Buying and Selling Real Estate in Los Angeles CA

Los Angeles Real Estate

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Want to find Los Angeles property?   Search listings here:
<A href=http://www.lacanadarealestate.com/searcher.asp title="Los Angeles home search">Los Angeles home search</A>

Los Angeles Event

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Need a laugh? Try the Los Angeles Comedy Shorts Film Festival

Enjoy!

Los Angeles Real Estate FHA Loan Limit

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You can check FHA loan limits online here: FHA loan limits

For Los Angeles, the FHA loan limit for a single family residence is currently $729,750. This loan limit is currently in effect until December 31, 2009.

Los Angeles Real Estate FHA Loan Limits

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You can check FHA loan limits online here: <A href=https://entp.hud.gov/idapp/html/hicost1.cfm rel="nofollow" target=_blank>FHA loan limits</A>
For Los Angeles, the FHA loan limit for a single family residence is currently $729,750.  This loan limit is currently in effect until December 31, 2009.

Los Angeles Historic Preservation Award

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Attention individual property owners! Nominations are being sought for the first-ever HPOZ Awards. Described as "...successful historic rehabilitation projects or community outreach activities in Los Angeles’ 24 Historic Preservation Overlay Zones (HPOZ)..."

Nominations close March 16, 2009.

Win a cool award for your labor of love!

Details are here: HPOZ Award

Los Angeles Real Estate Agent

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Read more about us - Los Angeles real estate agent

Los Angeles Real Estate

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Press release about the Los Angeles Real Estate market from January 22, 2009.

If we can help you with Los Angeles real estate, whether you are buying or selling, please call Fran and Rowena at (818) 952-0077, or email us:
info (at) lacanadarealestate.com.

Los Angeles

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Interest rates, updated daily: Mortgage rates

If we can help you with mortgage rates, for a purchase, refinance or other need, please contact us.

Los Angeles Real Estate Value

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Do you want to know what your Los Angeles property is worth?

Use this page in our website: Los Angeles home value

If we can be of further assistance, please contact us.

Los Angeles Real Estate VIP Registration

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Do you want to be a VIP?

It's easy on our website. Sign up to be a VIP buyer, and have your own VIP center. Leave private messages for us, save home searches, and save favorite homes.

Do it here:
Los Angeles real estate VIP registration

Los Angeles Relocation

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New to the Los Angeles area? Call us today for a complimentary buyer's relocation packet containing valuable information on local communities and selecting a home.

Fran and Rowena - (818) 952-0077

Realtor in Los Angeles - Profile

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View our profile on MyPlaxo - Fran and Rowena

For assistance with Los Angeles real estate, please contact Fran and Rowena at (818) 952-0077.

Los Angeles Real Estate - home resale st..

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Los Angeles real estate home resale statistics can be found online at dqnews.com. You can see the number of sales, median price and the change from one year ago. Both single family homes and condominiums are shown. The information is listed by zip code.

Check it out!

Los Angeles Real Estate - home resale st..

Sat, 13 Mar 2010 23:05:04 +0000

Los Angeles real estate home resale statistics can be found online at <a href=http://dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx rel="nofollow" target="_new>dqnews.com</a>. You can see the number of sales, median price and the change from one year ago. Both single family homes and condominiums are shown, plus the information is listed by zip code.

Los Angeles Real Estate - home resale st..

Sat, 13 Mar 2010 23:05:04 +0000

Los Angeles real estate home resale statistics can be found online at <a href=http://dqnews.com/Charts/Monthly-Charts/LA-Times-Charts/ZIPLAT.aspx rel="nofollow" target="_new>dqnews.com</a>. You can see the number of sales, median price and the change from one year ago. Both single family homes and condominiums are shown, plus the information is listed by zip code.

Los Angeles Arts Month

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The month of January, 2009 is the first designated Los Angeles Arts Month.

Among the events is the Los Angeles Art Show, being held from January 21 to January 25 at the Los Angeles Convention Center.

Los Angeles Arts Month

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The City of Los Angeles is having it's first "Los Angeles Arts Month", during the month of January, 2009.

There are many planned events, including the <a href="http://laartshow.com/" target=_new rel="nofollow">Los Angeles Art Show</a>, from January 21 to January 25.

Home Sellers - Advice for Showing Your H..

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Another new page in our website!

Home Sellers - Home Showing Advice

Showing Tips

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Now that you have put your home on the market, we have some helpful tips to give your home a winning look. Want a tip? Try to view your home from a buyer's prospective. Help your home stand out from the rest.

1. Keep your home clean. It may seem like a simple concept, but it's quite simply the most important step in making your home the best it can be to show to a potential buyer.   Remove clutter, have things put away, have beds made, keep dirty dishes out of the kitchen sink, have bathrooms straightened up after use, etc.   This also means keep it smelling fresh.   Freshen the air after cooking, etc.

2. Keep your home in good repair.   Make sure all light bulbs are working, paint is fresh (no chipped or missing paint), etc. A buyer can spot needed repairs and that may affect a potential sale.

3. Keep your home's appearance in neutral.   Neutral colors are inviting, and allow a potential buyer to imagine themself in the home.   This means decorating with neutral colors, and removing personal accessories such as most photographs, etc.

4. Keep it inviting. Fresh flowers and soothing background music make a buyer feel welcome.   Sometimes setting the dining table is a nice touch.

5. Keep it easy to show. Think of the numbers - the greater the number of showings from potential buyers, the greater the chance of selling your home. How easy is it to show your home?   Do your best to make it convenient for the buyer.

With these key steps in mind, your home will be in showing condition, and ready for your buyer!

Reverse Mortgages for Seniors

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Just added to our website:

Lear more about Reverse Mortgages

Reverse Mortgages for Seniors

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Just added to our website:

Learn more about Reverse Mortgages

Reverse Mortgage

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DEFINITION: reverse mortgage
A special type of loan available to equity-rich, older owners. Repayment is not necessary until the borrower sells the property.

In a reverse mortgage, the payments are actually made in "reverse" --- the loan pays you.

The purpose of a reverse mortgage is to allow older homeowners the opportunity to use the equity in their property now, without having to sell the property to get access to that equity.

With a reverse mortgage, you obtain a loan. Then, the loan pays you in monthly installments, in a lump sum, or in other ways.

The loan is repaid when you die, sell the property or move out permanently.

Normally, the lenders require that you be age 62 to obtain a reverse mortgage.

The U. S. Department of Housing and Urban Development has information on their website here: HUD Reverse Mortgage Information

A reverse mortgage is not for everyone, and there are ramifications of obtaining a reverse mortgage. Get counsel, seek professional advice, before making a binding decision.

For additional information, please contact a lender. If we can help you with reverse mortgage information, please Contact Us.

Looking for Los Angeles Information?

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We've compiled it all here:

Los Angeles information

If there is something you would like us to research or add, please let us know!

What we do for home buyers

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Another new page in our website - Home Buyer Services

Moving? Read relocation advice.

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Another new page in our website. This one is about moving with children, and how to make it easier on them, and on you!

Relocation - Moving with Kids

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Moving can be a stressful time on a family, and expecially on kids – no matter what the age. Use these helpful relocation tips to help your children make the transition.

Get the local newspaper so that you and your children can start to familiarize yourselves with your new neighborhood and community.
Discuss the move with your children, let them ask questions.
Let them participate in the move, and in decisions, as appropriate to their age and ability.
Have them make a list of the names, addresses, email addresses and telephone numbers of their friends. This will help them know that they can stay in touch, even after the move.
If you can, take your children with you on your new home search, and to the new community. Explore the area together so that they become familiar with the new neighborhood.
Visit your children’s new school, and take your children along too. Ask about extracurricular activities, including sports and clubs.
Visit your new church or synagogue. Ask to be connected with a “sponsor”, and ask about joining groups.
Try to arrange for activities for your kids – groups, sports, music lessons, etc.
Walk around your new neighborhood and try to meet your neighbors, and find out about others in the area.
Contact the “Welcome Wagon” in your new community. Ask if there is a “Newcomer’s Club”.
Have your children pack a box with their favorite things to take along with them on the move.
Remember – familiarity with people and surroundings will help your children adjust.
Have patience with your kids.
Try to maintain a normal routine, as much as possible.
Watch for warning signs that your child is having difficulty with the move.

Listing price of your home vs buyer acti..

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Another new page in our website for you! Read here:

How the listing price affects the buyer activity on your home

Home Pricing and Activity Level

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Home pricing is directly related to buyer activity. The greatest level of buyer interest and from the real estate community (including realtors who represent home buyers) occurs when a home is new to the market. It is during this period that your home has the best chance of receiving an offer from a potential home buyer. It makes sense --- the greatest buyer excitement is during the initial phase of home marketing.

Once a home has been on the market for a period of time, home buyers may think the home is overpriced. As a home seller, you might see offers that are below asking price --- if you receive an offer at all. Many buyers decide to wait until the listing price is reduced, so that they know that the seller is serious about selling and that the seller understands the market value of the property. If the price is too high, the buyer may feel that the seller may not be aware of the home's current market value; and, therefore, the seller might not be willing to negotiate with a buyer to reach a successful sale at the correct market value.

To best evaluate your price, remember to:

Examine comparable sold properties in your area
Be reasonable about your home's plusses and minuses
Price it in relation to the real estate marketplace and economic environment

Remember, correct pricing sells a home faster than any other factor. Price your home right at the beginning, to maximize the period when the greatest level of buyer activity occurs.

How to Stage Your Home to Sell

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Yes, another new page in our website - take a look!

How to Stage Your Home to Sell

Home Staging

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Home staging has become very important in today's real estate market. It's like detailing a car --- you want to make it "shine" when you put it up for sale. Home staging makes your home more desirable.

It doesn't have to take a lot of money to stage a home. But, most of us live in homes that are filled with memories and momentos, and generally is home to too much furniture.

What do you do to best stage your home before putting it on the market? Read our home staging tips. And, don't be afraid to ask a friend or your realtor to help.

1. Think like a buyer. Try to be objective when looking at your home. Walk up to your home, and up to the front door. What do you see?   Is it looking a little "tired"? Does the paint look "old"? Is the landscaping overgrown and unkept?

2. Maximize curb appeal.  Trim, weed, plant fresh plants and flowers, eliminate dead trees and branches, remove debris, repair fences and gates (repaint if necessary), wash driveways and sidewalks, wash windows and screens, remove trash cans from the front yard, pick up trash and newspapers, have exterior lights in working order, and have a working doorbell. Put out a fresh front doormat.

3. Interior staging - living room and family room.    The living room and family room are important rooms to a home buyer. Make sure the furniture is neatly arranged, not cluttered. Remove extra personal items so that the rooms appear spacious. Clean fireplaces.

4. Interior staging - kitchen. Remove unnecessary items from the counters. In fact, remove as much as you can from the countertops!   Clutter on the counters says "there is not enough storage space in this kitchen so it's kept on the counter".   Make sure the kitchen is very clean, including the oven interior. This is an important area for "smells". Make sure your kitchen does not have unpleasing smells. Keep the trash emptied.

An each update to the kitchen is new cabinet knobs.   It may be necessary to paint or stain cabinetry for a fresh, updated look.

5. Interior staging - bathrooms. Clean, including grout cleaning. Make sure the bathroom smells fresh. Remove kid's bath toys.   Pick a color scheme and put out coordinating pretty towels and soaps, and new shower curtain.

6. Interior staging - bedrooms. Bedrooms are an important place to remove clutter. It's easy to have too much furniture and too many toys in a bedroom. But, it's equally important to have your home in show-ready condition. Again, remove clutter, make sure the bedrooms are fresh. Maybe invest in an inexpensive yet pretty new bed comforter or bedspread to coordinate with the room.    Closets should also be cleaned out. Box extra items --- you're moving!

7. Interior staging - doors. Make sure the path to any doorway is clear. Move or remove furniture that interfers with or crowds the path to a door. Make it easy for a buyer to walk in and out of the home.

8. Bookcases - a special consideration. Don't load bookcases and bookshelves with books. Rather, make the bookshelves and bookcases light and airy (just like the rest of the house). Box up the extra books --- you're moving!

9. Appeal to all. Keep your home's decor "neutral" --- neutral in color and also neutral in design.

10. Donate. This is a good time to donate unused or unwanted items. Put those items to use. Donate them.

11. Ask your realtor for help! Realtors can help you with another point of view. They can help you know what will appeal to a potential buyer. It's what they deal with every day. Let your realtor help you too.

Los Angeles Maps

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We have added maps to our
Los Angeles Airports
and
Los Angeles Museums and Art Museums
pages.

Take a look at these pages.

Technorati - claim our blog

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Technorati Profile

New page in Los Angeles Real Estate webs..

Sat, 13 Mar 2010 23:05:04 +0000

Another new page!

Read about our Home Buyer Services

Relocation - Career Assistance

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Here are some steps you may want to take to ensure results and a positive relocation:

Search Online Job Databases - thousands of jobs searchable by occupation or location.
Contact friends and acquaintances both in your desired field of work and the area you are moving to, regardless of their field. Even people in a different industry know the city and can give you ideas on what companies to approach & to avoid; as well, they may know someone in your field and be willing to refer you.
Subscribe to the Sunday newspaper in the town you are moving to. Not only should you research want ads, but read the business section as well.
If one spouse's company is responsible for the move, check with their human resources department to see if they have trailing spouse assistance.
Contact the Chamber of Commerce. Most have lists of the top businesses in the area.
Join local business, civic and networking clubs.
Contact the State Employment Commission.
Make appointments with executive recruiters and employment agencies. Be sure to find out if you or the employer is charged, if they negotiate the hiring contract, if you would actually work for the agency or for the client employer, and carefully review any contract or have an attorney look it over before signing.
Sign up with a temporary agency. This can provide you with a job and income while you continue your search; in addition, many temp jobs lead to permanent employment.
Consider your own business, as either a part-time or interim business, or as a whole new career direction!

Relocation - Moving Tips

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When coordinating the move of household goods, several items require special care and attention. Anytime you are moving pets, automobiles, waterbeds, antiques, plants, waterbeds or office/high-tech equipment, extra planning and coordination is necessary.

The two major items that need special moving are autos and family pets. When considering automobiles in a move, often a full-service moving company will place a vehicle in the moving van. When moving yourself, auto tow-trailers can be hitched to the back of a moving truck. These arrangements, however, usually only handle one vehicle. When considering a second or third vehicle, there are several options:

Sell your vehicles prior to moving, and purchase new ones at your destination.
Have one of the family members drive the vehicle to your destination.
Hire an automobile transportation service to move the extra vehicle(s) for you.

"Timing is everything" when arranging a professional auto move. Scheduling the move can be a challenging, complex and sometimes overwhelming undertaking. There are school and office hours to consider, for example. It is important to use an auto mover that coordinates the move so that it most suits your needs, creating a smooth transition.

Relocation - Should you use a moving com..

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Pros and Cons of Moving Yourself

cost savings can be considerable, possibly into the thousands of dollars. moving yourself can usually save at least half of what a household goods transportation company will charge you, even if you rent a truck and pay helpers for their labor.
you assume full responsibility for the move, labor and damages.
packing all your belongings yourself gives you a better organizational opportunity to inventory, rearrange, throw away, give away, and tag items for garage sales.

Pros and Cons of Hiring a Full Service Van Line

the time savings and ease of move are tremendous with a professional mover.
the cost can vary greatly, depending on whether you include packing/unpacking, insurance limits and what company you choose.
most companies offer references and free estimates. A binding estimate holds both you and the company to the price quoted; a physical inspection is usually necessary. A non-binding estimate is an approximation of costs; Federal law requires a limit of no more than 10 percent additional charges.
many companies will guarantee pickup and delivery dates; if you're in a time crunch, this may be the only way to go.

Relocation - Moving with Pets

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Moving and relocating with pets involves special considerations and planning. Read more about it here.

Before you move:

Make an appointment and have your pet examined by your veterinarian; collect pet records.
Ask your vet for a reference for a practitioner in the new city.
Air travel should be booked four weeks ahead of departure for domestic moves and six to eight weeks prior to international flights.
If you are moving overseas, your pet must be examined and vaccinated 30 days prior to leaving.
Secure a form of identification to your pet's collar.

On Moving Day:

When booking a hotel or corporate housing, make sure the management allows pets.
Before crossing into another state, know that some states have border inspection of all animals.
Limit feeding of your pets to once a day during the move, preferably in the evening, unless your veterinarian instructs otherwise.
The appropriate size for a kennel should allow your pet room to stand up, lie down, and turn around in natural positions.
If you are moving locally, take your pets on several visits to the new home before you move in to familiarize them with their new habitat.

Relocation - Apartment Renting

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While renting has always been and continues to be an interim option during the home purchase process of a relocation, more and more it is becoming a long-term preference. Frequent moves, greater flexibility, rising ownership costs and amenities available through renting are great advantages. People today are renting in greater numbers, not just as a temporary step on the way to home ownership, but for the lifestyle they enjoy through renting.

Some of the factors to consider when deciding whether to rent or buy are:

your job situation and likelihood of moving again
initial and monthly costs of both options
tax savings and advantages
the availability, lifestyle and desirability of properties to rent or buy
current interest rates and mortgages available

The cost, availability and variety of rental housing possibilities will vary tremendously in different parts of the country. While a large city will offer a far greater number of rental properties and a greater variety of styles and amenities, they will also be much higher priced and may even have an extremely low vacancy rate. On the other end of the spectrum, small towns also tend to have a very low rental vacancy rate, simply because of the lack of rental housing there. Mid-sized cities will generally have the greatest choices available.

Initial costs on a rental property usually include the security deposit, additional deposit if you have a pet (many rentals do not allow pets), first month's rent, credit report fee, and an application fee. Be sure and get renter's insurance; if you don't, your personal belongings will not be protected in the event of a burglary, fire or any other loss.

Read lease agreements thoroughly, as they can vary greatly between states and even individual landlords. It is wise to have an attorney review leases. Be sure you understand what you and the landlord are each responsible for when it comes to utilities, maintenance and repairs. And, be sure you understand your responsibilities upon move-out --- do you have to clean the carpets? clean the drapes? You need to know!

Although the most typical lease term in the United States is one year, this can be negotiable too. Know what your liabilities are if you have to break your lease early.

Relocation - Temporary Housing

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Many people who are relocating experience a period of "in-between time" - that period when you initially move to your new community and begin the process of settling in and looking for a place to lease or purchase.

If you are planning on leasing, or if you've made several preview trips and have contracted on a new home, this interim period may only be a couple of weeks. In this case, a hotel or suite-hotel usually works best.

However, if your interim period is going to be close to 30 days or longer, you will probably want to opt for temporary "corporate housing." Corporate housing is a property that usually is available fully-furnished with room suites of furniture, cookware, linens/towels, small appliances such as coffee makers, irons and alarm clocks, major appliances like microwaves, refrigerator, stove and washer/dryer, plants and pictures, accessories, maid service and all utilities included, even local telephone service and cable TV.

To find corporate housing, or long-term housing, contact your realtor for recommended and trusted housing. Or, if you are working with a relocation company, contact your relocation advisor for a list of corporate housing sites.

Real Estate Mission Statement

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Yes, another new page in our website. Check it out ...

Mission Statement

Los Angeles Tourist Attractions

Sat, 13 Mar 2010 23:05:04 +0000

We have created another new page in our website, to best provide information about Los Angeles. Take a look!

Los Angeles Tourist Attractions

Los Angeles - Time Change = Battery Repl..

Sat, 13 Mar 2010 23:05:04 +0000

Remember --- with the time change, it is also recommended that you replace the batteries in your smoke detectors.

This is especially important at this time of year, when appliances and holiday decorations are a source for electrical fires.

Promote safety in the home! Install and have working smoke detectors. Check with your local authorities as to the legal requirement. But, certainly having a smoke detector IN each bedroom and OUTSIDE each sleeping area would be a good idea.

Los Angeles Airports

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Another new page in our website!

Los Angeles Area Airports

with a list of airports in and around Los Angeles, and the corresponding airport code.

Los Angeles Museums and Art Museums

Sat, 13 Mar 2010 23:05:04 +0000

Check out the new page in our website - Los Angeles Museums and Art Museums.

We want to be your resource for all things Los Angeles. Stay tuned for more information that will be added to our Los Angeles real estate website!

Los Angeles Home Prices

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If you want to check statistics on home prices, we suggest the monthly reports available on DQNews.com. There are charts available for different areas, including Los Angeles, and you can see for yourself what is happening with prices, number of sales, and a year-over-year comparison.

Homeowners Insurance

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DO I REALLY NEED HOMEOWNER'S INSURANCE?
Yes. A paid homeowner's insurance policy (or a paid receipt for one) is required at closing, so arrangements will have to be made prior to that day. This is required by your lender.

You should involve the insurance agent early in the home buying process. This can help save you money and help you close your purchase on time. Insurance agents are a great resource for information on home safety and they can give tips on how to keep insurance premiums low.

WHAT STEPS COULD I TAKE TO LOWER MY HOMEOWNER'S INSURANCE COSTS?
Be sure to shop around among several insurance companies. Also, consider the cost of insurance when you look at homes. Newer homes and homes constructed with materials like brick tend to have lower premiums. Think about avoiding areas prone to natural disasters, like flooding. Choose a home with a fire hydrant or a fire department nearby.

Other ways to lower insurance costs include insuring your home and car(s) with the same company, increasing home security, and seeking group coverage through alumni or business associations. Insurance costs are always lowered by raising your deductibles, but this exposes you to a higher out-of-pocket cost if you have to file a claim.

IS THE HOME LOCATED IN A FLOOD PLAIN?
Your real estate agent or lender can help you answer this question. If you live in a flood plain, the lender will require that you have flood insurance before lending any money to you. But if you live near a flood plain, you may choose whether or not to get flood insurance coverage for your home. Work with an insurance agent to construct a policy that fits your needs.

WHAT OTHER INFORMATION SHOULD I KNOW ABOUT HOME INSURANCE?
Ask your insurance agent what types of coverages are available in your area, and what additional coverages you should consider. Your insurance agent should be able to explain this information to you, and help you determine the coverage that is right for you.

WHAT OTHER ISSUES SHOULD I CONSIDER ABOUT HOME OWNER'S INSURANCE?
You should check to see if the house is in a low-lying area, in a high-risk area for natural disasters (like earthquakes, hurricanes, tornadoes, fire, etc.), or in a hazardous materials area. Be sure the house meets building codes. Also consider local zoning laws, which could affect remodeling or making an addition in the future. Your real estate agent should be able to help you with these questions.

Mortgage Terms, Abbreviations and Acrony..

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While not a complete list, we have compiled the common financing terms that apply to your mortgage or loan. Learn the terms, abbreviations and acronyms so you can be an informed borrower.

APR -- annual percentage rate. The cost of the loan expressed as a yearly rate on the balance of the loan.

ARM -- adjustable rate mortgage. A loan with an interest rate that is periodically adjusted to relfect changes in a specified index.

FRM -- fixed rate mortgage

HELOC -- home equity line of credit

INTEREST RATE CAPS -- A limit on the amount that can be charged to the monthly payment of an adjustable rate mortgage during an adjustment period.

LOAN-TO-VALUE RATIO -- A technical measure used by lenders to assess the relationship of the loan amount to the value of the property.

MARGIN -- The rate added to the index to determine the actual interest rate in an adjustable rate mortgage. For example, if the index rate is 5 percent and the margin is 2.5 percentage points, then the rate the borrower will pay is 7.5 percent.

MORTGAGE BANKER -- A company that provides home loans using its own money. The loans are usually sold to investors such as insurance companies and Fannie Mae.

MORTGAGE BROKER -- A company that matches lenders with prospective borrowers who meet the lender's criteria. The mortgage broker does not make the loan but receives payment from the lender for services.

PITI -- principal, interest, taxes and insurance. The sum of the principal, interest, taxes and insurance is designed to represent the borrower's actual mortgage-related expenses.

PMI -- private mortgage insurance. A special type of loan insurance that many lenders require borrowers to purchase if the borrower's down payment is less than 20 percent of the home's purchase price.

POINTS -- Fees charged by lenders at the time a loan is originated. A point is equal to 1 percent of the total loan amount.

PREPAYMENT PENALTY -- Lenders can impose a penalty on a borrower who pays a loan off before its expected end date.

VAR -- variable

La Canada Town Center

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The La Canada Town Center is now open. The stores open so far are Sports Chalet and Home Goods, with more to follow.

This has been a much-anticipated project, years in the planning. However, reflecting today's economic times, we have noticed that the Center has many vacant spaces.

The new Sports Chalet is a beautiful store, and Home Goods appears to be very popular.

Los Angeles County Property Tax Bills

Sat, 13 Mar 2010 23:05:04 +0000

Property tax bills are in the mail!

If you haven't received your tax bill shortly, please contact the Los Angeles County Tax Assessor to get one.

If you BOUGHT property in 2008 - make sure you have your tax bill. If you do not have the bill, contact the Tax Assessor.

If you SOLD property in 2008 and received the bill for that property, do NOT throw the bill away! Instead, forward it to the new property owner.

Any questions? Contact the Tax Assessor. The Los Angeles County Tax Assessor has an extensive website here.

Need help with property in Los Angeles? Call us! We are here to help.

Or, visit our website - Los Angeles Real Estate

Los Angeles rain!

Sat, 13 Mar 2010 23:05:04 +0000

Yes, it's true. It's raining today in Los Angeles. Other than the fact that Los Angeles drivers really do not know how to drive in the rain (or in any other weather, for that matter), it's a nice reminder that fall is here!

Los Angeles Real Estate Blog is Launched..

Sat, 13 Mar 2010 23:05:04 +0000

Welcome, and thank you for visiting this blog about Los Angeles. We would like to bring you interesting and fun items from around the Los Angeles area.

If you have something that you think would be interesting to post on this blog, please let us know!

Understanding Your Credit

Sat, 13 Mar 2010 23:05:04 +0000

If you have ever applied for a charge card, student loan, or any other kind of credit, you probably have a credit report (or credit profile). Credit reporting agencies collect and organize information about you and your repayment history, and make it available to those who are considering granting you credit.

Landlords, employers, government licensing agencies, and insurance underwriters can also obtain your credit report. Lenders will look at things like:
How promptly do you pay your bills?
How many credit cards do you have?
What is the total amount of credit extended to you?
How much do you actually owe on all of your accounts?

If they find a history of late payments, bankruptcies or other collection activities, too many accounts, too much indebtedness, maxed out lines of credit, or multiple inquiries in the past 12 months, this could negatively impact your ability to get credit.

What is on your credit report? Personal identifying information - name, social security number, date of birth, current and previous address and employers, credit account information - date opened, credit limit or loan amount, balance, monthly payment, payment history, public record information - bankruptcy, tax and other liens, judgements, and (in some states) overdue child support, inquiries - names of companies that got your credit report.

Your credit report does not contain information on checking or savings accounts; medical history, race, gender, religion or national origin; credit scores; friends; political preferences; or criminal record.

Negative information stays on your credit report for 7 years --10 in the case of some bankruptcies. P ositive information stays on indefinitely. Inquiries stay on for 6 months to 2 years, depending on the type of inquiry.

Credit Info

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Did you know that most mortgage lenders use a three-digit credit score to determine your loan eligibility? It is called the FICO score. FICO stands for "Fair Isaac Credit Organization". This score is based on the information contained in your credit report. And the interest rate you will be charged is based on your credit score, the better the interest rate on your loan. Why? Because the higher your credit score, the better your lender feels about lending you money. Essentially, the FICO score measures your credit risk. You can save money on a mortgage loan simply by improving your credit score as much as possible.

Each lender sets its own guidelines for approving loans and issuing credit.

FICO scores generally range between 300 to 875. Since the FICO score guidelines vary with loan amounts, loan type, etc., it is best to check with your lender on how your FICO score affects you and your loan terms.

Since lending varies from company to company, this information offers only general guidelines.

Your debt-to-income ratio also plays a role in determining whether or not you will be issued credit. The debt-to-income ratio measures your obligated debt (car loans, student loans, credit card payments, etc.) as a percentage of your income.

Ask your lender to calculate your debt-to-income ratio, and ask your lender to explain how you can get a better loan with better terms if you improve your debt-to-income ratio.

FICO Scores Effect Purchasing

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FICO® scores were developed by Fair Isaac & Company, Inc. for each of the credit repositories. The scores are: (Equifax) Beacon®, (Experian formerly TRW) Experian/FICO and (TransUnion) Empirica®. They are simply repository scores meaning they only consider the information contained in a person's credit file; they do not consider a persons income, savings or amount of a down payment for a mortgage.

The scores were designed to assess risk. They are useful in directing applications to specific loan programs and to set levels of underwriting, i.e. streamline, traditional or second review. The scores are objective, consistent, accurate and fast.

Many people in the mortgage business are skeptical about the accuracy of FICO scores. Scoring has only been an integral part of the mortgage process in the past few years; however, the scores have been in use since the 1950's by retail merchants, credit card companies, insurance companies and banks for consumer lending. The data from large scoring projects emphasizes the accuracy, the predictive quality of the scores. Large portfolios have been scored for mortgage servicing and investment groups, and again, they demonstrate that FICO scores work.

The scores were developed from each repository's database using actual loan performance. A sample of over 750,000 consumers per repository was used. The repositories have each made great strides to increase the accuracy of their respective database through computer technology and internal monitoring. There is a new standard reporting format for credit grantors to use when sending electronic information to the repositories; this is the critical first step to providing accurate data.

The scores use a multiple scorecard design. Each repository uses 10 individual scorecards, and the models at each repository are the same. This increases accuracy and optimizes the predictive variables for each subpopulation. (For example, a borrower with two 30-day late payments will be scored against a population with some minor delinquencies.) This feature may cause a borrower with delinquencies to score in the same range as a borrower without delinquencies. Scorecards are reviewed and updated every twenty-four months.

The actual scoring process is proprietary, and the algorithms are copyrighted. We can share the predictive variables, the portion of the credit file considered and the weight as provided by Fair Isaac. They are:

Previous credit performance (35%)
Current level of indebtedness (30%)
Time credit has been in use (15%)
Types of credit available (15%)
Pursuit of new credit (less than 5%)

FICO has changed the way it factors credit checks, inquiries. These changes should minimize the "negative" effects that aggressive rate shopping or the normal mortgage process can have on a mortgage applicant. In the new Beacon version, the deduping process has been expanded beyond seven days. One variable counts the number of days within 365 days of scoring. If there has not been an inquiry, the deduping mechanism is not activated. If there is a consumer originated inquiry within the past 365 days from mortgage or auto related industries, these inquiries are ignored for the first 30 calendar days from scoring; then, multiple inquiries within the next 14 days are counted as one. Each inquiry will still appear on the credit report.

Scores should not change significantly because the variable in the model using inquiries contributes less than 5% of the predictive power of the model. According to Equifax statisticians, an average of 5% of the credit reports in the Equifax consumer credit reporting database (over 200 million consumer files) will see a change in score due to this. Fewer than 5% of those will see a change significant enough to effect a loan decision.

In order to get a score a borrower must have the following conditions in his/her file:

No "Deceased" indicator on the credit file
At least one undisputed trade line that has been updated in the last six months
One trade line open at least six months

Scores range from 350 (high risk) to 950 (low risk). A scorecard of 660 will be 660 on Beacon 96, Empirica and Experian/FICO if the data on each file is the same. However, each repository is likely to contain different data.

Every score is accompanied by a maximum of four reason codes. Reason codes identify the most significant reason that a consumer did not score higher. They are not red flags. Consumers with scores in the 800 range get reason codes just as consumers with scores in the 500 range. The reason codes may be used in describing to the consumer the reason for adverse action. Scores are not part of the credit file and are not covered by the Fair Credit Reporting Act. Scores, if disclosed to the consumer, must be related to the credit file - using the reason codes - since the score has no meaning in itself; the meaning or risk level is assigned by the lender and the investor.

When applicants have erroneous information reported, document the inaccuracies. The easiest way to do that is to have your credit-reporting agency upgrade the merged in-file to an edited mid-range report or to a Residential Mortgage Credit Report. With the upgraded report, you can ignore the score! The file will have to be handled in a traditional manner for underwriting and investment purposes. The developed report will provide the paper trail that investors want.

Property Rights

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You have a right to do with the land as you please, subject to restrictions imposed by law. When you own land, you can do many things with it, such as:

use it
rent or lease it to others
sell or transfer it
give it away
use it as collateral for a loan
bequeath it to intended beneficiaries (by will or trust upon your death)
let it sit where it is without doing anything to it
(although this could create problems due to restrictions imposed by law.)

Real Property Definition

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Real property is generally defined as land and the things permanently attached to the land. Things that are permanently attached to the land are also known as improvements, and include such things as homes, garages, buildings, trees, etc.

Anything that is not real property is usually considered personal property.

Substances that are beneath the land (such as gas, oil, minerals) are also considered permanently attached. When purchasing a property, you should verify if these items are included in the sale.

When buying a property, it is very important to verify what is included in the sale, and what is not included in the sale. Do not assume! Verify the information in writing.

Property Investment

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If that's the question that keeps you up at night, welcome to the club. Many investors are wondering where to park their cash. And with the stock market in the dumps and real estate going gangbusters, who hasn't wondered if becoming the next Donald Trump is where it's at?

Nationally, housing prices are up 6.4 percent as of August, but in some places they've soared more than 20 percent in the past 12 months, the National Association of Realtors reports. Why not bag the bears and bulls, purchase a tax-friendly rental property and watch your investment grow? After all, you reason, it'll continue to appreciate while producing a steady income stream.

Trouble is, it's not that simple. Housing prices do fall from time to time and there's already word of a housing bubble that's likely to pop.

So, let's say you've got an extra $100,000 or just came into a $50,000 inheritance. Do you plow it into real estate or put your faith in Wall Street?

The quick answer: There isn't one. Yes, real estate can pay off big time - as can stocks. But both can plummet in value. And while real estate may provide steady rental income, it's a non-liquid asset so you can't sell it in a pinch. Variables aside, however, there is some math to crunch. So pull out that calculator and let's take a look.

First, consider the two ways you can potentially make money on rental property. That'd be rental income and/or a fat payout if you sell the place at a profit.

If you've got a monster mortgage and high expenses, rent may not cover your overall costs, even though they're deductible. By the way, don't forget some of those costs could include a professional caretaker to deal with tenants if you're not the kind of person who wants to put a lot of effort into property management.

Once you figure the costs, you've got to determine if your rent will leave you in the red or the black. In general, if you want to break even your rental income should equal 10 percent of the property's value.

So, let's say you take that $50,000 and use it as a 20 percent down payment on a $250,000 rental home – can you make at least $25,000 in rent a year? Check out ads for rental units in your area to see if your projection holds up.

These days, while the housing market remains hot, you may have trouble renting at all. If someone can buy as cheaply as renting, they'll often buy. That means landlords have to lower prices to attract tenants. In fact, they're already doing so. While rents have risen about 3.5 percent nationally in the past decade, this year they're down an average of 2 percent. And in some markets, like San Jose, San Francisco and Austin, rents have dropped 12 percent to 25 percent in the past year, according to NAR.

"We're looking at a very strong housing market so more renters are becoming homeowners," said NAR economist Sigrid Fennemore. In fact, rents should drop nationally by another 1 percent next year, she predicts, as massive layoffs take their toll.

As it turns out, it doesn't take much to beat the Street. Consider your $250,000 rental property.

If it climbs 6 percent in value the first year - the historic average annual gain on housing nationwide - you'd be sitting on an asset worth $265,000. You would have made 30 percent on your $50,000 downpayment.

"That's the effect of leveraging," said Gerald Weiss, a certified financial planner in Dublin, CA, who notes the value of your entire investment goes up, rather than just the value of the downpayment you contributed.

Now let's try a similar equation using stock investments.

Assume you plunk that $50,000 into an S&P 500 index fund that returns a conservative (though difficult to achieve lately) 8 percent. That's a $4,000 gain.
Not bad. But in order to make the same amount on your rental property, it would have had to appreciate far less – by just 1.6 percent. (To do the math, divide $4,000 by $250,000 and you'll get 1.6 percent.)

So, is real estate a slam dunk?

NO.

Experts like Schatsky and Weiss say they advise clients to have 5 percent to 10 percent of their portfolios in real estate – including Real Estate Investment Trusts (REITs).

REITS have earned more than 30 percent since 2000 - plus they've delivered 7 percent dividends. Best, to make this money you never have to deal with a tenant.

Property Trust(s)

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An REIT is a company dedicated to owning and, in most cases, operating income-producing real estate, such as apartments, shopping centers, offices and warehouses. Some REITs also are engaged in financing real estate. Most importantly, to be a REIT a company is legally required to pay virtually all of its taxable income (90 percent) to its shareholders every year.

An REIT may deduct the dividends paid to the shareholders from its corporate tax bill so long as —

the company's assets are primarily composed of real estate held for the long term,
the company's income is mainly derived from real estate, and
the company pays out at least 90 percent of its taxable income to shareholders.

The main benefit of being a REIT: one level of taxation.

The main limitation of being a REIT: a restriction on earnings retained by the company.

For a REIT to grow, capital must come from money raised in the investment marketplace as well as money generated internally. REITs, like other stocks, are carefully monitored by others, including the SEC, each REIT's independent directors, independent auditors, and the business and financial media.

Real Estate Negotiation

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Are you selling your property? When you receive an offer from a potential buyer, make sure you understand the contract and such things as what you are committed to pay for, deadline (contingency) dates and available options under the contract. Seek legal advice.

When reviewing a contract, be careful aware of clauses that have you paying a buyer's closing costs, and of course you should watch out for all the contingencies that could cost you time with your home off the market. If the buyer wants to close on the sale contingent with the selling of his or her house, include a kick-out clause that will allow you to back out of the contract within a specified period of time if you receive an offer that does not contain contingencies and that you would rather accept.

You might want to have your real estate agent obtain an estimate of your net proceeds from the sale from an escrow officer. In that way, you can understand the financial outcome of the offer.

Buyers vs. Sellers Market
It is important to understand how the real estate market is working in your local area. Is it a buyer's market? A seller's market? Is the market neutral? This will affect your position in the negotiations.

Buyers Market - The real estate market has more sellers than it has buyers. Buyers will find plenty of homes that they can consider to purchase, and even have the opportunity to revisit them again for comparisons, before submitting an offer.

Sellers Market - The real estate market has more buyers than it has sellers. Home sellers will likely receive multiple offers (i.e., more than one offer) on their property.

Offer and Counter Offer - Making it work

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The following represents the common offer and counter offer pitfalls

Avoid moving too fast.
It can be tempting to push negotiations through quickly, especially if you need to sell for financial or relocation reasons, or if the market is fast (if there are many buyers but few listings). Take the time to read offers carefully. If a buyer makes a low offer because the house needs repairs, make sure the buyer's estimate of the cost of those repairs is accurate. It may be better to make the repairs yourself before selling, rather than accept a big price cut.

Keep emotions out of the negotiations.
Remember that the house you are selling is a commodity. Don't take offense at comments about the landscaping or decor, especially when the buyer makes a lower offer based on those factors. If the market is not in your favor, you may have to offer a decorating allowance or accept a lower price. If you're in a seller's market, make a counter. In any case, don't take it personally.

Continue to to counter.
Countering an offer is a time-honored tradition in real estate. Countering means that you come back at the buyer with a different price or different terms - in other words, you make a "counter offer" to the buyer. Remember that negotiating to sell a house is a give-and-take process. If you fail to counter offers, you may end up accepting a lower price for your home in the long run. Make all counteroffers in writing to avoid misunderstandings.

Bargain in good faith.
If you aren't serious about selling your property—that is, you won't accept anything but an overpriced offer—you probably shouldn't be in the market. If you're a serious seller, watch out for the bad-faith buyer who will waste your time by making unacceptably low offers or engaging in endless negotiations. Even worse are bad-faith buyers who misrepresent their ability to purchase your home and take you off the market for several weeks before their failure to secure financing nullifies the contract. If you have any qualms about a buyer's means, ask for a pre-approval letter from a lender.

Sell Your Home Fast

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In today's real estate market, sellers want help to learn effective selling strategies to help sell their home fast.

Here are some tips to help you:

Set your price right -- accurate pricing sells a home faster than any other factor.
Good first impression -- The first impression that a buyer gets is very important. Take a look at your home objectively, as if you were the buyer.
Top condition -- The home that sparkles will stand out from the others.
Smart improvements -- Some improvements prior to marketing your home will make money for you, and shorten the marketing time for your property. Fresh paint, clean or new carpeting, and other improvements may make a real difference.
Team effort -- Selling your home is a team effort - between you, your agent, and other agents who show your home to prospective buyers.

Consult with your real estate agent for additional ideas to help you sell your home in your marketplace.

Real Estate Tax Advice

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You may qualify to exclude from your income all or part of any gain from the sale of your main home. Your main home is the one in which you live most of the time.

Ownership and Use Tests

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least 2 years (the ownership test) Lived in the home as your main home for at least 2 years (the use test) Gain

If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

If you can exclude all of the gain, you do not need to report the sale on your tax return If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040) Loss

You cannot deduct a loss from the sale of your main home.

Worksheets

Worksheets are included in Publication 523, Selling Your Home to help you figure the:

Adjusted basis of the home you sold
Gain (or loss) on the sale
Gain that you can exclude
Reporting the Sale

Do not report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable. Report any taxable gain on Schedule D (Form 1040).

More Than One Home

If you have more than one home, you can exclude gain only from the sale of your main home. You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

Example One:

You own and live in a house in the city. You also own a beach house, which you use during the summer months. The house in the city is your main home; the beach house is not.

Example Two:

You own a house, but you live in another house that you rent. The rented house is your main home.

Business Use or Rental of Home

You may be able to exclude your gain from the sale of a home that you have used for business or to produce rental income. But you must meet the ownership and use tests.

Example:

On May 30, 1997, Amy bought a house. She moved in on that date and lived in it until May 31, 1999, when she moved out of the house and put it up for rent. The house was rented from June 1, 1999, to March 31, 2001. Amy moved back into the house on April 1, 2001, and lived there until she sold it on January 31, 2003. During the 5-year period ending on the date of the sale (February 1, 1998 - January 31, 2003), Amy owned and lived in the house for more than 2 years.

Amy can exclude gain up to $250,000. However, she cannot exclude the part of the gain equal to the depreciation she claimed for renting the house.

Property Inspection

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When you have an accepted offer, one common contingency is that the home buyer hire and have an inspector or inspectors come to the property.

It is important for you, as the home seller, to remember that the inspector is paid to discover and inspect. The inspector will generally find issues --- conditions that the seller may not know about, or conditions that the seller has lived with for so long that they have forgotton about them or them may seem unimportant. Does every electrical receptacle work? Maybe not. And maybe you, the home seller, put furniture in front of that non-working receptacle and then forgot about it.

Most home sellers are nervous about the buyer's home inspection. In a transaction, the buyer's inspection will discover issues. Your real estate agent can be a real asset during this process.

If you agree to make repairs as a result of the inspection, ask your real estate agent how to best handle the repairs. Make sure you get any agreement with the buyer in writing.

You might want to read the information we have for home buyers about the home inspection.

Handling Offers on Your Property

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If you are in a real estate market where you might expect to receive multiple offers for your home, you may be faced with a difficult decision. Many sellers hope for multiple offers, but when presented with these multiple offers, find themself in a quandry. Multiple offers are a classic example of economic realities because they appear when the supply of homes for sale is limited and the demand for good-condition homes is strong. Sellers love multiple offers because they push up home prices and create an opportunity to spark a bidding war. Knowing how to respond to multiple offers can help you get the best price and terms for the sale of your home.

How can I make sure my home will attract multiple offers?
Hit the market at the right price and, assuming your home is in good condition, multiple offers should come in. Of course, in a challenging real estate market climate, it may not be an immediate occurrence.

TIP: Make sure your listing agreement states that your agent will put your home in the Multiple Listing Service (MLS) within 24 hours. Some agents will hold a home off the MLS for a day or two in hopes of selli ng it themselves or in-house (meaning by another agent within the same firm). Putting the home in the MLS as soon as possible is in the seller's best interest because the home then will be exposed to a much larger number of potential buyers.

Do I have to accept the offer with the highest price?
No. If you prefer a lower-priced offer, perhaps with a better qualified buyer or more attractive terms, you can accept that offer instead. Or you can give counteroffers to one or more of the buyers. Caution: If you reject a full-priced offer, you may owe your agent a full commission even if you don't sell your home.

Being greedy can back-fire. Don't stall a buyer. Many times, they will walk away and find another, newer listing with more negotiable sellers.

My agent says I should receive all my offers by fax, rather than having the buyers' agents present the offers. Is that okay?
Some agents recommend the fax-only option. However, sometimes you would want to meet the agent representing the buyer to ask questions and help understand the buyer's offer. If there are multiple offers, the fax-only practice is a time-saver for you and the agents. However, the jury is still out on this practice.

TIP: You might want to receive all the offers by fax, then have the top offers presented. Either way, you, as the seller, make the rules.

One of the buyer's agents is from the same brokerage company as my agent. Should I give extra consideration to this "in-house" offer?
No. All offers should be evaluated equally based on the price and terms. You want to pick the offer that best works for you, the seller, not for your agent.

TIP: Some brokerages give the seller a commission break for an in-house transaction. This concession is known as a "variable commission" or "listing broker advantage." It should be discussed in advance and disclosed through the MLS.

Can I counter more than one offer?
Yes. However, if you accidentally accept more than one offer you could be legally obligated to sell your home to two buyers. For safety's sake, use a standard counteroffer form that says the counteroffer isn't accepted until it is signed by the buyer and subsequently accepted by you.

Can I back out of my escrow with buyer A and accept a new higher offer from buyer B that my agent just received?
Trying to back out of an escrow is extremely unwise because an accepted purchase offer is a legal contract and the buyer can take action to enforce it. You should direct any and all legal questions and concerns with your legal advisor/professional.

My home has been on the market for four weeks, but I haven't received any offers. Who's at fault?
If you ignored your agent's advice about pricing your home or making any repairs, it's not really reasonable to blame the agent for the lack of offers. However, if the home is priced right and in good condition, you'll want to have a frank conversation with your agent and take corrective action. Review marketing efforts, including internet marketing. Express any concerns and give your agent an opportunity to make it right.

After the Open House

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Selling your home in today's real estate market involves doing whatever it takes to get your home sold. One "tool" that an agent uses is the public open house. Generally held on the weekend, the purpose is to attract potential buyers.

So, you've been gone during the open house time. Returning home, your agent is closing up your home after a weekend open house. Here are some questions you might want to ask about the open house:

1. How many people stopped by and who were they? If the turnout was disappointing, you may want to ask your agent about his or her efforts to attract people to the event. Was the open house listed in the newspaper? On the internet? In the multiple listing service? Was it mentioned around the agent's office? Did any of your neighbors drop by? How many directional "open house" signs were used?

2. When and how will the agent follow-up with prospective purchasers or their agents? Buyer prospects who seem well-qualified should be contacted as soon as possible after the event and asked whether they're interested in seeing the home again, have any questions or concerns about the home or are planning to make an offer to purchase it.

3. What positive and negative feedback did the agent receive about the home? You'll certainly want to know what people are saying about your home, but don't take minor criticisms too personally or overreact to any one person's comments. Do pay attention to repeated criticism of one or more specific aspects of your home. You can disregard one person who dislikes your taste in wallpaper, but if several people make the same comment, you might want to have that offensive pattern stripped off.

4. Did any problems or mishaps occur during the open house? Many open houses attract only a handful of visitors, but it's also entirely possible for 15 or 20 people to come through your home in a couple of hours. If there were any problems -- someone injured a knee on your glass -- topped coffee table or slipped and fell on the wet grass in your backyard-you'll want to know about it.

5. What's next? Now that the open house is over, what else is your agent planning to do to find a buyer for your home? Does the agent intend to continue with the existing marketing tactics or will some new plans be put into action? Would another open house be worthwhile?

OPEN HOUSE TIP: Some surveys suggest that open houses are more beneficial for the agent than the home seller and that only a tiny percentage of homes are sold as the direct result of an open house. However, in a challenging real estate market, sometimes buyers are more comfortable wondering around on their own on the weekends, looking at houses, rather than go out with an agent. Discuss the pros and cons of holding multiple public open houses with your real estate agent.

Real Estate Open House

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The weekend open house is a time-honored tradition in real estate sales.

In 1998, the Real Estate Center at Texas A&M University conducted a survey. The survey results hint at the notion that public open houses may be more beneficial for the agents themselves than for the home sellers. Almost all the agents who responded to the survey (97 percent) had held public open houses, but only 41 percent believe those events help sell the home that's being showcased. Thirty-two percent believe public open houses attract many potential buyers, but nearly three-fourths also believe those buyers are more likely to buy a home other than the one being held open. And 62 percent say most people attending open houses aren't serious buyers at all.

However, in today's real estate market (ten years later), public open houses may be more important than ever before. Many buyers are hesitant to commit to a property. By going to open houses (generally held on the weekends), potential buyers are able to look at houses without their realtor, and, therefore, without having to commit to a property. This relaxed approach is exactly what some buyers need to help make their decision to buy a property.

Public open houses also present a security issue for home sellers and agents. "Whether or not to hold an open house is a concern among agents," says Jack Harris, a research economist with the Texas A&M center. "Agents must be on-site for the duration of open houses. Safety is a growing concern because there is no way to know whether a visitor is a serious buyer, just curious or has more sinister motives."

Of course, if your agent is going to have a public open houses, find out what supplemental marketing efforts (e.g., advertising the open house in a local newspaper, and/or on the internet) he or she will use to attract serious buyers for your home to the event.

Weekday agent open houses (also called "broker opens") remain popular and, agents say, worthwhile for sellers. "Agent open houses are held when the listing agent invites other agents to view the home when first placed on the market, hoping one or more agents will have a buyer interested in the home," Harris explains.

Virtually all of the respondents had held agent open houses. More than half believe agent open houses are effective and 65 percent believe they're more effective than public open houses.

On the day when your agent holds a broker open, or a public open house, help make it a success. Be sure your home is as presentable and attractive as you possibly can make it.

Real Estate Marketing

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Your home should be listed, whenever possible, in the local Multiple Listing Service (MLS) and on our website, which has a huge online database of homes and virtually 100% of potential buyers who look for property on the Internet.

Advertising
The largest expense for a real estate agent has traditionally been classified advertising in local newspapers. However, today properties are also exposed through popular Internet home search/listing services, and real estate guides. Utilizing print advertising together with maximum internet exposure is critical to a successful marketing campaign.

Even with these additional advertising venues, a real estate "For Sale" sign on the front lawn are still remarkably effective. Many realtors use brochure boxes along with these signs to market the property. When appropriate, and with your permission, your agent may send a mailing about your property to neighbors. Sometimes one of them has a friend or relative who always wanted to live in the same neighborhood.

Showings and open houses
To prepare your home for viewing, make it as light, cheerful and serene as possible. Your realtor will probably find a tactful way to suggest that you not be present while the house is being shown to prospective buyers. This is done because your presence will inhibit their actions and conversations. They won’t feel free to open closets and cabinets, test out the plumbing, and discuss their observations objectively as they walk through. It goes without saying that your children and pets should not be on the premises either.

If your realtor has scheduled an open house, you may want to notify the neighbors, and assure them that they'll be welcome. They'll appreciate the chance to look around in your house, and sometimes they can turn up a buyer among their friends. In preparing for an open house, you should:

Pull the drapes back
Light lamps
Simmer a few drops of vanilla on the stove
Light your fireplace
Set the dining room or kitchen table if you have particularly nice linen or china
Put fresh towels in the bathroom
Leave the house so your realtor is free to deal with prospective buyers in a professional manner.

When preparing your home, think about the techniques that are used to show builders' model homes. You want your home to look like a model home.

How long has your house been on the market?
Professional appraisers sum up their entire body of knowledge in three words -- "Buyers make value." Your home is worth as much as some member of the buying public will come forth and pay for it. After it's been on the market for months, you've been given a clear message that the property may not be worth what you're asking for it. This is particularly true if there haven't been many prospects coming to see it. What you do at that point depends on whether you really need to sell, and whether you're working with a time limit. If you're not really motivated to move soon, you can always wait - years if necessary - and hope inflation will catch up with the price you want. Buyers become suspicious of a house that's been for sale for a long time.

If, however, you do need or want to sell, discuss with your realtor a schedule for reducing your price gradually until you find a level that attracts buyers. There's no point in saying, "We simply can't sell our house." Homes sell --- if the price is right.

If you’re buying another home
Don’t spend a great deal of time worrying about what will happen when you're selling one home and buying another. You're not alone. Realtors, lawyers, title and escrow companies have had plenty of experience in arranging contracts and loans so that the two transactions work together smoothly. In today's real estaet market it's best to list your present home for sale first.

Selling and buying a home is a very emotional event and if you create a "race" by locating your replacement property before you sell your current home, you may lose it to another buyer, who does not need to sell in order to buy. If you do find just the house you want, you can always put in a purchase offer contingent (dependent) on selling your present one. However, in a hot market you will have difficulty getting the house you want this way.

Sometimes the seller will sign a contract agreeing to wait a certain period of time while you find a buyer for your house - sometimes not. What would you do if you were presented with such a proposal, from a buyer who also has a house to sell? If you do find that you need to buy the next house before you've received the proceeds from the present one, lending institutions can sometimes make you a short-term "bridge" loan to tide you over between the two transactions. Make sure you fully understand the exposure and emotional investment before proceeding with this type of loan.

Listing Real Estate

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Realtors and buyers often work together without a written contract, but the opposite is true for realtors and sellers. On the listing side, written contracts are overwhelmingly the rule, not the exception. A listing agreement is a binding legal contract that shouldn't be taken lightly. As a seller, you should read the contract carefully and understand what it means before you sign. If you you need legal advice, consult an attorney.

Listing contracts vary considerably from place to place. However, most realtors use established listing agreement forms that are the de facto industry standard in their area or are dictated by their brokerage company. Everything on these preprinted forms is negotiable.

Here are some basic terms to consider:

1. Term of the Agreement. A longer agreement benefits the agent because it allows him or her more time to find a buyer for your home. In a weak market, that's okay, but if homes are selling quickly, you don't want to be committed to one agent for more than a few months. If the home doesn't sell within the initial period and you're satisfied with the agent's efforts, you can offer to extend the term of the agreement before it expires.

2. Commission. Although commissions are negotiable, most areas have a standard percentage that agents expect to receive. Whether you want to pay the percentage that's typical in your area or negotiate a lower rate is up to you. A lower commission will save you money. A higher commission will give the agent more incentive to invest in marketing your home. Other agents - those representing potential buyers - can find out how much commission is offered on your home through the multiple listing service (MLS).

3. MLS. A listing agreement typically authorizes your agent to post your home in the MLS. Unless you're selling a very exclusive property or have serious personal privacy concerns, the MLS is invaluable because it helps the agent market your home to the widest possible group of potential buyers. Today, most MLS databases are accessible by consumers on the Internet. The public does not have access to commission information on the listings.

4. Lockbox. A lockbox is a key-holding safe that can be inconspicuously attached to the front of your property. Any agent who has the means of accessing the lockbox (e.g., the key or combination) can retrieve the keys to your home, unlock your door and show your home to prospective buyers even when neither you nor your agent is present. If you're concerned about strangers entering your home alone, don't authorize a lockbox. If your home is vacant, located in a low-crime area or if you've removed your valuables and are willing to take the risk, a lockbox might be reasonable. The more people who see the property, the better chance you'll have of selling it for a favorable price. And, a lockbox will increase the number of showings because it is easy for an agent to gain access.

Ideas to help sell your home

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Making a good first impression can mean the difference between receiving serious offers for your home or being subjected to months of lookie-loos dropping by but never buying.

How can you ensure that your home will make the best impression possible? Here are six tips for savvy home sellers:

1. Focus on curb appeal - The outside of your house can be the source of a very good first impression. Keep the grass well-watered and mowed. Have your trees trimmed. Cut back overgrowth. Plant some blooming flowers. Store toys, bicycles, roller-skates, gardening equipment and the like out of sight. Have at least the front of your house and the trim painted, if necessary. Sweep the porch and the front walkway. After dark, turn on your front porch light and any other exterior lighting.

2. Clear out the clutter - Buyers will not purchase a home they can't see. If your home has too much furniture, overflowing closets, crowded kitchen and bathroom countertops or lots of family photos or collectibles on display, potential buyers won't be able to see your home. Get rid of anything you don't need or use. Fill up your garage or rent some off-site storage space if that's what it takes to clear out your home.

3. No smells here! - Many people are oblivious to scents, but others are extremely sensitive to offensive odors. To eliminate bad smells, bathe your pets, freshen the cat litter box frequently, shampoo your carpets, dry clean your drapes, and empty trash cans, recycling bins and ash trays. Place open boxes of baking soda in smell-prone areas, and refrain from cooking fish or strong-smelling foods. Introduce pleasing smells by placing flowers or potpourri in your home and using air fresheners. Baking a fresh or frozen pie or some other fragrant treat is another good idea.

4. Make necessary repairs - Buyers expect everything in their new home to operate safely and properly. Picky buyers definitely will notice - and likely magnify - minor maintenance problems you've ignored for months or even years. Leaky faucets, burned-out light bulbs, painted-shut or broken windows, inoperable appliances and the like should be fixed before you put your home on the market. These repairs may seem small, but left undone they can lead buyers to question whether you've taken good care of your home.

5. Introduce lifestyle accessories and make your home as comfortable and attractive as possible - Set the dining room table with your best dishes. Put out your only-for-company towels. Make up the spare bed. Hang some fresh curtains. Put some logs in the fireplace. Use your imagination.

6. Get a buyer's-eye view - Walk up to your home and pretend you've never seen it before. What do you notice? How do you feel about what you see? Does the home seem inviting? Well-maintained? Would you want to buy this home? Your answer should be an enthusiastic yes!

MAKE A GOOD IMPRESSION INSIDE AND OUTSIDE!

Multiple Offers

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Are you in a "seller's market"? A "seller's market" in one in which competition for houses gives a seller the advantage. It is the result of all kinds of things we do not have control over, from the economy to the sudden and amazing popularity of any given city or neighborhood.

When this happens, home prices tend to rise with the demand, and home buyers are much more likely to meet or even exceed your asking price. When the market is "hot", the chances are very good that you will be faced with multiple offers.

If you have a listing agent, this will be one of those times when you will be glad you do, as he or she will be able to lead the process and handle all the finer points of the negotiating.

Here are some decisions you will be faced with:

Should you give a counter offer to all buyers? If not, how many will you give counter offers to?
What are the terms of your counter offer(s)?
How long do you give the buyer(s) to repond to your counter offer?
What if every counter offer is returned? How do you select the "right" offer?

The other most important tool that you can bring into a multiple-offer scenario is an awareness of the legal land mines, and of course a sense of ethics, and lets not forget negotiating etiquette! It is during the multiple offer process that you will really appreciate the value of your real estate agent!

Sell Real Estate

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Are you getting ready to sell your home? Where do you start? What should you do to get your home show-ready?

From experience, realtors know that a "well-polished" house appeals to more buyers and will sell faster and for a higher price. Additionally, buyers feel more comfortable purchasing a well-cared for home because if what they can see is maintained, what they can't see has probably also been maintained. In readying your house for sale, consider the following:

How much should you spend to get your home ready to market?
Does your home have curb appeal?
What needs to be done to prepare the interior?

How much should you spend to get your home ready to market?
In preparing your home for the market, spend wisely. It doesn't have to take a lot of money. Buyers will be impressed by and will appreciate a new roof, but they aren't likely to give you enough extra money to pay for it. There is a big difference between making minor and inexpensive "polishes" and "touch-ups" to your house, such as putting new knobs on cabinets and a fresh coat of neutral paint in the living room, and doing extensive and costly renovations, like installing a new kitchen. Your realtor, who is familiar with buyers' expectations in your neighborhood, can advise you specifically on what improvements need to be made. Don't hesitate to ask for advice.

Does your home have curb appeal?
Before putting your house on the market, take as much time as necessary (and spend your money wisely) to maximize its exterior and interior appeal. Here are some tips to enhance your home’s exterior and curb appeal:

Keep the lawn edged, cut and watered regularly.
Trim hedges, weed lawns and flowerbeds, and prune trees regularly.
Check the foundation, steps, walkways, walls and patios for cracks and crumbling.
Inspect doors and windows for peeling paint.
Clean and align gutters.
Repair and replace loose or damaged roof shingles.
Repair and repaint loose siding and caulking.
In Northern winters, keep walks neatly cleared of snow and ice.
During spring and summer months consider adding a few showy annuals, perhaps in pots, near your front entrance. Flowers are a great way to bring a "smile" to your front entrance!
Re-seal a cracked and damaged asphalt driveway.
Keep your garage door closed.
Store RVs or old and beaten up cars elsewhere while the house is on the market.
Apply a fresh coat of paint to the front door.

What needs to be done to prepare the interior?
Here are some ideas to enhance your home’s interior:

Give every room in the house a thorough cleaning. It is important to remove the clutter, so buyers can see the home (not your "stuff"). This alone will make your house appear bigger and brighter. Some homeowners with crowded rooms find it helpful to rent storage garages and move our extra furniture and belongings (including those from the garage), thereby creating a sleeker, more spacious look.
Hire a professional cleaning service, once every few weeks while the house is on the market. This may be a good investment for owners who are busy elsewhere.
Remove the less frequently used, even daily used items from kitchen counters, closets, and attics, making these areas much more inviting. Since you're anticipating a move anyhow, holding a garage sale at this point is a great idea.
If necessary, repaint dingy, soiled or strongly colored walls with a neutral shade of paint, such as off-white or beige. The same neutral scheme can be applied to carpets and linoleum.
Check for cracks, leaks and signs of dampness in the attic and basement.
Repair cracks, holes or damage to plaster, wallboard, wallpaper, paint, and tiles.
Replace broken or cracked windowpanes, moldings, and other woodwork. Inspect and repair the plumbing, heating , cooling, and alarm systems.
Repair dripping faucets and showerheads. Buy showy new towels for the bathroom, to be brought out only when prospective buyers are on the way.
Spruce up a kitchen in need of more major remodeling by investing in new cabinet knobs, new curtains, or a coat of neutral paint.

Think of this as "home detailing", much like you would do "car detailing" if you were selling a car.

Real Estate List Price

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An agent can help you set your best list price because they have access to data you may not! Consider the free home evaluation tool. This is but a small taste of the data at the fingertips of of your real estate agent!

Pricing considerations -
In setting the list price for your home, you should be aware of a buyer’s frame of mind. Consider the following pricing factors: If you set the price too high, your house won’t be picked for viewing, even though it may be much nicer than other homes on the street. Compared to other houses for sale, your home simply looks too expensive to be considered. If you price too low, you'll short-change yourself. Your house will sell promptly, yes, but you may make less on the sale than if you had set a higher price and waited for a buyer who was willing to pay it.

Using comparable sales -
No matter how attractive and polished your house, buyers will be comparing its price with everything else on the market. Your best guide is a record of what the buying public has been willing to pay in the past few months for property in your neighborhood like yours. Ask your real estate agentto provide you with data on sales figures for those "comps", and analyze them for a suggested listing price. The decision about how much to ask, though, is always yours.

Consider market conditions -
A Comparative Market Analysis (CMA) often includes Days on the Market (DOM) for each comparable house sold. When real estate is booming and prices are rising, houses may sell in a few days. Conversely, when the market slows down, average DOM can run into many months. Your real estate agent can tell you whether your area is currently a buyer's market or a seller's market. In a seller's market, you can price a bit beyond what you really expect, just to see what the reaction will be. In a buyer's market, if you really need to sell promptly, offer an attractive bargain price.

Housing Market Info

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Homeowners have a seemingly insatiable appetite for information about the housing markets. "Are prices going up? How's the market? Is now a good time to sell?" they ask. Research reports and newspaper articles provide useful answers, but the information is usually buried in economic jargon. What is a "median price" anyway? What does "seasonally adjusted" mean? Does anyone understand "unsold inventory index?"

To help you follow the numbers, here are some helpful definitions:

Median price - An oft-cited indicator of the strength and direction of a housing market, a median price is the midpoint of all the prices of homes sold in a given area during a specified period. Midpoint means half the homes sold for higher prices and half the homes sold for lower prices. The median isn't the same as the average, which would be calculated by totaling all the prices and dividing by the number of prices. The median price can be affected over time by the characteristics and sizes of homes sold as well as price trends. For example, if the market shifts from starter homes to luxury mansions, the median price will increase even if homes are not appreciating in value.

Seasonally adjusted - Housing markets are naturally more active in the spring and summer months because people prefer to move during the longer warmer days and between school years. That pattern means it's difficult to make meaningful comparisons between results for different months or quarters of the same year. To overcome this hazard, economists statistically tweak the reported number of homes sold during various periods to reflect seasonal variations. The tweaked numbers are denoted as "seasonally adjusted."

Price discount - The "price discount" is the percentage difference between the seller's initial asking price and the actual purchase price of the same home. For example, if a home were priced at $200,000 and sold for $190,000, the discount would be 5 percent. Price discounts are usually reported as an average for a set of home sale transactions. A small percentage, on average, means the market favors sellers, while a large average discount signals a buyer's market.

Unsold inventory index - This index, which indicates the pace of the market, is calculated by measuring how long it would take for all the homes currently on the market to be sold at the current rate of sales. A smaller index is a positive sign for sellers, while a higher number is good news for buyers.

Affordability index - An affordability index measures whether a typical family can qualify for a standard mortgage to purchase a typical home. A "typical" family is defined as one that earns the median income in a given area, and a "typical" home is defined as a median-priced single-family house in the same area. An index value of 100 means a median-income family has exactly the amount of income needed to purchase a median-priced home. A number higher than 100 means the family's income is more than adequate, while a number less than 100 means the typical family can't afford to buy the typical home.

Get Ready to Sell Your Home

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If you´ve decided to sell your home, chances are you´re caught up in a host of emotions. You may be looking forward to moving up to a new dream house or facing the uncertainty of a major move across country. You may be reluctant to leave your memories behind or eager to start new adventures.

Whatever feelings you´re experiencing right now, there are plenty of practical matters that need your attention. Keep in mind the following considerations to help the whole process go more smoothly.

It´s a good idea to place your home on the market as far in advance as possible of purchasing a new one. If you find a new home first and then try to sell your present home, you may wind up with two mortgages, and certainly it will add to your stress. If this does happen, ask your real estate agent or banker about a "bridge loan" to help you make the double payments. Lenders use the same criteria for offering bridge loans as they use for mortgages. Should you choose to accept a bridge loan, beware of the expense and risk; during the term of the loan you must continue to pay both mortgages. Shop around for the best terms.

Keep in mind that when people move, sell and buy, there usually is a domino effect. Closing and moving dates have to be coordinated, and the more firmly everyone commits to a window of dates and sticks to them, the better for all involved. Put all agreements about dates in writing, and protect yourself by negotiating financial penalties for failure to comply.

A home that´s visually appealing and in good condition will attract potential buyers driving down the street. Use this checklist to view your property through an outsider´s eyes.

Are the lawn and shrubs well maintained?
Are there cracks in the foundation or walkways?
Does the driveway need resurfacing?
Are the gutters, chimney and walls in good condition?
Do the window casings, shutters, siding or doors need painting?
Are garbage and debris stored out of sight?

Strong curb appeal will lure potential buyers inside, where you have to live up to their expectations. Fortunately, there are plenty of easy improvements you can make to your home´s interior without spending a lot of money. Cleaning is the best idea. Your windows, floors and bathroom tiles should sparkle. Make sure you have clean heating and air conditioning filters. Shampoo dirty carpets, repair dripping faucets and oil squeaky doors. It may not seem fair, but a peek in the oven may be the hallmark by which a buyer judges how well you have kept up your home.

Remove unnecessary clutter from the garage, basement, attic and closets. If your home is crowded with too much furniture, consider putting some things into storage. If a room needs a fresh coat of paint, use a neutral off-white. Think, too, about how your home smells. You may be used to the smell of a pet or cigarettes, but such odors can be a strong turn-off to others.

Finally, set a mood for the buyer. Make your house homey with live flowers and fresh guest towels in the bathroom. Place scented potpourri around the house or, on the day you´re expecting a potential buyer, pop a batch of frozen cinnamon rolls into the oven for a welcoming aroma.

Remember, cosmetic changes do not have to be expensive. In fact, costly home improvements do not necessarily offer a good return on your investment when you sell. It´s attention to the basics -- anything that says ´´this home has been carefully maintained -- that will help you get the price you want.

Property Appraisal

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The preparation of any appraisal begins with an interior and exterior inspection of any given home, building or property. The appraiser then looks for assets and any and all detriments that the real estate will offer by viewing the property with an objective perspective.

Some of the more important items in the property is gross living area, condition, and quality of construction. Additionally, location, layout, number of bedrooms and bathrooms, and lot size are also considered. The appraiser will also note the amenities such as central air conditioning, landscaping, fireplaces, decks, and all recent renovations including pool, fencing, kitchens and baths, etc. It is important for the home owner to point out all the amenities, or improvements that may not be completely obvious to any appraiser in a normal and considerate walk through of the property.

The appraiser will also make an assessment of the neighborhood and surrounding areas, noting any location of amenities which could be important to a home owner and/or buyer. In many cases these same items may be considered a detriment to the property based on there distance to the subject. Often, residential properties that are too close to a non residential property (such as commercial or industrial property) may be viewed as less desirable by a purchaser, and reflected as such in any appraisal report.

Real Estate Appraisal

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The appraisal process is often considered to be the process of analyzing collecting and reconciling data that relates to any home or property being appraised. This data is then formatted in an order that can lead the reader of the report to the same conclusions as the appraiser.

You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn't mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don't want to worry initially about upkeep and repairs.

Only a licensed appraiser can give an "appraisal" of the home value, but one thing your real estate agent can help you with is determining what is your home worth. Their market value analysis will examine the current homes on the market, and the sales price of homes around the area. This is especially important when writing an offer!

Tax information for home sellers

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You may qualify to exclude from your income all or part of any gain from the sale of your main home/residence. Your main home is the one in which you live most of the time.

To claim the tax exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have owned the home for at least 2 years (the ownership test) and lived in the home as your main home for at least 2 years (the use test)

If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

If you can exclude all of the gain, you do not need to report the sale on your tax return. If you have gain that cannot be excluded, it is taxable. Report it on the appropriate form with your tax return.

You cannot deduct a loss from the sale of your main home or residence.

Read more on the Internal Revenue Service website, Publication 523, Selling Your Home.

DISCLAIMER - You are advised to check with your tax advisor, financial advisor, legal advisor, and any other professionals before making a binding decision. This information is provided as a courtesy only. You agree to hold harmless this website and it's owners from the information herein

Use a Real Estate Agent to Sell Your Hom..

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One of the most complex and important financial events in peoples’ lives is the purchase or sale of a home or investment property. Because of this complexity and importance, people usually seek the help of real estate brokers and sales agents when buying or selling real estate.

Real estate brokers and sales agents have a thorough knowledge of the real estate market in their community. They know which neighborhoods will best fit clients’ needs and budgets. They are familiar with local laws and know where to obtain financing. Agents and brokers also act as intermediaries in price negotiations between buyers and sellers.

Studies have shown that sales involving a realtor involve a higher sale price than those not utilizing the services of a real estate agent.

Also, real estate agents have more marketing resources than someone who is selling their property by themselves.

Consider these things when deciding whether or not to work with a listing agent to sell your home.

If You Work with an Agent

You sign a listing contract, which is a legally binding agreement that typically gives the agent the exclusive right to sell your property within a certain period of time (usually 60 to 90 days).
The agent researches the market in order to determine your home's market value and reach a sales price in consultation with you.
The agent prepares a written marketing plan that includes a schedule for listing, showing, and advertising your property.
The agent advises you on how best to prepare your home for sale and helps arrange for pre-sale tasks such as a home inspection.
The agent transmits any offers to you, negotiates the purchase based on your recommendations, and moves all the paperwork through the transaction.
You pay for the listing agent's services, either as a percentage commission or a flat fee, as specified in your listing contract. The buyer's agent is paid out of that fee.

If You Work Alone

You are in charge of the transaction, including marketing your property, negotiating the purchase, and handling the paperwork. Educate yourself on relevant federal laws and state regulations governing real estate sales.
You do your own market research (including possibly hiring an appraiser) to determine your home's value.
You create your own marketing plan and decide how you will handle inquiries from prospective buyers or their agents.
You decide how to prepare your home for sale, including arranging for pre-sale repairs, inspections, or other necessary services.
You field all buyer inquiries, show the house yourself, handle all negotiations, and move the paperwork through the transaction.
You pay for the buyer's agent's services, unless the buyer is also working alone or has hired the agent for a set fee. You may also pay for services you require during the transaction, such as legal advice or help negotiating the contract. Discount brokers offer individual services for flat rates.

Real estate agents usually are independent sales workers who provide their services to a licensed real estate broker on a contract basis. In return, the broker pays the agent a portion of the commission earned from the agent’s sale of the property. Brokers are independent businesspeople who sell real estate owned by others; they also may rent or manage properties for a fee. When selling real estate, brokers arrange for title searches and for meetings between buyers and sellers wherein details of the transactions are agreed upon and the new owners take possession of the property. A broker may help to arrange favorable financing from a lender for the prospective buyer; often, this makes the difference between success and failure in closing a sale. In some cases, brokers and agents assume primary responsibility for closing sales; in others, lawyers or lenders do so. Brokers supervise agents who may have many of the same job duties. Brokers also manage their own offices, advertise properties, and handle other business matters.

Besides making sales, agents and brokers must have properties to sell. Consequently, they spend a significant amount of time obtaining listings —agreements by owners to place properties for sale with the firm. When listing a property for sale, agents and brokers compare the listed property with similar properties that on the market and have recently sold, in order to determine a competitive market price for the property. Once the property is sold, the agent who sold it and the agent who obtained the listing both receive a portion of the commission. Thus, agents who sell a property that they themselves have listed can increase their commission.

Most real estate brokers and sales agents sell residential property. A small number, usually employed in large or specialized firms, sell commercial, industrial, agricultural, or other types of real estate. Every specialty requires knowledge of that particular type of property and clientele. Selling or leasing business property requires an understanding of leasing practices, business trends, and the location of the property. Agents who sell or lease industrial properties must know about the region’s transportation, utilities, and labor supply. Whatever the type of property, the agent or broker must know how to meet the client’s particular requirements.

Before showing residential properties to potential buyers, agents meet with them to get a feeling for the type of home the buyers would like. In this prequalifying phase, the agent determines how much the buyers can afford to spend. In addition, the agent and the buyer may sign a contract which states the agent will be the only one to show houses to the buyers. An agent or broker uses a computer to generate lists of properties for sale, their location and description, and available sources of financing. In some cases, agents and brokers use computers to give buyers a virtual tour of properties in which they are interested. With a computer, buyers can view interior and exterior images or floor plans without leaving the real estate office.

Agents may meet several times with prospective buyers to discuss and visit available properties. Agents identify and emphasize the most pertinent selling points. To a family looking for a house, they may emphasize the convenient floor plan, the area’s low crime rate, and the proximity to schools and shopping centers. To a potential investor, they may point out the tax advantages of owning a rental property and the ease of finding a renter. If bargaining over price becomes necessary, agents must follow their client’s instructions carefully and may have to present counteroffers in order to get the best possible price.

Once both parties have signed the contract, the real estate broker or agent must make sure that all special terms of the contract are met before the closing date. There are many details involved in the sale. For example, the agent must make sure that the mandated and agreed-upon inspections, including that of the home and termite inspections, take place. Also, if the seller agrees to any repairs, the broker or agent will oversee that they are made. Increasingly, brokers and agents are handling environmental problems as well, by making sure that the properties they sell meet environmental regulations. While loan officers, attorneys, or other persons handle many details, the agent must ensure that they are completed.

For Sale By Owner (FSBO) Advice

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Granted, some people are able to sell their own homes without the services of a real estate agent. Some of these successful do-it-yourselfers are very experienced home sellers, some are lawyers, some are highly experienced investors. Others are transferring ownership of their home to a child, a co-worker or a tenant who's already living in the home. These circumstances are the exception, not the norm, however. For most people, a for sale by owner (FSBO) transaction simply isn't a smart move.

Here is information for you to consider about FSBOs.

1. FSBOs cannot list their home in the multiple listing service (MLS). FSBOs are nott permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. FSBOs are also excluded from many home search engines and websites, including this site. A determined FSBO can put a for sale sign in his or her front yard and run ads in local newspapers, but be advised that the home will not receive nearly as much exposure as it would through the MLS.

2. Many agents will not show FSBO homes. In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there is no guarantee that the buyer's agent will be compensated for his or her services, unless the buyer has signed a buyer's brokerage agreement that specifically provides for such compensation. Even if a FSBO offers to pay the buyer's side of the commission, most agents won't want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to un-represented and probably unqualified prospects.

3. FSBOs usually overprice their home. Most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they're wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home's buyer appeal. Overpricing a for sale home is a sure way to deter potential buyers.

4. Buyers will feel intimidated. Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they'll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they'll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer.

5. FSBOs are likely to stumble into legal trouble. Real estate transactions are fraught with potential liability for unwary sellers, particularly in states that have extensive disclosure requirements (e.g., California). The required forms are extensive, and constantly being updated. A FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes.

6. Buying and/or Selling a home is probably the single most expensive purchase or sale that a person makes in his or her lifetime. Use a real estate agent does this for a living, day after day, full-time. Unless you want another full-time job, that of selling your home by yourself, then leave it to a professional. Trust that they have the time, energy, resources and assets to sell your property within a reasonable amount of time, for the market value.

Real Estate Appraisal

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Only an appraiser can give a real home value, but one thing your real estate agent can help you with, is determining the 'sold' value of homes around the area. This is especially important when writing an offer!

Real Estate Tax Shelter(s)

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You May Be Able To Shelter Up to $500,000 In Your Home!

If you have a gain from the sale or exchange of your main home (principal residence), you may be able to exclude from income up to $250,000 of the gain ($500,000, for certain married taxpayers filing a joint return). The exclusion may be allowed each time you sell or exchange your principal residence, but generally no more frequently than once every two years. You cannot deduct a loss from the sale of your main home.

If you sold your home under a contract that provides for part or all of the selling price to be paid in a later year, you made an "installment sale." Refer to Internal Revenue Service Topic 705 for more information (click here for Topic 705).

To be eligible for an exclusion, your home must have been owned by you and used as your main home for a period of at least two years out of the five years prior to its sale or exchange. You can meet the ownership and the use tests during different two year periods. However, both tests must be met during the five–year period ending on the date of the sale or exchange. If you and your spouse file a joint return for the year of the sale or exchange, you can exclude up to $250,000 of gain if only one of you qualified for the exclusion.

If you did not meet the ownership and use tests or if during the 2–year period ending on the date of the sale or exchange you sold or exchanged another home at a gain and excluded all or part of that gain, you may be allowed to exclude a portion of the gain realized on the sale or exchange of your home if:

You sold or exchanged your home due to a change in health or place of employment or due to unforeseen circumstances

You must consult a tax, financial and/or legal professional for more information about the tax benefits of owning a home! Do not make a binding decision without consulting the appropriate professional to determine your situation.

You may qualify to exclude from your income all or part of any gain from the sale of your main home. Your main home is the one in which you live most of the time.

Ownership and Use Tests

To claim the exclusion, you must meet the ownership and use tests. This means that during the 5-year period ending on the date of the sale, you must have:

Owned the home for at least 2 years (the ownership test) Lived in the home as your main home for at least 2 years (the use test) Gain

If you have a gain from the sale of your main home, you may be able to exclude up to $250,000 of the gain from your income ($500,000 on a joint return in most cases).

If you can exclude all of the gain, you do not need to report the sale on your tax return. If you have gain that cannot be excluded, it is taxable. Report it on Schedule D (Form 1040) Loss.

You cannot deduct a loss from the sale of your main home.

Worksheets

Worksheets are included in Publication 523, Selling Your Home to help you figure the:

Adjusted basis of the home you sold
Gain (or loss) on the sale
Gain that you can exclude
Reporting the Sale

Do not report the sale of your main home on your tax return unless you have a gain and at least part of it is taxable. Report any taxable gain on Schedule D (Form 1040).

More Than One Home

If you have more than one home, you can exclude gain only from the sale of your main home ("principal residence"). You must pay tax on the gain from selling any other home. If you have two homes and live in both of them, your main home is ordinarily the one you live in most of the time.

Business Use or Rental of Home

You may be able to exclude your gain from the sale of a home that you have used for business or to produce rental income. But you must meet the ownership and use tests.

Remember - the laws are constantly changing. Make sure you are up-to-date in the information as it pertains to you.

Tax benefits of home ownership

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As a homeowner, you have certain tax benefits. You can learn about it here, and read more about it on the Internal Revenue Service website here

The purchase - The IRS says you can deduct interest in the year that it is paid, and that is usually part of each monthly loan payment.

Mortgage interest - In general, you can deduct interest charged on a loan used to acquire or improve your principal residence in the year that it is paid.

The sale - If you have a gain from the sale of your main home (principal residence), there is an exclusion of tax on the sale of your home for the first $250,000 gain for single person, $500,000 for married.

The exclusion may be allowed each time you sell or exchange your main home, but generally no more frequently than once every two years. You cannot deduct a loss from the sale of your main home.

If you sold your home under a contract that provides for part or all of the selling price to be paid in a later year, you made an "installment sale." Refer to Internal Revenue Service Topic 705 for more information.

To be eligible for an exclusion, your home must have been owned by you and used as your main home for a period of at least two years out of the five years prior to its sale or exchange. You can meet the ownership and the use tests during different two year periods. However, both tests must be met during the five–year period ending on the date of the sale or exchange. If you and your spouse file a joint return for the year of the sale or exchange, you can exclude up to $250,000 of gain if only one of you qualified for the exclusion.

You sold or exchanged your home due to a change in health or place of employment or due to unforeseen circumstances

You are advised to consult with your tax, financial and/or legal professional to give you more details on other tax benefits and liabilities. You should do this before making any binding decision.

What happens on closing day

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What can you expect to happen on closing day?

You'll present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspection, warranties, etc.

Once you're sure you understand all the documentation, you'll sign the mortgage, agreeing that if you don't make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You'll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed.

You'll pay the lender's agent all closing costs and, in turn,he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner.

What makes up the closing?

Settlement Statement, HUD-1 Form (itemizes services provided and the fees charged; it is filled out by the closing agent and must be given to you at or before closing)
Truth-in-Lending Statement
Mortgage Note
Mortgage or Deed of Trust
Binding Sales Contract (prepared by the seller; your lawyer should review it)
Keys to your new home

Remember, the process is slightly different in each area. Ask your real estate agent what happens in your situation.

What is escrow and how does it work?

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DEFINITION - Escrow - A neutral third party that holds documents and money for a real estate transaction and ensures that all conditions of a sale are met. Also refers to a special account that a lender uses to hold a borrower's monthly payments on property taxes and insurance.

The amount of money that you will be required to come up with at escrow depends on a number of factors, including the cost of the house, your financing and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: (1) earnest money - the deposit you make on the home when you submit your offer, to prove to the seller that you are serious about wanting to buy the house; (2) the down payment, a percentage of the cost of the home that you must pay when you go to settlement; and (3) closing costs, the costs associated with purchasing the home, including loan fees, title insurance, messenger fees, notary fees, etc. Check with your realtor or escrow officer to get an estimate of your closing costs.

When you make an offer on a home, your real estate broker will put your earnest money into an escrow account. If the offer is accepted, your earnest money will be applied to your down payment and/or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies.

Who chooses the escrow? The escrow is selected by negotiation between the principals in the transaction.

Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise.

Home Much Home Can You Afford

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Do you know what price property you should be looking at? This is a very important step in your house-hunting. You want to make sure you are looking at properties that you can afford. Looking at houses that are below your budget can be discouraging. Looking at homes that are above what you can afford will only cause disappointment when you eventually look at houses in your price range.

Do you have a lender? Usually, a loan agent can give you an idea of your price range over the telephone in just a few minutes. They generally provide this service with no obligation. But remember, loan rates and terms can change while you are looking at properties. So, be sure to keep on top of the current loans while you are searching for a property.

If you would like to get an idea yourself, we have a calculator that can help!

Find out now! Use our calculator:

How Much Can You Afford?

You don't have to spend the maximum amount. And, different financing options will provide a range of prices for your purchase.

So, be informed! Learn more about how much house you can afford to buy.

Closing Costs

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As you get ready to close escrow on the purchase of your home, understand that you will be required to bring in funds to close escrow in addition to your down payment amount.

These "closing costs" can consist of:

Lender fees and charges
Prepaid interest
Escrow fees and charges
Appraisal fee
Title company fees and charges
Attorney fees
Property taxes, your portion
Notary fees, messenger fees, recording fees, etc.
Transfer taxes or fees
Homeowner's insurance
Survey fee

This may not be a complete list. You should request and receive a detailed estimate of your closing costs from all parties involved in the transaction - the lender, escrow company, attorney, title company, etc. - BEFORE closing so that you can review and understand the closing costs you are paying.

Final home walk thru before closing

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It's almost time! As the closing date nears, you will most likely go to the home again. Perhaps you have not been there in a while. Take a pad and pen to make notes!

In some cases, the seller will have moved out. This will likely be your first opportunity to examine the house without furniture, giving you a clear view of everything. The home will look different without furniture - sometimes better, sometimes not. Check the walls and ceilings carefully, as well as any work or repairs the seller agreed to do in response to the inspection. Any problems discovered previously that you find uncorrected should be brought up prior to closing.

Make sure you ask questions - find out what utilities you will need to have put into your name, get references from the seller for services such as a gardener, house cleaner, etc. If you are not familiar with the area, you might also want references for local doctors, dentists, etc. Think about what you will want to know to feel comfortable in your new home, and in your new community.

Also, you might want to ask the seller how to get in touch after the closing in case you have questions about the property. It is not uncommon to discover things that you don't understand about a home. For example, a light switch that you cannot figure out what light it goes to. Don't worry. These are common occurrences. If you are able to contact the seller for a quick answer, it can help you get to know your new home.

After You Apply For The Loan

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Depending on the type of loan you have applied for, and your personal situation, it can take a lender several weeks to complete the evaluation of your application. It is not unusual for the lender to ask for more information once your loan application has been submitted. Often this is documentation to verify information shown on the application. The sooner you can provide the requested information, the faster your application will be processed.
Once all the information has been verified, the lender will have a complete package on you as a buyer / borrower.  The underwriter (in some cases, more than one underwriter) will review your application and supporting documentation.  Your lender will generally contact you to let you know the outcome of your application.
If the loan is approved, you and your real estate agent can confirm the closing date. It is important to communicate with the lender and to review the closing information with the lender. Make sure you understand the fees that you will pay for the loan and related expenses. And after closing, you'll be able to move into your new home!

Credit History

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WHAT IS CREDIT HISTORY?

Credit history is a history of how you have paid off your debts and obligations. It is comprised of credit card payments, loan payments, etc.

You can find more definitions pertaining to credit in our Dictionary section here: dictionary of credit terms

WHY IS CREDIT HISTORY IMPORTANT?

Your credit history shows a potential lender your past performance of debt payment - how successful you have been in managing your debts. By looking at what you have done in the past, a potential lender will "guess" what you will do in the future.

IF YOU ARE GETTING AN FHA LOAN

In recent times, the FHA (this term is defined in our Dictionary section here: Federal Housing Administration) has tightened its credit requirements. This is a sign of the economic times.

You can read about FHA loans here on the official website here: FHA.

Generally, the FHA may be more flexible than conventional lenders in its qualifying guidelines. You can read about FHA loan credit issues here: FHA loan credit issues

Negotiating Tips

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These tips will help you get the very best deal and write the best possible offer.

An experienced real estate agent can help you with all of these items. They're experienced negotiators and have written many offers on all types of property. They are also familar with the market and neighborhood so can be of some assistance when it comes to shooting for a low price!

Make a point of asking your agent to keep your discussions and information confidential. Listen to your real estate agent's advice, but follow your own instincts on deciding a fair price.

Calculating your offer should involve several factors, such as: what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation.

Look at many homes. By the time you're ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

Also, don't take the negotiating process personally. Try to make it a win-win situation for both you and the seller.

Negotiating a Price

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Negotiating a price with the home seller can be both exciting and frustrating. A buyer will not want to pay too much for a property. A home seller will not want to sell the property for too little money. What should you do?

First, an experienced real estate agent can help you with these items. They're experienced negotiators and have written many offers on all types of property. They are also familar with the market and neighborhood so they can be of some assistance when it comes to negotiations.

Make a point of asking your realtor to keep your discussions and information confidential. Listen to your real estate agent's advice, but follow your own instincts on deciding a fair price. Calculating your offer price should involve several factors, such as: what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation.

Look at many homes in your property search. By the time you're ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

Find out the seller's situation, and see if you can make an offer that will be viewed as a win-win outcome.

If you're buying a HUD Home, you're required to use a real estate agent. While purchasing a HUD Home may be easier than many private real estate transactions, there are still some requirements which must be met, certain forms that must be used, and procedures that must be followed. But these requirements are clearly stated in advance, and the real estate agent will be there to help you through it all. There are no negotiations between buyer and seller when you buy a HUD Home. This can be a real advantage. There's no haggling about price --- everything is spelled out in black and white. In some areas, HUD may accept a counter-offer from you, but if your counter-offer is not accepted, the home goes back on the market. What's more, HUD responds promptly to your offer, and if it's accepted, closing on the home will usually occur within 30 to 60 days. Finding a HUD broker is not difficult, especially since so many real estate brokers are happy to sell HUD Homes. All you need to do is to call a few brokers who work in the area you're interested in and you'll find someone willing and experienced. Some brokers specifically advertise their desire to sell HUD Homes in the real estate sections of newspapers or online. Best of all, the valuable help you'll receive from the real estate agent is usually free! In most instances, agents get their sales commission from the home seller, not you, the buyer. Even if you're buying a HUD Home, HUD will pay the broker's commission.

Safety Inspection Tips

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Before completing the purchase of your home, you will want to have as much knowledge as possible about the home. You may want to have the inspector or inspectors check the safety of your potential new home. Home inspectors focus mainly on the home and its structure, construction, and mechanical systems. The home inspector will make you aware of maintenance and repairs that need to be performed.

The home inspector does not evaluate whether or not you're getting good value for your money. While home inspections differ in different areas, generally, an inspector checks and evaluates items such as the plumbing (including the water heater), the electrical system, the heating and air conditioning (HVAC) systems, the insulation and ventilation, water source and quality, the foundation, appliances, plus the inspector will check the doors, windows, ceilings, walls, floors, and roof. Be sure to hire a home inspector that is qualified and experienced.

You should include an inspection clause in the offer when negotiating for a home. An inspection contingency clause gives you an "out" on buying the house. Alternatively, you may be able to negotiate with the seller if repairs or problems are found as a result of the inspection.

If the house you're considering was built before 1978, you will want to have an inspection for the presence of lead-based paint. It's important to know that lead flakes from paint can be present in both the home and in the soil surrounding the house. The problem can be fixed temporarily by repairing damaged paint surfaces or planting grass over effected soil. Hiring a lead abatement contractor to remove paint chips and seal damaged areas will fix the problem permanently.

Other safety inspections that you may consider:
- accident prevention
- stairs safety
- fire safety, including installation of fire alarm(s) and smoke detectors
- carbon monoxide
- fireplaces
- pool and spa safety, water safety
- gas safety and gas appliances safety
- poisonous materials and flammable materials

Have multiple fire extinguishers in your home, garage and workshops.

Remember to examine safety in your home, and also around your home.

It is a good idea to get all inspections or evaluations in writing by the appropriate professional.

Be safe!

Home Inspection Checklist

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Though not a complete list, use this checklist as a guideline of some things to consider when making a home buying decision and a home inspection.

Examine the "big picture" - the general condition of the home and surrounding area.
Check the foundation, floors, walls and poured concrete.
Make sure there's no evidence of water seepage or moisture problems.
Are there settling cracks?
Check for proper drainage.
If necessary, make sure there's a sump pump for sanitary and foundation draining.
Check to see if the crawl space is dry.
Inspection by qualified exterminator is necessary for existing and potential problems related to wood rot, termites and other pest issues.
Check the condition of flooring throughout.
Check the construction of bridging and joists.
Check walls, whether drywall or plaster. Make sure there are no water marks.
Check ceilings, looking for evidence of water marks.
Check the chimney(s).
Examine the attic. Is it sufficiently insulated and ventilated?
Examine the basement. Make sure no evidence of water intrusion.
Check that the fireplace damper is in working order, and flues to the chimney are clear.
On heating and air-conditioning systems, check what periodic maintenance is required, such as oil fan motor, lubricate bearings, clean humidifier, replace filters, etc.
Check the hot water system -- type and gallon capacity. How long has the present unit been in service? Is it properly installed, vented and anchored?
Check the electricity to make sure that the standard house current, number of circuits, outlets and fuses or circuit breakers are sufficient for everyday needs, and the condition of wiring is good.
Check for good water pressure throughout house and that the tie-in to local water supply facilities, etc. are all in working order. Look for evidence of leaks.
Bathroom and kitchen fixtures should be in good shape. Make sure the appliances such as over, range, refrigerator, dishwater, disposal, trash compactor, laundry facilities, etc. are all in working order.
Check exterior lot and landscaping. Is it properly graded or contoured? Are trees and shrubs sufficient for your needs?
Check that fences, walls, patio and driveway are in good condition.
Be sure exterior walls are suitable to weather conditions. Check doors and windows. Are they easy to open and close (or replace) for storm/screen removal or installation?
What is the condition of the roof and any flashings or skylights?
Are the gutters and downspouts in good condition and clear from obstruction?
Is the garage door or opener in good working order? Is there sufficient electrical and heating access in the garage?

While this is by no means a complete list, it gives you an idea of the scope of a home inspection, and what a home inspector looks for.

Home Inspection

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WHAT DOES A HOME INSPECTOR DO, AND HOW DOES AN INSPECTION FIGURE IN THE PURCHASE OF A HOME?
An inspector checks the safety of your potential new home. Home inspectors examine the home especially on the structure, construction, and mechanical systems of the house and will make you aware of condition that exist, and repairs that are needed.

The inspector does not evaluate whether or not you're getting good value for your money. Generally, an inspector checks: the electrical system, plumbing and waste disposal, the water heater, insulation and ventilation, the heating and air conditioning systems, appliances, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors, attic and roof. Be sure to hire a home inspector that is qualified and experienced.

In some areas, you have a home inspection prior to signing an offer. In other areas, you have the home inspection performed after you have an agreed-upon offer, but as a contingency of the contract. An inspection clause gives you an "out" on buying the house if serious problems are found,or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.

It is most important that you consult with your realtor or legal advisor on contract provisions and contingencies, and how they work.

DO I NEED TO BE THERE FOR THE INSPECTION?
It's not required, but it's a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you'd like to purchase and it is a good time to ask general maintenance questions.

ARE OTHER TYPES OF INSPECTIONS REQUIRED?
If your home inspector discovers a serious problem a more specific inspection may be recommended. It's a good idea to consider having your home inspected for the presence of a variety of health-related risks like radon gas, asbestos, lead paint, mold, formaldehyde or possible problems with the water or waste disposal system.

HOW CAN I PROTECT MY FAMILY FROM LEAD IN THE HOME?
If the house you're considering was built before 1978 and you have children, you will want to have an inspection for lead-based paint. It's important to know that lead flakes from paint can be present in both the home and in the soil surrounding the house. The problem can be fixed temporarily by repairing damaged paint surfaces or planting grass over effected soil. Hiring a lead abatement contractor to remove paint chips and seal damaged areas will fix the problem permanently.

ARE POWER LINES A HEALTH HAZARD?
There are no definitive research findings that indicate exposure to power lines results in greater instances of disease or illness. However, if you have a concern, you should contact and hire a professional to help you assess the situation.

Debt vs Income Ratio

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The lender considers your debt vs income ratio (or, debt to income ratio) as part of their examination of you as a borrower.

The debt to income ratio is a comparison of your gross (pre-tax) income to your housing and non-housing expenses and debt obligations. Non-housing expenses would include such long-term debts as car or student loan payments, other installment debts, alimony, or child support.

According to the FHA guidelines, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with other non-housing expenses, should total no more than 41% of income.

The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

You should be familiar with your ratio(s) so that when it come time to obtain a loan and the financing for your purchase, you are ready!

What to consider before applying for a m..

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There are several things you need to think about before you apply for your loan!

For example - How much money will I have to come up with to buy a home?
Answer: The amount of money you have to come up with depends on a number of factors, including the cost of the house and the type of mortgage you get. In general, you need to come up with enough money to cover three costs: earnest money - (1) the deposit you make on the home when you submit your offer to prove to the seller that you are serious about wanting to buy the house; (2) the down payment, that part of the cost of the home that you must pay when you go to settlement or closing; and (3) closing costs, the costs associated with buying a home and obtaining a loan.

When you make an offer on a home, you will have "earnest money" (also called a "good faith deposit". If your offer is accepted, your earnest money will be applied to the down payment or closing costs. If your offer is not accepted, your money will be returned to you. The amount of your earnest money varies. If you buy a HUD home, for example, your deposit generally will range from $500 - $2,000.

The more money you can put into your down payment, the lower your mortgage payments will be. Some types of loans require that your down payment be 10% to 20% of the purchase price. That's why many first-time homebuyers turn to HUD's FHA for help. FHA loans require only 3% down - and sometimes less. You can read more about FHA loan programs here: FHA loan programs.

Closing costs - which you will pay at settlement - average 3-4% of the price of your home. These costs cover various fees your lender charges and other processing expenses. When you apply for your loan, your lender will give you an estimate of the closing costs, so you won't be caught by surprise.

Tips When Applying for a Mortgage

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Here are some helpful tips to consider when you are applying for a loan.

First, become educated. Take the time to learn about home loans and the process. Talk with people, and become informed.

Second, to ensure you won't fall victim to loan fraud, be sure to follow these precautions as you apply for a loan:

Be sure to read and understand everything before you sign.

Refuse to sign any blank documents.

Do not buy property for someone else.

Do not overstate your income.

Do not overstate how long you have been employed.

Do not overstate your assets.

Accurately report your debts.

Do not change your income tax returns for any reason.

Be truthful about your credit problems, past and present.

Be honest about your intention to occupy the house

Do not provide false supporting documents.

In other words, be absolutely honest on your loan application!

Finally, check out the reputation of your loan agent or mortgage broker.

What happens after I have applied for my loan?
We have that information on our website here: What happens after I apply for a loan?

How to select the right mortgage for you

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There are many decisions involved in buying a home. Choosing the right mortgage program is one of them. It is very important that you learn about the different loan types and also the different loan terms. A small change can mean big dollars for you.

First, you should shop around for a home loan. Call many lenders, and compare such factors as rates, terms, prepayment penalty, loan fees and closing costs. Get the complete picture. You can save a lot of money and spare you any surprises!

A word of warning - each lender has it's own program(s) and sometimes it's hard to compare. Make sure you are comparing "apples to apples".

You may want to get recommendations for a lender from your real estate agent, family, friends, or co-workers. Ask if they had a favorable experience with the loan agent.

Second, learn all you can about loans.

What types of loans are available and what are the advantages of each?

Fixed Rate Mortgages: Payments remain the same for the the life of the loan

Types of fixed rate mortgages include 15 year loans, 20 year loans, 30 year loans and some 40 year loans.

Advantages of a fixed rate loan:
Predictable - payments are constant and unaffected by interest rate changes and inflation.

Adjustable Rate Mortgages (ARMS): Payments increase or decrease on a regular schedule with changes in interest rates; increases subject to limits (knows as "caps")

Types of adjustable rate mortgages:
Balloon Mortgage - Offers low rates for an initial period of time (usually 5, 7, or 10 years); when that time has elapsed, the balance is due or refinanced (though not automatically)
Two-Step Mortgage- Interest rate is fixed for a period of time, then adjusts for the life of the loan and for the remainder of the loan term, it becomes an ARM linked to a specific index or margin

Advantages of an Adjustable Rate Mortgage:
Generally offer lower initial interest rates
Monthly payments can be lower
May allow borrower to qualify for a larger loan amount

When does an Adjustable Rate Mortgage make sense?
An ARM may make sense if you are confident that your income will increase steadily over the years or if you anticipate a move in the near future and aren't concerned about potential increases in interest rates.

What are the advantages of 15 and 30 year loan terms?
30-year loans: In approximately the first 23 years of the loan, more interest is paid off than principal, meaning larger tax deductions. As inflation and costs of living increase, mortgage payments become a smaller part of overall expenses.

15-year loans: The 15 year loan is usually made at a lower interest rate than a 30 year loan. Equity is built faster because early payments pay more principal.

Mortgage Loan Alternatives

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Financing your home purchase is very important for you to understand. There are many alternatives, and the loan that is right for you might not be the same loan that is right for someone else. Become an educated borrower. You do not want surprises in your loan.

Fixed Rate Mortgage - Payments remain the same for the the life of the loan.

Types of fixed rate mortgages include: various terms (such as 15 year loans, 20 year loans, 30 year loans, and some 40-year loans).

The major advantage of a fixed rate mortgage is that it gives you a steady, predictable payment amount. You will always know your monthly payment, and it remains constant throughout the term of the loan Therefore, your housing cost remains unaffected by interest rate changes and inflation.

Adjustable Rate Mortgage (ARM): Payments increase or decrease on a regular schedule with changes in interest rates. Increases or decreases are subject to limits, also known as "caps".

Types of adjustable rate mortgages include
Balloon Mortgage - Offers very low rates for an initial period of time (usually 5, 7, or 10 years); when time has elapsed, the balance is clue or refinanced (though not automatically)
Two-Step Mortgage - Interest rate is fixed for a certain period of time, then it adjusts and "acts" like an ARM for the remainder of the life of the loan. ARM linked to a specific index or margin

Advantages of adjustable rate mortgages:
- Generally an adjustable rate mortgage offers lower initial interest rates
- Generally monthly payments can start lower
- May allow a borrower to qualify for a larger loan amount

When should you consider an ARM?
When you get an adjustable rate mortgage, you are assuming risk because the interest rate can go up, and your payment can go up - significantly. YOu should be confident that your income will grow steadily, and that you can manage the payment increase(s).

What are the advantages of the 15 year loan?

On a 15 year loan, the interest rate is usually lower than on a 30 year loan. You will build equity faster because early payments pay more principal.

Can I pay off my loan before the end of the loan term?

Yes. By sending in extra money each month or making an extra payment at the end of the year, you can accelerate the process of paying off the loan. When you send extra money, be sure to indicate that the excess payment is to be applied to the principal. Most lenders allow loan prepayment, though you may have to pay a prepayment penalty to do so. Ask your lender for details.

Loans are a very personal part of your home buying. You should learn about financing, and consult with professionals to make sure you understand the loan you are getting, and how it applies to your personal situation.

Mortgage Loan Financing

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Generally speaking, a mortgage is a loan obtained to purchase real estate. The "mortgage" itself is a lien (a legal claim) on the home or property that secures the promise to pay the debt. All mortgages have two features in common: principal and interest.

What is Loan-to-Value (LTV)?

The loan-to-value ratio is the amount of money you borrow compared with the price or appraised value of the home you are purchasing. Each loan has a specific LTV limit. For example: with a 95% LTV loan on a home priced at $50,000, you could borrow up to $47,500 (95% of $50,000), and would have to pay,$2,500 as a down payment.

The LTV ratio reflects the amount of equity borrowers have in their homes. The higher the LTV the less cash home buyers are required to pay out of their own funds. So, to protect lenders against potential loss in case of default, higher LTV loans (80% or more) usually require mortgage insurance policy. This is know as "private mortgage insurance".

Definition: private mortgage insurance (PMI)
A form of insurance required by a lender when the borrower's down payment or home equity percentage is less than 20 percent of the home value. This insurance partially protects the lender if the borrower defaults on the loan.

You need to know that currently private mortgage insurance is not tax deductible. You should verify with your lender if you are paying PMI, how much it is, and how/when you can get PMI taken off your loan payment.

What types of loans are available and what are the advantages of each?

Fixed Rate Mortgage - Payments remain the same for the the life of the loan.

Types of fixed rate mortgages include: various terms (such as 15 year loans, 20 year loans, 30 year loans, and some 40-year loans).

The major advantage of a fixed rate mortgage is that it gives you a steady, predictable payment amount. You will always know your monthly payment, and it remains constant throughout the term of the loan Therefore, your housing cost remains unaffected by interest rate changes and inflation.

Adjustable Rate Mortgage (ARM): Payments increase or decrease on a regular schedule with changes in interest rates. Increases or decreases are subject to limits, also known as "caps".

Types of adjustable rate mortgages include
Balloon Mortgage - Offers very low rates for an initial period of time (usually 5, 7, or 10 years); when time has elapsed, the balance is clue or refinanced (though not automatically)
Two-Step Mortgage - Interest rate is fixed for a certain period of time, then it adjusts and "acts" like an ARM for the remainder of the life of the loan. ARM linked to a specific index or margin

Advantages of adjustable rate mortgages:
- Generally an adjustable rate mortgage offers lower initial interest rates
- Generally monthly payments can start lower
- May allow a borrower to qualify for a larger loan amount

What are the advantages of the 15 year loan?

On a 15 year loan, the interest rate is usually lower than on a 30 year loan. You will build equity faster because early payments pay more principal.

Mortgage Loan Basics

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Definitions:

Mortgage - In casual use, a sum of money borrowed to purchase a home at a certain interest rate using the property as collateral. In formal use, a mortgage is the legal document that pledges property as collateral for a loan.

Fixed-Rate Mortgage - With a fixed-rate mortgage, your interest rate stays the same for the term of the mortgage, which is usually thirty years. Your principal and interest payment remains stable, making it easier to plan a monthly budget. However, initial interest rates tend to be higher than with other types of loans.

Adjustable-Rate Mortgage (ARM) - With an ARM, your interest rate and monthly payments start out lower than with a fixed-rate loan, but your rate and payments can change either up or down, depending on where interest rates in general are going. (If they're going up, your monthly payments will probably go up as well, sometimes significantly.)

FHA-Insured Mortgage - In this type of loan, the Federal Government insures the lender against loss in case the home buyer defaults on the loan. This program was set up so that Americans who can't afford the 10% to 20% down payment required by most lenders can still buy a home. Many HUD homes can bought with FHA-insured mortgages, which allow you to purchase the home with as little as 3% down. You do not have to be a first-time buyer in order to qualify for an FHA loan.

VA Loan - Under this program, the Department of Veterans Affairs guarantees the lender against loss. HUD homes may be purchased with a VA loan or any other loan.

Assumable or Non-Assumable - You may find a home with a mortgage loan you can "assume" from the previous owner. This means that the lender is willing to transfer the old loan on the home to you. These loans can be wonderful bargains, and the paperwork is usually not very complicated. However, watch out for fees that the lender may charge in order to do the transfer. These fees may offset any savings you might think you are getting by assuming the current financing.

Mortgages (loans) are as different as apples and oranges!

Just as there is more than one kind of home, there is more than one way to finance it. Mortgage lenders have come up with many different methods of helping you finance the purchase of your home, and each one has its own advantages and disadvantages. You must really study each loan carefully! You should seek the advice and counsel of your tax, financial, legal or other appropriate professional to help you determine which loan program is right for you.

Are you going thru HUD? Read this:

First of all, you should know that HUD itself does not provide financing. You can obtain financing through a bank or mortgage lender. And since many HUD homes are eligible for FHA-insured mortgage loans, this often makes financing easier to obtain. However, you are not required to get an FHA loan to buy a HUD home.

Effective Offer Writing

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HOW DO I MAKE AN OFFER?
Your real estate agent will assist you in making an offer, which will include details of the purchase, including the following information:

Legal description of the property

Amount of earnest money

Down payment and financing details

Proposed move-in date

Price you are offering

Proposed closing date

Length of time the offer is valid

Details of the offer

While this is not a complete list of the offer, it gives you an idea of what you need to think about. The offer to purchase a home involves a lot of paperwork. Remember that a sale commitment depends on negotiating a satisfactory contract with the seller, not just making an offer.

HOW DO I DETERMINE THE INITIAL OFFER?

First, ask your realtor to keep your discussions and information confidential. Listen to your real estate agent's advice, but follow your own instincts on deciding a fair price. Calculating the amount of your offer should involve several factors: what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation. By the time you're ready to make an offer, you should have a good idea of what the home is worth and what you can afford. And, be prepared for give-and-take negotiation, which is very common when buying a home. The buyer and seller may often go back and forth until they can agree on a price.

Remember, however, that an offer to purchase a home is more than just the price. It also involves the terms. Ask your real estate agent to find out anything about the seller's personal situation that can help your offer appeal to the seller.

Once again, confer with your real estate professional to help make your offer a successful one!

Home Comparison Chart

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You may find it helpful to print out Home Comparison Worksheet.
Take it with you when you look at homes.

Features	House #1	House #2	House #3
Address
Price
Location
Number of Bedrooms
Number of Baths
Square Feet
# Garages
Family Room
Air Conditioning
Formal Dining Room
Pool
Spa/Jacuzzi
Lot Size
Landscaping
Kitchen
Floor Plan
Storage Space
Condition
Extras (specify)
Curb Appeal
Commute Time

Neighborhood Features

Neighborhood	House #1	House #2	House #3
Crime Rate
Quality of Schools
Traffic
Proximity to:	House #1	House #2	House #3
Schools
Hospitals
Shops
Transportation
Cultural Activities

Overall Opinion

	House #1	House #2	House #3
Overall Opinion

How to choose a home

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HOW CAN I KEEP TRACK OF ALL THE HOMES I SEE?
If possible, take photographs of each house (ask permission first): the outside, the major rooms, the yard, and extra features that you like or ones you see as potential problems. And don't hesitate to return for a second look. Use our Home Comparison Worksheet to organize your notes for each house.

HOW MANY HOMES SHOULD I CONSIDER BEFORE CHOOSING ONE?
There isn't a set number of houses you should see before you decide. Visit as many as it takes to find the one you want. On average, homebuyers see 15 houses before choosing one. Just be sure to communicate often with your real estate agent about everything you're looking for. It will help avoid wasting your time.

HOW MUCH CAN I AFFORD?
Before you start shopping for a home, you need to know what kind of home to shop for. To determine that, of course, you've got to figure out how much you can afford to pay each month.

Fortunately, there's a pretty simple formula for coming up with this number. It's the Federal Housing Administration (FHA) formula that many mortgage lenders use. The FHA has found that most people can afford to budget 29% of their gross monthly income to housing expenses, depending on total debt. Buyers with no debt can budget as much as 41% of monthly income to housing.

NOW WHAT?
Once you have figured out what kind of home are looking for, and how much you can afford, the next thing to do is to search for the best house for you, at the best possible price. Although this is the toughest part of the whole home buying process, doing your homework certainly does help. There are two ways of doing this -- searching on your own or by hiring a real estate agent and letting them do the hard work for you. Most people use a broker to help them find a home.

In case you are looking to do it yourself, here are a few tips that may help you.

Research, Research and Research!

Today, the easiest way to do this is the internet. The best way to find what you should expect for money is to visit real estate sites and see what is available in your price range. Make a list of all the houses that meet most of your (written down) requirements.

Searching Tip

Searching for real estate over the internet is so much easier than browsing a newspaper because you can key in your personal search criteria and don’t have to be bothered with the vast number of listings that aren’t for you. Internet real estate sites offer customized search options that allow you to zero in on your key requirements.

Local newspapers would be a better bet in case you are looking to buy a house in the same locality. Sunday newspapers generally have a number of good listings, including open house listings.

Make appointments to look at the houses

The more homes you see, the more comfortable you will feel when you find your dream home!

How to choose a neighborhood

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Every neighborhood is different. It is strongly recommended that you research the neighborhood you plan on living in before buying your home. It is even advisable that you park nearby and walk to neighborhood on different days, and at different times, to see what the area is really like. You might talk with people you meet.

Depending on your own particular needs and tastes, some of the following factors may be more important considerations than others: quality of schools, property values, traffic, crime rate, future construction, proximity to schools, employment, hospitals, shops, public transportation, freeways, airports, beaches, parks, stadiums and cultural activities such as museums, concerts and theaters.

When you buy a home in a neighborhood, you will become part of that neighborhood. So, do your research.

Pre-Qualification and Pre-Approval

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PRE-QUALIFICATION

Pre-qualification is an informal way to see how much you may be able to borrow or how much a lender may be willing to lend to you. Generally, you can be 'pre-qualified' over the phone with no paperwork by telling a lender your income, your long-term debts, and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house. And, the lender may be able to give you estimated monthly loan payments to help you budget.

PRE-APPROVAL

Pre-approval is a more formal commitment from a lender - but not a guarantee. A pre-approval usually involves completing an application, and providing supporting documentation to the lender. This process is called a "pre-approval" because it is generally done before you identify a property to buy. So, basically it is a preliminary approval of you as a borrower. Pre-approval gives you a more complete idea of what your loan will cost and how much you can afford. It has the added benefit of showing the sellers how serious you are about buying because you have already started the loan process.

FIND OUT ABOUT YOUR CREDIT HISTORY

There are three major consumer credit reporting companies: Equifax, Experian, and Trans Union. These three companies have a joint website for you to obtain your credit report. It is the official site to obtain a FREE copy of your credit report (no more than once every twelve months). You can visit that site here: www.annualcreditreport.com.

Real Estate Ad Terms, Abbreviations and ..

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What does it all mean? When you are looking through the real estate ads, there can be many terms and shortened terms that may be unfamiliar to you. We have compiled some of the more common acronyms for you here.

4B/2B -- four bedrooms and two bathrooms. "Bedroom" usually means a sleeping area with a window and a closet, but the definition varies in different places. A "full bathroom" is a room with a toilet, a sink and a bathtub. A "three-quarter bathroom" has a toilet, a sink and a shower. A "half bathroom" or powder room has only a toilet and a sink.

A/C -- air conditioning

appl -- appliances

ARM -- adjustable rate mortgage

assum. fin. -- assumable financing

att -- attached

ba, bth -- bath

B/I -- built in

br -- bedroom

bsmt -- basement

CA, C/A, CAC -- central air conditioning

cath ceil -- cathedral ceiling

CC&Rs -- covenants, conditions and restrictions

c-d-s -- cul-de-sac

Closing Costs -- This has different meanings in different states, in some states a real estate transaction is not consider "closed" until the documents record at the local recorder which is the public official who keeps records of transactions that affect real property in the area, sometimes known as a "registrar of deeds" or "county clerks" office; in others, the "closing" is a meeting where all of the documents are signed and money changes hands, costs -- the entire package of miscellaneous expenses paid by the buyer and the seller when the real estate deal closes. These costs include the brokerage commission, mortgage which is a legal document that pledges a property to the lender as security, that is, the property that will be pledged as collateral for a loan, for payment of a debt, instead of mortgages, some states use first trust deeds, related fees, escrow or attorney's settlement charges, transfer tax which is a state or local tax payable when title passes from one owner to another, recording fees, title insurance and so on. Closing costs are generally paid through escrow.

CMA -- comparative market analysis or competitive market analysis. A CMA is a report that shows prices of homes that are comparable to a subject home and that were recently sold, are currently on the market or were on the market, but not sold within the listing period.

condo -- condominium

contingency -- a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met. One example is a buyer's contract with the buyer's right to obtain a professional home inspection before purchasing the home.

da -- dining area

det -- detached

dk -- Most often refers to a deck

DOM -- days on the market

dr -- dining room

EIK -- eat in kitchen

FDR -- formal dining room

Fixture -- anything of value that is permanently attached to or a part of real property which is land and appurtenances, including anything of a permanent nature such as structures, trees, minerals, and the interest, benefits, and inherent rights thereof, . (Real estate is legally called "real property," while movables are called "personal property.") Examples of fixtures include installed wall-to-wall carpeting, light fixtures, window coverings, landscape, etc. Fixtures are a frequent subject of buyer and seller disputes. When in doubt, get it in writing.

frplc, fplc, F/P, FP (wbfp) -- fireplace (word burning fireplace)

FSBO -- for sale by owner

gar -- garage. Att Gar means attached garage.

grmet kit -- gourmet kitchen

HDW, HWF, Hdwd, h/w -- hardwood floors

HOA -- home owner's association

In-law potential -- potential for a separate apartment, subject to local zoning restrictions

kit -- kitchen

Large E-2 plan -- this is one of several floor plans available in a specific building

Listing -- an agreement between a real estate broker and a home owner that allows the agent to market and arrange for the sale of the owner's home. The word "listing" is also used to refer to the for-sale home itself. A home being sold by the owner without a real estate agent, that is, a person licensed to negotiate and transact the sale of real estate, isn't a "listing."

Lo dues -- low homeowner's association dues. But, be sure to find out how "low" the dues are compared to other dues in the area.

Lock box, LB -- locked key-holding device affixed to a for-sale home so real estate professionals can gain entry into the home after obtaining permission from the listing agent.

la -- living area

LR -- living room

Lsd pkg. -- lease which is a written agreement between the property owner and a tenant that stipulates the payment and conditions under which the tenant may possess the real estate for a specified period of time parking area. May come with additional cost.

MBR -- master bedroom (generally has a private bathroom)

MLS -- Multiple Listing Service. An MLS is an organization that collects, compiles and distributes information about homes listed for sale by its members, who are real estate brokers. Membership isn't open to the general public, although selected MLS data may be sold to real estate listings Web sites. MLSs are local or regional. There is no MLS covering the whole country.

OBO -- or best offer

oh -- open house

ofc -- office

pl, sp or s/p -- swimming pool

pot'l -- potential

PUD -- planned unit development

pvt -- private

pwdr rm -- half bathroom or powder room

RE -- real estate

remod -- remodeled

REO -- real estate owned (by a bank or other financial institution)

rf -- roof

rm -- room

sf -- square feet

SFR -- single family residential

spac -- spacious

Title Insurance -- an insurance policy that protects a lender, that is, a term which can refer to the institution making the loan or to the individual representing the firm, for example, loan officer which is also referred to by a variety of other terms, such as lender, loan representative, loan "rep," account executive, and others, the loan officer serves several functions and has various responsibilities: they solicit loans, they are the representative of the lending institution, and they represent the borrower to the lending institution’s are often referred to as "lenders" or owner's interest in real property from assorted types of unexpected or fraudulent claims of ownership. It's customary for the buyer to pay for the lender's title insurance policy - but check to see what is customary in your area.

twnhse -- townhouse

upr -- upper floor

vw, vu, vws, vus -- view(s)

WIC -- walk in closet

wd -- wood

yd -- yard

House Hunting Tips

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How do you find a home to buy? What considerations should you think about? Since this is such an important decision, we encourage you to do your "homework"!

Start by thinking about your situation. Are you ready to buy a home? How much can you afford in a monthly mortgage payment ? How much space do you need? What areas of town do you like?

After you answer these questions, make a "To Do" list and start doing casual research. Talk to friends and family, drive through neighborhoods, and look in the "Homes" section of the newspaper, and look online for real estate and homes for sale.

Your home should fit way you live, with spaces and features that appeal to the whole family. Before you begin looking at homes, make a list of your priorities - things like location and size. Should the house be close to certain schools? your job? to public transportation? How large should the house be? What type of lot do you prefer? What kinds of amenities are you looking for? Establish a set of minimum requirements and a "wish list." Minimum requirements are things that a house must have for you to consider it, while a "wish list" covers things that you'd like to have but aren't essential.

Select a community that will allow you to best live your daily life. Many people choose communities based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you? Or, do you prefer the peace and quiet of a rural community? When you find places that you like, talk to people that live there. They know the most about the area and will be your future neighbors. More than anything, you want a neighborhood where you feel comfortable.

Your Wish List

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Creating a Wish List on paper will help you decide which home you should buy. There are many things to consider when thinking of your new home and making a wish list. You can create check boxes to help you weed out the less than satisfactory homes. Be sure to prioritize your list so that each item will not count as much as other items.

A few Things To Consider:

Community and Lifestyle
Select a community that will allow you to best live your daily life. Many people choose communities based on schools. Do you want access to shopping and public transportation? Is access to local facilities like libraries and museums important to you? Or do you prefer the peace and quiet of a rural community? When you find places that you like, talk to people that live there. They know the most about the area and will be your future neighbors. More than anything, you want a neighborhood where you feel comfortable.

Schools
You can get information about school systems by contacting the city or county school board or the local schools. In addition, there is a lot of information online. Sometimes schools are ranked within your state, or within the country. Your real estate agent may also be knowledgeable about schools in the area.

Property Resale Value
Your real estate broker may be able to give you a ballpark figure by showing you comparable listings. If you are working with a realtor, they may have access to comparable sales maintained on a database. If you are thinking about buying a home in a new developement, then you will also want to think about factors such as whether the community is growing in a fashion that will increase the value of your home in the years to come.

Price
It is always advisable to purchase a home within your means. Use one of our calculators to help you determine that your new home purchase is within your budget!

Tips on how to find your dream home

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Almost everybody has a dream home. It's the home your imagine and see yourself in. Think about it ... what does your dream home look like?

It might be a good idea to write down the qualities that your dream home would have. Let's see if we can find you that home!

Once you have figured out what kind of home are looking for, the next thing to do is to search for that home. Many people start by looking at the local newspapers, or on the internet. This is a time-consuming process, but doing your homework will help you become an educated home buyer.

There are two ways of searching for a home. The first path is to search on your own. The second, more popular way, is to utilize the services of a real estate professional. You might want to read our information about how a realtor can help save you time and money. Most home buyers use a real estate agent because buying is an important financial decision, as well as an emotional decision.

In case you are looking to do it yourself, here are a few tips that would help:

Research and then Research more!

The easiest way to do this in today's market is to use the internet. In the comfort of your own environment, and when it is convenient to youk, you can learn what you can expect to find for the money you are willing/able to spend in different neighborhoods.

Searching for a Property

Searching for real estate by using the internet is easier than using a newspaper or newspapers. The internet real estate websites generally allow you to set your search criteria, thus filtering out properties that do not meet your criteria. This saves you time.

Local newspapers can also be a valuable resource for your property search. And, the local newspapers will help you get a better feeling for a community. As far as real estate listings, usually the Sunday newspapers have the greatest number of ads, including real estate ads.

Go to open houses

You can find open houses online, in the newspapers, or though your reall estate agent. Visit the open houses, get a feel for the different neighborhoods and communities, learn more about the area in which you want to live. And, by seeing different houses, you will get a better idea of your likes and dislikes.

A REALTOR Can Help

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Using a real estate agent is a good idea. All the details involved in home buying, particularly the financial ones, can be mind-boggling. A good real estate professional can guide you through the entire process and make the experience much easier. A real estate broker will be well-acquainted with all the important things you'll want to know about a neighborhood you may be considering ... the quality of schools, the safety of the neighborhood, restaurants, entertainment, what there is to do and see, and more.

The National Association of Realtors® has a good online reference you might want to read: Why use a Realtor®?.

A real estate agent will also be able to help you determine the price range you can afford and help you search for homes you'll want to see. With access to homes as soon as they're put on the market, the real estate agent can save you hours of wasted driving-around time. When it's time to make an offer on a home, the agent can help you with the terms of the transaction, and explain the process to you. And, remember - generally you do not pay for the services of a realtor. In most transactions, the real estate agents are compensated by the seller.

Home buyer confidence

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Start thinking about your situation - and about home buying!

Are you ready to buy a home? Start thinking about home buying and what it means.

How much can you afford in a monthly mortgage payment - use our calculators.

How much space do you need? What size house? What size land?

What features do you like in a home? Air conditioning? Pool?

What areas of town do you like?

What do you need to be near? Transportation? Work? Recreation?

After you answer these questions, we suggest you make a "priority list" of what you want your home and property to include, starting with the most important factor first. Then, start doing research. Talk to friends and family, drive through neighborhoods, and look in the "Homes" section of the newspaper. Make sure you pick up a copy - or even subscribe to - the local newspaper so that you become familiar with the area or areas you are considering.

And, do you financing homework. Learn about loans and mortgages, different loan programs, compare interest rates and terms.

This is a very large purchse! Be an educated home buyer! Learn all you can about the process and what is involved.

Buying or renting --- it's your choice!

The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity, take advantage of tax benefits, and protect yourself against rent increases. Also, you may not be free to decorate without permission. And, you are living in someone else's home. It's really up to you.

Benefits of owning a home

Owning a home has many benefits. When you make a mortgage payment, you are building equity. And that's an investment. Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities - like insurance, real estate taxes, and upkeep - which can be substantial. Home ownership gives you the freedom, stability, and security of owning your own home.

You can benefit by using a real estate broker

By using an experienced real estate agent, you get the benefit of their confidence and experience. This can be especially important to you, as a good real estate professional will have the ability to guide you through situations that are encountered, and make your home buying process a more enjoyable experience. An experienced real estate agent will be able to provide you with references for a lender or loan agent, inspector or inspectors, escrow, title, lawyer or legal professional, and other professionals that are generally needed in the process of buying a home.

Plan Ahead for Home Ownership

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Know Your Rights as a Homebuyer
Before you start, there are many laws that protect you from scams, unnecessary expenses, and discrimination in the process of homebuying. Know your rights as a home buyer!

Find out How Much Mortgage Can You Afford
You can save yourself a lot of wheel-spinning if you take a minute to figure out how much mortgage you can afford. Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (that's your monthly income before taxes and other paycheck deductions are taken out). You also need to consider current loan interest rates. The lower the interest rate, the more expensive the home you'll be able to afford.

Follow our tips and use our financial calculators to see how much you can afford in a mortgage payment and to calculate other factors in financing your purchase with a home loan.

Create Your "Wishlist"
Make your wish list. Focus on the features you want in a home - how many bedrooms, how many bathrooms, do you need a home office, do you want a garage, do you want a big yard? Knowing what you're looking for will help you focus your search.

Find a Real Estate Agent or Broker
You'll want to start searching for a realtor as soon as you decide to buy a home. Talk to several agents and find someone you think you'll be comfortable working closely with. Many of your friends and relatives have probably bought and sold their homes through brokers. Ask them who they used and what their experiences were. You can find out which brokers specialize in the kind of home or the area you want by looking in the Yellow Pages or your local newspaper's classified real estate ads. Or drive through neighborhoods and note the names of brokers on "for sale" signs. When you talk to prospective brokers, ask questions about the areas and types of homes in which you're interested. Do they seem knowledgeable? Most important, is their personal style a good fit with your own?

Mortgages and Homebuying Programs
Many different kinds of mortgages are available to you. Read about them, and make sure you understand the pros and cons of each. Your real estate broker can help you. HUD and other government agencies offer some special homebuying programs. Also, many local governments offer special homebuying programs to help low-income homebuyers. S hop around - you may be surprised at all your options!

First Time Home Buyer Tips

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Buying your first home can be scary; but if you follow these tips, you will do just fine!

Look at as many homes as possible to get a better feel for ones available in your price range. You want to become an educated home buyer for thisd most important financial purchase. Keep track of what you like and dislike about each home that you visit by printing and using our Home Comparison Worksheet.

How long will it take to find a home? It differs for everyone. You should take as long as you need in order to feel comfortable and confident in your decision. Do not let anyone hurry you.

Also consider the market value of the home, any special circumstances surrounding the sale of the home, how much you can afford to pay for the home, and the condition of the home when determining whether the home is right for you.

When you find a home in your price range and you want to buy it, visit the neighborhood at various times to get a more complete understanding of its activity. Talk with your prospective neighbors about what it's like to live in the area. Take a day and commute to your job from the area. And look at the home more critically -- you may discover flaws you hadn't noticed during your first visit.

Another aspect to consider is the financing you will use to purchase the home. For example, the seller may help pay closing costs such as transfer taxes or points on a mortgage. If this is the case, you may be more willing to negotiate to a successful purchase price. If you are using a realtor, your real estate sales professional can offer some assistance regarding how much you should offer, but the final decision is yours.

Debt to income ratio

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Your "debt to income ratio" is a ratio used by a lender to examine how much debt (both housing and non-housing debt) you have in relationship to the income you earn.

The debt to income ratio (or, debt vs income ratio) is a comparison of your gross (pre-tax) income to your housing and non-housing expenses and debt obligations. Non-housing expenses would include such long-term debts as car loans, student loan payments, credit cards, other installment debts, alimony, or child support.

It's easier to calculate this number if you are a salaried employee. Lenders have guidelines on what income they consider if you are compensated by commission, under a contract, or for any other non-salaried employment.

And, the lenders have guidelines with regard to how much and what they consider for your long term debts such as credit card debt and which debts are considered long term (generally, if you are paying off the loan within six months, it is not considered).

The lender also considers cash available for down payment and closing costs, credit history, etc. when determining your maximum loan amount.

Therefore, you will want to check directly with a lender or with several lenders to get information specific to your situation so that financing can be obtained for your purchase.

In this changing real estate and financial environment, we strongly advise you to consult with a lender, tax, or financial advisor, etc. with regard to your personal situation. This is an important purchase, be educated!

A lender will calculate this ratio for you, and each lender has an acceptable range that you must fall into before they will consider lending money to you to buy a home.

As part of preparing yourself to own a home, you should be able to answer the following questions:

1. Do you have a steady source of income/job)? Have you been employed on a regular basis for the last two to three years?

2. Do you pay your bills on time?

3. What outstanding long-term debts do you have such as student loans, car payments, etc?

4. Do you have the down payment funds saved?

5. Are you able to pay a monthly mortgage payment, plus homeowner's insurance, real estate taxes, homeowner's association fees, etc?

6. Do you have additional funds saved for unexpected personal costs plus the cost of home ownership (repairs, maintenance, etc.)?

Buying an Affordable Home

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Buying an affordable home means buying within your price range - and knowing your financing options.

Home mortgage loans can be available from several types of lenders such as thrift institutions, mortgage companies, commercial banks, and credit unions. Various lenders may quote you different prices, so you should contact several lenders to make sure you’re getting the best price. You can also get a home loan through a mortgage broker. Brokers set up transactions rather than lending money directly; in other words, they will find a lender for you. However, some mortgage brokers do lend money. The broker’s contacts to several lenders can mean a bigger selection of loan products and terms from which you can choose. However, there maybe fees associated with this service. Make sure you carefully compare loans and all fees prior to making a decision. And, of course, we advise you to check with your tax, financial and/or legal advisors before making a binding decision.

Factors to consider when looking for a home

Types of homes: There are many different types of homes: single family, condominium, townhouse, and duplex are just some of the more common. Additionally, the type of home you select may impact your buying power.

New or existing home: Consider whether you want to move into a new home or an existing home. Don't forget that you may have more initial expenses with a new home because you may have to pay for landscaping, window coverings, etc. that are not present in a new home. However, the condition of an existing home can significantly increase your maintenance requirements.

Quality and condition of a home: Examine the condition of the home. Carefully inspect the structure, interior and exterior of the house for defects. Consult/hire qualified professionals to help you determine the condition of the home. Obtain the seller's disclosure statements. Remember, that the additional renovation costs may add up over time and exceed your maintenance estimates. Will the house need a lot of repairs? How old are the appliances? The purchase of the home is one step, but the renovations and repairs are added costs that need to be considered.

Features: Consider the features of the home. Does it have gas or electric heating? How many bathrooms does it have? How many bedrooms do you need? All of these characteristics will influence the price of the home and your monthly housing expenses.

You may want to reference this document: HUD's Wish List worksheet (Note: You will need Adobe Acrobat to view this PDF file). This wishlist can help you identify and prioritize the features you are looking for in a home.

Location: Would you rather live in the city, the country, or the suburbs? Do you want to be near parks or the library? What about a shopping center? Is it important for you to be near major highways or public transportation? Get a feel for the surrounding area by exploring the neighborhood and talking to residents.

Crime rate: Look into the safety of the neighborhood. Does the neighborhood have a high crime rate? Has there been an increase in crimes committed in the area? If so, how will this influence the future property value of your home?

School system: The quality of the school system in a particular area is not only important to families with children but can influence the property value of your home.

Economic stability of the area: The economic growth and stability of the area surrounding a home can influence its future property value and desirability.

Property tax: Examine the annual amount of real estate taxes and other assessments levied on homes in the neighborhood you are considering.

Brokers will generally make contact with several lenders regarding your application, but they do not have to find the best deal for you unless they are contracted with you to be your personal agent. You should also consider contacting more than one broker, just as you would with banks or thrift institutions.

Knowing if you are dealing with a lender or a broker may not always be cut and dry. Some financial institutions work as both lenders and brokers. And most brokers’ advertisements do not use the word "broker." So be sure to ask whether a broker is involved. This information is important because brokers are usually paid a fee for their services that may be separate from and in addition to the lender’s origination or other fees. A broker’s compensation may be in the form of "points" paid at closing or as an add-on to your interest rate, or both. You should ask each broker you work with how he or she will be compensated so that you can compare the different fees. Be prepared to negotiate with the brokers as well as the lenders.

Pros and Cons of Home Ownership

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Buying a home is probably the largest purchase you will make. But is it right for you? Read more, and find out for yourself.

To buy or rent? This is a big decision - not only a financial decision, one having to do with the money involved, but also an emotional and very personal decision.

First - the financial aspect. You might find it helpful to use our Rent vs Buy Calculator.

However, aside from the ability to afford the property (and obtain financing for the purchase), you might want to consider:

Advantages of Owning a Home
- Owning your own home can give you a sense of stability, security and freedom. Want to hang a picture? Go ahead! You do not have to ask a landlord.
- The payments on your loan build equity in your home, which becomes a type of "savings". If you are renting, all of your payments go to the landlord.
- A sense of accomplishment
- Tax advantages and deductibility of mortgage interest and taxes (check with your financial and/or tax advisors with regard to the specifics in your situation and location)

Disadvantages of Owning a Home
- The cost to own a home can add up, such as maintenance and repairs, landscaping, decorating, plus taxes.
- Unable to relocate at a moment's notice.
- Renting may be less expensive

Owning a home isn't for everyone. It's a decision that has to be made by each person after considering the pros and cons, ins and outs, advantages and disadvantages.

Buy vs Rent

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WHY SHOULD I BUY INSTEAD OF RENT?

Answer: You'll love the feeling of having something that's all yours - a home where your own personal style will tell the world who you are. A thriving vegetable garden in the backyard, a tiled entryway, a yellow kitchen...when you own, you can do it all your way! But there's more to owning a home than personal satisfaction. You can deduct the cost of your mortgage loan interest from your federal income taxes, and usually from your state taxes, too*. And, interest will compose nearly all of your monthly payment for over half the number of years you'll be paying your mortgage. This adds up to hefty savings at the end of each year. And you're also allowed to deduct the property taxes you pay as a homeowner*. If you rent, you write your monthly check and it's gone forever. Another financial plus in owning a home is the possibility its value will go up through the years.
* we advise you to check with your tax and/or financial advisors

There are advantages to buying a home versus renting. View these advantages in a financial comparison of buying versus renting using the Buy vs Rent Calculator.

SAVINGS IF YOU BUY

In many cases, the amount of money a renter spends on rent can be about the same as or less than the amount a homeowner spends on a mortgage. With the tax benefit for homeowners, the savings can be significant.

SAMPLE CALCULATION - Buy vs Rent Comparison

The renter starts out paying $800 per month with annual increases of 5%, compared with a homeowner who purchases a home for $110,000 and pays a monthly mortgage of $1,000.

After six years, the homeowner's payment is lower than the renter's monthly payment With the tax savings of homeownership, the homeowner's payment is less than the rental payment after 3 years.

KNOW THE NUMBERS - Monthly Expenses of Buying

Your rental company takes part of your rent payment to cover certain housing expenses. When you decide to purchase a home, you accept responsibility for paying for these expenses (some of the expenses are listed below). They are additional costs of home ownership, and should be included in your budget estimates:

Property Taxes and Special Assessments

Home/Hazard Insurance

Utilities

Maintenance and repairs

Home Owner Association (HOA) Fee: Doesn't apply to all purchases. The HOA fee may include some utilities and maintenance - check with your association

Membership Fee: It may pay for recreational facilities and other services

LOOKING FOR A RENTAL APARTMENT OR HOME?

There are many websites to check online, as well as newspaper and print advertisements. Driving around the neighborhoods and looking for signs can also be a way to find a rental. The U.S. Housing and Urban Development has a good online reference for renters here: Renting

Also, the State of California, Department of Consumer Affairs, has a good online reference here: Landlord/Tenant Handbook

BEFORE YOU START LOOKING FOR A RENTAL KNOW THIS

Know your rights and responsibilities: Federal law prohibits housing discrimination based on your race, color, national origin, religion, sex, family status, or disability. If you have been trying to rent a home or apartment and you believe your rights have been violated, you can file a fair housing complaint. When you live in an apartment, you have both rights and responsibilities. Be sure you know what's expected of you - and what you can expect in return.

WHAT DO YOU NEED?

Figure out what you need: It's a good idea to think through what you need in an apartment before you begin shopping. How many bedrooms do you need? Do you need to be close to work, transportation, or something/someone else? Do you need parking? Make a list before you begin...that will help you in your search.

Checklist for Home Buyers

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Know Your Rights as a Home Buyer

Before you start, there are many laws that protect you from scams, unnecessary expenses, and discrimination in the process of homebuying. Know your rights!

Find out How Much Mortgage Can You Afford

You can save yourself and your real estate agent a lot of wheel-spinning if you take a minute to figure out how much loan you can afford. Generally, a lender will want your monthly mortgage payment to total no more than 29% of your monthly gross income (that's your monthly income before taxes and other paycheck deductions are taken out). You also need to consider current loan interest rates. The lower the interest rate, the more expensive the home you'll be able to afford.

We have many reports on loans that you can read. You can get more help in our Home Mortgage Center section.

Also, we have many useful calculators to help you. Take a look here: CALCULATORS.

Create Your "Wishlist"

Make a home buying "wish list". Focus on the features you want in a home: how many bedrooms, bathrooms, etc. Garage or no garage? What is important to you to have in your new home? Knowing what you're looking for will help you focus your search. And it will help your real estate broker, too.

You might want to read more about creating a "wishlist" in our report here: Home Buyer Wish List.

Find a Real Estate Broker

You'll want to start searching for a broker as soon as you decide to buy a home. Talk to several and find someone you think you'll be comfortable working closely with. Many of your friends and relatives have probably bought and sold their homes through brokers. Ask them who they used and what their experiences were. You can find out which brokers specialize in the kind of home or the area you want by looking in the Yellow Pages or your local newspaper's classified real estate ads. Or drive through neighborhoods and note the names of agents on "for sale" signs. When you talk to prospective brokers, ask questions about the areas and types of homes in which you're interested. Do they seem knowledgeable? Most important, is their personal style a good fit with your own?

Mortgages and Homebuying Programs

Many different kinds of mortgages are available to you. Read about them, and make sure you understand the pros and cons of each. Your real estate broker can help you. HUD and other agencies offer some special homebuying programs. Also, many local governments offer special homebuying programs to help low-income homebuyers. Shop around - you may be surprised at all your options!