As you've probably heard, today's market offers many opportunities for first-time home buyers. While shopping for your first home is an exciting time, it can also be a stressful experience as you navigate today's market.

Before you begin looking, make sure you're completely prepared and know what to expect. Work with a professional real estate agent who can help guide you through the following five steps:

Step 1: Take an honest look at your finances. Before you dive into the exciting part of home-buying - the search - make sure you have all your ducks in a row. Figuring out your finances and crunching some numbers will allow you to set a realistic budget.

Step 2: Secure a loan. After you get your finances in order, talk to lenders and mortgage brokers to ensure you can secure a loan. Shop around to get the lowest interest and overall best deal possible and make sure you understand all the fees involved. Talk to your agent whose brokerage may have an in-house mortgage lender you can work with.

Step 3: Map out your criteria. Now that you have your funding in order, begin your search. With a plethora of online home-search tools at your fingertips, it's relatively easy to map out different types of homes and neighborhoods and find what is right for you. Make big decisions - like urban versus suburban settings, an estimated property size and neighborhood requirements - before you start to physically look at properties. This will save you time and money.

Step 4: Take notes. On your own and with the help of an agent, you've found some houses you're interested in looking at. Don't venture out without a pen, paper and camera. Keep track of important details by taking notes and pictures. Have a list of questions ready and scope out neighborhoods by driving around for a bit.

Step 5: Close the deal. If you've found a home you love, don't wait to make a move. I've seen many first-time buyers miss out on a home because they got cold feet and continued shopping around. Make an offer and be ready to negotiate. Once a deal has been made, thoroughly read the contract and make sure you understand everything before you sign. Then you will be ready to begin with the appraisal and home inspection process.

A form of revolving credit where your home serves as collateral, home equity loans must be carefully considered, especially in today’s market, to make sure the benefits outweigh the costs. Therefore, before applying for a home equity loan, discuss the idea with your real estate agent and review the following considerations from the Federal Reserve Board. While an equity line can be a great way to fund a college tuition or pay off a big debt, such as medical bills, it can also put your home on the line should you find yourself unable to repay.

Interest Rates
Home equity lines of credit typically involve variable rather than fixed interest rates. In such cases, the interest rate you pay for the line of credit will change, mirroring changes in the value of the index. Because the cost of borrowing is tied directly to the value of the index, it is important to find out which index is used, how often the value of the index changes, and how high it has risen in the past. See if your lender will allow you to convert from a variable interest rate to a fixed rate during the life of the plan, or let you convert all or a portion of your line to a fixed-term installment loan.

Fees and Costs
Many of the costs associated with setting up a home equity line of credit are similar to those you pay when you buy a home, such as: paying for an appraisal; an application fee; up-front charges, such as one or more "points;" closing costs, including fees for attorneys, title search, mortgage preparation and filing, property and title insurance, and taxes. Make sure the investment you make to establish the home equity line isn’t more than the amount you actually draw against the line—otherwise, the initial charges would substantially increase the cost of the funds borrowed.

Repayment Plan
Before taking out an equity line, create a realistic plan for paying it back. Some plans set a minimum monthly payment that includes a portion of the principal (the amount you borrow) plus accrued interest. But, unlike typical installment loan agreements, the portion of your payment that goes toward principal may not be enough to repay the principal by the end of the term. Other plans may allow payment of interest only during the life of the plan, which means that you pay nothing toward the principal. If you borrow $10,000, you will owe that amount when the payment plan ends. Whatever your payment arrangements are, when the plan ends, you may have to pay the entire balance all at once.

Selling or Renting?
If you sell your home, you will probably be required to pay off your home equity line in full immediately. If you are likely to sell your home in the near future, consider whether it makes sense to pay the up-front costs of setting up a line of credit. Also keep in mind that renting your home may be prohibited under the terms of your agreement.

As a Member of the Top 5 in Real Estate Network®, I, along with my team, have consulted with many clients seeking to capitalize on a foreclosure purchase. We always advise them, however, to weigh the pros and cons. While a foreclosure could represent your best chance to get a great deal, make sure you educate yourself about the potential pitfalls of purchasing a distressed property in advance - and what correcting those pitfalls might cost. In most cases, it's not so much about what damage occurred but rather the source of the damage and how long before the problem was addressed.

Here are the top 10 signs that may indicate trouble in a foreclosed home:

1. Unheated house in winter months. If the home has been properly winterized, there's no need for heat. But if the home has not been properly winterized, pipes will burst and cause water damage.
2. Missing sinks, toilets and other fixtures. Make sure they've been properly removed and not ripped from walls and floors.
3. Peeling, bubbling and discolored paint; swelling in walls or ceilings (especially around kitchens and bathrooms), or a musty odor all indicate water damage and, potentially, the presence of moisture and mold.
4. Fungus growth inside cabinets, behind drawers and built-ins. Fungus could mean that there has been water damage. Since water falls down, look for the source above the mold.
5. Blocked drains or pipes will cause future problems and may have already created sewage backups.
6. Black cobwebs, greasy gray residue on walls and/or a strong oily odor. This could point to potential soot damage or a malfunctioning furnace.
7. An older home with extensive renovations. Check with the city for pulled permits in order to get remolding details. If asbestos is present and has been disturbed, be sure it's been remediated by a certified specialist.
8. Excessive painting of every nook, cranny, door and floor may mean that the seller is covering up mold.
9. Discolored subflooring. From the basement, check the subflooring above for stains and small holes, both caused by mold.
10. Air quality. The air quality within a home tells a lot about the home's condition. Be sure to include air and surface testing in your home inspection. It's a few hundred dollars well spent.

There are indeed many great opportunities in today's market, but proper education and preparation are essential to making the right investment. Please e-mail our team for further information and be sure to share this article with others who might be considering a foreclosure purchase.

Labor Day has always been a holiday that I have looked forward to.  To me, it represented the day before school started, fun new clothes, new books, and new classes of study, new teachers, and new friends.  My birthday is usually on or around this holiday so it made the celebration all that much more of special interest to me.  My parents always joked that I was born on Labor Day because I have had a strong work ethic from an early age.  I recently learned that was all in jest, however; it was their way of making a point of my incessant quest to find projects to do.   I find fun in doing things that most folks would consider work, so a Labor Day birthday seemed apropos.

 It is curious, though, that it has only been in recent years that I have paid much attention to when and why Labor Day became an American holiday at all.    It was all about honoring those that were industrious and entrepreneurial and the contributions made by average people to make our country great.   I thought that you might find the following excerpt from the official website of the Department of Labor interesting. 

 I’ll be thinking about you as I work on one of my many projects today!  Relax and enjoy YOUR day!

Pat

"Labor Day, the first Monday in September, is a creation of the labor movement and is dedicated to the social and economic achievements of American workers. It constitutes a yearly national tribute to the contributions workers have made to the strength, prosperity, and well-being of our country.

The first Labor Day holiday was celebrated on Tuesday, September 5, 1882, in New York City, in accordance with the plans of the Central Labor Union. The Central Labor Union held its second Labor Day holiday just a year later, on September 5, 1883.

In 1884 the first Monday in September was selected as the holiday, as originally proposed, and the Central Labor Union urged similar organizations in other cities to follow the example of New York and celebrate a "workingmen's holiday" on that date. The idea spread with the growth of labor organizations, and in 1885 Labor Day was celebrated in many industrial centers of the country.

Through the years the nation gave increasing emphasis to Labor Day. The first governmental recognition came through municipal ordinances passed during 1885 and 1886. From them developed the movement to secure state legislation. The first state bill was introduced into the New York legislature, but the first to become law was passed by Oregon on February 21, 1887. During the year four more states — Colorado, Massachusetts, New Jersey, and New York — created the Labor Day holiday by legislative enactment. By the end of the decade Connecticut, Nebraska, and Pennsylvania had followed suit. By 1894, 23 other states had adopted the holiday in honor of workers, and on June 28 of that year, Congress passed an act making the first Monday in September of each year a legal holiday in the District of Columbia and the territories.

The form that the observance and celebration of Labor Day should take were outlined in the first proposal of the holiday — a street parade to exhibit to the public "the strength and esprit de corps of the trade and labor organizations" of the community, followed by a festival for the recreation and amusement of the workers and their families. This became the pattern for the celebrations of Labor Day. Speeches by prominent men and women were introduced later, as more emphasis was placed upon the economic and civic significance of the holiday. Still later, by a resolution of the American Federation of Labor convention of 1909, the Sunday preceding Labor Day was adopted as Labor Sunday and dedicated to the spiritual and educational aspects of the labor movement.

The character of the Labor Day celebration has undergone a change in recent years, especially in large industrial centers where mass displays and huge parades have proved a problem. This change, however, is more a shift in emphasis and medium of expression. Labor Day addresses by leading union officials, industrialists, educators, clerics and government officials are given wide coverage in newspapers, radio, and television.

The vital force of labor added materially to the highest standard of living and the greatest production the world has ever known and has brought us closer to the realization of our traditional ideals of economic and political democracy. It is appropriate, therefore, that the nation pays tribute on Labor Day to the creator of so much of the nation's strength, freedom, and leadership — the American worker."

(Quoted From US Department of Labor 2010)

Many years ago, one of the very seasoned agents in our office did a survey.  She asked 24 full time agents how long they had been in the business (287 total years), how many open houses they each held open in a year (12.5), how many of the listings sold as a direct result of holding that house open (31), and the number of listings which sold as a direct result of someone else holding a competing house open (5).  After gathering and averaging the results, this is what she discovered: 

Out of 287 years collective experience between the 24 agents x 12.5 annual open houses average per agent resulted in 3,587.5 Open Houses held to sell 31 properties.  It took an average of 115 Open Houses for each home that sold as a result of this type of marketing.

One might look at the results of that informal survey and deduce that Open Houses are a waste of time; surely there are better ways to expose a home that is on the market for sale.  However, even in light of that very "scientific" study back then, I still am one of those old fashioned agents who really do like to do them!

I happen to enjoy meeting the neighbors and all the folks that visit Open Houses to get decorating ideas, check out the floor plan and are just plain nosey.  It is a great way to network and stay abreast of all the community rumors.  I am one who is energized by other people so having an Open House can prove to be quite stimulating and fun.  I go into the afternoon with no expectation that I will sell the home – even though that is the goal and I work diligently toward that end by showcasing the property in its most favorable light and following up after the fact with those that have stopped by.  Without grandiose expectations one cannot be drastically disappointed but may be wildly excited about linking up with an incredibly interesting person.

Many sellers want and expect agents to hold their home open to the public because it will often bring traffic and feedback that may have been lacking during the time on the market. Sellers are eager to have their homes admired and an Open House on a Sunday afternoon is just the ticket.  By cleaning up one time and getting out of the house for a few hours, there is a potential to have many showings with only one major inconvenience.  Sellers like this particular aspect of Open Houses.  My sellers will realize that the likelihood of a sale as a result of the Open House is quite small but are ever hopeful that they will be the exception to the rule.

The truth is that Open Houses can benefit all.  Sellers benefit by having exposure to people who might not see the home otherwise and who can share the benefits of the property with others who are in the market for a home.  Prospective buyers benefit from the opportunity to visit a property unencumbered by an agent with time constraints.  It also allows for comparison shopping throughout the market that will ultimately enable the buyers to make a faster or smarter home buying decision.  The neighbors benefit by being able to stay on top of the market trends in their community.  And, last but not least, Agents benefit by the contacts that are made with the visitors; they are wonderful networking opportunities and, if handled correctly, can lead to future business long after the open house has ended. 

In summary, if an agent believes an Open House will be a waste of time, it probably will be.  But, if the positive approach is employed in preparation and execution of the event, the end result can be surprisingly fruitful!

10 Tips for Staying Organized in 2010

If you’re like most people, one thing that always makes your New Year’s resolution list is, “Get more organized.” In today’s hectic and often challenging lifestyle pace, staying organized provides an important sense of control and ensures you stay on track toward important goals.

As a Member of the Top 5 in Real Estate Network®, I know that organization is the key to success, both at home and on the job. So as 2009 draws to a close, here are 10 tips for kicking off a well-organized year:

• Box it up right – Begin by stowing away the holiday décor in well-marked and sorted boxes. Try using empty wine cartons (you can probably get them free from your local liquor store) for fragile ornaments, and buy a few plastic storage cases that can be stacked and stored out of the way.
• Make some lists – Add any new names to your card and gift list, so that you are ready for next year.
• Get a new calendar – first, transfer in all birthdays and other important dates you want to be sure to remember.
• Schedule it – then begin scheduling annual medical, dental and veterinarian appointments for the family and pets, and note any other dates you want to remember, such as car maintenance, registration times, etc.
• Get it on sale – Get a head start on next year by taking advantage of after-holiday sales on wrapping paper, cards and gifts.
• Budget for next year – Take a look at your receipts to see how much you spent this year; then divide by twelve and begin a savings plan to help you get there stress-free.
• Hidden agenda – Designate a private spot for storing gifts you buy when they are on sale during the year. Keep a note in your wallet listing what you buy and for whom.
• Be tax ready – Create a folder or storage box for all receipts, check stubs, and other materials you will need when tax season rolls around. Make this the year you throw everything into the designated file or box.
• Be car ready – Keep a box in your trunk to hold blankets, umbrellas, diapers, flashlight and anything else you may want to have handy in an emergency.
• Check on your resolutions – Keep a written list of what you want to accomplish this year: losing weight, eating better, exercising, or even being more organized. Check the list each month to see how well you are doing.

While it seems impossible at times, staying organized is simpler than you think—and the rewards are tremendous—so forward these great tips to your family and friends. Wishing you a happy and healthy 2010 and be sure to e-mail me for any real estate-related assistance you may need in the New Year.

10 Financial Resolutions for 2010

As a Member of the Top 5 in Real Estate Network®, home buying clients often ask for advice on the best ways to manage and save money. As the credit card bills from holiday spending start to roll in, here are 10 New Year’s resolutions from bills.com for the year ahead…and beyond:

1. Make a plan. Create a straightforward budget for the year and monitor it monthly or weekly. Each month, review your progress and revise where necessary.

2. Use cash. Move away from credit cards and avoid going into debt, especially for daily, routine and ongoing purchases. Write checks or use automatic bill payments for bills, and withdraw enough cash or use a debit card for other expenses. Track withdrawals diligently to avoid going into overdraft.

3. Pay bills on time. The most important element of good credit is paying bills on time. Keep bills in one location and check that spot weekly. Set up online payments or write due dates on a calendar to stay on track.

4. Save. Your goal should be to save 10% or more of your income, but starting with even a few dollars a week is a great way to develop the habit of saving. You can always add more to your savings at any time. For example, after you pay off a bill, add the amount you would normally pay toward the bill to your savings instead. If you get a raise, bonus, cash gift or other one-time monetary receipt, save it—or at least a portion of it.

5. Practice preventative health. Money cannot buy good health, but in today’s world of skyrocketing medical and insurance costs, getting sick can cost you. Exercise and eat well, get enough sleep and, in these stressful times, take time to pursue relaxation practices, whether that means spiritual practices, meditation, a workout or coffee with a friend.

6. Think twice before spending. Find creative ways to cut back on expenses—take care of household maintenance, barter services or goods with friends or neighbors, and fix up old belongings rather than rushing to buy new ones. Some statistics say that people buy 30% more when shopping with a larger cart, so even a small change like avoiding the store cart when possible could save you money.

7. Participate in a retirement plan. Many believe now is a great time to invest for the long term. Especially if your employer matches contributions, contribute to a business retirement plan. If you are on your own for retirement savings, invest in an Individual IRA, Roth IRA and/or plan for self-employed persons.

8. Have the right insurance. Insurance protects against expenses you cannot cover yourself. Be sure you have life insurance to protect your family, auto insurance to cover your car, health insurance to provide for at least major medical incidents, and home or renter's insurance to protect possessions from theft or disaster.

9. Pay taxes on time. File your income tax return on or before April 15, with any tax due, to avoid penalties. At the same time, adjust withholding if needed to account for changes in income. That step might be especially important this year for those with lost or reduced work. If your refund was large, have fewer taxes withheld so you are not giving an interest-free loan to the government.

10. Get help if you need it. If you lose your job, file for unemployment quickly. If you are worried that you will be unable to pay rent, mortgage or other obligations, talk to your bank or a reputable debt resolution company to learn about your options.

Remember that today’s attractive housing prices, combined with the government’s expanded and extended home buyer tax credit, make investing in a home one of the best ways to secure your financial well being. If you would like more information, e-mail me, and please forward these sound financial tips to your family and friends.

10 Ways to Protect Yourself from Mortgage Fraud

Many of the challenges homeowners and home buyers are confronting today are the result of unscrupulous mortgages extended over the past several years. Help protect yourself during the home buying process with these tips from the American Homeowners Foundation and the American Homeowners Grassroots Alliance, www.AmericanHomeowners.org, or in Canada, www.genworth.ca:

1. Deal only with reputable mortgage bankers or mortgage brokers. Get recommendations from neighbors and friends who dealt with them as customers. Check on the mortgagor’s record with the local Better Business Bureau and state licensing authority. As a Member of the Top 5 in Real Estate Network®, I can also provide you with many credible mortgage resources.

2. Ask how long they have been in the business, and be wary of working with someone with less than five years experience, no matter how reputable their employer may be.

3. Unlike professional real estate agents like myself, mortgagors owe you no fiduciary duty. While it is in the long-term interest of mortgage lenders and brokers to treat consumers fairly, for many, that doesn’t stand in the way of charging higher fees or interest rates. Always get quotes from at least three mortgage lenders and/or brokers, and make sure each one knows you are doing so.

4. Since you’ll be providing them the most comprehensive personal financial information you’ll ever provide any company, ask the lender to describe their data security policies, both online and offline.

5. To reduce the likelihood of overpaying for a home, make sure that you review recent selling prices for similar homes in the same neighborhood before you make an offer. I can provide you with a detailed analysis of the homes in our communities.

6. Set aside some extra money for closing costs. One of the vexations of real estate financing are the differences in estimated settlement costs on the Good Faith Estimate (GFE) forms, and the actual settlement costs, which very often include several hundred additional dollars worth of previously undisclosed and creatively named fees.  

7. Pick the right kind of mortgage. Interest rates are higher on 30 year fixed rate loans than on 15 year fixed rate loans. Adjustable rate mortgage are always a gamble. You may well save money over the first few years if interest rates are dropping, but predicting their direction further out is very speculative. Prepayment penalties can more than offset any savings if the rates go up after that and you want to refinance.

http://www.realtor.org/rmodaily.nsf/pages/News2007072006?OpenDocument

http://www.hgtv.com/hgtv/home/article/0,1783,HGTV_3655_1466921,00.html