Real estate tips: best times to shop for homes

When to shop for the best house for the best price! Some general guidelines to help you get the best deal!

Shopping for a new home can be very exciting. You have decided you’re ready to take the plunge and either buy another house, or become a first time homeowner. You have an idea of what you’re looking for, you know what area you’d like to live in, and your financing is in order. Now, all you have to do is shop--right? Well, you could just go out and shop, but you also want to know when to shop to get the best price on the best house.

Each area differs in the most popular selling time. It’s really dependent upon the weather, holidays, and how the market is overall. Obviously, sellers want to get the best price for their home and buyers want to buy a home for the most reasonable price. Is there a time of year to shop when you can get the seller to come down on the asking price?

First thing you may want to do is talk to a realtor about your specific area. Your realtor is familiar with your area and may have some tips that apply only to that area. If you do not want to employ a realtor there are some general guidelines that may help.

The summer time tends to be a slow time, and many homeowners are just ready to get out of under their house payment. Typically, if a house is for sale in the summer it’s been for sale since the spring and the seller is getting anxious. So, if you are ready to make an offer during the summer this may be the best time! The seller may accept an offer that is very reasonable for both parties!

Another very slow time, when many people take their house off the market, is during the winter season. For some reason, there just aren’t many people looking to buy a home during this time of year. It probably has to do with gift buying and such for the holiday season, and not having the financial resources available to buy a house. So, if you find a house you love during the winter holidays you may get a great deal on it as the seller may be ready to take any reasonable offer!

The spring is the most common time to list a house for sell. This is good for the seller, because the buyers are also out and about ready to look at a whole new group of homes for sell. But, the seller will usually hold out for the best price possible. It won’t be until the house has been on the market for a few months that he’ll get a little bit anxious and be ready to negotiate a bit more. So, if you see a house that you love and your offer is rejected, wait a few months, and offer again.

These are just some general guidelines. There are some sellers who are willing to negotiate from the first day their house is for sale, and there are others who refuse to negotiate and will let the house sit on the market for as long as it takes to sell at their asking price. Time really is on the side of the buyer here, as sellers get anxious and will usually drop the price.

So, any time of year is a good time of year to shop for a house. But, there are better times of year to get the best price on that house. Good luck and happy house hunting!

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Pros and cons of lease options

A lease option purchase is creative way of purchasing a home.

A lease option is an agreement to lease a home and purchase it within a certain period. The renter/ purchaser pays an additional fee each month above the rental price that goes toward the down payment on the house. A lease option purchase is creative way of purchasing a home when you do not have the down payment or when you need time to clean up your credit report. For the seller, it is a great way to sell a home for top price if they have a little patience. Just as it can be a great way to purchase a home, there are also some negative aspects to it.

Pros for seller/landlord:

1. The seller/landlord receives above market price rent for the property. Because the tenant is paying extra each month as a down payment on the property, the property owner essentially gets extra rent for the unit.
2. The seller/landlord receives top dollar for properties. Since rent lease options are in high demand, the owner does not have to discount the sales price on the property.

3. The seller/landlord will get the best tenants. A tenant interested in a lease purchase option is usually a quality tenant who will treat the home like it belongs to them.

Cons for the seller/landlord:

1. The sale on lease purchase properties often fall through. Some tenants decide to purchase a different property, or wind up not being able to purchase at all. Therefore, they often back out of purchase, so a rent lease option is not an automatic sale. 2. Seller may miss house appreciation. The seller usually sets the sales price in the beginning of the lease purchases. When doing this they take the chance that they may miss extra income if the value of the home appreciates quickly.

Pros for buyer/ renter:

1. The renter/purchaser gets to try the house before they buy. This will help them ensure they want to want to buy the house, or might they find out that the house has hidden defects and can back out of the sale.

2. The renter/purchase gets to live in the home while saving for the down payment. This allows them to feel like they are in their own home.

3. In many cases, only a small down payment is required from the buyer/renter at the start of the lease purchase. It is much easier to have the buyer hold the money through the lease purchase agreement than to save on their own.

Cons for buyer renter:

1. Unscrupulous property owners will cancel the lease option because of one late payment and keep your money. They count on the tenant not being able to buy the house or make on time payments every month for three months, allowing them to pocket the down payments. You can avoid this by writing into the contract an allowance for three late payments before forfeiting the rent lease option.

2. If you decide not to go along with the purchase, you lose your down payment, which could be one-month rent to several months rent, plus the lease option amount being paid monthly.

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When, and when not, to invest in real estate

A guide to help you decide when it makes sense to invest in real estate and when it does not.

A guide to help you decide when it makes sense to invest in real estate and when it does not.
Real estate can be a great investment or a very poor one. More than two thirds of Americans are home owners, so the majority of people will chose to invest in some form of property. By carefully avoiding a few pitfalls it should be very easy to make sure your real estate investment pays off nicely.

Investing in your own home is a complex decision that you should investigate thoroughly before setting out to purchase a home. By far the most important factor when choosing buying a home is your time frame. Unless you plan to be in an area for at least three years you should probably rent rather than buy.

There are several reasons most people should not house hunt if they don’t they don’t plan to stay in one area very long. In the first place, home ownership usually has more upfront costs than renting. Most renters are asked in advance for a month’s rent and a deposit fee. In contrast buying a home involves closing costs and often a significant down payment. Closing costs include everything from an attorney’s fee to title insurance to fees banks charge to create the mortgage. A down payment is usually at least five percent of the purchase price.

In the short term home ownership poses some very real financial risks. The biggest risk is that real estate prices may drop. This can cause the home owner to face a situation where the mortgage and closing costs exceed the current value of the house. If you have to sell the house at this time you may not get your money back. On the other hand renters face no such risks. If real estate prices fall he may even benefit because rents may actually go down as landlords compete for tenants.

You should also avoid buying a house if you have just changed jobs or have a lot of other debt. A job change can make lenders reluctant to approve a mortgage because newly hired employees face greater economic instability. If you have lots of other debt this can also be a red flag for a loan officer. Lots of debt may indicate an individual has problems managing money. It’s much better to wait a while and pay down as much of the debt as you can before rushing to invest in real estate.

If you are planning to live in one place for at least three years buying a home can be a terrific financial decision with a nice payoff. First of all, most people who purchase their homes do not buy them outright. They put down a small down payment and then seek a home loan or mortgage from the bank for the balance of the house and closing costs. At first this decision may seem contrary to popular wisdom, which asserts that debt should be avoided whenever possible. As a general rule that’s true. This rule does not apply to home mortgages because of one crucial difference: home mortgage interest and property taxes are tax deductible. This means that whatever you spend on a mortgage will not count as part of your income. It also means most homeowners will be able to afford more in monthly mortgage payments then they would in rent. For example, if you were able to get a nice two bedroom apartment for $800 a month, you might be able to afford a $1000 a month mortgage.

Another reason why long term home ownership can be a good financial boon is appreciation. As home prices go up your house is valued more. You can sell your house for a higher price than you paid for it. The profit you earn from selling a primary residence has traditionally been tax free and is likely to remain so in the future.

Equity is the amount of money in your house once you’ve subtracted the mortgage. Investing in a house long term will build up your equity. If you don’t want to sell your house and move you can tap into the money in your house with a second home loan. Like the first mortgage the second home loan is still tax deductible. You can use that money for anything from medical expenses to college tuition. If you study your finances carefully you should have no problem deciding exactly when to invest in real estate.

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Are you selling your home for too little? 10 questions to ask yourself

The price per square foot method is often used to establish the price of a home, but there are other factors to keep in mind.

1. What is the trend; is it a buyer's market or a seller's market?

In a seller's market, a seller can expect a good price for his property, because the supply of homes can not keep up with demand.

Obviously, a buyer’s market is just the opposite of a seller’s market. It occurs when the supply of homes outweighs the demand. This doesn’t mean you won’t be able to sell your home for a reasonable price, but it does mean you will have to be more competitive. This is especially true if the economy is not seen as good, because even if interest rates are low, consumers tend to postpone making large purchases due to issues like fear of being laid off.

In a buyer’s market, you need to make the deal as attractive as possible. You should be willing to slightly reduce the price or make other concessions such as paying closing costs. Or, you may want to wait to sell until the market begins to change, if possible.

2. How are comparable homes in the area priced?

To determine the value of your home, you will need to establish what is happening with similar homes in your area. This will give you a starting point. You’ll need to figure out if your home is worth more, less, or about the same as comparable properties.

You’ll need to examine the condition of other homes and learn whether yours is in better, worse, or similar shape. Perhaps your home offers more square footage, an extra bathroom, a newer roof, a larger yard. Perhaps yours has been better maintained, or you’ve recently painted, installed new carpeting, or improved the landscaping. Or, maybe your home offers fewer of the above items than comparable homes. These things add to or subtract from the value of your home and must be taken into consideration.

3. Should I have my home appraised?

An appraisal is a great help in determining the fair market value of your home, and having one done has become standard procedure in the world of real estate. Having your home appraised is of benefit to you for many reasons. You may discover that your home has been unfairly assessed and therefore the property taxes should be lowered. Lower property taxes are a good incentive for a buyer.

A professional appraiser may also help you avoid making costly mistakes. If you are considering remodeling a bathroom before putting your home on the market, an appraiser will let you know if the investment will prove valuable. While most improvements will add to the value of your home, the effort and cost of a remodeling project may or may not be justifiably reflected in the sales price.

You may also learn that your home is worth far more than comparable homes in your neighborhood due to any number of things, such as more square footage or better condition.

4. Is my home buyer friendly?

When a prospective buyer enters your home, you want her to feel comfortable, to make herself at home. Also, remember that most buyers are looking for homes in “move in” condition. If not, they are certainly looking for a bargain if they have to do some of the work.

Make sure that clutter is minimized and space is maximized. Be sure high traffic areas are open and have good flow. Even though (in most cases) your furniture will be moving out with you, the buyer likes to picture his or her own furniture in your space. If you have an awkward arrangement, she may feel that the room doesn’t flow well, and may feel that her furniture would not fit comfortably either.

Everything should be sparkling clean and your home should smell nice. You can use fabric refreshers, room fresheners, or scented candles as long as they are not overpowering. Many realtors suggest throwing a frozen pie or a pan of sliced apples and cinnamon in the oven. The scent of a baking pie creates warmth and a sense of hominess.

A gallon or two of paint can go a long way toward making your home seem in move in condition. If you have chartreuse walls in one room, paint them a neutral color. Buyers may not share your love of chartreuse and may not feel like repainting before moving in. Even if they don’t mind painting, they will expect to be compensated for it, and they will be silently deducting from the amount they intend to offer.

It’s also a good idea to open drapes and blinds, turn on lights, or light candles. You want your home to appear as bright and airy as possible.

5. Are there repairs that I can complete myself or have done inexpensively, which will ultimately increase the value of my home?

You may be unwittingly knocking thousands of dollars off the purchase price by leaving minor repairs unfinished. A couple of hundred dollars and a couple of hours of work may significantly affect the final price.

For example: A crack in the wall or ceiling may cause the buyer to think there is other damage. They may not want to take the chance and may go on to the next house on the list. Or, they may decide that since they have to do such work, they will lower the amount they intend to offer. Taping, mudding, sanding, and repainting the wall or ceiling is not expensive or difficult, but it will make a big difference when it comes to the bottom line.

6. Does my home have curb appeal?

Make sure the lawn is freshly cut and etched if needed. Seed any bare areas, and be sure the yard is free from debris and clutter. If your mailbox or house numbers are missing or are in disrepair these items are simple and inexpensive to fix. Little things make a big difference.

Have overgrown trees or shrubs trimmed, and make sure the entrance to the home is easy to see and welcoming. Many realtors suggest that even if you do nothing else to the exterior, you should at least apply a fresh coat of paint to the front door.

7. Have I included every “extra” in my price?

If you are including appliances, furniture, or window treatments in the sale of your home, or have made recent improvements and repairs, be sure you have covered all of these items in the sales price.

8. Have I (or has my agent) advertised enough?

Don’t cheat yourself out of offers by skimping on advertising. The more people that know your home is for sale, the better. This doesn’t just mean newspaper ads and market listings either. Word of mouth is an important form of advertisement. Tell everyone you know that your house is on the market.

Also consider having at least one open house. Some people are uncomfortable with this idea, but it gives buyers a chance to really check out your home in a more comfortable manner. They won’t feel funny about peeking in closets if other people are doing it too.

9. Do I really know how my home presents to other people?

It may not be easy to hear constructive criticism, especially about something as personal as your home, but it is best if you have an honest evaluation. Even if you have done everything on the list plus had an appraisal done, have a brutally honest friend or neighbor give you their opinion and tell you what stands out to them. Do not take what they say personally. Use this information to make your home more valuable.

Your fond memories and sentimental attachment to your home may keep you from recognizing things that others can plainly see. Be ready to hear things you don’t want to hear, but take the advice in the spirit in which it is intended.

10. How much are my closing costs, mortgage payoff, and other costs; have I priced my home sufficiently to include these items?

Many people, especially those whom have never sold a home before, do not realize the many different costs associated with selling their home. The buyer may ask you to pay down points (to lower their interest) or to pay the closing costs, or you may want to offer to do so to make purchasing your home a more attractive deal.

You also need to make sure you will have enough left to complete your mortgage payoff, if any, and to cover the realtor’s commission and any other costs. Be sure to speak to your lender and your realtor about any costs you are unsure of before setting a firm price, and especially before considering any offers.

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Home buyers guide: what is a certificate of occupancy (co)?

Learn what a certificate of occupancy is, and when one is required.

A certificate of occupancy is a document authorizing occupancy and use of a building. When any new construction or modification of an existing structure that requires a building permit has been completed, a final inspection of the building is done. Upon approval of the inspection, the building inspector, allowing the owner or tenant to take residence, will issue a certificate of occupancy.

Here are some examples of when a certificate of occupancy needs to be issued

• When a residential newly constructed home has been completed and complies with municipal building codes.

• When a restaurant expands occupancy.

• When a multi-family home is converted to a single family home.

• When an owner of a building has zoning of the premises changed. (Authorized use of a piece of real estate for business purposes)

• Extensive remodeling projects which include changes to the plumbing, electrical, heating and cooling.

Who is responsible for getting the certificate of occupancy?

Once the building plans are drawn up, the contractor will apply for a building permit at the public works and building planning office located at your local municipal building in which the property is located. Upon approval of the plans, the building permit is issued. The fee for the permit is based on square footage of the structure. Depending on the municipality, additional permits may be needed for electrical, plumbing, heating and cooling, however only one certificate of occupancy will be issued. Inspectors from the municipal building department come in stages to inspect the work that has been done and report the approval back to the building department. Once all the work has been done and construction completed, a final inspection is done of the premises. If the work has been done correctly and there are no building code violations, a certificate of occupancy will be issued to the contractor.

Is a certificate of occupancy always required before taking residence in the home?

A certificate of occupancy is not required before residing in a newly purchased home where no major alterations requiring a building permit have been done. Under certain circumstances a partial certificate of occupancy may be issued. Examples of unavoidable delays would be weather conditions or being unable to meet a certain deadline. However, the property must be in a safe and useable condition. The partial certificate is only a temporary one. Depending on the type of work, the partial certificate may be valid for only 30 to 90 days to allow the contractor enough time complete the work.

Does issuance of the certificate of occupancy always mean the residence is in usable condition?

The certificate should not be issued if the property violates any building codes, and is not in usable condition. However, some inspectors may authorize issuance of the certificate of occupancy when the work has not been completed, with the understanding that the contractor will finish the work. This is when the property is very close to completion and is in useable condition and the work needing to be completed is minor.

Can the certificate of occupancy be revoked?

The building official does have the authority to revoke a certificate of occupancy when issued in error or when false or misleading information is given in order to obtain occupancy of the premises

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Home buyers guide: defining exactly what you want in a home

Don't get suckered in by the luxury features - here's how to find an affordable, quality house that is exactly what you want.

It's tempting to go a little crazy when browsing for a new house, especially if you're lucky enough to be in a good market where sellers are plentiful and you have lots of options. Want marble bathroom floors? Jacuzzi on the deck outside the master bedroom? Perhaps that luxurious foyer with built-in mirrors from floor to ceiling will impress guests more than a grand fountain in the front yard?

There are literally hundreds of luxury features available, and following the home refinance and remodel craze after the 9/11 attacks it seems every little shack in the boondocks now come with granite countertops and dual-showerhead bathrooms.

But hold on a second. While it is in our nature to enjoy being pampered, bear in mind that you're buying a house, not a weekend getaway at a spa. If you're like most people, you have a limited budget, and that means you make trade-offs in one form or another.

Your first concern should always be to cover the basics. The location is important. What good is a fantastic house if it now tacks on an extra hour each way to and from work? You won't be able to enjoy your house, because you'll be stuck in traffic most of the evening! Secondly, shake off the idea that bigger is better.

How big of a house do you actually need? How many rooms and how much storage space at roughly how many square feet? Keep this in mind as your realtor starts talking about twice as large mansions that just so happen to be just north of your upper limit (and the termites and rot in the basement that knocks the price down is for you to find out later!)

When it comes to houses, quality is king. Pay more for a modest house with a solid structure and you'll save yourself a lot of costly and inconvenient repairs down the road. The bargain mansion with problems may seem like a fair trade-off now, but wait until the basement toilet blows up at 3 AM and you may get second thoughts.

Maintenance is another issue that is easy to poo-poo away when looking at houses. An elaborately landscaped yard looks great when kept in shape; it looks like something out of a horror movie when it's not. If you haven't dealt with this before, here's a newsflash: it takes a LOT of time and hard work to keep all those bushes, flowerbeds, trees and lawns in check.

This is great news if you're newly retired and need something to keep yourself occupied. A family with two working parents and a few young kids may not be interested in doing the work. If you like a landscaped yard you can of course hire someone to do it for you, but then you should budget money for a landscaper as part of the cost of the house. The same applies to outdoor decks and the like that also needs time-consuming maintenance.

Next, let's look at the bells and whistles. The first question you should ask yourself is: will I actually use this? If you don't see yourself deriving much benefit from something, then what's the point? Buy it in the hope that some future buyer some day will decide that this particular gizmo makes all the difference and happily overpay you? Get real - you're buying a house for YOUR benefit, so that YOU can live there.

The quality aspect carries over to the luxury features. Is this something that is likely to break some day? If so, can you repair it or will it become a big chunk of trash lodged in or around your house - the bragging point turned into an embarrassment? Does it have potential to cause damage if it breaks?

Lastly, don't stretch as far as you can just because, well, you CAN. When a lender gives you an upper limit that they are willing to give you, that doesn't mean you should necessarily aim for that much. Focus on what you really need and a few select comforts that you're confident will be put to good use and declare victory there.

So what if you could have gone another $50,000 and gotten yourself another 1,000 square feet? All you'd really get is more to clean, fatter property tax bills and more uninvited relatives making use of your spare rooms. And if your finances turn sour for some reason, you have much better odds of pulling through with the smaller house. The bottom line: keep your focus on your needs and keep your cool.

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Financial advice: pros and cons of a home equity loan

So, you are considering a home equity loan. There are several things that you should know when considering this type of loan. There are many pros and cons to this situation, and it really just depends on your personal situation if this would be a good or bad decision for you and your family.

Firstly, what are you planning on using the home equity loan for? Do you desperately need the money for paying bills or paying off credit card debt? Are you considering major home improvements? There are probably very few times when a home equity is a great idea. For example, home equity loans are usually not a good idea to buy depreciating items, such as a new living room set, a big vacation, etc. Paying off credit card debt may be a decent move since you will change from interest that is not tax-deductible to interest that is tax-deductible. That is all nice and fine, but make sure that you do not take advantage of the fact that your credit cards are all now ready to be taken advantage of again. However, home equity loans may be a very good idea to use for an adoption of a child, or major home improvements.

Consider that you will have to pay back the home equity loan with interest. The interest will be tax-deductible, so that will be a major plus. However, if for some reason you can’t pay back this loan, your home will be on the line, and that is a very big con, and you should probably take this into consideration before even considering a home equity loan. Taking out a home equity loan takes some planning and self-discipline financially.

Buying depreciating items will the home equity loan is not usually a very good idea. Months or even years after your big vacation is over, you will still be paying for it, including large amounts of interest. Yes, the interest is tax-deductible, but is that really a good reason to feel good about your big luxury purchase? You can be the judge of that one.

Using a home equity loan for adoption is of course worth the money because you will be saving another human’s life and adding to your enjoyment and quality of life for the rest of your lifetime. Most people would be willing to go through the financial strain for a child. After all, many people spend thousands of dollars on fertility treatments to have children anyhow. With adoption, you definitely get a child out of it.

Home improvements are probably the best use of a home equity loan. Your equity will be working for you in this way, instead of sitting in an account somewhere. Improving your home will usually increase the value of your home, and its resale value. Before you do home improvements, you might want to look into what home improvements are the best investments, and which ones usually pay you back when you sell the house. In this situation, you may just get your money back when you sell it, which would basically be the smartest move on your part. Investments are usually a good idea. If you have the money and the power to make more money, this is usually the best use of your money.


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