Thinking of purchasing a home For Sale By Owner? Here is why you need a Reator on your side,

It is the buyer’s right to seek an agent, and it is in their best interest to do so.

For Sale by Owner

When a potential buyer sees a For Sale by Owner property he or she should contact their realtor before contacting the For Sale by Owner. And when the buyer makes an offer on the For Sale by Owner Property he or she needs representation on the sale. The buyer always needs representation for many reasons.

Home Inspections

Most buyers do not know to ask for home inspections, what they cost, or who to call to do one. If there is work to be done on an inspection report, a buyer should negotiate, and a REALTOR has skill and experience at this.

New Home Sites

New home site buyers need to hire a REALTOR to look out for their interests, too. Remember, the site agent is there to protect the builder’s interest and therefore everything will be geared towards what benefits the builder, not the buyer. When registering at a new home site, be sure to include your agent’s phone number, name, and company.

Dual Agency: The Listing Agency

When a REALTOR chooses to represent the seller AND the buyer, this is considered dual agency. A buyer’s rights are not emphasized in these circumstances. Bringing a REALTOR onto the buyer’s side equalizes the sale, and gives the buyer much needed experience and professional advice.

Earnest Money Deposit

When the buyer makes an offer on a For Sale by Owner – who makes the Earnest Money deposit? How does a buyer obtain the deposit back if the contract falls through? A REALTOR will place the money in an escrow account.

Buyer’s Broker Agreement

A buyer’s broker protects the buyer’s interest in the transaction. In Virginia, the seller pays the commission, so by law the listing agent and the selling agent have to protect the seller’s interest. So, if you select a buyer’s broker to work with you on the home purchase, you will be represented in the sale.

Cost Analysis

In order to prevent overpaying for a home, a REALTOR will do a cost analysis for a buyer, to determine if the home is priced correctly. This is the same kind of analysis an appraiser would do, using comparable sales which have closed in the last three months in the area.

Escalation Clauses

Escalation clauses are applicable in markets where there is very little inventory and it is a fast selling market. The escalation clause will give you a competitive edge in procuring the home that you want when multiple offers are presented on a property. An escalation clause is not a standard feature on contractual sales.

Home Owners Association

The buyer needs to know the time frame for the Home Owners Association (HOA) packet. A buyer may be caught in buying into an HOA with high hidden fees if the timeframe is missed when he or she can exercise their right to void the contract. This will vary from state to state.

Disclosures & Disclaimers

If there has been any structural damage to the home or adverse environmental problems with the home they must be disclosed. An example of this would be asbestos wrapped pipes. If not, then a disclaimer will accompany contract. Laws on disclosure/disclaimer vary from state to state.

Well and Septic

In rural areas, where well and septic are used instead of city water, they are applicable as conditions of the contract. There are time frames for these inspections also, which vary from state to state.

Termite and Moisture

Clean termite and moister letters vary from state to state and from the timeframe that needs to be adhered to in the contract. The majority of lenders require a clean termite and moister letter prior to closing. The REALTOR in your area would know these timelines.

Referrals

If you are moving into an unfamiliar geographic location, ask your real estate agent if he or she can refer you to an agent in the area you are moving to. A REALTOR obtained through referral will help in relocating and purchasing your new home.

Select an Agent Carefully

Each For Sale by Owner buyer needs to interview a REALTOR and select one who is comfortable approaching For Sale by Owners and working with them. Do not let For Sale by Owners or new home site agents dissuade you from using an agent. He or she may say that you will pay less for the home purchase. In reality, a REALTOR’s professional advice may save you from taking a property that could become a nightmare, or help uncover a hidden jewel. Remember, if you’re searching for a home you still need a realtor, to look out for your end of the sale. Get representation on your side.

Great Reasons to buy versus renting

The $8000 tax credit for first-time homebuyers was extended through April 30, 2010 and more people are included, including a $6500 tax credit offered to homebuyers who have lived in their current residence at least five years and who want to “trade up” (buy a new primary residence).

Appreciation

Although real estate moves in cycles, sometimes up, sometimes down, over the years, real estate has consistently appreciated. Many people view their home investment as a hedge against inflation. It is hard to see past the economy and home prices sometimes but hold on to the home long enough and it will pay appreciate in the long run. Just remember "Location, Location, Location"

Pride of Ownership

Pride of ownership is the number one reason why people yearn to own their home. It means you can paint the walls any color you desire, turn up the volume on your CD player, attach permanent fixtures and decorate your home according to your own taste. Home ownership gives you and your family a sense of stability and security. It's making an investment in your future.

Mortgage Interest Deductions

Home ownership is a superb tax shelter and our tax rates favor homeowners. As long as your mortgage balance is smaller than the price of your home, mortgage interest is fully deductible on your tax return. Interest is the largest component of your mortgage payment.

Property Tax Deductions

IRS Publication 530 contains tax information for first-time home buyers. Real estate property taxes paid for a first home and a vacation home are fully deductible for income tax purposes. We all love deductions!

Capital Gain Exclusion

As long as you have lived in your home for two of the past five years, you can exclude up to $250,000 for an individual or $500,000 for a married couple of profit from capital gains. You do not have to buy a replacement home or move up. There is no age restriction, and the "over-55" rule does not apply. You can exclude the above thresholds from taxes every 24 months, which means you could sell every two years and pocket your profit--subject to limitation--free from taxation.

Preferential Tax Treatment

If you receive more profit than the allowable exclusion upon sale of your home, that profit will be considered a capital asset as long as you owned your home for more than one year. Capital assets receive preferential tax treatment.

Morgage Reduction Builds Equity

Each month, part of your monthly payment is applied to the principal balance of your loan, which reduces your obligation. The way amortization works, the principal portion of your principal and interest payment increases slightly every month. It is lowest on your first payment and highest on your last payment. On average, each $100,000 of a mortgage will reduce in balance the first year by about $500 in principal, bringing that balance at the end of your first 12 months to $99,500.

Equity Loans

Consumers who carry credit card balances cannot deduct the interest paid, which can cost as much as 18% to 22%. Equity loan interest is often much less and it is deductible. For many home owners, it makes sense to pay off this kind of debt with a home equity loan. Consumers can borrow against a home's equity for a variety of reasons such as home improvement, college, medical or starting a new business. Some state laws restrict home equity loans.

Storage space: When you rent an apartment or condo, the only storage space you’re likely to have is whatever closet space is in the unit. Some apartments have supplemental storage, but you can’t count on it, and where it does exist, the storage conditions may be poor (a basement prone to flooding) and the security may be minimal (a wire cage with a padlock). When you own a house, not only is it probably going to be bigger than the place you were renting (600-square-foot apartments are a lot more common than 600-square-foot houses), automatically giving you more room for your stuff, but you can also put things in the attic, the garage, and the backyard. You can even buy a shed for your backyard to create additional storage space if you exhaust your other options.

Neighborhood quietness: As a homeowner, there are fewer people living on my entire block than there were in my former apartment building (which was also surrounded by other similarly high-density dwellings). Setting aside the obvious benefit of no longer sharing your walls, floors, or ceilings with neighbors when you own a house, with fewer people around, period, you generally get less noise. Of course, to accomplish this, you’ll have to buy a house in an area that is zoned only for single-family residential.

Pet options: Renting severely restricts your options for pet ownership. Either you can’t have one at all, it can only be a certain type, it has to be under a certain weight, you can only have one, you have to pay an extra deposit for it, or you have to pay a monthly “pet rent” for it. When you own a house, not only do you have near complete control of your property, you also have more space for animals to roam. The only restrictions on pet ownership you’ll face as a homeowner relate to city ordinances and your neighborhood norms (so if it’s your dream to raise chickens, do the research before you buy). And, unlike moving from one apartment to another, where finding a pet-friendly place is always a hassle, an owner-occupied house is almost always pet-friendly.

Control over repairs: When you live in someone else’s property, you’re at their mercy as to when repairs get completed. If this Friday is a bad day to have your toilet fixed because it’s your first vacation day in six months and you don’t want to wake up at 8:00 to deal with a plumber, your landlord probably doesn’t care. But if it’s your house, you can schedule the repair for a time that’s convenient for you. You also have the option of having someone else redo the repair if the first repairman botches the job, whereas in an apartment, your dishwasher will probably be spraying water all over your counter for as long as you live there if the building owner’s usual maintenance crew can’t fix it.

A short walk to the washing machine: Unless you live in a luxury apartment, doing laundry probably involves trudging your heavy laundry bag and detergent down at least one flight of stairs only to find out that all the washing machines are occupied. When you own a house, your washing machine will always be available — no more doing five loads of laundry at 9:00 on a Tuesday night. And no more hunting in the couch cushions for quarters or worrying about people stealing your clothes and having strangers see your underwear (unless you want them to, of course). You’ll also have the option of line-drying your clothes outdoors in the backyard, which is good for both the environment and your wallet. Many rental agreements prohibit fresh-air clothes drying, considering it to be “low-class” or “an eyesore.”

Fewer noise complaints from the neighbors: Need to assemble 10 bookcases from Ikea in a single afternoon? No problem. Do all the hammering in your house with the doors and windows closed and no one else is likely to hear it. But even if you do it outside, the neighbors probably won’t complain — after all, there are days when they need to make loud home improvements, too, and they’ll want you to return the favor of not minding their noise.

Not having to move: As long as you pay your taxes and your mortgage (and eminent domain doesn’t rear its ugly head), no one will ever tape a note to your door telling you that you have to move. What’s more, if your needs change, you won’t necessarily have to move when you own the place where you live. Instead, you can adapt it to suit you. You can add on another bedroom, screen in the patio, or turn the garage into a gym. There’s a certain sense of peace that comes with knowing you can lay your head in the same spot every night for as long as you want.

The freedom to choose: In an apartment, you might only have one option for extra television channels, and it’s probably cable. When you own a house, you’re limited only by the service providers that serve your area — not by restrictions on modifying the building. If you want to install a satellite dish or a special box on the exterior of your house, you probably can. Your phone service options might also improve in a house. For example, an apartment might necessitate a land line if you want the ability to buzz in friends and takeout delivery people from your fourth-floor abode, but in a house, you might be able to rely entirely on Internet-based phone service, which generally provides more calling options for less money.

Don’t underestimate the benefits of owning a house — they’re more than just financial. In fact, even when owning a house isn’t better for your bank account than renting, you may find that the emotional and lifestyle benefits are worth it.

Buyers overview

So, you may be interested in buying a home or property huh? I imagine you are a little nervous when you think about the process...or rather, what you don't know about the process. How about if I make it a little easier for you. Remember, just like in life, every situation is a little different so this is intended for an overview.

-So where to start...I will advise that you start the way I did when I purchased a home. The internet. This is the IT place and 90% of people start their search there. Why? Because you don't have to even leave your house to do it.

Realtor.com is a fantastic place to start...so is Re/Max.com by the way. Spend a few weeks looking through the listings paying special attention to features and prices in the areas you want to love in. You will be surprised at how much you know about the neighborhood homes when you start actual viewings.

-Open houses in your desired neighborhood is also a great way to see what is out there. Sunday is the most popular day for Realtors to hold them. Stop in even if you know you are not interested in the homes itself. You can see what is being offered for the money. Be prepared to sign in as a safety measure but also know that Realtors want you to sign in in hopes that you will choose them when you are ready to purchase. Expect a phone call if you leave a number.

-lets say you have found a few homes that you really really want to look at. Most people think this is the time to call the Realtor but Wait!!!

The better phone call would be to a loan officer. If you are serious then getting pre-approved is the best thing that you cal do at this point. Why? Well, lets say you call a Realtor...say me for instance. So you call me and say "Stephanie, I want to look at 1234 home St". I take you to see the home and you love it. You want to put an offer. You need to know that you can qualify for the loan first. Most offers to purchase can not even be submitted without a pre-approval letter included.
I don't want to waste your time, I don't want to waste my time, and I don't want you to fall in love with a home you can not afford to purchase. So call a loan officer. If you do not know who to call, you can ask your Realtor (if you have already called). We work closely with many great companies that we can refer you to.

-Called the loan officer and have the loan ball running? Great. Now you can call the Realtor. Ah but where to find one. Well, I found my first Realtor because her sign was in my neighbors front year. It turned out to be a good experience and she even got me started in this business.

The best advice I can give you is this. Work with someone you feel comfortable with. They will be involved with you financially and emotionally for several months. Check out the agent with all the signs in the neighborhood, go to the open houses and meet with them, chat with friend referrals.

• Some red flags when choosing an agent-a busy agent may mean someone with experience but it can also mean someone who may not be able to give you the time you need.
• Are they always late?
• Do they call you back and check in regularly?

If you ever come across an agent who says they know everything about Real Estate...Run. There is no way possible to know it all. Besides the fact that there is so much to learn that we are required to take continuing education classes, laws are constantly changed. A good agent is someone who can say "Ya know what, I am not sure but I will find out for you." and then does. I have access to some great agents in my office and I rely on them as they do me.

-Now that you have chosen and agent you like, it is time to sit down and talk about what you are looking for. This can also be done while viewing homes. You may be asked at this time to sign what is called a form called a Information About Brokerage Services. This form explains more about the duties of a broker to different parties in a Real Estate transaction. This really should be something you are given very early to sign.

-When you find the home you wish to purchase, Your agent should do a CMA (comparative market analysis) on the home to help determine a fair purchase price. You can certainly offer whatever you wish and your agent will be obliged present it but it is best to listen to your agent so that you do not overpay and end up spending more that you should have, or underpay and risk angering the sellers so that they no longer want to work with you. When you decide on your offer, you will submit an offer to purchase along with Earnest money (usually $500 or more) and possible option money. Earnest money is a way of showing the buyer that you are serious about your offer to purchase. The higher the amount the better and this money will be credited back to you when you close. However, if you do not close for certain reasons, that money may be given to the seller to recover losses. It depends on the situation.

Option money is like buying extra time to change your mind and is a good idea. Never buy a home without and inspection. The extra $100's you spend can save you thousands in the long run. This is the most common use of option money. You may spend $100 for an extra 7 to 10 days while you do inspections so that if a red flag comes up on the inspection, you can either back out of the contract (you will loose that $100 but keep the Earnest money) or re negotiate the contract taking repairs into consideration. If the option period passes with no issues, you will be credited the option money back at closing.

If all goes well, you will then be under contract to purchase your new home. At this point, your agent and loan officer will start working with a Title company to get all documents and get you closed. This can be expected to take anywhere from 30 days to as much as 60...sometimes longer depending on the circumstances. All you will really have to do at this point is wait and let the process happen. If you have chosen a good agent, he/she will be in constant contact with the title company and with you so every one is up to date.

Back to StephanieHamid.com

Tax Credits explained

The extension and expansion of the homebuyers tax credit that passed Congress allows more first-time buyers to qualify and now includes credit for existing homeowners who buy a new home.

First-time buyers who missed the November 30 deadline for the previous program do not have to worry now. They can qualify under the new one. Both credits expire next spring. Buyers must have a contract on a home before May 1, 2010 and they have until June 30, 2010 to close in order to qualify.

The first-buyer credit remains 10 percent of the cost of the home or $8ooo, whichever is less. A first-time home buyer cannot have owned a home during the past three years. The credit for existing homeowners is 10 percent of the value of the new home or $6500, whichever is less. Existing homeowners must have owned and lived in their current home five out of the last eight years. In both cases, only single family principal residences qualify. No second homes or investment properties.

Other changes include the income limits. The new legislation raises the income limits for those claiming the credit to $125,000 a year for individuals and $225,000 for couples, up from $75,000 and $150,000 in the previous first-time buyer credit. The cost of the new home cannot exceed $800,000.

If the home is sold within three years original purchase, the entire amount of credit is recaptured upon sale. Recapture provision is waived for military personnel relocating due to orders. Credit extended for one year after expiration date for any military personnel that is serving outside United States for at least 90 days in either 2009 or 2010.

For more information, and to see if you qualify for one of these tax credit, call your local Real Estate agent. And if you are in the Dallas area, feel free to e mail or call me with questions.

So how do you start a search for the perfect home anyway?

How do you now where to start? You know the old adage Location, Location, Location? That is your starting point.

More important than what city do you want to live in, is what community do you want to live in? Did you envision neighborhood cookouts and block parties, waving to the neighbors on a cool spring night, or watching your children ride bikes with their neighborhood friends? Or did you want an upbeat, 20 something, hip young neighborhood?

Once you have decided that, you start your search. Ideally, driving around and seeing the neighborhoods in person is the best way. Take time to chat with a few people in the perspective neighborhood. Find out about the Home Owners Association, local schools, and other things that only an insider would know. Take note of any homes for sale in the area that appeal to you.

When you have narrowed your search down to 3 or 4 neighborhoods, it is time to call a licensed Realtor...but be prepared, they will have questions for you. How many bedrooms and bathrooms, square footage, large year or small, Budget, time frame, pool, floor plan preferences.

Just a note, many times, what a buyer thinks they are looking for is not what they end up with. Sometimes, priorities have to be rearranged because of budgets, or they simply find what they thought they wanted is just not important. Go into any viewing with an open mind.

Also, be sure to pay attention to the home, not the furnishings. Many times buyers see rooms as small or dark but do not take into consideration the easy changes that can be made. HGTV has many shows dedicated to helping sellers stage their homes for buyers. A little paint, some nice pieces of furniture, and a few pictures on the wall make all the difference. But it is still the same house and these are easy changes a buyer can make too.

Lastly, have fun!

Great tips for selling your house

In the last post I talked about tips for buying a home. Now I would like to focus on what you can do if you are on the other end of the deal.

1. Start by hiring a qualified agent. Make sure you are comfortable with working with the agent. You will be spending a lot of time together. Interview a few and listen to their proposals. How will they market your home to perspective buyers? How many open houses will they hold? Remember, the commission is not just money in their pockets. They have to split with the buyer's agent and their broker and also pay for all the marketing so if you are offered a lot commission rate, it could be at the expense of marketing.
   
2. A good agent will perform a walk through and make a list of items that may need to be repaired or updated to make your property more desirable. This might hurt a bit but remember, the agent is there to help you sell.
   
3. Price it to sell. What you want for your home and what the market shows it is worth may be 2 different things. One of the best ways to ensure your home is on the market long term is to overprice it in the first place. A good buyer's agent will do a CMA (comparative market analysis) for their clients and they may not be as willing to look at over priced properties.
4. Be flexible in the times that you can show your home. Keeping your home spotless may by one of the biggest pains in selling but having it ready to show at any time will ensure you can show it at any time. You never know when the right buyer will come.
   
5. Make sure you have great curb appeal. If they are turned off by the outside, you have already lost them.
6. Don't get offended by low ball offers. Instead, counter with a serious offer. You have nothing to lose after all.
7. Consider requiring potential buyers to be pre-qualified. This could save loads of headache and wasted time waiting.
   
8. Clean clean clean.
9. Remember, it will all be over soon.
   

10 Tips for buying a home

Buying a new home can be an exciting and scary time for anyone. These no nonsense tips can aid you in finding the right house for you...and keep you from pulling your hair out in the process!

1. Consider renting if you only intend to live in the home for a short time. Between loan closing costs and down payments, the initial cost for purchasing can be several thousand. If you intend to stay in the home for 2 years or less, it may not be worth it.
   
2. Make sure your credit is in the best shape it can be. A credit score of 600 or less will generally earn you a high interest rate. Sometimes, putting off buying a home for 6 months while you work on your credit is the best thing.
   
3. Don't buy more than you can really afford. Just because the bank says you are qualified for $250,000 does not mean you must spend that much. Remember, this is a multi year investment.
   
4. Consider your down payment. FHA allows you to put down anywhere from 3 to 3 1/2% whereas a conventional loan can be anywhere from 5 to 20%.
   
5. Think resale. Consider top selling points when you are looking. A great school district, large closets, or hardwood floors will always be desirable. Someday, you may be ready to move on and your buyers will look for these things.
   
6. Get professional help. Nowadays there are so many laws that apply to the buying and selling of a home that a professional, while costing some, will almost always pay off in the end. A Realtor or Lawyer can save money and headache when it comes to possible problems with any deal.
7. Get pre-approved. This step insures you know how much you qualify for so you know what price range to look at. It also shows sellers that you are serious. Offers coming from pre-qualified buyers hold more weight when there are multiple offers.
   
8. Hire a qualified home inspector and make your offer subject to his findings. This is well worth the $300 to $400 you will spend to avoid costly repairs in the near future.
9. Ask the sellers to pay your closing costs. This can save you a lot up front. Though not all sellers will agree to this, some do. And it never hurts to ask.
10. Love the house you are in and try to enjoy the process. Having a great Realtor to work with will help.