Lately, I've been asking young people what they want to know about real estate. Many inexperienced buyers reply with a fundamental answer: How do we buy a home?
I tell them the first stage should always be to apply for a mortgage.
Yes, before any home is selected, the buyer must know how much of a mortgage he or she can afford. Knowing your credit score is very important. You, as a buyer, may otherwise qualify for a large mortgage but cannot secure one with nice low payments because of late payments on some of your credit cards and other bills.
When you apply for a mortgage, you will learn your credit score. A good, local loan officer will assist you in ways to address "fixable" issues. After buyers qualify for a mortgage, they can begin to look for homes that match their proposed payments.
Find an agent who you know is respectable, knowledgeable and honest. Sit with this agent and show the agent your letter of qualification from the lender. You are not bound to this lender nor are you bound to this agent. You may want to meet with several loan officers and several agents to determine who fits with your personality and your needs.
When you find an agent, secure a list of homes that meet your needs in location, price and floor plan. A good agent can research the status of houses that interest you. That is, information on what the seller paid for the house and when the property was purchased. This information will come in handy when you begin negotiations. Knowing the motivation of the seller is very important, in addition to knowing how this property has been maintained over the years.
Important points to understand when purchasing are the following:
--- Understand the total payment. Principal and interest are determined by the lender. In addition, buyers need to secure insurance on the property and you, the buyer, can shop rates to determine the best price and coverage. Your real estate agent can assist with this but the ultimate responsibility is on the buyer.
--- Taxes will change in the next year after the buyer's closing date. Buyers inherit the seller's taxes until Dec. 31. The following Jan. 1, a new tax rate will affect the property, but the actual tax bill will not be known until Nov. 1. Buyers can find estimated taxes through the Brevard County Appraisers Web site.
Homeownership is the American dream. In spite of all the problems in our economy today, owning a piece of America is still very possible.
Sunday, September 28, 2008
Sunday, September 21, 2008
Follow steps to buy...
Too many times, buyers are looking to find exactly the house that appeals to the taste and decor they like. It has been said over and over again . . .Location . . . location . . . location is the most important aspect of a real estate purchase!
If you are looking for a home, the procedure is simple.
First, find the general location you like. Once the general location is discovered, concentrate on neighborhoods and search for one that appeals to you in price, location and appearance. Drive this neighborhood in the morning, the evening and at night. View the homes within and surrounding this area for curb appeal. Neighborhoods that are well kept tend to hold their value.
Listen for noise from trains, planes, factories etc. Sometimes, these nuisances do not show up except at certain times of the day. Boats and cars parked on the road and off to the side of home begin to "downgrade" the neighborhood unless the lots are big enough to hide these things away from the house. When you are convinced by driving the area that this is the neighborhood for you, then the fun begins!
You too, can research on the Internet but do make a point of having a professional give you their opinion. When you study the market, it is then that you will see some consistency in the value.
The next step is making an offer. Do not insult the seller but ensure your agent can support the offer with evidence of nearby sales. Have your agent show the seller or seller's agent the competition and let him or her know that you have other options. If you do not get your favorite for a price you feel is fair, then go to your second choice and keep going until you are happy with the house and the price. Once closed, this house becomes your home.
Check your local lenders for new "down payment assistance programs" that have just been made available.
If you are looking for a home, the procedure is simple.
First, find the general location you like. Once the general location is discovered, concentrate on neighborhoods and search for one that appeals to you in price, location and appearance. Drive this neighborhood in the morning, the evening and at night. View the homes within and surrounding this area for curb appeal. Neighborhoods that are well kept tend to hold their value.
Listen for noise from trains, planes, factories etc. Sometimes, these nuisances do not show up except at certain times of the day. Boats and cars parked on the road and off to the side of home begin to "downgrade" the neighborhood unless the lots are big enough to hide these things away from the house. When you are convinced by driving the area that this is the neighborhood for you, then the fun begins!
- Tour each and every house that is on the market in this area.
- Find a floorplan that suits you and your lifestyle.
- Try to avoid the distractions of fixable cosmetic features, such as paint, wallpaper, and carpet.
- Floorplans are difficult to change and location, of course, is impossible to change.
- Do not focus on furniture that is in the home but consider the size of the furniture to picture your own items in the house. Study the plan and know what you can or cannot live with.
- Pick your three favorites homes and ask your agent to do a market analysis of comparable homes nearby that have sold, that are under contract and are actively listed.
You too, can research on the Internet but do make a point of having a professional give you their opinion. When you study the market, it is then that you will see some consistency in the value.
The next step is making an offer. Do not insult the seller but ensure your agent can support the offer with evidence of nearby sales. Have your agent show the seller or seller's agent the competition and let him or her know that you have other options. If you do not get your favorite for a price you feel is fair, then go to your second choice and keep going until you are happy with the house and the price. Once closed, this house becomes your home.
Check your local lenders for new "down payment assistance programs" that have just been made available.
Sunday, September 14, 2008
Buy now, save in interest
Fewer listings are coming on the market each month. Sales, even though low, are increasing each month. There still is a great deal of inventory in Brevard County, but if buyers wait too long to move forward, the price might be a good one, but it will cost more.
Let me explain.
Binki Kaiser, a renowned real estate expert, states that 94 percent of buyers in today's market find their homes on the Internet, investigate the neighborhoods, then make appointments with their agents. Today's buyer is particular, knowledgeable and striving for a good deal.
The buyers of today weigh renting a home vs. purchasing a home. They look at the low price of rentals and are enticed by the property they could rent. Today's buyer may be taking too long to make a decision, Kaiser says.
Mortgage rates just dropped. The rate will undoubtedly increase again soon. The struggle for the buyer is to get the best price. If he or she waits too long and the interest rate increases, it will cost this buyer more money, in the long term.
Using a 6.5 percent interest rate and a $325,000 mortgage, this example is "principle and interest" only. Taxes and insurance costs vary according to the home being purchased.
A 30-year mortgage with a 6.5 percent interest rate will cost the buyer an estimated $2,054 per month.
If the buyer waits and then decides to purchase the same home with the same term, but a 7.5 percent rate, this same $325,000 mortgage will cost the buyer an estimated $2,272 per month. The difference is $218 per month.
The buying power of the 6.5 percent interest rate vs. the 7.5 percent interest rate is best viewed as paying $34,500 more for the home if he or she waits and the interest rates jump back to 7.5 percent. That is, if the interest rate stays at 6.5 percent, one can finance $34,500 more, possibly roll the price of a new pool into the loan, and have the same payment as the 7.5 percent mortgage in the original amount of $325,000.
This is what cost vs. price entails.
To review this difference over 30 years, using the same mortgage amount of $325,000, the home with the 6.5 percent mortgage is paid out over the life of the loan in an amount estimated at $739,440. The 7.5 percent mortgage paid over 30 years totals an estimated $817,920. Now, the cost of this home is more than $78,480.
Buyers in today's market not only need to look at mortgage rates and low real estate prices but buyers need to understand the added advantage of buying over renting.
The government rewards us with tax deductions on mortgage interest and real estate taxes. One must review the vulnerability of rental rates increasing year to year versus the write-offs on income tax.
Buyers in this market have a great deal of investigating to do and if they are smart buyers, they will do it.
Let me explain.
Binki Kaiser, a renowned real estate expert, states that 94 percent of buyers in today's market find their homes on the Internet, investigate the neighborhoods, then make appointments with their agents. Today's buyer is particular, knowledgeable and striving for a good deal.
The buyers of today weigh renting a home vs. purchasing a home. They look at the low price of rentals and are enticed by the property they could rent. Today's buyer may be taking too long to make a decision, Kaiser says.
Mortgage rates just dropped. The rate will undoubtedly increase again soon. The struggle for the buyer is to get the best price. If he or she waits too long and the interest rate increases, it will cost this buyer more money, in the long term.
Using a 6.5 percent interest rate and a $325,000 mortgage, this example is "principle and interest" only. Taxes and insurance costs vary according to the home being purchased.
A 30-year mortgage with a 6.5 percent interest rate will cost the buyer an estimated $2,054 per month.
If the buyer waits and then decides to purchase the same home with the same term, but a 7.5 percent rate, this same $325,000 mortgage will cost the buyer an estimated $2,272 per month. The difference is $218 per month.
The buying power of the 6.5 percent interest rate vs. the 7.5 percent interest rate is best viewed as paying $34,500 more for the home if he or she waits and the interest rates jump back to 7.5 percent. That is, if the interest rate stays at 6.5 percent, one can finance $34,500 more, possibly roll the price of a new pool into the loan, and have the same payment as the 7.5 percent mortgage in the original amount of $325,000.
This is what cost vs. price entails.
To review this difference over 30 years, using the same mortgage amount of $325,000, the home with the 6.5 percent mortgage is paid out over the life of the loan in an amount estimated at $739,440. The 7.5 percent mortgage paid over 30 years totals an estimated $817,920. Now, the cost of this home is more than $78,480.
Buyers in today's market not only need to look at mortgage rates and low real estate prices but buyers need to understand the added advantage of buying over renting.
The government rewards us with tax deductions on mortgage interest and real estate taxes. One must review the vulnerability of rental rates increasing year to year versus the write-offs on income tax.
Buyers in this market have a great deal of investigating to do and if they are smart buyers, they will do it.
Sunday, September 7, 2008
Storm- ready homes a plus.
As the rains continue to fall, I am grateful for the renovations and enhanced construction implemented after the hurricanes of 2004. Windows are sealed, and if you do not have shutters, then hopefully you have impact-resistant windows or great plywood. Sandbags are available and should be placed where necessary. Follow the forecast, and stay safe and dry.
The real estate market marches on, even during the rains. The weather has changed the value of improvements that bring returns in today's real estate market.
Hurricane shutters expedite the sale of a home. Electrically operated or luxury shutters do not bring a financial return to sellers but certainly enhance the appeal of the property and bring some return in a quicker sale.
A newer roof with hurricane straps is almost a requirement in the sale of a home during the hurricane season.
Any other preventative/protective measures for hurricanes should be highlighted and brought to the attention of prospective buyers.
Upgraded wiring to accommodate a generator becomes a plus in selling, even more so if the generator comes with the house and is included in the sale price.
A gas grill in the summer kitchen is a good feature in case of power failures. It is interesting how the buyer's priorities change during the hurricane season.
This is the time that agents and sellers need to be particularly calm but thorough in relating hurricane information and past experiences.
A seller must disclose problems that he or she has encountered in the past, relative to the property. In the seller disclosure that is typically given to the buyer, sellers should explain exactly what problems were experienced in past storms and how the problems in the past were corrected.
It is important to explain all details of the property before the buyer has an inspection. Inspectors are thorough and tend to find indications of past leaks. When a buyer has been informed of everything prior to inspections, the seller's credibility is increased and there is trust with buyer and seller to complete the transaction.
Current statistics show that the hurricane season has not affected the trend of increased sales in the past few months. Our particular area of Florida has seen a correction in fewer listings coming on the market in addition to the increased sale activity.
With this information, if sales continue in the same pace and listings continue to decrease, the residential market, in my opinion, will begin to balance in approximately one year.
The real estate market marches on, even during the rains. The weather has changed the value of improvements that bring returns in today's real estate market.
Hurricane shutters expedite the sale of a home. Electrically operated or luxury shutters do not bring a financial return to sellers but certainly enhance the appeal of the property and bring some return in a quicker sale.
A newer roof with hurricane straps is almost a requirement in the sale of a home during the hurricane season.
Any other preventative/protective measures for hurricanes should be highlighted and brought to the attention of prospective buyers.
Upgraded wiring to accommodate a generator becomes a plus in selling, even more so if the generator comes with the house and is included in the sale price.
A gas grill in the summer kitchen is a good feature in case of power failures. It is interesting how the buyer's priorities change during the hurricane season.
This is the time that agents and sellers need to be particularly calm but thorough in relating hurricane information and past experiences.
A seller must disclose problems that he or she has encountered in the past, relative to the property. In the seller disclosure that is typically given to the buyer, sellers should explain exactly what problems were experienced in past storms and how the problems in the past were corrected.
It is important to explain all details of the property before the buyer has an inspection. Inspectors are thorough and tend to find indications of past leaks. When a buyer has been informed of everything prior to inspections, the seller's credibility is increased and there is trust with buyer and seller to complete the transaction.
Current statistics show that the hurricane season has not affected the trend of increased sales in the past few months. Our particular area of Florida has seen a correction in fewer listings coming on the market in addition to the increased sale activity.
With this information, if sales continue in the same pace and listings continue to decrease, the residential market, in my opinion, will begin to balance in approximately one year.
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