If you are planning to become a first-time home buyer, the following information about what occurs during a real estate closing will keep you in-the-know.
- When you are ready to make an offer on a home, it is good to make an offer that is 10% less than the asking price. This will give you plenty of room to negotiate with the seller.
- When you make a formal offer, you normally must pay 1% of the sale price as “earnest money”. This lets the seller know that you are serious about your offer.
- You will have contingencies, such as getting proof of proper financing and a good house inspection.
- You will hire a home inspector that will give the home a complete inspection, to catch any possible problems the home may have.
- When your offer is accepted by the seller, a legal and binding contract is drawn which states sell price, details of buyer’s or seller’s obligations, and date of possession.
- The required HUD “settlement sheet” provides a list of all monies paid at closing, including commissions, taxes and escrow amounts.
- There will be a mandatory title search, and title insurance and an application for homeowners insurance is required.
- Various closing costs will be paid such as the appraisal fee, the credit report fee, your taxes and the document preparation fee, to name a few.
- Utility service and mortgage payment transfers will be arranged.
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June 30th, 2009
Denver is America’s best city to buy a home, Forbes Magazine says in a new ranking of U.S. metro areas.
“While the majority of the nation’s housing markets are still working toward a bottom, some cities are boasting fundamentals that make them good places to buy a home now,” Forbes reported this week.
Phoenix was ranked No. 2 on the Forbes list, followed by Boston, San Diego and Los Angeles.
The Forbes rankings seem geared more toward each market’s current and future potential as a place to buy a home, since some of the cities at or near the top of the list are among those hardest hit by the recession.
The report ranked the 25 largest U.S. metro areas on the basis of change in price per square foot, frequency of real-estate transactions, and how evenly distributed home-sales activity is in a metro area.
“Denver tops the list,” Forbes said. “It had 25 percent of its property sales occur within approximately 25 percent of the city’s ZIP codes. This means sales in various parts of the city were fairly evenly distributed, showing proportionate activity. The further a city deviates from the 25 percent mark, the less evenly distributed the market is in that city, and thus the lower that city ranks.”
Forbes also determined that average price per square foot of housing space increased 5.7 percent in Denver between February and March of this year, and that transactions decreased 8.4 percent between March 2008 and March 2009, less of a drop than many cities.
“Denver scores very well in terms of being able to bring people into a stable housing market,” the magazine quoted Moody’s economist Christopher Cornell as saying. “It has better growth potential than most cities today.”
Forbes listed Las Vegas, Cleveland, Seattle and Detroit at the bottom of the 25 cities. “There, distressed sales have kept home values down and buyers away,” Forbes said.
It’s the second time in as many months that Denver has held the top spot in a ranking of real-estate potential.
On May 19, Denver was named America’s No. 1 city on the verge of recovery in a segment on NBC’s “Today” show. Real estate expert Barbara Corcoran, a regular guest on the show, said Denver more than any other U.S. city is “clearly on a rebound.”
Forbes drew its data from March 2009 RPX Monthly Housing Market Report, distributed by Radar Logic Incorporated, a New York-based derivatives firm.
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June 29th, 2009
Sometimes house sellers lose sight of what is most important to a home buyer or potential tenant. Making that good first impression is so important since you usually only get one chance during that first home showing. Remember to focus on the following and you should have an offer in no time:
- Spruce up that entryway, or change it to appear more welcoming as a buyer enters through the front door, with an attractive bench or chair and a vase of fresh flowers.
- Houses can lose their appeal to a buyer if there are dirty dishes piled in the sink, piles of laundry or dust. It is hard work to keep your house sparkling at all times for a surprise showing, but very necessary.
- Kitchens sell a house. If yours looks old, a buyer might ask for up to $10,000 off of the asking price. Specifics to focus on are change the counter tops, install new hardware and change to a neutral paint color. Even replacing just one appliance with a stainless steel version makes a difference!
- Never forget to remove any personal items such as family photos and collections. It makes it harder for a buyer to envision themselves in the space if all they see are dozens and dozens of hummels.
- Light is good! Even if you prefer a darkened space, remember that a prospective buyer looks for as much light as possible. Remove drapes if you have to to let in light, or trim back large bushes or trees that are preventing light from entering a space.
- Empty those closets so that at least half of it is visible. Many sellers find that they have to put things into temporary storage elsewhere, but this effort pays off as a buyer needs to believe that they have a myriad of places to put all of their “stuff”.
- In this economy try your best to be brave and list your home at 15% to 20% off of its value. This strategy has a track record of creating many tenants or buyers with bids, that often end up over the ask price.
For more information about how to properly price your home for sale go to “How Sellers Can Maximize Profit”.
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June 25th, 2009
Choosing the right community is so important. How you can you really love where you live unless you love the neighborhood? In the frenzy of finding a home and scheduling moving day, many people forget that researching the neighborhood is one of the most important ways to insure happiness at your new home. Before making your final decision on a home, don’t forget to:
* “Profile” the neighborhood. Ask yourself these questions: Is the quality of the school system important? Is the commute do-able for you? Do you like to be within walking distance to shops and restaurants? Do you like quiet?
* Once you zero in on a neighborhood you like you must research all school information, crime statistics, parks and recreation, neighborhood association fees and tourist attractions. Armed with this information it will be easy to make a wise decision for you.
* Take the time to visit. Don’t downplay your first impression. Take note of the community’s rush hour patterns, it’s social ability factor, it’s streetlights at night. Drive by the schools. Shop in the local grocery store. Try to meet some of your potential neighbors. All of these visual clues can be very revealing.
For more interesting ways to figure out if a neighborhood is right for you click here.
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May 28th, 2009
Homeowners having financial difficulties and in fear of losing their homes to foreclosure could be helped by the newest addition to the government’s housing-rescue plan. It entails a standard process and incentives for a short sale. It will simplify the process for borrowers to transfer ownership of their home to the mortgage company through a “deed in lieu” of foreclosure. This will benefit the buyer because they avoid “foreclosure” and it will benefit the lender because they will avoid the high foreclosure expenses and large amount of time it takes to complete the process. This year, short sales have increased to 20% of all home sales. Compared to foreclosure, a short sale is less costly to the lender, but for the buyer it must be approved and can take up to four months to complete. The government plans to pay mortgage-servicing companies up to $1,000 and borrowers up to $1,500 for completed short sales and “deed in lieu” of foreclosure. These incentives will help make the process go faster.
For more information on the government housing-rescue plan see USA Today for common questions.
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May 23rd, 2009
Since the kids will be out of school soon and many people will be planning vacations, it is time to start thinking about the best ways to protect your home from a possible burglary while you are away. The most obvious things most people do are stop the mail, stop the newspaper delivery, lock the house up tight and leave a light on. The following ideas go a step beyond these old stand-bys:
- If you happen to be going away on an extended trip, you may be better off asking a neighbor to pick up your mail and newspaper and bring it into your home each day.
- Invest in a couple of timers. You can set them to turn a light on and then off at the same time each day. You can also use a timer on a radio or stereo.
- Hire a house sitter in the form of your neighbor’s responsible teen, or work out a system with your neighbor where you can cover their house when they go away and they look after yours when you are away.
- If your neighborhood does not already have a “neighborhood watch” program, be the one to start it. That way you will always have someone to tell your travel plans to.
- Consider purchasing a home security system. Your home will be regularly monitored and many companies offer a neighborhood patrol.
Whether you rent your house or own it, your possessions are still a collection of your life. Keep it safe while enjoying your summer.
For more information about home security tips go to HowStuffWorks for additional ideas
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May 16th, 2009
It can be terribly expensive just to maintain the most important thing most people will ever own: their home. Keeping this fact in mind, here is a list of ways to improve your house’s value without emptying the bank.
- Hiring an inspector could be the most cost-effective thing a home owner ever does. This is especially true if the inspector finds a small problem that could become something much bigger down the line, such as a termite infestation, a water leak or a roofing problem.
- Amazing value is added only by painting a room.
- Energy efficient homes that feature items such as special or vinyl windows and/or programmable thermostats, save you money and are a marketable asset if you do intend to sell.
- Landscaping improvements in the form of large shade trees make houses more desirable. They can also cut your cooling costs up to 40%.
- Improve your house’s air quality by replacing old carpeting, or removing it entirely if you are lucky enough to have hardwood flooring underneath.
- By adding a small luxury item such as a water filtration system, you are adding value to your house and saving yourself money since you will no longer need bottled water.
- Replace old fixtures such as an old ceiling fan for a newer, more updated-looking model. It will make your home more pleasant on hot days, and will appeal to buyers when you need to sell.
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May 9th, 2009
In December of 2007 Congress signed into law the Mortgage Forgiveness Debt Relief Act. Under regular circumstances, when a lender chooses to forgive all or part of a borrower’s debt, the forgiven amount is considered income and the borrower is liable to be taxed. This law offers relief to the homeowner in that it extends relief for three years, covering debts discharged through calendar year 2012. Amendments have been made to remove tax liability and allow the borrower and lender to work together to find a common and beneficial solution for both parties. This debt relief is limited to primary residences only and the amount of forgiven mortgage debt allowed to be excluded from income tax is $2 million per year.
For more information about the Mortgage Forgiveness Debt Relief Act go to the I.R.S. website.
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May 7th, 2009
Anybody who lives with a pet knows that when you share the house you rent with one of these beloved friends, you give up the word “spotless” as a way to describe your home…forever. Here are some tips to keep the house you are renting as clean and fresh-smelling as possible, and your landlord happy, despite your pet’s, let’s just say, “untidiness”.
- Animal hair has an aroma. Usually, it’s not a good one. Vacuum regularly, even if the pet hair matches your furniture and you cannot see it. I promise you, your guests can smell it. Dyson makes a vacuum especially for picking up animal hair.
- This is obvious, but a regularly washed pet makes for a clean house. Think of how happy they are when it’s all over! Keeping pet’s nails trimmed down also limits scratches on floors and fabrics.
- Look into Crypton. It’s a stain-resistant fabric that includes suedes and twills. As always, leather and Ultrasuede are great choices for animal owners.
- Stick to rubber toys if you have a mad chewer. Pig’s ears and rawhide bones are not only terrible for your pet’s health, but if they make it inside your home, they will stain your floor and furniture.
To learn about more interesting things for your home with pets go to http://www.everydaystudio.com and http://www.animalhousestyle.com.
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May 1st, 2009
The days when people advise homeowners to keep a $50,000 home equity line of credit (Heloc) open as a monetary cushion, are over. As the economy, and subsequently the housing market, have fallen mortgage companies are making it much more difficult for people to qualify for home loans. If you do manage to wualify, you will pay much more than you would have even just a year ago. In most locales, the following is what you will be expected to document for most banks to qualify you for a Heloc:
- A FICO of at least 720
- A stable income that can be documented
- Solid proof that you have more than 20% equity in your home
- A healthy debt-to-income ratio
The following things are now generally required to qualify for most first Home Loans:
- The payment (PITI) must be 31% or less of your gross monthly income
- Proof of a healthy combined debt-to income ratio (including credit card payments and auto loans). If your monthly debt is over 38% of your income, you will not be eligible.
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April 24th, 2009
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