Buying a home

Do your upstairs neighbors stomp on your ceiling? Do the meatballs they're cooking next door fill your apartment with the smell of searing meat? Perhaps you long to sit quietly in your own backyard after a long day. Buying a home is a big step, but maybe you're closer than you think.

For the vast majority of us, owning a home is part of the American Dream. According to a study conducted by the NATIONAL ASSOCIATION OF REALTORS, 87 percent of those polled cited owning a home as the number one criterion for defining "the good life."

Owners and renters alike considered homeownership desirable for the following reasons: the pride of ownership, their dislike of paying rent, and the ability to change features of their homes to match their individual tastes and needs.

Like Mom and apple pie, owning your own home provides a sense of security and well-being that's hard to beat. Home is where we raise our families, have friends over for summer barbecues, paint the baby's room pink or blue, and find refuge from the outside world.

In addition to these intrinsic benefits, owning a home offers other advantages as well. For instance, as a homeowner, you have control over your environment. Not only can you change your home to meet your needs, but you also aren't subject to the terms of a lease or a landlord. As a homeowner, you can experience the emotional and financial security that comes from knowing what your housing expenses will be from year-to-year. Unlike rents, which can increase annually, most mortgages have fixed or capped monthly payments. So, as a homeowner, you can have a much better idea of what proportion of your paycheck goes toward your home. Think of it as the ultimate savings plan--it sure beats a passbook.

Bottom-Line Benefits

And it only gets better. Homeownership is the primary component in the creation of wealth for many Americans. (Data from Harvard University's Joint Center of Housing Studies illustrate not only that the median net wealth of homeowners is 34 times greater than that of renters, but also that over half of that wealth is generated from home equity.) As you pay down your loan amount each month, you accumulate equity, a growing ownership interest in your property. If you need funds, you can borrow against this equity in the form of a home equity loan. Further, interest on a portion of home equity is tax deductible.

Remember, most homes appreciate in value over time and can be a source of income for you, especially if you've lived in your house for many years. When you retire, you can sell your home if you need the funds or make use of a home equity conversion mortgage. This type of mortgage allows you to continue to live in your home and receive a monthly check at the same time. In essence you are able to tap into the accumulated home equity and receive a monthly sum which reflects the amount of that equity and the number of years you wish to receive that payment. In return for providing you with the payments, the lender receives an ownership interest in the home. These mortgages sometimes are called reverse annuity mortgages. Ask your lender about them.

Finally, don't forget about the significant tax advantages of owning your home. Interest on a home mortgage and property taxes are deductible. For most of us, mortgage interest provides the largest tax deduction. Also, a home is the single most important factor that determines whether you will be able to file a return which takes advantage of the wide range of allowable itemized deductions.

Contact a REALTOR today to help in your search of the American Dream.


Selling Your Home

Selling your home is a big decision. You probably spent more than a couple years there, and your family will have created many memories and neighborhood friends. Maybe you expected to stay put but circumstances have changed, or maybe you always knew you'd move sooner or later. Either way, it's always a little unsettling to pack-up, pull up roots, allow potential buyers to scrutinize your home, and manage all the details of the transaction while still providing for your family financially and emotionally.

Is this the right time to sell my house?

There are several factors to consider when deciding whether to sell your home. There are times when you may need to sell, such as when your job location or lifestyle change, or you have serious money problems. You may have outgrown your current home or are now able to afford a better place and are ready to move up. When the economic forecast is good, you may want to sell and take advantage of the strong market. Additionally, if you have inherited a home, it wouldn't make sense to continue making payments if it will be empty.

What is the most important factor in deciding to sell?

Be certain! If you are not sure you want to sell, you won't but forth the required effort or negotiate in good faith. Beyond being a waste of time, in certain instances a buyer can force you to honor a signed contract even if you change your mind. Save yourself the trouble.

How do I determine the sales potential of my home?

The basic influencing factors include location, appearance of house and neighborhood, size, condition, view, percentage of owners to renters in your neighborhood (owners tend to have a pride in ownership), and crime rate.

What are the steps once I've decided to sell?

First, choose a REALTOR and ask for a comparative market analysis. This will help you determine a fair asking price--high enough so you get what your home is worth and realistic enough so you interest buyers. Secondly, look into the current mortgage interest rates. It will affect what potential buyers can afford, and what you can afford if you move up.

Also, consider the time of year. The most popular time of year for families to move is in the summer, when children are out of school and the holidays are a long way off. Early spring is usually the best time to list and receive the maximum exposure.

Fix up the overall appearance of your home, with an eye for the little, easy things like cobwebs in the corner. (See more below.)

How can I best work with my REALTOR?

Ask about and understand what marketing steps he or she will take and when they will occur. Define your expectations of the transaction and communicate them.

Disclose problems, keep your house in good condition and let the REALTOR take the lead with buyers.

Keep your house clean, the yard neat, and be ready at any time. Let your REALTOR show the house, but if you are at home during a showing, look neat and stay inconspicuous. You probably have less experience, may make buyers uncomfortable, and may want to avoid hearing any negative comments buyers may have. Finally, you must allow inspections, fix anything necessary, and show up at the closing.

What should I do to get my home ready for showing?

Start by taking a look from the street. This is the first impression potential buyers will get. Remember what you liked when you first saw the house. Have you improved on it or let anything go? Next, walk slowly through the interior. Eliminate odors, especially pet and smoke. Clean the windows and pull back the drapes to maximize light, bright rooms.

We've found a great house at a good price. Should we buy?

You have three basic options. You can wait until you sell your current home. With this option you risk losing the new home to another buyer, but you may find one later you like even more. Secondly, you may add a contingency clause to your offer, stating that you must sell your current house before closing on the new one. Third, if you are having trouble selling your current house, you may consider renting it out or refinancing it for cash to help you buy. The problems associated with this third option include finding and managing tenants, trying to sell the house with tenants, and closing costs and higher mortgage payments with a refinance.

What are the important factors when considering an offer?

Consider all of the following: price, terms, clauses, personal property requested, and the amount and who holds the earnest money.

What can I do to help get potential buyers financed?

You may offer to pay points, which will reduce the rate and interest on the loan. If the buyers have adequate income but are a little short on cash, you may pay the non-recurring closing costs at the settlement. Another option, which should never be taken without fully understanding the risks, is to hold a second mortgage for buyers who cannot qualify for the full amount.

Are there any special considerations when selling a condo?

The most obvious difference is the maintenance fees. You may want to remind buyers that maintenance fees can often work out to less money than single-family home maintenance costs because condo fees are shared by all owners.