With foreclosures running up to 1.27% of all mortgage loans, according to the Mortgage Bankers Association, the best place to look for a million-dollar mansion to buy may be a bank or on the court house steps. In the first five months of 2004, over 113,000 million dollar mansions came onto the market as foreclosures. This is an increase of 37% from the previous year, according to Foreclosure Free Search.

As interest rates rise, mortgage rates are more likely to inflate, thus putting pressure on financially exhausted homeowners that are barely making ends meet already. More people have been taking out loans that have been more than they could possibly afford, while maintaining a certain lifestyle, or by trying to maintain a certain lifestyle. While the lender will calculate the amount that the borrower should be able to repay, according to the borrowers yearly income, this amount can often be more than the borrower can actually afford.

A million dollar mansion foreclosure can happen to the best of people, in the best neighborhoods, in any price range. These foreclosures can and do occur in the same proportions as do other homes. A million-dollar mansion foreclosure can sometimes be a surprising steal, mostly because some lenders don t want to price their properties to move fast. There are deals out there for those that are patient enough to look for them.

There are also disadvantages of buying a million-dollar foreclosure property as well, because most of these homes come onto the market due to a financial hardship. Sometimes the former owners become bitter from the loss of their home and sabotage the home by damaging or removing doors, appliances or light fixtures. Some of these homeowners may go as far as pouring concrete down the toilets or punching holes into the walls of these million dollar homes. Sometimes the financially strapped homeowners allow the homes to fall into disrepair, because the basic foreclosure can take about four months. This allows ample time for the lawn to become seriously overgrown and a slimy green pool to grow.

There are many ways to buy a million-dollar mansion in foreclosure. On average, at least 10 properties priced $1 million and more, will fall into default every year, but only a fraction of these properties will be sold at auctions. Most of these million dollar mansions are actually sold in a pre-foreclosure sale to buyers who search legal postings for Notices of Default. All buyers will need to be financially prepared to make an offer on the pre-foreclosure home immediately and have the down payment already in hand. These buyers also need to be prepared to deal with the emotional property owners who are losing their homes and who may not want to leave willingly. There may also be furious tenants to evict, which the buyer should be readily prepared to do.

Laws can vary from state to state, but home owners normally have up to four months to pay their debts to avoid foreclosure on their property. If the homeowners can t pay their debt in this time frame, then the lien holder of their property can force their home to be auctioned off, normally on the steps of the courthouse. These auctions are advertised in newspaper classifieds and are available for anyone to buy, so long as those buyers show up with a check of at least 10% of the anticipated purchase price. If buyers don t have this kind of money readily available, then most often a bank will be the successful bidder. Million dollar or more foreclosure properties can be also be found through brokers who specialize in Real Estate Owned properties, or REO s. These properties can be found by visiting the offices of these brokers or by searching the internet.

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Real estate is a fickle business with markets fluctuating according to season, the economy and supply and demand. The general market aside, there could be other reasons your great home isn t selling.

One of the top reasons great homes don t sell is because they are overpriced. Setting a sale price for your home is tricky business. You want to get the maximum possible return on the sale without alienating potential buyers with a too-high price. Many home sellers also mistakenly think padding the price of their home gives them an opportunity to negotiate down toward a more reasonable selling price. While this may seem logical, your initial high price may be driving away potential buyers put off by your over-valuation of your home. They may think your home is simply out of their price range, or that you are being greedy or unreasonable in your thinking.

It is important to price your house according to the market in which it is located. For example, a house located near schools and other amenities may sell for more than an identical house situated in a remote area with few amenities. Additionally, if there are a lot of houses for sale in your neighbourhood, it becomes a buyers market and you may not be able to secure the price you think you should get if your neighbors are willing to go lower. Finally, there are trade-offs when selling your house: a lower price usually means a larger market of potential buyers and a faster sale while a higher price means a smaller market of potential buyers and a slower sale. If you are determined to get a certain price for your home, you must be prepared to wait to get it.

Another reason your house may not be selling is exposure. Are you trying to sell it yourself? If so, it may be difficult to arrange showings around your work and family schedule, therefore limiting the potential for a sale. Listing your house with a realtor may give you the exposure boost you need to sell your home. Not only does a realtor have more flexibility in showing your home, he or she will also advertise the house and list it on the widely used MLS (Multiple Listing Service) website.

Even if your house is listed with a realtor, it may not be attracting buyers because of a poor photo on the MLS listing, advertising or feature sheets. Many potential buyers will dismiss a home as a possibility based on the impression made by the photo they see.

Other issues to consider include:

Is your house clean and neat? This is vital to making a strong impression on potential buyers. Clutter is not desirable, so take time to sift through your belongings and get rid of the stuff you don t need or want. Throw out the junk and donate the rest of your unwanted possessions to charity. Even after going through your things, you may have too much stuff in plain view. Organize your closets and cabinets to fit more in, and if there is still too much, buy some plastic containers and store the stuff you don t use very often in the tubs, which you can stack neatly in the basement. This may be inconvenient, but it will improve the look of your home.

Curb appeal: does your home look neat and welcoming from the street? It is in good repair? Just like with photographs, your home is judged on its appearance from the street. Increase your chance of a buyer being interested by spending a few minutes ensuring your house looks great.

Dated d cor can reduce the appeal of your home. Replace old flooring, apply new paint, and add a slip cover to your or unstylish furniture. Changing the hardware in your kitchen is a great way to modernize its look without spending a lot of money. If you have old, stained or smelly carpet, it should be removed. In fact, this may be a bonus as you could uncover lovely hardwood underneath the carpet.

Odor control. We may love our pets, but not everyone does. Make sure kitty s litter box is fresh (and out of the way!), and that hair and musty pet blankets are out of sight. As mentioned above, smelly carpet isn t appealing. If your pet has soiled the carpet, it should be professionally cleaned or removed.

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The specific type of property we’ll focus on in this article concerns residential real estate. It won’t come as earthshaking news to you when most people say that they bought a house in order to live in it. Basically, they chose it because they liked it.

Not all of them do, however. And therein lies a key distinction. Many bought the house not because they were fond of it, but because they hoped you would be. It was purchased for resale. We’ll call the first group “nesters,” the second “investors.”

What makes residential real estate different from, say, common stocks is this: There’s no such thing as a nester in stocks. People don’t buy a stock certificate for personal use. It’s too small to serve as a blanket and doesn’t taste very good. It’s also not much fun to look at for long. That forces them to think about its resale value even before they buy it.

Some people try to apply objective criteria quite consciously, whereas others operate more intuitively. They’re convinced it will appreciate in value, so they make the leap. As often as not they fall on their faces but at least they knew what they were doing — or thought they did.

But in buying a house to live in, personal and investment aspects — subjective and objective criteria — are being mixed. Under the circumstances, nesters might have been expected to do less well than average. As one complained: “I think I let my heart instead of my head guide me in picking this place.”

People who are buying houses they intend as their principal place of residence tend to pick properties that are distributed somewhat randomly. Price, the nature of the neighborhood, practical considerations, such as commuting distance to work and the quality of local schools, are deciding factors.

On the other hand, the pattern of purchases made by those who label themselves as deliberate investors, and who are buying the house for resale, is anything but scattered. In fact, the houses they choose tend to be clustered in zones that had been classified as “hot investment areas.” These are towns and streets that have allegedly been targeted for such things as urban renewal, a new shopping center, an industrial park or are in the path of a major new highway.

A reason nesters typically reap a greater profit is the length of time they hold on to the house. The median holding period is almost six years, versus a little under three years for investors. Commission costs and taxes, even at capital gains rates, tell only part of the story of reduced profits. A far more significant factor is that investors repeatedly wound up selling too soon.

There are two conclusions to be drawn from the data. The first is that, thanks to persistently high rates of inflation, investors have looked everywhere to find something of value that will keep pace with the progressive erosion in the purchasing power of their money. The result is that the number of home buyers who now give as their number one reason for purchasing a home, “it’s a good investment,” has nearly tripled in the past two decades, from 26% to 76%.

The second conclusion is that personal judgment is worth more in real estate than anyone has previously imagined. Let me qualify this a bit: You can’t just say, “I love the place, I’ll take it.” There are some hardheaded considerations and technical details that have to be carefully attended to. Yet the bottom line remains the same: If you buy a house because you like it, there will be other people who subsequently will like it too. If you buy it simply because you think it’s a great investment, you’ll probably be paying a premium for it.

So make all the computations you want on your calculator. But don’t for a moment discount your fondness for a house when it comes to buying. It’s certainly not true where stocks and bonds are concerned, but buying a house you like strictly for personal reasons increases significantly the chances that you’ll do well when you eventually have to sell it.

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VA home loans encompass several advantages over traditional loans, and are available to retired and active duty service personnel, some members of the Selected Reserve, and spouses who fall into certain categories such as the un-remarried wives and husbands of Armed Service personnel who perished from service-related injuries or conditions, or who have been missing in action or a prisoner of war for more than 90 days. The following guidelines may help you determine whether your service makes you eligible for a VA guaranteed loan:

Active duty eligibility begins after 90 days of continuous active service, or after 181 days of continuous active non-wartime service.

Selected Reserve reservists or National Guard personnel with a minimum of six years service, or those who have been honourably discharged due to disability, and who have been retired, who now serve on a different Ready Reserve, or who remain in the Selected Reserve are all eligible to apply for a VA loan.

Certain service does not meet the requirement for VA financing, including World War I service and active duty for training in the Reserves or National Guard. Individuals who do not qualify for a VA loan may, however, find themselves eligible for a Housing and Urban Development /Federal Housing Administration veterans loan. Contact your regional VA office for more details.

Eligibility for a VA loan is made by Veterans Affairs. Qualified individuals will receive a certificate which they can use when applying for a VA loan. Certificates can be obtained from any VA Eligibility Center upon submission of VA Form 26-1880 and suitable proof of service and discharge conditions. A copy, or Certificate in Lieu of Lost or Destroyed Discharge papers is available to veterans who can prove their military service but who may no longer have their original discharge documentation. This certificate can be helpful in obtaining a VA loan.

Each Veterans Affairs home loan supplies an amount of money that it guarantees lenders against loss on loans made to veterans. The maximum entitlement amount is currently $36,000 (or up to $60,000 for certain larger loans), but that figure is always subject to legislative changes. Contact your local VA office regarding loan figures and eligibility before agreeing to a particular loan. This entitlement amount is a one-time allotment unless a prior VA loan has been paid in full and the property it was used to obtain has been sold. The entitlement may also be restored if a qualified buyer agrees to assume the outstanding loan balance and substitute his or her own entitlement (same amount used on the original loan). If only part of the entitlement has been used to secure a loan, the remaining balance may be used for a second loan. This remaining entitlement option may be particularly useful for veterans who secured a loan using their entitlement when the maximum amount was lower than its present value: in this case, a veteran may use the difference between what he or she was eligible for then and the new maximum to help secure another loan.

When trying to determine which property to buy or fix, veterans should consider that most lenders require the total of the guaranteed entitlement and any cash down payment the veteran is able to make to equal about one quarter of the total sale price of the property in question. This limitation may help veterans decide what they can afford to spend to buy a home, mobile home, townhouse, or VA-approved condominium, to build or repair a home, to refinance an existing home loan, or to purchase a domestic lot for a home.

Finally, VA guaranteed home loans are not administered by Veterans Affairs. Rather, veterans obtain the loans by applying to regularly lending facilities and supplying the necessary proof that they qualify for a VA guarantee.

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But for a growing business, ownership of real estate, a non-current asset, often obscures potentially current liquid assets that can be put to work more effectively. Many expanding business seeking to stabilize their balance sheets against the vagaries of loan rates, or entering the market for more money, might look first to their own fixed holdings.

By selling property for cash and simultaneously renting it back from the buyer through a long-term net lease, a business may be spared the perils of borrowing and the headaches of a stock flotation — and gain capital advantages, too.

Indeed, through tax benefits to the buyer and cash flow improvement to the seller, a well-executed sale/leaseback deal can turn out to be one of those rate arrangements in commerce that result in measurable profits for both parties. Here’s how:

Suppose a business has owned its factory or headquarters for 20 years. The depreciated property is carried on the books at a residual value of 20% of the purchase price, even though its true market value may have risen dramatically. As such, it is clearly a wasted asset that does not even enhance the balance sheet.

If the building is sold outright, the company will have to pay capital gains taxes on the profit. If the original cost was, say, $120,000, the property would be carried at perhaps $20,000 for the land (which can’t be depreciated) and $20,000 residual value for the structure.

The company will have written down $80,000 in depreciation. Let’s assume the property is sold for $400,000, generating a $360,000 capital gain. If the effective corporate tax rate is 30%, $108,000 is paid in taxes, leaving $292,000 to plow back into the business, in contrast with a bank refinancing that would generate $320,000.

In terms of working capital, the business is initially $28,000 better off via the mortgage route.

One of the cornerstones of the agreement is the fact that a buyer is often willing to accept an annual rent that will cost the company less than annual interest on a loan. The buyer can do so since total return — profit on the continuing appreciation of the property and tax advantages that accrue to new ownership, as well as rental income — will make the package attractive. As a result, the sale/leaseback can effectively provide capital at rates that are 1-1/2 to 2-1/2 points under conventional debt rates.

The buyer might accept a lease, therefore, at $40,000 a year for 10 years, where orthodox financing might cost $48,000. The lessee takes the rent off gross profit as a business expense.

Experts agree that the sale/leaseback tactic, long popular in Europe where ownership is not the sanctified institution it is here, is becoming part of real estate’s “new wave” of alternate financing.

Since the lessee of the leased-back premises enjoys the perquisites of ownership — he can add to or otherwise alter the property as needed, retaining total control — in a sense he still “owns” it. If you have the rights to use it, then it’s really yours. And to clients who stubbornly insist that their company facilities are profitable assets, they retort, “Then sell your business and go into real estate.

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German investors poured nearly US$5 billion into U.S. commercial real estate in 2004, by far the largest source of foreign capital. The Australians ranked No. 2 with US$3.4 billion investment in 2004. Lately, German investment funds are curtailing their investment in the U.S. because they are facing a lot of strict rules on yields and use of leverage. Even so, Germany leads the pack in foreign investment. In this scenario, German investors are looking for new ways to invest in American commercial real estate, without going against their own legal and financial structures. Many are entering into preferred equity structures, which pose less risk than more traditional forms of ownership. German Investment funds are willing to pour a lot of money into office properties as they are much less management-intensive than retail and residential properties.

The volume of Australian commercial real estate investment is predominately in the office and retail sectors. The major reason for a high level of Australian investment in US real estate is an Australian law that was passed about 10 years ago. This law requires employers to place 9% of their employees salaries into Australian superannuation funds, which are akin to American 401(k) funds, except they are not voluntary. As a result, Australia today has the fourth largest volume of pension funds under management in the world.

The U.S. is the first investment option for Australian real estate capital as America is an easier place to invest than other jurisdictions. The transparency of American corporate governance and the cultural affinity Aussies have for America make investment in the U.S. a natural.

Further, while German investors are looking for creative ways to own real estate at the right price and stave off the competition, Australians are less concerned about price, but are flocking to America where they can get higher yields than in Australia.

While Canada ranks third in investment in commercial real estate properties of the United States, Middle East is in a strong fourth position. According to Real Capital Analytics, Middle East invested nearly US$1.2 billion into U.S. real estate in 2004, up from just over $1 billion in 2003. But there is one factor that distinguishes Middle East from other countries when it comes to investment in commercial real estate properties is that much of the capital that originates in the Middle East funnels through investment groups in the UK before the capital is employed in the U.S.

Overall, the main reason for investments in the American commercial real estate is that the United States remains a stable market despite high prices, low cap rates and steep competition.

Technorati Tags: real estate investing, home buying, mortgages

It may seem unlikely that such a scenario could play out, but it is a surprisingly common occurrence frequent enough to make purchasing a title insurance policy a good idea to safeguard your investment.

When you buy a home, your lawyer or legal representative will conduct a title search (also called a title examination) to determine ownership of the property in question. A title search involves collecting and examining, in detail, all of the public records that involve the title to the property you are purchasing. The search may include past deeds, wills, trusts or other liens against the property to ensure that it has passed properly from owner to owner. The person conducting the search will also attempt to confirm that all previous mortgages and judgements involving the property have been fully paid.

Most times, your title search will come back clear. On occasion, however, a cloud or defect such as a missing signature will be detected, and while the defect is likely the result of an administrative error, it should be cleared before your deal is completed. A thorough title search should also reveal nuisance issues such as easements that may affect your interest in purchasing the property. Easements or right of ways may not present an immediate problem, but could adversely affect the property in the future.

Title searches are helpful in identifying any potential title-related issues relating to your property, but mistakes happen (in the public records themselves, as opposed to just mistakes on the part of your examiner), and you may find yourself involved in a legal battle in the future if a title conflict does come to light after the close of your house deal. That s where title insurance comes into play; if you have a title insurance policy, your legal fees will be paid if you are forced to go to court, and if you lose the property as a result of a title dispute, you will be reimbursed up to the limit of your policy.

Similar to other types of insurance, title insurance policies do have certain exclusions, so it is important to clarify what your policy covers and what it does not. Some title insurance policies, for example, do not cover, or have limited coverage of problems related to easements, liens or mineral rights. Shop around if you want greater coverage and are willing to pay extra for it. No matter which policy you purchase, defects that occurred after you bought the property are not covered by title insurance.

Now that you have a better idea of what title insurance is and how it is used, do you need it? Maybe. If you pay cash for your property and do not require a mortgage, you may choose whether or not you want to purchase title insurance for your own protection. If, however, you are obtaining a mortgage to finance your house purchase your lender will likely insist on title insurance coverage to protect its own interests in the event of a title dispute. Your lender may also stipulate additional coverage to guard your portion of the home s value. Policies vary by insurance carrier, but generally, a lender s policy is for the amount of the mortgage and is payable to the lender in the event of a lost dispute while an owner s policy covers the full cost of the property plus legal fees. An issue to consider when purchasing title insurance is whether your policy includes inflation riders that will increase the amount of your coverage as your property value rises. You may pay a premium for this service.

Home buyers are usually responsible for the cost of title insurance, but may defray the charge by including title coverage as a condition of sale or by having the seller s policy adjusted and transferred to the buyer s name. Additionally, some states may require the seller to pay some or all of the title insurance costs, which are typically paid in full as part of your property s closing costs. Ask your legal representative to outline your responsibilities and the seller s responsibilities.

Technorati Tags: real estate, home purchase, real estate investing, property advice

Before you start house hunting, you need to consider the qualities that will make your home a wise investment for resale - features that will maintain and increase your home’s value even eight years down the road when it’s time to sell.

Location of the home and character of the neighborhood are two of the most important variables in any home buying decision.

Home buyers might want to consider the following to make their purchase a smart investment:

-Don’t buy the most expensive or the least expensive home in the neighborhood. If the home you want doesn’t match the quality of surrounding homes, you’ll have a tough time getting a good offer when you decide to sell.

If the home you’re interested in is the only nice one in the area, the surrounding homes may tend to drag down its value when comes time to have it appraised.

-Do move into a new development early. The last buyers to purchase a home in a new development generally will pay more. By the time the last residents have moved in, the original buyers have made a quick profit on their investment — their homes and their equity in them are now worth more.

-Do consider a new ‘’trade-up'’ home instead of a ‘’start-up'’ home. In the next 10 years, baby boomers will reach middle age, and older buyers will want to ‘’trade-up'’ to new homes with all the modern conveniences.

By choosing to invest in a ‘’trade-up'’ home now, you’ll be in a good position for the housing market of the future.

-Do look for a neighborhood with access to transportation. Access to buses, subways or non-congested highways can add value to a home.

-Don’t consider a home on a busy or noisy street. The best locations are dead-end streets, pipe stems or streets with little traffic. This is a plus for families with small children and provides an extra measure of security.

-Do look for an area with a good school system and nearby churches and synagogues. These might be very important factors for a potential buyer at resale time.

-Do look for an area that has good growth prospects. Look at real estate directories and check with the local planning commission to determine the past and future growth patterns of a specific neighborhood.

Zoning changes, commercial development or changes in the highway system could drastically affect the value of your home.

-Consider a home backed by a 10-year warranty and insurance plan. Some builders offer only a one- or two-year personal warranty without insurance backing.

That’s not going to help you or a potential buyer with much protection against structural defects that might surface in later years and reduce the value of a home. Look for a builder who provides 10 years of insurance and warranty protection.

One Kansas City realty chain reported its warrantied houses sell almost 50 percent faster at a 3 percent higher price than homes not covered by a warranty.

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1. Decorative moldings can be used throughout the home for interior to exterior, to trim doors, floors, walls, windows, fire places and ceilings. These moldings can be found at practically all home improvement stores and are fairly easy to install to enhance the look of any room.

2. Kitchens tend to be the greatest investment that many potential buyers look at the most. Replacing cabinets and counter tops, can be done gradually at your own discretion or you may choose a more creative way to improve the old ones by painting the cabinets and replacing the knobs or handles.

3. Vinyl windows are a great way to increase the value of any house. These windows function better than the old wooden windows by opening for easy cleaning and they conserve more energy in the months when heat or central air will be used the most. They do not require painting and they can really make a house look beautiful.

4. Adding a new roof can make a very strong impression. The roof is the first thing people see and this can play a strong role in how much your house will sell for. A new sturdy roof provides protection from leaks that make ugly stains on the ceilings in your house that can lead to more damage.

5. Installing vinyl siding, if you don t already have it, this can add up to $10,000 to the value of your house. If you have fairly decent vinyl siding already, you can hire a power washing company to clean the siding and give your house a fresh new look.

6. Painting the interior or exterior of a house can transform a house completely with a few coats of paint. You can be as colorful and creative as you like and you can take your time doing so, one room at a time.

7. Flooring absolutely makes the difference in any room. Whether you use linoleum, tiles, wood or carpet, a new floor can make all the difference.

8. Adding new appliances such as a refrigerator, stove, dishwasher, washer and dryer can greatly improve the value of your home. Along with adding a new water heater, furnace and central air unit.

9. Exterior landscaping can enhance a homes value by keeping a well maintained yard to adding strategically placed flowers and shrubs. You can also plant an attractive garden or install a small fish pond. Deciding to install or replace a fence along your property line will also be a great attraction to potential buyers, especially the ones who have children.

10. Adding a new deck is a great asset to the exterior look of your home. These can be made from a variety of wood and sealed to preserve the natural appearance. A new deck will provide the outside recreational area to grill out, while relaxing in a comfortable patio set and enjoying the great outdoors and fresh air.

Adding value to your home can be as simple and as affordable as you want it to be. Most improvements can be accomplished a little at a time, all depending on your time and budget. Smaller improvements can be made by simply adding potted plants along the stairs up to your freshly painted front door or by adding a small table or work of art in your foyer.

A visit to the home improvement store or looking through magazines can spark creativity when remodeling your home. Even if you have no idea where to start, one spark can lead to another and another, until before you know it, you have created a beautiful home that you may never want to leave.

Technorati Tags: real estate, home purchase, real estate investing, property advice

Obviously, the very first question is whether the area and the property you are considering meet your needs. While you indicate that you are in your mid-70s, one hopes that you will live a long time, and thus it is important to determine whether the neighborhood is convenient for your needs.

Are there adequate shopping facilities nearby, so that you do not have to worry about driving or other transportation merely to get groceries? Are there any plans for development in the area? You should investigate these matters with the local community planning officials in the town or county where you are looking to buy.

Once you decide on a particular house, I recommend that you discuss the purchase with all of your advisers and with your family. From a financial point of view, can you afford the house? From a legal point of view, you should obtain a knowledgeable real estate lawyer who will be representing your interest — and only your interests.

I strongly recommend that the contract you sign to purchase the property should include at least the following:

— Contingency on a satisfactory inspection by a building inspector of your choice.

You want an independent professional to carefully inspect the property, to make sure that it is structurally sound and to make sure that the mechanical equipment is not only in operating condition, but has a long useful life remaining. Obviously, you do not want to consider buying a house where the furnace may go bad in a year or two or the air conditioning system may be on its last legs.

— Contingency on financing.

You asked whether you should pay all cash for your house. There is no easy answer to this question. Much depends on your own financial situation. If, for example, you are considering buying a property worth $150,000, and if you have several hundred thousand dollars in reserve, then it might make sense for you to pay all cash.

Keep in mind, however, that if you pay all cash, the only tax benefits you will obtain are the real estate taxes on the property that have to be paid yearly. You might be better off — if you can afford a mortgage loan — to take out a moderate loan and make the monthly payments, taking advantage of some of the available tax benefits for home ownership. I know of too many retired individuals who are house rich and cash poor. Many people in your age bracket prefer to have a nest egg in the bank in the event of emergencies.

You should also consider whether your children would be interested in joining with you on the purchase on a shared-equity basis. Perhaps your children need some tax benefits, and would be interested in investing in your property.

— Title search.

It is important that you have a title company or a settlement attorney do a complete title report on the property prior to settlement. You are making a major investment and want to make sure that the title you receive will be free and clear of all outstanding liens, encumbrances or other defects — which we lawyers refer to as “clouds on title.”

If you decide to obtain a mortgage, you should talk to several local lenders in the community where your future house is located. There are numerous loans available today, ranging from six-month adjustable-rate mortgages (ARM) to fixed 30-year conventional loans. You may be eligible for an FHA loan, depending on the amount of the loan you are seeking, and you may also have some unused Veterans Administration benefits available to you if one of you is a veteran.

These financial questions should be explored before you sign the contract.

Technorati Tags: real estate, home purchase, real estate investing, property advice

Location is the first factor to consider when planning a move. If you have children, or are planning a family, you will want to know about the schools in the area. How about shopping centers, medical facilities, recreational opportunities and of course how far will you be from your place of employment. If you require public transportation, is there any within walking distance of your prospective new home. What about the crime rate? A check with the local law enforcement agency can either put your mind at ease or give you reason to look elsewhere. And finally, try to assess the quality and character of the people who live in the area. This is obviously difficult to do without interviewing them, but you can get a rough impression from the condition of their homes and properties and from the activities you might observe. As an example, if your prospective neighbor has discarded appliances all over the front yard and their son is roaring around the neighborhood on a mini-bike with no muffler, you might want to take all that into consideration. And remember, a poor location will definitely be a negative factor when and if you attempt to resell the home at some later date.

Once you ve zeroed in on your preferred location, you can start to think seriously about searching for your dream home. Rather than spin your wheels by looking at houses randomly, you should determine what you really want in a house and let those things help you focus your search. Make a list and start with the obvious: how many bedrooms do you need; do you want a garage; must you have a single story home due to your inability to climb stairs; is a fenced yard an absolute necessity? After listing the absolute must haves , think about the things you like and dislike about your current residence and factor those things into your wish list. Making a list will not only save you time, it will be a big help to your realtor in planning your viewings.

Most people don t really know how much house they can afford. Affordability is based upon income, credit status, interest rates, down payment, closing costs and the type of loan selected. By getting pre-qualified by a lending institution, you will know what you can afford to spend. Often, that figure is quite a surprise to prospective home buyers. In any case, pre-qualification will save you time and trouble by establishing your price range.

Typically, house hunting involves seeing as many homes as possible in a short period of time. Both the house hunter and the assisting realtor have busy schedules and want to tour fast and furious. However, after the first two or three houses, they all start to run together. You need to make notes after each viewing. One effective means of qualifying each home is to make multiple copies of your list of priorities and use it as a checklist to grade each home visited. This little tip will eliminate confusion when trying to make mental comparisons at the end of the day.

Regard your hunt as an excursion. If you were going to the zoo for the day and contemplated a lot of walking, you would dress comfortably and wear comfortable shoes. House hunting is no different; you ll be walking, climbing stairs, quite possibly going into basements and attics and constantly getting in and out of cars. Dressing to impress homeowners or your realtor should not be your top priority. Dress clean and neat of course, but comfortable is the name of the hunting game.

And last but not least, use your own realtor. When you call the realtor on a house for sale sign you re speaking to the seller s agent. Keep in mind that he or she represents the seller and will be looking after the seller s interests. You need your own realtor; someone who is working for you and is looking out for your interests.

House hunting can actually be an enjoyable experience if you take your time and do your homework.

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It s difficult to say what qualifies as a bona fide real estate bubble and what is just a hot market. There is no quantifiable standard to identify a real estate bubble and so we are left to depend on experts to tell us which areas of the country are experiencing a bubble and which areas are not. However, not even the experts can agree on the difference between a bubble, which is risky and unstable, and a boom, which has less risk of a rapid downturn. Some mortgage companies and other organizations with an interest in the real estate industry study the market and produce reports to help buyers identify potential windfalls and potential pitfalls by naming cities with what they determine is the greatest chance of a bursting bubble.

Homeowners who buy in a real estate bubble situation risk putting themselves in an undesirable financial situation, particularly if they have very low equity in their home. Equity is how much of the home you own, as opposed to the portion owned by the bank or other lending institution. If you have a lot to pay off before the home is truly yours, and the bubble bursts, you can find yourself in a position where you are paying off a significant debt on a property that can no longer fetch the same or higher value you paid for it. Of course, such a loss is only theoretical unless you actually try to sell your home. Property values fluctuate up and down on a regular basis, with both dramatic increases and decreases in value, so if you can stay in the home until the value rises again (even if it doesn t go all the way back up), you can avoid significant losses when it does come time for you to move. If you are forced to move before the market becomes more favourable, you could find yourself in a negative equity situation, which will affect your ability to buy your next home.

The situation is less serious if you have greater equity in your home, or if you have the financial ability to absorb a loss, in which case a bursting bubble situation is more of an irritant than a financial catastrophe.

If you re a person of average financial means who wants to buy a property in an area that may be undergoing a real estate bubble phenomenon, do so from an informed position. Be aware of the potential for loss and measure carefully the pros and cons of going ahead with your planned purchase. Do a little homework before you jump into a purchase: follow the local market for a couple months and track fluctuations; take note of any sale trends, and pay attention to what the experts (conflicted as they may be) report about the area in which you are interested. Use all of the information you gather to help you determine whether your potential positives outweigh the potential negatives.

Practising common sense can help you survive a bursting bubble scenario in the best possible shape. For example, it is wise to minimize your overall debt load to help you manage your financial burden if you are forced to move at an inopportune time. Invest your equity and any unexpected financial gains into improving the value of your home rather than in luxury or impulse buys. Most real estate experts agree that you can recoup between 80 and 90 percent of your investment in remodelling a kitchen or bathroom when it comes time to sell your property. Of course, your best protection is to purchase a home with excellent re-sale potential to minimize possible losses if real estate values plummet unexpectedly.

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Step One

Get pre-approved to buy another house before you sign a contract to sell your own home. If your financial situation changed since your last purchase, it s possible that you may no longer qualify for another loan. You may also be unable to sell your house for a price that will allow you to buy another house you want. This way, you won t end up renting or buying a house you don t really want. When applying for a pre-approval, be sure the lender discloses the estimated costs required for you to purchase a new home, such as: the loan price, down payment, new insurance, title and inspections fees.

Step Two

Call your lender to check the mortgage pay off and calculate the estimated proceeds. First, you will need to subtract the mortgage pay off from the fair market value of your home. Second, you will need to subtract the costs to sell your home from the remainder in order to get an idea of the proceeds you can expect to be paid at closing.

Step Three

Determine your homes fair market value. Most real estate agents will gladly help you determine the market value as a courtesy and may also give you helpful hints to what you can do to increase the value of your house. You may also consider hiring a licensed appraiser, which you will have to pay for out of pocket, to perform an appraisal on the subject property.

Professional appraisers will provide you with a detailed report that will usually include: the neighboring property values in comparison to your own, an evaluation of the real estate market in your area, harmful issues to the property s value and any defective qualities.

Step Four

Estimate what it will cost you to sell your house. If you are using a real estate agent, you may have to pay their commission. If you are planning to sell by owner, then you must consider the advertising, signs, attorney fees, closing agents and other possible fees involved. These other fees may include: appraisal, inspections, surveys, taxes and home owner association fees. Real estate agents can give you a more precise estimate of the closing costs and any other fees that may be involved. Real estate agents are professionals that deal with these transactions every day and can prove to be a valuable asset to you.

Step Five

Make repairs. Whether these repairs can be done by you or by hiring a contractor, they should be completed. If there are too many repairs that need to be done, your home will be considered a fixer upper. You want to get the most out of your house and dissuade potential buyers from submitting insultingly low offers. These repairs can range from fixing a broken window, adding a fresh coat of paint, replacing or repairing the flooring, to spackling a hole in the wall. The larger repairs may include fixing a damaged roof or repairing damaged siding. Other issues that can deter a potential buyer is mold and mildew stains and odors, leaky basements, lead based paint, broken gutters, location or type of circuit breaker, plumbing problems and old or faulty electrical wiring.

Step Six

Before you show your house, do some spring cleaning, regardless of what season it actually is. Organize your shelves and closets, wash the crayons off the wall, dust off the blinds and window sills, clean away the cob webs and wash all windows and appliances. You will want to make everything as spotless as possible and remove any offensive odors and clear the clutter. You will need to present your home in a clean and appealing way to the potential buyers.

You may also need to work on the exterior part of the house by scraping and painting porches and windows or maintaining an appealing lawn. You can also add low maintenance decorative flowering plants and shrubs to dress up your yard.

Now that your home is ready to show, make it accessible to real estate agents with potential buyers at all times. Most buyers feel more comfortable being shown a house when the owner is not present. If you decide to take a walk while your house is being showed, make a note to the agent if there are any pets on the premises. You will want to be sure that your cat doesn t get out the door or that your dog is securely locked up in a crate or in the back yard. You want everything to go as smoothly as possible.

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Step One

You must know what your wants and needs are before embarking on the long journey of house hunting. Taking a piece of paper, sit down and write down all the features that are most important to you:

Are you looking for a house in a specific city, neighborhood or school district?

How many bedrooms and bathrooms do you want or need?

Do you want off street parking, or a one or two car garage?

If you operate a home based business, are there any restrictions in the area you intend to buy in?

Do you want a finished basement or attic space?

Do you want a ranch style home or two story house?

Do you want a central air unit?

Do your want a furnace or a boiler for heat?

Now, on a separate piece of paper, write down all the features that you absolutely do not want in a house:

Living in a congested part of town.

Living next to an airport, train station or highway.

A home that is in great need of repair.

A home with too many stairs.

Keep this list in mind as you look at houses. This list may also change from time to time as you look at houses. You may choose to add or remove certain features you do not want or are willing to make compromises on. Don t be disappointed if you can not find the perfect home. Most homes do not come perfect, they can only be made that way through time and patience.

Step Two

Before you begin looking at properties, you will need to get your finances in order. This will be a good time to review your credit report and possibly clean it up a bit to improve your credit score. It s important to check your credit report to make sure there are no discrepancies. Any past due amounts should be paid in full or most companies will be willing to negotiate a settlement price to close the debt.

For example: If you have a past due credit card debt you no longer use and that has been entered into collections at an amount of $900. You may be able to offer the company a settlement of $500 to settle that debt and have the debt stricken from your records. Before paying this settlement, have this agreement in writing. Be sure to keep all of the receipts to the items you settle on your credit report because it may take weeks or even months for the settled debt to be removed from your credit report.

Step Three

Now decide what kind of property you are interested in buying. Are you interested in a HUD, foreclosure, real estate or for sale by owner property? There are many web sites on line where you can find homes by city, state, or price range. On these sites, you can see the picture of the home, many with virtual tours, and review the listing features and details.

Step Four

Now is the time to find a lender and get pre-approved for the loan. This will give you a better understanding of what price range you can look into. Being pre-approved also serves a great advantage for when you find the home that you want, so that you can move ahead and place an offer on the house without having to wait on a pre-approval while someone else steps in and takes the house right from under you.

Lenders may offer special programs on loans, such as the FHA or Ameri-Dream, that can save you extra money in the closing process. Before deciding on a loan, ask the lender about any of these special programs and what would work to your advantage.

Step Five

Most first time home buyers prefer to work closely with a reputable real estate agent, regardless of the type of property you wish to buy. Real estate agents are very knowledgeable and can give you many helpful tips and information that can benefit you. They are also great negotiators and will help explain the complicated paperwork involved when placing an offer on the house or when closing a deal. Be certain that your real estate agent is working for you as the buyer and not for the seller of the house you would like to purchase. This can lead to a conflict of interests and cause many problems.

Choosing a real estate agent to work with should take more than picking a number out of the phone book. Talk to your friends and neighbors and ask them for any recommendations. You should only work with an agent you feel comfortable with.

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The first thing you should do is talk to a real estate agent about the home buying process. It should not be a sales meeting and you should be able to find an agent that will agree to meet with you about the basics without having to sign a sales agreement with them. If you can t find a good agent to talk to, you might want to consider talking to a loan officer at your bank or a mortgage broker.

An equally important tip is to get your finances in order before you apply for a mortgage. Order a copy of your credit report so you can check it for accuracy. Mistakes are common and you want to make sure that there is no fraudulent activity. You have the right to dispute errors on your credit report. If you come across something that you know is an error, circle it and send it to the reporting agency along with a letter of dispute.

Next, you should really study the mortgage industry. You need to be able to find the right loan and lender most suitable for your needs. Familiarize yourself with industry terms like debt to income ratio and adjustable rate mortgage. Learn the difference between pre-approval and pre-qualified. It will all seem foreign at first, but taking the time to learn the business will spare you from headaches in the future.

Also, you need to figure out what your wants and needs are. What kinds of amenities are you looking for? How many bedrooms? One story or two story home? You also need to consider the size of the down payment and figure out what you need to do to come up with the money for it.

You must learn about how real estate agents work. There are buyer s agents and seller s agents. A buyer s agent s responsibility is to negotiate the best deal for the buyer. The goal of the seller s agent is to get the price that the seller most desires. The best way to find the right agent is to ask your friends for suggestions. They have all probably been in the same boat, so they can probably recommend a good real estate agent. When meeting with a potential agent, pay attention to how they treat you. Make sure they listen to you when you talk about what you want. Also, how are their follow up skills? Do they take the time to return your calls or emails? If they don t take the time to respond, move on. There is a better agent out there for you.

When looking for a home, consider all of the possibilities. Look up real estate agent s websites. Don t rule out For Sale by Owner Properties and foreclosed homes. Housing and Urban Development (HUD) homes can often be found for very reasonable prices. You do need to find an agent that is approved to sell HUD homes if you choose to take that road to home ownership.

Before you even think about making an offer, you need to consider the resale value. You might plan on being there for a long time, but you just never know. You might opt for a different climate to alleviate your allergies or you could simply be transferred by your company. You want to pick a good location that will be attractive to others as well.

Another issue that cannot be ignored are the deed restrictions, which govern what you can and cannot do with the property. If it has always been your dream to have a pool, you want to make sure that you don t buy a home in a subdivision that won t allow it because of deed restrictions.

Home inspections are an important part of the equation. Talk to your agent to find out when the inspection will be performed. It varies state to state. Sometimes the inspection will be right before the contract is signed and other times, they are performed right after an offer is made.

Finally, make sure you stay on top of things. Any number of problems can crop up at the last minute and delay the purchase of your home. If you aren t sure about something with the paperwork, don t be afraid to ask questions. You might think of something that everyone else has overlooked. Purchasing a home is a time consuming task, but it is worth it when you have your backyard barbeques.

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First, don t damage your debt to income ratio by making a major purchase before closing. If you decide you can t live without that brand new BMW, you might have to wait on owning a home. The bank could easily determine that your sky high car payment would hinder your ability to pay your mortgage. Wait until after you get the house to do some spending. No one expects a brand new house full of furniture and a sports car in the driveway unless you are a famous sports figure or Donald Trump.

Secondly, don t change jobs if you don t have to. The lenders like to see consistency versus constant job hopping. If you are just miserable with your job, maybe you can switch to a different job within the same field. Or you can tough it out until you have the house and then start putting out resumes.

Also, you should never surrender your earnest money to a For Sale by Owner Seller. There isn t anything stopping the sellers from spending the money before the transaction goes through. If the deal should fall through, the buyers would have to fight tooth and nail to get that deposit back. You should put the deposit into a trust account. You should be able to find an attorney willing to hold the deposit for you until the transaction is finalized. Your contract needs to state what will happen to the deposit in the event that the transaction falls through.

In addition, never let emotions guide you. Stay practical and realistic during the home buying process. Some sellers are willing to fix some of the problems with the home and others may not be as willing. Don t let that refusal close the door on your dream home. Conversely, you shouldn t let your loyalty to the home blind you to costly repairs down the road. You certainly don t want to be in a money pit.

Furthermore, don t forget to have the utilities activated. The utility companies might need a few days to switch the service. Don t forget to cancel the service at the old residence. That seems simple enough, yet many people forget that step entirely.

Another costly mistake might be forgetting to secure hazard insurance. Talk to your insurance company right away because the lender will want to see proof of coverage for the new home at closing. Failing to line up the insurance will lead to delays in closing.

You should not get too personal with the seller. After all, this is a business transaction, so it should be treated professionally. If you get into too many personal discussions, you might say something that could be taken the wrong way by the seller. You might have been joking about the ugly green carpet in the guest bedroom, but the seller might have taken that as offensive. In the end, it could hurt the dynamics of the transaction. You should be friendly, but professional.

If the appraisal comes in too low, don t freak out. There are several solutions to this dilemma. The seller might be willing to come down on the price of the home. The buyer can put more money down if they are committed to that home. The buyer and seller can negotiate the deal or the appraisal can be disputed.

Don t forget to use your agent. It is the agent s job to keep up with the daily details of the deal, including the lender, the seller, and the seller s agent. It is also your agent s responsibility to set up a final walkthrough prior to closing.

Lastly, don t forget to take care of your end of the deal. You must be on the same page as the lender. Provide them with the paperwork they need and answer their questions in a timely manner. Failure to do so will keep you from opening the front door of your new home.

These are some of the most common mistakes home buyers make. Educating yourself about the process will ensure a smoother transaction and a definite housewarming party.

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If you are working with a realtor, he or she will be able to make suggestions on how to make your particular home more saleable, but addressing the following problem areas is always a great place to start.

A smelly house is not an attractive house to potential buyers. The problem with odors such as cigarette smoke and pet smells is that you live with them day in and day out and may not notice them. To an outsider, however, the smell will be pungent and noticeable. You can get rid of these odors by smoking outside, keeping litter boxes fresh and in a contained area, repainting walls, shampooing and steam-cleaning carpets and opening your windows to let in fresh air. Don t try to cover odors with an air freshener without taking steps to eliminate the problem; it won t work and your house will still be smelly and unwelcoming to potential buyers. Removing odors from mold and mildew can be a little tougher and may require professional intervention if the affected area is not easily accessible (between walls for example).

Pets: you love them and think of them as part of the family. Your potential buyer may not share your sentiment, so like other members of the family, your furry companions should not be on site while someone is inspecting your house. Pile everyone in the family vehicle, or crate your pets in the yard so potential buyers can look around without being barked at, snarled at or pounced on.

Bathrooms are associated with hygiene, so unclean bathrooms are a major turn-off for most buyers. Make sure your toilet, tub, and sink are sparkling clean and that the drains are clear and free of wet hair and other odor-trapping debris. Shine your faucets and mirrors, de-clutter the medicine chest, empty the trash pail and launder your towels, shower curtain and floor mats.

Dark rooms look dingy and uninviting. Increase the brightness factor of your rooms by adding brighter bulbs (if appropriate), installing extra fixtures, or by placing accent lamps or cabinet lighting throughout the room. An even simpler fix is to pull back heavy curtains and lift your blinds. Trimming low-hanging branches from nearby trees can also help.

Busy wallpaper is a no-no. Too many patterns can be distracting and can date your d cor. Consider removing busy wallpaper, but don t paint over it because that will look even worse.

Wet basements are a cause for concern as they can indicate foundation leaks. More often however, damp basements are a sign of poor ventilation, plugged drains, or improperly positioned downspouts. Remove any mold or mildew that may have appeared as a result of dampness.

Bugs; they re usually harmless, but still an obstacle to home sales. Squash what you can, clear cobwebs, and enlist professional help if you have an infestation.

Low curb appeal can discourage potential buyers from taking a closer look at your home. Spruce up your yard, entry and fa ade. Make sure your paint isn t peeling, and that gardens look their best, even if out of season. Bicycles, lawn mowers and tools should be neatly stored in a shed or in the garage if necessary.

Plugged Gutters. Potential buyers may not notice blocked gutters during an initial showing, but they will turn up during a professional building or home inspection, which could be the difference between a conditional sale going ahead or not.

Clear out when someone is looking at your house. Potential buyers may feel awkward looking around your house if you are hovering over their shoulder. Working with a realtor to sell your house eliminates this problem, as they act as chaperone during the showing without intimidating your buyer.

Most of these fixes are simple and inexpensive to implement, yet can have a major impact on the saleability of your house. If possible, address any of the issues that are present in your home before you list it for sale.

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One of the first mistakes people make is not getting pre-approved or pre-qualified by a bank or lending institution. Sellers and their agents are often skeptical of a prospective buyer s ability to obtain a mortgage loan when the buyer has not been pre-qualified. When choosing between two comparable offers, or when contemplating countering a buyer s offer, a seller will always look more favorably upon the pre-qualified buyer.

Employing the services of a realtor makes great sense, since navigating through the home purchase process is both complex and fraught with financial dangers. However, as the buyer, you should have your own realtor who will be fully committed to representing your best interests. The seller s realtor will often favor the interests of the seller, with an eye to the commission involved. Your agent will be inclined to do a comparative market analysis , which will establish property values and selling prices of homes in the area of your targeted purchase.

Take your time! It happens all too frequently that people rush into signing a contract to purchase a particular home and then for any number of reasons, regret their hasty decision. Remember if you enter into a contract to buy a home, your chances of rescinding that contract are very slim. It doesn t help that you ve found another home you prefer, when you re under contract to make a purchase you re expected to follow through and buy it.

In addition to finding a home they like better than the one they ve contracted to buy, another reason people try to cancel a contract is that they realize too late that they ve over-purchased. The mere fact that you can qualify to purchase a particular property doesn t speak the full story. Being house poor is the pits. Putting the bulk of your earnings into your mortgage payment obviously detracts from your quality of life. Things you used to enjoy, such as vacation trips, going out to dinner or splurging on an expensive piece of clothing will have to be curtailed.

Some people have specific requirements for their dream home and unfortunately sometimes wait too long for that home to present itself. While waiting for utopia, people pass up excellent homes that are good bargains and would fulfill a majority of their demands. Also, in many cases, market prices and mortgage rates continue to rise.

The potential buyer should be aware that there are many types of mortgages being offered by lenders; therefore, they should explore all of their options before locking in. Interest only loans allow the buyer to pay only the interest on their mortgage for a period of usually up to five years. This is an attractive option for young buyers who want to establish themselves in a home of their own, but have not reached their full earning potential. Hopefully and assumedly, at the end of the prescribed 1-5 year period the buyers will be better able to meet full mortgage payments. All other options should be explored as well.

Failing to require a comprehensive home inspection, or relying on the knowledge of a friend, is a penny-wise/pound-foolish thing to do. The relatively minor expense of the full inspection is definitely cost-effective. The inspection should include a review of electrical system, condition of the roof, plumbing, heating and air conditioning, septic system, water quality, etc. etc. etc. This is a very important process that can save untold heartache in the future.

When selecting a home, don t forget that your quality of life in that home extends into the surrounding community. Your new home can be a showplace, but if it s surrounded by run down properties and neighbors who don t fit into your preferred social structure, you aren t going to be happy. Be sure that the school system meets with your approval; inquire about the crime rate and consider the quality of the stores and services available in the area.

Sometimes it s hard to look into the future, but when buying a home it s good to think about resale value. Not that this should be the final consideration, but when touring your prospective new home you should look for things that would be a deterrent to another buyer.

Finally, before signing the contract you should be aware of any restrictions imposed by your new community association. Such restrictions can include: fencing guidelines, parking restrictions (no RV s in the driveway), no boats in the yard, landscaping requirements, and even certain occupancy restrictions. Blindly buying into a heavily restricted community is a very common mistake.

The ten common buying errors mentioned here are by no means an exhaustive list of things to avoid. Buying a home should be done systematically and carefully. Checklists are available from reputable realtors and should be consulted and utilized throughout the searching and buying process.

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When negotiating a contract over buying a home you want to get the lowest possible price and close on the house within a reasonable amount of time so you can move in.

1. Let the seller know what you need or expect in a clear and reasonable manner. Sometimes a buyer may submit a letter to a seller depicting why the property is not worth the asking price and pointing out the faults. This is a sure way to start the negotiations off with a defensive seller. It would be best to anchor a reasonable price, while continuing to remain polite and respectful of the sellers home.

2. Be prepared to solve any repair, title, survey or loan problems fairly; so there are no future problems to be addressed at closing.

3. Never respond to offers emotionally. This combative style of negotiating can turn the seller angry or defensive and can escalate into negative comments, table pounding and threats to walk out on the offer.

4. Keep your cool. Never argue. Arguing can sometimes make the seller want to work against you instead of working with you.

5. Do not be too quick to respond. Do not ignore or respond to the sellers arguments or statements immediately. Make it known that you are listening carefully and considerately, but do not reject or accept any offers until you have had time to carefully consider them.

6. Have any unclear portions of the proposals clarified completely.

7. Never discuss personal issues that involve the seller or buyer, such as an urgency to move in or a financial status.

8. Let trust increase the buyers leverage by: listening and understanding what the seller has to say; convey an appreciation or admiration for the sellers home decorating and gardens; and respond to counter offers within a reasonable time frame.

9. Find a common ground with the seller. This can be a very powerful tool used to the buyers advantage in the event of multiple offers. Sometimes a seller may select a buyers contract for personal reasons, like if the buyers family reminded the sellers of themselves when they bought a home with their young children, or just by sharing the same religion.

10. Understanding your leverage as the buyer. The more the buyer can find out about the seller s needs, the better chance the buyer has to find solutions in negotiation. The buyer must be able to appeal to the seller s concerns. For instance, if the house has been on the market for over 300 days, the seller will have a lot more leverage than they would have with a brand new listing. If the sellers time frame is forthcoming, then the buyer can meet it with some leverage, unless the seller s have multiple offers.

Most buyers usually offer less than the listed price of the house. So, how much under the listed price should you offer? That all depends if the house is listed in a strong seller s market and the market analyses of the recent sales in the neighborhood from where the house is being sold. The buyer should do their homework before submitting an offer so low, they might risk offending the seller and have their offer rejected immediately.

If there are multiple offers on one property, disclosure is favored among all parties. However, the seller or agent representing them will make the final decision as to how the offers will be handled. The seller may disclose the terms of one offer to stimulate another buyer to submit a better offer. Normally the procedure for multiple offers is to notify each party of the multiple offers that have been received. Each of the parties is then given an opportunity to amend their offer and submit it within a certain amount of time. After all offers are on the table, the seller is once again free to review the amended offers and select a buyer to negotiate with. Sellers are in no way obligated to accept the first offer that comes in. Any offer selected may be countered, negotiated, or accepted as is.

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Typically the buyer will have a more of a role to play in the process of closing on a house. However, the seller will have an important role to play too. Usually a review of the settlement sheet is presented first for both to sign and agree upon. You will need to be sure about the terms and agreements before you sign. Next the buyer will be required to show proofs of required mortgage insurance, and that all necessary inspections have been completed according to the guidelines of the contract. All parties must be in complete agreement over terms and sign the documents. Once this phase is completed both parties will present a certified check for the entire amount of the closing costs. The lender will present the funds paid to the closing agent, also if there are any funds due they will be submitted at that time to the lending agent.

Depending on the requirements that you agreed to as a buyer, for example your bank or mortgage company may have stipulated that any you will need to set up an escrow account to pay your property taxes, or may be your designated home insurance provider out of this account, this will be efficiently handled at the closing meeting for your new home. Other issues such as the recording of the deed will be discussed. Don t be surprised if your informed that you don t have legal claim to the property until it is officially recorded at your local courthouse. It is to be understood that you may not move in until you have legal ownership of a clear title, and this process can take from a few days to over a week. This is why disbursement of funds to anyone involved in the transaction will not be paid until the deed recording is completed.

If you re the buyer you will need to know what forms you will be required to sign. Take a few moments and write down a check list, and bring along copies of any paper work that you have been required to sign or review. An important document known as the Truth in Lending statement will contain vast amounts of financial information for the buyer. This statement will contain information such as your interest rate for the mortgage, amount of the cash financed, and your monthly payment schedules along with the total amount paid based on the length of your loan. Detailed information will be found in other paper work for the buyer too. The mortgage note and other assigned specifications will spell out in specifics terms such as how and where the note is to be paid, and the institutions right to reclaim their rights to the property. This legal documentation will also explain that you re to meet other specific requirements, such as paying any necessary insurances and taxes yearly, that is of course if you are allowed to pay this independently, and is not part of an escrow account.

The value and importance of a good realtor is quickly appreciated in the closing meeting. Many of the processes involved are readily explained by a caring and competent professional before the closing ever takes place. Make sure though that you do your part by taking the time to ask any questions that you have with your realtor, and studying if necessary your part of the process, whether you re the buyer or seller. Home buying and selling can be a pleasant experience for all of those involved without a lot of hassle and grief. Just make sure you approach it with the right attitude and guidance.

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Pooling resources with friends, lovers or partners to come up with a down payment or the purchase price of a home is increasingly popular today. But now that you have the money, you and any partners face some tough decisions, starting with the deed.

First decide what kind of deed to have. If nothing to the contrary is stated on the deed, the property is owned as by tenants in common. With this kind of deed, there can be multiple partners, each owning a different percentage of the property. Partners can also transfer their portion of the property to anyone at any point, without the permission of the other owners.

In reality, however, if the partners disagree, it’s hard to sell part ownership in a home to a third party. Few people want to buy a home if they don’t have complete control of it. More likely to happen is that if one partner won’t buy the other out, a partition action is filed in court. A judge then orders a sale, which usually nets the partners less than the home’s market value.

If the deed is tenants in common, problems can also occur when a partner dies. The deceased’s share goes to the person or persons designated in the partner’s will.

But if there is no will, the share goes to the deceased’s relatives, who are entitled to the estate under New York State law. This can result in an original partner owning a home with a stranger or even multiple new partners.

If a partner wants his or her share in a property to go to the surviving partner in case of death, the deed should be written as joint tenancy. Then, no matter what a will says, the surviving partner or partners receive the deceased’s share.

Even after you decide what kind of deed to draw up, partners purchasing property together should also draw up a formal agreement, spelling out such things as how much interest each has in the property, who pays what expenses connected with the house and what happens if one partner is unable to pay their share. In the latter case, for example, the agreement might call for the delinquent payer’s proceeds to be reduced in the event of a sale, she says.

Many people, of course, never plan for problems, so they leap into the purchase “without looking at all the angles”. But if everything is examined, potential problems can be addressed in the agreement. Here are some examples:

One way some partners who own the property as tenants in common have solved the problem of transfer in case of a death is for each to take a term life insurance policy for half the value of the home. If one partner dies, the deceased’s heirs are left the property’s value in cash.

Engaged couples purchasing a home prior to marriage should have a prenuptual agreement, spelling out who put up what money to buy the home and what happens to the house if the engagement is broken.

Such agreements may seem cold-hearted, “But when love goes sour, it can be a nightmare.” Even if one partner moves out, both are still liable for the outstanding mortgage balance when both names appear on the note. Sort of like the sound of a roof caving in on a dream.

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A real estate agent is engaged and performs a valuable service in bringing prospective buyers to the house and facilitating the purchase. Given the extensive ‘’multiple listing service'’ network real estate brokers maintain and the energy agents put into the art of selling, a house usually can be sold quickly and painlessly this way.

It costs, however.

For that work, an estate agent receives 4 to 7 percent of the sale price of the house. Usually the homeowner simply builds the real estate commission into the selling price, so that the agent’s fee is covered. Right there, however, one should stop - at least to question whether the agent’s fee is really worth the effort.

Most of the time it is. On a $100,000 house, you are talking about $4,000 to $7,000 for perhaps a few weeks’ work by the real estate agent. On a $500,000 house, you are talking $20,000 to $35,000! Even if you grant that (1) real estate agents perform valuable and unique services in facilitating the actual sale of the house, and that (2) you could perhaps jack up the price of your house - still, that kind of money might be better spent.

You, the seller, could get the money. Or you, the buyer, could benefit in the form of a price reduction. Or the two of you could split the difference.

When should you consider selling a house without an agent?

If you’re confident your property is desirable and you’ll have little trouble drawing the buying public to it, you might go it alone. If the buyer is already known to you - a neighbor, family member, current tenant - a sale could be an easy affair. If your house has appreciated so little that the amount that goes to the real estate agent’s commission would eat into your initial investment, you might want to save the agent’s fee.

A word of caution: You should not attempt to circumvent a real estate agent when a listing contract is in effect. This is unfair and the agent could well sue for recovery of the commission.

OK. If you are still ready to go it alone, these are some points that real estate agents, lawyers, how-to authors, and veterans of the for-sale-by-owner experience advise that you keep in mind:

First determine your price. Real estate agents usually help you with this. Without an agent, you might want to call an appraiser in the Yellow Pages.
Prepare a spec sheet on the house also, listing price, property taxes, energy costs, square footage, number of bedrooms and bathrooms, type of heating and cooling, and the age and type of furnace, water heater, kitchen appliances, roof, etc.

Now determine how best to advertise. A ‘’for sale by owner'’ yard sign is usually a good idea. A well-worded advertisement in the Sunday newspaper is smart also.

Without working against your own interests, be frank about drawbacks with the house or the neighborhood.

Be prepared - just as you would if you had a real estate agent bring prospective offers to you - to negotiate on the price. If the buyer is alert he or she will know that you are saving the commission and might be inclined to ask you at least to split the difference.

Retain an attorney to examine any purchase and sale agreement (contract of sale) or other contractual matters and act as a liaison between you and the buyer if need be.

Don’t accept clauses that allow the purchase to be contingent on factors such as the sale by the buyer of another piece of property or any arrangement that prolongs the transaction and locks the house off the market.

Before you accept a sales contract and take it to your attorney, you should attempt to determine whether the buyer qualifies for the financing.

Get a list of the buyer’s employer’s name and address, gross annual earnings, gross annual income, outstanding debts.

After all that, you can decide for yourself whether saving several thousand dollars is worth it - or whether you have a new appreciation for the efforts of real estate professionals.

Technorati Tags: real estate, investing, real estate profits

- Shop for home financing first. Many home buyers begin by looking at homes they can’t afford, thus wasting the time of real estate agents and home sellers. A better approach is first to talk to several mortgage lenders to learn the maximum mortgage for which you can qualify. Inquire about both fixed rate and adjustable rate mortgages. Of course, after you have a home tied up on a purchase contract, you can shop further to see if the mortgage terms can be improved.

Mortgage lenders are especially eager to make loans today, because their business volume is down, but their vaults are bulging with mortgage money to loan. Home buyers should be aware mortgage lenders need borrowers as much as borrowers need lenders. Don’t be intimidated. If a mortgage company isn’t responsive and cooperative, there are dozens of other lenders who are.

- Become the neighborhood expert. Before making an offer to buy a home, inspect as many houses as possible in the neighborhood. Weekend open houses are an excellent time to inspect many homes in a short time period. After you inspect about 20 houses you will know more about an area’s homes than do most real estate agents.

This understanding is critical to a successful home purchase. Home buyers should be careful what they tell the salesperson, because that agent legally represents the home seller and is obligated to tell the seller every material fact known about the buyer.

- Before making an offer bid, ask for a competitive market analysis. Just to be certain you are not overpaying for a home. Before making a purchase offer bid, be sure to ask the realty agent for a written competitive market analysis. This form shows recent sales prices of similar nearby comparable homes, as well as asking prices of neighborhood homes currently for sale. By adding and subtracting market value for the pros and cons of the home you want to buy, you can make an offer that is neither too high nor too low.

- Insist on mortgage and inspection contingency clauses. There are two contingency clauses your home purchase offer bid should contain to protect against unexpected but often encountered problems.

The first is the mortgage contingency clause. No matter how certain you are of obtaining a home loan, be sure to include a simple finance contingency. Such a clause might read: “This purchase offer is contingent upon property and buyer qualifying for a first mortgage of at least $80,000 at a fixed interest rate not exceeding 10.5 percent for at least 30 years with a 2 point maximum loan fee and a maximum $731.79 monthly payment.” If the specified loan cannot be obtained, then you need not proceed and your good faith deposit must be refunded.

In addition to a termite inspection, if customary in your area, the other important contingency clause to consider involves a physical inspection. Such a clause might read: “This purchase offer contingent upon buyer obtaining at his expense within 10 days a satisfactory professional inspection report on the property; buyer to notify the seller if such report is unsatisfactory and this sale shall then be cancelled with the buyer’s earnest money deposit promptly refunded.”

Home buying can be an enjoyable experience for buyers who understand the process. By knowing what price home you can afford, inspecting many neighborhood homes before making a purchase offer, understanding who the agent represents, insisting upon a competitive market analysis before making a purchase offer and including finance and inspection contingencies, home buying will be a pleasurable purchase of your best investment.

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Under the terms of RESPA, home buyers are entitled to receive certain disclosures during the course of a real estate transaction. The law also prohibits kickbacks and referral fees that unnecessarily inflate the cost of settlement services and therefore falsely driving up the cost buying a home. RESPA provisions apply to loans secured with a mortgage on residential properties designed to house one to four families. Examples of the types of loans covered by RESPA include:

Purchase loans

Assumptions

Refinancing loans or measures

Property improvement loans

Lines of credit based on equity

An office within HUD, called RESPA and Interstate Land Sales enforces the RESPA statute. Buyers may contact the office directly if they think the terms of closing and settlement in their house deal do not respect RESPA provisions.

RESPA stipulates that certain disclosures be made at particular times during the real estate transaction process. When a buyer goes to apply for a mortgage loan, his or her broker or lender must provide either at the time of the application or by mail within three days a Special Information Booklet, a Good Faith Estimate (GFE) of potential settlement fees, and a Mortgage Servicing Disclosure Statement.

The Special Information is required for home purchases only, and contains details about different kinds of real estate settlement services. The GFE outlines the type and amount of settlement costs the buyer will likely encounter when his or her house deal closes, as well as whether the broker or lender requires the buyer to use a particular settlement services vendor. The figures in the GFE are estimates, but they should be relatively close to the actual settlement costs at closing. Finally, the Mortgage Servicing Disclosure Statement reveals whether the broker or lender will handle the buyer s loan or whether it will be transferred to another lender. The Mortgage Servicing Disclosure Statement should also have a section dedicated to options the buyer may employ to resolve any complaints.

If the buyer decides to go ahead with the transaction after securing appropriate financing, the next RESPA-required disclosure is an Affiliated Business Arrangement disclosure (AfBA), which is used if a settlement service vendor or provider refers the buyer to another provider that is affiliated with the original service provider. The affiliation can be part or full ownership of any other beneficial interest. The AfBA disclosure must be made before or at the time the referral is made, and it must give a full description of the relationship that exists between the two companies as well as a reasonable estimate of the fees of the second settlement service provider. In most cases, the buyer is not obligated to accept the services offered by the second service provider, but he or she may choose to do so.

One day before the settlement (or closing) date, the borrower may see the HUD-1 Settlement form, which details all settlement charges imposed on borrowers and sellers. All parties receive a complete copy of this form, showing all of the actual settlement costs, at the time of settlement, or in the mail shortly thereafter.

Another disclosure that is made at the time of settlement is the Initial Escrow Statement, which lists the estimates of charges that are expected to be paid from the escrow account during the first year of the loan. Charges may include taxes and insurance premiums. After the first year, loan servicers must provide borrowers with an updated annual escrow, which lists all deposits and payments, as well as any relevant shortages or surpluses related to the account.

If, at some point after the settlement occurs, the loan servicer reassigns the loan to another servicer, the borrower must be notified 15 days in advance by means of a Servicing Transfer Statement.

While RESPA does not set out particular penalties for non-disclosure of the above mentioned items, kickbacks and referral fees that violate Section 8 of the law are subject to fines of up to $10,000 and imprisonment for up to one year.

Settlement or closing fees cost Americans about $55 billion each year. HUD has initiated a RESPA reform process that the department hopes will simplify the costs involved with buying a home to better reflect the Bush administration s goal of helping to build an ownership society in which all Americans can own their own home. The reform process has not been completed, and for now, the rules remain as they have been for the past three decades.

Technorati Tags: real estate investing, real estate, home sales, investment property

Losers in the real-estate wars are often the agents who can’t match clients up with the right piece of property, the seller who loses money while his property sits unsold, and the buyer who can’t determine which property is the best investment for the future. The fact that the microcomputer can solve the problems of all three parties makes it “a sleeping giant that is about to wake up,” according to one real-estate-software developer.

The National Association of Realtors (NAR) in Chicago is bringing out the big guns with its Insite microcomputer system — a repackaged Digital Equipment Corporation (DEC) Professional 325 or 350 computer with bundled software and a laser printer.

The DEC-written software will provide standard word processing and list processing to facilitate mass mailings by real-estate brokers. With these two applications, the salesperson can keep a list of people who are interested in, for instance, a two-bedroom house with one acre of land. When a piece of property fitting that description comes on the market, the salesperson can merge a letter with the list of buyers and immediately notify a number of prospective buyers. In this case, both the needs of the potential buyers and the seller are served.

Packages such as Real Estate Strategy allow the buyer, seller, or agent to build a model of a real-estate deal and determine the best price and terms. The model takes into account the down payment, current interest rates, and desired cash flow. The package becomes even more useful when comparing more than one real-estate deal.

Another package that allows analyses of real-estate investments is available from HowardSoft of LaJolla, California, the company responsible for the best-selling Tax Preparer software package. HowardSoft’s Real Estate Analyzer for the IBM PC or Apple II allows investors to compare as many as ten loans and calculate the monthly payments on each. Unlike simpler programs that can perform this basic arithmetic task, Real Estate Analyzer calculates the tricky adjustable interest rate and balloon mortgages based on estimates of future economic conditions.

The HowardSoft package compares five factors of inflation and, drawing on the company’s tax background, includes the latest tax laws for depreciation, recapture, and capital gains. The Real Estate Analyzer also allows investors to maintain records on renters.

But not all agents are as eager to use a microcomputer. Pointing out that the currently used remote-terminal-based multiple-listing service is only as good as the people that use it, Steven Carlitz, a broker with Taylor Properties of Palo Alto, California, says, “I don’t think we’re ready for it yet.”

Carlitz says he doesn’t need a sophisticated record-keeping microcomputer to keep up with his current customer load. “If I had 200 clients of my own, it might be good to have a computer [to keep track of them], because I’ve made the most money when I’ve followed up a lot with people,” he says.

So though some agents are jumping on the microcomputer bandwagon, there is still some resistance.

There are a number of existing real-estate networks that are commonly known as multiple-listing services (MLSs). The large minicomputer databases maintained by MLSs are now reached by real-estate agents through dedicated dumb terminals. Agents list their properties on the network and, in exchange, get a crack at selling property placed on the network by other agents. The database can usually be searched for specific characteristics such as price range and number of rooms.

One idea that seems to be universally rejected by real-estate professionals is that of hooking a microcomputer to a videodisc or videotape to call up an image of the property.

Technorati Tags: real estate investing

In short, the nature of the business has changed significantly, affecting a wide range of business activities, including: competitive strategies, relationships with buyers and suppliers; methods of marketing and development; systems for control, coordination and motivation; product development; financial management; human resource development and management.

How various real estate organizations respond to these changes will directly affect their future success.

Strategic planning in the real estate business involves a variety of disciplines — organization analysis, tax planning, market analysis, deal-structuring, investment planning and financial analysis, to name but a few.

Corporate Strategies

While strategic planning can benefit many organizations, much of the demand for strategic planning comes from three corporate types, Diversified conglomerates with substantial, and often undervalued, real estate holdings are one type. Such entities often wish to upgrade their properties for overall corporate purposes and/or use the real estate in financial restructuring or simply to provide earnings.

A second type of corporate entity may be looking for a way to enter the real estate industry anew. A good example would be a regulated public utility trying to establish nonregulated real estate subsidiaries. A third corporate type involves real estate firms looking to reposition themselves in their market or expand into other markets or areas. To accomplish these goals, they also may need to restructure themselves organizationally or financially.

Situational Analysis

The purpose of the situational analysis is to establish common goals and objectives, and to document key variables affecting an organization’s business plans. Hopefully, these activities will lead to the ultimate goal of establishing a consensus among participants in the overall strategy.

Situational analysis involves a number of issues, starting with a determination of a company’s organizational structure and its overall business goals or objectives. It also may include an analysis of overall business trends and local market conditions, an inventory of current real estate holdings, and a review of any external conditions affecting a business — such as regulatory constraints, tax position, capital structure, etc.

An effective situational analysis includes interviews with key executives in the organization, review of important documents, property and site inspections, and the definition of short- and long-term goals. This process may require additional input from other non-real estate specialists, such as organizational, tax, or accounting advisors.

Once the situational analysis is complete, key executives convene in a special workshop to review results. This workshop is critical to the overall success of the engagement for three important reasons.

First, it establishes consensus between and outside consultant and the client regarding the focus of the process. Second, it provides a mechanism for department heads in the organization to participate in the strategic planning process. Finally, it provides a common basis of understanding of “what is,” reach the goal of “what is to be.”

Final Strategy

In the final step of the strategic planning process, all decisions are documented into a final strategic business plan. Naturally, the format of the final document will tend to reflect the organization’s own preferences, but a convenient summary can emphasize major points of the plan.

Once the documentation is finished, strategic planners conduct a final workshop to bring together any remaining details in the decision-making process. One major focus of this process is assigning implementation responsibility for various components of the plan to specific individuals. In addition, it is important to establish specific monitoring procedures.

In the long run, strategic planning can be of immense benefit to many types of organizations, especially in the often turbulent real estate industry.

Historically, the real estate community has consisted of independent, aggressive, dealmaking individuals who were in business to make money. Today, however, the real estate industry is maturing, primarily due to increased competition and market saturation.

The bottom line — real estate companies today must be concerned about business strategies for the real estate industry as a whole - not just individual projects.

Technorati Tags: real estate investing, real estate, home sales, investment property

Consider your intentions when you go looking for a new or new-to-you home. Are you searching for your dream home, a place you hope to hang your coat for a long time? Or perhaps you are looking for smaller, lower-maintenance place to ease you into retirement? Maybe you ve spotted a hot market and are hoping to turn a profit with a fast buy and a fast sell sometime in the near future. Your plans for your new house and how long you intend to stay there can affect its re-sale potential. For example, the trendy new neighborhood where your house is located may not be so trendy and popular ten years from now.

Regardless of your intentions, there are several other factors that will affect the re-sale potential of your home. First among these is location. You ve probably seen house-for-sale advertisements boasting about a home s location, and it s true, location is very important. Today s preferred location may not be the same five or ten years from now, but many of the elements that make it desirable will be the same. Large lots, mature trees, wide sidewalks, proximity to schools, shopping and public transit are all features that increase an area s lasting appeal and will therefore fetch higher re-sale prices than homes in areas that do not offer the same advantages. When thinking about location, you should also consider the population and economic growth trends in your city or town, and in which direction growth appears to be moving.

Demographics can also come into play when it comes to home re-sale value. With baby boomers heading into retirement and their golden years , one-level homes with wide passage ways and rooms large enough to accommodate wheelchairs may become more popular in certain areas, while suburbs filled with young families may put more of an emphasis on large yards and ample public green space and playground facilities. Try to learn about a town or city s population before you purchase a home there.

Be aware of the features that sell. Peruse local real estate advertising to find out the most desirable attributes in the area in which you want to buy. You may notice that homes with one bathroom sell for less than homes that have more bathrooms, or that homes with old, inefficient windows sell for less than those with newer, vinyl-clad windows and energy-efficient panes. The same can be said about a variety of features including closets, number of bedrooms, fireplaces, swimming pools and kitchen functionality. Don t despair, however, if a dated or less desirable home is all you can afford: outdated houses present an opportunity for renovations and upgrades that can vastly increase their value and re-sale potential. With a small investment and a little work, you can turn a fixer-upper into cash in your bank account. The profit margin increase can be significant enough to justify enlisting the help of a professional to help with major projects.

A residential building inspector can also help you identify the shelf life of a home you are considering buying. A thorough inspection report will give estimates on the lifespan of major home components such as the roof, furnace and driveway. If several of these components are reaching maturity at or near the time you want to sell, the re-sale potential of the home could be devalued as a result of the impending repairs. Take these timelines into consideration if you plan on moving in the near future, or if your cash flow will be compromised during the same period in which upgrades will become necessary.

Buying a house should be about meeting your needs and desires, but a little forward-thinking can mean an easier sell, and even a profit, a few years in the future if your needs change or you want to move on. A purchase designed to meet your current needs while accommodating future re-sale potential is a smart investment that will help you fund a bigger, better house when the time comes, or to create a little nest egg for future investments or retirement. Considering the re-sale value of a home before you buy it takes little effort but produces great routines all in all, a logical thing to do.

Technorati Tags: real estate, home purchase, real estate investing, property advice

Most states in the US require that if you re selling your home whether through a real estate agent or as a FSBO (For Sale by Owner) you must give to a potential home buyer a Seller Disclosure of Property Conditions form. This form discloses information about your property that would affect the living conditions or the resale able value of the home. Disclosure of property conditions includes any past or current problems with the property. Check out the different categories of property disclosure, and make sure that you list the necessary information required under each one. This list may or may not include issues that you would need to be concerned about, so make sure to check with your state and local agencies for complete information.

House Systems Includes areas such as plumbing, electrical, appliances, doors and windows, security system, pool, sprinklers, sump pumps, cooling and heating.

Foundations/Structures/ Basements Includes leaking and repair issues and drainage problems surrounding the house.

Roof Includes age, leaking and repair issues, second and new roof installation, time frame of roof repairs, and when or how often the roof leaks.

Land/Drainage Includes soil permeability issues such as drainage or flooding problems, or are there any other water sources such as a lake, spring or creek.

Boundaries Includes survey issues such as boundaries of property line, markage of known property lines by what means, such as moveable property stakes as rocks or trees. The allowable property easements for your area, as well as any other obstructions to property such as encroachments by other property owners.

Water Includes source of water and water pressure issues, and purification systems and tests conducted on water quality.

Sewer System Includes how property is serviced for sewage waste, such as septic, public utilities or cess pool. Dates of inspection and known sewer problems.

Construction/Remolding - Includes information on any new buildings or remolding to existing structure, and the necessary building permits.

Homeowner s Association Includes information of any homeowner s association rules and guidelines.

Miscellaneous Includes many areas to numerous to list, but some areas of information encompasses testing for radon gases, termite damage, abandoned under ground storage areas such as septic tanks or cisterns. Issues such as warranties, legal actions, or weather related damage such as tornadoes.

Just as important as you re state and local laws is the federal laws that regulate selling your home. Two issues of primary importance are disclosing lead paint and the conformity to the fair housing laws. According to federal law you must disclose if your home was built or remodeled before 1978. This law was passed and is now enforced by the EPA (Environmental Protection Agency) because of test results that show that lead based paints can cause detrimental affects on human health, especially in babies and small children. Lagging mental function and stunted growth can occur if sufficient amounts of lead based paints are consumed or particles inhaled. Disclosure of test results and the opportunity to test is federal law. Also, fair housing laws require adherence to the selling of your house, although if selling as FSBO the regulations are a bit more lax. The Fair Housing Act, under the Civil Rights Act of 1968, requires that sellers may not discriminate when selling a property. Discrimination is not allowed based on race, color, national origin, religion, sex, familiar or handicapped status.

Another area to consider before you advertise your house for sale is how to weed out the lookers among the potential serious buyers for your home. Many FSBOs can request that buyers become pre-approved by a financial institution before a bid will be accepted. During the home tour you can set parameters too by inquiring on the buyer s ability to quickly obtain financing. You might not want to wait while they must sell their house first in order to buy your house in a timely manner.

Sticky decisions concerning the contract should fully spell out the conditions of the sale, such as any deposits that are required and the ability of the buyer to have their deposit returned. Protection is provided to both when a contract is clearly written for both parties, as for example the ability of you to keep any monies from a buyer that backs out because of an unjust cause. Always make sure to consult an attorney when writing up your contract to sell your home. Remember too that laws fluctuate from state to state and being prepared is the best defense against an unsold home.

Technorati Tags: real estate, home purchase, real estate investing, property advice

Seeking out a smaller house on a smaller lot is one alternative. But it is not easy. Bedrooms are usually upstairs, which can be a problem for an older person. Moreover, few small houses are geared to just a couple or a single person. And often the so-called adult communities of the Northeast - condominiums or homeowner associations restricted to older residents - offer primarily attached units, which many find unacceptable.

Brenda and Theodore Schofield, for example, faced a typical problem. For 24 years they had lived in a five-bedroom colonial house on one and a half acres in Holmdel, N.J. After their three children had grown up the property was clearly too much for them.

‘’But there was no way I was going to move into something where I would have families on either side of me,'’ Mr. Schofield said. ‘’I get claustrophobia just visiting my mother in her apartment in New York City. There’s also a lot to be said for your own backyard even if it’s small. I don’t want to be told it’s common ground.'’

The developers of the age-restricted communities, as it happens, are increasingly seeking to appeal to people with these views.

We found that when prices were comparable, the detached units outsold the attached ones every time. The single-level detached houses are in communities designed and operated primarily as homeowner associations. This style of living frees older people from their former maintenance and security worries, eliminates those staircases and yet offers the sense of home ownership on a private lot.

Currently on the market is Greenbriar North, a development of 700 such houses on 60-by-105-foot lots being built by U.S. Homes in Marlboro Township in Monmouth County, N.J. About half have been completed and sold.

In another development, the Union Valley Corporation is beginning construction on Whiting Station, a 322-house community on 50-by-100-foot lots in Whiting, N.J., in Ocean County.

The two architectural designs show how closely both developers are adhering to the desires of those leaving the large home. Greenbriar North offers detached homes on either one or two levels. And even those on two levels are designed so that the occupants can live entirely on the first floor, using the upper level as a guest suite or for optional activities.

The detached setting gives them that opportunity. The homeowner association takes care of their lawn. The aluminum siding is virtually maintenance-free. And they have the advantage of the recreational facilities common to community association living - in this case a clubhouse with a woodworking and a ceramics shop, tennis courts and a shuffle board court.

Technorati Tags: real estate investing, leverage, home valuations

Learning about a home and its surrounding areas, disclosing all factors affecting a home’s value and obtaining a thorough inspection as well as a warranty plan are among the steps which can help reduce potential law suits.

Real estate professionals and home sellers should be aware of a neighborhood’s zoning — one of the factors which can affect a home’s value in the future.

It is important to be informed about certain residential properties which can also be zoned for other uses such as commercial or multifamily housing. In a residential neighborhood for example, an adjacent lot which is later converted into an automobile body repair shop will most likely lower the value of surrounding single-family homes.

Other factors which can affect a home’s value include nearby projects in the planning stages and environmental hazards. Real estate professionals should check with local officials about future projects such as a new freeway or re-routing of streets which can increase traffic and noise.

‘Real estate professionals and sellers should always disclose to the buyer this type of information about the area as well as any known environmental hazards such as a nearby landfill.

At the time a seller lists a home for sale, the real estate professional should be thoroughly aware of its condition and any problems to avoid future surprises during negotiations or after the close of the sale.

Termite and home inspection should be used in every transaction. A home inspection not only reveals defects in a home that can be addressed before closing the sale, but it can give buyers a comfort level, knowing what they’re getting and reinforcing their decision to buy.

Another important tool to help reduce after-the-sale problems is a home warranty plan. Home warranties are a good perk and give real estate professionals an opportunity to follow up with the homeowner who has had a positive experience and is usually happy.

Most litigation arises from anger caused by resentment building up from smaller problems. Home warranties help keep anger down, so if a larger problem occurs, the home buyer is more likely to call the seller and real estate professional to discuss the problem rather than file a lawsuit.

Before home warranties, most real estate professionals and sellers received calls within the first six months about broken dishwashers, disposals, water heaters and leaking roofs on rainy days. Now, however, most calls are regarding problems about zoning issues and non-permitted add-on rooms.

The following points which are perhaps more important than price when selecting a home warranty company and plan:

1. Consider the financial stability of the company.

2. Read the contract carefully and note what items are covered.

3. Check how fast the company services calls.

4. Check how the company handles claims which are in dispute.

Be knowledgeable about the condition of the property, disclose any known problems to the buyer and provide a warranty plan for unexpected mechanical breakdowns after the close of escrow. Taking these necessary steps will prevent after-the-sale problems and help limit future liability.

Technorati Tags: real estate investing, home buying, mortgages