For the past few year, all people were talking about was how it was a buyers market in real estate. Low prices, great deals and low interest rates were popular news headlines. If you were in the market for a new home, everyone’s advice to you was buy, buy buy. Lately, however, the idea of building your new home has slowly been making a comeback. The headlines from just this past week have all been about the rise of confidence for home builders. So, which is better: buying or building? Check out this Pros and Cons list from newhomeguide.com.

Home building pros:

·       Control: Building a home lets you have control over all the features and options that will affect you on a daily basis.

·       Knowledge: As you monitor the construction process, you’ll learn useful things about home construction and gain a sense of ownership that can only come from watching your house take shape step by step.

·       Expert advice:  You’ll have the expertise of the builder, contractors, and an architect to guide you.  Have peace of mind knowing that the pros are thinking about code, permits, and energy efficiency — not you.

·       The eco-friendly edge:  You have the option of using environmentally sound materials and energy-saving features that will both make your conscience feel good and keep more cash in your wallet over the years.

Home building cons:

Cost overruns:  You could have to pay extra for unexpected expenses.  Unexpected costs can occur in any home construction project.

Time: Waiting for construction to finish can be disheartening, not to mention that having to come up with alternate living arrangements while you wait can be costly.

Stress:  Every time a decision has to be made or a problem arises, you’ll hear about it.  Dealing with those considerations on a daily basis throughout the home building process can take their toll unless you’ve got a positive mental attitude.

Buying a new home
Buying a new home involves scouring real estate listings with an agent to find a home that suits your needs.  The process can take a few days or a few months, depending on how fast you want to move.

Home buying pros:

·       Shopping around:  You get to be a critical shopper, comparing different features until you find exactly the right combination at the right price.

·       Bargaining:  You can drive a tough bargain and get the best deal possible, knowing that, in a competitive market, there are other options waiting for you right up the road.

·       Taking your time: When buying a new home, you get to work at your own pace.  You can take your time house hunting.  And when it comes to moving in, you work with the seller to choose a date that’s soon or a few months away.

Home buying cons:

·       Concessions: When buying a home, may have to make concessions in regards to features you want.  You may not find the “perfect” house since you didn’t design it yourself.  And you may need to spend money making updates or repairs.

·       Stress:  Finding and making an offer on a new home can be stressful, especially if you are in a seller’s market.  You may need to act fast or make an offer that’s more than the listing price if you get stuck in a bidding war.

Maintain, maintain, maintain the status quo! This is the best advice anyone could give a potential home buyer. No matter what type of credit you have, there are things you can do to make lenders think twice. Here are 12 things you should NOT do if you are trying to get a home loan.

  1. Don’t change your job.
  2. Don’t change banks.
  3. Don’t buy a car or truck or any other form of transportation that you have to finance. This will increase your debt-to-income ratio. Typically this ratio should be at or below 12% before buying a home. Once you buy a home, that ratio will skyrocket but shouldn’t be higher than 43% of your income. Check yours here.
  4. Don’t buy furniture on credit before buying your house.
  5. Don’t make large deposits into your bank accounts. Lenders like the money that will be your down payment to be sitting in your account for at least two months.
  6. Don’t co-sign a loan for anyone.
  7. Don’t shift money between accounts.
  8. Don’t give deposits to a seller. The deposit should always go into a trust account because sometimes, if sellers have access to this money, they might even start spending it before the deal is closed.
  9. Don’t buy the house alone. It is always best to hire an agent to do the job for you.
  10. Don’t attempt to consolidate bills before speaking with your lender. The lender can advise you if this needs to be done.
  11. Don’t pack information that may be needed for the loan application.  Important paperwork such as W-2 forms, bank statements and tax returns should not be packed with your household goods. Duplicate copies could take weeks to obtain and could stall the closing date on your transaction.
  12. Don’t run a credit report on yourself or let anyone else for that matter!  This will show as an inquiry on your lender’s credit report. Inquires can lower your credit score a little bit and they must be explained in writing.

Stop! Before you remodel your home, read this! You might end up doing more harm than good with a remodel, thus, hurting your chances of selling it. Not all updates are good updates to your home. Remodeling the kitchen might bring you a good return on your investment, but converting a patio into a den for extra living space probably won’t. Here are some updates that aren’t worth it. For ones that are, check out my post from earlier this month.

 

  1. Skip luxury and stick with mid-grade upgrades in the kitchen and bathroom. Unless you are in a high-end home, high-end upgrades won’t be appreciated by buyers and might even look out of place.
  2. Think twice before changing the layout of your house. Adding a second story to your home when it is on a street full of bungalows will not bring in buyers looking in that neighborhood. Additionally, turning your porch into a den might give you extra living space but if it takes away the view from your dining room, the value of that room might go down.
  3. If your home is newer, don’t worry about upgrades. By newer, I mean 5-10 years old.
  4. Don’t spend your entire budget on one room and leave the other rooms out. If you make one room spectacular, it might make the other rooms look more shabby. Try and stay equal and consistent throughout the home.
  5. Stay within the price range of your neighborhood. You won’t get a return on your investment if you upgrade your home to a value more than the average selling price in your area.

Home improvements can have both positive and negative effects on the value of your home.  If you are trying to sell your home its important to know what you should spend your money on and what you shouldn’t when it comes to freshening up the interior.  Here are a few things you can do to give your home the extra push it needs to compete on the market.

 

  1. The kitchen is where you get your most money per square foot, so if the appliances are out of date (more than 5 years old), the cabinetry is lacking or the countertops are beat up, it is time to invest.  Opt for wood over laminate and add crown molding to your cabinets. For countertops, concrete and granite are thought to be top of the line, while plastic laminate is considered low-end grade.
  2. Because everything ends up on the floor, make sure yours is durable and long lasting. Wood, tile and natural stone are the most popular and you get the best return on your investment.
  3. A cheap fix that goes a long way is changing out the hardware in your kitchen and bathrooms. Going from standard grade fixtures to higher end finishes is relatively cheap. Plus, you can really unify your home or a room if you pick pieces that coordinate with each other.  The rule of thumb is that if your fixtures are more than 10 years old, replace them.
  4. The master bedroom and bathroom should be a retreat. Turn these rooms into a spa with simple color changes and de-cluttering them. If you have the budget, spend a little more in the bathroom with a Jacuzzi tub or oversized garden tub and tile floor.
  5. A clean and organized garage goes a long way. You don’t have to spend much money to accomplish this. Simply clean yours out and add some wire shelving for organization and your will have an appealing garage.
  6. Clean and organize your closets. Buy some storage boxes with labels to organize hall closets, take out off-season clothing to help bedroom closets look bigger.

 

Look for my next post that lays out upgrades that may negatively affect the value of your home.

It’s Spring Cleaning Time!

Your house has been airtight all winter long and now it s time to let the sunshine in. According to the Environmental Protection Agency (EPA), indoor air pollution is two to five times worse than outdoor air pollution. And the at-home version can cause or aggravate asthma and allergies, which are on the rise in the United States. Since you can’t fix the pollution, you have to detox your home!

Use this checklist  to get rid of fumes, mold, dust and dander from a weary winter.

Kitchen

  • Vacuum refrigerator grill and coil
  • Wipe the inside of the freezer

Living Room

  • Rotate heavy curtains, rugs, and throws for lightweight ones

Bedrooms

  • Replace cool-weather bedding with warm-weather bedding
  • Launder or dry-clean blankets

Bathrooms

  • Discard expired cosmetics, beauty products and medications

Home office

  • Clean out files
  • Review and update insurance policies, contracts and household inventories

Closets

  • Reorganize closets, giving away unwanted items
  • Replace cool-weather clothing with warm-weather clothing

Utility spaces

  • Remove lint from hose attached to the back of the clothes dryer
  • Clean the attic and basement, giving away or discarding unwanted items
  • Vacuum and mop attic and basement floors

Outdoor spaces

  • Scrub porch ceilings and walls
  • Scrub porch floors, decks, patios, the driveway and walkways
  • Scrub outdoor furniture, umbrellas, and awnings
  • Wash light-fixture covers
  • Clean gutters

Throughout the house

  • Vacuum and wipe walls and ceilings
  • Shampoo wall-to-wall carpets and area rugs with backings
  • Send area rugs without backings out for professional cleaning
  • Steam-clean upholstery
  • Dust radiators
  • Reseal stone surfaces
  • Reseal grout
  • Launder machine-washable window treatments
  • Take books off shelves, dust shelves and books
  • Polish metal door and window hardware
  • Oil window and door hinges
  • Wax wood furniture
  • Wax wood, stone, concrete, brick and unglazed tile floors
  • Strip and rewax vinyl and linoleum floors
  • Wash windows and window screens
  • Remove, wash and store storm windows


Have you thought about buying your first or second home but just can’t seem to afford it? Maybe you should consider co-buying it instead. It’s just as easy as sharing your Lincoln Logs was in kindergarten.

The biggest factor in co-buying is setting up the title properly. You can have a TIC (tenants in common) or a JTWROS (joint tenants with right of survivorship). If 2 married couples are buying together, then use tenants by the entirety” or “community property.

With a TIC, you and your cobuyer are allowed to own unequal interests (also called shares) in the property. Also, if one co-owner dies, that co-owner’s share is transferred to his or her beneficiaries. Tenancy in common (TIC) is by far the most common way for unrelated cobuyers to take title.

With a JTWROS, by contrast, you and your cobuyer have (in almost all U.S. states) no choice but to own equal interests in the property, 50/50. Upon the death of one joint tenant, the remaining owners gain the deceased owner’s interest in the property.

Don’t forget to address certain issues ahead of time and agree to terms in writing.

Who will pay ongoing expenses?

What percentage with each person own?

What is one co-owner later wants out?

  • How will you fairly assess the property’s value?
  • Does the selling co-owner have to accept the buyout offer?
  • What if the remaining co-owner can’t come up with sufficient funds to buy out the selling co-owner?

Co-buying a home is thinking outside of the box to reach your homeowner needs and wants. In today’s market, people are being as unconventional as ever and it is working.

Did you know winter is full of bargains for homebuyers? Savvy homebuyers and real estate investors who have long known that a deal made in winter is often hard to match in spring or summer.

Winter tends to dull (mostly unconsciously) a seller’s expectation of getting a top price. Clearly, it is seen to be the wrong time of year to sell. And it’s easy to understand why. All the freshness and color of spring and summer, and even fall, are absent. Gardens and greenery look dead, with no new growth. And surrounding the home prospective buyers can’t help noticing withered leaves, patchy and lifeless grass, damp and grubby pathways, and few, if any, flowers. The mood is dour; the situation has many negatives — or that’s how it can seem!

The winter season has fewer units on the market, and sellers tend to need to move from their property. You can use that to your advantage to get a favorable deal. Winter has fewer buyers in the market. Looking for a home in the winter can be inconvenient, and people are less likely to move. Families also tend to be on a September to June cycle because they are unwilling to move their children to a new town in the middle of the school year. Fewer buyers means less competition.

Lenders also usually have fewer loans to process and less paperwork to deal with (though this can change quickly if rates fluctuate). With lenders less hassled, you can expect a smoother process to get approved for a mortgage.

So, don’t let winter blues keep you from find a home. Get outside and catch a bargain!

Are you looking for a new city to live in? I’m not talking about just moving the a city in a different location than where you live now; I’m talking about a brand-spanking new, never been a city kind of place. You are in luck, because in the past two years the U.S. Census Bureau reports that nine new municipalities have incorporated. Maybe one of these will be your new home!

1. Anthony, New Mexico

Date of incorporation: Jan. 5, 2010

Population: 9,360

 

2. Coyote Flats, Texas

Date of incorporation: March 8, 2010

Population: 312

 

3. Tusayan, Arizona

Date of incorporation: March 26, 2010

Population: 558

 

4. Providence Village, Texas

Date of incorporation: May 8, 2010

Population: 5,000

 

5. Summitt, Wisconsin

Date of incorporation: July 29, 2010

Population: 4,674

 

6. Mastic Beach, NY

Date of incorporation: Aug. 31, 2010

Population: 12,930

 

7. Eastvsale, California

Date of incorporation: Oct. 1, 2010

Population: 53,668

 

8. Semmes, Alabama

Date of incorporation: May 2, 2011

Population: 2,897

 

9. Jurupa Valley, CA

Date of incorporation: July 1, 2011

Population: 94,235

What are you going to do when you retire?

1. Staying Put.

More and more, retirees are remaining in their local communities longer. However, the definition of “local community” is changing. Before the definition of local community used to be defined a 10-15 mile radius, it now encompasses an expanded area of almost 100 miles, based on supply, demand and costs.

2. Creative living solutions and multigenerational homes

Concepts such as multigenerational housing, the Greenhouse Project, senior villages, co-housing, homes built with in-law apartments and other communal living solutions will continue appearing and evolving. As the housing market stays neutral through 2012, investments  to make the home more of a multi-generational dwelling will increase. Renovations will be a key driver in adaptation but the resale value of these enhancements will have negligible effect on the value of the home.

3. Downsizing…or Not

In the past, retirees often downsized their living spaces from homes to condos. However, with today’s housing markets, retirees will be reluctant to sell their home at current market prices.  They may be looking at other ways to downsize, such as cutting their mortgage costs with reverse mortgages.

4. Reverse Mortgages

With fixed incomes and increased living expenses, many senior citizens are turning to reverse mortgages as a way to receive extra cash. Reverse mortgages allow seniors to turn equity into cash while keeping ownership of their home.

According to the AARP, more than 600,000 reverse mortgages have been issued since the start of the program in the late 1980s, nearly three-quarters within the last five years.

Bloomberg Business set out to figure out what home prices would look like in 2012. They joined forces with Fiserv to weigh historical data against current trends and get a bead on which way the markets might jump at one-year increments. They then combined the data and were able to get a pretty good idea of what home prices would be in three years’ time. Here is a look at what your home will be worth in 2012, broken down by metro area.

 

California

Los Angeles-Long Beach-Glendale

2012: $253,328

Down from 2008 pricing of $350,000

 

Texas

Houston-Sugar Land-Baytown

2012: $160,471

Down from 2008 pricing of $160,000

 

New York

White Plains-New York-Wayne

2012: $343,937

Down from 2008 pricing of $440,000

 

Florida

Tampa-St. Petersburg-Clearwater

2012: $119,348

Down from 2008 pricing of $166,000

 

Pennsylvania

Philadelphia

2012: $171,347

Down from 2008 pricing of $195,000

 

Georgia

Atlanta-Sandy Springs-Marietta

2012: $182,199

Up from 2008 pricing of $182,000

 

Illinois

Chicago-Naperville-Joliet

2012: $248,136

Up from 2008 pricing of $247,000

 

North Carolina

Charlotte-Gastonia-Concord

2012: $191,788

Up from 2008 pricing of $185,000

Michigan

Warren-Troy-Farmington Hills

2012: $157,469

Up from 2008 pricing of $149,000

 

Ohio

Cleveland-Elyria-Mentor

2012: $139,573

Up from 2008 pricing at $129,000