Real Estate Property Listings and Home Buying Tips

Posted on January 9, 2010 by cherryrl776

Tips on Buying a Home

1. Check your Credit Report

Your credit report score may affect the interest rate you might get when applying for a mortgage depending on your credit worthiness.

Check your credit report scores annually from three credit bureaus to ensure it is accurate before applying for a mortgage.

2. Make a home checklist

Create a home checklist while doing a home shopping and touring. This will help you narrow down your research.

You will be able to compare homes and choose the best ideal home for you according to your preference.

3. Get pre-approved for a loan

You may seek advice from a lender or mortgage broker on how much you are qualified for a mortgage loan by having a full assessment.

Pre-approval is based on your debt, credit history and actual income.

4. Find a good location

Choosing a good location is one of the most important factors when buying a home.

An ideal house is accessible to commercial establishments, good school districts, market place, public amenities and transportation.

Having a good location is an advantage is you plan to resell your property after few years.

5. Search for good deals

If in case a mortgage is not an option for you, you can try to browse websites like fha-home-loans.com and check out some ads.

There are some sellers who offer a down payment for as low as 3 percent of the purchase price.
This is through Seller Financing.

6. Check the terms of your mortgage

Ask your lender of how your payments are allocated. Ask if you have the option to pay down the principal first before the interest rates.

In this way, you will be able to save on your interest rates.

7. Do your homework before bidding

Before you bid, do a survey on home sales trends. Check if the trend is going up or down.

Collect information of at least 3-4 similar houses sold recently in the neighborhood.

If homes have recently sold at 5 percent less than the asking price, make a bid 8 percent lower than your seller is asking.

8. Buy a home insurance policy

Most lenders require a homeowner’s insurance policy in place before approving you loan.

9. Create a contingency plans

Contingency plans should include you are obtaining a mortgage or qualifying for a financing while maintaining two mortgages, a Property Inspection within a reasonable period of time, and the right to cancel if home inspection shows excessive wear and tear problems beyond acceptable measures.

10. Hire a Home Inspector

Home Inspector will help you point out potential issues that could require costly repairs.

11. be present during home inspection

This will give you a clear idea on the overall condition of the house.

12. Do an online shopping for homes

To save time, you can browse the internet for Real Estate Property Listings. Shop different websites for Real Estate Property Listings.

You have an access to various real estate property listings online, information about the property, as well as the steps to take when buying a property. Some websites offer virtual tours.

Buying a Home

Real Estate is a good option to invest your hard earned money. Before entering into this major investment,

one should consider some factors such as the budget, the price of the property, the location, the quality and your home criteria.

The most costly investment one could afford is a home. Buying a home can be a hassle and a pain in the budget for some people. Buying a home entails careful planning.

Set your own home criteria on home appearance and features when buying a home.

Is your dream home an upper end type positioned on a spacious green lot surrounded by a fence and a gate? A luxurious home at the heart of the city? Or an elegant condo unit? Should there be a swimming pool or small space for gardening?

Consider your home appearance and feature criteria in a home so that shopping for homes is worth your time.

Check for Real Estate Property Listings online. It avoids the hassle of going to several different Real Estate firms. It saves you time, money and effort.

There is a wide selection of Real Estate Property Listings online.

Most websites having Real Estate Property Listings provide information about the house such as prices, location and location map.

Some listings have a photo of the house and there are information on the details on the process to go though when buying a property.

Find a good location. A good location can draw potential buyers in the future especially if you plan to resell the property after few years. A good location also adds value to your property.

The ideal location for a home is within the reach of commercial establishments, good school districts, market place, public amenities and transportation.

Also check the type of social environment and unemployment rates within the area.

Find out if the home location is disaster prone area. . If this is the case, you may pay more for the home insurance.

Create your own check list for homes that meet your criteria. This will help you narrow down your research.

It will also allow you to compare different features of each home.

Bring a notebook and a digital camera to record some important details on the house description, features, asking price and property tax.

Ask approval from the seller if you can take a picture or a video of the house before you go on a tour.

Benefits of Rental Property Investment

Real Estate is one of the most profitable types of investment. But there are also some disadvantages like the high cost, paying a long term mortgage and Real estate downturn.

During Real Estate downturn, many investors get discouraged investing in Real Estate. If it is down, it does not mean it will not bounce back up.

Here are some Reasons Why You should
Invest in Real Estate:

Passive Monthly Income

A rental property provides a steady stream of income for you each month.

You do not have to find a back breaking job or hire employees to run a business just to earn money.
Money comes in and continues to come even though you are sleeping.

If you have a five bedroom apartment and you collect $200 a month per room, it will sum up to $10,000 a month straight to your pocket.

Or if you have several residential properties, you can rent each property and receive a passive monthly income.

There are home owners who list some of their properties to a home rental website and they receive income each month.

The percentage return on rental property exceeded that of dividend from stock market in the average based on the past years.

Appreciation

The value of Real Estate Property increases yearly. It is one major reason why it is ideal to invest in Real Estate.

The annual increase in the value of your property means more money for you in the coming years. Especially, when you bought a property at a very good price.

If we are going to apply the 5 percent general rule for appreciation.
If a property was bought for $ 400,000, 5 percent appreciation value would be $ 20,000.

The appreciation rate varies significantly by area. If you plan to resell your property after few years, with any luck, you may profit from it too.

Depreciation

The value of most assets like office equipment depreciates over time and it can not be recouped.

With Real Estate in the United States, there is an advantage on depreciation.

For every lost value of your Real Estate Property, you are allowed to take an annual tax deduction. Even if Real estate Property appreciates, you still get a deduction for the lost value.

Security

You can liquidate your property during financial hardship by selling it with a profit. Some investors buy several properties and liquidate one of it when they find a nice deal for investment.

Advantage on Capital Gains Taxation

There is a tax in Real Estate Properties for the Capital Gains since the value of your property appreciates annually as you own it.

But the good thing about it is you will only pay the tax on capital gains once you sell your property. You can also extend the time of paying your tax once your property is sold.

Property Upgrade

Improvement of your property appearance, quality, style and functionality can increase its value significantly.

Be aware of the change in trends. A property upgrade retains your property value.

If you think Real Estate is a good investment for you, go invest now and reap all the rewards that are waiting to come your way.

Benefits of Owning a Home

Best Investment in Terms of Appreciation

When you buy equipment for your business, It can be considered as your asset. The price was high when you bought it.

But as you use it over years, it devaluates. If you resell it after few years, the value will be appraised also depending on the condition of the equipment. Chances are it can be sold at a lower price or worse, it can be rejected for a resale.

When it comes to Real Estate, It is different; the value of your home appreciates each year.

The average appreciation value a home is approximately 5 percent a year. The rate is not constant each year. It varies.

Some years will have the appreciation rate less than 5 percent and some years will have more than 5 percent.

As an example, if you purchased a home for a total price of $ 100,000 and you put down at least 20 percent down payment, that is equivalent to $ 20,000 capital.

Assuming you would pay the remaining amount of purchase price using a mortgage.

A $ 100,000 home would increase in value $ 5,000 during the first year at an annual appreciation rate of 5 percent.

$ 100,000 purchase price X .05 appreciation rate = $ 5,000.

$5,000 is 25 percent of $ 20,000 capital for your down payment. This means, you earned 25 percent annual return on investment.

Savings; Asset that can be Liquidated

Investing on a home is a good option to put in your hard earned money especially if you are poor at budgeting your finances.

The value of your property accrues each year due to appreciation. It offers much better returns compared to putting all your money in the bank.

Peace of Mind

If you have your own home to stay, you will have a peace of mind. You will never worry of paying for the rent each month

Or somebody will suddenly occupy the house and send you away. In renting a house, the landlord can send you away from the house anytime he wants especially if the property has been sold.

Stable Monthly Housing Costs

A stable monthly cost is one of the great benefits of owning a home. Even if you pay for your mortgage for 20 years or more,

The interest rate will be within a certain range for the life of the loan. Unlike in renting, as property value accrues

Each year, it can cause rents to increase.

Do you realize how much savings you can potentially make 20 years from now?

Income Tax Savings

Paying your mortgage to buy a property can be stressful due to high cost. Especially, during hard times.

To give a relief to house buyers, Real Estate investors especially to mortgage borrowers, Property taxes, as well as the interest that you pay in a given year can be subtracted from your gross income. This is another savings on your part.

More Comfort

Having your own home gives you comfort. It has more space compared to an apartment. You have a place for storage area, bigger rooms, place for your own garage, small space for gardening and more.

If a home is well- ventilated, you will f eel comfortable doing your everyday tasks.

More Freedom

You can do whatever you want in your home, especially, in terms of improvements.

You have the freedom to customize your home setting according to your preference. You will be able to improve it the way you want it to be. Unlike in renting, house modification is limited. You need to get the permission and approval from your landlord before you can make changes.

Tax Exemptions

If you resell your property after few years and you have resided for at least 2 years,

You may be exempted for $ 250, 000 taxes for single home owners.

For married home owners, tax exemption is $ 500,000.

Investing on Preforeclosure Properties

Preforeclosure Investment Properties are the types of properties in default phase of foreclosures. These are properties you buy from sellers who are behind in their payments and may lose their property to the bank via foreclosure.

Why Invest in Preforeclosure Properties?

Investing on Preforeclosure Properties allows you to take over the existing financing already in place. No need for you to worry qualifying yourself for a loan.

The most motivated sellers are sellers in preforeclosure because they want to get the bank off their back. Thus, it allows you to create a large equity spreads about 30 percent or more for properties in good condition. This means, you can profit from selling preforeclosure properties.

Lenders want to liquidate bad loans so it allows you to negotiate with the lenders to get a large discount for the property.

Financing your Dream Home

Owning a home is the dream of most people.

For some people, financing a home is a big pain one’s budget.

When it comes to home financing, generally, one has to shell out a pile of cash meeting at least 20 percent of the house purchase price as a down payment.

Assess your financial capability if you plan to buy a property. Set a budget of how much you can afford. If you have a lot of debt to settle, give room for the bills you pay each month.

Consider the budget you have and sources of funds. Get pre-approved for a mortgage to know how much money you can borrow.

By using the web calculator, you will be able to have a clear idea on the status of your budget and set proper expectation.

Real Estate Calculator

Devise a strategy. Determine how many percentage of your monthly income are you willing to allocate for your mortgage if approved.

Check your credit Report from three credit bureaus; Transunion, Experian and Equifax.

Checking of credit report should be done annually to avoid errors, to ensure your credit report is accurate.

And to have mistakes corrected if you spot any.

Each credit report bureaus has different information on your credit report so it is better to check all of it.

Credit report scores can significantly affect the interest rate you might get when applying for a mortgage.

This means, having a good credit standing has an advantage. You can possibly get the best interest rates.

One has a slim chance of getting the best interest rates for having a low credit score or worse, loan application can be rejected.

For credit reports showing issues in the past that are accurate, explain your side and give a valid reason to the loan officer if possible.

Collect information on available mortgage features and interest rates from lenders in your area.

Decide which features meet your needs. Try to negotiate for reasonable interest rates depending on your credit worthiness.

Having cash at hand can greatly help when buying a home.

By being aware of what you spend and by setting a proper budget for your finances wisely, you can earn money that you can use in buying a home.

Some lenders will require a down payment of at least 20 percent of the purchase price.

There is also a fee for the closing costs such as title search cost, appraisal fee, attorney fees, loan fees and inspection fees.

It can easily add up to $ 10,000 or more.

If you can put down more than 20 percent of the purchase price, there maybe chances of getting a larger loan.

For a mortgage loan, down payments which are less than 20 percent require a mortgage insurance that serves as a bank

Insurance protection in case you fail to make payments. Mortgage insurance cost is added to your mortgage payments per year. It is usually 0.5 percent of the total loan amount.

Browse some websites like fha-home-loans.com or check out some ads. Some sellers offer good deals on a seller financing.

Some sellers offer less than 10 – 15 percent down payment. And close the deal with seller financing.

There are public and private lenders who offer low interest on mortgage that require a down payment for as low as 3 percent.

Search for all possible options which will work best for you.

Sources of Funds:

Personal Savings

You can set up a special interest-bearing savings account wherein no withdrawals are allowed. Put a big chunk at least 10-15 percent of your earnings

Or depending how much you can afford. Also include your income tax return and bonuses you receive from your employer. Downsize your living expenses.

401 K

If you have this type of account with your employer, you can use your entire contribution to finance your house.

IRA (Individual Retirement Account)

Having this type of account allows you to withdraw up to $10,000 for home buyers.

Mortgage Options:

Seller Financing

If you can not be qualified for a loan, this maybe a good option for you.

Seller financing means that you can pay the seller over a period of time rather than borrowing money from a mortgage

And pay the seller a lump sum at once.

A better interest rate can be negotiated. Some sellers accept a down payment of 10 – 15 percent of the total house price

Depending on the deal. Some offer for as low as 3 percent down payment.

You may avoid administrative charges and mortgage insurance.

Pay down the Principal

The life of the mortgage loan shortens as you pay down the principal. Check the terms and conditions of your mortgage company. Especially regarding payment allocation.

Try to ask if it is possible for you to pay down the principal amount first before the interest rate.

The bigger the balance on the principal is, the higher your interest rate will be.

If you owe less on the principal amount, you will save more on interest.

Closing the deal

Once your house touring is done; you are also done with the checklist on each house and find the house you want, make a bid for the house you intend to buy.

Do your homework: Create a strategy yourself before negotiating with a seller’s agent or if you have your own real estate agent, have your agent negotiate.

Collect information of at least 3 -4 similar homes sold recently in the neighborhood including the home sales trend.

Check if the home trend is going up or down over the past years.

Calculate the difference between the original home list price and the final price of the home sold.

Weigh it up. If the average difference is 5 percent below the asking price, you can make an offer 8 percent below the asking price.

By doing so, there is a little room to negotiate for the price. Or if recent houses a year ago were selling at list for 3 percent below, try to offer a bid 8 percent below asking price.

Avoid offering a very low price for your bid as it may turn off the seller causing your bid to be rejected.

Make a contingency plans; an offer should provide for a contingency

For obtaining a mortgage or for qualifying for a financing while maintaining two mortgages.

For a property inspection within a reasonable period of time.

For the right to cancel if home inspection shows excessive wear and tear for beyond the limit of your budget for the repairs.

It is better to hire a home inspector if you think you can not manage home inspection yourself. For skilled Home inspector, Hire ASHI certified.

Most lenders require a homeowners insurance policy in place before approving your loan so consider of buying an insurance policy for your home.

Insurers are increasingly using credit information to price homeowners insurance policies so protect your credit report by maintaining on time payments.

An offer to purchase will be written by the seller’s agent once both parties (the seller and the buyer) both agree with the price.

Ensure that your contingency plans will be included on the contract or deal. Have your lawyer review it.

Be present during home inspection. This allows you to have a clear idea on the overall condition of the property – construction materials, plumbing, heating and wiring.

With the help of your home inspector, you will be able to gauge your budget for repairs.

If in case your inspector finds a major repairs like roofing or water leakage, seek the help from your lawyer to discuss it with the seller.

The seller can either deduct the cost of the repairs from the final price or let the seller fix it before you move in.

Once you receive the final statement from your lender that lists all charges you can expect to pay at closing, review it carefully.

The final statement is usually received before the actual closing.

Need Contracts and Forms?
If you are planning to rent or sell your home yourself, or are an investor in real estate, forms and contracts are an absolute necessity Click Here! and have access to a professionally created home sale contract and real estate forms.

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