The Hidden Costs of Homeownership

by admin on April 2, 2012

The Hidden Costs of HomeownershipSo you’re ready to buy that house. You’ve saved up for your down payment, been pre-approved for your loan, and are ready to start looking. How exciting! However, as a homeowner, you are responsible for expenses that renters don’t need to worry about; and, that can be a rude awakening as a first-time homeowner.

Throughout my career I’ve seen many families make the mistake of forgetting about closing costs or homeowner’s insurance, or just general maintenance of a home that is now their responsibility for the first time ever. Make sure that you take these following points into consideration when figuring out how much house you can afford.

Here are some of the hidden costs of homeownership:

  • Closing costs

Closing costs can add several thousands of dollars to the cost of buying a house.  In today’s buyer’s market it is not uncommon for sellers to agree to pay the closing costs, so have your realtor ask if that is possible during negotiations.  Many buyers also choose to add the closing costs to the total loan amount, which saves you money up front, but that you will still have to pay back over time.

  • Property taxes

Property taxes are the principal source of revenue for municipalities, counties, and school districts. The average percentage for property taxes in the United States is 1.38% of the home’s value. Currently the states with the highest rates are New Jersey, Connecticut, New Hampshire, New York, and Rhode Island. The states with the lowest rates are Louisiana, Alabama, West Virginia, Mississippi, and Arkansas.

Some communities assess their residents a special tax that add on fees above and beyond their property tax. Make sure you know what the tax rate is for your state, and whether there are any special rules in the neighborhood where you are looking.

Most lenders divide up the total amount of property tax and divide it up into your monthly payments. The money is kept in an escrow account until the tax bill is due. This can add several hundred dollars to your monthly payment, so be sure to plan accordingly. If you don’t have an escrow account, make sure you save money for those tax bills.

  • Private Mortgage Insurance

If your down payment is less than 20% of the purchase price, you will be required to buy private mortgage insurance. This protects the lender in case you default on your payments, but the premiums come out of your pocket. Once you amass a certain amount of equity in your home, this insurance can be cancelled.

  • Homeowner’s insurance

You can’t get a loan without taking out homeowner’s insurance. Make sure you read your policy, because most basic plans don’t cover things like flooding, hurricanes, or earthquakes, so it may be worth it to take on extra insurance if you live in an area where these are a possibility.

You may also want to take on extra insurance if you have a lot of valuables that could be stolen or destroyed in a disaster.

  • Decorating

One of the best things about owning your own home is that you can decorate it any way you please. While this can be satisfying, it can also be hard on your pocketbook. Make sure you consider the cost of any renovations or decorating when considering a possible purchase.

  • Maintenance and repairs

In all my years in real estate, I’ve never seen a house that didn’t eventually need something repaired. Even if you buy a brand-new, pristine house, eventually something is going to go wrong. Roofs leak, furnaces break down, basements flood. Even your paint job will need to be touched up eventually.

Buying a house is a wonderful thing, but there are costs beyond the price of the house. Keep these in mind, and you will find a house that meets your needs, financially and emotionally.

This article was provided by Allison Klein of http://allisonkleinhomes.com/. You can learn more about Allison by visiting her website where you can search all Johnstown CO real estate here http://allisonkleinhomes.com/greater-fort-collins-area/johnstown/ and Windsor CO real estate here http://allisonkleinhomes.com/greater-fort-collins-area/windsor/.

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How to Declare Bankruptcy

by admin on March 5, 2012

How to Declare BankruptcyTimes can be scary, and scary financial times can be particularly frightening. Few people set out to bankrupt themselves or their businesses; but for various reasons, many people find themselves in this predicament. Most financial experts will recommend that you avoid declaring bankruptcy at all costs.

The repercussions are long-lasting, and can be devastating to your future for years to come. However, if you have exhausted all of your possible options and find that bankruptcy is the absolute only way for you to clean up your mess, then it is best to educate yourself on the subject.

How to Declare Bankruptcy

Most likely, this is the first (and hopefully only) time that you have ever declared bankruptcy. It might be helpful to familiarize yourself with some of the words and lingo that you are about to encounter through the process.  If you are facing personal bankruptcy, you will file one off the two types listed directly below.

  • Chapter 7 bankruptcies allow for an appointed trustee to take over a broken business in order to stop the financial bleeding. In a Chapter 7 filing, the filer is allowed to keep some of the property that is agreed upon as exempt.

~A Chapter 7 bankruptcy will follow you on your credit report for ten years.

  • Chapter 13 bankruptcies are closest to debt consolidation. While Chapter 7 bankruptcy filing liquidates all assets in order to satisfy in full all debts, Chapter 13 provides more of a debt reduction program to the filer and an opportunity to reorganize. 

~A Chapter 13 bankruptcy will follow you on your credit report for seven years.  

Obviously, there is a difference between the terms of Chapter 7 and Chapter 13, and there is a difference between the consequences. It will be wise for you to spend time learning about which filing is right for you.  While there are other Chapters of bankruptcy that deal with business debt, municipal (utilities) debt, farm debt, or international financial situations, Chapter 7 and 13 are the most common ones filed amongst individuals.

Try to stay calm. Keep in mind as you are facing this financial mountain that bankruptcy is not illegal. It is not a favorable situation to be in; however, obviously you are not the only one who has ever had to resolve these matters, or there would be no such precedent.

Talk to a bankruptcy attorney. If you are feeling overwhelmed as you educated yourself on the process, find horror stories online about others who have had to take this route, or you are afraid that you could “mess” this up too, consider hiring a bankruptcy attorney. This is a serious legal situation not to be taken lightly; therefore, arm yourself as best you can.

Expect the following steps:

  • Gather all pertinent bankruptcy forms and put them in order.
  • Sign and date all the sheets that require you do to so.
  • Make several copies—the required amounts and extras.
  • Two-hole punch your original papers together at the top and center of the papers. Do not staple them at all.
  • You can mail your forms into the court, but most financial professionals recommend that you deliver them to the bankruptcy court in person. By doing so, you may be able to have the clerk look over your forms and fix any small errors right away.
  • Expect to pay a fee by a money order all at once or by setting up an installment plan. If you can pay all at once, you will want to make the money order out to the “U.S. Bankruptcy Court.” If you are hoping to pay in installments, you have to go before the judge to explain why and to verify that you are in agreement with the installment plan.
  • Typically, you will wait between four and six months after you file before you see some movement and some clarity regarding your situation. Although, a Chapter 13 filing by definition will go “on and on” as you will be following the requirements of the payment plan upon which you agreed in the court settlement. Still, the judgment for both Chapter 7 and Chapter 13 typically come within four-to-six- months of filing.

Don’t Despair and Don’t Go Back!

While this can be a humiliating and discouraging time, don’t give up. Instead, recognize that everyone makes mistakes and falls into difficult situations. The main point now is to learn from what happened and not return to that place ever again.

If you’re looking into bankruptcy and your options, please talk to a local attorney. This advice is purely hypothetical, and should be taken with a grain of salt. Only a bankruptcy attorney can give you the correct advice on bankruptcy in your area. If you would like to learn more about the author Kimberley Kelly, please visit her homes for sale Indio CA website where you can search all homes for sale La Quinta CA and real estate in Palm Desert.

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Should I Fire my Real Estate Agent?

by admin on February 26, 2012

Should I Fire my Real Estate AgentThe housing market is rough these days, but a good real estate agent should be able to help you reach your goals. Whether you are buying or selling, a good agent will listen to your concerns and be able to meet your needs.

Sometimes, however, things just don’t work out the way we’d like. I’ve worked with many families over the years. Each family is unique and deserves the best, and sometimes, this means they need to fire their real estate agent.

The thought alone can be stressful; most people don’t like to create waves. But, the sale of your home is an important event, and it must be done well and must be completed as successfully as possible. So, do keep your eye out for warning signs that maybe you are not dealing with the right agent for you and your situation.

How you do know whether or not you should fire your real estate agent? Here are some warning signs:

  • Your agent engages in unethical behavior.

If you know that your agent is doing something outright unethical, or even illegal, then it is time to move on. The real estate market is competitive, and I’ve seen people do some crazy things to try to get ahead. If your agent tries to convince you that you owe money before your house is sold, it’s time to move on.

Another trick I’ve seen agents use is giving the seller an initial offer that is actually less than the true offer from the buyer. This makes the actual offer look better to the seller and more likely to be accepted.

I’ve even seen agents try to pressure families with contingency offers on homes that the landscaping and maintenance was their responsibility, when there was not even a closing date set. If your agent does anything that makes you feel uncomfortable, move on.

  • Your agent cannot answer simple questions about the local market.

A good buyer’s agent should know the general trends in the markets they are showing and be able to advise buyers on the range that would constitute a reasonable offer. Likewise, a good seller’s agent should advise clients on a reasonable price range where similar homes in the neighborhood are selling. If your agent does not have this knowledge, it’s time to move on.

  • The agent does not listen to you.

This should be a no-brainer, but I’ve seen people stick with an agent out of embarrassment or not wanting to be rude. Seriously, if your agent keeps showing you homes that are out of your price range, or do not meet your needs, then move on.

If you are selling, your real estate agent should be considerate of your schedule, and arrange showings at times that are as convenient for you as possible. Of course, you will need to compromise at times, but if your agent consistently dismisses your needs and concerns it’s time to move on.

  • You can’t get in touch with your agent.

If your agent is not answering their phone or returning messages within a reasonable time frame, they are showing a lack a respect. They work for you, not the other way around, and you deserve to be treated like the customer you are.

  • It’s just not a good fit.

Personality conflicts happen. Some people click and some just don’t. Even if your agent is the top-grossing, award-winning agent in your area, you still want someone who you feel comfortable with and who understands your needs. Buying or selling a home is a very personal decision. You are sharing intimate details of your life with this person. If you do not feel comfortable with your agent’s personality, move on.

The Customer is Always Right

In a perfect world, all agents would have their client’s best interests at heart. Unfortunately this is not always the case. Remember, you are the customer, and you deserve the best.  If it’s not working, then move on.

This guest blog was provided by Linda Wise a Viera FL real estate agent servicing home buyers in the Palm Bay Florida real estate market and many other areas including Patrick Air Force Base real estate.

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5 Tips for Buying a Home in a Retirement Community

by admin on February 13, 2012

5 Tips for Buying a Home in a Retirement CommunityMany homeowners in the retirement phase of life have mixed feelings about moving out of their homes. It can be liberating to get away from the responsibilities of owning and maintaining a  big, older house. But, it’s hard to give up the place where you’ve raised a family and watched your life develop.

Buying a home in a fantastic retirement community can add a rich texture to your days, as long as you choose a good fit. This choice of homeownership comes with many benefits, including on-site maintenance, close-knit relationships, age-appropriate activities, etc… With these five tips, you can be sure you’ll experience all of the benefits homeownership within a retirement community has to offer:

5 Tips for Buying a Home in a Retirement Community

1) Take a Tour

Will the space suit you? Is there enough room to fit the items you plan to bring along? Think about how you plan to spend your days. If you like to walk, garden, play cards or plan parties, be sure that the grounds and the building layout offer opportunities for these activities. Look for community areas, outdoor amenities, and above all, be sure that maintenance and landscaping is in tip-top shape. Out of order signs and overgrown grass are an indication of underlying issues with management that are bound to cause you headaches.

2) Safety & Security

Feeling safe in your home is critical to your happiness and peace of mind. Take note of security features like emergency call posts, security guards, and in-unit alarm/panic systems. Make sure that the safety equipment is installed and in-service. There should also be access to fire extinguishers, and all the smoke alarms should be in working order.

3) Cost Considerations

Can you comfortably afford the monthly payment required? Have you read the fine print to be sure you understand what is included? Are any association fees and dues affordable on your retirement income? How are increases in monthly payments are handled? Who makes the decision and under what circumstances? Request a history of costs for the past ten years, so you can spot trends. Don’t get caught off guard by unexpected fees that can make a serious dent in your savings. Demand full disclosure right up front.

4) Management Style

Who manages the community, and what is their reputation? Speak with other residents and check online reviews to ensure they are fair, responsive and dependable. Ask how complaints are handled and what the process is for making suggestions. Determine whether current residents participate in any sort of organized board or association.

5) Location, Location, Location

Any real estate agent will tell you that this is the number one rule in real estate… location, location, location. If you are used to city living, there’s no need to switch to country life, and vice versa. Choose a retirement community located in an environment where you feel comfortable. Consider the availability of public transportation, shopping, and places you go regularly (IE, church, volunteering, social groups, doctors, etc…). Make sure that the retirement community you are considering is not too far from friends and family that you want to see frequently.

Choose the Right Retirement Community for You

While you can certainly move to another facility if your first choice of retirement community doesn’t turn out to be a good fit. But, the disruption of packing, unpacking, and getting acclimated to a new place is no fun. Making a great match the first time will save you time, money and frustration. With these five tips, you are sure to select just the right spot for a new and happy home in a retirement community you’ll love for life.

Vickie Nagy is a San Ramon CA Realtor who has many great articles on her website. You can view those articles as well as search Pleasanton CA real estate, Blackhawk CA real estate, and Livermore CA real estate by visiting her website.

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Investing In Merritt Island Real Estate

by admin on February 7, 2012

Investing In Merritt Island Real EstateLooking to buy a home, a rental property, or a business lot? Are you confused about how much a particular space should cost in the real estate market today? Are you uncertain about where to look in order to ensure your happiness in your selection of a piece of property?

Investing in Merritt Island real estate is a big deal in today’s market. It can also be very rewarding if you choose the proper location to invest in at the proper cost. Below are a few helpful tips to think about when you decide to invest in real estate.

Investing In Merritt Island Real Estate

First and foremost, there are several different types of property one can invest in when looking at the real estate market. The investment that comes to most people’s minds first is a single-family home. Many view real estate as a solid investment while others look at it more like a liability. However, if you choose to invest in such a property, it is historically an investment that will increase in value with the passing of the years.

However, it is a slow growing investment; it takes quite a long period of time to be rewarded and the reward only comes when you decide to sell your home. Also note that you will only be successful in this if you are able to sell your home at a higher cost than what you paid for it.

Investing In  Merritt Island Rental Properties

A second way many individuals choose to invest in Melbourne Florida real estate is through rental property. Many individuals will buy property, fix it up, and then rent it out to several customers over a span of time. This can prove to be quite rewarding and many see it as a way to make the necessary money to pay for their own home. However, it is also important to recognize that this type of investment in real estate is one of the most high maintenance forms out there.

What does this mean? It means that you, as the investor, are responsible for any damage done to the property, any maintenance work that must be completed, and keeping the necessary requirements up to date. Essentially, it is like owning your own home, but having people pay to live in it—unless you hire someone to handle the management side of things for you.

Using The Stock Market As An Investing Tool

Another option when looking at investing in a property is Real Estate Investment Trusts (REITs). This is a bit more abstract than the previously listed options for investing in real estate. REITs are essentially part of the stock market. Individuals are able to hold shares on particular real estate properties. This can again be quite risky if the investment made is too narrow.

The more general or broad the scope of the property selection, the better chance you will have at having a positive outcome with your investment. Thus, it is important to speak with an expert in this area before purchasing your first share. You can also look on various sites to find more information on the topic as well.

Finally, there are options such as Titusville Florida real estate investment groups; these groups build a property and then other interested investors are able to buy into it after the foundation has been completely built. This is a benefit to you if you wish not to be a landlord or necessarily responsible for the property outside of the economic scope.

Overall, investing in the real estate market can be quite a complicated, yet rewarding process. It is important that you be fully educated before making important decision. Thus, it is necessary to filter through the various types of real estate investment options above before choosing one that is right for you!

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Should You Buy a Fixer-Upper?

by admin on February 6, 2012

Should You Buy a Fixer-UpperWhile looking at houses, you pass by one with a “for sale” sign in the yard.  While it is an older house, it is the one you picture in your head.

You can see your kids playing in the front yard.  Your agent tells you that it is well within your price range but is in need of work.  It is a distressed property and is being sold “as is” and is most certainly a “fixer-upper.”  Now what?

Should You Buy a Fixer-Upper?

Fixer-uppers are residential properties in need of renovations typically because they are older and dated, in foreclosure or being sold as a short sale.  Older properties often have tons of character as well as history attached to them and are extremely beautiful when renovated.  When homeowners are about to lose their homes due to foreclosure, they sometimes damage the home or pull out fixtures to sell.  With any kind of distressed property, it is important to determine whether the renovations are structural or cosmetic.

What’s The Cost Of Renovations?

For structural renovations, the work needed to make the house livable and structurally sound are projects such as replacing floors or staircases, removing or adding walls, and other renovations involving the structure itself.  Although properties that are in need of major overhauls are typically priced well below market value, these types of renovations can become quite costly.

Therefore, when considering whether to buy a property like this, the costs of renovations must be taken into account as part of the overall cost.  For investors, properties that need structural work are not always a good idea because the renovations can eat up all of the profit from buying the property at a price well under market value.  On the flipside, for buyers who are purchasing a home, this can be a great opportunity to work on the home in steps.  Many buyers will do what is necessary to live in the home, and then gradually make the other renovations that are typically cosmetic.

Cosmetic Renovations Can Be Easy

Cosmetic renovations are those that include replacing fixtures, installing new flooring, new cabinets, etc.  These are not as costly as major structural changes and can be done quickly and cost effectively.    Many cosmetic renovations will help increase the value of the property or make it show better if homeowners are buying a house in order to resell it.

Properties priced under market value and in need of cosmetic renovations are ideal for investors and homebuyers alike.  In today’s real estate market, there are many opportunities to find properties such as these and are all-around great buys if you are lucky enough to acquire one.

Focus On The Kitchen First

When prioritizing your renovation projects, most any real estate professional or builder will tell you that the most important room as well as the most expensive is the kitchen.  For investors who plan to resell, this is the first room that potential buyers want to see.

For homeowners, it is the main gathering area and most used room in the house.  Renovating can be as simple as new fixtures, painting, or installing a backsplash between the cabinets and the countertops; or, they can be as complex as installing new countertops, kitchen cabinets or a sink.  Many times, new appliances are part of the renovation package.

Don’t Get Into Something You Can’t Finish

For first time renovators, it is important not to bite off more than you can chew.  Start simple and pick a home with easy cosmetic fixes like those discussed above.  If you find a property that needs a major overhaul and are set on buying it, make sure you get a detailed list of what needs to be done along with a general cost so you know what is involved.  Then, leave it to the professionals unless you are very well verse in home renovations.

Buying A Fixer Upper Can Be A Great Investment

Buying a distressed property or “fixer upper” can be a great investment for many reasons.  These properties are typically not reliant on the market place at the time of purchase; for many buyers, they have the ability to buy in nicer neighborhood; buyers can potentially, walk into the home with equity; and most importantly, buyers can have the home they always wanted with their own character in them.  It is important to weigh all of the factors before making the decision to buy a distressed property so that you have a positive experience throughout the renovation process.

About the Author: Paula Henry of Sycamore Group Associates provides Avon real estate services and providing information about Avon Indiana Homes for those people searching Avon Indiana Neighborhoods to buy or sell their home.

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