10 Ways to Prepare for Homeownership

10 Ways to Prepare for Homeownership

1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
2. Develop your home wish list. Then, prioritize the features on your list.
3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.

Written by Realtor Mag

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Call Alvin's Team Today! 877-651-7810
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How Much Home Do You Need?

Your lender may be willing to loan you a mint, but do you really need that much house? Even comparison shopping with a site like LendingTree might not be enough to put you in the right mortgage. Likewise, a good real estate agent won't just ask you to determine the house you want based on the loan you can get, because you might not be able to carry the mortgage. Home much home you really need isn't simply based on your borrowing health, according to Hans Brings, vice president and broker with Coldwell Banker in Waltham, MA. We emailed Brings to pick his brain about what else you need to consider. "Have you stopped to think about what you need?" asked Brings, emphasizing the "need." Brings says your wants should be flexible, negotiable points. Your home owning needs are what truly matters. Brings says you'll also have to be flexible with your needs, not so much either-or, but more-or-less.             
      Family size
First consider the size of your family and your family's life style. If you are a backyard family, you can't buy most condos. If you live small, a big house won't cut it. You may need an extra room for an office, study, artwork or sleeping-over space for relatives who never go home. "Ask yourself questions about how you spend your time. Where do you spend the majority of your time in your current home? If the answer is "outside," then you probably don't need a lot of indoor space," Brings says Likewise, if your tribe gathers in a living space, you'll need one that's a comfortable fit for the gang.
  Bedrooms, bathrooms
Family size and needs also come into play when you consider how many bedrooms and bathrooms you'll need. If you have a penchant for entertaining, you'll have to throw that into the bedroom-bathroom mix. You'll want a strategically placed bath or half bath nearby on the ground floor, to keep guests from ogling your private master bedroom. If you host really large crowds, you may need a second downstairs bath, maybe off the game room, the guestroom or in the basement, but away from your personal spaces, says Brings.
          Kitchens, family rooms "If you're a cook, you may also look for more storage in the kitchen as well as larger, commercial styled appliances," Brings suggested. Gourmet cooks want the latest appliances and lots of storage room. Kitchen islands and pantries can help with both. The island can double as party central and a family meeting center - with nosh to nibble on. Many homes today forego formal dining spaces and add more informal space in enlarged kitchens to meet all casual and gourmet dining needs, entertainment habits and family gathering needs. Today's kitchens are also typically just off the family room, today's second most important room in the home. This is also where families gather and where parties overflow. Brings says, when it's time to buy, how you and your family live often has a lot more to do with the home you choose, than how much money you can borrow. Be smart about it.


Written by Unknown

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Housing is Helping Rebuild the American Economy

August 2013 U.S. Economic & Housing Market Outlook, explained the three reasons why housing is the key driving force to the overall economic recovery.

The Challenge

The report explains that the path to recovery has been historically slow:

The Great Recession officially ended in June 2009 and, with the release of the second quarter GDP, we now have data on four full years of economic recovery. The data release confirmed what many have felt: four years of recovery have only brought lackluster growth. Compared to all prior postwar recoveries, this expansion has been the weakest. Real GDP has risen by only 9 percent since the recession officially ended, while it grew an average of 17.4 percent in the four years following the end of the previous ten recessions.

The Answer – Housing

Freddie Mac explains that housing drives the economy in three ways. Here are excerpts from the report on each:
Demand for Housing Will Drive Employment

Increased demand for housing will help stimulate new single-family and multifamily construction and boost home sales. We expect starts to hover just below one million (SAAR) over the second half of the year, the best six-month building pace since the first half of 2008. This increased building and sales will add approximately 3/8 of a percentage point directly to GDP growth through residential fixed investment and will employ many more workers in construction and at other housing related firms.

Rising Prices = Increased Family Wealth = Increased Spending

With housing being the biggest asset of most American households, rising house prices directly affect the balance sheet of homeowners. Home equity is the largest component of net wealth for many families. As wealth rises, households generally increase their consumption spending. They may even tap into their equity through a home-equity loan, using the proceeds for either consumption or investment spending. Some evidence that home equity lending has picked up was found in Freddie Mac’s Refinance Report for the second quarter, which saw $9.5 billion in home-equity cashed-out as part of a refinance, up from a year ago.

Small Business Development is Funded through Home Equity

Rising house prices will help the economic recovery by spurring small business formation, as a business owner’s home often serves as collateral for a start-up. Small business growth has been very weak during the recovery…Recent research by analysts at the U.S. Census Bureau and University of Maryland indicated that slow house price growth has been a key contributing factor to anemic small business growth. According to their analysis 42 percent of the decline in the performance of young firms (relative to mature firms) is due to declines in home prices.

 The housing recovery is crucial to the recovery of the overall economy.

Written byThe KCM Crew

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3 Signs Your Agent Deserves to be Trusted

Risk aversion stops many good things from happening when it is supposed to stop bad things. Natural fear in taking action or making a decision is meant to preserve our health, property, and way of life, but it can do the opposite. For some real estate buyers and sellers, any change or decision is seen as risk to be avoided. Even those less afraid of risk or more confident about decision making usually rely on relevant information and expertise they can trust before they act or make a choice. Since it is the person delivering information who usually imparts "trust-ability" to facts and choices, your ability to read the "trust-worthiness" of real estate professionals you intend to rely on when selling or buying will affect the decisions you make and don't make. In this column, we're not discussing cheats or crooks who are out to deliberately commit fraud or worse. That's a discussion I've had with you many times before including this earlier column: "Silent Crime Against Homeowners: Mortgage Fraud." That said, remember that professionals with the best of intentions but without up-to-date knowledge or skills can pose risks for sellers and buyers. Without trusted input, individuals and couples can second guess themselves when buying or selling, vacillating on whether to stick with their decision or not. For instance, "buyer's remorse" is a risk-averse response attached to purchases of anything linked to dramatic or expensive change like real estate. Trust grounded in the value of the purchase and the soundness of the buying decision reduces risk aversion, and lessens or eliminates second guessing. This trust usually arises out of the relationship with the real estate professional, not the real estate itself. How can I be sure my real estate professional deserves to be trusted? Here are three signs to look for: #1. Encouragement: The correct answer to the question above is, "you can't always be sure about others." Instead, it's yourself who you must trust. A real estate professional who is intent on increasing your knowledge of how the sales process influences outcomes is also determined to build your confidence in your decision making. At the same time, your skepticism will be encouraged by welcoming your questions and contributions. As you gain confidence in your understanding of buying or selling real estate, you'll realize how and when to trust yourself and the real estate professional and brokerage you've chosen to rely on. #2. Clarification: Trust in the face of certainty is an achievement, however, trust in the face of uncertainty is an art. When a knowledgeable real estate professional delivers services, or explains properties or advice, they also clarify what they expect to receive from buyers or sellers who give their trust to the professional. In other words, during the uncertainty of the adventure into real estate, buyers and sellers are told how they can act in their own best interest to facilitate good outcomes from their real estate transaction. Trust takes the form of clarifying wants and needs, confirming budget limitations, and finalizing key decision criteria like location and price range. When a real estate professional is unclear or unspecific about what buyers and sellers can expect during the transaction, trust can be replaced by confusion and frustration. If you find these are common reactions when dealing with your real estate professional, why would they deserve to be trusted? Search out that real estate professional who is clear how to make real estate's inherent uncertainty manageable from your point of view. #3. Reliablity: What is said, written, texted, posted…matters, but how professionals act on what they communicate matters more. When a professional's interest in you is genuine, this concern is visible in every facet of the work carried out for and with you. Your interests should always be transparently and prominently placed above the professional's according to the Agency Law and fiduciary agreements that rule real estate. This commitment materializes as services that are relevant to your needs and delivery methods that match your daily patterns. If you live through your smartphone, you'll benefit from working with a professional who is equally connected. If you prefer emails, phone calls, and face-to-face contact, you'd like that preference respected. How does the professional's commitment to you materialize? Does the professional deliver on promises and responsibilities without prompting or excuses? If it's not clear to you how connected you are, perhaps the professional does not deserve your trust. Perception is the reality in earning trust and loyalty. Your definition of trust, and the professional's, need to be aligned.

• Should trusting include you questioning the professional, or is unquestioning acceptance demanded by the professional?
• Is their reaction defensive or offensive if their knowledge or skill is challenged?
• Do you understand exactly what the professional expects from you and from themselves as your relationship progresses?

Written by PJ Wade 

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How to Investigate the Neighborhood Where You Want to Live

You’ve gone to the open house. You’ve had a private showing. You’ve read the disclosures. You’ve decided this is the house for you, and you’re ready to make an offer.
Before you take that step, though, you should fully check out the neighborhood. After all, this is where you’re going to live for years. Is there something you don’t know about that could negatively affect the resale value later? Is there a neighbor who comes roaring home late at night on a muffler-free motorcycle? Is the next-door neighbor operating a day care for pre-schoolers?
Given the high stakes of homeownership, it pays to do your homework before making an offer. For example, a potential buyer was ready to sign on the dotted line for a home in San Francisco, a city famous for its microclimates. The buyer had only been to the home during the day, when it was sunny and warm. On his real estate agent’s advice, the buyer returned at night — to find the house blanketed by cold, windy fog. He continued his home search elsewhere, relieved he hadn’t unknowingly bought into the city’s “fog and wind belt.”
Here are five ways to investigate a neighborhood before you buy.
1. Talk to the neighbors
Without being intrusive, look for an opportunity to chat with your potential neighbors. What’s their opinion of the block and the neighborhood? Do they know of any problem neighbors? Are they aware of any recent car or home break-ins? Is anyone planning a big remodel that could impact other homes or their values? Do they know of someone on the block who might be getting ready to sell? An even more desirable home could be coming on the market.
2. Visit day and night, weekday and weekend
As the San Francisco example shows, don’t just visit the house during the day. Check it out at night to get a sense of what’s going on in the neighborhood after hours. Is it noisy or calm? Visit on the weekend and early morning, too. The more times of day you go, the more chances you’ll have to get the feel for the neighborhood.
3. Check out the local newspaper and the neighborhood blog
Some neighborhoods still have their own newspapers. If there’s one published for the neighborhood you’re considering, check it out for local stories. Pay particular attention to the “police blotter,” which typically lists crimes reported in the area. Also, some neighborhoods have blogs where locals ask for tips and advice, or post issues or concerns affecting the neighborhood. A Google search should help you find out whether there’s a blog for the neighborhood you’re considering.
4. Get an app
Some smartphone apps, such as CrimeReports for iPhone, provide information about crime based on your location or address. Among the problems you may see displayed on a map are noise nuisances, sex offenders and vehicle break-ins. The CrimeReports app gives you some specifics, such as when and where each incident occurred.
Zillow’s real estate apps allow you to see estimates of properties on the block. They also allow you to search recent sales or see rentals, a good indication of whether your neighbors are renters or homeowners.
5. Google the street address
If you Google the home’s street address, you might be amazed at what you find. You might, for instance, discover a nearby home-based business with employees (which could reduce street parking spaces). Using Google’s Street View, where photos can be months if not years old, you might discover that the ground-floor bedroom window once had bars on it.
Be a sleuth before the sale
The Internet is an amazing resource of information. Too often, though, potential home buyers don’t fully use it to find out everything they can before entering into a contract on a home. As soon as you’ve identified a home you want to buy, get online and do your homework. You might be pleasantly — or unpleasantly — surprised by what you learn.

Written by Brendon DeSimone

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Your Property Wish List

What does your future home look like? Where is it located? As you hunt down your dream home, consult this list to evaluate properties and keep your priorities top of mind.

Neighborhoods

What neighborhoods do you prefer?

Schools

What school systems do you want to be near?

Transportation

How close must the home be to these amenities:

• Public transportation
• Airport
• Expressway
• Neighborhood shopping
• Schools
• Other

Home Style

• What architectural style(s) of homes do you prefer?
• Do you want to buy a home, condominium, or townhome?
• Would you like a one-story or two-story home?
• How many bedrooms must your new home have?
• How many bathrooms must your new home have?

Home Condition

• Do you prefer a new home or an existing home?
• If you’re looking for an existing home, how old of a home would you consider?
• How much repair or renovation would you be willing to do?
• Do you have special needs that your home must meet?

Home Features

Front Yard	Must Have	Would Like	Willing to Compromise	Not Important
Back yard	Must Have	Would Like	Willing to Compromise	Not Important
Garage ( __ cars)	Must Have	Would Like	Willing to Compromise	Not Important
Patio/Deck	Must Have	Would Like	Willing to Compromise	Not Important
Pool	Must Have	Would Like	Willing to Compromise	Not Important
Family room	Must Have	Would Like	Willing to Compromise	Not Important
Formal living room	Must Have	Would Like	Willing to Compromise	Not Important
Formal dining room	Must Have	Would Like	Willing to Compromise	Not Important
Eat-in kitchen	Must Have	Would Like	Willing to Compromise	Not Important
Laundry room	Must Have	Would Like	Willing to Compromise	Not Important
Finished basement	Must Have	Would Like	Willing to Compromise	Not Important
Attic	Must Have	Would Like	Willing to Compromise	Not Important
Fireplace	Must Have	Would Like	Willing to Compromise	Not Important
Spa in bath	Must Have	Would Like	Willing to Compromise	Not Important
Air conditioning	Must Have	Would Like	Willing to Compromise	Not Important
Wall-to-wall carpet	Must Have	Would Like	Willing to Compromise	Not Important
Wood floors	Must Have	Would Like	Willing to Compromise	Not Important
Great view	Must Have	Would Like	Willing to Compromise	Not Important

Written by Realtor Mag

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com

Why You Should Work With a REALTOR®

Not all real estate practitioners are REALTORS®. The term REALTOR® is a registered trademark that identifies a real estate professional who is a member of the NATIONAL ASSOCIATION of REALTORS® and subscribes to its strict Code of Ethics. Here are five reasons why it pays to work with a REALTOR®.

1. You’ll have an expert to guide you through the process. Buying or selling a home usually requires disclosure forms, inspection reports, mortgage documents, insurance policies, deeds, and multi-page settlement statements. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes.
2. Get objective information and opinions. REALTORS® can provide local community information on utilities, zoning, schools, and more. They’ll also be able to provide objective information about each property. A professional will be able to help you answer these two important questions: Will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?
3. Find the best property out there. Sometimes the property you are seeking is available but not actively advertised in the market, and it will take some investigation by your REALTOR® to find all available properties.
4. Benefit from their negotiating experience. There are many negotiating factors, including but not limited to price, financing, terms, date of possession, and inclusion or exclusion of repairs, furnishings, or equipment. In addition, the purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.
5. Property marketing power. Real estate doesn’t sell due to advertising alone. In fact, a large share of real estate sales comes as the result of a practitioner’s contacts through previous clients, referrals, friends, and family. When a property is marketed with the help of a REALTOR®, you do not have to allow strangers into your home. Your REALTOR® will generally prescreen and accompany qualified prospects through your property.
6. Real estate has its own language. If you don’t know a CMA from a PUD, you can understand why it’s important to work with a professional who is immersed in the industry and knows the real estate language.
7. REALTORS® have done it before. Most people buy and sell only a few homes in a lifetime, usually with quite a few years in between each purchase. And even if you’ve done it before, laws and regulations change. REALTORS®, on the other hand, handle hundreds of real estate transactions over the course of their career. Having an expert on your side is critical.
8. Buying and selling is emotional. A home often symbolizes family, rest, and security — it’s not just four walls and a roof. Because of this, home buying and selling can be an emotional undertaking. And for most people, a home is the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on both the emotional and financial issues most important to you.
9. Ethical treatment. Every member of the NATIONAL ASSOCIATION of REALTORS® makes a commitment to adhere to a strict Code of Ethics, which is based on professionalism and protection of the public. As a customer of a REALTOR®, you can expect honest and ethical treatment in all transaction-related matters. It is mandatory for REALTORS® to take the Code of Ethics orientation and they are also required to complete a refresher course every four years.

Written by Unknown

Thinking about Buying or Selling?
Call Alvin's Team Today! 877-651-7810
Or visit our website: www.LivingLakeTahoe.com