Has your best chance at getting a great deal on your dream home or investment property passed you by?
The answer is NO. But you certainly did miss the bottom — the intersection of low home prices and rock-bottom mortgage rates.
But it’s still a bonanza out there for prudent buyers! Real estate is still incredibly low priced, mortgage rates are still reasonably low and great wealth still can be earned from owning quality properties for the long term
Long-term ownership
The most likely scenario where a real estate buyer increases his or her wealth — and “increasing wealth” is the reason most people desire to own real estate — is by holding property for the long term. When you own long term, you pay down your mortgage along the way, the property’s value hopefully will increase over the years and you skip the exorbitant transaction costs that go along with buying and selling real estate over and over again. So don’t buy a home or investment property unless you are virtually positive you will own it for years. You generally have to own a property for around 7 years to start earning any equity.
And keep this in mind: If you have that long-term ownership goal, the recent uptick in property prices shouldn’t be big a deal for you, because in 10, 15 or 20 years, the values should be much higher. In fact, in 15 years you’ll hardly remember what you paid today; you’ll just be bragging about how it was the best investment you ever made.
Buy good quality real estate
Beware: You can’t just buy any property and expect it will add wealth to your financial picture. You have to buy nice properties that are affordable to you — no get-rich quick schemes.
Many properties are wealth-draining, not wealth building. It’s usually the ones that sound like incredible deals, but they end up being too good to be true. A few types of properties that usually diminish your wealth are fixer-uppers, fancy prize properties, second homes, vacation rentals, land, properties in mismanaged homeowners associations, rent-to-own deals, and properties in bad areas. Most of those are going to be wealth-destroying for a variety of reasons.
To sum it up
The bottom has passed — a perfect storm of low prices and low interest rates is gone, gone, gone — but it’s still a buying bonanza out there for savvy buyers.
If you are buying a personal residence, buy a home you can afford. If you are buying rental properties, buy properties that pay for themselves.
Interest rates and home prices are still very reasonable — as long as you have a long-term ownership perspective.
Most importantly, don’t worry about what the news says and all the negative or positive commentary on the airwaves. Buy a great property for yourself, and you will hopefully enjoy the
Written by ProfessorBaron.com
Wednesday, July 31, 2013
Monday, July 29, 2013
What Is a Home Warranty, and Do You Need One When Buying a Home?
When you buy a computer from Best Buy, you’ll be asked if you want to cover it with an extended warranty. Some people go ahead and pay the extra money, but not everyone thinks these warranties are a good idea. Consumer Reports almost always says they aren’t worth the money.
You might be surprised to learn that, sort of like the computer from Best Buy, you may have the option of buying a warranty for your home. Depending on your situation, a home warranty could definitely be worth the investment.
What is a home warranty?
For a fee of between $300 and $500 a year, depending on where you live, a home warranty covers the costs of repairing or replacing most any malfunctioning system in your home.
Let’s say your dishwasher starts leaking, your clothes dryer burns out, or your water heater won’t heat water anymore. If you had a home warranty, you wouldn’t have to call around to get estimates for repairs. You wouldn’t have to pay out of pocket to get it fixed, either.
Instead, you would just call up your home warranty provider. The warranty company would call the appropriate repair company it has an arrangement with. The repair company then would call you and set up an appointment. The company would send someone to your house to fix the problem, if possible, or replace the malfunctioning appliance with a brand new one. Your home warranty would cover the costs, though you’d probably be responsible for a co-pay of about $50 per incident.
Who should buy a home warranty?
Home warranties are particularly great for first-time Gen X /Y and Millennial home buyers who’ve been renters until now. They’re used to calling the landlord whenever there’s a problem, and a home warranty company takes over that role. These homeowners are working long hours and might not have the time or the energy to call around to find a plumber or an electrician to get quotes or bids, let alone wait around for the noon to 4 p.m. window for the repairman to show up. Sometimes, it takes just one costly and unexpected system repair — and the drama associated with it — to realize the savings of a one-year home warranty.
But home warranties aren’t limited to Gen X, Gen Y or other first-time home buyers. A homeowner can buy one at any time. Are you buying or do you own a 15- to 20-year-old home (or older)? Does the home have aging appliances and systems? A home warranty might be well worth your money.
Many appliances and systems start to break down after 15 or 20 years, and you don’t want them all falling apart on you around the same time. Your real estate agent can give you referrals, and you can read reviews of home warranty companies on the Home Warranty Reviews site.
Home warranties are also great for investors or “accidental landlords,” folks who end up renting their homes out because they have to move and want to hold out until the market picks back up. If you’re not an experienced real estate investor and don’t have a network of repair folks, it might be easier to pay for the home warranty. The last thing you want is a tenant without hot water calling you day in and day out. If you have a home warranty, you can cut right to the chase, keep happy tenants and minimize stress.
If you shop for a home warranty, be sure to ask each company exactly what’s covered. If something isn’t covered (such as the plumbing system), ask if you can add on coverage, and if so, at what cost
Written by Brendon DeSimone
You might be surprised to learn that, sort of like the computer from Best Buy, you may have the option of buying a warranty for your home. Depending on your situation, a home warranty could definitely be worth the investment.
What is a home warranty?
For a fee of between $300 and $500 a year, depending on where you live, a home warranty covers the costs of repairing or replacing most any malfunctioning system in your home.
Let’s say your dishwasher starts leaking, your clothes dryer burns out, or your water heater won’t heat water anymore. If you had a home warranty, you wouldn’t have to call around to get estimates for repairs. You wouldn’t have to pay out of pocket to get it fixed, either.
Instead, you would just call up your home warranty provider. The warranty company would call the appropriate repair company it has an arrangement with. The repair company then would call you and set up an appointment. The company would send someone to your house to fix the problem, if possible, or replace the malfunctioning appliance with a brand new one. Your home warranty would cover the costs, though you’d probably be responsible for a co-pay of about $50 per incident.
Who should buy a home warranty?
Home warranties are particularly great for first-time Gen X /Y and Millennial home buyers who’ve been renters until now. They’re used to calling the landlord whenever there’s a problem, and a home warranty company takes over that role. These homeowners are working long hours and might not have the time or the energy to call around to find a plumber or an electrician to get quotes or bids, let alone wait around for the noon to 4 p.m. window for the repairman to show up. Sometimes, it takes just one costly and unexpected system repair — and the drama associated with it — to realize the savings of a one-year home warranty.
But home warranties aren’t limited to Gen X, Gen Y or other first-time home buyers. A homeowner can buy one at any time. Are you buying or do you own a 15- to 20-year-old home (or older)? Does the home have aging appliances and systems? A home warranty might be well worth your money.
Many appliances and systems start to break down after 15 or 20 years, and you don’t want them all falling apart on you around the same time. Your real estate agent can give you referrals, and you can read reviews of home warranty companies on the Home Warranty Reviews site.
Home warranties are also great for investors or “accidental landlords,” folks who end up renting their homes out because they have to move and want to hold out until the market picks back up. If you’re not an experienced real estate investor and don’t have a network of repair folks, it might be easier to pay for the home warranty. The last thing you want is a tenant without hot water calling you day in and day out. If you have a home warranty, you can cut right to the chase, keep happy tenants and minimize stress.
If you shop for a home warranty, be sure to ask each company exactly what’s covered. If something isn’t covered (such as the plumbing system), ask if you can add on coverage, and if so, at what cost
Written by Brendon DeSimone
Friday, July 26, 2013
How to Sell Your Home and Buy Another at the Same Time
Being a move-up buyer can be tough in today’s market. Although deals are closing rapidly, there’s no guarantee that your new dream home will close at the same time as your old dream home. Selling and buying at the same time is a delicate dance, but it is doable. There are a few ways to pursue this plan:
1. Sell first, then buy. This is perhaps the safest plan, but it calls for multiple moves. In this scenario, you list your home and complete the transaction before purchasing another home. When you sell your home, you put the bulk of your belongings in storage and live in a temporary rental or, if possible, enter into a rent-back deal with your home’s new owner. The advantage of this method is that you know exactly how much you can spend on a new home, and you don’t have to worry about temporary financing. Also, without another home waiting in the wings, you’ll be less tempted to drop the price or to take the first offer that is below the asking price. The disadvantage is that it is a disruptive experience, and you could be displaced for a while if you are home-shopping for a long time.
2. Buy first, then sell. This strategy minimizes disruption. You can move into your new place at your leisure and then take time to prepare your home for sale. The major disadvantage is that, depending on how fast your old home sells, you could be shouldering the burden of two mortgages for some time. You are also responsible for maintenance and security on the vacant home. This scenario works best if your first home is already paid off.
A variation of this plan is to buy a new home with the plan to rent out the old one for a year. This buys you some time with money coming in, but being a landlord comes with its own stresses and responsibilities. You may also need to repair or renovate the home after it has served as a rental.
3. Buy and sell simultaneously. To execute this plan, you need to prepare for all contingencies and to know that if your timing is off, you will face one of the two scenarios listed above. The trickiest bit can be timing the financial burden. One option is bridge financing. This enables you to own two homes for a short amount of time. To do this, you need to either borrow money from family or obtain a short-term loan from a bank or other lending institution to span the time period between when you close on your new home and sell your old one. In essence, you are getting a short-term home-equity loan, also known as a HELOC, a Home Equity Line of Credit, on your present house and using it as a down payment on your new house. You then repay the loan when you sell your first home. It is not easy to qualify for a conventional bridge loan, since you have to demonstrate that you have enough money to pay for both mortgages for an indefinite period of time.
Experts advise applying for the HELOC well before you buy a new house. That way most of the credit on the line is unused until you actually need it. Lenders don’t like a HELOC that works only for a very short time, and it’s a challenge to get a HELOC if your present home is on the market.
Try to schedule the closing date on the sale of your old home after the closing date on the home you buy. In this way, you can stay in your present home until you move into your new home. Otherwise, you can attempt to negotiate a rent-back arrangement.
There is no right answer in choosing any of these scenarios. Your Realtor may be able to advise which is best, depending on the local market. However, much depends on your financial stability, as well as your tolerance for risk or disruption.
Written by Herbert J. Cohen
1. Sell first, then buy. This is perhaps the safest plan, but it calls for multiple moves. In this scenario, you list your home and complete the transaction before purchasing another home. When you sell your home, you put the bulk of your belongings in storage and live in a temporary rental or, if possible, enter into a rent-back deal with your home’s new owner. The advantage of this method is that you know exactly how much you can spend on a new home, and you don’t have to worry about temporary financing. Also, without another home waiting in the wings, you’ll be less tempted to drop the price or to take the first offer that is below the asking price. The disadvantage is that it is a disruptive experience, and you could be displaced for a while if you are home-shopping for a long time.
2. Buy first, then sell. This strategy minimizes disruption. You can move into your new place at your leisure and then take time to prepare your home for sale. The major disadvantage is that, depending on how fast your old home sells, you could be shouldering the burden of two mortgages for some time. You are also responsible for maintenance and security on the vacant home. This scenario works best if your first home is already paid off.
A variation of this plan is to buy a new home with the plan to rent out the old one for a year. This buys you some time with money coming in, but being a landlord comes with its own stresses and responsibilities. You may also need to repair or renovate the home after it has served as a rental.
3. Buy and sell simultaneously. To execute this plan, you need to prepare for all contingencies and to know that if your timing is off, you will face one of the two scenarios listed above. The trickiest bit can be timing the financial burden. One option is bridge financing. This enables you to own two homes for a short amount of time. To do this, you need to either borrow money from family or obtain a short-term loan from a bank or other lending institution to span the time period between when you close on your new home and sell your old one. In essence, you are getting a short-term home-equity loan, also known as a HELOC, a Home Equity Line of Credit, on your present house and using it as a down payment on your new house. You then repay the loan when you sell your first home. It is not easy to qualify for a conventional bridge loan, since you have to demonstrate that you have enough money to pay for both mortgages for an indefinite period of time.
Experts advise applying for the HELOC well before you buy a new house. That way most of the credit on the line is unused until you actually need it. Lenders don’t like a HELOC that works only for a very short time, and it’s a challenge to get a HELOC if your present home is on the market.
Try to schedule the closing date on the sale of your old home after the closing date on the home you buy. In this way, you can stay in your present home until you move into your new home. Otherwise, you can attempt to negotiate a rent-back arrangement.
There is no right answer in choosing any of these scenarios. Your Realtor may be able to advise which is best, depending on the local market. However, much depends on your financial stability, as well as your tolerance for risk or disruption.
Written by Herbert J. Cohen
Wednesday, July 24, 2013
Is This The Best Time to Buy a Home … For You
We’re at the beginning of a housing recovery. Everyone is sprinting out of the gates to get into the real estate market. Mortgage loan rates are low. Credit is becoming easier to get. The economy, despite dips here and there, continues on a gradual, upward incline. People are feeling more secure in their jobs. Home sales are up in some areas, but prices are still down from where they were before the 2008 market bust.
All these trends tell the same story: It’s a good time to buy a home. But is it a good time for you to buy a home? The timing may seem right, but everything else needs to be right, too.
Here are some things to consider before jumping into the market.
The perfect home might not be out there right now
Buying a home isn’t like buying a high-definition TV. It’s not an impulse purchase, either. It’s likely the biggest purchase you’ll ever make. Your home is your solace. It’s the place you’ll return to after a long day, where you can escape from the stress of the outside world, where you’ll make memories with your family. It’s important to make the right choice.
Meanwhile, in many markets the housing inventory is tight. With fewer homes to choose from right now, you might not find the right place that will feel like home to you. If that’s the case, wait! More inventory will eventually come. If you settle for a smaller house now because you want to “time” the market, you will be stuck selling and then buying a larger house in just a few years.
Wait for the home you’ll be happy living in for at least five years, if not 10-20 years. And if you don’t feel like you’re going to live in your home for at least five years, you may be better off renting anyway.
Buying a home is a journey
The home buying process is an evolution. It can take twists and turns, and you may end up in a type of home or a location that you least expected. Most buyers spend up to one year on the home search from the time they engage their real estate agent until they close on the home. Learning and getting comfortable with your local market takes time and experience. Buyers spend months looking at listings and doing online research before they even contact an agent. Feeling competitive with your co-worker or friend who just bought? Don’t. For all you know, they were looking for many months before you even thought about buying.
Don’t be seduced by low prices and interest rates
Even though our world moves quicker and information flows faster than ever today, real estate was always meant to be a long-term investment. If you’re in it for the long haul, you shouldn’t be focused on buying at the right “time.” Make the best choices not just for today, but also for years from now.
Don’t feel pressured to buy because of rising interest rates or the fear of home prices rising. Interest rates, though they have gone up recently, are still at 30- and 40-year lows. When the time is right for you to get serious in the market, negotiate the best price possible and lock in the best rate possible. Look for homes where you can create value.
Slow and steady wins the race
The best strategy, today and always, is simple: Buy the home that’s best for you, when it’s the right time for you to buy. As always, research the market as much as possible. Talk to your agent. Think everything through carefully and calmly. Be proactive — not reactive.
Written by Brendon DeSimone
All these trends tell the same story: It’s a good time to buy a home. But is it a good time for you to buy a home? The timing may seem right, but everything else needs to be right, too.
Here are some things to consider before jumping into the market.
The perfect home might not be out there right now
Buying a home isn’t like buying a high-definition TV. It’s not an impulse purchase, either. It’s likely the biggest purchase you’ll ever make. Your home is your solace. It’s the place you’ll return to after a long day, where you can escape from the stress of the outside world, where you’ll make memories with your family. It’s important to make the right choice.
Meanwhile, in many markets the housing inventory is tight. With fewer homes to choose from right now, you might not find the right place that will feel like home to you. If that’s the case, wait! More inventory will eventually come. If you settle for a smaller house now because you want to “time” the market, you will be stuck selling and then buying a larger house in just a few years.
Wait for the home you’ll be happy living in for at least five years, if not 10-20 years. And if you don’t feel like you’re going to live in your home for at least five years, you may be better off renting anyway.
Buying a home is a journey
The home buying process is an evolution. It can take twists and turns, and you may end up in a type of home or a location that you least expected. Most buyers spend up to one year on the home search from the time they engage their real estate agent until they close on the home. Learning and getting comfortable with your local market takes time and experience. Buyers spend months looking at listings and doing online research before they even contact an agent. Feeling competitive with your co-worker or friend who just bought? Don’t. For all you know, they were looking for many months before you even thought about buying.
Don’t be seduced by low prices and interest rates
Even though our world moves quicker and information flows faster than ever today, real estate was always meant to be a long-term investment. If you’re in it for the long haul, you shouldn’t be focused on buying at the right “time.” Make the best choices not just for today, but also for years from now.
Don’t feel pressured to buy because of rising interest rates or the fear of home prices rising. Interest rates, though they have gone up recently, are still at 30- and 40-year lows. When the time is right for you to get serious in the market, negotiate the best price possible and lock in the best rate possible. Look for homes where you can create value.
Slow and steady wins the race
The best strategy, today and always, is simple: Buy the home that’s best for you, when it’s the right time for you to buy. As always, research the market as much as possible. Talk to your agent. Think everything through carefully and calmly. Be proactive — not reactive.
Written by Brendon DeSimone
Monday, July 22, 2013
Redfin Agents Anticipate Kinder, Gentler Housing Market
Technology-powered real estate brokerage Redfin says its latest
boots-on-the-ground intel reveals the housing recovery is poised to soften with
reduced competition and less intense price hikes.
Redfin's Redfin Real-Time Agent Survey for the second quarter even
hints that real estate agents are more likely to recommend that buyers step back
and wait for the market to cool a bit later in the year.
Other reports, including a recent market analysis from Capital Economics, says the double-digit annual price
increases early this year are on their way out.
That doesn't mean sellers are losing their edge - yet.
"There has been a recent softening of the market, said Redfin Agent Mark
Biggins.
"Inventory has begun to increase steadily, while buyers are becoming fatigued
and dropping out. The buyers that are active have more homes to choose from and
this is spreading out demand, reducing the number of offers any given house will
receive," Biggins added.
Redfin collected data, June 21 through June 25, 2013, from 380 Redfin real
estate agents in 22 major metropolitan markets across the U.S.
Real estate agents surveyed by Redfin:Expect more modest price gains - 86 percent of agents believe home prices
will rise in the coming months, down from 97 percent in the first quarter. Only
16 percent expect home prices to "rise a lot," down from 44 percent in the first
quarter.
Notice less competition. Only 11 percent of agents recommend that buyers use
aggressive strategies such as waiving contingencies and expanding their budget
when facing a bidding war, down from 15 percent in the first quarter and
signaling a shift away from the fierce competition seen earlier in the year.
Nevertheless, still struggling with low inventory and multiple offers - 93
percent of agents pointed to low inventory and multiple offers as the most
common challenges facing buyers, down slightly from 96 percent in the first
quarter.
Recognize that it is still a strong seller's market - 86 percent of agents
surveyed described now as "a good time to sell," up from 82 percent in the first
quarter. Meanwhile, only 46 percent described it as "a good time to buy," down
from 57 percent in the first quarter.
Written by Broderick Perkins
Real estate agents surveyed by Redfin:
Written by Broderick Perkins
Friday, July 19, 2013
Most Consumers Misunderstand Budgeting
Budgeting goes hand-in-hand with planning to buy a home, but many consumers
don't make the connection.
A survey by the National Foundation for Credit Counseling (NFCC) revealed 57
percent of those who responded believe incorrectly that a budget is a
restriction on how they choose to spend money.
Fewer, 43 percent, understand that budgeting allows them to direct money
spending to chosen goals.
"A budget actually provides the structure through which a person can be in
charge of his or her spending, directing the dollars to their best use," said
Gail Cunningham, spokesperson for the NFCC.
"Spending should be a reflection of a person's priorities, but without a
plan, the priorities often get pushed aside in favor of the tyranny of the
urgent," Cunningham added.
A budget, often part of homeownership counseling curriculum, is designed to change
spending habits from wants to needs. It does so by allowing you to see where
your money is being spent.
Once you know where your money goes, you can make changes to unnecessary
spending and direct spending and savings toward practical financial goals, say,
buying a home.
NFCC's June Financial Literacy Opinion Index was conducted via the homepage
of the NFCC Web site (www.DebtAdvice.org) from June 1 to June 30, 2013 and was
answered by 793 individuals.
Benefits of budgeting
NFCC says the reluctance to construct a budget suggests that people may be
afraid to face the financial facts, choosing instead to allow the most pressing
need or want of the moment to make the decision for them.
Instead of being restrictive, a budget often creates more money due to smart
spending choices. If financial freedom is the goal, a spending plan is the tool that starts the process.
NFCC reminds consumers that a budget's spending plan includes the following
benefits:
"It's a shame that budgeting has a negative connotation. Everyone needs a spending plan, but when times are tough, a budget is even more critical," Cunningham said. "When every penny counts, it's important to count every penny," she added.
Written by Mark K. Hicks
- Creates a thoughtful awareness of spending
- Relieves financial stress
- Increases financial security
- Helps structure a plan for the future
- Allows planning for large purchases
- Assists in meeting financial goals
- Frees up money to designate for savings
- Uncovers money available to invest
- Allows preparation for emergencies
- Avoids late payments through scheduling timely payments
- Finds hidden money for debt repayment
- Potentially raises the
credit score
"It's a shame that budgeting has a negative connotation. Everyone needs a spending plan, but when times are tough, a budget is even more critical," Cunningham said. "When every penny counts, it's important to count every penny," she added.
Written by Mark K. Hicks
Wednesday, July 17, 2013
Buying Real Estate in Lake Tahoe
Of all the decisions you'll face when buying real estate in Lake Tahoe, there's none more important than the person you choose to represent you.
The job of your Sales Associate is to support you in finding the right home with the best possible terms, and to aid you through the entire process. Your Sales Associate will explain the process of buying a home, and familiarize you with the various activities, documents and procedures that you will experience throughout the transaction.
Your Real Estate Professional should be:
* Knowledgeable about the communities of interest to you.
* Aware of the complicated local and state requirements affecting your transaction.
* Effective in multi-party, face-to-face negotiations.
* Highly-trained, with access to programs for continued learning and additional certifications.
* Technology-focused.
* Supported by professional legal counsel.
* Aware of the complicated local and state requirements affecting your transaction.
* Effective in multi-party, face-to-face negotiations.
* Highly-trained, with access to programs for continued learning and additional certifications.
* Technology-focused.
* Supported by professional legal counsel.
The Loan Process
Your Sales Associate will help you to select a mortgage lender. Once you have made your decision..
*Loan Submission - Once all the necessary documentation is in, your completed file is submitted to a lender for approval.
*Loan Approval (Underwriting) - Loan approval, or underwriting, generally takes 24 to 72 hours. All parties are notified of the approval and any loan conditions that must be received before the loan can close.
*Closing - Once all parties have signed the loan documents, they are returned to the lender. If all the forms have been properly executed, the lender sends the loan funds by wire transfer. At this point, the borrower finishes the loan process and actually buys the house.
Finding and Choosing the Right Home
Based on criteria that you and your Sales Associate establish together, your Associate will help you find the perfect home. There are many factors to consider in selecting a property, including location, bedroom and bath count, schools and amenities.
Your Sales Associate will apply their extensive community knowledge and professional resources to research available properties, and show you the homes that best meet your needs. If you find a property that interests you through the Internet or your own research, let your Sales Associate know so that a showing can be arranged.
As you view different properties, your criteria may change. Open and direct communication with your Sales Associate is a key element of a successful property search.
Making an Offer
Once you have found the home that you wish to purchase, your Sales Associate will apply their professional training and do all the necessary research to help you structure an effective offer.
This is where your Sales Associate's negotiation skills come into play. When an offer is made, the seller will have the option of accepting, rejecting or counter-offering. Your Sales Associate will negotiate the best possible terms for you.
Your Sales Associate will draft the purchase agreement, advising you of protective contingencies, customary practices, and local regulations. Home warranty, title and escrow arrangements will be detailed in the offer. Although your Sales Associate will give you advice and information, it is your decision as to the exact price and terms that you wish to offer.
Managing the Escrow
When the purchase agreement is accepted and signed by all parties, your Sales Associate will open escrow for you and your earnest money will be deposited. The escrow is a neutral third party that will receive, hold, and distribute all funds associated with your transaction.
Removing Contingencies
Prior to closing escrow, all of the contingencies of the Purchase Agreement must be met. Your Sales Associate will coordinate this process. Typical contingencies include:
* Approval of the Seller's Property Disclosure Statement.
* Approval of the preliminary title report.
* Loan approval, including an appraisal of the property.
* Physical inspections of the property.
* Pest inspection and certification.
* Acquisition of homeowner's insurance.
Closing Escrow and Moving In!
* Approval of the preliminary title report.
* Loan approval, including an appraisal of the property.
* Physical inspections of the property.
* Pest inspection and certification.
* Acquisition of homeowner's insurance.
Closing Escrow and Moving In!
When all of the conditions of the purchase agreement have been met, you will sign your loan documents and closing papers. You will deposit the balance of your down payment and closing costs to escrow, and your lender will deposit the balance of the purchase price. The deed will then be recorded at the County Recorder's office and you will take ownership of your home.
Your Sales Associate is a valuable source of helpful tips for planning and coordinating your move.
Written by Unknown
Monday, July 15, 2013
Homebuyers Locking In Affordability
Fully aware both home prices and mortgage interest rates are on the rise,
home buyers are hedging their bets with fixed rate mortgages (FRMs) and sizable
down payments to lock in affordable housing.
A LendingTree survey revealed that 64 percent of prospective homebuyers
expect mortgage rates to rise and 68 percent expect home prices to
rise over the next 12 months.
Those expectations of rising costs prompted 57 percent of respondents to say
they plan to put 15 percent or more down toward the purchase of the home
compared to only 44 percent opting for a down payment that's less than 15
percent.
Home buyers also plan to finance their home purchase with FRMs to keep
housing affordable - 45 percent of home seekers expect to apply for a 30-year
FRM, 36 percent a 15-year FRM and only 7 percent an adjustable rate mortgage
(ARM). The remaining 12 percent weren't sure how'd they finance their home.
Conducted online by Research Data Technology from May 21 to May 23, 2013,
LendingTree's survey queried 600 people in the market to buy a home within the
next 12 months.
"The housing market is stabilizing and financing is
becoming more available for potential homebuyers," said Doug Lebda, founder
and CEO of LendingTree.com.
"Increasing home prices are providing would-be sellers with the confidence
needed to take action, while rising interest rates are placing a sense of
urgency on potential home buyers. Together this creates a unique window of
opportunity for buyers and sellers to take advantage of the market while home
prices and rates are still reasonably affordable," Lebda added.
Higher interest rates have already forced some existing homeowners out of the
refinance market.
Refinancing fell 15.6 percent in a single week in late June,
after interest rates peaked for the year at 4.46 percent, according to the
Mortgage Bankers Association (MBA). Refinancing
is down 29.5 percent in June, compared to a year ago.
Fortunately, home buying wasn't hampered as much by higher mortgage rates.
Home buying mortgage applications crept up by 0.1 percent in June compared to
May and remain 12.3 percent higher than a year ago.
Capital Economics surmised the rise in rates is prompting more fence-sitters
to leave the perch and buy before rates and home prices knock them out of
contention for a home buy.
LendingTree also found financial and habitat circumstances are motivating
home shoppers to become homebuyers.
Approximately 42 percent of potential homebuyers cited the financial benefits
of owning versus renting as a main driver for their decision to buy while 32
percent said they needed more space to accommodate growing families.
Other reasons for seeking a home include upgrading to better neighborhoods
(32 percent), relocating (24 percent), downsizing for affordability (10 percent)
or downsizing because of empty-nester status (9 percent).
Greater urgency to buy in some regions - 72 percent of home buyers residing
in the western United States anticipate higher residential prices compared to 59
percent of those in the northeastern United States.
Most potential home buyers are also aware of the benefits of shopping around
for a mortgage - 66 percent believe there is a 25 to 75 basis points difference
in interest rates to be had by shopping around.
Also, 49 percent of respondents said they would apply the money saved on
their interest rate towards debt reduction.
Those polled cited mortgage brokers as the most influential source for
mortgage-related information, followed by the Internet and then real estate
brokers, the LendingTree survey found.
Active home seekers (80 percent) are more optimistic about their households'
financial condition 12 months from now, compared to casual home seekers (70
percent).
Less active home seekers cited they require more confidence in their
household financial situations before home ownership moves into sharper focus.
Time consuming paperwork is considered the most annoying aspect of the home
buying process for 31 percent of respondents.
Uncertainty about the fairness of their mortgage rate (30 percent) is tied
with complexity of terms (30 percent) for the top causes of frustration in
shopping for a mortgage.
Written by Broderick Perkins
Written by Broderick Perkins
Friday, July 12, 2013
Time To Buy Real Estate? Potential Buyers Think So
It seems many buyers who've been sitting on the sidelines may finally get in
the game, according to Fannie Mae's June 2013 National Housing Survey. The
reason? The fear and expectation of both mortgage interest rates and housing
prices going up.
The agency posted this on its website. "The spike in mortgage rate
expectations this month seems to have had an impact on a number of the survey's
indicators and may increase housing activity in the near term by driving urgency
to buy," said Doug Duncan, senior vice president and chief economist at Fannie
Mae. "Consumers may recognize that today's still favorable mortgage rates and
homeownership affordability levels will recede over time. Given rising home and
rental price expectations and improving personal financial attitudes, more
prospective homebuyers may be deciding that now is the time to get off the
fence."
If you're shopping for a home here are a few things to help you decide if now
is the right time to buy.
A home is likely the largest purchase you'll ever make so understanding
what's involved is vital. Low interest rates, markets filled with short sales,
foreclosures, and high inventory could make this the optimal time to buy.
However, it's important to know exactly what you'll need when closing escrow.
Sometimes buyers don't consider all the fees and are shocked when it's time to
pay. Here are some of the costs involved with buying a home.
You'll want to hire a qualified real estate agent. Some states may require
real estate attorneys to help with the transaction. An agent and/or a lawyer
provide excellent expertise and knowledge, so it's wise to enlist the help of
these professionals as they know the ins and outs of the business and will help
you avoid what could be very costly mistakes.
A home inspection is another fee that you'll pay once you have decided on a
home you want to buy. Sometimes a homeowner has already had a home inspection
completed, but you'll want to bring in your own home inspector to compare
reports. This could cost several hundred dollars. If there are negative items
found about the home and you can't arrive at an agreement for either a credit or
having the sellers fix the problems, then you may consider not buying the home.
Other fees that will come up include title search and insurance, recording
fee, and transfer tax. Some of these fees can be negotiated and, perhaps, paid
for by the seller. Talk it over with your agent. How much a seller is willing to
pay for will depend on many factors including how quickly the home must be sold
and how close your offer is to the listing price.
Make sure you have a reserve so that you can pay for any unexpected changes
in your income or any maintenance issues that come up later with your home. A
lot of times things come due all at once, so be sure to calculate a good amount
of money to keep in an account that you will save for your home. When the time
comes and the money is needed, you'll give a huge sigh of relief and be glad you
have this safety account.
Written by Phoebe Chongchua
Written by Phoebe Chongchua
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