Monday, July 30, 2007

How It All Began!

Have you ever wondered how and when "real estate" became a national industry, and buyers and sellers began to seek professional representation? You may be surprised that realty's modern history began less than a century ago. Those early days have affected home ownership ever since.

Back in the 1920s, Herbert Hoover pushed the idea that home ownership was the foundation of democracy. He and others helped to professionalize and standardize the practice of building and selling homes.

It wasn't until the Great Depression, however, that the government really got involved with the National Housing Act of 1934. Critical to the act was the introduction of mortgage insurance and putting established practices into law.

After these policy changes, large numbers of middle-income families began buying homes. Before then, only the wealthy and upper working class could afford such a purchase, and usually without a mortgage.

Now we can apply our modern perspective and imagine how things might be changing in our current economy. The "middle class" is feeling the squeeze as the gap between wealth and poverty grows. Owning a home makes more sense now than ever, as a secure place to live and as an investment. But great care must be taken to avoid the problems of over-financing and risky home loans. Trust a professional real estate agent to protect your best interests.

Sunday, July 22, 2007

Sights and Smells!


Attracting buyers has turned into quite the competitive sport. Once you catch a buyer's attention with a favorable asking price, how do you encourage them to select your home from the other choices? Namely, assault their senses!

Since first impressions do count, you should start at the front door. Apply a fresh coat of paint and new hardware. On the inside, paint the walls with neutral colors. Designers recommend golden beiges and sandy tans.

Now make the buyer's eyes dance around the home, taking in shiny new faucets, bright light fixtures, and attractive doorknobs and cabinet pulls. Like jewelry that accessorizes your home, these details can make quite a statement about your pride of ownership.

Another way to show off is to reduce your furnishings by at least 25% throughout the house, even if you have to pay for storage. This will convey a sense of open space to potential buyers as they size up the interior for their own belongings.

Finally, when your home is being shown, you can subconsciously influence buyers through their noses. It may sound silly, but it's proven that a home smelling of freshly made bread or cookies generates more offers. Of course, a spotless kitchen helps to increase that impact.

Conveying cleanliness and comfort throughout your home will make a lasting impression, so don't overlook the power of the senses!

Sunday, July 15, 2007

Time to Move!

When you've found the home of your dreams, you don't want to delay in producing your offer to purchase, so it's a great benefit to know what to expect in advance. While there is no foolproof formula for negotiating a fair price, you can begin by looking at recent sales in the neighborhood and comparing their list price to their final sale price.

If homes are generally selling at 5% below list, you have that starting point for determining your offer. Once a price has been accepted, it's time to put it into high gear by obtaining your financing, scheduling a home inspection, and establishing a closing date. Your offer should be contingent upon securing a loan and a satisfactory "walk-through" before closing.

Earnest money, or the "deposit" on your purchase, will be placed in escrow. It will eventually transfer to the sellers, or will be refunded to you if any unsettled issues prevent the closing of the transaction. If major repairs are needed, the seller may fix the problems, or offer a reduction in price. With such a contingency clearly stated in your offer, you can walk away from the deal if the seller doesn't comply.

As these few considerations are the tip of the iceberg, your best bet is to always work through intermediaries, whose objectivity and experience help guarantee a smooth transaction.

Sunday, July 8, 2007

Start on the Right Foot!


As you consider buying your first home, you'll get lots of advice, but you shouldn't do anything without a complete understanding of your financial situation and how much home you can afford. So, where do you begin?


There are two parts to financing - the downpayment (generally 20% of the purchase price) and the balance (the remaining 80%). Secure the best interest rate by reviewing your credit reports and correcting errors, which are surprisingly common. Do this at least two months in advance of your home search, as that's how long it can take to clean up your reports.


You'll know exactly what you can afford by securing pre-approval from a lender, who will review your income, debt and credit, and suggest the loan best suited to your qualifications and needs. If you can put down more than the usual 20%, you may qualify for a higher loan amount.


With less than 20% down, you might pay a higher interest rate or PMI (Private Mortgage Insurance), because the lender assumes a greater risk. Consult a financial adviser about ways to raise the cash, like withdrawals from an IRA or gifts from your parents. Each has tax implications, so proceed with caution.


With your financial house in order, you're ready to discuss your desires with a real estate professional and begin your home search in earnest. Congratulations!

Sunday, July 1, 2007

More or Less!

A country church once paid $1,500 per acre more than "fair market value" for two acres of land adjoining the existing church property. In another transaction, a young couple agreed to accept $7,900 less than "fair market value" for their three-year-old tract home.

Once "fair market value" is established on real estate, other factors such as availability and time pressure may influence the final sales price. The church wanted an additional two acres adjoining church property to use for a picnic and fellowship area. Property located in any other spot would have been unsuitable. Thus the adjacent land held more value for the church because of its location, and they were willing to pay the price.

The couple that accepted $7,900 less than fair value for their home exemplifies the concept of time pressure. The husband, a middle management candidate within his company, was offered a promotion in another state. He was anxious to move and assume his new responsibilities. They weighed a higher selling price for their home against a fast move to the new job. The new job won out, resulting in a lower than fair market value sale price.

Keep in mind that even when the final sale price of real estate is higher or lower than "fair market value," both buyer and seller may experience complete satisfaction with the transaction.