Buying a home is an exciting experience. For first time buyers new to the process, it can also be terrifying. In order to ease buying jitters, take a look at a few simple tips.
At the beginning of this journey, you'll need to decide on a budget. There are several factors you need to keep in mind. First, how much of a downpayment do you have? FHA loans allow for as little as 3.5 percent of the purchase price as a downpayment. Other lenders generally require a higher percentage.
Do you want to be house rich and cash poor? Just because a lender approves you for a mortgage payment of $200,000 at $2,000 a month, doesn't mean you want to spend that. It may leave you with no money left over for travel, entertainment, or other luxuries you have come to enjoy. Thus comes the saying, "house rich, cash poor."
To find out what a lender thinks you can afford, you will need to get pre-approved. The lender will examine your financial status, including your credit score. This will determine what interest rate you'll be offered and for what amount you are approved.
After setting your budget, you'll need to pick the neighborhoods you are interested in. Are you looking for a short commute, good schools, entertainment within walking distance, or an old neighborhood with charm? These preferences are entirely up to you and will determine the direction of your search.
The MLS is a great place to start your search. The real estate agent you are working with can help you weed through the thousands of listings by supplying you with potential matches, or a simple google search on your own can give you a list of MLS sites to search. Realtor.com also features a MLS that is open to the public. The MLS shows pictures, descriptions, and locations of homes that match your search criteria.
Use the MLS to narrow down potential neighborhoods. It can be a good starting point to give you an idea of costs, amenities, and size of homes.
As you begin your home search, your local real estate agent will let you know of upcoming open houses. An open house is generally held on a weekend and means the listed home will be open for you to view. There will be other potential buyers there, as well as their agents.
A showing, on the other hand, is when your agent and the listing agent agree upon a set upon time for you to view the house. The seller will not be present, and you'll have the house all to yourself.
Good luck with your home search, and may you find your dream home.
Published: September 22, 2010
Foreclosure Gaffs May Further Roil the Market
Uncovering deficiencies in the foreclosure process could potentially have serious implications for the market, said Stuart Saft, a partner at New York law firm Dewey & LeBoeuf, because it raises questions about the ownership of properties that have been resold.
Mortgage servicers, who asked for anonymity, say they anticipate more legal action contesting foreclosures.
Miami attorney Richard J. Burton, who specializes in foreclosure litigation, says he expects that class-action lawsuits will be filed against GMAC and other servicers, furthering slowing the foreclosure process.
The turmoil in the market also could encourage more voluntary defaults, said Cameron Findlay, chief economist at LendingTree.com, because overwhelmed lenders may simply ignore newly delinquent homeowners.
Source: Bloomberg, Bob Ivry, Prashant Gopal and Jody Shenn (09/27/2010)
Mortgage servicers, who asked for anonymity, say they anticipate more legal action contesting foreclosures.
Miami attorney Richard J. Burton, who specializes in foreclosure litigation, says he expects that class-action lawsuits will be filed against GMAC and other servicers, furthering slowing the foreclosure process.
The turmoil in the market also could encourage more voluntary defaults, said Cameron Findlay, chief economist at LendingTree.com, because overwhelmed lenders may simply ignore newly delinquent homeowners.
Source: Bloomberg, Bob Ivry, Prashant Gopal and Jody Shenn (09/27/2010)
What's New in New Housing Design
Here are the products grabbing the attention of the home building and remodeling industries, according to Bill Millholland, executive vice president of sales and marketing at Case Design/Remodeling in Maryland, and Jamie Gibbs, a New York-based interior designer:
· Appliance Drawers. Small warning drawers, modest-sized dishwasher drawers for small loads, refrigerator drawers and microwave drawers. · Counter-depth refrigerators. Some are only 24 inches deep.· Motion-detecting faucets. Like you'd find in the restrooms of businesses.· LED (light-emitting diode) lighting. These are used under cabinets and in ceiling fixtures as a longer-lasting, more efficient alternative to compact fluorescent lamps and incandescent bulbs.· Electric heated floors. A nice touch in bathrooms, · Showers with multiple heads and body sprays. Bathtubs are out.
Source: The Washington Post (09/25/2010)
· Appliance Drawers. Small warning drawers, modest-sized dishwasher drawers for small loads, refrigerator drawers and microwave drawers. · Counter-depth refrigerators. Some are only 24 inches deep.· Motion-detecting faucets. Like you'd find in the restrooms of businesses.· LED (light-emitting diode) lighting. These are used under cabinets and in ceiling fixtures as a longer-lasting, more efficient alternative to compact fluorescent lamps and incandescent bulbs.· Electric heated floors. A nice touch in bathrooms, · Showers with multiple heads and body sprays. Bathtubs are out.
Source: The Washington Post (09/25/2010)
Sell Your Home Faster, Give Your Cabinets a New Look
As the fall season sets in and the weather gets colder, it's just another reason to spend more time in the kitchen cooking up warming soups and maybe some hot cider. But no matter which season, kitchens and great rooms tend to be very popular for homeowners and, of course, buyers.
For this reason, it's important to make sure your cabinets are looking good--not laden with holes from chipped or worn off paint or stain. Kitchen cabinets often take a beating from all the opening and closing of the doors and drawers; however getting them looking good again can seem like an overwhelming project.
According to the National Kitchen & Bath Association, "The variables that affect the cost of kitchen cabinets relate to quality, appearance, and functional effectiveness."
So, if you're really sprucing them up and using high-end handles, adding more shelving inside them, the costs will rise. But what if the insides of your cabinets aren't really in poor condition? Maybe the hinges and the hardware are still in good shape, it's just the outside that could use a makeover.
That's when giving your cabinets a new face might be your best option. Stripping the cabinets and painting or refacing them can add a lot of value to the overall appeal of the home without incurring the bigger expense of replacing your cabinets.
The NKBA says that, "This will cost about half of what you would spend for comparable new kitchen cabinets, but such a strategy will only work if the basic room configuration and cabinet placement in your existing kitchen are to remain the same." However, if your cabinets are sagging or you need a new configuration for more space, for instance, this option won't work. But, again, if your cabinets simply need a new face, this can be a good solution especially when you're listing your home for sale. The investment isn't nearly as high as replacing them.
There are a few steps involved in refacing: remove/prep the veneer, strip the surface, fill in missing chips, clean cabinets, apply new veneer and trim, prep veneer, and finally stain and finish. Some homeowners decide to do their own handyman work.
There are many articles on the step-by-step process, so this column won't focus on that but instead will let you know a few things that you should be aware of to ward off bigger problems. Actually, the first is an issue I had when refacing my kitchen cabinets. (After one painter messed up the cabinets, I ended up having to hire a qualified professional to successfully finish the job.) What you should know before you start. Especially in tract homes, certain types of cabinets may have a protective layer (veneer) on top of the wood or pressed particle board. If you remove this layer you can end up with a big mess. While it often chips off over the years, and appears easy to remove, in fact you can peel it off with your finger tips, removing it completely will require the under material to be sanded and prepped so that the surface will allow paint to stick to it. But, removing it may also cause harm to the cabinets.
"Most kitchen cabinets are made with pre-veneered laminated wood (particle board in some cases) and the hardwood veneer is rolled onto the laminated wood with terrifically high pressure and in most case you would damage the wood underneath trying to remove the veneer," according to RefinishFurniture.com. The site indicates that the old veneer can be left on as a base. The old must be lightly sanded to remove the finish and then a new veneer can be added. RefinishFurniture.com also recommends marking all the cabinet doors before you remove them to strip them or prep them for paint or stain. It'll save you so much time and frustration when you go to put them back on.
Another word of advice. While many homeowners like the do-it-yourself projects, when you're selling your home, this kind of project can become tedious and too time consuming. Refacing your cabinets will help your home show better but the question is: Do you do-it-yourself or hire a company to do what they do best? Either way, newly painted or stained cabinets go along way when it comes time to sell your home.
For this reason, it's important to make sure your cabinets are looking good--not laden with holes from chipped or worn off paint or stain. Kitchen cabinets often take a beating from all the opening and closing of the doors and drawers; however getting them looking good again can seem like an overwhelming project.
According to the National Kitchen & Bath Association, "The variables that affect the cost of kitchen cabinets relate to quality, appearance, and functional effectiveness."
So, if you're really sprucing them up and using high-end handles, adding more shelving inside them, the costs will rise. But what if the insides of your cabinets aren't really in poor condition? Maybe the hinges and the hardware are still in good shape, it's just the outside that could use a makeover.
That's when giving your cabinets a new face might be your best option. Stripping the cabinets and painting or refacing them can add a lot of value to the overall appeal of the home without incurring the bigger expense of replacing your cabinets.
The NKBA says that, "This will cost about half of what you would spend for comparable new kitchen cabinets, but such a strategy will only work if the basic room configuration and cabinet placement in your existing kitchen are to remain the same." However, if your cabinets are sagging or you need a new configuration for more space, for instance, this option won't work. But, again, if your cabinets simply need a new face, this can be a good solution especially when you're listing your home for sale. The investment isn't nearly as high as replacing them.
There are a few steps involved in refacing: remove/prep the veneer, strip the surface, fill in missing chips, clean cabinets, apply new veneer and trim, prep veneer, and finally stain and finish. Some homeowners decide to do their own handyman work.
There are many articles on the step-by-step process, so this column won't focus on that but instead will let you know a few things that you should be aware of to ward off bigger problems. Actually, the first is an issue I had when refacing my kitchen cabinets. (After one painter messed up the cabinets, I ended up having to hire a qualified professional to successfully finish the job.) What you should know before you start. Especially in tract homes, certain types of cabinets may have a protective layer (veneer) on top of the wood or pressed particle board. If you remove this layer you can end up with a big mess. While it often chips off over the years, and appears easy to remove, in fact you can peel it off with your finger tips, removing it completely will require the under material to be sanded and prepped so that the surface will allow paint to stick to it. But, removing it may also cause harm to the cabinets.
"Most kitchen cabinets are made with pre-veneered laminated wood (particle board in some cases) and the hardwood veneer is rolled onto the laminated wood with terrifically high pressure and in most case you would damage the wood underneath trying to remove the veneer," according to RefinishFurniture.com. The site indicates that the old veneer can be left on as a base. The old must be lightly sanded to remove the finish and then a new veneer can be added. RefinishFurniture.com also recommends marking all the cabinet doors before you remove them to strip them or prep them for paint or stain. It'll save you so much time and frustration when you go to put them back on.
Another word of advice. While many homeowners like the do-it-yourself projects, when you're selling your home, this kind of project can become tedious and too time consuming. Refacing your cabinets will help your home show better but the question is: Do you do-it-yourself or hire a company to do what they do best? Either way, newly painted or stained cabinets go along way when it comes time to sell your home.
Feds leave interest rates alone
The Federal Reserve issued a statement on Tuesday saying that it will hold off on further efforts to stimulate the economy and keep the federal funds rate at or near zero, but signaled that it was ready to step in with further action if necessary.
The Open Market Committee said in a release,“The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”
The Fed apparently debated resuming securities purchases aimed at driving long-term interest rates even lower. Those who were opposed said it is likely this approach won’t work.
Source: Bloomberg, Craig Torres (09/21/2010)
The Open Market Committee said in a release,“The Committee will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”
The Fed apparently debated resuming securities purchases aimed at driving long-term interest rates even lower. Those who were opposed said it is likely this approach won’t work.
Source: Bloomberg, Craig Torres (09/21/2010)
Fed ready to aid US economy
By Robin Harding in Washington
Published: September 21 2010 19:34 Last updated: September 21 2010 19:34
The Federal Reserve took no action at its September meeting but sent a signal that it may soon restart large purchases of Treasury bonds by changing its policy statement.
After its meeting on Tuesday, the rate-setting Federal Open Market Committee said that it “will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”
MIT Prof Says Housing Demand Is about to Take Off At least some analysts are bullish on housing.
William C. Wheaton, professor of economics at Massachusetts Institute of Technology, argues that the housing market is due for improvement, calling home construction, "a sleeping giant that is about to wake up."
Wheaton believes that because there has been so little construction that demand exceeds the level of building and it will soon absorb excess inventory.
"Housing construction will not only rise, but it will stay high for a while, which didn't happen in previous recoveries," Wheaton predicts.
Source: Fortune, Nin-Hai Tseng (09/17/2010)
Published: September 21 2010 19:34 Last updated: September 21 2010 19:34
The Federal Reserve took no action at its September meeting but sent a signal that it may soon restart large purchases of Treasury bonds by changing its policy statement.
After its meeting on Tuesday, the rate-setting Federal Open Market Committee said that it “will continue to monitor the economic outlook and financial developments and is prepared to provide additional accommodation if needed to support the economic recovery and to return inflation, over time, to levels consistent with its mandate.”
MIT Prof Says Housing Demand Is about to Take Off At least some analysts are bullish on housing.
William C. Wheaton, professor of economics at Massachusetts Institute of Technology, argues that the housing market is due for improvement, calling home construction, "a sleeping giant that is about to wake up."
Wheaton believes that because there has been so little construction that demand exceeds the level of building and it will soon absorb excess inventory.
"Housing construction will not only rise, but it will stay high for a while, which didn't happen in previous recoveries," Wheaton predicts.
Source: Fortune, Nin-Hai Tseng (09/17/2010)
Mortgage Rates Inch Down...
Mortgage-backed securities prices, which drive mortgage interest rates in the opposite direction, improved this week significantly on Monday and Tuesday, helping mortgage rates inch back down to record lows.
Current 30-year fixed mortgage rates are at 4% for well-qualified consumers with a 20% down payment who pay a standard .07 to 1 point origination. Today’s 15-year fixed mortgage rate is 3.625%. Both fixed mortgage rates today match all time record lows and have been verified available by FreeRateUpdate.com who researches over two dozen wholesale lenders’ rate sheets daily.
FHA mortgage rates continue to be available at similar interest rates to conforming mortgages; however, FHA fees and MI raise closing costs, making the APR on an FHA loan higher than that of a conforming mortgage at the same note rate and origination fee.
Jumbo mortgage rates are unchanged this week. Today’s jumbo 30-year fixed loan rate is at a near record low 5.125%.
Wells Fargo, the nation’s number one retail mortgage lender by volume, originating even more loans than Bank of America, is advertising on their website a conventional 30-year fixed mortgage at an interest rate of 4.5% with an APR of 4.686. Wells Fargo’s advertised 30-year fixed rate is up slightly from a week ago.
Today's Mortgage Rates - Available to well-qualified consumers at a standard .07 to 1 point origination:
Conventional:
30-year fixed: 4%
15-year fixed: 3.625%
5/1 ARM: 3.25%
FHA:
30-year fixed: 4%
15-year fixed: 3.75%
5/1 ARM: 3%
Jumbo:
30-year fixed: 5.125%
15-year fixed: 4.625%
5/1 ARM: 4.25%
Current 30-year fixed mortgage rates are at 4% for well-qualified consumers with a 20% down payment who pay a standard .07 to 1 point origination. Today’s 15-year fixed mortgage rate is 3.625%. Both fixed mortgage rates today match all time record lows and have been verified available by FreeRateUpdate.com who researches over two dozen wholesale lenders’ rate sheets daily.
FHA mortgage rates continue to be available at similar interest rates to conforming mortgages; however, FHA fees and MI raise closing costs, making the APR on an FHA loan higher than that of a conforming mortgage at the same note rate and origination fee.
Jumbo mortgage rates are unchanged this week. Today’s jumbo 30-year fixed loan rate is at a near record low 5.125%.
Wells Fargo, the nation’s number one retail mortgage lender by volume, originating even more loans than Bank of America, is advertising on their website a conventional 30-year fixed mortgage at an interest rate of 4.5% with an APR of 4.686. Wells Fargo’s advertised 30-year fixed rate is up slightly from a week ago.
Today's Mortgage Rates - Available to well-qualified consumers at a standard .07 to 1 point origination:
Conventional:
30-year fixed: 4%
15-year fixed: 3.625%
5/1 ARM: 3.25%
FHA:
30-year fixed: 4%
15-year fixed: 3.75%
5/1 ARM: 3%
Jumbo:
30-year fixed: 5.125%
15-year fixed: 4.625%
5/1 ARM: 4.25%
First Time Buyer's ABCs
As a first-time buyer, you have a lot of questions. There is terminology you don't understand. And there are expenses you need to anticipate. Here are some explanations of just that, to help you on your way to homeownership.
First, what costs should you expect? After you have become "pre-approved" for a mortgage, you will know how much you can spend (aka your "budget"). Pre-approval is done by the bank or lender who will be writing your mortgage. It is accessed by your: credit history, assets, employment history, and financial status. And it guarantees you a loan.
Being pre-approved can quicken the time it takes to close, as well as give you an advantage over buyers who are not pre-approved, should a home garner multiple offers.
Next, figure out how much money you'll need to put down. Are you looking at an FHA loan with 3.5 percent down? Or are you planning on putting 15 to 20 percent down? Financial expert Suze Orman recommends that in today's troubled market, you put at least 20 percent down on a house.
Closing costs are what are paid, well, at closing. You should expect to pay for an appraisal, title services, title insurance, transfer taxes, inspections, loan origination, private mortgage insurance, and homeowners insurance, among a host of other charges. The average closing costs are paid, yes, by the buyer. And they average around 2 to 4 percent of the total purchase price of the home. You can, of course, negotiate payment of closing costs with the seller. This is especially true in a market which favors buyers.
What is mortgage insurance? Mortgage insurance, also known as private mortgage insurance (PMI), protects your lender, should you default on your loan. And it can be required when you have made only a small downpayment. It costs around 1 percent of the total loan. According to the Federal Reserve Bank of San Francisco, "Under [The Homeowner's Protection Act of 1998], mortgage lenders or servicers must automatically cancel PMI coverage on most loans, once you pay down your mortgage to 78 percent of the value if you are current on your loan."
What is escrow? With a purchase as large as this, it is important that one party doesn't run off with all the funds! This is where an escrow account comes into play. All necessary and agreed upon funds are put into a third party account. When all terms have been met, then the funds are released to the appropriate parties.
What is an offer? When you have found a home you like, you'll discuss with your agent what a reasonable price pay is. This will more than likely be less than the price the seller is asking. And it will be based on the condition of the home, the price of home's in the neighborhood, as well as current market conditions. Remember, your offer is the price you are willing to pay for the property. You have signed the offer and, if accepted, you will be expected to follow through with the purchase of this home!
What are property taxes? Welcome to homeownership! Property taxes are paid each year to your local government at the county level. Some areas of the country charge much higher taxes than others, and the price is a percentage of the value of your property. That means that more expensive the house, the more expensive the taxes.
As a first-time buyer, it is highly recommended you work with a local real estate agent. They not only can answer any questions you may have, but their wealth of knowledge and experience will help guide you in a positive direction for this important transaction.
First, what costs should you expect? After you have become "pre-approved" for a mortgage, you will know how much you can spend (aka your "budget"). Pre-approval is done by the bank or lender who will be writing your mortgage. It is accessed by your: credit history, assets, employment history, and financial status. And it guarantees you a loan.
Being pre-approved can quicken the time it takes to close, as well as give you an advantage over buyers who are not pre-approved, should a home garner multiple offers.
Next, figure out how much money you'll need to put down. Are you looking at an FHA loan with 3.5 percent down? Or are you planning on putting 15 to 20 percent down? Financial expert Suze Orman recommends that in today's troubled market, you put at least 20 percent down on a house.
Closing costs are what are paid, well, at closing. You should expect to pay for an appraisal, title services, title insurance, transfer taxes, inspections, loan origination, private mortgage insurance, and homeowners insurance, among a host of other charges. The average closing costs are paid, yes, by the buyer. And they average around 2 to 4 percent of the total purchase price of the home. You can, of course, negotiate payment of closing costs with the seller. This is especially true in a market which favors buyers.
What is mortgage insurance? Mortgage insurance, also known as private mortgage insurance (PMI), protects your lender, should you default on your loan. And it can be required when you have made only a small downpayment. It costs around 1 percent of the total loan. According to the Federal Reserve Bank of San Francisco, "Under [The Homeowner's Protection Act of 1998], mortgage lenders or servicers must automatically cancel PMI coverage on most loans, once you pay down your mortgage to 78 percent of the value if you are current on your loan."
What is escrow? With a purchase as large as this, it is important that one party doesn't run off with all the funds! This is where an escrow account comes into play. All necessary and agreed upon funds are put into a third party account. When all terms have been met, then the funds are released to the appropriate parties.
What is an offer? When you have found a home you like, you'll discuss with your agent what a reasonable price pay is. This will more than likely be less than the price the seller is asking. And it will be based on the condition of the home, the price of home's in the neighborhood, as well as current market conditions. Remember, your offer is the price you are willing to pay for the property. You have signed the offer and, if accepted, you will be expected to follow through with the purchase of this home!
What are property taxes? Welcome to homeownership! Property taxes are paid each year to your local government at the county level. Some areas of the country charge much higher taxes than others, and the price is a percentage of the value of your property. That means that more expensive the house, the more expensive the taxes.
As a first-time buyer, it is highly recommended you work with a local real estate agent. They not only can answer any questions you may have, but their wealth of knowledge and experience will help guide you in a positive direction for this important transaction.
How to Avoid Being Part of a Real Estate Scam
With increasing reports of real estate scams worldwide, here are some ways recommended by fraud experts to avoid being caught up in sales fraud when the transaction involves an out-of-state buyer or seller.
· Ask everyone to prove that they are who they say they are. Have the out-of-state party provide a photocopy of their driver’s license or passport that has been notarized. · Verify signatures. Compare the signature on the real estate contract to other signatures on their driver’s license, passport, the original sales contract, etc.· Make sure the warranty deed hasn’t been altered. Get a copy of the original from the title company.· You select the professionals. Require the out-of-town party to use a real estate professional, attorney, or title company of your choosing.· Require a face-to-face meeting. The safest way to ensure that they are who they say they are is to require that they show up at closing.
Source: AOL Real Estate, Sheree R Curry (09/14/2010
· Ask everyone to prove that they are who they say they are. Have the out-of-state party provide a photocopy of their driver’s license or passport that has been notarized. · Verify signatures. Compare the signature on the real estate contract to other signatures on their driver’s license, passport, the original sales contract, etc.· Make sure the warranty deed hasn’t been altered. Get a copy of the original from the title company.· You select the professionals. Require the out-of-town party to use a real estate professional, attorney, or title company of your choosing.· Require a face-to-face meeting. The safest way to ensure that they are who they say they are is to require that they show up at closing.
Source: AOL Real Estate, Sheree R Curry (09/14/2010
How Buyers Compete in a Sellers' Market
No matter the market, sellers can find a competitive edge, whether it be through pricing, staging, or even negotiating closing costs.
What about buyers? Do they have any hope for an edge during a sellers market?
A sellers market is one which favors the seller. Perhaps you find yourself in a hot area where homes garner multiple offers and bidding wars. Or perhaps you live in an area where prices are appreciating or there is only a small inventory of homes for sale. No matter the situation, buyers can still find ways to gain an advantage.
Here are a few tips that might do just that.
1. Pre-approval: Be sure to start your home buying process by getting pre-approved for a mortgage. This will prove to your potential seller that you are ready, willing, and able to buy their home. A pre-approval will also give you an exact number of how much money you can borrow, and thus spend.
2. Be ready to buy: There can be no hesitation during a sellers market. There will be other buyers waiting to to grab up the same deal you just found. If the numbers work out in your favor for a home you like, then be ready to put in a strong offer.
3. Know your budget: You may be approved for a loan of up to $300,000, but you only want to spend $250,000 as your max. Be sure to know ahead of time what your budget really is.
4. Make a strong offer: In a sellers market, homes can expect to receive nearly if not all of their asking price. And in many cases, you may even find a home sells for more than the asking price. So, in order to make both a good impression on the seller so they take your interest seriously, as well as to beat out the competition, be sure to present a strong first offer.
5. We willing to negotiate terms: This means if a seller needs 60 days until closing, do what you can do accommodate them. Or maybe they are unwilling to make a repair before you move in, but are willing to pay you the repair costs instead. Be willing to work with a seller, if it means getting the home you desire.
These simple tips can make a big difference when it comes to buying in a sellers market.
What about buyers? Do they have any hope for an edge during a sellers market?
A sellers market is one which favors the seller. Perhaps you find yourself in a hot area where homes garner multiple offers and bidding wars. Or perhaps you live in an area where prices are appreciating or there is only a small inventory of homes for sale. No matter the situation, buyers can still find ways to gain an advantage.
Here are a few tips that might do just that.
1. Pre-approval: Be sure to start your home buying process by getting pre-approved for a mortgage. This will prove to your potential seller that you are ready, willing, and able to buy their home. A pre-approval will also give you an exact number of how much money you can borrow, and thus spend.
2. Be ready to buy: There can be no hesitation during a sellers market. There will be other buyers waiting to to grab up the same deal you just found. If the numbers work out in your favor for a home you like, then be ready to put in a strong offer.
3. Know your budget: You may be approved for a loan of up to $300,000, but you only want to spend $250,000 as your max. Be sure to know ahead of time what your budget really is.
4. Make a strong offer: In a sellers market, homes can expect to receive nearly if not all of their asking price. And in many cases, you may even find a home sells for more than the asking price. So, in order to make both a good impression on the seller so they take your interest seriously, as well as to beat out the competition, be sure to present a strong first offer.
5. We willing to negotiate terms: This means if a seller needs 60 days until closing, do what you can do accommodate them. Or maybe they are unwilling to make a repair before you move in, but are willing to pay you the repair costs instead. Be willing to work with a seller, if it means getting the home you desire.
These simple tips can make a big difference when it comes to buying in a sellers market.
10 most desired home features
Based on survey responses, the following are the top 10 most desired home features and the percentage of respondents who ranked the feature as high priority:
1. Garage or parking space: 86.8 percent.
2. Master suite: 78.9 percent.
3. Ample storage space: 72 percent.
4. Large or walk-in closets: 66.5 percent.
5. Guest bedroom: 66.4 percent.
6. Outdoor entertainment area: 64.3 percent.
7. Gourmet or updated kitchen: 60.6 percent.
8. Breakfast room or eat-in kitchen: 55.8 percent.
9. Large yard: 43.2 percent.
10. Wood floors: 40.8 percent.
1. Garage or parking space: 86.8 percent.
2. Master suite: 78.9 percent.
3. Ample storage space: 72 percent.
4. Large or walk-in closets: 66.5 percent.
5. Guest bedroom: 66.4 percent.
6. Outdoor entertainment area: 64.3 percent.
7. Gourmet or updated kitchen: 60.6 percent.
8. Breakfast room or eat-in kitchen: 55.8 percent.
9. Large yard: 43.2 percent.
10. Wood floors: 40.8 percent.
Hardwood Vrs Carpets
New homes, fixer-uppers, and remodels are faced with that all important question. What flooring should be installed? Will it be carpet, with its warm, inviting, and oh-so comfortable nature. Or will it be hardwoods, with their time-honored tradition and durability?
Regardless if you're a designer, do-it-yourselfer, or builder, the choice is yours: hardwoods or carpet?
For most it comes down to price, longevity, and maintenance.
For price, low and medium grade carpet may cost less up-front, but the average lifespan of carpet is only 10 to 15 years, so you will be looking to replace the carpet several times over your own lifetime. And you must figure into that cost the yearly cleanings that are a necessity to keep healthy and attractive carpets.
Hardwoods range widely in price, depending on their popularity and, but there are affordable options for most any project. In addition, hardwoods can last a lifetime with proper care, even if they may need to be sanded and refinished down the road.
Hardwoods are low on the maintenance scale, with "proper maintenance" being key to a beautiful, long life for your hardwoods. Lowe's For Pros recommends:
Use a damp cloth to blot up spills as soon as they happen.
Sweep, dust and vacuum floors regularly with a hard floor attachment to prevent dirt and grit accumulation, which can scratch or dull the floor finish.
Periodically use a hardwood floor cleaner specifically formulated for use on pre-finished hardwood floors.
Don't wet mop or wash the floor with soap, water, oil-soap detergent or any other liquid cleaning material. This could cause warping and swelling and void the warranty.
Do not use steel wool, abrasive cleaners or strong ammoniated or chlorinated cleaners.
Avoid buffing or a polishing machine on prefinished floors.
For tough spots on hardwood floors such as oil, paint, markers, lipstick, ink or tar, use acetone or nail polish remover on a clean white cloth, then wipe the area with a damp cloth to remove any remaining residue.
For spots such as candle wax or chewing gum, harden the spot with ice and then gently scrape with a plastic scraper, such as a credit card.
Hardwood floors can also be a sound ecological choice. Wood is a natural resource, and fast growing varieties, such as Bamboo (which is really a grass), offer even more green incentive.
Additionally, the American College of Allergy, Asthma, and Immunology recommends that house dust allergy sufferers "remove wall-to-wall carpets from the bedroom if possible." Have a child with asthma? Ninety percent of asthma sufferers are allergic to dust mites. And dust mites love carpet.
Carpet installation itself also rears another ugly head. There are chemicals used in most modern carpets that emit fumes for months and years to come. These fumes can cause headaches and runny eyes and nose. There are, however, natural options available for more eco-friendly carpets. These options, though, will more than likely add to your overall cost.
The choice is entirely up to you on which flooring option is right for you. Be sure to do your due diligence with research and price comparisons before making any final decisions!
Regardless if you're a designer, do-it-yourselfer, or builder, the choice is yours: hardwoods or carpet?
For most it comes down to price, longevity, and maintenance.
For price, low and medium grade carpet may cost less up-front, but the average lifespan of carpet is only 10 to 15 years, so you will be looking to replace the carpet several times over your own lifetime. And you must figure into that cost the yearly cleanings that are a necessity to keep healthy and attractive carpets.
Hardwoods range widely in price, depending on their popularity and, but there are affordable options for most any project. In addition, hardwoods can last a lifetime with proper care, even if they may need to be sanded and refinished down the road.
Hardwoods are low on the maintenance scale, with "proper maintenance" being key to a beautiful, long life for your hardwoods. Lowe's For Pros recommends:
Use a damp cloth to blot up spills as soon as they happen.
Sweep, dust and vacuum floors regularly with a hard floor attachment to prevent dirt and grit accumulation, which can scratch or dull the floor finish.
Periodically use a hardwood floor cleaner specifically formulated for use on pre-finished hardwood floors.
Don't wet mop or wash the floor with soap, water, oil-soap detergent or any other liquid cleaning material. This could cause warping and swelling and void the warranty.
Do not use steel wool, abrasive cleaners or strong ammoniated or chlorinated cleaners.
Avoid buffing or a polishing machine on prefinished floors.
For tough spots on hardwood floors such as oil, paint, markers, lipstick, ink or tar, use acetone or nail polish remover on a clean white cloth, then wipe the area with a damp cloth to remove any remaining residue.
For spots such as candle wax or chewing gum, harden the spot with ice and then gently scrape with a plastic scraper, such as a credit card.
Hardwood floors can also be a sound ecological choice. Wood is a natural resource, and fast growing varieties, such as Bamboo (which is really a grass), offer even more green incentive.
Additionally, the American College of Allergy, Asthma, and Immunology recommends that house dust allergy sufferers "remove wall-to-wall carpets from the bedroom if possible." Have a child with asthma? Ninety percent of asthma sufferers are allergic to dust mites. And dust mites love carpet.
Carpet installation itself also rears another ugly head. There are chemicals used in most modern carpets that emit fumes for months and years to come. These fumes can cause headaches and runny eyes and nose. There are, however, natural options available for more eco-friendly carpets. These options, though, will more than likely add to your overall cost.
The choice is entirely up to you on which flooring option is right for you. Be sure to do your due diligence with research and price comparisons before making any final decisions!
Real Estate's Latest Numbers
It can be difficult to wade through the varied reports on housing and the state of the U.S. economy.
In this edition, we bring you some of the latest figures from across the nation.
We look first today to consumer spending. The latest figures in show that while personal spending was flat in the month prior, and even stagnated in the Spring, July saw the strongest pace in four month -- up 0.4 percent.
An increase in consumer spending means the economy is being reinvigorated by cash flow. When consumer spending is down, it means, according to The Huffington Post, that shoppers are remaining "cautious, and it could lead economists to curtail their expectations for growth."
So this rise in July is welcome news.
The National Association of Realtors has released their monthly pending home sales index findings, showing that pending sales -- that's sales where a contract has been signed, but the transaction is not yet closed but is normally finalized within one of two months -- rose 5.2 percent in July.
Lawrence Yun, NAR chief economist, commented that, "Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery."
He continued, saying, "But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity."
Pending sales are still far below, around 20 percent below, their rates seen in the summer of 2009.
The silver lining in pending sales news? Interest rates remain at historic lows, meaning home affordability is at new highs. This is great news for would be buyers.
This week we also heard from Fed chairman, Ben Bernanke. He said in an address at an Economic Symposium in Jackson Hole, Wyoming, "The prospects for household spending depend to a significant extent on how the jobs situation evolves."
Unemployment rates continue to remain high in most of the country. The U.S. Bureau of Labor Statistics reports that the current rate is 9.5 percent.
You will find pockets of the nation where unemployment rates are a bit lower. Yahoo! Finance reports that North Dakota, powered by agriculture and commodities, has just a 3.6 percent unemployment rate.
Numerous Midwestern states offer similar rates. Nebraska is "another state reliant on its agricultural sector, Nebraska also specializes in freight transport, telecommunications, manufacturing, information technology, and transportation. And, not to mention, it has the nation's third-wealthiest person amidst its GDP rank." Their rate? Just 4.7 percent.
Bernanke continued that "Household finances and attitudes also bear heavily on the housing market, which has generally remained depressed."
He noted that in "particular, home sales dropped sharply following the recent expiration of the homebuyers' tax credit. Going forward, improved affordability--the result of lower house prices and record-low mortgage rates--should boost the demand for housing. However, the overhang of foreclosed-upon and vacant housing and the difficulties of many households in obtaining mortgage financing are likely to continue to weigh on the pace of residential investment for some time yet."
In this edition, we bring you some of the latest figures from across the nation.
We look first today to consumer spending. The latest figures in show that while personal spending was flat in the month prior, and even stagnated in the Spring, July saw the strongest pace in four month -- up 0.4 percent.
An increase in consumer spending means the economy is being reinvigorated by cash flow. When consumer spending is down, it means, according to The Huffington Post, that shoppers are remaining "cautious, and it could lead economists to curtail their expectations for growth."
So this rise in July is welcome news.
The National Association of Realtors has released their monthly pending home sales index findings, showing that pending sales -- that's sales where a contract has been signed, but the transaction is not yet closed but is normally finalized within one of two months -- rose 5.2 percent in July.
Lawrence Yun, NAR chief economist, commented that, "Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery."
He continued, saying, "But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity."
Pending sales are still far below, around 20 percent below, their rates seen in the summer of 2009.
The silver lining in pending sales news? Interest rates remain at historic lows, meaning home affordability is at new highs. This is great news for would be buyers.
This week we also heard from Fed chairman, Ben Bernanke. He said in an address at an Economic Symposium in Jackson Hole, Wyoming, "The prospects for household spending depend to a significant extent on how the jobs situation evolves."
Unemployment rates continue to remain high in most of the country. The U.S. Bureau of Labor Statistics reports that the current rate is 9.5 percent.
You will find pockets of the nation where unemployment rates are a bit lower. Yahoo! Finance reports that North Dakota, powered by agriculture and commodities, has just a 3.6 percent unemployment rate.
Numerous Midwestern states offer similar rates. Nebraska is "another state reliant on its agricultural sector, Nebraska also specializes in freight transport, telecommunications, manufacturing, information technology, and transportation. And, not to mention, it has the nation's third-wealthiest person amidst its GDP rank." Their rate? Just 4.7 percent.
Bernanke continued that "Household finances and attitudes also bear heavily on the housing market, which has generally remained depressed."
He noted that in "particular, home sales dropped sharply following the recent expiration of the homebuyers' tax credit. Going forward, improved affordability--the result of lower house prices and record-low mortgage rates--should boost the demand for housing. However, the overhang of foreclosed-upon and vacant housing and the difficulties of many households in obtaining mortgage financing are likely to continue to weigh on the pace of residential investment for some time yet."
10 Low-Cost Tips to Improve Your Home's Appeal
When selling your home, the goal is to sell it quickly for the highest price while investing as little as possible in renovations. With a limited budget and a little effort, you can greatly increase your home's appeal by focusing on what prospective buyers can see on their first visit.
Tip #1: Refresh the exteriorFirst impressions count when it comes to selling a home. Most buyers won’t even leave their car if they don’t find the exterior appealing. The best ways to improve your home’s exterior include: -Repairing and/or replacing trims, shutters, gutters, shingles, mailboxes, window screens, walkways and the driveway. -Painting siding, trim and shutters and lamp and mailbox posts. -Pressure washing vinyl siding, roofs, walkways and the driveway. -Washing windows.
Tip #2: Spruce up the lawn and landscapeHome buyers associate the condition of your lawn and landscaping with the condition of your home’s interior. By improving the outside, you affect buyers’ impression of the entire property. The best ways to enhance the yard include: -Mowing and edging the lawn. -Seeding, fertilizing and weeding the lawn. -Keeping up with regular lawn maintenance by frequent watering.-Trimming and/or removing overgrown trees, shrubs and hedges. -Weeding and mulching plant beds. -Planting colorful seasonal flowers in existing plant beds. -Removing trash, especially along fences and underneath hedges. -Sweeping and weeding the street curb along your property.
Tip #3: Create an inviting entranceThe front door to your home should invite buyers to enter. The best ways to improve your entry include: -Painting the front door in a glossy, cheerful color that complements the exterior. -Cleaning, polishing and/or replacing the door knocker, locks and handles. -Repairing and/or replacing the screen door, the doorbell, porch lights and house numbers. -Placing a new welcome mat and a group of seasonal potted plants and flowers by the entry.
Tip #4: Reduce clutter and furnitureA buyer cannot envision living in your home without seeing it. A home filled with clutter or even too much furniture distracts buyers from seeing how they can utilize the space your home offers. If you have limited storage space, you may want to consider renting a temporary storage unit to place items you wish to keep. The best ways to declutter your home include: -Holding a garage sale to prepare for your move, getting rid of unnecessary items.-Removing clutter such as books, magazines, toys, tools, supplies and unused items from counter tops, open shelves, storage closets, the garage and basements. -Storing out-of-season clothing and shoes out of sight to make bedroom closets seem roomier. -Removing any visibly damaged furniture. -Organizing bookshelves, closets, cabinets and pantries. Buyers will inspect everything.-Putting away your personal photographs, unless they showcase the home. Let buyers see themselves in your home.-De-personalize rooms as much as you can.
Tip #5: Clean, clean, cleanThe cleanliness of your home also influences a buyer's perception of its condition. The appearance of the kitchen and bathrooms will play a considerable role in a buyer's decision process, so pay particular attention to these areas. The best ways to improve these areas include: -Cleaning windows, fixtures, hardware, ceiling fans, vent covers and appliances. -Cleaning carpets, area rugs and draperies. -Cleaning inside the refrigerator, the stove and all cabinets. -Removing stains from carpets, floors, counters, sinks, baths, tile, walls and grout. -Eliminating house odors, especially if you have pets. -Considering air fresheners or potpourri.
Tip #6: Make minor repairsThe small stuff does count, especially with first-time home buyers. Without dismissing the importance of repairing major items such as a leaky roof or plumbing, you do not need to spend money on replacing these items. Instead, focus on the minor repairs that will make your home visually appealing. The best ways to improve your home include: -Repairing ceilings and wall cracks. -Repairing faucets, banisters, handrails, cabinets, drawers, doors, floors and tile. -Caulking and grouting tubs, showers, sinks and tile. -Adding fresh paint to ceilings, walls, trim, doors and cabinets. -Tightening door handles, drawer pulls, light switches and electrical plates. -Lubricating door hinges and locks.
Tip #7: Showcase the kitchenThe heart of any home is the kitchen. If you are going to spend any money on renovations, this is the one area where you will see the greatest return. Even with a modest budget, focusing on a few key areas can make a great difference in getting the asking price for your property. The best ways to showcase the kitchen include: -Replacing cabinet doors and hardware. -Installing under-cabinet lighting. -Replacing light fixtures. -Replacing outdated shelving with pantry and cabinet organizers to maximize space. -Baking cookies or cupcakes for a showing, to create a homey smell.
Tip #8: Stage furnitureFurniture placement can enhance the space of your home while giving buyers an idea of how to best utilize the space with their own belongings. Take some time to rethink how different areas in your house could be used. Some ideas to think about include: -Moving couches and chairs away from walls in your sitting and family rooms to create cozy conversational groups. -Creating a reading corner in the master bedroom. -Clearing an empty room to set up a reading space. -Turning an awkward space into a home office. -Setting the dining room table with your best china.-Set wine glasses in front of the fireplace or next to a Jacuzzi tub.
Tip #9: Light up the houseCreate a sense of openness and cheerfulness in your home through its lighting. To improve the lighting try: -Opening shades and drapes to let the sunshine warm and brighten rooms. -Installing brighter light bulbs in rooms that tend to be dark. -Adding additional lamps for ambient lighting. -Turning on all the lights for a showing.
Tip #10: Add fresh touchesYou can easily add color and style to your home by adding fresh touches throughout. Some ideas to consider include: -Placing fresh floral arrangements in the entry and master bedroom. -Placing bowls of bright-colored fruit in the family room and the kitchen. -Filling an empty corner with a potted leafy plant. -Setting new hand soap in the bathrooms.-Displaying fresh towels near sinks.
Tip #1: Refresh the exteriorFirst impressions count when it comes to selling a home. Most buyers won’t even leave their car if they don’t find the exterior appealing. The best ways to improve your home’s exterior include: -Repairing and/or replacing trims, shutters, gutters, shingles, mailboxes, window screens, walkways and the driveway. -Painting siding, trim and shutters and lamp and mailbox posts. -Pressure washing vinyl siding, roofs, walkways and the driveway. -Washing windows.
Tip #2: Spruce up the lawn and landscapeHome buyers associate the condition of your lawn and landscaping with the condition of your home’s interior. By improving the outside, you affect buyers’ impression of the entire property. The best ways to enhance the yard include: -Mowing and edging the lawn. -Seeding, fertilizing and weeding the lawn. -Keeping up with regular lawn maintenance by frequent watering.-Trimming and/or removing overgrown trees, shrubs and hedges. -Weeding and mulching plant beds. -Planting colorful seasonal flowers in existing plant beds. -Removing trash, especially along fences and underneath hedges. -Sweeping and weeding the street curb along your property.
Tip #3: Create an inviting entranceThe front door to your home should invite buyers to enter. The best ways to improve your entry include: -Painting the front door in a glossy, cheerful color that complements the exterior. -Cleaning, polishing and/or replacing the door knocker, locks and handles. -Repairing and/or replacing the screen door, the doorbell, porch lights and house numbers. -Placing a new welcome mat and a group of seasonal potted plants and flowers by the entry.
Tip #4: Reduce clutter and furnitureA buyer cannot envision living in your home without seeing it. A home filled with clutter or even too much furniture distracts buyers from seeing how they can utilize the space your home offers. If you have limited storage space, you may want to consider renting a temporary storage unit to place items you wish to keep. The best ways to declutter your home include: -Holding a garage sale to prepare for your move, getting rid of unnecessary items.-Removing clutter such as books, magazines, toys, tools, supplies and unused items from counter tops, open shelves, storage closets, the garage and basements. -Storing out-of-season clothing and shoes out of sight to make bedroom closets seem roomier. -Removing any visibly damaged furniture. -Organizing bookshelves, closets, cabinets and pantries. Buyers will inspect everything.-Putting away your personal photographs, unless they showcase the home. Let buyers see themselves in your home.-De-personalize rooms as much as you can.
Tip #5: Clean, clean, cleanThe cleanliness of your home also influences a buyer's perception of its condition. The appearance of the kitchen and bathrooms will play a considerable role in a buyer's decision process, so pay particular attention to these areas. The best ways to improve these areas include: -Cleaning windows, fixtures, hardware, ceiling fans, vent covers and appliances. -Cleaning carpets, area rugs and draperies. -Cleaning inside the refrigerator, the stove and all cabinets. -Removing stains from carpets, floors, counters, sinks, baths, tile, walls and grout. -Eliminating house odors, especially if you have pets. -Considering air fresheners or potpourri.
Tip #6: Make minor repairsThe small stuff does count, especially with first-time home buyers. Without dismissing the importance of repairing major items such as a leaky roof or plumbing, you do not need to spend money on replacing these items. Instead, focus on the minor repairs that will make your home visually appealing. The best ways to improve your home include: -Repairing ceilings and wall cracks. -Repairing faucets, banisters, handrails, cabinets, drawers, doors, floors and tile. -Caulking and grouting tubs, showers, sinks and tile. -Adding fresh paint to ceilings, walls, trim, doors and cabinets. -Tightening door handles, drawer pulls, light switches and electrical plates. -Lubricating door hinges and locks.
Tip #7: Showcase the kitchenThe heart of any home is the kitchen. If you are going to spend any money on renovations, this is the one area where you will see the greatest return. Even with a modest budget, focusing on a few key areas can make a great difference in getting the asking price for your property. The best ways to showcase the kitchen include: -Replacing cabinet doors and hardware. -Installing under-cabinet lighting. -Replacing light fixtures. -Replacing outdated shelving with pantry and cabinet organizers to maximize space. -Baking cookies or cupcakes for a showing, to create a homey smell.
Tip #8: Stage furnitureFurniture placement can enhance the space of your home while giving buyers an idea of how to best utilize the space with their own belongings. Take some time to rethink how different areas in your house could be used. Some ideas to think about include: -Moving couches and chairs away from walls in your sitting and family rooms to create cozy conversational groups. -Creating a reading corner in the master bedroom. -Clearing an empty room to set up a reading space. -Turning an awkward space into a home office. -Setting the dining room table with your best china.-Set wine glasses in front of the fireplace or next to a Jacuzzi tub.
Tip #9: Light up the houseCreate a sense of openness and cheerfulness in your home through its lighting. To improve the lighting try: -Opening shades and drapes to let the sunshine warm and brighten rooms. -Installing brighter light bulbs in rooms that tend to be dark. -Adding additional lamps for ambient lighting. -Turning on all the lights for a showing.
Tip #10: Add fresh touchesYou can easily add color and style to your home by adding fresh touches throughout. Some ideas to consider include: -Placing fresh floral arrangements in the entry and master bedroom. -Placing bowls of bright-colored fruit in the family room and the kitchen. -Filling an empty corner with a potted leafy plant. -Setting new hand soap in the bathrooms.-Displaying fresh towels near sinks.
From "Double Dip" to Double Opportunity
The "double-dip" threat of further economic downturn reverberates through the media, online and off. However, the more significant threat to property owners—and wanna-be owners—may lie in applying short-term, recession-focused thinking to long-term real estate investments, like their home and cottage, therefore, creating a personal financial "double dip."
Panic reactions and short-term thinking can be expensive in times of change. By over-reacting to declining property values, rising costs or slower selling times in the short term, some owners can make decisions that increase losses in the long term—the double dip. It’s like selling otherwise-solid stocks when the stock market experiences a downward correction, and, thereby, compounding losses.
Regardless of national forecasts, it’s what happens locally that matters to you and your real estate. It’s at street level, that the value of one property is established over its neighbours. The local economic impact on income and cost of living are felt directly in your pocket.
Yes, today everything is electronically-interrelated in ways that are just becoming evident, like the domino-effect of the economic meltdown. However, your reaction to these times, and those of local governments and citizens, make the real difference to you and your situation. Your words, actions and inaction dictate whether you’ll give up and be conquered, or rise up and conquer.
Waiting for things to go back to the way they were, and other "caught in the headlights" reactions, waste time and use up valuable resources. These "victim" strategies can make financial matters worse, as you lose more ground than you can gain back in good times. Are you prepared for the possibility that when prosperity returns—and it will—it may not look anything like the "more is more" pre-recession world?
"The same brilliant minds that got us into this, don’t seem to know how to get us out." That’s the sentiment repeated over and over, in different words, strong words, as I listened to Canadians from all walks of life during my summer tour to find out what’s really happening behind the headlines, viral blasts and government pitches.
What’s happening in your neighbourhood usually has more direct impact on your bottom line than what pundits predict on global scales. How you make the personal decisions that change the path of your life can make a greater contribution to security and financial well-being than whether you save by skipping lattes or go "green." This column regularly examines fresh perspectives on those and other real-estate-related decisions, and this article is no exception. Keep asking yourself "What’s my point?" when you consider actions and reactions. You’ll join those who have discovered they have more to contribute to their own success than they had given themselves credit for.
For instance, one of the most common reactions to financial stress is the flight to cheaper locations. Like all good ideas, this once can have negative repercussions if all aspects of relevant change are not considered. That’s the potential for double-dip.
After a long hot summer in the city, many urban dwellers start to dream about leaving the concrete behind and buying their own picket-fenced rural property. Moving away from urban rents and premium-priced housing may seem to open up a bonanza of value, but consider the risks. Ignore the risks, and you may find costs are greater than rewards—the double dip.
In some locations, a condominium can be purchased for monthly costs equivalent to city rents. However, monthly maintenance fees for the condominium may become prohibitively high.
A rural or suburban house may be purchased for a fraction of the price that the same structure would fetch in prime city locations. There is value in moving outside urban areas, but there is also risk. Research the full range of implications in a move and you’ll come out ahead financially, because you’ll understand the impact of the compromises you make. Scroll through the list of articles in this column and you’ll discover some of the financial hazards of life outside the city. For example, returning to an urban lifestyle comparable to the one you left may become a financial impossibility since rural property does not always appreciate in value as quickly as urban real estate.
Real estate is the investment you can live in. This double opportunity can be used to weather economic storms and achieve financial goals if you don’t let short-term thinking overshadow long-term gain. Look beyond immediate solutions, and consider possible long-range positive and negative effects of today’s choices to avoid the double dip. "Act in haste, repent in leisure" is not an effective real estate strategy.
Panic reactions and short-term thinking can be expensive in times of change. By over-reacting to declining property values, rising costs or slower selling times in the short term, some owners can make decisions that increase losses in the long term—the double dip. It’s like selling otherwise-solid stocks when the stock market experiences a downward correction, and, thereby, compounding losses.
Regardless of national forecasts, it’s what happens locally that matters to you and your real estate. It’s at street level, that the value of one property is established over its neighbours. The local economic impact on income and cost of living are felt directly in your pocket.
Yes, today everything is electronically-interrelated in ways that are just becoming evident, like the domino-effect of the economic meltdown. However, your reaction to these times, and those of local governments and citizens, make the real difference to you and your situation. Your words, actions and inaction dictate whether you’ll give up and be conquered, or rise up and conquer.
Waiting for things to go back to the way they were, and other "caught in the headlights" reactions, waste time and use up valuable resources. These "victim" strategies can make financial matters worse, as you lose more ground than you can gain back in good times. Are you prepared for the possibility that when prosperity returns—and it will—it may not look anything like the "more is more" pre-recession world?
"The same brilliant minds that got us into this, don’t seem to know how to get us out." That’s the sentiment repeated over and over, in different words, strong words, as I listened to Canadians from all walks of life during my summer tour to find out what’s really happening behind the headlines, viral blasts and government pitches.
What’s happening in your neighbourhood usually has more direct impact on your bottom line than what pundits predict on global scales. How you make the personal decisions that change the path of your life can make a greater contribution to security and financial well-being than whether you save by skipping lattes or go "green." This column regularly examines fresh perspectives on those and other real-estate-related decisions, and this article is no exception. Keep asking yourself "What’s my point?" when you consider actions and reactions. You’ll join those who have discovered they have more to contribute to their own success than they had given themselves credit for.
For instance, one of the most common reactions to financial stress is the flight to cheaper locations. Like all good ideas, this once can have negative repercussions if all aspects of relevant change are not considered. That’s the potential for double-dip.
After a long hot summer in the city, many urban dwellers start to dream about leaving the concrete behind and buying their own picket-fenced rural property. Moving away from urban rents and premium-priced housing may seem to open up a bonanza of value, but consider the risks. Ignore the risks, and you may find costs are greater than rewards—the double dip.
In some locations, a condominium can be purchased for monthly costs equivalent to city rents. However, monthly maintenance fees for the condominium may become prohibitively high.
A rural or suburban house may be purchased for a fraction of the price that the same structure would fetch in prime city locations. There is value in moving outside urban areas, but there is also risk. Research the full range of implications in a move and you’ll come out ahead financially, because you’ll understand the impact of the compromises you make. Scroll through the list of articles in this column and you’ll discover some of the financial hazards of life outside the city. For example, returning to an urban lifestyle comparable to the one you left may become a financial impossibility since rural property does not always appreciate in value as quickly as urban real estate.
Real estate is the investment you can live in. This double opportunity can be used to weather economic storms and achieve financial goals if you don’t let short-term thinking overshadow long-term gain. Look beyond immediate solutions, and consider possible long-range positive and negative effects of today’s choices to avoid the double dip. "Act in haste, repent in leisure" is not an effective real estate strategy.
Crumbs of Optimism
There’s no hiding the fact that optimism has been taking a beating this summer. Consumer confidence is in the tank, jobless benefits are on the rise, and as we’ve told you, home sales suffered a big drop in July. We’ve all heard about the potential of a double dip recession, and if you pair the words “economy” and “optimism” together on Google, you’re not going to find much to read about.
And yet, even under the most barren of landscapes, if you practice enough patience and persistence, you will find a seed or two of hope to sustain you through these troubled times.
We hear so much about people who can’t afford their mortgages or who can’t find a job or who can’t manage their debt, that we forget that the fact that the vast majority of us are still gainfully employed, well-fed and have roofs over our heads. Yes, some of our investments have taken a beating. Our IRAs and 401K plans are certainly nothing to brag about. But those are called long-term investments for a reason. They, at least, have a decent shot at long-term recovery. In the here and now, the fact remains that the great recession has been an event more witnessed than experienced by most Americans.
The vision has certainly been frightening at times, but President Franklin Roosevelt was right when he told the nation during the Great Depression that “the only thing we have to fear is fear itself”. Fear is what keeps us on the sidelines, and in a nation where 70 percent of the economy comes from consumer spending, we all really need to take a collective chill pill.
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The fact is, while the U.S. economy is hardly setting anything on fire, it is still growing – up 2.4 percent in the second quarter of the year. Progress is progress, no matter how small, and two former Treasury Secretaries – Robert Rubin, who served under President Clinton , and Paul O’Neill, who was in the most recent Bush Administration – both told CNN this month that they see that slow and bumpy growth continuing.
That growth will be pushed along as consumers have more money to spend, and perhaps the record low mortgage rates can help with that. Have you seriously looked into refinancing your home? Mortgage rates are at record lows, and if you could drop yours by even just a percentage point, you could save hundreds of dollars a month – money that could be poured back into the economy. And yes, we know there are millions of you out there whose loans are now larger than the value of your homes, but for many of you, there are government-backed programs to help you get lower rates.
And here’s one more piece of good news for consumers. Gas prices are falling again. They’re down about a nickel in the past two weeks, and the Oil Price Information Service is projecting another sizable drop after Labor Day, perhaps as much as 15 cents a gallon. Those pennies quickly add up to dollars, dollars that can be spent one way or another. Whether you’re reducing your debt, or buying more products, you’ll be helping the bottom line.
And perhaps the bottom line for all of us these days is that we need to be brave, we need to spend wisely and most of all we need to be patient.
And yet, even under the most barren of landscapes, if you practice enough patience and persistence, you will find a seed or two of hope to sustain you through these troubled times.
We hear so much about people who can’t afford their mortgages or who can’t find a job or who can’t manage their debt, that we forget that the fact that the vast majority of us are still gainfully employed, well-fed and have roofs over our heads. Yes, some of our investments have taken a beating. Our IRAs and 401K plans are certainly nothing to brag about. But those are called long-term investments for a reason. They, at least, have a decent shot at long-term recovery. In the here and now, the fact remains that the great recession has been an event more witnessed than experienced by most Americans.
The vision has certainly been frightening at times, but President Franklin Roosevelt was right when he told the nation during the Great Depression that “the only thing we have to fear is fear itself”. Fear is what keeps us on the sidelines, and in a nation where 70 percent of the economy comes from consumer spending, we all really need to take a collective chill pill.
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The fact is, while the U.S. economy is hardly setting anything on fire, it is still growing – up 2.4 percent in the second quarter of the year. Progress is progress, no matter how small, and two former Treasury Secretaries – Robert Rubin, who served under President Clinton , and Paul O’Neill, who was in the most recent Bush Administration – both told CNN this month that they see that slow and bumpy growth continuing.
That growth will be pushed along as consumers have more money to spend, and perhaps the record low mortgage rates can help with that. Have you seriously looked into refinancing your home? Mortgage rates are at record lows, and if you could drop yours by even just a percentage point, you could save hundreds of dollars a month – money that could be poured back into the economy. And yes, we know there are millions of you out there whose loans are now larger than the value of your homes, but for many of you, there are government-backed programs to help you get lower rates.
And here’s one more piece of good news for consumers. Gas prices are falling again. They’re down about a nickel in the past two weeks, and the Oil Price Information Service is projecting another sizable drop after Labor Day, perhaps as much as 15 cents a gallon. Those pennies quickly add up to dollars, dollars that can be spent one way or another. Whether you’re reducing your debt, or buying more products, you’ll be helping the bottom line.
And perhaps the bottom line for all of us these days is that we need to be brave, we need to spend wisely and most of all we need to be patient.
Most Homebuyers Have No Regrets
The Great Recession may have drained the equity from millions of homes, but when it comes to making what's often the greatest purchase of all, the vast majority of homeowners are resting easy.
An overwhelming 90 percent of homeowners say they don't regret buying their current home, according to a new study by Bankrate, Inc.
That's even in the face of stagnant - or sliding - home prices they've suffered and rock-bottom mortgage rates they may have missed out on.
Only 9 percent of respondents expressed second thoughts about taking the plunge. Why? Most often because they couldn't sell their home and move on, or because they were unable to afford the monthly mortgage payment.
"It's surprising and reassuring to hear 90 percent of homeowners say they don't regret the purchase of their current homes," says Greg McBride, CFA, senior financial analyst for Bankrate.com.
"And all the nasty headlines in the past two years have really moved the needle in terms of mortgage awareness, with a significant drop in the percentage of borrowers who don't know what type of mortgage they have," McBride said.
Only 8 percent of Americans don't know what type of mortgage loan they have. That's a lot lower than the 26 percent of respondents in a Bankrate study done two years ago who said they were in the dark about their mortgage type.
Being bullish on homeownership isn't necessarily new. A recent Fannie Mae report revealed 70 percent of consumers see a home as one of the safest investments to make and 64 percent think now is a good time to buy.
"The key to any real estate survey conducted in today’s market would be to factor in the state where the survey's respondents reside. In many parts of the country, particularly in the Central states, they did not experience a real estate boom like the West and East coasts and therefore are not faced with the fall out of a dramatic real estate bust today," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.
She added, "Feelings about homeownership should have changed very little in those states where home prices and equity have remained relatively stable."
Other results in the Bankrate poll of 1,001 randomly selected adults, conducted last month by Princeton Survey Research Associates International, include:
• Fixed-rate mortgages are gaining in popularity. Seventy-nine percent of respondents said they had this type of mortgage on their home.
• Wealthier Americans -- those making more than $75,000 -- overwhelmingly preferred fixed-rate mortgages. Almost 90 percent of those who were asked, said they used a fixed-rate mortgage.
Crystal Chow is a DeadlineNews Group associate editor who contributed to this article.
An overwhelming 90 percent of homeowners say they don't regret buying their current home, according to a new study by Bankrate, Inc.
That's even in the face of stagnant - or sliding - home prices they've suffered and rock-bottom mortgage rates they may have missed out on.
Only 9 percent of respondents expressed second thoughts about taking the plunge. Why? Most often because they couldn't sell their home and move on, or because they were unable to afford the monthly mortgage payment.
"It's surprising and reassuring to hear 90 percent of homeowners say they don't regret the purchase of their current homes," says Greg McBride, CFA, senior financial analyst for Bankrate.com.
"And all the nasty headlines in the past two years have really moved the needle in terms of mortgage awareness, with a significant drop in the percentage of borrowers who don't know what type of mortgage they have," McBride said.
Only 8 percent of Americans don't know what type of mortgage loan they have. That's a lot lower than the 26 percent of respondents in a Bankrate study done two years ago who said they were in the dark about their mortgage type.
Being bullish on homeownership isn't necessarily new. A recent Fannie Mae report revealed 70 percent of consumers see a home as one of the safest investments to make and 64 percent think now is a good time to buy.
"The key to any real estate survey conducted in today’s market would be to factor in the state where the survey's respondents reside. In many parts of the country, particularly in the Central states, they did not experience a real estate boom like the West and East coasts and therefore are not faced with the fall out of a dramatic real estate bust today," said Nancy Osborne, chief operating officer of Erate.com, a Santa Clara, CA-based financial information publisher and interest rate tracker.
She added, "Feelings about homeownership should have changed very little in those states where home prices and equity have remained relatively stable."
Other results in the Bankrate poll of 1,001 randomly selected adults, conducted last month by Princeton Survey Research Associates International, include:
• Fixed-rate mortgages are gaining in popularity. Seventy-nine percent of respondents said they had this type of mortgage on their home.
• Wealthier Americans -- those making more than $75,000 -- overwhelmingly preferred fixed-rate mortgages. Almost 90 percent of those who were asked, said they used a fixed-rate mortgage.
Crystal Chow is a DeadlineNews Group associate editor who contributed to this article.
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