Home Appraisal Library

Tips for Buying a Home in Foreclosure

2008-07-01T16:41:00.001-04:00

If you are looking for an investment home, you might be interested in picking up a home that is in foreclosure. While buying a home that is in foreclosure can certainly be a great way to make some extra money, there are a few things you should keep in mind before moving forward. In this way, you can ensure the process is as smooth as possible for everyone involved.

Know Your State Laws and Regulations

When it comes to foreclosure, the proceedings vary from state to state. Therefore, even if you have purchased a home in foreclosure in the past, that doesn’t mean the proceedings will be the same if you are considering a purchase in another state. Similarly, if you are looking for homes for sale by owner on an MLS listing, keep in mind that the proceedings may be different on a home in a different state from where you live.

In some states, it is possible for homeowners to stay in a home for up to a year while going through foreclosure. This is particularly true in states where the mortgage system is used. In those where trust deeds are used, on the other hand, the owner may have only about four months before he or she has to vacate the premises.

Understand the Period of Redemption

Don’t get too excited about a purchase until the sale is finalized. Nearly every state allows the homeowner to enjoy a period of redemption. This means the owner has the right to take care of the financial default, which includes paying all of the costs of the foreclosure as well as paying back the missed principal payments and back interest. If the homeowner manages to accomplish this within the state’s designated timeframe, he or she can regain control of the home. Although this doesn’t happen often, it is possible. In order to gain a better understanding of how this works in your state, it is best to consult with a real estate lawyer.

Make Certain You Can Handle the Emotional Stress

When considering investing in a foreclosure, many people fail to think about the fate of the homeowner. More than likely, however, you will come face to face with the homeowner and the family that is losing its home. This is particularly true when it comes to homes that are for sale by owner. For many people, meeting those people that are losing their home can be quite upsetting and uncomfortable. Therefore, be certain you are mentally and emotionally prepared for this situation before you get started in the purchase process.

Homes go into foreclosure for many reasons. In some cases, the homeowner may have been laid off, fired, or unable to work due to medical problems. Others may have buried themselves in a debt they were unable to repay while others may be going through major life changes, such as divorce or the death of a loved one. These situations can be quite heartbreaking and can make an investor feel guilty about the purchase. At the same time, you may be helping the homeowner get out from beneath a burden that he or she can no longer carry. In that case, it can be a win-win situation for everyone involved.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .

Online Real Estate Agents Gaining Access to MLS Listings

2008-06-19T16:28:00.001-04:00

The Justice Department and the National Association of Realtors has reached a tentative agreement that is quite meaningful to those looking to purchase or sell a home. Prior to the settlement, it was quite difficult for real estate brokers based on the Internet to gain access to home-listing information. Under the terms of the settlement, however, online agents will be able to access more information through the Internet. As a result, those looking to buy a home will also be able to access more information. Not only is this good for those interesting in purchasing a home, it also provides sellers with greater exposure. As a result, they can potentially sell their homes much faster.

Why All of the Controversy?

Online real estate agents and agents that operate offline have been at odds for quite some time now. The main reason for the adversity is the fact that online real estate agents are able to offer their services at a discounted rate. They also provide their customers with the convenience of browsing through listings on their own. In order to try to even the playing field, many online real estate agents were unable to access the 800 Multiple Listing Services that were affiliated with the National Association of Realtors.

Obviously, those real estate agents that are conducting their business offline are concerned about making MLS listings available to online agents. After all, it could significantly reduce their commissions and more buyers may choose to work through an online agent rather than one that conducts business offline.

Changes are Afoot

Obviously, restricting online real estate agents from accessing MLS listings hardly seems fair to those that conduct their business online. As such, government lawyers filed suit in the fall of 2005 against the Realtors group. The lawyers claimed that restricting access was discriminatory toward online real estate agents.

Although the suit was filed in 2005, it was only recently that the two groups reached a settlement. The settlement has now been filed in Chicago and has made the MLS database accessible to traditional real estate agents as well as those that operate online.

Providing Consumers with Options

In addition to ending discriminatory practices, opening up the MLS listings is beneficial to consumers as well. In fact, the Federal Trade Commission and the Justice Department both concluded last year that restricting MLS access was denying consumers the benefits of the Internet. In other words, consumers have long been saving cash on goods and services with the help of the Internet. Yet, the same was not necessarily true when it came to purchasing real estate. The agencies concluded that the main reason real estate buyers were not benefiting from the Internet was because online agents were denied access to MLS listings.

Whether or not the MLS listing fiasco is the real barrier to using the Internet for real estate purchases remains to be seen. Nonetheless, consumers will certainly benefit when competition is increased among real estate agents – whether they exist online or off.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .

How is Your Home’s Value Appraised?

2008-06-10T10:31:00.001-04:00

When it comes to appraising the value of your home, you might be surprised by the vast difference in value of your home when compared to one that is nearby. In fact, in some cases, the appraised value of homes located right across the street can be much higher or much lower than the appraised value of your home. Why is there such a discrepancy in these values? The answer is simple: market value.

Calculating Market Value

In order to determine a market value, appraisers must crunch a variety of different numbers. Obviously, it is impossible to determine the true 100% market value of a home because every house across the nation is not put up for sale each year. Therefore, appraisers have to piece together a variety of information in order to determine the value of your home. This includes looking at the average percent change in value for homes in the neighborhood, which is based on sales information that is available. This information is then used to help determine of a home’s value.

If there is no recent sales information available for the neighborhood, the appraiser may look at similar homes in different communities instead. By looking at homes of similar size and with similar amenities, an appraiser can get a good idea of the value of the home. Nonetheless, the differences in neighborhoods needs to be taken into account, as some neighborhoods are simply more desirable to potential buyers than others. For example, a home located on a golf course is certainly going to have higher appraised value than one that is not, if all other attributes are similar.

Considering Special Circumstances

Of course, there are special circumstances about homes that can make their actual value different from others in the same market. For instance, if your home is located in a part of the neighborhood that is near a highway, your value will likely go down because of the noise and distraction of the highway. On the other hand, a home that is located on a corner lot or near to a park may have a higher appraised value because of the added land or convenience it brings to the homeowner.

Determining the value of a home in a neighborhood where the houses are of varying sizes can also be difficult. In some areas, where each home is of similar in size age and attributes, finding comparable sold homes is easy and appraisals are generally quite accurate. In the neighborhoods where this is not the case, however, the value of one home can be much less or much more than the value of the home located next door.

In order to get an accurate appraisal, a variety of factors need to be taken into consideration. In addition, it is important to remember that an appraisal is not a guarantee of the amount of money you can expect to get for your home. Rather, it is a good starting point for you to use when determining how much you would like to receive when selling your home.
Appraising is an “art”, not a “science”. If you hire two different appraisers to value your home, you most likely will get two different values.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .

Making Money with a Fixer-Upper

2008-05-30T16:15:00.002-04:00

If you are looking for a way to make a little extra cash, you may be considering purchasing a “fixer upper” and then making some renovations before putting the home on the market. In the industry, purchasing a home with the intention of selling it shortly after is referred to as “flipping,” and, while flipping can certainly be profitable, there are many things you should take into consideration before you purchase a fixer-upper and start making some changes to it.

Consider the Location
No matter what you do to a home, you won’t be able to make a profit on it if you purchase a home in a bad location. In fact, fixing up the home may actually make it nicer than the other homes in the neighborhood, which will make it even harder to sell. After all, who wants to purchase a nice home that is surrounded by run down houses? So, before you invest in a fixer-upper, make certain the entire neighborhood isn’t also in need of fixing.

Watch the Expenses
Before you purchase a fixer upper, you need to determine the extent of the damages. If the home is in need of major repairs, you likely won’t be able to recoup the cost of the repairs. If the home just needs cosmetic repairs, such as a new paint job or new flooring, you may be able to invest very little for a great return. Therefore, you need to be certain to inspect the home thoroughly and to have a clear idea of how much it will cost to fix it up before you make a purchase.

Assess Your Skills
You also need to be honest with yourself about your level of skill. While painting the walls may not be a problem, you may run into problems when it comes to changing plumbing or installing cabinetry. If you cannot do it yourself, you will need to hire a professional to get the work done. This, of course, can be quite costly. Similarly, if you do the work yourself and you do it poorly, the renovations will do little to improve the value of the home. In fact, it could cause the value to depreciate further.

Think About the Customer
When making renovations to a home with the intent to sell, you always need to keep the potential buyer in mind. Therefore, while you may love the idea of converting a bedroom into an office, most homebuyers are looking for homes with plenty of bedroom space. If they decide to convert a room, they can do that later. In order to attract the largest group of buyers, however, you should focus on providing a living room area, a dining room, and as many bedrooms as possible.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .

Should You Invest in a Swimming Pool?

2008-05-19T15:35:00.001-04:00

When it comes to increasing the value of your home, you may think that adding a pool to your backyard is a good investment. After all, we all remember the kid in the neighborhood that had the swimming pool and opened it up for swimming parties throughout the summer. Still, while many people enjoy having a swimming pool, there are many that don’t want the hassles of pool ownership either. Therefore, adding a swimming pool to your property isn’t necessarily a good way to boost its resale value.

Reasons to Avoid Putting in a Pool

When it comes to selling your home, having a swimming pool can be more of a liability than a help. For parents with small children, for example, a swimming pool is looked as a potential danger rather than a joy. After all, it doesn’t take much for a curious child to wander over to a pool and fall in. Therefore, you can lose a significant part of the market when you have a pool on your property.

A pool will also reduce your available market because your home will simply be too expensive for them to buy. In order to recoup your expenses, you will ask a higher price for your home. As a result, certain potential buyers will not be able to pay the additional costs or won’t be willing to pay the higher price for a home with a pool. So, you will be faced with either having to drop your price or waiting longer to find a buyer that is willing and capable of buying your home.

When Having a Swimming Pool Can be a Plus

Although having a swimming pool can be a liability, there are certain situations during which it is advantageous to have a swimming pool. For example, if you live in a neighborhood where most of the homes have a pool, failure to have a pool can significantly bring down the value of your home. Therefore, it is important for you to consider your neighborhood when determining whether or not having a swimming pool is good investment.

If you live in a neighborhood that caters more to middle-aged buyers with teenage children, having a swimming pool will also be more of a draw. After all, by the time the kids are teens, safety concerns are not as great and teenagers love the idea of having a pool to enjoy with their friends.

When all is said and done, having a pool will certainly increase the overall value of your home. At the same time, it does not have a significant return on investment. In fact, most appraisers will deduct anywhere from 40 to 60% of what you paid to install the pool when determining the value of your home. Therefore, if you want to have a pool and you plan to stay in the home for years to come, go ahead and install one. If you are planning to move in the near future, on the other hand, don’t view a pool as a good investment.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of on-line home appraisals and offers a nationwide personalized instant informational report about home appraisal. For more information, please visit .
www.electronicappraiser.com .

How Does Your Backyard Affect the Value of Your Home?

2008-05-13T10:58:00.000-04:00

Have you ever thought about how the sunlight may affect the value of your home? Many people have heard that having a backyard that faces the south is a positive attribute when selling a home. While this may be true, whether or not a south-facing backyard is a benefit will largely depend upon the person looking at buying your home. In the end, however, it is unlikely that having a south-facing yard will add any value to your home.

The Benefits of Having a South-Facing Backyard

There are many potential benefits to having a south-facing backyard and, depending upon the person looking at buying your home, these benefits can really help with closing a sale. For example, having a south-facing backyard means that the home will receive plenty of sunlight. If the person is an avid gardener, having this extra sunlight is definitely a benefit. After all, most perennial flowers and vegetable plants need plenty of sunlight in order to thrive.

Having a south-facing backyard is also beneficial to those that suffer from seasonal depression. Although it won’t serve as a “cure all” for depression, the extra sun can go a long way toward helping a person with seasonal depression feel better in the winter months. In addition, the extra sunlight can help prevent moss from forming on the roof of the home. Not only is moss on the roof unattractive, it can be quite damaging as well. Therefore, this can definitely be a selling feature for the home.

The Down Side to Having a South-Facing Backyard

Although there are many benefits associated with having a south-facing backyard, there are downsides to this feature as well. Namely, if the home doesn’t have air conditioning, having a south-facing backyard means the house will likely get quite hot during the summer. If it does have an air conditioner, the cost of running the conditioner may be higher because of the extra heat.

Whether or not a south-facing backyard is an attribute really depends upon the person buying the house. In addition, there are likely to be other factors that will draw the attention of potential buyers more than the location of the backyard. For example, if there is a great view to the south, many homebuyers may prefer a home that faces in that direction instead. Similarly, if a potential buyer enjoys gardening, it may still be possible to successfully maintain a garden even if the backyard faces the north. For these reasons, an appraiser isn’t likely to value your home any higher than he or she would value a home on the other side of the street. On the other hand, if you happen to have a home that is on a corner, your home is likely to get appraised at a higher value because it offers more versatility.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of on-line home appraisals and offers a nationwide personalized instant informational report about home appraisal. For more information, please visit .
www.electronicappraiser.com .

Should You Renovate Your Kitchen Or Bathroom Before Putting Your Home on the Market?

2008-05-06T12:19:00.001-04:00

Many people think that renovating their kitchens and their bathrooms is the best way to add resale value to their homes. While these renovations can certainly help bulk up your home’s value, there are some things you should keep in mind before you start tearing out walls and cabinetry in either of these two rooms.

How Much Can I Get Back From a Renovation?

The amount of value you add to your home when you renovate your kitchen or bathroom will really depend on the status of the room before you got started and the types of renovations you made. For the most part, however, you can expect to get anywhere from 75 to 100% of the money you put into your renovation project back when you sell your home.

Although making these renovations won’t necessarily help you make more money than what you put in, they can help you sell make the home more attractive to buyers. As a result, you may be able to sell the home more quickly. In addition, if you do the work yourself, you may see a much greater return. Just be certain the work is of high-quality, or you may actually decrease the value of your home rather than bring its value up.

What Should I Consider Before Making a Renovation?

When making a renovation in your kitchen or bathroom, your goal should be to modernize the space without making it too personal in terms of taste. In other words, while you might like the thought of having bright red cabinets in your kitchen, many of your potential buyers may not like this color scheme. So, update your room without going over the top with colors and other design elements.

You should also consider the other home in your neighborhood before you start your renovations. If other homes in your neighborhood are mid-market houses and you add the highest-end finishes, you won’t get as much back on your return and you may actually have difficult selling your home. After all, most buyers don’t want to spend a great deal of money on a very nice home that is surrounded by less attractive houses. You should aim to keep the home on the same level as the surrounding homes in the neighborhood in order to get the greatest return.

Completing a bathroom or a kitchen renovation can certainly help to boost the value of your home, but plan out your renovations carefully in order to make certain every dollar you put into your home will come back to you in resale value. Ideally, your renovations should help you earn more than what you have put in, so talk with a real estate agent and ask for feedback and guidance before you start making your changes.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of on-line home appraisals and offers a nationwide personalized instant informational report about home appraisal. For more information, please visit .
www.electronicappraiser.com .

Estimating Your Home’s Value

2008-04-29T15:46:00.001-04:00

While the best way to get an estimate of your home’s value is to consult with a professional appraiser, it is possible to get a ballpark figure on your own. By coming up with your own estimate, you can better determine if you are ready to contact an appraiser and put your home on the market. In general, there are two things to consider when trying to estimate the value of your home: How does your home compare to similar homes in the area have recently sold for and how much do you adjust to compensate for superior or inferior features of your home.

Considering Comps

When trying to develop an estimated value of your home, you will first need to compare your home to other similar homes that have sold in the area. The homes you use for comparison purposes are referred to as “comps or comparables.” It is important to note that market activity can change dramatically in just a few months’ time. Therefore, it will do you little good to compare your home to a home that sold over a year ago if there are homes that have sold recently. Rather, you should only consider those homes that have sold in the last six months or less. In actuality, however, it is best to only look back at the past three months.

If your home is in a market that is not particularly active, it may be difficult to find comps in your area. Similarly, if your home has special features that are not regularly found in homes in your area, you may not be able to find a reasonable comp to use for comparison purposes. Significant international and national events, such as war and elections, can also cause sudden changes in housing prices.

Amenities and Other Considerations

In addition to comparing your home to other similar homes in your area, there are several other factors that need to be considered when estimating the value of your home. These include:

• Age of the home
• Amenities
• Location
• Size
• Condition

In general, you should compare your home to a home that is of similar age to your home. Homes of a similar age and location typically also have similar amenities. Of course, this isn’t always the case, as your home may include other special amenities such as a pool, a bonus room, a great view, or a particularly large garage.

Ideally, you should compare your home to other homes that are in the same area as yours. If there has been no recent activity in your area, however, you might need to compare your home to other homes in neighborhoods that are similar to yours. In order to find a neighborhood similar to yours, look for one with homes that were built around the same time as yours and that are of comparable size.

The size of your home is another important consideration. The total square footage of your home, the number of rooms in your home, and even the size of your garage will all have an impact on the value of your home.

Since so many factors are involved with determining the value of a home, it can be difficult for a homeowner to develop a precise estimate of its value. Therefore, in order to get a more accurate appraisal of your home, it is best to enlist in the services of a professional appraisal service, a local real estate agent and or a on-line valuation company.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of on-line home appraisals and offers a nationwide personalized instant informational report about home appraisal. For more information, please visit .
www.electronicappraiser.com .

Five Simple Steps to Homebuying

2008-04-16T11:27:00.002-04:00

Are you planning to buy a new home? If this is your first home purchase, understanding the ins and outs of purchasing a home can be a bit overwhelming and confusing. With these simple steps, however, the process can be much simpler and easier to understand.

Step 1: Hiring a Real Estate Agent

Depending upon the route you want to take to purchase a home, you might want to hire a real estate agent to help you with the purchase process. If you are interested in purchasing a home directly from the homeowner, however, hiring an agent may not be necessary. Still, you should hire someone to represent you when finalizing the deal. That way, you can be certain you are not signing something that you will regret later.

Step 2: Get Pre-Approved for a Mortgage

In order to expedite the buying process, it is helpful to get pre-approved for a loan. When you get pre-approved for a loan, you know exactly how much you can spend on your home and how much you can expect to be able to borrow. This will give you a better idea of which homes you should look at and will also help you seal the deal more quickly after you find the home of your dreams.

Step 3: Determine the Location that is Right for You

Now, it is time to actually start doing some house hunting. In order to narrow down your choices, decide upon the type of setting you would like for your new home. Do you want to live in a rural location? Perhaps you would like to live in the suburbs or in the city. Or, maybe you want a home on the beach or in the mountains. Do you want lots of land or is a small city lot sufficient? Remember to consider your current family situation as well as your future plans so you can make a wise decision.

Step 4: Decide Upon the Type of House You Want

Once you have determined the right location for your dream home, it is time to consider the style of house that you want. Do you want a simple ranch home or are you looking for one with multiple stories? Do you want a basement? Are you interested in a condo or would you prefer a log home? The better you formulate a vision of the home you want, the easier it will be to find the one that suits your taste and needs.

Step 5: Consider the Amenities

Although you will pay extra for certain amenities, it is certainly easier to find a home with the ones you want rather than trying to add them on later. Some popular amenities that you might want in your home include:

• Air conditioning
• Deck
• Eat in kitchen
• Extra bathrooms
• Fireplace
• Formal dining room
• Jacuzzi / Pool
• Patio
• Screened porch
• Three car garage
• Wooded lot
• Proximity to schools / Work
• Location

Remember, purchasing a home with these amenities will cost extra, so make certain you are willing to pay more for the amenities you desire.

Whether you hire a real estate agent to help you find a home or you decide to work directly with a homeowner, you will have a much better experience if you know what you are looking for in a home. This way, you can narrow down your choices and view only those that truly suit your needs.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit http://www.electronicappraiser.com/.

Increasing the Value of Your Home

2008-04-11T09:41:00.006-04:00

Are you considering selling your home? Before you get the value of your home appraised and put it on the market, you might want to consider making some changes to your home that will help to improve its value. You just might be surprised by how much your home value can be improved by a few simple changes.

Creating a Modern Kitchen

One of the best ways to increase the value of your home is to update your kitchen. Most of today’s buyers are looking for large kitchens that offer plenty of workspace. Solid surface counters are also a must in an updated kitchen, as are newer appliances that are in good working order. A kitchen that opens up to another room will also be well-received by potential buyers and you should place a window over your sink whenever possible.

Updating Your Bathroom

After the kitchen, the bathroom will generally have the greatest impact on the value of your home. Bathrooms containing a whirlpool tub or spa are big sellers. Other features that homebuyers look for include separate showers that contain multiple jets or steam and double sinks. A growing number of buyers are also looking for toilets in a separate room and master baths that are nice and roomy.

The physical appearance isn’t all that matters when it comes to the bathroom, however, as the plumbing is also important. Make certain your pipes are large enough to carry enough water and that your hot water heater is big enough to keep the water at a comfortable temperature. At the very minimum, you should have a 75 gallon hot water heater, though most homebuyers will prefer a 100 or 150 gallon heater.

Going Natural

Today’s homebuyers are also looking for homes that contain natural materials. Items such as hardwood floors, ceramic tile, and granite are all positive additions to a home. When it comes to bathrooms and kitchens, buyers are especially interested in avoiding linoleum and having flooring such as wood and ceramic tile. Laminate and wood floors are more popular than wall-to-wall covering in other rooms of the house.

Providing Plenty of Storage

The more storage space you can provide, the happier your potential buyers will be. An oversized garage and attic space are both great assets. Buyers are also looking for closet space to store their personal belongings. His and hers walk-in closets are particularly attractive in the master suite. Don’t look at your basement as your storage space, as homebuyers are more interested in finished basements rather than basements filled with clutter.

Making it Light and Airy

Homes with a light and airy feeling are particularly popular. Therefore, you might want to consider adding additional lighting and finding ways to let in more natural light. Find ways to open up your home in order to create an illusion of spaciousness. Knocking out the wall between your kitchen and your dining room, for example, can really open up your home and make it more appealing to potential buyers.

About the Author: Shannon Kietzman is a well known author and trusted resource. Shannon regularly writes for http://www.electronicappraiser.com/, which is a leading provider of home appraisals that offers a nationwide personalized instant informational report about house values. For more information, please visit www.electronicappraiser.com .

How to Choose the Real Estate Agent That is Right for You

2008-04-04T12:12:00.002-04:00

If you are planning to hire a real estate agent to help you with selling your home, it is important that you take the time to find someone that is well qualified and that will look out for your best interest. Therefore, there are several things you should keep in mind when searching for a real estate agent in order to guarantee the best results. These include:

• Checking credentials
• Finding out more about the real estate agent’s procedures
• Confirming who the agent will be representing
• Learning about fees

By evaluating all of these areas, you will have a better chance of hiring a real estate agent that will best suit your needs.

Checking Credentials

Ideally, you should hire someone that is a designated Realtor. Real estate agents are actually different from Realtors, as Realtors have to complete extra steps in order to achieve this designation. Realtors are also held to a higher standard than real estate agents because they have to adhere to the Code of Ethics as established by the National Association of Realtors.

In addition to dealing with someone that is a Realtor, you should also check to make certain the agent has an active license that is in good standing. It is also a good idea to find out the designations the agent holds. This way, you can make certain You can easily check on the Realtor’s license by checking with the governing agency in your state.

Finding Out More About the Real Estate Agent’s Procedures

Before you pick a Realtor, it is important to find someone that uses procedures you are comfortable with. For example, you might want to work with an agent that will put your home on the Multiple Listing Service (MLS) database or you may prefer one that will keep the sale more private. While most agents will be flexible and will work within the terms you prefer, others may have an established procedure that they are unwilling change. Make certain you and the agent are a good match before you sign a contract.

Confirming Who the Agent Will be Representing

There are two major types of real estate brokers to select from: buyer’s brokers and seller’s brokers. A buyer’s broker represents the best interest of the person buying the house while the seller’s broker represents the person selling the home. This is an important differentiation because the agent is bound to the person he or she represents, which means the agent does not have to maintain confidentiality for the other person in the sell. In other words, if you are dealing with an agent that represents the buyer and you tell the agent you would be willing to go as low as $130,000 on your price, the agent is obligated to share this information with the buyer. Make certain you are dealing with an agent that will be representing your best interests.

Learning About Fees

You also need to discuss fees upfront. You should have a clear understanding of how much you will have to pay the agent for his or her commission. You should also find out whether or not the agent is willing to reduce the commission amount if you are having trouble selling the home for the price you are trying to get.

In exchange for the fees you pay, the agent should clearly describe the services that will be provided. Don’t assume that services such as advertising your home are automatically part of the deal. After all, you don’t want to be caught by surprise by extra fees that pop up down the road.

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant information about house values. For more information, please visit www.electronicappraiser.com.

Saving for your First Home

2008-04-03T18:45:00.000-04:00

If you have done any research on home buying at all, you have probably learned that there are many costs associated with home buying in addition to the mortgage itself. Legal fees, property taxes, insurance, home appraisal fees, and closing costs can easily add up to thousands. The best scenario for financing a home is having a considerable down payment on hand. A down payment will reduce your monthly payment as well as the interest you will pay over the course of the loan, and a down payment of at least 20% will eliminate the need for private mortgage insurance.

There is no concrete rule dictating how much you should save for your down payment, though a good rule of thumb is to save as much as possible! Here we offer some suggestions to help you save up a sizeable down payment for your home purchase:

-Plan ahead. Once you decide you want to purchase a home, do not expect anything to happen overnight. It may take a year or two, or longer, to save up the funds you need to get started. Do not let a long timeframe discourage you. Everyone has to start somewhere.

-Downsize. If you are currently renting your home, you may consider downsizing to a less expensive home or even moving in with a willing family member while you save up. This arrangement will likely force you to give up some of the amenities and convenience to which you are accustomed, but it is a short term sacrifice to reach your longer term goal. Reduce your standard of living temporarily and sock away your savings into the home fund.

-Boost your income. Some people choose to take on a second job or do contract work on the side to increase their income while saving for a home. If you have the option, consider seeking out a means of bringing in additional income, then save every extra cent. Working extra may not be the most appealing idea, but it is important to maintain focus on your goal and remind yourself that every penny is propelling you closer to it.

-Lose some amenities. Reduce your cable package or get rid of it altogether. Analyze your cellular phone plan and look for any opportunities to cut it back. Wash your car yourself instead of taking it to a car wash. Rent movies instead of going to the theater. Purchase items in bulk at discount outlets. When you eliminate a cost, deposit that amount into your home savings account.

-Stick with it. Scrutinizing every expenditure for an extended period of time can feel exhausting. To save up a down payment for a home, you may need to accustom yourself to a lower standard of living temporarily. That is not to say that you have to deprive yourself of pleasure completely, but rather seek out cost cutbacks that still allow you to enjoy life. For example, if you love going out to dinner, give yourself limits for frequency and cost.

Saving up for your first home is about consistency and self control. When you feel your inspiration to save money is waning, check out homes in your area on the internet or in person to serve as a goal reminder to help keep you on track. Home sweet home will feel even sweeter when you know you truly earned it.

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

Why Get Pre-approved for a Mortgage?

2008-03-24T16:50:00.001-04:00

Imagine the scenario. Months into your grueling house search, you have finally found The One. The location is right and the home and property fulfill your wish list to a T. You have already unpacked your boxes and stretched out on your expansive deck…in your imagination. The only thing standing between you and your dream home is the paperwork. And you’ve already pre-qualified for a mortgage, how hard could it be? All the stars are aligned and it’s time to make an offer.

Not so fast. Another family has already begun envisioning their own version of life in your dream home. Dad is grilling steaks on your dream deck while the family dog pounces through your beautiful kitchen. The only difference between yourself and the competing buyer? The other family has been pre-approved for a home loan, and places an offer on the home right away.

The difference between being “pre-qualified” and “pre-approved” warrants clarification. First, it is important to understand that neither being pre-qualified or pre-approved guarantees financing for a home. Pre-qualification means that someone, perhaps your real estate agent or lender, has informally taken a look at your finances and deemed that you are likely a good candidate to qualify for a home loan of a certain amount. Bear in mind that pre-qualification is based on information you provide that has not been verified, and in no way guarantees that you will actually qualify for a loan in the amount specified. So if you are not guaranteed financing based on the amount for which you pre-qualify, of what use is being pre-qualified? Getting pre-qualified can be a good start for home buyers who have no idea of what price range they can afford. Having a general idea of the loan amount for which a home buyer may qualify helps real estate agents and home seekers narrow down the pool of potential properties significantly.

Getting pre-approved for a home loan takes the process a step further, and will give you a more accurate number to work with during your home search. Your credit report and income will be reviewed before you are pre-approved, giving the lender a more accurate impression of your financial status as compared to your word alone. Believe it or not, it is not uncommon for potential home buyers to stretch the truth about their financial status in order to be pre-qualified for a larger amount. Doing so only leads to wasted time and money looking at homes that are economically unfeasible, an undesirable scenario for all parties involved.

Shopping for a home is often a long, involved process. The last thing you want when you finally discover the home you want to purchase is to lose it to another, more prepared buyer. Being pre-approved gives you information about the maximum loan amount for which you will likely be approved, as well as the interest rate you can expect. Knowing a maximum loan amount and your probable interest rate allows you to calculate with more accuracy what your monthly mortgage payment would be for a particular home, a major factor in determining what home you can comfortably afford. Being pre-approved for a home loan can give you advantages in negotiation as well; sellers may be more inclined to accept your offer because of reduced uncertainty, and you may be able act quicker than another buyer since several steps of your application process have already been completed.

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant information about house values. For more information, please visit www.electronicappraiser.com.

Selling Your Own House

2008-03-24T15:00:00.002-04:00

You have decided to put your home on the market and want to do it yourself. Here are a few steps to consider as you prepare to do a For Sale By Owner.

1. Put up your For Sale Sign. Before advertising your home, make the right first impression. Attract buyers with low cost cosmetic steps such as cutting the grass, cleaning up the outside and painting drab walls. Have a garage sale to get rid of inside clutter. Why? Because people buy homes that appear clean, solid and well maintained.

2. Set your price right and sell your own home fast. To find the true value of your home, compare it to similar homes recently sold in your neighborhood. You may even want to get an appraisal to be sure of what your house is worth. When setting your price, also consider the cost of closing fees, other selling costs, and the amount of cash you want after the sale. You may also want to look at financial terms that support a higher price for your home. A Buyer might be willing to pay more for your house if he or she can assume your current mortgage, or if you are prepared to provide. Often, home prices are higher in Spring and Summer. Buyers look for homes in the Spring and Summer, making it harder to get high prices in Winter when few Buyers are looking for homes.

Be sure to list what items are not included in the sales of your home. In general, items that are bolted to a wall, floor or ceiling or attached by a pipe are included in the sale. Expensive chandeliers are usually bolted to the ceiling. If you want to take your chandelier with you, list it as NOT included in the sale.

3. Good Advertising Sells Homes. New low cost web sites will put multiple pictures of your house on the Internet. Use Internet ads in combination with local newspapers and neighborhood flyers.

A flat fee MLS listing is an effective form of advertising because real estate agents look in the MLS to find homes that match buyer requirements, and most buyers use real estate agents.

4. Schedule An Open House. Kick off your home selling campaign with an open house. Invite all the neighbors for blocks around your house. Show them your home's best points and tell them your price. Why? Because neighbors are the best promoters of the neighborhood and they all have friends and family who buy homes.

5. Negotiating With Buyers. Always make a counter offer when selling your own home. The buyer who offers less than your asking price can be encouraged to pay more or agree to other terms like accepting the house without repairs.

6. Closing the deal and selling your own home. Avoid the tendency to relax after getting a buyer to sign your sales contract. Finishing details, the events between signing a contract and closing day should lead smoothly to collecting cash for your house, but little things can go wrong if you don't pay attention.

Buyers have the right to inspect your house. Pay attention! Every inspection is a potential deal killer. Closing documents can be completed by an attorney, escrow agent or title officer, depending on your state. The closing attorney or escrow agent transfers the title to the buyer, pays all outstanding bills, and turns the cash balance over to the seller.

Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

Hiring a contractor

2008-03-12T14:45:00.001-04:00

You are ready to make those improvements on your home – maybe you are ready to sell it, need equity from it or just want to make the place look better. Nevertheless, finding the right people to help you get the job done requires knowing a few basics.

First of all, there are contractors and there are handymen. The handyman often limits his work to hourly or daily jobs and lives by a whole different set of rules than the home improvement contractor. When hiring a contractor, here are a few things to know:

1. Have a good idea of what you want. You shouldn't even talk to a contractor before you have a fairly clear idea of the scope of the job and the desired end result. Ceramic tile or fiberglass enclosure? Multilevel deck or large platform? Vaulted or cathedral ceilings? Skylights or sun tunnels? You don't have to know all the minute details of laying a foundation or putting up drywall... just a clear vision of the finished job and the major components.

The contractor can help you work within your budget but cannot possibly present you with samples of every product available. This is the job of a home designer or architect and is unfair to expect this, especially on smaller jobs.

One great place to start educating yourself about all the decisions you will need to make is through home-related publications. Visit any of the larger bookstores and you will find walls of magazines on home decor, remodeling and renovation. There are also many magazines that specialize in certain types of jobs, such as kitchens and bathrooms. Though these publications tend to showcase top-end products and intricate designs, the fact is you can learn much about your own likes and dislikes while educating yourself about the variety of available products... all from your living room sofa.

2. Finding your contractor. Though there may be hundreds of contractors in the Yellow Pages and newspapers, this is of little value to you, except to help you to develop a list. By far the best way to find a good contractor is through a direct referral from someone you trust who has successfully completed a similar project. The next best source of referrals is your local hardware store, home store or lumberyard. Established businesses are loath to give a referral to a contractor who will hurt their reputations. A business that receives valid negative feedback about a contractor will stop referring him.

3. Qualifying your contractor. To qualify your contractor, complete the following:

A. The contractor should come and look at the job. Some contractors will try and give a job quote sight unseen. This is most common with tradesmen... electricians and plumbers... especially when they are very busy. You still want him to come to your home. Why? Well, you can tell a lot about a person by talking to him face-to-face that you just can't get over the phone. Look at his truck, his physical appearance.

B. Licensing and/or registration -Every state has different rules and contractors are expected to follow them. Some states require licensing for all contractors, some are based on the average size of the job, others require licensing fees per job, and some require nothing at all! In some large metropolitan areas, the rules can vary literally from block to block! Some states defer to local governments. To determine the licensing requirements for your area, call your local building inspector or town hall.

C. Insurance is not optional -Liability and medical insurance for contractors may or may not be required in your state, but it must be for anyone working in your home! Hiring an uninsured contractor is hiring an irresponsible contractor. Require that they present a certificate of insurance prior to signing any contracts, and call the agent to verify that the policy actually exists and what it covers. At a minimum, the contractor's general liability policy should be 100% of the value of your home.

4. Get at least three clearly written, understandable bids on any project. The written quote will give you first real sense of what you project will entail and how much it will cost. The quality, clarity and style of the quote will tell you a lot about the contractor and his penchant for detail. Clarity and detail is important. Without the details of the project on paper in an understandable fashion, it is impossible for you to compare the bids from the different contractors, making your choice of contractor all the more difficult.

Taking a very low bid may be looking for trouble. It could leave the contractor cash-strapped and begging for more money later. One of the main causes of an honest contractor pulling a Houdini is that he needs money to live on, so he moves on to another job temporarily to feed the family. This is a particular problem with smaller contractors who do not have adequate credit and must "pay-as-they-go". Mounting materials costs and poor financial planning can drive them from your job and into the arms of another! Then again, you might find that the low bidder is the only one not overpricing the job. Only by having quality quotes will you be able to make an intelligent choice.

5. Get a written contract. A complete, clearly written contract is absolutely essential for both trust and peace of mind! For example, if it does not say in the contract that he will clean your yard after tearing off the three layers of shingles on your roof… better get it written in. Everything you and the contractor agree to should be in the contract!

Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

2008-03-03T13:29:00.002-05:00

What is PMI?

You have probably seen the initials PMI when you have applied for a home loan. If you are paying PMI, also known as Private Mortgage Insurance, it is probably because you put less than 20% down on your home mortgage.

PMI can be defined as an insurance that is required to protect the lender in the event the borrower defaults on their loan. PMI is paid for by the borrower and is included in each monthly mortgage payment. Private mortgage-insurance companies offer the insurance to lenders, who then are able to accept lower down payments than they would normally accept. The insurance then provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. Therefore, without mortgage insurance, you might not be able to buy a home without a 20% down payment.

The cost of PMI increases as your down payment decreases. For example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.

The decision on when to cancel the private insurance coverage does not depend solely on the amount of equity in you home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value. Some lenders may require that you pay PMI for one or two years before you may apply to remove it.

To cancel the PMI on your loan, you must contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal. Another way of canceling the PMI on your loan is to refinance and to get a new loan without PMI.

At one time, homeowners didn’t know they had the option of canceling their PMI. Then, in 1998, a new federal law called The Homeowner’s Protection Act (HPA) required lenders or servicers to provide certain disclosures concerning PMI for loans secured by the consumer's primary residence obtained on or after July 29, 1999.

In the past, most lenders honored consumers' requests to drop PMI coverage if their loan balance was paid down to 80 percent of the property value and they had a good payment history. However, consumers were responsible for requesting cancellation and many consumers were not aware of this possibility. Consumers had to keep track of their loan balance to know if they had enough equity and they had to request that the lender discontinue requiring PMI coverage. In many cases, people failed to make this request even after they became eligible, and they paid unnecessary premiums ranging from $250 to $1,200 per year for several years. With the new law, both consumers and lenders share responsibility for how long PMI coverage is required.

Under HPA, you have the right to request cancellation of PMI when you pay down your mortgage to the point that it equals 80 percent of the original purchase price or appraised value of your home at the time the loan was obtained, whichever is less. You also need a good payment history, meaning that you have not been 30 days late with your mortgage payment within a year of your request, or 60 days late within two years. Your lender may require evidence that the value of the property has not declined below its original value and that the property does not have a second mortgage, such as a home equity loan.

Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

What is A Home Appraisal?

2008-02-22T14:35:00.001-05:00

You are ready to make that big purchase, maybe it is your dream home or it could be an investment piece of real estate. Whichever it may be, the purchase of real estate is a complex financial transaction that requires multiple parties to pull it off.

Of the many people involved with a real estate transaction, including the Realtor, mortgage company, title company and financial institution, all want to make sure that the value of the property is in line with the amount being paid.

This is where the appraisal comes in. An appraisal is an unbiased estimate of what a buyer might expect to pay - or a seller receive - for a parcel of real estate, where both buyer and seller are informed parties. To be an informed party, most people turn to a licensed, certified, professional appraiser to provide them with the most accurate estimate of the true value of their property.

To start the real estate appraisal process, first there must be an inspection. An appraiser's duty is to inspect the property being appraised to ascertain the true status of that property. The appraiser must actually see features, such as the number of bedrooms, bathrooms, the location, and so on, to ensure that they really exist and are in the condition a reasonable buyer would expect them to be. The inspection often includes a sketch of the property, ensuring the proper square footage and conveying the layout of the property. Most importantly, the appraiser looks for any obvious features - or defects - that would affect the value of the house.

Once the site has been inspected, an appraiser uses two or three approaches to determining the value of real property: a cost approach, a sales comparison and, in the case of a rental property, an income approach.

The cost approach is the easiest to understand. The appraiser uses information on local building costs, labor rates and other factors to determine how much it would cost to construct a property similar to the one being appraised. This value often sets the upper limit on what a property would sell for. Why would you pay more for an existing property if you could spend less and build a brand new home instead is the reasoning behind the cost approach? While there may be mitigating factors, such as location and amenities, these are usually not reflected in the cost approach.

This is where the sales comparison comes in. Appraisers use the sales comparison method through getting to know the neighborhoods in which they work. They understand the value of certain features to the residents of that area. They know the traffic patterns, the school zones, the busy throughways; and they use this information to determine which attributes of a property will make a difference in the value. Then, the appraiser researches recent sales in the vicinity and finds properties that are ''comparable'' to the subject being appraised. The sales prices of these properties are used as a basis to begin the sales comparison approach.

Using knowledge of the value of certain items such as square footage, extra bathrooms, hardwood floors, fireplaces or view lots (just to name a few), the appraiser adjusts the comparable properties to more accurately portray the subject property. For example, if the comparable property has a fireplace and the subject does not, the appraiser may deduct the value of a fireplace from the sales price of the comparable home. If the subject property has an extra half-bathroom and the comparable does not, the appraiser might add a certain amount to the comparable property.

In the case of income producing properties - rental houses for example - the appraiser may use a third approach to valuing the property. In this case, the amount of income the property produces is used to arrive at the current value of those revenues over the foreseeable future.

Combining information from all approaches, the appraiser is then ready to stipulate an estimated market value for the subject property. It is important to note that while this amount is probably the best indication of what a property is worth, it may not be the final sales price. There are always mitigating factors such as seller motivation, urgency or ''bidding wars'' that may adjust the final price up or down. But the appraised value is often used as a guideline for lenders who don't want to loan a buyer more money that the property is actually worth. The bottom line is: an appraiser will help you get the most accurate property value, so you can make the most informed real estate decisions.

Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

Buying a new home, should you wait or purchase now?

2008-02-11T20:28:00.000-05:00

Are you looking buy a new home due to a new job, a transfer or just because you are seeking a better neighborhood? If you are someone who has been keeping up on real estate news, the latest housing headlines are far from encouraging: Foreclosures are up, home prices are down and new-home sales are at record lows. All this dismal news has many buyers sitting on the sidelines, afraid to make a move. But, economists say, waiting for the bottom may not be the smartest strategy.

First, there's no agreement on when the U.S. real-estate market will officially touch bottom. If you believe the National Association of Realtors, it will happen later this year. Investment bank Merrill Lynch is much more pessimistic, predicting that U.S. home prices will drop another 15% this year and 10% in 2009, with perhaps even more depreciation in 2010. But even with this knowledge, evaluating your own personal situation, including where you live, how long you have owned your current home and what you plan to do with your new home, all are deciding factors on whether you should buy right now or wait a little longer.

Here Are Five Reasons To Buy Now:

1. Prices in the neighborhood you are interested in are relatively stable. Either they are holding their own or increasing, or the pace of decline is slowing significantly. If you have to move and don't like apartments, the small penalty you pay for missing the bottom may not mean much.

2. You plan to stay in the home for more than five years. If you can stick it out that long before selling, economists say you’ll probably ride out any downturn and come out ahead on price.

3. Your rent rivals a mortgage payment. If you can afford to buy, it can give you one bonus that renting can't: the mortgage-interest deduction on your taxes.

4. You've found the right house in the right area for you. The schools are great. You love the area and know it would be hard to find another house like the one you have your eye on. In a better market, you would most likely have much more competition for that home.

5. You've built equity in your house and are moving to a place where homes are cheaper. In your new market, your money will go a lot further.

Here Are Five Reasons To Hold Off:

1. You've lived in your house less than two years. Chances are you haven't had enough time to accumulate equity in your home. Indeed, you may have negative equity, if you live in many areas such as California, Florida, Arizona or Nevada.

2. Your job security is uncertain. If your company or business is in distress, it's probably better to stay put until the smoke clears.

3. You don't plan to stay in your next house at least five years. While it's not important to buy at the exact bottom of the market, it is important to stay long enough to ride it out completely.

4. You don't have good credit or a decent down payment. Do you have a job and income you can document? As a result of the subprime lending crisis, lenders are much more careful about whom they're giving their money to.

5. You have an existing home to sell in a neighborhood where prices are dropping precipitously or where the number of foreclosures is spiking. In this climate, you're probably better off waiting out the storm.

Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisalservice. For more information, please visit www.electronicappraiser.com.

Use a Realtor® when buying from a Builder or Not?

2008-02-08T12:54:00.000-05:00

The number of new homes being built every year (In 2007 there were 1,620,000 housing starts as reported by Freddie Mac) http://www.freddiemac.com/news/finance/pdf/Jan_2007_FRECOM_Outlook.pdf ).

As a buyer of a “new construction home” should you use the expertise of the Realtor® on the buying side? Typically a Realtor® who helps a buyer find a home is recognized as a “buyer’s agent”, someone who represents the buyer.

As a buyer’s agent, the real estate agent owes you a certain amount of loyalty. They should be acting in the buyer's best interest. They should maintain confidentiality by not offering information to the seller/builder that would influence your ability to negotiate the best terms. And a buyer’s agent would disclosure to other parties of the transaction that they represent you, the buyer only.

Let’s examine a few areas where a Realtor® / buyer’s agent can help.

Negotiating:
Not every unit with a builder’s inventory is fixed in price. Builders are often negotiable on homes (especially in this market). Builders have been known to throw in everything from carpet upgrades to a new car if you buy one of their homes. Having a buyer’s agent on your side can take the pressure off of you negotiating with the builder. The buyer’s agent acts as a third party to the transaction, often like a messenger, “Don’t shoot the messenger, just because he wants a built in pool……for free”.

Builders often factor in a co-operating or buyer’s agent commission in the pricing of their homes. They are not charging you extra because you bring your agent to the table. The use of a buyer’s agent ends up being a free service. It is not commonplace for a buyer’s agents to charge you as the buyer a commission.

Don’t feel that if you don’t use a buyer’s agent that you will also be entitled to receive a discount off the purchase price, any price reductions will need to be negotiated separately.

Loan:
Many builders are associated with or have a marketing agreement with a lender. This is not necessarily a bad thing but using an on-site lender doesn’t give you the ability to shop different lenders for better terms. A Realtor® can guide you through the mortgage process and help you shop for the best terms.

Re-Sale Items:
Let’s face it, although this may be your dream home, you may not live in it forever. A buyer’s agent can help you with items that can affect you reselling your home such as the floor plan, elevation choices, lot location, and upgrades. Most agents would agree that unless your home has an elevator, a home with a master bedroom on the first floor is the most desirable configuration.

Your agent may recommend one lot location over another, or which direction your patio should face. Did you overlook the busy street your new home backs up to….your Realtor® may catch it.

Contract:
Builder real estate contracts are often very different than those commonly used in your state and tend to be slanted in the builders favor. They also do not like to negotiate on the fine print of their real estate contracts. A buyer’s agents are not attorneys but regularly prepare contracts. They can help you in some of the terminology within a contract and may be able to point out language and can or can’t live without.

Walk Thru and Inspections:
Let you buyer’s agent do some of the work for you. Buying a newly built home is very exciting, and you may visit the site daily to see how it is progressing, don’t be afraid to let your buyer’s agent give you an update or email you pictures of the progress, after all they are being paid for their service.

Finally:
Do your homework in selecting a buyer’s agent. Recommendations are worth their weight in gold. And make sure the builder will cooperate (compensate) with a buyer’s agent in advance of your first visit to your builder. Builders are not fond of showing you a property on one day and you showing up with your Realtor® the next to write a contract

Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

How A CMA Can Help You

2008-01-28T11:21:00.000-05:00

A comparative market analysis, or CMA, is a real estate agent's evaluation based on local listing and sales data used to determine the probable sale price of a property in the current market. For a seller, a CMA can help you determine a listing price. If you are a buyer, the CMA will help you decide on what to offer for a listing.

Although reports can vary from a two-page list of comparable home sales to a 50-page comprehensive guide, the length and complexity of the CMA depends on the real estate agent's business practice. However, standard comparative market analysis reports contain the following data:

1. Active Listings - Active listings are homes currently for sale. Such listings are not completely indicative of market value because sellers can ask whatever they want for their home, but they will give you an idea of averages.

2. Pending Listings - Pending listings are formerly active listings that were under contract. These homes have not yet closed, so they are not yet a comparable sale. Unless the listing agent is willing to share information about the pending sale -- and many are not -- you will not know the actual sold price until the transaction closes. However, pending sales do indicate the direction the market is moving.

3. Sold Listings - Homes that have closed within the past six months are your comparable sales. These are the sales an appraiser will use when appraising your home for the buyer, along with the pending sales (which will likely have closed by the time your home is sold). Look long and hard at the comparable sales because those are your market value.

When examining comparable sales remember to choose homes that most closely resemble your home. It is difficult to compare a tri-level home to a single-story home. Select the homes from this list that are mostly identical to your home in size, shape and condition, such as: similar square footage, similar age of construction, similar amenities, upgrades and condition and similar location.

4. Off-Market / Withdrawn / Canceled - These are properties that were taken off the market for a variety of reasons. This number can be used as a high water mark. The reason these homes are removed from the market may be due to prices being too high. The median prices of this group will almost always be higher than the median prices of comparable sales. However, listings cancel for other reasons such seller's remorse, the DOM was too long, repair requests, or the seller fired the agent.

5. Expired Listing - This group will reflect the highest median sales price because they did not sell and were probably unreasonably priced. Some of the expired listings could also show up as an active listing, listed by a new agent at a new price. Listings also expire because they were not aggressively marketed or because the home was in need of repairs.

A real estate agent's knowledge of the local market can affect the accuracy of a CMA, particularly in a neighborhood with a lot of variability in the housing stock. Unless the agent has actually seen the comparable listings, he or she may not draw the correct conclusions. So pick your agent carefully and you too can benefit from the value of a CMA.

Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

The appraisal industry has changed…..forever!

2008-01-24T15:16:00.000-05:00

AVM’s have forever changed the way Wall Street, Lenders and Banking industry use appraisal. You may be asking yourself, what is an AVM and how does it affect the appraisal industry?

AVM is short for "Automated Valuation Model". Appraisers, Wall Street and Lending Institutions all use AVM technology in their analysis of residential property. An AVM is a residential Valuation Report that can be obtained in a matter of seconds. It is a technology driven report. The product of an automated valuation technology analysis, public record data, and computer decision logic combined to provide a logical calculated estimate of a probable selling price of a residential property. An AVM generally uses a combination of two types of evaluation, the running of a hedonic model and a repeat sales index. The results of each are weighed, analyzed and then reported as a final estimate of value based on a requested reasoning date. http://www.electronicappraiser.com/why.cfm

AVM’s have been around since the late 1990’s. For decades, mortgages have been constantly bought and sold in large groups of loans, (pools) by banks, institutional investors and Wall Street. As technology caught up with the demand, there arose a need to rapidly evaluate large groups of residential loans without appraising each property associated with the corresponding loan. This has always been an expensive process that could take several weeks to complete. AVM technology allowed the addresses associated with each loan to be fed into a computer, AVM reasoning would be applied to each property and result in a report of the then current “market” value for each property in a loan pool. The AVM would assist the institutional investor in determining their risk for that pool.

As AVM technology improved, many uses for them evolved. Not only were they being used for large pools, but also for individual loans. Fifteen years ago, a no closing-cost loan was virtually unheard of, with AVM’s they became commonplace. Loans were just too expensive to process, one of the largest costs being that of a traditional appraisal. AVMs allowed lenders to quickly evaluate a property and in many cases determine if a full appraisal were necessary to fund a loan, and could be done inexpensively. This was especially true in “portfolio” loans, loans in which a lender did not intend to sell.

AVM’s give a non-partial analysis, appraisers are constantly being persuaded by real estate brokers and loan agents to hit a certain value. There is no bargaining with an AVM, the computer determines a non-biased value, thus greatly reducing the risk of fraud.

AVM’s are attractive in price, significantly lower than a traditional appraisal. From $25-$50 for individual reports, to a few dollars each if bought in bulk.

AVM’s have not evolved to the point where they are able to replace the appraiser, nor are they suited for every use. For example, they are relatively new to the market in originating first mortgage loans and in a rapidly changing real estate market (up or down), local knowledge is a must. The acceptance and uses of AVMs is constantly expanding, and as it expands the need for a traditional appraisals will continue to diminish.

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant home appraisal service. For more information, please visit www.electronicappraiser.com.

Why Should You Use A Realtor®

2008-01-15T16:36:00.000-05:00

We all want to save a few bucks when we can. But there are times when scrimping is not worth it and in the end, it could cost your more than you can save.

Hiring a Realtor® is one of those times when it isn’t wise to scrimp. When the stakes are high, as with the investment of purchasing or selling your home, your want a professional on your side.

So what can a licensed Realtor® offer you?

1. Help you determine how much house you can afford. Sometimes lenders have limited options when it comes to purchasing a home. A Realtor® can help you get more creative and possibly even connect you with a lender who can be more flexible with your funding options.

w2. When looking for that ideal home, you either need to have the time to peruse the listings or leave it to a realtor, whose job it is to know all of the listings. By giving your Realtor® an idea of what you are looking for, they can keep their eye open on your behalf while watching the price range.

3. If you are moving to a new city or town, you want to know the ins and outs of the community. A Realtor® can give your local information such as what the zoning rules are, where the local schools are and what the environment is like. All of this can be of great help to you before making your big investment in a town you are unfamiliar with.

4. If negotiating price is your weakness, whether in selling or buying, a Realtor® can help do this for you. The Realtor® can also help you with date of possession, inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

5. During the evaluation of your property, your Realtor® will follow up with due diligence. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. The Realtor® can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property.

6. When selling your home, the Realtor® can give you up-to-date information on what is happening in the marketplace and the price, financing, terms and condition of competing properties. These are key factors in getting your property sold at the best price, quickly and with minimum hassle.

7. When it comes to promoting your home for sale, the Realtor®, who sees people day in and day out looking for property as well as other realtors, can be your perfect marketing strategy. In many markets across the country, over 50% of real estate sales are cooperative sales; that is, a real estate agent other than yours brings in the buyer.

8. Your Realtor® can help you objectively evaluate every buyer's proposal without compromising your marketing position. This initial agreement is only the beginning of a process of appraisals, inspections and financing -- a lot of possible pitfalls. Your Realtor® can help you write a legally binding, win-win agreement that will be more likely to make it through the process.

9. Last, the Realtor® can answer questions and tie up loose ends before the closing of the house. They complete the paperwork and resolve issues, which can save you many headaches.

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant information about house values. For more information, please visit www.electronicappraiser.com.

Question: Why use a Realtor®?

2008-01-11T16:07:00.000-05:00

Answer: …..The Multiple Listing Service (MLS)

Access to real estate information: Realtors® have many resources to turn to in assisting you in your home search that public web sites lack. The web has changed the way we all search for information. Many publications are now quoting that up to 80% of home shoppers initiate their search on the web. This is up from 0% about 10 years ago.

Real estate is one of the most commonly search subjects on the net. Every web portal from Google to Yahoo, to Earthlink, to MSN has a real estate tab or sub-site to simplify real estate search. The amount of real estate data on the web will blow your mind. To make things more complicated, every week new real estate sites come online. Realtors® have these public options available along with their local Multiple Listing Service (MLS). MLS as defined by Wikipedia as:

Multiple Listing Service (MLS) (also Multiple Listing System or Multiple Listings Service) is a group of private databases which allows real estate brokers representing sellers under a listing contract to widely share information about properties with real estate brokers who may represent potential buyers or wish to cooperate with a seller's broker in finding a buyer for the property. There is no single authoritative "MLS", and no universal data format. The many local and private databases--some of which are controlled by single associations of realtors or groupings of associations (which represent all brokers within a given community or geographical area) or by real estate brokers--are collectively referred to as the MLS because of their reciprocal access agreements. http://en.wikipedia.org/wiki/Multiple_Listing_Service .

Full use of an MLS system is generally only available to its members, Realtors®. MLS information is very time sensitive. Once a new listing is obtained from an broker and placed into their MLS system, it is immediately available to its members. A resourceful Realtor® can find a “hot property”, a price reduction or brand new listing by searching their MLS and immediately calling you to set up an appointment. These can be homes that may not be anywhere else on the net. It can take several days for property to go from an MLS system to Realtor.com where it will be viewed by the rest of the world. Don’t get me wrong Realtor.com can be a great place to start, but it gets its information from the local boards of Realtors® and the MLS.

A Realtor® armed with the knowledge of how to efficiently search the MLS system will be able to narrow your search with ease. How many times have you gone to a web site looking for a home and your results were in the hundreds or even thousands? It’s time consuming going through that many properties. MLS searches get very granular, giving your Realtor® the ability to input your criteria, save the search, and have it email them anytime a property match is found. A search could be as complicated as: Condominiums (in your favorite building) with only east facing exposure, between $300,000 and $339,900, that allow pets, come with owner financing, and include the window treatments. Try doing this search on Realtor.com.

Once you employ the help of a REALTOR®, he or she will have access to the MLS. If you are a seller your home will be immediately exposed to the community of agents who also belong to the same MLS. If a buyer, your agent will have up to date information of available homes that meet your discriminating taste; even if your dream home is a concrete home, only two stories, in your favorite zip code, built between 2000-2004, includes a finished basement, 4 bedrooms, 3 bath rooms, at least 2500 square feet on a ½ acre lot and a new roof. Try this one on Realtor.com…..

About the Author: Greg Sullivan is the President of www.electronicappraiser.com, a leading provider of home appraisals offering a nationwide personalized instant information about house values. For more information, please visit www.electronicappraiser.com.