Thursday, May 03, 2007

Lending Trees tips for new home buyers

Looking forward to spring home buying season? Get some tips from before you start.

Charlotte, NC (PRWeb) April 8, 2007 -- Finding the home of your dreams is exciting. Placing a bid to purchase it might be a different story. Buying a new home can often lead buyers into a major Goldilocks dilemma: is my offer too high, too low, or just right? But don't worry - the decision on how much to pay for a home can be as easy as doing a little homework.

So, how do you determine the right amount?

To get to the bottom of that question, offers up the following tips.

Don't exceed your budget.
First, understand your budget. This is the most important rule to following: never offer more for a home than you can actually afford. Getting a pre-approval letter from your lender can help keep you in the ballpark of how much you have to spend, but keep in mind that letter details how much the lender is willing to lend you, not necessarily how much you can realistically afford.

Let your agent be your guide.
Real estate agents are in the business of knowing how much a particular home can and will go for in your local real estate market. He or she can guide you using information such as prices paid for other homes sold in the area, prices your market will bear, and how motivated the seller may be.

Reasons you might want to offer a lower price include a weak market and the possibility that the home needs some repair work not done by the seller in advance of listing the house.

Reasons you might want to offer a higher price for a home include: the home has the exact features you want, including some that aren't available in other area homes; time pressure; and if your market is a strong one characterized by multiple offers and strong demand.

Online home value estimate (HVE) and Competitive Market Analysis (CMA)
Automated valuation services on real estate Web sites are a popular resource for home price estimates. These tools rely heavily on historical home-sales data, but current market forces that might be affecting prices in your local area. An online home value estimate (HVE) will give you a good baseline to work from but also consider getting a Competitive Market Analysis or a CMA. A CMA will draw on your agent's experience in the area as well as recent sales data for the neighborhood you are buying. Each service is a free or inexpensive way to equip you with valuable information prior to making an offer on a home

Wednesday, May 02, 2007

Home information pack scams

Home inspectors could make up to 250 million pounds a year on producing packs that never get used, causing huge waste for home owners trying to sell their homes, according to the Law Society. The prediction comes as leading professionals continue to call for a delay in introducing the controversial home selling scheme, which is due to start in June.

Paul Marsh, the vice-president of the Law Society, said that buyers would be forced to ask for a fresh Home Information Pack (HIP) when a property had been on the market for more than six months, leading to nearly half a million packs being pulped every year. With each one costing at least 500 pounds, the total bill would hit 250 million pounds.

He said: "Not only is it the money it is the performance of inspectors getting in their 4x4s driving around and producing all the sheets of paper. This is supposed to be eco-friendly." Nearly two million homes are put on the market every year, with a quarter going unsold after a year, it is estimated.

The Royal Institution of Chartered Surveyors (RICS) has also raised concerns about the system and has called for the Government to re-examine how the proposed home inspectors are trained. Senior chartered surveyors with decades' of experience have to undertake a 27-day course to learn how to undertake the inspections, which involves checking the energy efficiency of each house.

With little time before the packs become compulsory, only 100 qualified chartered surveyors have started their training. Jeremy Leaf, the housing spokesman for the RICS, said: "The fact that their skills are not being sufficiently recognised is a deterrent to many." Other organisations are credited with being able to certify inspectors and Ruth Kelly, the minister responsible for introducing the scheme, insists that there will be 3,000 qualified inspectors by June.

A spokesman at her department said yesterday that the Law Society was scaremongering. "Some HIPs providers will offer HIPs for free - others have said they will offer them on a no-sale no-fee basis - so it's possible for buyers to not make a sale without losing out. At the moment if a sale fails the buyer is often left with wasted costs."

Mr Marsh disputed that failed sales would fall after the introduction of the scheme. "Sales fall through for a whole host of reasons," he said. "Tell me why a report into energy-efficient light bulbs will make any difference."

The Government guidelines suggest that a HIP could remain valid for well over a year. On its official website it says: "Some documents can be no be more than three months old when marketing starts, but there is no obligation to update packs as long as the property remains on the market."

However, most experts believe that the packs will have to be updated at least every six months.

Mr Leaf said: "If you are moving to an area you are not familiar with, you - as a buyer - might well want to get a fresh search done after three months."

A spokesman for the Council of Mortgage Lenders agreed. "Searches more than six months old will have to be re-commissioned; and searches are the only significant component left in the pack," he said. HIPs were meant to speed up home-buying and make it cheaper for first-time buyers by shifting the cost from buyer to seller.

6 more home buyer tips

While buying a home is without a doubt an exciting endeavor in some cases home buyers overlook things until after it’s too late, creating a sense of buyer’s remorse that can be time consuming and expensive to correct. By learning about the most common and biggest mistakes, other buyers have made; however, you can make sure you do not fall into an expensive trap when you set about purchasing your next home.

1. Some buyers, particularly first time home buyers, have a tendency to change their financial status prior to closing on the sale of their home. It is always important to keep in mind that just because you qualified for a mortgage several weeks ago you very well might not if you make any type of major purchase just before closing. This means you should avoid buying anything on credit after you have made your loan application. In particular, avoid purchasing expensive major items such as electronics or computers, furniture for the new home, gardening equipment, refrigerators and other appliances and especially automobiles. Even a small change in your credit ratio could cause your loan application to be denied.

2. The second most common mistake made by many home buyers is simply purchasing the wrong home. This is because home buyers can frequently get so caught up in the excitement of the buying process or the ‘look’ of a home that they may fail to get proper consideration to what they really need in a home. Overlooking critical features in a home can easily result in purchasing a home that becomes difficult to live in and with later on.

3. One of the most common mistakes buyers make is withholding information from their real estate agents and real estate lawyers. Reasons for this tend to include believing that some information simply isn’t important enough to mention as well as a fear of how they might come across to others if they do bring up concerns. It is important to keep in mind when you are purchasing a home that the professionals that you work with are just that-they are experienced professionals who have handled a number of transaction. There is a good chance that there isn’t much they haven’t already heard. Remember that their job is to represent your best interests. They cannot do that if they do not have all of the information. The best way to bring about a smooth transaction is for everyone to be up front.

4. When considering the purchase of a home it is also critically important to consider how much house you can realistically afford. Remember that just because you can qualify to purchase a home in a particular price range doesn’t necessarily mean you can really afford. Besides that mortgage payment you will also have other expenses including insurance, home maintenance and possibly home owner’s or association dues as well.

5. Buying a home without a professional inspection is also another critical mistake. If you are financing the purchase of your home a professional inspection is usually required; however, if you are not financing the purchase or if the seller has agreed to finance it you won’t be required to have a professional inspection completed. Even if this is the case, it is always recommended to have an inspection completed anyway by a professional who might spot something you overlooked. This gives you the opportunity to ask the seller to make necessary repairs as well as possibly renegotiate terms of the sale as well.

6. Buyers also frequently make the mistake of simply not looking at enough homes. This results in not knowing enough about what’s currently on the market; which can cause you to miss out on a better home. Only after you have looked at several homes should you begin narrowing it down. At that point it is important to re-visit each home at least once and view them again with fresh eyes. You may find that a home you previously thought was ideal has hidden problems. Taking a look at several homes allows you to make a much better educated decision and ultimately find a home that is best suited for you and your needs. A compulsive purchase while shopping around for a home could end up being not only one that you will regret but also extremely expensive as well.

By taking the time to learn from the mistakes of others you can avoid making some of the most common errors when you begin the home purchasing process.

Andrew owns a Home Buying Guide website that provides many home buying tips. You can visit his website at: