Buying a home means there will be costs involved in the process, such as

In some cases sellers avoid contingency contracts and may pressure you to move quickly and drop contingencies. But what if the property fails to appraise at the right value, or your lender fails to fund your loan? Know what you can include in your contract as a contingency and be prepared to stand firm!

The home inspection provides the opportunity to help you decide if you should walk from a tempting deal. Even properties that look well maintained and in good condition can have hidden flaws. In addition to the basic home inspection, there may be other inspections (for lead, termites, sewer and others) or areas that need to be addressed in your contract. Make sure you know what you are getting into!

The types of contingencies vary from state to state. Here are the top 10 most common contingencies and what be aware of as you make your offer>

Common Purchase Contract Contingencies

• Appraisal. Beware of the possibility that the appraisal may come in low.
• Loan Contingency. Your lender may fail to find your loan as requested, even if pre-approved.
• Home Inspection. One of the top indicators of flaws in the home.
• Lead-based Paint. Federal laws gives all buyers 10 days to inspect for lead-based paint.
• Wood Destroying Pest Inspection. The contract should specify who pays for termite inspection and correction.
• Roof Inspection. Make sure the roof is part of the home inspection, and if not specify a third party inspection for the roof.
• Sewer Inspection. This can be especially important for an older home or home on a septic system.
• Preliminary Title Report. Make sure the seller can transfer a clean title, with no unpaid liens against the property.
• Seller Statutory Disclosures. Some states require sellers to disclose all know material facts about the history of the property.
• Contingent on Existing Home. This is one of the most common contingencies, and sellers usually specify a number of days to perform.

When negotiating your offer and contract, make sure you protect your rights as a buyer and understand your state laws and other requirements necessary to close on your new home!

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Homeowners insurance is something that every homeowner needs and while you never want to have to use it, it is vital that you have it in case of an emergency. Did you know that water damage is the most common (and costly) homeowners’ property insurance claim? Keep in mind, you don’t have to live in a flood zone to be hit by this kind of property loss. Roof leaks, bursting pipes and drainage issues are also contributing factors to water damage in your home.

It is vital that you review your policy so you know what is covered in and to make sure you are adequately cover this kind of loss.

Don’t get caught short in case of an emergency and your property suffers any kind of material damage.Do your homework when you select your insurance company and policy. Property insurance claims vary based on geography and even neighborhood, so it is also important to understand what the risks are for your address,

According to Allstate Insurance Company, below are some common types of property claims.
• Hail
• Water
• Wind
• Theft
• Physical damage (other)
 
Each area is different so be sure that you understand the specific risks associated with your neighborhood and that the policy you choose protects you from those kinds of damages.

Allstate offers a great tool called the Common & Costly Claims, check it out on their website www.allstate.com. Simply put in your zip code and the tool offers the top five property claims and the average cost by zip. This tool can help you determine the kind of policy or rider that you may need to make sure your home is safe and that your assets are protected.

It’s also a good idea to work with an agent so that you understand exactly what your policy covers; and in the event of a claim, how to recover the full value of your belongings or real property. Certain policies also cover temporary housing or living expenses for catastrophic loss- make sure you take full advantage of the premiums you pay!

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One of the questions that has come up as part of the tax credit push is what exactly is a ‘binding contract’ in the eyes of the IRS. No one really seems to know, but it does raise some interesting points.

For any kind of tax benefits or allowances, it is best to seek the advice of a tax accountant or attorney. They can help translate murky guidelines and offer the best course of action when buying or selling a home.

When it comes to actually writing an offer, the next step is to allow your realtor to craft the contract or use a standard state contract. Your offer should be thorough and concise. Don’t leave any terms blank or undefined. Any ambiguities in an offer can lead to interpretation down the line that render the contact ‘non-binding’. Not only can this have an impact on your Home Buyer Tax Credit, other tax advantages or even the ability to close on the deal.

Do your homework – and let tax and real estate professionals guide you. From the IRS to your local chapter of NAHB to your CPA, you should make your decisions based on a number of resources:

Internal Revenue Service

National Association of Home Builders (NAHB)

National Association of Realtors

All contracts have some contingencies – and some are more important than others. Just be sure to consult with an expert to make sure your offer is clean, clear and enforceable.

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You have found

Here are the components of a residential appraisal:

• Property details
• Comparisons  to at least three similar properties
• Evaluation of the market conditions in the area
• Environmental conditions that could decrease the property’s value
• Structural issues that could decrease the property’s value
• Estimate of time on the market
• Status of the home site – new development, established neighborhood, acreage

Common misconceptions

1. Appraisals aren’t the same as home inspections
2. Appraisals are owned by the lender and not the buyer
3. Assessed values don’t necessarily match market value
4. Realtors do not provide appraisals
5. Consumers do have the right to question appraisal facts and contest them

Understanding the neighborhood and ‘comps’ are an important part of your buying experience, but you are also bound to the official appraisal given to the lender. Work with your realtor, lender AND appraiser to make sure you understand all the details in the appraisal report of your new home.

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If you are a homeowner who is interested in the latest in home safety tecnhology, you will want to check out the latest from Schlage. They are now offering 

•Check the status of your lock and set temporary codes to your home from your Internet enabled computer or cell phone
•Change, add, or delete access codes to your lock remotely
•Access a 90 day history of who has accessed your lock in

Some of the benefits:

•No key to hide, lose, carry, or forget
•Ready to use out of the box. Installs quickly, usually in less than 30 minutes
•Powered by a 9-volt battery. If the Internet goes down or the power goes out, the lock still provides you secure access to your home
•Use the keys provided with the lock as a standard door lock
•Ability to program up to 19 unique user codes
•Add, change, or delete user codes in seconds

The system can be accessed via computer or cell phone and you can send a command to your home using the password-protected Schlage LiNK online interface on your cell phone or computer. The command travels to your home via the Internet, using Secure Socket Layer (SSL) encryption technology, the same security used for online banking

Many cell phones support the Schlage LiNK application. Currently, Blackberry and Windows Mobile phones are supported with the Schlage LiNK phone application on Verizon. A Schlage LiNK application compatible with other Verizon phones is undergoing testing and should be available by the end of 2009. To see if your phone is supports this system, text “phone” to 695465 (MYLINK) on your cell phone to see if it’s compatible.

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Before the purchase of your new home is final, a final inspection of the home will need to be completed,

Before you begin your inspection, it is a good idea to make a list of things to look for so you can be prepared.  It is also recommended that you have your Sales Contract with you so that you can review any items that should be included with the house.

If you are in the market for a

     Let's look at the pros and cons of fixed rate mortgages:

PROS

• Interest rate on your mortgage cannot be increased for the life of your loan
• Monthly payment will remain the same for the life of the loan
• Loan will be completely paid off by the end of the term

CONS

• Fixed monthly payment amount may be difficult to make at the start of the loan
• Large percentage of payment goes to interest payment in first years of the loan
• Usually has a higher interest rate than a variable rate loan initiated at the same time
• Interest rate cannot be reduced as in some variable rate programs
• Maybe harder to qualify for, as higher income may be required

Depending on your financial situation, a fixed rate mortgage may be the best solution for you.  If you can afford the monthly payment required to obtain the loan, then the fact that your interest rate and monthly payments will stay the same for the life of the loan while give you peace of mind and make monthly budgeting easier.

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If you're planning to

This type of mortgages are great for first-time homebuyers, buyers, buyers with bad credit as well as those homebuyers who do not have the funds for 20% downpayment.

With an FHA loan, it helps banks mitigate this risk by insuring otherwise risky borrowers' mortgages. The FHA agrees to pay the difference between what a home gets at a post-foreclosure auction and what's still owed on the home when a borrower defaults.

With the sluggish economy and problems with the real estate market, the FHA may soon begin tightening its loan standards, leaving some borrowers without the financing they need.

Below are a few of some potential roadblocks you might encounter if you are applying for an FHA loan, and how to get through them.

• The FHA requires a new property to be livable from day one. As a result, the agency has a strict inspection requirement intended to catch any potential health or safety hazards. You should make sure everything is in working order and address things like a broken window, or a broken fire alarm, as these can create significant delays in the buying process. It is of course difficult to repair these issues if you are not yet the property owner but you will need to communicate with the seller and negotiate the necessary repairs.
• The FHA also has limits for how high a borrower's debt-to-income ratio can be. It will be more difficult for homebuyers who have more than 30 percent of their monthly income on a mortgage payment or 43 percent on all debts combined. Below are also some additional requirements borrows will need to face:  Show consistent or increasing income, have a steady employment record (at least 2 or more years with the same employer) as well as have no bankruptcies in the last two years.
• Another issue is that if the property appraisal comes in below the price you've negotiated, the deal is off. A possible solution is that the buyer could try to come up with a larger down payment to help to make up the difference between the appraisal and the negotiated price or possibly negotiate a new price based on the appraisal. Buyers have the advantage in today's real estate market, so the chances of a motivated seller accepting a lower price is good.            
  

Every new

1. Don't Overspend on New Furniture and Remodeling 
Buying a home and moving is expensive, there is no argument on that. First time homebuyers can typically have an eye opener when it comes to all the costs involved as well as the increase in monthly utility expenses that may be substanically more than when they rented.  It can be very tempting to spend more money on new furniture, furnishsing for the home and remodeling projects. However, give yourself time to adjust to the expenses of home ownership and rebuild your savings - the projects and that new sofa will still be waiting for you when you can more comfortably afford them.

2. Address Important Maintenance Items 
New homeowners will need to budget for the new expenses that accompanies home ownership-  making repairs. It can be a shock to realize that you will need to address all maintenance issues that come up like plumbing problems, a leaky roof as there is no landlord to call!  It is important to not neglect any problem that could get worse over time, turning a relatively small problem into a much larger and costlier one.

3. Seek Professional Tax Advice When Filing Your Tax Return 
Even if you hate the thought of spending money on an accountant when you normally do your returns yourself, and even if you're already feeling broke from buying that house, hiring an accountant to make sure you complete your return correctly and maximize your refund is a good idea. Home ownership significantly changes most people's tax situations and the deductions they are eligible to claim. Just getting your taxes professionally done for one year can give you a template to use in future years if you want to continue doing your taxes yourself. And remember, tax preparation expenses are tax deductible, so whatever your marginal tax rate is, think of that as a discount on the cost of the service.

4. Get Properly Insured 
Your mortgage lender will require you to purchase homeowners insurance, enough to fully replace the property in the event of a total loss. However, you will also need to consider obtaining insurance coverage to help pay your mortgage should you be unable to make the payments.  If you share your home with anyone who relies on your income to help pay the mortgage, whether it's a spouse or a child, you'll need life insurance with that person named as a beneficiary so he or she won't lose the house if you die unexpectedly. Mortgage insurance is another option to help safeguard your home in the event you cannot make your monthly payments.

Owning a home is wonderful but also comes with great responsibilities. It can be difficult to manage your finances well enough to keep the home and maintain the home's condition well enough to protect your investment.

If you are

1. Time the market right. At this time, we are in a "buyers" market, where most sellers are very motivated to sell, this can give a buyer the upper hand. On the other side,  a "sellers" market, or a market where housing supply and demand are roughly equal might give the seller an advantage. If possible, you want to be in the market at a time when it favors your position as a buyer or seller.

2. Pay attention to the details. Buyers and seller pay a lot of attention to the transaction price. It is a good idea to consider other perks or benefits that can add to the overall worth. For example, if you negotiate that the roof be replaced or perhaps having the seller pay some of the closing costs this can sweeten the deal. Don't be stuck with the idea that the purchase prince is the only financial gain to the transaction.

3. Don't forget about financing. Keep in mind that there are several factors that can impact the final sale:

• Has the buyer been pre-qualified or pre-approved by a lender?  Having buyers that are "pre-qualified" or "pre-approved" are more likely to pose less risk than a buyer who has never met with a lender. This also shows the seller that they are serious about the offer and will give the seller more confidence. that they are a qualified buyer.

•If there is a low interest rate, then there will be a larger selection of potential buyers. More buyers equal more potential demand, which is good news for sellers. On the downside, high interest rates will cause buyers to be more selective or cause them to withdrawal from the market all together.

•The traditional 20% downpayment is not standard anymore. If the buyer has good credit, loans with 5 percent down or less are now widely available. Many loans where 100 percent financing are still available, although not as much as a few years back.

Negotiation is an important tool of the real estate transaction. To be a successful home seller or buyer you should have a basic understanding of negotiation methods, knowing the motivation of the other party and adapting to their style.

Spring has officially arrived! If you are selling your home, the spring and summer months are traditionally the busiest times of year for the residential real estate market. Eventhough the current real estate market

• If you're going to work with a real estate professional, be sure to research and interview a few to make sure you are comfortable with them. Be sure to get references and be honest to let them know what your expectations are.
• Make sure to get your loan pre-approved. This will give you the upper hand in several ways. You will know upfront how much you will be able to finance and it shows the seller that you are serious and ready to buy when you make an offer.
• Be flexible. If your Realtor calls with a listing that matches your criteria and wants to show you the home right away, beady to make an offer -- quickly.
• Don't forget to look at the potential in homes. Of course there are only so many thing you can change, but if minor things are standing in your way, such as paint or carpet color or flooring, don't forget that these are easy changes to make and could create a whole different space!I

Now is a great time to buy and spring only makes your choices more plentiful! Check out the latest lstings and contact me to view them!

Each year, many homeowners decide to sell their home and downsize down to a smaller one. For some, their children are no longer living at home and they don't need all the space and some decide the responibility of a large home is too much. Recently, many homeowners are deciding to trade down to a smaller home with a more manageable mortgage. Whatever your reason for looking for a smaller home, below are some advantages and disadvantages for you to consider.

Advantages

•Increased Cash Flow. In a sluggish economy, a better cash flow is something everyone would like. It makes sense, if you're spending less on your mortgage payment, you are likely to have money leftover every month to allocate for other needs. .

•Lower Utility Bills. It costs a lot less to heat and cool a smaller space. Not only will this help save money but reducing energy is better for the environment and helps to keep your home green.

•More free time. A smaller home means less to clean, less responsibility, and less stress. A large home can be alot of maintenance bot inside and out. With a smaller house, there is more free time.

Disadvantages

•Less Space. Moving to a smaller home would probably result in selling, giving away or throwing out furniture, books, and other non essential items. If parting with personal items that you don't have the space for is not for you, you will need to consider some options for storage.

•Less room for guests and entertaining. Less space means it will be more difficult to host parties and have overnight guests.

•Lifestyle Changes. Trading down means changing a lifestyle, and for some homeowners may not like the changes from a large prestigious home to a smaller simpler one.

The decision to move into a smaller home can be a difficult one but it doesn't always mean that you have to move into a home that has less amenities. Some people find that although the space is less, they have the money to upgrade appliances, add spas and other luxury items.

Foreclosures are everywhere and with the economy being strained, many homeowners

Most lenders require that you have at least 10 percent equity in your home. You can easily check the value of your home on sites such as Zillow.com and I can provide you with a free and quick estimate of your home’s worth. Today's lenders typically will require that you have a credit score of at least 720 to qualify for good rates.

Lenders are aware of the many fiscal difficulties borrowers have in making their mortgage payments when hardships arise. However, they typically won't volunteer or advertise their help. So if you are struggling to make your payments on time, it is vital that you take the initiative and contact your lender and give them a heads up on your current financial hardship before you miss payments.  Keep in mind that lenders have more incentive than ever to work with you. Plunging property values mean they’re recovering less now on foreclosures. Plus, many that received cash infusions from the U.S. Treasury are under pressure to show that they’re responding to the housing crisis.

Recently the

• All transactions must be arms-length and there can be no identity of interest between the buyer and seller.
• If the sales price of the property is 20 percent or more above the seller's acquisition cost, the lender must meet specific conditions for the waiver to apply.
• The waiver is limited to forward mortgages, and cannot be used under the Home Equity Conversion Mortgage (HECM) purchase program.

Read more specifics on this waiver, visit the HUD.gov release.

Assumable mortgages are a unique lending instrument that allows someone else to take over the payments for you. The assumable mortgage is an alternative to the traditional financing most

Assumable mortgages are very different and are also usually not very common today's market but depending on your situation, they may work for you. Below are the basics of assumable mortgages and what they can do for you.

How They Work

An assumable mortgage works in that another person can take over the loan that was originally issued to someone else. In order to assume the mortgage, the purchaser must qualify for the loan and pay closing fees, including the appraisal cost and title insurance. This can be beneficial for a piece of property that has been difficult to sell. A potential buyer can take over the current mortgage rather than obtaining their own financing. If you are in a situation where you need to sell a home quickly this can be an option.

Benefits of Assumable Loans

• The process of converting the original loan to an assumable mortgage, is relatively simple. Because the buyer will not need do go thru the closing process or obtain a property appraisal, the entire process can be completed quickly. 

•If the original loan was written during a time when interest rates were low, that is a big benefit to the buyer. The buyer is guaranteed the original interest rate, they do not have to take whatever rate the market is at currently. dictates to them.

•If you are the seller and need to sell the home quickly, offering an assumable mortgage is a big attraction to buyers. 

Disadvantages of Assumable Loans

• One risk for this type of mortgage can exist for the seller of the home. Some assumable mortgages can hold the seller liable for the loan itself even after the assumption takes place. Thus if the the buyer were to default on the loan, potentially the seller could be left responsible for whatever the lender is unable to recover. The homeseller can avoid this by indicating their release their liability in writing at the time of the assumption.

•Sometimes large down payments can be required and could be difficult for some buyers to obtain.

Whether you are planning to

If your cabinets are still in good condition, refacing with a wood veneer could be the best way to give your kitchen a makeover. Prices vary between different types of veneer so the overall cost will depend on the wood you choose.

Refacing cabinets means adding new doors and the framework that holds them.  Existing structures are left standing, no cabinets are removed and the layout remains the same. A typical refacing job involves replacing the cabinet doors, the drawer fronts, and the hardware. Matching wood, paint, or laminate veneer is used to resurface any exposed cabinet framework.

The cost of a refacing job will depend on the size of the project, the materials, and options, but a typical refacing job generally costs between $1000-$5000 depending on if you plan to do it yourself or hire a contractor.  To determine the projected cost of a refacing project, some companies will give a price per unit. They count each cabinet door, drawer, end panel, and false front as a unit, and add up the kitchen's units for a total unit count. Price per unit can range from as low as $150 to as high as $250, depending on options and material selection. Using a high-end wood door will up the costs, while a less expensive RTF veneer might be a more budget-friendly option.

What exactly is an escrow?
An escrow is an arrangement in which a disinterested third party, called a escrow holder, holds legal documents and funds on behalf of a buyer and seller, and distributes them according to the buyer’s and seller’s instructions. The escrow becomes the depository for all monies, instructions and documents pertaining to the purchase of your home.

How does the escrow process work?

The escrow is a depository for all monies, instructions and documents necessary for the purchase of the home, including  funds for the down payment, lender’s funds and documents for the new loan. The duties of an escrow holder include: following the instructions given by the principals and parties to the transaction in a timely manner; handling the funds and/or documents in accordance with instructions; paying all bills as authorized;  closing the escrow only when all terms and conditions have been met; and, distributing the funds in accordance with instructions.

Do I need documentation?
Receipt of your deposit is generally included in your copy of your purchase contract. Your funds will then be deposited in your separate escrow or trust account and processed through your local bank.

What information will I have to provide?
Typically you will be asked to complete a statement of identity as part of the necessary paperwork. Because many people have the same name, the statement of identity is pucused to identify the specific person in the transaction through such information as date of birth, social security number, etc. This information is kept confidential.

How long is the escrow?
The length of an escrow is determined by the terms of the purchase agreement and can range from a few days to several months. Typically an escrow often takes an average time of 30 to 45 days.

When does the escrow process end?

The escrow process ends when you actually close on the home, during the closing procedure. This is when all funds are transferred accordingly, when all documents are signed, and when you get the keys to your new home.

Annual Percentage Rate (APR): The APR for your home loan is an annual cost that includes the interest rate quoted by your mortgage company plus additional home loan costs such as origination fees and points.  Required by law, this amount is to be disclosed to the homeowner by the lender under the federal Truth in Lending Act. This amount includes up-front costs paid to obtain the loan but does not include the PMI,  title insurance, appraisal, and credit report.

Closing Costs: These are the expenses aside from the price of the property that are incurred by buyers and sellers when transferring ownership of a property.  These costs include origination fees, property taxes, charges for title insurance, escrow costs, appraisal fees etc.  Many times these costs are shared by the buyer and the seller.

Escrow: During the home loan process, a neutral third party known as Escrow holds documents and money (including earnest money deposits) for safekeeping until the real estate transaction is complete.

Points: The amount paid either to maintain or lower the interest rate charged. Each point is equal to one percent (1%) of the loan amount. This means that, to lower your interest rate by one point on a $300,000 mortgage, you’ll need to pay an additional $3,000 at closing.

Private Mortgage Insurance (PMI):  If you are purchasing a home and you do not have a the traditional 20 percent down payment,  lenders will require you to carry private mortgage insurance. Private mortgage insurance will usually require an initial premium payment and may require an additional monthly fee depending on your loan’s structure.

Title Insurance: This type of insurance protects both the buyer and the seller against legal issues that may arise with a  home’s title. If a problem occurs, the title company pays the associated legal fees to correct the situation.   

There are  many different terms out there that will come up when you buy a home and apply for a loan. If you are ever confused or have any questions about a particular term or contract be sure to ask your realtor or real estate attorney for clarification before signing any legal documents.

Types of Generators

You can get generators in various sizes and types of power. The more items you plan to to provide power to, the bigger and more costly the generator.

Stationary Generators

A stationary generator is  outside-mounted and run on propane or natural gas and supply more power than a portable. They are typically equipped with a forced air or other type of cooling system that allows it to be enclosed typically outside mounted on a concrete pad similar to a central air conditioning unit.

• Permanent generators are installed as part of the electrical system and provide power to the building wiring.
• Electrical current from the generator may back-feed into the home's electrical system and cause damage or fire and ruin equipment if it is not properly installed. It is recommended a qualified electrician install a generator to a home electrical system.
• Stationary generators are far more powerful than any portable unit, a stationary generator will allow you to weather any outage for an extended period of time.

Portable Generators

This type of generators are typicaly wheeled and are ususally the most popular, You will need to make sure you have an ample supply of fuel when using this type for extended use. This type is idea if you plan to use a few selected circuits such as  for lights in the general living area, heating or cooling systems, or refrigerator.

• If deciding to use a portable generator, it is important to select one that is adequately sized. Some electrical motors in home appliances and equipment can be ruined or damaged if they do not receive enough electrical current.
• Portable generators are least expensive and can be transported for camping, trips or other locations where temporary power is needed

Before you purchase a generator be sure to you have determined the total watts needed to power the items you need. This is important to help you determine what size generator is required. An electrician can help make this determination or you can check the manufacturer information for each appliance.

Whether you choose a portable or a stationary, all generators burns fuel and must be run outdoors. Always follow the manufacturers instructions and never run it in the garage or inside the home.