Posts tagged "Home Buyer"

Ten Tips Every Home Buyer Should Know and Understand

When people buy a home most tend to do some bit of research before actually getting serious about the process. However, there is quite a bit more in terms of buying tips home purchasers should be aware of but frequently are not. There were ten critical tips that were shared, by Dottie Herman and Eric Tyson, on the June 2^nd broadcast of “Eye on Real Estate” radio show.  Herman, the CEO and President of Prudential Douglas Elliman, and Tyson and real estate mogul and best-selling author, discussed real estate topics for listeners near and far.

These tips include:

1.      Affordability – Buyers should before even beginning discussion what they can truly afford in a house and what they cannot. This rule is critical to avoid getting locked into a house that will end up costing too much and will eventually end up in a foreclosure down the road. The bank, mortgage broker, and real estate agents won’t always watch out for this. Many times the fees and initial interest pay off any loss risk they might have before the loan is sold off to another lender.

2.      Map Out Personal Circumstance – The same way a homebuyer determine affordability ahead of time, he should also understand every aspect of his personal circumstances. This includes all other liabilities, income, demands, expectations and future financial plans. All have an influence on buying a home.

3.      Comfort Level – Buying a home also needs to be as stress free as possible. A home buyer will not be in the right frame of mind to buy the right home for his needs if he’s worried about holding onto a job, expecting a child in a month or two, trying to close a major deal, or deal with a divorce. Life has many moments of stress and moments of calm. Buying a home should happen during periods of as much calm as possible.

4.      Avoid Salespeople – It never fails. A party goes into buy a home and gets hammered with ten to twenty different sales pitches before the home purchase is done. This can include insurance policies, pest contracts, warranties, alarm systems and even landscaping. Every opportunity to leverage another sale is attempted by home sellers and their affiliates.

5.      Hire a Good Financial Planner – This seems like an odd tip. Why does someone need a stock picker to a home purchase? It’s not quite that sort of situation. A financial planner provides a valuable service in looking a one’s financial activities from an outside perspective. A planner can point out where advantages or disadvantages exist, which can thousands of dollars in differences from taxes to real estate investment.

6.      Hire Top-Notch Real Estate Representation – Did you know buyers can have real estate agents as well as sellers? It’s true, and those agents get paid by the sale, not out-of-pocket, just like the seller’s agent. Having a good agent, mortgage analyst and home insurance company can make the difference in avoiding home-buying problems or being buried in them.

7.      Buy and Refinance? Hold On – Most refinancing costs $5,000 to $10,000 by the time a deal is done. So a homebuyer needs to ask himself, will the change in loan interest recover enough in two years to not only offset that cost but create a cost avoidance of the same amount? If the answer is no, then refinancing should be delayed until a better opportunity comes along.

8.      Look for Automation – An electronic, schedule mortgage payment keeps a homeowner on track with his home loan. Without that deadline automatically charging an account, a homeowner could be tempted to delay a payment one month a few days when times are tight. That becomes the start of problems.

9.      Still Save and Save Some More – A home purchase may seem to suck up any available money, either in a down payment or related expenses like moving, furniture, accessories and even room paint. However, putting back an emergency fund in one’s savings account as quickly as possible is critical.

10.    Mortgage Insurance – Skip It – Agents will push mortgage insurance as a necessary part of the home buying process as a safety net for a home loan. However, it’s not necessary. Instead, a good life insurance policy will truly help provide a financial safety net for a family if income is lost and a mortgage is in jeopardy.

There are also a few after-the-fact issues homeowners should be aware of as well, according to Dottie Herman and Eric Tyson. First, don’t take increases in property tax assessments lying down. Many county assessors change tax rates from behind a desk, never truly evaluating the value of a property versus its actual market worth. When an assessment goes up, an owner should fight it if it seems extreme. Holding onto purchase documents is a smart idea as well; it allows for a true documentation of what a home gained in value when sold later on. Finally, buyers need to purchase the home they truly want within their means. Buying something less will result in immediate dissatisfaction soon after. And given all the money involved in a typical purchase that would be a huge waste.

Simple Steps That Lower Your Moving Costs

You just bought a new house and want to make sure you get the most professional efficient cost effective relocation.  You can follow these simple steps to ensure this happens. 

First, educate yourself on what kind of move you have and how you are being charged for the process.  Different types of moves have different types of charges.

• Local Move:  You are moving within a local area less than 60 miles.  These estimates are based on an hourly rate, depending on how many workers are needed and how much time it will take to pack, load and deliver your possessions.  This is called a time and material estimate. 
• Out of State Move:  Your move is out of the state, estimates will be based on the distance of the move and the weight of your goods.  To provide you with an accurate estimate, your sales consultant will need about an hour of your time to walk through your home. He or she is viewing  and quantifying everything that will be relocated on your move. 

Other factors can influence the price of your move, including what optional services you select for your relocation.

• Packing:  Are you going to pack all the loose items in boxes for transport? Or is this a service you would like the professionals to handle?
• Specialty Items:  Do you have unique, heavy or delicate pieces, such as automobiles, pianos, large exercise equipment, or large appliances that may need special servicing and attention?

On a local move time is of the essence.  The faster the move gets done, the more money you will save.  The key is to have everything as ready as possible when your moving crew arrives.  Have all boxes taped, labeled and ready to go.  You don’t want to end up paying $100 or more an hour for movers to tape boxes.  You want your professional crew doing the things that make them the professionals; prepping and wrapping the important items, and handling your precious items with care. 

Labeling boxes is also very important.  I recommend labeling the boxes with a room location and a brief description of what is in the box.  This will save time at destination when items are going into the new home.  This avoids the headaches of opening the boxes to see the contents then deciding where it goes.  You will be too busy showing the movers where you would like the bigger pieces set and placed. 

Additionally, if you have everything prepped and ready there are a couple other time saving tips that can save you time and money.  You can disassemble tables, beds and anything else that needs to be disassembled to get out of the house.  You can also make items more easily assessable by eliminating stair carries and long walks.  Bringing some items from basement to main floor or garage will knock tons of time off your final bill.  If manual labor isn’t your thing and you don’t want to take the risk of getting injured you always have the option to just sit back and point and let the experts take care of everything, as they are on your clock and would be happy to assist you with anything.

Finally, if you are moving over 60 miles within the state or out of state your estimate will be based on distance and weight.  You really can’t control the distance of your relocation but you can control the final weight of your shipment.  Moving provides a great opportunity to sort and eliminate items and household goods no longer needed.  You can focus on eliminating heavy items in order to save costs on your move.  For example excess books, weight equipment, tools, and large appliances can sneak up on you very quickly towards the final weight of your move.  I am not saying to get rid of items you use on a daily basis and are necessities, but a good example would be if you have 20 boxes of old college texts books at 50 pounds a box totaling 1,000 pounds. This is 1,000 pounds of weight you may not want to pay to have moved.  Make sure you get things as organized as much as possible before the estimator arrives.  This will allow the consultant to quote the move as close as possible to the actual final shipping weight. 

It is my hope these small tips will help you understand what is needed to have your most cost effective relocation.  If you have any additional question, or would like a free in home estimate, please e-mail me at csabolik@morsemoving.com or call me at (734) 740-2072 to schedule an appointment.  I look forward to the opportunity to add you or your client to our growing list of satisfied customers. 

Chris Sabolik

Regional Manager

Morse Moving/agent for ALLIED van lines

Visit our website at www.morsemoving.com

2012 The Year of New Construction

The market has definitely changed

After the last five or six years of very little to no new construction homes 2012 is set to be the year that new construction starts up again.  Since there were virtually no new homes built over the last few years there is some pent up demand for new homes.  Most of the homes on the market have been distressed in some way either foreclosed or short sale with deferred maintenance.  In the areas that I work (about a 25 mile radius around Canton) whenever a home priced properly and in good shape hits the market there are instantly many showings and in many cases multiple offers.  There is definitely demand for homes in move in condition. 

There are a couple of savvy local builders that have continued to build homes the last few years because they have adapted their business plan to the market conditions.  The entry level new construction homes priced from $160k to $250k up have been moving very quickly.  The homes that I have walked through have been very well built but typically don’t have a lot of the details that homes were built with five or six years ago.

There are many advantages for buyers to look toward new construction rather than existing homes.  The obvious is that there is a builder warranty and everything is new.  So with a new home you don’t have to be worried about replacing a roof or furnace.  New construction homes are also a clean slate so a buyer can move in and not have to worry about removing traces of a previous owner.  Another huge issue that has been prevalent in existing home sales is the appraisal.  Appraisals are typically not in issue with new homes.

Builders that have been on the sidelines for the last five years are testing the market and building one or two homes to get back into the marketplace.  I firmly believe that this trend will continue and will ramp up significantly as we get closer to the summer months.  Communities like Canton, Northville, Novi and Commerce are already seeing a lot of builder activity.

If you are interested in seeing new home constructions that are currently available check out the New Construction tab at DiscoverGreatHomes.com.  This site will give you links to available new construction homes available in various communities.  When you are ready to start shopping for a new construction home be sure to have a Realtor with the Accredited Buyers Representative (ABR) professional designation working for you.  The ABR will help you look at the purchase objectively and help with details such as site selection, options/upgrade selection, new construction financing and negotiating with the builder.

So let’s see if 2012 really shapes up to be the year of New Construction.  I welcome you to leave your thoughts and comments on this subject.  Have you been looking at homes?  I would love to hear your thoughts on this article and also on the market conditions for new construction in Michigan.

Gordon Johnson

Realtor, ABR, SRES

Coldwell Banker Preferred, Realtors

44644 Ann Arbor Road

Plymouth, MI 48170

(734) 658-3662

Gordon@DiscoverGreatHomes.com

www.DiscoverGretHomes.com

Commonly Made Mistakes When Choosing a New Neighborhood

A recent article published on MSN looks at some mistakes people often make when choosing a neighborhood to relocate to. Most people comb over a potential new home but neglect to spend sufficient time investigating the surrounding neighborhood.

FHA Mortgage Cost to Increase April 18th

On February 14 HUD announced that they are increasing the annual mortgage insurance that they charge on FHA loans by .25. That means that the current .9% annual MIP charged on an FHA loan with 3.5% down will increase to 1.15%. Additionally, FHA will begin charging annual mortgage insurance on some 15 year loans that they hadn’t done up until now.

The impact of this increase on a buyer will vary based on the loan size but the example that FHA cites in the HUD Mortgagee Letter dated February 14, 2011 shows a $163,000 purchaser with a $157,295 mortgage. This buyer will pay an additional $33 monthly after the increase.

Note that the increase is for case number assigned on or after April 18, 2011. For clarification, lenders typically order a case number on a transaction once a purchase agreement has been accepted and the customer has applied for the loan.

Why does this matter? Are you a home buyer sitting on the fence? Are you negotiating to the last nickel? Are you “giving it a little more time” before they make an offer? This time delaying can and will cost YOU more money. Home Buyers need to get moving now and avoid the increase.

Avoid Costly Home Buyer Mistakes

You can easily avoid these five potentially vaer costly home buying mistakes with just a little bit of planning and research. For most people buying a house is the largest single investment they will ever make. Many home buyers simply call the seller’s agent because they got the number from the sign in front of the house. The listing agent has a contract that defines their obligations to the seller, not the buyer.

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Short Sale + New Mortgage + Underwriter = Stress

The banks were bailed out by the Federal Government with OUR tax dollars you would think that they would be granting mortgage loans to well qualified borrowers. The mortgage industry has, in my opinion, gone way too far with their requirements for approving mortgages. Underwriters are coming up with absolutely rediculous requirements for home buyers seeking mortgage approval. Don't get me wrong, I believe that they need to be diligent and ensure that the buyers are capable of repaying the mortgage once the deal is closed.

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