Tips for First-Time Homebuyers

Home-price adjustments in markets around the country have opened doors of opportunity for many renters. If you are transitioning from renter to homeowner, the prospect of making such a large investment may be exciting, while at the same time overwhelming. But it doesn’t have to be. Here are six common mistakes to avoid.
1. Not understanding the homebuying process. Educate yourself. Find a homebuyer seminar that you can attend or research online. The U.S. Department of Housing and Urban Development Web site (www.hud.gov) has an entire section devoted to homebuyers with common questions of first-time homebuyers, mortgage and home-buying programs information, downloadable tools such as a wish list and home-shopping checklist, tips on selecting a real estate professional, etc. Likewise, Prudential Real Estate’s popular Web site, prudential.com/realestate, offers consumers brand-new tools for the homebuying process, such as free home environmental reports, Value Range Estimates and Property Profiles, among other resources.
2. Not asking questions. There are many facets and intricacies to the homebuying process, so although you may gain a basic knowledge, you will still have questions. Don’t hesitate to let your real estate professional know that you are new to the process. Make sure you choose a sales professional who is willing to spend time with you and walk you through the entire process. He or she will expect you to have questions at each step—from house hunting, to making an offer to the closing. Remember, this is one of the largest financial transactions of your life, so you want to have a clear understanding of what’s going on.
3. Buying on impulse. Don't feel pressured into making an offer on the first home you see. Buyers, especially first-timers, may be impressed by the first two or three homes they view. Look at a good selection. List the positives and negatives about each home. Narrow the prospects to three or four and then return for a closer look. When you decide to make a bid on a property, work with your real estate professional to get all of your questions answered before making an offer. But don't wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.
4. Looking outside your price range. Before beginning your home search, consider getting pre-qualified to so get an idea of how much you may be able to borrow. Use this information as a starting point in determining your price range. Then take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, homeowners insurance, utilities, private mortgage insurance (PMI) and maintenance.
5. Not planning ahead. Think about personal changes you are planning in the next five to seven years. For instance, are you starting a family, and if so, is the home large enough and will it continue to be? If this will be a starter home or if you think you’ll be relocating in a few year, you’ll probably want to pay closer attention to appreciation and resale value. If a double-income is necessary to qualify for financing and to make your payments, do your plans foresee an income sufficient to continue making payments?
6. Failure to focus on location. Don’t just focus on the house. Examine the community. Does it suit your lifestyle? Is the area safe, well-maintained, close to work, stores and schools? Find out about zoning and what new construction is planned on vacant land in the immediate area. Also consider the property marketability when it’s time to sell.
Above all, remember knowledge is key. No question is a silly question. Your real estate professional can be an invaluable asset throughout the process. Making smart home buying decisions will make the home-buying process less scary and your first home purchase a rewarding experience.

What Buyers Should Know Before Making an Offer

Be it the real estate market in 2010 or any other real estate market for that matter, the structure of a real estate purchase contract offer can be the difference in it being accepted or rejected.
No, the offering price is not the only factor in negotiating a contract to purchase a home.
Regardless of the number of pages in the sales contract, a contract offer can be broken down into 3 separate parts which can be important to the seller: Price, Terms and Conditions.
Each has to be satisfactory in order to obtain seller acceptance. In some situations, full price offers are not acceptable due to the buyer's terms and conditions in the contract offer. In other instances, contracts get accepted and signed even though the offer was much lower in price than other competing offers, but was more favorable for the seller in terms and conditions.
What then is the secret in preparing and submitting a contract offer to buy real estate? This is where the value of an experienced REALTOR and Buyer's Agent is with providing assistance in preparing and structuring the contract offer in a manner that does not create questions or concerns for the seller and their listing agent when it is presented to them.
There is more to purchasing a home than just looking at houses, whether the home is in Crofton or Columbia, Maryland, in Anne Arundel County or any other state.
The first step toward purchasing a home is obtaining Mortgage Pre-Approval from a reputable Mortgage Lender (Mortgage Pre-Approval Versus Mortgage Pre-Qualification), and be sure a copy is included with the contract offer. Why? The first question to be asked by the seller and listing agent at a contract presentation will be "Does the buyer have Mortgage Pre-Approval? And this is where the benefit of a Mortgage Pre-Approval letter provides advantages over a standard Pre-Qualification letter.
Secondly, there is no cardinal rule that there must be some fixed amount that a seller will negotiate from their asking price. Home buyers need to obtain factual sales information about the market area, and section of Town, they are considering buying in before submitting an offer. While it is very likely that sale prices have declined in the past few years, they have not dropped equally in all Towns and in all neighborhood locations.
Remember Economics 101 from Grammar School: "What's true of the whole may not be true of the parts." That is what I am referring to here. Real estate values are local, and various factors influence market value such as buyer demand, amount of homes for sale, mortgage rates, local economic conditions and so on and so on. As important, similar design and size homes may differ in value due to condition and improvements.
In preparing a contract offer, it is important that a buyer obtain a Market Analysis for the property being considered. A report like this can be prepared by the buyer's agent and it should contain information comparing similar properties which are active on the market for sale, homes which expired and did not sell in the past six months, under contract sales and closed sales in the past six months. This information should also provide the asking price history and days on market before sold. With a report like this, a buyer can then have a better understanding of the real estate market and be better prepared when submitting a contract offer.
It is highly recommended that buyers obtain a blank contract of sale and addendums early in the home searching process. Contracts can be intimidating to many buyers. It would be much better to review the contract documents in advance of making a contract offer. Making a contract offer is an important decision. Being properly prepared is an important aspect of making a successful contract offer.
Thirdly, buyers should be completely aware of their personal finances and the total costs of purchasing a home. Buying a home involves down payment, expenses occurred during the purchase, such as mortgage application fee, inspection fees, and closing costs. It is important for buyers to obtain the estimates related to transaction expenses and closings costs. When a buyer is not properly prepared for expenses like these, they could have an affect on exactly how much a buyer has for the down payment which then could affect how much is needed in a mortgage to complete the purchase.
Buyers should be educated and informed when making an offer to buy a home.

Six Questions that Can Help You Gain Insight on a Prospective Home

Unlike an automobile, you can’t test drive a home before you purchase it. You have to base your decision on other factors such as layout, condition and much more. And, of course, the seller is obligated to disclose the property’s condition that may alert you to issues such as previous mold, defective water heater or leaky roof. Yet, that still doesn’t always paint the entire picture. Here are six questions you should consider asking the seller to gain additional insight about the prospective home before you make a final decision.

1. Why is the seller selling the house?
This question may help you evaluate the “real value” of the property. Is there something about the house the seller does not like? If so, you may be able to adjust the purchase offer accordingly.
2. How much did the seller pay for the home?
In some instances, the answer to this question may help you negotiate a better deal. However, it is important to remember that the purchase price is influenced by several factors, like the current market value and any improvements the seller may have made to the home. The original purchase price might not have anything to do with the current value of the house.

3. What does the seller like most and least about the property?
By asking the seller what he or she likes most and least about the property, you might get some interesting information. In a few cases, what a seller likes the most about a home might actually be something the buyer is looking to avoid. For example, if the seller describes his house as being in a “happening neighborhood,” the buyer might consider this a negative factor because the area may be too noisy or busy for his or her taste.

4. Has the seller had any problems with the home in the past?
It is also a good idea to ask the seller if he or she has had any problems with the home while living there. Has the seller had problems with a leakage from the upstairs bedroom in the past? If so, even if the leak has been corrected, the floor and walls around the bathroom might have been damaged. You should check that these items were repaired properly.

5. Are there any nuisances?
Use this question to find out about barking dogs, heavy airplane traffic or even planned changes to the community, such as a planned street widening. This may give you insight on why the seller is really moving.

6. How are the public schools in the area?
Because the value of a community is usually greatly influenced by the public schools in the area, finding out the buyer’s perception can give you some insight about the quality of the area’s schools.
Knowing all you can about a prospective home will help you make a more informed decision as well as offer. Your real estate professional can be a great resource in helping you get your key questions answered and give you advice on how to evaluate your findings.

Choosing the Right Community for You

If you are buying a home, one of the first things your real estate professional will do before taking you on home tours is interview you to determine the type of house you want such as a 2,000-square-foot four-bedroom, split-level with a formal dining room and two-car garage. But just as important is the type of community you want to live in. Knowing what your requirements are will help narrow your home search and save time.
To expedite the house-hunting process, start by making a list of the dream home factors that are most important to you and your family’s lifestyle. Consider style, location, proximity to work and schools, yard size, children in the community, and of course, price.
Price and location generally are the key factors you’ll use to identify the communities that best suit you. If you are moving within the same city, you may want to start your community search by getting in your car and exploring. There are also resources on the Internet that let you compare communities.
You’ll want to ask yourself critical questions, such as: Do you dream of something quaint and charming that can only be found in an older area? Or, do you prefer everything new? Are you willing to sacrifice size and space for architectural detailing? What about drive and commute time to the office and schools? Will you forgo the number of bedrooms and a big yard for proximity to a lake or other recreational areas?
Whether you have children or not, buying a home in a community with good schools is important. It not only adds value to your property, but also is an attractive feature when and if you decide to sell. There are plenty of resources available to get information about schools within the communities you are considering. Various Internet sites offer school reports and profiles. They provide statistical data such as graduation rates, college-bound percentages, and standardized test scores. You can also learn about special programs the schools offer. In addition to these reports, many schools have their own Web sites you can peruse. And of course you can always talk to people in the area or take a tour of the school.
Additional factors you’ll want to consider during your community search are crime, recreational activities, proximity to shopping and restaurants, and other specific family needs.
Once you’ve narrowed your search to two or three communities that fit your price range and lifestyle, make comparisons of price and sales activity. Your real estate professional can help you determine which communities are most sales-worthy at present, and which are more likely to continue to be.
There are many factors involved in selecting the right community for you and your family. Discuss your options with your real estate professional. This will provide the information he or she needs to help you find property listings to tour. Remember, a targeted approach to house hunting is less time consuming, less expensive and more efficient.

Getting Your Home Ready to Sell

As a seller, your No. 1 goal is to sell your home as quickly as possible at or near the listing price. In today’s market, where there is much more competition for buyers, it is important to put your best foot, or in this case, home forward because first impressions are vital.
Many of today’s prospective homebuyers have busy lifestyles and are looking for properties that don’t require a lot of work. Therefore a home in move-in condition is much more attractive. Before placing your home on the market, you may want to invest in making needed repairs.
To get started, inspect both the inside and outside of the home. Take inventory of practical and aesthetic repairs. You may want to apply a fresh coat of paint on the walls, doors, and shutters. Clean the carpet and buff and polish wooden floors. Tighten and polish hardware. Repair cracks in sidewalks and driveways, and clean any stains on them. Replace missing or warped roofing. Clean or re-grout kitchen and bathrooms. Repair dripping faucets and drains or plumbing fixtures that aren’t operating.
Fix sticking doors and replace old locks and doorknobs. Replace old bulbs and broken electrical sockets. Replace cracked windows and torn screens. Repair broken fencing and reseal the deck. Clean up stains on the tiles and countertops.
Some experts also recommend hiring a certified home inspector to thoroughly and impartially evaluate the property. (For a list of inspectors in your area, visit the American Society of Home Inspectors website, www.ashi.com, or ask your real estate professional for recommendations.) A standard report will review the condition of the home’s heating system, central air conditioning, plumbing and electrical systems, the roof, attic, walls, ceilings, floors, windows and doors, the foundation, basement and visible structure.
If there are recommendations for improvement, consult with your real estate professional in prioritizing the list of repairs.
Depending on your goals and budget, you may want to repair only items that could cause significant deterioration to the home, such as a leak. In addition, your local market conditions may dictate how extensive your repairs need to be. Let your budget and your real estate professional guide you.
However, be careful about major repairs. Sellers rarely recoup money on major remodeling projects, and you may want to save funds for your new home.
A home in good condition demonstrates pride of ownership. Taking the time to make small repairs to your home can go a long way in making sure that your home is presented to potential buyers in its best possible light. They also just might make the sale.

Resolve to Get Your Home Documents Organized

As a homeowner, you begin to accumulate all sorts of records and papers the moment you made the offer on your home. Loan documents, inspection reports, title insurance policy, home improvement receipts, appliance warranties are just a few of documents that you may at one time or another need. Would you be readily able to locate these items? Are they filed away or in different junk drawers around the house? Knowing where these items are can save you a lot of time and even money in the long run.
Consider investing in a record-keeping system. It doesn’t have to be expensive. You can purchase an accordion file and label each flap with a different category. Then use the following tips as a guide to get started.

Contracts and Legal Papers
Keep all the papers signed and/or given to you at the closing together in one place, preferably in a safe deposit box. These documents include the deed, settlement statement, appraisal, disclosures, mortgage note, inspections and any other reports, and title insurance policy. You will need these records again if you decide to refinance or sell your home.

Insurance Policies
Keep a copy of all insurance policies relating to your property together. This may include homeowners, flood and earthquake policies. With these documents, keep a list of insurance agents or companies and copies of correspondence related to claims.


Purchase and House Data
It’s also a good idea to keep a copy of the original listing of your house, comparable market analysis, floor plans, blueprints, and historical information. If you own a newly built home, keep a list of contractors and material suppliers as well.

Property Taxes
Keep your tax bills and record of payment for as long as you own the home and possibly even longer. You may need these items if your tax returns are ever audited.


Home Maintenance and Improvements
Records in this category include receipts for repairs or replacement expenses, names of contractors, contracts, and a log of maintenance tasks.


Warranties, Manuals and Receipts
These documents provide you with a proof of purchase date and determine service and parts guaranteed. In addition, the manuals usually provide care information so you can help ensure your household appliances are being properly maintained. You should keep your warranties, manuals and receipts for these items for as long as you own the appliances.


Home Inventory
If you were ever to lose any of your possessions due to fire, burglary, or vandalism, having a home inventory can help you avoid a lot of heartache and make it easier when filing an insurance claim.
Start with a sheet a paper for each room in the house. Go around the room and list every item. Don’t forget the attic, basement or other storage places. For each item, write the original cost, purchase date, replacement cost, model number, brand name, where purchased, and a general description. You can also use a computer software system so that you have an electronic copy.
Besides a written inventory, take photos or video of each room for visual documentation. It is also a good idea to arrange valuable collections, silver, jewelry, etc. and take close up photos.
Keep a copy in your home files and the originals in a fireproof safe or safe deposit box. Make sure you update your home inventory photos and list at least once a year.

Organizing your home files may take a considerable amount of time initially, but it will definitely be time well spent in the event you need the documents later on.

Should You Use a Real Estate Professional to Buy A Home?

With just the stroke of a few keys, you can find myriad resources on the Internet to help you in your search for a new home. Besides property listings, you can find out about specific communities, schools and mortgage options. Prudential Real Estate has made three great resources – Environmental Profile, Property Profile and Value Range Estimate – available on prudential.com/realestate that provide detailed real estate information just by keying in a U.S. property address.
With this wealth of information at your disposal, do you really need a real estate professional to represent you? Absolutely.
Think of it this way, when you go to an unfamiliar place, sure you could do a self-guided tour. However, your tour is much more rewarding and enriching when you have someone who is familiar with the location to guide you along because he or she has inside knowledge on the history, culture and stories that you may not have otherwise received.
The same can be said about sales professionals. Their role is more than someone to drive you around from property to property. They can be a great resource, especially to homebuyers relocating from other communities. He or she knows the local area including home values, taxes, utility costs, and school data, and may even be knowledgeable about resources pertaining to your special interests or needs. For instance, should you require help relocating an aging parent with you, your real estate professional may be able to direct you to local services or organizations for the elderly.
A sales professional can familiarize you with the processes involved in buying a home, alert you to potential risks, help you determine how much house you can afford, explain alternative financing strategies, as well as provide tremendous moral support.
Another benefit is having a strong advocate during the negotiating process. Sales professionals can help you objectively evaluate an offer then work to negotiate a favorable contract. During the process, he or she will review the contract and obligations before you sign, explain how contingencies and release clauses work, and so on.
And something easy to overlook is our familiarity with the complexity and risks inherent in the process. In the years I have been practicing I have been continually amazed at how quickly a seemingly simple transaction can grow legally complex and risky. When complex questions arise, a sales professional can help you quickly locate an attorney or other licensed professionals whose services you may require, such as home inspectors, engineers, surveyors and lenders.
As your single point of contact, a sales professional can manage the entire transaction including coordinating inspections, keeping in touch with the other real estate professionals, managing the documentation for the loan process, monitoring deadlines associated with contingencies, providing applicable paperwork, estimating closing costs, and helping prepare for a smooth and uneventful closing.
If you’re about to begin the process of buying or selling a home, consider involving a real estate professional. When the stakes are high, it’s comforting to have a specialist by your side.

Tips on Moving With Pets

When making your moving plans, don’t forget to include your beloved pets. Although they present a new set of challenges, it doesn’t have to add to your stress if you take the following steps before your big move.
Visit the Vet
Schedule a pre-move visit with your veterinarian for a checkup and to make sure that all vaccinations are current. Use this time to get copies of your pet’s records, a recommendation for a veterinarian in your new location, and possibly a tranquilizer to give your pet during transportation.
Research Laws in New Area
Research the requirements regarding animals in your new locality. Nearly every state has laws regarding entry of dogs, cats, horses, birds and other pets. For example, most states require interstate health certificates for dogs and horses coming from another state. If you own an exotic animal such as a ferret or potbellied pig, check to see if it is allowed as a pet in your new city. Some states require an entry permit. You can obtain compliance information from the state veterinarian or other appropriate authority. It’s important to get this information well ahead of your move so that you can get any necessary examinations or documents.
Make sure your pet’s identity and rabies tags are current. You should also have a special travel identification tag just in case they become lost during the move. The tag should include the pet’s name, your name and new address, and an alternate contact.
Decide on Transportation Mode
Decide how you will be transporting your pet. Animals are not allowed on moving vans, so your choices are by car or air.
By Car
If traveling by car, the American Animal Hospital Association suggests that you take your pet on short rides before the trip so that he can get accustomed to the movement. The day of the trip, don’t feed your pet for several hours before departure. It’s also a good idea to take him on a long walk before heading out.
Pack a travel kit to include food, food and water dishes, can opener, scooper, paper towels for clean ups, and plastic bags. You may also want to include a blanket to cover your car seats, plus treats and a favorite toy.
If you are traveling with birds or other small pets, such as a hamster, make sure they are in a stable cage with proper ventilation. A kennel for cat or dog may also be a good idea.
If your trip will require an overnight stay, find out well in advance of your trip whether pets are allowed at the lodging of your choice. The website www.petswelcome.com is a great place to search for lodging that accommodates pets.
By Air
Traveling by air definitely requires preplanning. Each airline has its own policy regarding pet transportation. In addition, there are federal requirements you must follow. For example, dogs and cats must be at least eight weeks old and weaned for at least five days. In addition, cages and containers must meet certain standards.
You need to decide if your pet will accompany you in the cabin or be checked as baggage, or shipped separately by air freight.
Check with your airline to make sure that pets are allowed to travel in the cabin and obtain guidelines. The U.S. Federal Animal Welfare Act requires that pets traveling in the passenger cabin be in a carrier that can fit underneath the seat without blocking the main aisle. The container must remain stowed the entire flight.
If your pet will be transported as baggage or by freight, make shipping arrangements as far in advance as possible so that space can be reserved. It is recommended that you schedule a non-stop flight on a weekday. You also need to supply the air carrier written instructions for food and water.
Other precautions to take when transporting your pet by air include:
Before traveling, get your pet accustomed to the kennel in which it will be shipped.
Don’t give your pet solid food six hours prior to the flight. Providing water a few hours before the flight is advisable.
Write your contact information on the container and make sure your pet is wearing a tag with the same information.
The Federal Aviation Administration (www.faa.gov) and Department of Transportation’s (http://airconsumer.ost.dot.gov) websites have valuable information regarding traveling with pets.
Transitioning to New Home
Once you are in your new home there are some things you can do to help ease the transition for your pet. If you have a dog, take him for a walk immediately so that he can become familiar with the new area. Cats, on the other hand, have a tendency to run away searching for their old home. They should be kept indoors for several weeks until they become comfortable in the new home and familiar with its scents and noises.
Veterinarians also advise that you bring water from your old home, because a change in water sources can sometimes cause your pet to become sick.
Like humans, pets are can become stressed when change occurs. By planning ahead, you can help to make sure your pet has a smooth transition to its new environment.

How to Budget for Home Maintenance

RISMEDIA, December 22, 2009—While buying a home is a huge financial expenditure, homeowners need to keep in mind that the spending doesn’t stop once the home is purchased. Whether you are moving into a new or old home, homeowners need to be aware of the ongoing maintenance that any home requires. Here, Dan Steward, President, Pillar To Post discusses what homeowners need to know when it comes to ongoing home maintenance.

First, buyers should understand the 1% rule. This rule postulates that normal maintenance on a home is about 1% of the value of the home per year. For example, a $250,000 home would require $2,500 per year to maintain. This would be enough to replace the roof covering…and then, a few years later, to replace a failed hot water tank…and then a few years more until a new central air system is required.

Then there is the 3% rule. Some experts say that home buyers should plan on spending 3% of the value of the home in the first year of ownership. This is because new homeowners will most likely have to buy drapes, blinds, a washer and dryer, a stove, maybe even a new roof covering. Also, new homeowners often customize the environment to their taste, so they need to budget for repairs, replacements and maintenance.

In addition, most home components have fairly predictable life cycles. For example, the typical life cycle of a high-efficiency furnace is 15 to 20 years. What this means is that most high-efficiency furnaces last between 15 and 20 years.

One way to know the extent of the maintenance needed and the costs to repair and/or replace items is to have a home inspection conducted. Home inspectors are required to let the buyer know if a component is significantly deficient or if it is near the end of its life cycle (service life), and a reputable home inspection company may offer up-to-date repair-cost guides to help clients with their planning.

Home inspectors work with Realtors and buyers to help them understand the issues that are found in the home, regardless of age, offering the right perspective and objective information. Home buyers need to understand that it’s normal for items in a home to wear out. This should be regarded as normal “wear and tear” and not necessarily a defect.

A good home inspection determines the current condition of the house, offering a report of all the systems and components in need of maintenance, service, repair or replacement.

For example, consider a home inspection that uncovers that the heating system is old and requires replacement. A home buyer may see this as a huge problem. However, this problem may be the only item in the home that requires attention. If a buyer were to look at this situation in perspective, this home could be well above average—a home merely requiring a new furnace.

A good home inspection provides objective information to help the buyer make an informed decision. Knowing what items need to be budgeted for repair or replacement will help home buyers plan or negotiate better and not be stuck with unexpected costs of hundreds, or even thousands of dollars in the long run. Also, fixing these items will make a marked improvement on the performance of a home and minimize issues that could affect its future integrity…and value.

Home Owners Would Spend Tax Credit Wisely

A survey of homeowners by Coldwell Banker Real Estate found that 20 percent said they were more likely to consider purchasing a new home after learning about the $6,500 tax credit than they were six months ago.

Of the more than 1,000 homeowners surveyed, 83 percent said that if they were to purchase a home and qualify for the tax credit, they would pay off debts, make home improvements, add it to savings or use the money for household expenses.

Only 6 percent said they would spend the money on a luxury item like a vacation or a shopping spree.

Exterior Remodeling: Best Bang for Your Buck

Despite a slow market and a slight decrease in the resale value of most remodeling projects, REALTORS® report that the smartest home improvement investments may also be some of the least expensive. Results from the 2009 Remodeling Cost vs. Value Report show that small-scale exterior projects are the most profitable at resale, according to estimates by REALTORS® who completed a recent survey.

On a national level, eight out of the top 10 projects in terms of costs recouped were exterior replacement projects that cost less than $14,000. Certain types of door and siding replacements, as well as wood deck additions all returned more than 80 percent of project costs upon resale. A steel entry door replacement – a new addition to this year’s list – recouped 128.9 percent of costs, followed by upscale fiber-cement sliding replacements at 83.6 percent. Wood deck additions recouped 80.6 percent of costs.

“Once again, this year’s Remodeling Cost vs. Value Report highlights the importance of a home’s first impression,” said NAR President Vicki Cox Golder, owner of Vicki L. Cox & Associates in Tucson, Ariz. “With exterior projects returning a high percent of project costs upon resale, Realtors® can help give your home curb appeal while adding value to the real estate transaction.

The 2009 Remodeling Cost vs. Value Report compares construction costs with resale values for 33 midrange and upscale remodeling projects comprising additions, remodels and replacements in 80 markets across the country. Data are grouped in nine U.S. regions, following the divisions established by the U.S. Census Bureau. This is the twelfth consecutive year that the report, which is produced by Hanley Wood, LLC, was completed in cooperation with REALTOR® Magazine, as REALTORS® provided their insight into local markets and buyer home preferences within those markets.

On a national level, the project with the biggest improvement from 2008 was the attic bedroom addition, recouping 83.1 percent of remodeling costs compared to 73.8 percent in 2008. The only other interior project that landed in the top 10 was a minor kitchen remodel with 78.3 percent costs recouped.
Other exterior projects in the top 10 include midrange vinyl and upscale foam-backed vinyl sliding replacements, which returned more than 79 percent of costs. In addition, several types of window replacements – midrange wood, midrange vinyl, and upscale vinyl – all returned more than 76 percent of costs upon sale.

Similar to last year’s report, the least profitable remodeling projects in terms of resale value were home office remodels and sunroom additions, returning only 48.1 percent and 50.7 percent of project costs.

Regionally, cities in the Pacific states of Alaska, California, Hawaii, Oregon and Washington once again outperformed the rest of the nation in terms of remodeling costs recouped upon resale. The West South Central region of Arkansas, Louisiana, Oklahoma, and Texas; the East South Central region of Alabama, Kentucky, Mississippi and Tennessee; and the South Atlantic region of the District of Columbia, Florida, Georgia, Maryland, North Carolina, South Carolina, Virginia and West Virginia also performed relatively well.

The regions that generally returned the lowest percentage of costs were New England (Connecticut, Massachusetts, Maine, New Hampshire, Rhode Island and Vermont), East North Central (Illinois, Indiana, Michigan, Ohio and Wisconsin), West North Central (Iowa, Kansas, Minnesota, Missouri, Nebraska, North Dakota and South Dakota), and the Middle Atlantic (New York and Pennsylvania).

Golder commented that remodeling projects are just one of many factors that contribute to a home’s overall resale value. “As the first, best source for real estate information, REALTORS® are experts in providing insight into what projects and investments will make a difference in your house. It’s important to consult with a REALTOR® who can explain the variety of factors that affect a home’s value, such as location, condition of surrounding properties and the regional economic climate,” she said.

Has the Housing Industry Hit Bottom?

RISMEDIA, December 18, 2009—Despite significantly lower traffic and sales this month, Southern California retained pricing strength and the majority of surveyed builders expect revenues to increase in 2010, according to John Burns Real Estate Consulting’s December survey of home builders.

“At this point, it’s clear that the extension and expansion of the tax credit weren’t enough to drive demand through the seasonally slow time of the year,” said Jody Kahn, a vice president with the firm. “This month’s survey results, backed by numerous channel checks and our Consulting team’s work in the market, confirm that buyers feel little urgency to buy homes today, and probably won’t until the tax credit expiration nears next Spring.”

This month’s survey consists of 264 home building industry executives from public and private companies. In total, their insight is reflective of on-the-ground conditions in 93 MSAs and 2,000+ communities.

Also of interest, 57% of respondents reported that they are planning for more revenue in 2010 than 2009, driven by increased community count, better orders and slightly higher prices. The most optimism came from the Northeast, Southwest, Texas and Southern California. “If they are correct, and we believe they are, the trough for this cycle was 2009 for single-family starts, new home sales and new home prices,” said CEO John Burns. “That being said, the continued shift to smaller, simpler homes may drive the headline new home price down a bit, and the recovery will be slowed by rising distressed sales.

Conditions are likely to vary dramatically by submarket and price point, which we have addressed in our Land Acquisition and New Home Strategy report for 23 MSAs.”

Additional survey highlights include:
-Average net sales per community declined to 1.4 nationally from 1.6 last month, and from a recent high of 2.0 in September. Only the Southern Florida and Southeast regions reported increased net sales per community, while the Southern California, Midwest and Northern Florida regions reported flat net sales rates.
-The average unsold, finished inventory per community increased to 3.3 units, rising from a recent low of 2.8 units. We believe the rise is explained by aggressive speculative starts by a few builders who are betting on strong sales in the Spring. In addition, higher cancellations during November from sales that did not close within the original tax credit deadline were reported.

45 Lessons in Life

This is a small piece that was forwarded to me by a client. I think that it is inspirational and a very good way to resolve to be better next year! Happy New Year!

As Seen on TV – In Reality, Are Those Real Estate Shows Really Fake?

RISMEDIA, December 21, 2009—(MCT)—Flip on your television and tune into HGTV’s “House Hunters,” and you might see yet another set of Chicago homebuyers and a local real estate agent in action.

The popular cable TV program seems to like the local real estate market; it’s certainly been featured before. And with every show, another buyer and agent learn the skinny about what’s real and unreal on reality television.

“House Hunters” is one of those programs you can stumble across and then find yourself sitting down to watch, critiquing the three different properties being shown and the buyer’s tastes, and then guessing which one they’ll pick. It also provides a sense of property values in a given locale, as in “look how much more/less house we can get if we moved somewhere else.”

So hearing the behind-the-scenes details of several episodes that have been filmed here recently is a bit like pulling back the curtain to reveal the real Wizard of Oz.

A few months ago, while they were looking for another set of homebuyers, the show’s producers stumbled across the blog of Chicago Realtor Eric Rojas and asked if he had a willing buyer. He did. But Chicagoans Kurt and Kelly Schnakenberg had to be more than willing to appear on television. They had to have the financial wherewithal to actually close on a home, and they had to have the right personalities for the show, something they demonstrated in a videotape sent to the producers.

Rojas, meanwhile, had to fill out a questionnaire about how he does business.

For the show, the couple looked at three properties in Lakeview: a $415,000 loft, a $355,000 vintage condo with a kitchen that needed work and a $400,000 loft-style town house that needed updating. Of those three, one of them was the unit the couple did indeed purchase. Another one was under contract to someone else, so the listing agent had no problem showing it. The third unit was for sale, but the couple had never seen it before and had pretty much already made up their mind.

The conversations aren’t the same, either. Kurt Schnakenberg said he and his wife did debate the merits of various condos but it was never so serious and “usually over a bottle of wine.”

Chicago agent Carrie Georgitsis, who showed properties to her father for a different episode, had no idea how tiring it would be until she found herself involved in 40 hours of filming for what amounts to less than 25 minutes of programming. She found herself having to say the same things over and over, while the camera crew shot her conversations with her father from different angles, and had to be careful not to tip off viewers to which property was chosen.

Why can’t it be more real than it is? Here’s three good reasons: One, it’s a TV show and it’s meant to be entertaining. If it turned out that the buyers had bad credit and couldn’t close on a home, there’d be no happy ending and no “after” shot showing the new homeowners in their abode. Two, sellers—and homeowners associations—have to agree to the filming and some don’t want to be bothered or don’t want to deal with the legal ramifications if a crew member gets hurt during filming. And three, if the buyers and the real estate agent are totally unlikable and mumble, do you want to watch them buy a house?

Rojas doesn’t think so. “‘House Hunters’ is house candy,” Rojas said. “It’s not realistic. It’s directed. You don’t learn anything about buying. You learn about real estate values. You learn about how houses look.”

Despite all that, agents who’ve done it say they still watch the show, and they’d go back on it again. After all, it’s great marketing exposure, particularly because programs are repeated.

“It’s totally fake, but does anybody think reality TV is real? It’s all canned, but it’s fun to watch,” said real estate agent Karl Vogel, who was also featured in a recent episode helping a Boston native find a home in Chicago.

The Schnakenbergs, who’d never before seen the show, already plan to capitalize on their upcoming 30 minutes of fame when it comes time to sell their condo. “Listing it ‘as seen on HGTV’ couldn’t hurt us,” Kurt Schnakenberg said. “I’m not sure if it will get us more money, but it will help us get more showings.”

(c) 2009, Chicago Tribune.

5 Questions to Consider Before Buying a Home

RISMEDIA, December 15, 2009—(MCT)—Interest rates on the benchmark 30-year, fixed-rate mortgage dipped to a 38-year low recently, giving consumers another reason to consider purchasing a home or refinancing their current one.

Freddie Mac recently stated the average rate on a 30-year loan was 4.71% with an average 0.7 point, the lowest rate since the agency began its weekly tracking of long-term interest rates in 1971. A point is equal to 1% of the loan amount, payable as a lump sum at closing. While the decline wasn’t overly dramatic, the dip is likely to get people wondering whether it’s time to sign on the dotted line.

The 5 following questions may help you decide if now is the time to go ahead and purchase a home or refinance your current home.

Q: Why are rates so low?
A: Since early January, the Federal Reserve has been purchasing mortgage-backed securities guaranteed by Fannie Mae, Freddie Mac and Ginnie Mae in an effort to stabilize the housing market by making homes more affordable for consumers. The Federal Reserve Bank of New York, which is managing the program, plans on purchasing $1.25 trillion of securities.

Q: Are rates expected stay this low?
A: It’s hard to tell, but don’t count on it because the lending landscape is likely to change next year. In September 2009, the Fed said it would gradually wind down the purchase program, ending it by March 30, 2010. That has some in the mortgage lending industry worried.

In a recently published mortgage survey, more than 60% of Bankrate.com’s panel of experts predicted that rates will move higher over the next 30 to 45 days. How much higher is anyone’s guess. Last year at this time, the average 30-year, fixed-rate mortgage was 5.53%.

Q: Why do different mortgage surveys come up with different average interest rates?
A: It depends on which lenders are in their sample, when the survey was taken and whether the rates quoted are the posted rate, the application rate or the commitment rate. Also, some surveys take into account the points paid to secure the rate.

But regardless of the survey, the general consensus is that rates are ultra-low right now and may be the lowest the market will see.

Q: What else does a consumer need to know?
A: The lowest rates are offered to the most credit-worthy customers who can make sizable down payments. Shop not just for the interest rate and the points involved but also for the fees involved, which can vary widely from one lender to another.

If you’re refinancing, remember the bigger the loan, the greater the payoff for finding a lower interest rate. Savvy customers put in their paperwork with a lender and set a “strike” interest rate at which to lock in the loan, a good move considering rate volatility.

Several refinancing calculators are available online that let borrowers plug in all the required numbers and determine the monthly savings and how long it will take to recoup the expense of a refinancing.

Q: So is now the best time to buy a home?
A: It depends on personal situations. Homebuyers certainly have a lot of factors working in their favor right now—low interest rates, plenty of marked-down homes for sale and an extended and expanded federal tax credit that will expire in the spring.

On the flip side, there’s growing sentiment among analysts that housing prices, which are showing ever-so-minor improvement, may fall further. The reason? Lenders are expected to get better at determining which borrowers will qualify for loan modifications. That means lenders also will get faster at moving homes through the foreclosure process.

Mark Zandi, chief economist at Moody’s Economy.com, recently predicted that housing prices nationally will hit bottom in 2010’s third quarter. That means anyone buying a house now could see the value of their investment initially depreciate.

(c) 2009, Chicago Tribune.

Choosing the Right Community for You

If you are buying a home, one of the first things your real estate professional will do before taking you on home tours is interview you to determine the type of house you want such as a 2,000-square-foot four-bedroom, split-level with a formal dining room and two-car garage. But just as important is the type of community you want to live in. Knowing what your requirements are will help narrow your home search and save time.
To expedite the house-hunting process, start by making a list of the dream home factors that are most important to you and your family’s lifestyle. Consider style, location, proximity to work and schools, yard size, children in the community, and of course, price.
Price and location generally are the key factors you’ll use to identify the communities that best suit you. If you are moving within the same city, you may want to start your community search by getting in your car and exploring. There are also resources on the Internet that let you compare communities.
You’ll want to ask yourself critical questions, such as: Do you dream of something quaint and charming that can only be found in an older area? Or, do you prefer everything new? Are you willing to sacrifice size and space for architectural detailing? What about drive and commute time to the office and schools? Will you forgo the number of bedrooms and a big yard for proximity to a lake or other recreational areas?
Whether you have children or not, buying a home in a community with good schools is important. It not only adds value to your property, but also is an attractive feature when and if you decide to sell. There are plenty of resources available to get information about schools within the communities you are considering. Various Internet sites offer school reports and profiles. They provide statistical data such as graduation rates, college-bound percentages, and standardized test scores. You can also learn about special programs the schools offer. In addition to these reports, many schools have their own Web sites you can peruse. And of course you can always talk to people in the area or take a tour of the school.
Additional factors you’ll want to consider during your community search are crime, recreational activities, proximity to shopping and restaurants, and other specific family needs.
Once you’ve narrowed your search to two or three communities that fit your price range and lifestyle, make comparisons of price and sales activity. Your real estate professional can help you determine which communities are most sales-worthy at present, and which are more likely to continue to be.
There are many factors involved in selecting the right community for you and your family. Discuss your options with your real estate professional. This will provide the information he or she needs to help you find property listings to tour. Remember, a targeted approach to house hunting is less time consuming, less expensive and more efficient.

10 Trouble Spots to Consider When Purchasing a Foreclosed Home

RISMEDIA, December 21, 2009—It’s easy pickings out there for many potential homebuyers. Housing prices are at their lowest in more than a decade, inventories are high, analysts are predicting a new wave of foreclosures and the government is offering two substantial tax credits for which many homebuyers qualify.

But bargain buyers beware, warns Vince Mastronardi, whose property preservation business has been busy preparing foreclosed homes for sale.

“Buyers need to educate themselves about the potential pitfalls of purchasing distressed property,” says Mastronardi, president of On-Site Specialty Cleaning & Restoration. “It’s not so much what damage occurred, but the source of that damage and how long before the problem was addressed.”

These 10 signs may indicate that trouble is around the corner.

1. Unheated house in winter months. If the home has been properly winterized, there’s no need for heat. But if the home has not been properly winterized, pipes will burst and cause water damage.

2. Missing sinks, toilets and other fixtures. Make sure they’ve been properly removed and not ripped from walls and floors.

3. Peeling, bubbling, and discolored paint; swelling in walls or ceilings (especially around kitchens and bathrooms) or a musty odor all indicate water damage and, potentially, the presence of moisture and mold.

4. Fungus growth inside cabinets, behind drawers and built-ins. Fungus could mean that there has been water damage. Since water falls down, look for the source above the mold.

5. Blocked drains or pipes will cause future problems and may have already created sewage backups.

6. Black cobwebs, greasy gray residue on walls and/or a strong oily odor. This could point to potential soot damage or a malfunctioning furnace.

7. An older home with extensive renovations. Check with the city for pulled permits in order to get remolding details. If asbestos is present and has been disturbed, be sure it’s been remediated by a certified specialist.

8. Excessive painting of every nook, cranny, door and floor may mean that the seller is covering up mold.

9. Discolored subflooring. From the basement, check the subflooring above for stains and small holes, both caused by mold.

10. Air Quality. The air quality within a home tells a lot about the home’s condition. Be sure to include air and surface testing in your home inspection. It’s a few hundred dollars well spent.

“Time and technique are the most important factors of effective clean-up and preventing future problems like mold or contamination,” Mastronardi explains. “Ideally, professional cleanup begins within a few days of the damage; technicians are trained, certified or licensed; and equipment is specialized and up to date.”

Ask the seller to explain how the damage was fixed. Plus, check out the company that performed the repairs to ensure it has industry-recommended certification. If needed, follow-up with the seller or repairing company for specific repair details.

Anne Arundel County Heritage

Back in the 1950's the folks in Annapolis (the capital of Maryland) made the wise decision to maintain as many of the historical buildings in the city as possible. The goal was to keep the 17th century feel, and as a result Annapolis has the largest collection of 17th century real estate architecture in the country. You can stroll through downtown Annapolis and enjoy the museums, historic sites, shopping, dining, and views of the water.

Anne Arundel County is located on the Chesapeake Bay, and there are many water activities. Every fall a week is devoted to the sail boat show, and a week is devoted to the power boat show. All of the boats are in the waterm and visitors to the shows can board the boats. Any time of the year, you can walk across the Easport Bridge over Spa Creek. Hundreds of boats can be viewed from the bridge. The U.S. Naval Academy adds to the rich maritime heritage of Annapolis.

Top Things to Do in Maryland

Planning a trip to Maryland or thinking about relocating? Here is a list taken from www.worldtravelguide.net of things you should definitely check out!

• Tour the National Aquarium in Baltimore (image below) (website: www.aqua.org), home to more than 560 species of sub aquatic life. Start your day by having breakfast with the dolphins, or sign up for a sleepover with the sharks.

• Listen to the music at the beautiful Pier Six Concert Pavilion (website: www.piersixpavilion.com) where concerts are hosted during the summer months (June to late September).

• Climb the Washington Monument (website: www.nps.gov/wamo) in the heart of Washington, DC for a panoramic view.

• Take a water taxi ride to the neighbourhoods of Fell's Point (website: www.fellspoint.us) and Little Italy (website: www.littleitalymd.com).

• Sign on for sailing lessons at the world-renowned Annapolis Sailing School (website: www.annapolissailing.com).

• Soak up the sun at Ocean City (website: www.oceancity.org), a lovely beach resort boasting an expansive white sand beach, a 5km- (3-mile-) long boardwalk, amusements, tram rides, boating and deep-sea fishing.
  

• Hike or bike the old towpath once used by mule-drawn barges in Chesapeake & Ohio Canal National Historic Park (website: www.nps.gov/choh), stretching 295km (184 miles) from Washington, DC to Cumberland in Western Maryland, and visit the headquarters where George Washington began his military career.

• Enjoy a variety of water-based activities at Deep Creek Lake (website: www.deepcreeklake.com), the state's four-season resort, or play 18 holes of golf on two scenic championship courses.

• Admire some of the world's best racehorses during the week-long activities celebrating the annual running of the Preakness Stakes (website: www.preakness.com) in May. It is the second event in thoroughbred racing's prestigious triple crown.

What are your favorite things to do in Maryland? I would love to hear them!

Maryland Fun Facts

Main Street (formerly Church Street) in Annapolis, Maryland, USA Photo © Hisham Ibrahim / Getty Images

Thinking about moving to Maryland? Here are some fun and interesting facts about the "Old Line State." (Taken from history.com)

• Maryland was the hometown of the Babe and the Raven: Baseball great Babe Ruth and Edgar Allen Poe lived there. Poe is also buried in Baltimore's Westminster Cemetery.

• The state sport of Maryland is jousting, a competition between two armored contestants mounted on horses in which each tries to strike the other with a lance. The sport has been enjoyed in Maryland for 300 years.

• Maryland is famous for great seafood, especially crabs. During lunch hour on Maryland's Chesapeake Bay, vendors sell almost as many crabcakes as hot dogs and hambugers combined.

• Maryland's Mount Clare Station, built in Baltimore in 1830, was the first railroad station in the United States.

• Notorious gunslinger Doc Holliday was called "Doc" because he was a dentist. Holliday learned his trade at the Baltimore College of Dental Surgery.

• Kunta Kinte, the slave ancestor of Roots author Alex Haley, arrived in Annapolis in 1767. This is now commemorated at the City Dock by a plaque and statue of Haley.

• The Mother Seton House in Baltimore and the National Shrine of Saint Elizabeth Ann Seton in Emmitsburg both celebrate the life of the first American to be sainted, a Baltimore resident.

• America's first umbrellas were produced in Baltimore, beginning in 1828.

• Each year on September 17, 23,100 luminaries are lit at Maryland's Antietam National Battlefield to honor the dead of America's bloodiest one-day battle, fought during the Civil War.

• The Mason-Dixon line was drawn between Pennsylvania and Maryland in the 1760s to end a border dispute. The line is traditionally thought of as the division between America's North and South.