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Renting vs. Buying

2007-06-21T16:18:00.000-07:00

by Dan Faires
www.danfaires.com

Ahhhh, the age old decision; "Should I rent or should I buy?" We have all asked ourselves this question at one point or another in our lives. There are many advantages to doing both. For the past several years the housing market has been fantastic, and many homeowners have profited from the increase in value. I am currently 28 years old and I was fortunate enough to have purchased my home at 26. When I tell all of my renter friends what I purchased the home for and what it's worth now; the are astonished.

However.......it has been a tremendous challenge. The costs are far higher than what most real estate agents will tell you. They don't care, they want to sell you a home, only a truly great agent will tell you what is will be like. Luckily my wife and worked with an agent who was very honest and full of integrity. (Hard to find these days I know). We pay an estimate of $2600.00 a month for our home mortgage of $254,000. Let me break it down;

$1500.00 - 1st Mortgage (includes taxes)
$500.00 - 2nd Mortgage
$200.00 - Homeowners Dues (only covers Sewer and water)
$50.00 - Homeowners insurance
$350.00 - for gas, electricity, and garbage.

You can see that the cost rise quickly and especially since that does not include cable TV, home phone, or any of the other luxuries we "need."

But home ownership is about sacrifice. My wife and I don't eat out anymore and I sold the truck that I loved to drive, it was my "big kid toy." Three years after purchasing our home we have 2 children and are in need of a bigger house. We first purchased the home for $254,000 it is now worth $350.000 and we once sell this home and roll our profit in the next home as a down payment. We will be able to purchase what's called an "upgrade home" Think of your first home as a stepping stone. Most individuals or couples can not afford their dream house right out of the gate. You need to start smaller and work your way up. That's the advantage to buying. It's an investment in your future. It's the biggest purchase most of us will undertake and done correctly, it will be the most lucrative.

If you are ready to buy a home and you are willing to make the sacrifice, you will benefit from purchasing a home and under going all of the stress that comes with it. However if you aren't ready, then renting is a very viable solution. The is nothing wrong with renting. I know several people who will be life long renters and there is absolutely nothing wrong with that. It's all about personal preference and what you are willing do. Whatever decision you choose, if you are comfortable and honest about it; then it's the right choice.

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2007-06-21T11:47:00.000-07:00

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Home Buying Guide to Getting Started

2007-06-19T16:14:00.000-07:00

by Dan Faires

http://www.danfaires.com/

Let's say one morning you wake up and realize that, yes, you should buy a home. You're tired of throwing away money on rent and figure that it's time to get into a home of your own. But you have reservations. After all, if it's your first time, you've got questions. You might be a little nervous that you'll mess up, and it's normal to feel that way. First, you need to gather information. Information is empowering. Lucky for you that you came to the right place. So let's get started buying your first home!

Reconsider if Home Ownership is For You

Before you announce to the world that you are going to buy a home, let's try to talk you out of it. Yup, consider this about renting versus buying. Still want to move forward? OK. Then here are reasons to buy.

This list contains in detail eight benefits of home ownership, including how to figure out which items are tax deductible to you. A tax lawyer also explains how loan points work and how to deduct loan points on your tax return. But be careful if you work from your home and decide to deduct for a home office. You could face tax consequences for deducting a home office when you later decide to sell. Realize, however, that if disaster hits, you can also deduct uninsured home losses.

Review Home Buying Tips

If you're a single woman, the good news is more women than ever are buying homes. More than one in five home purchases are made by single women. Before you start home shopping, review this about home buying. It covers how many homes you will probably see before you buy, and how to keep track and rate each home you visit.

Learn From Other's Mistakes

Smart people learn from the mistakes of others. May all your home buying mistakes be new ones! More important, homes to avoid are those with a bad layout, and that link explains how to recognize a bad layout. If you are considering homes with a basement, here is how to spot a wet basement, and if you decide to purchase a home with a wet basement, learn how you can fix the problem so it doesn't return.

Order a Free Credit Report

Your credit report will determine the rate and terms of your loan. You can order a free credit report online. If you have bad credit because of late payments or a recent bankruptcy, you can still buy a home; you'll just pay more in rate and terms. If you can't qualify for a conventional loan, consider a land contract.

Find a Real Estate Agent

There are millions of real estate agents in the business and plenty of reasons why you want to hire an agent to help you. The trick is to find a good real estate agent. Once you settle on an agent, expect to sign a buyer broker agreement, if not before you tour homes, you will sign an agreement for representation when you write an offer.

Interview Agents

After you find several agents, it's smart to interview those agents before selecting your representation. Learn the differences between Realtors versus agents and choose accordingly. If you haven't decided on an agent to hire, be careful of procuring cause and why it's wise to inform the agent that you're undecided.

Understand How Agents Work

What you've heard about agents from friends and family might not be true. Review these top 10 agent protocol rules before you get into hot water, and remember that agents face restrictions regarding their fiduciary responsibility to you.

Find a Lender You Trust

Your bank isn't the only place to get a mortgage these days. You have other options. But do recognize the signs of predatory lenders and stay away from them. Once you find a lender you like, interview your lender before making your final selection.

Apply for a Mortgage

Explore mortgage options. FHA loans are popular with first-time home buyers. Figure out if you will put money down, as there are many ways to find a down payment. Compare loans with insurance such as PMI to piggyback loans and understand the ramifications of a loan with negative amortization such as an Option ARM or an interest-only mortgage. Decide if you should lock your loan rate upon application. Then ask for a preapproval letter from that lender.

Look for a Home

Is there a good day to buy a home? Don't pass by overpriced homes and do take time to look at new homes. Builders offer amenities and hot trends that may payoff big when you sell. When buying in a down market or a slumping marketplace, it's important to act fast.

Make an Offer

You'll write purchase offers differently for a buyer's market than seller's market offers. Avoid offer rejection by employing these top three negotiation tips, putting up a reasonable earnest money deposit and using counter offers to your advantage.

Get a Home Inspection

Always get a home inspection, and remember to look in the attic. Follow up your home inspection with a final walkthrough before closing. Beware of hiring a bad home inspector. If you didn't ask for a home warranty in your offer, considering paying for a warranty yourself.

Obtain Home Disclosures

If you're buying a condo or townhome, get a copy of the homeowner association documents. Also, the seller should provide you with a variety of home disclosures and disclose material facts.
Buy Home and Title Insurance

You can save significant money by shopping for home insurance after signing an offer. It's smart to buy your own owner's title insurance policy, as you will also insure the lender separately. Title insurance will disclose covenants, conditions and restrictions

Save for Purchases After Closing

After you have taken possession, you may then realize there are things to buy you have not considered. Consider them now.

From Elizibeth Weintaub

How Can I Improve the Value of My Property?

2007-04-27T10:11:00.000-07:00

by Dan Faires
www.danfaires.com

"The biggest factor outside of a homeowner’s control is market conditions. But other issues -- including the condition of the property, specific home improvements and neighborhood stability and safety -- can influence property values. The greatest rise in home prices occurs when the economy is strong and the number of home sales is increasing. Though markets vary, that has occurred several times in recent history -- including the early 1970s, late 1980s and late 1990s. Specific home improvements can increase the value above the cost of the improvements. According to Remodeling magazine, which publishes an annual "Cost vs. Value" remodeling report, a remodeled bathroom returns 81 percent to the owner, a bathroom addition, 89 percent and a master bedroom suite, 82 percent. Remember, quality pays. Well-planned and well-executed remodeling jobs are a good investment while bad work seldom enhances value or livability. The safety and security of a neighborhood can affect property values, too. If you live in a high-crime area, an organized community watch program not only will lower the crime rate but give home values a boost, too."

There are also many ways to update your home and increase the value of your investment. With the sky rocketing prices in recent years; homes are becoming increasingly more unaffordable. However the dream is still attainable. I recently previewed two town homes in the same complex. Built in 1994, one was completely original while the other had only updated cabinet handles through out the home. Which do you think my buyer preferred? This simple change separated the two homes and as a result the one we chose sold faster. It's a competition and you want to do whatever it takes to win.

Craigslist, Ebay, and the newspaper are a few examples of places to find inexpensive materials to use in your updating. Once you have the materials; the Internet is a great resource to gain the knowledge it takes to finish the job. Everyone can update their homes. Time and energy, combined with the know how are the essentials to furthering your investment. Also visit new homes around your area to learn and stay current with current trends or attend open houses when you have time. Another great way to save money is visiting a granite and marble retailer. Most will have a few pieces of pre-cut slabs that clients either didn't want of couldn't afford, and are usually willing to sell that piece at a lower price. Undertaking an update doesn't have to be a complex remodel and the simple updates can go a long way to increasing the value of your home.