April, 2009

Home buying is a solid investment, and building equity is often better than throwing money into a rent check. But it’s important to remember that there are maintenance costs associated with owning a home, as well as the cost of buying furniture and settling in.

How to be prepared:

1. Before you buy, look at the utility bills. Many times some, or all, of a rental property’s utility bill is included in the rent; some tenants pay their own gas or electric but not the water. Shirley recommends asking the home seller for a 12-month list of utility bills. Looking at a year’s worth of gas will not only help the buyer budget for monthly costs, it will help judge whether the heating or A/C is efficient or inefficient (and may need replacing).

2. If you’re looking for a bargain, look past curb appeal. A good REALTOR® will recommend that sellers clean up their front yard to make a good first impression. But not all sellers are willing to put the time into it, even though it may pull down the price their home sells for. If you’re willing to do some yard work, you may find a gem of a home hidden behind an overgrown lawn.

3. When making an offer, consider a home warranty. In today’s market, you may be able to ask the sellers to cover the cost of the warranty. But even if you can’t, Shirley recommends this investment to help prevent a devastating, unexpected cost down the road.

4. Before closing, watch that credit card! You’ve got a house to fill with furniture, but watch that credit card bill. Your underwriter will not be happy to see sudden alterations in your credit card before closing. Hold off until after the papers are signed, or just wait for the major purchases until you can pay cash.

5. When you move in, design by the hour. It may seem like an extravagance , but working with a designer who works by the hour will make your home feel like home much faster. If you don’t know a good one, a REALTOR® can most likely recommend a designer with whom he or she has a good relationship. In one hour, you can get plenty of solid advice on using your furniture, buying new furniture, and decorating — your home will look as good for you as it looked when it was staged to sell.

The Department of Housing and Urban Development maintains a Web site at www.hud.gov/buying/ which is a great resource.

There, you can find:

• home finance resources,
• a mortgage glossary,
• a list of approved lenders, and
• list of “Nine Steps to Buying a Home.”

The site is both a great primer for first-time homebuyers and a refresher course for seasoned veterans. Whatever category you fall in, you know that the research is important, but the fun part is looking at actual homes.

Of course, a REALTOR® can help your home search by sending you listings, but it’s fun to look for yourself, as well! A great place to start is an internet search — looking online will let you take a survey of available inventory to help narrow down your preferences, and cover a lot of ground very quickly. It will also let you compare geographic features, such as your potential commute or local schools, and get a good idea for what you can expect in your price range.

There are a lot of sites which provide home listings, but Gil’s favorite is REALTOR.com. Like most home search sites, at REALTOR.com you search primarily by zip code. You can also narrow down your search by price range, and by the minimum number of bedrooms and bathrooms.

The listings are displayed with high-definition pictures, neighborhood maps, and contact information for the agent representing the property. But the really cool feature of this site? The listing also offers you an automatic estimate of a monthly payment for the home.

Of course, you may pay less than the asking price, so here’s an insiders’ tip: Always search a little bit outside of your price range. If your ceiling, is, say, $400,000, search up to $450,000 homes. You can count on a REALTOR® to help you negotiate down to the price you can afford.

If you’re not ready to buy, you still may find REALTOR.com to be a valuable resource. Besides listing over four million homes for sale nationwide, the site has moving and decorating tips, home maintenance advice, and even a widget to help you figure out what your home is worth.

If you’re on the hunt, make sure to check it out. But remember, while looking at pictures on the internet is great, there’s nothing like the experience of walking through the front door with a REALTOR® and falling in love with your dream home!

There’s a couple of ways to break into the real estate profession:

First, most of the big brokers in your area will have classes. Give them a call and find the best class around.

A second way is to talk to a REALTOR® you’ve worked with in the past. They can give you advice on getting started, and may even give you a tip on whether their company is willing to hire someone new to the business. There’s nothing like the personal approach.

Either way, you can expect to attend real estate salesperson classes roughly 3 hours a night, 3 times a week, for a few months. It depends on the jurisdiction, and different states have different class requirements.

Remember, you’ll have to pay for those classes, as well as your course books, and it could cost several hundred dollars.

Once you’ve passed your course exam, you’ll have to find a broker to hire you. Many brokers have major in-house training and mentoring programs, but expect that at least some brokers will turn you down, as a new agent. Some companies simply want experienced agents who can start making money immediately. You’ll find your place, though.

You should take your state exam after you’ve found a place to hire you. In many states, this is actually a requirement. Once you have your license, you get to work. You can always find more resources through the National Association of Realtors at REALTOR.org.

Existing home sales fell slightly in March. But, as Lawrence says, there’s always volatility in the market month to month. The past 5-6 months have been consistent in showing a little up and a little down. The important thing is, over time, activity does seem to be stabilizing.

The $8,000 tax credit hasn’t kicked in yet. It’s really important to remember this. For one thing, the deals that show up in the March numbers were made before the stimulus bill kicked in. It’s possible that many prospective buyers were waiting for the stimulus package before buying a home, looking for a bump in that credit. It’s still too soon to tell, but Lawrence suggests that we’ll see more traffic — due to that tax credit — in the coming months.

The worst may be over in California, Arizona, and Nevada. During the bubble years, these were some of the markets that most overshot. So in the last two bust years, of course, they’ve overshot the fall, too. Lawrence thinks that the worst in those markets is probably over, as buyers are looking for bargains boost sales, and more offers are also starting to boost prices.

The Opportunity of a Lifetime
Lawrence points out that the extremely low interest rates, low prices, high inventory and the $8000 tax credit all add up to the best buying conditions in the past 60 years. If you pass this opportunity by, he says conditions like this might not come around again…for another 60 years!