Finding The Right Home

choosing a new used home buy rentWhat are the pros and cons of adding on to your current home vs. buying a new home?

Before making a choice between adding on to an existing home or buying a larger one, consider these questions:

* How much money is available, either from cash reserves or through a home improvement loan, to remodel your current house?

* How much additional space is required? Would the foundation support a second floor or does the lot have room to expand on the ground level?

* What do local zoning and building ordinances permit?

* How much equity already exists in the property?

* Are there affordable properties for sale that would satisfy your changing housing needs?

Do we dig deep and buy a dream home or settle for a starter home?

Choosing between a smaller house in an affluent neighborhood, an older, bigger house in a more working-class community or a brand-new home in a subdivision is not easy. If you’re in this situation, start by examining your priorities and asking the following questions:

* Is the surrounding neighborhood or the home itself the most important consideration?

* Is each of the neighborhoods safe?

* Is quality of the schools an issue?

* Do any of the areas seem to attract more families with children or adult residents? And where do you fit in?

As for the return on your investment, home-price appreciation is hard to predict. In the late 1980s, and again 10 years later, the more expensive move-up housing appreciated wildly. But during the recession that followed, smaller homes tended to hold their value better than more expensive ones.

How do you choose between buying and renting?

Home ownership offers tax benefits as well as the freedom to make decisions about your home. An advantage of renting is not worrying about maintenance and other financial obligations associated with owning property. There also are a number of economic considerations. Unlike renters, home owners who secure a fixed-rate loan can lock in their monthly housing costs and make prudent investment plans knowing these expenses will not increase substantially. Home ownership is a highly leveraged investment that can yield substantial profit on a nominal front-end investment. However, such returns depend on home-price appreciation.

“For some people, owning a home is a great feeling,” writes Mitchell A. Levy in his book, Home Ownership: The American Myth. “It does, however, have a price. Besides the maintenance headache, the amount of after-tax money paid to the lender is usually greater than the amount of money otherwise paid in rent,” he concludes.

As for evaluating the risk associated with home ownership, David T. Schumacher and Erik Page Bucy write in their book The Buy & Hold Real Estate Strategy that “good property located in growth areas should be regarded as an investment as opposed to a speculation or gamble.” The authors recommend that prospective buyers spend a few months investigating a community. Many people make the mistake of buying in the wrong area. “Just because certain properties are high-priced doesn’t necessarily mean they have some inherent advantage,” the authors write. “One property may cost more than another today, but will it still be worth more down the line?”

How do I get the real scoop on homes I am looking at?

Home inspections, seller disclosure requirements and the agent’s experience will help. Disclosure laws vary by state, but in some states, the law requires the seller to complete a real estate transfer disclosure statement. Here is a summary of the things you could expect to see in a disclosure form:

* In the kitchen — a range, oven, microwave, dishwasher, garbage disposal, trash compactor.

* Safety features such as burglar and fire alarms, smoke detectors, sprinklers, security gate, window screens and intercom.

* The presence of a TV antenna or satellite dish, carport or garage, automatic garage door opener, rain gutters, sump pump.

* Amenities such as a pool or spa, patio or deck, built-in barbeque and fireplaces.

* Type of heating, condition of electrical wiring, gas supply and presence of any external power source, such as solar panels.

* The type of water heater, water supply, sewer system or septic tank also should be disclosed.

Sellers also are required to indicate any significant defects or malfunctions existing in the home’s major systems. A checklist specifies interior and exterior walls, ceilings, roof, insulation, windows, fences, driveway, sidewalks, floors, doors, foundation, as well as the electrical and plumbing systems.

The form also asks sellers to note the presence of environmental hazards, walls or fences shared with adjoining landowners, any encroachments or easements, room additions or repairs made without the necessary permits or not in compliance with building codes, zoning violations, citations against the property and lawsuits against the seller affecting the property.

Also look for, or ask about, settling, sliding or soil problems, flooding or drainage problems and any major damage resulting from earthquakes, floods or landslides.

People buying a condominium must be told about covenants, codes and restrictions or other deed restrictions. It’s important to note that the simple idea of disclosing defects has broadened significantly in recent years. Many jurisdictions have their own mandated disclosure forms as do many brokers and agents. Also, the home inspection and home warranty industries have grown.

Choosing the Right Real Estate Agent

realtor real estate agent home new usedI took some time today to look through a buyer’s eyes and see what he or she should looking for when searching for the right real estate agent to work with. This can be tough sometimes when you’re looking into a new area, especially a resort area like Myrtle Beach. In areas where it’s primarily a local market it’s much easier, with input from friends, coworkers, civic clubs, etc.

1. When you find a real estate agent online, take the time to read their bio, read their client testimonials if they have them, their areas of expertise, their designations and anything else you feel pertinent. They are going to be representing you in most likely the largest investment of your life.

2. Shoot them an email or give them a call, I suggest a call, you can tell a lot about an agent by how fast they respond to either of these. It lets you know that your business is a high priority to them. You deserve the best customer service and a professional agent will provide this from the very first contact. You see, their success depends on your success and only your success.

3. Ask plenty of questions, their years of experience, their designations, their areas of expertise, local knowledge, past experiences etc. This will help you and the agent build trust throughout not only the search experience, the offer, the escrow period but even after the close if you might need help with local trade resources or having friends and family who need the same services that you needed. You’ll have complete confidence when you tell someone that they can feel safe and protected by using your last agent.

4. This one more or less falls on you, share all of you and your families needs for the home your seeking. Give as many details as you feel pertinent, no matter how small. I’ll promise you as an agent I certainly appreciate these things. Your personal likes, hobbies, interests etc. can be very valuable in locating the right area. You see, my success is totally dependent on your successful experience. This business operates on relationships as well as homes.

5. Last but not least, keep the lines of communications open at all times. This might open up things you have in common with each other and take a little of the stress out of the experience. Buying a home is a stressful task and a good professional agent will eliminate a lot of it for you. Let us handle some of it, that’s what we do best.

In closing, when your ready, make that call or email and be choosey who represents you and your family. It doesn’t cost you a single penny to have the best agent represent you, I only get paid for results.

Home Appraisals and Market Value

new used home appraisal market valueWhat is the return on new versus previously owned homes?

Buying into a new-home community may seem riskier than purchasing a house in an established neighborhood, but any increase in home value depends upon the same factors: quality of the neighborhood, growth in the local housing market and the state of the overall economy. One survey by the National Association of Realtors shows that resale homes do have an edge over new homes. The trade group’s figures show the median price of resale homes increased 4.3 percent between 1999 and 2000, compared to 2.8 percent for new homes in the same period.

What’s a house worth?

A home ultimately is worth what someone will pay for it. Everything else is an estimate of value. To determine a property’s value, most people turn to either an appraisal or a comparative market analysis. An appraisal is a certified appraiser’s estimate of the value of a home at a given point in time. Appraisers consider square footage, construction quality, design, floor plan, neighborhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account. Most appraisals cost about $300.

A comparative market analysis is a real estate broker’s or agent’s informal estimate of a home’s market value, based on sales of comparable homes in a neighborhood. Most agents will give you a comparative market analysis for free. You can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder or assessor offices, through private real estate information companies or on the Internet.

What standards do appraisers use to estimate value?

Appraisers use several factors when estimating a home’s value, including the home’s size and square footage, the condition of the home and neighborhood, comparable local sales, any pertinent historical information, sales performance and indices that forecast future value. For detailed information on appraisal standards, contact the Appraisal Institute at 875 N. Michigan Ave., Suite 2400, Chicago, IL 60611-1980; (312) 335-4458.

Can I find out the value of my home through the Internet?

You can get some idea of your home’s value by searching the Internet. A number of Web sites and services crunch the numbers from historic public records of home sales to produce the statistics. Some services offer an actual estimate of value based on acceptable software appraisal standards. They also depend on historic home sales records to calculate the estimate. Neither of these services produce official appraisals. They also don’t factor in market nuances or other issues a certified appraiser or real estate professional might in assessing the value of your home.

What is the difference between list price, sales price and appraised value?

The list price is a seller’s advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area. The sales price is the amount of money you as a buyer would pay for a property. The appraisal value is a certified appraiser’s estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.

What are the standard ways of finding out how much a home is worth?

A comparative market analysis and an appraisal are the standard methods for determining a home’s value. Your real estate agent will be happy to provide a comparative market analysis, an informal estimate of value based on comparable sales in the neighborhood. Be sure you get listing prices of current homes on the market as well as those that have sold. You also can research this yourself by checking on recent sales in public records.

Be sure that you are researching properties that are similar in size, construction and location. This information is not only available at your local recorder’s or assessor’s office but also through private companies and on the Internet. An appraisal, which generally costs $200 to $300 to perform, is a certified appraiser’s opinion of the value of a home at any given time. Appraisers review numerous factors including recent comparable sales, location, square footage and construction quality.

How do you determine the value of a troubled property?

Buyers considering a foreclosure property should obtain as much information as possible from the lender, including the range of bids expected. It also is important to examine the property. If you are unable to get into a foreclosure property, check with surrounding neighbors about the property’s condition. It also is possible to do your own cost comparison through researching comparable properties recorded at local county recorder’s and assessor’s offices, or through Internet sites specializing in property records.

What is the difference between market value and appraised value?

The appraised value of a house is a certified appraiser’s opinion of the worth of a home at a given point in time. Lenders require appraisals as part of the loan application process; fees range from $200 to $300. Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Either an appraisal or a comparative market analysis is the most accurate way to determine what your home is worth.

Best Tips for Your Home Move

You found your home, the contract has been signed, and the closing date has been set. Now, it’s time to prepare for moving day. You should begin planning for it well in advance. Moving, after all, may be the biggest job of all.

Careful preparation is essential, whether you’re moving across town or across the country. Here, you’ll find useful information on:

Selecting a Moving Company

Selecting the right moving company is a critical step. You’ll want to be sure you understand all the costs and options involved. Start by asking friends and families if they have any recommendations. Plan to interview at least two companies for estimates, which should be cost- and obligation-free. Your buyer’s representative may also be able to suggest reputable moving companies in your area.

Decide which moving company is right for you:

Step 1: Call movers and schedule interviews as soon as you know when the actual move might take place, especially if you’re moving during a peak moving period, which includes:

• The first or last few days of each month – this is when most closings take place.

• Holidays – especially those coinciding with school vacations.

• Summer months – since most families try to schedule a move between school years

Step 2: Conduct interviews. Moving companies should agree to visit your home and provide a written estimate. Ask whether this estimate is binding or non-binding, so you know whether they will still honor it later, when you actually make your move. Also insist that the estimate provide as much detail as possible, so you can make better comparisons with other estimates.

If you’re moving within a local or regional area, the estimate will probably be based on an hourly rate, depending on how many workers are needed and how much time it will take to pack (if you want this done for you), load, transport, and unload your possessions at the final destination. Interviewing at least two companies will give you a more accurate picture of just what your move will entail and how much it is likely to cost.

Out-of-state moves. If your move is out of state, estimates will be based on the distance of your move and the projected weight of your shipment. To provide you with an accurate estimate, movers will need ample time to walk through your home and inspect each room, as well as all storage areas, viewing everything that will be going to the new location.

Price extra services: Many factors can influence the price of your move, including how many optional services you require, such as:

• Packing and unpacking-Are you willing to do this yourself, or would you prefer to pay professionals to pack some or all of your loose items?

• Boxes-Most movers will sell you new boxes. Prices vary by company. Ask about used boxes too, since some movers offer these too at a reduced cost.

• Special handling-If you have unique, heavy or delicate pieces, such as a piano, large exercise equipment, or antique furniture, you may need to pay more for special handling.

• Special packaging-Movers may recommend that certain pieces be packed in wood crates. Check the cost versus the advantages of this choice.

• Insurance. Most movers have some level of liability insurance. You may, however, want to investigate additional insurance coverage, since it’s not uncommon for objects to be damaged during a move.

If you want these or other services, make sure you tell each moving company to include them in their estimate.

Step 3: Making your selection

Several factors will affect your final decision:

• Price – While this may seem straightforward, it may take some effort to accurately compare prices, since weight estimates will likely differ by mover, as will prices on individual services.

• Availability – If you move during a peak time, you may find yourself coordinating your move with your mover’s schedule, rather than your own.

• References – Request and contact references beyond the letters of recommendation that you should be offered in the interview. If you want to do a little more research, call the Better Business Bureau or the State Attorney General to see if any complaints have been filed against the company.

• Customer service – The person who provides your estimates will probably be your key contact leading up to and during the actual move. Are they experienced, confident, a good communicator, and seemingly interested in satisfying your needs?

Moving Tips

Your move may be simple or complex, depending on your situation, including how much you own, how far you’re moving, and how many people are moving with you. In any case, it’s a good idea to start with a thorough moving checklist that covers all the possible bases, including important time frames.

Buying a Home – Escrow & Closing Costs

Studies show that home-buying closing costs, which can average 2 to 3 percent of a total home purchase price, are often more costly than many buyers expect. But there are some ways to save:

  • Negotiate with the seller to pay all or part of the closing costs. The lender must agree to this as well as the seller.
  • Get a no-point loan. The trade-off is a higher interest rate on the loan and many of these loans have prepayment penalties. But buyers who are short on cash and can qualify for a higher interest rate may find a no-point loan will significantly cut their closing costs.
  • Get a no-fee loan. Usually, though, these fees are wrapped into a higher interest rate though it will save you on the amount of cash you need upfront.
  • Get seller financing. This kind of arrangement usually does not entail traditional loan fees or charges.
  • Rent the property in which you are interested with an option to buy. That will give you more time to save for the upfront cash needed for the actual purchase.
  • Shop around for the best loan deal. Each direct lender and each mortgage brokerage has their own fee structure. Call around before submitting your final loan application.

Who pays the closing costs?

Closing costs are either paid by the home seller or home buyer. It often depends on local custom and what the buyer or seller negotiates.

What is covered by closing costs?

Closing costs are the fees for services, taxes or special interest charges that surround the purchase of a home. They include upfront loan points, title insurance, escrow or closing day charges, document fees, prepaid interest and property taxes. Unless, these charges are rolled into the loan, they must be paid when the home is closed.

Where do I get more info about closing costs?

For more on closing costs, ask for the “Consumers Guide to Mortgage Settlement Costs,” Federal Reserve Bank of San Francisco, Public Information Department, P.O. Box 7702, San Francisco, CA 94120, or call (415) 974-2163.