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.

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.

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.

Crofton, MD - A Great Place to Live

Crofton is a planned community. On a map, Crofton is a triangle bordered by Route 3, Route 424 (Davidsonville Road) and Route 450 (Defense Hwy). It is midway between Baltimore and Washington, DC. Inside the trangle, everything is residential with the exception of the Crofton Country Club, a few churches, and Village Green...a small cluster of businesses. Crofton Parkway is a wide boulevard that is a 4 mile circle inside the triangle. Many of the homes along the parkway back to the golf course. On any given day, you will see people strolling, running, and biking the parkway.

In the past 10 years, new housing was build outside of the Crofton triangle. There are townhouses and single family homes by a variety of builders. Walden is a planned community with a golf course and country club. Housing in the newer area of Crofton is comparable to other housing built in the Washington, DC area in the past 10 years.

One of the advantages that Crofton has is location and the accessibility to transportation. Washington, DC is a 25 minute drive; Baltimore is a 30 minute drive. There is a bus that leaves Crofton every morning for the New Carrolton Metro Station (orange line). The bus returns every evening. The New Carrolton station is about a 20 minute drive from Crofton and there is parking there. The MARC train that goes to Union Station leaves from Bowie and Odenton. Both stations are within 15 minutes of Crofton.

Crofton has a beautiful park with athletic fields and an outdoor theater. In addition, there is a smaller park with a lake inside the triangle. The lake is stocked with fish, and on a summer day, many youngsters try their luck at fishingl. The other lake in Crofton put the community in the public eye a few years ago when snakehead fish were found.

A quiet residential community, Crofton has all sorts of activities. Every summer there are Sunday evening concerts on Village Green; there is an Easter Egg Hunt, a Halloween parade, and a Christmas tree lighting. There are summer ice cream socials, and every spring and fall there is a wonderful craft bazaar across from the Village Green.

Average List Price for Sold Properties in Anne Arundel, Howard, and Prince George's Counties for August

This is where the really positive news shows. The number of houses sold in the month of August for Anne Arundel County was 9% higher than a year ago. In Howard County there was a 7% increase. Prince George's County is the big winner with a 48% increase over August 2008. Keep in mind that the sales price is lower than a year ago. However, the good news has to start somewhere. Increase in sales price will come as the economy improves. It may be the the $8K tax credit is getting the first time home buyer out to buy. It also appears that now is the time to buy if you are a first time home buyer that has been sitting on the fence, because this is probably the bottom of the market. As short sales and foreclosures decrease, home prices will start to increase. It is hard to say when that will happen, but it is inevitable. Keep in mind that like all of our economy, the housing market is cyclical, and we have been in this down cycle for three years.

Data from MRIS

Resale Houses Sold in Anne Arundel, Howard, and Prince George's Counties for August

This is where the really positive news shows. The number of houses sold in the month of August for Anne Arundel County was 9% higher than a year ago. In Howard County there was a 7% increase. Prince George's County is the big winner with a 48% increase over August 2008. Keep in mind that the sales price is lower than a year ago. However, the good news has to start somewhere. Increase in sales price will come as the economy improves. It may be the the $8K tax credit is getting the first time home buyer out to buy. It also appears that now is the time to buy if you are a first time home buyer that has been sitting on the fence, because this is probably the bottom of the market. As short sales and foreclosures decrease, home prices will start to increase. It is hard to say when that will happen, but it is inevitable. Keep in mind that like all of our economy, the housing market is cyclical, and we have been in this down cycle for three years.

Data from MRIS

Median Sold Price for Real Estate in August - Anne Arundel, Howard, and Prince George's Counties

Median price tells us that as many houses sold above this dollar amount as sold below the amount. This statistic has been down over the same period a year ago for the past 12 months in all 3 counties. Anne Arundel and Howard Counties' numbers are less than 10% and have been for the entire year. Prince George's County has taken the biggest hit in prices. This is because there are more distressed properties in Prince George's County than in any other county in Maryland. Also, keep in mind that a lot of first time home buyers are taking advantage of the $8,000 federal tax credit. This means that lower priced homes are selling because people are being given an incentive to purchase.

So this statistic indicates that many more lower priced homes are being sold than higher priced homes.

Data from MRIS

Average Sold Price for Real Estate in Anne Arundel, Howard, and Prince George's Counties

Unfortunately, the positivity that we saw in dollar sales has not reached average sold price. For Anne Arundel County, it's the best average sold price since March. Howard County suffered an 8%+ lost compared to average sold price a year ago. Prince George's County has experienced the most significant losses in average sold price because of the large number of short sales and foreclosures. As a county, Prince George's has suffered the most significant number of distressed homes in Maryland.

Based on the past couple of months statistics, it appears that the price of homes will be the last statistic to improve.

Data from MRIS

Should Buyers Use a Real Estate Professional?

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. With this wealth of information at your disposal, do you really need a real estate professional to represent you? Absolutely.

It's like having a guide. 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.
Get up to the date information. These days, changes to regulations for the real estate industry are ocurring quite frequently. 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.

Your advocate. 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.
Avoid risk. And something easy to overlook is our familiarity with the complexity and risks inherent in the process. It is amazing 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.
Single point of contact. 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.