Though it may not be the case in your locale, nationally one real estate trend is abundantly clear: It’s a buyer’s market.

Gone are the halcyon days for sellers who could once enjoy bidding wars over their house as they fielded multiple offers after just days of the house being on the market. Call it what you will, a “downturn” in the housing market, or simply a “correction.” Either way, now is not the best time to be a seller.

One way to help ensure your home sells in a buyers’ market is to make sure your house is priced appropriately. To do so, follow these simple steps:

Don’t over-price of the home to give yourself room to negotiate down. Back during the height of the real estate boom, sellers could routinely tack on additional 20 percent to the home’s price, hoping they could get the windfall, but also knowing they could negotiate down, if need be. But those days are long gone. Now, if potential buyers see what they view as an inflated housing price, they may go to the next listing without giving you the chance to negotiate a lower price.

Round the price down. Consider following a pricing tactic retailers have used for years. Rather than pricing a home at $400,000, consider selling it for $398,000. Not only does a $390,000 home sound a lot cheaper than a $400,000 home, more importantly, as buyers’ and real estate agents are increasingly turning to the internet, your house will be viewed by folks searching for homes between $300,000 and $399,999, but would be skipped if you listed you home at an even $400,000.

Research similar homes in your area. It has been said that “all politics is local,” and that’s also true of real estate. When looking to price your home, forget about what houses are going for nationally, or even across town. To get an idea of how much you should sell your house for, take a look at other comparable houses in your neighborhood have sold for. To find these, check the listings of your local newspaper or head to the internet, where you can search for comparable homes by imputing your zip code. Be careful to look at the price homes have actually sold at, not what the asking price was. Also, make sure you are looking at up-to-date information. In today’s changing real estate market, homes that sold for a certain price six months ago may be selling for a lower (or higher) price today. For the most accurate information, try limiting you search to comparable homes that have sold in the last three months.

By pricing your home wisely, you should have a much better shot of selling it, even in a buyer’s market.

By David Plowman

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In an ever-tightening real estate market, little things can mean the difference between selling your home quickly at its asking price or having it linger on the market for weeks before selling well below its original price.

Because of this, real estate agents are stressing the importance of curb appeal and improving the look of the home’s interior to be more appealing to potential buyers. While many sellers frequently complete this work on their own, others are turning to professional home stagers.

Professional home stagers may offer many advantages over do-it-yourself.

First, home stagers offer a sense of objectivity sellers may lack. When sellers look at their own house, their views may be filtered by their memories and not notice a something that may turn a potential buyer off. For example, sellers may look at closet wall and fondly remember how they tracked their youngest son’s growth by making a crayon mark on the wall every six months. However, a potential buyer could look at the same wall and see a dirty house, and wonder if there are any other problems hidden beneath the surface.

Second, most home buyers stay up-to-date on current design trends and have developed a keen eye for what looks sell—and what doesn’t. They understand that simple things like adding a colorful bouquet, removing a chair in a cramped room or rearranging pictures can quickly brighten a room and make it appealing to homebuyers.

Professional home stagers offer a variety of services, ranging from simply conducting an evaluation, to actually completing the staging process, while others may even bring in contemporary furniture to update the look of a home.

While costs for home staging vary depending on the services used and the sellers’ location, studies seem to indicate results justify the cost. A recent U.S. Housing and Urban Development report revealed that staged homes generally sell for 15-percent more than similar homes that are not staged, according to a fact sheet provided by homestagingresource.com.

By David Plowman

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When buying a house, you will undoubtedly need to take out a mortgage. As you look for one, you will quickly realize that getting a bank to loan you the money for the biggest investment you’ll ever make is no easy task. You quickly realize that are many mortgage pitfalls you need to steer clear of in order to get the best deal possible. To help you find the way, we’ve provided a few pointers:

• Know your credit history. Any lender you work with is going to check your credit history and your credit score, so you should do the same, long before you fill out a loan application. Errors can and do happen, so should be familiar with your history and correct any errors before potential lenders look at your history.
• Know if you eligible for homebuyer programs. Most areas will offer government-sponsored first-time homebuyer programs that may offer better loans rates than you’d find elsewhere. Some programs may also offer loan options for people with damaged credit.
• Get pre-approved for a loan. There is a big difference between “pre-qualified” and “pre-approved.” A pre-qualification is a general review of your income and debts, usually based solely on information you provide the mortgage company which gives you an idea of how much of a loan you could receive. The process to be pre-approved is more complex. You will generally have to provide proof of your income and debts (in the form of tax returns, pay stubs and credit information. The potential lender will also check your credit history. If you complete this process successfully, the lender will provide a written verification that they will actually loan you the money, pending appraisal, title report and purchase contract. In almost all cases, a seller would opt to sell to someone who is pre-approved for a loan as opposed to someone who is just pre-qualified.
• Borrow what you can afford to pay back. Just because you are approved for a loan, doesn’t mean you can afford the monthly payments. Don’t opt to get the maximum loan amount you can only find every cent you make has to go back into making your mortgage payments.
• Shop around for the best rate. Just as your would shop at different retailers for different rates for similar products, lenders may offer different rates for the same loan. Check with several companies to know you are getting the best deal. (Click here for more information on shopping for a loan.)
• Know what you are getting charged for. Lenders may add a litany of fees to their loan amount. When you shop for a loan, ask about any miscellaneous fees in addition to the interest rate and any points you may have to pay.
• Budget for closing costs. It is a reserve corollary of the adage “you need money to make money.” When it comes to getting a home loan, “you need to pay money to lend money.” The day you close on your home and sign the final loan papers can be a very expensive day. You may need to pay for attorney’s fees, taxes, prepaid homeowner’s insurance, the miscellaneous lender’s fees discussed above and points. Your lender should give you a solid estimate of all the closing fees involved, but you should start a savings fund for those fees well before then.
• Keep a savings reserve. With all of the home buying charges and the monthly payments, it might seem like you are hemorrhaging money. While that may be the case, you should also make sure you have some emergency reserves. You need to be prepared if the roof on your new home suddenly springs a leak or if the air conditioning goes on the fritz. If you are already tapped out by buying the home, e such an emergency could turn into disaster.

When looking for a home mortgage, being prepared could save you time and money.

By David Plowman

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If you are looking to buy a new house, one of the first things you will want to do is to determine how much a house you can afford. We’ve included a home affordability calculator here. in order to get an accurate estimate you will need to take a careful review of your finances and to calculate your income, expenses and outstanding debt.

Here’s a quick guide on how to make those calculations.

1. Calculate your income.
• Add up your monthly salary, and if applicable, your co-borrowers salary. If you or your co-borrower expects your incomes to change in the next few years, work that into the calculation. But be both realistic and conservative with these projections. For instance, if you are currently a paralegal about to pass the bar and become a full-fledged lawyer in a year, you should work the anticipated salary increase into your projections. But be careful not to over-estimate your salary projections. For instance, it is much better to project a $2,500 salary hike next year and actually receive a $5,000 raise than vice-versa.
• Include any income you expect to receive from investment dividends or interest payments.
2. Calculate your Debt.
• Track all of your monthly expenses. Include such things as rent (or mortgage payments if you are already a home owner), Utilities, car expenses, insurance, as well as any monthly child support payments.
• Also include your monthly payments on any outstanding debts you have, such as a student loan, car payment, credit cards or another form of personal debt. Of course, if you are close to paying off a debt, make sure you include that in your long-term projections. For example, if you are10 months away from making your last payment on your car loan, figure that the amount of that payment will be going to your mortgage after that period.

By taking a fair and honest assessment of your income and debts, you will be able to more effectively use a home affordability calculator, and will have a better estimate of what you can afford.

By David Plowman

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Whether mortgage rates are decreasing or on the rise, one thing will always remain constant, you will always want to get the best deal on your mortgage. After all, shaving a percentage point off your interest rate, paying fewer points or reducing your closing costs could add up to big savings over the course of your loan.

Before you begin shopping for a loan, you should estimate the total loan amount and the monthly payments you can afford. Begin by calling local banks and lending institutions, or by researching lenders on the internet. If you have a checking account at a bank or credit union, make sure to contact them, as they might give a deal to existing customers.

When looking for a mortgage, find out if you are dealing with a lender or a broker. (See story below for information about the difference between the two.)

But whether you are going through a broker or directly through a lender, understand that these companies operate competitively, so you should shop around for the best deal on the “product” you are buying (your loan) just as you shop for any major purchase. It is recommended that you call at least three lenders or brokers to get the best deal.

When you talk to them, remember that the loan with the lowest monthly payments may not be the best deal. That’s because lenders structure their loans differently, and some may have higher closing costs than others, while other loans may require a larger down payment than others.

Instead, you should ask each lender or broker the same questions about loan. Make sure to ask them:

• What is the minimum down payment?
• What is the length of the loan?
• What is the interest rate?
• What is the annual percentage rate (APR)? (This number, expressed as a yearly rate. It includes the interest rate, points, broker fees, and any other loan charges.)
• Are any points included in the loan?
• Are there any monthly private mortgage insurance premiums (MPI) included in the loan? If so, how long must you keep the insurance?
• What escrow payments are needed?
• What will the total estimated monthly payment be? (This should include the principal, interest, taxes, insurance costs, and any PMI costs.)

In addition to these loan costs which are generally part of your monthly loan payment, there are several other payments you may need to pay at the closing of your loan. Keep in mind that different lenders may have different names for these fees and may that they may have additional charges.

These fees include:

• Application or loan processing fee.
• Origination or loan processing fee.
• Lender fee or funding fee.
• Appraisal fee.
• Attorney fee.
• Document preparation fee.
• Broker fee.
• Credit report fee.

After you have found a loan program you are satisfied with, you may want to ask to see if the prices you were quoted can be “locked-in.” Doing so could protect you from having to pay increased fees if rates rise from when you were quoted the loan price. Some lenders may charge for this, but the fee may be refunded at the time of the loan’s closing.

By putting in some extra legwork when you shop for a home loan, you could save thousands of dollars.

By David Plowman

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For most of us, purchasing a home also involves getting a loan to cover the cost. With such a wide variety of loan programs available, it is important to shop around to make sure that you are getting the best loan program available.

As you do this, you’ll soon realize there are two ways of finding a home loan. You can deal with lenders directly, or you can go through a broker. There are critical differences between the two, and its important that you understand what those differences are,

A lender (for instance your bank or your credit union) will work with you directly to transact the loan. The loan representative may have several different loan programs for you to choose from, however, all of the loan options are managed by that particular lender.

On the other hand, a mortgage broker will arrange the loan between you and a lender. The potential advantage to this is that brokers work with several different lenders and therefore may have access to more mortgage programs than you would if you worked directly with a lender.

Once the broker receives your loan application, the broker is in contact with several different lenders, and will attempt to match your needs with a loan program from one of several lenders the broker works with.

Because of this, might be able to find you a cheaper loan than if you contacted lenders directly. Additionally, brokers may be particularly helpful if you have specialized loan needs. For example, if you have a poor credit history, your local lender may reject your application while brokers may be able to find a lender who will work with you.

If you decide to use a mortgage broker, it is important to remember that while the broker may not charge you directly for their services, you will probably still wind up flipping the bill. That’s because the broker charges the lender, who in turn adds the broker’s fee to the loan fees.

Keep in mind that since different brokers may work with different lenders, you can’t place just one call to a broker to ensure you are getting the best loan. Instead, you should contact several different brokers, just as you would if you were contacting different lenders.

Be aware that brokers may not advertise themselves as such, if you are not sure if you are dealing with a mortgage lender or a broker, be sure to ask them

Deciding on whether to get your home loan from a broker or directly lender depends on your individual needs. You should access certain factors such as your credit score, the type of loan you are looking for, and the specific loan programs they can offer you. But knowing the differences between the two and how each one works is an important first step in deciding whether to get a loan from a broker or a to go directly through the lender.

By David Plowman

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Your home is probably the biggest investment you’ve ever made, so if you decide to sell it, finding the right real estate agent is a decision you should carefully consider. After all, you will be working closely with them as they will be advising you on how to maximize you home’s selling price, how to present it for an open house, and maybe even suggest minor repairs and renovations to further enhance its value.

In order to find the best agent, consider taking the following steps:

• Ask your friends for referrals The old adage that word of mouth being the best form of advertising certainly holds true here. If one of your friends or co-workers had a good experience with a particular agent, you should take that information to heart.
• Invite the real estate agent to your home Not only will this give the agent to view the home he/she might be selling, but it will give you a chance to talk with the agent where you will be most comfortable.
• Be prepared Have an information sheet ready describing your homes best features and the points you think your prospective agent should highlight when selling the home.
• Ask about the agent’s background How many years experience does your prospective agent have? Does the agent have knowledge of the area? What’s the agent’s sales record? Ask if the agent can provide references.
• Ask about the agent’s selling strategy How will the agent market determine your homes asking price? How will the agent market your house?

You will have a very close working relationship with your sales agent, so its important that you find an agent you work well with. Changing agents after your house is already on the market can be a time consuming process, and one that could adversely affect the final asking price of your home. Protect the biggest investment you’ve made by carefully screening your real estate agent before you sell.

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It is an age old question, which is taking on new importance in today’s changing real estate market; is it better for you to buy your home or rent it?

Like many other decisions, there is no blanket answer, since the answer for the most part depends on your individual situation, your priories, values and goals. But thankfully there are several tools help you evaluate this question.

• Are you planning to live in your home for several years? Buying involves a large front-end cost in the form of a down-payment, closing costs and loan application fees. While there may be several long-term benefits to making that sort of investment, you are unlikely to re-coup these costs if you are going to be moving in a short period of time.
• Do you have some savings in the bank? In addition to the closing costs described above, owning a house can be expensive to maintain. If your plumbing goes out, the roof begins to leak or the paint deteriorates, you will no longer be able to simply call the apartment manager to fix the problem. You will either have to fix the problem yourself or hire a handyman. And both scenarios can be costly. If you have only budgeted enough money to pay for the down payment and closing costs, you may want to delay your home purchase until you have started a nest egg that will help you take care of whatever maintenance issues that will come up.
• Is your credit in good shape? If not, you may want to concentrate first on building up a favorable credit history, because a few dings on your credit report could translate into an expensive loan, or it could even hinder your ability to get one at all.

If you answered yes to many of these questions you may be well-suited to take on the challenges of homeownership. You will quickly learn that there are several benefits as well.

These include a chance to build equity in your home, increased tax benefits, and an appreciation value.

To illustrate this, Ginnie Mae, a government agency dedicated to providing financial assistance to low- to moderate-income homebuyers, compared the long-term financial outlook of someone who rented an apartment at $800 a month, and a homeowner who purchased a $100,000 house and is making $1,000 a month payments.

The renter typically saw a five-percent annual rent increase, meaning that in six years the rent exceeded the homeowner’s payment. In addition, the homeowner was able to receive valuable tax breaks the renter was not entitled to. These two factors combine to create a substantial savings over renting. For example, in Ginnie Mae’ model, the homeowner saved $2,664 in tax savings in the seventh year of homeownership.

In the end, deciding whether it is best for you to buy or to own your own home is a deeply personal decision, and requires a careful assessment of your economic and personal goals.

By David Plowman

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At at least one point in our lives, we’ve all done it. We stood in front of the mirror making sure we looked just right. Wearing our best dressed-to-impress outfit, we made sure our clothes were spotless, that every hair was in place and that no blemish was left uncovered. We’ve probably even stood there in front of the mirror before leaving for our big meeting—whether it was with a potential employer, an important business client or a hot date—and rehearsed our entrance. We practiced the first all-important handshake, pre-selected our best confident smile or carefully practiced our opening greeting.

That’s because we know first impressions count. How you present yourself in the first 30 seconds of meeting someone could impress them or distress them. We want to make sure we make our best first impression, put our best foot forward and exuded a “wow factor” from the first moment we entered the room.

But what first impression does your home make? As people approach your house, do they look at your yard and say “wow” or “eww”? Will their first impression of your home remind them of a page from Better Homes and Gardens or a punch line from a Jeff Foxworthy “You might be a redneck if…” joke?

The answer to these questions can be very important, especially if you are selling your home. A well-landscaped lawn could add a lot to the value of your home. More importantly, since an increasing number of house-hunters are getting their first impression of houses through pictures posted on-line, it could mean the difference between getting a showing or getting skipped over. If the first picture of your house a prospective buyer sees shows an overgrown lawn, they will be less likely to call for a showing.

In order to help enhance your home’s curb appeal and potentially add value to your home, reality experts recommend you take the following steps:

• Clean it up Invest in a few trash bags and remove of any litter or yard waste. This simple step is overlooked by many.
• Spruce it up Simple landscaping like adding edging to your yard, planting greenery around your house or even adding window boxes can make a big difference.
• Size it up Walk down the street and look at your yard objectively. If you were approaching it for the first time, what would your impression be? Does it look inviting? What is the focal point of the yard? Generally, all landscaping features should serve to point to the front door and make the entrance to the home feel warm and inviting.
• Paint it up Of course, no amount of landscaping can make your home look attractive if the exterior paint is peeling or if the colors have faded. A fresh coat of paint can give your home a dramatic new look

By spending just a little time and effort into your home’s yard, you can help ensure that potential buyers have a good first impression.

By David Plowman

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After years of record sales and high appreciation values, the real estate market appears to be slowing.

While many parts of the country escaped the full force of the real estate frenzy, many of the country’s hottest market’s including Miami, California, and Arizona saw explosive growth between 2000 and 2005, with prices soaring 55 percent to 100 percent over and above inflation. The only that seemed higher than the prices was the demand for new homes. In many locations throughout the nation, new home developments sold out in matters of days, some even before construction was completed.

Even as many statistics still seem to be pointing toward a boom market–nationwide sales figures remain high and as new home construction continues as at breakneck rate–there are many subtle signs that the real estate market is beginning to slow.

For instance, in Florida, the once overheated market has cooled considerably, with a 20 percent drop in sales in February of 2006 as compared to the same period in 2005. Sales in California have also seemed sluggish with a 15 percent drop for the same period. Anecdotal stories further suggest the days of the real estate boom are waning. Houses appear to be staying on the market longer, and advertising boasting “reduced rates” on houses and condos are slowly popping up again.

Experts disagree on whether today’s downturn will snowball into a bust market, or if real estate is simply stabilizing. “Our nation’s housing industry is managing a soft landing,” David Lereah, Chief Economist for the National Association of Realtors said on the organization’s website.

Other experts are a little more pessimistic, to a point. Mark Vitner, senior economist for Wachovia Corp told bizjoournal.com he predicts a 20 percent pullback in sales of new and existing homes in the next few years. But he is quick to caution he is not predicting an end-of-days bust that drags the nation’s financial future down with it. “The economy is strong and has been strong for the last several years. It’s hard for me to see an overall slowdown,” Vitner told the website.

But one thing’s for sure, the days of housing developments selling out overnight are gone. It is a buyer’s market,” Vitner concludes.

By David Plowman

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