Buying and Selling Real Estate in Boston MA

I am thinking about selling my BOSTON ar..

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Now is probably not the very best time to sell your real estate. However, if you do need to sell, be sure to clean and dress the home as best as possible to get the maximum sell price.

How would you describe the activities of..

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There are lots of things to do in and around boston! There are at least four Different Tour Companies that tour guests onthe Freedom Trail: Boston Adventures Boston By Foot The Freedom TrailFoundation The Histrionic Academy.

Fenway Park is the oldest Major League baseball park in the UnitedStates. Its small, intimate atmosphere really allows you to feel likeyou are "in the game." On a warm summer night there is nothing...

North End : This Italian neighborhood, Boston's oldest, is known for its wonderful restaurants and historic sights.

Beacon Hill: The famous Boston Brahmin neighborhood of red brick sidewalks, cobblestoned streets, elegant townhouses and gas street lamps.

Think Boston

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If you're looking to live and work in the Boston area, there has NEVER been a better time to buy! Contact us today for the best deals in Boston Real Estate including Boston Bank Owned Homes and Boston Foreclosures!

What BOSTON area community events are ha..

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There are always lots of things going on in the Boston Downtown area!

I live out of state and am relocating so..

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Use our web site to find the home of your dreams!

What areas surrounding BOSTON do you cov..

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What areas surrounding BOSTON do you cov..

Understanding Your Credit

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If you have ever applied for a charge card, student loan, or other kinds of credit, you probably have a credit report (or credit profile). Credit reporting agencies collect and organize information about you and your repayment history, and make it available to those who are considering granting you credit. Landlords, employers, government licensing agencies, and insurance underwriters can also obtain your credit report. Lenders will look at things like: How promptly do you pay your bills? How many credit cards do you own? What is the total amount of credit extended? How much do you actually owe on all of your accounts? If they find a history of late payments, bankruptcies or other collection activities, too many accounts, too much indebtedness, maxed out lines of credit, or multiple inquiries in the past 12 months, this could negatively impact your ability to get credit. What is on your credit report? Personal identifying information - name, social security number, date of birth, current and previous address and employers Credit account information - date opened, credit limit or loan amount, balance, monthly payment, payment history Public record information - bankruptcy, tax and other liens, judgements, and (in some states) overdue child support Inquiries - names of companies that got your credit report Your credit report does not contain information on checking or savings accounts; medical history; race, gender, religion or national origin; credit scores; friends; political preferences; or criminal record. Negative information stays on your credit report for 7 years--10 in the case of some bankruptcies. Positive information stays on indefinitely. Inquiries stay on for 6 months to 2 years, depending on the type of inquiry.

Mortgage Funding Info

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The reason why most commercial mortgage deals don't get funded is not because you can't find a lender. More often than not, the reason can be traced back to the "presentation" of the loan request. For example, when completing a residential loan, you fill out a 1003 using Point, Genesis, or another FNMA 1003 program. For a commercial loan request, what do you fill out?

Since there is no uniform commercial mortgage application, most brokers submit a 1003, an operating statement, and possibly a rent roll. However, this would be akin to submitting only the borrower's tax return and pay stubs, expecting a preliminary approval. In other words, it is clearly inadequate.

"A s lenders we see hundreds of loan requests, and most of these requests are incomplete and poorly prepared," says Chris Lewis, VP of Commercial Lending for Wells Fargo, Los Angeles. "Complete loan requests, however, go to the top of the stack as this shows that the broker understands the issues and has some control over the deal."

P ackaging a commercial mortgage loan is significantly different than packaging a residential loan. The main difference is that you need to determine whether the property -- not the borrower -- is generating sufficient "rental" income to cover the mortgage payments on the proposed loan amount (e.g., DSCR), and whether there is commensurate value to meet the lenders' loan-to-value requirement (e.g., LTV).

To calculate the DSCR and LTV, the stabilized net cash flow (NCF) must be determined. In most cases, lenders must re-create the operating statements to conform to their respective underwriting models, which requires identifying certain property-specific expenses.

Credit Info

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Did you know that 75% of all mortgage lenders use a three-digit credit score to determine your loan eligibility? This score is based on the information contained in your credit report. And the interest rate you will be charged is based on your credit score, so raising your credit score as little as 15 points could result in a lower interest rate and thousands in savings. You can save anywhere from a few hundred dollars in credit card interest charges, thousands of dollars on your next car loan, and tens of thousands of dollars on a mortgage loan simply by improving your credit score as much as possible.

The information below offers general guidelines as to what your credit score might be. Each lender sets its own guidelines for approving loans and issuing credit. For this reason, the information below offers only general guidelines. Your debt-to-income ratio also plays a role in determining whether or not you will be issued credit. Some lenders require a debt-to-income ratio that may be higher or lower than those stated below. See bottom of this page to find out how to calculate your debt-to-income ratio.

The information below is based on the FICO scoring model which ranges from about 375 to 900. Other lenders might use their own in-house scoring systems or another scoring model. General rules to determine your credit score and creditworthiness are as follows:

A rating [Credit score 660 or higher] -- You can easily obtain financing at the best rate; you can get approved for a credit card online in a few seconds. Note that a score above 700 means you have extremely good credit.

Typical debt- to- income ratio: Below 35%

Mortgage: You have not been late with a payment in the last 24 months

Installment loan: You have been 30 days late making payments 0 or 1 time within the last 12 to 24 months

Revolving credit: You have been 30 or 60 days late with a payment 0 or 1 time in the last 12 to 24 months

Additional requirements: Good/excellent credit during the last 2 to 5 years; no bankruptcy within the last 2 to 10 years

B rating [Minimum credit score 620] You can get approved, but not at lowest rate. You can get credit cards and such, but at a higher rate than someone with an A rating.

Typical debt-to-income ratio: Around 50%

Mortgage: You have been 30 days late with a payment 2 or 3 times in the last 12 months

Installment Loan: You have been 30 days late with a payment 2 to 4 times during the last 12 months

Revolving credit: You have been 30 days late with a payment 0 to 2 times in the last 12 months

Additional requirements: You have no 60-day late mortgage payments; if filed bankruptcy, it must be discharged 2 to 4 years ago

C rating [Minimum credit score 580] Have trouble getting approved. Very high rates.

The lender might ask you to get someone to co-sign for you.

Typical debt-to-income ratio: 55% or higher

Mortgage: You have been 30 days late with a payment 3 or 4 times in the last 12 months

Installment Loan: You have been 30 days late with a payment 4 to 6 times during the last 12 months

Revolving credit: You have been 60 days late with a payment 2 to 4 times in the last 12 months

Additional requirements: If you filed bankruptcy, it was discharged 1 or 2 years ago

D rating [Minimum credit score 550] Serious trouble getting approved. Co-signor required.

Typical debt-to-income ratio: Around 60%

Mortgage: You have been 30 days late with a payment 2 to 6 times in the last 12 months; and 60 days late 1 to 2 times during the last 12 months

Installment Loan: You have a few 90 and 120 day late payments during the last 12 months

Revolving credit: You have a few 90 and 120 day late payments during the last 12 months

Additional requirements: If you filed bankruptcy, was discharged within last 12 months

E rating [Credit score under 550] Unlikely to be approved.

Typical debt-to-income ratio: Around 65%

Mortgage: You have a pattern of 20, 60, 90 and/or 120 day late payments

Installment Loan: You have a pattern of 20, 60, 90 and/or 120 day late payments

Revolving credit: You have a pattern of 20, 60, 90 and/or 120 day late payments

Additional requirements: You may have a current bankruptcy or foreclosure

How to Calculate Your Debt-to-Income Ratio

The formula for calculating your debt-to-income ratio is monthly fixed expenses divided by gross monthly income (before taxes and deductions). Monthly fixed expenses include all debt, such as the following: house payment or lease, credit card and other revolving credit balances that it will take you longer than 6 months to pay off; car payments, alimony, child support, etc. Do not include grocery, telephone, and utility bills or any debt that will be paid off in the next few months.

Sample calculation:

Gross monthly household income: $5,000

Fixed expenses: $1,560

[house payment $540.00 + car payment $370.00 + credit cards $250.00 + child support $400.00]

Debt-to-income ratio calculation:

$1,560

$5,000 = 31%

Find Your Dream

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Pretty much every person has dreamed of owning and each of these people also has a specific home in mind that they would call their dream home. When thinking about this dream home, people imagine all of the different features that this home would have and all of the great moments that they would have there as well. Unfortunately, this remains a dream for the majority of people because they are never able to accomplish this goal. Owning this dream home remains a dream because people do not know how to begin the buying process and believe that owning a home is out of their reach.

If you are truly committed to owning your dream home, it is possible. The first thing you must do is figure out the type of home you are looking for and the begin searching for the best possible deal. This is the most difficult aspect of home buying because it requires a great deal of research work. You can do this research either on your own, if you want a personalized experience, or through a real estate agent, who will search for a home that meets your requirements for you. If you do decide to find a home on your own, here are some tips to help you along the way.

Research, Research and Research!
The development of the internet has made researching a new home easier than it has ever been. Many real estate agents now have online listings that you can browse quickly and easily and many of these listings include a virtual tour. Through this virtual tour, you can view everything that the home has to offer and then decide whether or not you wish to add it to your list. Internet real estate is also convenient because you can browse at any time and you have access to every listing at the same time.

Searching Tip
Internet researching allows for you to enter in your personal requirements for the home, which will filter out any homes that do not feel this criterion. This will save you a great deal of time, as you will only view the houses that have the same number of bathrooms, bedrooms, and other variables that you desire. This customer search is just like having your own personal real estate agent because the internet allows you to find only the houses that you are interested in.

Your local newspaper is also a good source of information because there will usually be a special section that is devoted entirely to real estate. This will allow you to view listing that are not posted online, for whatever reason, and also homes that are for sale by the owner, as these listings are not usually found on the internet.

Make appointments to look at all the short listed houses

As your search progresses, you will surely develop a shortlist of houses that you wish to view. Be sure that you make an appointment to view each one of these houses because you never know which house will be the one that finally catches your eye. By viewing every house that you like, you will ensure that you are making the right choice when the time does come for you to purchase your new home.

Property Rights

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You have a right to do with the land as you please, subject to restrictions imposed by law. When you own land, you can do many things with it, such as:

use it
rent or lease it to others
sell or transfer it
give it away
use it as collateral for a loan
bequeath it to intended beneficiaries (by will or trust upon your death)
let it sit where it is without doing anything to it
(although this could create problems due to restrictions imposed by law.)

Real Property Definition

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Real Property Definition

Property Investment

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If that's the question that keeps you up at night, welcome to the club. Many investors are wondering where to park their cash. And with the stock market in the dumps and real estate going gangbusters, who hasn't wondered if becoming the next Donald Trump is where it's at?

Nationally, housing prices are up 6.4 percent as of August, but in some places they've soared more than 20 percent in the past 12 months, the National Association of Realtors reports. Why not bag the bears and bulls, purchase a tax-friendly rental property and watch your investment grow? After all, you reason, it'll continue to appreciate while producing a steady income stream.

Trouble is, it's not that simple. Housing prices do fall from time to time and there's already word of a housing bubble that's likely to pop.

So, let's say you've got an extra $100,000 or just came into a $50,000 inheritance. Do you plow it into real estate or put your faith in Wall Street?

The quick answer: There isn't one. Yes, real estate can pay off big time - as can stocks. But both can plummet in value. And while real estate may provide steady rental income, it's a non-liquid asset so you can't sell it in a pinch. Variables aside, however, there is some math to crunch. So pull out that calculator and let's take a look.

First, consider the two ways you can potentially make money on rental property. That'd be rental income and/or a fat payout if you sell the place at a profit.

If you've got a monster mortgage and high expenses, rent may not cover your overall costs, even though they're deductible. By the way, don't forget some of those costs could include a professional caretaker to deal with tenants if you're not the kind of person who wants to put a lot of effort into property management.

Once you figure the costs, you've got to determine if your rent will leave you in the red or the black. In general, if you want to break even your rental income should equal 10 percent of the property's value.

So, let's say you take that $50,000 and use it as a 20 percent down payment on a $250,000 rental home can you make at least $25,000 in rent a year? Check out ads for rental units in your area to see if your projection holds up.

These days, while the housing market remains hot, you may have trouble renting at all. If someone can buy as cheaply as renting, they'll often buy. That means landlords have to lower prices to attract tenants. In fact, they're already doing so. While rents have risen about 3.5 percent nationally in the past decade, this year they're down an average of 2 percent. And in some markets, like San Jose, San Francisco and Austin, rents have dropped 12 percent to 25 percent in the past year, according to NAR.

"We're looking at a very strong housing market so more renters are becoming homeowners," said NAR economist Sigrid Fennemore. In fact, rents should drop nationally by another 1 percent next year, she predicts, as massive layoffs take their toll.

As it turns out, it doesn't take much to beat the Street. Consider your $250,000 rental property.

If it climbs 6 percent in value the first year - the historic average annual gain on housing nationwide - you'd be sitting on an asset worth $265,000. You would have made 30 percent on your $50,000 downpayment.

"That's the effect of leveraging," said Gerald Weiss, a certified financial planner in Dublin, CA, who notes the value of your entire investment goes up, rather than just the value of the downpayment you contributed.

Now let's try a similar equation using stock investments.

Assume you plunk that $50,000 into an S&P 500 index fund that returns a conservative (though difficult to achieve lately) 8 percent. That's a $4,000 gain.
Not bad. But in order to make the same amount on your rental property, it would have had to appreciate far less by just 1.6 percent. (To do the math, divide $4,000 by $250,000 and you'll get 1.6 percent.)

So, is real estate a slam dunk?

NO.

Experts like Schatsky and Weiss say they advise clients to have 5 percent to 10 percent of their portfolios in real estate including Real Estate Investment Trusts (REITs).

REITS have earned more than 30 percent since 2000 - plus they've delivered 7 percent dividends. Best, to make this money you never have to deal with a tenant.

Property Trust(s)

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An REIT is a company dedicated to owning and, in most cases, operating income-producing real estate, such as apartments, shopping centers, offices and warehouses. Some REITs also are engaged in financing real estate. Most importantly, to be a REIT a company is legally required to pay virtually all of its taxable income (90 percent) to its shareholders every year.

Negotiating a Contract

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When writing a purchase contract, avoid expensive terminology such as paying a buyer's closing costs, and of course you should watch out for all the contingencies that could cost you time with your home off the market. If the buyer wants to close on the sale contingent with the selling of his or her house, include a kick-out clause that will allow you to back out of the contract within seventy two hours if you receive an offer that does not contain contingencies

Buyers vs. Sellers Market
The first job before making a contractual offer is understanding the housing market that is working in your local area. This will help you determine how quickly you need to buy when looking at homes.

If you happen to be in the buyer's market, you will of course have plenty of time to find and search out several homes in different areas and price ranges before you negotiate best possible price.

If you happen to be in a seller's market, things are different, you may have a very short time to make and write an offer before your house slips away!

Buyers Market - The real estate market has more sellers than it has buyers and time is on your side! You will find plenty of homes that you can visit, and even revisit again for comparisons, before you negotiate favorable contract terms.

It would be very advisable to run a CNA, or comparable neighborhood analysis on homes that you have visited before making your offer.

Items you should compare include:

The age and the condition of similar homes in the same neighborhood

The homes that are sold within the last six months in the same area.

Real Estate Negotiation

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Dont Let It Fall Through

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The following represents the most common reasons why deals fall through..

Moving too fast.
Its tempting to push a negotiation through quickly - more so if you have financial pressure, or have to relocate. Take your time though, read each offer carefully and consider if the amount is what you were originally looking for - or close to it. It may be better to make repairs before selling, and letting time work on your side.

Letting emotions rule.
Homes are a commodity. Dont be offended by remarks people make about your home decor or landscaping. Dont be offended by a low offer. In a seller's market, counter with an appropriate offer and dont be affraid to deal with a buyer who has offended you.

Reluctance to counter.
Countering an offer is normal in the real estate business. Countering means bringing another offer to the buyer and their agent. They will either come back with another offer or decline. Make caounter offers in writing to avoid misunderstandings.

Bad-faith bargaining.
Bad faith bargaining means making offers with no serious intention of completing the transaction. If you aren't serious about selling your home, that is, if you won't accept anything but an over inflated offer, you shouldn't be in the market. A bad faith buyer only makes unacceptably low offers with no serious intention of buying.

Sell Your Home Fast

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Sell Your Home Fast

Real Estate Tax Advice

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Real Estate Tax Advice

Property Inspection

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A pre-sale evaluation from a qualified home inspector can save both money and heartache. You'll end up with a list of repairs you can address before you sell. The last thing you want is a surprise during the buyer's home inspection that will force you to lower the price or make costly, last-minute repairs before closing.

Once you've found the home of your dreams, it's time to make an offer to buy it. Before deciding how much to offer, HUD urges you to get a professional inspection. It can also be helpful to find out how long the home has been on the market-if it's been for sale a while, the seller may be more willing to bargain.

After you and the agent have prepared your offer, he or she will present it to the seller. It may be accepted or rejected, or the seller may counter your offer by asking for a higher price or by making changes in the sales contract.

WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME?
An inspector checks the safety of your potential new home. Home Inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware of only repairs,that are needed.

The Inspector does not evaluate whether or not you're getting good value for your money. Generally, an inspector checks (and gives prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and Ventilation, the HVAC system, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors, and roof. Be sure to hire a home inspector that is qualified and experienced.

It's a good idea to have an inspection before you sign a written offer since, once the deal is closed, you've bought the house as is." Or, you may want to include an inspection clause in the offer when negotiating for a home. An inspection t clause gives you an 'out" on buying the house if serious problems are found,or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.

DO I NEED TO BE THERE FOR THE INSPECTION?
It's not required, but it's a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you'd I like to purchase and it is a good time to ask general, maintenance questions.

ARE OTHER TYPES OF INSPECTIONS REQUIRED?
If your home inspector discovers a serious problem a more specific Inspection may be recommended. It's a good idea to consider having your home inspected for the presence of a variety of health-related risks like radon gas asbestos, or possible problems with the water or waste disposal system.

HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOME?
If the house you're considering was built before 1978 and you have children under the age of seven, you will want to have an inspection for lead-based point. It's important to know that lead flakes from paint can be present in both the home and in the soil surrounding the house. The problem can be fixed temporarily by repairing damaged paint surfaces or planting grass over effected soil. Hiring a lead abatement contractor to remove paint chips and seal damaged areas will fix the problem permanently.

ARE POWER LINES A HEALTH HAZARD?
There are no definitive research findings that indicate exposure to power lines results in greater instances of disease or illness.

Pick An Offer

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How can I make sure my home will attract multiple offers?
Hit the market at the right price and, assuming your home is in good condition, multiple offers should come in. "Sellers see [home prices] are going higher, so they want to go a little higher. Sometimes it works and sometimes it doesn't. You can end up having to wait for the market to catch up with you," says Bob Stallings, broker/owner of RE/MAX Real Estate Specialists in Long Beach, California.

TIP: Make sure your listing agreement states that your agent will put your home in the Multiple Listing Service (MLS) within 24 hours. Some agents will hold a home off the MLS for a day or two in hopes of selling it themselves or in-house. Putting the home in the MLS as soon as possible is in the seller's best interest because the home then will be exposed to a much larger number of potential buyers.

Do I have to accept the offer with the highest price?
No. If you prefer a lower-priced offer, perhaps with a better qualified buyer or more attractive terms, you can accept that offer instead. Or you can give counteroffers to one or more of the buyers. Caution: If you reject a full-priced offer, you may owe your agent a full commission even if you don't sell your home.

Being greedy can back-fire. REALTOR Rae Wayne of The Bizzy Blondes team with RE/MAX Westside Properties in Culver City, California, says one seller instructed her to tell all the buyers' agents that offers would not be considered until the property had been on the market for one week, unless the offer was full-price or better. One agent asked to submit an offer right away, but the sellers, who were hoping for multiple offers, insisted on waiting until the appointed time. A week later, that agent was still the only one ready to submit an offer. "The seller said to me, 'What if we plan a party and nobody comes?' I said, 'That's the risk you took when you didn't want to look at this offer four days ago,'" she says. If you delay, anything can happen, including the buyers losing interest or offering a lower price.

My agent says I should receive all my offers by fax, rather than having the buyers' agents present the offers. Is that okay?
Some agents recommend the fax-only option. "Very few agents who do a lot of business will [present offers] anymore," says Carole Geronsin, a Realtor-associate with Prudential California Realty in Anaheim Hills, California. "Before, everyone would meet and the agents would tell all about their buyers, then everyone would wait while the seller made a decision." If there are multiple offers, the fax-only practice is a time-saver for you and the agents. However, the jury is still out on this practice. "I wonder [whether] the sellers are getting the full picture of the buyers, unless there are cover letters telling them about the buyers' qualifications. It's hard to really understand [the offers] and make a clear decision," says Stallings. "I'm a strong believer that it's best for both sides to have the offers presented, so the seller can ask the buyers' agents questions about the buyers."

TIP: You might want to receive all the offers by fax, then have the top offers presented. Either way, you, as the seller, make the rules.

One of the buyer's agents is from the same brokerage company as my agent. Should I give extra consideration to this "in-house" offer?
No. All offers should be evaluated equally based on the net price and terms. "We often have offers on our own listings and the sellers don't pick ours. If my own offer is marginal and the other offer is good, the last thing I want is for my seller to be mad at me. I'm going to look for the best offer," says Judy Sheller, the other half of The Bizzy Blondes team.

TIP: Some brokerages give the seller a commission break for an in-house transaction. This concession is known as a "variable commission" or "listing broker advantage." It should be discussed in advance and disclosed through the MLS.

Can I counter more than one offer?
Yes. However, if you accidentally accept more than one offer you could be legally obligated to sell your home to two buyers. For safety's sake, use a standard counteroffer form that says the counteroffer isn't accepted until it is signed by the buyer and subsequently accepted by you.

Can I back out of my escrow with buyer A and accept a new higher offer from buyer B that my agent just received?
Trying to back out of an escrow is extremely unwise because an accepted purchase offer is a legal contract and the buyer can take action to enforce it. "Legally, once you have signed and agreed to the offer with buyer A, you can't get out of it. Your only hope would be that the buyer does an inspection and makes a bunch of requests. You flatly refuse everything and perhaps the buyer walks away," says Wayne.

My home has been on the market for four weeks, but I haven't received any offers. Is this situation my agent's fault?
If you ignored your agent's advice about pricing your home or making any repairs, it's not really reasonable to blame the agent for the dearth of offers. However, if the home is priced right and in good condition, you'll want to have a frank conversation with your agent and take corrective action. Never sign a listing agreement with a term of more than three months. As a last resort, you can ask your agent's sales manager to help resolve any complaints.

Open House Expectations

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Your agent is closing up shop in your home after a weekend open house. You cleared out early, as instructed, but now you've returned home and are bursting with curiosity about the day's event. Here are some questions you might want to ask:

1. How many people stopped by and who were they? If the turnout was disappointing, you may want to quiz your agent about his or her efforts to attract people to the event. Was the open house listed in the newspaper? Mentioned around the agent's office? Did any of your neighbors drop by?

2. When and how will the agent follow-up with prospective purchasers or their agents? Hot prospects who seem well-qualified should be contacted as soon as possible after the event and asked whether they're interested in seeing the home again, have any questions or concerns about the home or are planning to make an offer to purchase it.

3. What positive and negative feedback did the agent receive about the home? You'll certainly want to know what people are saying about your home, but don't take minor criticisms too personally or overreact to any one person's comments. Do pay attention to repeated criticism of one or more specific aspects of your home. You can disregard one person who dislikes your taste in wallpaper, but if six or seven people make the same comment, you might want to have that offensive pattern stripped off.

4. Did any problems or mishaps occur during the open house? Many open houses attract only a handful of visitors, but it's also entirely possible for 15 or 20 people to traipse through your home in a couple of hours. If there were any problems -- someone injured a knee on your glass -- topped coffee table or slipped and fell on the wet grass in your backyard-you'll want to know about it.

5. What's next? Now that the open house is over, what else is your agent planning to do to find a buyer for your home? Does the agent intend to continue with the existing marketing tactics or will some new plans be put into action? Would another open house be worthwhile?

TIP: Unless open houses are particularly well-attended in your neighborhood, you might want to forgo these events altogether or just hold one open house the first or second weekend after your home is listed. Some surveys suggest that open houses are more beneficial for the agent than the home seller and that only a tiny percentage of homes are sold as the direct result of an open house.

Your Open House

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The weekend open house is a time-honored tradition in real estate sales, but has it outlived its effectiveness? Quite possibly, according to a new survey conducted by the Real Estate Center at Texas A&M University. The survey results hint at the notion that public open houses may be more beneficial for the agents themselves than for the home sellers.

Almost all the agents who responded to the survey (97 percent) had held public open houses, but only 41 percent believe those events help sell the home that's being showcased. Thirty-two percent believe public open houses attract many potential buyers, but nearly three-fourths also believe those buyers are more likely to buy a home other than the one being held open. And 62 percent say most people attending open houses aren't serious buyers at all.

Even though open houses may be of only marginal benefit for sellers, they aren't necessarily a total loss for sharp agents. In addition to bringing in buyers for other homes, open houses create opportunities for agents to sign listing agreements with neighbors who stop by to see the open home. Fifty-five percent of the survey respondents agreed with the statement that open houses help them generate new listing contracts.

Public open houses also present a security issue for home sellers and agents. "Whether or not to hold an open house is a concern among agents," says Jack Harris, a research economist with the Texas A&M center. "Agents must be on-site for the duration of open houses. Safety is a growing concern because there is no way to know whether a visitor is a serious buyer, just curious or has more sinister motives."

Despite the potential for meeting prospects, many agents find open houses troublesome, dangerous and generally a waste of time. The first lesson for home sellers is: Unless your home is unusual (i.e., difficult to sell), you might want to spend your weekends enjoying your own backyard, rather than turning your home over to your real estate agent. If your agent is gung-ho on public open houses, find out what supplemental marketing efforts (e.g., advertising the open house in a local newspaper) he or she will use to attract serious buyers for your home to the event.

The falling favor of public open houses may be partially attributable to new marketing techniques, including real estate Web sites, cable television infomercials and yard signs that transmit radio messages about the home. Weekday agent open houses (also called "broker opens") remain popular and, agents say, worthwhile for sellers. "Agent open houses are held when the listing agent invites other agents to view the home when first placed on the market, hoping one or more agents will have a buyer interested in the home," Harris explains.

Virtually all of the respondents had held agent open houses. More than half believe agent open houses are effective and 65 percent believe they're more effective than public open houses.

The second lesson for home sellers is: On the day when your agent holds a broker open, be sure your home is as presentable and attractive as you possibly can make it.

Your Open House

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Your Open House

Marketing Info

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Your home should be listed, whenever possible, in the local Multiple Listing Service and on my site, which has a huge online database of homes and virtually 100% of potential buyers who look for property on the Internet.

Advertising
The realtors largest expense has traditionally been classified advertising in the local newspaper. However, today properties are also exposed through popular Internet home search/listing services, radio and television promotions, and real estate guides. Even with all these additional advertising avenues, "For Sale" signs on the front lawn are still remarkably effective. Many realtors use brochure boxes along with these signs to market the property. When appropriate, and with your permission, your agent may send a mailing about your property to neighbors. Sometimes one of them has "a friend or relative who always wanted to live near me." You never know.

Showings and open houses
To prepare your home for viewing, make it as light, cheerful and serene as possible. Your realtor will probably find a tactful way to suggest that you not be present while the house is being shown to prospective buyers. This is done because your presence will inhibit their actions and conversations. They wont feel free to open closets and cabinets, test out the plumbing, and discuss their observations objectively as they walk through. It goes without saying that your children and pets should not be on the premises either.

If your realtor has scheduled an open house, you may want to notify the neighbors, and assure them that they'll be welcome. They'll jump at the chance to poke around in your house, and sometimes they can turn up a buyer among their friends. In preparing for an open house, you should:

Pull the drapes back
Light lamps
Simmer a few drops of vanilla on the stove
Light your fireplace
Set the dining room or kitchen table if you have particularly nice linen or china
Put fresh towels in the bathroom
Leave the house so your realtor is free to deal with prospective buyers in a professional manner.

TIP: When preparing your home, think about the techniques that are used to show builders' model homes.

How long has your house been on the market?
Professional appraisers sum up their entire body of knowledge in three words -- "Buyers make value." Your home is worth as much as some member of the buying public will come forth and pay for it. After it's been on the market for months, you've been given a clear message that the property may not be worth what you're asking for it. This is particularly true if there haven't been many prospects coming to see it. What you do at that point depends on whether you really need to sell, and whether you're working with a time limit. If you're not really motivated to move soon, you can always wait - years if necessary - and hope inflation will catch up with the price you want. The problem is that in that time, your home begins to feel shopworn. Buyers become suspicious of a house that's been for sale for a long time. If, however, you really do need to sell, discuss with your realtor a schedule for dropping your price gradually until you find a level that attracts buyers. There's no point in saying, "We simply can't sell our house." Anything will sell if the price is right.

If youre buying another home
Dont spend a great deal of time worrying about what will happen when you're selling one home and buying another. You're not alone. realtors , lawyers, and title and escrow companies have had plenty of experience in arranging contracts and loans so that the two transactions dovetail smoothly. It's best to list your present home for sale first.

Selling and buying a home is a very emotional event and if you create a "race" by locating your replacement property before you sell your current home, you may lose it to another buyer, who does not need to sell in order to buy. If you do find just the house you want, you can always put in a purchase offer contingent (dependent) on selling your present one. However, in a hot market you will have difficulty getting the house you want this way.

Sometimes the seller will sign a contract agreeing to wait a certain period of time while you find a buyer for your house - sometimes not. What would you do if you were presented with such a proposal, from a buyer who also has a house to sell? If you do find that you need to buy the next house before you've received the proceeds from the present one, lending institutions can sometimes make you a short-term "bridge" loan to tide you over between the two transactions. Make sure you fully understand the exposure and emotional investment before proceeding with this type of loan.

Listing Real Estate

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1. Term of the Agreement. A longer agreement benefits the agent because it allows him or her more time to find a buyer for your home. In a weak market, that's okay, but if homes are selling quickly, you don't want to be committed to one agent for more than a few months. If the home doesn't sell within the initial period and you're satisfied with the agent's efforts, you can offer to extend the term of the agreement before it expires.

2. Commission. Although commissions are negotiable, most areas have a standard percentage that agents expect to receive. This amount usually is 6 percent of the sales price, but you will find agents who accept 5 percent and agents who ask for 7 percent. Whether you want to pay the percentage that's typical in your area or negotiate a lower rate is up to you. A lower commission will save you money. A higher commission will give the agent more incentive to invest in marketing your home. Other agents can find out how much commission is offered on your home through the MLS. The agent's commission technically shouldn't be renegotiated as part of the purchase agreement between the seller and the buyer, but some agents will give a little to close a price gap between the seller and buyer, consequently making the transaction viable.

3. MLS. A listing agreement typically authorizes your agent to post your home in the Multiple Listing Service (MLS). Unless you're selling a very exclusive property or have serious personal privacy concerns, the MLS is a no-brainer because it helps the agent market your home to the widest possible group of potential buyers. Today, most MLS databases are accessible by consumers on the Internet. The public does not have access to commission information on the listings.

4. Lockbox. A lockbox is a tiny key-holding safe that can be inconspicuously attached to the front of your property. Any agent who has the means of accessing the lockbox (e.g., the key or combination) can retrieve the keys to your home, unlock your door and show your home to prospective buyers even when neither you nor your agent is present. If you're concerned about strangers entering your home alone, don't authorize a lockbox. If your home is vacant, located in a low-crime area or if you've removed your valuables and are willing to take the risk, a lockbox might be reasonable. The more people who see the property, the better chance you'll have of selling it for a favorable price.

Selling My Property

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Selling My Property

Getting Real Estate Ready

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Presentation is very important. Buyers are lured to clean, attractive and spacious homes. The goal is to impress your buyer. Brighten the house and remove clutter from table tops and rooms. Clean your home from top down to really make it sparkle. Aestetic improvements such as cropping trees and bushes also go a long way to increase your home's appeal.

In preparing your private property for sale, consider:

how much should I spend?

exterior and curb appeal

preparing the interior

How much should I spend?

In preparing your home for the market, spend as little money as possible. Buyers will be impressed by a brand new roof, but they aren't likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen.

The simplest way to think about how much to spend is to divide your spending into two categories:

What things, if left unchanged, are going to bring the price down by more than it costs to fix or change them?

What new changes can I make that will definitely increase the price by more than I pay for them?

The first category tends to be all your 'touch-ups' - fresh coats of paint etc. The second category requires careful thought before you spend - new bathrooms or kitchens or carports. You need to be convinced that (a) you will definitely get a significantly higher price for this effort, and (b) that you don't decrease the pool of people who are potential buyers. (In other words, not everyone wants a pizza oven in the back yard, so your potential buyers pool is decreased.)

Focus on curb appeal

The age-old observation that "you never get a second chance to make a first impression" certainly applies when it comes to attracting buyers to a for-sale home. Estate agents understand the power of 'curb appeal;' that initial impression a buyer gets driving up outside your property.

Ever noticed how, after living in a house for a while, you become 'blind' to those niggling details that other people see? To maximize curb appeal, you need to see the exterior of your property with 'fresh eyes;' perhaps ask a good friend for their opinion.

Tips to enhance your home's exterior and curb appeal:

Keep the lawn edged, cut and watered regularly. (Buy 'Bounce Back' from your local nursery to apply it to make your lawn greener.)

Trim hedges, weed lawns and flowerbeds, and prune trees regularly. Cut back overgrowth on pathways.

Consider planting a few lavender bushes around the outside of your garden gate.

During spring and summer months consider adding a few showy annuals, perhaps in pots, near your front entrance. (Two large pots either side of an entrance always looks good.)

Basic intercom systems are pretty cheap nowadays; consider installing one at your gate if appropriate.

Store toys, bicycles, roller-skates, gardening equipment and the like out of sight.

Have at least the garden gate, the front of your house and the trim painted, if necessary.

Check the foundation, steps, walkways, walls and patios for cracks and crumbling.

Inspect doors and windows for peeling paint.

Sweep the porch and the front walkway.

Repair and replace loose or damaged roof tiles.

Re-seal an asphalt driveway.

Keep your garage door closed.

Store old and beaten up cars elsewhere while the house is on the market.

All in all, your attention to curb and exterior appeal should translate into excited buyers by the time they enter your home. With no 'cringe factors' outside the house, they are in a great frame of mind entering the house and fully expect a positive experience.

Maximizing interior appeal

There is a lot that you can do to improve the impression the interior of your home gives potential buyers, without getting into major renovations. In general, don't underestimate the power of paint! While we all have different tastes, please be aware that if you have outlandish taste in interior colour, you will be decreasing the pool of potential buyers. In other words, this is not an exercise in expressing yourself creatively; rather it is an exercise in creating an interior that appeals to as many buyers as possible. If necessary, repaint dingy, soiled or strongly colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum.

Here are some of the other 'insider tips' that estate agents use:

Clear out the clutter

Real estate agents say buyers won't purchase a home they can't see. If your home has too much furniture, overflowing closets, crowded kitchen and bathroom countertops or lots of family photos or collectibles on display, potential buyers won't be able to see your home. Get rid of anything you don't need or use. This alone will make your house appear bigger and brighter. Some homeowners with crowded rooms have actually rented storage garages and moved half their furniture out, creating a sleeker, and more spacious look.

Removing less frequently used items from kitchen counters, closets, and attics make these areas much more inviting. Since you're anticipating a move anyhow, holding a garage sale at this point is a great idea.

Use your nose

Many people are oblivious to scents, but others are extremely sensitive to offensive odours. To eliminate bad smells, bathe your pets, freshen the cat litter box frequently, shampoo your carpets, dry clean your drapes, and empty trash cans, recycling bins and ash trays. Place open boxes of baking soda in smell-prone areas, and refrain from cooking fish or strong-smelling foods. Introduce pleasing smells by placing flowers or potpourri in your home and using air fresheners. Baking a fresh or frozen pie or some other fragrant treat is another common tactic when expecting buyers.

Make all necessary repairs

Buyers expect everything in their new home to operate safely and properly. Picky buyers definitely will notice - and likely magnify - minor maintenance problems you've ignored for months or even years. Leaky faucets, burned-out light bulbs, painted-shut or broken windows, inoperable appliances and the like should be fixed before you put your home on the market. These repairs may seem small, but left undone they can lead buyers to question whether you've taken good care of your home.

Here are a few examples:

Check for cracks, leaks and signs of dampness in the attic and basement.

Repair cracks, holes or damage to plaster, wallboard, wallpaper, paint, and tiles.

Replace broken or cracked windowpanes, moldings, and other woodwork. Inspecting and repairing the plumbing, cooling, and alarm systems.

Repair dripping taps and showerheads.

Keep it spotless

This is often a tricky point for estate agents to make - different people are comfortable living with different levels of cleanliness. To appeal to as many buyers as possible, it is imperative that every inch of your house is clean and grime-free. Giving every room in the house a thorough cleaning. Hiring a professional cleaning service, once every few weeks while the house is on the market. This may be a good investment for owners who are busy elsewhere.

Focus on the 'hotspots'

While all rooms in the home are important, estate agents know that kitchens, bathrooms and master bedrooms are the 'hotspots.' These rooms require special attention. Assuming that you don't do major renovations, here are some ideas:

Kitchen cabinet and general cupboard doors can be spruced up with a paint technique and new handles.

Repaint the kitchen and bathroom walls in neutral colour, if necessary.

Clean all tiling grout using a grout cleaning product. (You can buy grout cleaner from your hardware store.) You'll be amazed how much better your tiles look!

If your lights are dated, consider replacing them.

Consider retiling your kitchen and bathroom, if appropriate.

New curtains in these areas may be a worthwhile investment.Buy new towels for the bathroom, to be brought out only when prospective buyers are on the way.

Real Estate List Price

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An agent can help you set your best list price because they have access to data you may not! Consider the free home evaluation tool. This is but a small taste of the data at the fingertips of of your real estate agent!

Consider these things when deciding whether or not to work with a listing agent to sell your home. If you're buying a home, think about working with a buyer's agent.

If You Work with an Agent

You sign a listing contract, which is a legally binding agreement that typically gives the agent the exclusive right to sell your property within a certain period of time (usually 60 to 90 days).

The agent researches the market in order to determine your home's market value and reach a sales price in consultation with you.

The agent prepares a written marketing plan that includes a schedule for listing, showing, and advertising your property.

The agent advises you on how best to prepare your home for sale and helps arrange for pre-sale tasks such as a home inspection.

The agent transmits any offers to you, negotiates the purchase based on your recommendations, and moves all the paperwork through the transaction.

You pay for the listing agent's services, either as a percentage commission (usually 4 to 6 percent) or a flat fee, as specified in your listing contract. The buyer's agent is paid out of that fee.

Housing Market Info

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Median price. An oft-cited indicator of the strength and direction of a housing market, a median price is the midpoint of all the prices of homes sold in a given area during a specified period. Midpoint means half the homes sold for higher prices and half the homes sold for lower prices. The median isn't the same as the average, which would be calculated by totaling all the prices and dividing by the number of prices. The median price can be affected over time by the characteristics and sizes of homes sold as well as price trends. For example, if the market shifts from starter homes to luxury mansions, the median price will increase even if homes are not appreciating in value.

Seasonally adjusted. Housing markets are naturally more active in the spring and summer months because people prefer to move during the longer warmer days and between school years. That pattern means it's difficult to make meaningful comparisons between results for different months or quarters of the same year. To overcome this hazard, economists statistically tweak the reported number of homes sold during various periods to reflect seasonal variations. The tweaked numbers are denoted as "seasonally adjusted."

Price discount. The "price discount" is the percentage difference between the seller's initial asking price and the actual purchase price of the same home. For example, if a home were priced at $200,000 and sold for $190,000, the discount would be 5 percent. Price discounts are usually reported as an average for a set of home sale transactions. A small percentage, on average, means the market favors sellers, while a large average discount signals a buyer's market.

Unsold inventory index. This index, which indicates the pace of the market, is calculated by measuring how long it would take for all the homes currently on the market to be sold at the current rate of sales. A smaller index is a positive sign for sellers, while a higher number is good news for buyers.

Affordability index. An affordability index measures whether a typical family can qualify for a standard mortgage to purchase a typical home. A "typical" family is defined as one that earns the median income in a given area, and a "typical" home is defined as a median-priced single-family house in the same area. An index value of 100 means a median-income family has exactly the amount of income needed to purchase a median-priced home. A number higher than 100 means the family's income is more than adequate, while a number less than 100 means the typical family can't afford to buy the typical home.

Pricing Your Property

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If youve decided to sell your home, chances are youre caught up in a host of emotions. You may be looking forward to moving up to a new dream house or facing the uncertainty of a major move across country. You may be reluctant to leave your memories behind or eager to start new adventures. Whatever turbulent feelings youre experiencing right now, there are plenty of practical matters that need your attention. Keep in mind the following considerations to help the whole process go more smoothly.

Its a good idea to place your home on the market as far in advance as possible of purchasing a new one. If you find a new home first and then try to sell your present home, you may wind up with two mortgages. If this does happen, ask your real estate agent or banker about a bridge loan to help you make the double payments. Lenders use the same criteria for offering bridge loans as they use for mortgages. Should you choose to accept a bridge loan, beware of the expense; during the term of the loan you must continue to pay both mortgages. Shop around for the best terms.

Keep in mind that when people move, sell and buy, there usually is a domino effect. Closing and moving dates have to be coordinated, and the more firmly everyone commits to a window of dates and sticks to them, the better for all involved. Put all agreements about dates in writing, and protect yourself by negotiating financial penalties for failure to comply.

A home thats visually appealing and in good condition will attract potential buyers driving down the street. Use this checklist to view your property through an outsiders eyes.

Are the lawn and shrubs well maintained?

Are there cracks in the foundation or walkways?

Does the driveway need resurfacing?

Are the gutters, chimney and walls in good condition?

Do the window casings, shutters, siding or doors need painting?

Are garbage and debris stored out of sight?

Strong curb appeal will lure potential buyers inside, where you have to live up to their expectations. Fortunately, there are plenty of easy improvements you can make to your homes interior without spending a lot of money. Cleaning is No. 1. Your windows, floors and bathroom tiles should sparkle. Make sure you have clean heating and air conditioning filters. Shampoo dirty carpets, repair dripping faucets and oil squeaky doors. It may not seem fair, but a peek in the oven may be the hallmark by which a buyer judges how well you have kept up your home.

Remove unnecessary clutter from the garage, basement, attic and closets. If your home is crowded with too much furniture, consider putting some things into storage. If a room needs a fresh coat of paint, use a neutral off-white. Think, too, about how your home smells. You may be used to the smell of a pet or cigarettes, but such odors can be a strong turn-off to others. Finally, set a mood for the buyer. Make your house homey with live flowers and fresh guest towels in the bathroom. Place scented potpourri around the house or, on the day youre expecting a potential buyer, pop a batch of frozen cinnamon rolls into the oven for a welcoming aroma.

Remember, cosmetic changes do not have to be expensive. In fact, costly home improvements do not necessarily offer a good return on your investment when you sell. Its attention to the basics -- anything that says this home has been carefully maintained -- that will help you get the price you want.

Property Appraisal

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The preparation of any appraisal begins with an interior and exterior inspection of any given home, building or property. The appraiser then looks for assets and any and all detriments that the real estate will offer by viewing the property with an objective perspective.

Some of the more important items in the property is gross living area, condition, and quality of construction. Additionally, location, layout, number of bedrooms and bathrooms and lot size are also considered. The appraiser will also note the amenities such as central a/c, landscaping, fireplaces, decks, and all recent renovations including pool, fencing, kitchens and baths etc. It is important for the home owner to point out all the amenities, or improvements that may not be completely obvious to any appraiser in a normal and considerate walk through of the property.

The appraiser will also make an assessment of the neighborhood and surrounding areas, noting any location of amenities which could be important to a home owner and/or buyer. In many cases these same items may be considered a detriment to the property based on there distance to the subject. Oftne, residential properties that are too close to a non residential property may be viewed as less desirable by a purchaser, and reflected as such in any appraisal report.

Real Estate Appraisal Info

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The appraisal process is often considered to be the process of analyzing collecting and reconciling data that relates to any home or property being appraised. This data is then formatted in an order that can lead the reader of the report to the same conclusions as the appraiser.

You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn't mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don't want to worry initially about upkeep and repairs.

More Tax Advice

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You may qualify to exclude from your income all or part of any gain from the sale of your main home. Your main home is the one in which you live most of the time.

Ownership and Use Tests

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least 2 years (the ownership test) Lived in the home as your main home for at least 2 years (the use test) Gain

If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

If you can exclude all of the gain, you do not need to report the sale on your tax return If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040) Loss

You cannot deduct a loss from the sale of your main home.

Worksheets

Worksheets are included in Publication 523, Selling Your Home to help you figure the:

Adjusted basis of the home you sold
Gain (or loss) on the sale
Gain that you can exclude
Reporting the Sale

Do not report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable. Report any taxable gain on Schedule D (Form 1040).

More Than One Home

If you have more than one home, you can exclude gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

Example One:

You own and live in a house in the city. You also own a beach house, which you use during the summer months. The house in the city is your main home; the beach house is not.

Example Two:

You own a house, but you live in another house that you rent. The rented house is your main home.

Business Use or Rental of Home

You may be able to exclude your gain from the sale of a home that you have used for business or to produce rental income. But you must meet the ownership and use tests.

Example:

On May 30, 1997, Amy bought a house. She moved in on that date and lived in it until May 31, 1999, when she moved out of the house and put it up for rent. The house was rented from June 1, 1999, to March 31, 2001. Amy moved back into the house on April 1, 2001, and lived there until she sold it on January 31, 2003. During the 5-year period ending on the date of the sale (February 1, 1998 - January 31, 2003), Amy owned and lived in the house for more than 2 years.

Amy can exclude gain up to $250,000. However, she cannot exclude the part of the gain equal to the depreciation she claimed for renting the house.

Real Estate Agent

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One of the most complex and important financial events in peoples lives is the purchase or sale of a home or investment property. Because of this complexity and importance, people usually seek the help of real estate brokers and sales agents when buying or selling real estate.

Real estate brokers and sales agents have a thorough knowledge of the real estate market in their community. They know which neighborhoods will best fit clients needs and budgets. They are familiar with local zoning and tax laws and know where to obtain financing. Agents and brokers also act as intermediaries in price negotiations between buyers and sellers.

Real estate agents usually are independent sales workers who provide their services to a licensed real estate broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from the agents sale of the property. Brokers are independent businesspeople who sell real estate owned by others; they also may rent or manage properties for a fee.

Real Estate FSBO Advice

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1. FSBOs can't list their home in the MLS. FSBOs aren't permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. FSBOs are also locked out of many home search engines and Web sites, including this site. Sure, a determined FSBO can put a for-sale sign in his or her front yard and run a tiny advertisement in the local newspaper, but the home won't receive nearly as much exposure as it would through the MLS.

2. Agents won't show FSBO homes. In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there's no guarantee that the buyer's agent will be compensated for his or her services, unless the buyer has signed a buyer's brokerage agreement that specifically provides for such compensation. Even if a FSBO offers to pay the buyer's side of the commission, most agents won't want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to un-represented and probably unqualified prospects.

Real Estate Appraisal

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Only an appraiser can give a real home value, but one thing your real estate agent can help you with, is determining the 'sold' value of homes around the area. This is especially important when writing an offer!

Real Estate Tax Shelter(s)

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Real Estate Tax Shelter(s)

Real Estate Tax Benefits

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The purchase - The IRS says you can deduct interest in the year that it is paid, and that is usually part of each monthly loan payment.

Mortgage interest - In general, you can deduct interest charged on a loan used to acquire or improve your principal residence in the year that it is paid.

The sale - Because your home is considered a capitol gain, there is no tax on the sale of your home.. (up to $500k for married, $250k for single)

If you have a gain from the sale or exchange of your main home in 2003, you may be able to exclude from income up to $250,000 of the gain ($500,000, for certain married taxpayers filing a joint return). The exclusion may be allowed each time you sell or exchange your main home, but generally no more frequently than once every two years. You cannot deduct a loss from the sale of your main home.

If you sold your home under a contract that provides for part or all of the selling price to be paid in a later year, you made an "installment sale." Refer to Topic 705 for more information.

To be eligible for an exclusion, your home must have been owned by you and used as your main home for a period of at least two years out of the five years prior to its sale or exchange. You can meet the ownership and the use tests during different two year periods. However, both tests must be met during the five–year period ending on the date of the sale or exchange. If you and your spouse file a joint return for the year of the sale or exchange, you can exclude up to $250,000 of gain if only one of you qualified for the exclusion.

If you did not meet the ownership and use tests or if during the 2–year period ending on the date of the sale or exchange you sold or exchanged another home at a gain and excluded all or part of that gain, you may be allowed to exclude a portion of the gain realized on the sale or exchange of your home if:

You sold or exchanged your home due to a change in health or place of employment or due to unforeseen circumstances

A qualified real estate professional can give you more details on other tax benefits and liabilities! Consult a professional for more information about the tax benefits of owning a home!

Real Estate Tax Benefits

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The purchase - According to the IRS, you are able to write off any interest that is paid on a home loan each year. These interest payments are a part of your monthly payments, so figure out exactly how much of this is interest.

Mortgage interest - You are able to deduct any interest on a loan that is used in order to improve your residence as well. What this means is that if you take out a loan to do renovations, you can deduct the interest on this loan from your income tax.

The sale - Since your can claim your home as a capitol gain, you can avoid having to pay income tax on the sale of your home. You may have to pay capitol gains taxes, however, so keep that in mind.

If you are able to have a gain from the sale of your home or from an exchange of a home with someone else, you can even exclude up to $250,000 from this gain. This can be used frequently, although it is not recommended that you do it more than every few years because it is an exclusion, rather than a policy. You also are unable to deduct any losses that may occur when you sell a home, so be careful and do not expect too much from the government in terms of tax breaks.

In some cases, people will include a contract where the buyer will pay for the house a little bit at a time. This is called an installment sale and there are special tax breaks available for it as well.

Not everyone is able to receive an exclusion, so look into it before doing assuming that you can receive these tax-breaks. In order to get an exclusion from paying these taxes, you must have owned the home and lived in it for two out of the last five years. Therefore, if you had been renting the home out the entire time, you will not be eligible. If you meet these requirements, then you can begin the process for filing for exclusion, but be sure that you meet the standards or else it will lead to problems with your tax return that will be difficult to fix.

For those who did not meet these requirements, you may still be able to receive an exclusion on a small portion of your sale price if you had to sell the home due to health concerns, an unexpected change of jobs, or any other unforeseen circumstance. Basically, if you sold out of necessity, rather than trying to make some money off of a deal, you may be able to exclude some of your earnings from taxation.

If you have any question on these tax benefits, the best thing you can do is contact an experienced real estate agent to go over things with you and to let you know about how you are liable if you provide false information. There are many tax benefits involved with buying a home, so look into them and see where you could be saving money.

Loan Closing Advice

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WHAT MAKES UP CLOSING COST?

On closing day, there will be a number of extra costs that you may not have been expecting, although they should have been mentioned to you at various times of the process by the lender and the broker. These costs are make up of the following things.

Fees to the Attorney and Escrow Fees. You may have to pay the lender's attorney fees as well.
Property taxes that are due to cover to that date.
Any interest that is due from the closing date to 30 days before your first payment is due.
A Loan Origination Fee, which covers administrative costs.
Any recording fees for paperwork.
A Survey fee for the land.
Your first month's premium for your mortgage insurance, if you were forced to get some.
Title Insurance for both you and the lender.
Any loan discount points you may have accumulated.
You must make your first payment into escrow on your future property taxes and insurance.
You must pay for homeowner's insurance, complete with protection against natural disaster insurance if you live in a high risk zone.
Fees to pay for all of the documentation that was prepared for you.

WHAT CAN I EXPECT TO HAPPEN ON CLOSING DAY?

On closing day, you can expect to have to present your receipt of your home insurance so your premium must have been paid. Then a closing agent will present you with a list of the money that you owe and any money that the seller owes you, as per your agreement. The sellers also has to provide you with proof of inspection and let you know about any warranties on the products within the house.

After this, you can sign the mortgage agreement, which basically states that if you miss any payments or default in any way, the lender has the right to sell your property and then apply any money that is made on the deal against what you owe, plus any expenses associated with this process. Your mortgage also states that you promise to repay the loan in full and the seller will then give you the signed deed to the house.

You will then pay the lender anything that is owed, such as closing costs, and the lender will give you a receipt of all of the items that you have paid for. Once all of this is recorded, you own the house and you are free to do what you want with it.

WHAT MAKES UP CLOSING COST?

The Settlement Statement, which is a statement that outlines all of the expenses that you are paying for in this process.
A Truth-in-Lending Statement, which states that you have told the truth about all of the information that you have provided.
Mortgage Note, which is a representation of your mortgage in writing.
Mortgage or Deed of Trust and documentation of this.
Binding Sales Contract, which is the term on which the home was bought. The seller will provide this so have your attorney take a look at it.
The keys to your new home

Escrow Advice

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Escrow - This is the term that is applied to when a neutral third party takes care of all of the documents and money that are needed for a real estate deal to be finalized in order to ensure that all of the conditions of the deal are met. This can also be used to refer to a bank account that is used by a lender to hold all of a borrower's property tax and insurance money, in order to ensure that these payments are made.

Your escrow payment will depend on many different variables, such as how much the house costs and the type of mortgage that you will be receiving. Since there are so many different types of mortgages, you will have to have this explained to you by a professional. Basically, however, you must remember that you will need to come up with money for earnest money, the down payment, and the closing costs. All of these amounts vary from deal to deal, so be sure to get an estimate on them before you sign any paper work. If you are sort in coming up with any of these amounts, it will lead to financial problems for you in the future, so be sure that you have enough money put away to handle them.

As soon as you make an offer on a house, you will be required to put the earnest money into an account with the real estate broker. This is a deposit on the house that shows that you are serious about purchasing the house. If your offer is accepted, all of this money will go towards the various expenses that are associated with the house. This could be anything from paying off the down payment to taking care of the closing costs. No matter what, this money will be put to good use and if you cannot reach a deal with the seller, the money is returned to you in full so you can make an offer on another house.

If you want to lower your monthly payments, make a large down payment. The more money you put down, the less you will have to borrow and, therefore, the less you will have to pay back. While it can be difficult to come up with this much money to put down, so you are best to do so because it will be worth it in the end. If you are a first time buyer, you can get away with making a very low down payment but, once again, try to put more down than you have to in order to lower your monthly payments and interest amounts.

The closing costs are paid at settlement and are usually 3-4% of the total price of the home. Do not be intimidated by these costs, however, as you can sometimes get the seller to pay half of these for you. These charges go towards paying lender charges and other administrative work. You can get a rough estimate on the closing costs before the process begins, so you will know some of what you are up against.

Home Loans

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In order to save yourself and everyone else a great deal of time, figure out exactly how much you can afford to spend on a house before beginning the search process. This will only take a few minutes and it will prevent you from wasting time by looking at houses that are out of your prices range. What you do is take your gross income per month and then divide it by 29%. This will be the maximum amount that you will be able to spend each and every month. Next, you see how much money that will be over the entire year. To do this, you simply multiply the original number by 12.

You then take this new amount an multiple it by the number of years your mortgage will be over. This new number that you have will be the maximum amount that a lender will be able to give you for a home, although you will still have to factor in the fact that many of your payments go towards interest. You can probably afford a home that is higher than this amount because you will have to factor in your down payment, but this a ballpark figure of what your new home will cost.

Also keep an eye on interest rates because you will be able to get a better home if the interest rates are low, since your monthly payments will be much lower as well. For an accurate representation of how much you can afford to spend on a home, use a mortgage calculator online.

Closing Costs

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HOW DOES THE LENDER DECIDE THE MAXIMUM LOAN AMOUNT THAT YOU CAN AFFORD?

The lender will make this decision based on your debt-to-income ratio. What this lender does is compare your gross income, which means before taxes, to your housing expenses, as well as any other expenses that may be present in your life. These non-housing expenses are basically any other debts that you are attempting to pay off or other payments that you may have on a set schedule. This is done in order to determine exactly how much you will spend each month on the various things in your life.

Your total mortgage payment should not be more than 29% of your income and your debt-to-income ratio percentage should not be more than 41%. The lender will also consider the closing costs that are present in your particular situation, which will vary from deal to deal, but generally covers the cost of paperwork, as well as any other administrative costs that may require payment.

WHAT IS EARNEST MONEY? HOW MUCH SHOULD I SET ASIDE?

Your earnest money is money that is used as a deposit in order to signify your desire to purchase the home. You want to be able to convince the seller that you are serious in your desire to purchase the home, so you will want to make this deposit anywhere from 1-5% of the total cost of the home. If your offer is accepted, this earnest money will go towards the cost of the home, down payments, or closing costs. If you are not able to reach an agreement with the seller, this money will be returned to you. If you back out of the deal for whatever reason, however, the seller may get to keep the entire amount of his or her troubles

HOW LARGE OF A DOWN PAYMENT DO I NEED?

This depends entirely on what the mortgage lenders asks for, but there are options that are designed to make owning a home easier for you. Currently, it is not uncommon to find lenders who will only require 5% down and they are especially more likely to offer a lower amount for first time buyers. The more money you put down, however, the less you will have to borrow, which will mean lower interest rates and lower monthly payment so if you can afford it, try to put as much down as possible. Most mortgages that ask for less than 20% down will require you to take out an insurance policy in order to protect the lender against default. Also, remember that things like closing costs, moving expenses, and other miscellaneous expenses will have to be paid as well.

WHAT CAN I USE TO PAY THE DOWN PAYMENT AND CLOSING COSTS OF AN FHA LOAN?

In order to pay the down payment and the closing costs, you can use any money that you can get your hands on. This includes things like gifts and private loans, and whatever other ways you know of to get money. If you are able to do repairs to the home yourself, something you get can the seller to pay parts of these for you. This is called sweat equity and it can lower the amount of money that you have to come up with immediately. No matter what method you use, be sure to have this amount of money in actual cash because you cannot currently use your mortgage money to pay for these things.

Review A Closing

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Before the closing on your new home becomes official, do an inspection of the home so that you will be able to see any damage that is present. If you followed the proper steps, you will have included a clause in the contract of the house that says that the sale can be either nullified or postponed if there is significant damage done to the house. You also may have included a clause in the contract that states that the damaged aspects of the home would be repairs before you moved in. If you realize that this was not done, now is the time to speak up about it. Before the closing becomes official, have all of this taken care of or else you will have to pay for it in the future.

Closing a Home

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After you close the home, you will finally have the opportunity to view the home while having a clear view of everything. This is because there will not be any furniture in the home and this is a great chance for you to do a more thorough inspection of the property.

Have a look at the walls and ceilings for any additional damage that may have been covered up previously and also take a look at any damage that the seller may have agreed to fix in the contract. If this is not fixed, it is up to you to pursue getting it fixed because this is a breach of the seller's end of the contract. Be sure to do all of this right away so that this damage will not be blamed on you.

After The Loan

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The time between filing an application for a loan and actually receiving the lender's decision can vary. It will usually take between one and 6 weeks to hear back and there is also the chance that the lender will ask you for more information. If you are asked for more information, try to remember that this is a normal procedure and it does not mean that you will be rejected.

Simply try to get the information in as soon as possible in order to speed up the process because the sooner you act, the sooner the decision will come. If you are approved, the lender will call you regarding a closing date on the loan. Once you meet with the lender and go over everything, the money is yours and you can buy the new homes that you have always dreamed of. If you are rejected, improve your credit score and then try again. It is not the end of the world.

Credit History

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If you have had credit problems in the past, the FHA will work with you to rebuild your credit rating. They are much more flexible than other lenders and will give you the chance to rebuild your credit if you meet the following criteria:

At least two years have gone by since your bankruptcy was discharged. This gives them a little bit of a timeframe to view in order to see if you have improved your spending habits.
If any judgements that were held against you have been paid in full.
If you have had tax problems, you must have settled any outstanding liens and made re-payment arrangements regarding the remainder of the money that you owe.
At least three-years have elapsed since any foreclosure you many have had on a home or if the deed-in-lieu has already been settled.

Just because you have had problems in the past does not mean that you will never be able to buy a home. The FHA will help you if you have at least made progress towards re-establishing your credit, so do not rule out this option.

Negotiating Tips

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Here are some negotiation tips that will assist you in getting the best deal possible when you buy a home:

Get a home inspection before signing anything. You will be able to use any flaws in the home as bargaining chips, so be sure you know everything that is wrong with it.
Find out which financing options that you could choose that are of the greatest benefit to the buyer. This includes things like getting them their money quickly or fast closing times.
Do not be afraid to ask people for advice. There are countless professionals around to assist you so do not be shy and use their expertise.

Any experienced realtor will be able to help you with the afore mentioned items because he or she will have seen nearly any situation before. Think about it. If you have sold hundreds, or even thousands, of homes during your career, you will have seen a lot of different situations. These realtors will know what is a fair price and what is too high, to get advice whenever you can and find out how you can make the situation seem as good for the buyer as possible.

The only problem with doing this is that the realtor works for the buyer in the end. While this real estate agent may give you a few pointers beforehand, you are on your own with the actual negotiations, unless you happen to find a buyer's agent. Ask the realtor to keep your conversations confidential, but also do not confide in him or her too much about your strategy. Most importantly, figure out a fair price for the home on your own. Do all of the research that is necessary and figure things out for yourself in order to get the best deal because only you know what type of deal you are looking for. Take a look at the condition of the home, the area that it is in, and how long it has been available when calculating an offer. Also, be sure to be reasonable. If you make an unreasonable offer, the seller may be more likely to stick to the original price. By the time you make an offer, you will have a pretty good idea of how much the home is worth and what you are willing to pay. Finally, be prepared to negotiate a little bit because this is how a home sale works. Things will go back and forth, so do not get frustrated if your first offer is rejected, as it is only part of the process.

Property Negotiation

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Any homebuyer wants to get the best house possible for the lowest amount of money. This is simply how business works because people naturally want look out for their own best interests. In the real estate world, this can be difficult to obtain, however, because it is such a competitive marketplace and there are thousands of dollars at stake each time an amount is offered. The best thing you can do in this situation is hire an experience real estate agent to handle this part of the process for you. This agent will know what a fair price entails and will be able to effectively negotiate from your point of view. The agent will also be very familiar with the neighborhood and the market trends, so they will be able to help you find a low price on real estate.

The problem with this is that you must hire a buyer's agent to accomplish this because the agent that you first contact works for the seller. Because of this, there is no way that this agent will assist you in getting a low price, so unless you hire your own agent, you will have to come up with an amount of your own. You can listen to this realtor's advice, but be sure to take everything that he or she says with a grain of salt because he makes money on the commission of the sale. To come up with an accurate price to offer for the property, first look at the area that the home is in and what type of condition the home is in. These two factors will go a long way in determining the overall value of the home because this is what the home's value is based on. Also, consider how long the home has been on the market because the longer the home has been available, the more likely the seller will be to accept your deal. In addition, homes that have been on the market for a lengthy period of time may have something wrong with them, so be weary of these situations.

Once you are ready to make an offer, you should have a good idea of what the home is worth based on the factors that were mentioned before. If you decide that the final price of the home will be more than you can afford, then look elsewhere for a less expensive home. If you believe that you can afford the home, then it is time to begin negotiations. The seller will likely reject your first offer and reply with a counteroffer. This process can be ongoing until the two of you can reach an agreement on an agreeable price.

Some situations are different from others, such as when you buy a HUD Home because in these situations, you are required to use a buyer's broker. There are a number of procedures that must be followed in this process, but a realtor will help you each step of the way and will explain everything to you. With a HUD Home, there are never any direct negotiations between the buyer and the seller, which makes things much easier and less stressful. There will no the any haggling over the prices of these homes either, as everything is in the form of a written offer. If this written offer is not accepted, the house goes directly back onto the market. If the offer is accepted, the closing process on the home begins. You will be able to find a broker that sells HUD Homes quite easily because they are some of the easiest homes to buy and sell. All you have to do is place a few phone calls and you are sure to find someone who sells these types of homes because they simplify the process so much. As a seller, you also do not have to pay any of the commission involved, making this a great situation for everyone involved.

Safety Inspection

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One thing that you must do before committing to buying a new home is considering everything that this new situation will ask of you. One of the things that you must do before buying the home is get it inspected by a certified safety inspector. What this inspector will do is look for any major problems that may be present in the home's structure and construction, so that you can make a better choice on whether or not the house is worth it. This inspector will tell you about any repairs that absolutely must be made, so pay attention to everything that he or she tells you.

It is not the inspector's job to tell you if you are getting a good deal on this property for your money, but rather to take a look at all of the things that are vital to your new home and letting you know what need to be repaired. He or she can usually give you a rough estimate on what these items will costs to repair as well, although this is not an exact figure. The inspector will look at the building's electrical system, plumbing, insulation, the water source, and all of the structural things of the home like the foundation, windows, doors, roofs, walls, and ceilings. He or she can also inspect the hot water heater, the furnace, and the air conditioning to see if there will be any problems in the near future.

Never sign a written offer sheet on a house until it has been inspected, especially if you have your doubts about a property. Many times, the seller will either not tell you about these problems or is unaware of them, so you cannot rely on the seller to tell you what it wrong. Once you have bought the house, you have bought all of the problems that come along with this house, unless of course you put a clause into the contract that will protect you against such things. Many well-informed buyers will insert a clause into the contract that saying that the seller must pay for any significant damage that is found upon inspection. Other clauses in contracts will void the entire deal if there is anything significantly wrong with the house, so choose the option that is best for you and do not compromise on it.

If you are buying an older house, you may want to have someone come in and check for the presence of lead paint. This is a major problem with older homes because lead based paint was used up until 1978. This paint is not only a problem inside the house because your yard could have lead paint chips in the soil if your house used this paint at any time. You can easily cover up this hazardous paint with fresh paint in order to prevent chipping, but you may want to bring in a professional if you are wary of this paint being a major problem around your home. A contractor can come in and fix the problem immediately, so this may be an option for some older homes.

Home Inspector Worksheet

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Even though you will want to get a thorough inspection from a company that specializes in that sort of thing, you can check a number of things on your own in order to have an idea about what may be wrong with a house.

Have a look at the foundation of the house and any other cement for cracks or damage. Also, check the walls for any type of damage.
Look for any evidence of water damage or moisture problems.
Remember that minor settling crack in concrete will not affect the structure significantly.
Be sure that all water is draining properly from the home and yard.
In wet areas, check for a sump pump for foundation and sanitary drainage.
If there is a crawl space, make sure that it is dry. A wet crawl space is a sign that more water problems could arise in the future.
Have the home inspected by an exterminator. This will save you from problems with rotting wood due to termites in the future.
Be sure that the flooring is in good condition.
Make sure that the bridging and joists are constructed in a solid manner.
Have a look at all of the walls for watermarks. This could be a sign of leakage in the home.
Inspect the attic and make sure that it is insulated and ventilated because this can lead to the loss of heat in the winter.
If there is a fireplace, make sure that the damper works and that the chimney is all cleared out.
Have a look at the heating and air-conditioning to ensure that regularly scheduled maintenance has been completed. You can do so by checking the filters, the fan motor, and the bearings for maintenance. If they are in bad shape, you will have problems in the future with them.
Have a look at the hot water tank and note how large it is and what type it is. Also, have a look at how old it is, as older ones will need to be replaced.
Look at the electrical box to make sure that everything works properly and that the electrical system is good enough for everyday usage. Also check the wiring quickly, to make sure that there is no significant damage to it.
Be sure that the water pressure is strong enough in the home and check to make sure that all faucets are in working shape.
Have a look at all of the bathroom and kitchen fixtures because they should all be in working shape. This includes things like the oven, fridge, and any laundry and dishwashing appliances that are included with the home.
Be sure to have a look at the yard and make sure that it has been taken care of. Also, be sure that it has enough trees and shrubs to make you happy because having to plant new ones can be an expensive process.
Make sure that all fences are in working shape. Also have a look at the patio and driveway concrete because fixing this can also cost you a great deal of money.
Confirm that the outside walls of the house will stand up to all of the weather conditions in your area. Also, be sure that the windows and doors are all in working order and see how difficult they would be to replace if need be.
Look at the roof for any significant damage. Also, look at the gutters and downspouts to make sure that they do what they are supposed to do.
If you have a garage, make sure that the garage door opener is in good shape and works properly. Also, make sure that there is electricity and heating in the garage.

Home Insurance

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DO I REALLY NEED HOMEOWNER'S INSURANCE?

Yes, you do need to have a homeowner's insurance policy by the time your deal has been closed. Many times, you must show a receipt of this before anything can be made official so you must have gone through the process of acquiring insurance earlier on. It is recommended that you contact an insurance agent as early as possible because he or she can save you money on insurance premiums because they have information on what you can do to keep them low. They also have a wealth of information on home safety that can home in handy when you are having your home inspected.

WHAT STEPS COULD I TAKE TO LOWER MY HOMEOWNER'S INSURANCE COSTS?

The most important thing you can do is visit a number of different home insurance options in order to find the best price. Also, think about home insurance premiums before you choose a house to buy. Newer and brick constructed houses tend to have low premiums because they are built much better. Also, buy in an area that is not prone to natural disasters if you want to money. Insurance companies know about all of these things and will lower your premiums if you are considered a lower risk. Having a fire department in the proximity will also give you an advantage when searching for a good deal on insurance.

IS THE HOME LOCATED IN A FLOOD PLAIN?

This question can be answered by the real estate agent and is a very important thing to consider. If you do live on a plain that is likely to flood, your lender will require you to have flood insurance before lending you money for a mortgage. This is simply the lender's way of protecting its own interests because of the high risk of this area. If you only live close to a flood plain, but not in one, it is your choice whether or not to get this extra insurance. Examine the history of the area in order to decide what the best plan for you is.

WHAT OTHER ISSUES SHOULD I CONSIDER BEFORE I BUY MY HOME?

Natural disaster can do a lot of damage to your home, so try to avoid buying in the home that is prone to these things if at all possible. Things like earthquakes, tornadoes, hurricanes, and even volcanoes can ruin your home and even put your life at risk. If you do buy in one of these high risk areas, make sure that your home is inspected thoroughly and that it meets all of the building codes.

Home Inspection

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After you find your dream home, you must decide how much you are willing to spend on the house and then make an offer. In order to do this accurately, you will want to have the home inspected by a professional. You may also want to find out how long the house has been on the market for because the long it has been for sale, the more likely the owner will be to accept a lower offer. Once you prepare an offer, the real estate broker will show this offer to the seller and the seller has the opportunity to either accept or reject it. The seller will then usually make a counteroffer, if your offer is not acceptable. This process usually continues until an offer that is agreeable to both parties is reached, or all talks breakdown because there is too much difference between the two parties.

WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME?

The job of an inspector is to check the home for damage, much of which could be a safety concern. They will focus on the foundation, the frame, the electrical wires, the plumbing, and any other aspect of the home that is vital to its functionality. This inspector will not tell you about things that may need to be looked at, but only things that are in immediate need of repair. Each of these things will affect the value of the house, so pay careful attention to what the inspector says.

This inspector will not tell you in if he believes the house is worth what the seller is asking for it, but will rather simply take a look at everything and let you know how much any needed repairs will cost. Along with the pipes and wires, be sure to have the inspector take a look at the floors and ceilings for potential cracks and leaks. Any expenses that you will have to pay in home repair will make the house less valuable to you. Also, be sure to only hire an inspector with a wealth of experience because anything he or she misses will cost you in the future.

Be sure to have this inspection completed before you sign any offer sheets because once you agree to close the deal, the seller will not be responsible for any of these damages. You can also include a clause in your contract that says that the agreement is void if there are any problems found during the inspection. This can all be negotiated, so be sure to consider this option when buying a home. You can even insert a clause into the agreement that states the seller must pay for any major damage that is found to the house. This will be much more difficult to agree upon, so try a variety of different methods in order to protect yourself.

DO I NEED TO BE THERE FOR THE INSPECTION?

You do not have to be there, but it is recommended because once the inspection is over, you will be able to ask questions about the damage that has been done to the house. You can also get the inspector's opinion on the house as a whole, as well as get answers on any maintenance questions you may have about the home.

ARE OTHER TYPES OF INSPECTIONS REQUIRED?

If the original inspection turns up any significant problems, you may have to hire a specialized inspector to have a closer look at that area of the home. You may also want to have your home looked at for anything that could cause health problems for you and your family. This is includes things like asbestos, gas leaks, or potential problems with your water supply. None of this is mandatory, but it will help protect your family should there be something wrong.

HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOME?

In many houses that were built before 1978, there is the potential that lead-based paint was used. This can pose a significant health risk for children, the elderly, and those with weak immune systems, so have this inspected as well before moving in. The flakes from this lead paint can also be in the soil and yard around the home, so this is another portion that will need to be looked at. You can temporarily fix this problem by painting over any areas that are shipping away, but if the problem is significant, you can hire a contractor to eliminate the problem entirely.

ARE POWER LINES A HEALTH HAZARD?

No research has been found to prove that there is any sort of hazard involved with power lines. If you still believe that they will cause a problem, simply do not buy a house near them. There is really nothing else you can do.

Debt To Income Ratio

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When getting a mortgage, the lender will look at your debt-to-income ratio in order to come up with the amount of money that they will lend you. What this ratio does is measure your pre-tax income against the other expenses that you will have on a month-to-month basis. This includes both housing and non-housing expenses, which as student loans, car payments, and child support. What the lender will do is come up with an amount that is no more than 29% of your gross income for your loan amount.

This amount will also have to be no more than 41% of your total income when these other payments are factored in. Things like the cash needed for a down payment and closing costs are also factored into this amount, as well as your credit history. Basically, your lender will come up with the maximum amount that they would feel lending to you bases on your current income and your current expenses. If they feel as though you would be a very high risk because of your current expenses, they may reject your application completely, so make sure that the time is right when applying for a loan.

Your Loan

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Before attempting to secure a home loan, there are several things that you must consider. For example, you must consider how much of your own money you will need to come up with in order to buy the home. Nearly every lender out there will require you to come up with a down payment before they will allow you to purchase a home and this down payment can be a significant amount of money. In addition, you must come up with earnest money, which is a deposit that you give to the homeowner as a method of showing your interest in the property. Finally, you must be able to pay for the closing costs, which is all of the administrative work that goes into the process. Sometimes the seller will help you pay for this, so be sure to ask about this beforehand. This is not money that you will want to borrow, so be sure that you can afford these costs before starting the home buying process.

As you make an offer on a home, you can have your broker hold onto the earnest money in an escrow account. If you and the homeowner come to terms on a deal, this deposit money will be applied to either your down payment or to your closing costs. By giving this money to an attorney, you are ensuring that everything will be done the right way. Also, if you do not come to an agreement with the seller, this money will be returned to you. The amount of money that you put in escrow varies, but the general amount of a deposit is between $500 and $2000.

Remember that you can lower your monthly payments significantly if you can afford to make a large down payment. This is because the overall amount that you owe will drop, which will also allow for your total interest paid to drop. With some loans, you can be forced to pay 10-20% of the purchase price, so be sure to find a down payment amount that you can afford before selecting a lender.

The closing costs come at the end and are usually between 3 and 4% of the total price of your home. There is a variety of fees that must be taken care of and the closing costs go towards that. When you first apply for your loan, the lender should give you a rough amount of what the closing costs will be. Use this amount as a guide because although it may not be exact, it will be very close to the final amount.

Apply for a Mortgage

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Loan fraud has become a very large problem over the past few years, as people attempt to buy a house without having the means to do so. This leaves lenders in a bad situation because many of these people cannot afford to pay them back. Because of this, these lenders are checking all loan documents more thoroughly, so be sure to follow these tips to avoid punishment for your documents.

Make sure that you have read and are able to understand everything before signing a single document
Never sign a blank document or a document that appear to be missing sections
Never buy property for another person
Be sure to state the correct income on all forms
Avoid lying about how long you have held your current job
Give an accurate representation of your assets
Report every one of your debts and do not understand amounts
Never make changes to your income tax returns
Always tell the whole truth about past credit problems that you may have had
Be honest about whether you intend to live in the house or rent it out
Never provide any false documents to anyone because they cause more problems than they could ever solve

WHAT HAPPENS AFTER I'VE APPLIED FOR MY LOAN?

Once you apply for your loan, you will have to wait for the lender to go over all of your information. This can take anywhere between 1 and 6 weeks, depending on how much there is to go over and how busy the lender is, so be patient if you do not hear back right away. In addition, the lender may ask for additional information once the original documents have been submitted. Do not believe that this harms your chances, as it is perfect normal. Try to get this additional documentation in as soon as possible because it will speed up the process for you. Once all of the information has been checked over and verified, the lender will call you with his or her decision. If you are approved, you will have to visit with the lender to figure out a closing date and once this is decided, you are free to purchase your new home and begin the moving process.

Select a Mortgage

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WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?

If you are looking for stability in your monthly payments, then a fixed-rate mortgage is for you because the monthly payments and interest rates stay exactly the same throughout the entire process.

Types

15-year
30-year

Advantages

The stability that is offered with these types of loans is the main selling feature because you can plan your monthly budget around these rates. Nothing will change for the entire term, so you will not be subject to interest rate changes and you do not have to worry about your monthly payments gradually sneaking upwards.

If are a little more adventurous and believe that interest rates will stay low for the foreseeable future, then an adjustable rate mortgage may be the right one for you. When you choose this type of loan, your payments can increase or decrease, depending on what the interest rates are like at that time.

Types

The balloon mortgage has a very low interest rate and is specially designed for people who want to pay off their entire house early. After the original term has been completed, these balloon mortgage holders have the option of paying off the remainder of their loans or renegotiating another loan.

The Two-Step Mortgage is usually chosen by homebuyers in times when interest rates are soaring because they allow for one adjustment over the entire term. That way, you can still have stability without having to settle for a very high interest rate.

Advantages

The advantages of these types of loans are that they can save you a great deal of money over the course of your loan. If you get lucky and get low interest rates, then you will save a lot. Also, if you are able to pay off the entire amount after the original period, you will save a great deal of money. This option may also allow you to take out a bigger loan, which can be a huge advantage in the housing market.

WHEN DO ARMS MAKE SENSE?
These loans are perfect for people who want to own their home outright very quickly. If you do not want to mess around with a long term mortgage, then get an adjustable rate mortgage and you will have more options when paying your home off.

WHAT ARE THE ADVANTAGES OF 15- AND 30-YEAR LOAN TERMS?

30-Year:

The 30-year mortgage allows you some major tax benefits over the course of your repayment and allow gives you very low rate at the end of the agreement, in comparison to the rest of the market. By the end of your term, people will not believe how low your monthly payments are.

15-year:

With 15-year mortgages, you will have everything paid off much sooner, which is a huge advantage in the long run. You also build up equity much faster, which protects your investment and you can even receive a lower interest rate.

Mortgage Alternatives

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WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?

With a Fixed-rate Mortgage, your payments will stay at a fixed amount for the entire term of your loan. You will not have to worry about your interest rates or monthly payments changing, which will provide you with peace of mind.

Types

15-year
30-year

Advantages

These type of loans are extremely predictable because they do not change at all. For first payment will be the same as your last payment, giving you incredible stability. Things like inflation in the housing market will also not affect you, so your monthly payments will be comparably low by the end of the term, even if they seem high to begin with.

Housing cost remains unaffected by interest rate changes and inflation.

If you choose an Adjustable Rate Mortgage, you are taking a bit more of a risk because you never know what interest rates will do. If there is a significant jump in interest rates, it could impact you for a lengthy period of time because there is no guarantee that the rates will come back down again.

Types

A Balloon Mortgage will allow you to sign up for an initial period, which is usually between 5 and 10 years, for a low interest rate. The problems is that once this first period has passed, you are responsible for either paying off the rest of the house or renegotiating and this second mortgage will bring you much higher interest rates.

A Two-Step Mortgage will adjust your rates only once and it will remain the same for the entire term after that first adjustment. This is the perfect solution for getting a mortgage in times of high interest rates, because your rates can be adjusted when the interest rates come back down.

Advantages

The advantages of these types of mortgages are that they are known to offer lower interest rates to start because it will go with the actual interest rate, rather than an adjusted one. This means that your monthly payments will be lower to start with as well, which is important to younger buyers who are just getting their start. This type of loan may also qualify you to receive more money, so look into that before deciding.

WHEN DO ARMS MAKE SENSE?

These types of loans make a whole lot of sense for people who believe that they will be making much more money a few years down the road. This is an especially good option for people who believe that they will have enough of a savings to pay off the entire house within 10 years because they can do so without penalty. This is also a good option for those who are not concerned with the possibility of interest rates rising in the future.

WHAT ARE THE ADVANTAGES OF 15- AND 30-YEAR LOAN TERMS?

30-Year:

On a 30-year loan, the first 23 years go towards paying off a significant portion of your interest. This means that you can deduct more money from your taxes over these years because this interest is tax deductible. Your monthly mortgage payments will also seem much smaller by the end of this term because inflation will have driven other peoples' housing costs up, while yours has stayed the same. .

15-year:

When you get a 15-year mortgage, you build up equity at a very rapid rate because the early you get it paid off, the more money you are putting towards your principle. Your interest rates will also be lower, which lowers the total amount that you pay over the term.

Basic Mortgage

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A mortgage is defined as a loan that you receive in order to pay for real estate. The agreement usually states that in exchange for this loan, you agree to pay it back over a set amount of years, while also paying a set amount of interest. Failure to live up to the terms of the mortgage can lead to you defaulting, which could lead to you losing your home.

Also Consider LOAN TO VALUE (LTV) H
The loan to value ratio of the mortgage refers to the actual amount of money that you have borrowed compared to the actual price of the home. Each mortgage has a limit on this, which only allows for you to receive a loan for a certain percentage of the final price. The rest of this money has to come from a down payment that you make upfront to the lender.

This ratio is a direct reflection of the amount of equity that the person receiving the loan has in his or her home. The higher the ratio, the less money the individual has to put into the home him or her self. Since these higher amounts require such a large loan, lenders will sometime require the borrower to take out a mortgage insurance policy in order to protect them against a possible default. This usually occurs on loans where the borrower borrows more than 80% of the total cost of the home.

WHAT TYPES OF LOANS ARE AVAILABLE AND WHAT ARE THE ADVANTAGES OF EACH?

On a fixed-rate mortgage, the interest rate and, therefore, the payments stay the same over the entire term of the repayment.

Types

15-year
30-year

Advantages

This is the most predictable type of mortgage because you will know exactly what you will owe every month for the entire term of the loan. Also, your housing costs will not change with inflation or the changing of interest rates.

With an Adjustable Rate Mortgage, you monthly payments can either increase or decrease depending on the currently interest rates. While these increases do have limits, this can create some uncertainly at times.

Types

Balloon Mortgage- This type gives you low rates to start with, but when this initial period is over, the terms must be renegotiated or the entire balance must be paid off.

Two-Step Mortgage- With this sort of mortgage, your interest rate can only change once over the entire course of the loan, which allows for your expenses to be a little more predictable.

Advantages

This type of mortgage usually offers lower interest rates to start with, which makes the monthly payments lower as well. Because of this, you may be able to get a higher amount, which will get you a nicer house for your money.

WHEN DO ARMS MAKE SENSE?
This sort of loan is a good option for people who know that their income will increase significantly over the next few years or for people who think that they may be moving in the near future. There is the potential for an interest rate increase to make your payments rise significantly, so choose carefully.

WHAT ARE THE ADVANTAGES OF 15- AND 30-YEAR LOAN TERMS?

30-Year:

For the first 23 years of this type of loan, you will be paying off high amount of interest, which means that you can write a significant amount of this off as a tax deduction. Also, since there will be inflation over this time period, your payments will seem very small by the end of this term.

15-year:

These mortgages normally come with a lower interest rate and you will pay less interest in total because of the shorter period. In addition, equity is built up much more quickly, which is important if you want to resell the house or use it as collateral.

CAN I PAY OFF MY LOAN AHEAD OF SCHEDULE?

You can pay off your mortgage early if you send extra money in each month or make a lump sum payment at the end of the year. When sending this money in, make sure that you let your lender know that this money is to be applied to the principle of the loan rather than the interest. You may also have to pay a penalty for making these payments, so make sure that the penalty does not negate paying off the mortgage early because that would be a waste of money. Go over all of your options with your lender before making any extra payments.

Mortgage Loan

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When financing a home, be sure to remember that there are multiple ways to finance it because home lenders want you to be able to buy your own home. The reason for this is that they make money every time they provide a mortgage, so they do their best to get you a mortgage that suits your needs. Each of these methods has its own pros and cons, so look into the situation careful before agreeing to a lender's terms. Just because they offer it does not mean that you have to accept it, so take your time and get the right mortgage for you.

One type of mortgage is a fixed-rate mortgage, which means that your interest rate will not change over the entire term of the loan. This gives you more stability because your interest and monthly payments will never change. This allows for you to plan a fixed-budget every month, so that you will know exactly how much you will spend on housing each and every month of the term. The negative with this type of loan is that the interest rates tend to be higher, so you run the risk of having to pay more in the long run.

Another type of mortgage is the adjustable-rate mortgage. With this type of plan, you monthly payments will start out lower than with a fixed-rate, since the interest rate will be lower, but there is no guarantee where this rate will go. It can be either higher or lower, depending on what happens with the interests rates. This can be a negative because you will not have a set amount of pay every month. If interest rates rise significantly, you could find yourself in some serious financial difficulty, so be sure to plan for such an occasion if you choose this option.

The FHA-Insured Mortgage is meant to help those who cannot afford the down payment that most lenders require to get a mortgage by providing government issued insurance for lenders in case these people default. In many cases, these types of mortgages allow for buyers to get a mortgage with as little as 3% down, which makes owning a home more accessible for thousands of Americans. The problem with this type of loan is that the monthly payments are higher because of the lack of a down payment. Sometimes the terms are over a much longer period of time as well, which causes people to be paying for their home for many more years.

A VA Loan allows for the lender to be protected against default as well, expect the Department of Veteran Affairs takes care of this instead of the federal government. This is a program that helps war veterans buy homes of their own once they return from duty.

An assumable mortgage is just like any other mortgage, except that it is transferable to the new owner if the house is sold. If you find a home that is assumable, it means the lender will be willing to allow you to overtake an existing mortgage. These homes are usually very good deals and the paperwork is much easier to handle as well.

Do not rush into getting a loan for your home and talk to as many people as possible before committing. Be sure to speak with a loan officer in order to get all of the information that you need before making any decisions on which type of loan to get.

Effective Offer Writing

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HOW DO I MAKE AN OFFER?

You will be able to get assistance from a real estate agent regarding your written offer and it will include a number of different things:

A complete description of the entire property, including any fixtures that may be included
The amount of earnest money, which is a deposit on the property that represents a desire to buy
The amount of the down payment and the financing details from the lender
The date that the buyer would like to move in
The price that the buyer is offering
The date that the buyer would like to have everything closed by
How long this offer is valid for
Any other details of the deal that need to be in writing.

While this is a good starting point, remember that the seller does not have to accept your terms. Therefore, you may have to negotiate with the seller and adjust things in the contract that he or she does not agree with.

HOW DO I DETERMINE THE INITIAL OFFER?

Remember, first of all, that the broker usually works for the seller, unless you have hired your own broker. Therefore, you may not want to simply go along with the terms that the broker recommends. Therefore, you will need to know how to set forth your own offers, which means that you will have to know how much to offer. Be sure to ask the broker to keep all of your conversations confidential because you do not want information regarding your deal to be leaked. You should listen to the real estate agent's advice, as he or she wants to get the deal done as much as you, but also follow your own beliefs. What you need to do is look at other homes that are selling in the area in order to determine a fair price. This does not mean simply looking at the listed prices of these properties, but finding out what they actually sold for. This is because the listed price is usually considerably higher than what the home actually ended up selling for. You must also consider factors like the condition of the house, how long it has been available for, how hot the housing market in genera is, the terms of financing, and what the seller's situation is. The longer the house has been on the market, the less the seller will be likely to accept. With a little research, you should be able to come up with a number that is acceptable for both parties. Also, be prepared to negotiate the price a little bit once you have made your first offer. If you cannot agree on a price, this may take some time to complete. Also, do not be afraid to walk away should the seller charge you more than you are willing to spend because there are other houses out there.

Mental Control

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One tip that may be effective is to take a deep breath!

You do not want to seem overanxious because the seller must believe that he or she could lose you as a buyer at any moment. Remember that the seller needs you just as much as you need him or her. Therefore, you must treat each other with equal respect. If the seller knows that you are overanxious, you might not get as good of a deal so just take a deep breath and relax. Even if you do not get this particular home, you will find another that you like. There is absolutely no pressure on you in this situation so just stay calm. It may also help if you have several options on houses to buy. That way, if one deal falls through you can just move on to the next one. You will want to purchase a home on your terms with your offer being accepted, so just take your time and get through it calmly.

One tip to control your excitement is to focus on the negative! While you obviously like the home that you are negotiating on, otherwise you would not be in that situation, every home has things wrong with it. Therefore, it may help to focus your mind on the negatives of the home, so that you do not get overemotional. There are other homes available if you do not end up with this one and maybe one of these other homes will end up being even better.

When asking questions on the home, ask questions on potential problems that the property make have, like maintenance issues. You will want to know if anything needs to be replaced and if there are constant problems with any appliances. Also, be sure to ask questions about the neighborhood because you do not want to end up in an area that is not compatible with your lifestyle. Keep asking questions until everything that you want answered has been answered and do not let the seller and the broker get away with not giving you a full answer. It is your money and you deserve an explanation for all potential problems. Write all of these questions down beforehand, so that you do not forget while in the moment, and then write down the answers as well. This will give you a clearer understanding and will allow you to go over the answers once you are away from the situation.

Comparison Shopping

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Print out this worksheet and make notes about the homes you visit.

Features	House #1	House #2	House #3
Address of Home
Price of Home
Location in City
Number of Bedrooms
Number of Baths
How many Square Feet
Number of Garages
Is there a Family Room?
Is there Air Conditioning?
Is there a Formal Dining Room?
Is there a Pool?
Is there a Spa/Jacuzzi?
Total Lot Size
What type of Landscaping?
What type of Kitchen?
What is the Floor Plan?
Is there Storage Space?
What type of Condition?
Extras (specify)
Curb Appeal
Commute Time to Work

Neighborhood Features
Neighborhood	House #1	House #2	House #3
Neighborhood Crime Rate
Quality of Schools in Area
Amount of Traffic
Proximity to:	House #1	House #2	House #3
Schools
Hospitals
Shops
Transportation
Cultural Activities

Overall Opinion
	House #1	House #2	House #3
Overall Opinion

Home Selection

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HOW CAN I KEEP TRACK OF ALL THE HOMES I SEE?
There are many different ways to keep track of everything that you see, but try to keep a written account so that you do not forget any details. Also, try, if possible, to take a photograph of each property because a visual representation will help you to keep each home straight in your mind. Also, do not be afraid to ask to look at a property for a second time in order to go over your notes while viewing

HOW MANY HOMES SHOULD I CONSIDER BEFORE CHOOSING ONE?
There is no answer to this question because it is impossible to know how many homes you will need to view before you find the perfect one. You should remember to visit as many homes as it takes and never settle for a home that is not exactly what you are looking for. The average homebuyer visits 15 houses before deciding on one, but do not use this as a guide because every situation is different. Whether you choose the first house you had looked at or the 100th, make sure that you make the decision that is best for you.

Before you begin viewing homes, develop an idea of the type of home that you want to view. To do this, you will have to determine how much you can afford to spend each month because this will give you a base of housing to choose from. One you have narrowed things down by price, it makes the entire process easier because you will have a more limited number of houses to look at.

The Federal Housing Administration has come up with a formula for deciding how much you can spend and it states that most people can afford to spend 29% of their monthly income on housing. This is not set in stone, since buyer with no other debt can afford to spend up to 41% of their income on housing, but lenders will generally agree that 29% is high enough. By coming up with an amount that you can afford to spend, you will know exactly how much you can afford to pay for a house, which will begin to help you narrow down your search.

Once you know what your price range is, you must begin looking for the best value within that price range. This can be difficult because you must consider things like the neighborhood and resale value when defining the value of a house, so you will want to do your research on every prospective house before buying. You can also hire a real estate agent to help you along with the process, as they have experience in many different neighborhoods and will help you find a house in one that has what you want.

If you do not hire a real estate agent, then you will want to make sure you are well prepared with information before narrowing down your search.

Research, Research and Research!
This has been made much easier because of the internet because it allows for you to search through multiple directories in a matter of minutes. You also do not have to make a variety of phone calls to different people because the internet allows you to view more information than in the paper and you can also use e-mail as a form on communication. The research process is faster and more convenient than ever before because of the internet, so take advantage of it.

Searching Tip
A quick internet search will bring up a variety of different listing sites in your neighborhood, which will allow you to view many listings at once. Most of these sites have a search function built in, so you can filter out houses that cost too much, do not have enough bedrooms, or even select the neighborhood that you wan to live in. The internet allows you to quickly find some target listings that you want to view in the near future, so use it wisely.

Just because the internet is so popular does not mean that newspapers are obsolete, however, as they still offer a wide variety of listings that you can sort through very quickly. Many times, the newspaper will have a special section that is devoted to real estate, so keep an eye out for that and go through it.

Make appointments to look at all the short listed houses

Each time a house catches your eye, make an appointment to view it. You do not want to let the perfect house slip through your fingers because you procrastinated, so begin making appointments immediately and you will find the perfect house for you in no time.

Home Hunt

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As you know, every neighborhood is different, even if these neighborhoods are very close to one another geographically. Each area has different people, different activities, and a different way of life. Since these differences can be very subtle, it is important to thoroughly check out a neighborhood before you buy a house in one. One thing that you may want to do is walking around the neighborhood in the early evening. At this time, most people will be home from work, so you will be able to see what the neighborhood is like on a daily basis. You may also want to consider visiting the neighborhood on a weekend because this is the time of the week when things could get louder in the area.

You will also want to look at some of the other features that the neighborhood has to offer. If you have children, you will want to find out what the schools in the area are like. If you plan to resell your property at some point, you will also want to learn about things like the values of neighboring properties, the crime rate, and development in the area, as well as its proximity to things like grocery stores and shopping malls. Less desirable fixtures like prisons, airports, and freeways may also be in the area, so do your research thoroughly.

If you like to go out at night, you may want to take a look at the nightlife in the area, which also holds true if you want quiet on your weekends. Each of these things can affect your overall experience in this new neighborhood so be sure that you learn as much as possible about it before making any final decisions.

Approval Letters

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Getting pre-qualified for a loan is a way of finding out how much you will be able to borrow, should you want to buy a home. You are able to get pre-approval over the phone without having to submit any proof simply be telling the lender about your income, any debts you may have, and how much of a down payment you can afford. This does not means that you must go through with obtaining a mortgage, but simply allows for you to begin researching potential homes while knowing roughly how much money you will be able to borrow. This is a valuable research tool because it allows you to filter out houses that are too expensive, as well as homes that may not be in a good neighborhood, but you thought would be all that you could afford.

From the lender's point of view, granting you a pre-approval is a commitment to lend you money because it causes them to begin to get your financial records together and beginning the actual approval process. It also shows lenders that you are interested, which will allow you to get your actual loan much quicker than if you were starting from scratch.

Find Out About Your Credit History

Before attempting to get a mortgage, it is important to find out about your own credit history. The three major companies in this field are Equifax, Experian, and Trans Union and they will allow you to see exactly what a lender would see. Pay very close attention to certain boxes on this report, since they tell the lender how much money you owe other lenders, how often you get behind on payments, and how consistent you are at making payments on time. Getting the actual report is quite easy, as you simply call one of the companies that was mentioned early or visit their websites and request a report. There is a fee for this service, but the insight that it will give you into your credit rating is definitely worth it because it will increase your chances of being approved for a mortgage. As long as you do not see any red flags on your report and a creditor will not like, you are free to begin the process of getting a loan to pay for your house.

Real Estate Ads

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4B/2B -- This means that the house has four bedrooms and two bathrooms. A bedroom will generally be a room with a door, a window, and a closet that is large enough to fit a person's bed and dresser. The bathroom in this case constitutes a full bathroom, which means that it has a bathtub, a toilet, and a sink. There are other types of partial bathrooms that come in some houses, but they will usually be explained in the listing.

assum. fin. -- Assumable financing. This means that the new owner is able to assume an existing mortgage when purchasing the house.

Closing Costs: The definition of this varies in each individual state, as different places have a different definition of closing. The basic idea, however, is that the closing costs are the extra expenses that are paid for by the buyer and the seller at the end of the transaction. This can include things like the broker's commission, paperwork, attorney's fees, transfer fees, and various taxes. Basically, there will be a list of expenses that will come from various places once the deal is done. This is usually paid through escrow, which means that both parties will put money into a fund that is held by a third party and the third party pays these fees with this money.

CMA -- This is the comparative market analysis or competitive market analysis and it allows you to see the prices of homes that are similar to yours and how much they sold for. This will allow you to see what kind of deal you got on your home.

Contingency -- This is a clause that allows for an agreement to be postponed until certain conditions are met. For example, a sale could be contingent on something on the house being fixed and the deal will not be officially finalized until that portion of the house is fixed. The buy will then have the opportunity to void the contract if the seller does not uphold his or her part of this agreement.

dk -- This means that the home features a deck.

Expansion pot'l -- This stand for expansion potential, which means that the house can easily be expanded into a much larger house. In many cases, this means that there is plenty of space on the lot for expansion, or something it can mean that the house could support another level.

Fab Pentrm -- This stands for fabulous pentroom, which is a room at the very top of the building that offers a unique view.

FDR -- This is a formal dining room, which is a room for eating that is separate from the kitchen.

Fixture -- This can be a number of things that are permanently a part of the property and, therefore, are owned by the homeowner. This is usually things like trees and plants, but is could also mean a separate garage, a shed, or even a guesthouse. These things are not portable, which makes them part of the property, rather than personal property of the owner. What constitutes a fixture is important because it can impact your property taxes, so make sure you get a list of everything that can be considered a fixture before buying.

Frplc, fplc, FP -- A fireplace within the home. This can be either gas, electric, or wood, so make sure it is the type that you want before buying.

Gar -- A garage. Sometimes the advertisement will tell you how many cars will fit in the garage or whether it is attached or detached.

Grmet kit -- A gourmet kitchen, which is a kitchen that has a variety of professional features.

HDW, HWF, Hdwd -- This means hardwood floors, which increase the value of a home because of their longevity.

Hi ceils -- This simply means that the interior of the house has high ceilings.

In-law potential -- This means that the house has the potential to house an in-law suite. What this usually means is that is has a self-contained basement that could be transformed into a suite easily.

Large E-2 plan -- Each building has different floor plans and this is one of the most common that you will find.

Listing -- A listing is not what most people believe it is, as the majority of people believe that it is the actual advertisement that you see on a house. A listing, however, is actually the agreement between the homeowner and the real estate broker that the broker will arrange for the sale of the house. The term can also refer to the actual house once it has been put on the market.

Lo dues -- This means that the homeowners association's dues are low, but the term low is obviously subjective, so get the actual rates rather than believing this term.

Lock box -- This is a box that is placed outside of a listed house that gives the real estate broker access to the home when the current owner is not home. This is done so that the home can be shown at anytime, although permission is still needed to access the residence.

Lsd pkg. -- This is an area of the lease where parking is included in the agreement. It gives the tenant the right to a parking area near the building, although it is subject to additional costs.

MLS -- This means Multiple Listing Service. This allows for brokers to post their advertisements on this system and gives people the opportunity to view them all in one place.

Nr bst schls -- This means that the home is near the best schools. Be sure to research which schools are near because both near and best are subjective terms.

Pot'l -- This means potential and is used to describe something that could easily be added to the property.

Pvt -- This stands for private and is used to highlight the privacy of the property.

Pwdr rm -- This is a half bathroom or powder room, which means that there is a room with only a toilet and a sink.

Title Insurance -- This is an insurance policy that is meant to protect the mortgage lender in case something goes wrong with the repayment process. In many cases, the buyer will pay for this insurance since the lender is taking a significant risk on behalf of the buyer.

House Search

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If you are in the market to buy a new home, you will want to be careful about rushing into any decisions that you may regret later on. Many people make the mistake of buying before considering everything that goes along with owning your own home, so be sure not to fall into that trap. Begin by having a look at your personal situation and where you are in life. If you are not in a stable place in life, buying a home will only create problems for you. In addition, you must think about your job.

If you are constantly changing jobs or if you do not feel secure, then this probably is not the best time to be buying a home. You must also think about how much room you need and the neighborhood that you want to live in. If you cannot afford to live in a good neighborhood or to buy a large enough house, the time might not be right to buy. If you still feel after you are ready after considering all of these things, then it is time to start doing some research work on potential homes.

The home that you choose should fit your lifestyle, which means that it should have enough room for everything that you will want to have in the home. If you wish to have an office, you will want to buy a home that includes an office or a bedroom that can easily be converted into an office. If you enjoy being at the center of all of the action in town, you may want to pursue a place downtown. There are so many variables in this situation to consider, so do not jump into a bad situation by not seriously considering everything that you want in a home. Also, make a list of requirements that your home must have and do not even consider a home unless it matches this criterion. This is a situation where you must exercise patience and this list will help you greatly. Also, have a list of things that you would like for your home to include, but that are not essential. This will allow for certain houses to separate themselves from the rest, which will help you to find your dream home.

Every city has so many different neighborhoods and each of these areas has its own unique traits. Research the community before buying into it because you never know what could be hiding. Each community will have positives and negatives to keep track of each. If you see a negative that is something that will always bother you, do not buy a house in the area. Remember, this is a place that you will have to return to everyday for the foreseeable future, so do not settle for anything other than the exact home that you want in a neighborhood that you feel comfortable in.

House Search

Sat, 19 May 2012 23:05:04 +0000

If you are thinking of buying a home, you must careful consider your personal situation before actually beginning the process. Buying a home is much more than just saving up for a down payment and then making monthly payments. Buying a home is a long-term commitment that is somewhat difficult to get out of. You also must be prepared to handle any extra costs that are associated with the home, so be sure that you have extra money put away. You should also think about how much you can truly afford to spend every month on a mortgage, how large of a house you need, and what area of town you want to live in. Once you do this, begin researching homes and communities before making your first contact with a seller.

The home that you choose should be something that you can transition into quite easily. It should appeal to your lifestyle and should also have enough room for the whole family. If there are any special features that you truly desire, be sure to include these features in with your search. You should have a list of priorities that you home must feature; otherwise you may end up settling for something that is not exactly what you wanted. If you would like to be close to a certain school, make sure you prioritize that particular neighborhood. Have a set list of minimum requirements that your new home must have and do not even consider buying a home unless it meets up with these requirements, otherwise you will end up disappointed in the end.

The community that you end up in should also be a high priority because it should be a place that will allow you to enjoy the lifestyle that you desire. If you enjoy shopping, you may want to choose a location that is close to a shopping district, while if you do not own your own vehicle, you will want to be close to a public transit system. If you want to be away from the noise of the city, then a suburban location may be more desirable for you, so choose a community that will provide the lifestyle you want. The people in the neighborhood may also sway your opinion of it, so get to know a few people before buying.

Your Wish List

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An important part of the home buying process is creating a wish list that features everything that you want your home to have. There are a number of different variables when choosing a home to buy and you should consider each of them before making your final decision. To do this, you simply write down each home you are considering, as well as a list of attributes that you find appealing. You then check off the positive attributes that each home has. This is important because it will give you a visual representation of the positive and negative of each home, which will help the process as a whole greatly.

A few Things To Consider:

Community
Be sure to choose a home in a community that will give you the lifestyle that you desire. If you want to live in the quiet neighborhood, then a downtown apartment is probably not the best choice. You must also consider things like schools, shopping, and public transportation. If you do not have vehicle, you will not be very happy living in an area with a lack on public transportation. If you have children, you may want to find a home in a place with many playgrounds or at least lots of other children living in the area. The most important thing is to find a community that you feel comfortable in. If you do not think that you will enjoy living in the area, then you should keep looking.

Schools
There is information available on schools in almost every community, so if you have children, be sure to research the local school system before committing to a neighborhood. If you buy a home in a neighborhood with a poor school system, you will probably end up having to send your children to a private school, which can get very expensive.

Resale Value
You should be able to tell quite easily whether your resale value will increase of decrease in the future based on what is happening in the area. If you notices many new developments I the area, then your resale values will probably increase significantly. If the neighborhood looks run down, then you will be looking at a significant decrease in the future. Be sure to look through the neighborhood thoroughly because you never know what types of problems you will uncover. Visit the neighborhood at all times of the day and night and keep an ear out for crimes that may be occurring in the neighborhood because this can hurt your resale value considerably.

Price
Every homebuyer considers the price before buying a home because if price were not an issue, you would not be worried about choosing the right house because you would simply be able to buy another one. Everyone want to get the best value for their dollar, so make sure that the home and the community are right for you before finalizing any deals. Also, make sure that your mortgage payments can be easily fit into your budget because missing a mortgage payment can completely ruin your credit.

Confidence and Experience

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Start by thinking about your situation. Make sure that you know exactly what situation you are in before making any decisions. For example, be sure that you are ready for the financial responsibility of owning a home, be sure that you have found a home that is big enough for you in the present and in the future, and be sure that the home that you have chosen is in the area of town that you want to settle down in. All of these variables can make your experience a negative one if you are not completely sure, so sit down and carefully consider each of these before making a final decision.

Buying is almost always better than renting! The only advantage of renting a home is that you are not responsible for the maintenance costs of the property. Other than that, it is always better to own because it gives to the opportunity to build equity and provides you with tax breaks. It also protects you against any rent increases that your landlord may try to force on you and you can paint or alter the house in any way, without having you answer to anyone.

Owning your home is an investment, while renting one is the equivalent of paying into someone else's investment. Since you are more worried about your own future than your landlord's, it makes sense to buy as soon as possible. The real estate market will always be around, which makes this a relatively low risk investment as well. While this investment does bring about responsibilities, they are not overwhelming for anyone to handle and they are offset by the freedom and you will enjoy while owning your own home.

By using an experienced real estate agent, you leverage their confidence and experience. The more experienced your real estate agent is, the better the chance that he or she can get you through any difficulties that may arise while buying a home. These difficulties can arise if you try to buy a home for less than market value because this can drive the market as a whole down. Seasoned agents, however, will have dealt with this in the past and will likely be able to get out through anything with little problem.

Ownership Advice

Sat, 19 May 2012 23:05:04 +0000

Know Your Rights as a Homebuyer
The home buying process can be a confusing one for people who have never been through it before and people who are more experienced in real estate will, often times, try to take advantage of you, so make sure that you know all of your rights before you even begin your search for a new home.

Find out How Much Mortgage Can You Afford
Figure out how much you can afford to pay each month before signing up for a mortgage. There are plenty of mortgage calculators available to find out what percentage of your monthly income each mortgage would cost you, so use one of them for a more accurate interpretation of the mortgage offers that you are presented. Also, keep in mind that there are laws present in many places that prevent you from spending more than a certain percentage of your monthly income on a mortgage payment. Find out exactly how much you can afford per month before committing to any sort of mortgage.

Create Your "Wish list"
Every house is different, so be sure to create a list of what you want your home to include. If you want your home to have four bedrooms, then it does not make much sense to view a home with only one bedroom. By creating a wish list, you are setting a criterion that every house you view must meet. This will save you time and prevent frustration while searching for a home.

Find a Real Estate Agent or Broker
Your real estate agent or broker will arrange for you to begin viewing homes, so they are a necessity in this process. While you can do this yourself, it would take a great deal of time and this is not worth it in most cases because it will not save you much money. Be sure to talk to several agents because each one will have different listings. If you see a listing that you are interested in, call the realtor that has listed that particular home. Even if he has already sold the home that you were interested in, at least he can call you back if he comes across something similar. If a friend or family member has recently bought a home, ask about how his or her broker handled the situation and see if they can provide a recommendation. Every broker or real estate agent a different set of expertise or knowledge, so be sure to choose the one that is best for you.

Mortgages and Homebuying Programs
Be sure to research the different types of mortgages that are available to you. They all have positives and negatives so look very carefully at the fine print before signing any deal. You may want to hire an attorney to take a look at your documents before signing so that you know exactly what you are getting yourself into because not everyone plays fair in this business.

Young Buyer

Sat, 19 May 2012 23:05:04 +0000

Getting involved in the real estate market can be very overwhelming the first time you do it, especially if you are buying a home that you will live in for a long time. Because of this, it is important to get as much help as possible. These tips will help you through the home buying process and are especially for a first time buyer.

Make sure that you look at as many homes as possible in order to get a better idea of what is available for the price that you are looking to pay. You may love the very first house that you view, but keep looking because there may be something out there for much less money.

Be sure to also consider what you feel would be fair market value for the home. Many people will attempt to sell a home for more than its worth so if you come across a home with significant damage, do not pay too much for it. You do not want to take on a home that is more trouble than it is worth.

If you do finally find the perfect home, be sure to inspect the neighborhood thoroughly at different times of the week and day. If you are a quiet person, you do not want to move into a neighborhood that gets rowdy on the weekends or next to a neighbor that is constantly throwing parties. Talk to the neighbors to see what goes on in the neighborhood in order to get a better understanding of it. Also, commute from the neighborhood to your job at least once to get an idea of the traffic that will be present each morning. This will give you a better understanding of what your day-to-day life will be like while living here.

Finally, be sure to take a look at what type of financing is available for you when purchasing the home. Many times, the seller of the home will help you pay the transfer fees and closing costs, so ask about this upfront. If this is the case, you may be more likely to pay a little bit more for the home, as the costs will all work out in the end. You realtor will help you out with all of this information, but be sure to make the final decision yourself because it is one that will affect you for the rest of your life.

Home Ownership: Are You Prepared?

Sat, 19 May 2012 23:05:04 +0000

Deciding whether or not you should buy a home is one of the most important decisions that you can ever make. In doing so, you must ask yourself some very important questions, so that you are not left with your credit rating ruined and your home taken away.
Do you have a source of income that you can rely on long term? This means that you must have held this job for at least 2-3 years and you know for a fact that you will be able to keep it for years. Losing a job is one of the main reasons why people default on mortgage payments, so be sure that you can rely on the job that you current have long term.
Do you always pay for bills on time? Late payment on bills may not seem like a big deal, but it is a huge deal with mortgage payments. A few late payments can cause a lender to claim that you have violated your contract, which can lead to a foreclosure on your house. Many people who pay their bills late constantly do so because they forget, rather than a lack of money, so be sure that you keep your mortgage payment up to date at all times.
Do you already have long-term outstanding debt? This can include things like car payments, which will already put a strain on your credit rating and can ruin you financially should you lose your job. If you are already making car payments, make sure that you are not living beyond your means when signing up for a mortgage.
Do you have enough money for a down payment? Nearly every bank or mortgage company around requires a down payment because this shows that you have the ability to pay off a mortgage. If you cannot afford to save up for a down payment, then you probably cannot afford a mortgage. Use your ability to save up for a down payment as a barometer on whether or not you are ready for a mortgage.
Do you have the financial capacity to pay for a mortgage and any additional costs that the house may bring up each month? If you cannot afford to make all of your payments each month, it should be a red flag that you are not ready to receive a mortgage.

If you can honestly answer yes to all of these questions, then it is time for you to seriously consider buying a home. If not, then keep waiting and your time will come soon enough.

Buying an Affordable Home

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Depending on where you live, you can find home loans in a variety of different sources. Lenders like thrift organizations, mortgage companies, commercial banks, and credit unions are all in the loan business, so you will never be short on options when trying to secure a loan. At each of these places, you will probably get different rates, so it is very important to shop around for the best rates possible. You are also able to set up a loan through a mortgage broker, which is a person or company that will arrange a loan for you with a lender. This is often times much easier than doing it yourself because a broker will make sure that you receive the best rates around.

When searching for a home, there are a number of different things that you should think about before making a purchase:

Types of homes - There is no point in moving into a condominium or a duplex if you place a high value on your own privacy and there is no point in moving into a single family dwelling if you do not want to have a yard. The type of home that you choose will have a major impact on your buying power, so choose wisely.

New or existing home - You must also consider whether or not you want a new or existing home. New homes usually cost more money than existing homes, but they are also cheaper to maintain because everything is new. You must choose the option that you feel is best for your individual situation.

Quality of home - Every home around is a different quality, depending on how much abuse it has taken over the years. If you buy a home that is in terrible shape, make sure that you can afford renovations or your home will not be a very happy one. If you buy an old house that needs many repairs, it might be wise to get an estimate on the damage before buying the home. You might find that it will end up costing you less to simply buy a new home than to fix up an old one.

Features - Different homes have different features and these features are usually the selling point of the home. There is no point in buying a house without air conditioning if you truly want a house with this feature, just like there is no point in buying a house with a pool if you will never use it. Also, be sure to purchase a house with enough bedrooms and bathrooms to accommodate your family.

Location - The location of your home is usually what attracts you to it in the first place, as you do not want to end up in a dangerous neighborhood. You also do not want to end up in the city if you would prefer to live in the country, so be careful when choosing the location that you want to live in. If you are unsure about a neighborhood, research it before moving in because this may save you having to move again right away if you do not like it.

Crime rate - This goes hand in hand with the location that you choose, since every neighborhood has a different crime rate. This is something that can be easily researched and can save you a lot of hardship in the future. The crime rate can also affect the value of your home in the future, so keep an eye on it.

School system - If you have children, the quality of the school system is of the utmost importance. Sending your children to a bad school can impact them for the rest of their lives. A poor school system can also cause the property value to fall in in the future, so keep an eye on this even if you do not have children.

Economic stability of area - If there is economic growth, or at least the potential for economic growth, the value of the property will increase over time.

Property tax - Have a look at how much property tax is in the area because of it is too much, it might be wise to look elsewhere.

A broker will make contact with multiple lenders for you, although they do not necessarily have to give you the best deals that they find. If you have any doubts about your broker, contact another one. There is nothing wrong with trying time after time until you get the rate that you desire so be patient when selecting a lender.

Sometimes it can be difficult to figure out if you are dealing with a broker or a lender because many institutions act as both. Be sure to read any advertisements carefully so that you do not wind up in the wrong spot because that can ruin your opportunity for receiving a good rate. Also, be sure to ask your broker how he or she will be paid. There are many brokers that work on commission from the lenders, but others require a payment directly from you, so choose the type of broker that will best suit your own needs.

Home Ownership : How To

Sat, 19 May 2012 23:05:04 +0000

If you are interested in buying a home, you most likely got started in the process by seeing a simple advertisement of an appealing looking home. This usually starts the people on the road towards home ownership because it allows people to dream of what their house could look like in the future. Next, people will usually contact a lender to see how much money they are able to borrow for their purchase. Since very few people can afford to purchase a home outright, finding a lender is a necessary step in the home buying process. After this, people will begin to contact sellers in order to find a deal that suits them. If these people already have a home in mind, it makes this step very easy to get through. Finally, there is the closing of the deal, where the legal title is transferred to the new owner.

On each of these steps, the buyer will have the opportunity to negotiate, in order to get the best terms available for that particular home. You can negotiate the cost with the seller and other variables with the lender, so that you can get the best deal for yourself. There is not a set way to negotiate these terms, nor is the home buying process the same in every case, but the following few paragraphs will give you an outline about what to expect when you buy your home.

Buying and Financing A Home You will begin the process by talking to a real estate broker. Normally, the seller of the home will hire a broker and then the broker will speak with prospective buyers of the home and will broker a deal that is acceptable for both parties. As a buyer, it might be wise to hire a buyer's broker because the seller's broker will usually attempt to persuade you to accept the seller's conditions, since this broker is technically working for the seller. A buyer's broker will work for you in this situation, so that you are not left with a bad deal.

If you cannot find a buyer's broker, you do not have to be too worried because the seller's broker is legally bound to treat you fairly. If you do not believe that this broker is treating you fairly or that the broker is attempting to get you to sign a bad deal, report this person to your state's Real Estate Commission because this sort of thing is definitely not permitted.

Many times, the broker will help you to secure a mortgage, which is a huge help because real estate brokers have many connections in this field. They will be able to connect you with someone who is more likely than others to accept you as a client based on your credit history, although it is still important to look into other lenders. Be sure to compare the rates that are offered by others, but do look into the lender that is recommended by the broker because you may get a good deal.

Selecting an Attorney Before signing any papers, it is a good idea to hire an attorney to look over your agreement. Since anything you sign is legally binding, you will not want to enter into an agreement unless you understand everything. Hiring an attorney will protect your interests and will make sure that you get everything that you are expecting. If you do select an attorney, be sure to find one that will represent your interests fairly. Also, be sure to shop around and find the best rates for an attorney, since they are all different. You may want to ask your attorney what he or she charges for each aspect of the process and whether or not he or she will be representing anyone else who is involved in this sale during this particular transaction.

By following this guide, you can ensure that everything goes smoothly with your home purchase.

Buy vs Rent

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Why should I buy, instead of rent? In the end, buying is usually the right answer because it gives you more control over your own home than renting. Once you buy a home, it is yours and you can do whatever you want with. You will not have to answer to landlords and you can make alternations to the house without having to ask first. Also, every penny that you spend on the house is an investment. When you rent a home, you are putting money into someone else's investment, but when you buy, it is an investment of your own. Buying a home is like securing your future because no matter what, the home is yours.

Think of buying a home as like putting money into a retirement fund because once you are ready to retire, you can simply sell the home and live off of the money. The value of real estate is constantly increasing, so buying a home in an investment that will make you money in the long run, while still having a use in the present. While you do have to pay a significant down payment in order to buy a home and the monthly instalments will be nearly the same as with a rental, the long term investment benefits and knowing that your money is actually going into something makes owning your own home priceless.

Buy vs. Rent Comparison As a comparison, if a renter is paying $800 a month to live in a home and he or she sees the rent increase 5 percent per year, within six years this renter will be paying more than someone who bought a house and is paying $1000 per month. With a fixed rate mortgage, you will definitely save yourself money in the long run because inflation will not cause your payments to rise. Also, you can write off a percentage of the interest that you pay on your taxes each year, making owning a home a much better deal than renting.

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Monthly Expenses: Buying
Something that you must keep in mind when deciding whether you want to rent or buy a home is the other expenses that will appear when you own. Each month, your landlord takes some of the money that you spend on rent and uses it to cover certain expenses. If you own your house, you are responsible for paying these expenses. These expenses can include things like property damage, the replacement of appliances, and property taxes, so be sure to factor all of these things in before making a decision.

Before You Start Looking... Before you begin looking for a new place, be sure to have a plan that you will follow. You must have a budget in mind, so that you know what you can afford and you must also learn your rights and responsibilities. Keep in mind that it is illegal for someone to discriminate against you because of your ethnicity, so if you have been trying to find a place and feel as though your rights have been violated, contact the proper authorities. This is important because it keeps people honest and prevents problems from arising later on because of this discrimination. It is important for anyone who chooses to rent a home to know his or her rights because many landlords or property management companies will attempt to take advantage of tenants for financial reasons. Do not become a victim in this trend and speak up against this sort of practice.

Checklist for Home Buyers

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Know Your Rights as a Homebuyer The first thing that you must do before buying a home is learn about the laws that are present to protect you as a homebuyer. Since there is so much money involved, you must learn how to protect yourself from things like extra expenses and frauds. Be sure to speak to a lawyer so that you will know all of your rights before buying.
Find out How Much Mortgage Can You Afford Defaulting on a mortgage payment can completely ruin your credit rating, so be sure that you can afford your mortgage before signing any papers. There are different interest rates and terms for mortgages, so be sure to choose the one that best suits your interests. As a general rule, your mortgage should not take up more than 29% of your monthly income, so try to negotiate your mortgage rates around the amount. This will save you problems in the future because it will ensure that you will be able to afford your monthly payments, while still having money left over the live off of.

Create Your "Wishlist" There are so many different homes to choose from in the marketplace and each of them has its own selling features. Make a list of the things that your home cannot be without and another list of features that you would like, but are not necessary. You will be living in this home for a long time, so do not settle for something that is not perfect for you. Having this list will make the process run a lot smoother because you will not waste time looking at houses that do not meet this criteria.

Find a Real Estate Broker This is one of the first steps you must take once you decide that you want to buy a home. A real estate broker will find you homes to view that are based on your own personal preferences and will ensure that you find the home you are looking for. When finding a broker, be sure to talk to other people who have bought homes recently in order to find someone who is recommended. You do not want a broker that will not go that extra mile to serve you, so choose wisely. Different brokers generally specialize in different styles of homes, so take a look through the newspaper and look for a broker that appears to be selling homes that you may like. That way, you will not be disappointed when you begin viewing homes.

Mortgages and Homebuying Programs Shop around and find the mortgage or home buying program that is best for you. There are many different options around, but many people simply settle for the first mortgage that is offered to them. This is a very common mistake that must be fixed because the first option isnt always the best one. Look out for your own best interests and find a mortgage that suits your income and lifestyle. There are also a number of home buying programs available for low-income individuals so check them out, even if you do not think that your mortgage attempts will be approve. There are more options than many people know when buying a home.