Wait! Are You Buying the Right House?

Don't let your emotions overrule a reasonable assessment of whether a particular home really meets your needs.

Anyone who has ever bought a home remembers the wonderful feeling of finding the right property and falling in love with it. It's an indescribable mixture of comfort, excitement and dreams about to come true. "Can we afford it? Will the sellers accept our offer? How soon can we pick up the keys?" the excited buyers ask. Great vibes are undoubtedly a good sign in deciding to purchase a home. But you shouldn't let your emotions overrule a reasonable assessment of whether a particular home really meets your needs.

Here are a few of the many rational questions you'll want to ask yourself before you rush into a commitment to buy.

Price
Your lender says you can afford to buy the home you adore, but are you comfortable with the monthly payments you'll be obligated to make? Is the down payment within your means? Will you have enough cash to pay transaction costs and moving expenses? If the house needs major repairs, remodeling or redecorating can you save the necessary funds within a reasonable time period?

“When you need to borrow money the Mob seems like a better deal I think. 'You don't pay me back I break both yer legs.' Is that all? You won't take my house or wreck my credit rating? Fine where do I sign. Legs? Fine. You don't even have to sign anything. ”
― Craig Ferguson

Condition
Along with price, the condition of the home should be a top consideration. Does the home need a new roof? Extensive upgrading of the electrical wiring? New plumbing? Is the home disaster-ready (e.g., bolted to the foundation in earthquake country)? A fixer-upper home with lots of potential can be a great find or a money pit. Will you be able to meet the financial challenges and live with the mess and inconvenience while the home is being brought up to your expectations?

Size and configuration

Is the house the right size for your needs and does it have the right combination of bedrooms, bathrooms and other living areas? Is that small closetless den really big enough for your child's bedroom? Is one bathroom adequate and if not, what are the real costs and headaches of adding a second one? Does the kitchen have enough cupboard and countertop space? Is the garage wide enough and deep enough for your vehicles? Will your piano really fit in that alcove near the staircase?

Comfort
Does the house have a central heating system? A central air-conditioning system? Are those climate controls important to you? Are the windows large enough and positioned to create cross ventilation? If the house has two stories, are you comfortable with the idea of walking up and down stairs every day? Is there a downstairs bathroom (and bedroom, if needed) for guests who can't navigate the stairs?

Style
Is the design and architecture of the house too modern or too traditional for your preferences in furniture and home furnishings?

Resale potential
People move to a new home every seven years, on average. If you wanted to sell your home or were forced by unexpected circumstances to sell it, how easy would it be to find a ready, willing and able buyer?

Features
Some buyers fall in love with pricey home amenities that seem attractive and desirable at the time, but later prove to be more headache and less pleasure than the buyers anticipated. Do you really want a swimming pool? High-maintenance ornamental trees? Commercial-grade built-in kitchen appliances? Expensive hardwood floors? Some homes are easier to visit than they are to own.

“The most important quality for an investor is temperament, not intellect… You need a temperament that neither derives great pleasure from being with the crowd or against the crowd.” -Warren Buffet


“I knew, as every peasant does, that land can never be truly owned. We are the keepers of the soil, the curators of trees.”
―Lisa St Aubin

Read More

HOW CLEVER CLIENTS DETERMINE THE EXACT VALUE OF A PROPERTY SO AS TO GET THE BEST DEAL

Let's clear this up once and for all. There is only ONE way to determine the market value for single-family houses: Comparable Sales. Let me repeat: The most accurate way to determine the market value of a house is to use actual comparable sales.

Comparable sales are recent sales of similar houses in the same or similar, nearby neighborhood. This approach is called the "market comparison" method and is the method used by professional, licensed real estate appraisers for appraising single-family houses. 

“Never count on making a good sale. Have the purchase price be so attractive that even a mediocre sale gives good results."- Warren Buffett

Assessed value

IGNORE, I repeat, IGNORE the "assessed value" of the house. Tax assessments vary dramatically from one area to another. Each Tax Assessor's Office has its own individual approach to assessing the property within its jurisdiction.

The information is rarely current. This approach may or may not have any bearing on the real market value of the property. Never rely on assessment and tax information to determine current market value unless you are an expert on tax assessments for your area.

Last sale price

Like tax assessments, it is also dangerous to rely on the "Last Sale Price" of the house. The previous buyer of the house may have paid too much or too little for it. You have no way of knowing. Moreover, the Last Sale Price is an event that occurred much too far in the past to be relevant to the current market value. It is safest to ignore this information as well.

Real estate agents and "listed" price

You should always do your own market value analysis. Never rely on the agent's opinion regarding market value. Your own opinion will be much more accurate once you have learned the correct way to determine market value. Although real estate agents learn to calculate market value, they also learn to unduly complicate matters. Some of this can be dangerous to your pocketbook.

For instance, in determining market value, many agents consider the "listed" or asking price of houses that have not yet sold. This is foolhardy at best. The only measure of market value is what a house sells for. Period. 

Using comparable sales to calculate value

The most accurate way to determine the market value of a house is to use actual comparable sales. In theory, if three identical houses in the same neighborhood have recently sold for $80,000, $78,000 and $81,000, a forth identical house will sell within this same price range.

The market value of the fourth house, therefore, is between $78,000 and $81,000. The problem, however, is that in real life this happens rarely.

More likely, you will find that different houses in an area have sold for a wider variety of prices, perhaps within a range of $59,000 to $100,000. Some houses are larger, others smaller. Some are older, others newer. Some need repairs, others are perfect.

The asking price may be inflated for several reasons. First, some sellers just want to test the market to see what they could get for the house if they really wanted to sell it. They may not even intend to sell the house. Second, some sellers are unrealistic. They are in love with their house and won't sell it unless they can get what may be a wholly unreasonable price.

The listed price also may be inflated because of the real estate agent who obtained the listing. Real estate agents compete vigorously with each other to get these listings. The agent who has the listing earns a commission when the house sells, even if some other agent actually sells the house.

The agents who make the most money are usually the ones who can get the most listings. Therefore, some agents are tempted to "stretch the truth" when they tell the home owners the market value of their home. They want to convince the sellers that their house will sell for more if they will list their house for sale with the agent's company.

Once the agent gets the listing and the house doesn't sell for this inflated price, the agent will persuade the sellers to lower the price. The price might be lowered several times before it actually sells.

The price of a house listed for sale with an agent may also be inflated because a real estate commission must be paid. Commissions vary from state to state and are usually between 5%  to 10% of the sales price.
Top of Form

The big three... While many factors come into play when you're evaluating a residential property's value by "comps" (comparable sales), the three key factors are location, size (square footage) of the home, and the number of bedrooms and bathrooms. Obviously, you'll need to look at many other aspects before you can pinpoint the exact value of a property, but these are the "big three." You should be able to look at comparable sales involving properties with these three factors and get a good idea of the value of the property you're selling. 1. Location Location is extremely important when you're comparing sold properties. A professional appraiser typically looks at houses within a one-mile radius or less, and so should you. In the case of a subdivision, where the houses are all similar and built in the same time period, you need to compare similar houses with similar styles in the same subdivision to get an accurate valuation. If there's a wide mix of properties in the subdivision, you may need to go outside of it to get comparable sales. Just be careful with "dividing lines." Geographic lines such as opposite sides of the river, the park, or a main highway can be invisible dividing lines that put the property in another school district and may not garner equitable comps. 2. Size When determining a home's value, be sure to evaluate the square footage. Note that appraisers typically look at homes that are within 20% up or down in square footage as comparables. Generally (especially within a subdivision), most homes fall within a fairly limited size range. Therefore, you should be able to develop a good gauge for the selling price of homes in those particular sizes. Of course, not all square footage is created equal. Most people think that if a house has 1,000 square feet and is worth $100,000, then the 1,100 square-foot house next door would be worth $110,000. Wrong! The extra 10% in square footage equals only a few percentage points in value. If these two houses offer the same location, style, and number of bedrooms and baths, the 10% additional square footage won't change the valuation much. Why? Because there is a fixed cost on a house based on the value of the land, cost of construction, sewer, subdivision plans, and other factors. An extra few hundred feet of space involves very little cost--only wood, nails, carpet, and possibly some minor electrical and plumbing costs. 3. Bedrooms & bathrooms The number of bathrooms and bedrooms is more relevant than simply the raw square footage. In other words, a three-bedroom home with 1,200 square feet might be worth more than a two-bedroom home with 1,250 square feet. It also matters where the bedrooms and bathrooms are located--on the main floor or the basement. While finished basements can add value, the amount of that value is less than it is for above-ground living areas. Plus, this greatly varies depending on different regions of the country. In humid areas, below-ground living space isn't as valuable to homeowners as in dryer areas of the country. To determine a home's value using comps, also look at the quality and number of bedrooms and bathrooms. Three-bedroom homes are generally a big plus over two-bedroom homes, but four or five-bedroom homes don't add as much over a three-bedroom if they are roughly the same size in square footage. Likewise, two bathrooms is a big plus over one bathroom, but three or more don't add as much value. When comparing bathrooms, make sure you understand the different types of bathrooms and compare them correctly. A full bathroom includes a shower, bath, toilet, and sink. A three-quarter bath has a shower but no tub, plus a toilet and sink. A half bath has a toilet and sink but no tub or shower. A three-quarter or full-bath create roughly the same value, particularly if another bathroom in the house has a tub. A half-bath has less value unless there are enough other bathrooms in the house. Also, a five-piece bath (separate shower and tub) generally wouldn't add more value than a regular full bathroom with a combination shower and tub. There are other factors to consider that affect the value of a home, but generally you'd give these less weight than the location, size, and number of bedrooms and bathrooms. Some houses have one-car or two-car garages, some have carports, and others have neither. The garage factors in some value, depending on the rest of the neighborhood. For example, if the neighborhood comps all have two-car garages, this can affect value as much as 10% on the subject property if it only has a one-car garage or no garage. However, if the houses are all small and there's a mix of garage options, the garage won't be as big of an issue. Likewise, a four-car garage in a three-car-garage-neighborhood probably won't count for much either. One exception is with condominium developments. Parking spots or garages are generally sold with condominiums and can have substantial value, particularly in large cities where parking is limited to the street. In addition to looking at properties sold in your target area, you need to look at properties that are for sale. While asking prices are not sold prices, it will give you an idea where your local market is heading--up or down. Also, keep in mind that if your strategy is to flip the property, the properties for sale are your direct competition and thus the asking prices are very relevant. For example, if you find properties that have sold for $150,000, but the current inventory on the market is prices at $140,000, the asking prices of your competition become just as relevant, if not more, as the sold prices of other homes. If you regularly invest in the same neighborhood, take some time to build yourself a "due diligence" notebook of properties that have sold, are under contract, and are for sale within your area.  YOU MAY ALSO LIKE 5 Things to consider before you rent  a house  Why you need a competent contractor or property consultant  Buyer arrested for buying property  Is your wife secretly building a house?

Read More

12 Things to Consider Before Buying a Home

Don't let your emotions cloud your judgment

Wait! That house may seem like everything you’ve ever wanted, but before you make an offer, take some time to consider a few things beyond the size, style and price.

When buying a home, it’s easy to let emotions get in the way of reality, or get sudden amnesia about factors that may make a difference.

"Sometimes we want something so badly, we’re not willing to ask all the questions we should,” says Leslie Levine, author of "Will This Place Ever Feel Like Home?"

For instance, she says, you may see a basketball hoop over the garage and assume the neighborhood is great for kids. But a closer inspection may show that it’s rusted and hasn’t seen a ball in a decade, and that other yards in the neighborhood have no jungle gyms or tire swings out back.

1. Visit at various times of day

The windows that let in so much light during the day may be a peeping Tom’s dream at night. That seemingly quiet residential street may be a noisy, highway-feeder street during morning or evening rush hour; or it may be near impossible to get from your quiet street across traffic and onto the feeder street in the morning. The adjacent school may seem like a nice perk if you’re buying in the summer, but during the school year, daily playground noise and extra traffic may be more than you bargained for.

2. Talk to neighbors

How many people in the neighborhood own their homes? Sometimes it’s hard to tell at first if you’re choosing a neighborhood that’s primarily rental houses.

3. Ask if the neighborhood has an association

“Is there a newsletter for it? How often does the neighborhood get together? Do they have a block party every year?” Levine asks. “Even if you don’t plan to attend, the fact that they’re having a gathering says they care about their community, that they want to get to know each other, that they’re willing to socialize that way. People who behave that way are building a community. They’re going to look out for your kids; they’re going to look out for your house. It’s a nice, safe way to celebrate something.”

4. Quiz the sellers

What problems are they aware of that the house had in the past – even if they’ve been fixed? An ice dam five years ago may have caused water damage that has since been repaired. But it’s good to know that the house may be prone to ice dams so you can take preventive measures rather than find out the hard way. Discovering the basement flooding was solved by building up the landscaping in a particular area will prevent you from leveling the ground there in later years.

5. Get a home inspection

Virtually all houses have defects, according to National Association of Exclusive Buyers Agents. Some will be obvious and most will be curable. But knowing what needs fixing can help you negotiate a lower price – or at least prepare you for costs you’re soon to incur. Strongly consider getting inspections, too, for lead paint, radon and wood-eating pests.

6. Get detailed records on past improvements

This isn’t always possible. But if you’re told the house’s exterior was painted two years ago – and then see a receipt noting the whole project cost just $1,000 – then you’ll be forewarned that cheaper materials were used and that you may be looking at repainting sooner than you thought.

7. Don’t just assume remodeling will be a snap

If you voice your ideas to the sellers, you may be able to glean valuable insights. For instance, perhaps that shower is in an odd location because, when remodeling 10 years ago, the previous owners discovered a costly structural impediment to putting a shower where it would seem more appropriate.

8. Consider the view

“So many neighborhoods now have teardowns. So look at the two houses on either side of you. If this neighborhood has had some teardowns, one of those houses might be a candidate. And they may build some behemoth structure that affects your light or the way your house looks or your view,” Levine says.

9. Pay close attention to taxes

Don’t just ask what the seller’s most recent tax bill was; ask what several recent tax bills have been. In some areas, houses are re-appraised – and taxed at higher rates – frequently. That great deal and good investment may not seem quite so grand if the property taxes skyrocket year after year. Again, look at newspaper archives or talk to your Realtor about the way taxes are used in this area. In some cities, schools are substantially funded through property taxes – which means you can count on yours increasing regularly.

10. Check with city hall

Look at  the property’s and neighborhood’s zoning, as well as any potential easements, liens or other restrictions relating to your property. The seller should disclose these facts, but it’s better to be safe. If you’re using a buyer’s agent, he or she should be able to help you with this.

11. Reconsider the bells and whistles

Are you sure you can live with a one-car garage, or a detached garage, or on-street parking? The pool may be a nice bonus, but can you afford the upkeep?

12. Explore the surrounding area

If you’re not just making a cross-town move, you may not know that only three blocks away, this pretty neighborhood backs up to a dumpy commercial area or a less-than-savory part of town. If the home is near an airport, fire station, police station, hospital or railroad track, expect to hear trains, planes or ambulances throughout the day and night. Make sure you’re not too close to an agricultural area that may generate odors or kick up dust or other airborne problems.

“To spend one hour learning from a wise man is worth more than ten years of studying books.” – Chinese Proverbs

Read More

WHY PEOPLE PREFARE US

1.     Any transaction with us always results in a win-win situation

2.     We dig deep into the history of any property in our custody

3.     We carry out extensive investigation and confirmation of the ownership of the    property handed to us.

4.     We work with a cutting-edge attorney that assists in processing legal documents

5.     We steer clear of properties that are under disputes.

6.     We engage neighbours, landlords and community leaders in attempt to assist in 
investigating the true ownership of properties

7.     We critically examine all documents relating to a property to make sure it is authentic

8.     We address clients fears and concerns by making sure they get genuine property

9.     We get feedback from clients to ensure continued satisfaction.

10.  We render a sincere assistance to inexperienced clients by giving them a proper orientation so as to make the best choice of property.

11.    We have built up a track record of honesty, integrity and always engaging in trouble-free transaction

12.    We enjoy a favourable report from satisfied clients.

Read More