First-Time Homebuyers Face the Opportunity of a Lifetime
Posted by Terry Scattergood 1/1/2011
Today’s first-time homebuyers are presented with the opportunity of a lifetime. Mortgage rates in early December stood near lows last seen during the Truman administration while home prices were well off their peaks of previous years. The combination made housing affordability, as measured by the National Association of REALTORS®, the highest since NAR® launched its Affordability Index in 1973.
Housing inventory is also abundant in many markets, enabling first-timers to secure good homes and pave the way to their financial futures. Indeed, homes and their long-term virtues of shelter, wealth-building and personal and civic pride are available at bargain-basement prices that won’t, or can’t, last.
Naturally, first-timers have many questions about home buying, starting with costs. With research and the services of a licensed real estate professional, these consumers can demystify the process and place themselves on the fast track to homeownership.
Knowledge is power – Nine out of every 10 home searches today begin on the Internet. With just a few mouse clicks, you can peruse neighborhoods, search countless online listings and take virtual tours packed with detailed photographs. The process gives you working knowledge of home availability and pricing in your local markets so by the time you sit down with your real estate sales professional you’re well on your way.
Also visit informative websites such as www.ginniemae.gov, www.realtor.com and prudential.com, and check the local newspaper for homebuyer seminars.
Affordability – Costs involved in the purchase of a home – mortgage, down payment and closing expenditures – can be overwhelming to first-time homebuyers. By looking at your income and debt ratio, your real estate professional can help you calculate how much you can afford each month in mortgage payments. But before determining your price range, you should also take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, insurance, utilities and maintenance. And if your down payment is less than 20 percent of the cost of the home, you will be responsible for private mortgage insurance.
Mortgage payment – In today’s buyers market, you may face competition for your dream home. To establish your spending limit and gain the ability to move quickly on a home, get pre-approved for a loan before you start looking. The fact that your loan has already been approved is of great value to the seller because it shortens the purchase process, and there is less of a chance that the buyer will back out of the sale. This process will also help you identify any credit challenges you must address prior to your purchase.
If you don’t have a specific mortgage lender in mind, ask your sales professional for a recommendation.
Down payment – The down payment amount varies depending on the value of the home you choose and your mortgage lender. First-time homebuyers may also qualify for down-payment assistance programs and grants available through their states and municipalities. Contact your state housing finance authority, county housing and community development office for an application.
Closing costs must be factored in as well. These include origination fees charged by the lender, title and settlement fees, taxes and prepaid items such as homeowners insurance or homeowner association fees. All told, buyers should spend no more than 28% of their income on housing costs, according to Fannie Mae. Your real estate professional will be able to explain your options.
Making offers – Make sure you visit several different homes to get a feel for the marketplace. Visit the ones you like again to see things you might have missed. Work with your real estate professional to get all of your questions answered before making an offer. And remember there are no silly questions. Make sure you understand and are comfortable with every aspect of the transaction.
Indeed, home ownership remains a sound financial decision for most and a key component of long-term financial planning. First-time buyers who seek homes for all the right reasons – a place to raise a family, build for the future and face life’s opportunities and challenges – can secure their dreams and build for their futures at some of the most attractive values in years.
Home Sellers: Cut to the Chase in Home Repairs and Enhancements
Posted by Terry Scattergood 1/10/2011
2011 opens as a strong buyer’s market so home sellers must be on their toes to give their homes maximum appeal. Not only should sellers complete the home repairs they know must be made, they should also hire a certified home inspector to thoroughly and impartially evaluate their properties.
If this inspection results in a fix-it list, review the list with your real estate professional to establish necessities and priorities. Depending on your budget and objectives, you may want to repair only items that could cause significant deterioration to your property, such as a leaky roof. Ideally, the closer you can get your home to “move-in-ready” status, the more likely you are to attract today’s cautious and discerning buyers.
Among the most common repairs and enhancements yielding immediate buyer appeal include:
• Paint inside and outside in neutral colors
• Steam clean or replace carpets
• Polish or replace hardwood floors
• Clean or re-grout kitchen and bathrooms
• Replace light fixtures
• Change light bulbs throughout and replace wall-switch covers
• Repair dripping faucets
• Fix sticking doors
• Repair broken fencing
Home sellers wanting to do more should consider the findings of Remodeling magazine’s 2010-’11 Cost vs. Value Report, released in December 2010. The survey used input from REALTORS in 80 cities to rank home remodeling projects according to those that bring the greatest cost recovered at sale.
Many of the top projects focus on exterior replacements, as replacements are generally less expensive than other types of projects and they add all-important curb appeal – essential for today’s competitive market or any other.
The Top Five projects in the Cost vs. Value Report include:
No. 1 – Entry door replacement (steel)
No. 2 – Garage door replacement (four-section door, reuse existing motorized opener)
No. 3 – Siding replacement (fiber-cement siding)
No. 4 – Kitchen remodel (minor: new cabinet doors, drawers and hardware, plus new energy-efficient appliances, flooring, counters, sink and faucet)
No. 5 – Deck addition (wood)
When the dust clears and projects are complete, be sure that you and your real estate professional document your repairs and enhancements, and share the report with prospective buyers. Walk prospects through the enhancements and include their costs.
A home in good condition demonstrates pride of ownership. Taking the time to make enhancements helps ensure your home is presented in its best-possible light, primed for sale. Is Solar-thermal Hot Water for You?
Posted by Joe Scattergood on August 14th, 2010 Roof-top solar panels that create hot water with sunshine significantly reduce energy bills and are relatively easy to install and maintain. We Americans take our hot water for granted—we love our soaker tubs, and many of us just can’t start the day without a vigorous shower. But it’s not free. According to the U.S. Department of Energy, on average we spend about $308 per year, per household, just to have hot water ready at the twist of a faucet handle. But you could slash that figure in half, or more, with a solar-thermal system—a proven renewable-energy technology that enables the rays of the sun to heat your home’s hot-water supply. Both solar-thermal systems and more costly solar-photovoltaic panels—which use the sun to generate electricity—can make a significant dent in your utility bill. But with a solar-thermal system, instead of generating energy, you’re saving it. “When compared to solar-electric panels, it is a lower-cost option,” says Monique Hanis, a spokesperson for the Solar Industries Association. “A system for a home would run anywhere from $4,000 to $6,000, and that could take care of a good chunk of your hot-water needs.” Those ballpark figures don’t include the across-the-board federal tax credit that knocks 30% off the cost of a system, plus there are additional state and local-government incentives that can trim set-up costs even more. (Check the Database of State Incentives for Renewables & Efficiency for relevant programs in your area.) Maintenance is minimal, and collectors should last for 20 years or more. How solar-thermal works
All solar-thermal systems feature glassed-covered boxes or sets of tubes that contain fluid-filled piping. The systems can be divided into two basic categories—direct and indirect. In an indirect system, a pump continually circulates an antifreeze solution between the collector mounted on your roof and a heat-exchanger coil located inside your home’s hot-water tank. A pump circulates the antifreeze solution between the solar panel—where the sun heats it—and the coil, where it raises the temperature of the water in the tank. The second type of solar-thermal system, called a direct system, circulates household water directly through the solar collector. This setup is only appropriate for regions, such as Hawaii and Florida, that don’t experience winter freeze-ups. Either type of thermal collector is so efficient that it will produce hot water even on a cloudy day—though a snowfall will bury and temporarily disable a collector until warmer temperatures melt the snow off. How much you’ll need
A solar contractor/installer will evaluate your property’s potential for capturing solar radiation throughout the year, but your house is likely a good candidate if one side of its roof faces south, without too much shading from tall trees and structures. A pair of 4-by-8-foot collectors will significantly reduce the cost of heating hot water for a family of four. How much you’ll save depends on where you live. The National Renewable Energy Laboratory has researched the degree to which a solar-thermal system can reduce a homeowner’s energy bill in various regions of the country. The lab expresses this savings via a rating known as a “solar fraction.” Put simply, a solar fraction is the percentage of a home’s water-heating energy needs that could be met with a rooftop collector. For example, a solar fraction of 60% means that the solar-thermal hot water system would reduce the amount of energy a home used to heat hot water by 60%. In Harrisburg, Penn., Albany, NY, and Eugene, Ore., the solar fraction is 50%. In Fort Worth, Texas, and Tampa, Fla., it’s a whopping 75%. Researching solar-thermal collectors
Last fall, the U.S. Department of Energy added solar-hot water systems to its EnergyStar program. You can browse approved solar water heaters on the Energy Star web site, and discuss which model best suits your needs with an installer. Bear in mind that solar-thermal collectors are not do-it-yourself projects. The North American Board of Certified Energy Practitioners certifies solar-thermal installers. As of late 2009, the group’s web site lists 97 professionals across the country who sell, install, and service the systems. If you’re interested in saving energy and harnessing the free power of the sun, a solar-thermal water-heating system is an attractive option. James Glave is the author of “Almost Green: How I Saved 1/6th of a Billionth of the Planet.” He has been reporting on the challenges and opportunities of sustainable development full-time since 2005. By: James Glave Home Inventory: Value Your Possessions After a Loss
Posted by Joe Scattergood on August 14th, 2010 Use these tactics to create a home inventory after a casualty loss to support an insurance claim. Take plenty of photos of your possessions--they can serve as back-up documentation if you need to file an insurance claim. Despite your best intentions, you never got around to creating a home inventory, a detailed list of your belongings, for insurance purposes. Now that you’ve suffered a theft or casualty loss, you’re kicking yourself. All isn’t lost: There are strategies you can use to approximate a home inventory after the fact and assign value to your damaged or destroyed possessions. Lita Epstein, co-author of “The Complete Idiot’s Guide to Accounting,” suggests first checking your insurance policy to see what’s covered and to what degree. Ideally, you should have replacement cost coverage, which reimburses at full price for a comparable item rather than deducting for depreciation. Once you determine your level of coverage, you’re ready to inventory your belongings. Make a list
Start by making a comprehensive list from memory of everything that was lost, says Mark Goldwich, founder of GoldStar Adjusters, a Jacksonville, Fla., claims adjusting firm. Using a home inventory checklist—you can download our free PDF worksheet—might help you remember items that may not otherwise come to mind. Record any important details that affect value such as types of stones in jewelry or the size of a television screen. Examine any available receipts, checkbook ledgers, bank statements, and credit card records for details on purchases. Solicit photos and videos
Photographs or videos of your possessions can be an important part of proving the value of a loss, says Kelan J. Vorbach, an insurance representative with John B. Wright Insurance in Manasquan, N.J. Examine your photos and home videos, as items may appear in the background. Those images can be used as back-up documentation for your claim. Vorbach also recommends asking friends and family for any photos or videos taken in your home. Work with what you have
In the case of theft, you may still have owner’s manuals or accessories that came with the item that was stolen. In one of Goldwich’s cases, proof for a claim included the remote control to a stolen video camera, as well as copies of credit card statements, emailed receipts from online purchases, and even tops from the packaging of some items. In cases where possessions are destroyed, Epstein recommends taking photos of the damage and assembling a list from any remains at the scene, as long as it’s safe to do so. Check online
Look on manufacturers’ websites to get estimates of what similar items cost, suggests Epstein. You may even want to contact manufacturers to see if they can help you determine the retail value of a comparable item, she says. If you don’t have replacement value coverage for your possessions, sites like eBay and Craigslist that sell used merchandise may give you an idea of how much you can expect to pay for a similar item, says Goldwich. Hire an appraiser
Especially if you lost high-value items, it may be in your best interest to hire a certified personal property appraiser to help you document your claim, says Epstein. Check with the International Society of Appraisers, which has an online appraiser search function. Hiring a professional typically costs between $250 and $500, though fees can vary greatly depending on the size and complexity of a claim. Some appraisers charge a percentage of the appraised value, perhaps 2% to 5%. Epstein says an appraiser’s report can go a long way in helping you document the value of your items, often making the investment worthwhile. Document everything
It’s critical to devote a day or two to documenting your claims thoroughly, not only for your insurance company but also for the IRS. Federal tax rules allow for certain deductions related to theft and casualty losses, including declared disasters. “Those types of claims have a high rate of audit, so you want to be sure you have as much documentation as possible to defend the deduction,” Epstein says. Consult a tax adviser, and refer to IRS Publication 547. By: Gwen Moran 11 Reasons to Use a Real Estate Sales Professional When Buying a Brand-New Home
Posted by Joe Scattergood on June 10th, 2010 Existing and potential homeowners are looking at real estate from all angles as the U.S. economy and local housing markets continue their recovery. For many, there is strong appeal in buying brand-new homes as myriad builder incentives and low interest rates create significant value. Today’s new homes boast exciting floor plans and designs tailored for specific lifestyles, complete with a huge array of features and appointments. They include energy efficient products and building techniques, reducing buyers’ utility bills. Of course, new-home consumers love that their properties, from roofs to appliances, will not need replacement for many years. It might not seem necessary to involve a real estate professional in a transaction where a buyer can deal directly with a builder. Yet by using a real estate professional you gain a skilled professional to protect your interests and guide you along the right path. Here are 11 advantages to using a real estate professional when buying a newly constructed home. 1. Just as a real estate professional calls on experience and knowledge of an area to help buyers locate pre-owned homes in a community, he or she can also direct buyers interested in newly built homes to developments and communities that match client specifications. 2. A sales professional can suggest builders with reputations for delivering a high-quality product, responding quickly to issues, and being financially sound. 3. A sales professional may be familiar with how a builder prices his products and where there may be room to negotiate price or upgrades. 4. Without representation, you are one buyer purchasing only one home. But a sales professional can significantly impact a builder’s bottom line by providing a steady supply of customers. This leverage may work in your favor at the negotiating table. [Note: The builder may require your sales professional to accompany you on your first visit to the site. Check with the builder. 5. The lender approval process may go smoother if a sales professional schedules visits, accompanies you to lenders, and helps expedite required documents. 6. What may seem like a simple transaction can grow legally complex and risky. A sales professional is familiar with those complexities and risks inherent in the homebuying process. When such questions arise, we can steer you to the right advisors and services you may require. 7. If your contract includes a contingency to sell an existing home your real estate sales professional assuredly can help, though your sales professional will explain that buying before selling isn’t always in your best interest as it can undermine your bargaining. 8. When relocating to a new area, sales professionals can be particularly valuable resources. In addition to providing local area information regarding schools, day care or elder care services, public transportation, proposed development, and so on, once construction is under way, they can periodically stop by the work site, supply you with progress reports, and photograph or videotape phases of the construction. 9. A sales professional can assist you as you face hundreds of design choices and consider which upgrades could potentially add value to the home when it comes time to sell. 10. A sales professional can accompany you at the site while you okay the plumbing and electrical locations prior to dry walling, as well as on the walk-through or builder orientation. 11. Lastly, most often the builder pays the sales professional’s commission. You enjoy individual attention and support at no cost to you. Builder incentives and heightened affordability have many real estate consumers considering brand-new homes. Rather than rely on builders’ agents – who are paid by the builders – savvy shoppers are hiring real estate sales professionals to help them through the buying process and on to the American dream. Ten Quick Curb Appeal Tips That Sell
Posted by Joe Scattergood on March 11th, 2010 Everyone has always heard how important curb appeal is
when selling your home. Within the first 15 seconds of a buyer driving up to your home, they have already formed an opinion of your home, no matter how immaculate it is inside. They may have already decided that they don't like your home based on their first impression. This is why curb appeal is so important. You can invest a tremendous amount of money on upgrades and new items inside, but the impression that the buyers leave your home with is the first impression, the curb appeal. What a lot of sellers don't realize is how easy these changes can be. You get used to the exterior of your house, so you don't generally notice the ugly things around the front of your home. You must make sure everything on the exterior of your home, from the street to your doorstep, is looking its best. This is why every seller should at least apply these 10 easy tips. • Street and Driveway: The street in front of your home should be free of litter and may need a quick sweep. The driveway should be free of stains by either pressure washing or bleaching. If you park your vehicle in the driveway, make sure it is attractive and well-maintained. If not, park it down the street. • Sidewalk and Front Walkway: Make sure the sidewalk and front walkways are swept clean and remove any weeds you see growing in the cracks. You should repair any bad cracks in the front walkway. • Fence: Repair any loose or broken boards and give it a fresh coat of paint. This will give your home a crisp newer look. • Mailbox and Light Fixtures: Buyers will be paying attention to detail so you should too. Paint or replace a worn looking mailbox. Light fixtures that are old and rusted should definetly be replaced. • Landscaping: Make sure the lawn stays freshly mowed and all shrubs are neatly trimmed. Add a little sod to any bare spots in your lawn. • Paint: Put a fresh coat of paint on the whole exterior of your home. If you don't have the time to do it yourself or the money to pay someone to do it for you, then just paint the shutters or trim. • Windows: Clean those windows until they sparkle. Add shutters to the front windows or install flower boxes below the windows with bright flowers. • Roof: If the roof needs to be replaced, do it before you start showing your home to buyers. Replace any broken or missing shingles or tiles where needed. If the eaves and fascia boards look bad, just give them a fresh coat of paint. • Gutters and Downspouts: Make sure these areas are neat and trim and consider replacing ones that are in need of serious repair. • Doorway: This is the focal point of your home. You can simply repaint the door and replace the hardware to give a new fresh look. If you have house numbers by your door, those can easily be replaced, if needed. Most of these fixes can be performed by the homeowner, and they can be invaluable during the sale of your home.
Terry & Joe's Top 5 Selling Tips...
1. Select the right agent. Any agent can list your home, but few can sell it with a minimum of fuss and a level of marketing expertise that matches the fee they charge. Trust, negotiation skills, ability to listen and local knowledge are more important than most vendors realize. 2. Get the price right from day one. Match your circumstances and your home to the correct method of sale and you’ll win every time. If your car is worth $20,000, would you advertise it at $35,000? 3. Get the presentation right. First impressions can make or break a sale. Homes with major negatives will sell if a buyer feels good once they’ve been inside. 4. Get the marketing right. You can’t sell a secret. Great wide-angle photography, a guided video tour, upgraded internet listings, an eye catching sign, a great heading, tempting copy or a buyer your agent met yesterday at another listing? Appropriate marketing doesn’t cost, it pays! 5. Tap into a large pool of buyers. Marketing to a large network of NH & MA agents and buyers will. Team Scattergood relies heavily on cutting edge & unique marketing strategies. A major player like Prudential Verani Realty will always recommend marketing - then add value with the largest buyer/agent network in New Hampshire. |