Buying Your First Home

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Finding the right first home starts with a price range and a short list of desirable neighborhoods. But there are many other factors you'll need to consider before investing in what may be your biggest asset.

Before You Start:

• Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
• Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.
• Think about your lifestyle and how it might affect your choice of home and neighborhood.
• Do a little research on current home prices in the neighborhoods you plan to target.

Buying Your First Home

Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.
Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.
Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.

How Much Mortgage Can You Afford?

Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.
The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28 percent of your monthly gross income.
The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36 percent.
Many home buyers choose to arrange financing before shopping for a home and most lenders will "pre-qualify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.
In addition to qualifying for a mortgage, you will probably need a down payment. The 28 percent to 36 percent debt ratios assume a 10 percent down payment. In practice, down payment requirements vary from more than 20 percent to as low as 0 percent for some Veterans Administration (VA) loans. Down payments greater than 20 percent generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.

How Much Home Can You Afford?

Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28 percent yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).
Their total debt ceiling of 36 percent is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.

Costs of Buying a Home

Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3 percent and 8 percent of your purchase price.

Ongoing Costs

In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.
Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.

Choosing a Neighborhood

Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.
Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.

Finding a Broker

If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.
Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5 percent to 7 percent and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.

Home Buying Costs

Down Payment	0% - 20% of purchase price
Home Inspection	$200 - $500
Points	$1,000 and up for 1% - 3%
Adjustments	3% - 8% of purchase price

Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.
Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.

Summary:

• Buying a home can mean building significant value through the years.
• Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.
• Pre-qualifying with your lender is a good way to determine how much house you can afford.
• You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.
• In addition to your mortgage payments, you will also need to consider the other costs of home ownership.
• Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.
• Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.
• Remember to consider resale value when buying your home.

Simple Solutions to Common Door Issues

DAILY REAL ESTATE NEWS April 18, 2012

7 easy fixes for common door problems When planing a door, time of year matters By Paul Bianchina Inman News® Share This If you have some doors around your house that aren't working quite right, don't despair. There are a number of quick and easy fixes that will take care of whatever's sticking, squeaking, swinging or otherwise ailing your doors. The door binds in the upper corner of the jamb: This is a common complaint, since the weight of the door wants to pull it down at an angle from the top corner, opposite the upper hinge. This causes the door to bind against the jamb in that corner. To fix it, remove one or two of the screws that hold the hinge to the jamb. Replace these screws with new ones that are long enough to reach all the way through the jamb and into the stud behind the jamb; predrill new pilot holes through the existing holes in the jamb to make it easier to drive the screws. These new, longer screws will pull the jamb back up against the stud and take the angle out of the door frame, relieving that pinch point in the corner. The door binds against other parts of the jamb: First of all, ask yourself when this started happening. Is it only in the winter? If so, it's probably due to seasonal swelling, which happens when the wood absorbs moisture from the air. Check to see if the door is being directly exposed to moisture, such as a drip from a leaky gutter, or perhaps it's constantly shaded by overhanging trees and rarely dries. If you can identify the cause of the seasonal moisture, correct it. Be careful about planing a door during the winter: When it dries out again, it'll be undersized for the opening. If the binding isn't seasonal, look for stress cracks in the drywall or moldings around the door. This can indicate settling issues, which may be caused by shifts in the home's foundation, or simple drying of the wood framing, especially in newer homes. If the settling doesn't continue and the binding doesn't worsen, you can relieve the bound area by tapping against the frame with a hammer and a block of wood, or by removing the door from its hinges and planing it a little. If the settling is worsening, consult with a contractor or structural engineer. Door won't stay latched: If the door won't stay latched, or if it needs to be pushed hard to get it to latch into the strike plate, first look at the way the door is fitting in the jamb. If you see that it appears to be leaning down at the upper corner, try installing longer screws as described above. Otherwise, it's a matter of readjusting the strike plate. Site the latch to see where it's hitting the strike plate, to try to determine if the plate needs to move up or down. If necessary, try coating the latch with lipstick or crayon and then closing the door -- the resulting marks on the strike plate will help indicate where it's hitting. If only a small adjustment is needed, try grinding the opening in the strike plate to make it larger as needed. Use a small file or a rotary tool with a metal grinding bit. If a larger adjustment is needed, unscrew and remove the strike plate, then reposition it on the jamb and reinstall it. You may need to chisel the jamb slightly to accept the plate in its new position. Screws are coming out: If the screws that hold the hinges are coming out of the jamb, or you've had to reposition the strike plate and the screws want to go back into the old holes, you need to create new wood for the screws to grab into. This is easily done by drilling out the old screw holes to the size of a standard hardwood dowel, typically 3/8 inch. Apply glue to the dowel, insert it into the hole, allow it to dry, then cut it off flush with the surrounding surface. Drill a new pilot hole into the dowel, and reinsert the screws. Door swings and won't stay open: This is caused by a door that's out of plumb in its opening. To correct it, you need to insert a small amount of shim between the back of the hinge and the door jamb -- usually the bottom hinge. To do that, loosen the hinge screws almost all the way, so that you have some play between the hinge and the jamb. Insert a piece of wooden shim or other material, such as small pieces of plastic laminate, behind the hinge, then retighten the screws. You may need to adjust the amount of shim to get the door to swing correctly, and you may also need to add a small amount of shim to the center hinge as well. The door latch hits the strike plate: This is caused by a strike cylinder that's worked loose, or by a loose doorknob. If the strike cylinder that goes into the edge of the door is held in place with a small rectangular plate and two screws, first try tightening the screws. If they'll tighten and hold OK, that will pull the cylinder back into the door and hold it. If the screws won't hold, then you'll need to install dowels as described above. Many newer doors have strike cylinders that are drive-in, meaning they're held in place by a friction fit in the hole that's drilled in the edge of the door, rather than by screws. They're also held by tension on the doorknob, which is what the strike cylinder is connected to. First, loosen the screws holding the doorknob, so that you have a little play in the knob. Set a block of wood against the strike cylinder, and tap it with a hammer to drive it back into the door until it's flush with the door's edge. Finally, securely tighten the doorknob's screws to hold the knob and cylinder in place. The door hits the wall: You need a door stop. There are three types of door stops available, depending on the situation. The simplest is a solid or flexible stop with a screw on one end and a rubber cap on the other, which is screwed into a pilot hole that's drilled into the door or into the baseboard. Another style is a hinge stop, which is used when you want to stop the door before it can open far enough to contact a stop on a wall. To install this type of stop, remove the top or center hinge pin, slip it through the hinge stop, then reinstall the pin in the hinge. The hinge stop has an adjustable rod that screws in and out to contact the door at different points, allowing you to stop the door's swing exactly where you want it. The third type is called a floor stop. Floor stops are attached directly to the floor, and are the strongest of all the stops, making them especially well suited for commercial applications. On the downside, because they sit directly on the floor, they can sometimes be in the way. Floor stops typically have a long pin that fits into a predrilled hole in the floor for strength, along with a screw that secures it to the floor. Remodeling and repair questions? Email Paul at paulbianchina@inman.com. All product reviews are based on the author's actual testing of free review samples provided by the manufacturers. Contact Paul Bianchina: Email Letter to the Editor Copyright 2012 Paul Bianchina

5 Hot Design Trends in New Homes!

http://styledstagedsold.blogs.realtor.org/2012/04/09/5-hot-design-trends-in-new-homes/

Home Price Changes by State

Home Price Changes by State
This is a great blog post check it out.

13 Copperfield Ct

13 Copperfield Ct, a set on Flickr.

If you have seen this home before you need to come see it again. This 3 bed, 2.5 bath, 2,200sqft traditional Hampton Leas home has recently been updated with: new hardwoods throughout the downstairs; new carpet upstairs; tile in the bathroom & laundry room; & fresh paint throughout. This home also boasts: formal living & dining rooms; a large family room; a large eat-in kitchen, solid surface counters, update appliances, an island, pantry & plenty of cabinet space. Upstairs are three large bedrooms including the oversized master suite with private bath, double vanities, & a walk-in closet. This home also has an unfinished third floor that could give that additional space for a fourth bedroom, work out or rec room.

173 Preston Green

173 Preston Green, a set on Flickr.

Come live in this incredibly maintained 3 bed, 3 bath, 1,661sqft Preston Green home. This four year old home feels more like 1 year old when you walk in the door with it's beautiful laminate hardwoods and crisp paint. This home boasts: two master suites, one upstairs and one down, with walk-in closets, double vanities and tons of space; a spacious kitchen with natural cabinets, beautiful dark Formica, finished off with updated black appliances; a large family room with sliding glass door that leads you out to your entertaining patio and privately fenced back yard. Don't miss the attic storage space or the spacious one car garage. This home is like new and ready for you. Come make it yours before someone else does.

Why Hasn't Someone Sued Zillow, Yet?

So, I was working on Zillow tonight "claiming my listings". Yeah, people don't know all of the little detail stuff we have to do. We have to go into most sites and make sure they are putting our contact information next to our listings. If not "Jane Smith" can pop up next to it and answer any questions the perspective buyer may have. I am not sure how that is fair, but it is. Oh, and did I tell you it was a big pain in the butt?
Anyways, that is not why they need to be sued. As I was "claiming" them, I was noticing the websites "Zestimate". You know the price where Zillow says what it thinks your home is worth. Every single listing was "Zestimated" under what we have them priced at. Now we understand that actual market value is based on what a buyer is willing to pay. However, we pride ourselves on being good at it. Heck we had a 94.57% list to sell percentage in 2011 based on 54 closed listings. To put it in perspective, the entire MLS has a list to sell percentage of like 82%.
All that aside, as a Seller, I would be angry that some website based out of who knows where, is "Zestimating" my home under my listing price. It's hard enough to sell a house in this market, let alone close to what you are asking, without a website putting their two cents in there and telling a perspective buyer that my home is over priced. And believe me Buyers look. To get a home priced correctly there is a lot of science, research, skill, knowledge and a little bit of luck that goes into it.  I know Zillow will say, "oh, its based off of tax records, comparable sales, etc". But to get a true value of a home you need a local professional, that knows the area, neighborhoods, streets and homes. Often times when we go to list a home, we know the comps personally and have been in them, so we can speak intelligently! I don't see how some pimpled faced computer nerd in California can write a program that will ever replace Us.