buying a home
An issue of Consumer Reports® has a relevant investigation of defects in homes. Importantly, the article gives excellent advice regarding how home buyers can take steps to avoid trouble.
The Consumer Reports® article states “Be proactive. Consumers should never buy a house without first hiring a real-estate attorney and a home-inspection engineer.”
It is important for home buyers to understand that the credentials of home inspectors vary widely, some are licensed engineers, some are non-engineers, some claim to be professional home inspectors, some claim to be certified, some claim membership in a home inspector group. Some certifications can be obtained by almost anybody, a high school diploma is not a requirement and certifications can even be obtained by joining a trade group.
The Consumer Reports® article states “Hire a qualified home inspector. Preferably, the inspector should be an engineer or architect.”
If you have questions about why you should hire a qualified home inspector, contact us. We’ll provide you with complete details.
Despite the recession and declines in home prices, Americans still view homeownership as being important to the economy and the American family, according to the “Housing 360 Survey” conducted among more than 3,005 homeowners and renters across the U.S.
“We thought people would be soured after watching home values fall but instead we found the typical American still places high value on homeownership,” said Frank Anton, CEO of Hanley Wood, LLC, the nation’s premier media and data research company serving the housing and construction industries. “We found this holds across all demographic groups and across the country, even in hard-hit places like Nevada and Arizona where there have been 50 percent or more declines in value. The increase in the rise of rental rates in many markets is one factor driving people to consider buying.”
The survey found that despite the recession and housing crisis, homeownership is still very important—that both renters and homeowners feel it is a good time to buy a home and 19 percent of homeowners and 29 percent of renters are considering buying a home in the next two years. In fact, the survey findings support that up to two million potential home buying consumers are waiting to jump into the market when the time is right.
The “Housing 360 Survey” answers why renters and homeowners are not buying. For homeowners, there is no urgency to buy, and given the turmoil in the markets, many of them are happy where they are. For renters, there is also no urgency to purchase a home. There are major problems they are facing: First, they have the challenges of being able to qualify for a mortgage and raise the down payment. And second, they have concerns about the economy and their jobs.
The survey covers 70 questions relating to Americans’ decision-making process and attitudes on homeownership, renting, remodeling, financing, home buying, gasoline prices, household relationships, and retirement planning. Sixty two percent of respondents were first-time homeowners. The survey found 89 percent of owners and 59 percent of renters feel that homeownership is important to the American family while 87 percent of owners and 73 percent of renters feel homeownership is important to the economy overall.
Some significant findings in the survey include:
- Now is a good time to buy. 72 percent of owners and 59 percent of renters think now is a good or very good time to buy.
- New and existing homes both attractive. 29 percent of owners and 12 percent of renters would prefer to buy a new home. 34 percent of owners and 41 percent of renters would prefer to buy an existing home. People prefer new homes because they are new and there is less maintenance. They prefer existing homes because they are more affordable and they want to live in an existing community.
- Renting is a preferred choice for many. People rent for financial reasons, for convenience and for flexibility.
- Doubling up trends increased. 30 percent of respondents are “doubling up” – living with adult children or parents.
- Now is a good time to remodel. 42 percent of owners say now is a good time to remodel. Top remodeling priorities are maintenance and energy efficiency. Most homeowners will pay for remodeling from personal savings.
- Staying put in retirement. 60 percent of homeowners plan to stay in their current home for their entire retirement.
All data is courtesy of the “Hanley Wood Housing 360 Survey”.
Selling a house in this economy has its challenges. A seller must make a careful assessment of the pros and cons of their property before they put in on the market. One question that must be answered right from the start is establishing whether now is the best time of the year to sell.
Generally, fall and winter are not the best time to sell a home, but due to the increase of foreclosures and short sales, there is an abundance of available homes to choose from, but with many of these properties it is truly buyer beware. The market is plagued with potential hazards for the unsuspecting buyer. Many homes for sale have not been properly processed in the foreclosure process so a new buyer may find themselves in a legal maze where they could lose money. It is up to their real estate agent to inform them of the obstacles.
Interest rates are at all time lows, making now an attractive time for anyone who’s been sitting on the sidelines to jump in, meaning if you’re thinking of selling a home, now could be a great time to take advantage of record low interest rates.
Forecasts of possible further declines in housing prices may or may not happen, but if your home is in good selling condition, you may have an advantage over all the foreclosures and short sales that are flooding the market, simply because of the high risk a buyer must take when buying these properties.
If you need to sell a home, consider the condition of your home, and what you will be competing with in your neighborhood. It may just be the best time ever to sell your home.
It is important that a home buyer understand all of the costs involved in purchasing a home. These costs go way beyond the purchase price. Inspections, fees, appraisals, and on and on and on…. the terminology used in real estate can be extremely confusing for home buyers. What’s more, who pays for these things is even harder to figure out.
Real estate agents, title company officers, and mortgage providers deal with real estate transactions on a daily basis, so they understand this language. When it comes to what is known as the ‘closing costs’ it becomes even harder to understand for the average home buyer. Because closing costs can be, and often are, negotiated between buyer and seller, there are no clear-cut answers. Let’s start by taking a look at the closing costs that can appear on your closing statement:
- Upfront, prepaid, interest points
- Appraisal costs
- Title transfer costs
- Real estate agent fees
- Loan origination fees
- Property taxes
- Homeowner’s insurance
These closing costs are simply the extenuating costs of purchasing a home. But, they can’t just appear out of nowhere when it comes time to write the check. That’s where the ‘HUD’ comes in.
All closing costs must be disclosed on a form called the HUD-1 Settlement Statement. The HUD-1 must be signed by all parties in the transaction before it is legally considered complete. In most cases, the loan officer for the buyer and the buyer’s agent will review the HUD-1 with the buyer so there are no surprises when it comes to signing it at the closing table.
Included in the HUD-1 Settlement Statement are also any credits due to the buyer, such as the down payment amount, tax credit from the seller, buyer closing costs the seller has negotiated to pay, as well as any money held in escrow on behalf of the buyer, such as the earnest money deposit.
This is a long, long list of money in and money out. Many of the terms may be confusing to you, the buyer. Don’t be afraid to have your agent explain, in detail, each and every item and provide supporting documentation to help you understand. A good real estate agent and loan officer will provide a true copy of the estimated HUD-1 prior to your closing. You may even want to obtain a blank HUD-1 form to read through just so you are prepared to ask questions before the figures get filled in.
Closing costs are often said by home buyers to be the most confusing part of the entire home buying process; even more confusing than inspections, offers, and contracts. These costs deserve individual attention from both you and your buyer’s agent. Be sure to insist on being fully informed as to the detail of each cost. After all, you are footing the bill for this large investment of a home and you deserve to know everything that involves your money.
Tags: buying a home, closing costs, home buying, hud-1
You will hear it said that today we are in a buyer’s market. The current real estate market is primed for buyers to purchase due to a huge inventory of homes to choose from and low interest rates. If considering buying a home, now may just be the time to take action.
Before answering “Is now the right time to buy?” some homework will be necessary. There may be a surplus of homes on the market, but buying a house will depend on the financial situation of the individual buyer. Take these steps to craft a plan of action to make buying a home now, or in the future, a positive and lucrative experience.
Step One – Contact a Trusted Loan Officer
A loan officer will be able to review income, financial history, credit reports, and other documentation and advise the buyer on how much of a loan they can qualify for. There are literally hundreds of loans available, which is why consulting a loan officer is a smart thing to do. A loan officer understands the various products available and will present one or more options that best suit each individual buyer. Should the buyer not qualify for a loan at this time, they will come away from the experience with an understanding of what actions they need to take in order to qualify in the future.
Step Two – Hire a Buyer’s Agent
A buyer’s agent is an agent who works on behalf of the buyer, representing the buyer. The services should include negotiating for the buyer, consulting the buyer, listening to the buyer’s wants and needs, assisting in identifying the potential of a property, showing the houses to the buyer, providing market analysis on houses the buyer is interested in, determining fair market value, and assisting in the completion of documents to purchase the house. The initial consultation should help you determine if the agent is someone you can work with. A buyer should interview two or three buyer’s agents in order to find the best fit for them personally and professionally.
Step Three – Consult Other Recent Buyers
This may include family members, friends, and co-workers. They will each have different experiences depending on a variety of factors, but it is good to start becoming familiar with what occurs during a real estate purchase. People do love to talk about their experiences buying a house, and it’s your job as a home buyer to listen closely. Take it all in, then make a determination based on facts.
Is now the right time to buy? The answer may be “Yes!” But first the buyer must understand how much of a home they can afford as well as the ins-and-outs of the real estate process. Consult a buyer’s agent who understands what you, the buyer, wants. Because, in a buyer’s market, there are hundreds of options available to the buyer who is prepared and has a plan of action in place.