Homefinding Book

Money Magazine recently published a study that shows Cincinnati is one of six cities where property values are most likely to rise and least likely to decline over the next 12 months. Buying a home today in Greater Cincinnati makes good financial sense. Why? Three key reasons:

1) Great Inventory. Anyone looking for a home today will find a tremendous selection - nearly 16,000 properties are listed in the Cincinnati MLS. Whether you’re looking for a starter home, a high-end custom home or something in between, you’ll find just the home you’re looking for.

2) Low Interest Rates. Mortgage rates determine how much you can afford. With the current low rates, you have significantly more buying power. How low are rates today? Those who bought a home in 1963 were paying roughly the same rate as you’ll pay today. The rates won’t stay this low forever. Buying a home now can save you thousands of dollars in interest.

3) Home Ownership Will Always be a Good Investment. Even if you are on the fence for now, that’s OK. There will be plenty of opportunities to buy a home when you’re ready. Home ownership is a vital engine in the American economy. It creates strong communities and builds wealth for families who buy homes. Home ownership won’t go out of style. Home owners are invested in our communities. They are the joiners, fixer-uppers, and watchdogs that make our nation strong. Nine out of 10 consumers consider home ownership to be a sound financial decision. Purchasing a home is a great way to invest your money. In the past 40 years, real estate has delivered the most consistent positive return over any investment. When you are buying a home, you are building equity and adding to your assets.

Buying a house at any stage in life can be a challenge. If you have questionable credit, buying a house is difficult at best and for some seams nearly impossible. You’ve probably watched countless seminars that tell you it is possible to buy new houses with no money down or terrible credit and while it is possible, recent changes have made it exceedingly difficult. The good news is that there are still options for those who have less than perfect credit.

What are these options?

Credit Repair

This option is often a little more time and effort consuming than most people desperate to move into their first home like to consider but in the long run is the most rewarding. If you make a concentrated effort to repair and/or restore your credit while avoiding further credit problems you should see better results than you will from all other options. The rewards of good credit are many. Not only will you be more likely to qualify for a traditional mortgage but you will also be in a better position to receive an attractive interest rate. The interest rate is what most impacts the final price you will pay for your home and the lower this number is the better for you.

Lease Option

A lease option gives you the opportunity to build up a down payment for your home while living in the home. These arrangements are becoming more common as investors see the benefits of such an arrangement. What this means for you is that you will have a set period of time that is agreed upon in advance (generally no longer than two years) to repair your credit and obtain financing for the home at a specified price. You will live in the house during this time and have various responsibilities for the repair and upkeep of the home according to the contract you both agree on. The benefit of this to you is that a portion of the lease (again it will be an agreed upon amount) you pay each month will be set aside into an escrow fund that will count towards your down payment at the end of the contract period. If you do not manage to get the financing the portion of funds will return to the home owner and you are free to work out an additional contract or seek other options.

Rent to Own

The most attractive to many who are facing financial woes and living with questionable credit is a rent to own situation. These are not often as attractive as they may appear at first glance but do provide benefits if you are willing to pay a hefty price for your slice of the American dream. One thing to keep in mind is that you will often pay either more than the general market value for the home in question or a higher interest rate than is generally charged by lenders. The benefits though are immediate and you can begin working towards home ownership immediately. The terms are generally iron clad though and you must make timely payments every month in order to continue the path to home ownership or face serious consequences and/or setbacks.

It is possible to buy a home for you and your family – even if your credit isn’t the best. It is much better though to sort out your credit issues before purchasing a home because there are invariably new and unexpected expenses that go hand in hand with home ownership.

There is a huge trend in today’s real estate market to purchase homes in housing communities that offer ‘custom built’ homes for everyone that qualifies. Many home buyers find the idea of a home that no one has lived in before tempting to say the least. It is important though to remember that there are many benefits to be found by purchasing older homes and not focus only on the new home market.

What are some of these benefits?

Character.

Many of these new communities sacrifice originality for the sake of speed. The goal of these communities it to build homes quickly and this is achieved by offering limited options when it comes to floor plans and home exteriors. Chances are that all the homes in the community are similar if not nearly identical. It is hard to create a home with character when you are surrounded by homes that look the same. There is also something to be said about character growing as homes age. Older homes are often defined as quaint, charming, and atmospheric. New homes that are build in modern housing communities seem far more sterile than those that have seen a few seasons come to pass.

Preserving the Past

Old homes that are purchased and loved by the families of today are often given new life. This means that they aren’t bulldozed for a new housing development or strip mall, and that they are not left to the ravages of time. If you take the time to purchase an old home and love it back to life, the costs may appear high in the beginning but the results are priceless.

They Don’t Make ‘em Like They Used To

Another benefit of buying older homes is that the houses of today are not built to quite the standards that the homes of yesterday were built. If you have the option to check out a house that was built 100 years ago and compare it to the modern homes being built you should notice that the walls are solid and the flooring is meant to stand the tests of time.

Lower Environmental Impact

Purchasing and restoring an existing home is simply better for the environment. We are facing a world that is growing more and more crowded by the hour. New homes are being built in every corner of the world. When you purchase an existing home you are putting it to use and not taking up the space, cutting down the trees, or using the other materials that go into building a new home. Even if you do extensive renovations to the home you are creating a lower environmental impact than if you purchase a new home construction.

There is no perfect decision for everyone or every family. The homes of yesterday generally need updated wiring and plumbing, which brings new costs of their own into the picture. Older homes may also have more maintenance issues than newer homes but they have a sense of charm and history that new homes will be hard pressed to match even 100 years from now.

With property prices dropping, first-time buyers might start celebrating. But is property really becoming more affordable? Lenders have been stung by the cheap borrowing over the last decade and now mortgage companies have become far more selective about who they lend to and are no longer prepared to give the low interest rates and 100% mortgages. In fact, to get a decent deal you now have to have a decent deposit of around 20% or more. Deposits are hard enough to get your hands on but with the cost of living rising sharply it is even harder to save in the first place. For those already on the property ladder, they are likely to have seen the price of their house price and home equity decrease.

For tenants who may think they are safe: rents are actually increasing as mortgages and living costs rise – landlords need to make more from their property. There are a growing number of tenants and fewer properties to rent as more and more people are putting off a home purchase and as landlords increase rents.

However it isn’t all doom and gloom. For those of us who saved while times are good, we can still avail of good mortgage deals. Those who brought there houses a long time ago are unlikely to fall into negative equity due to the phenomenal rise in house prices over the last decade.

There is also good news. Each state has its expensive and more affordable areas: a house which might cost $1 million in one area might be 100,000 cheaper in another. More than that, It is very important in the current trends to check out the market carefully, some areas are still rising and certain areas are dropping faster or more than others. Also, some areas are cheap but low house prices don’t make the area affordable, jobs may be few with low incomes. So where are the most affordable locations to live (in no particular order)?

Note: Average house prices that are double the yearly average income make the housing affordable.

Indianapolis, Indiana
Average house price – $112,500
Average income – $60,383
% of housing for sale that is affordable – 89%

Cleveland, Ohio
Average house price – $122,900
Average income – $57,472
% of housing for sale that is affordable – 82%

Detroit, Michigan
Average house price – $154,600
Average income – $63,052
% of housing for sale that is affordable – 80%

Pittsburgh, Pennsylvania
Average house price – $109,000
Average income – $54.872
% of housing for sale that is affordable – 76%

Cincinnati, Ohio
Average house price – $136,800
Average income – $60.146
% of housing for sale that is affordable – 78%

St Louis, Montana
Average house price – $134,400
Average income – $59.950
% of housing for sale that is affordable –77%

Atlanta, Georgia
Average house price – $170,400
Average income – $63,484
% of housing for sale that is affordable – 69%

Greensborough, North Carolina
Average house price – $145,100
Average income – $50,447
% of housing for sale that is affordable – 71%

Dallas, Texas
Average house price – $145,500
Average income – $58,738
% of housing for sale that is affordable – 57%

Austin, Texas
Average house price – $176,200
Average income – $65,739
% of housing for sale that is affordable – 56%

When you start looking for your home, you look in the paper or search the internet and see a home you want. Then you go to the office it is listed with, or call the listing agent directly. After all who would know the most about the home and get you a better deal than the one closest to the seller? So you are taken to see the home and make an offer, and get the home.

But was that agent working for you? NO, THE AGENT HAS ONLY ONE CLIENT, THE SELLER. Every word you said was related directly to the seller in order to get the HIGHEST price possible for the seller. You mentioned it was nice and if pushed, you would go to an xxx limit. The agent knows the seller’s bottom line and know knows you can be pushed higher than that. So who made out on that deal? Not you! Since you disclosed all of your personal information, it was relayed directly to the seller. And this is not only true of the listing agent, but all the other agents who show you a home, because they are all obligated to the seller of any house they show you. Unless you have your own Buyer’s agent you are at the mercy of the other agents. You need someone YOU can trust.

When you first go into a real estate office they make you sign a form that states this, but do you really understand? It is like going into court and both attorneys are on the side opposite you.

Now if you were truly represented in this deal, the agent would have worked hard for you to get the best price. But only an agent who is a Buyer’s Agent can do that, one you have signed an exclusive contract with, and not only can they negotiate better for you, but when they find our pertinent information about the seller or the house, that may help you bargain, they are OBLIGATED TO YOU. Only a buyer’s agent can protect your information.

The buyer’s representative also brings to the table market conditions, neighborhood conditions, schools, attractions and other local matters as well as a general overall knowledge about the transaction, all from the buyer’s perspective.

And finally, all agents have access to the same housing database. Only office exclusives are unavailable from that list. But as a buyer agent, that agent is also allowed to bring you to these exclusives, while a regular agent can not other than agents from that particular office. So by running around with different agents, you are really wasting your time. A buyer agent can and will set you up on an email notification list and everyday a list of homes that fit your particular criteria will be sent for you to view. You can choose which homes you want to see ahead of time. So next time you are tempted to run back and forth between agents, think of the advantage of knowing one that will work only in YOUR BEST INTEREST!

Buying your home is a daunting experience, and you’d be better off informed in investing your nest egg, especially if you’re a first-time home buyer. Here are 10 tips that will allow you to avoid some very common mistakes.

1. Inspect Everything: Get a inspection report on the house you’re interested in and go through it. Make sure its done by a professional.

2. Picture the House Empty: Don’t be influenced by beautiful furniture, since that is not part of the sale.

3. Plan your Mortgage Payment: Look at your income level and living expenses. Mix in the future events such as kids, bonuses to determine how much you can pay for a mortgage.

4. Compare Homes: Get a good market perspective by viewing 5-7 homes.

5. Work with a Team: The right real estate professional will provide with you a good team (lender, title agent, etc.) to help you with the home buying process.

6. Ask a Lot of Questions: Make sure you understand all the expenses including: utilities, insurance, taxes, maintenance and home-owner dues if applicable.

7. A Last Walk-Through: To prevent surprises, do a final walk-through after all the furniture has been removed. Make sure the property is left as agreed in your contract.

8. Be Flexible: Closing delays are common in real estate, so always prepare for contingencies.

9. Document It: All agreements should be written down to avoid confusion, and for future reference. Even the most well-intentioned discussions can be misunderstood.

10. Be Open & Honest: Create a good working environment without headaches and delays by having an open and honest dialog with your real estate team.