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Buyer Articles
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Seller Articles
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Buyers Articles
10 Things to Take the Trauma Out of Home buying
1. Find a real estate agent that’s simpatico. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the agent you chose is both skilled and a good fit with your personality.
2. Remember, there’s no “right” time to buy, any more than there’s a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price, and a good home won’t stay on the market long.
3. Don’t ask for too many opinions. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.
4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go.
5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, but trying to “win” by getting an extra-low price may lose you the home you love.
6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself—room size, kitchen—that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.
7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.
9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.
10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4 percent annually over from 1998 to 2002, a home’s most important role is as a comfortable, safe place to live.
What Your Home Inspection Should Cover
Siding: Look for dents or buckling
Foundations: Look for cracks or water seepage
Exterior Brick: Look for cracked bricks or mortar pulling away from bricks
Insulation: Look for condition, adequate rating for climate (the higher the R value, the more effective the insulation is)
Doors and Windows: Look for loose or tight fits, condition of locks, condition of weatherstripping
Roof: Look for age, conditions of flashing, pooling water, buckled shingles, or loose gutters and downspouts
Ceilings, walls, and moldings: Look for loose pieces, dry wall that is pulling away.
Porch/Deck: Loose railings or step, rot
Electrical: Look for condition of fuse box/circuit breakers, number of outlets in each room
Plumbing: Look for poor water pressure, banging pipes, rust spots or corrosion that indicate leaks, sufficient insulation
Water Heater: Look for age, size adequate for house, speed of recovery, energy rating.
Furnace/Air Conditioning: Look for age, energy rating. Furnaces are rated by annual fuel utilization efficiency; the higher the rating, the lower your fuel costs. However, other factors such as payback period and other operating costs, such as electricity to operate motors.
Garage: Look for exterior in good repair; condition of floor—cracks, stains, etc.; condition of door mechanism.
Basement: Look for water leakage, musty smell.
Attic: Look for adequate ventilation, water leaks from roof.
Septic Tanks (if applicable): Adequate absorption field capacity for the percolation rate in your area and the size of your family.
Driveways/Sidewalks: Look for cracks, heaving pavement, crumbling near edges, stains. |
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Common Closing Costs for Buyers
The lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will probably have to be a cashier’s check. The title company or other entity conducting the closing will tell you the required amount for:
- Down payment.
- Loan origination fees.
- Points, or loan discount fees you pay to receive a lower interest rate.
- Appraisal fee.
- Credit report.
- Private mortgage insurance premium.
- Insurance escrow for homeowners insurance, if being paid as part of the mortgage.
- Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.
- Deed recording fees.
- Title insurance policy premiums.
- Survey.
- Inspection fees—building inspection, termites, etc.
- Notary fees.
- Proration for your share of costs such as utility bills and property taxes.
A Note About Proration. Because such costs are usually paid on either a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. Proration is a way for the sellers to pay you back or for you to pay them for bills they may have paid in advance. For example, the gas company usually sends a bill each month for the gas used during the previous month. But assume you buy the home on the 6th of the month. You would owe the gas company for only the days from the 6th to the end for the month. The seller would owe for the first 5 days. The bill would be prorated for the number of days in the month, and then each person would be responsible for the days of his or her ownership.
What to Keep From Your Closing
- The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need for income tax purposes and when you sell the home.
- The Truth in Lending Statement summarizes the terms of your mortgage loan.
- The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.
- The deed transfers ownership of the property to you.
- Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.
- Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association’s rules and restrictions.
- Insurance policies provide a record and proof of your coverage.
8 Ways to Improve Your Credit
Credit scores, along with your overall income and debt, are a big factor in determining if you’ll qualify for a loan and what loan terms you’ll be able to qualify for.
1. Check for and correct errors in your credit report. Mistakes happen, and you could be paying for someone else’s poor financial management.
2. Pay down credit card bills. If possible, pay off the entire balance every month. However, transferring credit card debt from one card to another could lower your score.
3. Don’t charge your credit cards to the maximum limit.
4. Wait 12 months after credit difficulties to apply for a mortgage. You’re penalized less for problems after a year.
5. Don’t order items for your new home you’ll buy on credit—such as appliances—until after the loan is approved. The amounts will add to your debt.
6. Don’t open new credit card accounts before applying for a mortgage. Having too much available credit can lower your score.
7. Shop for mortgage rates all at once. Too many credit applications can lower your score, but multiple inquiries from the same type of lender are counted as one inquiry if submitted over a short period of time.
8. Avoid finance companies. Even if you pay the loan on time, the interest is high and it will probably be considered a sign of poor credit management.
This information is copyrighted by the Fannie Mae Foundation and is used with permission of the Fannie Mae Foundation. To obtain a complete copy of the publication, Knowing and Understanding Your Credit, visit http://www.homebuyingguide.org
5 Common First-Time Homebuyer Mistakes
They don’t ask enough questions of their lender and miss out on the best deal.
They don’t act quickly enough to make a decision and someone else buys the house.
They don’t find the right agent whose willing to help them through the home buying process.
They don’t do enough to make their offer look good to a seller.
They don’t think about resale before they buy. The average first-time buyer only stays in a home for four years.
Reprinted with permission from Real Estate Checklists and Systems, www.realestatechecklists.com.
Seller Articles
5 Ways to Speed Up Your Sale
1. Price it right. Set a price at the lower end of your property’s realistic price range.
2. Get your house market ready for at least two weeks before you begin showing it.
3. Be flexible about showings. It’s often disruptive to have a house ready to show on the spur of the moment, but the more often someone can see your home, the sooner you’ll find a seller.
4. Be ready for the offers. Decide in advance what price and terms you’ll find acceptable.
5. Don’t refuse to drop the price. If your home has been on the market for more than 30 days without an offer, be prepared to lower your asking price.
What You’ll Net at Closing
To find out how much money you’ll net from your house, add up your closing costs and subtract them from the sale price of the house.
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Closing Costs for Sellers |
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Mortgage payoff and outstanding interest. |
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Proration for real estate taxes. |
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Proration for utility bills, condo dues, and other items paid in arrears. |
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Closing fees charged by closing specialist. |
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Title policy fees. |
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Home inspections. |
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Attorney’s fees. |
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Survey charge. |
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Transfer tax or other government registration fees. |
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Brokerage commission. |
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Total |
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20 Low-Cost Ways to Spruce Up Your Home
Make your home more appealing for yourself and for potential buyers with these quick and easy tips:
1. Trim bushes so they don’t block windows and cut down on light.
2. Buy a new doormat.
3. Put a pot of bright flowers (or a small evergreen in winter) on your porch.
4. Put new doorknobs on your front door.
5. Put a fresh coating on your driveway.
6. Edge the grass around walks and trees.
7. Keep your garden tools out of site.
8. Be sure kids put away their toys.
9. Buy a new mailbox.
10. Upgrade your outside lighting.
11. Use warm, incandescent light bulbs for a homey feel.
12. Polish or replace your house numbers.
13. Clean your gutters.
14. Put out potpourri or burn scented candles.
15. Buy new pillows for the sofa.
16. Buy a flowering plant and put in a window you pass by frequently.
17. Make a centerpiece for your table with fruit or artificial flowers.
18. Replace heavy curtains with sheer ones that let in more light.
19. Buy new towels.
20. Put a seasonal wreath on your door.
Remodeling That Pays
Upgrading your home is always appealing, but which enhancements get you the best return for your money when it’s time to sell? The 2004 Cost vs. Value Report by Remodeling magazine and REALTOR® Magazine has the answer.
Visit REALTOR® Magazine Online's Cost vs. Value page to view reports from previous years, order reprints, and find out how you can take part in next year's survey. Here are the national averages for 10 of the projects in the 2004 report:
MAJOR KITCHEN REMODEL
Update an outmoded 200-square-foot kitchen with new cabinets, laminate countertops, and standard double-tub stainless-steel sink with standard single-lever faucet. Include energy-efficient wall oven, cooktop, ventilation system, built-in microwave, dishwasher, and garbage disposer. Add custom lighting and new resilient floor. Finish with painted walls, trim, and ceiling. Include 30 linear feet of semi-custom grade wood cabinets, including a 3-by-5-foot island.
National Average
Job cost: $42,660
Value at sale: $33,890
Cost Recouped: 79.4%
BATHROOM REMODEL
Update bathroom that's at least 25 years old. Replace all fixtures to include standard-sized tub with ceramic tile surround, toilet, solid-surface vanity counter with integral double sink, recessed medicine cabinet, ceramic tile floor, and vinyl wallpaper.
National Average
Job cost: $9,861
Value at sale: $8,887
Cost Recouped: 90.1%
MASTER SUITE ADDITION
On a house with two or three bedrooms, add a 24-by-16-foot master bedroom suite over a crawlspace. Include walk-in closet/dressing area, whirlpool tub in ceramic tile platform, separate 3-by-4-foot ceramic tile shower, and double-bowl vanity with solid surface countertop. Bedroom floor is carpet; bath floor is ceramic tile. Paint the walls, ceiling, and trim. Add general and spot lighting and exhaust fan.
National Average
Job cost: $70,245
Value at sale: $56,257
Cost Recouped: 80.1%
FAMILY ROOM ADDITION
Add a 16-by-25-foot room on a crawl space foundation with vinyl siding and fiberglass shingle roof. Include drywall interior with batt insulation, prefinished hardwood floor, and 180 square feet of glazing, including windows, atrium-style exterior doors, and two operable
skylights. Tie into existing heating and cooling.
National Average
Job cost: $52,562
Value at sale: $42,347
Cost Recouped: 80.6%
WINDOW REPLACEMENT
Replace 10 existing 3-by-5-foot double-hung windows with vinyl- or aluminum-clad, double-glazed, wood replacement windows. Wrap existing exterior trim as required to match. Don't disturb existing interior trim.
National Average
Job cost: $9,273
Value at sale: $7,839
Cost Recouped: 84.5%
ROOFING REPLACEMENT
Remove existing roofing to bare wood and dispose of properly. Install 30 squares of fiberglass asphalt shingles with new felt underlayment, galvanized drip edge, and mill-finish aluminum flashing.
National Average
Job cost: $11,376
Value at sale: $9,197
Cost Recouped: 80.8%
ATTIC BEDROOM
In a house with two or three bedrooms, convert unfinished space in attic to a 15-by-15-foot bedroom and a 5-by-7-foot shower bath. Add a 15-foot shed dormer and four new windows. Insulate and finish ceiling and walls; carpet unfinished floor. Extend existing heating and central air conditioning to new space. Retain existing stairs.
National Average
Job cost: $35,960
Value at sale: $29,725
Cost Recouped: 82.7%
BASEMENT REMODEL
Create a 20-by-30-foot entertaining area with wet bar, a 5-by-8-foot full bath, and a 12-by-12-foot auxiliary room. Exterior walls are insulated. Include five six-panel primed hardboard doors. Main room includes 15 recessed ceiling light fixtures, three surface-mounted light fixtures, and snap-together laminate flooring system. Bathroom includes standard white toilet, vanity with cultured marble top, resilient vinyl flooring, two-piece fiberglass shower unit, a light/fan combination, vanity light fixture, and recessed medicine cabinet. Bar area includes 10 linear feet of raised panel oak cabinets with laminate
countertops, stainless steel bar sink, single-lever bar faucet, under-counter refrigerator, and vinyl floor tile.
National Average
Job cost: $47,888
Value at sale: $36,457
Cost Recouped: 76.1%
SUNROOM ADDITION
Add a 200-square-foot sunroom to a two-story house. Form and pour footings for slab-on-grade foundation. Use exposed post-and-beam framing on interior side and extruded aluminum window frame-and-flashing system with insulated, low-E, laminated, or tempered glazing. Provide for natural ventilation using screens and ceiling fan. Insulate all non-glass areas; provide movable shades for glass area.
National Average
Job cost: $31,063
Value at sale: $22,002
Cost Recouped: 70.8%
DECK ADDITION
Add 16-by-20-foot deck using pressure-treated SYP joists supported by 4-by-4 posts set into concrete footings. Install composite deck material in a simple linear pattern. Include a built-in bench, a planter of the same decking material, and stairs. Provide a railing system made of the same composite material as the decking or a compatible vinyl system.
National Average
Job cost: $6,917
Value at sale: $6,000
Cost Recouped: 86.7%
Make Your Home Irresistible: 10 Open House Tips
1. Add a touch of color. Use fresh or silk flowers to breathe life and color into the main rooms. A colored afghan or throw on the couch will jazz up a dull room.
2. Make the bathrooms feel luxurious. Put away those old towels and toothbrushes. When buyers enter your bathroom, they should feel pampered. Add a new shower curtain, fresh towels, and fancy guest soaps.
3. Does it smell good? Set out potpourri or fresh baked goods for a homey smell. Make sure that there are no lingering scents from cigarettes or pets.
4. Help them envision living there. Set the table with pretty dishes and candles, and create other vignettes throughout the home to help buyers picture themselves there. For example, in the basement lay out a chess game.
5. Beautify the entrance. Buy a fresh doormat with a pretty pattern or a clever saying.
6. Make the rooms feel bigger. Take one or two major pieces of furniture out of every room to create a sense of spaciousness.
7. Accentuate counter space. Put away kitchen appliances and personal bathroom items to give the illusion of more counter space.
8. Lay logs in the fireplace. Or put a basket of flowers there if it’s not in use.
9. Depersonalize the rooms. Put away family photos, mementos, and distinctive artwork.
10. The lawn should sparkle. Turn on the sprinklers for 30 minutes to make the lawn sparkle.
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