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In recent times, Americans have grown increasingly pessimistic about their national economy. They consider the condition of their economy to be as dismal as it was during the recession of the early 1990s.
Rising prices are clearly the uppermost concern. Nearly 49% of the people say that rising prices of essential commodities is the issues that concern them the most. In contrast, only 19% cite the unemployment situation and 12% cite declining real estate values. Inflation is the primary concern uniformly for people at all income levels, although the constantly declining real estate values affect strongly upper middle class Americans with household incomes of $100,000 or more.
The two major factors that have grossly affected the real estate markets are: 1. Easily available house loans that enabled borrowers who had poor credit to purchase homes which they otherwise could not have. These risky loans were then securitized and sold to investors.
2. When these less credit-worthy borrowers were not able to repay their loans, the lenders stopped the easy credit. Builders, who had already taken steps to meet the new demand, could not stop building new homes.
Richard Bitner, a 14-year veteran of the mortgage industry has stated in his recently published book how "greed, fraud, and ignorance" were involved in pushing home prices to absurdly high levels as well as getting borrowers to buy houses they simply could not afford.
Wild speculation by investors and high expectations of homebuyers of an attractive financial payoff made housing market more volatile than the other sectors. This factor caused people to buy a home less for personal use, but more as an investment to resell and generate a capital gain.
In the U.S. real estate prices have steadily gone upwards, year after year, at least during the last four decades. But home prices severely nosedived in the early 1990s and experienced a major boom in the mid2000s.
In the largest metropolitan areas across the nation, housing prices have slipped by about 15 percent during the current two-year slump - more in parts of Florida and California, less in some states, including Connecticut. Although the housing market slowdown is national phenomenon, yet it has taken its earliest toll in Midwestern communities. Some market forecasters say that coastal communities, from California to the Eastern seaboard, may ultimately witness the sharpest downturn in prices. Experts believe that the uncertainty is greatest in coastal areas and other hot markets such as Las Vegas, due to the unusual nature of their recent price surge.
The devastation taking place in the building and home construction markets is expected to continue till the end of the year, according to analysts who spoke at a recent conference sponsored by the National Association of Home Builders.
Quite a few leading economists opine that the deterioration of the housing market has caused the U.S. economy to slip into a recession that may continue at least till June. They feel the high oil prices will continue to hamper consumer spending and will make home financing difficult. A recovery in the housing sector may not happen until at least 2009.
Drastic decline in home prices has adversely affected the homeowners' wealth and some mortgage borrowers have found the value of their homes has fallen below the price of their mortgages. Many industry watchers predict that sooner than later, the housing crunch will cost Americans $400 billion in lost home value.
You have to successfully manage your emotions during the buying process so that you do not rush into wrong home buying decisions which you may later repent. Whether you are concerned about the technical aspects of buying a home, fulfilling the legal formalities or a better plan to raise your finances, - let not emotions blind your reason and your ability to think clearly. A common mistake made by home buyers that causes them to make bad decisions, and waste thousands of dollars is the lack of a well-thought out plan. Your plan should include obtaining approval for your loan, a dispassionate studying of the real estate market, identifying the right neighborhoods etc.
As buying a home is a matter of personal pride, it is not possible to be completely free from all emotions and act with equanimity and mental poise. But remember that you are entering into a complex business deal, and therefore it is necessary to keep as focused as possible and not make impulsive decisions that you will regret later.
You will have to determine whether the price the seller is demanding is abnormally high, or it is a fair price in keeping with market norms. For this, you should have researched the market well to know what comparable homes are selling for. Without this knowledge of market value, you may be trapped into bidding too much, or fail making a fair bid and losing a good deal. What exactly are your requirements when planning to buy a home? It is saner to write down all your needs and then use it as a benchmark to verify every home you inspect. When initially going round looking for homes to buy make it a point to inform the sellers that you are being represented by a Buyers Agent. Completely avoid giving your name and contact particulars or sign a register. When you give this type of information either orally or by writing in a register you may surrender your rights for buyer representation. Effectively this may prevent you from having your own agent who will represent you and help you buy that property at your price.
If you are excited and overwhelmed with emotion during the buying process then you will end up becoming owner a wrong home unsuited to your requirements. You certainly do not wish to discover when you are near the end of a transaction that there are encumbrances on the properly such as tax arrears, undisclosed owners etc. Never expect all sellers to honestly disclose all the demerits of the house. You and your seller have conflicting interests - you to buy the house at minimum price and he wanting maximum price. Home buyer's emotion often interferes and makes it hard to visualize any problems that may subsequently crop up after buying the home. It is certainly worthwhile engaging an independent professional inspector to objectively view and assess the home. A professional inspector will save you money and hassle by letting you know well in advance what the demerits are and not after you have already negotiated a price. Having a home inspection allows the problem to be addressed before the sale closes.
Arrange for pre-approval of mortgage as pre-approval is quite easy and free. When you have a pre-approved mortgage, you can shop for your home in a more relaxed fashion and with a greater sense of security, conscious of the fact that the money will be there when you find the right home. Be extremely cautious when closing the deal and insist on meticulously going through all the paperwork before you sign on the dotted lines. Make sure this documentation truly and faithfully reflects your understanding of the transaction, and that nothing has been added or deleted.
Most of the people, who have the intention and resources to build their own homes, are unaware how to plan, design and construct their dream houses. Let us understand the steps that we need to take sequentially to translate our dream house into a reality. Before you commence construction, you must apply and obtain a Building Permit from the local Building Department. The Department will demand a complete set of plans that should typically include eight to twelve sheets of drawings along with structural performance calculations provided by an engineer and an energy performance report for the proposed building. The plans are usually produced by an architect or a qualified designer. Your proposed construction is subject to Zoning Restrictions and Building Codes. The Zoning Department will obviously be concerned whether your project will affect the surroundings in any way before clearing your project. The Building Department will examine whether your house is securely built and will it withstand an earthquake. They will also look into the safety of electrical wiring. Design of a house is the drawing on paper of the way you want to construct your house using a set of drawing conventions, symbols and terms that are understood by all the professionals in the construction business. The design reveals the size of your house, the number of bedrooms, special access, the kitchen size, toilet facilities etc. Several designer-client meetings take place during the design development stage when most of these details are worked out Then you prepare the construction documents which comprise of the basic design drawings, the site plan, the floor plans and elevations and also contain several sheets of detailed drawings that show how the house will be built. The drawings are accompanied by a set of engineer's calculations showing that the proposed structure is sound and will resist earthquake and wind forces. To get a Building Permit, your plans must conform to both the local zoning requirements and the building codes. Building Department typically takes three to six weeks to approve plans. When you are granted your Building Permit, you are also given several documents. The law requires that your Building Permit should be posted prominently on your property. Then you have the crucial task of selecting a contractor. Some contractors work with a small crew and do one job at a time. Some own big companies and run several jobs at the same time. Some work on a time and materials basis while others offer you fixed bids for the entire project. The best way to select a contractor is to obtain bids from a few of them. This will help determine the likely market for cost for your job. Inordinately high bids could indicate that the contractor is really not interested in your project. Excessively low bids could indicate that a contractor is inexperienced or desperate for work. Mid-priced contractors whose bids are in line with your initial budget should be your choice. You should arrange for a meeting between your to ensure that the plans are completely understood by the contractor and there are no communication gaps. You will have to do quite a bit of shopping for items like kitchen cabinets, lights and plumbing fixtures and they must be purchased in time to be on the site when the contractor needs them. Normally it takes four months to a year to build a house, depending on its size and complexity. Please remember that your construction will need periodic inspections by the authorities and it is your job to satisfy him about the plumbing and wiring within the walls. After all the construction work is complete, you will need a Final Inspection Report before the Building Department issues the occupancy certificate that allows you to move into your dream house.
When you sell home for cash, regardless what kind of surface the house has; definitely you must renovate it, so select neutral colors something like off-white. When it comes to floors, again stick to lighter colors. In some cases, if you haven't done much painting recently, it makes sense to repaint the entire interiors. If carpets are in good shape, a professional cleaning will usually be enough. In case if they are stained or old, you are better off either replacing them. Incase of kitchen or bathrooms, replace any older vinyl flooring; this can quickly brighten up things. Use quality materials and avoid colors and patterns which are busy, improving the beauty of your house can increase its value.
When you sell home for cash, there are certain kinds of renovations that won't help you to get a higher price, so watch for these; - A swimming pool. It is considered to be a liability and not an asset! Unless you live in a hot place; the cost of pool maintenance and insurance is a buyer's turn-off. Families especially with kids avoid houses with pools.
- Home addition. Definitely it's an addition to your house that will add inside space, but how will it look from the outside? Many home additions can look unnatural and boxy when it is compared with rest of the house. If you want an addition, see that it is well designed.
- Stylish finishes. Don't fall for those latest trends when it comes to renovating. As soon as it's out of style, it might look bad. One trend which will probably last for a while is mahogany for home appliances or custom paneling in maple. Otherwise, try those timeless, classic renovations!
- A Jacuzzi. Yes, nothing beats a lovely soak after a busy day. But not everyone prefers a giant tub with multiple jets. Instead, try a rain showerhead if you want to include some luxury to the bathroom.
Most of us have the desire to acquire additional properties to earn  rental revenue but we seldom realize this dream for lack of time, money and knowledge. So we never get round to buying any other house than the ones we live in. It is time we thought more about this issue as a second income from renting a property can have many advantages. No matter how much one earns, he is unable to cope with the inflationary trends and rising costs. People, who have additional properties let out on rent, tell you that wealth begets wealth and investing in a second property to rent can be a solution to your financial problems. This move will also provide you a sense of financial security and psychological ease. Mortgage providers were traditionally offering loans only to people who wanted to buy a home to live in. This scenario is now changing and an increasing number of mortgage providers are offering loans for a property you want to buy for renting. Getting rental revenue is seen as a sound investment by many and is becoming more commonplace. Most financial experts assert that buying properties for letting out is the best solution for retirement planning. They say the adage "There's nothing more solid than bricks and mortar" is absolutely relevant when thinking of retirement plans. However make sure that the property you buy for rent is in an area which is likely to have a demand as otherwise it can turn into a dead investment.  If you are buying a property for renting out purposes rather than living in, then you will have to seek a buy-to-let (BTL) mortgage. There is a clear distinction between BTL and mainstream mortgages. Instead of assessing the amount you can borrow based on your income, BTL loans are calculated on the rent you could get for the property. Lately the rules for BTL have become more relaxed and you can get a mortgage with rental coverage of 100 per cent in many cases. For many years traditional landlords have invested in real property to realize rental income. But since the mid-nineties there has been an upsurge in demand for rental property which is working to the advantage of many mortgage providers keen to promote new amateur landlords. The one major risk is that even if the property is not occupied for all 365 days of the year, the owner still has to pay the monthly mortgage bills. Buying to let for the student market is certainly a viable option in university towns. However, student rents are generally lower, and it may be worth bearing in mind the likely damage to the property after years of student  occupancy Capital appreciation is likely to match, if not exceed, inflation rates and this is an encouraging sign. But in the final analysis the rents that you earn should be approximately 130 per cent of the monthly mortgage repayment as a minimum, in order to cover all of the potential costs. It is essential that you do not let your personal tastes to come in the way when you decide to buy a property for letting out. Instead you should be asking 'how many people would want to hire this property and what the likely rental value would be. Consulting a real estate agent will be helpful in knowing all relevant particulars
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