Posted by Annalisa Burgos | July 20, 2009
I’ve never been a great haggler.
For most of my 20s, I accepted terms that were offered to me, not really knowing I could fight for what I wanted.
Perhaps it was my aversion to conflict (Libras like me seek balance, after all) or the ingrained, albeit naive, notion that people always offer a fair price.
Looking back, I wish I would have negotiated many more things in my life — career opportunities, salaries, boyfriends… but I digress.
As a first-time homebuyer, it is absolutely critical that you understand how to make a strong offer and how to negotiate with the seller to get terms you both can live with, especially if you really want the home.
Negotiating skillfully requires that you do your research — calculate the property’s fair market value from comps, understand the seller’s motivations for selling in this market, and know what concessions you are willing to make and what your deal breakers are.
Check your emotions at the door. Consider everything analytically, carefully, so you don’t get caught up in the heat of the moment and end up doing something you regret.
Think of this preparation as your training before you jump into the negotiating ring. Just because you’re in a buyer’s market doesn’t mean the seller is going to jump at your offer. You can safely assume that the seller has done their homework, so why should you come unprepared?
Posted by Annalisa Burgos | July 1, 2009
With the flood of first-time buyers and bargain hunters in today’s real estate market, your friends at FrontDoor.com want to remind ALL homebuyers out there to do your due diligence.
Don’t get so caught up with finding a steal that you forget the basics!
In this month’s Top 10, we break down the 10 most costly mistakes buyers commonly make and offer some valuable tips.
Check it out:
Top 10 Home Buying Mistakes That Can Cost You
www.frontdoor.com/top10
Buying a home is a big deal, but it should also be a fun experience. By making smart decisions, your buyer’s thrill won’t become buyer’s remorse.
Happy house hunting!
Posted by Annalisa Burgos | June 24, 2009
Real estate auction company REDC (Real Estate Disposition Corp.) works with lenders to sell thousands of foreclosure properties at auctions throughout the country. And in this market, lenders need all the help they can get to unload this excess inventory, quickly and efficiently. Note: REDC auctions are for bank-owned homes or REOs, and are not the same as the public auction, which takes place at the local courthouse.
On June 7, more than 1,200 bargain hunters attended an REDC auction in New York City, where 113 bank-owned houses in the tri-state area were sold for a total of $10 million in sales.
Watch the video to see what it’s like to buy a bank-owned home at an auction.
AUCTION TIPS:
1) Research. Before you buy at a foreclosure auction, do your research. Print out the auction brochure (if there is one), note the open house dates for the properties you’re interested in and see them in person. You more than likely will have to buy “as-is” and you won’t be able to get a home inspection done. When you visit the homes, look out for these 10 red flags for homebuyers.
2) Crunch the numbers. Estimate how much you expect to spend on home improvements on top of the purchase price, which includes a premium the auction company charges each buyer. If you’re an investor, subtract those expenses from the income you expect to generate from the home (rent) and decide if it’s a smart investment.
3) Register and be prepared. Each auction has different requirements, but all of them require you to register and bring a cashier’s check or cash for the required earnest money deposit. Many transactions are cash-only, but some auctions will allow you to finance the purchase through a lender, so get pre-approved beforehand so you know what your maximum bid will be.
For more tips on how to buy a foreclosure, go to www.frontdoor.com/foreclosures.
Posted by Annalisa Burgos | June 8, 2009
HGTV has always been about enhancing your home and home life. So it makes sense that FrontDoor.com, the real estate site powered by HGTV, is about enhancing your search for the place you call home. That means bringing you valuable tips and advice to help you make smart decisions. So in addition to our blog and large library of articles and videos, we’ve created a vlog.
Real estate topics can be dry and boring, and most of the real estate news videos I’ve seen out there are just that. As the host, I want this to be informative and fun. And as a journalist, I want this to be relevant, since today’s buyers and homeowners don’t have time to sift through all the information that’s out there.
The vlog is not meant to be fancy or flashy. It’s our way of connecting with you as that smart friend “in the know.” Future episodes will feature different topics and occasionally a special guest. If there’s something you’d like to know or have an idea or pitch for the vlog, we want to hear it. Post a comment here and we could feature it in our next episode!
Posted by Annalisa Burgos | June 4, 2009
We’ve all heard about the $8,000 tax credit for first-time homebuyers — the government’s carrot to spur buying and help reduce unsold inventory.
How it used to work: A first-time buyer would complete the homebuying process, file their tax return with the IRS in January and the credit would be applied to the taxes owed. If you don’t owe anything, you get the full credit.
How it works now: A new federal program will let you use the tax credit immediately — during closing. This is an even sweeter carrot, because the down payment and closing costs are typically the biggest obstacles to overcome when buying a home.
In today’s uncertain economy, people would rather hold on to their cash. With lenders charging higher fees, this program lightens the burden of closing costs. Average fees for a $200,000 mortgage in 2008 with a 20 percent down payment were $3,118, according to Bankrate.
The catch or two…: How much your credit will be depends on your income, tax-filing status and home price. You have to get a Federal Housing Administration (FHA) mortgage and put down at least 3.5 percent of the purchase price. Of course it doesn’t hurt to use the credit to boost your down payment, which could help lower your interest rate.
Also it’s important to note that like conventional loans that require private mortgage insurance (PMI) when the down payment is less than 20 percent, FHA loans require what’s called a mortgage insurance premium (MIP). With the FHA loan, you pay an up-front premium (1.75 percent of the loan) which is financed into the mortgage and a monthly premium for at least the first five years (0.50 percent to 0.55 percent).
The bottom line: Any time you can get money upfront as opposed to waiting for it, it’s a good thing. Too bad I still own a condo in Knoxville, or else I’d be all over this.
Posted by Annalisa Burgos | June 2, 2009
Every now and then, we’ll invite one of our Insiders, FrontDoor’s team of savvy real estate experts, to write a guest blog. Today, Rick Sharga, SVP of foreclosure data provider RealtyTrac, shares his tips for buying a foreclosure property and how to minimize the risk:
“Interest in buying foreclosure properties has never been higher. In a Harris Research study conducted for RealtyTrac and Trulia, over 55 percent of homebuyers expressed an interest in buying a foreclosed home or bank-owned property. A number of foreclosure-related Web sites, including www.realtytrac.com, are among the most frequently visited real estate Web sites.
And it’s no wonder: according to RealtyTrac research, a homebuyer will see an average discount of over 30 percent on a foreclosure property or bank-owned home across the country. In some of the harder hit areas, discounts are considerably higher, with homes selling for 70 percent or 80 percent less than what they sold for just a few years ago. Those lower prices, combined with historically low mortgage rates and an $8,000 tax credit for first time homebuyers make this an ideal time to be on the market.
Even with all of the interest in purchasing foreclosure homes, and the financial incentives to do so, many people have concerns about possible hazards. According to the Harris study, 71 percent of those surveyed were concerned about “hidden costs” and 46 percent were afraid that the process was “risky.”
In fact, the most common mistakes people make when buying a foreclosure property are overvaluing the property itself and underestimating the amount of money it will take to repair and refurbish the home. But there are simple steps that homebuyers can take to minimize risks and ensure a more successful purchase.
Avoiding “hidden costs”: Buying a bank-owned property is the safest bet. The bank will typically have cleared the title, meaning there are no outstanding liens against the property. If the bank is servicing a loan for Freddie Mac or Fannie Mae, they will generally have to bring the property up to a minimum level of repair as well. Smart homebuyers will engage the services of a professional contractor before purchasing the home, to get a formal estimate of how much work needs to be done, and what it will cost. Many contractors will prepare an estimate for free in the hopes of securing the job. Both Fannie Mae and the FHA also have loan products that allow a homebuyer to build the cost of some repairs into the actual mortgage, further minimizing out-of-pocket costs.
Taking the “risk” out of the process: Anyone concerned about the process being risky should avoid foreclosure auctions. Purchases are made without the opportunity to inspect the property and on an as-is basis. Auction purchases are almost always cash only, and there is no recourse if the property turns out to be a lemon. Buying a bank-owned property or a foreclosure home via a short sale conducted by a professional real estate agent minimizes risks considerably.
As with any other investment, there are trade-offs between risk and reward. But given the state of today’s market, and the enormous discounts available on foreclosure and bank-owned properties, the rewards are great and the potential risks can be managed. It’s a buyer’s market that may only come along once in a generation — time to get busy!”
Thanks for the tips, Rick. For more great advice, check out FrontDoor’s step-by-step guide to buying a foreclosure home, whether it’s in pre-foreclosure, at auction or bank-owned at http://www.frontdoor.com/foreclosures.
Posted by Annalisa Burgos | April 24, 2009
As far as real estate news is concerned, this week was more of the same. Foreclosure activity is up, home sales are down. And with unemployment up 8.5 percent in March, more out-of-work homeowners will have trouble making their mortgage payments.
Hopefully by now, every struggling homeowner knows there are options to foreclosure, such as a short sale, refinancing or getting a loan modification.
As Rick Sharga, SVP at foreclosure data provider RealtyTrac, explains in this interview earlier this year, three major reasons are fueling the jump in foreclosures across the country.
Meanwhile, one man’s loss is another man’s gain. Not surprisingly, investors and first-time homebuyers are flooding the market looking for bargains. Among the best cities to look? Las Vegas. Sin City had the highest rate of foreclosures of any major city in the first quarter of this year, according to RealtyTrac’s latest report.
And while existing home sales are down 7.1 percent over the past year, the National Association of Realtors says more than half of the homes that were bought in March were snatched up by first-time buyers. Hmmm, must be that $8,000 federal tax credit everyone’s talking about. Wish I could get in on that, but I bought a condo in 2007.
For tips and advice on how to work the foreclosure market, check out FrontDoor.com’s Foreclosure Buying Guide.
Posted by Annalisa Burgos | March 20, 2009
Happy first day of Spring! In celebration of the traditional kickoff to the busiest season for real estate (and this one will definitely be busy, what with interest rates as low as 4.3 percent!), FrontDoor.com is bringing you helpful tips to make the most of your homebuying and selling experience.
Sellers, we know this may be a challenging market, but the good news is that you have the potential to showcase your home to a large number of buyers who are out in force trying to take advantage of low interest rates. If your home is in great shape and priced competitively, you’ll have every buyer’s attention. You may even spark a bidding war. Get your home ready with our Staging Tips for Spring and be sure to visit FrontDoor’s Home Selling Guide for more tips and advice on selling in a buyer’s market.
Buyers, you’re in a wonderful position! There are great deals out there. But before you start looking for houses, call at least three lenders, compare rates and terms, and get a preapproval. It’ll help you determine how much house you can afford. Check out our Home Finance Guide for more tips and advice on shopping for a loan.
If you’ve never owned a home, check out FrontDoor’s First Time Homebuyer’s Guide. We’ve broken down the entire process in simple terms, complete with checklists and worksheets, so you’ll know exactly to expect. Did you know there are cities suited for first time homebuyers?
And buyers and sellers, consider going green in honor of spring. FrontDoor’s Green Real Estate Guide is chocked full of information on how to make affordable green updates and how to find a “green” home.
Happy house hunting and selling!
Subscribe to this blog
Friend us on Facebook
Follow us on Twitter