Home Buying Tips you Haven’t Heard

The following are not your usual home buying tips. For example, almost everyone will tell you that you should buy a home, but the first tip below suggests an alternative.Consider Renting

This is all about time and place and your own situation. Are you going to be in one place for long? If you are likely to move within a few years, you may be better off renting. Transaction costs of buying and selling will likely eat up any equity gains you get. It may seem profitable to buy at $200,000 and sell at $220,000 two years later, but commissions, closing costs and loan costs can easily add up to $20,000, so where is the gain? Also, there is no guarantee that prices will rise, and if they don’t you suffer a real loss.

Also, it is a matter of the ratio between rental rates and the costs of buying, and what is likely to happen in the market. For example, suppose you are in a slow-growing stable area, and your total monthly cost to buy a home is going to be around $1,200. If rent is anywhere near that for the same size home, you should probably be buying a house.

On the other hand, let’s look at the example of Tucson, Arizona in late 2005. You could buy a small home for about $190,000, with mortgage, taxes and insurance running about $1,325 per month. But you could rent the same home for just $675 per month. Now add to this the fact that home prices had been rising at 20% or more per year for years, and 12% of all recent sales were to speculators, not owner-occupants (a sure sign of a market top).

In this case, it would have made more sense to rent. Had you bought there two years ago, you would have paid $650 per month extra to be a home owner, or $15,600 over these last two years. In addition, the house would probably be worth a little less now than when you bought it. Better to have banked that $15,600 and bought the home today.Other Home Buying Tips

Compare ALL costs when you look at various homes. It is easy to consider just the price of a home, or what that means in terms of a mortgage payment. However, there are other costs. If the home is in a flood zone, for example, insurance could be $200 per month higher than for other homes. Look at taxes, insurance, utility costs (big homes cost more to heat) and any other regular costs, so you can honestly compare houses according to what they will cost you monthly.

Go to online forums to learn about a new town. Many people like to talk about where they live. They get to do this in various online forums, which you can search for by entering the name of the town and “forum” into any search engine. Be aware that these are often places where locals complain about their town, but you can also find interesting and useful information, and ask questions.

If your real estate agent doesn’t represent you, don’t be loyal. If she is really a seller’s agent, she is obligated to pass on comment you make to the seller, like “I think we can go higher if they reject our first offer.” Even if she represents you, be sure she does it well. If you are shown three houses that have nothing to do with the criteria you laid out, show the agent the door. By all means stick with a good agent who really helps you, but otherwise you can also call the listing agent for each house you want to see.

Inspect the home yourself. You probably plan to have a home inspection done by a professional before you buy. But you should also visit the home a second time yourself, and do your own inspection. Bring a checklist and look over everything, even if this takes an hour or more. In this way you can tell the professional inspector what your concerns are, and be ready with questions for him.

There is another reason to do this inspection. It has to do with a concept called “time investment.” Sellers are more likely to accept an offer if they have invested more time and hope into a buyer. Negotiation secrets like this are a whole other area of home buying tips – one that you may want to learn about.

Will Real Estate Hold Up? Take a Look at Florida

Is it interesting how a huge financial bubble can be created? Is it something that just happens? Are there dark forces behind it? Who could have known? The basic facts are that a huge amount of credit was pumped through the Federal Reserve and re-circulated by agencies such as Fannie Mae and Freddie Mac. This has been going on since 1992 really, but it went into super acceleration by 2001. This money then was directed to certain locations that were considered highly desirable. These locations included much of Florida, California around Los Angeles and San Francisco, and the Virginia and Maryland suburbs of Washington DC.

In Florida, markets that had the biggest increase in values in this period include Panama City, the Gulf Coast around Cape Coral, and Sarasota. Now these areas are getting the biggest drops in value, of from 10 to 20 percent. Certain condominiums in St. Petersburg were never built, despite deposits being made already. Construction jobs in neighboring Tampa are down by several thousands.

The good news is that the message has gotten to Fed Chairman Ben Bernacke that if you want a soft landing to the bubble, you have to keep interest down. There may be some side effects to that, like a collapsing dollar if interest rates go too low. This is why the ideas of the Franklin Roosevelt era of directing credit to needed areas at low percentages, and otherwise letting interest rates go as high as they want, make sense. Otherwise, even better areas like Miami-Dade County could start to go down in value. If you’re looking for a home that’s a good thing, but there are also other expenses being added to the equation. Hurricane insurance costs are up all over Florida after severe hurricanes over the last few years. The Gulf Coast could rapidly become a disaster area for investors. Some blogs say that the situation is not so bad. With so many real estate brokers giving mortgages to people who can’t afford them, something was bound to happen. The problem is not that the houses built or condos constructed are bad, though some are poorly done, but that the mortgage market was out of control. In the United States in general, we may soon get to the point that general government aid to homeowners with adjustable rate mortgages out of control, may be necessary. Till then, hold on to your hats, it could be a wild ride down.

Green Real Estate Education Is Important And Timely.

Our company works 24/7 to try to get sub-contractors, agents and mortgage professionals to understand how important they are in the energy and climate issues we all face. The built structure contributes to adding such unhealthy levels of Co2 and other gasses into the atmosphere. Knowing that existing homes and building need to drastically change is a monumental task. Being invited to teach at the GO GREEN EXPO in Philadelphia is such an honor and we teach those that are in these structures everyday, that suggesting proper upgrades and renovations to property owners is a responsibility they have. As I sit here and watch snow falling in Maryland and along the east coast, I can’t help but feel capturing this moisture and storing it for those days we have little precipitation, offers such a viable solution to drought areas. Just put a cistern and silo in many areas and it is done- When Atlanta just received snow, they could have stored and used this moisture. They are one of the most extreme examples of drought problems in our country.

So I beg all continue to work hard. The energy sector represents new jobs FOR THOSE WHO ARE LOSING THE ONES THEY HAD. Jobs for those who can manufacture, install and sell and market these systems, for rainwater, recycling efforts and the labor needed to build windmills, plant crops that produce energy and so on. It is almost as if we have the new “gold rush” in front of us. We just need to shift our perspective to understand the possibilities. Installing solar has such benefits and yes, will take new skills. Most all involved in the new “green revolution” will confirm education is needed. We are writing courses around the clock for all of this. But offering education for $200-$500 and more will cancel out 90% of our population to get this much needed information. We are doing this for under $100 which is why we have educated 4,000 in just under 23 months. 

Why are so many under estimating the buyer today? Can the economists not see they are brighter and smarter than in the past? It isn’t the $1200 mortgage payment that stops them, it is the extra $ 800 in taxes and insurance, and then another $200 or more for home association fees? Wake up and get green! Consumers are smarter today than ever before. They can get on the net and learn.  A home has to produce better and more lasting results for lower utility bills in the near future and must be better for our living environment. A property must not only meet our needs, but more and more consumers are demanding that they exceed those needs. DO you want a $400 utility bill or one that is $150? Using renewable energy to power our homes as they do in other countries will be necessary to kick start the real estate market. 

We used to move every 5 to 7 years. But todays consumers want to stay longer. The home they buy or rent must be healthier too. Do you want a home that is off gassing unhealthy fumes to your family while they sleep and watch TV?

Similarly, to keep employees happy and coming back, our workplaces must offer more. Our lifestyles are changing, and this is reflected in our ideas of home purchase, or when corporations decide to move their offices or build branch visibility.

Today we know that green built structures document higher productivity and lower absenteeism rates  because of  the healthier materials used. Many more people are beginning to accept the fact that first costs are not the only factor to consider when building or renovating. It is the life expectancy of the structure that is considered for green upgrade decisions.

I encourage everyone to join the new revolution. Begin to care about your own family and friends carbon footprint and make a difference for them and for your clients and customers. As consumers, begin to look at the long-term value of the renovations you invest in. In the long run, you will see a difference in the quality of your life and your bottom line.