Ready, set, buy a home...

What are the steps necessary to purchase a home? The first step is to go to a lender and reveal your income and debts and apply for pre-approval. The next step is to look for a home. A good Realtor is a wonderful beginning to this process. Make sure this is someone who is knowledgeable and full time.

Location is the most important aspect of the property you are purchasing. Secure information on the Internet and learn the types of housing available within your budget. Do not base your choices on color of carpet or paint -- these are things that you can change. Base your decision on location and floor plan. Does this property suit your lifestyle? When you have selected the neighborhood, view every property in that neighborhood in your price range and investigate all of the active listings. Ask your Realtor to pull the sales, homes under contract and active listings from the Multiple Listing Service.

Understand the contract you are signing, and do not hesitate to ask the agent to explain this contract in detail. I would also suggest an "inspection addendum" that gives the buyer the right to cancel the contract and receive a return of deposits if the inspection of the property reveals a problem you cannot accept. After a contract has been negotiated to a meeting of the minds on price and terms, you should apply for your mortgage.

Next are the inspections. Hiring an inspector is an essential part of checking out a home.
Ask if there is anything that you, the buyer, should be concerned with now or in the near future. Ask the inspector if he thinks there is anything in the home that indicates a further inspection is necessary. In Florida, you should always have a termite inspection. If the inspection is acceptable and the items you want to be repaired are agreeable to the seller, you now go to the next step.

The mortgage company or lending institution will order an appraisal of the home to determine the opinion of value based on current comparable sales in the neighborhood. The appraisal may come in low. Appraisers are guided, in this timeframe, to be conservative. I disagree that the appraiser should be guided this way. I believe the appraisal should be accurate and based on current sales, not a forecast of doom and gloom for the future.

The market value will never recover if appraisals are mandated to eliminate any appreciation in the market. But I do not guide the appraisers and banks nor do I create the value. You should also do a final walkthrough of the home before you close. Take time to make sure that the closing costs, interest rate and amount due at closing are what you had expected. The market is great and the interest rates are low. There could not be a more perfect time to purchase, so feel good, you are now a part of the American dream.

Market continues to move.

As the heat of the summer begins to approach, the sizzling activity of sales in Brevard County is the greatest in many months. Fueled by short sales and foreclosures and fired up by the lowest interest rates in years, the economic forecast indicates the light at the end of this tunnel is shining a little brighter on Brevard.

Existing lending institutions echo President Barack Obama's mandate "to help the homeowner."
Lenders are working with sellers in foreclosure, to recast loans, by lowering the interest rates, extending the foreclosure process or eliminating back payments. Communication with the lender, by the homeowner, is imperative. If the plan works, it could decrease the number of foreclosures and lead to a stabilization of the real estate market sooner than expected. By "sooner than expected," I mean stabilization will be seen in two years rather than three.

On the other hand, the delay in foreclosures may just mean that another wave will come at a later date than originally predicted. With the economy showing some signs of recovery, let us hope the foreclosures will be rescued by employment and budgeting by the homeowner in distress. Utilizing all of the counseling, refinancing and recasting offered by lenders, this type of homeowner has some alternatives rather than losing his home.

In some neighborhoods, the abundance of short sales and foreclosures has been eliminated, and buyers are finding they have missed the bottom-of-the-market bargains. Sellers, not in duress, are holding to somewhat higher prices and buyers will determine if they will purchase for the higher than short sale or foreclosure price or move on to another neighborhood. The future holds the answer to whether more short sales and foreclosures will appear or is this the corrective process of the real estate market?

Buyers may be frustrated at the change in a neighborhood from an abundance of short sales to none at all. The buyers must remember that even though they missed the short sale, the prices are still extremely low compared to the price to build. This, too, will change. New homes are being sold with no profit to the builder but the inventory and selection is growing smaller. There is still an oversupply and there are still great values, but the very best deals are disappearing.

The latest Housing Chartbook March 2009 economic forecast indicates the market may still drop slightly but next year's interest rates are predicted to increase slightly, therefore, negating any advantage for buyers to wait. Buying now at today's low prices, low interest rates and still with a good selection of inventory has buyers rushing to contract on existing homes.

Sell low, buy low the motto

Some in this real estate market need to sell and some must sell. Here are some hints for those sellers who must sell:

• If you are relocating to a new area, search the area to see if the market where you are headed is as soft as the market in Brevard County. Most likely, the prices in the area you are going to also are low -- or maybe even lower. The term "sell low, buy low" should be your motto. This could be your chance to purchase your dream home for a much lower interest rate. Sounds like a win-win situation.
• If you are staying in Brevard County, you also win with the "sell low, buy low" motto.
  Visit or call three lenders and check interest rates. Ask for a "pre-qualified" letter so, when you do sell, you have a good idea of what you can purchase.
• Now for the tough part: placing your home on the market. Staging your home to sell is paramount in today's market. From curb appeal to every detail inside and outside of your property, your mission is to make it look perfect.
  

Step back from your house and look at the sidewalk, the yard, the flower beds, fencing and front entry porch. All should look clean, crisp and manicured. The front door should be freshly painted and sparkling clean. If you could imagine that the most important person in the world is coming to visit you at your home, how perfect would you want it to be? This is the standard that your house should reflect. This sterling presentation can lead to a quicker sale.

Inside your home, remove all clutter. The clutter could be a favorite collection or display, but it complicates the view the buyer sees of your home. Simplicity is key, and minimal furniture for maximum space presentation is your goal for home staging. Light, bright, open and airy are selling points of a Florida home. Any time that you can bring the outdoors in by opening windows and showing beautiful views, do it.

• Pricing is more important than the way your home shows. Believe and understand that the buyer does not know, nor does he care, about the amount you need to sell for. The buyer most likely has experienced the same shock at pricing that you have experienced. The buyer is here to buy low because he sold low.

Why are we still thinking that we can sell for prices from 2005? We cannot. Get smart quick. Understand your market and believe that it has changed. Just hold on to the fact that you can gain by also buying in this market. The market is extremely active in a variety of price ranges. More activity is seen in the under $300,000 range. Great values can be purchased in the luxury housing market. The condominium market continues to render great buys with some moderate change in pricing. More activity in the next few months is predicted to continue as families begin to relocate over the summer months.

Selling low lets you buy low, too.

Because it is a buyers' market, some feel that selling is not the right thing to do now. Not necessarily true. It all depends on what your plans are. The time can be right to sell if real estate is in a sell-low, buy-low market.

If you are moving locally, do it. Selling in the soft market and then buying in the soft market can work out in the long run. If you wait, say five years, for the market to become stronger, you may get more for your house, but you'll end up paying more too.

In other words, if you sell high and stay in the same area, you likely will have to buy high, too.
We would all like to sell high and buy low, but this doesn't work unless you plan to move from a high market to a low market -- much like people who moved from the Northeast did when they came to Florida years ago.

Here are the most important reasons to buy now:

• Low interest rates: According to Freddie Mac, 30-year interest rates have hovered around 6 percent since the beginning of the year.
• Portability of the Homestead exemption on your home's taxable value.
• Wide selection: Nearly 300 homes are listed in Melbourne on the Multiple Listing Service this week.
• Low prices.
  

Here are the most important things to remember if you are trying to sell now:

• Price: Be realistic and price your home correctly. Stop dreaming about the high prices. They are long gone.
• Condition: Make needed repairs, remove clutter and clean, clean, clean.
• Availabilty: Be prepared to have your home shown at short notice. Do not postpone or re schedule any showings.

This is a great market for buyers and sellers to fulfill their dreams. It all depends on your perspective. Think about it. It can work to your advantage.

Programs provide assistance...

The March wind must have pushed potential buyers to rethink any decision to postpone their purchase. The activity last month, although all statistics are not yet in, appears to have come close to doubling sales production from the preceding month. Wow!

Does this mean we are out of the downward economic spiral and beginning to spin toward that light at the end of the tunnel?

So many factors have created the advantage on the buy side. The lowest interest rates in many years, the abundance of selection available in the real estate market and the incredible values in prices. But the fact remains that many homeowners have over-financed their property. Homeowners, who have owned their home for many years, refinanced when property values were high and pulled the equity out of their home for use on other things. In addition, buyers in the high market times were given loans they could barely afford, and some of those loans had an escalation clause to increase the interest rates in the future.

Some sellers had placed a large equity line on their home to speculate and purchase more real estate as an investment. Even conservative homeowners with a small loan may have found themselves without a job or a decrease in pay, creating a financial hardship. Lenders, in the past, were eager to lend, and in some cases greedy to lend, and allowed homeowners income ratios to high levels of debt. When the economic conditions changed, income for many decreased. This created a devastating situation for the homeowner who over-financed. The result is the creation of the short sale and foreclosure market.

How do we help those homeowners faced with losing their homes?

President Barack Obama has created the HUD counseling hot line. Financial counseling is available by going online at financial stability.gov or calling 1-888-995-4673 Be prepared to have all of your financial information at hand. On the local level, Brevard County judges have created a plan to assist homeowners. The plan cannot and does not eliminate foreclosure, but offers the chance for the homeowner to mediate with the lender before final foreclosure proceedings. The Brevard County plan, created by the 18th Judicial Circuit Court, mandates communication/mediation between the lender and homeowner. The procedures for this plan are found by going to FLCourts18.org or calling 617-7238 for a mediation appointment. The cost is $250.