How do you get the house if your offer is one among many offers? Other than selling your first born, there are some things you can do.

• Write a very, clean, straightforward offer.
• Don’t ask for any extras.
• Put down a good, solid amount of earnest money.  There’s no set amount, but show you are serious by putting down 2-3% of the offer price as your earnest money amount.  If you’re worried about this, then ask your Realtor to explain the ways you could lose your earnest money in a transaction and also how you can legally get it back because of the contingencies in an offer.
• Include a copy of a pre-approval letter from your lender.
• Find out the seller’s hot buttons.  Do they want the fridge, washer, dryer or would it be more convenient for them to leave these appliances?
• Find out what works for the seller in terms of closing.  If the seller wants to stay a little longer, use a date that will work for the seller.  Allow the seller to stay in the house for free for a week after the closing to allow for an easy move.  Imagine the power of this for a seller.  (Banks will limit the time a seller can stay in the home after the sale is closed, so nothing beyond 30 days will work.)
• Use short timelines for contingencies.
• Once you determine the time frames that work for the seller, use those and incorporate short dates for any contingencies.  Know how quickly your lender can close your loan for any home before you make an offer, so you can use the shortest date possible time frame for financing.  The same thing should apply to the inspection time frame.  Shorten the time frame from the boiler plate time of 10 days to 5 or less.  You can easily find an inspector in a short period of time which should make it possible to do an inspection in a matter of days.
• Ask your Realtor to make a personal presentation to the seller.  It helps to humanize you as a buyer.  If your Realtor is able to do so, then wait outside in your car in case a quick response is needed.  You’ll be there to immediately sign any changes.  (This can only be done if the listing agent and seller allow your Realtor to make the presentation.  Many do not.)
• Pre-inspect the home before you make the offer.  This may sound radical, but when the market was booming 5 years ago, buyers in Seattle routinely did this before writing an offer for a home.

You would need the seller’s permission to do this, but it might make the difference between winning or losing the home.  Usually an inspection happens within the first week-10 days after the sale and then negotiations for repairs begin.  If you and the seller don’t agree on what will be repaired, you can back out of the sale, as long as you and your Realtor follow the time frames and guidelines of the contract.  Imagine the power of coming to the table with an offer in which there’s no inspection. It’s no longer a concern for the seller.  It’s not a concern for you, because you’ve already done your inspection.  It gives you a lot of power as a buyer.  You’ve had the opportunity to determine whether the house is a well-built home…or not.  In this scenario, if the house has a lot of problems, you may not want to make the offer to start.  By pre-inspecting a home you’ll know before you get involved in all the emotional ups and downs that accompany a multiple offer situation whether you truly want the home.   There is a chance you could do an inspection, make a great offer, and still not get the house.  But it may be better to lose the money on the inspection than lose a home you really want.

Article provided by Debra Sinick & Brooks Beaupain

Most negative information can stay on your credit reports for no more than seven years, or ten years in the case of certain types on bankruptcy.  Then why is an old collection account still appearing on a reader’s credit reports more than a decade after he stopped paying?  Truth is, some debts can haunt you for years to come:

  I stopped paying a credit card debt in the middle or end of 2000.  In the fall of 2006 a collection agency  bought the debt.  I was living in another state and did not realize that a judgement was passed until a year or so later. It is now May 2012, and this is still on my credit report, more than 11 years later.  What about the 7 years from the date that payment stopped?

This reader is correct in his basic understanding of how long collection accounts can be reported.  Specifically, under the Fair Credit Reporting Act, collection accounts must be removed from credit reports seven years and 180 days after the consumer fell behind on payments on the original account that was later turned over to collections.  That’s true whether the debt has been paid or not.

But in this case, it sounds like our reader is not talking about a collection account that’s on his credit report. He’s talking about a judgement, which is a different animal with its own reporting period.  The collection agency took him to court, and since he didn’t respond, obtained a deficiency judgement against him. Here is what the Fair Credit Reporting Act says about how when judgements must be removed from credit reports:

  Civil suits, civil judgements, and records or arrest that from date of entry, antedate the report by more than seven years or until the governing statue of limitations has expired, whichever is the long period.

In plain English that means that a judgement can be reported for up to seven years from the date the judgement was entered by the court.  But here is the kicker: if you don’t pay it off or settle it, it may be reported until the statue of limitations has expired. In most states, that’s ten to twenty years!  And since unpaid judgements can often be renewed, theoretically at least, an unpaid judgement can remain on your credit reports indefinitely.

This very long reporting period is one good reason to settle up on a judgement. But there’s another good reason to pay it off. In most states, judgement creditors have collections powers than creditors without judgements don’t have.  That may include the ability to garnish wages or seize property, such as bank accounts.

Like most debts, judgements can often be settled for less than the full balance.  Our reader shouldn’t hesitate to negotiate if he can’t pay the full balance.  Of course, if he does strike a deal, he should get it in writing before he pays.

Article provided by Gerri Detweiler

The housing market is coming up roses this spring.

Some of the buds are a bit stunted, but the air is filled with an unmistakably rosy sent.

Realtor.com says, on average nationwide, prices and sales are blooming, inventories are wilting, and more and more markets reveal a potential for growth not seen in years.

“Things are picking up.  All the prices are down and interest rates are really low.  It’s like Macy’s is having a sale,” said Martin Morales, Secretary-Treasurer of the Monterey County (CA) Association of Realtors.

No, you didn’t miss the bottom, but the potential for a buyers’ bum rush and forecasts for higher rates later this year could cause the competition to heat up this spring.

That’s your cue.

Hire a real estate market hero

It’s the best time to buy a home in years, but the worst time to move without a professional on the payroll.

Shopping in today’s market without first hiring a licensed real estate agent is like going to war without combat skills.  Investors will show you no mercy, all-cash buyers are looking to make a killing and agent-represented buyers are locked and loaded.

Ask family members, relatives, friends, co-workers and others you trust for a referral.  Also get referrals from Realtor.com’s “Find a REALTOR” search engine.

Look for tenured experience in general and specialty experience – designations and certifications – for certain sales skills, including short sales, second homes, green homes, luxury homes, buyer representation and property management, to name a few, depending upon your needs.

“Talk to your sphere of influence.  Also, take a look around the neighborhood where you want to live and see who is active and who has testimonials that prove they are active and successful” said Karen Smyth, a real estate agent with Keller Williams Realty-Peachtree Road, Atlanta, GA.

Look for technology super powers

Today, tech-savvy is just as important as a solid track record, but it goes beyond laptops and desktops.  Today’s housing browser is always connected and always on the go.

Virtually all, 98 percent, of homebuyers who used a mobile device (smart phone or tablet) in their home search considered the device a valuable tool, with 46 percent asserting the tech tool as “Essential” and 52 percent stating it as “helpful”, according to a “Mobile Home Shoppers” a study from Network Communications, Inc. (NCI).

“Our research supports that homebuyers are turning to their smart phones and tablets in their search and taking action to reach real estate professionals,” says Scott Dixon, president of NCI’s Real Estate Division.

According to NCI, mobile device users do pretty much everything the last tech generation of home buyers did, and then some, when they went browsing for housing.  The new breed of home shopper plugs into GPS to locate listings and check our neighborhoods, they fire up apps to help them hone their search, and, via social media, they Care Bear-share listings, video tours and their successful home-buying experience with family, friends and acquaintances.

“Tech-savvy agents who are comfortable with methods of communication such as Twitter, Facebook, Skype, etc tend to be faster to respond to their clients needs and thus also able to alert buyers faster when new homes come on the market, which is important due to well-priced inventory moving quickly right now,” said Jonathan Benya, a real estate agent with Keller Williams of Southern Maryland.

“We’ve seen a 50 percent drop in inventory over the last 12 months, so response time is key,” Benya added.

With great power, comes great responsibility

But a suitcase full of gadgets doesn’t amount to a hill of beans if the agent can’t wield other powers, says Morales, broker/co-owner of Century 21 Scenic Bay Properties in Monterey, CA.

For example, in the third of the market that offers bargain basement prices on distressed properties, the agent must ferret out hellish conditions that can come with those properties.

“The value of the agent is not showing properties any more.  Anyone can look at a property, but you need someone to show you how to know if you can profit on the property.  Someone who can keep you out of harms way so you don’t buy a property that will give you problems in long run,” said Morales.

Mid-mannered alter ego

Oakford Taylor, a real estate agent with Long and Foster in Bear, DE says the fundamentals also still apply, especially now, more than ever, in this hurry-up-and-get-it-done world.

Having strong rapprot with an agent supercedes all else.  If the two of you can’t talk, the deal will balk.

It doesn’t matter what credentials you have.  If you don’t have interpersonal skills, people will walk away,” said Taylor, snapping his cape.

Article provided by Realtor.com.

Depending on the location, house hunters may find themselves in a strange, transitional real estate market that’s emerging from historic lows.

Advantage: Buyer? Yes, in many areas, that’s still the case.

But buyers have guidelines for success in this type of market, too.  They need to show they’re serious if they hope to secure their dream house amid stiff deal-sniffing buyer competition or sellers so frustrated they may be willing to hold out for a stronger market turnaround.  Professionalism and realistic expectations can go a long way toward ensuring a smooth and timely closing transaction, which is important to buyers and sellers alike.

There are also deals to be found, but playing hardball with lowball offers that are out of sync with comparable local  sales can be time-consuming.  Time can mean money.

There may be wiggle room with seller concessions (covering closing costs, tossing in repair credits), so entering into a prospective deal armed with local market knowledge and respectful consideration of the seller’s position can go a long way toward getting a great deal on a great property.

Here are a few tips for buyers to consider, culled from National Association of Realtors data and independent brokerage sites:

• Save yourself and all involved the delay and headache of financial surprises by researching your own credit report.  You should also consider securing a preapproved loan or at least let a bank determine the range you’ll likely qualify for.  This will help set realistic expectations for your search.
• Short sales, foreclosed properties, or rent-to-own dwellings shouldn’t be ruled out as part of a wide and comprehensive home search. But these types of sales may take more time and involve more financial hoops, so be prepared.
• With your agent or on your own, thoroughly study the comparable nearby sales.  But limit that search to recent transactions – no older than six months if such data is available.  Extend the timeframe if you need to. Price isn’t all that matters; find out how long properties are staying on the market, on average.  This stat can also help inform how far below the asking price you might consider for an opening bid.
• Speaking of negotiations, they’re back and have been for a few years.  Gone (in most but not all markets) are the bidding wars where would-be buyers didn’t stand a chance unless they came in above the asking price from the start.  Ironically, touch competition has cropped up in some instances, thanks to the weak housing market. If buyers are going for a foreclosure, for instance, all-cash offers from property developers and other buyers are edging out bank-financed offers.  Again, be prepared and know your own financial situation in advance.
• Keep in mind that real estate health is not only a “local” market story (you can essentially ignore national sales statistics), but it can change street by street.  Maybe the property you desire is near a prestigious hospital, university, large government employer, or vibrant restaurant and shopping district.  That’s good for your long-term investment, but it also means the seller has a pricing advantage at the outset and could care less about macro-pricing trends.  Competition may be tight; if the economy remains spotty, other buyers will look for this kind of neighborhood stability.
• It’s perfectly acceptable to ask how firm the seller is with the price.  You or your agent can pose this question to the seller’s agent.  Semantics are important.: Ask “How flexible are they on the price?” Avoid: “How much less will they take?”  Consult with your agent for their opinion on the likelihood of the success of a lowball offer.  You have the right to go in at whatever level you want, but keep in mind that a lowball number may turn off the seller and close down any chance at negotiation.  You may have to bid on several properties (dozens, perhaps) before you get a seller to jump. Of course, this tactic might work on your first try.  Try to check your emotions at the door.
• You can always ask for reasonable incentives.  Some ideas: seller pays closing costs, a property-tax installment, or condo/homeowners association fees.  Maybe a seller upgrades the appliances or provides a cash credit toward remodeling or repairs.  At the extreme end of the spectrum, sellers might be willing to front a few months of mortgage payments.  During the market’s lows, some sellers creatively tossed in new bikes if, for instance, the home is near bike paths or they purchased local gym memberships for buyers.  How far might sellers go to move the property?  Buyers and agents armed with local market knowledge will know how to negotiate incentives.  The seller is also likely to let the buyer determine the length of the closing, within reason.
• Incentives are great, but buyers may still be responsible for closing costs and should plan on this expense well ahead of house-hunting.  The average amount of closing costs and prepaid items needed to cover your closing are approximately 4 percent of your loan amount.  Buyers may also have to put up “earnest” or “good faith” money, which is essentially a deposit before moving into the offer/contract phase.
• Regardless of market conditions, there are a few basics to add to the checklist.  These can be a jumping-off point for negotiations.  Buyers should hire a title company to check the house for liens and tax arrearages; hire their own inspector, not the seller’s (have your inspector also check for any potentially unpermitted work, such as an addition) and keep in mind that some states have specific rules about disclosures; and verify property line accuracy by requesting a seller-secured survey, or buyers may have to buy their own survey.  Be respectful as you talk with sellers and their agents about these needs.  Sellers should also be accommodating, as these steps show that a buyer is serious about the property.

Bottom line: Savvy buyers should know what they’re up against and what opportunities abound, as another traditional springtime home-buying season ramps up- this one as market traffic and pricing are on the rise.

Article provided by Rachel Koning Beals

If you’re going into the home purchase process well armed with information, you already know how important it is to use your real estate agent and not the seller’s.

If this is news to you, read on.

Real estate agents owe their clients what is known as a “fiduciary duty.”  Although it sounds like legal jargon, it simply means the agent is obligated to act in the best interests of his or her client.

What are these interests?  At their most basic, the seller’s interest is to sell the home for the most money possible while the buyer is interested in purchasing the home for the least amount of money possible.

Of course, both parties have ancillary interests such as the protection of their privacy.  The fact is, a seller’s interests and a buyer’s interests are completely different and, in fact, conflict with one another.

Let’s take a look at some of the specific interests that a real estate agent’s fiduciary duty includes.

Full Disclosure

Above and beyond the homeowner’s disclosures, the real estate agent must disclose all information he or she has that is relevant to the principal’s interests.  This includes any facts the agent may have about the value of desirability of the home and any knowledge about the other party that may affect negotiations.

An example of the duty to disclose is the seller’s agent that finds out, somehow, that the buyer is willing to pay more than what he originally offers. Since the agent has a fiduciary duty to the seller, she must disclose this fact.

Suppose the buyer’s agent knows that the seller is going through a divorce and is highly motivated to sell the home quickly.  This is valuable information for his client and must be disclosed.

Confidentiality

Hand in hand with disclosing the opposing  party’s secrets comes a duty to protect those of the principal.  If the seller’s client is motivated to sell the home because of a job transfer, yet wants this information kept from the buyer, his agent has a duty to keep the information confidential.

Absolute Obedience

Real estate agents are obligated to obey all client instructions, as long as these instructions are legal.  The seller’s agent is obligated to follow the instructions of only the seller and the buyer’s agent is obligated only to the buyer.

Loyalty

The duty of  loyalty demands that the real estate agent act solely in the best interests of the principal to the exclusion of all other interests, including his or her own.  In layperson’s terms, loyalty means that the seller’s agent must do everything he or she can to gain an advantage for the seller. The same applies to the buyer’s agent and the buyer.

While the above doesn’t include all fiduciary duties of a real estate agent, it includes those most important to the consumer.

As you can see, the seller and the buyer have competing interests, creating competing duties for their agents.  This is why, even though in many states it is legal for an agent to represent both parties in the transaction (known as dual agency), it is not wise for the agent or the consumer.

There is no shortage of real estate agents in this country.  Furthermore, the seller pays the buyer’s agent’s fees, so there is no reason not to have your own real estate agent.

What Else Should You Expect from Your Real Estate Agent?

Search for appropriate homes – If you’ve told your agent you want three bedrooms and two bathrooms and she kept showing you homes with 1 bathroom, your agent isn’t paying attention to your needs.

Help determine value – Your agent should compile a comparative market analysis for any home on which you would like to make an offer.  This helps you determine if the list price is appropriate and how much money to offer for the home.

Disclosure – Aside from the agent’s fiduciary duty to disclose what he knows about the party, he also has a duty to disclose any property defects that he has observed.

Purchase agreement – Your agent should explain to you the entire purchase agreement before asking you to sign it.  The agreement should be constructed in a manner that protects your interests and meets your needs.

Counter offer – Should the seller counter your offer or you need to amend the purchase agreement to request repairs, your agent should fully explain the process and advise you to seek legal counsel, if appropriate, to ensure your protection.

Acceptance- Once your offer is accepted your agent should offer advice about obtaining a home inspection and other inspections that may be specific to the region, remain in contact with the title company and the lender to ensure that all time limits are met, and attend the closing with you.

Real estate agents who are members of the National Association of Realtors (NAR) are the only agents allowed to call themselves Realtors. NAR has its own set of ethics that Realtors swear to uphold in addition to their statutory fiduciary duties.

Article provided by Shannon O’Brien

Are you considering buying a new home?  If so, you know getting started is among the toughest steps – establishing budget, finding a Realtor and truly coming to now what type of home you want.  Is a condo right for you? Are you interested in renovated properties? Planned communities? New versus old?  That last consideration gives many potential homeowners pause.  Why? Because there are so many great benefits to buying a newly constructed home; however, at the same time, there are downfalls that many buyers overlook.  Here are a few of the pros and cons of buying new homes that will help you make an educated purchasing decision.

Pro: Everything is new! This goes without saying, but when you purchase a newly built home, everything – from shingles to wiring to sheetrock to floors – is brand new.  Many people prefer this, others do not.

Con: Everything is new.  Some home buyers prefer homes built in the past because they have character.  Their walls have stories to tell, and their structures have stood the test of time.  You are more likely to find fault with foundation and electrical systems if an older home hasn’t been well maintained, but upon a satisfactory inspection, homes with history are appealing to many.

Pro: Energy efficiency.  It makes little sense to build a new home without energy efficient windows, insulation and Energy Star rated appliances.  With all the options available to builders to “build green,” most are.

Con:  The risk of low quality for high speed.  We’ve all seem homes pop up in what seems like overnight, and while some scrupulous builders simply have the manpower and connections to make this happen, others do not. Be wary of rapid build times, and guarantee your builder isn’t cutting corners for a quick paycheck.

Pro: Rapid turnaround:  This can also be a positive aspect when buying a new home. If you’ve done your research, read reviews and are confident your builder is reputable and skilled, being able to have your new  home ready in a matter of months can be an incentive to buy new.  In many older homes, repairs will be necessary; however, the time it takes can increase if a builder pushes back closing and move in times again and again.

Con: Is your new home being built in a brand new, planned community? Or, how about on a large tract of land far away of urban amenities?  If so, consider this – your neighborhood doesn’t have a personality or sense of community intact.  Many people prefer to buy older homes in established areas because they appreciate the sense of comradery and community that already exists.

Pro: Fewer repairs.  As mentioned, one of the downfalls of buying an older home (especially a neglected property) is the need for repairs.  With a new home, it’s unlikely you will have to make extensive repairs in the near future.

Con: Curb appeal and landscape.  With newly built homes, it is rare that mature trees and plants are installed.  Chances are you’ll need to foster growth, water, plant things and watch them grow for a few years until they reach maturity.  For many, this is an unappealing cost, not to mention effort, associated with buying a new home.

There are clearly benefits to buying new  homes, and among them is space.

Pro: Most new homes are built bigger.  Older homes tend to have smaller rooms, fewer bathrooms and less functional kitchens – unless they’ve been remodeled.

If you’re considering buying a new home, remember to look at both the pros and cons to guarantee it will be purchasing decision you’re pleased with for years to come.

Article provided by The Article Resource Guide

Are you gearing up to buy your first place?  Shopping for a home is exciting, exhausting and a little scary, especially in this market.  In the end, your aim is to end up with a home you love at a price you can afford.  Sounds simple enough, right?  Unfortunately, many people make mistakes that prevent them from achieving that simple dream.  This article from Investopedia will help arm yourself with these tips to get the most out of your purchase and avoid making 10 of the most costly mistakes that could put a hold on that sold sign.

1.  Not knowing What You Can Afford

As we learned from the subprime mortgage mess, what the bank says you can afford and what you know you can afford or are comfortable with paying are not necessarily the same.  If you don’t already have a budget, make a list of all your monthly expenses (excluding rent), including vehicle costs, student loan payments, credit card payments, groceries, health insurance, retirement savings and so on.  Don’t forget major expenses that occur only once a year, like any insurance premiums you pay annually or annual vacations.  Subtract this total from your take-home pay and you’ll know how much you can spend on your new home each month.

If you end up looking at homes that are outside your price range, you’ll end up lusting after something you can’t afford, which can put you in the dangerous position of trying to stretch beyond your means financially or cause you to feel unsatisfied with what you actually can afford.  You may even learn that you can’t afford they type or size home that you desire and that you need to work on reducing your expenses and/or increasing your income before you even start looking.

2.  Skipping Mortgage Qualification

What you think you can afford and what the bank is willing to lend may not match up, especially if you have poor credit or unstable income, so make sure to get preapproved for a loan before placing an offer on a home.  You’ll be wasting the seller’s time, the seller’s agent’s time and your agent’s time if you sign a contract and discover later that the bank won’t lend you what you need or that it won’t give you a mortgage you find acceptable.

Be aware that even if you have been preapproved for a mortgage, your loan can fall through if you do something to alter your credit score, like finance a car purchase. If you cause the deal to fall through, you may have to forfeit the money that you put up when you went under contract.

3.  Failing to Consider Additional Expenses

Once you’re a homeowner, you’ll have additional expenses on top of your monthly payment.  Unlike when you were a renter, you’ll be responsible for paying property taxes, insuring your home against disasters and making any repairs the house needs (which will occasionally include expensive items like replacing the roof or furnace).

If you purchase a condo, you’ll have to pay monthly maintenance costs regardless of whether anythings needs fixing because you’ll be part of a homeowners association, which collects fees from the owners of each unit in the form of condominium fees.

4.  Being Too Picky

Go ahead and put everything you can think of on your wish list, but don’t be so inflexible that you end up continuing to rent for significantly longer than you really want to. First-time homebuyers often have to compromise on soemthing because their funds are limited.  You may have to live on a busy street, accept outdated decor, make some repairs to the home or forgo that extra bedroom.  Of course, you can always choose to continue renting until you can afford everything on your list – you’ll just have to decide how important it is for you to become a homeowner now rather than in a couple of years.

5.  Lacking Vision

Even if you can’t afford to replace the hideous wallpaper in the bathroom now, it might be worth it to live with the ugliness for a while in exchange for getting into a house you can afford.  If the home meets your needs in terms of the big things that are difficult to change, such as location and size, don’t let physical imperfections turn you away.  Besides doing home upgrades yourself, even if you have to hire a contractor, is ofter cheaper than paying the increased home value to a seller who has already done the work for you.

6.  Being Swept Away

Minor upgrades and cosmetic fixes are inexpensive tricks that play on your emotions and elicit a much higher price.  Sellers may pay $2,000 for minimal upgrades or staging that you’ll end up paying $40,000 for.  If your on a budget, look for homes whose full potential has yet to be realized.  Also, first-time homebuyers should always look for a house they can add value to; this ensures a bump in equity to help you up the property ladder.

7.  Compromising on the Important Things

Don’t get a two bedroom home when you know you’re planning to have kids and will want at least three bedrooms. By the same token, don’t buy a condo just because it’s cheaper when one of the main reasons you’re over apartment life is because you hate sharing walls with neighbors.  It’s true that you’ll probably have to make some compromises to be able to afford your first home, but don’t make a compromise that will be a major strain.

8.  Neglecting to Inspect

It’s tempting to think that you’re a homeowner the moment you go into escrow, but before you close on the sale, you need to know what kind of shape the house is in. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs.  Keeping your feelings in check until you have a full picture of the house’s physical condition and the soundness of your potential investment will help you avoid making a serous financial mistake.

9.  Not Hiring Your Own Agent or Using the Seller’s Agent

Once you’re seriously shopping for a home, don’t walk into an open house without having an agent (or at least being prepared to throw out a name of someone you’re supposedley working with).  Agents are held to the ethical rule that they must act in the best intererst of their clients, but if you’re a buyer, you’ll probably have a stronger advocate for your interests if you use your own agent and not the seller’s.

10.  Not Thinking about the Future

It’s impossible to perfectly predict the future of your chosen neighborhood, but paying attention to the information that is available to you now can help you avoid upleasant surprises down the road.

Some questions you should ask about your prospective property include:

• What kind of development plans are in the works for your neighborhood?
• Is your street likely to become a major street or a popular rush-hour shortcut?
• Will a highway be built in your back yard in five years?
• What are the zoning laws in your area?
• If there is a lot of undeveloped land? What is likely to get built there?
• Have home values in the neighborhood been declining?

If you’re happy with the answers to these questions, your house’s location can keep it’s luster.

Buying a first home can seem stressful and overwhelming, and it isn’t without its share of potential pitfalls.  If your’re aware of those issues ahead of time, though, you can protect yourself from costly mistakes and shop with confidence.

For many people, a home is the largest purchase they will ever make, but that doesn’t mean it has to be the most difficult.

Article provided by Meridian Realty Group LLC

With the current economic conditions the number of foreclosures and short sale properties on the market is significant, making it an ongoing issue for many Realtors who may not be as experienced with the process and have the unenviable task of clearing these sales as efficiently as possible.

The federal government is trying to help the situation with the $25 billion National Mortgage Settlement designed to provide eligible homeowners with relief as well as implementing across-the-board servicing standards meant to improve borrower communication and servicing consistency. 

The challenges of buying foreclosures and short sales are numerous.  Unresponsive lenders, lost documents that require multiple submissions, inaccurate or unrealistic home value assessments and long processing delays can cause buyers to walk away.  The NATIONAL ASSOCIATION OF REALTORS offers Short Sale and Foreclosure Resource (SFR) to provide professionals and clients with the training to manage these tricky transactions.

Here’s a list of tips to help REALTORS navigate the space and offer the best possible services to their clients.

7 Tips When Buying Foreclosures and Short Sale Homes

Patience is a Virtue – Agents and sellers tend to establish a low asking price to attract buyers.  Banks can be unaware of the asking price and since they have the last word on whether to accept or reject offers and, and since properties with low initial asking prices can spark feeding frenzies, buyers need to remain patient throughout the process, which can take months.

Don’t Get Caught in a Bidding War- Some foreclosures and short sales are put on the market at cut-rate prices to avoid expenses like property taxes, insurance, upkeep and utilities. Lowball prices attract dozens of buyers who can bid the property from a bargain to overpriced in short order.  Help your clients calculate how much they want to spend and don’t exceed that price.

Know Your Market and Demographics – To help determine an appropriate valuation and asking price, be sure to research recent home sales in the area to give buyers a better idea of what properties are selling for. Consult the Realtors Property Resource for current and historical information, including the largest database of foreclosure information by county in the industry.

Know What the Bank Wants – Some banks want strong buyers and some want strong offers.  Build a relationship with lenders directly by getting to know asset managers at banks.  Some banks prefer large down payments, some want the highest price and there’s always the possibility for deeper discounts with all-cash offers.

Don’t Count on Repairs- Keep your clients’ expectations in check – the reality of the situation is that home repairs on short sales and foreclosures are seldom completed.  The good news is that buyers willing to absorb repair costs are usually more attractive to banks.

Tour the Property- Foreclosed and short sale properties can be in deficient shape, making it important to tour the property with a qualified contractor to spot major problems and add repairs to the overall budget. Some issues can be minor, but others can be deal breakers.  Help your buyers know what they’re getting themselves into.

Get Your Paperwork in Order for Short Sales – In short sales, there’s no leniency with the closing escrow date. Take care of all loan paperwork immediately after opening escrow and be prepared a few days before the closing date.  Then, if unexpected delays occur, a request for an extension can be made early enough for banks to consider them.

Article provided by National Association of Realtors

To make sure you’re prepared to succeed with your home purchase, you need to do these two things:

• First, make an assessment of your personal finances and get your financing in order.  If possible, find a licensed financial advisor to help you understand your cash needs and long-term objectives.  Then, talk to a loan officer early and obtain a pre-approval letter with a direct lender.  Keep it current.  Long gone are the days when sellers would accept offers without accompanying proof of funds and financing. 
• Second, get yourself a good buyer’s agent.  In the past, some frutstrated buyers who had poor experiences during the boom days with inexperienced agents stayed away from all agents; they’re doing themselves a disservice.  In today’s competitive market environment, a skilled buyer’s agent is your main competitive edge, helping you to navigate a rapidly shifting market place and giving you a fighting chance to get the home you want this year.

Here are some tips on what to look for in a good buyer’s agent.

  1.  An effective communicator:  One of the top complaints from buyers is a non-responsive agent, and deservedly so.  Real estate is a people business.  When it comes to winning deals, a buyer’s agent needs excellent communication skills and responsiveness with all parties involved.  To save yourself headaches and frustration, find an agent who really speaks to you from the get-go.  This is not just about speaking the same language. It means an agent who adapts to your communication style.  Whatever your preferred method of communication, be it a phone call, text message, email, video chat and what not, your Realtor should be able to respond with a timely message, ideally within hours if not minutes.

  2.  On top of the market trend and local data:  The real estate market is in flux and the recovery is highly localized.  The agent who is plugged-in can help you access the latest data and make the best decision.  At the introductory meeting, ask the propsective agent a few questions about trends in the local market.  Have the agent explain the rationale behind each trend, like school ratings, employment levels, mortgage rates, or home prices.  If he or she appears to know less than you, move on.

  3.  Tuned into your needs and timelines:  Many buyers avoid getting an agent because they don’t want to be pushed to buy anything.  Certainly, nobody should be pushed into anything.  A good agent should advise and guide you. She should take the time to understand your needs and match you with a suitable property within your budget.

This relationship is a two-way street.  The buyer should do their part to be honest and communicate your needs and timelines. Don’t try to draw attention from agents by boasting that you are ready to buy now or want something much higher than your budget.  You will end up with what you’ve asked for — a pushy salesperson. 

If you merely want to monitor the market and are not yet ready to buy, tell your agent so your agent won’t rush you.  In a hot market, good property can come and go within days, so you need to tell your agent when you’re ready to act decisively.

  4.  Organized and attentive to details:  Thanks to all the new regulation created after last housing bubble burst, real estate business has a lot (and I mean a lot) of highly regulated paperwork — from the initial offer, to inspection reports, to endless disclosures, to closing statements from the title company and the lender.  Besides the sheer volume, time is of the essence.  All the paperwork have to be reviewed, completed and reviewed according to a very tight schedule.  It can easily overwhelm any buyer and even novice agents.  A good agent can help you make sense of the myriad of documents and make sure each time-sensitive task is completed according to the contract terms.

On the road to real estate success, a buyer’s agent is like a car.  You should always start your journey with a good one.

Article provided by Tina Lam

The decision to pursue homeownership may be based on many factors: everything from a friend’s decision to purchase a home or a family member’s advice against “throwing your money away on rent” to your bad experience with a landlord or the noisy neighbors sharing your wall.  While all of those scenarios (minus peer pressure, of course) may inspire valid arguments for considering the purchase of a home, how do you determine if you’re genuinely ready to join the ranks of homeowners?  After all, it’s hardly a decision to be taken lightly.  If you’ve spent your life as an apartment-renter or a condo-dweller, you’ve never had a yard to maintain.  Even more significant, you’ve never moved into a home without appliances – a refrigerator, washer and dryer, and microwave, for example – you’ve taken for granted as a renter.  All of those appliances represent immediate expenses you’ll face upon move-in – and that’s precisely the time when you’re already feeling financially drained.

So is there any definitive way of knowing whether or not you’re ready for homeownership?  Yes, to an extent.  You can ask yourself a series of questions, and based on your answers, you’ll have a fairly strong indication of whether  or not you’re ready to commit to what’s sure to be one of the biggest financial commitments you’ll make in your lifetime.  Ask yourself the following questions, and jot down your immediate response (don’t ponder the answer you think the model homeowner would provide).  Go with your instincts.

• Why do you want to purchase a home?  It it’s because your best friend just purchased a home and is constantly gushing about her new garden, extra living space and great neighbors, don’t get caught up in her excitement.  Remind yourself that committing to homeownership means facing expenses you probably can’t even comprehend at the moment.  It also means ongoing maintenance.  The bottom line is that homeownership is an lifetime commitment that can’t be decided overnight.
• How long have you wanted to be a homeowner?  Were you content being a renter until some recent event or thought triggered thoughts of homeownership?
• Do you think your quality of life will improve if you own a home? How:
• In what terms do you associate homeownership? Does it represent in your mind an important step toward ” becoming settled”?  Do you view homeownership – the act of putting down roots – as a necessary milestone that you must cross in order to be taken seriously? Or do you view homeownership merely as a smart investment that can pay large dividends later if and when you decide to sell?  If you’re thinking of homeownership solely as a means of putting down roots, you could become so wrapped up in this emotional decision that you overlook the practical factors every prospective homeowner should consider: the quality of the surrounding neighborhood, the resale value of the other homes on the block, the quality of the local schools and the quality of your prospective  home’s construction, among other criteria.  You may also fail to consider whether or not the market is favorable for buying a home right now. It may be in your best interests to wait.
• On the other hand, if the market conditions are good for considering the purchase of a home right now, are you feeling pressured to buy?  Renters who live in hot real estate markets sometimes feel as if they should hurry up and buy homes before prices become too high.  But if your instincts are telling you that this really isn’t the best time for you to make this commitment, it’s best to avoid jumping into homeownership at the present time.  Instead, consider waiting until the market cools down slightly.  Remind yourself that this isn’t the only time your local market will be hot; you’ll probably witness an upswing again in the near future.  Or you may even consider another neighborhood that lies outside of the “red-hot”, high priced region.
• Are you happy with your present job? Are you confident that you’ll remain with your current employer for a  lengthy period – so confident that you’re ready to put down stakes and commit to staying in the area for several more years?  It that’s the case, it may indeed be a smart investment to purchase a home located close to your place of work.  And if you work long hours, the closer you move to the office, the better your quality of life.  You’ll also save considerable amounts of money on gas.
• Are the local schools noted for their academic quality?  Even if you don’t have children, it’s smart to consider this factor because it will affect your home’s resale value. If you do have children, how close are schools to your prospective new home?  Will you save time shuttling the kids back and forth, allowing you to spend more time with them at home?  If so, this is an excellent reason for considering homeownership.
• Are you ready to assume the responsibility of home maintenance, including everything from appliances to yard work and plumbing?  Remember that you’ll have to factor these inevitable expenses into your annual budget.  How much you’ll need to budget will depend, of course, on the age of your home, the general condition of the home upon move-in, and most important, how attentive you are to it’s ongoing maintenance needs.  If you turn a blind eye toward those little signs that something is wrong, and you wait until something catastrophic happens, you’ll be facing expenses far greater than you could imagine -or afford.

If, after answering these questions honestly, you’re still feeling trepidation, you should by all means listen to your instincts. Homeownership does, indeed, represent one of the most significant milestones of our lives.  When you sign on the dotted line and commit to this major investment, you should feel confident in your decision and look forward to what lies ahead.  Your choices have never been more numerous or more varied than they are in today’s real estate market. You have all the time in the world to make your decision, so make it slowly, deliberately and intelligently – so that when the time is right, you’ll know it.

Article provided by Serge Vindigni