Monday, July 14, 2008

What not to do as a First Time Home Buyer

Purchasing a home can be overwhelming for the first time buyer. There are legal, financial, and even emotional issues that a first time buyer needs to be able to handle efficiently prior to purchasing a new/2nd hand home. One first timer tip is to read a lot of literature on the experiences either good or bad that others have made when purchasing their homes. This would at least minimize the chances of being disappointed or finding yourself in a position wherein you’re stuck with a huge mortgage in the wrong house. Below are even more tips you can note before purchasing your home for the first time:

Do not jump the gun – For a lot of people, planning to buy a home is exciting at the very least. Once people make that decision to actually purchase one, they also make the mistake of surfing the web 24/7 to snatch that great home deal; thinking that they would not get something better at a later point in time. This rush in purchasing a home, causes first time buyers to get stuck with a contract to purchase/build a house they don’t really like. Remember, if you purchase a contract to buy a house, you cannot simply change your mind and be simultaneously released from the contract.

Over-buying – For some first time home buyers, purchasing a house that is too big or too heavy financially to maintain is a mainstay mistake. There are situations in which the cost of maintaining the big house causes too much financial stress for the family. Make sure you know your financial limits because not everyone can live the life of a real-estate hungry celebrity. Leave yourself some room to breathe. Purchase a smaller house which you can maintain and put good furniture.

Not comparing mortgage rates – Be sure to explore ALL options before taking a mortgage. Rates, terms, lender, etc. are just some of the variables you have to take into account prior to taking a mortgage. Do not be dazzled by the “lowest” rates a mortgage broker gives you initially. This industry is so competitive that you can easily get a lower rate just by looking for the next mortgage broker. Take your time with this one.

Tuesday, July 1, 2008

Viva La’ Revolution! Investing in Green Real Estate

The Green revolution has arrived, and it wants you! In todays modern construction world, many builders are investing in Green construction and finding a whole new Market of eager buyers, and the cost depends on just how green you want to get. As for how much it costs, and how much it saves, well, that just depends on who you asks. The exact cost of going green is still being debated; most estimates come in at around 10% above traditional construction practices. Others feel the extra cost’s are offset by the money saved through energy efficient construction and reduced waste.

There are also loan programs designed for consumers through Fannie Mae that offer incentives to build green. Fannie Mae is the congressionally chartered private company that works with lenders to back mortgages for low, and moderate income Americans; they are the prime mover of Green mortgages throught their EEM program. To qualify for the program, homeowners must either buy a new energy efficient home, or commit to upgrading an existing building as recommended by an inspector certified through the Home Energy Rating System (HERS). While HERS inspections cost as much as $400, the projected savings from energy efficiency are considered part of the borrowers income, and can help them qualify for larger mortgages.

What is GREEN?

In building a house or office building, a great many materials and products will be used. Even in the greenest of projects it is likely that many products will be used that are not themselves green, but they are used in a manner that helps reduce the overall environmental impacts of the building. Take recycled plastic lumber, for example: it’s made from recycled waste, it’s highly durable, and it can preclude the need for pesticide treatments. Straw particleboard products are made from agricultural waste materials, and they are free from formaldehyde off-gassing.

Products Made with Salvaged, Recycled, or Agricultural Waste Content

The materials used to construct a building (and where those materials came from) are key to determining the greenness of a project. In certain situations, from a life-cycle perspective, recycling has downsides. For example, energy consumption or pollution may be a concern with some collection programs or recycling processes. Pre-consumer recycling refers to the use of industrial by-products, as distinguished from material that has been in consumer use. Iron-ore slag used to make mineral wool insulation, fly ash used to make concrete, and PVC scrap from pipe manufacture used to make shingles are examples of post-industrial recycled materials.

A number of products are derived from agricultural waste products. Most of these are made from straw, the stems left after harvesting cereal grains. Citrus oil, a waste product from orange and lemon juice extraction is also used in some green products. Aside from salvaged or recycled content, there are a number of other ways that products can contribute to the conservation of natural resources. These include products that serve a function using less material than the standard solution, products that are especially durable and therefore won’t need replacement as often, products made from FSC-certified wood, and products made from rapidly renewable resources.

Some of these products may not be distinctly green on their own but have resource efficiency benefits that they make it possible. For example, drywall clips allow the elimination of corner studs, engineered stair stringers reduce lumber waste, pier foundation systems minimize concrete use, and concrete pigments can turn concrete slabs into attractive finished floors, eliminating the need for conventional finish flooring. Certified wood products Third-party forest certification, based on standards developed by the Forest Stewardship Council (FSC), is the best way to ensure that wood products come from well-managed forests. Wood products must go through a chain-of-custody certification process to carry an FSC stamp.

A few manufactured wood products, including engineered lumber and particleboard or MDF, can be included if they have other environmental advantages, such as absence of formaldehyde binders. Rapidly renewable materials are distinguished from wood by the shorter harvest rotation—typically 10 years or less. They are biodegradable, often (but not always) low in VOC (Volatile Organic Compound) emissions, and generally produced from agricultural crops.

Products That Avoid Toxic or Other Emissions

Many of the adhesives on the market contain a high content of chlorinated solvents. These solvents smell bad, are unhealthy to breath, and create air pollution. Some building products are considered green because they have low manufacturing impacts, because they are alternatives to conventional products made from chemicals considered problematic, or because they facilitate a reduction in polluting emissions from building maintenance. Most of the products satisfying this criterion are in categories that are dominated by the more harmful products, such as foam insulation categories in which most products contain HCFCs.

Certain materials and products are green because they prevent the generation or introduction of pollutants (especially biological contaminants) into occupied space. Duct mastic, for example, can block the entry of mold-laden air or insulation fibers into a duct system. Track-off systems for entryways help to remove pollutants from the shoes of people entering. Coated duct board, compared with standard rigid fiberglass duct board prevents fiber shedding and helps control mold growth. Many of the conventional products used for repair and improvement projects around the house contain high levels of toxins. However, such chemicals can have many adverse affects on the health of you and your family. Children are particularly vulnerable to environmental toxins, thus it’s important to surround them with items made of non-toxic, natural, organic materials.

Although we can’t very well tear our homes down and rebuild them to be Green, there are many uncomplicated low cost changes we can make such as:

Solar Attic Fans, which are a simple and environmentally sensible solution that can save you money! Powered completely by free solar energy, with no electrical wiring, no expensive electrician and city permits. Place them wherever you need improved circulation; attics, lofts, workshops, storage sheds, garages, even barns.

Tunnel Sun Lights are a complete roof-to-ceiling skylight system that channels sunlight around attic obstructions to bring sunlight to hard-to-reach areas of your home.

Water Aerators help reduce the huge quantity of water which is wasted on a daily basis in the average home. For example, a normal sink’s faucet flow is 3 to 5 gallons of water per minute. There are other frequently ignored wastes as well, such as the fact that the average American uses over 100 rolls of toilet paper each year! Installing an after market bidet will reduce this consumption.

Fiberglass insulation contains glass fibers and some varieties are treated with formaldehyde. Cellulose insulation is an effective and safe alternative; it is made from recycled newspapers and some pre-consumer waste. Even when it comes to flooring there are many alternatives to synthetic flooring such as natural cork for a number of reasons, such as: 1) Its sustainable 2) Its beautiful3) Its lasting4) Its quiet5) Its helps allergy sufferers. Also, hardly any other product combines such extremely high comfort with natural properties.

LEED®

The U.S Building Council has created a ranking system for scoring the greenness of a project known as LEED®. It is the nationally accepted benchmark for the design, construction and operation of high performance green buildings. It gives building owners and operators the tools they need to have an immediate and measurable impact on their buildings’ performance. It also promotes a whole-building approach to sustainability by recognizing performance in five key areas of human and environmental health: * Sustainable site development * Water savings* Energy efficiency* Materials selection * Indoor environmental quality.

Who Uses LEED®?

Architects, real estate professionals, facility managers, engineers, interior designers, landscape architects, construction managers, lenders and government officials all use LEED to help transform the built environment to sustainability. State and local governments across the country are adopting LEED for public-owned and public-funded buildings; there are LEED initiatives in federal agencies, including the Departments of Defense, Agriculture, Energy, and State; and LEED projects are in progress in 41 different countries, including Canada, Brazil, Mexico and India.

So as you can see, Green is here to stay, and in time it will likely become “The Way” to build homes and buildings. For many builders and realty investors, it will take time to adapt, and adopt the mindset of the revolution; but as with all revolutions, change is inevitable. So to those of you that are embracing the Green movement, I say, Viva La’ Revolution!

Anyone interested in learning more about building green can purchase a copy of GreenSpec, a builder’s guide to going green. GreenSpec Directory, Fourth Edition (Paperback) by Editors of Environmental Building News (Author)

Monday, May 12, 2008

Is now the time to buy?

Many people are out there trying to make a buck in the current market. The current state of our country is not the best in terms of the economy even though the government is trying to stimulate it. Foreclosures are a record high with more than 112 percent more foreclosed homes over the last year. That is a ghastly number. That is just they way it is now in our country. The cost of milk and gas are crazy as well. Are we crazy to buy these things hoping that enough complaining will make the prices go down? Unfortunately, someone has to make money on everything that we buy from the store or put into our car. Many people believe that we do not have a choice or say in the matter.

By no means is this story trying to enable conversations around politics or the economy. We all are hard working Americans and we work hard for what we get. How do we get a break in life? Well, there are many different ways to increase your income without breaking a sweat. There are also ways in which you have to work very hard to earn your wealth. If you look at it at a different angle, there are other opportunities in which you can make money at others expense. Unfortunately, that is just the way it is sometimes.

With foreclosures being as high as they are now in our country, many people are taking the opportunity to get property at cheap prices, making some changes and then re-selling it to make a sizable profit. It is a buyers market now, and if you can find the right property, you can make a bundle. There are many different real estate software programs out there that help you find those financially troubled properties and turn them into a gold mine.

Depending on if you are a self-motivated person or if you are working for a local property owning company, there are many real estate software programs out there that can help you in different ways. Some real estate software programs help you to get organized so you can go out in the field to search for the potential moneymaker.

For those working for a company, there are many different uses for the product. It can help you stay organized and keep all your prospective clients names and information handy. There is nothing as detrimental as forgetting about a client or not having their information. The real estate software can also help you simplify daily tasks such as managing contracts, tracking appointments, deadlines and to do lists. The biggest and most efficient thing you can do is have everything in one centralized location.

On the other side of the fence, you have those people that would like to do all the work on their own and not have to pay a company. There are programs out there that can help you calculate your risk for ownership of that property, help you determine the long-term profitability of your property, calculate the best time to sell the property and help you find potential buyers.

As you can see, there are many things that real estate software can do for you or your business. There are many different types of programs out there. You have to decide which one is best for your situation. Do some research and make the right decision based of what you need. With the current market, some people will make money off of another persons hardships. Sometimes that is just the way it is.

Source : Is Now The Right Time To Buy?

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Friday, May 9, 2008

Buying a home for the first time is very exciting!

You get to search for the house of your dreams and envision what it will look like and imagine having all the home features that you have wanted for a long time. And you should get excited! Searching for a place to finally call your own is a wonderful thing! But there are certain considerations that first-time homebuyers need to keep in mind as they're searching for their dream home.

While it's important to know what you want in your home, it's important to remember that you're probably not going to find a home with every single little thing that you have dreamed of and is in perfect condition. Be willing to overlook the small things, because nothing will be perfect.

Think about what you are looking for a home and what features are very important to you. Prioritize your list and decide on what you could live without.

Before even looking, you should get a copy of your credit report and make sure that there are no mistakes on it. If there are, get them corrected as soon as possible. Also review your finances and decide if you have enough to make a down payment and cover closing costs.

Another important thing to do before you even start looking is to talk to a mortgage company and get prequalified for a loan. This will be extremely useful when you do find a home that you love and want to make a firm commitment to the seller.

It's important to have a good support system, especially if you're using people who have bought homes before. Make sure to keep it to one or two people though. Anymore than that and you will become easily confused and not know who to believe.

Another important consideration is when you could move into your new home. Consider when your lease runs out and how easy it would be to find another rental. Also find out if your landlord would allow you to sublet your rental if you were to move into a house sooner than expected.

Think about what you need now by thinking about what you will need in the future. If you are only looking for a small home to get yourself started, you will have very different needs than if you are looking for something that you want to stay in for the next five to ten years. This could also affect your mortgage.

Make sure that you have enough money left at the end of the purchase to put money into your new home. Even if it doesn't need repairs immediately, it will at some point and you want to make sure you have the funds to cover it.

Protect yourself by getting a home inspection and if possible, a warranty for your first year in the home from the seller.

Don't go it alone, especially for the first time. Find a good Realtor who will work in the buyer's best interest. These Realtors can often have their commission drawn from the seller's commission payment.

Many first-time homeowners make the same mistakes so it's important to avoid them. Make sure you understand all your options for a mortgage so you can get the deal that will suit you most. Act decisively and increase your chances of getting the home you want. Make your offer as attractive as you can to the seller. Consider resale when you are looking at houses to buy.

For additional home buying tips, visit http://www.findhoustonhome.com/houston-homes.html

Paige Martin specializes in Houston Condos and is a member of the prestigious Martha Turner Properties' Circle of Excellence, an award given to honor the company's top producers. Paige is a member of the Houston Association of Realtors, Texas Association of Realtors, and the National Association of Realtors. Her website features over 500 pages of Houston real estate information and details on over 40,000 properties and all Houston Townhomes for sale as well, as free tips on how to quickly sell Houston homes. Paige Martin, Realtor, Martha Turner Properties.

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Investing in bankruptcies can be a big money maker for the real estate investor.

Investing in bankruptcies can result in a substantial income when you choose the right property. There are several laws that can change from area to area that govern bankruptcies. This means that there are risks involved to the investor, and being aware of these risks can help your investing tremendously.

A large risk that you face with bankruptcies is that the owner can come back and lay claim to their property. Some states even have laws stating the bankruptcies are not complete for a certain amount of time. You will have to determine if your region has this type of law protecting the homeowners when they file bankruptcy. If this is the case you may want to make sure the home is vacant before making an offer on the property. You do not want to put your money into something only to lose it when the homeowners get back on their feet.

When the owner defaults on the mortgage a bankruptcy order is then put in place. The bank will start the proceedings necessary to regain possession of the property. These bankruptcy properties are usually listed in the local paper under the sheriff's sale heading. The opening bid usually start at approximately two thirds of the appraised value of the home. The highest bidder is awarded the property. Investing in bankruptcies can greatly increase an investor's portfolio.

Having a plan of action when you are investing in bankruptcies is a crucial part. The first thing you must do is determine what your plans for the property are. Is it going to be a rental property or do you plan to flip the house? Determining what you want to do with your properties beforehand is important so that you know what area to look in, and how you can make a profit from your new property.

Choosing the bankruptcies carefully is a high priority. You do not want to find bankruptcies which will be depreciating, instead look for high growth potential that will increase in value. Just because the price seems to be right does not mean the property is the one for you. Determine what the average selling time was of the houses which have been sold. This will give you a good indication as to what you can get for the property you are looking at.

When investing in bankruptcies you should always look at the bottom line. If you can not make a 10% or greater return on the investment then it is not a good property to purchase. You must know your market. Looking at past sales in the area is key. Determining whether the area is growing or declining is an important factor in the bankruptcy. Knowing how long each house that sold stayed on the market is also significant. You may find bankruptcies which have been on the market for six months or more, this is a good indication that it is probably a bad investment. With all the other investors out there, if one of them did not want it, you probably do not want it either.

Once you become more familiar with investing in bankruptcies you will learn what to buy and what to avoid. You will understand which areas are good investments and which ones are not worth your time. You will also be able to understand more of the real estate market and the lending red tape. This will help when you are investing in bankruptcies.

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Wednesday, May 7, 2008

Tax Benefits of Owning Your First Home.

Owning a home has many benefits, especially in the world of taxes. From points, to interest, to real estate tax breaks, the government finds a multitude of ways to make owning a home an advantage during tax time.

Property Tax Advantage

Property taxes, otherwise known as real estate taxes, are fully deductible.

Mortgage advantage

The most notable tax break is that all mortgage interest, up to a maximum of $1 million dollars, can be deducted on your taxes. If you are married taxpayers filing jointly, make that $500,000.

Interest Advantage

Your total home equity debt is limited to the smaller of $100,000 (or $50,000 for each member of a married couple if they file separately), or the total of your home's fair market value, less certain other outstanding debts against it.

Point Advantage

You can fully deduct points associated with a home purchase mortgage. A point equals 1% of the loan principal. One to three points are common on home loans, which in the end, turns out to be thousands of dollars. Refinanced mortgage points are also deductible, provided they are amortized over the life of the loan. Homeowners who refinance can write off the balance of the old points and start to pay off the new.

Home Equity Advantage

If you take out a loan to make considerable home improvements, you can deduct the interest on this loan. There is no dollar limit on this deduction; nonetheless, the work must improve the value of your home, such as a new driveway, an extra room or a pool, and not simply be minor cosmetic improvements, such as painting, fixing broken windows or wallpapering.

There are also many tax advantages after the initial purchase of your home, such as using a room for a home business, capital gains, selling, capital improvements, moving costs, and other home owning tax advantages. Consult a professional to educate yourself further and learn in-depth about your specific tax situation. If you own your home, there are many tax advantages that can be afforded to you.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

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