buying tips

Choose a Neighborhood Before Choosing a Home

If you’re looking to buy a home, be sure to spend as much time — if not more — checking out the neighborhood as you do looking at the home itself. Picking the right neighborhood will determine your family’s safety, education and attitude. In short, the neighborhood you live in affects your quality of life.

Location — This one is first and to some degree affects all the others. How close are you to your  jobs, schools, shopping, restaurants, parks, museums, freeways, public transportation and medical facilities?

Crime/Safety — Check with local law enforcement to review crime statistics. In addition, visit local shops at different times of the day to see what they’re like, especially at night. It’s amazing how the feel of a place can change once the sun goes down.

Schools — If you have, or plan to have kids, see how the area schools rank. If they are not that good, are there alternatives, public or private? Schools affect values.

Social Life — Is the neighborhood close to your family and friends? Keep in mind if you have to drive an hour for a social visit, you won’t do it very often. In addition, is there a neighborhood activity center, coffee shop or pub — a place where locals gather?

Property Values — Are prices going up, down, or what? Make sure you know.

Open Space — Are there parks, trails or other open spaces where you can walk, jog, bike, or take the dog for his morning … exercise?

Traffic — Drive by schools, shopping and other hot spots during prime time to see if you can live with the pace.

Future Construction — Check with the home owner association or city agency to see what plans they have for the future. Things change; make sure you know what to expect.

Neighbors — Go ahead and knock on a few doors. Simply introduce yourself, tell them you’re looking to buy in the area, and ask for their input. Do they have positive things to say. Are they friendly?

Of course there are many other considerations, but this covers most of the important ones. While your realtor should be able to answer many of these questions, be sure to check for yourself. After all, you’re the one that will be living there. Once you’ve identified your perfect neighborhood, it’s time to move on to the next step and start looking for your dream home.

buying tips

Common Closing Costs

If you have ever bought or sold a home, you’re probably aware of the costs associated with a real estate transaction. If you’re a first-time buyer, however, you might want to know what “closing costs” to expect. Keep in mind costs and fees vary from state to state, and there may be unique costs to your locality, but the following are pretty common:

* Escrow fees
* Property taxes
* Interest
* Loan origination fee
* Loan discount points
* Title insurance
* Survey fee
* Recording fee
* Document preparation fees
* First payment to escrow account for taxes
* First payment to escrow account for insurance
* Homeowners insurance
* Homeowner association fee
* Home inspection report
* Property appraisal

Once you pinpoint the home of your dreams, ask Phil and he will be able to give you a good estimate of anticipated costs.

buying tips

First-Time Buyers Responding to Incentives

According to the National Association of Realtors®, existing-home sales eased in March but first-time buyers are responding to low mortgage interest rates and tax credits.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3 percent to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008.

NAR Chief Economist Lawrence Yun said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”

Although prices rose from February to March, the national median existing-home price for all housing types was $175,200, down 12.4 percent from March 2008. The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes.

A NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February.

buying tips

First-Time Buyers Responding to Incentives

According to the National Association of Realtors®, existing-home sales eased in March but first-time buyers are responding to low mortgage interest rates and tax credits.Existing-home sales – including single-family, townhomes, condominiums and co-ops – declined 3 percent to a seasonally adjusted annual rate of 4.57 million units in March from a downwardly revised level of 4.71 million in February, and were 7.1 percent lower than the 4.92 million-unit pace in March 2008. NAR Chief Economist Lawrence Yun said the market appears to be stabilizing with modest monthly ups and downs, and that first-time buyers are driving the market. “The share of lower priced home sales has trended up, indicating a return of many first-time buyers, which we also see in a parallel member survey,” he said. “Sales in the upper price ranges remain stalled because of higher interest rates on jumbo loans.”

Although prices rose from February to March, the national median existing-home price for all housing types was $175,200, down 12.4 percent from March 2008. The price increase from February to March was 4.2 percent, which is much higher than the typical 1.8 percent seasonal increase between those two months. Distressed properties, which accounted for just over half of all transactions in March, typically are selling for 20 percent less than traditional homes. A NAR practitioner survey in March showed first-time buyers accounted for 53 percent of transactions, based largely on contracts offered before the $8,000 first-time home buyer tax credit became available. “Buyer traffic has been rising, and real estate offices are getting phone inquires about the tax credit,” Yun said. “By early summer we should be seeing a positive impact on home sales from record-low mortgage interest rates in addition to the stimulus provisions.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low 5.00 percent in March from 5.13 percent in February.

buying tips

All Home Warranties Are Not the Same

Whether you’re buying or selling a home, chances are good that a home warranty will be discussed at some point. So, what is it?

In short, a home warranty is a service contract — similar to an insurance policy — that protects the new home owner against the cost of unexpected repairs or replacement on major systems and appliances that may break down due to normal use. Of course, the coverage is only for systems and appliances in good working condition at the start of the warranty period.

All home warranty plans are not the same, so be sure to check to see which items are covered, and whether or not it covers full replacement value. Common items covered include plumbing, electrical, furnace, refrigerator, dishwasher, garbage disposal, stove, microwave, water pump, washer and dryer, heating ducts and water heater. Swimming pool equipment, hot tubs, saunas, and landscaping items are usually available with a surcharge.

A home warranty is not a requirement to sell your home, but is frequently offered by the seller upfront to ease the buyer’s mind both during and after the sale. If the home owner is not offering a home warranty, it is usually negotiated into the offer at some point by either the buyer or seller. A good home warranty plan costs around $400 and normally covers items for one year.

buying tips

Tips on Identifying Mold

Mold is a fungus that grows anywhere there’s a food source and moisture, and can cause serious damage to both your health and home. The most common places to find mold include basements, windowsills, refrigerator seals, under the kitchen sink, air registers, entryways, and the bathroom. In addition, it may be hiding behind walls, under the carpet, or up in the attic. Following are some ways to help identify it:

1. Carpet that has had any water damage is prone to produce mold. To check your carpet for mold, lift a small section up off the floor. Note that mold can come in any shade of color, including red, black, green, purple, gray, yellow, etc. In addition, the texture is usually cottony, velvety, granular or leathery.
2. If you can’t see it, follow your nose. Mold usually carries an odor, often described as musky, musty, or earthy. If you can smell it, you can assume that moisture and mold are close by.
3. If you suspect you have mold, but can’t pinpoint the problem, consider hiring a professional to test your home, including various testings of air quality. Pricing varies, but any detection of mold should be viewed as a red flag, and it’s better for both your health and your checkbook to catch it as early as possible.

Regular cleaning with a bleach-based product is the most effective way to kill mold spores. But, keep in mind mold can mushroom up in as little as 48 hours under certain conditions. So, it’s a good idea to take an occasional peak — or sniff — in the attic or cellar.

buying tips

Don’t Underestimate Rates and APRs

The difference between a 6.5 percent interest rate and a 7 percent rate may not seem like much, but it very well could be the difference between buying the home you want versus buying the home you can afford.

When shopping for a home, or anything requiring financing, rates matter! A lower interest rate allows you to borrow more money than a higher rate with the same monthly payment. Interest rates can fluctuate as you shop for a loan, so ask your lender if they offer a rate “lock-in” which guarantees a specific interest rate for a certain period of time, usually 30 to 90 days (you may have to pay for it).

Also, keep in mind a lender must disclose the annual percentage rate, more commonly referred to as the APR, of a loan. The APR shows the cost of a mortgage loan by expressing it in terms of a yearly interest rate. It is usually higher than the interest rate because it takes into account the cost of points, mortgage insurance and other service fees thrown into the loan.

So, don’t just compare rates — compare APRs as well.

buying tips

Items Needed to Secure a Home Loan

To make your loan application go smoothly, the following documents are generally needed to complete the loan application process. Keep in mind different lenders may require different documentation, but the following items are almost always necessary:

* Most recent two pay stubs
* Last two year’s W-2’s
* Information on long-term debts
* Most recent two to three months bank statements
* Two year’s tax returns (if self employed)
* Home address(es) the past two years (and landlord contact information if applicable)
* Copy of sales contract and estimate of proceeds, or settlement sheet (if you have or will be selling a home)
* Proof of any other income
* Address and description of the property you wish to buy
* Copy of sales contract on home purchase (and disclosures)
* Copy of driver’s license for all borrowers

During the application process, the lender will order a credit report and a professional appraisal of the property you want to purchase. The application process typically takes two to six weeks.