A $200,000 home costs more than a $185,000 home, right? Well, yes and no. Assuming the same type of financing for both homes, the $200,000 home does cost more initially. But many factors contribute to the overall long-term cost of a house. Here are some things to keep in mind when trying to determine the true cost of purchasing a particular home:

• Does it have a pool or hot tub that requires maintenance?
• How much yard maintenance is required and who will perform it?
• Are there trees that should be removed?
• What are the utility costs? Although your usage won’t be exactly the same as the current owners, you may be able to get their utility bills for the past year from them or directly from the utility company.
• How soon will the roof need to be replaced?
• Does the house need repainting?
• Does the electrical system need upgrading to handle the load for your appliances and electronics?
• Does the home have aluminum wiring, lead-based paint, or other safety or health hazards you will want to address?
• Does the house need new carpeting or flooring?
• What remodeling projects do you see as a must?
• Will appliances need replacing?
• What are the estimated property taxes for the property?

Also, be sure to get a professional inspection to identify other potentially costly problem areas.

2004 by the Texas Association of Realtors, All rights reserved.

No comments yet. Tell me what you think! Click HERE to comment.

1. Find a real estate professional who will fit your needs. Home buying is not only a big financial commitment, but also an emotional one. It’s critical that the practitioner you choose is both skilled and a good fit with your personality.
2. Remember, there’s no “right” time to buy, any more than there is a right time to sell. If you find a home now, don’t try to second-guess the interest rates or the housing market by waiting. Changes don’t usually occur fast enough to make that much difference in price and a good home won’t stay on the market long.
3. Don’t ask for too many options. It’s natural to want reassurance for such a big decision, but too many ideas will make it much harder to make a decision.
4. Accept that no house is ever perfect. Focus in on the things that are most important to you and let the minor ones go.
5. Don’t try to be a killer negotiator. Negotiation is definitely a part of the real estate process, by trying to “win” by getting an extra-low price may lose you the home you love.
6. Remember your home doesn’t exist in a vacuum. Don’t get so caught up in the physical aspects of the house itself-room size, kitchen-that you forget such issues as amenities, noise level, etc., that have a big impact on what it’s like to live in your new home.
7. Don’t wait until you’ve found a home and made an offer to get approved for a mortgage, investigate insurance availability, and consider a schedule for moving. Presenting an offer contingent on a lot of unresolved issues will make your bid much less attractive to sellers.
8. Factor in maintenance and repair costs in your post-home buying budget. Even if you buy a new home, there will be some costs. Don’t leave yourself short and let your home deteriorate.
9. Accept that a little buyer’s remorse is inevitable and will probably pass. Buying a home, especially for the first time, is a big commitment, but it also yields big benefits.
10. Choose a home first because you love it; then think about appreciation. While U.S. homes have appreciated an average of 5.4% annually from 1998 to 2002, a home’s most important rose is as a comfortable, safe place to live.

Reprinted from REALTOR Magazine Online by permission of the National Association of REALTORS, Copyright 2005, All rights reserved.

No comments yet. Tell me what you think! Click HERE to comment.

The ABR offers it’s members a Buyer’s Rep publication that provides members with industry news and updates each month. In the February 2010 edition there’s an article written by Melanie McLane, who is both a broker and a residential appraiser. Her insight is very informative, so I want to share it with my readers. I have summarized her article below.
The work of appraisers has been turned upside-down over the last year due to changes in the industry forced on them by the mortgage crisis taking place nationwide. Most of the changes in policies, procedures, and regulations over the past year have been detrimental for the appraisal industry. This also causes problems for real estate agents and their buyers.
How did this happen? First, in 2007 New York Attorney General Andrew Cuomo filed a lawsuit against First American Mortgage charging they allowed WaMu (Washington Mutual) to improperly pressure appraisers who would appraise at the value needed. In March 2008 Fannie Mae and Freddie Mac agreed to adopt new loan appraisal policies. May 1, 2009 The Home Valuation Code of Conduct (HVCC) became effective for all single-family mortgages (except government-insured loans) delivered to Fannie Mae and Freddie Mac. Feb 15, 2010 was the effective date for HUD’s version of HVCC. November 1, 2010 the original HVCC agreement is set to sunset on this date.
HVCC was designed to improve the integrity of the appraisal process, but several unintended negative consequences have occurred. Appraisal Management Companies take about 40% of the fee from appraisers and expect the appraisals to be completed quickly. This is leaving many appraisers disgruntled. The AMC’s send out bulk requests and the job goes to whoever applies first, which might not be the best appraiser for that particular area. AMC’s, for the most part, remain unregulated in most of the country. To make matters worse, most AMC’s are owned by banks! So are they really a firewall between the lenders and the appraisers?
So how does all of this affect you, the consumer? The quality of appraisals is down, so some buyers may overpay for houses. On the other hand, some appraisals are off in the other direction, causing sellers to lose money. Having an outside party AMC is actually slowing down the appraisal process and causing appraisals to take longer and closings to take longer.
You can learn more about HVCC at http://www.realtor.org/hvcc . I encourage my buyers to use lenders I recommend because I know those lenders because using a lender you don’t know anything about, could cost you your next home. Do not use internet lenders for a something as important as a mortgage! You can ask your lender, when looking for the best loan option, whether they use AMC or do they have an independent appraisal department. Also, how is the lender going to ensure an appraiser with geographic competency. Have local appraisers refused to work for your AMC and if so, why? These are all things you, the borrower, can ask your lender before they order an appraisal.
As a courtesy to my sellers, I include a list of upgrades for the appraiser. I also have the appraiser contact me to schedule the appraisal visit, so that I can talk to him and get his email address and send him a copy of the contract so he knows the purchase price. I also want to know if that appraiser is familiar with the area and has done appraisals in that area before. I want to be able to contact him directly if the house does not appraise in case he overlooked something.
The National Association of Realtors and others have been working to implement a moratorium on HVCC, but right now it is still set to go into full effect on November 1, 2010.

No comments yet. Tell me what you think! Click HERE to comment.

If the latest technology and entertainment options are important in your new home, add the following questions to your buyer’s checklist.  This is interesting information I got from the REALTOR Magazine Online and reprinted with permission of the National Association of REALTORS.  Visit the Consumer Electronics Association ( http://www.ce.org/techhomerating ) for a complete Tech Home Rating Checklist.

1.  Are there enough jacks in every room for cable TV and high-speed Internet hookups?  Does it include U-Verse if that’s important to your family?

2.  Are there enough telephone extensions or jacks?  Most people use their cell phones these days, but some still want a phone in every room, including the bathrooms.

3.  Is the home prewired for a home theater or multi-room audio and video?

4.  Does the home have a local area network for linking computers?

5.  Does the home already have wiring for DSL or other high-speed Internet connection?

6.  Does the home have multi-room lighting controls, window-covering controls, or other home automation features?

7.  Does the home have multi-room lighting controls, window-covering controls, or other home automation features?

8.  Is the home wired with multi-purpose in-wall wiring that allows for reconfigurations to update services as technology changes?

No comments yet. Tell me what you think! Click HERE to comment.

Here are seven ways to cut the cost of your home insurance from http://helpinsure.com , a Texas customer-friendly Internet site. These are tips to help you save on your homeowners insurance.
1. Shop around – and do it early! Check with several different home insurance companies to get rate quotes. (An independent insurance agent can provide rate quotes from a variety of companies.) And definitely do it well before your policy expires, just in case you run into any snags along the way.
2. Raise your deductible. The deductible is the amount of money you have to pay toward a loss before your insurance kicks in. Home insurance deductibles usually start around $250. However, if you increase your deductible to:
$500, you’ll save up to 12% on your premiums
$1,000 ? Save up to 24%
$2,500 ? Save up to 30%
$5,000 ? Save up to 37%
3. Buy your home and auto policies from the same company. Many companies will give what’s called a “multi-line” discount if you buy both home insurance and auto coverage from them.
4. Don’t skimp when buying a home. If you’re looking at buying a home, think about the cost of insuring the home. A newer home’s electrical, heating, and plumbing systems and overall structure are likely to be in better condition than those of an older home – and can lead to a discount on your premiums.
5. Insure your home, not the land. While your home and its contents are at risk from fire, theft, windstorms, and other perils, the land your home sits on is not. Don’t include the value of the land in deciding how much home insurance you need to buy.
6. Improve security and safety. Items such as dead-bolt locks, burglar alarms, and smoke detectors can usually bring discounts of 5% each. Your insurance company may also offer a significant discount of 15% or sometimes even 20% if you install a sophisticated home-security system.
7. Check your policy annually. Your policy should reflect the value of your home and belongings. If you review your policy every year, you can easily make the necessary adjustments. If, for example, you just sold a valuable painting, you won’t need the same amount of personal property coverage. But if you’ve added a garage or other addition, you’ll need to increase your dwelling coverage.

2004 Copyright Texas Association of Realtors. All rights reserved.

1 comment. Please CLICK HERE to add another.