Powered by RealTown Blogs

Archives

November 2007

It takes a village....You need a Realtor and a team of professionals when buying a home

Nov. 26, 2007

The home buying process can be either a smooth sail to your promised land or the Poseidon Adventure. The route it takes depends on the team of professionals you enlist to help you navigate your course.
Your dream team ideally will contain 5-7 housing professionals: A real estate agent, an attorney, a mortgage lender, a home inspector, a pest inspector, possibly a lead paint inspector and an insurance agent. With these key people in place, you should have your needs covered.
I recommend you recruit a Realtor to begin building out your team. I suggest you begin by asking for referrals. Have any of your family, friends or coworkers recently purchased a home? Did they use an agent? Were they happy with the service they received? I recommend you look specifically for a Realtor, and not simply a real estate agent. Agents are required to pass the state licensing exam, operate within the state laws and pay the state license fees. Realtors do all that and more: they must adhere to their own code of ethics, over and above the state requirements.
Once you have the name of a Realtor, I suggest you set up a preliminary meeting.
During this meeting, you will learn more about the agent and the home buying process. Hopefully, after the meeting, you will be able to determine whether this individual is one whom you can trust to help you achieve your home ownership dreams.
Some factors that you may want to consider: how long has the Realtor been in business? A more experienced Realtor will be unflappable if an issue arises during the process. Issues always arise; it comes down to getting them solved, and getting you moved!
Will the Realtor provide you with references? Is the Realtor trained to represent you as a Buyer's Agent? If so, the agent should have earned one of the following educational designations: 'ABR' - Accredited Buyer Representative or 'CBR' - Certified Buyer Representative. How will the agent assist you in the process? How will the agent be paid for her services? Typically, the seller will pay the agent from the proceeds of the sale, so you will not incur out of pocket expenses for your Agency representation.
Before you even begin looking at properties, a seasoned Realtor will suggest that you speak with a mortgage lender. The Realtors know that savvy homeowners will require a prequalification or preapproval letter from a lender before they accept any offer and remove their property from the open market. So, it pays to get this out of the way before you start your search. An added benefit is that the mortgage representative has access to the most recent rates and closing costs, and can translate this to a monthly housing cost for you. I suggest you ask the Realtor for recommendations of reputable, experienced mortgage representatives who offers competitive rates.
In order for any documents regarding real estate to be legally binding in Massachusetts, they must be in writing. Thus, it is a good idea to have an attorney selected in advance to help manage and explain the contracts. It is important that you select an attorney who specializes in real estate. Your lender will be using an attorney to handle the closing. You may choose to use this same attorney to help you with the Offer to Purchase Real Estate and the Purchase and Sales Agreement. Again, your Realtor can make a recommendation based on the attorneys that are approved by your lender.
If you use a Buyer's Agent (and I recommend that you do), the agent can give you the names of home inspectors once you identify a property. Agents who represent the seller can not recommend home inspectors to you. You may also want to ask for recommendations from friends who have recently purchased homes.
These inspectors must be members of licensed. Be sure you know how they charge (by the job or the hour?) and when and how you can expect to receive their written report. You may want the inspector to place radon canisters in the property to test for the presence of radon as well. It is an additional cost, but one well spent.
It is a good idea to schedule a pest inspection during the time the home inspection is in progress. You should hire a licensed pest inspector. Again, referrals are the way to go. Usually, if termites occur within a year of the inspection, the company will treat your property free of charge. .
If you are concerned about the presence of lead based paints (you are purchasing a home built before 1978, you have a child under 6, or you are purchasing rental property), you should enlist the services of a licensed lead inspector.
Before the closing, the lender will require that you produce an insurance binder, so you will need to connect with an insurance agent. Again, ask for referrals. If you are purchasing a condominium, I recommend you use the company that carries the master insurance policy. That company will know where the condominium policy coverage ends and where your personal policy needs to begin coverage. For example, in the event of a fire, who must replace the inside walls: the unit owner or the condominium association?
If you assemble this team of experienced professionals based on referrals from family, friends and your Realtor, you will be well on your way to making home ownership a reality!

0 Comments | Permanent Link
View more entries tagged with: , , , , , ,

Dreaming of owning a vacation home?

Nov. 7, 2007

Have you ever longed to own a home in one of your favorite getaway destinations?
Maybe now is a good time to make your dream a reality. The recent moderation in the real estate market has made prices more affordable, and interest rates are still historically low.
Indeed, more people than ever before are buying second homes or investment properties. However, before you take the plunge, let me give you some suggestions to guide your decisions.
  1. Consider your hobbies. Do you enjoy skiing? Maybe a mountain resort is for you. Do you prefer boating or swimming? Maybe a home near a lake or the sea would be more appropriate.
  2. Consider distance. How far are you willing to travel to your second home? An hour? Three hours? Do you want to be able to drive, or are you willing to fly?
  3. Consider the expense of traveling to the property. This will increase the cost of ownership for you, and may limit your ability or desire to visit regularly.
  4. How frequently would you like to use the property? Would you like to visit every weekend, monthly, quarterly, or spend an entire season?
  5. Remember to factor in other costs of ownership: furnishings, maintenance, utilities, taxes and insurance.
  6. Do you prefer the privacy of a single family residence, the income possibilities of a multi family, or the reduced maintenance of a condominium?
  7. Be realistic about your current life style and commitments. Will you use the property often enough to benefit from the investment?
  8. Would you consider renting the property to offset some of the expenses of ownership?
If you would consider renting the property, you may want to explore buying an 'investment' property rather than a second home. Tax codes permit you to spend a certain number of days per year enjoying the property during your 'inspection' of its condition. If the limited personal use is acceptable to you, I suggest you speak with your accountant. There are tax benefits from investment property, such as depreciation expenses, which you can write off against the income received. It may be an excellent way for you to diversify your financial portfolio.
If investment property appeals to you, you need to evaluate whether you will manage the rentals and upkeep yourself or hire a property management firm.
Of course, outsourcing increases your ownership costs and decreases your income.
However, the added peace of mind may far outweigh the expense.
For more information about investment properties, I recommend you read Rich Dad, Poor Dad by Robert Kiyosaki. Mr. Kiyosaki suggests that we cannot accumulate great wealth by work alone. Instead, we must save and make our money work for us. He suggests that investing in real estate is an excellent way to accumulate assets that create a stream of income for us into the future- our mail box money!
Whether it is a vacation or an investment property that intrigues you, a licensed Realtor can help you determine your priorities and evaluate the many opportunities available to you in today's market.

0 Comments | Permanent Link
View more entries tagged with: , , , , , ,