No Excuse Not to Buy a Home Now

Could it be that some people waited too long to get a good deal on a home? Birmingham, Alabama REALTOR® Charita Cadenhead says ‘yes’ and shares her reasons why in a recent post.

“Potential homebuyers [have] chose[n] the absolute worst time to stall on buying a home. Interest rates are at an all time low, foreclosures are rampant, presenting an endless possibility of getting more house for their money, and more choices than they’ll ever have. And yet, they waited and waited and continue to wait. What they have done is ‘waited’ themselves out of an opportunity.

Now on the seller side (and we’re talking about traditonal, non-foreclosure sellers), a small window of opportunity has opened the door for owners of non-foreclosure properties to capitalize on the current processing freeze on foreclosure properties. Current sellers have been complaining about having to compete with foreclosures in their neighborhoods. Now that banks such as Bank of America have put a freeze on foreclosures (listed, processing and pending sales, etc.), a boatload of the competition has suddenly vanished.

That being said, what excuses do home sellers have now to wait?

• They have less competition in the market place
• More negotiating power in the interim
• The attention of more buyers who are now intimidated by foreclosures (they’re thinking that foreclosures may not be such a great deal after all)

While sellers may not get maximum dollar, if they play their cards right, they can certainly get more than they thought. This current real estate market is a market of opportunity and sometimes there’s only a small window of opportunity. Sellers can be like buyers have been and ‘wait’ themselves out of a golden opportunity. Or they can ‘get off the pot’, as they say, and take advantage of the best opportunity in the past two years.

Any seller that has been contemplating the sale of their home would be wise to jump not only at this window of opportunity, but through it. Sellers should learn a valuable lessons from the many potential buyers who missed their window of opportunity. Just for once in their lives, they need to take the leap of faith and be an opportunist.”

Click here to read more blog posts by Charita Cadenhead.

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The Ten Biggest Mistakes in Home Buying

The Ten Biggest Mistakes in Home Buying

1. Not doing your homework
You’ve probably heard the old maxim: “Knowledge is power.” Nowhere is this truer than in real estate. With a price tag that’s two or three times your annual salary, if ever a purchase demanded preparation it’s home buying.

It can be overwhelming when you think about all the factors that can affect a home’s value: its location, the school district, deed restrictions, taxes, amenities. That’s why it’s imperative that you do your homework before you start. With all of the information available today on the Internet, from Realtors and in housing guides, there’s really no excuse for entering the market ill-prepared.

2. Trying to make a shrewd investment
It’s easy to think we are all financial geniuses. No doubt some of you are. So, Mr. Gates and Mr. Buffet, you have my permission to move on to the third biggest mistake in home buying. As for the rest of you, forget everything they told you in that late-night infomercial. While real estate investing can make a great career, it’s no place for amateurs.

As simple as it may sound, when it comes to buying a home, your best bet is to choose one that appeals to you. The chances are very good that if you like it others will, too.

Am I suggesting that you throw caution to the wind? Lead with your heart and not with your head? Absolutely not, but if you choose a neighborhood where you and others like you want to live and a home that’s attractive and structurally sound, then you probably won’t go wrong. If you want to be known as a shrewd real estate investor, then wait at least three to five years before selling and you can tell everybody that you outguessed the market.

3. Choosing a poor location
OK – you’ve found the perfect home. It’s in a good school district, it’s got great curb appeal, a terrific floor plan that fits your family and the price is right. The only drawback is the bowling alley that backs up to it. Walk away.

Nothing spoils life and resale value like a poor location. If it bothers you now, don’t think you will learn to live with it. The flood lights from that office building across the way will only get brighter with time. The planes on final approach to the airport will only get louder and more frequent.

The best looking home, the most extravagant landscaping, tall fences, and insulated windows will never overcome a homesite near a pig farm (no offense to pig farmers).

4. Overlooking an inferior floor plan for an attractive exterior
I don’t mean to downplay the importance of curb appeal. A home that turns your head as you drive down the street can be a real asset. Resale will be a lot easier if you don’t have to stand on the curb shouting, “No, wait! I know it looks bad, but this home’s got great personality!” If the romance doesn’t continue when you open the door, then you’ve got a problem that will be difficult to unload.

You want a home that makes your heart beat faster when you first open the door. It’s got to have a layout that makes people feel comfortable, one that responds to the way we live today. Open. Friendly. Functional.

I’ve seen it happen a hundred times. Buyers approach a home with an exterior they’re not crazy about, then they discover a fantastic floor plan, and when they come back out, the exterior seems to have magically improved.

If I had to choose between a good-looking exterior or a knockout interior – and I couldn’t have both – I’d choose the great interior any time. After all, that’s where you live every day.

5. Not considering how your family wants to live
We all carry around a mental picture of the perfect home. If you’re a child of the 60’s your ideal home probably looks like the Cleaver’s house. Younger shoppers may be searching for the Brady’s or the Cosby’s home, or maybe even the Taylor’s home from Home Improvement. These images seldom fit the way we really live.

It’s also not about finding a home your parents would like (unless they’re helping with the down payment). It’s not choosing a home your best friends would want.

This home only needs to fit one family – yours. Your comfort and happiness depends on how well you can judge that fit.

Start by thinking of how you live now. Try not to be influenced by those fantasies of how life would be if only you had the right home. If your idea of fun is watching reruns of Jeopardy in your pajamas, then look for a TV room that accommodates your favorite naugahyde reclining lounger. If you like to have friends and family over for informal get-togethers, then look for a large kitchen that’s open to the Family Room. How many rooms do you need? How should they be arranged? Master up or down? Will you have use for a home office?

Don’t overlook how your family lives outside, as well. Will you use a pool or would a hot tub suffice? Do you like to garden and work in the yard, or would you rather have less maintenance?

If you’re buying a used home, you’ll have to look beyond the current owner’s décor and furnishings. If it’s a builder’s furnished, new model home, the toughest part will be facing the fact that the decorator and furniture don’t come with it. If you’re honest with yourself, you can find a home that will fit your family and feel like…well, home.

6. If buying a resale, not having the home properly inspected

I can’t emphasize this one enough. When you find your dream home, it’s love at first sight. As with all love affairs, you begin to lose your objectivity and see only what you want to see. “OK, so the foundation is cracked. But, isn’t this the cutest little window you’ve ever seen?” Now is a good time to seek professional help.

They’re called structural and mechanical inspectors. Good ones are worth every penny you pay them. A good one is licensed by the state (ask to see his or her certificate) and has no personal relationship with you, the seller, or the Realtor. This is someone you pay for a professional, unbiased opinion about the structural integrity and mechanical performance of the home you’re planning to buy. They will inspect every major component of the house from the foundation to the rafters, including the central air, furnace, water heaters, plumbing and electrical. You will also want to have the home inspected for termites. As much as it may hurt to hear something negative about the one you love, this is when you want the ugly truth.

Many resale homes were built when energy codes were more lenient or nonexistent. Independent third-party performance verification inspections that test for energy-efficiency can make a big difference in the performance of your home and its effect on your pocketbook.

You and the seller will be given a written report with a list of items that must be repaired before you close the deal. Usually the contract spells out limits on what the seller is obligated to pay for repairs. If the cost of recommended repairs exceeds this amount and the seller is unwilling to pay for them or to adjust the sales price, DO NOT proceed. (You may elect to pay the difference if the overall deal is still a good one.) This could be the toughest decision of your life, but ignore the engineer’s warning and you will live to regret it

7. If buying new, failing to check out the builder’s reputation

If you’re shopping for a new home, you probably know where you want to live, so you’ll be comparing Home Builders in that area of town. You’ll look for home designs that appeal to you in a price range you can afford. Once you’ve narrowed your search to one or more builders’ homes, your next step should be to take a long hard look at the builders. Here are the most important questions you should answer about any builder before you let them build your home:

How long have they been in business?

How many homes have they sold?

What do their Homeowners think of them?

How many of the Homeowners would buy from the builder again?

What do other builders say about them?

What industry recognition have they received?

What does the Realtor community think of them?

What kind of warranties do they offer?

Do they have a department solely dedicated to warranty issues?

Do they have an energy-efficiency or green building program?
The best way to check out a builder is to ring some doorbells and knock on doors. Visit the neighborhoods where they build and ask Homeowners about their experiences. You should talk to at least three to five neighbors and get a consensus before you make one of the largest investments of your life.

If you don’t get satisfactory answers to most of these questions, choose another builder. If none of them pass this test, choose another part of town. Beyond all the fancy advertising and hype, builders have only one thing of real value: their reputation. If the one you’re considering doesn’t have a good one, they shouldn’t get your business.

8. Not getting what you want because you’re impatient

To borrow a phrase from the Rolling Stones, time is on your side. Show me someone in a hurry to buy and I’ll show you someone who pays too much. There are a lot of things you can rush into and recover from later, but this does not include marriage or buying a home. Never, ever, ever, rush into buying a home. Have I made my point yet? It is the single largest investment most of us ever make. It requires an enormous amount of energy, effort and research. It takes time to do it right.

You need time to do your homework. You’ve got schools to check, tax rates to compare, mortgage companies to shop, neighborhoods to drive, and – if it’s a new home – you need to check the builders’ reputations (See #7 above).

If it’s a used home, you need time to negotiate. Seldom should you pay the “asking price” on a used home. The longer you can take, the better the deal you can usually make. If you find yourself in an unavoidable time bind because of a transfer or the impending sale of your home, try to make arrangements to delay the purchase. You can always store your non-essential things and rent in the interim. Sometimes people who purchase your home are willing to lease it back to you on a pro-rated basis if you need extra time. It doesn’t hurt to ask and it could save a lot. Do the math. If patience can save you $5,000 on the purchase price, wouldn’t that be worth it?

Whatever you do, even if you don’t have time and you must move forward, try not to show it until after the price is set.

9. Waiting for a better time to buy based on the market
and interest rates

Buy low. Sell high. It’s a great plan if you’re a fortuneteller, but for the rest of us mere mortals, here is the best advice for when to buy a home: There is no time like the present. You know what houses cost. You know what interest rates are. You know you have a job (If not and you’re not independently wealthy, maybe you should consider putting it off).

Warren Buffet says, “the rear view mirror is always clearer than the windshield.” Looking back, we can all see when the best time to buy a home would have been –it is hard to find a better time than the present. Who can predict the future? The best we can do is learn from the past. History shows that those who purchased homes and kept them for three to five years or more did better than those who didn’t. How can you argue with that?

Will interest rates be lower some day? Maybe – then you can refinance. Will home prices ever be significantly lower? Probably not. Will you be making money in the future? We all hope so. Do you have a crystal ball? Stop your waiting. Just do it.

10. And the biggest home buying mistake…drum roll, please…

not buying at all!

- From David Weekley

Cheaper To Buy New or Rent?

Local fair market rents: Are you paying too much, would it be cheaper to buy?

Published Tuesday, October 12 2010 - (1) Comments

The current U.S. Department of Housing's Fair Market Rents data are getting additional attention this year. The data have always been renters' benchmark to shop the market but the recession, a punky housing market and renters who use the data to see if they would get a better deal buying instead of renting has ratcheted up interest in the numbers this year. Answers to the last question vary and depend on the person - or family's - finances, credit history and plans for the future.

HUD's Fair Market Rents data consists of "gross rents (contract rent for shelter plus utilities) aggregated by metropolitan statistical area or by county for non-metropolitan areas. The fair market rents are calculated for a base year using several surveys, including the Decennial Census and the American Community Survey, and are projected forward using the rent and utility components of the consumer price index for a given metropolitan area."

Here's what the numbers look like in the NE Tenn. and SW. Va. region:

Sullivan Co.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$440	$473	$588	$788	$942
Washington Co.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$393	$475	$589	$732	$912
Hawkins Co.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$440	$473	$588	$788	$942
Carter Co.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$393	$475	$589	$732	$912
Unicoi Co.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$393	$475	$589	$732	$912
Johnson Co.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$350	$435	$540	$732	$759
Greene Co.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$350	$442	$540	$732	$752
Scott Co. Va.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$440	$473	$588	$788	$942
Washington Co. Va.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$440	$473	$588	$788	$942
Lee Co. Va.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$381	$460	$588	$756	$800
Wise Co. Va.	Efficiency	1-Bedroom	2-Bedroom	3-Bedroom	4-Bedroom
	$489	$499	$588	$765	$964

8 Tips for Finding Your New Home

8 Tips for Finding Your New Home

By: G. M. Filisko

Published: February 10, 2010

A solid game plan can help you narrow your homebuying search to find the best home for you.

1. Know thyself

Understand the type of home that suits your personality. Do you prefer a new or existing home? A ranch or a multistory home? If you’re leaning toward a fixer-upper, are you truly handy, or will you need to budget for contractors?

2. Research before you look

List the features you most want in a home and identify which are necessities and which are extras. Identify three to four neighborhoods you’d like to live in based on commute time, schools, recreation, crime, and price. Then hop onto REALTOR.com to get a feel for the homes available in your price range in your favorite neighborhoods. Use the results to prioritize your wants and needs so you can add in and weed out properties from the inventory you’d like to view.

3. Get your finances in order

Generally, lenders say you can afford a home priced two to three times your gross income. Create a budget so you know how much you’re comfortable spending each month on housing. Don’t wait until you’ve found a home and made an offer to investigate financing.

Gather your financial records and meet with a lender to get a prequalification letter spelling out how much you’re eligible to borrow. The lender won’t necessarily consider the extra fees you’ll pay when you purchase or your plans to begin a family or purchase a new car, so shop in a price range you’re comfortable with. Also, presenting an offer contingent on financing will make your bid less attractive to sellers.

4. Set a moving timeline

Do you have blemishes on your credit that will take time to clear up? If you already own, have you sold your current home? If not, you’ll need to factor in the time needed to sell. If you rent, when is your lease up? Do you expect interest rates to jump anytime soon? All these factors will affect your buying, closing, and moving timelines.

5. Think long term

Your future plans may dictate the type of home you’ll buy. Are you looking for a starter house with plans to move up in a few years, or do you hope to stay in the home for five to 10 years? With a starter, you may need to adjust your expectations. If you plan to nest, be sure your priority list helps you identify a home you’ll still love years from now.

6. Work with a REALTOR®

Ask people you trust for referrals to a real estate professional they trust. Interview agents to determine which have expertise in the neighborhoods and type of homes you’re interested in. Because homebuying triggers many emotions, consider whether an agent’s style meshes with your personality.

Also ask if the agent specializes in buyer representation. Unlike listing agents, whose first duty is to the seller, buyers’ reps work only for you even though they’re typically paid by the seller. Finally, check whether agents are REALTORS®, which means they’re members of the NATIONAL ASSOCIATION OF REALTORS®. NAR has been a champion of homeownership rights for more than a century.

7. Be realistic

It’s OK to be picky about the home and neighborhood you want, but don’t be close-minded, unrealistic, or blinded by minor imperfections. If you insist on living in a cul-de-sac, you may miss out on great homes on streets that are just as quiet and secluded.

On the flip side, don’t be so swayed by a “wow” feature that you forget about other issues—like noise levels—that can have a big impact on your quality of life. Use your priority list to evaluate each property, remembering there’s no such thing as the perfect home.

8. Limit the opinions you solicit

It’s natural to seek reassurance when making a big financial decision. But you know that saying about too many cooks in the kitchen. If you need a second opinion, select one or two people. But remain true to your list of wants and needs so the final decision is based on criteria you’ve identified as important.

Should I Buy a New Home or an Old One?

Advantages of Buying a New Home versus Older One

Posted in: Home Builders, Homes for SaleTags: Easy Maintenance, green features, new homes, New vs Old, Older Homes, Safety of Newer Homes

No matter what the current economic situation is, buying a new home will always have distinct advantages over purchasing an older home. From being able to customize your floor plan and features to more updated technology and appliances, there are a number of reasons you should consider purchasing a newly built home over a pre-owned home for you and your family.

Everything is New
One of the most obvious advantages to purchasing a new home vs an older home is the fact that everything in your home will be brand new. When purchasing a pre-owned home, the carpet, fixtures, walls, appliances etc… have been used by at least one family before you. Any stains, chips or holes are yours to keep and will remain for the duration of your lease. Purchasing a new home ensures that everything will be clean and unused when you move-in.

Customization
When purchasing a new home, you are given the opportunity to customize certain aspects of your home; the level of customization varies from builder to builder. Cabinets, flooring, bonus rooms and energy efficient features are just some of the many amenities you get to pick out when building your home.

Green Features
Many new homes today are built with your comfort and the environment in mind. These homes often are constructed with green materials and are designed to include other environmentally friendly amenities as well, such as solar panels, tankless water heaters, better insulation and indoor air filtration systems. These features are both kind to the environment and to your wallet, as they save you money each month on utilities. Ussually any pre-owned home you purchase will not have these added benefit of green features.

Safety
Some older homes were built with hazardous materials, such as asbestos and lead-based paint. For families moving into an older home, these dangerous and outdated building methods can seriously threaten the health and safety of you and your family. In addition, overtime, mold may have developed in a home and can greatly affect the health of you and your family. In choosing to buy a new home, you will be moving into a house that is not only free of these hazards, but it is also up to date on all plumbing and wiring regulations, ensuring a safer environment for your family.

Easy Maintenance
Newer homes are built using durable and lasting materials, which translate into to less upkeep and maintenance. In an older home, you may have to deal with worn out appliances, run-down materials, wiring and plumbing that may be in constant need of repair, or any number of other issues. As a new home owner, you’ll run into fewer issues and if you do, you can call your home builder’s customer service team for quick resolution. In most cases, you are protected by a builder warranty and manufacturer warranties on materials and products.

re-posted with Permission