Why Home Appraisals and Inspections Are Important

If you are looking to buy a house, it is crucial you understand the difference between an appraisal and inspection. You will be dealing with these two elements till you sign on the dotted line, pay the seller and get the keys to your new home. Both elements are important and required if you and the seller want to close the deal.

Importance of Appraisals

Under normal circumstances, a buyer will not have that much cash lying in the bank to pay the asking price of the property. He would need to approach a lending institution to get a mortgage to make the payment. Any lending institution will not sanction a mortgage unless the appraisal is done. This is mandated by law.

The appraiser assesses the value of the property based on the price at which comparable properties in the area were sold recently. Besides, the appraiser also observes the cracks and obvious signs of wear and tear in the property like broken windows and damaged floors. After determining the value of a property, the appraiser lets the lending institution determine whether it will be able to recover the loan amount should you default.

Basically, appraisals let banks see whether they can recover the mortgage amount should the property get foreclosed. They use the value of the property as collateral and give the buyer the 80 percent of the agreed sale price. The remaining 20 percent has to come out of the buyer’s own pocket.

Who Benefits From an Appraisal?

While an appraisal benefits the lender the most, it can also be used as a benchmark by the buyer to determine whether they are paying too much for the property. Besides getting an idea about the value of the property, the buyer also gets to learn more about the site’s size, zoning, flooding zoning, earthquake zoning and also room count.

Significance of Inspections

When you are buying a home, it is important to know the state the house is in and how much money you would have to spend over and above the mortgage to rectify problems. An inspection ensures you are not stuck with a lemon, so to say.

While most homeowners are honest about issues their homes may have, some may not know about termites or mold as they are not visible to the naked eye. These issues can cost a fortune to fix.

A home inspection performed by a qualified and licensed inspector checks every aspect of the structure and gives you a fair idea how much you would have to pay to fix issues with the property. This information is important, as you can decide whether it is worthwhile buying the property or walking away from it. It also allows you to negotiate the price.

To get a property inspected thoroughly and in the right manner, you need a good inspector. Always use a licensed inspector, who is in no way connected or associated with the buyer, real estate agent or any other party involved in the deal.

Using Appraisals and Inspections Prudently

When you approach a bank for a mortgage, you will have to pay for the appraisal up front. While the bank gets the actual appraisal report, you can ask for a copy. You are legally entitled to one. After receiving the copy, review it thoroughly. If you don’t understand it, request your real estate consultant to explain it to you.

The appraisal will also highlight whether the market you are buying the property in is increasing, declining or remaining stable. If the market is declining, the lender will not be willing to give you the mortgage or may reduce the amount they are willing to lend.

When getting the property inspected professionally, do some research to find out what you should specifically ask the inspector to look for? An online search should easily reveal what a good inspection should cover. Before the inspection begins, talk to the inspector and discuss each item that he is going to review. Also, make it a point to be with the inspector during the inspection process, so that you are certain nothing has been missed out and the inspection was conducted thoroughly.

Both appraisal and home inspection can help you make an informed decision. One allows you to check the value of the property and ensure you are not being taken for a ride by the seller; while the other ensures you are getting value for your money and a home that will not eat up your bank account.

Original article from www.propertycluster.com | 

4 Seller Tips to Seal the Deal

You want to get the best price for your homes as quickly as possible. Who doesn’t? But how do you entice prospective buyers to seal the deal? Impress potential buyers with these four well-researched real estate tips, and you may impress yourselves with the results.

1. Sales price

A correctly priced house is the key to selling a home. Buyers will be looking for a home to meet their price point and includes their top priorities. In most cases a home listing becomes stale due to improper pricing. A house priced too high may miss potential buyers, which costs time and money. And of, course, you don’t want to price yourself so low that you lose money on the house. You want to seal the deal.

2. Location, location, location

A home in an excellent location sells quicker and for more money. Home buyers seek quality of life in a neighborhood: parks, community pools, gyms and supermarkets close to home. Properties close to mass transportation, highways and fewer traffic zones save time, and they can add a lot of lifestyle convenience. This goes for future resale value, too: a home located a block from a noisy train station will have lower resale potential than one two blocks from a school and park.

3. Fix it up

This is the time to spruce up your house to seal the deal. Odd jobs you’ve put off: do them now. Fix the damaged door hinge, the chipped light switch, and the paint on the garage door. You don’t want a picky buyer to pass on your $300,000 home because they were put off by a spot of peeling paint that made them wonder if anything else is less than tip-top shape. You want to seal the deal instead by doing the little things.

4. Make your home welcoming

Sellers need to present a welcoming atmosphere. This is the best opportunity to showcase the qualities of your home for home buyer viewings so you can seal the deal. Clean up the yard as much as possible. Purchase a nice welcome mat and some potted plants to place around the entrance to the house. If your REALTOR® makes suggestions for staging the home interior—decluttering, moving furniture, maybe painting a wall—heed them. They knowwhat’s selling. And they want no less than that for your home, too.

All sellers want to be able to seal the deal quickly, so that they can move on to their next experience. Following these quick sellers tips can help get that done sooner, rather than later.

Updated from an earlier version by Susan Wellish. |From www.realtor.com originally by Anne Miller

3 POWERFUL BUYING FOREVER QUESTIONS REVEAL YOUR FOREVER HOME

When your "Forever Home" speaks to you, what will it say about your future together? How will you recognize your "Forever Home" when you see it? Finding a house or condominium to love forever, is much like searching out a person to love forever:

You can't force it. You won't know if it's the first or the fiftieth property you see.
It may happen with a rush of familiarity as you cross the threshold - love at first showing - or it may be a growing realization as you explore every corner after several visits inspecting the home with family and professionals like a home inspector, contractor, or interior designer.
Falling in love or being in love with the neighborhood may be your top priority, so then you'll search out the property which requires the least number of compromises for long-term living.

Whether "home" jumps out at you, or the lasting connection comes on more slowly, you'll be successful at recognizing this new headquarters for your life - and maybe your work - if you invest time deciding exactly what you mean by "Forever Home." Experienced real estate professionals are a great resource here as their stories of faulty first impressions and amazing connections with real estate will transform you into an insightful "forever" buyer. Ask questions and relate the answers to your specific situation and long-term goals.

How Do You Define "My Forever Home"?

Consider the following 3 powerful Buying Forever Questions to discover your definition of a long-term residence, on any time line that matters to you.

1. What is it about the house or condominium that will make you, and those you love, want to stay forever or at least for a very long time?

Set priorities for your search:

• Which location is preferred and why? Proximity to schools and work are popular criteria, but with home schooling and home-based businesses on the rise, what else do you want to be close to? What will matter once the children move out? Rate conveniences including what's within walking distance, what's in the neighborhood, what's a short drive away... good, bad, and indifferent. Buy the best location you can afford and compromise on features that can be changed or are less important to you.
• Which neighborhood do you dream of belonging to? If you're in for the long haul, go for the enclave at the top of your list or pretty close to it. You can consider the growing edge of this area, that's the streets that are now outside that neighborhood but that will naturally be engulfed as it grows. Buy the best neighborhood you can afford when you're in for the long haul to reap the greatest amount of appreciated value, and to assure neighborhood sustainability and growth.
• What property orientation to sunrise and sunset is important in your life? Are solar energy possibilities important to you or might they be in the future?
• What size and style of structure do you lust after? Broaden you search in this category by including houses that can be renovated or enlarged to achieve your ideal size and layout.

2. What is it about the home that will provide flexibility as your life, work, family size, goals…and the neighborhood change over time?

Imagine a series of outcomes for your future:

• Are there options with layout and room size which will allow some shuffling if more children or live-in relatives arrive, or if children leave home and relatives go solo?
• Is the decor right on trend so it will date quickly, or does long-lasting high-quality, classic-design predominate?
• Telecommuting, or working from home, and home-based business are both on the rise, so consider how you'd adapt your home if this was an option or a necessity.
• What mobility barriers are there and could home modifications cost-effectively overcome them if necessary? This may or may not be in your future, but if challenges arise for any family member would this force a move? For instance, is there room to ramp entrance stairs or add a lifting device? Sunken living rooms (one or two steps down) can be an expensive barrier to overcome. Check large closets and alcoves to see if an elevator could be added if needed.

3. Can the home become a financial partner in your future if the need for more income arises?

Explore a range of alternatives:

• Is renting out part of the home or taking in a boarder a practical option for initially affording the house or condominium? Buying the best location you can afford may include boosting your income this way until the mortgage is paid down to manageable levels.
• Consider the possibility that you may want adult children, relatives, or care givers to share your home at some point. You may also decide on spending months at a time traveling or living elsewhere. Would the layout allow a separate suite for them - or you - to be easily constructed in the home?
• Is the home relatively-low maintenance or could it be? Consider long-term maintenance costs for the condominium facility (You pay your share of new roofs, garage repairs, and other big costs after all). Rising taxes and monthly condominium fees should also factor into long-term affordability calculations.
• Is this an energy-efficient home or could it be, so that expenses remain on budget as energy costs climb?
• Does the location and type of building typically qualify for home equity conversion options like reverse mortgages? If "forever" is the plan, at some point you will want to start "spending the equity" since you can't take it with you.

Compare this "Forever Home" list with your current home-buying criteria. Too often buyers, who say they want to buy "Our Forever Home," focus on short-term features like stainless steel appliances, open concept living areas, and granite counter tops, not on long-term benefits like those in the "Forever Home" list above. Features go out of style and will date a home and bring value and saleability down. Your "Forever Home" should be packed with benefits and value for today and into the future.

When your "Forever Home" speaks to you will you be receptive to what it says about your future together?

Written by PJ Wade on Monday, 09 June 2014 12:21 pm | www.realtytimes.com

4 Reasons to Buy YOUR HOME Now!

Here are four great reasons to consider buying a home today, instead of waiting.

1. Prices Will Continue to Rise

The Home Price Expectation Survey polls a distinguished panel of over 100 economists, investment strategists, and housing market analysts. Their most recent report projects appreciation in home values over the next five years to be between 30.8% (most optimistic) and 9.4% (most pessimistic).

The bottom in home prices has come and gone. Home values will continue to appreciate for years. Waiting no longer makes sense.

2. Mortgage Interest Rates Are Increasing

Although Freddie Mac’s Primary Mortgage Market Survey shows that interest rates for a 30-year mortgage have softened recently, most experts predict that they will begin to rise later this year. The Mortgage Bankers Association, Fannie Mae, Freddie Mac, and the National Association of Realtors are in unison; projecting that rates will be up almost a full percentage point by the end of next year.

An increase in rates will impact YOUR monthly mortgage payment. Your housing expense will be more a year from now if a mortgage is necessary to purchase your next home.

3. Either Way, You are Paying a Mortgage

As a recent paper from the Joint Center for Housing Studies at Harvard Universityexplains:

“Households must consume housing whether they own or rent. Not even accounting for more favorable tax treatment of owning, homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord plus a rate of return. That’s yet another reason owning often does—as Americans intuit—end up making more financial sense than renting.”

4. It’s Time to Move On with Your Life

The ‘cost’ of a home is determined by two major components: the price of the home and the current mortgage rate. It appears that both are on the rise.

But, what if they weren’t? Would you wait?

Look at the actual reason you are buying and decide whether it is worth waiting. Whether you want to have a great place for your children to grow up, you want your family to be safer, or you just want to have control over renovations, maybe it is time to buy.

If the right thing for you and your family is to purchase a home this year, buying sooner rather than later could lead to substantial savings.

If you're considering beginning the home-buying process, make sure you give me a call or visit my website for great listings in your area! www.mikecirillo.com

Original article taken from www.keepingcurrentmatters.com | Written by The KCM Crew

5 Kitchen and Bath Remodeling Trends That Will Last

To help you get ahead of and sort out the kitchen and bathroom trends — pity the last fool to install an avocado appliance in the 1970s — HouseLogic.com went to this month’s trend central, the International Builder’s Show. Our takeaway: For gosh sake, enjoy your home; remodel so that you love where you live.

Still, with a couple of exceptions, these five kitchen and bath trends offer lasting value:

1. Kitchen cleanliness.

By clean, we’re talking design, not germs. Kitchens are going clean, contemporary, and horizontal (open shelves, long and horizontal pulls, thick countertops). Even in a classic kitchen, go with simple, flat cabinets rather than highly carved cabinet details, says designer MaryJo Camp of Design Camp, Denver, N.C.

HL tip: This is a trend to get on board with. A simple, tidy, fresh appearance will have broad appeal if you decide to sell.

2. Color is out. 

This year, colors are cycling out, Camp says, except for black and white used together.

HL tip: Practically speaking, black and white are hard to keep looking good. Black kitchensshow every scratch and white cabinets show every speck of dirt.

Regardless, color is fickle; choose what’s best for your space.

3. Dark wood is where it’s at.

If you’ve had white cabinets, you know they show every speck of dirt, which can drive you crazy unless you have a cleaning fetish. Combine those white cabinets with another up-and-coming trend: dark wood. Or if your budget can handle the hit, go with specialty woods like mahogany or zebra wood that can make an island look like a piece of furniture.

HL tip: Alternatively, you could invest your money in more kitchen storage and functionality than trendy decorative elements that might not stand the test of time.

4. Appliances that blend in.

The more open our kitchens get, the more we want them to look like the rest of the house. That’s fueling a trend away from the big pro range and ginormous stainless-steel refrigerator and toward concealed, high-performance refrigerators and dishwashers. Induction cooktops, which use less electricity than electric cooktops, are growing in popularity, Camp said.

HL tip: When you buy appliances, look for the Energy Star label or go even deeper on energy performance ratings with Consortium of Energy Efficiency.

5. Ageless design gets easy.

What the Baby Boom wants, the Baby Boom gets. And Baby Boomers want to live in their homes forever. That’s led manufacturers to create DIY remodeling products with built-inuniversal design features — like toilet paper roll holders strong enough to hold your weight as you arise from the throne.

If you wanted a no-threshold shower five years ago, you had to have it fabricated as a custom piece, said Mary Jo Peterson, a Brookfield, Conn., designer. Today, companies sell no-threshold shower kits with trench-style drains covered with grills so you can roll yourself right in.

HL tip: We love the trend to universal design-ready remodeling products. To get started, check out our four universal design product ideas from anti-scald valves and door handles.
 
Which of these trends will your incorporate into your remodeling plans? Do you worry about staying ahead of trends? 

Original article written by Dona DeZube from HouseLogic.com | http://www.houselogic.com/blog/kitchens/kitchen-bath-remodeling-trends-last/

3 Philadelphia Real Estate Trends to Watch

From more apartment buildings to greater outdoor amenities, here are a few Philadelphia real estate trends to keep an eye out for in the coming months and years. The focus of some trends is on sustainability, so expect them to stick around.

When you think of a trend in real estate, you most likely think of passing styles or fads, like the demand for granite counters or hardwood flooring. But trends can also pertain to the structure and design of a home — and that’s where we’ve seen a few Philadelphia real estate trends cropping up lately. If you’re in the market for a new home, particularly a newly constructed home, odds are that you might see a few of these on offer.

More Multi-Family Homes

Philadelphia — particularly in the Center City area — is seeing an influx of multi-family homes, as well as apartment buildings. Many of these apartments will be in newly constructed buildings. There’s also a trend of unused buildings being converted into one- or two-bedroom apartments. For example, the site of the Wharton Street Lofts in South Philadelphia used to be the James Wilson School. While the builders could have removed all traces of the century-old school building’s former existence, they chose to preserve some features — some of the apartments even feature refined, built-in chalkboards. There’s a suggestion that some of the other unused school buildings can be converted to apartments in a similar way.

In Center City, there are more than 2,600 new apartment units in the works, thePhiladelphia Business Journal reports. Another 2,700 are in the planning stages, and more than 2,000 units have already completed construction. Although that might seem like a staggering amount of new apartment units, the Business Journal notes that the demand is there, according to Center City District research.

Outdoor Amenities

At the moment, green reigns supreme in Philly. Philadelphia magazine’s Property blog breaks down the trends from the American Society of Landscape Architects’ 2014 survey: Expect to see more garden space, more outdoor structures such as decks, and more sustainable and green design across town.

While the city government is working to improve access to green space for all residents, potential buyers can help fuel the demand by tracking down homes with more outdoor amenities. Current homeowners might think to add more outdoor features to their properties. 

Green Roofs

Speaking of sustainable design, one of the biggest Philadelphia real estate trends is the green roof, in which the typical roof coating is replaced with a layer of living greenery. Green roofs aren’t gardens. They’re meant to be passive installations that improve storm water drainage, but you don’t have to tend to them and you typically don’t expect to grow edible or decorative plants. Philadelphia has long been a leader in the green roof movement. In 2012, the city had installed over 200,000 green roofs and ranked fifth in Green Roofs for Healthy Cities’ list of top 20 metro regions in North America.

Green roofs are promoted by the Philadelphia Water Department and by PECO. PECO’s long been on the cutting edge when it comes to green roofs: Back in 2009, it installed a 45,000-square-foot green roof on top of its Center City headquarters. Green roofs are also showing up in the city’s newer residential buildings, including Awesometown in the Fishtown area and the Thin Flats in Northern Liberties.

These environmentally conscious initiatives are an example of Philadelphia real estate trends that not only make the city more appealing for new residents but, by focusing on sustainability, also make it a better place to live for the future.

Article written by Amy Freeman from Coldwell Banker Blue Matter

Is Rent to Own the Right Option For You?

Are the high home prices stopping you from owning a home? You can still be a proud owner if you consider rent to own. Before you get confused about this term, here is a brief explanation. Rent to own, also known as lease option, provides you a possibility to fulfill your dream of owning a home. In this option, the person initially leases the property and has the option of buying it at the end of the contract period. This option therefore allows home owner to save the down payment and get proper financing.

If you and the landlord actually have a good contract, it can be beneficial for both parties involved.

Why Should Prospective Homeowners Look at Rent to Own?

Prospective homeowners should not completely discard the option of rent to own without understanding it and analyzing its benefits. It can prove to be a hassle-free way to own a home especially for those who have just switched jobs. It is also beneficial for those people, who want to build their credit ratings or want some time to save up enough money to pay the down payment.

If you are a first-time homebuyer, this could just be the option that you are looking for. First time homebuyers are often shocked by the amount of down payment they have to make and the prices of homes. This puts them off.

Under the rent to own option, you can stay in the house for a fixed period of time and this allows you to check whether the house suits your needs and also whether the neighborhood is what you had envisaged. The rent that you pay usually covers the down payment for the house and it also helps build equity in the house, so that you enjoy better interest rates.

Understanding the Working of Rent to Own

As a prospective buyer, you cannot just walk up to the seller and request a lease option. This option is dependent on the prevailing real estate market conditions. If the market is soaring or even steady, you can forget about getting a rent to own option. On the other hand, if home property market is dipping, homeowners do not want their homes to sit and collect dirt. This is when they begin looking at different options to sell their homes and are more open to the lease option.

Typically, if you and the seller can reach an agreement, a contract will be drawn out. It all depends on how good your lawyer is if you want the contract to be more in your favor. Nonetheless, there are certain things that each lease option contract will cover. Some of them are as follows:

• You, the renter, have agreed to lease the house for a fixed time, which usually is anywhere from one year to three years.

• The renter has to pay something known as option fee, which is non-refundable. However, you can add it to the down payment. Usually, the option fee varies from 1 to 5 per cent of the purchase price.

• The renter pays higher rent for the property than what is prevailing in the market. The market rent amount is deducted from the rent you pay and the remaining portion is put into a fund that is used to make the down payment at a later stage.

• The purchase price is fixed and cannot be altered at a later stage by you or the seller.

• You, the renter, can purchase the house anytime before the lease contract expires.

Why are Sellers Open to Rent to Own?

Usually, a seller will only consider lease option if he or she is facing difficulties in disposing the property. It can also be beneficial for those homeowners, who have relocated to another city or country or those who have bought a new house before they could sell their previous house and thus, face the burden of paying two mortgages simultaneously.

Another reason why sellers tend to be partial to rent to own option is that they enjoy regular rent during the contract period. This increases their income.

As the contract locks the property price at the time of signing the contract, homeowners have peace of mind if they are worried about the price falling in the future. This keeps their investment intact and they can make a profit at the time of the sale.

Above all, they never have to worry about tenants thrashing up the property, as the tenants usually look after the property well and this substantially reduces maintenance and upkeep costs.

Rent to Own Option – The Risks

While there are benefits for both buyers and sellers, there also are certain risks that both parties should be prepared for.

• If either party infringes the terms of the rent – not paying the rent on time or not making necessary repairs – the agreement become null and void.

• Even at the end of the contract, the renter may not get approved for the mortgage and this is a missed opportunity for the seller to sell his property.

• The purchase price that the buyer views as bargain at the time of signing the contract may seem too high at the expiration of the contract, especially if property prices in the neighborhood fall.

• Rent to own contracts usually are drawn up to benefit sellers and that is why prospective buyers should get a good real estate attorney to check out the contract before signing on the dotted lines. This helps to protect the buyer.

• Even though the seller is going to sell the property a few years down the line, he still has to incur expenses for its upkeep, taxes and other expenses that landlords are expected to bear.

Summary

A rent to own option definitely can be a win-win situation for the seller and buyer. However, buyers should remember this is like any other property sale. So, they should get the property appraised and inspected by professionals. Furthermore, they should consult a financial institution to find out how they can get a mortgage at the expiration of the contract. This will ease your burden and ensure you have made the right choice.

A lease option ensures sellers are not saddled with an empty property that keeps depreciating in value. So, whether you are a buyer or seller, you should seriously give rent to own or lease option another look.

By Rebecca. From www.PropertyCluster.com