list and start with the obvious: how many bedrooms do you need; do you want a garage; must you have a single story home due to your inability to climb stairs; is a fenced yard an absolute necessity?
After listing the absolute "must haves", think about the things you like and dislike about your current residence and factor those things into your wish list. Making a list will not only save you time, it will be a big help to your realtor in planning your viewings.
Most people don't really know how much house they can afford. Affordability is based upon income, credit status, interest rates, down payment, closing costs and the type of loan selected.
By getting pre-qualified by a lending institution, you will know what you can afford to spend. Often, that figure is quite a surprise to prospective home buyers. In any case, pre-qualification will save you time and trouble by establishing your price range.
Typically, house hunting involves seeing as many homes as possible in a short period of time. Both the house hunter and the assisting realtor have busy schedules and want to tour fast and furious. However, after the first two or three houses, they all start to run together. You need to make notes after each viewing.
One effective means of qualifying each home is to make multiple copies of your list of priorities and use it as a checklist to grade each home visited. This little tip will eliminate confusion when trying to make mental comparisons at the end of the day.
Regard your hunt as an excursion. If you were going to the zoo for the day and contemplated a lot of walking, you would dress comfortably and wear comfortable shoes.
House hunting is no different; you'll be walking, climbing stairs, quite possibly going into basements and attics and constantly getting in and out of cars. Dressing to impress homeowners or your realtor should not be your top priority. Dress clean and neat of course, but comfortable is the name of the hunting game.
And last but not least, use your own realtor. When you call the realtor on a "house for sale" sign you're speaking to the seller's agent. Keep in mind that he or she represents the seller and will be looking after the seller's interests. You need your own realtor; someone who is working for you and is looking out for your interests.
House hunting can actually be an enjoyable experience if you take your
http://www.real-estate-marketing-talk.com/house-hunting.html
Location is the first factor to consider when planning a move. If you have children, or are planning a family, you will want to know about the schools in the area. How about shopping centers, medical facilities, recreational opportunities and of course how far will you be from your place of employment.
If you require public transportation, is there any within walking distance of your prospective new home. What about the crime rate? A check with the local law enforcement agency can either put your mind at ease or give you reason to look elsewhere.
And finally, try to assess the quality and character of the people who live in the area. This is obviously difficult to do without interviewing them, but you can get a rough impression from the condition of their homes and properties and from the activities you might observe.
As an example, if your prospective neighbor has discarded appliances all over the front yard and their son is roaring around the neighborhood on a mini-bike with no muffler, you might want to take all that into consideration. And remember, a poor location will definitely be a negative factor when and if you attempt to resell the home at some later date.
Once you've zeroed in on your preferred location, you can start to think seriously about searching for your dream home. Rather than spin your wheels by looking at houses randomly, you should determine what you really want in a house and let those things help you focus your search.
Make a list and start with the obvious: how many bedrooms do you need; do you want a garage; must you have a single story home due to your inability to climb stairs; is a fenced yard an absolute necessity?
After listing the absolute "must haves", think about the things you like and dislike about your current residence and factor those things into your wish list. Making a list will not only save you time, it will be a big help to your realtor in planning your viewings.
Most people don't really know how much house they can afford. Affordability is based upon income, credit status, interest rates, down payment, closing costs and the type of loan selected.
By getting pre-qualified by a lending institution, you will know what you can afford to spend. Often, that figure is quite a surprise to prospective home buyers. In any case, pre-qualification will save you time and trouble by establishing your price range.
Typically, house hunting involves seeing as many homes as possible in a short period of time. Both the house hunter and the assisting realtor have busy schedules and want to tour fast and furious. However, after the first two or three houses, they all start to run together. You need to make notes after each viewing.
One effective means of qualifying each home is to make multiple copies of your list of priorities and use it as a checklist to grade each home visited. This little tip will eliminate confusion when trying to make mental comparisons at the end of the day.
Regard your hunt as an excursion. If you were going to the zoo for the day and contemplated a lot of walking, you would dress comfortably and wear comfortable shoes.
House hunting is no different; you'll be walking, climbing stairs, quite possibly going into basements and attics and constantly getting in and out of cars. Dressing to impress homeowners or your realtor should not be your top priority. Dress clean and neat of course, but comfortable is the name of the hunting game.
And last but not least, use your own realtor. When you call the realtor on a "house for sale" sign you're speaking to the seller's agent. Keep in mind that he or she represents the seller and will be looking after the seller's interests. You need your own realtor; someone who is working for you and is looking out for your interests.
House hunting can actually be an enjoyable experience if you take your
http://www.real-estate-marketing-talk.com/house-hunting.html
Real Estate Appraisals Protect Lenders; Not Buyers and Sellers
Real Estate Appraisals are a necessary step in the home buying process. There is a lot of confusion out there regarding the truth about appraisals. Realtors, Buyers, Sellers and Investors are often confused about their purpose think of them as home inspections; but they aren't!
Sellers often think that a low appraisal for their home is the kiss of death, but that's not necessarily true. The more you learn about real estate appraisals beforehand, the better prepared you'll be to head off problems before they occur.
For example, I always made it a point to be on the premises whenever appraisals for my real estate transactions occured. I discovered that I could influence the appraisal price in subtle, but hugely profitable ways.
Here's what I mean! If I was selling a "fixer upper" and hadn't made any improvements yet I'd walk through with the appraisers and point out the things I was going to do to improve the properties to get maximum value before closing. They would in turn come back with a value that was "subject to the improvements being made", which was sometimes tens of thousands of dollars more than the "as is" value was!
Since very few people have the ability to pay for a house with cash, the appraisal is going to be necessary. A loan is never going to go through without an appraisal. The purpose of the appraisal is to establish the home's market value. The sales price will be based on the market value.
The main goal of the appraiser is to protect the lender. Lenders don't want to be stuck with property that is not worth its price tag, so the appraisal must be completed before the lender will approve the loan. The information contained in Real Estate Appraisals is invaluable to the lender. The lender will study the details of the appraisal before reaching a final decision.
The lender will often dictate the choice of appraiser. It might have one in house or through a contract with an independent appraiser. If you go with your own choice for appraiser, they may be subject to final approval from the lender.
Residential properties are normally appraised using either the sales comparison approach or the cost approach. When using the sales comparison approach, an appraiser compares the property to similar properties that have sold in the area and bases the market value on the comparables or comps. The cost approach is based on the costs to build, which means it is more appropriate for new properties.
The actual appraisal reports are very detailed. They contain information about the subject property along with comparisons of a few similar properties. There is an evaluation of the overall house market within the area. The appraiser will then list any issues that he or she feels might diminish the property's value.
The next component is a list of any serious problems like bad roofs or weak foundations. The appraiser then gives an estimate of the sales time for the house. Finally, the report will indicate the type of property.
It is important to note that the real estate appraisal is not the same thing as an inspection. The appraiser might make note of any problems they see, but they are not responsible for declaring if your home is in good condition or not. They are only responsible for assessing the property and determining the market value for the lender. A home inspection is a different process altogether.
Real estate appraisals only include the home, the land, and any improvements to the land. It does not cover any personal property that might be sold with the house. The buyers should purchase those items separately.
Everyone fears the possibility of a low appraisal. It happens all of the time, usually during closing. There are some things you can do to remedy this common but stressful situation. The buyer can make a larger down payment. If this is not feasible, the seller and buyer can negotiate the price some more. Additionally, the appraisal can always be disputed.
What all goes into an appraisal? Appraisers are looking at the condition and size of the house, its proximity to good schools, and the size of the lot. Appraisers do not look at dirty dishes or overflowing laundry baskets. They do care about chipped paint, broken windows, and appliances that don't work.
Real Estate Appraisals are not being conducted by just anyone off the street. Real estate appraisers are trained professionals licensed by the state in which they work. They are qualified for the work they do by completing state certification requirements like exams and continuing education courses. This line of work demands strong critical thinking skills and the ability to interact with different groups of people.
Get the appraisal thing right and you can close profitable, hassle free transactions. But if you get it wrong a good deal can go bad...fast!
http://www.real-estate-marketing-talk.com/real-estate-appraisals.html
Sellers often think that a low appraisal for their home is the kiss of death, but that's not necessarily true. The more you learn about real estate appraisals beforehand, the better prepared you'll be to head off problems before they occur.
For example, I always made it a point to be on the premises whenever appraisals for my real estate transactions occured. I discovered that I could influence the appraisal price in subtle, but hugely profitable ways.
Here's what I mean! If I was selling a "fixer upper" and hadn't made any improvements yet I'd walk through with the appraisers and point out the things I was going to do to improve the properties to get maximum value before closing. They would in turn come back with a value that was "subject to the improvements being made", which was sometimes tens of thousands of dollars more than the "as is" value was!
Since very few people have the ability to pay for a house with cash, the appraisal is going to be necessary. A loan is never going to go through without an appraisal. The purpose of the appraisal is to establish the home's market value. The sales price will be based on the market value.
The main goal of the appraiser is to protect the lender. Lenders don't want to be stuck with property that is not worth its price tag, so the appraisal must be completed before the lender will approve the loan. The information contained in Real Estate Appraisals is invaluable to the lender. The lender will study the details of the appraisal before reaching a final decision.
The lender will often dictate the choice of appraiser. It might have one in house or through a contract with an independent appraiser. If you go with your own choice for appraiser, they may be subject to final approval from the lender.
Residential properties are normally appraised using either the sales comparison approach or the cost approach. When using the sales comparison approach, an appraiser compares the property to similar properties that have sold in the area and bases the market value on the comparables or comps. The cost approach is based on the costs to build, which means it is more appropriate for new properties.
The actual appraisal reports are very detailed. They contain information about the subject property along with comparisons of a few similar properties. There is an evaluation of the overall house market within the area. The appraiser will then list any issues that he or she feels might diminish the property's value.
The next component is a list of any serious problems like bad roofs or weak foundations. The appraiser then gives an estimate of the sales time for the house. Finally, the report will indicate the type of property.
It is important to note that the real estate appraisal is not the same thing as an inspection. The appraiser might make note of any problems they see, but they are not responsible for declaring if your home is in good condition or not. They are only responsible for assessing the property and determining the market value for the lender. A home inspection is a different process altogether.
Real estate appraisals only include the home, the land, and any improvements to the land. It does not cover any personal property that might be sold with the house. The buyers should purchase those items separately.
Everyone fears the possibility of a low appraisal. It happens all of the time, usually during closing. There are some things you can do to remedy this common but stressful situation. The buyer can make a larger down payment. If this is not feasible, the seller and buyer can negotiate the price some more. Additionally, the appraisal can always be disputed.
What all goes into an appraisal? Appraisers are looking at the condition and size of the house, its proximity to good schools, and the size of the lot. Appraisers do not look at dirty dishes or overflowing laundry baskets. They do care about chipped paint, broken windows, and appliances that don't work.
Real Estate Appraisals are not being conducted by just anyone off the street. Real estate appraisers are trained professionals licensed by the state in which they work. They are qualified for the work they do by completing state certification requirements like exams and continuing education courses. This line of work demands strong critical thinking skills and the ability to interact with different groups of people.
Get the appraisal thing right and you can close profitable, hassle free transactions. But if you get it wrong a good deal can go bad...fast!
http://www.real-estate-marketing-talk.com/real-estate-appraisals.html
Buying Your Home Online
Buying Your Home Online
Online Auctions; Buying Your Home Online
Ecommerce is rapidly expanding to the real estate market. Sellers are looking to auction off down payments, lease agreements, or selling the home outright. Individual homeowners and real estate agents are turning to the Internet as an avenue for sales.
Buying your home online can be a risky venture. On the flipside, there are some great deals out there. If you decide to take this path, you should be aware of the challenges associated with buying a home site unseen. The more educated you are, the better.
First of all, the home could have major structural issues not evident in an online picture. Pictures don't always tell the whole story. It has also become much easier to doctor photographs.
You have to consider the possibility that some sellers might not be as truthful as they should be. After all, they are trying to sell the property, so the sales description is going to emphasize the positives and downplay the negatives.
Getting a fixer upper is one thing. Living in a house that is structurally unsound is a completely different matter.
Secondly, when buying your home online you must make sure that you know your property rights. If you are buying land, you must make sure that you can have the utilities you want.
There might be restrictions that are not specified on the auction site. There would be nothing worse than buying the property for your dream home and then discovering that you cannot have utilities.
Another potential hazard to buying your home online is not knowing anything about the area. It would be well worth your time to do some investigating. Is the property in an area that is prone to flooding? Is the property accessible by car? These are things that the seller might not mention in their ad.
Also, it is easy to become a victim of online fraud. There is really no way to regulate the online auctions. The auction companies have their own guidelines in place to circumvent illegal activity, but with the high volumes of online business activity every day, it is hard to police every transaction.
The government may eventually step in and try to pass laws that will protect online consumers. Time will only tell, so until then you have to keep your guard up.
On the positive side of buying a home online, it is important to note that online auctions are not legally binding. The companies are not actually licensed to sell real estate; therefore, they are not true auction houses.
The service that they offer is advertising to potential buyers. It gives buyers and sellers the opportunity to communicate with one another online and work out a legally binding contract after bidding ends.
When placing an eBay bid online, you should be aware that there are two types of bids: "Binding" and "non-binding". The term binding is not entirely accurate because it does not result in a legally binding contract.
A Binding real estate auction means that you have placed a bid with intent to buy. If you don't live up to your end of the transaction, you will receive negative feedback. It won't result in legal problems, but it can hurt your business potential on EBay.
Everyone looks at the feedback and most people won't do business with someone if they have a lot of negative feedback. A non-binding bid simply means that you cannot receive negative feedback if you fail to complete the transaction.
Always take the time to review the auction companies' policies and procedures. There should be a link to them on the main page. If you have trouble locating them, contact the company directly.
You should be able to email them any questions that you may have and they should respond to your inquiries quickly. Try to talk to people that have a lot of experience with doing business online.
It seems like just about everyone has some experience with online auctions. They may have some horror stories, but don't let that discourage you. You can learn a lot from the mistakes of others.
If you prefer reading to chatting, there are also several books about the subject. Visit the technology section of your favorite bookstore and you are bound to see a possible resource.
Take all of the advice and use common sense when entering into an online real estate deal. You will emerge as the winner and have a fabulous home to show for it.
http://www.real-estate-marketing-talk.com/buying-your-home-online.html
Online Auctions; Buying Your Home Online
Ecommerce is rapidly expanding to the real estate market. Sellers are looking to auction off down payments, lease agreements, or selling the home outright. Individual homeowners and real estate agents are turning to the Internet as an avenue for sales.
Buying your home online can be a risky venture. On the flipside, there are some great deals out there. If you decide to take this path, you should be aware of the challenges associated with buying a home site unseen. The more educated you are, the better.
First of all, the home could have major structural issues not evident in an online picture. Pictures don't always tell the whole story. It has also become much easier to doctor photographs.
You have to consider the possibility that some sellers might not be as truthful as they should be. After all, they are trying to sell the property, so the sales description is going to emphasize the positives and downplay the negatives.
Getting a fixer upper is one thing. Living in a house that is structurally unsound is a completely different matter.
Secondly, when buying your home online you must make sure that you know your property rights. If you are buying land, you must make sure that you can have the utilities you want.
There might be restrictions that are not specified on the auction site. There would be nothing worse than buying the property for your dream home and then discovering that you cannot have utilities.
Another potential hazard to buying your home online is not knowing anything about the area. It would be well worth your time to do some investigating. Is the property in an area that is prone to flooding? Is the property accessible by car? These are things that the seller might not mention in their ad.
Also, it is easy to become a victim of online fraud. There is really no way to regulate the online auctions. The auction companies have their own guidelines in place to circumvent illegal activity, but with the high volumes of online business activity every day, it is hard to police every transaction.
The government may eventually step in and try to pass laws that will protect online consumers. Time will only tell, so until then you have to keep your guard up.
On the positive side of buying a home online, it is important to note that online auctions are not legally binding. The companies are not actually licensed to sell real estate; therefore, they are not true auction houses.
The service that they offer is advertising to potential buyers. It gives buyers and sellers the opportunity to communicate with one another online and work out a legally binding contract after bidding ends.
When placing an eBay bid online, you should be aware that there are two types of bids: "Binding" and "non-binding". The term binding is not entirely accurate because it does not result in a legally binding contract.
A Binding real estate auction means that you have placed a bid with intent to buy. If you don't live up to your end of the transaction, you will receive negative feedback. It won't result in legal problems, but it can hurt your business potential on EBay.
Everyone looks at the feedback and most people won't do business with someone if they have a lot of negative feedback. A non-binding bid simply means that you cannot receive negative feedback if you fail to complete the transaction.
Always take the time to review the auction companies' policies and procedures. There should be a link to them on the main page. If you have trouble locating them, contact the company directly.
You should be able to email them any questions that you may have and they should respond to your inquiries quickly. Try to talk to people that have a lot of experience with doing business online.
It seems like just about everyone has some experience with online auctions. They may have some horror stories, but don't let that discourage you. You can learn a lot from the mistakes of others.
If you prefer reading to chatting, there are also several books about the subject. Visit the technology section of your favorite bookstore and you are bound to see a possible resource.
Take all of the advice and use common sense when entering into an online real estate deal. You will emerge as the winner and have a fabulous home to show for it.
http://www.real-estate-marketing-talk.com/buying-your-home-online.html
Buying a HUD Home from the U.S. Government
Buying a HUD Home listed through the Department of Housing and Urban Development (HUD) is an exciting proposition. Although HUD homes are typically purchased by low to moderate income people anybody can buy them.
However, HUD has special purchase programs for educators and law enforcement officers. Teachers, police officers and others are offered special housing incentives, and receive additional incentives to enter purchase homes in specific neighborhoods and communities.
Yep, if you’re a savvy buyer you can get an outstanding deal on a HUD foreclosure.
Don't have perfect credit? Don't worry about it, as HUD homes are not limited to buyers with perfect credit. In fact, you may be able to purchase a home with government assistance even if you have fallen on hard times or have less than stellar credit.
Let's take a quick peek at HUD homes available in your area, which you can do by clicking on the following link. Then, search by state, county, city, zip code, etc. Here's the link;
Available HUD Homes
Now, when you find a home you're interested in pursuing find a HUD approved real estate office to show you the property. The link above will also point you to lists of approved offices.
When you meet with an agent the process for finding a HUD home is the same as for any home. Meet with an agent, and then tell them what you want in a home. The agent will then get to work looking for one that meets your needs. It's that simple!
A HUD property becomes available when a homeowner with a HUD insured mortgage cannot make payments. At that point it is foreclosed on.
Next, HUD pays the lender for what is owed on the property and takes ownership of the home. The homes are then auctioned off, and are sometimes auctioned off for less than the appraised market value. This is why such great deals can be found on HUD homes.
The auction is considered the “offer period”. Everyone places their bids and the highest bidder gets the house. You can submit a bid at any time if the house isn’t sold in the offer period. If HUD approves your bid, your agent will be contacted within 48 hours.
In the event that your bid wins, your agent will help you with the paperwork. Your settlement date will usually fall within 30-60 days of your winning bid. It is important to remember that you cannot finance a home through HUD.
So, you need to have your own financing arrangements. Have everything ready to go at the time you place your bid. If your bid wins, but you do not close, you may lose your deposit.
If the home is in need of repairs, the responsibility falls on you - the buyer. HUD homes are sold “as is” and do not come with a warranty, nor will HUD make any repairs. However, the price of the home is always adjusted downward to reflect the cost of repairs.
Never consider buying a HUD home unless you are willing to absorb the cost of repairs. However, in many instances the repairs might be minor, so don’t turn down a good home because it needs a little work.
Before looking for homes, you should determine what you are willing to spend in repairs and stick to it. Consequently, it is important to have the home inspected prior to making an offer so that you can figure the cost of repairs into your bid.
If you are purchasing a HUD home as a real estate investment you cannot bid during the initial offering period, because families in need of housing take priority. Therefore, the initial offering is only available to buyers with the intent to live in the home. If no one bids on the home, investors can then bid on it.
Finally, if foreclosure HUD home listings cannot be sold within 6 months, HUD will then sell them to charities or agencies for the purpose of providing housing for needy families. Ultimately, the homes are likely going to end up with those individuals needing them the most.
http://www.real-estate-marketing-talk.com/hud-home.html
However, HUD has special purchase programs for educators and law enforcement officers. Teachers, police officers and others are offered special housing incentives, and receive additional incentives to enter purchase homes in specific neighborhoods and communities.
Yep, if you’re a savvy buyer you can get an outstanding deal on a HUD foreclosure.
Don't have perfect credit? Don't worry about it, as HUD homes are not limited to buyers with perfect credit. In fact, you may be able to purchase a home with government assistance even if you have fallen on hard times or have less than stellar credit.
Let's take a quick peek at HUD homes available in your area, which you can do by clicking on the following link. Then, search by state, county, city, zip code, etc. Here's the link;
Available HUD Homes
Now, when you find a home you're interested in pursuing find a HUD approved real estate office to show you the property. The link above will also point you to lists of approved offices.
When you meet with an agent the process for finding a HUD home is the same as for any home. Meet with an agent, and then tell them what you want in a home. The agent will then get to work looking for one that meets your needs. It's that simple!
A HUD property becomes available when a homeowner with a HUD insured mortgage cannot make payments. At that point it is foreclosed on.
Next, HUD pays the lender for what is owed on the property and takes ownership of the home. The homes are then auctioned off, and are sometimes auctioned off for less than the appraised market value. This is why such great deals can be found on HUD homes.
The auction is considered the “offer period”. Everyone places their bids and the highest bidder gets the house. You can submit a bid at any time if the house isn’t sold in the offer period. If HUD approves your bid, your agent will be contacted within 48 hours.
In the event that your bid wins, your agent will help you with the paperwork. Your settlement date will usually fall within 30-60 days of your winning bid. It is important to remember that you cannot finance a home through HUD.
So, you need to have your own financing arrangements. Have everything ready to go at the time you place your bid. If your bid wins, but you do not close, you may lose your deposit.
If the home is in need of repairs, the responsibility falls on you - the buyer. HUD homes are sold “as is” and do not come with a warranty, nor will HUD make any repairs. However, the price of the home is always adjusted downward to reflect the cost of repairs.
Never consider buying a HUD home unless you are willing to absorb the cost of repairs. However, in many instances the repairs might be minor, so don’t turn down a good home because it needs a little work.
Before looking for homes, you should determine what you are willing to spend in repairs and stick to it. Consequently, it is important to have the home inspected prior to making an offer so that you can figure the cost of repairs into your bid.
If you are purchasing a HUD home as a real estate investment you cannot bid during the initial offering period, because families in need of housing take priority. Therefore, the initial offering is only available to buyers with the intent to live in the home. If no one bids on the home, investors can then bid on it.
Finally, if foreclosure HUD home listings cannot be sold within 6 months, HUD will then sell them to charities or agencies for the purpose of providing housing for needy families. Ultimately, the homes are likely going to end up with those individuals needing them the most.
http://www.real-estate-marketing-talk.com/hud-home.html
Ten Tips for the First Time Home Buyer
Are you a first time home buyer?
If yes, buying your first home is one of the most exciting things you will ever do. If you have spent years living in apartments, there is nothing more satisfying than owning your own property.
The home buying process can be a little lengthy and confusing, so I've put together the following tips that will help a first time home buyer get through a sometimes difficult and very stressing process.
The first thing a first time buyer should do is talk to a real estate agent about the home buying process. It should not be a sales meeting and you should be able to find an agent that will agree to meet with you about the basics without having to sign a sales agreement with them.
If you can’t find a good agent to talk to, you might want to consider talking to a loan officer at your bank or a mortgage broker.
An equally important tip for a first time home buyer is to get their finances in order before they apply for a mortgage. Order a copy of your credit report so you can check it for accuracy.
Mistakes are common and you want to make sure that there is no fraudulent activity. You have the right to dispute errors on your credit report. If you come across something that you know is an error, circle it and send it to the reporting agency along with a letter of dispute.
Next, first time home buyers should really study the mortgage industry. Take the time to really get familiar with the mortgage lending process. It could save you a lot of time and money!
You need to be able to find the right loan and lender most suitable for your needs. Familiarize yourself with industry terms like debt to income ratio and adjustable rate mortgage. Learn the difference between pre-approval and pre-qualified. It will all seem foreign at first, but taking the time to learn the business will spare you from headaches in the future.
Also, you need to figure out what your wants and needs are. What kinds of amenities are you looking for? How many bedrooms do you want? Do you want one story, but prefer a two story home? First time home buyers also need to consider the size of the down payment and figure out what they need to do to come up with the money for it.
You must also learn about how real estate agents work. There are buyer’s agents and seller’s agents. The goal of the seller’s agent is to get the price that the seller most desires. However, a buyer’s agent’s responsibility is to negotiate the best deal for the buyer. So, it can be in your best interest to go with a buyer agent arrangement.
The best way to find the right agent is to ask your friends for suggestions. They have all probably been in the same boat, so they can probably recommend a good real estate agent. When meeting with a potential agent, pay attention to how they treat you.
Make sure they listen to you when you talk about what you want. Also, how are their follow up skills? Do they take the time to return your calls or emails? If they don’t take the time to respond, move on. There is a better agent out there for you.
When looking for a home, consider all of the possibilities. Look up real estate agent’s websites. Don’t rule out For Sale by Owner Properties and foreclosed homes. Housing and Urban Development (HUD) homes can often be found for very reasonable prices.
However, it is important to find an agent that is approved to sell HUD homes if you choose to take that road to home ownership. Better yet, you need to find one that is well versed in the HUD property buying process, as it can be very complicated.
Even as a seasoned real estate sales pro I always felt like a dummy whenever I pursued buying or selling HUD properties. It really is a specialty unto itself, so finding an agent who knows the process can make your HUD property buying experience a more successful one.
Now, before you even think about making an offer you need to consider the resale value. You might plan on being there for a long time, but you just never know. You might opt for a different climate to alleviate your allergies or you could simply be transferred by your company. You want to pick a good location that will be attractive to others, so when it's time to resell and move on it will be as desirable to others as it was to you.
Another issue that cannot be ignored is the deed restrictions, which govern what you can and cannot do with the property. If it has always been your dream to have a pool, you need to make sure that you don’t buy a home in a subdivision that won’t allow it because of deed restrictions.
Home inspections are an important part of the equation. Talk to your agent to find out when the inspection will be performed. It varies state to state. Sometimes the inspection will be right before the contract is signed and other times, they are performed right after an offer is made.
Finally, make sure you stay on top of things. Any number of problems can crop up at the last minute and delay the purchase of your home. If you aren’t sure about something with the paperwork, don’t be afraid to ask questions. Purchasing a home is a time consuming task, but it is well worth it when you have your own "home sweet home."
http://www.real-estate-marketing-talk.com/first-time-home-buyer.html
If yes, buying your first home is one of the most exciting things you will ever do. If you have spent years living in apartments, there is nothing more satisfying than owning your own property.
The home buying process can be a little lengthy and confusing, so I've put together the following tips that will help a first time home buyer get through a sometimes difficult and very stressing process.
The first thing a first time buyer should do is talk to a real estate agent about the home buying process. It should not be a sales meeting and you should be able to find an agent that will agree to meet with you about the basics without having to sign a sales agreement with them.
If you can’t find a good agent to talk to, you might want to consider talking to a loan officer at your bank or a mortgage broker.
An equally important tip for a first time home buyer is to get their finances in order before they apply for a mortgage. Order a copy of your credit report so you can check it for accuracy.
Mistakes are common and you want to make sure that there is no fraudulent activity. You have the right to dispute errors on your credit report. If you come across something that you know is an error, circle it and send it to the reporting agency along with a letter of dispute.
Next, first time home buyers should really study the mortgage industry. Take the time to really get familiar with the mortgage lending process. It could save you a lot of time and money!
You need to be able to find the right loan and lender most suitable for your needs. Familiarize yourself with industry terms like debt to income ratio and adjustable rate mortgage. Learn the difference between pre-approval and pre-qualified. It will all seem foreign at first, but taking the time to learn the business will spare you from headaches in the future.
Also, you need to figure out what your wants and needs are. What kinds of amenities are you looking for? How many bedrooms do you want? Do you want one story, but prefer a two story home? First time home buyers also need to consider the size of the down payment and figure out what they need to do to come up with the money for it.
You must also learn about how real estate agents work. There are buyer’s agents and seller’s agents. The goal of the seller’s agent is to get the price that the seller most desires. However, a buyer’s agent’s responsibility is to negotiate the best deal for the buyer. So, it can be in your best interest to go with a buyer agent arrangement.
The best way to find the right agent is to ask your friends for suggestions. They have all probably been in the same boat, so they can probably recommend a good real estate agent. When meeting with a potential agent, pay attention to how they treat you.
Make sure they listen to you when you talk about what you want. Also, how are their follow up skills? Do they take the time to return your calls or emails? If they don’t take the time to respond, move on. There is a better agent out there for you.
When looking for a home, consider all of the possibilities. Look up real estate agent’s websites. Don’t rule out For Sale by Owner Properties and foreclosed homes. Housing and Urban Development (HUD) homes can often be found for very reasonable prices.
However, it is important to find an agent that is approved to sell HUD homes if you choose to take that road to home ownership. Better yet, you need to find one that is well versed in the HUD property buying process, as it can be very complicated.
Even as a seasoned real estate sales pro I always felt like a dummy whenever I pursued buying or selling HUD properties. It really is a specialty unto itself, so finding an agent who knows the process can make your HUD property buying experience a more successful one.
Now, before you even think about making an offer you need to consider the resale value. You might plan on being there for a long time, but you just never know. You might opt for a different climate to alleviate your allergies or you could simply be transferred by your company. You want to pick a good location that will be attractive to others, so when it's time to resell and move on it will be as desirable to others as it was to you.
Another issue that cannot be ignored is the deed restrictions, which govern what you can and cannot do with the property. If it has always been your dream to have a pool, you need to make sure that you don’t buy a home in a subdivision that won’t allow it because of deed restrictions.
Home inspections are an important part of the equation. Talk to your agent to find out when the inspection will be performed. It varies state to state. Sometimes the inspection will be right before the contract is signed and other times, they are performed right after an offer is made.
Finally, make sure you stay on top of things. Any number of problems can crop up at the last minute and delay the purchase of your home. If you aren’t sure about something with the paperwork, don’t be afraid to ask questions. Purchasing a home is a time consuming task, but it is well worth it when you have your own "home sweet home."
http://www.real-estate-marketing-talk.com/first-time-home-buyer.html
Ten Things To Avoid If You’re A Home Buyer
Are you a home buyer looking to purchase a home sometime soon?
If so, there are several things you should avoid when you enter the home buying process. And if you aren’t careful to avoid them it is possible that your closing will be delayed or even canceled. Your adherence to the following rules will put the keys to the house in your hands quickly.
First, don’t damage your debt to income ratio by making a major purchase before closing. If you decide you can’t live without that brand new Benz, you might have to wait on owning a home. The bank could easily determine that your sky high car payment would hinder your ability to pay your mortgage. Wait until after you get the house to do some spending. No one expects a brand new house full of furniture and a sports car in the driveway unless you are a famous sports figure or Donald Trump.
Secondly, don’t change jobs if you don’t have to. The lenders like to see consistency versus constant job hopping. If you are just miserable with your job, maybe you can switch to a different job within the same field. Or you can tough it out until you have the house and then start putting out resumes.
Also, a home buyer should never surrender their earnest money to a For Sale by Owner Seller. There isn’t anything stopping the sellers from spending the money before the transaction goes through. If the deal should fall through you’ll have to fight tooth and nail to get that deposit back. You should put the deposit into a trust account. You should be able to find an attorney willing to hold the deposit for you until the transaction is finalized. Your contract needs to state what will happen to the deposit in the event that the transaction falls through.
In addition, never let emotions guide you. Stay practical and realistic during the home buying process. Some sellers are willing to fix some of the problems with the home and others may not be as willing. Don’t let that refusal close the door on your dream home. Conversely, you shouldn’t let your loyalty to the home blind you to costly repairs down the road. You certainly don’t want to be in a money pit.
http://www.real-estate-marketing-talk.com/home-buyer.html
If so, there are several things you should avoid when you enter the home buying process. And if you aren’t careful to avoid them it is possible that your closing will be delayed or even canceled. Your adherence to the following rules will put the keys to the house in your hands quickly.
First, don’t damage your debt to income ratio by making a major purchase before closing. If you decide you can’t live without that brand new Benz, you might have to wait on owning a home. The bank could easily determine that your sky high car payment would hinder your ability to pay your mortgage. Wait until after you get the house to do some spending. No one expects a brand new house full of furniture and a sports car in the driveway unless you are a famous sports figure or Donald Trump.
Secondly, don’t change jobs if you don’t have to. The lenders like to see consistency versus constant job hopping. If you are just miserable with your job, maybe you can switch to a different job within the same field. Or you can tough it out until you have the house and then start putting out resumes.
Also, a home buyer should never surrender their earnest money to a For Sale by Owner Seller. There isn’t anything stopping the sellers from spending the money before the transaction goes through. If the deal should fall through you’ll have to fight tooth and nail to get that deposit back. You should put the deposit into a trust account. You should be able to find an attorney willing to hold the deposit for you until the transaction is finalized. Your contract needs to state what will happen to the deposit in the event that the transaction falls through.
In addition, never let emotions guide you. Stay practical and realistic during the home buying process. Some sellers are willing to fix some of the problems with the home and others may not be as willing. Don’t let that refusal close the door on your dream home. Conversely, you shouldn’t let your loyalty to the home blind you to costly repairs down the road. You certainly don’t want to be in a money pit.
http://www.real-estate-marketing-talk.com/home-buyer.html
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