Buying and Selling Real Estate in Miami Beach FL

Miami Design Center

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The hottest real estate market in South Florida today is Uptown Miami, a 25 block stretch along Biscayne Blvd and the Bay, between the Design District at the north and the new Performing Arts Center to the south. Known as Miami's heart orf the arts, the neighborhood is exploding with new restaurants, boutiques, galleries and cafes, with over $1 billion in new residential development attracting over 6000 new residents in the condominiums and apartments now being built.

Dealing With a Low Appraisal

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Remedies to Save the Transaction Uh Oh The contract is in place and progressing nicely. The buyers felt it was safe to go ahead with inspections, and the results were acceptable. The closing date is on target. Everyone is waiting for the appraisal results so that a loan commitment letter can be issued. No one is too worried, because the house sold for an appropriate price, and appraisals have a magical way of coming in just where they need to be. Everyone gets a call. The appraisal is $10,000 less than the sales price. Buyers, sellers, and agents panic. Is there anything you can do? Don't Panic It happens sometimes, and there are often ways to 'fix' the problem. The first thing to do is stay calm. One or both parties may have another contract that hinges on a successful completion of this one, and getting bad news can make everyone a basket case, especially when it's close to closing day. Options Seller Reduces Price Would the seller be willing to reduce the price of the home? Hold on, that's not the only solution, but it is a common one. If the buyers are seeking a mortgage, they can probably back out of the contract due to the financing contingency, since the low appraisal will affect the way the lender views the home. The seller may be willing to deal. (Note: A cash buyer should have been protected with a contingency clause that states she can back out of the deal if the home doesn't appraise at or above the sales price.) Buyer Pays More Down The buyer may want the home badly enough to make a larger down payment, but don't assume that will correct the problem. I know of an instance where the buyer was prepared to pay an additional $15,000 down to make a deal work. It was a special type of property that was hard to appraise, and the appraisal came in low. Even though the buyer could have paid more down, the lender would not approve the loan. Talking with a few more local lenders at the time verified that others felt the same way. They did not want to finance a property that the buyer went into with a negative equity, even if the buyer was willing to take the risk. Blend the Two Seller and buyer come to an agreement, both giving a little. Dispute the Appraisal Ask the lender for another appraisal. They may even pay for it. Find your own comps, and share them with the lender. They may ask you to fill out a form that resembles the one appraisers use to make the comp information more readable. The lender may send out a new appraiser or ask the original appraiser to reevaluate the property. When working with the original appraiser, try to be helpful, not belligerent. Find out which houses were used as comps, and keep in mind that most appraisers base their opinions on paperwork. They often haven't seen the comps up close and personal the way we do. It could be they used houses you know needed a lot of work, even though it wasn't stated in the MLS. When you explain their condition in a professional manner, appraisers are more likely to investigate the comps to see if adjustments should have been made. Does the Contract Include Personal Property? Appraisers only put a value on real property, the land and the improvements to the land. If the contract includes furniture and other types of personal property, it won't be a part of the appraisal. Is the Seller Paying Funds to the Buyer at Closing? This type of contract can be killed by a low appraisal, since the house must appraise at the listed price, even though buyers are receiving part of the money back. Always talk with the lender about their policies and the proper wording for this type of agreement. Then be prepared to deal with it if the appraisal comes in low.

Toxic Mold - Stachybotrys Chartarum

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A handful of US homeowners have burned down their homes, and everything in them, because they felt it was the only way to eradicate toxic mold from their surroundings. Juries have awarded huge sums of money to homeowners who initiated lawsuits against their insurance companies (for not paying for moisture-related repairs in time to prevent severe problems) and home builders (for shoddy workmanship that resulted in house-wide mold). While toxic mold can definitely be a problem, in most instances its growth can be prevented or stopped before such drastic actions are necessary. What is Mold? Molds are fungi that reproduce by releasing tiny spores into the air. Spores lucky enough to land on moist objects may begin to grow. There are thousands of different types of mold and we encounter many of them every day, inside and out. What is Toxic Mold? Toxic mold is a type of mold that produces hazardous byproducts, called mycotoxins. While individuals with asthma and other respiratory problems may have reactions to many types of mold, it's thought that mycotoxins are more likely to trigger health problems in even healthy individuals. These toxins are believed to be linked to memory loss and to severe lung problems in infants and the elderly. Floating particles of mold are invisible to the naked eye, so it's impossible to see where they might have landed unless they begin to grow. Loose mold particles that accumulate on items within a house are easily inhaled and can be a constant irritation to the people and pets who live there. The toxic mold we hear most about is Stachybotrys chartarum (or Stachybotrys atra). This slimy, greenish-black mold grows on moisture-laden materials that contain cellulose, such as wood, paper, drywall, and other similar products. It does not grow on tile or cement. Even if the mold in your home is not toxic mold, it can still be a problem, because mold growing on organic materials will in time destroy them. Too much mold of any type smells bad and degrades air quality. Be on the lookout for the damp, humid conditions where mold thrives: Bathrooms with poor ventilation. Install an exhaust fan if possible. Leaky water pipes. Repair them immediately. Roof leaks. Repair them right away. Flood cleanup should be handled as soon as possible. The EPA offers a handbook to help. Clothes dryers and exhaust fans should always vent to the outside, never under the house or back into a room. Other solutions: Consider installing a dehumidifier in chronically moist rooms. Don't carpet damp areas. It's the perfect breeding ground for mold. Insulate pipes and other cold surfaces to discourage condensation. Install storm windows to eliminate condensation on glass. Make sure the crawlspace under your house is well ventilated. Cover crawlspace dirt with plastic. Porous materials, such as ceiling tiles, may have to be replaced, but replacing them won't solve the problem if the source of moisture is not eliminated. Cleanup Clean visible mold with detergent and water. Allow to dry then apply a solution of 1/2 cup bleach per gallon of water to help kill the remaining spores. Make sure the room is well ventilated before you begin. Never combine bleach and ammonia because the mixture produces a toxic gas. Before You Buy Some home buyers test air quality before closing on a home. In the past air quality testing was ordered primarily to detect radon gas, but mold tests are becoming more common. Your home inspector may not perform mold tests, but can probably help you find someone who does. In my area that type of test costs between $300-$500 dollars. If you are concerned about toxic mold an air test might help you feel better about your new home. Talk to your real estate agent or your attorney to determine if a special contingency should be inserted in the contract that will allow you to back out of the deal if toxic mold is detected and cannot be thoroughly eliminated.

Flood Insurance Facts

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Who Can Purchase Flood Insurance? Almost anyone whose community participates in the National Flood Insurance Program can buy flood insurance. Even people whose homes have been flooded in the past can purchase coverage. An exception is homes in Coastal Barrier Resources System areas. In 1982, Congress passed an act to discourage building in fragile coastal areas, making national flood insurance unavailable to those homeowners. Private insurance may be available, so talk to your insurance agent. Who Needs Flood Insurance? You may think the only people who need flood insurance are those who live in flood zones or in areas that are affected by tropical systems. That's not true. Twenty to twenty-five percent of all flood-related claims are made by people in low to moderate risk areas. The National Flood Insurance Program (NFIP) defines flooding as "a general and temporary condition during which the surface of normally dry land is partially or completely inundated." That can happen anywhere after heavy rains, snow melts, or other events that trigger water release. Lenders may require some home owners to purchase flood insurance before closing on a home. How Much Does Flood Insurance Cost? Homes in low to moderate risk areas qualify for the Preferred Risk Policy, which is $100 per year. The average flood insurance policy runs from $300-$400 per year for $100,000 of coverage. Isn't Flood Insurance Covered By My Homeowner's Policy? No--your homeowner's policy will not cover losses caused by flooding. It should cover blowing rains that might enter as a result of wind damage--but not flooding. How Much Coverage Can I Buy? You can buy up to $250,000 of coverage for your home's structure and up to $100,000 of flood insurance coverage for its contents. Renters can purchase a contents policy. Ask your insurance agent to explain the items covered by each type of policy. When Can I Purchase Flood Insurance? You can buy flood insurance anytime, but the policy won't go into effect for thirty days. That means you can't wait until a storm is approaching to purchase flood insurance. There are a few exceptions to that rule. If the coverage is related to making, increasing, extending, or renewing a loan, there's no waiting period. If the initial purchase of flood insurance is made during the thirteen-month period following revisions to flood maps in your community, there is a one-day waiting period. Ask your insurance agent for the details about these exceptions. Who Sells Flood Insurance? You can purchase flood insurance from your local insurance agent. The policy is backed by the US government. What About Commercial Buildings? Yes, you can purchase flood insurance for commercial buildings. Coverage limits are $500,000 for the building and $500,000 for its contents. Why Bother--I Can Always Get Federal Assistance Only if the President declares your area a Federal disaster area. Most flooding events do not fall into that category. Federal aid is funding you must repay. With flood insurance so affordable, it's not worth the risk. Talk to your insurance agent about Federally backed flood insurance

Processing Your Loan Application

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There are several federal laws which provide you with protection during the processing of your loan. The Equal Credit Opportunity Act ("ECOA"), the Fair Housing Act, and the Fair Credit Reporting Act ("FCRA") prohibit discrimination and provide you with the right to certain credit information. No Discrimination. ECOA prohibits lenders from discriminating against credit applicants on the basis of race, color, religion, national origin, sex, marital status, age, the fact that all or part of the applicant's income comes from any public assistance program, or the fact that the applicant has exercised any right under any federal consumer credit protection law. To help government agencies monitor ECOA compliance, your lender or mortgage broker must request certain information regarding your race, sex, marital status and age when taking your loan application. The Fair Housing Act also prohibits discrimination in residential real estate transactions on the basis of race, color, religion, sex, handicap, familial status or national origin. This prohibition applies to both the sale of a home to you and the decision by a lender to give you a loan to help pay for that home. Finally, your locality or state may also have a law which prohibits discrimination. Frequently, there are differences in the types and amounts of settlement costs charged to the borrower -- for example, some borrowers are charged greater fees for mortgages depending on their credit worthiness. These differences may be justified or they may be unlawfully discriminatory. It is important that you examine your settlement documents closely, especially lines 808-811 on the HUD-1 settlement statement, and do not hesitate to compare your settlement costs with those of your friends and neighbors. If you feel you have been discriminated against by a lender or anyone else in the home buying process, you may file a private legal action against that person or complain to a state, local or federal administrative agency. You may want to talk to an attorney; or you may want to ask the federal agency that enforces ECOA (the Board of Governors of the Federal Reserve System) or the Fair Housing Act (HUD) about your rights under these laws. Prompt Action/Notification of Action Taken. Your lender or mortgage broker must act on your application and inform you of the action taken no later than 30 days after it receives your completed application. Your application will not be considered complete, and the 30 day period will not begin, until you provide to your lender or mortgage broker all of the material and information requested. Statement of Reasons for Denial. If your application is denied, ECOA requires your lender or mortgage broker to give you a statement of the specific reasons why it denied your application or tell you how you can obtain such a statement. The notice will also tell you which federal agency to contact if you think the lender or mortgage broker has illegally discriminated against you. Obtaining Your Credit Report. The Fair Credit Reporting Act ("FCRA") requires a lender or mortgage broker that denies your loan application to tell you whether it based its decision on information contained in your credit report. If that information was a reason for the denial, the notice will tell you where you can get a free copy of the credit report. You have the right to dispute the accuracy or completeness of any information in your credit report. If you dispute any information, the credit reporting agency that prepared the report must investigate free of charge and notify you of the results of the investigation. Obtaining Your Appraisal. The lender needs to know if the value of your home is enough to secure the loan. To get this information, the lender typically hires an appraiser, who gives a professional opinion about the value of your home. ECOA requires your lender or mortgage broker to tell you that you have a right to get a copy of the appraisal report. The notice will also tell you how and when you can ask for a copy

RESPA Disclosures

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One of the purposes of RESPA is to help consumers become better shoppers for settlement services. RESPA requires that borrowers receive disclosures at various times. Some disclosures spell out the costs associated with the settlement, outline lender servicing and escrow account practices and describe business relationships between settlement service providers. Good Faith Estimate of Settlement Costs. RESPA requires that, when you apply for a loan, the lender or mortgage broker give you a Good Faith Estimate of settlement service charges you will likely have to pay. If you do not get this Good Faith Estimate when you apply, the lender or mortgage broker must mail or deliver it to you within the next three business days. Be aware that the amounts listed on the Good Faith Estimate are only estimates. Actual costs may vary. Changing market conditions can affect prices. Remember that the lender's estimate is not a guarantee. Keep your Good Faith Estimate so you can compare it with the final settlement costs and ask the lender questions about any changes. Servicing Disclosure Statement. RESPA requires the lender or mortgage broker to tell you in writing, when you apply for a loan or within the next three business days, whether it expects that someone else will be servicing your loan (collecting your payments). Affiliated Business Arrangements. Sometimes, several businesses that offer settlement services are owned or controlled by a common corporate parent. These businesses are known as "affiliates." When a lender, real estate broker, or other participant in your settlement refers you to an affiliate for a settlement service (such as when a real estate broker refers you to a mortgage broker affiliate), RESPA requires the referring party to give you an Affiliated Business Arrangement Disclosure. This form will remind you that you are generally not required, with certain exceptions, to use the affiliate and are free to shop for other providers. HUD-1 Settlement Statement. One business day before the settlement, you have the right to inspect the HUD-1 Settlement Statement. This statement itemizes the services provided to you and the fees charged to you. This form is filled out by the settlement agent who will conduct the settlement. Be sure you have the name, address, and telephone number of the settlement agent if you wish to inspect this form. The fully completed HUD-1 Settlement Statement generally must be delivered or mailed to you at or before the settlement. In cases where there is no settlement meeting, the escrow agent will mail you the HUD-1 after settlement, and you have no right to inspect it one day before settlement. Escrow Account Operation & Disclosures. Your lender may require you to establish an escrow or impound account to insure that your taxes and insurance premiums are paid on time. If so, you will probably have to pay an initial amount at the settlement to start the account and an additional amount with each month's regular payment. Your escrow account payments may include a "cushion" or an extra amount to ensure that the lender has enough money to make the payments when due. RESPA limits the amount of the cushion to a maximum of two months of escrow payments. At the settlement or within the next 45 days, the person servicing your loan must give you an initial escrow account statement. That form will show all of the payments which are expected to be deposited into the escrow account and all of the disbursements which are expected to be made from the escrow account during the year ahead. Your lender or servicer will review the escrow account annually and send you a disclosure each year which shows the prior year's activity and any adjustments necessary in the escrow payments that you will make in the forthcoming year

Securing Title Services

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Title insurance is usually required by the lender to protect the lender against loss resulting from claims by others against your new home. In some states, attorneys offer title insurance as part of their services in examining title and providing a title opinion. The attorney's fee may include the title insurance premium. In other states, a title insurance company or title agent directly provides the title insurance. Owner's Policy. A lender’s title insurance policy does not protect you. Similarly, the prior owner’s policy does not protect you. If you want to protect yourself from claims by others against your new home, you will need an owner's policy. When a claim does occur, it can be financially devastating to an owner who is uninsured. If you buy an owner's policy, it is usually much less expensive if you buy it at the same time and with the same insurer as the lender's policy. Choice of Title Insurer. Under RESPA, the seller may not require you, as a condition of the sale, to purchase title insurance from any particular title company. Generally, your lender will require title insurance from a company that is acceptable to it. In most cases you can shop for and choose a company that meets the lender’s standards. Review Initial Title Report. In many areas, a few days or weeks before the settlement or closing of the escrow, the title insurance company will issue a "Commitment to Insure" or preliminary report or "binder" containing a summary of any defects in title which have been identified by the title search, as well as any exceptions from the title insurance policy’s coverage. The commitment is usually sent to the lender for use until the title insurance policy is issued at or after the settlement. You can arrange to have a copy sent to you (or to your attorney) so that you can object if there are matters affecting the title which you did not agree to accept when you signed the agreement of sale. Coverage & Cost Savings. To save money on title insurance, compare rates among various title insurance companies. Ask what services and limitations on coverage are provided under each policy so that you can decide whether coverage purchased at a higher rate may be better for your needs. However, in many states, title insurance premium rates are established by the state and may not be negotiable. If you are buying a home which has changed hands within the last several years, ask your title company about a "reissue rate," which would be cheaper. If you are buying a newly constructed home, make certain your title insurance covers claims by contractors. These claims are known as "mechanics’ liens" in some parts of the country. Survey. Lenders or title insurance companies often require a survey to mark the boundaries of the property. A survey is a drawing of the property showing the perimeter boundaries and marking the location of the house and other improvements. You may be able to avoid the cost of a complete survey if you can locate the person who previously surveyed the property and request an update. Check with your lender or title insurance company on whether an updated survey is acceptable.

Selecting a Settlement Agent

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Settlement practices vary from locality to locality, and even within the same county or city. Settlements may be conducted by lenders, title insurance companies, escrow companies, real estate brokers or attorneys for the buyer or seller. You may save money by shopping for the settlement agent. In some parts of the country (particularly western states), settlement may be conducted by an escrow agent. The parties sign an escrow agreement which requires them to provide certain documents and funds to the agent. Unlike other types of settlement, the parties do not meet around a table to sign documents. Ask how your settlement will be handled.

Shopping for a Loan

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Your choice of lender and type of loan will influence not only your settlement costs, but also the monthly cost of your mortgage loan. There are many types of lenders and types of loans you can choose. You may be familiar with banks, savings associations, mortgage companies and credit unions, many of which provide home mortgage loans. You may find a listing of some mortgage lenders in the yellow pages or a listing of rates in your local newspaper. Mortgage Brokers. Some companies, known as "mortgage brokers" offer to find you a mortgage lender willing to make you a loan. A mortgage broker may operate as an independent business and may not be operating as your "agent" or representative. Your mortgage broker may be paid by the lender, you as the borrower, or both. You may wish to ask about the fees that the mortgage broker will receive for its services. Government Programs. You may be eligible for a loan insured through the Federal Housing Administration ("FHA") or guaranteed by the Department of Veterans Affairs or similar programs operated by cities or states. These programs usually require a smaller downpayment. Ask lenders about these programs. You can get more information about these programs from the agencies that run them. (See Appendix to this Booklet.) CLOs. Computer loan origination systems, or CLOs, are computer terminals sometimes available in real estate offices or other locations to help you sort through the various types of loans offered by different lenders. The CLO operator may charge a fee for the services the CLO offers. This fee may be paid by you or by the lender that you select. Types of Loans. Loans can have a fixed interest rate or a variable interest rate. Fixed rate loans have the same principal and interest payments during the loan term. Variable rate loans can have any one of a number of "indexes" and "margins" which determine how and when the rate and payment amount change. If you apply for a variable rate loan, also known as an adjustable rate mortgage ("ARM"), a disclosure and booklet required by the Truth in Lending Act will further describe the ARM. Most loans can be repaid over a term of 30 years or less. Most loans have equal monthly payments. The amounts can change from time to time on an ARM depending on changes in the interest rate. Some loans have short terms and a large final payment called a "balloon." You should shop for the type of home mortgage loan terms that best suit your needs. Interest Rate, "Points" & Other Fees. Often the price of a home mortgage loan is stated in terms of an interest rate, points, and other fees. A "point" is a fee that equals 1 percent of the loan amount. Points are usually paid to the lender, mortgage broker, or both, at the settlement or upon the completion of the escrow. Often, you can pay fewer points in exchange for a higher interest rate or more points for a lower rate. Ask your lender or mortgage broker about points and other fees. A document called the Truth in Lending Disclosure Statement will show you the "Annual Percentage Rate" ("APR") and other payment information for the loan you have applied for. The APR takes into account not only the interest rate, but also the points, mortgage broker fees and certain other fees that you have to pay. Ask for the APR before you apply to help you shop for the loan that is best for you. Also ask if your loan will have a charge or a fee for paying all or part of the loan before payment is due ("prepayment penalty"). You may be able to negotiate the terms of the prepayment penalty. Lender-Required Settlement Costs. Your lender may require you to obtain certain settlement services, such as a new survey, mortgage insurance or title insurance. It may also order and charge you for other settlement-related services, such as the appraisal or credit report. A lender may also charge other fees, such as fees for loan processing, document preparation, underwriting, flood certification or an application fee. You may wish to ask for an estimate of fees and settlement costs before choosing a lender. Some lenders offer "no cost" or "no point" loans but normally cover these fees or costs by charging a higher interest rate. Comparing Loan Costs. Comparing APRs may be an effective way to shop for a loan. However, you must compare similar loan products for the same loan amount. For example, compare two 30-year fixed rate loans for $100,000. Loan A with an APR of 8.35% is less costly than Loan B with an APR of 8.65% over the loan term. However, before you decide on a loan, you should consider the up-front cash you will be required to pay for each of the two loans as well. Another effective shopping technique is to compare identical loans with different up-front points and other fees. For example, if you are offered two 30-year fixed rate loans for $100,000 and at 8%, the monthly payments are the same, but the up-front costs are different: Loan A - 2 points ($2,000) and lender required costs of $1800 = $3800 in costs. Loan B - 2 1/4 points ($2250) and lender required costs of $1200 = $3450 in costs. A comparison of the up-front costs shows Loan B requires $350 less in up-front cash than Loan A. However, your individual situation (how long you plan to stay in your house) and your tax situation (points can usually be deducted for the tax year that you purchase a house) may affect your choice of loans. Lock-ins. "Locking in" your rate or points at the time of application or during the processing of your loan will keep the rate and/or points from changing until settlement or closing of the escrow process. Ask your lender if there is a fee to lock-in the rate and whether the fee reduces the amount you have to pay for points. Find out how long the lock-in is good, what happens if it expires, and whether the lock-in fee is refundable if your application is rejected. Tax and Insurance Payments. Your monthly mortgage payment will be used to repay the money you borrowed plus interest. Part of your monthly payment may be deposited into an "escrow account" (also known as a "reserve" or "impound" account) so your lender or servicer can pay your real estate taxes, property insurance, mortgage insurance and/or flood insurance. Ask your lender or mortgage broker if you will be required to set up an escrow or impound account for taxes and insurance payments. Transfer of Your Loan. While you may start the loan process with a lender or mortgage broker, you could find that after settlement another company may be collecting the payments on your loan. Collecting loan payments is often known as "servicing" the loan. Your lender or broker will disclose whether it expects to service your loan or to transfer the servicing to someone else. Mortgage Insurance. Private mortgage insurance and government mortgage insurance protect the lender against default and enable the lender to make a loan which the lender considers a higher risk. Lenders often require mortgage insurance for loans where the downpayment is less than 20% of the sales price. You may be billed monthly, annually, by an initial lump sum, or some combination of these practices for your mortgage insurance premium. Ask your lender if mortgage insurance is required and how much it will cost. Mortgage insurance should not be confused with mortgage life, credit life or disability insurance, which are designed to pay off a mortgage in the event of the borrower's death or disability. You may also be offered "lender paid" mortgage insurance ("LPMI"). Under LPMI plans, the lender purchases the mortgage insurance and pays the premiums to the insurer. The lender will increase your interest rate to pay for the premiums -- but LPMI may reduce your settlement costs. You cannot cancel LPMI or government mortgage insurance during the life of your loan. However, it may be possible to cancel private mortgage insurance at some point, such as when your loan balance is reduced to a certain amount. Before you commit to paying for mortgage insurance, find out the specific requirements for cancellation. Flood Hazard Areas. Most lenders will not lend you money to buy a home in a flood hazard area unless you pay for flood insurance. Some government loan programs will not allow you to purchase a home that is located in a flood hazard area. Your lender may charge you a fee to check for flood hazards. You should be notified if flood insurance is required. If a change in flood insurance maps brings your home within a flood hazard area after your loan is made, your lender or servicer may require you to buy flood insurance at that time.

Terms of the Agreement of Sale

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If you receive this Booklet before you sign an agreement of sale, here are some important points to consider. The real estate broker probably will give you a preprinted form of agreement of sale. You may make changes or additions to the form agreement, but the seller must agree to every change you make. You should also agree with the seller on when you will move in and what appliances and personal property will be sold with the home. Sales Price. For most home purchasers, the sales price is the most important term. Recognize that other non-monetary terms of the agreement are also important. Title. "Title" refers to the legal ownership of your new home. The seller should provide title, free and clear of all claims by others against your new home. Claims by others against your new home are sometimes known as "liens" or "encumbrances." You may negotiate who will pay for the title search which will tell you whether the title is "clear." Mortgage Clause. The agreement of sale should provide that your deposit will be refunded if the sale has to be canceled because you are unable to get a mortgage loan. For example, your agreement of sale could allow the purchase to be canceled if you cannot obtain mortgage financing at an interest rate at or below a rate you specify in the agreement. Pests. Your lender will require a certificate from a qualified inspector stating that the home is free from termites and other pests and pest damage. You may want to reserve the right to cancel the agreement or seek immediate treatment and repairs by the seller if pest damage is found. Home Inspection. It is a good idea to have the home inspected. An inspection should determine the condition of the plumbing, heating, cooling and electrical systems. The structure should also be examined to assure it is sound and to determine the condition of the roof, siding, windows and doors. The lot should be graded away from the house so that water does not drain toward the house and into the basement. Most buyers prefer to pay for these inspections so that the inspector is working for them, not the seller. You may wish to include in your agreement of sale the right to cancel, if you are not satisfied with the inspection results. In that case, you may want to re-negotiate for a lower sale price or require the seller to make repairs. Lead-Based Paint Hazards in Housing Built Before 1978. If you buy a home built before 1978, you have certain rights concerning lead-based paint and lead poisoning hazards. The seller or sales agent must give you the EPA pamphlet "Protect Your Family From Lead in Your Home" or other EPA-approved lead hazard information. The seller or sales agent must tell you what the seller actually knows about the home's lead-based paint or lead-based paint hazards and give you any relevant records or reports. You have at least ten (10) days to do an inspection or risk assessment for lead-based paint or lead-based paint hazards. However, to have the right to cancel the sale based on the results of an inspection or risk assessment, you will need to negotiate this condition with the seller. Finally, the seller must attach a disclosure form to the agreement of sale which will include a Lead Warning Statement. You, the seller, and the sales agent will sign an acknowledgment that these notification requirements have been satisfied. Other Environmental Concerns. Your city or state may have laws requiring buyers or sellers to test for environmental hazards such as leaking underground oil tanks, the presence of radon or asbestos, lead water pipes, and other such hazards, and to take the steps to clean-up any such hazards. You may negotiate who will pay for the costs of any required testing and/or clean-up. Sharing of Expenses. You need to agree with the seller about how expenses related to the property such as taxes, water and sewer charges, condominium fees, and utility bills, are to be divided on the date of settlement. Unless you agree otherwise, you should only be responsible for the portion of these expenses owed after the date of sale. Settlement Agent/Escrow Agent. Depending on local practices, you may have an option to select the settlement agent or escrow agent or company. For states where an escrow agent or company will handle the settlement, the buyer, seller and lender will provide instructions. Settlement Costs. You can negotiate which settlement costs you will pay and which will be paid by the seller.

Selecting an Attorney

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Before you sign an agreement of sale, you might consider asking an attorney to look it over and tell you if it protects your interests. If you have already signed your agreement of sale, you might still consider having an attorney review it. An attorney can also help you prepare for the settlement. In some areas attorneys act as settlement/closing agents or as escrow agents to handle the settlement. An attorney who does this will not solely represent your interests, since, as settlement/closing agent, he or she may also be representing the seller, the lender and others as well. If choosing an attorney, you should shop around and ask what services will be performed for what fee. Find out whether the attorney is experienced in representing home buyers. You may wish to ask the attorney questions such as: What is the charge for negotiating the agreement of sale, reviewing documents and giving advice concerning those documents, for being present at the settlement, or for reviewing instructions to the escrow agent or company? Will the attorney represent anyone other than you in the transaction? Will the attorney be paid by anyone other than you in the transaction? Please note, in many areas of the country attorneys are not normally involved in the home sale. For example, escrow agents or escrow companies in western states handle the paperwork to transfer title without any attorney involvement.

Role of the Real Estate Broker

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Frequently, the first person you consult about buying a home is a real estate agent or broker. Although real estate brokers provide helpful advice on many aspects of home buying, they may serve the interests of the seller, and not your interests as the buyer. The most common practice is for the seller to hire the broker to find someone who will be willing to buy the home on terms and conditions that are acceptable to the seller. Therefore, the real estate broker you are dealing with may also represent the seller. However, you can hire your own real estate broker, known as a buyer’s broker, to represent your interests. Also, in some states, agents and brokers are allowed to represent both buyer and seller. Even if the real estate broker represents the seller, state real estate licensing laws usually require that the broker treat you fairly. If you have any questions concerning the behavior of an agent or broker, you should contact your State’s Real Estate Commission or licensing department. Sometimes, the real estate broker will offer to help you obtain a mortgage loan. He or she may also recommend that you deal with a particular lender, title company, attorney or settlement/closing agent. You are not required to follow the real estate broker’s recommendation. You should compare the costs and services offered by other providers with those recommended by the real estate broker.

Glossary of Real Estate Terms

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Agent - An individual who represents a seller, a buyer or both in the purchase or sale of real estate. Amortization - The schedule of loan payments that establishes the amount of payment to be applied to the principal and the amount to be applied to interest, usually on a monthly basis, for the full term of the loan. Annual Percentage Rate (APR) - The TOTAL interest rate of a mortgage, including the stated loan interest as well as any upfront interest paid in securing the loan. The APR will invariably differ from the mortgage rate quoted due to the inclusion of these items. Appraisal - An estimate of value of a Real Estate property by a professional third party. Virtually all non-owner financed mortgages will require an appraisal and is generally paid for by the buyer. Adjustable Rate Mortgage (ARM) - A mortgage in which the Interest rate is adjustable, meaning that the rate can go up or down according to prevailing financial market conditions. Assessment - The value of a property as determined by the local tax jurisdiction which is used to determine the amount of your property taxes. Buyer's Agent - A Real Estate Agent that has made an agreement to represent the buyer exclusively, rather than the seller. Comparable Market Analysis (CMA) - A comparison of the prices of similar houses in the same general geographic area. A CMA is used to help determine the value of a property, either for a seller or a buyer. Closing - The process that effects the final transfer of the deed from the seller to the buyer, as well as finalize all aspects of the mortgage of the property. Closing Costs - Funds needed at the time of closing (separate from and in addition to the down payment). Loan origination fees, discount points, Attorney fees, recording fees and pre-paids are some items that may be included. They often will total from 3% to 5% of the price of the home, payable in cash. Contingencies - These are conditions--or "safety valves" written into Real Estate offers and contracts to prevent a buyer from being forced to buy a house that is unsatisfactory--either structurally or financially. Examples of contingencies are "This contract is subject to the buyer obtaining a satisfactory whole house inspection." or "Subject to the buyer being able to obtain a mortgage." Condominium - Housing where the owner owns only the unit in which the live--from the interior walls inward, generally--as well as a portion of the common area. Debt to Income Ratio - The ratio of a borrowers total of debt as a percentage of their total gross income. Deed - The document that, when recorded with your local government, determines ownership of a property. Transferred from seller to buyer at closing. Earnest Money - Money that is submitted with an offer to purchase which indicates a buyer's seriousness and good faith. In virtually all cases, earnest money will need to be submitted at the time of the offer and remains in escrow until the time of closing, at which time it becomes part of the downpayment. Equity - The difference between the value of a property and the total of any outstanding mortgages or loans against it. Escrow - Funds held in reserve both prior to closing (for example the earnest money and deposit) by a third party and after closing by the mortgage company to pay future taxes and homeowners insurance. In some areas, "escrow" also refers to the closing process. Fixed Rate Mortgage - A mortgage loan where the interest rate is established at its origination and continues unchanged through the life of the loan. FSBO (For Sale By Owner) - Real Estate that is sold without the assistance of an Agent. FSBO can refer to both the individual selling the property "They are a FSBO," or the property itself "that house is a FSBO." Foreclosure - The process through which a lender takes back property from a defaulting owner and re-sells it. Homeowner's Association - An owners group, whether in a condominium, townhouse or single family subdivision that establishes general guidelines for the operation of the community, as well as its standards. Inspection - A whole house inspection of a home being considered for purchase which looks for defects in the property. Interest - That portion of a mortgage payment that is the "charge" for using the lender's funds. Lien - A legal claim against a piece of property that can prevent it from being sold unless the lien is satisfied (paid off). Liens can be filed by unpaid contractors or other debtors in a legal process so that they will be paid when a property is sold. Listing - A property for sale by a Real Estate Brokerage and Agent. Loan Origination Fee - A charge imposed by the lender, payable at closing, for processing the loan. Lock-in - An agreement by the lender at the time of mortgage application or shortly thereafter, to write the mortgage at a specific interest rate, whether rates rise or fall up to the date of closing. Obviously a good move if rates are rising, not so good if they are falling. Lock-ins have specific expiration dates, such as 30, 60 or 90 days in the future. LTV (Loan to Value) - The ratio of the amount of the mortgage as a percentage of the value of the property. MLS (Multiple Listing Service) - A listing (almost always computerized) of all the properties for sale by Real Estate Brokerages in a given geographical area. PMI (Private Mortgage Insurance) - Required on virtually all conventional loans with less than 20% downpayment. Although the payments for PMI are included in your mortgage payment, it protects the lender should you default on the loan. On FHA loans, you will pay a MIP (Mortgage Insurance Premium) which accomplishes the same purpose. Points - 1 point is equal to 1% of the loan value, paid at closing. Points can be loan origination fees or "discount points" which reduce the interest rate of the loan (you are actually paying a finance charge up front). When a lender, for example, quotes a rate of 8 1/2% with 1 + 1 points, 1 point is for the origination fee and 1 point is for the discount fee. Prequalification - The first stage of a mortgage application where the lender will run a basic credit report and determine your debt to income ratio in order to see how much mortgage you qualify for. Pre-paids - Paid for (in cash) at closing for such items as homeowners insurance for one year and real estate taxes for several months. Principal - The amount borrowed for a mortgage loan. Your monthly mortgage payment will be applied to both the interest and the principal (be assured, though, that the lions share will go to the interest portion in the first years of the loan). Property Tax - An annual or semi-annual tax paid to one or more governmental jurisdictions based on the amount of the property assessment. Generally paid as part of the mortgage payment. Recording - The act of entering deed and/or mortgage information into public record with your local government jurisdiction. Sub-Agent - A Real Estate Agent who is working with a buyer but who represents the seller in the transaction. Title Insurance - Protects your title--your ownership rights--from claims against it. Paid at closing, title insurance may be the responsibility of the buyer, the seller, or both, depending on what is traditional in your locality. Warranty - Covers either most of the house in a new home, or selected items (for example the heating and air conditioning system or the water heater) in a used home. Warranties can vary widely and are optional in used homes (paid for by either the buyer or the seller). Zoning - Laws that govern specifically how a zoned area can be used. For example, an area may be zoned for single family residential, condominiums, commerical or retail, or a mix of two or more uses.

The Final Walk Through

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At some point (shortly before the date of final closing) it will be necessary for you to make a final inspection of the house that you are purchasing--a final walk through. In all probability, you will be accompanied by your Agent, who will help you examine the house. This is to verify that all items for which you have contracted to buy are there, and items that you have not contracted to buy have been removed. For example, you do not want to arrive at your new house after closing to find that the beautiful chandelier in the dining room has somehow been replaced by a cheap overhead fixture, or that the draperies and window treatments that were specifically referenced in the contract have been packed and moved away. Additionally, you do not want to move in to find that numerous items have been left by the sellers because they did not want to move them or take them to the dump. When you do your walk through, pay particular attention to attics, crawl spaces or basements, and garages. If the sellers have not moved yet, you still may get a clear picture that there are certain items (since they may not be boxed or appear to be ready to move) that they have no intention of taking with them. Bring this to the attention of your Agent to avoid the hassles that can surface on moving day. Take your time when you are doing your walk through inspection. Try to be as calm as possible. Many a buyer has been so busy dreaming of themselves in the new home that they have neglected to take a good look and missed an important item that was contracted to convey upon Closing. Have a copy of your Sales Contract with you so that you can review any items that should be included with the house. Here are a few points to review: · Check the house from bottom to top: basement to attic. · Pay particular attention to expensive items and those that are of importance to you. · Watch for areas where furniture or rugs may have been when you originally looked at the house. Many times defects in carpeting or floors that were covered are now visible. · If an item is missing, or if there is trash or discarded items left behind, deal with it now. Assume that if it is gone, the sellers intend for it to be gone, or if it is still there, they do not intend to remove it. · Leave your emotions outside the door. You will have plenty of time to swoon over your new home--now is the time to make sure the house is as you expected it to be. This is the time to deal with any potential problems. If you see an item that needs to be addressed, let your Agent know so that they can get it handled before closing.

Bringing it all Home -- the Closing

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After the searching for a home is done, the negotiations have been completed, the house has been inspected, and the mortgage has been applied for and committed to, the focus suddenly turns to the Closing, Settlement, or Escrow as it is known in some localities. For simplicity, in our discussions here we will refer to the process when it all comes together and you finally own the home as Closing. An understanding of the elements of and players in the closing, as well as a concise preparation for it, will eliminate many nervous hours as the day approaches. What is involved? It is the proverbial "signing on the dotted line:" the process of which will put the title to the house in your name, verify homeowners' insurance on the property, commit in writing to the terms of the mortgage, and usually, put the keys to the house in your hands. In general, you will leave the closing and go to your new home as a homeowner. The weeks and months of anticipation are all settled in the short amount of time that you spend at the closing. Closing procedures will vary from locality to locality. In some areas, the buyers and sellers (as well as their Real Estate Agents) will all attend the closing. In other areas, only the buyers will be present. The closing will take place at the office of an Attorney, a Title Company, or an Escrow Company (again, there is some variance here based on your local laws and tradition). In general, though, the closing will be attended by all of the buyers involved and their Real Estate Agent, as well as the Closing Agent, who has reviewed all of the components of the house sale and who is the one who will say "sign here" more times than you have ever heard in your life. What forms are involved? Although there may be additional documents involved, the primary items which are dealt with at the Closing are: · The Settlement Statement--Page 1 and Page 2 · The Contract · The Loan Papers · Title Insurance · Homeowners' Insurance · The Title or Deed · The Down Payment and Closing Costs The Closing is your final opportunity to make certain that everything related to the purchase of your home is correct. It is important, therefore, that you do adequate preparation prior to the day of Closing. Although your Agent will most likely review all of the items needed with you, it is a good idea to have the right information in case you need to handle it on your own. What items will we need? The following are the most important items that you will need prior to or at closing and some hints regarding them: A Closing cost estimate - This should first be given to you by your Agent at the time of the contract, and then given to you by the Lender, a Good Faith Estimate, shortly after the application for the loan. This should give you a reasonably close estimate of funds you will need at the time of closing. Homeowners' Insurance Policy - This must be secured prior to the date of closing. Settlement Statement - You should have a copy of the Settlement Statement before the date of Closing. Generally this will not be available until one or two days prior to the actual Closing, but it is important to have it because it gives you the total amount of cash you will need at Closing and also how those various funds will be dispersed. In addition, it gives you an opportunity to iron out any discrepancies prior to sitting down at the Closing table. Your Agent should also have a copy for review. Certified Funds - On the day of Closing you will need certified funds for closing costs and down payments. This is an important reason for needing a copy of the Settlement Statement a day or two in advance--so you know the amount of funds needed and so that any problems can be handled in advance. By making adequate preparations in advance, you will be far less likely to have nasty surprises when everyone (especially you!) is ready for closing.

House Inspections

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Depending on the type of financing you choose, there should be either 2 or 3 separate inspections on the home you want to purchase. The first should be your own basic inspection (see the bottom of this page for what to look for), the second should be a professional whole-house inspection by a reputable person. Should you select a government loan (FHA or VA), the third inspection should come at the time of the appraisal, which to some degree amounts to a "mini-inspection." Do not, however, rely on this appraisal as your only inspection of the property! We cannot emphasize enough the value and necessity of an extensive home inspection. Many home purchasers, either in the desire to save the $200 to $500 that a good inspection costs, or due to simple ignorance, have spent enormous sums of money repairing items that any good home inspector would have pointed out. Any offer to purchase you make should be contingent upon (subject to) a whole house inspection with a satisfactory report. Do not let anyone--not the agent, not your family or friends, and especially not the seller--dissuade you from having the property thoroughly inspected! Not only will you sleep much sounder after you have moved into the house, a professional inspection can give you an escape hatch from a contract on a defective house. If the contract is written contingent on an acceptable inspection, any defects in the home must be either repaired or monetarily compensated for. If you are not satisfied, you have the option to cancel the contract. Inspections are designed to disclose defects in the property that could materially affect its safety, livability, or resale value. They are not designed to disclose cosmetic deficiencies (for example, an interior wall that needs paint touch up). You will need to determine on your own those type of items that will need attention: don't expect a whole house inspection to reveal them to you. Don't wait until you have placed an offer on a house before you begin the search for a home inspector. There will be a time limit in the contract designating when the inspection must be completed (typically between 7 and 14 days). If you start trying to find an inspector at that point, and cannot find an acceptable one to schedule it in that time frame, you will only have two choices: go with an inspector that is not your first choice, or run the risk of running past the deadline for the inspection (which could void any chance having the seller take care of repairs). Neither is an acceptable alternative!

The Art of Negotiation

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Real Estate is one of the few places (along with the automobile business) in American life where some form of negotiation is the rule rather than the exception. Just because it is the norm, however, does not mean that most people are proficient at it. Sure, most folks feel that they are the best negotiators in the world, but in reality, it is a learned art. It takes a keen understanding of the process in order to be good at it--and before you begin making offers on homes. When it comes to Real Estate matters, the 3 most important aspects of an effective negotiation are: 1) Information 2) Preparation 3) Realism Recognizing that being a good negotiator does not come naturally to most people--it must be worked at--is the first step in becoming one. 1) Information CMA's--Comparable Market Analyses Once you have found a home that you are prepared to buy, the first step in your process of negotiation is to determine the fair value for the home. Your Agent can be of great help here, since Real Estate Agents have access to the information that you need: Comparable Market Analyses (CMAs). A CMA will show exactly what properties similar to the one in which you have an interest have sold for. These analyses are based on fact, rather than opinion, and that information will always be of more value to you. Generally, CMAs will list houses in a particular location that are currently on the market, have sales pending on them, have expired from the market, and have sold. Be forewarned: it is primarily the SOLD properties that you need to be concerned with. What houses are on the market for is not always a good indication of what their value is, those that have pending sales will only tell you what the listing price is (not what it is going to sell for) and those that have expired because they haven't sold may indicate that they didn't move because they were overpriced. The CMA which you obtain will most likely give you some general information about the houses that will be compared: Number of bedrooms and baths, square footage, the listing price and the sold price. It is important that the CMA focuses on houses similar to the one you have selected. If you are interested in a 4 bedroom, 2 1/2 bath 2 story, a CMA that lists only 3 bedroom 1 bath homes is of little or no value. Likewise, a CMA that includes a number of properties from a neighborhood 2 miles away will have limited value. To have a good CMA you must have all of the similar sales in the neighborhood in the last year. Obviously, the fresher the data (the more houses sold in the last few months), the better the CMA. Note: In all likelihood, if you are dealing with the Selling Agent instead of a Buyer's Agent, you will not have access to a CMA. This is one of the many reasons that it is vitally important to consider Buyer's Representation. Condition Once you have the information in hand, it is important to drive by all of the properties that are listed in the SOLD column. Why? Because condition has so much to do with the ultimate selling price of a house. Does the home in which you are interested shine above or fall below the others that have sold. Size, number of rooms, and lot size can only tell you so much. Your eyes will be able to tell you a lot more. Make a realistic comparison between the condition of your chosen house and those that have recently sold. Then adjust your thinking up or down from what you have seen. Extra Amenities Does the house you have chosen have more or less amenities than the comparable homes? Although amenities will not affect the value as much as location or condition will, they still can be a factor. Be wary, though. An outdoor hot tub may have been a major motivating factor in your choice of a house, but it will not add a great deal to the value of the property. Motivation An effective negotiator will gather as much information as is available on the house and the sellers. Obviously, one of the most important pieces of information you can have is the seller's reason for selling. Is it a case of having to sell or wanting to sell? Or, is it a case of "lets throw it on the market at a goofy price, and if somebody bites, we'll move?" If your Agent represents you in the transaction as a Buyer's Agent, they may or may not be able to secure this information for you (it depends on what the seller and the Seller's Agent want to reveal). If you are working with an Agent that represents the seller in the transaction (or in a Dual Agency position) they cannot disclose this information without the seller's consent. Even if this information cannot be revealed to you, a friendly discussion with one of the neighbors may give you a feel for the situation. 2) Preparation Just having the right information is not enough. You must prepare yourself in order to use it effectively. The most important factor in your preparation is your emotional frame of mind. Buying a house is emotionally charged enough, without adding more fuel to the fire by letting your emotions override your common sense. It is not unusual to be excited--in fact, it is normal--but you must keep your excitement in check or you will lose the value of all the information you have gathered. In addition to your emotional frame of mind, your financial frame of mind should be in order. An offer to purchase will carry a lot more weight if there are no dangling financial problems and if you have been pre-qualified for a mortgage. "You can't be afraid to let it go." You must convince yourself that if the price is not to your liking (or worse, above your budget), you will be able to walk away. It is important for you to set a realistic limit and then stick to it. Overpaying for a house is epidemic among buyers who let their emotions rule their better judgment. It becomes very easy to regret paying too much for a house when you make a mortgage payment every month. Unlike a product that you overpay for once when you buy it, a house reminds you every 30 days that you made a mistake! Finally, plan your work and work your plan. Organize your information and have it quickly available. When it comes time to make an offer, you don't want your "ammunition" scattered on scraps of paper in the back seat of your car. 3) Realism Don't throw away all of the information gathering and preparation you have done by making a ridiculous offer on a well priced home. Nothing will turn a seller off more than a low ball offer on a house that has been realistically priced. Often, negotiations will stop, rarely to be revived again. If they are re-opened, the sellers generally will show their displeasure at the initial low offer by locking at or near the listing price. An example: Mr. and Mrs. Buyer have been looking at houses for months. Finally, they find the perfect house, which is an ideal match for their needs and wants. The house is listed at $155,000. Mr. and Mrs. Buyer have a CMA in hand that shows average selling prices in the neighborhood to be in the $148,000 to $153,000 range. Ignoring the information they have, they make an offer of $120,000. Mr. and Mrs. Seller, annoyed at the low offer, counter offer at full selling price, $155,000. The Buyers, still convinced that they can "steal" this house, make a 2nd offer of $125,000. The Sellers, now very frustrated, do not move from their $155,000 price. Suddenly, there is word that another offer is forthcoming, this time from Mr. and Mrs. Smith. In fear of losing the house, Mr. and Mrs. Buyer up their offer to $154,000 (still needing some concession) and the Sellers accept. Consider, though, that a realistic first offer in the $150,000 range (remember, the CMA showed $148,000 to $153,000) may well have been accepted by the Sellers. If this were the case, the Buyer's paid $4000 more than they had to. The moral: An unrealistic offer on a house that meets your needs and is priced correctly could end up costing more than it would with a realistic offer.

The Art of Negotiation

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Sales Contracts - Discussion Becomes Com..

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Once the perfect home has been found, it is time for the house buyer to take the step that makes so many of us tremble with fear: the sales contract. To take some of the mystery out of the house sales contract, we will discuss what the contract involves and the components of most housing sales contracts. First, remember that what you are signing is a legal contract. No matter what anyone says, you are not just making an "offer". Most sales contracts will have some paraphrase of the following: "This is a legally binding contract. If not understood, seek competent advice before signing." To put it simply, if what is written on the contract regarding selling price and provisions is accepted by the seller, you have bought a home. Unlike other negotiable businesses, such as the automobile business, "would you take?" is defined in Real Estate by a legally binding contract backed with a monetary deposit. Although there will be some variance based on the location of your residence, most Real Estate contracts contain most or all of the following items: What - A legal description of the property as well as the street address. How much - The selling price. Mortgage contingency - Subject to obtaining a mortgage (if applicable) and the specifics of the mortgage--amount, rate and term. Application to be made in X number of days. Deposit - How much money accompanies the contract and who will hold it. Closing - When and where. Inclusions and exclusions - What is and is not included in the sale of the property. Home inspection - Contingency for and to be done in X number of days. Warranties - Any that are included with the house and description of the warranty. Condominium - If the property is a condo, other provisions will apply. Well and Septic - If applicable, they must be tested (and pass). Termite and Pest inspection - Who will pay and if there is infestation or damage, who will repair. Possession Date - When the buyers take possession of the house--before, at or after closing. Acceptance - How long the sellers have to respond to the offer with either acceptance or a counter-offer. Arbitration - Any provisions for arbitration of disputes. Insurance - Whose insurance covers the property up until the closing date. Property Disclosures - Notices of any property disclosures concerning the house. The exact wording of the sales contract will vary from locality to locality (and sometimes even within localities), but by being prepared to see at least the items listed above, you will be in a better position when it comes time for the Agent to ask for your signatures!

Personal Home Inspections

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The purpose of your personal inspection is only to eliminate those properties from consideration that have too many obvious deficiencies. It is not designed to take the place of a professional house inspection. If a house passes your initial "tests" (location, wants and needs, etc.) you will probably want to schedule a second showing where you can spend an hour or so doing an inspection of the house. What to look for: Foundation - Are there obvious cracks? Any apparent shifts in the foundation? Roof - Does it appear new, old, or of an indeterminate age? What is the overall condition? Evidence of leaks - Check inside as well as outside. Check all ceilings and areas around windows. Basement or crawlspace - Is there dampness? Is there adequate insulation? Attic - How does the interior of the roof structure look? Quality and workmanship - In general and in any additions Apparent energy efficiency - Does the house appear tightly sealed? Electrical - Any obvious malfunctions? Plumbing - Any unusual noises or malfunctions? Appliance condition - What is the age and condition of the stove, dishwasher, refrigerator (if included), etc.? Heating/cooling system - Does it seem to do the job heating or cooling? Exterior - Is the house going to need repairs or paint soon? Lot - Does the drainage appear good--and away from the house? Lot - Are there any trees encroaching on the roof or foundation?

House Buying Mistakes

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Buying a house covers a lot of ground--including legal, financial and emotional considerations. To not educate yourself and learn from the mistakes of others only sets you up to be at best disappointed and at worst finding yourself living in the wrong house. We have listed some of the most prevalent--and potentially dangerous and expensive--mistakes made by first time home buyers. Running before walking - This is easy to do once the decision to buy a home has been made. It means rushing off looking at homes, surfing the web or calling on advertisements before doing some up-front preparation. Not spending time doing this preparation, though, can be a disaster. We get a number of emails from buyers who have contracted to purchase a home and want to know the easiest way of getting out of the purchase. Let it be known loud and clear: If you contract to purchase a home and "change your mind," the chances of getting released from the contract are almost non-existent. Still we hear "We found another home!" Sorry, too late. Maybe next time. "We are buying too much house!" Okay, maybe you will be able to rent out a room or two. " It's not what we want!" Maybe you can paint the house, or add on to it or replace the carpeting, but you will almost certainly will be living in it! Over-buying the first time - Being "house poor" is a very uncomfortable existence. A large and beautiful home with little or no furniture tends to be empty and cold. A life where almost every dime of your earnings goes to the support of your house wears thin very quickly and is a frequent cause of family stress. Pushing yourself right up to--or beyond--your limits leaves you highly exposed when the inevitable changes to the national or your personal economy occur. Leave yourself some breathing room! Finding out too late that you have no representation - This can be a real nasty surprise when you assume that the Agent with whom you are working represents you when they actually represent--and owe complete allegiance to--the seller. How does this happen? By not taking the time to investigate and familiarize yourself with the laws regarding Agency. Or, by rushing out to look at homes, whether in person or on the Internet, and contacting the Agent who has the house advertised (who will be the listing Agent and will absolutely represent the seller). Another pitfall occurs when you try to represent yourself in the purchase of a home, thinking that you will save money. This may be the case, but it is just as--or more--likely that you will run into a savvy seller who is looking to keep the commission savings in their pocket rather than give it to you. In addition, without representation and the use of a Comparative Market Analysis, how do you determine a realistic selling price for a property? Not comparing mortgages - There are far too many variables--type of mortgage, term, lender and amount of points to mention a few--not to investigate all of your options. Don't simply accept the first plan presented to you, whether it is from a mortgage broker, an Agent or on the recommendation of a friend or relative. Spend time comparing to get the most advantageous plan for your requirements and financial situation. Not getting mortgage preapproval - In the past it may have been different, but today prequalification and preapprovals are a necessary part of the home buying process. Not only will it give you an exact price range for your purchase, preapproval will add a great deal of strength to your offer. Waiting for the "perfect" home - Many first time buyers make the mistake that they will, if they look around long enough, find a home that has a full 100% of their needs and wants. With the thousands of variables available in housing, including location, style, size, amenities and condition, this is almost always an unrealistic goal. There are two potential problems with this strategy: First, these buyers pass by homes that meet 90% or more of their requirements only to eventually give up (often purchasing homes with less of their requirements because they are worn out!) and second, while they are waiting for the "perfect" home, housing market prices (and often mortgage rates) continue to rise, adding expense to their purchase. Instead, it makes sense to determine the most important of your needs and the most desired of your wants and selecting a home that meets the majority of them. Shortcutting the inspection process - This can involve skipping a whole house inspection completely in order to save the relatively small amount of money involved or it may involve using a friend or relative with limited experience to conduct the inspection. In either case you run the risk of not exposing potentially expensive--or even hazardous--defects in the property. Protect yourself and invest the $200 to $500 for a professional inspection.

Condominiums

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The easiest way to understand the concept of condominium ownership is to see at as an apartment you own (in fact, many condominiums are apartments that have been converted over the years). Your ownership extends inward from your interior walls, floors and ceilings. In addition, you are a partner, with all of the other owners in the complex, of the exterior structure (the foundation, exterior walls and roof) as well as any common areas and amenities (for example, swimming pools, clubhouses, tennis courts, play areas, etc.) One of the requirements of condominium ownership is the payment of a monthly condo fee, which covers general repairs and maintenance to the common areas of the complex as well as (hopefully) build up a cash reserve for future needs. In general, all exterior maintenance and repairs are the responsibility of the condominium association, although you will be charged for them, either through your association dues or a special assessment (a one time charge assessed to all owners for, as an example, a new roof). The normal day-to-day maintenance of the grounds (some examples are cutting the grass, shoveling snow and maintaining the pool) are also the responsibility of the association. Interior maintenance and repairs (for example, replacing a dishwasher) are the responsibility of the individual owner. In some areas, a condominium may be the only consideration that fits within your budget. The reason for this are simple. In general, the same square footage will cost less in a condo setting than it will in a single family home or townhouse, due mainly to land cost--you can build many more condos than you can single family homes on the same amount of land. Advantages of Condominiums · You will be responsible for little or no exterior maintenance or repairs. · Many condominium communities offer amenities (pools, play areas, tennis courts, etc.) you may otherwise not be able to afford. · Condominiums are often located in locations convenient to centers of employment and shopping. · Condominiums are often more reasonably priced than other forms of housing. Disadvantages of Condominiums · You will be responsible for payment of Condominium Association fees. · You give up more privacy when compared to single family homes as well as townhouses. · You only own from your interior walls inward. The rest of the structure and all of the land is owned in common with the other condominium owners. · When it is time to sell, it can often take longer to sell a condominium. Is a Condominium for You? It is if... · You want absolutely nothing to do with exterior maintenance and repairs. · You like the idea of amenities (swimming pools, tennis courts and the like) but you don't like the idea of having to pay for them on your own. · You like the safety of numerous and nearby neighbors.

Townhouses

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Townhouses often can make an excellent "middle ground" between a detached single family home and a full fledged condominium because, to some degree, they offer attributes of both. For purposes of definition, we will describe a townhouse as a home that is attached to one or more other houses, but which sits directly on a parcel of land that you also own (if you don't own the land, it is a condominium). For this discussion, townhouses can ranges from duplexes and triplexes all the way through huge townhouse communities consisting of hundreds of similar homes. There is a good degree of variance in the way townhouse communities are structured. It may be a simple agreement (as is often the case of duplexes and triplexes) that each parcel of land and the home that sits on it is separately owned. In the case of larger townhouse communities, you will generally have an additional shared ownership in the common areas of the complex as well as any amenities such as swimming pools, park areas, etc. This ownership you will share jointly with all other townhouse owners in the complex. In any townhouse purchase that involves an Homeowners' Association, it is vitally important to get as much information as you can, since the association can have a considerable impact on your ownership experience! Advantages of Townhouses · May have less exterior maintenance and repairs to be responsible for. · Having a neighbor's home attached to yours may bring a higher level of security. · There may be amenities in the community (for example, pools, tennis courts, playgrounds and the like). Disadvantages of Townhouses · You will be responsible for payment of Home Owner's Association fees. · You give up privacy when compared to single family homes. · Your options for changing the exterior look of your house will be limited. Is a Townhouse for You? It is if... · You like the idea of your "space" but not having to deal with most exterior maintenance has even more appeal. · A small backyard "retreat" or deck is just about all the yard you need. · The idea of having neighbors close doesn't really bother you--you just don't want them above and below as well as next to you!

Single Family Homes

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By far the most common form of housing in North America is the single family detached home--ranging from 600 square foot bungalows to 6000 (or more) square foot sprawling mansions. The most important distinguishing factors that determine a single family dwelling are that it sits on its own piece of land (which is sold part and parcel with the home) and it is not attached to anyone else's residence. With single family homes, your home pretty much is your castle. Subject to neighborhood and subdivision regulations and ordinances, you can do with it as you wish. Want a different exterior color? Usually you can accomplish that (taking into account the fact that the neighbors may not be receptive to a purple house with ecru trim). Need more room and want to add on? Subject to the codes of your jurisdiction, you may be able to expand your living space. You will probably have a yard of some sort--from "postage stamp" size up through multiple acres, and your ownership will include all of it. In effect, when you buy a single family home your purchase will be of a parcel of land (your lot) on which sits a structure (your house). Advantages of Single Family Homes · To a large degree, "your space" is your own. You can modify or improve it as you wish. · Re-sale value is generally the highest on single family detached homes. · If you need more room, you can usually add on to the existing house. · Generally there are no property management fees as there are in condominiums and many townhouses. Disadvantages of Single Family Homes · All maintenance and repair costs--interior, exterior and everything in between--are yours. · Lack of amenities (for example, pools, playgrounds, etc.) that you may find in other types of housing. · You are responsible for landscaping and lawn upkeep costs. · In most areas, single family homes are more expensive than townhouses or condominiums. Is a Single Family Home for You? It is if... · You like your "space." The idea of apartment living gives you the willies. · The prospect of cutting the lawn, trimming the bushes and shoveling snow excite you (or at least don't send you headed for the nearest bridge.) · You like the idea of modifying your home--changing the color, the appearance, the size. Having someone tell you that you couldn't do that would bother you.

Mortgage Hints

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Don't build yourself a mortgage mountain. It's fine to want the best home you can afford, but be certain that it is comfortable affordability. Although you may find certain mortgage lenders who will stretch your qualification ratios (the ratio of your total mortgage payment to your total income) the traditional ratios--the mortgage payment as 28% of your income and the total of your mortgage payment plus your monthly debt payments as 36% of your income--are good basic guidelines. Get your budget under control. Spending some time reviewing your budget (or developing one if you don't already have it) and sharpening your money saving skills can bring big rewards later. A coordinated budget allows you to get the most home for your money without strapping yourself while eliminating wasteful spending. Prepare to pay off small debts. Having 3 credit card balances, for example, one with a $125 balance, a second with a $165 balance and a third with $275 balance will only cloud the picture. Even though the total is only $565, all 3 will have minimum payments, credit lines, etc. If possible, prepare to pay them down to $0 balances. Begin to gather documentation. It is not necessary that you have all items on hand before you apply, but there are a number of documents you will need eventually and the approval process will go much smoother if you begin to gather them now. Examples: W-2's and income tax returns from the last few years (especially if you are self-employed), copies of pay stubs, a copy of your credit report (you can get a free copy of your credit report here), records of any child support or alimony (either going out or coming in) and bank statements for all accounts (checking and saving) for the last several months. Don't forget about closing costs. In addition to your downpayment, you will need to reserve funds for closing costs. Depending on the type of loan and your location, these costs can range from 3-5% of the mortgage amount, will be paid in cash at the closing and cannot be borrowed funds. Compare. There are lots of sources for mortgage funds--be sure to make comparisons. Your local bank or credit union, mortgage brokers and Internet resources are all available. Be certain to compare equal terms, downpayments and loan types. Consider points when comparing. Your total mortgage cost will be determined by 3 factors: The interest rate, the term and the amount of points. Consider a 15 or 20 year term. Many home buyers make the assumption that a shorter term will boost their payments out of reach. Unless you make the comparison, though, you may never know if a 15 or 20 year (if available) term could have been affordable. See a comparison of a sample loan. If you are concerned about committing to the higher payment of a shorter term, try this tactic: Mortgage the home with a 30 year loan but have the lender develop a 15 and a 30 year amortization sheet for you. Then, do your best to pay the mortgage at the shorter term payment. It will do wonders for your equity position!

Choosing a Mortgage

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Choosing among the many houses that may be available is hard enough--then you need to make a choice from the myriad of mortgages that are offered in today's market. So many decisions! Take heart, though, since although there are literally hundreds of different mortgages available, they all fall into only a few basic varieties. Some may fit perfectly into your situation, others may be unwise or unattainable. By narrowing your choices, the process of picking the right mortgage becomes much easier. Fixed Rate or Adjustable? One of your first decisions should be between a fixed rate (the interest rate remains constant through the life of the mortgage) or an adjustable (the interest rate is adjusted--either up or down--at specified times during the mortgage term). Adjustable Rate Mortgages (ARMs) will have an initial interest rate lower than fixed rates but will adjust upward (unless rates really fall!) usually after the first year. They may be a good choice if you are sure that you will not be owning the home for an extended period (more than 5-7 years) of time. Advantages and Disadvantages of Fixed and ARM Mortgages Advantages--Fixed · Since you know what your payment will be for the life of the loan, you can budget more easily. · No possibility of an interest rate change making your mortgage payment suddenly unaffordable. · No anxiety over interest rate fluctuations. Disadvantages--Fixed · More income needed to qualify because of higher initial mortgage rate. · If interest rates decrease appreciably, it will be necessary to refinance to get a lower payment. Advantages--ARM · Lower initial interest rate and therefore lower monthly payment. · If interest rate declines, your payment will also decline. · Easier to qualify for due to lower initial interest rate and payment amount. Disadvantages--ARM · If interest rate increases, your payment will also increase. · A large increase in interest rates--and payment--could make your house unaffordable. Terms: 15, 20 or 30 years You will probably want to shoot for the shortest term that is comfortable (and for which you will qualify). The interest savings are enormous as the term decreases. Always make a comparison between a 15 year term payment and a 30 year term payment. The difference is often surprisingly smaller than anticipated. The savings over the term of the loan, however, can be substantial. For example, comparing a 15 year term to a 30 year term, $100,000 mortgage at an 8 1/2% fixed rate yields the following results. Principal and Interest Payment (per month) 15 Year: $985 30 Year: $769 Total paid over term in P&I 15 Year: $177,300 30 Year: $276,840 Total interest over term 15 Year: $77,300 30 Year: $176,840 HINT: If you can't qualify for a shorter term try to add at least the amount of 1 additional payment per year--this will knock nearly 10 years off a 30 year loan. Common Loan Types: Conventional, FHA, VA and "No-Document" Conventional: A "traditional" mortgage, not directly insured by the Federal Government. Most conventional loans under $275,000 are administered through Fannie Mae or Freddie Mac (private corporations but regulated by the government). Those loans over that amount are designated "jumbo loans" and are funded by the private investment market. FHA: Insured by (but not funded by) the Federal Housing Administration (FHA) a division of the U.S. Department of Housing and Urban Development (HUD), and designed for, in general, low- and middle-income borrowers and many first-time buyers. There are, however, limits (which vary from county to county) to the maximum loan amount. On January 1, 2000 HUD began insuring home mortgage loans of up to $121,296 in communities where housing costs are relatively low, and loans ranging up to $219,849 in communities where housing costs are relatively high. FHA loans have somewhat more relaxed qualifying standards and ratios than conventional loans and have the availability of both 15 and 30 year fixed as well as 1 year adjustable mortgages. VA: For those qualified by military service, the Veterans Administration (VA) insures (but does not fund) 15 and 30 year fixed as well as 1 year adjustable mortgages with lower down payment requirements (as low as 0 down) and somewhat more lenient qualifying ratios. No-Document ("No-doc) Loans: No-doc mortgages are generally a wise choice for self-employed people, those who do not wish to verify their income, and those with a brief or blemished credit history, or no credit. The benefits of a no-doc mortgage include a shorter application process since you are not required to provide income, employment or asset documentation, as well as a streamlined approval process because there is little subsequent verification. However, no doc mortgages generally will be at slightly higher interest rates and are offered by fewer lenders. Points or No Points A large component of your mortgage decision has to do with one of the first charges associated with your loan--even before you make your first payment--the "points" attached to the mortgage. A point is 1% of the loan amount, paid to the lender or the mortgage broker at closing (in cash). For more information on paying (or not paying) points, see the article "Should I Pay Points?" written by Randy Johnson, author of the best-selling book on mortgages How to Save Thousands of Dollars on Your Home Mortgage. Mortgage Comparisons Once you have a general idea of the type of mortgage that best suits your situation, the next step is to begin to make comparisons among the lenders that are available. Weekend newspapers will often have the rates of individual local lenders posted in their Real Estate section. To get the specifics of each lender's rate and term, you can contact the bank or mortgage company directly. Another source is a mortgage broker in your area, who will often represent a number of sources of mortgage funds and can assist you in your choice.

Mortgage Prequalification and Preapprova..

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You: The most important beneficiary, of course, is you. One of the most common questions new homebuyers ask goes something along the lines of "Please let us know how much house we can afford." We're stumped! Why? There are simply too many variables--credit history, income, debt, special mortgage programs and variations in qualifying guidelines between different mortgage types--to answer that question. The only sure way of getting the question answered is through prequalification. The mortgage prequalification step is a relatively simple one, but it is an important one. It begins the process of formally applying for a mortgage, and it gives everyone involved--especially you--a clear sense of the direction they should be headed. Your Agent: By knowing what your financial parameters are, your Agent can spend more time looking for houses that "fit" and less time pursuing dead ends. No matter how much you might want a 4000 square foot home for $275,000, if your qualifications say $125,000, your qualifications say $125,000. When it comes to mortgages, "yes, but" doesn't carry much weight! The Seller: Want to strengthen your bargaining position? Get prequalified. Want your offer to stand out in a case of multiple offers for the same house? Get prequalified. Look at it from the seller's perspective. If you had 2 offers on the table for your house, one from a fully prequalified buyer and the other from an "I'll get around to that soon" buyer--to which offer would you devote the most attention? Even if the prequalified buyer's offer was $1000 less, would you take the chance on the buyer that perhaps may not be qualified? When it comes to a seller evaluating offers, "a bird in the hand..." definitely applies. It is important to remember that the amount of mortgage you will qualify for is the maximum. It is the amount that the lender feels you can afford, but it is not necessarily the amount that you want to pay. It sometimes is advantageous to be conservative here. For example, if you qualify for a $100,000 mortgage and you have $15,000 available in cash for downpayment and closing costs, you are qualified to buy homes with a maximum selling price of $115,000. So as to not push yourself to the limit, you may want to look at homes that sell in the $100,000 to $110,000 range. Too many buyers simply rush off to the $115,000 level and some find themselves strapped when it comes time to purchase necessary items (such as draperies, additional furniture and lawn and garden tools, for example) or when they forget to factor in increases in monthly expenses (for example utilities and maintenance and repair costs).

The dos and donts of Life insurance

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The Do's Do shop around. Rates for insurance may vary by as much as 200% from company to company for the same coverage. Do review your coverage periodically. You may want to increase or reduce your coverage as your needs change. Lifestyle changes such as marriage, divorce, birth or death of a family member or residential move may prompt a change in life insurance coverage. Do your life insurance homework before purchasing any coverage. Know and understand the coverage amount that you require as well as the type of insurance that you are looking for before approaching an insurance agent or broker. This can help avoid the unpleasantness of being talked into insurance coverage that is not suited to your needs. Do purchase automatically renewable and convertible coverage when buying term insurance. The renewable clause allows you to renew your policy for another term regardless of what happens to your health. The convertible feature enables you to convert the term coverage to a permanent policy. Do look into paying lower premiums for your life insurance if you have stopped smoking. Non-smokers can save up to 50 per cent on the cost of their life insurance coverage. Do avoid buying life insurance for children in most cases. The purpose of life insurance is to provide replacement income for the dependents of the insured. Children do not have dependents. Do look into purchasing a longer-term (term-to-100) policy or universal life coverage if you have investments such as stocks, real estate or a business that you would like to pass onto your survivors. This type of policy can be used to pay for any taxes that may become payable at death. The Don'ts Don't purchase a policy unless you understand the concept behind it. Remember that the purpose behind life insurance is to provide income for your dependents if you die. A considerable amount of money can be lost by those who purchase life insurance coverage without understanding why it exists or how it works. Don't buy an accidental death policy. The same also applies for double and triple indemnity riders. Life insurance needs should not increase just because a death is accidental. Don't be afraid to ask friends and relatives for a referral to an insurance agent or broker. Dealing with someone that you trust can be worth more than anything so do not be afraid to meet with several until you find one that you feel comfortable with. Don't cancel an existing policy, when replacing it with a new one, until you have the new policy in place. Don't use whole life insurance policies as investments. The rate of return on the investment portion of your insurance premium can be very low. Don't buy life insurance unless you need it. For example, a single person may not necessarily need life insurance since they do not have any dependents to provide for. Don't purchase term insurance that consists of long terms of coverage unless it is warranted. Five or ten year terms are normally recommended. Although the premiums will rise when the insurance is renewed for another term, you will still be better off than paying for insurance that you no longer need.

Tax Information for First-Time Homeowner..

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Publication 530 Tax Information for First-Time Homeowners For use in preparing 2002 Returns -------------------------------------------------------------------------------- Table of Contents [ Click for Index ] Publication 530, Tax Information for First-Time Homeowners Important Reminders What You Can and Cannot Deduct Real Estate Taxes Deductible Taxes Items You Cannot Deduct as Real Estate Taxes Special Rules for Cooperatives Home Mortgage Interest Deductible Mortgage Interest Mortgage Interest Paid at Settlement Points Where To Deduct Home Mortgage Interest Mortgage Interest Statement Mortgage Interest Credit Figuring the Credit Limits Dividing the Credit Carryforward Refinancing Basis Figuring Your Basis Cost as Basis Gift Inheritance Adjusted Basis Keeping Records How To Get Tax Help -------------------------------------------------------------------------------- Index [ Click for Table of Contents ] A Adjusted basis B Basis C Construction Cooperatives Cooperatives Cost basis Credit, District of Columbia first-time homebuyer Credit, Mortgage interest D Deduction, Real estate taxes E Escrow accounts F Form, 1098 Form, 8396 Form, 8396 G Ground rent H Home, Inherited Home, Purchase of Home, Received as gift Homeowners association assessments House payment Housing allowance, minister or military I Improvements Insurance Insurance Interest, Home mortgage Interest, Prepaid L Late payment charge Local benefits, assessments for M Mortgage credit certificate (MCC) Mortgage insurance premiums Mortgage interest, Deduction Mortgage prepayment penalty N Nondeductible payments Nondeductible payments P Points R Recordkeeping Refund of, Mortgage interest Refund of, Mortgage interest Refund of, Real estate taxes Repairs S Settlement or closing costs, Basis of home Settlement or closing costs, Mortgage interest Settlement or closing costs, Real estate taxes Settlement or closing costs, Real estate taxes Stamp taxes Suggestions T Taxes, real estate Taxpayer Advocate TTY/TDD information W What you can and cannot deduct

Moving Expenses

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How To Report The following discussions explain how to report your moving expenses and any reimbursements or allowances you received for your move. Form 3903. Use Form 3903 to report your moving expenses. Where to deduct. Deduct your moving expenses on line 26 of Form 1040. The amount of moving expenses you can deduct is shown on line 5 of Form 3903. You cannot deduct moving expenses on Form 1040EZ or Form 1040A. Reimbursements. If you received a reimbursement for your allowable moving expenses, how you report this amount and your expenses depends on whether the reimbursement was paid to you under an accountable plan or a nonaccountable plan. For more information on reimbursements, see Publication 521. When To Deduct Expenses If you were not reimbursed, deduct your allowable moving expenses either in the year you incurred them or in the year you paid them. Example. In December 2000, your employer transferred you to another city in the United States, where you still work. You are single and were not reimbursed for your moving expenses. In 2000, you paid for moving your furniture. You deducted these expenses in 2000. In January 2001, you paid for travel to the new city. You can deduct these additional expenses in 2001. Reimbursed expenses. If you are reimbursed for your expenses, you may be able to deduct your allowable expenses either in the year you incurred them or in the year you paid them. If you use the cash method of accounting, you can choose to deduct the expenses in the year you are reimbursed even though you paid the expenses in a different year. If you are reimbursed for your expenses in a year after you paid the expenses, you may want to delay taking the deduction until the year you receive the reimbursement. If you do not choose to delay your deduction until the year you are reimbursed, you must include the reimbursement in your income. Choosing when to deduct. If you use the cash method of accounting, which is used by most individuals, you can choose to deduct moving expenses in the year your employer reimburses you if: You paid the expenses in a year before the year of reimbursement, or You paid the expenses in the year immediately after the year of reimbursement but by the due date, including extensions, for filing your return for the reimbursement year. How to make the choice. You can choose to deduct moving expenses in the year you received reimbursement by taking the deduction on your return, or amended return, for that year. You cannot deduct any moving expenses for which you received a reimbursement that was not included in your income. (Reimbursements are discussed in Publication 521.)

What You Can and Cannot Deduct

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What You Can and Cannot Deduct To deduct expenses of owning a home, you must file Form 1040 and itemize your deductions on Schedule A (Form 1040). If you itemize, you cannot take the standard deduction. See the Form 1040 instructions if you have questions about whether to itemize your deductions or claim the standard deduction. This section explains what expenses you can deduct as a homeowner. It also points out expenses that you cannot deduct. There are two primary discussions: real estate taxes and home mortgage interest. Generally, your real estate taxes and home mortgage interest are included in your house payment. Your house payment. If you took out a mortgage (loan) to finance the purchase of your home, you probably have to make monthly house payments. Your house payment may include several costs of owning a home. The only costs you can deduct are real estate taxes actually paid to the taxing authority and interest that qualifies as home mortgage interest. These are discussed in more detail later. Here are some expenses, which may be included in your house payment, that cannot be deducted. Fire or homeowner's insurance premiums. FHA mortgage insurance premiums. The amount applied to reduce the principal of the mortgage. Minister's or military housing allowance. If you are a minister or a member of the uniformed services and receive a housing allowance that is not taxable, you can still deduct your real estate taxes and your home mortgage interest. You do not have to reduce your deductions by your nontaxable allowance. Nondeductible payments. You cannot deduct any of the following items. Insurance, including fire and comprehensive coverage, and title and mortgage insurance. Wages you pay for domestic help. Depreciation. The cost of utilities, such as gas, electricity, or water. Most settlement costs. See Settlement or closing costs under Cost as Basis, later, for more information. Real Estate Taxes Most state and local governments charge an annual tax on the value of real property. This is called a real estate tax. You can deduct the tax if it is based on the assessed value of the real property and the taxing authority charges a uniform rate on all property in its jurisdiction. The tax must be for the welfare of the general public and not be a payment for a special privilege granted or service rendered to you. Deductible Taxes You can deduct real estate taxes imposed on you. You must have paid them either at settlement or closing, or to a taxing authority (either directly or through an escrow account) during the year. If you own a cooperative apartment, see Special Rules for Cooperatives, later. Where to deduct real estate taxes. Enter the amount of your deductible real estate taxes on line 6 of Schedule A (Form 1040). Real estate taxes paid at settlement or closing. Real estate taxes are generally divided so that you and the seller each pay taxes for the part of the property tax year you owned the home. Your share of these taxes is fully deductible, if you itemize your deductions. Division of real estate taxes. For federal income tax purposes, the seller is treated as paying the property taxes up to, but not including, the date of sale. You (the buyer) are treated as paying the taxes beginning with the date of sale. This applies regardless of the lien dates under local law. Generally, this information is included on the settlement statement you get at closing. You and the seller each are considered to have paid your own share of the taxes, even if one or the other paid the entire amount. You can each deduct your own share, if you itemize deductions, for the year the property is sold. Example. You bought your home on September 1. The property tax year (the period to which the tax relates) in your area is the calendar year. The tax for the year was $730 and was due and paid by the seller on August 15. You owned your new home during the property tax year for 122 days (September 1 to December 31, including your date of purchase). You figure your deduction for real estate taxes on your home as follows. 1. Enter the total real estate taxes for the real property tax year $730 2. Enter the number of days in the property tax year that you owned the property 122 3. Divide line 2 by 365 .3342 4. Multiply line 1 by line 3. This is your deduction. Enter it on line 6 of Schedule A (Form 1040) $244 You can deduct $244 on your return for the year if you itemize your deductions. You are considered to have paid this amount and can deduct it on your return even if, under the contract, you did not have to reimburse the seller. Delinquent taxes. Delinquent taxes are unpaid taxes that were imposed on the seller for an earlier tax year. If you agree to pay delinquent taxes when you buy your home, you cannot deduct them. You treat them as part of the cost of your home. See Real estate taxes, later, under Cost as Basis. Escrow accounts. Many monthly house payments include an amount placed in escrow (put in the care of a third party) for real estate taxes. You may not be able to deduct the total you pay into the escrow account. You can deduct only the real estate taxes that the lender actually paid from escrow to the taxing authority. Your real estate tax bill will show this amount. Refund or rebate of real estate taxes. If you receive a refund or rebate of real estate taxes this year for amounts you paid this year, you must reduce your real estate tax deduction by the amount refunded to you. If the refund or rebate was for real estate taxes paid for a prior year, you may have to include some or all of the refund in your income. For more information, see Recoveries in Publication 525, Taxable and Nontaxable Income. Items You Cannot Deduct as Real Estate Taxes The following items are not deductible as real estate taxes. Charges for services. An itemized charge for services to specific property or people is not a tax, even if the charge is paid to the taxing authority. You cannot deduct the charge as a real estate tax if it is: A unit fee for the delivery of a service (such as a $5 fee charged for every 1,000 gallons of water you use), A periodic charge for a residential service (such as a $20 per month or $240 annual fee charged for trash collection), or A flat fee charged for a single service provided by your local government (such as a $30 charge for mowing your lawn because it had grown higher than permitted under a local ordinance). You must look at your real estate tax bill to decide if any nondeductible itemized charges, such as those listed above, are included in the bill. If your taxing authority (or lender) does not furnish you a copy of your real estate tax bill, ask for it. Assessments for local benefits. You cannot deduct amounts you pay for local benefits that tend to increase the value of your property. Local benefits include the construction of streets, sidewalks, or water and sewer systems. You must add these amounts to the basis of your property. You can, however, deduct assessments (or taxes) for local benefits if they are for maintenance, repair, or interest charges related to those benefits. An example is a charge to repair an existing sidewalk and any interest included in that charge. If only a part of the assessment is for maintenance, repair, or interest charges, you must be able to show the amount of that part to claim the deduction. If you cannot show what part of the assessment is for maintenance, repair, or interest charges, you cannot deduct any of it. An assessment for a local benefit may be listed as an item in your real estate tax bill. If so, use the rules in this section to find how much of it, if any, you can deduct. Transfer taxes (or stamp taxes). You cannot deduct transfer taxes and similar taxes and charges on the sale of a personal home. If you are the buyer and you pay them, include them in the cost basis of the property. If you are the seller and you pay them, they are expenses of the sale and reduce the amount realized on the sale. Homeowners association assessments. You cannot deduct these assessments because the homeowners association, rather than a state or local government, imposes them. Special Rules for Cooperatives If you own a cooperative apartment, some special rules apply to you, though you generally receive the same tax treatment as other homeowners. As an owner of a cooperative apartment, you own shares of stock in a corporation that owns or leases housing facilities. You can deduct your share of the corporation's deductible real estate taxes if the cooperative housing corporation meets all of the following conditions. The corporation has only one class of stock outstanding. Each stockholder, solely because of ownership of the stock, can live in a house, apartment, or house trailer owned or leased by the corporation. No stockholder can receive any distribution out of capital, except on a partial or complete liquidation of the corporation. The tenant-stockholders pay at least 80% of the corporation's gross income for the tax year. For this purpose, gross income means all income received during the entire tax year, including any received before the corporation changed to cooperative ownership. Tenant-stockholders. A tenant-stockholder can be any entity (such as a corporation, trust, estate, partnership, or association) as well as an individual. The tenant-stockholder does not have to live in any of the cooperative's dwelling units. The units that the tenant-stockholder has the right to occupy can be rented to others. Deductible taxes. You figure your share of real estate taxes in the following way. Divide the number of your shares of stock by the total number of shares outstanding, including any shares held by the corporation. Multiply the corporation's deductible real estate taxes by the number you figured in (1). This is your share of the real estate taxes. Generally, the corporation will tell you your share of its real estate tax. This is the amount you can deduct if it reasonably reflects the cost of real estate taxes for your dwelling unit. Refund of real estate taxes. If the corporation receives a refund of real estate taxes it paid in an earlier year, it must reduce the amount of real estate taxes paid this year when it allocates the tax expense to you. Your deduction for real estate taxes the corporation paid this year is reduced by your share of the refund the corporation received. Home Mortgage Interest This section of the publication gives you basic information about home mortgage interest, including information on interest paid at settlement, points, and Form 1098, Mortgage Interest Statement. Most home buyers take out a mortgage (loan) to buy their home. They then make monthly house payments to either the mortgage holder or someone collecting the payments for the mortgage holder. (See Your house payment, earlier, under What You Can and Cannot Deduct.) Usually, you can deduct the entire part of your house payment that is for mortgage interest, if you itemize your deductions on Schedule A (Form 1040). However, your deduction may be limited if: Your total mortgage balance is more than $1 million ($500,000 if married filing separately), or You took out a mortgage for reasons other than to buy, build, or improve your home. If either of these situations applies to you, you will need to get Publication 936. You may also need Publication 936 if you later refinance your mortgage or buy a second home. Refund of home mortgage interest. If you receive a refund of home mortgage interest that you deducted in an earlier year and that reduced your tax, you generally must include the refund in income in the year you receive it. For more information, see Recoveries in Publication 525. The amount of the refund will usually be shown on the mortgage interest statement you receive from your mortgage lender. See Mortgage Interest Statement, later. Deductible Mortgage Interest To be deductible, the interest you pay must be on a loan secured by your main home or a second home. The loan can be a first or second mortgage, a home improvement loan, or a home equity loan. Prepaid interest. If you pay interest in advance for a period that goes beyond the end of the tax year, you must spread this interest over the tax years to which it applies. You can deduct in each year only the interest that qualifies as home mortgage interest for that year. However, there is an exception that applies to points, discussed later. Late payment charge on mortgage payment. You can deduct as home mortgage interest a late payment charge if it was not for a specific service in connection with your mortgage loan. Mortgage prepayment penalty. If you pay off your home mortgage early, you may have to pay a penalty. You can deduct that penalty as home mortgage interest provided the penalty is not for a specific service performed or cost incurred in connection with your mortgage loan. Ground rent. In some states (such as Maryland), you may buy your home subject to a ground rent. A ground rent is an obligation you assume to pay a fixed amount per year on the property. Under this arrangement, you are leasing (rather than buying) the land on which your home is located. Redeemable ground rents. If you make annual or periodic rental payments on a redeemable ground rent, you can deduct the payments as mortgage interest. The ground rent is a redeemable ground rent only if all of the following are true. Your lease, including renewal periods, is for more than 15 years. You can freely assign the lease. You have a present or future right (under state or local law) to end the lease and buy the lessor's entire interest in the land by paying a specified amount. The lessor's interest in the land is primarily a security interest to protect the rental payments to which he or she is entitled. Payments made to end the lease and buy the lessor's entire interest in the land are not redeemable ground rents. You cannot deduct them. Nonredeemable ground rents. Payments on a nonredeemable ground rent are not mortgage interest. You can deduct them as rent only if they are a business expense or if they are for rental property. Cooperative apartment. You can usually treat the interest on a loan you took out to buy stock in a cooperative housing corporation as home mortgage interest if you own a cooperative apartment and the cooperative housing corporation meets the conditions described earlier under Special Rules for Cooperatives. In addition, you can treat as home mortgage interest your share of the corporation's deductible mortgage interest. Figure your share of mortgage interest the same way that is shown for figuring your share of real estate taxes in the Example under Division of real estate taxes. For more information on cooperatives, see Special Rule for Tenant-Stockholders in Cooperative Housing Corporations in Publication 936. Refund of cooperative's mortgage interest. You must reduce your mortgage interest deduction by your share of any cash portion of a patronage dividend that the cooperative receives. The patronage dividend is a partial refund to the cooperative housing corporation of mortgage interest it paid in a prior year. If you receive a Form 1098 from the cooperative housing corporation, the form should show only the amount you can deduct. Mortgage Interest Paid at Settlement One item that normally appears on a settlement or closing statement is home mortgage interest. You can deduct the interest that you pay at settlement if you itemize your deductions on Schedule A (Form 1040). This amount should be included in the mortgage interest statement provided by your lender. See the discussion under Mortgage Interest Statement, later. Also, if you pay interest in advance, see Prepaid interest, earlier, and Points, next. Points The term points is used to describe certain charges paid, or treated as paid, by a borrower to obtain a home mortgage. Points may also be called loan origination fees, maximum loan charges, loan discount, or discount points. A borrower is treated as paying any points that a home seller pays for the borrower's mortgage. See Points paid by the seller, later. General rule. You cannot deduct the full amount of points in the year paid. Because they are prepaid interest, you generally must deduct them over the life (term) of the mortgage. Exception. You can fully deduct points in the year paid if you meet all the following tests. Your loan is secured by your main home. (Your main home is the one you live in most of the time.) Paying points is an established business practice in the area where the loan was made. The points paid were not more than the points generally charged in that area. You use the cash method of accounting. This means you report income in the year you receive it and deduct expenses in the year you pay them. Most individuals use this method. The points were not paid in place of amounts that ordinarily are stated separately on the settlement statement, such as appraisal fees, inspection fees, title fees, attorney fees, and property taxes. The funds you provided at or before closing, plus any points the seller paid, were at least as much as the points charged. The funds you provided do not have to have been applied to the points. They can include a down payment, an escrow deposit, earnest money, and other funds you paid at or before closing for any purpose. You cannot have borrowed these funds from your lender or mortgage broker. You use your loan to buy or build your main home. The points were computed as a percentage of the principal amount of the mortgage. The amount is clearly shown on the settlement statement (such as the Uniform Settlement Statement, Form HUD-1) as points charged for the mortgage. The points may be shown as paid from either your funds or the seller's. Note. If you meet all of the tests listed above and you itemize your deductions in the year you get the loan, you can either deduct the full amount of points in the year paid or deduct them over the life of the loan, beginning in the year you get the loan. If you do not itemize your deductions in the year you get the loan, you can spread the points over the life of the loan and deduct the appropriate amount in each future year, if any, when you do itemize your deductions. Home improvement loan. You can also fully deduct in the year paid points paid on a loan to improve your main home, if tests (1) through (6) are met. Points not fully deductible in year paid. If you do not qualify under the exception to deduct the full amount of points in the year paid (or choose not to do so), see Points in chapter 5 of Publication 535, Business Expenses, for the rules on when and how much you can deduct. Figure A. You can use Figure A as a quick guide to see whether your points are fully deductible in the year paid. Amounts charged for services. Amounts charged by the lender for specific services connected to the loan are not interest. Examples of these charges are: Appraisal fees, Notary fees, Preparation costs for the mortgage note or deed of trust, Mortgage insurance premiums, and VA funding fees. You cannot deduct these amounts as points either in the year paid or over the life of the mortgage. For information about the tax treatment of these amounts and other settlement fees and closing costs, see Basis, later. Points paid by the seller. The term points includes loan placement fees that the seller pays to the lender to arrange financing for the buyer. Treatment by seller. The seller cannot deduct these fees as interest; but they are a selling expense that reduces the seller's amount realized. See Publication 523 for more information. Treatment by buyer. The buyer treats seller-paid points as if he or she had paid them. If all the tests under Exception (discussed earlier) are met, the buyer can deduct the points in the year paid. If any of those tests is not met, the buyer must deduct the points over the life of the loan. The buyer must also reduce the basis of the home by the amount of the seller-paid points. For more information about the basis of your home, see Basis, later. Figure A. Are my points fully deductible this year? Funds provided are less than points. If you meet all the tests under Exception (discussed earlier) except that the funds you provided were less than the points charged to you (test 6), you can deduct the points in the year paid up to the amount of funds you provided. In addition, you can deduct any points paid by the seller. Example 1. When you took out a $100,000 mortgage loan to buy your home in December, you were charged one point ($1,000). You meet all the tests for deducting points in the year paid (see Exception), except the only funds you provided were a $750 down payment. Of the $1,000 you were charged for points, you can deduct $750 in the year paid. You spread the remaining $250 over the life of the mortgage. Example 2. The facts are the same as in Example 1, except that the person who sold you your home also paid one point ($1,000) to help you get your mortgage. In the year paid, you can deduct $1,750 ($750 of the amount you were charged plus the $1,000 paid by the seller). You spread the remaining $250 over the life of the mortgage. You must reduce the basis of your home by the $1,000 paid by the seller. Excess points. If you meet all the tests under Exception except that the points paid were more than are generally charged in your area (test 3), you can deduct in the year paid only the points that are generally charged. You must spread any additional points over the life of the mortgage. Mortgage ending early. If you spread your deduction for points over the life of the mortgage, you can deduct any remaining balance in the year the mortgage ends. A mortgage may end early due to a prepayment, refinancing, foreclosure, or similar event. Example. Dan paid $3,000 in points in 1994 that he had to spread out over the 15-year life of the mortgage. He had deducted $1,400 of these points through 2000. Dan prepaid his mortgage in full in 2001. He can deduct the remaining $1,600 of points in 2001. Exception. If you refinance the mortgage with the same lender, you cannot deduct any remaining points for the year. Instead, deduct them over the term of the new loan. Form 1098. The mortgage interest statement you receive should show not only the total interest paid during the year, but also your deductible points paid during the year. See Mortgage Interest Statement, later. Where To Deduct Home Mortgage Interest Enter on line 10 of your Schedule A (Form 1040) the home mortgage interest and points reported to you on Form 1098 (discussed next). If you did not receive a Form 1098, enter your deductible interest on line 11, and any deductible points on line 12. See Table 1 for a summary of where to deduct home mortgage interest and real estate taxes. If you paid home mortgage interest to the person from whom you bought your home, show that person's name, address, and social security number (SSN) or employer identification number (EIN) on the dotted lines next to line 11. The seller must give you this number and you must give the seller your SSN; Form W-9, Request for Taxpayer Identification Number and Certification, can be used for this purpose. Failure to meet either of these requirements may result in a $50 penalty for each failure. Mortgage Interest Statement If you paid $600 or more of mortgage interest (including certain points) during the year on any one mortgage to a mortgage holder in the course of that holder's trade or business, you should receive a Form 1098, Mortgage Interest Statement, or similar statement from the mortgage holder. The statement will show the total interest paid on your mortgage during the year. If you bought a main home during the year, it will also show the deductible points you paid and any points you can deduct that were paid by the person who sold you your home. See Points, earlier. The interest you paid at settlement should be included on the statement. If it is not, add the interest from the settlement sheet that qualifies as home mortgage interest to the total shown on Form 1098 or similar statement. Put the total on line 10 of Schedule A (Form 1040) and attach a statement to your return explaining the difference. Write "See attached" next to line 10. A mortgage holder can be a financial institution, a governmental unit, or a cooperative housing corporation. If a statement comes from a cooperative housing corporation, it will generally show your share of interest. You should receive your mortgage interest statement for each year by January 31 of the following year. A copy of this form will also be sent to the IRS. Example. You bought a new home on May 3. You paid no points on the purchase. During the year, you made mortgage payments which included $1,872 deductible interest on your new home. The settlement sheet for the purchase of the home included interest of $232 for 29 days in May. The mortgage statement you receive from the lender includes total interest of $2,104 ($1,872 + $232). You can deduct the $2,104 if you itemize your deductions. Refund of overpaid interest. If you receive a refund of mortgage interest you overpaid in a prior year, you generally will receive a Form 1098 showing the refund in box 3. Generally, you must include the refund in income in the year you receive it. See Refund of home mortgage interest, earlier, under Home Mortgage Interest. More than one borrower. If you and at least one other person (other than your spouse if you file a joint return) were liable for and paid interest on a mortgage that was for your home, and the other person received a Form 1098 showing the interest that was paid during the year, attach a statement to your return explaining this. Show how much of the interest each of you paid, and give the name and address of the person who received the form. Deduct your share of the interest on line 11 of Schedule A (Form 1040), and write "See attached" next to that line.

Mistakes Sellers Make When Choosing a Re..

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Selling a home should be like any other business transaction, but all too often sellers make emotional or impulsive decisions that cost them money and time. Choosing the right Realtor to market a property and negotiate the sale is the most important step in the process. “My friend (or family member) sells real estate.” Friendship alone isn’t enough to establish a professional’s credentials. Use tough standards when selecting an agent, just as you would when hiring an attorney, a doctor, or an accountant to handle your taxes. A true friend will understand and appreciate that this is a business decision and will offer their credentials and expect to compete for the listing. Besides, if a problem or challenge develops while selling your home, do you want to risk damaging a friendship or family relationship? “Your presentation sounds good. I’ll list right now” Look at more than one presentation and consider the advantages and disadvantages of each. Making an impulsive decision when caught up “in the moment” could be difficult to correct later. Since you normally contract to list your house with the agent for a specific period of time, you may find yourself unable to “switch” to another if you find yourself unhappy with the service you receive. “You’re the only agent who agrees with my selling price.” Some agents tell you what you want to hear. In the real estate profession, this is known as “buying a listing” and is employed by shortsighted agents who are more interested in themselves than they are in you. However good it works as a short-term “sales tactic” in getting your listing, it is an extremely poor strategy in selling a home at the highest possible price. You see, your house gets the most attention from other agents when it is a “new” listing. If priced properly, lots of agents will show it to their buyers. If you price it too high, no one will show the house and it will sit on the market for some time. When you finally drop your price to reflect its real value, your house is “old news” and buyers may think you are growing desperate. Therefore, the prices you are offered will come in lower and lower - and you may find yourself accepting a price that is below what you could have received had the house been priced properly to begin with. Besides, pricing your home too high will only make similar houses for sale look that much better. Overpricing helps sell those houses, not yours. “I don’t need references. I’m a good judge of character.” A snap judgement isn’t good enough. You also need to determine if the agent is competent and the best way to do that is to check up on references. Ask for references on recent sales -- check up on references of recent customers. Find out how an agent’s customers feel about their selling experience. Remember that how long an individual has been in real estate isn’t necessarily all you should look for. Experienced agents can grow jaded and not work as hard - newer agents sometimes make up with enthusiasm and effort what they lack in experience. “I’m going to list with the agent who has the lowest commission.” You get what you pay for. Paying a cut-rate commission will often get you a sign in the front yard and placement in the Multiple Listing Service, but little additional effort from your agent. Realize that agents and real estate companies put up their own funds to market and advertise your home. Marketing and advertising costs money -- the lower the commission, the less incentive for an agent to put up his or her own money to market your home. Incentive plays a very important role in sales. A “full service” agent earning a full commission will often “drop everything” to handle any challenges that come along - an agent earning a small commission does not have that same incentive. Incentive is also important to the buyer’s agent. Since there are almost always two agents involved in every sale, they split the commission according to the listing agent’s instructions. One agent is your listing agent. The other agent is the buyer’s agent. When your listing agent dropped his commission, did he also reduce the commission that will be paid to the buyers’ agent? If so, you won’t find as many agents willing to show your house - they’ll be showing houses that offer a customary commission to the buyer’s agent. Finally, negotiating ability is an important skill in a listing agent. Are you willing to put your faith in an agent who can’t even negotiate his or her own commission? “The agent is what counts - not the company.” Agents who work for large well-established companies with lots of agents do have some advantages. Large companies generally have longer office hours, so someone is always available to answer an ad call on your home. Large offices often have larger budgets and can spend more on advertising. The ad space for your particular home might not be huge, but because the total ad is so large it gets lots more attention. Large real estate companies often have lots of agents. This is important because when your house is newly on the market, the company may stage an “office preview” where every agent in the office comes through and tours your home. Every agent who views your home and is impressed is another agent on your sales team. Additionally, larger companies are often better at offering ongoing education to their agents. As a result, your agent may be better qualified and prepared to offer a quality service. Although most states require real estate agents to enroll in “ongoing education” to keep pace with changes in the real estate market, many agents only take the “bare minimum” in ongoing education courses. Sometimes, large offices are better at convincing their agents to go beyond the minimum. There are exceptions to every rule, of course. Some very effective agents go off on their own and open private offices or “boutique” agencies. “All realtors passed the same test so they must know the same things.” The real estate profession is constantly changing and, as mentioned above, the best real estate professionals stay abreast of those changes by continuing their education. Some go beyond the required minimum requirements. Many agents acquire “professional designations” that show they took additional specialized courses. “This agent will hold an open house every week.” Open houses can and do sell homes, but usually not your home. Only a small fraction of the homes held open are sold as a direct result of the open house. More often, “open houses” are a way that real estate agents “prospect” for potential clients. If they develop a rapport with those visitors to your open house, they can find out about their housing needs and sell them the home that most closely matches those needs. Meanwhile, the person who eventually buys your home may be visiting someone else’s open house. Good agents know better than to pin all their selling efforts on an open house. They use their time in more effective marketing methods. The most effective marketing is not directly to the public, but to other agents. By getting other agents interested in your home, your listing agent multiplies your sales force beyond just one individual. “I want an agent who lives in my neighborhood.” Knowledge of the local market isn’t only acquired by living in the immediate neighborhood. Sure, your agent should have intimate knowledge of recent sales, models, schools, businesses, and so on, but that is easily achieved through extensive research. Convenience shouldn’t be the primary reason for choosing an agent. “This agent sold more homes last year than anyone else.” That should only be the beginning. What is more valuable -- an agent who listed 32 homes and sold 25 - or an agent who listed twelve homes and sold all twelve? So you need to ask some questions. How many of their listings did not sell? How many were reduced over and over before they sold? How long were the houses on the market? How smoothly was the process handled? How accessible was the agent when there were questions or problems? Quantity is important, but only if all of the quality questions have been answered satisfactorily. Conclusion The best agent is the one who will do the most effective job of marketing the property, negotiating the most favorable terms and conditions, and communicating with the seller to make the process as smooth as possible.

Buying Pre-Construction

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It might not seem necessary to involve a real estate professional in a transaction where a buyer can deal directly with a builder. Think again! A real estate professional representing the buyer’s interests, can guide you along the right path, smooth the rough places and help ensure you make a decision you can live with (and in) for many years. Here’s how: Just as a real estate professional calls on experience and knowledge of an area to help buyers locate pre-owned homes in a community, he or she can also direct buyers interested in newly built homes to developments and communities that match client specifications. An agent can suggest builders based on their reputation for delivering a high-quality product, responding quickly to issues, and being financially sound. An agent may be familiar with how a builder prices his products and where there may be room to negotiate price or upgrades. Without agent representation, you are one buyer purchasing only one home. But an agent can significantly impact a builder’s bottom line by providing a steady supply of customers. The agent’s leverage may work in your favor at the negotiating table. [Note: The builder may require your agent to accompany you on your first visit to the site. Check with the builder.] When relocating to a new area, agents can be particularly valuable resources. In addition to providing local area information regarding schools, day care or elder care services, public transportation, proposed development, and so on, once construction is under way, an agent can periodically stop by the work site, supply you with progress reports, and photograph or videotape phases of the construction. An agent can assist you as you face hundreds of design choices and consider which upgrades could potentially add value to the home when it comes time to sell. An agent can accompany you at the site while you okay the plumbing and electrical locations prior to drywalling, as well as on the walk-through or builder orientation. By now, you should be convinced of a real estate professional’s value as you search for and purchase a newly built home. Still, here’s one more great reason to work with an agent-the builder pays the agent’s commission. You enjoy individual attention and support at no cost to you. What a great way to start life in a new home!

Make Money in Real Estate Investing

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Lower Your Taxes Tax incentives for real estate investors can often make the difference in your tax rates. Deductions for rental property can often be used to offset wage income. Tax breaks can often enable investors to turn a loss into a profit. For which items can investors get tax breaks? You could claim deductions for actual costs you incur for financing, managing and operating the rental property. This includes mortgage interest payments, real estate taxes, insurance, maintenance, repairs, property management fees, travel, advertising, and utilities (assuming the tenant doesn't pay them). These expenses can be subtracted from your adjusted gross income when determining your personal income taxes. Of course, these deductions cannot exceed the amount of real estate income you receive. In addition to deductions for operating costs, you can also receive breaks for depreciation. Buildings naturally deteriorate over time, and these "losses" can be deducted regardless of the actual market value of the property. Because depreciation is a non-cash expense -- you are not actually spending any money -- the tax code can get a bit tricky. For more information about depreciation and various tax alternatives, ask your tax advisor about Section 1031 of the U.S. Tax Code. Have a Positive Cash Flow There are two kinds of positive cash flows: pre-tax and after-tax. A pre-tax positive cash flow occurs when income received is greater than expenses incurred. This sort of situation is difficult to find, but they are usually a strong and safe investment. An after-tax positive cash flow may have expenses that outweigh collected income, but various tax breaks allow for a positive cash flow. This is more common, but it is generally not as strong or safe as a pre-tax positive cash flow. Regardless of what kind of real estate you choose to invest in, timely collections from your tenants is absolutely necessary. A positive cash flow -- whether it be pre-tax or after-tax -- requires rental income. Be sure to find quality tenants; a thorough credit and employment check is probably a good idea. Use Leverage One of the most important factors in determining a solid investment is the amount of equity you are purchasing. Equity is the difference between the actual worth of the property and the balanced owed on the mortgage. Benefit from Growing Equity While investing in real estate is relatively complex, it is often worth the extra work. When compared to other financial investments, like bonds or CD's, the return on investment for real estate purchases can often be greater. The key to real estate investing is equity. Determine an amount of equity that you want to achieve. When you reach your goal, it's time to sell or refinance. Determining the proper amount of equity may require the assistance of a real estate professional.

Ask a Realtor Before You List

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Most of us sell only a small number of homes in our lifetimes. With limited experience in real estate how are we to be capable of maximizing the profits from our home sale? Many home sellers make the critical mistake of thinking all Realtors are the same. They list with the first agent who comes along. Does it make good business sense to put the responsibility of selling your home with someone who has no plan or qualifications? This special report will educate you with valuable information that will help you make the best decision concerning: Which real estate agent should you list with? Start by doing a few hours of research. Ask around... get to know who has the most signs, ads and marketing material in your neighborhood. Who’s the most active agent? Compile a list of agent names and use these questions to help you determine which agent is right for you. Could you send me some information about yourself? - You can often get a good idea of which agents are the most professional by looking at their promotional materials. If their own materials aren’t professional, how well are they going to market your home? Track how long each agent takes to respond to your request and how quickly they follow up. If they don’t respond efficiently to your listing requests imagine how they’ll handle potential home buyers. How many homes have you listed and how many homes have you sold in the last six months? - Look for an agent who has experience with homes similar to yours and is active in your area. If your home has special features look for an agent with experience in those areas. Your agent should have a good record of selling homes, not just listing them. After all, this is your ultimate goal. What is your average length of time from listed to sold? - Don’t automatically assume the shorter time on the market the better. That could reflect selling homes quickly at lowball prices. Look at what the asking price was compared to the selling price. An agent who sells close to the asking price and quick is effective at helping clients determine the right price and helping them get it. How long have you been in business and what professional organizations do you belong to? - The length of time a real estate agent has been licensed is not a sure fire sign that they’ve been an active seller. They may have been in business for 10 years but only part time, whereas an agent who’s been in business for 2 years may be a real top producer. So take into account what professional organizations they belong to. The minimum should be a licensed professional who’s a member of the local real estate board and multiple listing service as well as the state and National Association of Realtors. Local community groups and associations are also pluses in terms of networking and commitment. Do you have an assistant or support staff? - By employing someone to handle the details of their business the agent can spend more time servicing your needs. However, make sure you know how much time an agent will spend and how much time their assistant will spend on the sale of your home. It may be fine if the assistant does most of the legwork as long as the agent is there at the most critical times of the transaction period. How often will you hold open houses? Will they be public or by appointment only? - Simply putting a sign on your lawn and holding open houses every Sunday will not sell your home. Too frequently open houses make the property a target for low ball bidders. Look for an agent with a specific plan for each open house. The plan should be just one facet of a complete marketing plan. What listing price do you recommend and what is that price based on? - Pricing is the most critical step to selling your home. Take great care in choosing an agent with the knowledge to price your home effectively. Keep in mind the selling price should attract prospective buyers to your home, get you top dollar in the current market and reflect the condition of your home. Be realistic and avoid ‘yes agents’, who will say ‘yes’ to any request or price while your home languishes on the market. Lowball agents will try to talk you into an artificial price simply to sell as fast as possible. What does the listing agreement entail, what are the beginning and expiration dates, and what are the fee amounts I will be paying? - Have your agent go over every detail in the listing agreement with you until you understand it completely. Make sure the beginning and ending dates are on the agreement; a good standard for length is three months. Know exactly what fees you will be paying and remember that less is not always better. If the agent stands to make very little commission you can bet it will be reflected in the amount of time and effort that is spent marketing your home. If the agent reduces their commission to get the listing it may mean they intend to spend very little money promoting the property. The normal commission is between 5 and 7 percent. What disclosure laws apply to me and what do I need to be aware of? - Make sure your agent helps you with locating professional inspectors for the various mandatory home inspections required in your area. Create a home marketing file including a property fact sheet, a property transfer disclosure statement, pest control report, applicable C.C.& R’s , applicable study zones report, structural engineering report, property profile from the title company, plans for alterations or additions, and special equipment report for pools, spas, sprinklers and alarm systems. Your agent should be able to handle this for you. What types of things separate you from your competition and will you give me some feedback? - How effectively will they advertise? Do they have 24-hour advertising capability? Will all the leads be followed up on by your agent’s team or will they go to other agents who may have other listings they would prefer to show? Agents who are innovative and offer new methods of attracting home buyers will measurably outperform agents who rely on methods of the past. Marketing effectively in the 90’s and beyond requires progressive strategies that add value and service for both buyers and sellers!

INTEREST RATES

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Less is more If you're new to investing or real estate and don't know the first thing about interest rates, here's a good tip: the higher the interest rate, the more expensive it's going to be. High interest rates mean you will have to pay back more on the money you borrow. Another good rule of thumb is that affordability increases if you use an adjustable rate mortgage (it's easier to qualify this way). Of course, there will be a wide range of prices that you can choose from, depending on what kind of financing you choose.. Not even the Fed knows for sure The Fed holds a considerable amount of power, but they can't control everything. Mortgage interest rates are affected by many unpredictable political, economic and social events. So there is no guarantee what direction interest rates will go, despite the forecasts of the experts. Therefore, make your financial decision based on where things are today including your budget, your needs and your future plans. Locking in rates assures your lowest interest If you do decide you want to lock in at a certain interest rate, you will need to complete a loan application and send it to your lender as soon as possible. This must be done so that your commitment doesn't runout before your loan is approved. Follow up and be se sure that the lender is receiving all of the necessary documentation. Get a property appraisal, which usually costs about $300, through your loan agent as soon as possible. Don't obsess and miss a good real estate deal Although rising interest rates can create more problems for home buyers, waiting and hoping for low rates is not necessarily a smart move. You may end up paying a higher price. Also, refinancing is always an option in the event that interest rates come down.

Your First Home the Easy Way!

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Buying a residence can be a hair raising experience. You will experience a roller coaster of emotions while finding the right place, securing the loan and finally moving in. For most of us, the first time home purchase is the largest investment we’ve ever considered. The emotions of purchasing something so expensive and personal can often cloud our business judgment. Most home purchasers do little or no research before they invest their nest egg. Doesn’t it make sense to become as completely informed as possible before you buy your first home? This special report is designed to help you avoid 10 common and crucial mistakes. The right real estate professional can help you make good sound business decisions based on your personal situation. Inspect, Inspect and Inspect - Go over the inspection report with a fine tooth comb. Make sure the report was done by a professional organization. For condo purchases go over the CC&R’s, By-Laws, and Association Fees. Don’t take anything for granted... inspect everything! Imagine the Property Vacant - Your furnishings and decorations will be the ones filling this new residence. Don’t be swayed by beautiful furniture; it leaves with the owner. Income + Lifestyle = Mortgage Payment - Sit down with your professional real estate agent and honestly discuss your income level and living expenses. Take into account future considerations, children, add-ons, amenities, and fix-ups. Your dream home is certainly worth a sacrifice but don’t mortgage your entire future. View Several Homes - See at least 7-10 properties. Don’t move too slow but don’t move on the first property you see. With your agent’s help you should be able to view enough properties to get a good overall perspective of the home market. When you find the right property all the leg work will be worth it. Utilize Your Team - By aligning yourself with the right real estate professional you will have an entire team at your disposal. Utilize your lender, title rep and agent. Each of them should work hand in hand for your benefit. Explore all the options before you sign. Be Columbo - Check out all costs and expenses before you sign. Utilities, taxes, insurance, maintenance and home owner dues if applicable. Make sure all utilities (gas, electricity, and water) are on during tyour walk-throughso you can inspect everything in working order. Ask lots of questions and be very detail conscious. Do a Final Walk-Through - Visit the property after all furnishings have been moved out to be sure there are no surprises. Be absolutely positive the property was left exactly as you had agreed upon in the contract. Things that could have been spotted in a final walk-through are often unintentionally overlooked. Plan For Flexibility - Closing dates are not written in stone. Allow for contingencies and have a back-up plan. If you or the sellers need a little more time to conclude the final arrangements, don’t let these delays upset or frustrate you. These types of circumstances are not uncommon in a real estate transaction. If It’s Not In Writing, It Doesn’t Exist - All promises and discussions should be in writing. Don’t make any assumptions or believe any assurances. Even the best intentions can be misinterpreted. Have your professional keep an ongoing log in writing of all discussions and get the seller’s written approval on all agreements. Loyalty Breeds Loyalty - Be open, honest and up front with your team. Hard feelings and disloyalty will cause head aches, delays or may even keep you from getting into the home you worked so hard to locate. Take the time to select the right team in the beginning and your first home purchase will be a pleasing and memorable experience.

Mortgage Funding Info

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The reason why most commercial mortgage deals don't get funded is not because you can't find a lender. More often than not, the reason can be traced back to the "presentation" of the loan request. For example, when completing a residential loan, you fill out a 1003 using Point, Genesis, or another FNMA 1003 program. For a commercial loan request, what do you fill out?

Since there is no uniform commercial mortgage application, most brokers submit a 1003, an operating statement, and possibly a rent roll. However, this would be akin to submitting only the borrower's tax return and pay stubs, expecting a preliminary approval. In other words, it is clearly inadequate.

"As lenders we see hundreds of loan requests, and most of these requests are incomplete and poorly prepared," says Chris Lewis, VP of Commercial Lending for Wells Fargo, Los Angeles. "Complete loan requests, however, go to the top of the stack as this shows that the broker understands the issues and has some control over the deal."

Packaging a commercial mortgage loan is significantly different than packaging a residential loan. The main difference is that you need to determine whether the property -- not the borrower -- is generating sufficient "rental" income to cover the mortgage payments on the proposed loan amount (e.g., DSCR), and whether there is commensurate value to meet the lenders' loan-to-value requirement (e.g., LTV).

To calculate the DSCR and LTV, the stabilized net cash flow (NCF) must be determined. In most cases, lenders must re-create the operating statements to conform to their respective underwriting models, which requires identifying certain property-specific expenses.

Agreementto Rescind Contract of Sale

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Agreementto Rescind Contract of Sale

Agreement to Assign

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Agreement to Assign

Credit Info

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Did you know that 75% of all mortgage lenders use a three-digit credit score to determine your loan eligibility? This score is based on the information contained in your credit report. And the interest rate you will be charged is based on your credit score, so raising your credit score as little as 15 points could result in a lower interest rate and thousands in savings. You can save anywhere from a few hundred dollars in credit card interest charges, thousands of dollars on your next car loan, and tens of thousands of dollars on a mortgage loan simply by improving your credit score as much as possible.

The information below offers general guidelines as to what your credit score might be. Each lender sets its own guidelines for approving loans and issuing credit. For this reason, the information below offers only general guidelines. Your debt-to-income ratio also plays a role in determining whether or not you will be issued credit. Some lenders require a debt-to-income ratio that may be higher or lower than those stated below. See bottom of this page to find out how to calculate your debt-to-income ratio.

The information below is based on the FICO scoring model which ranges from about 375 to 900. Other lenders might use their own in-house scoring systems or another scoring model. General rules to determine your credit score and creditworthiness are as follows:

A rating [Credit score 660 or higher] -- You can easily obtain financing at the best rate; you can get approved for a credit card online in a few seconds. Note that a score above 700 means you have extremely good credit.

Typical debt- to- income ratio: Below 35%

Mortgage: You have not been late with a payment in the last 24 months

Installment loan: You have been 30 days late making payments 0 or 1 time within the last 12 to 24 months

Revolving credit: You have been 30 or 60 days late with a payment 0 or 1 time in the last 12 to 24 months

Additional requirements: Good/excellent credit during the last 2 to 5 years; no bankruptcy within the last 2 to 10 years

B rating [Minimum credit score 620] You can get approved, but not at lowest rate. You can get credit cards and such, but at a higher rate than someone with an A rating.

Typical debt-to-income ratio: Around 50%

Mortgage: You have been 30 days late with a payment 2 or 3 times in the last 12 months

Installment Loan: You have been 30 days late with a payment 2 to 4 times during the last 12 months

Revolving credit: You have been 30 days late with a payment 0 to 2 times in the last 12 months

Additional requirements: You have no 60-day late mortgage payments; if filed bankruptcy, it must be discharged 2 to 4 years ago

C rating [Minimum credit score 580] Have trouble getting approved. Very high rates.

The lender might ask you to get someone to co-sign for you.

Typical debt-to-income ratio: 55% or higher

Mortgage: You have been 30 days late with a payment 3 or 4 times in the last 12 months

Installment Loan: You have been 30 days late with a payment 4 to 6 times during the last 12 months

Revolving credit: You have been 60 days late with a payment 2 to 4 times in the last 12 months

Additional requirements: If you filed bankruptcy, it was discharged 1 or 2 years ago

D rating [Minimum credit score 550] Serious trouble getting approved. Co-signor required.

Typical debt-to-income ratio: Around 60%

Mortgage: You have been 30 days late with a payment 2 to 6 times in the last 12 months; and 60 days late 1 to 2 times during the last 12 months

Installment Loan: You have a few 90 and 120 day late payments during the last 12 months

Revolving credit: You have a few 90 and 120 day late payments during the last 12 months

Additional requirements: If you filed bankruptcy, was discharged within last 12 months

E rating [Credit score under 550] Unlikely to be approved.

Typical debt-to-income ratio: Around 65%

Mortgage: You have a pattern of 20, 60, 90 and/or 120 day late payments

Installment Loan: You have a pattern of 20, 60, 90 and/or 120 day late payments

Revolving credit: You have a pattern of 20, 60, 90 and/or 120 day late payments

Additional requirements: You may have a current bankruptcy or foreclosure

How to Calculate Your Debt-to-Income Ratio

The formula for calculating your debt-to-income ratio is monthly fixed expenses divided by gross monthly income (before taxes and deductions). Monthly fixed expenses include all debt, such as the following: house payment or lease, credit card and other revolving credit balances that it will take you longer than 6 months to pay off; car payments, alimony, child support, etc. Do not include grocery, telephone, and utility bills or any debt that will be paid off in the next few months.

Sample calculation:

Gross monthly household income: $5,000

Fixed expenses: $1,560

[house payment $540.00 + car payment $370.00 + credit cards $250.00 + child support $400.00]

Debt-to-income ratio calculation:

$1,560

$5,000 = 31%

Fico Scores Effect Purchasing

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FICO® scores were developed by Fair Isaac & Company, Inc. for each of the credit repositories. The scores are: (Equifax) Beacon®, (Experian formerly TRW) Experian/FICO and (TransUnion) Empirica®. They are simply repository scores meaning they only consider the information contained in a person's credit file; they do not consider a persons income, savings or amount of a down payment for a mortgage.

The scores were designed to assess risk. They are useful in directing applications to specific loan programs and to set levels of underwriting, i.e. streamline, traditional or second review. The scores are objective, consistent, accurate and fast.

Many people in the mortgage business are skeptical about the accuracy of FICO scores. Scoring has only been an integral part of the mortgage process in the past few years; however, the scores have been in use since the 1950's by retail merchants, credit card companies, insurance companies and banks for consumer lending. The data from large scoring projects emphasizes the accuracy, the predictive quality of the scores. Large portfolios have been scored for mortgage servicing and investment groups, and again, they demonstrate that FICO scores work.

The scores were developed from each repository's database using actual loan performance. A sample of over 750,000 consumers per repository was used. The repositories have each made great strides to increase the accuracy of their respective database through computer technology and internal monitoring. There is a new standard reporting format for credit grantors to use when sending electronic information to the repositories; this is the critical first step to providing accurate data.

The scores use a multiple scorecard design. Each repository uses 10 individual scorecards, and the models at each repository are the same. This increases accuracy and optimizes the predictive variables for each subpopulation. (For example, a borrower with two 30-day late payments will be scored against a population with some minor delinquencies.) This feature may cause a borrower with delinquencies to score in the same range as a borrower without delinquencies. Scorecards are reviewed and updated every twenty-four months.

The actual scoring process is proprietary, and the algorithms are copyrighted. We can share the predictive variables, the portion of the credit file considered and the weight as provided by Fair Isaac. They are:

Previous credit performance (35%)
Current level of indebtedness (30%)
Time credit has been in use (15%)
Types of credit available (15%)
Pursuit of new credit (less than 5%)

FICO has changed the way it factors credit checks, inquiries. These changes should minimize the "negative" effects that aggressive rate shopping or the normal mortgage process can have on a mortgage applicant. In the new Beacon version, the deduping process has been expanded beyond seven days. One variable counts the number of days within 365 days of scoring. If there has not been an inquiry, the deduping mechanism is not activated. If there is a consumer originated inquiry within the past 365 days from mortgage or auto related industries, these inquiries are ignored for the first 30 calendar days from scoring; then, multiple inquiries within the next 14 days are counted as one. Each inquiry will still appear on the credit report.

Scores should not change significantly because the variable in the model using inquiries contributes less than 5% of the predictive power of the model. According to Equifax statisticians, an average of 5% of the credit reports in the Equifax consumer credit reporting database (over 200 million consumer files) will see a change in score due to this. Fewer than 5% of those will see a change significant enough to effect a loan decision.

In order to get a score a borrower must have the following conditions in his/her file:

No "Deceased" indicator on the credit file
At least one undisputed trade line that has been updated in the last six months
One trade line open at least six months

Scores range from 350 (high risk) to 950 (low risk). A scorecard of 660 will be 660 on Beacon 96, Empirica and Experian/FICO if the data on each file is the same. However, each repository is likely to contain different data.

Every score is accompanied by a maximum of four reason codes. Reason codes identify the most significant reason that a consumer did not score higher. They are not red flags. Consumers with scores in the 800 range get reason codes just as consumers with scores in the 500 range. The reason codes may be used in describing to the consumer the reason for adverse action. Scores are not part of the credit file and are not covered by the Fair Credit Reporting Act. Scores, if disclosed to the consumer, must be related to the credit file - using the reason codes - since the score has no meaning in itself; the meaning or risk level is assigned by the lender and the investor.

When applicants have erroneous information reported, document the inaccuracies. The easiest way to do that is to have your credit-reporting agency upgrade the merged in-file to an edited mid-range report or to a Residential Mortgage Credit Report. With the upgraded report, you can ignore the score! The file will have to be handled in a traditional manner for underwriting and investment purposes. The developed report will provide the paper trail that investors want.

Property Rights

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Property Rights

Real Property Definition

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Real Property Definition

Property Investment

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Property Investment

Property Trust(s)

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Property Trust(s)

Negotiating a Contract

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Negotiating a Contract

Real Estate Negotiation

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Real Estate Negotiation

Dont Let It Fall Through

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Dont Let It Fall Through

Sell Your Home Fast

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Sell Your Home Fast

Real Estate Tax Advice

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Real Estate Tax Advice

Property Inspection

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Property Inspection

Pick An Offer

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Pick An Offer

Open House Expectations

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Open House Expectations

Your Open House

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Your Open House

Marketing Info

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Marketing Info

Listing Real Estate

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Listing Real Estate

Selling My Property

Thu, 17 May 2012 23:05:04 +0000

Selling My Property

Multiple Offers

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Multiple Offers

Getting Real Estate Ready

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Getting Real Estate Ready

Real Estate List Price

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Real Estate List Price

Housing Market Info

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Housing Market Info

Pricing Your Property

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Pricing Your Property

Property Appraisal

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Property Appraisal

Real Estate Appraisal Info

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Real Estate Appraisal Info

More Tax Advice

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More Tax Advice

Real Estate Agent

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Real Estate Agent

Real Estate FSBO Advice

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Real Estate FSBO Advice

Real Estate Appraisal

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You should look at each home for its individual characteristics. Generally, older homes may be in more established neighborhoods, offer more ambiance, and have lower property tax rates. People who buy older homes, however, shouldn't mind maintaining their home and making some repairs. Newer homes tend to use more modern architecture and systems, are usually easier to maintain, and may be more energy-efficient. People who buy new homes often don't want to worry initially about upkeep and repairs.

Only an appraiser can give a real home value, but one thing your Miami Beach real estate agent can help you with, is determining the 'sold' value of homes around the area. This is especially important when writing an offer!

Real Estate Tax Shelter(s)

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Real Estate Tax Shelter(s)

Real Estate Tax Benefits

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Real Estate Tax Benefits

Loan Closing Advice

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Loan Closing Advice

Escrow Advice

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Escrow Advice

Home Loans

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Home Loans

Closing Costs

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Closing Costs

Review A Closing

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Review A Closing

Closing a Home

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Closing a Home

After The Loan

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After The Loan

Credit History

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Credit History

Negotiating Tips

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Negotiating Tips

Property Negotiation

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Property Negotiation

Safety Inspection

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Safety Inspection

Home Inspector Worksheet

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Home Inspector Worksheet

Home Insurance

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Home Insurance

Home Inspection

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Home Inspection

Debt To Income Ratio

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Debt To Income Ratio

Your Loan

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Your Loan

Apply for a Mortgage

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Apply for a Mortgage

Select a Mortgage

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Select a Mortgage

Mortgage Alternatives

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Mortgage Alternatives

Basic Mortgage

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Basic Mortgage

Mortgage Loan

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Mortgage Loan

Effective Offer Writing

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Effective Offer Writing

Mental Control

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Mental Control

Comparison Shopping

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Comparison Shopping

Home Selection

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Home Selection

Home Hunt

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Home Hunt

Approval Letters

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Approval Letters

Real Estate Ads

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Real Estate Ads

House Search

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House Search

Your Wish List

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Your Wish List

Find your Dream

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Find your Dream

A REALTOR Can Help

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A REALTOR Can Help

Confidence and Experience

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Confidence and Experience

Ownership Advice

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Ownership Advice

Young Buyer

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Young Buyer

Home Ownership: Are You Prepared?

Thu, 17 May 2012 23:05:04 +0000

Home Ownership: Are You Prepared?

Buying an Affordable Home

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Buying an Affordable Home

Home Ownership : How To

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Home Ownership : How To

Buy vs Rent

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Buy vs Rent

Checklist for Home Buyers

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Checklist for Home Buyers