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 - home improvements, roofing repairs etc - 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
by Brent Rangen
Recent market activity has caused many to hesitate before buying. Maybe you have been keeping an eye on what is on the market but 
haven’t seen a REALLY good deal. You know the one - the one that is going to make you jump without hesitation because it’s a can’t miss. If this is your thinking process you are not alone. If you are brave enough to step up you may just be in for the home-buying chance of a lifetime.
A homeowner may be more inclined to work with you and agreeing to terms of contracts, closing costs, contingencies, or anything you desire. The market trends have already started to improve and as they improve the smaller the buyers negotiation platform. Perhaps you will not get a large price reduction. You may be able to get everything included and have a move in ready house for less. That’s not to say that you won’t be able to get a price reduction. However, homes have never been more affordable, the HAI (Housing Affordability Index) is at an 18 year low. Mortgage rates are low. According to Freddie Mac, 30-year fixed-rate mortgages are down over 1% from this time last year at 5.29% for the week ending August 20th. 15-year fixed-rate mortgage averages are down too. Read the rest of this entry »
Tags: home buyer incentives, home buying, homebuyer advice, real estate, should i buy
Readers have been very active in our blog! We strive to provide you great, informative articles, tips and up-to-date post to help you navigate your way in the home buying process. Below, you will find the top five posts you, the reader, found most interesting.
Can the 2009 Home Buyer Tax Credit be Used as a Down Payment? - US Housing and Urban Development Secretary Shaun Donovan announced that the First Time Home Buyer Tax Credit would be able to be used for down payments and closing cost.Of course this is a government initiative so you better read read the details.
2009 Home Buyer Tax Credit Explained - The government is doing more to allure buyers back into the real estate market with the 2009 First Time Home Buyers Tax Credit.
Using the Internet to Buy a New Home - Consumers are equipped with resources that enable them to determine where the best homes are based on surveying the local area over the internet. Here are seven important topics a home buyer can cover before leaving home…
Negotiating New Home Incentives - Home buyer incentive offers buyers may capitalize on are free finished basements or garages, upgraded granite counter tops, free hardwood floors, upgraded appliance packages, and enhanced bathroom or bedroom suit -es. This post offers tricks of the trade when negotiating for new construction incentives.
Buying a Home After a Divorce - Get ready to roll up your sleeves, because a divorce can easily get rough when finances are involved. Here are some things to help you find your way to home ownership after a divorce.
Tags: home buying, most read, popular post, top 5 list
In a world of instant gratification, we all want what we want, when we want it. For some, the real estate 
market requires immense planning and for others it is a blind jump. Fortune favors the bold, but not the stupid. You have to be educated on what your options are. For some, a land contract or lease to own may seem like an ideal situation, but there are dangers in this agreement.
So what is a land contract? A land contract is an agreement between a home buyer and a private home seller. The seller remains in possession of the title or deed of the property, allowing the buyer to take residence with in the said property and make payments on the property in which the seller would make to the mortgage company.
This is an option most utilized by those who have limited options ofr immediate home ownership due to either financing problems, poor credit scores, or a lack of funds for down payment. Typically a last resort option, a land contract can be a dangerous liaison for the buyer for two reasons.
First, land contracts are sometimes entered into without proper legal documentation. Remember that any verbal agreement is going to be very difficult to back up without proper evidence. Anything you decide to invest in should be covered in a written contract, which should be thoroughly reviewed by both parties legal representation.
Second, the seller retains the legal title of the property along with the responsibility of paying mortgage payments and taxes on the property. Without a legal contract, there have been numerous reported cases of sellers not paying either the mortgage and/or property taxes. In this instance the buyer is unaware that the money they have been providing is not going into the property as they had mutually agreed upon, only to find out when the home enters repossession or a lien is placed upon it. You must always check on these two areas because they affect your investment.
Are all land contracts dangerous? No, but they do complicate the buying process and you still have to invest in the home inspection and pay mortgage payments. If you are capable of financing a home at a reasonable rate, the risk and headache is not worth it. Buying a new home can be easy or complicated. It just depends on how much leg work you do in the begining.
Tags: finance, home buying, land contract
A magicians true power does not lie in the ability to bend the laws of physics, rather it is hisor her power to get their audience to watch their right hand as the left one commits an act of deception with a sleight of hand maneuver. This power of illusion is the magicians true power. This power is also a common trait of con artist and unethical business practitioners. In the real estate world there have been quite a few magicians working the lending angle. This set up for the bait and switch mortgages usually involves disappearing funds from the potential Home Owner. Find your dream home, without paying more than you should.
So what is a “Bait and Switch” mortgage? It is a magic trick. There will be an advertised mortgage rate that very few people would qualify for, but because the company can offer it to some segment of the population it is a legal advertisement. This highly coveted, but unattainable percentage rate, is the bait to get you into the office.
Once you have applied for the rate advertised, you most likely will find yourself disappointed in the fact that you don’t qualify. The lender will engage you about your situation with a very empathetic approach. Then there will be an offer to finance at a different rate, higher than what was advertised.
Another area to watch out for are hidden fees. Remember to never sign anything until you have had all contracts reviewed by your attorney regardless of how “standard” the mortgage broker claims the contract to be. Also ensure that you receive an itemized list of all fees you are going to be required to pay.
A borrower should also track market trends while applying for a loan. There is a time difference between when a borrower submits their loan application and when the loan rates are actually locked in. The rates are subject to the changes in the market. the market rises, your rate rises. the market falls, your rate falls. In the event that the market falls, some brokers fail to change the rate so make sure there have not been any significant changes in the market between application and signing the papers.
One way you can safeguard yourself from unethical lenders is to check and see if they have been reported to the Better Business Bureau. Not all unethical companies are reported, but this is an excellent start for checking references. Another great way to determine what is the legitimacy of an organization is to ask to see the loan commitment letter from the lender who is locking in the rate on the loan. This is a legitimate request and buyers should not work with anyone unwilling to show the loan commitment letter.
Tags: buying a home, financing a house, fraud, mortgage, scam
You’ve worked so hard for your home. Made untold sacrifices to realize the American dream of home
ownership and for unforeseen circumstances the dream you built is threatened from dire economic conditions that threaten foreclosure. A feeling of helplessness envelopes your spirit and there seams to be no way out. Then miraculously you find help that is just too good to be true. As the old adage goes, “If its too good to be true, it probably is.”
There are numerous legitimate resources, local and national to help you avoid foreclosure, but avoid scams that ask you to put your financial future at risk.
Here are some popular scams cheating people out of their homes.
- Equity Stripping: In this instance a distressed homeowner is presented with a situation of being behind on mortgage payments. they are approached by a financier that offers a bailout. The homeowner is then advised to stop payment on their mortgage while the situation is being negotiated. Once the homeowner is facing immediate foreclosure the financier claims that the deal has fallen through for the bailout. At this point the homeowner is in a tough situation if they have not been placing their mortgage payments in escrow. Without the money to pay they are in even more desperate of a situation and the financier then says the homeowner must enter into a special program where the home is signed over to the financier or associate and the original owners will pay their mortgage back as tenants. The home is signed over but the financier never truly pays the mortgage and the homeowners loose everything.
- Quit Claim Deed: In this scenario you fall behind on your mortgage and enter another party offering assistance on to your home deed. Without consulting an independent lawyer, you could be signing over your home ownership rights while still holding on to financial responsibility for the home.
- Mortgage Liability. This is any situation that only deals with the actual deed or property. If you have reached an agreement for help it can be costly to neglect the fact that your deed and your mortgage are not one in the same. beware of any deal that treats the two as one entity without specifying how they will be dealt with separately.
Tags: foreclosure scams, home owner help, home selling, new home buying
