Monday, December 12, 2011
I couldn't have said it better myself! Great Article from MSN.
Great advice from MSN. From http://realestate.msn.com/10-homebuying-tips-from-real-estate-pros
10 homebuying tips from real-estate pros
December Buying Advice: Here are words of wisdom on finding and buying a home that you'll love.
By Melinda Fulmer of MSN Real Estate
One of the best gifts you can receive, at any time of the year, is good advice. In the spirit of holiday giving, we asked real-estate professionals of all types to give us their best tips for buyers, from finding and financing a home to feeling satisfied after move-in.
In this year-end installment of Buying Advice, we'll also check in with the latest housing statistics and answer a reader's question about private mortgage insurance (PMI): how to avoid it and ways to kick it to the curb for good.
Our top 10 list for buyersWe received a flood of answers to our request for advice. Here are the tips that real-estate pros thought were most important to buyers navigating today's market.
1. Get the right agent. A good agent can relieve some of the stress of house hunting. Get recommendations from friends and co-workers in your area. Don't just let the listing agent on a house represent you both, as his fiduciary responsibility is to the seller. Interview a couple of agents to find the right chemistry and look over their record of sales in the past year. Once you have found somebody you like, make sure she is willing to communicate with you in the form you want (email, phone, text, etc.) and as often as you want.
Find homes for sale in great neighborhoods
2. Get preapproved for a loan. "A preapproval letter — or lack of one – can mean snagging or missing the perfect home," says agent Carol Dellynn Schimschat on MSN Real Estate's Facebook page. It helps you stay realistic about price, puts you more at ease during the process and gives you an edge over other bidders.
3. Don't look at too many homes. It's easy to get overwhelmed and confused if you look at too many homes or seek too many opinions from friends and relatives. Make a "must have" list with your immediate family for the features that are non-negotiable, versus just "wants" or "wishes," says Jessica Edwards with Seas Coast Realty in North Carolina. Have your agent help narrow down the field. There's a lot of inventory out there, and you can't or shouldn't see it all.
4. Keep an open mind. More times than they can count, agents say, buyers will start a search looking for that perfect Craftsman bungalow only to find that the features and amenities they crave are in a sprawling midcentury ranch house. Be open to suggestions from your real-estate agent, who might show you something you didn't know you would love.
5. When you find a home you like, learn about the neighborhood. A large part of your satisfaction with daily life revolves around the amenities, schools and neighbors where you live. "Once you find a home, go back to the street and neighborhood at different times of the day and on the weekend," says Tony Geraci, broker/owner of Century 21 Homestar in Cleveland. "Try to meet some of the neighbors."
6. Never buy without a home inspection. As many agents pointed out, you can't rely on what you see in a walk-through. Problems hide under carpeting and inside walls and attics. Always get that home you're buying checked over by a certified home inspector and follow through on any additional inspections he recommends.You'll be glad you did.
7. If you don't understand something, speak up. Ideally, your agent will have run through the homebuying process and what to expect at the outset of your search. But if you don't understand any part of the paperwork, process or terminology, ask, says Denver real-estate agent David Simonson. So many people whiz through paperwork without understanding what they are signing. That can come back to haunt you.
8. Submit your highest and best offer upfront. In markets that are doing relatively well, prime properties often receive multiple offers. "There's no time to haggle," says Maria Pena Morales of Re/Max Ranch & Beach in San Diego. Make sure it's a realistic offer and submit it with a list of comparable sales to support it.
9. Be prepared to compromise. To come up with a winning bid, you might have to tailor it to a seller's needs, such as a longer or shorter close. Don't expect sellers to consent to repairs that amount to upgrades or remodels, says San Diego agent Gabrielle Benjamin. And don't lose a house you love over something small like carpet, appliances or countertops. It's not these things that will make or break your experience in a house, it's the big things such as layout, size and location, says Don Tepper, an agent in Fairfax, Va.
10. Don't get emotional. It's easy to get caught up in the excitement and tension of bidding. But you shouldn't move past your predetermined price range, no matter how much you love the house. "Be realistic with your price range, don't overextend yourself, and be comfortable with everyone in your transaction," replied jlibman_MTGNews to @MSNRealEstate's Twitter feed. And consider choosing a backup house that you like almost as much, says Todd Hetherington of Century 21 New Millennium in Washington, D.C. It might take some of the pressure out of negotiations.
Housing snapshotSales of existing homes rose 1.4% in October from September, to 4.97 million, and were up 13.5% from October 2010, according to the National Association of Realtors.
The median existing-home price continued to soften, dipping 4.7% to $162,500 in October from the same time last year.
NAR economist Lawrence Yun characterized the market as "fairly steady," but at a lower than desired level, in part because of the high number of contract failures, caused by rejected mortgage applications or other failures in the underwriting process such as low appraisals.
Contract failures were reported by 33% of NAR members in October, up from 18% in September and 8% a year ago.
One bright spot was a decline in the number of homes on the market. Total housing inventory fell 2.2% to 3.33 million existing homes for sale, or about an eight-month supply.
Distressed homes – foreclosures and short sales – made up 28% of October's sales versus 34% in October of last year.
Reader question: When can you get rid of PMI?One thing most buyers would rather avoid is private mortgage insurance -- coverage that does nothing for you but that reimburses your lender should you default on your mortgage and your house isn't worth enough to get the money back in a foreclosure sale.
Reader Carlos Chacin of Louisiana wrote to Buying Advice asking if we could provide a rundown of how PMI works and how to get out of it. Thanks for the question, Carlos.
Lenders require PMI when the down payment on a home is less than 20%. This extra payment is added to your mortgage each month and typically costs around 0.5% of your loan.
It can be canceled after your home's value has risen or you have made enough payments to give you a 20% to 25% equity stake in the house, says Ilona Bray, attorney and author of "Nolo's Essential Guide to Buying Your First Home."
However, accumulating that stake takes time, Bray says, because the way most home loans are amortized, buyers are mostly paying off interest at first. And declining home values have made it harder for a lot of people to meet that mark.
According to the Homeowners' Protection Act, which applies to people who bought their homes after July 29, 1999, you can ask that your PMI be canceled when you've paid down your mortgage to 80% of the loan if you have a good record of payment, haven't taken out a second mortgage and the value of the house hasn't gone down. If you meet these requirements, the lender must honor your written request to cancel the PMI.
What's more, when you've paid down your mortgage to 78% of the original loan; the law states that the lender must automatically cancel your PMI. But, says Bray, don't expect your lender to keep track of this and notify you. Keep track of when you'll meet this milestone yourself.
If you suspect that your home has gone up in value since you bought it – either because of rising prices in your area or a big remodel you've done – you can try to make a case to your lender.
Here are the steps Bray suggests taking to get your PMI canceled:
1. Write a formal letter to your lender asking for its guidelines for eliminating PMI.
2. Get your home appraised to find out its current market value. Your lender will probably require an appraisal to see if your home has declined in value. In this case, it's best to use one recommended by your lender, as it will respect these findings.
3. Calculate your loan-to-value ratio using the results of the appraisal. In other words, divide your loan amount by the home's value to get a figure that should be in the decimal points. For example, if your loan is $200,000 and your home is appraised at $250,000, your LTV ratio is 0.8 or 80%.
4. Compare your LTV ratio to that required by your lender. Most lenders require the ratio be 80% or lower before they will cancel your PMI. If the LTV is at the percentage required by your lender, follow the lender's guidelines for requesting a cancellation. If the lender refuses or is slow to act on your request, write a series of polite but firm letters requesting action. These letters will not only serve to prod bank officials into action, but they will serve as evidence if you are later required to take the lender to court, Bray says.
10 homebuying tips from real-estate pros
December Buying Advice: Here are words of wisdom on finding and buying a home that you'll love.
By Melinda Fulmer of MSN Real Estate
One of the best gifts you can receive, at any time of the year, is good advice. In the spirit of holiday giving, we asked real-estate professionals of all types to give us their best tips for buyers, from finding and financing a home to feeling satisfied after move-in.
In this year-end installment of Buying Advice, we'll also check in with the latest housing statistics and answer a reader's question about private mortgage insurance (PMI): how to avoid it and ways to kick it to the curb for good.
Our top 10 list for buyersWe received a flood of answers to our request for advice. Here are the tips that real-estate pros thought were most important to buyers navigating today's market.
1. Get the right agent. A good agent can relieve some of the stress of house hunting. Get recommendations from friends and co-workers in your area. Don't just let the listing agent on a house represent you both, as his fiduciary responsibility is to the seller. Interview a couple of agents to find the right chemistry and look over their record of sales in the past year. Once you have found somebody you like, make sure she is willing to communicate with you in the form you want (email, phone, text, etc.) and as often as you want.
Find homes for sale in great neighborhoods
2. Get preapproved for a loan. "A preapproval letter — or lack of one – can mean snagging or missing the perfect home," says agent Carol Dellynn Schimschat on MSN Real Estate's Facebook page. It helps you stay realistic about price, puts you more at ease during the process and gives you an edge over other bidders.
3. Don't look at too many homes. It's easy to get overwhelmed and confused if you look at too many homes or seek too many opinions from friends and relatives. Make a "must have" list with your immediate family for the features that are non-negotiable, versus just "wants" or "wishes," says Jessica Edwards with Seas Coast Realty in North Carolina. Have your agent help narrow down the field. There's a lot of inventory out there, and you can't or shouldn't see it all.
4. Keep an open mind. More times than they can count, agents say, buyers will start a search looking for that perfect Craftsman bungalow only to find that the features and amenities they crave are in a sprawling midcentury ranch house. Be open to suggestions from your real-estate agent, who might show you something you didn't know you would love.
5. When you find a home you like, learn about the neighborhood. A large part of your satisfaction with daily life revolves around the amenities, schools and neighbors where you live. "Once you find a home, go back to the street and neighborhood at different times of the day and on the weekend," says Tony Geraci, broker/owner of Century 21 Homestar in Cleveland. "Try to meet some of the neighbors."
6. Never buy without a home inspection. As many agents pointed out, you can't rely on what you see in a walk-through. Problems hide under carpeting and inside walls and attics. Always get that home you're buying checked over by a certified home inspector and follow through on any additional inspections he recommends.You'll be glad you did.
7. If you don't understand something, speak up. Ideally, your agent will have run through the homebuying process and what to expect at the outset of your search. But if you don't understand any part of the paperwork, process or terminology, ask, says Denver real-estate agent David Simonson. So many people whiz through paperwork without understanding what they are signing. That can come back to haunt you.
8. Submit your highest and best offer upfront. In markets that are doing relatively well, prime properties often receive multiple offers. "There's no time to haggle," says Maria Pena Morales of Re/Max Ranch & Beach in San Diego. Make sure it's a realistic offer and submit it with a list of comparable sales to support it.
9. Be prepared to compromise. To come up with a winning bid, you might have to tailor it to a seller's needs, such as a longer or shorter close. Don't expect sellers to consent to repairs that amount to upgrades or remodels, says San Diego agent Gabrielle Benjamin. And don't lose a house you love over something small like carpet, appliances or countertops. It's not these things that will make or break your experience in a house, it's the big things such as layout, size and location, says Don Tepper, an agent in Fairfax, Va.
10. Don't get emotional. It's easy to get caught up in the excitement and tension of bidding. But you shouldn't move past your predetermined price range, no matter how much you love the house. "Be realistic with your price range, don't overextend yourself, and be comfortable with everyone in your transaction," replied jlibman_MTGNews to @MSNRealEstate's Twitter feed. And consider choosing a backup house that you like almost as much, says Todd Hetherington of Century 21 New Millennium in Washington, D.C. It might take some of the pressure out of negotiations.
Housing snapshotSales of existing homes rose 1.4% in October from September, to 4.97 million, and were up 13.5% from October 2010, according to the National Association of Realtors.
The median existing-home price continued to soften, dipping 4.7% to $162,500 in October from the same time last year.
NAR economist Lawrence Yun characterized the market as "fairly steady," but at a lower than desired level, in part because of the high number of contract failures, caused by rejected mortgage applications or other failures in the underwriting process such as low appraisals.
Contract failures were reported by 33% of NAR members in October, up from 18% in September and 8% a year ago.
One bright spot was a decline in the number of homes on the market. Total housing inventory fell 2.2% to 3.33 million existing homes for sale, or about an eight-month supply.
Distressed homes – foreclosures and short sales – made up 28% of October's sales versus 34% in October of last year.
Reader question: When can you get rid of PMI?One thing most buyers would rather avoid is private mortgage insurance -- coverage that does nothing for you but that reimburses your lender should you default on your mortgage and your house isn't worth enough to get the money back in a foreclosure sale.
Reader Carlos Chacin of Louisiana wrote to Buying Advice asking if we could provide a rundown of how PMI works and how to get out of it. Thanks for the question, Carlos.
Lenders require PMI when the down payment on a home is less than 20%. This extra payment is added to your mortgage each month and typically costs around 0.5% of your loan.
It can be canceled after your home's value has risen or you have made enough payments to give you a 20% to 25% equity stake in the house, says Ilona Bray, attorney and author of "Nolo's Essential Guide to Buying Your First Home."
However, accumulating that stake takes time, Bray says, because the way most home loans are amortized, buyers are mostly paying off interest at first. And declining home values have made it harder for a lot of people to meet that mark.
According to the Homeowners' Protection Act, which applies to people who bought their homes after July 29, 1999, you can ask that your PMI be canceled when you've paid down your mortgage to 80% of the loan if you have a good record of payment, haven't taken out a second mortgage and the value of the house hasn't gone down. If you meet these requirements, the lender must honor your written request to cancel the PMI.
What's more, when you've paid down your mortgage to 78% of the original loan; the law states that the lender must automatically cancel your PMI. But, says Bray, don't expect your lender to keep track of this and notify you. Keep track of when you'll meet this milestone yourself.
If you suspect that your home has gone up in value since you bought it – either because of rising prices in your area or a big remodel you've done – you can try to make a case to your lender.
Here are the steps Bray suggests taking to get your PMI canceled:
1. Write a formal letter to your lender asking for its guidelines for eliminating PMI.
2. Get your home appraised to find out its current market value. Your lender will probably require an appraisal to see if your home has declined in value. In this case, it's best to use one recommended by your lender, as it will respect these findings.
3. Calculate your loan-to-value ratio using the results of the appraisal. In other words, divide your loan amount by the home's value to get a figure that should be in the decimal points. For example, if your loan is $200,000 and your home is appraised at $250,000, your LTV ratio is 0.8 or 80%.
4. Compare your LTV ratio to that required by your lender. Most lenders require the ratio be 80% or lower before they will cancel your PMI. If the LTV is at the percentage required by your lender, follow the lender's guidelines for requesting a cancellation. If the lender refuses or is slow to act on your request, write a series of polite but firm letters requesting action. These letters will not only serve to prod bank officials into action, but they will serve as evidence if you are later required to take the lender to court, Bray says.
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