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9 Buyer Traps & How To Avoid Them

by Diane Cardano-Casacio & Her Team
No matter which way you look at it, buying a home is a major
investment.  But for many homebuyers, it can be an even more
expensive process than it needs to be because many fall prey to
at least a few of the many common and costly mistakes which trap
them into either:
* paying too much for the home they want, or
* losing their dream home to another buyer or,
* (worse) buying the wrong home for their needs.
 
A systemized approach to the homebuying process can help you
steer clear of these common traps, allowing you to not only cut
costs, but also secure the home that’s best for you.
 
This important article discusses the 9 most common and costly of
these homebuyer traps, how to identify them, and what you can do
to avoid them.
 
 
THE 9 BUYER TRAPS
 
1. Bidding Blind.
What price should you offer when you bid on a home?  Is the
seller’s asking price too high, or does it represent a great
deal?  If you fail to research the market in order to understand
what comparable homes are selling for, making your offer would be
like bidding blind.  Without this knowledge of market value, you
could easily bid too much, or fail to make a competitive offer at
all on an excellent value.
 
2. Buying the Wrong Home.
What are you looking for in a home?  A simple enough question,
but the answer can be quite complex.  More than one buyer has
been swept up in the emotion and excitement of the buying process
only to find themselves the owner of a home that is either too
big or too small.  Maybe they’re stuck with a longer than desired
commute to work, or a dozen more fix-ups than they really want to
deal with now that the excitement has died down.  Take the time
upfront to clearly define your wants and needs.  Put it in
writing and then use it as a yard stick with which to measure
every home you look at.
 
3. Unclear Title.
Make sure very early on in the negotiation that you will own your
new home free and clear by having a title search completed.  The
last thing you want to discover when you’re in the back stretch
of a transaction is that there are encumbrances on the property
such as tax liens, undisclosed owners, easements, leases or the
like.
 
4. Inaccurate Survey.
As part of your offer to purchase, make sure you request an
updated property survey which clearly marks your boundaries.  If
the survey is not current, you may find that there are structural
changes that are not shown (e.g. additions to the house, a new
swimming pool, a neighbor’s new fence which is extending a
boundary line, etc.).  Be very clear on these issues.
 
5. Undisclosed Fix-ups.
Don’t expect every seller to own up to every physical detail that
will need to be attended to.  Both you and the seller are out to
maximize your investment.  Ensure that you conduct a thorough
inspection of the home early in the process.  Consider hiring an
independent inspector to objectively view the home inside and
out, and make the final contract contingent upon this inspector’s
report.  This inspector should be able to give you a report of
any item that needs to be fixed with associated, approximate
cost.
 
6. Not Getting Mortgage Preapproval.
Preapproval is fast, easy and free.  When you have a preapproved
mortgage, you can shop for your home with a greater sense of
freedom and security, knowing that the money will be there when
you find the home of your dreams.
 
7. Contract Misses.
If a seller fails to comply to the letter of the contract by
neglecting to attend to some repair issues, or changing the
spirit of the agreement in some way, this could delay the final
closing and settlement.  Agree ahead of time on a dollar amount
for an escrow fund to cover items that the seller fails to follow
through on. Prepare a list of agreed issues, walk through them,
and check them off one by one.
 
8. Hidden Costs.
Make sure you identify and uncover all costs - large and small -
far enough ahead of time.  When a transaction closes, you will
sometimes find fees for this or that sneaking through after the
"sub"-total - fees such as loan disbursement charges,
underwriting fees etc.  Understand these in advance by having
your lender project total charges for you in writing.
 
9. Rushing the Closing.
Take your time during this critical part of the process, and
insist on seeing all paperwork the day before you sign.  Make
sure this documentation perfectly reflects your understanding of
the transaction, and that nothing has been added or subtracted.
Is the interest rate right?  Is everything covered?  If you rush
this process on the day of closing, you may run into a last
minute snag that you can’t fix without compromising the terms of
the deal, the financing, or even the sale itself.
 
 
One More Tip...
 
Find out if your agent offers a Buyer Profile System or
"House-hunting Service," which takes the guesswork out of finding
just the right home that matches your needs.  This type of
program will crossmatch your criteria with ALL available homes on
the market and supply you with printed information on an on-going
basis. A program like this can help you to affordably move into
the home of your dreams.

Hiding Places

by Diane Cardano-Casacio & Her Team

YOU ARE SHOWING YOURH OUSE IN AMINUTE, THESE QUICK TIPSWILL HELP YOU FIND THE SECRET HIDING PLACES WHERE BUYERS WILL NEVER LOOK!

What do you do when your realtor calls and wants to show your home in say, ½ an hour? Jump for joy first, since someone wants to look at YOUR home, right? Then, panic. As you hang up the phone, you notice that your teenagers have been at it again… your house is CLEAN, it’s just not TIDY. Now, what do you do? Since we all know that the first impression is important, especially if you want to sell your home in the next decade, we have a few tips that will help you quickly hide away “stuff”. But first, you have to know where the buyers are going to look, and ensure that these places are constantly tidy. Places that buyers will look include the oven, any closets, kitchen drawers, laundry room, and the kitchen pantry.

Think about it, these places give them an indication, essentially, of how much storage space there is. Fighting the Money-Hungry Home Selling Shark of Staging ahead of time means preparing for a showing on short notice will be a breeze. If your closets are overflowing, the buyers will think there just isn’t enough room to store their own things, since obviously you don’t have the space. Don’t defeat your efforts by stashing clutter in them at the last minute, no matter how tempting it may be! Enough of that! What you want to know is… at the last minute, where CAN you hide things?

UNDER THE BED.

It’s spacious, easy to get to, and no one in their right mind would get down on their hands and knees to look there during their first visit. In addition, kids are probably used to stashing things there anyway, and can help you

IN THE WASHER AND DRYER.

Who hasn’t seen the commercial where a little kid has stashed a pet in there? We don’t recommend putting your pets in there, but clothes and shoes and stuff can easily fit. Although buyers like to look in the laundry, to see the size and neatness, they won’t be looking to see if you actually have things in there. Our caution is to let everyone in the family know that it’s a hiding place, and to never start the machines without checking the contents first.

IN THE REFRIGERATOR.

This is risky, you know your kids are going to be in and out of the fridge – and how embarrassing would it be to have a shoe fall out? On the other hand, if you’ve just walked in from the grocery, you can certainly stash the entire grocery bag in there, until you’re ready to unpack it and put things away neatly.

BEHIND THE COUCH.

That is, if the couch is against the wall. We all know that things get trapped there anyway, so it could be a quick opportunity to drop a toy or wayward socks for a quick fix.

 

IN THE TRUNK OF YOUR CAR.

Your garage or carport needs to be tidy. If it isn’t garbage day, yet you have bags

lying around, drop them in. Skateboards and roller blades are a hazard anyway, so drop them in too. Nobody has a right to check in your vehicle, take advantage of that fact!

Let me leave you with this quick story. My mother-in-law, being a naturally organized person, has clothes closets organized by color and like items, linen closets with towels and sheets stacked by size and color, jars in her kitchen pantry with labels facing the front like a grocery store shelf. This may seem extreme, buy when she showed the house for sale, one buyer actually told her that he’d buy her home for the state of her closets alone! He believed that if she paid that much attention to a closet, that she must have taken that kind of care with the rest of her home. Never underestimate the added value you can give your home by fighting the Home Selling Shark of Staging early on!

 

FHA vs. Conventional Financing

by Diane Cardano-Casacio & Her Team

FHA vs. Conventional Financing
Find out why more and more people are turning to FHA!

Most applicants are innundated with a variety of terms describing mortgages that are available on the market. The most popular include, Fannie Mae, Freddie Mac, and FHA. 

FHA was created by the Federal Government to provide affordable housing financing for qualified borrowers. FHA insures the loan, limiting the lender's risk. The borrower pays an upfront insurance premium which is approximately 1.75% of the loan amount. This money can be financed directly in the loan amount. The borrower also pays a monthly premium of .55% of the loan amount divided by 12 months. FHA requires down payment of 3.5%. This money can be a gift. No reserves are required.

Borrowers must provide proof of sufficient income to show ability to pay the mortgage. FHA guidelines are more relaxed, such as; a bankruptcy that was discharged at least 2 years ago, the use of alternative credit (utilities, cable TV, auto or medical insurance premiums, child care, school tuition, furniture or appliance store accounts) in lieu of traditional credit, and higher debt to income ratios. FHA interest rates are extremely competitive with conventional rates.

Fannie Mae loans are conventional loans made at the risk of the lender without benefit of any government guarantee or government insurance. A conventional loan with an LTV (loan to value ratio) of greater than 80% requires primary mortgage insurance, which can be paid monthly. The borrower must have 5% of his/her own funds for the down payment and 2 months reserves on deposit. Closing costs must be paid by the borrower.

Requirements of a conventional loan applicant include excellent credit, job stability with sufficient income, a sizable down payment, and low debt to income ratios. Borrowers who meet Fannie Mae guidelines are rewarded with an interest rate only slightly lower than an FHA interest rate.

 Taken from: http://www.fhatoday.com/comparison.htm

What Is PMI or Private Mortgage Insurance?

by Diane Cardano-Casacio & Her Team

PMI or Private Mortgage Insurance is normally required when you buy a house with less than 20% down. Mortgage insurance is a type of guarantee that helps protect lenders against the costs of foreclosure. This insurance protection is provided by private mortgage-insurance companies. It enables lenders to accept lower down payments than they would normally accept. In effect, mortgage insurance provides what the equity of a higher down payment would provide to cover a lender's losses in the unfortunate event of foreclosure. Therefore, without mortgage insurance, you might not be able to buy a home without a 20% down payment.

The cost of PMI increases as your down payment decreases. Example: The cost of PMI on a 10% down payment is less than the cost of PMI on a 5% down payment. Your PMI premium is normally added to your monthly mortgage payment.

The decision on when to cancel the private insurance coverage does not depend solely on the degree of your equity in the home. The final say on terminating a private mortgage-insurance policy is reserved jointly for the lender and any investor who may have purchased an interest in the mortgage. However, in most cases, the lender will allow cancellation of mortgage insurance when the loan is paid down to 80% of the original property value. Some lenders may require that you pay PMI for one or two years before you may apply to remove it.

To cancel the PMI on your loan, contact your lender. In most cases, an appraisal will be required to determine the value of your property. You will probably also be required to pay for the cost of this appraisal. Another way of cancelling the PMI on your loan is to refinance and to get a new loan without PMI.

Courtesty of http://www.mtg-net.com/sfaq/faq/pmi.htm

5 Ways To Prepare Your Home For Spring

by Diane Cardano-Casacio & Her Team

5 ways to prepare your home for spring


For the Journal-Constitution
Published on: 04/03/08

Despite the lingering cold weather, the first day of spring officially arrived on March 20. Once again it is time to go out and assess the condition of our homes after the winter weather. Here is my list of five spring "hot spots" to check.

1. Gutters and downspouts: With any luck, we will have some good soaking rains this spring. Since no one likes to spend time outside in cold weather, there is a good chance that your gutters and downspouts are full of leaves and other debris. Overflowing gutters can deposit excessive amounts of water against the foundation of your house, resulting in water leaking into basements and crawl spaces. It is time to make sure that your gutters and downspouts are clean.

Kris Jensen / AJC
Clean out and prepare gutters and downspouts for hoped-for rains in the coming months.
 
 

2. Decks: Winter weather can be especially hard on exterior wood surfaces. Check the decking and railings on your deck for cracking or splitting wood. Badly damaged wood should be replaced. Since the summer sun is also hard on exterior wood, spring is a good time to apply a coat of sealer on the decking and railings. A number of good products are available at home improvement and hardware stores; however, my favorite wood sealer called Total Wood Protectant must be purchased from the manufacturer. Information about this product is available online at www.woodsealants.com.

3. Trees: Especially if you have trees close to your house, now is the time to inspect them. You probably can find simple things like dead branches on your own, but assessing the health of a suspect tree may require the assistance of a certified arborist. Our ongoing drought has affected the health of many of our trees. If you have any trees on your property that you suspect are not healthy, I recommend having them inspected.

4. Termites: Warm weather is when termites begin to swarm. A swarm of termites looks like a series of black flying ants. If you are working in the yard and see these flying insects, you should notify a licensed pest control company as soon as possible. Since the Georgia Association of Realtors contract no longer requires termite letters when you purchase a home, some recent homeowners may not even be aware of the potential damage that can result from termite infestation. I strongly recommend that you have your house bonded by a licensed pest control company.

5. Air conditioner: First of all, make sure that you have changed the filter in your furnace. The same filter serves your air conditioner. This filter has been working hard all winter and likely needs to be changed or cleaned. Spring is also the best time to have your air conditioning system checked by a licensed heating and cooling contractor. When choosing a contractor, make sure they are licensed by the state. It is a good idea to ask friends and associates who they use and are happy with.

Full House At This Month's Buyer Workshop

by Diane Cardano-Casacio & Her Team

This month we had a full house of first time homebuyers at our buyer workshop. As we do each month, Diane Cardano & her team presented free information about the homebuying process to people who wanted to learn and become well-educated as they prepare to buy a home.

C.A. Sokol from Vision Mortgage Capital came and discussed information about interest rates, credit scores, and other hot topics that tend to confuse first time homebuyers.

We hold workshops every month for buyers at the Abington Library, from 6:30-8:30pm. These workshops are free, open to the public and are so incredibly informative that every person considering buying a home should attend.

If you missed this workshop, you can still attend the next one! For more information on our next workshop tentatively scheduled for April 22nd, go to www.SavvyHomeBuyerWorkshop.com

Why It's So Hard To Sell Your Own Home

by Diane Cardano-Casacio & Her Team

Check out this interesting article from Realtor.com:

FSBO Woes: Why It's So Hard to Sell Your Own Home
For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards.

By Marcie Geffner at Realtor.com

Granted, some people are able to sell their own homes without the services of a real estate agent. Some of these successful do-it-yourselfers are very experienced home sellers. Others are transferring ownership of their home to a child, a coworker or a tenant who's already living in the home. These circumstances are the exception, not the norm, however. For most people, a for-sale-by-owner (FSBO) transaction simply isn't in the cards. Here are five reasons why.

1. FSBOs can't list their home in the MLS. FSBOs aren't permitted to put their home in the multiple listing service (MLS) because these industry membership organizations are open only to licensed real estate brokers and agents. FSBOs are also locked out of many home search engines and Web sites, including the gigantic Realtor.com. Sure, a determined FSBO can put a for-sale sign in his or her front yard and run a tiny advertisement in the local newspaper, but the home won't receive nearly as much exposure as it would through the MLS.

2. Agents won't show FSBO homes. In a typical home sale, the buyer's agent receives a percentage of the commission that the seller pays the listing agent. Without a listing agreement, there's no guarantee that the buyer's agent will be compensated for his or her services, unless the buyer has signed a buyer's brokerage agreement that specifically provides for such compensation. Even if a FSBO offers to pay the buyer's side of the commission, most agents won't want to go through a transaction with an unsophisticated self-represented seller across the table. That means the pool of potential buyers for FSBO homes is limited primarily to unrepresented and probably unqualified prospects.

3. FSBOs usually overprice their home. Like most homeowners, most FSBOs honestly believe their own home is worth more than comparable homes in the same neighborhood. Usually, they're wrong. A real estate agent can provide an update on market conditions, an assessment of the likely selling price of the home and tips for improving the home's buyer appeal. Overpricing a for-sale home is a sure way to deter potential buyers 4. Buyers will feel intimidated. Potential buyers will spend less time in a for-sale home if the owner is present during the showing, and they'll be shy about discussing its pluses and minuses with their own agent if the owner is within earshot. Buyers will also be less inclined to make an offer if they know they'll be negotiating directly with the seller. Having an agent on each side creates an effective emotional buffer between the seller and buyer.

5. FSBOs are likely to stumble into legal trouble. Real estate transactions are fraught with potential liability for unwary sellers, particularly in states that have extensive disclosure requirements (e.g., California). A FSBO who overlooks even one required form or legally mandated disclosure could face a protracted and expensive buyer lawsuit after the transaction closes.

From realtor.com.

First Seller Seminar Of The Year Is A Success!

by Diane Cardano-Casacio & Her Team

2008 was a year of change. The market shifted and it challenged us to think differently and find ways to embrace this New World of Real Estate. Nothing was business as usual.

Because of this, it was also a year of innovative ideas. We were concerned with the fact that the vast majority of people don't know what they don't know when it comes to the sale of their home or real estate in general.

2009 Seminar Attendees Sucking Up Information Like Sponges!

We began to hold free seminars, open to the public, to educate them on the steps to selling a home fast and for top dollar. We were amazed at how people truly desired and needed this information. They wanted to learn so much so that they signed up in droves to listen to Diane's presentation and tips based on her 16 years of real estate experience.

This year is proving to be no different! We held out first Savvy Home Seller Seminar of 2009 last week at North Hills Country Club. It was our best yet with participants actively engaged and just blown away by what they did not know. In some cases, people were amazed at what has changed in real estate since they last sold a home 10, 15, or 30 years ago. In other cases, some thought the influence of technology in home sales was incredible.

Diane working on-on-one with attendees to answer their questions!

Either way, participants left VERY satisfied with the information received and found it to be time well spent! Most referred us their closest friends and family members who are thinking about selling a home so we can sign them up for the next one in May!

If you or someone you know would like to participate in an upcoming Savvy Home Seller Seminar, just give us a call at 215-576-8666 to get on the mailing list or register at www.SavvyHomeSellerSeminar.com!

 

Gearing Up For Home Buyer Workshop

by Diane Cardano-Casacio & Her Team
It's that time of the month again! We are gearing up for our monthly Buyer Workshop. Find more details here:
We'd like to cordially invite you to our monthly Savvy Home Buyer Workshop on Wednesday, March 18th from 6:30-8pm at the Abington Library.
This is a great opportunity to speak with a loan officer one-on-one, if you choose, and have your questions about qualifying for a home, getting a mortgage and all other questions about financing answered. Foreclosures and the new $8000 tax credit to homebuyers will be discussed.
You will also learn what to do first and the step-by-step process of buying a home from the area's #1 Real Estate Team.
This no-pressure workshop is open to the public, and nothing will be sold at this event- the information is free! Registration is required. Visit us at www.SavvyHomeBuyerWorkshop.com for more information and to sign up!
 We hope to see you there!

10 Do's & Don'ts For Home Sellers

by Diane Cardano-Casacio & Her Team

10 Do's and Don'ts for Home Sellers                                            

5 Dos

Consult your real estate agent before prepping your home for the market. If you just start making changes, you may be focusing on things that are not as important as others.

Make sure your agent will have a strong online presence. The majority of house hunters begin their search on the Internet and then narrow down which ones to actually visit.

Be certain your agent is knowledgeable about the area. He or she should have a good understanding of the local community, schools, recreation and politics to share with potential buyers.

Feature professional color photos of your home. This is as important for the Internet listing as it is for the printed brochures. The brochure should also include a detailed floor plan.

Have a clear understanding of the selling process. Familiarize yourself with the typical marketing time in your area, what to expect with a home inspection and any hot-button items that could be of concern. Also, be familiar with the contract process, attorney review, mortgage contingency, deposit escrows and closing time frames.

5 Dont's                                                                                                     

Don't just go with the agent who tells you your house is worth the most. Conduct some research to verify the pricing, and consider looking at the competition.

Don't just assume that the agent who sold you your house will be a good fit on the selling side. Interview more than one person to find out what each has to offer.

Don't ignore offers that don't meet your asking price. By not countering even low offers, you could easily discourage what may ultimately be a good offer.

Don't assume that your agent works full-time. Many do not, so be sure to ask.

Don't just accept everything your agent says. Get it in writing. Make sure he or she offers a written marketing plan with which you agree. Also, understand that once you sign, you are locked in to a legal contract for the term agreed upon.

From HGTV http://www.hgtv.com/real-estate/10-dos-and-donts-for-home-sellers/index.html

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Diane Cardano & Associates
CARDANO Realtors
1021 Old York Road, Suite 401
Abington PA 19001
Office: 215-576-8666
Fax: 215-576-8677