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Top Ten Pitfalls to Avoid When Buying Your Home

by Masha Halpern

You’re ready to buy a home – or so you think. Many home buyers make mistakes when purchasing a home, especially a first home. But these mistakes can lead to a bad purchase or even a foreclosure. Here are the top ten pitfalls and mistakes many people make when buying a home – don’t fall into these traps!

1. The “No Money Down” Pitch.  Beware these online or cable TV ‘gurus’ who tell you how to get rich in real estate without a penny down. The only money these guys make is off of you if you buy their CD, book or attend a seminar. It takes experience AND capital to make money in real estate, whether it is one home or ten.

2. All Realtors are the Same, Right? Wrong. Holding a real estate license does not mean that the agent you are talking to is the best one in your market or for your situation. Get referrals, look at the agents sales statistics and interview potential agents carefully.

3. Depleting Your Savings. Most lenders require 20% or more down on a new mortgage. If you don’t have it, wait until you do. Completing wiping out your savings or borrowing a down payment leaves you in a precarious financial situation if something happens.

4. Ignoring Professional Advice. Unless they sound really off base, listen to your realtor and mortgage broker when they offer advice or guidance. You should also do your own homework when looking for the right neighborhood or figuring out the best mortgage package for your family. Let the professionals guide you with their expertise and experience.

5. The “Too Good To Be True” Monthly Payment. Low monthly payments can mean that you are building no equity in your home – even going in the hole on your principal balance. Make sure that you completely understand ALL the terms of your mortgage agreement – from interest rates to monthly payments, and what the consequences are.

6. Landing in the Wrong Neighborhood. Do your homework on the neighborhoods you are looking at. The city should have demographic information, school information and ranking and crime statistics. Is the neighborhood full of foreclosures? IT could affect the value of all the homes in the neighborhood. Make sure you understand the comps and the real value of your potential home site.

7. Buying Above Your Means. Tough times mean that everyone has to revaluate priorities. Be sure to carefully consider the features and prices of homes that will really suit your needs and allow you to live comfortably without spending your entire income on your monthly mortgage payment.

8. Foregoing the Home Inspection. Even if the conditions of your loan don’t require a home inspection, go ahead and spend the relatively small sum to get the home thoroughly checked out by an objective third party. You may uncover problems that the seller should be responsible for, and at the very least, you’ll go into the purchase with the right information about the condition of the home.

9. Acquiring More Debt Before Closing. With credit requirements continuing to tighten, rest assured that your lender will run additional credit reports right before closing. If you have made additional credit purchases – from a new car to furnishings for your new home, it can reflect negatively on your credit and your debt to income ratio. In some cases in can cost you your new mortgage, even if you were pre-approved.

10. Sinking Into Debt After Closing. Many people breathe a sig of relief once the home loan has closed and then immediately begin purchasing for the home or buying items they have been putting off while waiting for the mortgage to go through. Take it easy! You’ve just added a big responsibility with that mortgage payment.

You may not realize it at the time, but many of the decisions you make when looking for a new home will affect your ability to stay in it once the loan has closed. Respect the advice of professionals, do your homework and avoid the common pitfalls of ‘too good to be true pitfalls.’

Share your experiences, what other pitfalls should buyers avoid?

 

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Tax Credit Still Available For Veterans

by Masha Halpern

Eventhough the deadline for receiving tax credits for buying a new home expired in April, eligible veterans who are purchasing a new home are still able to receive a credit up to $6500.

Veterans only need to be in contract by April 30, 2011 and close by June 30, 2011 and they are not required to take a VA mortgages to get the credit.

Qualified service members who are ordered on a period of official extended duty have until April 30th, 2011 to get a binding contract on a home in place and until June 30th, 2011 to close. Additionally, a service member who must return to the U.S. for medical reasons before completing his or her tour outside the U.S. may also qualify for the one-year extension.

Eligible parties specifically include members of the uniformed services, Foreign Services or employees of the intelligence community who were on qualified extended duty for at least 90 days during the period beginning after Dec. 31, 2008 and ending before May 1, 2010.

This credit is much needed and can help veteran's who are selling their current home and may need to lower their asking price in order to sell their property. The credits and deductions should serve to both help the housing recovery efforts as well as provide additional benefits to service people and their families.

As with any government credit or incentive, let tax professionals, including resources at the Internal Revenue Service, guide you through the qualifying and deduction requirements.

If you or a military personnel you know has or who have or plan on taking advantage of this extension we would love to hear from you. Will this incentive encourage you to purchase a new home?

 

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Why Buyers Are Still Waiting to Purchase A Home

by Masha Halpern

We are all aware that the Real Estate Market is slow. At the same time, housing is still at its most affordable level in years. So why aren't buyers purchasing homes?

1. One reason is how much credit is available to buyers. There are more hurdles in obtaining a mortgage than before. In addition to showing that you can afford to buy a home, even if you have a lot in savings, banks want to see income. Lenders want to see W-2 forms.

2. Some buyers think prices will fall even lower.  Home prices are low now, mortgage rates are low as well. Interest rates will slowly start to creep up. Don't put off until tomorrow what you can do today. Now is a great time to BUY!!

3. Buyers are not confident in the economy. Unemployment is high. Even those who have jobs don't feel a sense of job security. The more insecure people are in making purchases, the slower the economy grows.  It's a catch 22. Another reason to BUY a home; to help jump start the economy!!

I think once consumers regain confidence and banks increase lending to those who qualify, buyer activity should pick up.  In the meantime, SELLERS be patient. Your home will sell, all you need is one buyer.

Chapel Hill Area Thanksgiving Events

by Masha Halpern

It's hard to believe but Thanksgiving is next week! From great places to dine to fun events that you can enjoy with your family, the Chapel Hill area offers plenty to choose from.

Enjoy this holiday season and take time to give thanks. Happy Thanksgiving!

Thanksgiving Holiday Blues Jam

Friday, Nov 26 9:00p to Saturday, Nov 27 12:30a at Papa Mojo's Roadhouse, Durham, NC. After a day of shopping stop by to enjoy some popular Triangle musicians for a jammin’ good time. Lots of great food too - come join in on the fun!!

Downtown Chapel Hill Lights Up Sunday Night

Make plans to watch as Chapel Hill lights up with energy saving LED snowflake lights next Sunday night throughout downtown.

With the holiday season fast approaching, plans are now set for the Downtown Tree Lighting Ceremony and the lighting of the 22 foot tall Community Tree in the Memorial Garden of University Baptist Church at 6 p.m. Sunday, Nov. 28. The ceremony is organized by the Chapel Hill Downtown Partnership.

Enjoy the caroling of the church choir as Mayor Mark Kleinschmidt joins us as the guest tree lighter again this year. Don't forget your camera - children can meet Santa Claus and Mrs. Claus and have their pictures taken for free! The community tree will stay up through the holiday season. University Baptist Church is located at 100 S. Columbia St. at the corner of Columbia and Franklin streets.

The holiday parade, scheduled 10 a.m. to noon on Saturday, Dec. 11, is presented by the Chapel Hill Jaycees. The parade starts at the Morehead Planetarium and winds the entire length of Franklin Street to Carrboro Town Hall. Applications for parade participants will be accepted until Nov. 27. For more information visit www.chapelhilljaycees.org.

Annual Thanksgiving Food Drive for NCCU Alumni Association

Saturday, Nov 20 8:00 am at Eagleland, Durham, NC
The Young Professional Experience (TYPE) will be assisting the NCCU Alumni Association this upcoming Saturday, November 20, 2010, from 8am until 11am in the Annual Thanksgiving Food Drive. The food drive will benefit 10 area families in need. To volunteer or to donate please contact Carolyn Ramsey-Williams at 919 479-9613.

 

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Sharing The Cost of Closing

by Masha Halpern

The final step of purchasing a new home is when the buyer goes to closing. This is a time when the paperwork will be completed, and for the home seller it is e the remaining mortgage balance and the agent's commission will be deducted from the sales price. However, many however don't figure in the closing costs that are involved as well. 

While the amount and who will be responsible can vary from state to state, typical closing costs refer to all of the taxes, fees and costs required to close a real estate transaction.

When selling your home, it is important to ask your agent for a breakdown of what you are expected to pay in closing costs as well what the buyer will pay. In most states the buyer and seller split closing costs but some states consider the buyer to be responsible or both parties can be required to pay the costs. 

Typically the person responsible for paying closing costs can be dependent on the market. For example in a market that is plentiful, the seller could have more of a chance in having the buyer pay the majority of the closing costs. But in a market that is struggling such as now, buyers tend to have the upper hand and many sellers will pay the majority of the closing costs in order to complete the sale.

Below are some of the common closing costs faced by sellers and buyers:

Escrow/attorney fees: Some states require third-party escrow companies handle real estate closings, while others dictate attorneys perform the function. Title companies, title agents, lenders, brokers and even real estate agents are allowed to handle closings and/or escrows depending on the state. These fees are usually split between the buyer and seller.
Title insurance: There are usually two types of
title insurance that must be purchased – the lenders’ policy and the owners’ policy. Usually either a title company or in some states a lawyer will research the title to make sure there are no liens against the property or unidentified owners. These policies protect the lender and new owner for the full value of the property. Usually, the seller pays for the owner’s policy and the buyer pays for the lender’s policy. This is often referred to as clearing title.
Transfer or documentary taxes: These are paid either to the state, county, city or a combination depending on the state. This is where the government agency gets their share of the transaction. This is also known as a reconveyance tax.
Recording fee: Usually paid to the county for recording the deed, which shows ownership of the property.
Mortgage tax: This is an additional tax collected by some states. Alabama, Florida, Georgia, Hawaii, Kansas, Maryland, Minnesota, New York, Oklahoma, Tennessee and Virginia are the states that collect this tax.
Brokerage commission: The fee you contractually agreed to pay for the selling of your home.


Aside from these costs, the seller may be responsible for costs such as any credits that were promised to the buyer for repairs or home warranties. Don't forget that Federal law requires that sellers and buyers receive a copy of a
HUD-1 form outlining all charges in a real estate transaction.

 

 

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New Twist to the Housing Crisis – Cheaper to Own Than to Rent

by Masha Halpern

It seems like every day there is a new twist to the housing crisis and mortgage meltdown – from ‘robo-signing’ to the latest stats that rising rents and falling property values are changing the cost of home ownership in some of the nation’s top markets.

Many are asking is it really cheaper to own now than rent? The surge in foreclosures has forced high numbers of homeowners into the rental market, which means demand is up and outpacing the availability of affordable rental units. Home values and prices continue to tumble, making the cost of ownership a better financial proposition than leasing. Is this a natural correction that’s going to boost homeownership and lower inventories? Not so fast.

With so many Americans out of work and on credit tightropes, you aren’t going to see a surge in mortgage applications any time soon. Mortgage credit and other qualifications are still strict and unlikely to loosen up in the near future. Instead, we may see a real housing crisis – one in which families can’t afford to rent or buy standard housing.

Trulia.com tells us that the top five markets in which to buy are Arlington, TX, Fresno, CA, Miami, FL, and Mesa and Phoenix, AZ.

“Choosing to buy a home or continue to rent is a highly personal financial and life decision that many people are grappling with right now,” said Pete Flint, CEO and co-founder of Trulia. ”In the wake of the foreclosure crisis and ongoing struggles in the industry, we created the Rent vs. Buy Index to provide a bit more context about current marketplace conditions to help prospective buyers make the right decisions for their own personal situations.”

High foreclosure rates, falling home prices and widespread unemployment have all contributed to the trend.

 

 

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Photo of Masha Halpern - Boutique Real Estate Real Estate
Masha Halpern - Boutique Real Estate
Keller Williams Realty
101 Cosgrove Avenue, Suite 200
Chapel Hill NC 27514
Direct 919-951-1780
Toll Free 877-478-4669
Fax: 919-928-9030




Masha Halpern of Keller Williams Realty provides real estate services in the Chapel Hill, Carrboro and Durham, North Carolina area including real estate services for buyer, sellers and those relocating to the surrounding areas of Apex, Bahama,Cary, Efland, Hillsborough, Holly Springs, Mebane, Raleigh, and Wake Forest. Search for homes in Chapel Hill, Carrboro, Durham or the surrounding communities.  Request a market analysis for your North Carolina property.  I list and sell residential real estate, investment property, vacant land, lots for sale in Chapel Hill, Carrboro and Durham, North Carolina area.

Chapel Hill, Carrboro and Durham, North Carolina real estate and homes for sale in North Carolina - Masha Halpern & The Smart Move Team