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Monday, November 15, 2010
Email Letter
Monday, October 25, 2010
No Excuse Not to Buy a Home Now
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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Friday, October 22, 2010
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).
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
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.
1. Not doing your homeworkYou’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.
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? 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
Monday, October 18, 2010
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 |
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