In real estate jargon there are typically two types of markets: a buyer’s market or a seller’s market. However, outside of these tight confines fall other sub markets that may be defined as first time home buyers market or lease to purchase market. Similar to Democrats and Republicans in politics, limiting the markets of real estate to buyers and sellers only excludes a substantial group of participants.
First time home buyers are obviously home buyers. However, first time home buyers also come with some additional needs and challenges. Typically they will have very limited savings to apply towards a down payment or a limited credit history. The mortgages designed to assist first time home buyers are excellent at accommodating these particular challenges. Real estate agents as well need to be accepting and accommodating of the unique needs first time home buyers bring to the table to successfully help their clients locate the right home.
In particular, the current market is a first time home buyers market because of the extension of the $8,500 first time home buyers tax credit until April 2010, Read the rest of this entry »
Tags: first, first time home buyer, tax credit
Bankruptcy can have a devastating impact in a person’s life, making it difficult to get a mortgage loan. Buying a home after bankruptcy is no longer impossible here are some reasons to consider home ownership after a bankruptcy:
Filing for bankruptcy or home foreclosure need not be an incomprehensible barrier to property ownership. However, it will take a while to re-establish a FICO credit score and save an adequate amount for house deposit. Those who borrow money will also need to accept that they will need to pay an extra amount each month (or higher interest rate) in order to get a bankruptcy home loan due to the greater risk of default posed to the potential lender.
Tags: buying a home, foreclosure
If you want to live in a newly built home, be forward about pressing your advantages. Just a year or two ago, home builders were holding fast and firm on asking prices. Now it’s a buyer’s market. Here are ways to get a good deal:
Look for spec homes. These generally are already built, never lived in, and are simply awaiting buyers. Many builders erected them before the economy turned sour with expectations that they would pull in a higher price. Now that price is unrealistic, and builders are negotiating.
Don’t expect that the builder’s financing is the best deal in town. Remember: Over the years you live in your home, you’ll pay more in interest than on principal! Shop around for the best option. If your builder knows you’re being proactive, chances are he’ll give you a better deal. It might come as a lower interest rate, a percentage of the selling price returned to you at closing, shaved points, or some other benefit. He might offer you an in-ground pool if you stay with his financer. But the extra interest could cost you much more than that over the years. Read the rest of this entry »
Tags: buying a home, home builders, home buying tips, tips
The choice of whether to use a custom home builder or a production builder depends on what kind of control you want over the design of your new home, and what your budget is. There are several differences between a custom and production builder. In order to make the right choice for you, you need to understand what the difference is between the two. Each type of builder has their appealing qualities that are benefits for the home owner.
A production builder is usually about half the price of a custom builder. This is because they will usually buy several lots of land and build using stock plans which offer some variety of choices and options but not the type of choices that a custom builder will be able to give the home owner. Production builders are builders that usually have large numbers of projects each year. They will build more than 25 projects in a year. Read the rest of this entry »
Tags: Add new tag, building a home, custom home builders, new home builders
When two parties negotiate to transfer ownership of a home, they come up with a sales agreement that specifies who pays for what at the closing. There are items that are traditionally paid by the seller, and items traditionally paid by the buyer. But the key point to remember is that whatever the two parties mutually agree, no matter what, just about anything can be negotiated.
Let’s look at items that usually fall to the seller’s responsibility. Excluding his mortgage payoff, which is the seller’s most obvious expense, usually his next largest responsibility is the Realtor’s commission. Traditionally this is six percent of the total sale amount. The seller also pays:
* Document preparation fee
* Tax service and set-up fee
* Settlement or closing fee
* Title examination fee
* Title insurance binder
* Attorney’s fee
* Title insurance (split with the buyer)
* Local tax stamp fee
* Pest inspection
The above items do not amount to very much against the big picture of the sale. That leaves negotiating room to convince the seller to contribute to the buyer’s closing costs.
Why would the seller do that? This usually occurs when housing prices have been driven down, and the seller is motivated to facilitate the sale. It sweetens the deal for a buyer who doesn’t have enough cash for both a down payment and for his closing costs. The way it works is that the buyer’s offer reflects the amount of money that he needs for his closing. To use round numbers, say that John is selling a house for $100,000. Larry is buying it and needs $20,000 down and $2,000 for closing costs but he only has $18,000. Larry then agrees to pay $104,000 and John contributes $4,000 to Larry.
This is perfectly legal, and the only real caveat is that the higher sale price of the home must remain within its appraised value. One other stipulation is that the seller’s contribution cannot be used toward the buyer’s hazard insurance, taxes, or other one-time fees. However, the seller’s contribution often frees up the buyer’s funds so that he has the money to use for those items.
Sometimes the seller agrees to pay points. A “point” equals the cost of one percent of the mortgage. A buyer can pay this amount in order to get a reduction in his mortgage interest rate. But it doesn’t benefit the buyer to pay points if he does not have a down payment of at least twenty percent, because then he has to pay mortgage insurance to the bank. It would make better sense for the buyer to use that money toward the down payment than toward the purchase of points. However, the seller might pay for points — again, to sweeten the pot for the buyer.
There are always alternatives to traditional sales agreements. For example, in FHA home loans, the seller is “allowed” to pay all of the closing costs. The buyer does have to contribute a 3% payment, whether this goes toward closing costs or toward the down payment. Many sellers agree to FHA loans because this is voluntary and they don’t have to pay those costs. However, in VA home loans the seller is “required” to pay the closing costs. Again, this can be negotiated by jacking up the selling price.
Pretty much anything can be negotiated between a buyer and a seller. A seller who has not upgraded aspects of his home might present the buyer with money as an addendum to the sale so that the buyer can arrange the upgrade. Buyers and sellers negotiate every day whether to pay for repairs identified at appraisals, the length of time between closing and possession by the new owner, and many other issues.
During a real estate transaction, the seller has contracted with a Realtor to represent his interests. If he tells the Realtor what he ultimately wants from the sale in terms of dollars, the Realtor can manipulate figures to make it happen. The buyer cannot be advised by the seller’s Realtor. It might behoove the buyer to retain his own Realtor. Each Realtor works for the person who has hired him.
If you have questions about the Boulder real estate market, use AutomatedHomefinder.com, visit NewHomeGuide.com for new homes in most States and Cities.
Tags: buying a home, closing, home buying tips, negotiating
