I’ve had the privilege of working with many first-time home buyers over the years, and I find that the same few questions are consistently asked when we begin working together. As in most trades, we get so familiar with the lingo and the process that we tend to forget to explain things in plain English to the novice real estate client.

Here are the top four questions I get asked by first-time home buyers:

1. How much do you charge? The commission is paid out of the seller’s proceeds. Any property that is listed in the Multiple Listing Service has an associated percentage that the seller will pay both the listing agent and the cooperating (buyer’s) agent. 
2. Can you still help me if I want to see a home that another real estate company is selling? Yes, all agents have access to the Multiple Listing Service and can show any home that is for sale. 
3. What’s the purpose of the good faith deposit? A valid contract must have several elements, including what we call “consideration.” In this case, the consideration consists of the good faith deposit money (usually $1,000 to $5,000). The check, made payable to the escrow company, is held un-cashed during the negotiation process. It is only sent to the escrow company if and when there is an agreement between the buyer and seller and we can open escrow. At that time, the escrow company cashes the check and holds it in escrow until completion of the deal, at which point it is released to the seller as part of their proceeds. If during the inspection process the buyer decides not to buy the house, then the escrow company refunds the good faith deposit to the buyer.
4. What are closing costs? Closing costs are all the costs associated with purchasing property. Some examples include: loan fees, recording and notary fees, escrow and title company charges, interest payment to the new lender, the first year of fire insurance, and impound payments of taxes and insurance, if applicable. Together with the lender and the title company, I always provide my clients with an estimate of closing costs so they are fully aware of how much cash they must have in order to close the deal.

Are you a first-time buyer? If your questions weren’t answered here, please contact me at dbyrne@fhallen.com or leave a comment below.

And remember, if you’re anxious to take advantage of the $8,000 first-time home buyer tax credit – as well as great, low interest rates – it takes about 30 days to close and first-time buyers must have a signed purchase agreement on or before April 30, 2010. In those cases where a contract is signed by April 30, 2010, the purchase must be completed no later than June 30, 2010. 

For more information on the tax credit, visit: www.federalhousingtaxcredit.com.

Posted by:Deborah Byrne

My last post illustrated the tried and true reasons to buy real estate now. For the most part, all of those reasons were norms we’ve always known about real estate.  But today, there are different reasons to act now.  There’s a timer on some of the following reasons – some of these will disappear soon, as soon as April 30, 2010!  So tick tock.

Here we go, 5 more reasons (in no particular order) to buy real estate today:

• Home Buyer Tax Credits  -You’ve heard lots about this, but it is a good reason to get on the bandwagon and buy a home.  The tax credit applies to purchases that occur before April 30, 2010, or where a binding contract is signed before that date and the transaction is completed by June 30, 2010.  Currently, the government is offering two programs.  An $8,000 First-Time Home Buyer Tax Credit and a $6500 Move up/Repeat home Buyer Tax Credit  –  quick overview. More FAQ’s about the Home Buyer Tax Credits can be found here.


• The Energy Efficiency Tax Credits- FEDERAL—The Existing Home Retrofit Tax Credit, Tax Code Section 25C is available to homeowners and credits 30% of the cost up to a $1,500 lifetime limit are available for projects completed in 2010. 


• Local and regional funding is available for Energy Efficiency programs LOCAL– Sonoma County’s Energy Independence Program is a new opportunity for property owners to finance energy efficiency, water efficiency and renewable energy improvements through a voluntary assessment. These assessments will be attached to the property, not the owner and will be paid back through the property tax system over time, making the program not only energy efficient but also affordable.  I’ll bet there are lots of ways for you to capitalize on energy credits while you live in your home.  If you are still renting, it’s time.  Buy a home, get tax credits!  Check out what is available to you with a quick Google search.


• Time’s A Wastin’—Act Now.  Foreclosures, Short Sales, just ‘get me out of this house now’ sales. There are so many reasons prices are low.   The market seems to be correcting, so don’t wait.  Get approved for a loan, find a great realtor, and start shopping!  There’s tons of information out there.  Get someone to help you or just help yourself.  Go on, do it. Time’s a wastin’!


• Control over your environment– Owning your home offers other advantages as well. Not only can you change your home to meet your needs, but you also are not subject to the terms of a lease or a landlord’s whims. As a homeowner, you can experience the emotional and financial security that comes from knowing  what your housing expenses will be from year to year for the most part.  Unlike rents, which can increase annually, most mortgages have fixed or capped monthly payments. So, as a homeowner, you can have a much better idea of what proportion of your paycheck goes toward your home. Think of it as the ultimate savings plan. If you are still trying to decide if you want to rent or buy, this calculator, designed by Michael Bluejay may be the best tool I’ve found for that.  Have fun.

So there you have it.  My Top Ten For 2010.  Top Ten Reasons to Buy Real Estate Now.  Comments are welcome as always.  Email me at mohayer@fhallen.com. 

Posted by:Martha O’Hayer

It’s 2010. Hard to believe that we have entered a new decade. We’ve certainly learned some valuable lessons in Real Estate during the past decade – some old, some new and, quite frankly, some we hope to never learn again. But one thing it has taught us is despite the ebbs and flows, there are many great reasons to buy real estate. So moving into 2010, here are five reasons (in no particular order) to BUY NOW! Check back later for five more. You can email me at mohayer@fhallen.com. I welcome your feedback.

• Appreciation — Historically, homes values have appreciated. Even though during the past few years we’ve experienced a cooling off and drop off in appreciation, things seem to be on the upswing. Prices across the country are at historic lows, but not for long. Here in Sonoma County, median home prices rose 9% in December 2009 according to the Press Democrat. You can check your area’s appreciation here. If the values in your area seem to be on the way up, don’t delay. I’ll bet those homes are a great deal today. Seriously.

• Mortgage Interest Deduction — Interest is the biggest part of your mortgage payment. Owning your home is a great tax shelter. Deductions for mortgage interest are still one of the best benefits of home ownership.

• Interest Rates — Rates are at an all time low. No kidding. Today’s rates may be the best we’ll see in our lifetime, but we’re already seeing upticks and most analysts believe that rates have nowhere to go but up. Eric S. Rosengren, president and chief executive of the Boston Fed, believes that interest rates will go up by Spring, 2010, which he discusses in an article here. So act now and you’ll be sure to get the best bang for your home purchase buck.

• Leveraging Your Asset — First, find your dream home. Then you can make a down payment of as little as 3.5% of the purchase price in the case of an FHA loan. Next, earn returns on the total value of the property. All the while, you get to live in your investment. Beautiful.

• Property Tax Deductions — Property taxes paid on your primary residence, as well as vacation homes, are fully deductible for income tax purposes. Specifics on deductions can be found on the IRS site.

There are so many more reasons to act now and take advantage of home ownership. So, buy NOW, seriously! Low rates, low prices, big tax deductions and leverage. Whew, what more could you ask for? Here are five reasons, and five more are to follow, so stay tuned for part two of Top Ten for Twenty Ten—reasons to buy a home now. If you have questions or would like additional information, please feel free to contact me at mohayer@fhallen.com or go to my website at www.marthaohayer.com.

Posted by:Martha O’Hayer

Previous posts have centered on “how-to’s” for sellers. Well, buyers have just as many rules! For most buyers, the first step is to get pre-approved for a mortgage. It is imperative to know just how much home you can buy, and exactly what your monthly payment will be, before you start your home search. My “no-surprises” mantra applies to buyers as well as sellers.

When applying for a mortgage loan, there are definite do’s and don’ts to keep in mind. In general, you don’t want to make any changes to your financial picture until after you’ve moved into your new home.

Here are ten rules to keep in mind while navigating the process:

1. Do not change jobs, become self-employed or quit your job.
2. Do not buy a car, truck or other large purchase that requires monthly payments.
3. Do not use credit cards excessively or let your payments fall behind.
4. Do not spend money that you have set aside for closing costs or down payments.
5. If refinancing, do not stop making your current mortgage payments.
6. Do not originate any new inquiries into your credit.
7. Do not make large deposits to your checking or savings accounts without first checking with your loan officer.
8. Do not change bank accounts.
9. Do not co-sign a loan for anyone.
10. DO make sure the loan application is completed fully and accurately, and provide your loan officer with any requested information promptly.

Each of these rules has been violated by a borrower at one time or another, resulting in delays or outright denial of the loan. Don’t let this happen to you. And if you are looking for a reputable lender, contact me at 707.537.2308 or dbyrne@fhallen.com and I’ll provide you with the names of some good ones.

Posted by:Deborah Byrne

In a previous post I discussed how best to prepare your home for sale. I went through the nuts and bolts of repairing, cleaning and decluttering, and how best to show your home to the viewing public. But wait, you’re not done yet! You must keep looking through the eyes of a potential buyer.

Once your home is in escrow, there is still a lot that needs to be done. The buyer will spend 2-3 weeks doing various inspections – what we call “due diligence.” This is the last place we want surprises. Any additional repair or maintenance expenses the buyer discovers or perceives will give him or her reason to renegotiate price or terms.

For this reason, I strongly urge sellers to get a pest inspection at the time they put their home on the market. This allows maximum leverage – you can decide to do the repairs upfront , adjust the price accordingly, or simply disclose what might be needed ahead of time. Often you can do a simple repair for a couple hundred dollars, but a buyer will ask for a several – thousand – dollar credit.

For country properties, pumping the septic tank is the minimum that should be done. For maximum protection a septic inspection should be done as well. Failed systems during the rainy season that follows a sale are a major source of lawsuits. Another common inspection for country property is a well test – another way to avoid costly surprises.

A home inspection is another important tool. It gives a snapshot of the home’s main systems and allows you to proactively take care of any repairs or maintenance issues. Many repairs are very inexpensive and simple, yet a buyer will place maximum dollar value on them.

Remember: Surprises cost money… and deals!

Posted by:Deborah Byrne

Traditionally, fall brings about a change in activity in the real estate market since many homebuyers plan their transactions around the school year. With school in session, sales can tend to slow. Additionally, many sellers take their homes off the market for the holidays and wait for the more favorable spring selling climate. Pair the cyclical trend with reduced consumer spending, an increasing unemployment rate and decreasing cash flow, and this would appear to be an unfavorable time to list your home.

However, we’ve seen from experience that if priced right from the start, some homes do sell in a short time frame, no matter the season. Indeed, there are buyers out there who recognize that now is a great time to purchase a home. Fueled by low mortgage rates and government incentives, savvy buyers are looking to make a purchase. Case in point: The Duran Group’s listing at 3650 Rutherford Way in Santa Rosa. Priced at $789,900, this five bedroom, three bath home with over 3,356 sq. ft and built in 2000 drew five offers and went into contract after only nine days on the market.

Plagued by the economic crisis, the spending and saving habits of Americans are being looked at now more than ever as indicators of economic recovery.

However, maybe this is a more accurate sign of what’s to come.

Are you interested in buying in this off-peak season? Click here for some tips.

Posted by:Raina Duran

The minute you decide to sell your house, it is no longer your home, your castle, or your sanctuary. Shift your mindset toward thinking of your home as a product to be merchandised. Develop a critical “buyer’s eye” and try to look dispassionately at every aspect of the property, both inside and out.

After you have made all your repairs, scrupulously cleaned and scrubbed every nook and cranny, and cleared out the clutter, you’re ready for your first showing. Here are a few tips:

• Where possible, keep blinds and drapes open. The first impression should be light and bright. Keep as many lights on as necessary to make the rooms bright, especially rooms that are naturally darker.
• Where practical, leave a few windows open to keep the airflow up. On especially hot days, keep the air conditioning or fans on. On especially cold days keep the heat on. There only needs to be a few degrees difference from the outside in order to make the home feel welcoming.
• This is a time when your hidden domestic goddess really needs to come out. Before leaving the house make sure things are picked up and tidy.
• Fresh flowers and plants are a welcoming sight. Stay away from artificial air fresheners and scented candles. Many buyers are sensitive to the perfume they use, and feel they are a sign of trying to mask something unpleasant.
• Leave the house when prospective buyers arrive with their agent. Buyers will feel freer when the seller is not there, and will linger to get a feel for the home.
• Leave the negotiating to your agent! Let your Realtor^® discuss price, terms and other factors. Don’t volunteer unnecessary information such as your motivation to sell or your eagerness to get a quick offer.
  
  

While it’s a little extra work keeping your house in “showing condition,” the big payoff will be a quicker sale for top dollar!

Posted by:Deborah Byrne

When preparing their homes for sale, most people get it that when exposing their homes to potential buyers, everything has to be clean and presentable. That, however, is sometimes easier said than done. I now include the following advice in all my listing presentations, and I hope you will find some of these ideas useful and profitable.

Rules #1, 2 and 3 are CLEAN, CLEAN, CLEAN. Baseboards, corners, ceilings, and everything in between should sparkle. Don’t forget closets and cupboards – people will look! Don’t forget carpets and windows … clean, clean, clean!

Curb appeal is crucial. Many buyers will not even go inside if the yard is unkempt, overgrown or otherwise unappealing. Many more buyers will go inside but will start mentally deducting dollars from their offer.

Clutter can kill. You don’t want buyers distracted by your “stuff.” The overall impression should be that of lots of space. Avoid putting extra belongings in closets and garages – get it out of the house if at all possible. Now’s the time to have that garage sale, call the kids to pick up their college mementos, or make the trip to Goodwill. Anything that is distracting to the eye – or the mind – should be cleared out, such as collectibles, children’s toys, pet paraphernalia, etc. Check with your local garbage company for debris boxes to save some trips to the dumps. Many people have extra computers, monitors, printers, cell phones, etc., which can’t be put in the landfill but can be recycled at Computer Recycling Center, www.crc.org. Check with them for operating hours and any restrictions.

Each room must have a purpose (singular). Buyers get confused with dual purpose rooms, leading them to fear there isn’t enough space for all their activities and “stuff.”

Make all minor repairs and touch ups. Leaky faucets, loose knobs, sticking doors and windows, and other minor flaws detract from a home’s perceived value. Have them fixed. Many buyers believe that for every problem they notice, there are 10 more hidden problems.

I don’t feel you need to remove all personalization from your home. That’s neither practical nor necessary. Remove EXCESS personalization; in other words, one or two vacation pictures are charming, but an entire wall of vacation pictures is distracting. To share your favorite selling tips, drop me a note at dbyrne@sonic.net. I’ll share your favorites on a future blog!

Posted by:Deborah Byrne