Buying a home is a big move. It leads to a series of things to think about. 

One of them is whether you want to live in a condo or a single unit family house? Each choice comes with their own set of advantages and disadvantages. Only you can determine what’s best for you.

Michelle and Kevin Millsom, 31 and 36, is a newlywed couple living in Boston. Choosing to live in a penthouse apartment was the best thing for them. They don’t have any children, both have high-powered financial careers, and they love the excitement that the city had to offer.

“We enjoy everything the city has to offer—the restaurants, theatre, outdoor concerts. We walk everywhere and find the easy access to the airport to be a plus since we travel frequently for work,” said Kevin. “When we have children, we may think about a house in the suburbs, but for now this is where we want to be.”

They wanted to be at the heart of the city. So they bought a penthouse apartment overlooking Boston’s famous esplanade and Charles River.

Sounds to good to be true? As with all things, it also comes with its own share of disadvantages. They live in a two-bedroom/two-bath condo that costs way more than a home three times the size of their condo. And it’s just 20 minutes away. They share the building with fourteen other tenants which means that decision-making  with regards to the building need to be consulted with them. They also need to pay $300 per month for a parking spot for a car which they seldom use because of the convenience of their location. To most people the cost may sound unreasonable. But to Kevin and Michelle, who appreciate the convenience and the good location, the cost is all worth it.

Condo living is not for everyone. Adriana Forte, 62, chose to live in a “condex,” (a two-family home with a shared wall) in the Boston suburb of Arlington. After her divorce she chose to live in a condex thinking that taking care of a home will be too much to handle. However it turned out to be a wrong decision. “It’s difficult to live with neighbors so close,” Forte said. “First there was the noise. My neighbors are night people, and every night they are just getting geared up when I’m trying to sleep. Then I found myself handling 100 percent of the finances and maintenance of the duplex—without compensation. I may as well be living in my own house!”

She missed out on a lot of things that a single-family house can offer – fresh air and private outdoor space. Forte loves maintaining a home and a garden.

Consider these things to help you decide what is most important to you.

• Location – Where do you want to live? Are both the condo and house in the same area?
• Privacy – Are you comfortable about living closely with neighbors? How much do you value your privacy?
• Responsibility – Do you want to have full control over decision-makings for your home? Or do you want to share that responsibility with other neighbors?
• Maintenance – Do you enjoy taking of your home and garden? Or are you the type who is just not into plants?
• Budget – How much can you afford? A condo might be more reachable right now.

Life is dynamic. People change and situations change. Whatever you decide now, can still be changed to suit your current lifestyle and preferences.  

Determining the price of your home is crucial to the sale. Wrong pricing could either cause your house to stay longer in the market or could mean getting less from the actual value of your home. This is why sellers opt to pay $300 to $400 to have their homes appraised before putting it on the market, says Alan Hummel, past president of the Appraisal Institute and chief appraiser for St. Paul, Minn.-based Forsythe Appraisals LLC. He said presale consultations in their firm increased in the first quarter while the real estate market for residential properties slowed down and properties in the market increased.

Real estate agents can also do the appraisal for you. But going to an appraiser will give a more accurate and unbiased assessment. Usually, agents also turn to appraisers or suggest this to this clients especially if the house has stayed in the market for quite some time.

The appreciation for a more accurate pricing came just a few years ago. Gone are the days when you can just quote a price and see how it goes. “Now you’ve got to be competitive and you have to know that the offers coming in are reasonable,” Hummel said.

He adds, if a property spends too much time on the market, the price it will be able to command often decreases, some buyers will question the reasons for the property’s inability to sell.

An appraiser will assess your home from a objective view, based on several factors like its location and the condition of the house. “We’re trying to react the way a typical purchaser would,” he said. The appraisal also will analyze the health of the local real estate market, giving homeowners more personalized expectations for selling their home—a feature especially important with the plethora of national news stories generalizing the real estate market, Hummel pointed out.

Appraisers sometimes use a cost approach where they determine the price of the house by comparing it to a new house with similar specifications. This approach is beneficial to sellers with newer homes because this gives them an idea of where their home stands in the new-construction front.

It will also be a good idead to look for the appraisal report before you bought your home, says Michael H. Evans, president of Evans Appraisal Service Inc. in Chico, Calif., and a fellow of the American Society of Appraisers. According to him, only a few people actually take time to review the paperwork when it’s done. Most buyers are just focused on buying the house. “They don’t go back and review that paperwork unless there’s a significant issue that needs to be addressed,” says Evans.

But reading through the report can actually save you from problems. It’s also a good idea for sellers to address this before putting the house in the market.The American Society of Appraisers shares with us some things you should know about home appraisals.

The appraisal report includes the following information

• The appraisal. It will give details about the house, a description of the neighborhood and comparison with other similar properties in the area.
• Evaluation of the area’s real-estate market;
• Major damage or possible problems that will affect the value of the house;
• An estimate of the length of time that the house will stay in the market

An appraisal report versus a home inspection

An appraisal is an opinion of the value of the house. It compares your house with similar houses that were sold. A home inspection report on the other hand, is on the lookout for flaws and damages in the structure.

Securing a copy of the appraisal

It is your right under federal law to have a copy. When you bought your home you paid for an appraisal. If you don’t have a copy, you can ask for it from your lender.

What to look for in the report

Pay attention to items on the report that have a negative adjustment. Those are the things you’ll need to change or replace to get a good offer. It could be an outdated kitchen or bathroom; adding another bathroom; or adding more space in the garage to fit another car.

The value of getting an appraisal before entering the market

The appraisal will help you pruce your house more accurately. If a seller’s askig price is more than the actual value of the house, it will cause the house to stay long in the market, which will eventually force the seller to sell their home at a very low cost just so they could already sell it.  

Because of the crash of the housing bubble and the economic slump, many Americans find themselves with a home that costs way less than what they paid for. It’s worse for families who are troubled financially on top of this. Foreclosure seems to be the most logical option. Let’s discuss details and other options.

During the housing bubble, many people were compelled to join the bandwagon and purchased a house. But now they find that their houses are worth far less than what they paid for. There are many reasons why this happened. During the bubble, constructions companies built massive housing projects and a lot of them stayed vacant. Neighborhoods stayed empty. Some neighborhoods that were populated evetually became empty as homeowners turne/d to sub-prime mortgages, causing the entire neighborhood to fall in value. Houses in neighborhoods like this are hard to sell even at low rates. They are even hard to put up for rent.

On top of the crash of the housing bubble, a lot of Americans find themselves out of work or they have reduced work hours. Both cause families to lose part of their income. This makes bills harder to pay.

At that time, buying a house with low interest rates was so appealing. Despite their financial capacity, many American families turned to lenders to purchase a home. But now keeping a job has become tough and paying for mortgage has become such a challenge. The value of the house has depreciated so much that even if you sell the house, it won’t be enough to pay for the mortgage.

The first thing that people think about when faced with a situation like this is foreclosure. However, you must first think hard about it because they come with consequences. Having a record of foreclosure will give you a negative credit rating. and it will stay that way for years. When you need to apply for a loan, you might not be approved because of it. Even renting a house might be difficult if the landowner requires a credit report. Credit options is expected to be lower and there can be tax implications. If payment for mortgage has been continuously late, the homeowner may already feel the consequences mentioned above.

One of the advantage of being foreclosed is  that you can continue living in the house without having to pay for rent. Depending on your state, it could be a year or longer. You can also talk to the bank to ask for new terms. Especially if the property is in a difficult market. Be careful and be sure to know what you’re getting yourself into. There are some lenders who foreclosed homes illegally. 

If you’re not quite sure about foreclosure, you can also consider a short sale. A short sale is an agreement with the bank that they can sell the house at an amount much less than what was borrowed. Through this, the homeowner can get off the hook with minimal costs or be given terms that are easier financially. However, going into a short sale can also put you in a bad light in terms of your credit score.

Usually, families who are facing this difficult situation are advised to find a more affordable housing set-up; like living with relatives or having the house rented. But keep in mind that having your place rented can present problems of its own. You might find yourself with troublesome tenants that might lead you to more costs on repairs. 

If you are convinced that having your house rented out is the best option for you, research on what you need to know before putting up that sign. You need to first establish if your house can be rented out. Some homeowner associations do not allow rental. There could also be restrictions you should be aware of. Like in many college towns for example, laws have been passed to prohibit no more than two non-related adults to live in one single-family house.

The best thing to do is to seek legal advice from a lawyer. Each homeowner’s situation is unique. And different conditions apply so there is no one-fit solution to the problem. Just be open to various options and seek professional help so you can make informed decisions.

• Do you work full time as a real estate agent? How long have you been working full time in this field? What professional associations do you have? By asking if they’re working full time allows you to determine how commited you can expect them to be in your transactions. The length of time they’ve spent on this field can give you confidence knowing that they know what they’re doing, but it is not guaranteed. And tenure does not guarantee a good service.
• Do you have an a staff or assistant? Or a team that can take care of the various parts of the process? What are their roles in the transaction? What are their names and contact information? Brokers usually work with other people to carry out all the necessary work and achieve a succesful transaction. The more clients they have, the more staff they’ll need to have. It’s okay to ask if you want to find out who are the people wotking with them and what their roles are. You could also ask questions like: To whom will I give the payment? Who will be there in closing?
• Do you have a website where properties for sale are listed? Can i have the web address? Does it have a hotline or customer service email? Who responds to them and how quickly are they handled? Being online does a lot to marketing. Most people turn to their internet when they look for something. It can give them a lot of information in their convenience. Try searching for your agent’s website and see how visible they are online.
• How often will you contact me? How will you contact me? Establish a communication system with your agent so you will have an idea on how often to expect to hear from them. And ask how they will contact you – by your home phone? mobile? email? So you can be ready for them.
• What sets you apart from other realtors? Is there something you do that other agents don’t that can give me the best deal for my home? Sometimes the key to selling a home in a short time is dependent on your agent’s research, marketing skills and delivery.
• Can you give me names of past clients? Selecting an agent is like hiring an employee. Asking about them from references can give you an idea of how they are in their profession.
• Do you have a performance guarantee? Can I terminate our listing agreement if I am not satisfied with your service? It can be difficult for an agent to offer a performance guarantee. But this does not mean they are not capable of providing a high quality service. The agent should however be able to tell you what you could expect from them.
• How will you get paid? How are your fees calculated? Can I have this in writing? In most cases, the seller has the responsibility of paying agent commissions. There may be other small fees, such as administrative or special service fees, that are charged to clients, regardless if they are the buyer or seller. Before you hire an agent, ask for an estimate of costs.
• How will you develop pricing strategies for our home? The price of a house is one of the major factors in selling it quickly. Current property information is important. Ask your realtor how they made the market analysis, and if they included For Sale by Owner homes, foreclosed homes and bank-owned sales in that list.
• In terms of advetising and marketing, what do you plan to do to sell my home? Who determines where and when my home is marketed? Who will pay for advertising? Ask your agent for a clear plan on how money for marketing and advertising will be spent. Ask for samples or case studies of the types of marketing strategies that your agent has in mind (such as Internet Websites, print magazines, open houses, and local publications).

If you’re thinking of selling your home, prep up your kitchen. Homebuyers put a premium on the kitchen. Families do a lot of things in the kitchen – preparing meals, sharing meals, sorting through bills, and just hanging out.

According to a recent survey by SieMatic Corp., 85% respondents said that the condition of a home’s kitchen is a major consideration when making a purchasing decision.

You don’t have to give your kitchen a major overhaul. There are other things you can do to make your kitchen look attractive without tearing it down.

Give it a fresh paint. Painting your kitchen new is one, inexpensive way to prep it up. Choose a neutral color since potential buyers have different preferences.

Give your countertops a fresh look. Take a good look at your countertop. Does it need new tiles? Find inexpensive ways to improve it. It won’t cost much especially if your counter is not big. In terms of the color, again, keep it neutral.

Update the faucets. Nowadays, there are so many faucets to choose from. You can pick a stylish faucet to add a pretty and modern touch to your kitchen.

According to HouseMaster, a major home inspection company with offices in more than 390 cities in the United States and Canada, 40 percent of previously-owned homes have atleast one damage. Kathleen Kuhn, CEO and president of HouseMaster says, “Virtually every ‘used’ home needs some repair or improvement.” “That’s to be expected. But with today’s high prices, you want to make sure that you are aware of any major problems in a house you are considering purchasing, and what it will take to remedy the situation.”

From over one million home inspections, they’ve concluded that these are the most serious home defects to look out for:

• 1. Cracked heater exchange
• 2. Failing air-conditioning compressor
• 3. Environmental hazards including radon, water contamination, asbestos, lead paint, and underground storage tanks
• 4. Moisture in the basement
• 5. Defective roofing and/or flashings
• 6. Insect infestation — termites or carpenter ants
• 7. Mixed plumbing
• 8. Aluminum wiring
• 9. Horizontal foundation cracks
• 10. Major house settlement
• 11. Undersized electrical system
• 12. Chimney settling or separation

As per Kuhn, most of these damage can be repaired. But, depending on the gravity of the problem, it might cost you a lot especially if the problem is part of a major system. This is something that needs to be thought of before buying a house.

Roof repairs or a new roof could cost you at least thousands of dollars. A new air conditioning compressor could cost up to $1,200. To repair a basement will cost about $5,000. If you are already in the negotiating process, your agent should advise you to present a provision for renegotiating or backing out of the contract in the event that the inspector finds serious problems.

“If the property inspectors find that little or no corrective work is required, you have little or nothing to negotiate,” say Eric Tyson and Ray Brown in their book, Homebuying for Dummies. “Suppose, however, that your inspectors discover the $200,000 house you want to buy needs $20,000 of corrective work for termite and dry-rot damage, foundation repairs, and a new roof. Big corrective work bills can be deal killers.”

If however you are really bent on buying the house despite the problems, they offer these advises:

• The sellers can leave enough money in escrow to cover the cost of repairs, with instructions for the escrow officer to pay the contractors as the work is completed.
• The lender can withhold part of the full loan amount in a passbook savings account until the work has been done.
• The sellers may give a credit for the work. Lenders may disapprove of this last alternative because there aren’t assurances that the repairs will be made.

Get a qualified inspector. Their service costs between $250 and $400. If you want to ensure his credibility, ask for referrals from groups like organizations like the American Society of Home Inspectors or the American Association of Home Inspectors. New members are certified before they could join the group. You can also ask referrals from friends who has had to go through the same experience. But don’t leave everything to the home inspector. Invest a few hours with them asking them to explain the problem (if there are), what to look out for, how to keep your house well-maintained.

As Kuhn of HouseMasters say, “A pre-purchase inspection is your best protection against buying a home based more on emotions, rather than as a sound investment.”

• Take time to think about why you want to sell your home. It can be from a need to move to another place or you need to find a bigger home for your growing family. Ask yourself what you want to accomplish from this sale. As you think about this, you need to also define the time frame and profit margin that you have in mind. Discuss these goals with your real estate agent.
• Set your price. In setting the selling price, you need to be fair. You need to research on the selling price of comparable homes in your area as well as the real estate climate in your area. Most homeowners set a price based on the personal value of their home. Don’t make this same mistake. Take into consideration the condition of your house – the age, wear and tear, damage. It’s usually hard for sellers to set a realistic, unbiased price so you’ll need to consult your real estate agent. This is why it’s important that you find an agent you can trust. Your agent should be able to provide you with information about the selling price of comparable houses in your neighborhood and the average time they waited to be sold. You could also ask someone to do an appraisal on your house so you could have a second opinion and a more objective one. Setting a fair market value price on your house is important. Studies show that houses priced higher than 3 percent of their market value, took a longer time to sell. When a property takes a long time to sell, buyers start to think there’s something wrong with it. This leads sellers to become desperate and sell the property for far less than it’s actual market value.
• All sellers want to sell their homes quickly. But only some are willing to make their houses look salable. Take away eyesores to make your house attractive to buyers. Check every area of the house especially the garage and make sure to remove clutter or stored boxes. Fix what needs to be fixed – broken light, hard-to-open windows and  doors. The appearance and condition of your house will influence it’s price and salability. Cleaning up doesn’t only mean wiping away the dust or scrubbing the floors. It also means putting away most of your personal stuff. It will be hard to sell a house that has so many family photos and mementos. When there’s too much of the seller’s personal stuff, the buyers will have a hard time thinking about making it theirs. Ask your real estate agent for some suggestions on how you could make your home attractive to buyers.
• Market your home. Get as much people to know that you have a house for sale. The internet is the best way to do this. It allows you to reach potential buyers from anywhere in the world who are probably planning to move in your city. But yard signs and local paper advertisements are still effective ways of reaching buyers. Your agent will know how to bring in qualified buyers. The first th/ee to six weeks are the busiest.
• Receive offers. When you receive an offer, your real estate agent will first check if the potential buyer is prequalified or preapproved. The next step would be to review the contract. The contract should include the following: Legal description of the property, Offer price, Downpayment, Financing arrangements,  List of fees and who will pay them, Deposit amount, Inspection rights and possible repair allowances, Method of conveying the title and who will handle the closing, Appliances and furnishings that will stay with the home, Settlement date and Contingencies. As the seller you have three options: to accept the contract as it is; accept it with revisions; or reject it. You need to be careful in dealing with contracts. It is legally binding. If there is anything at all that is unclear, ask your agent or lawyer before signing it.
• Negotiate. Most offers have to undergo negotiating so both parties can get whta they want. Real estate agents are experienced when it comes to this and they should be able to look after your interest and lead you throughout the bargaining process. These are the negotiable items: Price, Financing,Closing costs, Repairs, Appliances and fixtures, Landscaping, Painting, Move-in date. As soon as both parties have agreed to the terms of the sale, your agent will prepare the contract.
• Preparing to close. When you accept an offer, the next thing to do is to think about all the things that you and your buyer needs to do before you could close the sale. The house may need repairs; or the property needs to be  surveyed and appraised. Your agent can act as your spokesperson and deal with the buyer’s agent and service providers. It depends on your negotiation if you as seller need to pay for the cost of the services or a portion of it or even none of it. If the terms on the contract are fulfilled, then you can proceed with the sale. If however, there are problems in fulfilling the terms, you or the buyer can opt to revise or walk out. If you both decide to push through with the sale, make sure to prepare the papers. A few days before the signing, check to be sure that the necessary documents are there.
• Closing the deal. This is when the whole process of selling your house will end. After the signing of contracts, you are no longer the owner of the property. Your agent should be there to guide you through the proces. You may also invite a lawyer to be present. There are some states that require this. After the closing, there are still a few things you will need to take care of. You will need to cancel services like electricity, gas, lawn care, cable and other routine services. If the new owner decides to keep the services, change the name on the account.

If you sell your house looking like a model home, chances are you’ll sell it for a good price. This technique is called home staging. Sellers acknowledge the importance of home staging that it has become a fast-growing profession.

“Staging is not decorating. Decorating is optional, staging is mandatory in order to sell the house for the most possible money in the shortest amount of time,” says home staging instructor Joanne O’Donnell. She has been teaching home staging courses for several years.

The concept was started by Barb Schwarz in 1972 who was then a realtor. She realized that houses that were prepared to be sold prior to putting it up in the market, sold better than those that were not. Today thousands of real estate professionals understand the importance of home staging.

“When we put your home on the market it is no longer your home; it is a product and we’re marketing it,” O’Donnell tells her students.

Home stagers start by taking a close look at the house inside and out. O’Donnell encourages her students to go around the house with the seller. As they go through the house, they should take notes of the things that need to be moved or taken out.

Even though home staging is about improving the appearance of the house, O’Donnell emphasizes that it’s different from interior decorating. “You can’t go out and buy new things for every problem that you have with a house,” she says. Home staging is about decluttering in a way that it looks attractive to the masses. “Clutter eats up equity”, O’Donnell often reminds her students. “The whole idea of staging is that you want to market to the largest number of people to get as many offers as possible,” says O’Donnell.

There are five important points to remember in home staging. O’Donnell refers to them as the Five C’s of staging – clean, clutter-free, color, creatively staged, compromise with the sellers.

Gerin Canin, a lawyer from New York is transitioning into a home stager. She says, “People don’t see that a lot of things that are in their houses are part of themselves and when you try to sell a house you want to make it as neutral as possible, not necessarily in the colors, but in the way it’s presented.”

“I think that when people sell their homes they don’t necessarily see their house as a potential buyer would see their house. They become attached to things. [The seller] doesn’t notice things that other people would notice. So I do think it’s important to have an opinion from someone else,” explains Canin.

Here are some tips from professional home stagers:

Inside the house :

• Clear the clutter
• Remove from sight extra appliances and wirings
• Put away family pictures
• Do what you can to give a lot of open space

Outside the house:

• Paint/Power wash
• Put shutters
• Plants, high, medium, low — with lots of color
• Add decks to improve the look

Being a homeowner has its perks and privileges but it also comes with a lot of responsibilities which all involve money. You need to think of repairs, taxes, insurance and maintenance. Not to mention city maintenance and repairs for streets, sewers, curbs and sidewalks near your home. If your house is in the corner of the block, these costs are doubled. 

But don’t let these costs discourage you from becoming a homeowner. If you have the desire and enough funding to purchase a home, you should also have a good understanding of government policies so your house becomes a good investment. Consider it as a business with the city and state financial departments so your chances of making a promising investment is high.

Know what it takes to become a homeowner. Learn the ropes from completing and filing paperwork and getting in touch with necessary agencies. All the hassle involved in the process can be confusing and discouraging.

Your role is an investor. Your responsibility is to own and maintain your property. But you are not expected to know everything including the business side of owning a home. You need to team up with people you can trust who can help you ensure your house’s value will increase. This team should be able to guide you in making prompt payments, tax assessments, insurance, maintenance,( H.O.A. requirements, when applicable), upgrades and necessary repairs or maintenance. If these sounds all too overwhelming for you, you ight as well stick to renting.

Through renting you are giving business to the owners. Being a renter, you don’t need to come up with a large amount of money and no need for taxes.

Think about these things:

• How much is my income?
• How much is my rent?
• What is your credit rating?
• How much do you spend and how much do you save?
• How well do you handle your money?

You need to think about these things to determine if you’re ready to be a homeowner. You should also consider the economy. Do you know the current market climate? Do you believe it’s looking up? Are you knowledgeable when it comes to government regulations.

So ff you want to buy a property and work towards increasing the value, you as homeowner needs to be knowledgeable about finances, real estate, taxes, government policies and regulation, city building codes and restrictions and have good credit rating. If you know these things, you can make your investment grow and start other investments for your family’s future.

After some time, the value of the home you invested in will increase. This is the measure of your success as a financial wizard. You were able to take advantage of the government tax system and policies and borrowed against it. The money you borrowed is tax free and your earnings from it is tax-deductible.

People who used this method was able to finance other things like school tuition, payment for a new home or a new investment.

If you bought a home for $600,000 and you sell that same home for  $1,000,000, you can have the gain tax-free for up to $500,000 for a married couple. Real estate transactions like this is the only one that have a no tax income advantage. You may want to consider them for your retirement fund.

When it comes to investing, no time is better than now. But don’t do it in haste. Careful planning is required. And do it with a team of professionals who can help you with financial and legal matters.

A real estate agency is really a team that lead you to good investments and they teach you how you could maximize your earnings – tax free.

Renting versus Buying

Renting	Buying
no tax deduction	tax write -off
rental fee can go up anytime	house expensie will not go up
not free to make changes	you can make physical changes as you please
you can be evicted	home value increases over time
temporary	your home for as long as you want

The price you set for your home is very important. It will determine how long it will stay in the market and how much profit you will get. The knowledge of your real estate agent with regards to this matter is crucial. He or she should be able to inform you in terms of the current market condition, what sells and what doesn’t. Your goal is to price your house that fits its arket value but not too much.

Time. In real estate selling, time is against you. There are several factors involved that can determine the outcome. But time can be a good barometer to gauge your profit. Studies have shown that the longer a house stays in the market, it’s price decreases. So if you want to sell your house for as high as your asking price, do what needs to be done to sell the house quickly.

You need to be objective when you come up with an asking price. How much you value your home may not translate to how much it’s really worth. Don’t spend so much on home improvements and raise the price because of these renovations. Potential buyers might not like the improvements and find your house overpriced.

Because you are running against time. Try to keep things as simple as possible. Keep an open mind and be flexible to your buyers’ requests. As mush as possible do not include contingencies on the sale. This might drive buyers away.