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Getting a Home Inspection

by Lorna Calder

Purchasing a home is one of the biggest investments you will make in your lifetime, and it can also be one of the most stressful. By having a home inspection it can help to ensure that the quality of your potential home is in good condition and help to eliminate surprises by making you aware to any problems.

So how do you go about selecting a home inspector?    One good way to start is one of the two nationally recognized professional associations for home inspectors; the American Society of Home Inspectors or The National Association of Home Inspectors.   In order to be listed with either of these organizations one has to go through a certification process. Both of these have a search engine to help you find “state certified home inspectors.”  Once you have a few names it doesn’t hurt to check with the Better Business Bureau.  Make a list of inspectors that have been recommended.  Avoiding anyone who has a negative report can help you avoid any potential problems with your inspection. 

A few things questions to ask when talking to your potential home inspector:

• What is the inspector's experience? How many years have they been in the business and how many inspections do they do a year?
 
• Exclusively inspections? Beware of contractors who do house inspections "on the side"--they may be looking for work and this isn’t necessarily what you want.

• What type of report? Will it be written or oral or both? Will the report contain suggestions for remedying deficiencies?   Preference should always be to get it in writing. When will the report be ready?

• How long will it take? Depending on the size of the house an inspection should take between 2 and 4 hours.

• What will be included in the inspection?

• What certifications do they have? Are they ASHI or NAHI certified?

 

Determining the Value of Your Home

by Lorna Calder

In today's real estate market every homeowner is asking the same question - What is the value of my home?  Lorna Calder of RE/MAX Associates Northeast says that this is probably the number 1 question a homeowner will ask.  Most homeowners are not sure how to determine the value in a changing real estate market.

Being informed and know what your home will sell for today will should be the first step in preparing to sell your home.  A home is worth what someone will pay for it, and what someone will sell it for - this is 'Market Value'. Everything else is an estimate of value. To determine a property's value, most people turn to either an appraisal or a comparative market analysis.

An appraisal  is a licensed / certified appraiser's opinion of value and is an estimate based on amenities, energy efficiency, and the quality of the of the value of a home at a given point in time. To make their determination, appraisers consider recent sold comparables, square footage, construction quality, design, floor plan, neighborhood and availability of transportation, shopping and schools. Appraisers also take lot size, topography, view and landscaping into account.

The list price is the price tag put on a house in a real estate listing; it usually is only an estimate of what the seller would like to get for the property. The sales price is the amount a property actually sells for. It may be the same as the listing price, or higher or lower, depending on how accurately the property was originally priced and on market conditions such as location and condition.

A seller may need to adjust the listing price if there have been no offers within the first few months of the property's listing period.

The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors. Lenders require appraisals as part of the loan application process; fees can range from $200 to $375. Appraisers use several factors when estimating value including historical records, property performance, condition of the home and indices that forecast future value.

Market value is what price the house will bring at a given point in time and is defined as the amount that a willing seller will sell the property for, and the amount a willing buyer will pay - a meeting of the minds so to speak. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker. Because brokers and agents are not state-certified appraisers, they may not perform appraisals in most states. Instead, they estimate the value of a property using a CMA.

In some states you can do your own cost comparison by looking up recent sales of comparable properties in public records. These records are available at local recorder's or assessor's offices, through private companies or on the Internet. Texas is a "non-disclosure" state, this means that real property sales prices are not a matter of public record. Sold comparable information can be obtained by your real estate agent through the CMA process or through tools provided by real estate agents like Market Snapshot. Neither of these services produce official appraisals. They also don't factor in market nuances or other issues a certified appraiser or real estate professional might in assessing the value of your home.

 

Should I Lock My Mortgage Rate?

by Lorna Calder

Your mortgage rate is on the list as one of the most important factors to consider when buying a home. Obviously the lower your rate the less you have to pay back.  Locking in a low mortgage rate in a market that is fluctuating up to a full point over the first half of 2009 will be critical.

What does it mean to 'lock' in a rate?

Locking your interest rate down means that the broker or banker will give you a commitment for a loan at today's current rate (typically for 30-60 days). While locking in your rate before you are ready to close puts you on a time table, it  lets you know upfront the points and terms that you will be buying under.  Some rates can be locked for 15 days and some for up to three months.  You still need to buy before that rates terms expire.  Otherwise you will be back to negotiating a rate and everything else.

A few things you need to do before locking things in:
• Shop around:  your rates and terms may vary wildly from lender to lender and rate locks can be a serious cost.  Don’t be afraid to shop before you lock that rate.
• Make sure you allow for loan processing time in your lock period and be sure to be ready to put in that loan application before the terms will expire.  This includes checking credit reports and even a pre-approval can help.

As with everything it is important to get it in writing.   The contract has to lock the interest rate, the points, terms and other costs.  It must include the names the mortgage will be in, the cost of the lock the terms as well as the effective date and its expiration date and time.  If you have any post-lock options make sure they are included in the contract.

Keep in mind that even a half a percent fluctuation can cost you thousands of dollars.  If you lock in your rate you can be better prepared for what the bottom line of your mortgage will be.  With an uncertain market, this can only help!

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