finance and investment

Calculating A Home’s Worth As A First Time Homebuyer

Finding the perfect home as a first time homebuyer can be a long, drawn-out task if you’re not organized and prepared to go through all the steps involved with the search process. One of the most important steps in the home buying process involves the valuation of the home, or determining what the home is worth from your perspective.

Authors Eric Tyson and Raymond Brown of the book “Home Buying for Dummies” point out that the true value of the home doesn’t only consist of the price. Value means different things to different people, so you need to identify the factors that are most important to you when searching for your ideal home. Ultimately, the value of the home is what a particular home is worth to you, and what types of benefits you will derive from this type of investment.

The first step in the valuation process involves reviewing the actual dollar cost of the home, compared to other homes in the neighborhood. You need to review MLS listings and find out what the seller paid for the home, if possible. Even though the amount the seller paid for the home may be much higher or lower than the asking price, it helps to give you a baseline amount to work with. Of course, you will need to factor in how long ago the seller purchased the home, because any longer than two to three years may not give you an accurate estimate at all.

The second step that a home buyer can take is to figure out how much repair work is needed and what the cost will be. Ask yourself a few questions like “If I move in next week, what has to be done to make it livable and lovable?” or “What needs to be fixed and how much will it cost?” Sometimes, the cost of repairs is factored into the asking price but if it is not, it is to your advantage to know what the add-on expenses you may be facing in the near future.

The final step in determining the true value of any of the homes for sale is to project what the real estate value of your investment will be 5, 10 or 20 years from the date of your purchase. Is the home for sale located in a brand new subdivision or in a historic part of town? What is the average appreciation price of the homes in the neighborhood that you are interested in? Home buyers must be aware of the fact that investing in real estate property in an area where the price steadily appreciates will be to their advantage in case they ever decide to sell the home that they have purchased.

When deciding which among the many homes for sale to purchase, try to look at the different properties available in the various neighborhoods to see what best suits your needs and your budget. Finding out what the true value of the home that you are interested in goes far beyond the price of purchase. There is more to a buying a new home that just what simply meets the eye. Find out more about the current homes for sale in the different neighborhoods and what benefits you can get as a first time home buyer.

Alexandria P. Anderson is a licensed Minnesota Realtor that offers homes for sale in Eden Prairie to people who want to purchase Eden Prairie realty and other properties in the Twin Cities of Minneapolis and St. Paul, MN.

finance and investment

Steps In Buying A House – Conducting A Self-Inspection

You want to prevent yourself from any major surprises if you’re thinking of a new house purchase, so getting a specialized inspector for properties will minimize a lot of the stress and concerns concerning your potential residence early in the process of buying the property.

However, you aren’t expected to conduct an official home inspection prior to the committing yourself to the preliminary sales agreement, therefore it really is best to learn as much as possible regarding the condition of the house by having an honest dialogue with the seller and perhaps carrying out your own inspection at which you can actually check for standard structural defects or potential problems.

Virtually all vendors will likely be open to letting you examine the house before you sign any type of contract, and this will provide you the leveraging influence when negotiating the final value. The book ‘Smart Consumer’s Guide to Home Buying’ by Barron encourages all prospective home buyers to make a checklist where he/she can take note of any issues as well as areas of concern before they get further into the negotiation process. The authors explain that, “If you are thinking about buying a house that will need renovation or upgrading, the more value will be derived from your mini-inspection.”

Think about developing an inspection guideline for a home inspection report to help you do a walk-through of the home as well as note down the look and overall condition of the said house. Below are a handful of the crucial areas for you to check:

Find out about the age of the house – you’ll have to know how long since the home was constructed, how many times the property has been renovated, and also ask for any engineering and architectural plans available.

Examine the groundwork for potential issues – check for significant breaks as well as apparent water problems around the property and also in the attic. Inquire regarding flooding or any other weather-related problems that have taken their toll on the house in different seasons.

Check the details of the property, especially the interior, for damages and problems – you’ll want to be sure that the doors do not have problems and that all the walls are free of cracks. Take note of anything that may have to be repaired immediately and make sure you also take a picture or two of any issues that you may want to discuss with the seller beforehand. You’ll need to examine potential problems of odor or molds and check that all water entry areas are very clean and functioning properly.

Examine the external details of the home for potential problems and other damages – do all of the windows and doors have enough insulation? Do they open and close fluidly? Be sure that all of the siding, windows and doors don’t have cracks and any evident damages.

Review heaters and air conditioning devices – inquire regarding the average cooling and heating charges in a month, and also ask how long the equipment have been around. You have to know these things as at times, you may have to buy a brand new heaters and air conditioning equipment.

Aside from the actual examination survey, you may consider having pictures or maybe short videos with a digicam to help you to go over everything again in more detail later on. This extra footage also can provide you an upper hand throughout the negotiation process with the owner.

Alexandria P. Anderson is a licensed Minnesota Realtor that uses the Minnesota Home Listings to help her clients to find and purchase MN Property.

finance and investment

3 Easy Ways To Increase Your Credit Score

It used to be that \”people\” made decisions about your credit worthiness. You knew your banker and your handshake was all the collateral you needed. Those days are long gone, and now a single number – your FICO score – determines your credit worthiness.

We can talk about several ways to review your credit but to keep it simple we are going to focus on the credit model created by Fair, Isaac Company. Better known as FICO.

A FICO score is one of the main factors used to determine your interest rate and the amount of a loan you will be offered. A good score makes you a more attractive loan then say someone who has a less then stellar credit history.

Keeping your credit history in good order and improving your rating is not a hard thing to do…but it will take time. Here are a few ideas how to do just that.

FIRST: You need to get a copy of your credit history

You may not have a credit history for several reasons. Maybe you?re a student, maybe you pay all your bills with cash, maybe you have never needed a loan for anything. All this will have an effect on your history.

The easiest way to raise your score is acquire a loan, and pay it off on time. In general, installment loans are weighted more heavily than credit cards. In other words, you will improve your credit score faster if you buy goods with an installment loan, rather than acquiring a credit card.

Another way to acquire a better credit history is to take $1000 and open a 6 month CD account at a financial institution. Now, get an installment loan for $1000, using that CD as collateral. Now, here\’s the trick. Take the $1000 loan, and open another 6 month CD account at another institution. Take another loan for the $1000 at the second institution. Do this one more time.

Let the CD\’s mature, paying only the minimum for the 6 months. Once they mature you cash them out and pay off all three loans. Congratulations…you now have a credit history.

SECOND: Maintain Your Good Credit History

Ok…now you have a good history. No major debt…now to keep the FICO as high as you can.

You don?t need to close old accounts. (Unless you?re being charged a fee to keep the account open.) Part of the FICO formula is based on the amount of credit available vs. how much you have used.

Another thing to be aware of is how you manage your money. Here?s the scenario: you have a $2000 credit card. Every month, you charge about $1800 to that card. And, every month you pay it off. But here\’s what happens – your credit card company reports your credit information monthly to FICO. However if they report it on the day before you pay it off…the credit agency sees you carry a balance every month. If you can try changing the days you pay off your credit card.

THIRD: Fix your bad credit

At some point there is a very good chance you will have something that causes your credit rating to drop. Don\’t panic…poor credit can be fixed. Understand however that the process takes time. In some cases you may need to talk to a credit counselor to assure you address the reasons for the drop as well as remove any future habits that may cause it to drop again.

The most heavily weighted part of your score is based on your payment history. The first thing to do to start repairing your credit history is to pay your bills on time. The mortgage is the most important, followed by installment loans, and finally credit cards.

The next largest portion of your FICO score is based on how you use credit. The fastest way to improve this is to pay down your credit cards.

At the end of all this, make sure you review your credit report. Get one report from all three credit agencies. Read every page. (I know it reads like stereo instructions in Greek) Look at the entries and call and contact the creditors to have them remove any errors.

Your FICO score is an important part of your financial life, and using these strategies may help improve your FICO score. Before making any drastic changes to your finances, consult with a financial advisor.

Doc Schmyz has invested all over the US and Mexico. His website shares Real estate investing information for all over the US. Find real estate information by state

finance and investment

Home Buying Advice – Working With a Seller’s Agent

A home purchasing deal will more than likely involve a seller’s agent. First time homebuyers should realize that a seller’s agent, or a sub-agent, should have the seller’s best interest in mind when doing transactions. In other words, a sub-agent is hired by the seller to forge a deal with a buyer.

Regulations vary from state to state, but there are certain things they cannot do according to national law. The author of ’100 Questions Every Home Buyer Should Ask’ encourages all buyers to review the agent’s forms and disclosures thoroughly to understand exactly what types of services they will be offering; if you do not understand anything, do not sign the form. It’s also important to understand the key things that a seller’s agent can and cannot do for you:

A seller’s agent can give you information regarding similar homes in the area. This information is called comparables or ‘comps’ and is a listing of homes that have similar price, size and area, and age. Comps can include homes that were recently sold or are currently in the market. This information allows a homebuyer to have a basis of comparison to ascertain the value of a home.

Seller’s agents cannot dictate, or otherwise pressure, home buyers into buying a home. The seller’s agent’s job is to facilitate the selling of a home but it doesn’t mean that they can force homebuyers into buying a home. You might be in a situation wherein you are deciding between two homes that are handled by one subagent. In this case, the seller’s agent cannot compel you to choose one home over the other.

A home’s flaws or defects cannot be pointed out by a seller’s agent. Basically, the seller’s agent cannot influence your purchasing decision. This means that you have to make your own assessment to determine the condition of a home. But, hidden material defects can be disclosed to the buyer.

The seller’s agent cannot make suggestions on the best offer for the home. It may be tempting to ask the seller what price you should pay for the property, but they cannot legally offer this information at any time during your communications. The seller broker has certain obligations to the seller, so this information may impede on that relationship.

With all the restrictions on your relationship, a seller’s agent can still ask for referrals from you. Seller’s agents are typically self-employed or small business owners and there is no law that restricts someone from referring others to a business.

The job of a seller’s agent is to make the buying and selling process as smooth as possible. As a buyer, you have to remember that seller’s agents are working for the seller. Therefore, it is still important for you to do your own research and work with a professional buyer’s agent.

About the Author: Alexandria P. Anderson is a Twin Cities real estate agent that helps people to find and purchase homes in the twin cities of Minneapolis and St. Paul, Minnesota.

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finance and investment

How To Negotiate The Price As A First Time Homebuyer

It is best to submit a purchase offer only after you’ve researched everything about your probable home purchase. Submitting an offer to the seller is not the end of the home buying process. You may have to negotiate for the home’s final price if the seller rejects your initial offer.

Knowledge of the contract and devising a contingency plan are just some ways to ensure you get your dream home within your budget. Barron’s ‘Consumer’s Guide to Home Buying’ advises homebuyers to make a checklist of things to consider even before entering the negotiation process. Below are some of the things you need to pay attention to when negotiating:

1. Who are the key decision-makers involved in the transaction? ‘Knowing the players’ benefits the skilled negotiator because this allows you to understand who will really influence the buying and selling process. For example, is the seller working independently or are they working with agents, lawyers and other third parties to coordinate the transaction? Knowing who you will be negotiating with can help you identify the best approach for negotiations and give you a chance to gauge the trustworthiness of the selling party.

2. Have a back-up plan. It is possible for you and the seller to reach a stalemate when negotiating. Consider developing a back-up plan just in case no agreements are reached during negotiations. Define your maximum offer and do not go over it; just look for other homes to buy.

3. Read the whole contract in detail. Know what you’re getting into before you sign your name on the contract. Review the contract in detail and take note of any provisions that are not clear to you. It is best to clarify all terms in the contract with the seller than to assume the meaning of the terms yourself.

4. Are you comfortable with your realtor? Your realtor or buyer’s agent can provide guidance and professional advice about the home negotiation process, but you need to feel like you can trust them. Make sure you have spent enough time with them to develop a positive relationship and share your thoughts or reservations about the home well before the negotiating process gets started so you can make the most informed decision.

5. Be prepared to handle negotiation setbacks. Poor communication happens in any negotiation often and you have to learn how to deal with it. There are other things as well that make negotiating difficult. It is important to remain impervious to negotiation setbacks but you have to know when to stop negotiating when you think the transaction is not going anywhere.

Author: Alexandria P. Anderson specializes helping people to find and purchase Minneapolis Condos, as well as Minneapolis Lofts for her Minnesota real estate clients.

finance and investment

How To Deal With Bad Credit Reports As A Real Estate Investor

In today’s world our credit score is everything. Creditors and bankers approve or disapprove loans based on your credit worthiness. In some cases it also will determine your credibility to certain employers or landlords.

A good credit rating allows you to be able to apply for loans and/or credit cards easily. And, ultimately, isn’t that the goal? It will also mean that you will have more chances of getting certain jobs. You will be able to pay your bills on time.

Having bad credit reduces the opportunities of these things. You may get approved for a loan or for a credit card but with a higher interest rate. You are considered a “at risk” customer because the creditors are not sure if you will pay your bills. If you are trying to apply for an apartment complex the landlords may take a look at your credit score to determine if you will be able to pay your rent.

These are just some of the many reasons as to why having a good credit score is very important in today’s world. However, what do you do if you happen to have a bad credit score? If you have bad credit it is important to address this problem as soon as you can. Here are few ways to do just that.

First, you must stop missing payments and make payments on time to avoid making things worse. So how do you do this? You pay your previous overdue debts as soon as possible. This cuts off the bad credit reports from creditors. It will not improve the actual credit score but it will put you on the right track to repairing your credit history.

Secondly, you can help raise your credit score by opening a new savings or checking account. By paying the monthly credit card bills on time you will be able to see a significant rise in your credit history report.

If you continue to follow these steps you will eventually start to see a good credit rating. However, your past credit history will contain bad credit scores and ratings. This does not expire for 5 to 7 years. You must remember that it does take time to raise your credit rating. You must be patient and diligent to see a change.

That is why it is very important to make positive reports for your creditors. They then will pass those on to credit reporting agencies. Remember to pay your loans and credit cards on time in order to get a good credit rating. By doing so you will eventually end up with a good credit score and history. Never miss out on a future financial opportunity when they come your way.

Doc Schmyz has worked with investors all over the US and Mexico. He built a free website shares Real estate investing information for all over the US. Find real estate information by state

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