Buying and Selling Real Estate in Austin TX

Out of all the real estate agents in tow..

Thu, 17 May 2012 23:05:04 +0000

QUESTION: What community events are happening around Austin this month?

Each month Austin hosts a great selection of community events to satisfy a wide range of interests. Here is a short list of some of Austin’s most popular events for the month of April:

Austin’s Earth Day Festival
Auditorium Shores
www.ecology-action.org
512.322.0000

Austin Fine Arts Festival
5th St. and Guadalupe
www.austinfineartsfestival.org
512.458.6073

Bob Marley Festival
Auditorium Shores
www.austinmarleyfest.com
512.801.1498

Eeyore’s Birthday Party
Pease Park
http://eeyore.sexton.com
512.448.5160

It’s My Park Day
Parks all over Austin
www.austinparks.org

Old Settler’s Music Festival
Salt Lick Pavilion
www.oldsettlersmusicfest.org
512.346.0999 x 3

Texas Hill Country Wine and Food Festival
Four Seasons Hotel
www.texaswineandfood.org
512.249.6300

Property Rights

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You have a right to do with the land as you please, subject to restrictions imposed by law. When you own land, you can do many things with it, such as:

use it
rent or lease it to others
sell or transfer it
give it away
use it as collateral for a loan
bequeath it to intended beneficiaries (by will or trust upon your death)
let it sit where it is without doing anything to it
(although this could create problems due to restrictions imposed by law.)

Real Property Definition

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Real Property Definition has many variances depending on where you look so its best to ask a lawyer if you have a specific question. However in one interpretation from a Real Estate license school "it is usually considered land and anything affixed, incidental or appurtenant to it, and anything considered immovable under the law. Land, buildings, and other immovable property permanently attached thereto.

Again we advise talking to a lawyer to get a more specifc perspective based on your situation and region.

Property Investment

Thu, 17 May 2012 23:05:04 +0000

If that's the question that keeps you up at night, welcome to the club. Many investors are wondering where to park their cash. And with the stock market in the dumps and real estate going gangbusters, who hasn't wondered if becoming the next Donald Trump is where it's at?

Nationally, housing prices are up 6.4 percent as of August, but in some places they've soared more than 20 percent in the past 12 months, the National Association of Realtors reports. Why not bag the bears and bulls, purchase a tax-friendly rental property and watch your investment grow? After all, you reason, it'll continue to appreciate while producing a steady income stream.

Trouble is, it's not that simple. Housing prices do fall from time to time and there's already word of a housing bubble that's likely to pop.

So, let's say you've got an extra $100,000 or just came into a $50,000 inheritance. Do you plow it into real estate or put your faith in Wall Street?

The quick answer: There isn't one. Yes, real estate can pay off big time - as can stocks. But both can plummet in value. And while real estate may provide steady rental income, it's a non-liquid asset so you can't sell it in a pinch. Variables aside, however, there is some math to crunch. So pull out that calculator and let's take a look.

First, consider the two ways you can potentially make money on rental property. That'd be rental income and/or a fat payout if you sell the place at a profit.

If you've got a monster mortgage and high expenses, rent may not cover your overall costs, even though they're deductible. By the way, don't forget some of those costs could include a professional caretaker to deal with tenants if you're not the kind of person who wants to put a lot of effort into property management.

Once you figure the costs, you've got to determine if your rent will leave you in the red or the black. In general, if you want to break even your rental income should equal 10 percent of the property's value.

So, let's say you take that $50,000 and use it as a 20 percent down payment on a $250,000 rental home ? can you make at least $25,000 in rent a year? Check out ads for rental units in your area to see if your projection holds up.

These days, while the housing market remains hot, you may have trouble renting at all. If someone can buy as cheaply as renting, they'll often buy. That means landlords have to lower prices to attract tenants. In fact, they're already doing so. While rents have risen about 3.5 percent nationally in the past decade, this year they're down an average of 2 percent. And in some markets, like San Jose, San Francisco and Austin, rents have dropped 12 percent to 25 percent in the past year, according to NAR.

"We're looking at a very strong housing market so more renters are becoming homeowners," said NAR economist Sigrid Fennemore. In fact, rents should drop nationally by another 1 percent next year, she predicts, as massive layoffs take their toll.

As it turns out, it doesn't take much to beat the Street. Consider your $250,000 rental property.

If it climbs 6 percent in value the first year - the historic average annual gain on housing nationwide - you'd be sitting on an asset worth $265,000. You would have made 30 percent on your $50,000 downpayment.

"That's the effect of leveraging," said Gerald Weiss, a certified financial planner in Dublin, CA, who notes the value of your entire investment goes up, rather than just the value of the downpayment you contributed.

Now let's try a similar equation using stock investments.

Assume you plunk that $50,000 into an S&P 500 index fund that returns a conservative (though difficult to achieve lately) 8 percent. That's a $4,000 gain.
Not bad. But in order to make the same amount on your rental property, it would have had to appreciate far less ? by just 1.6 percent. (To do the math, divide $4,000 by $250,000 and you'll get 1.6 percent.)

So, is real estate a slam dunk?

NO.

Experts like Schatsky and Weiss say they advise clients to have 5 percent to 10 percent of their portfolios in real estate ? including Real Estate Investment Trusts (REITs).

REITS have earned more than 30 percent since 2000 - plus they've delivered 7 percent dividends. Best, to make this money you never have to deal with a tenant.

Property Trust(s)

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An REIT is a company dedicated to owning and, in most cases, operating income-producing real estate, such as apartments, shopping centers, offices and warehouses. Some REITs also are engaged in financing real estate. Most importantly, to be a REIT a company is legally required to pay virtually all of its taxable income (90 percent) to its shareholders every year.

Negotiating a Contract

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Hopefully at this point of the process you have read our other reports and opinions and have hired a real estate agent that is licensed to represent you.

Some of our other reports talk about prepping yourself on the buyer/seller side and you have done your best at this point. Now that an offer is in play its best to keep your cool and realize this is the most stressful paret on each side.

Buyers- having your ducks in a row and putting in the offer should have you When writing a purchase contract, avoid expensive terminology such as paying a buyer's closing costs, and of course you should watch out for all the contingencies that could cost you time with your home off the market. If the buyer wants to close on the sale contingent with the selling of his or her house, include a kick-out clause that will allow you to back out of the contract within seventy two hours if you receive an offer that does not contain contingencies

Buyers vs. Sellers Market
The first job before making a contractual offer is understanding the housing market that is working in your local area. This will help you determine how quickly you need to buy when looking at homes.

If you happen to be in the buyer's market, you will of course have plenty of time to find and search out several homes in different areas and price ranges before you negotiate best possible price.

If you happen to be in a seller's market, things are different, you may have a very short time to make and write an offer before your house slips away!

Buyers Market - The real estate market has more sellers than it has buyers and time is on your side! You will find plenty of homes that you can visit, and even revisit again for comparisons, before you negotiate favorable contract terms.

It would be very advisable to run a CNA, or comparable neighborhood analysis on homes that you have visited before making your offer.

Items you should compare include:

The age and the condition of similar homes in the same neighborhood

The homes that are sold within the last six months in the same area.

Real Estate Negotiation

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Figuring out a purchasing cost of a home can be one of the most difficult portions of the home selling process. This aspect requires a contract to be written up and can include some tricky language that you may want to avoid. There will be a number of different clauses present, so make sure that anything that you agree to is something that you are prepared to live with. There may also be contingency clauses in the contract so make sure that you live up to your side of the bargain in every case.

Buyers vs. Sellers Market

Before setting a price, you must determine what type of market it is. If it is a buyer' market, you will want to price the home lower than if it is a seller's market. Work with your realtor in order to decide which type of market it is and price your home accordingly. For the buyer, this will let you know how quickly you need to act when buying a home.

Buyers Market - In real estate, there supply will always exceed the demand, so buyers generally have the advantage. You will be able to find a home that you want to buy for a price that you can afford as long as you are patient. You should even be able to come to an agreement that meets the terms that you wanted if you look around long enough, so take your time and enjoy the process.

Dont Let It Fall Through

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The following represents the most common reasons why deals fall through

Moving too fast.

Since you want your home to sell as quickly as possible, you may be tempted to force things a little too much. This, however, can cause significant problems because it can scare the buyer off. Many times, you will want to force things for financial reasons, such as buying a new home or starting a new job, but you must be patient. Read each and every offer thoroughly because you only want to accept the one that is the best for you and your family. If there is an offer that is too low because of some repairs that need to be made, only accept it if you feel the repairs are worth that much. Waiting a little bit longer can find you a deal that is much better

Letting emotions rule.

Emotions have no business in this industry because they make people make bad decisions. Remember that the person who is buying your home is trying to get the lowest price out of you, so do not take anything he or she says about your tastes personally. Be sure you consider the offer, even if you do not like the buyer, because in a buyer's market is may be the best offer you receive.

Reluctance to counter.

Do not be afraid to counteroffer because the buyer is expecting it. Very few deals go through on the first offer, so counter offering of part of the process. This is a process that will take time, so be patient and consider everything before accepting an offer and do not be afraid to make a counter.

Bad-faith bargaining.

This is when the buyer, the seller, or both is not truly attempting to make a fair deal, but is simply trying to see how the negotiations will play out, without ever being serious. This is not only in bad taste, it is also illegal. If you do not truly wish to sell your home, do not enter into negotiations with anyone. Also, if you are not going to sell unless you receive far more than market value, then do not both to sell your home and wait until the market improves. As a seller, be careful of bad-faith buyers who will make very low offers in an attempt to save ridiculous amounts of money. This can type your home up for weeks, so ask for a letter of pre-approval before entering into negotiations with a potential buyer.

Sell Your Home Fast

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Don't waste time.

The basic rule is that you waste as little time as possible because the longer you wait, the less likely you are to get the full asking price. Also, put your house on the market in the spring or summer because this is when people are looking to move. When children are not in school is an especially good time to sell because that is the only time when many families are willing to move. Also remember that you are responsible for paying the property taxes on your own place while you are selling, which can add up if you purchase another home at the same time. Therefore, if you receive an offer that is comparable to your asking price and the terms are good, you should accept it.

Real Estate Tax Advice

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It seems as though everyone is offering some sort of tax advice for homeowners nowadays, but be sure that you receive the correct advice in every situation. While there are ways that you can receive a tax exclusion, be sure that you know the correct ways to receive this because having it wrong can cause you hardship in the future

Ownership and Use Tests
In order to claim a tax exclusion, you must have lived in the house for two of the last 5 years. There is no way around that rule. You must have also been the owner of the home over that time. If the house has not been your main place of residence, then you are not eligible and you should pay your taxes on the sale. If you are eligible, however, you can exclude up to $250,000 on that sale. You are not able to deduct any losses than you may incur, however. If you are able to exclude money from your return, then you do not have to report it on your tax forms.

For those who own more than one home, you must make sure that the home that you sold could be considered your permanent residence. It is easy to figure this out, as your permanent residence is the place where you live the majority of the time. If you have sold your home and are wondering about tax breaks, make sure that you have things right because failure to do so can bring about major sanctions against you in the future.

Property Inspection

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Having your home evaluated by a professional before you place it on the market can eliminate a number of problems that occur during the selling process. This will allow you to fix anything that is in need of repair so that you do not have people backing out of potential deals at the last minute because of problems with your home. Many of these are relatively easy to fix, so they should be looked at thoroughly.
If you are buying a home, you will also have the home inspected by a professional because he or she will be able to turn up a number of potential problems that you should have fixed before purchasing.

WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME?

What the inspector does is give the home a thorough inspection for any safety issues that are present. This includes things like the foundation, construction and anything mechanical inside the home. This inspector will let you know everything that needs to be repaired and will fill you in on any minor issues that could become larger problems in the future.
This inspector is not a buyer's broker so he or she will not be able to inform anyone what he or she thinks the house is worth. The job of this inspector is basically to check things like the heating, plumbing, water source, and even check for things like termites that could do structural damage the house. Finding a qualified and experienced home inspector is a must because anything that is missed could be very expensive to fix down the line.
Once you find out what is wrong with the home, you can begin fixing everything that absolutely must be fixed. In doing so, hire people to come in and do it the right way because there is a chance that the buyer will bring in an inspector as well and you will want everything to pass the test. If there are any serious problems, you may want to leave them for the next owner, but be sure to let them know about the problems and take them off of the price of the house. Otherwise, the house will be very difficult to sell.

DO I NEED TO BE THERE FOR THE INSPECTION?

You do not have to be there, but it will help in finding out everything that is wrong with the house. Some of these things may be simple to fix so you could do them yourself. You can also ask questions about who to call to get these things fixed, which will help you greatly.

ARE OTHER TYPES OF INSPECTIONS REQUIRED?

There are other health issues like asbestos that will need to be looked at a little more closely if they are found. If the home inspector recommends a professional, be sure to contact one immediately and get the home inspected even more closely.

HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOME?

If you are living in an older home, there is a chance that it contains lead based paint. Since you have already been living there, you have probably taken care of any issues regarding this problem, but just to be sure, put an extra coat of paint over top of any paint that is chipping away. If you are unsure about something, bring in a professional to take a look at it.

Pick An Offer

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If you place a home on the open market, you can expect to receive more than one offer for your home, especially if you own a nice home. This occurs because there are more people looking to buy homes than homes available, which is excellent news for the seller. Having multiple offers pushes the value of your home upward and allow for you to accept only certain prices and certain conditions, which clearly puts you in control of the sale of your home.
How can I make sure my home will attract multiple offers?

Start by offering an excellent price on your home and you will see a number of offers come in immediately. It is important not to set the price too low because then you will not receive fair market value. Offer a fair price and people will want the house and then you can choose the best offer that comes in.
Do I have to accept the offer with the highest price?

There is no rule that says that you have to accept any offer, as sometimes the most qualified buyer is not the person who offered the most. You can also present a counteroffer to any of the bidders, which will also help you in getting the price and the terms that you desire. Be careful when doing this, however, as some agents will charge you commission for turning down an offer that is the full price of the home. You do not want to be greedy because that can cause you to lose a great deal of money. Sometimes greedy can cause people to lose interest and this interest may be hard to get back afterwards.
My agent says I should receive all my offers by fax, rather than having the buyers' agents present the offers. Is that okay?

It is ok to accept these terms, but it is not necessary. It may be a time saver in some situations, but in others it causes problems because of a lack of firsthand communication. There is only so much than can be included in a fax and questions cannot be answered right away, so this could lead to a lack of information getting through and some confusion in some cases. One option is to have all of the offers sent to you via fax and then have the best offers presented by a realtor. As the seller, it is up to you to get what you want from your real estate agent.

One of the buyer's agents is from the same brokerage company as my agent. Should I give extra consideration to this "in-house" offer?
No, each and every offer should be looked at in the same manner, with no special considerations to these types of offers. You are doing yourself a disservice if you accept an offer without looking at what else is out there, so never give any sort of special consideration to anyone. Some brokers may give you a break on the commission for an in-house offer, so factor this is when evaluating the offer.
Can I counter more than one offer?

Yes, but be sure that you do not accept multiple offers because this is illegal and can lead to major problems for you. In order to protect yourself, there are standard sheets that you can use that will state that the counteroffer sheet must be signed by you afterwards in order to be deemed as accepted.
Can I back out of my escrow with buyer A and accept a new higher offer from buyer B that my agent just received?

This can lead to legal problems for you so it is not advisable for anyone. Anything you sign is a legal contract and you can be sued if you try to back out of it. Once you have agreed to term with a buyer and have signed, you have legally agreed to sell to that person, so you have to go through with it.
My home has been on the market for four weeks, but I haven't received any offers. Is this situation my agent's fault?

This depends on whether or not you have followed your agent's advice on how much to charge for the home and by making any repairs that were desperately needed. If the home is reasonably prices and the repairs have been made, then there may be a problem with the agent and you should talk to him or her about what is going on with the home.

Open House Expectations

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If your real estate agent has held an open house at your listing, you may want to ask some questions about how much interest was shown in your house, so that you can make some improvements to it if need be.

1. How many people stopped by and who were they? If you did not get as many people as you thought you would, it could be the agent's fault. Find out what he or she did to attract people to the house and what he or she will do next time to get a better turnout. Find out if the event was in the newspaper and if any of the neighbors came by to talk a look.

2. When and how will the agent follow-up with prospective purchasers or their agents? If someone seemed very interested, be sure to see how the agent will turn this prospect into a sale. See when the person will return to the house, while also seeing if the person had any concerns that could be addressed.

3. What positive and negative feedback did the agent receive about the home? One thing you definitely want to know if how people felt about the house in general. Try not to take anything personally, because it is all objective criticism, as maybe your home simply was not in line with their tastes. If something was repeated in the criticism, then you may have a problem and should probably look into it.

4. Did any problems or mishaps occur during the open house? If a large number of people stopped by, be sure that everything went smoothly. If someone tripped over a hose or bumped into something, you may want to remove that item to make sure it does not happen in the future. Even a minor issue can impact the home's value, so take care of everything that was a problem.

5. What's next? Come up with a plan with your real estate agents about what will happen in the near future. You want your home to be sold, so see how long this will take how that so many people have viewed it. Also, see if your realtor will implement any new plans when marketing.

QUICK TIP: You may want to skip having an open house unless it is something that is common in your area. This is because they are becoming less popular as time goes by and it is a huge inconvenience for you.

Your Open House

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Open houses have long been one of the main methods of creating real estate sales, but some are beginning to believe that they are no longer affective. In a recent survey that was conducted by Texas A&M University, many people stated that the open houses may still be beneficial to the real estate agent as a way of creating contacts, they are no longer effective for the seller.

This survey, which questioned a number of real estate agents around the country, resulted in 97% of these people saying that they had recently held an open house, but only 41% of these people saying that they believed it would help in the sale of that particular house. While 32% believed that the open house would attract potential buyers of the home, nearly 75% believed that it would be more likely to sell a different home and 62% said that the majority of people who attend an open house are not serious about buying a home anyway.

Despite the fact that agents do not believe that open houses help the sale of that house, it can still be a benefit for a good agent because it creates a scenario where the agent can create contact with other people who are willing to sell in the area and even to sign these people to exclusive contracts at the event. About 55% of realtors believe that open houses are an excellent manner of creating new listings for themselves in the future.

There are a number of home security issues involved with open houses that must be considered by agents. In fact, many agents will no long hold them because they must be on-site for the entire time to keep an eye on people. There is no way of knowing why a person is at a house and realtors are very wary of creating a problem for the seller.

Open houses are increasingly being considered a waste of time by real estate agents and they are beginning to believe that they are better off ignoring them completely. Sellers are also beginning to agree with this, as they would rather spend their weekends relaxing than spending them outside of their home due to an open house. If you are unsure about whether or not to have one, speak to your realtor about what the benefits will be and then decide on a course of action.

Another reason why open houses are falling in popularity is that there are so many other marketing options available. This includes things like the internet, television, radio, and yard signs, so there is no shortage of alternative marketing techniques. Basically, if you are selling your home, you no longer need to rely on open houses because there are so many different ways of getting your property out there.

Marketing Info

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Marketing Info

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Whenever you are selling a home, you should have it listed on the Multiple Listing Service because this will allow it to reach the maximum number of people in the shortest period of time, including people who are looking on the internet.

Advertising

The advertising landscape has changed greatly over the past few years, as it has never been easier to reach a wide range of people. Previously, the local newspaper was the best way to advertise and while it is still highly effective, there are now other ways to reach this audience. The internet is the most obvious method, as countless people browse the internet for whatever it is they are looking for at any given time. Also, television and radio spots are becoming much more common for marketing. Some realtors even send out newsletters to people around the city, informing them of properties available in their area. This is important because these people may have friends or family who are looking to move into the area. The sign on the front lawn also remains popular, as it allows for people to call about a house they have just seen and already know that they like.

Showings and open houses

You will want to prepare your home before you show it by making it as bright as possible. Speak to your realtor to find the best way to do this in the most effective manner. Also, make sure that you are not present when the house is being shown because this prevents the potential buyer from acting in a natural fashion. People are not comfortable looking around in a stranger's home, which will not allow them to get a good view of the house.

If an open house has been scheduled, tell all of your neighbors about it and invite them over. That way, they will know about it and can invite any friends that they have into the area, which increases the likelihood of a sale. Remember that the more people that view the home, the more likely you are to find a buyer, so make your open house a busy one.

During your open house, be sure to:

. Have the drapes completely opened.
. Turn all of the lights on.
. Place a few drops of vanilla on the stove for smell.
. Place a log or two on the fireplace.
. Have your fancy china out in the dining room.
. Bring to good towels out in the bathroom.

After the house is ready, leave and let your realtor handle everything. Remember that he or she is a professional and has done this countless times before.

QUICK TIP: Take a look at what people do when showing a show home and mimic these techniques as closely as possible.

How long has your house been on the market?

Any professional appraiser knows that is the buyer that decided the true value of a home. Therefore, the house that you are selling is only worth as much as someone will pay for it. Just because you believe it is worth something, does not mean that someone will pay that much for it and if you go months without selling your home, it may be a sign that you should lower the price. If you are not receiving many people to come look at it, then it is definitely not stirring up a whole lot of interest around the real estate world. If you can wait to sell your home, then do so because this may also be a sign that the market is in a slow stage. You want to be sure not to wait too long, however, because buyers will begin to believe something is seriously wrong with your house it is available for too long. What you do is completely up to you, so discuss it with your realtor. What people normally do is drop the price slowly until someone buys it because any house on the market will sell if the right price is asked.

If you're buying another home

Do not let this factor into your decision about whether or not to take an offer because there are ways around any problems that arise here. Realtors know how to make sure that you can do both at the same time and they also know what your options are if your home does not sell right away.

What you do not want to do is find a place to buy before you have even listed your current house because that will force you into selling immediately. Make sure that you discuss your plans with a realtor because he or she might be able to draft a contract for you that states that your selling the house is dependent on you buying another one or vice versa. Either way, you can be protected from being homeless if you weigh all of your options carefully before committing to anything.

Bridge loans are available when you buy a new home before selling yours and they help you to pay two mortgages at once. This can be very pricy in the end, however, so be careful when entering into an agreement of this sort.

Listing Real Estate

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When a realtor and a buyer work on finding a home, there does not necessarily have to be a contract, but this is not the case with realtors and home sellers. In these cases, a written contract is mandatory and this is something that must be paid attention to. You must read over your contract thoroughly because you do not want to violate any of the terms that are put for in it. You must be able to understand your legal rights, so call a lawyer to discuss it if there is anything that you do not truly understand.

The content of the actual contract will depend on a number of different things, but it will usually include the policies that are common in your particular area. You are able to negotiate everything on this contract, so go over it completely and do not be afraid to question everything that you do not agree with
These are some of the basic things that will be on most of these contracts:

1. Term of the Agreement. This is the length of time that the agent has to exclusively list the home. The longer the agreement is, the longer the agent has to make the sale. If the market is weak, then you will be fine with a long-term agreement, but in a strong market, you should not need one and you will not want to be committed to someone who cannot sell your home. You are able to extend the contract if you are satisfied with the effort that the agent has put in on your behalf.

2. Commission. The terms of commission are negotiable, but are generally decided by a standard percentage. This amount will vary, depending on the realtor or company, but it usually between 5-7%. You are able to negotiate, but will not be able to go too low, especially in a hot market. The lower the percentage, the more money you keep on your sale, but a higher percentage may persuade the agent to spend more time on your home. Other agents will know what type of commission you are giving, which could lead them to try to get involved with your sale come renegotiation time.

3. MLS. Most listing agreements will include a clause that posts your house on the Multiple Listing Service. This allows for your home to reach a very wide range of buyers, which is a major advantage and is one of the reasons why people use realtors. Many of these databases are available directly to the buyer on the internet, giving you another reason to get involved with a realtor who posts on this database. The MLS gives you the best chance of selling your home quickly, so take advantage of it today.

4. Lockbox. Whenever you are selling a home, you will want to give your realtor access to the home when you are away and this is done through a lockbox. This is basically a tiny safe that is placed on your property that holds a key to your house, giving the realtor access to show your home. If you do not like the idea of people being in your house, then do not allow the realtor to use a lockbox. If you do use a lockbox, remember that strangers will be in the home, so you may want to hide any valuables. Remember that you have a better chance of selling if you allow more people to view the property, but also keep in mind that there is a small risk that something may go missing when using a lockbox.

Selling My Property

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One thing that you will absolutely want to do is make sure that every potential buyer gets an excellent first impression of your home. If the first impression is poor, it will not matter how the next viewing goes, if they even bother coming back, so have the house in tip-top condition the first time.

If you want to know how to create a good first impression for your house, have a look at these tips.

1. Focus on curb appeal. The first impression of the home will be from outside the front doors so make the house look great from the curb. This includes keeping the grass watered and cut, as well as pruning any trees and shrubs you may have. Planting a few flowers outside will also help the buyer's overall impression, so be sure to do this as well. Store any bikes or gardening equipment out of sight, because they will make the property look cluttered. Also, try to have the front of the house freshly painted, even if you do not have time to do the rest, because it will attract buyers to the house. Even simply things like turning on the front porch light and sweeping the front step will give the house a better appearance than if you do not do these things.

2. Clear out the clutter. For many people, clutter can be a deal breaker because it does not allow people to truly view the house. If all the people can see is furniture and overcrowded countertops, it will got give the house a positive overall vibe. Throw everything that you do not use out or into storage before showing your home because this will make the home seem much larger. You do not want to make it seem as though you do not have enough room for everything that you need, so do whatever is necessary to remove some of these things from your house.

3. Use your nose. A bad smell can also be a deal breaker because no one wants to live in a stinky house. While some people do not notice bad smells, others are very sensitive and you can never tell who will be what, so try to eliminate all odors from your house. Shampoo all of your carpets and try to keep any pets that you may have clean. Also, smoke outside for the time being to help eliminate that smell. Place air fresheners or baking soda in areas where bad smell is frequent and do not cook any strong smelling foods in the days leading up to a viewing. Cooking something that smells good is another thing that is used by many people just before a potential buyer arrives.

4. Make all necessary repairs. The buyer will be going through the home attempting to find whatever is wrong with the home, so try to fix everything noticeable to avoid this. Even if it seems like something minor, it will affect the buyer's overall opinion of the home and will, therefore lower their offer. The buyer wants to believe that you have taken good care of the home, so do your best to make this appear to be the case.

5. Introduce lifestyle accessories and make your home as comfortable and attractive as possible. Have the home look as functional as possible by setting out some nice dishes on the table or by putting out all of the best towels in the bathroom. The better the house looks, the more likely the buyer is to want it, so do whatever it takes.

6. Get a buyer's-eye view. Take a walk up to the home like you have never seen it before and give your honest opinion of it. If it looks like something that you would buy, then you have done your job properly.

Getting Real Estate Ready

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Every realtor who has been around the industry knows that a home that is polished is more attractive to the buyer, which means that it will sell much more quickly and for closer to the asking price. In addition, any buyer will be more likely to purchase a home that appears as though it has been taken care of by the previous owner because it will decrease the maintenance costs in the future. Therefore, it is necessary to get your home looking as good as possible before showing it, so that you can maximize your earnings on this sale. Because of this, it is important to think about:

1. The amount of money you should spend on this process

2. How the exterior looks from the road

3. How much should you spend

One thing to remember in this process is to spend as little as possible, in order to get the most out of your investment. Even though new siding will greatly improve the look of your house, it will not increase the value enough to pay for it in full. Therefore, be sure to only make minor improvements that will improve the overall look, without putting you in a hole financially. This includes things like dusting, painting, and polishing, rather than extensive renovations. Speak to a real estate agent about what you can do to improve the look of your house for sale without spending too much money.

Maximizing exterior and curb appeal

This means that you must make the home look as good as possible to people standing on the curb. This does not have to be expensive, but is rather a series of minor alterations that can be made, such as:

1. Making sure the lawn is in great shape.

2. Keeping all hedges, trees, and flowers watered and pruned.

3. Fix all cracks in the steps, patio, foundation, or walkway

4. Repaint doors and windows if they are peeling.

5. Make sure that the gutters have been cleaned and that they are doing what they are supposed to do.

6. Have the chimney inspected and cleaned.

7. Have a look at the roof and replace any loose and damaged shingles.

8. Loosing siding should be fixed.

9. If you live in a colder environment, be sure that your walkways do not have any snow or ice accumulated on them.

10. Add a few flowers to the outside of the home in order to make it look nicer. A few flowers make the house seem more cared for.

11. Have the driveway re-sealed.

12. Make sure that the garage is always closed to avoid showing clutter.

13. Move any RVs and old cars somewhere else for the time being.

14. Make sure that the door is freshly painted or even replace the front door as a whole.

15. Maximizing interior appeal

On the inside of your home, you can make it more appealing by:
Cleaning every room in the entire house thoroughly, while also removing anything that you do not need. This gives the house the appearance of being bigger, since no space is being wasted. Some people even rent out a storage space while they are selling in order to make the home seem larger than it normally does.

Bringing in a professional cleaner every couple of weeks while you are selling. This gives the home a clean look all the time.

Remove anything that is not being used on a regular basis from the kitchen and closets and store it elsewhere. This makes these areas seem much cleaner and, therefore, more inviting for your guests. Since also starts the moving process for you, as everything will have to be removed eventually anyway.

You may also want to paint all of your walls a neutral color, because these colors are less likely to be thought of as ugly. This is also something that can be applied to your carpeting, but do not to through the expense of replacing this.

There may be cracks in the basement or attic that will lead to leaks, so be sure you repair all of these that you find.

Also, repair any cracks or holes in the plastering, wallpaper and tiles.

If you happen to have broken windowpanes, replace these, along with any other woodwork inside the home. Have the plumbing, heating. A/C, and alarm inspected by a professional and fix anything that needs it.
Dripping faucets and showerheads will show a lack of care being paid to the house, so be sure to fix these.
Make sure to kitchen looks great by cleaning it and giving it a quick paint job. It will improve its overall look quite a bit.

Real Estate List Price

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When setting a list price, be sure to converse with a real estate agent because they will have information on the market that you do not have. You can receive a free home evaluation, but contacting an actual real estate agent will get you all of the information that you need in order to make an informed choice on a list price.

When deciding whether or not to hire an agent, take a look at all of these factors, because there are many benefits with hiring someone to handle your needs. If you do decide to hire an agent:

You will have to sign a contract that gives this agent the rights to sell your property for the length of the contract. Therefore, you can only use one agent per house at any given time.
This agent will do a great deal of research for you, which will help you come up with a fair price for the property that you agree with.

You will also have a marketing plan writing for you by the agent, which includes a full schedule for your listing, showings, and even the advertising that will be done for you.
Your agent will also help you to prepare your home to be view with ideas such as how to get everything looking as good as possible and how to go through with a home inspection.

It is up to the agent to send any offers that come his or her way to you and to help you handle any negotiations that may arise in the situation. He or she will also handle all of the paperwork that comes up during this process.

It is up to you to pay for these useful services, usually with a percentage of the sale price of the home. You can also negotiate a flat fee with the realtor and place it into the original contract. Each of these methods has positives and negatives, so be sure to find the one that is best for you.

If You Work Alone
It is up to you to handle all of the marketing that your property will require, as well as any negotiating and paperwork that may arise as a result. If you follow this route, be sure that you know all of the laws that are mandatory for real estate transactions so that you do not end up in trouble.
It is also your responsibility to do your own research of the marketplace, which includes hiring someone to appraise your home in order to come up with a fair asking price.

It will also be your responsibility to come up with your own marketing plan, including how you will show the home and how you will deal with anyone who shows interest.

You will also have to figure out for yourself how you will keep your home looking as nice as possible and how to get it ready for inspection.

Any questions that the buyer may have will be directed directly to you, which will take up a great deal of time. You must also handle all of the paperwork required in making written offers and negotiating prices.

Another thing you will have to do is pay the buyer's agent, as the buyer's agent will find you prospective buyers. This is, of course, the buyer does not have an agent and the two of you go through the entire process on your own. You may also have to pay for legal advice at various times of the process, which can be quite costly.

Housing Market Info

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Most homeowners will attempt to gain as much information on the real estate market as possible, just in case they are forced to sell their home someday. Therefore, these homeowners will want to understand exactly what is happening in the housing market in their area. They will keep an eye on whether prices are going up and when the best time to sell is because this is an investment that can be cashed in at any time. Within this information, however, are a great deal of industry related terms that the average person may not understand.
In order to help, here are the definitions of some of these confusing terms:

Median price. This is an indication of how strong the housing market currently is and what direction it is headed in, as it is the midpoint of all of the houses that have been sold in a particular area during a particular time period. This is a little different than an average, as it is impacted by not only the number of homes sold and their prices, but also of the characteristics that these homes have. For example if more mansions are being sold that one bedroom starter homes, then the median price will go up because these homes will be costing more money, even though the actual market may not be increasing. Therefore, it is important to keep an eye on the variables that go into a median price, rather than simply watching the numbers involved.

Seasonally adjusted. As a rule, remember that the housing markets are busier in the spring and summer because these are the times that people would prefer to move. No one wants to move during the cold winter months because it can be draining and the days are much shorter. Also, many people want to move while their children are not in school, which explains why certain months are busier than others are. Because of this, it can be difficult to come up with market comparisons over the course of the year, so economists have come up with a formula to adjust the number to give a more accurate representation of the housing market. This is called seasonally adjusted and it prevents people from thinking that the market is taking off in the summer, as this is a trend that naturally occurs every year because of sources outside of the actual housing market.

Price discount. This is the difference percentage wise between the asking price and the actual price that a home is sold for. This occurs when an offer that is below the asking price is accepted by the buyer and these price discounts are reported as an average over a set amount of transactions. When the percentage is low, it is a seller's market, while a high number will show that it is a buyer's market currently.
Unsold inventory index. This is an index that tells how long it would take for all of the homes that are currently on the market to be sold using the current speed of sales. The smaller the number of the index means that sellers are doing well, while a higher number means that the buyer will be able to ask for a lower price on most houses.

Affordability index. This represents whether or not the average family in an area can afford to buy an average home. The average family is defined by whatever the median income in the area is and the average home is defined by the median price in the area. This index is based on the number 100, where if the number is right at 100, then the average family has exactly enough money to afford this. If the number of more than 100, then the average family has more than enough money, while a number under 100 signals that the average family cannot afford this.

Pricing Your Property

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For a home seller, the idea of moving away from all of the memories you have created at that residence can be an emotional one. While there is a chance that you are moving because you have been able to find a better house, there is also a chance that your job has forced you to move to an entirely new area of the country. This means that you will be leaving behind not only all of the memories that were created in this house, but also in the area and you may be a little hesitant to move on. No matter what, you will be feeling some sort of emotion, so try to keep your mind on some practical solutions to getting your mind off of the emotion and onto completing this process as seamlessly as possible.

One thing you will want to make sure you do is place your home on the market well in advance of your move. That way, you will not wind up with two mortgages if your first home does not sell right away. If you do end up in this situation, you may want to consider a bridge loan, which will help you pay this other mortgage while you wait for the sale to be completed. If you contact a lender about a bridge loan, you will have to go through the same process as with an actual mortgage and you must be aware that there is a tremendous expense with doing this. Nevertheless, since you must pay both mortgages, you may not have a choice, so be sure to look around and find the best rates on a bridge loan if it does become necessary.

Also, remember that when people move, there is an affect on other people as well. This is because someone else will be moving into your home while you are moving into someone else's. Closing and moving dates must be considered while making a sale and being sue to keep these dates in order will help everyone along. Make sure all of these dates are in writing so that there are no problems with the move and so that no one is left homeless for a few days while things are straightened out. Protect yourself by implementing fines for a party that goes not meet their end of the agreement.

When selling your home, remember that the better the home looks from the outside, the more interest it will attract from buyers. Therefore, you must be sure to consider the following things:

1. Be sure that the lawn and shrubs are watered and cut.
2. Fix any cracks in the foundation or walkways.
3. If you driveway needs to be resurfaced, have it done beforehand.
4. Keep the gutters, walls, and the chimney painted and in excellent condition.
5. Inspect whether or not the window frames, shutters, and doors need to be painted.
6. Keep any garbage out of sight of the street.

If you keep all of these things in order, you should be able to attract buyers inside the home. Once inside, you must continue to sell them on the quality of your home and you can do so with some minor improvements that will not cost you must money at all. The first thing to remember is to keep everything clean. Absolutely everything in the home should be as clean as possible because even though this is temporary, it will add to the overall appearance of the home. Also, replace the heating an air conditioning filters because this is something that many people will check when viewing a home. All of these things will show the buyer whether or not you have kept up on the upkeep of your home, which is important in establishing a value for the home, so be careful with this aspect.

When you live in a home for a long time, clutter can accumulate in the garage, basements, and closets, but this must be taken care of before you show the home. If you have too much stuff in your home, take it to storage because having all of these things will make the house seem smaller. If you must paint something, use a neutral color so that it does not offend anyone. Remember that not everyone likes every color, so use something like off-white. Also, consider the smell of the home because pet and cigarette smells affect some people more than others. While you might be used to a smell, others will not be. In addition, by bringing things like flowers and potpourri into your home, you can create a certain atmosphere that the buyer will like.

None of these minor changes is expensive, but they will give the buyer a good impression of the home. You do not have to completely redecorate your home, but rather just make sure that everything is comfortable and the home will sell itself.

Property Appraisal

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The process of an appraisal begins with a thorough inspection of both the inside and the outside of a given home. What the appraiser will do is look for anything that adds value to the home, as well as anything that reduces the homes value. The appraiser is completely independent and does not have anything to gain or lose based on the amount he or she comes up with, so they can generally be trusted to give a fair appraisal of a property.

There are a number of important aspects of the home that will lead to an amount being higher or lower than expected, such as the square footage of actual living area, the condition of the home, and how well the home is constructed. The location, floor plan, number of bedrooms, and the size of the yard are also factors. Also noted are any additional features like air conditioning, special landscaping, a fireplace, a patio, and any renovations that have made the home nicer. The homeowner must make sure that the appraiser is aware of all of these new additions, so that they are sure to be recognized.

Finally, the appraiser will also give an appraisal of the neighborhood. An area that has a high crime rate will lower the value of the property, while being close to shopping or schools will raise the value of a property. Other factors may include the proximity to industrial zones, fire departments, hospitals, or any other areas where there may be a great deal of noise at any given time. All of these things will be included in the report, so you will know exactly why this home was given that particular price.

Real Estate Appraisal Info

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The appraisal process is one of the most important in selling a home because it is where the price of the home is decided. In order to do this, data must be collected on the home and the neighborhood, in order to find a price that is fair for everyone. An appraiser will come in and do a report on the property and everything that is found will be presented in a manner that will convince the reader that the appraiser's value of the home is the correct one.

In order to appraise a home, the first thing that is looked for is the unique characteristics of the home. For example, older homes are usually in older neighborhoods, making it easier to tell what the market trends will be, as well as other neighborhood characteristics. What this does is make the neighborhood must more predictable than newer neighborhoods. At the same time, however, an older home will cost more in maintenance, so this must be included in the report. Newer homes are much easier to keep in good shape because everything is new inside of them and they also have a variety of energy saving features that are not available in older homes.

It is up to an appraiser to come up with the true value of a home, but a real estate agent can come up with an educated guess based on other properties in the neighborhood. This is important for the seller when asking for a price and for the buyer when making that first offer, so contact an experienced realtor before making any sort of offer on a home.

More Tax Advice

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If you own a home, there is a chance that you may be able to exclude part of the income that you receive from the sale of your home from your tax return. This must be on the home that you live in most of the time and there is a set of tests that must be passed in order for you to qualify.

Ownership and Use Tests
In order to be excluded from paying certain taxes, you must meet certain criteria as a homeowner. In the 5-years prior to selling or trading your home, you must have done one of the following things:

Been the registered owner for two of the last five years, while also living in the home for two of these years.

If you are able to qualify with those two criteria, you are able to exclude up to $250,000 from your income tax return.

If you are able to exclude this gained income, you just leave this money off of your income tax return form completely. If you do not meet the criteria, however, you must include this income on your form in full. You cannot deduct a loss from the sale of your main home.

You do not even have to include the sale of your main home on your income tax form unless you are required to pay taxes on it. Remember that you still have to pay taxes on any gains that are more than $250,000, so if your home sold for $300,000, you will owe taxes on $30,000 of that income.

More Than One Home
Some people are lucky enough to own more than one home, but you can only receive this tax break on the sale of your main home. If you sell a secondary home, you are responsible for paying taxes on it. It is easy to tell which is which because the main home is the one that you live in most of the time.

Example One:
If you own a house in the city and in the country, the home in the city will probably be your main home, as long as you use it while you are at work. If you live in the country and the city home is just for vacation, then the opposite is true.

Example Two:
If you own a house, but are currently living in a different house that you are renting, the rented house is your main residence.

Business Use or Rental of Home
You can still get a tax break on a home if you are not currently living in it, but you must have lived in it for two of the last five years, with no exceptions.

Real Estate Agent

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Buying or selling a home can be one of the most important financial decisions that an individual ever makes, as there is always a great deal of money involved. Sometimes, these decisions can cause an individual to lose money, but they are generally a good way to make money, since real estate is always becoming more expensive. This is a very complex process, however, which makes having help in understanding what is happening very important. You can receive this help through a real estate broker, so do not hesitate to contact someone in this field if you have any questions about your property.

Realtors have a great deal of knowledge about real estate in their particular location, which means that they will be able to find a buyer and a seller for a home, due to the fact that they know how valuable the property is. They also know all about the zoning laws in the area and can even help you to secure a tax break. A realtor also acts as a mediator in the price negotiating process between the buyer and the seller.
A real estate agent is somewhat different from a real estate broker, as the agent will provide his or her services to the broker in exchange for commission on the sale of the house. Basically, the agent acquires the customers for the broker and is paid for doing so. Brokers are the people who sell real estate for others, while agents find houses for others to buy. A broker will also help the buyer to find attractive mortgage options and arranges for meetings between the two parties involved in the transaction. Brokers also sometimes get involved in the legal aspects of the sales process, which is important because you do not want to make any mistakes in this portion of the transaction.

Another duty that these agents and brokers have is finding properties to sell. They will not have much work to do if they are not constantly finding new properties to list with themselves, while helping their clients find competitive prices for their properties. In exchange for this service, they are paid a commission by the seller, which can be quite significant because of the high prices of housing.
The majority of real estate agents and brokers are involved with the sale of residential property, but there are some who sell commercial land as well. The reason why these types of realtors are fewer in number is because there is generally less commercial land for sale in any given city. For these specialty agents, it is important to acquire as much knowledge as possible on what type of cliental to go after, as well as setting their own prices based on the market. No matter what type of property is being sold, it is up to the agent to meet the demands of the client.

There is a process that must be completed before an agent will agree to show a home to a buyer. This process is pre-qualifying for a mortgage, as there is no point in showing someone a home that he or she cannot afford. In addition to this, the buyer will sometimes sign a loyalty contract that states that he or she will only buy a home from this particular agent, which usually goes along with the agent providing the buyer with help in getting a mortgage. Computers have become more important than ever before in this process, as the agent will now show the buyer all of his or her listings on a computer, along with mortgage options, and can even give virtual tours on the internet.

The real estate agent will meet repeatedly with a buyer in order to look at the various properties that the agent is offering. The agent will attempt to show the buyer properties that he or she will enjoy and will place a special emphasis on the features that the buyer is looking for. For example, if someone wants a large yard, the agent will be sure that he or she makes a big deal out of the homes yard. Since everyone is looking for something different, this is relatively easy for the realtor to do. All he or she has to do is focus on the selling point of the home and hope that the customer buyer. If the buyer likes a home, then the bargaining process begins, which is another aspect where the agent gets involved. Offers and counteroffers are made until a price that is agreeable for both parties is reached.

Once the contract has been signed, the agent must then ensure that even stipulation that is included in the contract is met. An example of this is repairs made to certain areas of the house than were agreed upon in the contract. The realtor must make sure that everything that appears in the contract is completed or else the deal could fall through and he or she will lose his or her commission.

Real Estate FSBO Advice

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While some people enjoy the money that is saved on commission by selling their home themselves, most people should not try the For Sale By Owner method of selling their home. Those who are able to accomplish this are usually very experienced in real estate, giving them an advantage in the market. These people are few and far between, however, and selling your own home is generally not a good idea for the majority of homeowners because the process can become a full time job. Here is a list of reasons why you should find a realtor rather than attempting to sell your own home.

1. FSBOs cannot list their home in the MLS. Those who take the For Sale By Owner approach are not able to get their homes listed in the Multiple Listing Service because this service can only be accessed by licensed realtors. What this does is significantly lessen the number of people who can view your home, which is a huge problem because the more people who view your home, the better chance you have of selling it. The only real options that any home seller has in this situation is to put up a for sale sign outside of the house and advertise in the local paper and on websites. This is not nearly as efficient as having a realtor advertising your property in countless places at one time, which puts you at an immediate disadvantage.

2. Agents will not show FSBO homes. Another disadvantage of selling your own home is that buyers agents will not get involved with the process. This means that anyone who contacts a real estate agent looking for a home to buy will not be given access to your home. This is because the buyers agent usually gets commission from the sellers agent, but in this situation, there is no commission guaranteed. What this does is create a situation where you have to show your house yourself and then have to do all of the negotiating yourself. Since very few unrepresented buyers have the experience to negotiate with you fairly, you will probably end up trying to negotiate a deal with a buyer who does not know the home buying process, which can make thing very difficult to finalize.

3. FSBOs usually overprice their home. Whenever people sell their own home, they tend to overprice it as well. This is because they have an emotional attachment to the home, which makes them believe that it is worth more than other comparable homes in the neighborhood. What they do not realize is that there are a number of variables that go into setting a price for a home and it is very difficult to come up with a legitimate price. Real estate agents do this for a living, so they will be able to come up with a fair price. Finding a fair price is the only way you will be able to come up with a buyer for your home and most buyers have an idea of how much a home in an area should cost.

4. Buyers will feel intimidated. Buyers want a certain amount of privacy when viewing a home and they wish to be able discuss the pros and cons of a house without the owner around. If you are showing your own home, you will surely be around, which will make the viewers leave much faster than if they do not feel pressured. By having a realtor show the home, it makes the buyer feel more relaxed, which could lead to him or her being more likely to buy the home. The buyer also know that he or she will have to negotiate directly with the seller, so he or she will not want to discuss any positives that are need either.

5. FSBOs are likely to stumble into legal trouble. There are so many legal issues with regards to selling a home and it is very possible that you will make a mistake and end up in some sort of legal trouble if you sell your own home. Even if you do not know that you are breaking a law, you could be prosecuted for a mistake that you make or you may even face a lawsuit from the buyer at some point. Do not take any of these unnecessary risks, contact a realtor and have your home sold the right way.

Real Estate Appraisal

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You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn't mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don't want to worry initially about upkeep and repairs.

Only an appraiser can give a real home value, but one thing your real estate agent can help you with, is determining the 'sold' value of homes around the area. This is especially important when writing an offer!

Real Estate Tax Shelter(s)

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You May Be Able To Shelter Up to $500,000 In Your Home!

Those who own homes are beginning to realize that having such an asset does more than simply give them a place to live. For people who make money from the sale or trade of their permanent home, there are significant tax breaks available that can make the process much more financially rewarding. In fact, up to $250,000 can be excluded from your tax return in some situations for a single person and some married couples can exclude up to $500,000. This makes it possible for these individuals to make money off of their homes without having to pay a significant amount in taxes. This can only be done every 2 years, however, so be careful when filing your return. Also, remember that you cannot deduct money from your tax return for losses on a home.

There is a set of criteria that must be passed in order to be eligible for this exclusion, beginning with owning the home and living in it as a main residence for two of the past five years. This means that you cannot have rented the home out or only used it as a seasonal residence over that time, but rather must have permanently lived at that address. This must be met in order for you to qualify, so be sure that you follow all of the rules before filing your taxes.
If you do not meet the afore mentioned criteria, there is still another way that you can receive an exclusion. This will happen if you were forced to sell the home because of unforeseen circumstances like losing your jobs, illness, or anything else that made it difficult for you to afford your house. If you are selling your home merely for the profit, you must meet the other criteria, but if you were forced into it, then you may still be eligible for a tax break.

Speak to an experienced real estate agent before filing for any of these tax benefits because they will probably have more information on whether or not you qualify. If you are still unsure, ask your accountant for Ownership and Use Tests.

In order to receive any of these exclusions, you must use an ownership test, in order to decide if meet the ownership requirements. What these test say is that you must have owned the home for two of the last five years and lived in the home for two of the last five years.

If you own more than one house, then it must be decided which house is your main house because you can only receive a tax break on the sale of your main home. For example, if you own one house in the city and a beach house where you spend the summers, the city house would be your main residence because that is where you spend most of your time. In addition, if you own one house, but live a house that you are renting from someone, the rented house is your actual home, so the house that you own would not be eligible for a tax break.
If this criterion is met, you will be able to receive a tax break when you sell your home on up to $250,000 per person. This is a significant saving that can making selling your home every few years worth it.

Real Estate Tax Benefits

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Real Estate Tax Benefits

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The purchase - According to the IRS, you are able to write off any interest that is paid on a home loan each year. These interest payments are a part of your monthly payments, so figure out exactly how much of this is interest.

Mortgage interest - You are able to deduct any interest on a loan that is used in order to improve your residence as well. What this means is that if you take out a loan to do renovations, you can deduct the interest on this loan from your income tax.

The sale - Since your can claim your home as a capitol gain, you can avoid having to pay income tax on the sale of your home. You may have to pay capitol gains taxes, however, so keep that in mind.

If you are able to have a gain from the sale of your home or from an exchange of a home with someone else, you can even exclude up to $250,000 from this gain. This can be used frequently, although it is not recommended that you do it more than every few years because it is an exclusion, rather than a policy. You also are unable to deduct any losses that may occur when you sell a home, so be careful and do not expect too much from the government in terms of tax breaks.

In some cases, people will include a contract where the buyer will pay for the house a little bit at a time. This is called an installment sale and there are special tax breaks available for it as well.

Not everyone is able to receive an exclusion, so look into it before doing assuming that you can receive these tax-breaks. In order to get an exclusion from paying these taxes, you must have owned the home and lived in it for two out of the last five years. Therefore, if you had been renting the home out the entire time, you will not be eligible. If you meet these requirements, then you can begin the process for filing for exclusion, but be sure that you meet the standards or else it will lead to problems with your tax return that will be difficult to fix.

For those who did not meet these requirements, you may still be able to receive an exclusion on a small portion of your sale price if you had to sell the home due to health concerns, an unexpected change of jobs, or any other unforeseen circumstance. Basically, if you sold out of necessity, rather than trying to make some money off of a deal, you may be able to exclude some of your earnings from taxation.

If you have any question on these tax benefits, the best thing you can do is contact an experienced real estate agent to go over things with you and to let you know about how you are liable if you provide false information. There are many tax benefits involved with buying a home, so look into them and see where you could be saving money.

Loan Closing Advice

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WHAT MAKES UP CLOSING COST?

On closing day, there will be a number of extra costs that you may not have been expecting, although they should have been mentioned to you at various times of the process by the lender and the broker. These costs are make up of the following things.

Fees to the Attorney and Escrow Fees. You may have to pay the lender's attorney fees as well.
Property taxes that are due to cover to that date.
Any interest that is due from the closing date to 30 days before your first payment is due.
A Loan Origination Fee, which covers administrative costs.
Any recording fees for paperwork.
A Survey fee for the land.
Your first month's premium for your mortgage insurance, if you were forced to get some.
Title Insurance for both you and the lender.
Any loan discount points you may have accumulated.
You must make your first payment into escrow on your future property taxes and insurance.
You must pay for homeowner's insurance, complete with protection against natural disaster insurance if you live in a high risk zone.
Fees to pay for all of the documentation that was prepared for you.

WHAT CAN I EXPECT TO HAPPEN ON CLOSING DAY?

On closing day, you can expect to have to present your receipt of your home insurance so your premium must have been paid. Then a closing agent will present you with a list of the money that you owe and any money that the seller owes you, as per your agreement. The sellers also has to provide you with proof of inspection and let you know about any warranties on the products within the house.

After this, you can sign the mortgage agreement, which basically states that if you miss any payments or default in any way, the lender has the right to sell your property and then apply any money that is made on the deal against what you owe, plus any expenses associated with this process. Your mortgage also states that you promise to repay the loan in full and the seller will then give you the signed deed to the house.

You will then pay the lender anything that is owed, such as closing costs, and the lender will give you a receipt of all of the items that you have paid for. Once all of this is recorded, you own the house and you are free to do what you want with it.

WHAT MAKES UP CLOSING COST?

The Settlement Statement, which is a statement that outlines all of the expenses that you are paying for in this process.
A Truth-in-Lending Statement, which states that you have told the truth about all of the information that you have provided.
Mortgage Note, which is a representation of your mortgage in writing.
Mortgage or Deed of Trust and documentation of this.
Binding Sales Contract, which is the term on which the home was bought. The seller will provide this so have your attorney take a look at it.
The keys to your new home

Escrow Advice

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Escrow - This is the term that is applied to when a neutral third party takes care of all of the documents and money that are needed for a real estate deal to be finalized in order to ensure that all of the conditions of the deal are met. This can also be used to refer to a bank account that is used by a lender to hold all of a borrower's property tax and insurance money, in order to ensure that these payments are made.

Your escrow payment will depend on many different variables, such as how much the house costs and the type of mortgage that you will be receiving. Since there are so many different types of mortgages, you will have to have this explained to you by a professional. Basically, however, you must remember that you will need to come up with money for earnest money, the down payment, and the closing costs. All of these amounts vary from deal to deal, so be sure to get an estimate on them before you sign any paper work. If you are sort in coming up with any of these amounts, it will lead to financial problems for you in the future, so be sure that you have enough money put away to handle them.

As soon as you make an offer on a house, you will be required to put the earnest money into an account with the real estate broker. This is a deposit on the house that shows that you are serious about purchasing the house. If your offer is accepted, all of this money will go towards the various expenses that are associated with the house. This could be anything from paying off the down payment to taking care of the closing costs. No matter what, this money will be put to good use and if you cannot reach a deal with the seller, the money is returned to you in full so you can make an offer on another house.

If you want to lower your monthly payments, make a large down payment. The more money you put down, the less you will have to borrow and, therefore, the less you will have to pay back. While it can be difficult to come up with this much money to put down, so you are best to do so because it will be worth it in the end. If you are a first time buyer, you can get away with making a very low down payment but, once again, try to put more down than you have to in order to lower your monthly payments and interest amounts.

The closing costs are paid at settlement and are usually 3-4% of the total price of the home. Do not be intimidated by these costs, however, as you can sometimes get the seller to pay half of these for you. These charges go towards paying lender charges and other administrative work. You can get a rough estimate on the closing costs before the process begins, so you will know some of what you are up against.

Home Loans

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In order to save yourself and everyone else a great deal of time, figure out exactly how much you can afford to spend on a house before beginning the search process. This will only take a few minutes and it will prevent you from wasting time by looking at houses that are out of your prices range. What you do is take your gross income per month and then divide it by 29%. This will be the maximum amount that you will be able to spend each and every month. Next, you see how much money that will be over the entire year. To do this, you simply multiply the original number by 12.

You then take this new amount an multiple it by the number of years your mortgage will be over. This new number that you have will be the maximum amount that a lender will be able to give you for a home, although you will still have to factor in the fact that many of your payments go towards interest. You can probably afford a home that is higher than this amount because you will have to factor in your down payment, but this a ballpark figure of what your new home will cost.

Also keep an eye on interest rates because you will be able to get a better home if the interest rates are low, since your monthly payments will be much lower as well. For an accurate representation of how much you can afford to spend on a home, use a mortgage calculator online.

Closing Costs

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HOW DOES THE LENDER DECIDE THE MAXIMUM LOAN AMOUNT THAT YOU CAN AFFORD?

The lender will make this decision based on your debt-to-income ratio. What this lender does is compare your gross income, which means before taxes, to your housing expenses, as well as any other expenses that may be present in your life. These non-housing expenses are basically any other debts that you are attempting to pay off or other payments that you may have on a set schedule. This is done in order to determine exactly how much you will spend each month on the various things in your life.

Your total mortgage payment should not be more than 29% of your income and your debt-to-income ratio percentage should not be more than 41%. The lender will also consider the closing costs that are present in your particular situation, which will vary from deal to deal, but generally covers the cost of paperwork, as well as any other administrative costs that may require payment.

WHAT IS EARNEST MONEY? HOW MUCH SHOULD I SET ASIDE?

Your earnest money is money that is used as a deposit in order to signify your desire to purchase the home. You want to be able to convince the seller that you are serious in your desire to purchase the home, so you will want to make this deposit anywhere from 1-5% of the total cost of the home. If your offer is accepted, this earnest money will go towards the cost of the home, down payments, or closing costs. If you are not able to reach an agreement with the seller, this money will be returned to you. If you back out of the deal for whatever reason, however, the seller may get to keep the entire amount of his or her troubles

HOW LARGE OF A DOWN PAYMENT DO I NEED?

This depends entirely on what the mortgage lenders asks for, but there are options that are designed to make owning a home easier for you. Currently, it is not uncommon to find lenders who will only require 5% down and they are especially more likely to offer a lower amount for first time buyers. The more money you put down, however, the less you will have to borrow, which will mean lower interest rates and lower monthly payment so if you can afford it, try to put as much down as possible. Most mortgages that ask for less than 20% down will require you to take out an insurance policy in order to protect the lender against default. Also, remember that things like closing costs, moving expenses, and other miscellaneous expenses will have to be paid as well.

WHAT CAN I USE TO PAY THE DOWN PAYMENT AND CLOSING COSTS OF AN FHA LOAN?

In order to pay the down payment and the closing costs, you can use any money that you can get your hands on. This includes things like gifts and private loans, and whatever other ways you know of to get money. If you are able to do repairs to the home yourself, something you get can the seller to pay parts of these for you. This is called sweat equity and it can lower the amount of money that you have to come up with immediately. No matter what method you use, be sure to have this amount of money in actual cash because you cannot currently use your mortgage money to pay for these things.

Review A Closing

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Before the closing on your new home becomes official, do an inspection of the home so that you will be able to see any damage that is present. If you followed the proper steps, you will have included a clause in the contract of the house that says that the sale can be either nullified or postponed if there is significant damage done to the house. You also may have included a clause in the contract that states that the damaged aspects of the home would be repairs before you moved in. If you realize that this was not done, now is the time to speak up about it. Before the closing becomes official, have all of this taken care of or else you will have to pay for it in the future.

Closing a Home

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After you close the home, you will finally have the opportunity to view the home while having a clear view of everything. This is because there will not be any furniture in the home and this is a great chance for you to do a more thorough inspection of the property.

Have a look at the walls and ceilings for any additional damage that may have been covered up previously and also take a look at any damage that the seller may have agreed to fix in the contract. If this is not fixed, it is up to you to pursue getting it fixed because this is a breach of the seller's end of the contract. Be sure to do all of this right away so that this damage will not be blamed on you.

After The Loan

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The time between filing an application for a loan and actually receiving the lender's decision can vary. It will usually take between one and 6 weeks to hear back and there is also the chance that the lender will ask you for more information. If you are asked for more information, try to remember that this is a normal procedure and it does not mean that you will be rejected.

Simply try to get the information in as soon as possible in order to speed up the process because the sooner you act, the sooner the decision will come. If you are approved, the lender will call you regarding a closing date on the loan. Once you meet with the lender and go over everything, the money is yours and you can buy the new homes that you have always dreamed of. If you are rejected, improve your credit score and then try again. It is not the end of the world.

Credit History

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If you have had credit problems in the past, the FHA will work with you to rebuild your credit rating. They are much more flexible than other lenders and will give you the chance to rebuild your credit if you meet the following criteria:

At least two years have gone by since your bankruptcy was discharged. This gives them a little bit of a timeframe to view in order to see if you have improved your spending habits.
If any judgements that were held against you have been paid in full.
If you have had tax problems, you must have settled any outstanding liens and made re-payment arrangements regarding the remainder of the money that you owe.
At least three-years have elapsed since any foreclosure you many have had on a home or if the deed-in-lieu has already been settled.

Just because you have had problems in the past does not mean that you will never be able to buy a home. The FHA will help you if you have at least made progress towards re-establishing your credit, so do not rule out this option.

Negotiating Tips

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Here are some negotiation tips that will assist you in getting the best deal possible when you buy a home:

Get a home inspection before signing anything. You will be able to use any flaws in the home as bargaining chips, so be sure you know everything that is wrong with it.
Find out which financing options that you could choose that are of the greatest benefit to the buyer. This includes things like getting them their money quickly or fast closing times.
Do not be afraid to ask people for advice. There are countless professionals around to assist you so do not be shy and use their expertise.

Any experienced realtor will be able to help you with the afore mentioned items because he or she will have seen nearly any situation before. Think about it. If you have sold hundreds, or even thousands, of homes during your career, you will have seen a lot of different situations. These realtors will know what is a fair price and what is too high, to get advice whenever you can and find out how you can make the situation seem as good for the buyer as possible.

The only problem with doing this is that the realtor works for the buyer in the end. While this real estate agent may give you a few pointers beforehand, you are on your own with the actual negotiations, unless you happen to find a buyer's agent. Ask the realtor to keep your conversations confidential, but also do not confide in him or her too much about your strategy. Most importantly, figure out a fair price for the home on your own. Do all of the research that is necessary and figure things out for yourself in order to get the best deal because only you know what type of deal you are looking for. Take a look at the condition of the home, the area that it is in, and how long it has been available when calculating an offer. Also, be sure to be reasonable. If you make an unreasonable offer, the seller may be more likely to stick to the original price. By the time you make an offer, you will have a pretty good idea of how much the home is worth and what you are willing to pay. Finally, be prepared to negotiate a little bit because this is how a home sale works. Things will go back and forth, so do not get frustrated if your first offer is rejected, as it is only part of the process.

Property Negotiation

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Any homebuyer wants to get the best house possible for the lowest amount of money. This is simply how business works because people naturally want look out for their own best interests. In the real estate world, this can be difficult to obtain, however, because it is such a competitive marketplace and there are thousands of dollars at stake each time an amount is offered. The best thing you can do in this situation is hire an experience real estate agent to handle this part of the process for you. This agent will know what a fair price entails and will be able to effectively negotiate from your point of view. The agent will also be very familiar with the neighborhood and the market trends, so they will be able to help you find a low price on real estate.

The problem with this is that you must hire a buyer's agent to accomplish this because the agent that you first contact works for the seller. Because of this, there is no way that this agent will assist you in getting a low price, so unless you hire your own agent, you will have to come up with an amount of your own. You can listen to this realtor's advice, but be sure to take everything that he or she says with a grain of salt because he makes money on the commission of the sale. To come up with an accurate price to offer for the property, first look at the area that the home is in and what type of condition the home is in. These two factors will go a long way in determining the overall value of the home because this is what the home's value is based on. Also, consider how long the home has been on the market because the longer the home has been available, the more likely the seller will be to accept your deal. In addition, homes that have been on the market for a lengthy period of time may have something wrong with them, so be weary of these situations.

Once you are ready to make an offer, you should have a good idea of what the home is worth based on the factors that were mentioned before. If you decide that the final price of the home will be more than you can afford, then look elsewhere for a less expensive home. If you believe that you can afford the home, then it is time to begin negotiations. The seller will likely reject your first offer and reply with a counteroffer. This process can be ongoing until the two of you can reach an agreement on an agreeable price.

Some situations are different from others, such as when you buy a HUD Home because in these situations, you are required to use a buyer's broker. There are a number of procedures that must be followed in this process, but a realtor will help you each step of the way and will explain everything to you. With a HUD Home, there are never any direct negotiations between the buyer and the seller, which makes things much easier and less stressful. There will no the any haggling over the prices of these homes either, as everything is in the form of a written offer. If this written offer is not accepted, the house goes directly back onto the market. If the offer is accepted, the closing process on the home begins. You will be able to find a broker that sells HUD Homes quite easily because they are some of the easiest homes to buy and sell. All you have to do is place a few phone calls and you are sure to find someone who sells these types of homes because they simplify the process so much. As a seller, you also do not have to pay any of the commission involved, making this a great situation for everyone involved.

Safety Inspection

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One thing that you must do before committing to buying a new home is considering everything that this new situation will ask of you. One of the things that you must do before buying the home is get it inspected by a certified safety inspector. What this inspector will do is look for any major problems that may be present in the home's structure and construction, so that you can make a better choice on whether or not the house is worth it. This inspector will tell you about any repairs that absolutely must be made, so pay attention to everything that he or she tells you.

It is not the inspector's job to tell you if you are getting a good deal on this property for your money, but rather to take a look at all of the things that are vital to your new home and letting you know what need to be repaired. He or she can usually give you a rough estimate on what these items will costs to repair as well, although this is not an exact figure. The inspector will look at the building's electrical system, plumbing, insulation, the water source, and all of the structural things of the home like the foundation, windows, doors, roofs, walls, and ceilings. He or she can also inspect the hot water heater, the furnace, and the air conditioning to see if there will be any problems in the near future.

Never sign a written offer sheet on a house until it has been inspected, especially if you have your doubts about a property. Many times, the seller will either not tell you about these problems or is unaware of them, so you cannot rely on the seller to tell you what it wrong. Once you have bought the house, you have bought all of the problems that come along with this house, unless of course you put a clause into the contract that will protect you against such things. Many well-informed buyers will insert a clause into the contract that saying that the seller must pay for any significant damage that is found upon inspection. Other clauses in contracts will void the entire deal if there is anything significantly wrong with the house, so choose the option that is best for you and do not compromise on it.

If you are buying an older house, you may want to have someone come in and check for the presence of lead paint. This is a major problem with older homes because lead based paint was used up until 1978. This paint is not only a problem inside the house because your yard could have lead paint chips in the soil if your house used this paint at any time. You can easily cover up this hazardous paint with fresh paint in order to prevent chipping, but you may want to bring in a professional if you are wary of this paint being a major problem around your home. A contractor can come in and fix the problem immediately, so this may be an option for some older homes.

Home Inspector Worksheet

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Even though you will want to get a thorough inspection from a company that specializes in that sort of thing, you can check a number of things on your own in order to have an idea about what may be wrong with a house.

Have a look at the foundation of the house and any other cement for cracks or damage. Also, check the walls for any type of damage.
Look for any evidence of water damage or moisture problems.
Remember that minor settling crack in concrete will not affect the structure significantly.
Be sure that all water is draining properly from the home and yard.
In wet areas, check for a sump pump for foundation and sanitary drainage.
If there is a crawl space, make sure that it is dry. A wet crawl space is a sign that more water problems could arise in the future.
Have the home inspected by an exterminator. This will save you from problems with rotting wood due to termites in the future.
Be sure that the flooring is in good condition.
Make sure that the bridging and joists are constructed in a solid manner.
Have a look at all of the walls for watermarks. This could be a sign of leakage in the home.
Inspect the attic and make sure that it is insulated and ventilated because this can lead to the loss of heat in the winter.
If there is a fireplace, make sure that the damper works and that the chimney is all cleared out.
Have a look at the heating and air-conditioning to ensure that regularly scheduled maintenance has been completed. You can do so by checking the filters, the fan motor, and the bearings for maintenance. If they are in bad shape, you will have problems in the future with them.
Have a look at the hot water tank and note how large it is and what type it is. Also, have a look at how old it is, as older ones will need to be replaced.
Look at the electrical box to make sure that everything works properly and that the electrical system is good enough for everyday usage. Also check the wiring quickly, to make sure that there is no significant damage to it.
Be sure that the water pressure is strong enough in the home and check to make sure that all faucets are in working shape.
Have a look at all of the bathroom and kitchen fixtures because they should all be in working shape. This includes things like the oven, fridge, and any laundry and dishwashing appliances that are included with the home.
Be sure to have a look at the yard and make sure that it has been taken care of. Also, be sure that it has enough trees and shrubs to make you happy because having to plant new ones can be an expensive process.
Make sure that all fences are in working shape. Also have a look at the patio and driveway concrete because fixing this can also cost you a great deal of money.
Confirm that the outside walls of the house will stand up to all of the weather conditions in your area. Also, be sure that the windows and doors are all in working order and see how difficult they would be to replace if need be.
Look at the roof for any significant damage. Also, look at the gutters and downspouts to make sure that they do what they are supposed to do.
If you have a garage, make sure that the garage door opener is in good shape and works properly. Also, make sure that there is electricity and heating in the garage.

Home Insurance

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DO I REALLY NEED HOMEOWNER'S INSURANCE?

Yes, you do need to have a homeowner's insurance policy by the time your deal has been closed. Many times, you must show a receipt of this before anything can be made official so you must have gone through the process of acquiring insurance earlier on. It is recommended that you contact an insurance agent as early as possible because he or she can save you money on insurance premiums because they have information on what you can do to keep them low. They also have a wealth of information on home safety that can home in handy when you are having your home inspected.

WHAT STEPS COULD I TAKE TO LOWER MY HOMEOWNER'S INSURANCE COSTS?

The most important thing you can do is visit a number of different home insurance options in order to find the best price. Also, think about home insurance premiums before you choose a house to buy. Newer and brick constructed houses tend to have low premiums because they are built much better. Also, buy in an area that is not prone to natural disasters if you want to money. Insurance companies know about all of these things and will lower your premiums if you are considered a lower risk. Having a fire department in the proximity will also give you an advantage when searching for a good deal on insurance.

IS THE HOME LOCATED IN A FLOOD PLAIN?

This question can be answered by the real estate agent and is a very important thing to consider. If you do live on a plain that is likely to flood, your lender will require you to have flood insurance before lending you money for a mortgage. This is simply the lender's way of protecting its own interests because of the high risk of this area. If you only live close to a flood plain, but not in one, it is your choice whether or not to get this extra insurance. Examine the history of the area in order to decide what the best plan for you is.

WHAT OTHER ISSUES SHOULD I CONSIDER BEFORE I BUY MY HOME?

Natural disaster can do a lot of damage to your home, so try to avoid buying in the home that is prone to these things if at all possible. Things like earthquakes, tornadoes, hurricanes, and even volcanoes can ruin your home and even put your life at risk. If you do buy in one of these high risk areas, make sure that your home is inspected thoroughly and that it meets all of the building codes.

Home Inspection

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After you find your dream home, you must decide how much you are willing to spend on the house and then make an offer. In order to do this accurately, you will want to have the home inspected by a professional. You may also want to find out how long the house has been on the market for because the long it has been for sale, the more likely the owner will be to accept a lower offer. Once you prepare an offer, the real estate broker will show this offer to the seller and the seller has the opportunity to either accept or reject it. The seller will then usually make a counteroffer, if your offer is not acceptable. This process usually continues until an offer that is agreeable to both parties is reached, or all talks breakdown because there is too much difference between the two parties.

WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME?

The job of an inspector is to check the home for damage, much of which could be a safety concern. They will focus on the foundation, the frame, the electrical wires, the plumbing, and any other aspect of the home that is vital to its functionality. This inspector will not tell you about things that may need to be looked at, but only things that are in immediate need of repair. Each of these things will affect the value of the house, so pay careful attention to what the inspector says.

This inspector will not tell you in if he believes the house is worth what the seller is asking for it, but will rather simply take a look at everything and let you know how much any needed repairs will cost. Along with the pipes and wires, be sure to have the inspector take a look at the floors and ceilings for potential cracks and leaks. Any expenses that you will have to pay in home repair will make the house less valuable to you. Also, be sure to only hire an inspector with a wealth of experience because anything he or she misses will cost you in the future.

Be sure to have this inspection completed before you sign any offer sheets because once you agree to close the deal, the seller will not be responsible for any of these damages. You can also include a clause in your contract that says that the agreement is void if there are any problems found during the inspection. This can all be negotiated, so be sure to consider this option when buying a home. You can even insert a clause into the agreement that states the seller must pay for any major damage that is found to the house. This will be much more difficult to agree upon, so try a variety of different methods in order to protect yourself.

DO I NEED TO BE THERE FOR THE INSPECTION?

You do not have to be there, but it is recommended because once the inspection is over, you will be able to ask questions about the damage that has been done to the house. You can also get the inspector's opinion on the house as a whole, as well as get answers on any maintenance questions you may have about the home.

ARE OTHER TYPES OF INSPECTIONS REQUIRED?

If the original inspection turns up any significant problems, you may have to hire a specialized inspector to have a closer look at that area of the home. You may also want to have your home looked at for anything that could cause health problems for you and your family. This is includes things like asbestos, gas leaks, or potential problems with your water supply. None of this is mandatory, but it will help protect your family should there be something wrong.

HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOME?

In many houses that were built before 1978, there is the potential that lead-based paint was used. This can pose a significant health risk for children, the elderly, and those with weak immune systems, so have this inspected as well before moving in. The flakes from this lead paint can also be in the soil and yard around the home, so this is another portion that will need to be looked at. You can temporarily fix this problem by painting over any areas that are shipping away, but if the problem is significant, you can hire a contractor to eliminate the problem entirely.

ARE POWER LINES A HEALTH HAZARD?

No research has been found to prove that there is any sort of hazard involved with power lines. If you still believe that they will cause a problem, simply do not buy a house near them. There is really nothing else you can do.

Debt To Income Ratio

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When getting a mortgage, the lender will look at your debt-to-income ratio in order to come up with the amount of money that they will lend you. What this ratio does is measure your pre-tax income against the other expenses that you will have on a month-to-month basis. This includes both housing and non-housing expenses, which as student loans, car payments, and child support. What the lender will do is come up with an amount that is no more than 29% of your gross income for your loan amount.

This amount will also have to be no more than 41% of your total income when these other payments are factored in. Things like the cash needed for a down payment and closing costs are also factored into this amount, as well as your credit history. Basically, your lender will come up with the maximum amount that they would feel lending to you bases on your current income and your current expenses. If they feel as though you would be a very high risk because of your current expenses, they may reject your application completely, so make sure that the time is right when applying for a loan.

Your Loan

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Before attempting to secure a home loan, there are several things that you must consider. For example, you must consider how much of your own money you will need to come up with in order to buy the home. Nearly every lender out there will require you to come up with a down payment before they will allow you to purchase a home and this down payment can be a significant amount of money. In addition, you must come up with earnest money, which is a deposit that you give to the homeowner as a method of showing your interest in the property. Finally, you must be able to pay for the closing costs, which is all of the administrative work that goes into the process. Sometimes the seller will help you pay for this, so be sure to ask about this beforehand. This is not money that you will want to borrow, so be sure that you can afford these costs before starting the home buying process.

As you make an offer on a home, you can have your broker hold onto the earnest money in an escrow account. If you and the homeowner come to terms on a deal, this deposit money will be applied to either your down payment or to your closing costs. By giving this money to an attorney, you are ensuring that everything will be done the right way. Also, if you do not come to an agreement with the seller, this money will be returned to you. The amount of money that you put in escrow varies, but the general amount of a deposit is between $500 and $2000.

Remember that you can lower your monthly payments significantly if you can afford to make a large down payment. This is because the overall amount that you owe will drop, which will also allow for your total interest paid to drop. With some loans, you can be forced to pay 10-20% of the purchase price, so be sure to find a down payment amount that you can afford before selecting a lender.

The closing costs come at the end and are usually between 3 and 4% of the total price of your home. There is a variety of fees that must be taken care of and the closing costs go towards that. When you first apply for your loan, the lender should give you a rough amount of what the closing costs will be. Use this amount as a guide because although it may not be exact, it will be very close to the final amount.

Apply for a Mortgage

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Loan fraud has become a very large problem over the past few years, as people attempt to buy a house without having the means to do so. This leaves lenders in a bad situation because many of these people cannot afford to pay them back. Because of this, these lenders are checking all loan documents more thoroughly, so be sure to follow these tips to avoid punishment for your documents.

Make sure that you have read and are able to understand everything before signing a single document
Never sign a blank document or a document that appear to be missing sections
Never buy property for another person
Be sure to state the correct income on all forms
Avoid lying about how long you have held your current job
Give an accurate representation of your assets
Report every one of your debts and do not understand amounts
Never make changes to your income tax returns
Always tell the whole truth about past credit problems that you may have had
Be honest about whether you intend to live in the house or rent it out
Never provide any false documents to anyone because they cause more problems than they could ever solve

WHAT HAPPENS AFTER I'VE APPLIED FOR MY LOAN?

Once you apply for your loan, you will have to wait for the lender to go over all of your information. This can take anywhere between 1 and 6 weeks, depending on how much there is to go over and how busy the lender is, so be patient if you do not hear back right away. In addition, the lender may ask for additional information once the original documents have been submitted. Do not believe that this harms your chances, as it is perfect normal. Try to get this additional documentation in as soon as possible because it will speed up the process for you. Once all of the information has been checked over and verified, the lender will call you with his or her decision. If you are approved, you will have to visit with the lender to figure out a closing date and once this is decided, you are free to purchase your new home and begin the moving process.

Select a Mortgage

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WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?

If you are looking for stability in your monthly payments, then a fixed-rate mortgage is for you because the monthly payments and interest rates stay exactly the same throughout the entire process.

Types

15-year
30-year

Advantages

The stability that is offered with these types of loans is the main selling feature because you can plan your monthly budget around these rates. Nothing will change for the entire term, so you will not be subject to interest rate changes and you do not have to worry about your monthly payments gradually sneaking upwards.

If are a little more adventurous and believe that interest rates will stay low for the foreseeable future, then an adjustable rate mortgage may be the right one for you. When you choose this type of loan, your payments can increase or decrease, depending on what the interest rates are like at that time.

Types

The balloon mortgage has a very low interest rate and is specially designed for people who want to pay off their entire house early. After the original term has been completed, these balloon mortgage holders have the option of paying off the remainder of their loans or renegotiating another loan.

The Two-Step Mortgage is usually chosen by homebuyers in times when interest rates are soaring because they allow for one adjustment over the entire term. That way, you can still have stability without having to settle for a very high interest rate.

Advantages

The advantages of these types of loans are that they can save you a great deal of money over the course of your loan. If you get lucky and get low interest rates, then you will save a lot. Also, if you are able to pay off the entire amount after the original period, you will save a great deal of money. This option may also allow you to take out a bigger loan, which can be a huge advantage in the housing market.

WHEN DO ARMS MAKE SENSE?
These loans are perfect for people who want to own their home outright very quickly. If you do not want to mess around with a long term mortgage, then get an adjustable rate mortgage and you will have more options when paying your home off.

WHAT ARE THE ADVANTAGES OF 15- AND 30-YEAR LOAN TERMS?

30-Year:

The 30-year mortgage allows you some major tax benefits over the course of your repayment and allow gives you very low rate at the end of the agreement, in comparison to the rest of the market. By the end of your term, people will not believe how low your monthly payments are.

15-year:

With 15-year mortgages, you will have everything paid off much sooner, which is a huge advantage in the long run. You also build up equity much faster, which protects your investment and you can even receive a lower interest rate.

Mortgage Alternatives

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WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?

With a Fixed-rate Mortgage, your payments will stay at a fixed amount for the entire term of your loan. You will not have to worry about your interest rates or monthly payments changing, which will provide you with peace of mind.

Types

15-year
30-year

Advantages

These type of loans are extremely predictable because they do not change at all. For first payment will be the same as your last payment, giving you incredible stability. Things like inflation in the housing market will also not affect you, so your monthly payments will be comparably low by the end of the term, even if they seem high to begin with.

Housing cost remains unaffected by interest rate changes and inflation.

If you choose an Adjustable Rate Mortgage, you are taking a bit more of a risk because you never know what interest rates will do. If there is a significant jump in interest rates, it could impact you for a lengthy period of time because there is no guarantee that the rates will come back down again.

Types

A Balloon Mortgage will allow you to sign up for an initial period, which is usually between 5 and 10 years, for a low interest rate. The problems is that once this first period has passed, you are responsible for either paying off the rest of the house or renegotiating and this second mortgage will bring you much higher interest rates.

A Two-Step Mortgage will adjust your rates only once and it will remain the same for the entire term after that first adjustment. This is the perfect solution for getting a mortgage in times of high interest rates, because your rates can be adjusted when the interest rates come back down.

Advantages

The advantages of these types of mortgages are that they are known to offer lower interest rates to start because it will go with the actual interest rate, rather than an adjusted one. This means that your monthly payments will be lower to start with as well, which is important to younger buyers who are just getting their start. This type of loan may also qualify you to receive more money, so look into that before deciding.

WHEN DO ARMS MAKE SENSE?

These types of loans make a whole lot of sense for people who believe that they will be making much more money a few years down the road. This is an especially good option for people who believe that they will have enough of a savings to pay off the entire house within 10 years because they can do so without penalty. This is also a good option for those who are not concerned with the possibility of interest rates rising in the future.

WHAT ARE THE ADVANTAGES OF 15- AND 30-YEAR LOAN TERMS?

30-Year:

On a 30-year loan, the first 23 years go towards paying off a significant portion of your interest. This means that you can deduct more money from your taxes over these years because this interest is tax deductible. Your monthly mortgage payments will also seem much smaller by the end of this term because inflation will have driven other peoples' housing costs up, while yours has stayed the same. .

15-year:

When you get a 15-year mortgage, you build up equity at a very rapid rate because the early you get it paid off, the more money you are putting towards your principle. Your interest rates will also be lower, which lowers the total amount that you pay over the term.

Basic Mortgage

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A mortgage is defined as a loan that you receive in order to pay for real estate. The agreement usually states that in exchange for this loan, you agree to pay it back over a set amount of years, while also paying a set amount of interest. Failure to live up to the terms of the mortgage can lead to you defaulting, which could lead to you losing your home.

Also Consider LOAN TO VALUE (LTV) H
The loan to value ratio of the mortgage refers to the actual amount of money that you have borrowed compared to the actual price of the home. Each mortgage has a limit on this, which only allows for you to receive a loan for a certain percentage of the final price. The rest of this money has to come from a down payment that you make upfront to the lender.

This ratio is a direct reflection of the amount of equity that the person receiving the loan has in his or her home. The higher the ratio, the less money the individual has to put into the home him or her self. Since these higher amounts require such a large loan, lenders will sometime require the borrower to take out a mortgage insurance policy in order to protect them against a possible default. This usually occurs on loans where the borrower borrows more than 80% of the total cost of the home.

WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?

On a fixed-rate mortgage, the interest rate and, therefore, the payments stay the same over the entire term of the repayment.

Types

15-year
30-year

Advantages

This is the most predictable type of mortgage because you will know exactly what you will owe every month for the entire term of the loan. Also, your housing costs will not change with inflation or the changing of interest rates.

With an Adjustable Rate Mortgage, you monthly payments can either increase or decrease depending on the currently interest rates. While these increases do have limits, this can create some uncertainly at times.

Types

Balloon Mortgage- This type gives you low rates to start with, but when this initial period is over, the terms must be renegotiated or the entire balance must be paid off.

Two-Step Mortgage- With this sort of mortgage, your interest rate can only change once over the entire course of the loan, which allows for your expenses to be a little more predictable.

Advantages

This type of mortgage usually offers lower interest rates to start with, which makes the monthly payments lower as well. Because of this, you may be able to get a higher amount, which will get you a nicer house for your money.

WHEN DO ARMS MAKE SENSE?
This sort of loan is a good option for people who know that their income will increase significantly over the next few years or for people who think that they may be moving in the near future. There is the potential for an interest rate increase to make your payments rise significantly, so choose carefully.

WHAT ARE THE ADVANTAGES OF 15- AND 30-YEAR LOAN TERMS?

30-Year:

For the first 23 years of this type of loan, you will be paying off high amount of interest, which means that you can write a significant amount of this off as a tax deduction. Also, since there will be inflation over this time period, your payments will seem very small by the end of this term.

15-year:

These mortgages normally come with a lower interest rate and you will pay less interest in total because of the shorter period. In addition, equity is built up much more quickly, which is important if you want to resell the house or use it as collateral.

CAN I PAY OFF MY LOAN AHEAD OF SCHEDULE?

You can pay off your mortgage early if you send extra money in each month or make a lump sum payment at the end of the year. When sending this money in, make sure that you let your lender know that this money is to be applied to the principle of the loan rather than the interest. You may also have to pay a penalty for making these payments, so make sure that the penalty does not negate paying off the mortgage early because that would be a waste of money. Go over all of your options with your lender before making any extra payments.

Mortgage Loan

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When financing a home, be sure to remember that there are multiple ways to finance it because home lenders want you to be able to buy your own home. The reason for this is that they make money every time they provide a mortgage, so they do their best to get you a mortgage that suits your needs. Each of these methods has its own pros and cons, so look into the situation careful before agreeing to a lender's terms. Just because they offer it does not mean that you have to accept it, so take your time and get the right mortgage for you.

One type of mortgage is a fixed-rate mortgage, which means that your interest rate will not change over the entire term of the loan. This gives you more stability because your interest and monthly payments will never change. This allows for you to plan a fixed-budget every month, so that you will know exactly how much you will spend on housing each and every month of the term. The negative with this type of loan is that the interest rates tend to be higher, so you run the risk of having to pay more in the long run.

Another type of mortgage is the adjustable-rate mortgage. With this type of plan, you monthly payments will start out lower than with a fixed-rate, since the interest rate will be lower, but there is no guarantee where this rate will go. It can be either higher or lower, depending on what happens with the interests rates. This can be a negative because you will not have a set amount of pay every month. If interest rates rise significantly, you could find yourself in some serious financial difficulty, so be sure to plan for such an occasion if you choose this option.

The FHA-Insured Mortgage is meant to help those who cannot afford the down payment that most lenders require to get a mortgage by providing government issued insurance for lenders in case these people default. In many cases, these types of mortgages allow for buyers to get a mortgage with as little as 3% down, which makes owning a home more accessible for thousands of Americans. The problem with this type of loan is that the monthly payments are higher because of the lack of a down payment. Sometimes the terms are over a much longer period of time as well, which causes people to be paying for their home for many more years.

A VA Loan allows for the lender to be protected against default as well, expect the Department of Veteran Affairs takes care of this instead of the federal government. This is a program that helps war veterans buy homes of their own once they return from duty.

An assumable mortgage is just like any other mortgage, except that it is transferable to the new owner if the house is sold. If you find a home that is assumable, it means the lender will be willing to allow you to overtake an existing mortgage. These homes are usually very good deals and the paperwork is much easier to handle as well.

Do not rush into getting a loan for your home and talk to as many people as possible before committing. Be sure to speak with a loan officer in order to get all of the information that you need before making any decisions on which type of loan to get.

Effective Offer Writing

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HOW DO I MAKE AN OFFER?

You will be able to get assistance from a real estate agent regarding your written offer and it will include a number of different things:

A complete description of the entire property, including any fixtures that may be included
The amount of earnest money, which is a deposit on the property that represents a desire to buy
The amount of the down payment and the financing details from the lender
The date that the buyer would like to move in
The price that the buyer is offering
The date that the buyer would like to have everything closed by
How long this offer is valid for
Any other details of the deal that need to be in writing.

While this is a good starting point, remember that the seller does not have to accept your terms. Therefore, you may have to negotiate with the seller and adjust things in the contract that he or she does not agree with.

HOW DO I DETERMINE THE INITIAL OFFER?

Remember, first of all, that the broker usually works for the seller, unless you have hired your own broker. Therefore, you may not want to simply go along with the terms that the broker recommends. Therefore, you will need to know how to set forth your own offers, which means that you will have to know how much to offer. Be sure to ask the broker to keep all of your conversations confidential because you do not want information regarding your deal to be leaked. You should listen to the real estate agent's advice, as he or she wants to get the deal done as much as you, but also follow your own beliefs. What you need to do is look at other homes that are selling in the area in order to determine a fair price. This does not mean simply looking at the listed prices of these properties, but finding out what they actually sold for. This is because the listed price is usually considerably higher than what the home actually ended up selling for. You must also consider factors like the condition of the house, how long it has been available for, how hot the housing market in genera is, the terms of financing, and what the seller's situation is. The longer the house has been on the market, the less the seller will be likely to accept. With a little research, you should be able to come up with a number that is acceptable for both parties. Also, be prepared to negotiate the price a little bit once you have made your first offer. If you cannot agree on a price, this may take some time to complete. Also, do not be afraid to walk away should the seller charge you more than you are willing to spend because there are other houses out there.

Mental Control

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One tip that may be effective is to take a deep breath!

You do not want to seem overanxious because the seller must believe that he or she could lose you as a buyer at any moment. Remember that the seller needs you just as much as you need him or her. Therefore, you must treat each other with equal respect. If the seller knows that you are overanxious, you might not get as good of a deal so just take a deep breath and relax. Even if you do not get this particular home, you will find another that you like. There is absolutely no pressure on you in this situation so just stay calm. It may also help if you have several options on houses to buy. That way, if one deal falls through you can just move on to the next one. You will want to purchase a home on your terms with your offer being accepted, so just take your time and get through it calmly.

One tip to control your excitement is to focus on the negative! While you obviously like the home that you are negotiating on, otherwise you would not be in that situation, every home has things wrong with it. Therefore, it may help to focus your mind on the negatives of the home, so that you do not get overemotional. There are other homes available if you do not end up with this one and maybe one of these other homes will end up being even better.

When asking questions on the home, ask questions on potential problems that the property make have, like maintenance issues. You will want to know if anything needs to be replaced and if there are constant problems with any appliances. Also, be sure to ask questions about the neighborhood because you do not want to end up in an area that is not compatible with your lifestyle. Keep asking questions until everything that you want answered has been answered and do not let the seller and the broker get away with not giving you a full answer. It is your money and you deserve an explanation for all potential problems. Write all of these questions down beforehand, so that you do not forget while in the moment, and then write down the answers as well. This will give you a clearer understanding and will allow you to go over the answers once you are away from the situation.

Comparison Shopping

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Print out this worksheet and make notes about the homes you visit.

Features	House #1	House #2	House #3
Address of Home
Price of Home
Location in City
Number of Bedrooms
Number of Baths
How many Square Feet
Number of Garages
Is there a Family Room?
Is there Air Conditioning?
Is there a Formal Dining Room?
Is there a Pool?
Is there a Spa/Jacuzzi?
Total Lot Size
What type of Landscaping?
What type of Kitchen?
What is the Floor Plan?
Is there Storage Space?
What type of Condition?
Extras (specify)
Curb Appeal
Commute Time to Work

Neighborhood Features
Neighborhood	House #1	House #2	House #3
Neighborhood Crime Rate
Quality of Schools in Area
Amount of Traffic
Proximity to:	House #1	House #2	House #3
Schools
Hospitals
Shops
Transportation
Cultural Activities

Overall Opinion
	House #1	House #2	House #3
Overall Opinion

Home Selection

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HOW CAN I KEEP TRACK OF ALL THE HOMES I SEE?
There are many different ways to keep track of everything that you see, but try to keep a written account so that you do not forget any details. Also, try, if possible, to take a photograph of each property because a visual representation will help you to keep each home straight in your mind. Also, do not be afraid to ask to look at a property for a second time in order to go over your notes while viewing

HOW MANY HOMES SHOULD I CONSIDER BEFORE CHOOSING ONE?
There is no answer to this question because it is impossible to know how many homes you will need to view before you find the perfect one. You should remember to visit as many homes as it takes and never settle for a home that is not exactly what you are looking for. The average homebuyer visits 15 houses before deciding on one, but do not use this as a guide because every situation is different. Whether you choose the first house you had looked at or the 100th, make sure that you make the decision that is best for you.

Before you begin viewing homes, develop an idea of the type of home that you want to view. To do this, you will have to determine how much you can afford to spend each month because this will give you a base of housing to choose from. One you have narrowed things down by price, it makes the entire process easier because you will have a more limited number of houses to look at.

The Federal Housing Administration has come up with a formula for deciding how much you can spend and it states that most people can afford to spend 29% of their monthly income on housing. This is not set in stone, since buyer with no other debt can afford to spend up to 41% of their income on housing, but lenders will generally agree that 29% is high enough. By coming up with an amount that you can afford to spend, you will know exactly how much you can afford to pay for a house, which will begin to help you narrow down your search.

Once you know what your price range is, you must begin looking for the best value within that price range. This can be difficult because you must consider things like the neighborhood and resale value when defining the value of a house, so you will want to do your research on every prospective house before buying. You can also hire a real estate agent to help you along with the process, as they have experience in many different neighborhoods and will help you find a house in one that has what you want.

If you do not hire a real estate agent, then you will want to make sure you are well prepared with information before narrowing down your search.

Research, Research and Research!
This has been made much easier because of the internet because it allows for you to search through multiple directories in a matter of minutes. You also do not have to make a variety of phone calls to different people because the internet allows you to view more information than in the paper and you can also use e-mail as a form on communication. The research process is faster and more convenient than ever before because of the internet, so take advantage of it.

Searching Tip
A quick internet search will bring up a variety of different listing sites in your neighborhood, which will allow you to view many listings at once. Most of these sites have a search function built in, so you can filter out houses that cost too much, do not have enough bedrooms, or even select the neighborhood that you wan to live in. The internet allows you to quickly find some target listings that you want to view in the near future, so use it wisely.

Just because the internet is so popular does not mean that newspapers are obsolete, however, as they still offer a wide variety of listings that you can sort through very quickly. Many times, the newspaper will have a special section that is devoted to real estate, so keep an eye out for that and go through it.

Make appointments to look at all the short listed houses

Each time a house catches your eye, make an appointment to view it. You do not want to let the perfect house slip through your fingers because you procrastinated, so begin making appointments immediately and you will find the perfect house for you in no time.

Home Hunt

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As you know, every neighborhood is different, even if these neighborhoods are very close to one another geographically. Each area has different people, different activities, and a different way of life. Since these differences can be very subtle, it is important to thoroughly check out a neighborhood before you buy a house in one. One thing that you may want to do is walking around the neighborhood in the early evening. At this time, most people will be home from work, so you will be able to see what the neighborhood is like on a daily basis. You may also want to consider visiting the neighborhood on a weekend because this is the time of the week when things could get louder in the area.

You will also want to look at some of the other features that the neighborhood has to offer. If you have children, you will want to find out what the schools in the area are like. If you plan to resell your property at some point, you will also want to learn about things like the values of neighboring properties, the crime rate, and development in the area, as well as its proximity to things like grocery stores and shopping malls. Less desirable fixtures like prisons, airports, and freeways may also be in the area, so do your research thoroughly.

If you like to go out at night, you may want to take a look at the nightlife in the area, which also holds true if you want quiet on your weekends. Each of these things can affect your overall experience in this new neighborhood so be sure that you learn as much as possible about it before making any final decisions.

Approval Letters

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Getting pre-qualified for a loan is a way of finding out how much you will be able to borrow, should you want to buy a home. You are able to get pre-approval over the phone without having to submit any proof simply be telling the lender about your income, any debts you may have, and how much of a down payment you can afford. This does not means that you must go through with obtaining a mortgage, but simply allows for you to begin researching potential homes while knowing roughly how much money you will be able to borrow. This is a valuable research tool because it allows you to filter out houses that are too expensive, as well as homes that may not be in a good neighborhood, but you thought would be all that you could afford.

From the lender's point of view, granting you a pre-approval is a commitment to lend you money because it causes them to begin to get your financial records together and beginning the actual approval process. It also shows lenders that you are interested, which will allow you to get your actual loan much quicker than if you were starting from scratch.

Find Out About Your Credit History

Before attempting to get a mortgage, it is important to find out about your own credit history. The three major companies in this field are Equifax, Experian, and Trans Union and they will allow you to see exactly what a lender would see. Pay very close attention to certain boxes on this report, since they tell the lender how much money you owe other lenders, how often you get behind on payments, and how consistent you are at making payments on time. Getting the actual report is quite easy, as you simply call one of the companies that was mentioned early or visit their websites and request a report. There is a fee for this service, but the insight that it will give you into your credit rating is definitely worth it because it will increase your chances of being approved for a mortgage. As long as you do not see any red flags on your report and a creditor will not like, you are free to begin the process of getting a loan to pay for your house.

Real Estate Ads

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4B/2B -- This means that the house has four bedrooms and two bathrooms. A bedroom will generally be a room with a door, a window, and a closet that is large enough to fit a person's bed and dresser. The bathroom in this case constitutes a full bathroom, which means that it has a bathtub, a toilet, and a sink. There are other types of partial bathrooms that come in some houses, but they will usually be explained in the listing.

assum. fin. -- Assumable financing. This means that the new owner is able to assume an existing mortgage when purchasing the house.

Closing Costs: The definition of this varies in each individual state, as different places have a different definition of closing. The basic idea, however, is that the closing costs are the extra expenses that are paid for by the buyer and the seller at the end of the transaction. This can include things like the broker's commission, paperwork, attorney's fees, transfer fees, and various taxes. Basically, there will be a list of expenses that will come from various places once the deal is done. This is usually paid through escrow, which means that both parties will put money into a fund that is held by a third party and the third party pays these fees with this money.

CMA -- This is the comparative market analysis or competitive market analysis and it allows you to see the prices of homes that are similar to yours and how much they sold for. This will allow you to see what kind of deal you got on your home.

Contingency -- This is a clause that allows for an agreement to be postponed until certain conditions are met. For example, a sale could be contingent on something on the house being fixed and the deal will not be officially finalized until that portion of the house is fixed. The buy will then have the opportunity to void the contract if the seller does not uphold his or her part of this agreement.

dk -- This means that the home features a deck.

Expansion pot'l -- This stand for expansion potential, which means that the house can easily be expanded into a much larger house. In many cases, this means that there is plenty of space on the lot for expansion, or something it can mean that the house could support another level.

Fab Pentrm -- This stands for fabulous pentroom, which is a room at the very top of the building that offers a unique view.

FDR -- This is a formal dining room, which is a room for eating that is separate from the kitchen.

Fixture -- This can be a number of things that are permanently a part of the property and, therefore, are owned by the homeowner. This is usually things like trees and plants, but is could also mean a separate garage, a shed, or even a guesthouse. These things are not portable, which makes them part of the property, rather than personal property of the owner. What constitutes a fixture is important because it can impact your property taxes, so make sure you get a list of everything that can be considered a fixture before buying.

Frplc, fplc, FP -- A fireplace within the home. This can be either gas, electric, or wood, so make sure it is the type that you want before buying.

Gar -- A garage. Sometimes the advertisement will tell you how many cars will fit in the garage or whether it is attached or detached.

Grmet kit -- A gourmet kitchen, which is a kitchen that has a variety of professional features.

HDW, HWF, Hdwd -- This means hardwood floors, which increase the value of a home because of their longevity.

Hi ceils -- This simply means that the interior of the house has high ceilings.

In-law potential -- This means that the house has the potential to house an in-law suite. What this usually means is that is has a self-contained basement that could be transformed into a suite easily.

Large E-2 plan -- Each building has different floor plans and this is one of the most common that you will find.

Listing -- A listing is not what most people believe it is, as the majority of people believe that it is the actual advertisement that you see on a house. A listing, however, is actually the agreement between the homeowner and the real estate broker that the broker will arrange for the sale of the house. The term can also refer to the actual house once it has been put on the market.

Lo dues -- This means that the homeowners association's dues are low, but the term low is obviously subjective, so get the actual rates rather than believing this term.

Lock box -- This is a box that is placed outside of a listed house that gives the real estate broker access to the home when the current owner is not home. This is done so that the home can be shown at anytime, although permission is still needed to access the residence.

Lsd pkg. -- This is an area of the lease where parking is included in the agreement. It gives the tenant the right to a parking area near the building, although it is subject to additional costs.

MLS -- This means Multiple Listing Service. This allows for brokers to post their advertisements on this system and gives people the opportunity to view them all in one place.

Nr bst schls -- This means that the home is near the best schools. Be sure to research which schools are near because both near and best are subjective terms.

Pot'l -- This means potential and is used to describe something that could easily be added to the property.

Pvt -- This stands for private and is used to highlight the privacy of the property.

Pwdr rm -- This is a half bathroom or powder room, which means that there is a room with only a toilet and a sink.

Title Insurance -- This is an insurance policy that is meant to protect the mortgage lender in case something goes wrong with the repayment process. In many cases, the buyer will pay for this insurance since the lender is taking a significant risk on behalf of the buyer.

Your Wish List

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Your Wish List

House Search

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If you are thinking of buying a home, you must careful consider your personal situation before actually beginning the process. Buying a home is much more than just saving up for a down payment and then making monthly payments. Buying a home is a long-term commitment that is somewhat difficult to get out of. You also must be prepared to handle any extra costs that are associated with the home, so be sure that you have extra money put away. You should also think about how much you can truly afford to spend every month on a mortgage, how large of a house you need, and what area of town you want to live in. Once you do this, begin researching homes and communities before making your first contact with a seller.

The home that you choose should be something that you can transition into quite easily. It should appeal to your lifestyle and should also have enough room for the whole family. If there are any special features that you truly desire, be sure to include these features in with your search. You should have a list of priorities that you home must feature; otherwise you may end up settling for something that is not exactly what you wanted. If you would like to be close to a certain school, make sure you prioritize that particular neighborhood. Have a set list of minimum requirements that your new home must have and do not even consider buying a home unless it meets up with these requirements, otherwise you will end up disappointed in the end.

The community that you end up in should also be a high priority because it should be a place that will allow you to enjoy the lifestyle that you desire. If you enjoy shopping, you may want to choose a location that is close to a shopping district, while if you do not own your own vehicle, you will want to be close to a public transit system. If you want to be away from the noise of the city, then a suburban location may be more desirable for you, so choose a community that will provide the lifestyle you want. The people in the neighborhood may also sway your opinion of it, so get to know a few people before buying.

Your Wish List

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An important part of the home buying process is creating a wish list that features everything that you want your home to have. There are a number of different variables when choosing a home to buy and you should consider each of them before making your final decision. To do this, you simply write down each home you are considering, as well as a list of attributes that you find appealing. You then check off the positive attributes that each home has. This is important because it will give you a visual representation of the positive and negative of each home, which will help the process as a whole greatly.

A few Things To Consider:

Community
Be sure to choose a home in a community that will give you the lifestyle that you desire. If you want to live in the quiet neighborhood, then a downtown apartment is probably not the best choice. You must also consider things like schools, shopping, and public transportation. If you do not have vehicle, you will not be very happy living in an area with a lack on public transportation. If you have children, you may want to find a home in a place with many playgrounds or at least lots of other children living in the area. The most important thing is to find a community that you feel comfortable in. If you do not think that you will enjoy living in the area, then you should keep looking.

Schools
There is information available on schools in almost every community, so if you have children, be sure to research the local school system before committing to a neighborhood. If you buy a home in a neighborhood with a poor school system, you will probably end up having to send your children to a private school, which can get very expensive.

Resale Value
You should be able to tell quite easily whether your resale value will increase of decrease in the future based on what is happening in the area. If you notices many new developments I the area, then your resale values will probably increase significantly. If the neighborhood looks run down, then you will be looking at a significant decrease in the future. Be sure to look through the neighborhood thoroughly because you never know what types of problems you will uncover. Visit the neighborhood at all times of the day and night and keep an ear out for crimes that may be occurring in the neighborhood because this can hurt your resale value considerably.

Price
Every homebuyer considers the price before buying a home because if price were not an issue, you would not be worried about choosing the right house because you would simply be able to buy another one. Everyone want to get the best value for their dollar, so make sure that the home and the community are right for you before finalizing any deals. Also, make sure that your mortgage payments can be easily fit into your budget because missing a mortgage payment can completely ruin your credit.

Confidence and Experience

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Start by thinking about your situation. Make sure that you know exactly what situation you are in before making any decisions. For example, be sure that you are ready for the financial responsibility of owning a home, be sure that you have found a home that is big enough for you in the present and in the future, and be sure that the home that you have chosen is in the area of town that you want to settle down in. All of these variables can make your experience a negative one if you are not completely sure, so sit down and carefully consider each of these before making a final decision.

Buying is almost always better than renting! The only advantage of renting a home is that you are not responsible for the maintenance costs of the property. Other than that, it is always better to own because it gives to the opportunity to build equity and provides you with tax breaks. It also protects you against any rent increases that your landlord may try to force on you and you can paint or alter the house in any way, without having you answer to anyone.

Owning your home is an investment, while renting one is the equivalent of paying into someone else's investment. Since you are more worried about your own future than your landlord's, it makes sense to buy as soon as possible. The real estate market will always be around, which makes this a relatively low risk investment as well. While this investment does bring about responsibilities, they are not overwhelming for anyone to handle and they are offset by the freedom and you will enjoy while owning your own home.

By using an experienced real estate agent, you leverage their confidence and experience. The more experienced your real estate agent is, the better the chance that he or she can get you through any difficulties that may arise while buying a home. These difficulties can arise if you try to buy a home for less than market value because this can drive the market as a whole down. Seasoned agents, however, will have dealt with this in the past and will likely be able to get out through anything with little problem.

Ownership Advice

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Know Your Rights as a Homebuyer
The home buying process can be a confusing one for people who have never been through it before and people who are more experienced in real estate will, often times, try to take advantage of you, so make sure that you know all of your rights before you even begin your search for a new home.

Find out How Much Mortgage Can You Afford
Figure out how much you can afford to pay each month before signing up for a mortgage. There are plenty of mortgage calculators available to find out what percentage of your monthly income each mortgage would cost you, so use one of them for a more accurate interpretation of the mortgage offers that you are presented. Also, keep in mind that there are laws present in many places that prevent you from spending more than a certain percentage of your monthly income on a mortgage payment. Find out exactly how much you can afford per month before committing to any sort of mortgage.

Create Your "Wish list"
Every house is different, so be sure to create a list of what you want your home to include. If you want your home to have four bedrooms, then it does not make much sense to view a home with only one bedroom. By creating a wish list, you are setting a criterion that every house you view must meet. This will save you time and prevent frustration while searching for a home.

Find a Real Estate Agent or Broker
Your real estate agent or broker will arrange for you to begin viewing homes, so they are a necessity in this process. While you can do this yourself, it would take a great deal of time and this is not worth it in most cases because it will not save you much money. Be sure to talk to several agents because each one will have different listings. If you see a listing that you are interested in, call the realtor that has listed that particular home. Even if he has already sold the home that you were interested in, at least he can call you back if he comes across something similar. If a friend or family member has recently bought a home, ask about how his or her broker handled the situation and see if they can provide a recommendation. Every broker or real estate agent a different set of expertise or knowledge, so be sure to choose the one that is best for you.

Mortgages and Homebuying Programs
Be sure to research the different types of mortgages that are available to you. They all have positives and negatives so look very carefully at the fine print before signing any deal. You may want to hire an attorney to take a look at your documents before signing so that you know exactly what you are getting yourself into because not everyone plays fair in this business.

Young Buyer

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Getting involved in the real estate market can be very overwhelming the first time you do it, especially if you are buying a home that you will live in for a long time. Because of this, it is important to get as much help as possible. These tips will help you through the home buying process and are especially for a first time buyer.

Make sure that you look at as many homes as possible in order to get a better idea of what is available for the price that you are looking to pay. You may love the very first house that you view, but keep looking because there may be something out there for much less money.

Be sure to also consider what you feel would be fair market value for the home. Many people will attempt to sell a home for more than its worth so if you come across a home with significant damage, do not pay too much for it. You do not want to take on a home that is more trouble than it is worth.

If you do finally find the perfect home, be sure to inspect the neighborhood thoroughly at different times of the week and day. If you are a quiet person, you do not want to move into a neighborhood that gets rowdy on the weekends or next to a neighbor that is constantly throwing parties. Talk to the neighbors to see what goes on in the neighborhood in order to get a better understanding of it. Also, commute from the neighborhood to your job at least once to get an idea of the traffic that will be present each morning. This will give you a better understanding of what your day-to-day life will be like while living here.

Finally, be sure to take a look at what type of financing is available for you when purchasing the home. Many times, the seller of the home will help you pay the transfer fees and closing costs, so ask about this upfront. If this is the case, you may be more likely to pay a little bit more for the home, as the costs will all work out in the end. You realtor will help you out with all of this information, but be sure to make the final decision yourself because it is one that will affect you for the rest of your life.

Home Ownership: Are You Prepared?

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Deciding whether or not you should buy a home is one of the most important decisions that you can ever make. In doing so, you must ask yourself some very important questions, so that you are not left with your credit rating ruined and your home taken away.
Do you have a source of income that you can rely on long term? This means that you must have held this job for at least 2-3 years and you know for a fact that you will be able to keep it for years. Losing a job is one of the main reasons why people default on mortgage payments, so be sure that you can rely on the job that you current have long term.
Do you always pay for bills on time? Late payment on bills may not seem like a big deal, but it is a huge deal with mortgage payments. A few late payments can cause a lender to claim that you have violated your contract, which can lead to a foreclosure on your house. Many people who pay their bills late constantly do so because they forget, rather than a lack of money, so be sure that you keep your mortgage payment up to date at all times.
Do you already have long-term outstanding debt? This can include things like car payments, which will already put a strain on your credit rating and can ruin you financially should you lose your job. If you are already making car payments, make sure that you are not living beyond your means when signing up for a mortgage.
Do you have enough money for a down payment? Nearly every bank or mortgage company around requires a down payment because this shows that you have the ability to pay off a mortgage. If you cannot afford to save up for a down payment, then you probably cannot afford a mortgage. Use your ability to save up for a down payment as a barometer on whether or not you are ready for a mortgage.
Do you have the financial capacity to pay for a mortgage and any additional costs that the house may bring up each month? If you cannot afford to make all of your payments each month, it should be a red flag that you are not ready to receive a mortgage.

If you can honestly answer yes to all of these questions, then it is time for you to seriously consider buying a home. If not, then keep waiting and your time will come soon enough.

Buying an Affordable Home

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Depending on where you live, you can find home loans in a variety of different sources. Lenders like thrift organizations, mortgage companies, commercial banks, and credit unions are all in the loan business, so you will never be short on options when trying to secure a loan. At each of these places, you will probably get different rates, so it is very important to shop around for the best rates possible. You are also able to set up a loan through a mortgage broker, which is a person or company that will arrange a loan for you with a lender. This is often times much easier than doing it yourself because a broker will make sure that you receive the best rates around.

When searching for a home, there are a number of different things that you should think about before making a purchase:

Types of homes - There is no point in moving into a condominium or a duplex if you place a high value on your own privacy and there is no point in moving into a single family dwelling if you do not want to have a yard. The type of home that you choose will have a major impact on your buying power, so choose wisely.

New or existing home - You must also consider whether or not you want a new or existing home. New homes usually cost more money than existing homes, but they are also cheaper to maintain because everything is new. You must choose the option that you feel is best for your individual situation.

Quality of home - Every home around is a different quality, depending on how much abuse it has taken over the years. If you buy a home that is in terrible shape, make sure that you can afford renovations or your home will not be a very happy one. If you buy an old house that needs many repairs, it might be wise to get an estimate on the damage before buying the home. You might find that it will end up costing you less to simply buy a new home than to fix up an old one.

Features - Different homes have different features and these features are usually the selling point of the home. There is no point in buying a house without air conditioning if you truly want a house with this feature, just like there is no point in buying a house with a pool if you will never use it. Also, be sure to purchase a house with enough bedrooms and bathrooms to accommodate your family.

Location - The location of your home is usually what attracts you to it in the first place, as you do not want to end up in a dangerous neighborhood. You also do not want to end up in the city if you would prefer to live in the country, so be careful when choosing the location that you want to live in. If you are unsure about a neighborhood, research it before moving in because this may save you having to move again right away if you do not like it.

Crime rate - This goes hand in hand with the location that you choose, since every neighborhood has a different crime rate. This is something that can be easily researched and can save you a lot of hardship in the future. The crime rate can also affect the value of your home in the future, so keep an eye on it.

School system - If you have children, the quality of the school system is of the utmost importance. Sending your children to a bad school can impact them for the rest of their lives. A poor school system can also cause the property value to fall in in the future, so keep an eye on this even if you do not have children.

Economic stability of area - If there is economic growth, or at least the potential for economic growth, the value of the property will increase over time.

Property tax - Have a look at how much property tax is in the area because of it is too much, it might be wise to look elsewhere.

A broker will make contact with multiple lenders for you, although they do not necessarily have to give you the best deals that they find. If you have any doubts about your broker, contact another one. There is nothing wrong with trying time after time until you get the rate that you desire so be patient when selecting a lender.

Sometimes it can be difficult to figure out if you are dealing with a broker or a lender because many institutions act as both. Be sure to read any advertisements carefully so that you do not wind up in the wrong spot because that can ruin your opportunity for receiving a good rate. Also, be sure to ask your broker how he or she will be paid. There are many brokers that work on commission from the lenders, but others require a payment directly from you, so choose the type of broker that will best suit your own needs.

Home Ownership : How To

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If you are interested in buying a home, you most likely got started in the process by seeing a simple advertisement of an appealing looking home. This usually starts the people on the road towards home ownership because it allows people to dream of what their house could look like in the future. Next, people will usually contact a lender to see how much money they are able to borrow for their purchase. Since very few people can afford to purchase a home outright, finding a lender is a necessary step in the home buying process. After this, people will begin to contact sellers in order to find a deal that suits them. If these people already have a home in mind, it makes this step very easy to get through. Finally, there is the closing of the deal, where the legal title is transferred to the new owner.

On each of these steps, the buyer will have the opportunity to negotiate, in order to get the best terms available for that particular home. You can negotiate the cost with the seller and other variables with the lender, so that you can get the best deal for yourself. There is not a set way to negotiate these terms, nor is the home buying process the same in every case, but the following few paragraphs will give you an outline about what to expect when you buy your home.

Buying and Financing A Home You will begin the process by talking to a real estate broker. Normally, the seller of the home will hire a broker and then the broker will speak with prospective buyers of the home and will broker a deal that is acceptable for both parties. As a buyer, it might be wise to hire a buyer's broker because the seller's broker will usually attempt to persuade you to accept the seller's conditions, since this broker is technically working for the seller. A buyer's broker will work for you in this situation, so that you are not left with a bad deal.

If you cannot find a buyer's broker, you do not have to be too worried because the seller's broker is legally bound to treat you fairly. If you do not believe that this broker is treating you fairly or that the broker is attempting to get you to sign a bad deal, report this person to your state's Real Estate Commission because this sort of thing is definitely not permitted.

Many times, the broker will help you to secure a mortgage, which is a huge help because real estate brokers have many connections in this field. They will be able to connect you with someone who is more likely than others to accept you as a client based on your credit history, although it is still important to look into other lenders. Be sure to compare the rates that are offered by others, but do look into the lender that is recommended by the broker because you may get a good deal.

Selecting an Attorney Before signing any papers, it is a good idea to hire an attorney to look over your agreement. Since anything you sign is legally binding, you will not want to enter into an agreement unless you understand everything. Hiring an attorney will protect your interests and will make sure that you get everything that you are expecting. If you do select an attorney, be sure to find one that will represent your interests fairly. Also, be sure to shop around and find the best rates for an attorney, since they are all different. You may want to ask your attorney what he or she charges for each aspect of the process and whether or not he or she will be representing anyone else who is involved in this sale during this particular transaction.

By following this guide, you can ensure that everything goes smoothly with your home purchase.

Buy vs Rent

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Why should I buy, instead of rent? In the end, buying is usually the right answer because it gives you more control over your own home than renting. Once you buy a home, it is yours and you can do whatever you want with. You will not have to answer to landlords and you can make alternations to the house without having to ask first. Also, every penny that you spend on the house is an investment. When you rent a home, you are putting money into someone else's investment, but when you buy, it is an investment of your own. Buying a home is like securing your future because no matter what, the home is yours.

Think of buying a home as like putting money into a retirement fund because once you are ready to retire, you can simply sell the home and live off of the money. The value of real estate is constantly increasing, so buying a home in an investment that will make you money in the long run, while still having a use in the present. While you do have to pay a significant down payment in order to buy a home and the monthly instalments will be nearly the same as with a rental, the long term investment benefits and knowing that your money is actually going into something makes owning your own home priceless.

Buy vs. Rent Comparison As a comparison, if a renter is paying $800 a month to live in a home and he or she sees the rent increase 5 percent per year, within six years this renter will be paying more than someone who bought a house and is paying $1000 per month. With a fixed rate mortgage, you will definitely save yourself money in the long run because inflation will not cause your payments to rise. Also, you can write off a percentage of the interest that you pay on your taxes each year, making owning a home a much better deal than renting.

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Monthly Expenses: Buying
Something that you must keep in mind when deciding whether you want to rent or buy a home is the other expenses that will appear when you own. Each month, your landlord takes some of the money that you spend on rent and uses it to cover certain expenses. If you own your house, you are responsible for paying these expenses. These expenses can include things like property damage, the replacement of appliances, and property taxes, so be sure to factor all of these things in before making a decision.

Before You Start Looking... Before you begin looking for a new place, be sure to have a plan that you will follow. You must have a budget in mind, so that you know what you can afford and you must also learn your rights and responsibilities. Keep in mind that it is illegal for someone to discriminate against you because of your ethnicity, so if you have been trying to find a place and feel as though your rights have been violated, contact the proper authorities. This is important because it keeps people honest and prevents problems from arising later on because of this discrimination. It is important for anyone who chooses to rent a home to know his or her rights because many landlords or property management companies will attempt to take advantage of tenants for financial reasons. Do not become a victim in this trend and speak up against this sort of practice.

Checklist for Home Buyers

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Know Your Rights as a Homebuyer The first thing that you must do before buying a home is learn about the laws that are present to protect you as a homebuyer. Since there is so much money involved, you must learn how to protect yourself from things like extra expenses and frauds. Be sure to speak to a lawyer so that you will know all of your rights before buying.
Find out How Much Mortgage Can You Afford Defaulting on a mortgage payment can completely ruin your credit rating, so be sure that you can afford your mortgage before signing any papers. There are different interest rates and terms for mortgages, so be sure to choose the one that best suits your interests. As a general rule, your mortgage should not take up more than 29% of your monthly income, so try to negotiate your mortgage rates around the amount. This will save you problems in the future because it will ensure that you will be able to afford your monthly payments, while still having money left over the live off of.

Create Your "Wishlist" There are so many different homes to choose from in the marketplace and each of them has its own selling features. Make a list of the things that your home cannot be without and another list of features that you would like, but are not necessary. You will be living in this home for a long time, so do not settle for something that is not perfect for you. Having this list will make the process run a lot smoother because you will not waste time looking at houses that do not meet this criteria.

Find a Real Estate Broker This is one of the first steps you must take once you decide that you want to buy a home. A real estate broker will find you homes to view that are based on your own personal preferences and will ensure that you find the home you are looking for. When finding a broker, be sure to talk to other people who have bought homes recently in order to find someone who is recommended. You do not want a broker that will not go that extra mile to serve you, so choose wisely. Different brokers generally specialize in different styles of homes, so take a look through the newspaper and look for a broker that appears to be selling homes that you may like. That way, you will not be disappointed when you begin viewing homes.

Mortgages and Homebuying Programs Shop around and find the mortgage or home buying program that is best for you. There are many different options around, but many people simply settle for the first mortgage that is offered to them. This is a very common mistake that must be fixed because the first option isn?t always the best one. Look out for your own best interests and find a mortgage that suits your income and lifestyle. There are also a number of home buying programs available for low-income individuals so check them out, even if you do not think that your mortgage attempts will be approve. There are more options than many people know when buying a home.