Top 3 Reasons to Delay Purchasing a Home

Posted by admin on Sep 4th, 2010 | 0 comments

So you have set aside enough funds for a down payment on a house and

closing costs? And you are curious to know if there is ever a time when you

shouldn¡¯t buy? Regardless of all the benefits of buying a home, it is still a major

and life changing purchase and a buyer should go forward with an cautiously

optimistic but informed attitude.

An important thing to honestly evaluate before you purchase is the average

appreciation rates of your local market and your own personal circumstances.

Historically, the average appreciation rate for real property has been roughly

6%; however, as the nation is huge your local market appreciation rates can

obviously vary. Your main objective should be to stay in your house long

enough so that you are not placed in a position where you will have to sell your

home at a loss. If you have to sell a home before it has appreciated enough to

cover the costs and commissions of selling, you could find yourself in a

serious, financial bind. This especially applies to those who buy a home with a

down payment of ten percent or less. In the market of the past five years,

many who purchased homes with zero down payments are finding themselves in

exactly that position, basically ¡°under¡± their loan.

Real estate commissions traditionally run around six percent of a home¡¯s sales

price. The seller¡¯s closing costs generally amounts to about one and a half

percent. Adding all the costs you would incur if you were forced to sell, you

can see how this can easily exceed the first year¡¯s appreciation of your home. If

you made a minimal down payment (from 3% – 5%), you could actually have to

come up with cash out of pocket to sell your home. In addition, if the value of

the houses in your neighborhood has dropped considerably, you may also find

yourself owing a deficiency judgment. A deficiency judgment is a judgment for

an amount not covered by the value of the security( in this case your house) put

up for a loan or installment payments. In general, with the final sale of the

house, the owner is still left with a balance owing on the original amount of the

loan and is liable by law to pay it. While this is the worst case scenario, it still is

prudent to know that such situations can occur and realistically evaluate how

you can avoid them.

The three occasions when it is much better to hold off on buying a home are the

following:

New to the Area

A very good to reason to delay buying a home is if you have just moved to an

unfamiliar area or region of the country. It makes sense to rent for a number of

months before deciding on exactly which neighborhood you desire and can

afford to live in. Often when people are too hasty to buy a home immediately,

they find that they might have made a better decision if they had waited awhile

and had become more familiar with the surrounding neighborhood and local

community. They would have additional leisure time to evaluate home values

and find the best bargain in the neighborhood they desired to live in.

Uncertain or Unstable Job Future

You could have just graduated from college or you are expecting a promotion

and a transfer. Or perhaps, your company has announced an impending

“restructuring¡± or ¡°downsizing¡±. If any of these apply to your situation, it might

be best to forego buying a home until your job and financial situation stabilizes.

It is much easier to dissolve a lease on an apartment or condo, than to try to sell

a home in a financially difficult or pressing situation.

Marital Problems

While not advertised on national real estate ads, real estate agents are often

participants in the real unfolding life drama of clients who have to sell their

houses due to foreclosure, divorce, and deaths in the family. One of the

saddest scenarios occurs when recent former clients undergo a divorce and are

forced to sell a recently purchased house. For whatever reason, many couples

in marital turmoil, are steeped in denial and often decide that buying a new

home may help resolve their difficulties. Perhaps it is inevitable that such

problems should then occur, but selling a home before it appreciates can create

an additional emotionally draining financial burden in an already difficult

situation.

While this certainly isn¡¯t meant to discourage the prospective buyer, it certainly

is intended to inform the buyer of the serious decision they are about to

undertake and to evaluate his or her circumstances honestly. Taking the time to

be forthright at the outset will assure a purchase they will be happy with in the

long run.

For more information visit www.nefcortez.com />

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Are Condominium Association Fees Worth the Purchase

Posted by admin on Sep 1st, 2010 | 0 comments

Purchasing a home is without a doubt the most exciting thing that can happen to anyone. It is the single largest purchase you will make in your life. Many people chose to purchase homes because they are tired of paying someone else’s mortgage by paying rent each month.

There are a lot of people who want to take the plunge and purchase a home but they are afraid of what it entails. They may feel like they are biting off more then they can chew. Along with the mortgage payments, there will be repair bills, on top of the monthly bills, upkeep on the home and property, and if you live in an area where there is inclement weather, there will be snow removal, and seasonal clean up. It is enough to scare anyone into staying a renter.

It does not have to be like that; many people choose to purchase a condominium as their first home to find out if it is really what they want. There are many benefits to purchasing a condo, the greatest being that you will not have to do any of the outside maintenance on the property.

When you purchase a condo, there will be a monthly fee to the condominium association. This fee is different from your mortgage; it is a fee that each community charges each condo owner.

You may think that the association fee is just an added charge that is not needed, however when you stop and think about what it covers, you may change your mind about the added expense.

Condo association fees cover every type of maintenance emergency that comes up. This can be very cost effective if a roof needs to be replaced. The owner does not incur any of the expense. This makes the association fees very reasonable.

The association fees also cover any snow removal and upkeep of the outside property, meaning that the owner does not have to shovel snow or rake leaves.

There are many benefits to purchasing a condo.

Starter home – condominiums make an excellent starter home. You are able to upgrade the inside to whatever you want, and when you make your payments on time, you are building your credit rating so when you are ready to sell, you will receive a better interest rate.

Amenities – They have great amenities, whether it is a pool, fitness center or both, you will spend countless hours with friends and family.

Parking – most properties offer off street parking, this is a great benefit if the area has limited or no parking at all.

Real Estate investing – Condos are an excellent real estate investment. Purchasing a condo and renovating it can turn a huge profit for investment companies.

Many regions of the United States offer excellent condo communities, however there are a few outstanding areas that are being sought after more and more. Morgantown West Virginia Real Estate Condos and Apartments is one of these communities. The incredible view and the diversity of the city make this community one of the most up and coming condo communities in the country today.

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Finding Rent to Own Homes

Posted by admin on Aug 29th, 2010 | 0 comments

Finding homes to rent are pretty easy.  And, of course, there is a huge selection of homes to buy right now.  However, finding homes that are rent to own can be very difficult.  We’ve gotten more questions about rent to own homes in the past 5 months than we have in the 5 years before that.  These are also sometimes called lease to purchase homes or lease with the option to purchase.  All of these names can be used interchangeably, since they are referring to the same kind of basic set up. 

In rent to own situations, the sellers are willing to lease the home for a certain amount of time.  When that rental time is up, the renter has the option to buy the home.  Usually the money spent on rent during that time is deducted from the purchase price of the home – a price which is usually negotiated when the rental time is up and market statistics are as up to date as possible.  But, if you’re interested in a lease to purchase, know that all of these factors are flexible and depend on the situation.  For example, in some cases the purchase price is negotiated well before the renter moves in.  So, no two cases will be exactly alike.

A lot of buyers look for rent to own homes in order to have time to get their credit in order.  Or, sometimes buyers find a home that they really like, but they’re simply not ready to buy yet.  So, renting with the option to purchase gives buyers a lot of flexibility and ensures that they will get the home they want if they decide to purchase it.  It’s similar to test driving a car.  But instead of trying it for a couple of days, you actually get to move your stuff in and stay for as many months as you can negotiate.  There are a lot of benefits for buyers in a rent to own situation.

For sellers, rent to owns can become sticky situations.  Because the renter/buyer has so much flexibility, the seller loses a lot of control in the process.  After all, there is no guarantee that the renter will buy the home after the specified time frame.  So, a seller may have taken his home off the market for nothing and may have lost other potential buyers (who are actually willing and able to buy real estate) in the mean time.  Depending on how the contract is written, the seller gets to keep all of the money from the rental period regardless of whether the renter buys.  Some sellers are willing to risk taking their home off the market for the chance of the sale, and they may view the money earned as income they would not have gotten if the home had sat vacant instead.  Sellers who are desperate and willing to try anything may want to consider listing their home as a rent to own – since some interest (even if it’s not serious interest) is better than no interest at all.

For buyers and sellers, finding a real estate agent who is willing to work with rent to own homes can be difficult.  So, if you’re considering a rent to own situation, be sure to tell your agent upfront.  If he or she is not able to work with you, find another agent who has experience with these transactions, since there are a lot of factors to take into consideration with rent to own properties.

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