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On this page you can find all kinds of articles to help you to understand buying and selling your home.


What's hot and what's not in housing?
Find out what the hottest trends in housing is.

It's real estate season -- or is it?
When is the best time to by or sell your home.

Buying A Home
Here is a timeline to help you keep track of your buying process.

Ask Dr. Don: Do we need a real estate agent?
By Dr. Don Taylor

 

Dear Dr. Don,
 We're first-time home buyers, and we're still doing our homework. Is it better trying to get everything done ourselves without dealing with a real estate agent (so we can get the price of the house lower), or should we deal with a real estate agent? Can you tell me the advantages and disadvantages of each path? Do you have any suggestions about us doing it ourselves?
Thank you,
 Martha Maison

Dear Martha,
I understand what you're trying to accomplish, but you need to think through the actual consequences of a decision not to use a real estate agent.

First, remember that the homeowner is making the decision whether or not to list her property with a real estate agent. So the homeowner is deciding whether or not you will pay a commission. You can limit your search to for-sale-by-owner properties, but that can drastically limit your selection of available homes, since about 80 percent of all homes are listed with a real estate agent.

 The seller may be a little more flexible on price when selling by owner, but they're not likely to give you all the commission savings or they'd be no better off than if they had let a real estate agent have the listing. So the seller's motivation is to keep all or part of what she would have paid in commissions.

Let's assume that the typical commission in your market is 6 percent. Let's further assume that by purchasing a by-owner listing you can save half the commission, or 3 percent. If the homeowner can reasonably expect that her house will sell at $150,000, then she's saving $9,000 on commissions by not listing the property and may be willing to sell the house for $145,500, splitting the commission savings with the buyer. You could save $4,500.

You're going to spend at least some of that savings in additional time and effort in completing the transaction. Do you know which costs are customary for a seller to pay in your market and which the buyer normally pays? Can you pick out a good home inspector, termite inspector and do you have any thoughts about when you want to close on your new home?

You'll definitely want a real estate attorney to review the transaction. You should take that step even if you used a real estate agent since the agent can't provide legal advice, but how many extra hours of the lawyer's time will you require because you bought a house without an agent?

I think a first-time home buyer is well served by selecting a buyer's agent to represent them. A buyer's agent represents your interests in a real estate transaction. If you don't sign a buyer's agent contract with your agent, then they represent the seller in the transaction even though you're the one who brought them into the transaction.

The listing agent and the buyer's agent will typically split the commission stipulated in the listing agreement. You want to make sure that your agent is paid in that manner and can't come back to you for any part of the commission.

The written contract that you sign with a buyer's agent should stipulate that the buyer's agent's commission is to be paid solely by the seller from the sales transaction proceeds. It would be a good idea to have your real estate attorney read this contract before signing.

It would be best to have an exclusive buyer's agent rather than someone who could potentially represent both buyer and seller. You may not be able to find someone in your area that is exclusively a buyer's agent. That's OK. You can still have them act as your buyer's agent up to the point where you're asked to sign a dual agency agreement.

A dual agency agreement allows the real estate agent to represent both seller and buyer. In your situation as a first-time home buyer, I wouldn't recommend that you sign a dual agency agreement. This Better Business Bureau publication has more information on real estate agents, including buyer's agents.

What's hot and what's not in housing
 By Dana Dratch

 

What's hot in new homes? Fewer walls, more toys.

Buyers are looking for open spaces in the main area of the home with oversized kitchens that flow into large family rooms. When it comes to the master bathroom, buyers are looking for a little luxury.

"We're basically seeing larger kitchen areas and more open floor plans with vaulted ceilings," says Dick Koestner, a regional vice president with the National Association of Realtors and partner in Koestner McGivern & Associates in Davenport, Iowa.

Buyers want something "far less formal and far more celebratory," says Ron Phipps, a regional vice president of the National Association of Realtors.

Living rooms are going the way of the powder blue tuxedo. "The real formal living room is gone," says Joan Isgro-Grant, an affiliate of Weichert Realtors in Kingston, N.Y.

Homeowners are also demanding more for the money. And with lower interest rates, they are not afraid of buying more home. "What they look at isn't the cost, it's the monthly payment," says C. D. Boring, president of RE/MAX Realty Plus in Sebring, Fla.

That translates to higher-grade appliances, more wood, more tile, more solid surface countertops and more designer touches in mid-priced to high-end homes.

 

"It amazes me," says Phipps, president of Phipps Realty and Relocation Services in Warwick, R.I. "Even in modest homes, you have much more money allocated for cabinets, countertops, appliances and raw space."

Homeowners may be eating out as much or more than ever, but they are using their kitchens to entertain and as a gathering place for the family. As a result, "builders are putting more money in kitchens," says C. Kent Conine, president of the National Association of Home Builders, an industry trade group.

Likewise, the master bathroom is the place they get away from it all. "It needs to be large and needs to have a feeling of luxuriousness -- and high quality," says Dan Lee, vice president with First Weber Group Inc., in Madison, Wisc. "Natural light is important, too."

Here are some of the most popular new home features:

First-class kitchens. "They are really tricking out the kitchens," says Sean Degen, vice president of architectural services for Pulte Homes Inc., which builds everything from $100,000 houses to those priced well above $1 million.

The amenities will vary, depending on the price range. But look for solid surface counter-tops such as Corian, granite or marble. Also hot: professional quality appliances -- side-by-side refrigerators and stoves with more than four burners or smooth surfaces with no burners at all -- and cabinetry in maple, cherry and birch as builders try to tap "the wow factor," says Conine, president of Conine Residential Group in Dallas.

But the space also has to be practical, says Lee. Buyers "are looking for the design of the kitchen to flow. It has to make sense."

Home office space. "Media rooms and home offices are probably the two most desirable amenities right now," says Conine. With an office, buyers are looking for "something pretty generic, so they can customize it to their own tastes." But touches like window seats and built-in bookshelves are always appreciated.

Entertainment rooms. In the entertainment center, buyers want all the toys, says Conine. "As much as they can afford. And with the lower interest rates, they can afford a little more."

First floor master suite. Also known as "master on the main," this style is especially popular with baby boomers who are planning ahead. "People are 45 years old and going, 'When I retire I don't want to climb those steps,'" says Koestner. He sees buyers looking ahead 15 to 30 years to the time the mortgage is finally paid off with an eye toward what their needs might be then.

Ranches are hot for the same reason, says Michael V. Sajdyk, director of marketing for Davis Homes, based in Indianapolis. Buyers are saying, "Why do I need a second floor if I can do it all on one floor?"

Luxurious master bathrooms. Separate tubs and showers are a must. But for many buyers the emphasis is shifting from a jetted tub to an oversized shower with two or more heads.

No longer exclusive to high-end homes, "Now you're seeing them in mid-range homes," says Koestner.

Look for lots of tile, marble and multiple heads in the shower. "Showers are the big thing right now," says Degen. "People realize, 'I take a bath four times a year, but I take a shower every day so I might as well make it nice.'"

Still, especially in some regions, the bathroom is no longer No. 1 on the buyer's list. "It's still pretty glamorous," says Conine. "But I'm sure they've peaked in some areas". The trade-off: closets.

"You can never have enough storage."

Low maintenance. "We're seeing empty nesters who want a more carefree lifestyle and less square footage," says Conine. Many are looking at patio homes, town houses or houses with less total space but more goodies.

"They want the bells and whistles in the new house that they had to sacrifice for space when they were younger," says Sajdyk, whose company builds largely in the $70,000 to $180,000 price range.

And everyone is interested in a house that they don't have to spend time and money maintaining. Look for lots of floors made of tile, woods and even colored concrete, says Conine. Buyers are attracted to the "durability and adaptability" of these surfaces. "And you can always buy a new rug and throw it on the floor."

On the exterior, this translates to low maintenance building products like brick and certain types of siding. And sometimes even to a smaller yard.

"That's why so many couples today are looking at townhouses or row houses," says Richard F. Gaylord, a Realtor with RE/MAX Real Estate Specialists in Long Beach, Calif. "They want a place to eat [outside] and let the dog out, but they don't want a lot of work attached to it."

Decorative lighting. Both inside and out, buyers are looking for attractive light sources in kitchens, baths and family rooms, and lots of them.

Natural products. Wood floors, granite, marble or stone countertops, solid wood doors and wider molding are all popular features, says Lee. "People are looking for higher quality natural products. These things are getting more and more important."

So, too, are "green" building materials. "There's a big push for green-built homes where we aren't pillaging the environment to supply our housing needs," says Lee.

Places to play. Buyers are willing to make do with small lots, provided there are parks or recreation facilities nearby. If not, they will want "a pool in the yard, a spa in the yard or a play area for [the] children," says Gaylord, a regional vice president with the National Association of Realtors.

Fireplaces. "It's pretty much expected," says Lee. "For the most part, people want that option." Depending on where you live and how much your home is worth, a double-sided fireplace, especially in the kitchen/great room area, is trendy.

Traditional architecture. Buyers are returning to the comfortable, familiar styles of their youth. "The post modern styling is gone," says Degen. In the South and Southwest, traditional might mean stucco or adobe. In the rest of the country, Colonial, Victorian, Greek Revival and Colonial Revival are big, he says.

So what is today's version of shag carpet and avocado green kitchen? What's "out" varies with the climate and price range. Some trends definitely seem to be waning, including formal living rooms, whirlpool tubs, wall-to-wall carpet throughout the whole house and any garage not big enough for at least two cars. "A place for storing the toys is really important," says Lee.

Strangely enough, even though living styles have gotten much more casual, formal dining rooms are a must for many buyers. "They still have grandma's dining room set and they don't want to get rid of it," says Isgro-Grant, a regional vice president of the National Association of Realtors.

Homes have gotten bigger, says Degen. One industry survey found that from 1980 to 1999, square footage increased by about 16 percent. That means the average home went from about 2,000 square feet to a little more than 2,300 square feet.

But during that same period, the average lot size decreased by 6 percent -- from about one-third of an acre down to about one-quarter of an acre, Degen says.

In northern Virginia, F. Gary Garczynski has seen lots shrink from a minimum of a quarter acre in the 1970s to "half that" currently.

"I think that's occurring in a lot of areas where ground is at a premium, says Garczynski, a developer and the immediate past president of the National Association of Home Builders. He's also noticed a wider interest "in environmentally sensitive green building."

Some real estate watchers make the connection between ever larger homes and ever shrinking interest rates. "Twenty years ago, interest rates were 18 to 20 percent and smaller houses were in," says Myra Zollinger, partner with Coldwell Banker Realty Center in Chapel Hill. Today, she says, people want a large kitchen, large bathrooms and "lots of light."

That is probably one reason eight to 10-foot ceilings are popular. But they are also being more careful with the space they buy. In many regions, vaulted ceilings -- except for the great room -- are on their way out, according to real estate professionals and builders. Instead, home buyers opt for plans that take that space and give them an extra room.

Trends in new homes can vary widely, depending on the region. In New England, Yankee buyers are less impressed with elaborate bathrooms, says Phipps. Instead, they'd rather have closet space. "I think that in New England, sensibility of function [is] above all else," he says. But, especially as outsiders move to the area, he adds, "it is changing."

Likewise, in the northeast a wide open lot with no trees could be a tough sell, while in the Midwest, it might not be an issue.

But when buyers desire trees, they want them full-grown, says Lee. "They aren't willing to wait any longer," he says. "They want trees that are already 15 to 20 feet high -- an instant neighborhood."

And while detached garages are cold and unpopular in the northern climes, they are flying off the market in the West and Southwest, where buyers often turn them into studio or office space, says Degen.

And in the Midwest and Southern California, whirlpool tubs in the master bath are still popular, while the trend in the rest of the country seems to favor oversized showers.

In the South -- and especially Florida -- buyers are looking for self-contained communities that offer recreation, such as a golf course, pool, tennis and a clubhouse. And gated communities are big. "If they have families, they want to feel comfortable that their kids can ride their bikes," says Boring.

Dana Dratch is a freelance writer based in Atlanta.

Buying a house
By Laura Bruce

 

This timeline is simply a memory aid for the things you'll need to do when buying a new home. Your sequence may differ greatly, although you'll probably need to do most of the same things.

You may find your dream home in a week, or it may take months. Your timeframe will also hinge on whether you're moving across town or across the country. It's smart to be prepared for any scenario.

6 months out

  • Narrow your territory. Buyers generally buy town first, neighborhood second, house third. Cancel out the towns and neighborhoods you don't care for. You can do this on your own or with a one-time area tour with an agent. You're eliminating what you don't want.
  • Know your financial situation. Get a credit check. Leave yourself time to correct any problems.
  • Determine how much house you can afford. This is just for your own use. The mortgage lender will also make this determination at a later point.
  • Think about your budget and structure your home selection around that. Should you be looking at a townhouse or a single-family, someplace in the suburbs or a little farther out?
  • Interview real estate agents to help you with your search.

 

4 months out

  • Select a mortgage broker or a mortgage lender. They'll run your credit and get preliminary information such as bank statements and retirement and investment account numbers.
  • Talk with your bank or mortgage company. Double-check your buying power. You don't want to waste time looking at homes you can't afford.
    Mortages: How much house can you afford?
    Calculator: How much house can you afford?
  • Get pre-approved for a mortgage. Make an application. Collect the required documents and paperwork. Have a mortgage just waiting for the address of the property you want to buy.
  • Here is a list of questions to ask when applying for a mortgage.
  • Your lender should give you a copy of a Housing and Urban Development publication called "Your Settlement Costs." It explains all the fees and expenses you should know about.
  • Make sure you have a local real estate attorney. Don't wait until you find a house to find an attorney.

6 weeks out

  • If you're doing a corporate relocation, find out exactly what is covered and what you're expected to do.
  • Make a list of everyone who needs to be notified of the move -- friends, relatives, creditors, schools, doctors and dentists.

5 weeks out

  • Select a mover. Arrange for a storage facility if you won't be moving into a new home right away after you leave your current home.
  • Contact insurance companies to make sure your belongings are covered during the move. If not, find out what the mover covers. Their basic insurance probably insures items by the pound, which isn't good enough. See what other insurance they offer.
  • Have an appraisal of expensive items you want shipped by the mover.

2 weeks out

  • Arrange to have utilities and phone service in your old home shut off, or transferred if it's a local move. Remember, movers need light so have the power cut off the day after you move.

1 week out

  • Close safe deposit box. Important papers, jewelry and the like should be kept with you during the move.
  • You may want to close savings accounts, but keep checking accounts open until you're able to open new ones in your new location.
  • Get a cashier's check for the movers.

When you find a house

  • Make an offer.
  • Title search -- the buyer or the lender should initiate a title search. You want to be sure there are no liens or encumbrances on the property.
  • Inspection: the real estate agent will recommend having a home inspection. Here are tips for finding and hiring an inspector.
  • The lender will hire an appraiser. This will ascertain whether the house is worth what the buyer is paying.
  • Get homeowner's insurance. Proof of insurance will be faxed to the closing agent.
  • Consider a home warranty. It either comes with the listing or it can be purchased.
  • Be prepared for closing. Review your paperwork and the HUD publication "Your Settlement Costs." The down payment, interest, taxes and insurance are among the costs you'll probably have to pay.
  • Cash to close -- figure out where you'll get the money for closing costs. Do you have to sell stocks? If you're borrowing from a relative make sure the check is in your account long enough to clear.
  • Get a cashier's check for closing costs. (Also: Tips to avoid last minute closing costs)

Closing day/Moving day

  • Carefully review the bill of lading.
  • If the old house isn't sold yet, make sure a relative and the real estate agent have keys.
  • Final walk through of the house. This is usually done the day of the closing or the day before.
  • Make sure you have all the payments you'll need to take possession of the house.
With assistance from Lori Dahl, Burgdorff Realtors, Parsippany, N.J.,
and Jim Bradley, president of American Residential Lending, Atlanta, Ga.

It's real estate season -- or is it?
By Steve McLinden

Ah, glorious spring, a time for fresh starts and positive change.

From coast to coast, for-sale signs crop up like wildflowers on the lawns of subdivisions. Moving sales proliferate. Moms and dads box up their possessions and ponder what awaits them on a new block or in a new town. Kids finish out semesters, wary that a different school culture and a new set of friends await them in fall. It's a rite of spring and early summer in our transient society.

It's a time when real estate salespeople get lightheaded from make-hay fever, as buyers and sellers come out in full bloom.

But is it always the best time to buy or sell a house?

That's a definite maybe, say experts. Like most buy-sell situations, it all depends on motivations.

Indeed, April through July outpace the balance of the year in sales, historic data at the National Association of Realtors indicates. So there'll surely be more home inventory and variety then. But you better move fast, because that's just what other home hunters are doing.

  "It starts building up early in the year but peaks around June," says research economist Jack Harris of the Texas A&M University Real Estate Center. "There's school ending, there's vacation time and the weather is also nicer. It's generally just a good time to get out and look at homes."

Many buyers apply their income tax refunds toward down payments, adding to the spring push.

While the buying frenzy stays steady through most of the summer, it falls in early fall, Harris says. It usually drags for a month or so, then escalates briefly again around October. Some of that second spike is attributed to sellers who were overly optimistic pricers in the spring, but who have grudgingly decided to make concessions in the fall, he added.

Some seasonal house-hunting hints:

  • Be a contrarian. True, there's a greater choice of homes in the spring, but sellers then can better hold to their asking prices because of demand. "If you can stand to be a contrarian, it could pay to wait," says Harris. "Most people don't do that, though. They just get carried along with the crowd." Additionally, when home loans are less in demand, some lenders are willing to forego certain fees typically charged to win off-peak mortgage customers.
  • Off-season dealing: Sellers in late fall and early winter, especially between Thanksgiving and New Years Day, are often more motivated to deal, real estate agents say. "I've done my best negotiating from October to December," says Jim Crawford, a real estate agent, lecturer and Web consultant in Roswell, Ga. "You don't want lots of people tromping through your home around Christmas time ... so you're more apt to accept an offer."
  • Window at summer's end: Sometimes, late summer opens a small window of leverage for buyers dealing with sellers of slow-moving family homes, Crawford says. "You usually find that the family core is more important than the extra dollar."
  • Some sellers can wait you out: Empty nesters and single sellers will always account for some off-peak housing stock, but they're often less motivated to sell quickly, Crawford says.
  • Heed non-cycle or short-cycle markets: Parts of Florida, Colorado and California and other regions of the country that have large resort areas or large numbers of retirees and semi-retirees, don't follow the traditional sale season. Winter resort areas peak in sales between January and April, according to agents. In northern climates, the wintry elements can compress the annual peak seasons more to their warmest-weather months.
  • Tax timing: It can play a role if you plan to buy late in the year. Determine through a tax preparer if the deductions will better fit in the current or future year. If need be, try to close Dec. 31 rather than Jan. 2, or vice versa. (Be sure you know which items of your closing will be tax-deductible and which will be added to the value of the property.)
  • Opportunism: While it may sound ghoulish, layoff announcements or a planned corporate headquarters move in some markets can soon result in more homes on the market for the short term with a variety of price points and some motivated sellers. Proceed with sensitivity.

    Home-buying "seasonality" can vary from market to market and may be slowly shifting, say trend trackers. In recent years, January has seen record or near-record sales for the month, says National Association of Realtors researcher Walter Molony. A buyer's market in a city will mean more inventory is available year round, while a seller's market, generally driven by local employment opportunities, can winnow peak seasons significantly

    However, most agents agree on the seasonal axiom that homes generally sell for 3 percent more than the annual average during the months of May and June, at or around the average annual price in very early spring and in fall, and then drop 3 percent below the average annual price in December and January.

A few other seasonal-selling strategies:

  • Sell to a larger market: In most areas, May, June, July and August are considered the high-volume closing months, with about 40 percent of all homes selling during that four-month period.
  • The sooner, the better: While deed transfers do peak between May and August, most of those sales were actually arranged from one to three months earlier. It takes time to close home transactions.
  • Holding out: Your wait could be a long one. A home priced unreasonably high can be hard to sell in any season, particularly in a buyer's market. Industry stats show homes with price tags 5 percent above market value have a 10 times greater chance of selling than those priced 15 percent above market.
  • Reduce selling stress: Placing your home for sale as far in advance of buying the new one as possible will help remove one component out of the already complicated sales equation. You don't want to wind up juggling two mortgage payments in addition to the other exasperation associated with home selling. But don't tarry too long in visiting your targeted buying area, lest you miss its peak inventory season. (You may have to send your spouse out as a scout while you hold down the home fort.)
  • Get inside the buyer's mind: See seasonal house-hunting tips (above) and adjust strategies accordingly.

Buyers and sellers should also note that 60 percent of all moves in America take place in summer, according to JoyceVanLines.com. Book as early as possible, especially if you have a clear closing date. Joyce and other movers advise that home buyers/sellers call for an estimate at least 60 days in advance of a move.

Even with reliable spring sales peaks, the Internet has added a non-seasonal dimension to the home-buying mindset. Virtual tours, accompanied by a wealth of neighborhood, school and civic data, can speed along the decision-making process well before a prospective home buyer hits town, agent Crawford says. "It is literally open house, 24-7, on the Web."

In markets such as weather-friendly Southern California, seasonal factors play a much smaller role in home-inventory turnover, agents say. Terri Dillon, who owns four Realty Executive offices in the San Diego area, says house hunting is a year-round sport in her market, although spring still carries a slight edge.

However, at year's end, says Dillon, investors who sold off residential properties mid-year are often in a hurry to close on the purchase of another investment residential property to satisfy requirements of a capital-gains deferring 1031 exchange. The IRS gives you 180 days from the date of your last property's closing to close on another real estate investment to defer the previous gains tax.

Knowing the motivation of the seller can be very important in the sales process, says Realtor Susan Marthens of Windermere Services Co. in Portland, Ore. "If they're transferring, they'll want to get it out on the market quickly," she says. "That's something people can't always control. Sometimes they'll have to negotiate accordingly."

She adds: "But if a particular time of year isn't important to the seller ... then I always tell them, 'Right around spring.' "

Steve McLinden is a freelance writer based in Arlington, Texas

 

 


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W. Tom Huber Realtors
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