Have You Found The Lowest Rate, Think Again!
So you've got your new home picked out and you're ready to embark upon the long process of securing a home loan and ultimately taking ownership of your dream home. Armed with that excitement, you take to the Internet in hopes of uncovering a hidden interest rate nugget, that low rate that other people have overlooked and that you have found through persistence and effort. Well, as you embark on that trip, there are some things to keep in mind during the pursuit for the lowest interest rate possible.
There are probably thousands of web sites offering financial data that can be pertinent to your search, so it is important to quickly cut through them all and pick one that seems to be at least somewhat reputable and has easy-to-access information. You'll probably want to focus your search on a 30-yeark, fixed-rate mortgage to get a barometer of the interest rate climate initially.
There are many sites out there that will go into detail on interest rate fluctuation but finding one with graphs that can show you the trend of that rate over time will provide you with a great piece of ammunition when trying to determine what the short term market might do and what kind of interest rate would, in the end, be a good one for the time frame you're looking at.
In addition, there are scores of financial articles written every day about the state of the real estate market and doing some reading on the current state of the market will help you greatly in your pursuit for a low interest rate. Sites like the Wall Street Journal online and other respected newspapers usually publish their full financial sections online. Google News and other outlets can additionally offer a slew of recent financial articles with a search or two.
Each loan has its own special set of financial aspects, so comparing them can be difficult at first glance. Thankfully, there are sites out there that will do it for you and doing a search for financial loan comparisons will give you a few good results. By putting in some information about you and your financial status, you can get some loan offers back that are tailored to your situation and can be compared against each other. This is a great step to help save time that might otherwise be spent deciphering the many loan options available through a multitude of lending agencies.
Finally, be thorough in your search. If you are truly looking to get a full picture of the loans available to you, contacting your local institutions (banks and credit unions) is a great step in the process and sometimes the added benefit of supporting local business or having a nearby branch office can make up for an interest rate shortcoming. It is up to you to assign priority to something like that.
Interest rates are important but while you've set out to pursue the lowest rate possible, you might find that there are other benefits you haven't considered that are important as well. These aspects should also make their way into your loan comparison as things like convenience, reliability and other factors differ from lender to lender. Decide what is important to you and what concessions you would make to accommodate one of those other desires.
Finding the lowest interest rate possible is a noble goal and with the avalanche of online information at the fingertips of anyone with an Internet connection, finding that rate is easier now that in the past. However, as you go through your search, keep in mind that a mortgage is more than just an interest rate and remain open to other benefits that might offset a bit of a higher rate.
Published by Joe and Colleen Lane, Realtors?.??The Lane Real Estate Team?services Tri City?Wa Real Estate,?Kennewick Wa Real Estate,?Pasco?Wa Real Estate,?Richland Wa Real Estate, and surrounding Southeastern Washington Communities. ?
About the Author
by Joe and Colleen Lane
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If you need assistance selling your house ERA Othello Realty can share their expertise and experience with you in a friendly and professional manner. From all aspects of selling your house: from getting a qualified CMA (Comparative Market Analysis) to advising you on the presentation of your house, marketing your home online and in print, conducting an open house, showing your house within your guidelines and discretion, constant communication, negotiating the best price for your home and being with you until closing and beyond. We can also assist you in your search for a new home. Please call us at 732-364-2015. We are the realtors NJ! Look at these Listings of Homes for Sale in NJ. Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ.
Finding Nice Budget Priced Accommodation Is Not An Easy Task!
It's often said that you only get what you pay for? In most cases it's a true statement but not so with the housing market. High price is not always high quality just as low cost doesn't automatically mean low standards. There are so many rental options available out there in the concrete jungles, but the question is how to find such places?
For most people the hardest part about finding good rental accommodation is the search. This is especially true in the low to mid price ranges. It can prove to be an absolute nightmare. There are usually only 2 viable options available which are word by mouth or by search yourself.
It's really hard to find that perfect dwelling if you're on a low budget, but it can be done. Quite often it's all about settling for a compromise. Common problems are that the place is either too big or too small, out of budget or too far from the workplace. Then, just when everything seems to be going fine, the neighbourhood lets the whole deal down.
Another drawback with budget type accommodation, is that when it comes to renting property in the low to mid price range, the real estate agents are not truly interested. Go into their office and tell them you're looking for a crash pad for a couple of hundred dollars and see how helpful they are! The odds are they won't assign you a tasty looking escort for the day who respectfully accompanies you into the back of a company limo as she enthusiastically presents you with one studio squat after another!
Although some agents advertise direct contacts to such dwellings on their websites, it's not unusual for the phone numbers, prices, and other details to be out dated, incorrect, or both, which shows their lack of commitment to properties of these types.
There are websites too that boast a comprehensive database, listing nothing but budget priced accommodation, but there is a catch! You have to pay a subscription fee to get access to them, and even then you won't know how useful it is until you pay up.
So my friends and fellow home hunters, by far the best way to find a great pad at that affordable price is to ask around well in advance of your move, or find a decent no nonsense website and begin to add potential properties to a wish list so that you have a few options to check out when it's getting time to move.
About the Author
Gary Tooth is a proficient writer for Situationhome.com where there are articles are on the Home Theater System and the Black and Decker Firestorm.
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Make Your Homes for Sale Offer Contingent Upon a CLUE Report
In most state's, you purchase title insurance to ensure you are not also buying the responsibility for earlier liens against the property. In a finite few states, you pay to have an abstract search to do the same. The one thing most buyers of homes for sale never think of or do is to check the insurance claims history of potential homes for sale. This could be a crucial mistake.
Insurance companies share information with each other. They use the Comprehensive Loss Underwriting Exchange (CLUE), which is a huge database of information. CLUE holds the dates, type of loss, and amount paid on claims to previous owners of your potential homes for sale for the past five years. Information contained in CLUE could very well mean higher homeowners insurance premiums or no coverage at all for particular homes for sale.
For example, previous homes for sale water damage claims are red lights for insurers, because such problems eventually may lead to expensive claims of toxic mold. In California, alone, there have been substantial toxic mold claims over the past ten years. Some fairly new homes had to be completely demolished -- very costly to those insurers. Historically, insurance companies have found that toxic mold damage is generally caused by previous water damage that was not adequately repaired. Therefore, when insurers see a previous water damage claim, they are apt to not decline coverage or cancel your policy within the first 60 days grace period for the insurer -- even though the claims happened before you owned the homes for sale.
Water damage is only one of many damage claims insurers look for when underwriting your potential homes for sale. They will evaluate all of the homes for sale claims history to determine if the potential homes for sale is a disaster just waiting to happen.
Since current homeowners have a motive to present their homes for sale as perfect, it will not do much good to directly ask them about previous claims. Also, they may not know the history of the homes for sale before they purchased it. Unfortunately, only a homeowner may order a report from CLUE, called the Home Seller's Disclosure Report. An insurer will not order information from CLUE until you sign an insurance contract and it goes into underwriting, which you cannot do until you have signed a purchase contract for the homes for sale. You can, however, have your realtor put a contingency clause in any homes for sale offer you make that stipulates the sale may be cancelled if a negative CLUE report is received.
If you are a seller of a homes for sale, getting a CLUE report before putting the property on the market is a good idea. As in any report, errors can be made (just think about all of the errors people find in their credit reports). Ordering a report early means you can catch any errors and get them corrected. A CLUE report can be ordered from ChoiceTrust.com, which also tells you how to correct report errors. Also, locate all of the receipts for repairs from all insurance claims you made, proving to the buyer's insurer that the problems no longer exist. For previous claims such as water damage, you may even pay for a pre-inspection to ensure the problem was adequately repaired and no future claim will result.
Finally, buyers should begin shopping for homeowners insurance immediately after signing the purchase contract. Not only is it required to be in place at closing by homes for sale lenders, but also there always is the chance you may be rejected by the first chosen insurer and will need time to find another insurer.
So, discuss with your realtor a contingency clause in any offer you make for a homes for sale before he/she begins showing you homes, and plan to begin looking for an insurer immediately after signing the purchase contract.
About the Author
John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more on San Diego Homes for Sale visit http://www.twtrealestate.com
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If you are looking for homes for sale in Spring Lake NJ, Newark NJ, Marlboro NJ or any other area in New Jersey ERA Othello Realty are the real estate agents that you are looking for. Whether you are looking to buy or sell your New Jersey real estate they can help you. We list homes for sale in Manalapan NJ, Point Pleasant Beach real estate and many other New Jersey properties for sale. Aberdeen NJ Homes for Sale, Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ. Search through thousands of houses for sale in New Jersey. We are the realtors NJ!
More Singles Are Buying Homes.
It used to be that both men and women waited to become first-time homebuyers until they married. They rented or lived at home with parents until Mr. or Ms. Right was found.
Today, according to the National Association of Realtors, one in every four home real estate purchases are made by singles, with single women outnumbering the men by two-to-one. The cause is thought to be that many single men in their 20s or early 30s continue to live with their parents until marriage, while single women are more apt to move into rental real estate with friends after college. Additionally, women are marrying later in life, attaining higher educational degrees, and spending more time to establish their careers. This provides them more available financial resources to purchase their own real estate and move into a place of their own.
My daughter did this in her early 30s. A successful web designer in West Palm Beach, Florida, she decided that she was wasting her money renting and wanted something that was hers. As with most single renters, she purchased a condo (townhouses are another good alternative for previous apartment dwellers). Though it was a big step and a huge commitment, she has a sense of security, satisfaction and accomplishment that cannot be found through renting.
Some Benefits of Renting After renting for several years, many singles become frustrated with their dollars going into someone else's pockets with nothing to show for it. They dislike not being able to decorate as they wish or sharing space with roommates.
For some locations and personal situations, however, renting may be the best and cheapest alternative. You do not pay for repairs, maintenance or property taxes. You have more flexibility to move when you wish, without being concerned with first selling your real estate. So, if you are considering buying residential real estate, compare your options carefully before making a commitment.
Homeownership Benefits Are Many Owners of real estate attain many benefits. There are numerous real estate deductions at tax time on both federal and state income taxes, especially if you purchased your home real estate within the tax year. (See my article at this web site, titled "Real Estate Tax Breaks for Your Home" for more benefits of homeownership.) Because it is your home, you can make more permanent changes through renovations and decorating. Additionally, your investment generally increases in value and you accumulate equity that can be borrowed against in the future for necessities, such as the purchase of a car or that vacation of which you always dreamed.
Though buying real estate before marriage is a big commitment, more and more singles are doing just that and finding the move much more rewarding than renting.
About the Author
John Harris is an expert researcher and writer on real estate topics such as economics, credit improvement tips, home selling advice and home buying preparations. For more on San Diego Homes for Sale visit http://www.twtrealestate.com
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If you would like to buy a house/home we are your source of thousands of available listings of real estate. As a native Licensed New Jersey Real Estate Broker we have many agents in our realty who are very familiar with the needs of New Jersey Real Estate buyers. If you are interested in selling your house, or any other NJ real estate, we are here to help you sell. Our experience real estate office staff will walk you through the whole house selling process. Get in touch with us and we will show you how we can help your sell your home in New Jersey. We are the realtors NJ! Great Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ.
Planning for Your Home
In a world of slap-dash home construction, having a custom or semi-custom home built just for you isn't something most of the population has experience with. And while it's an exhilarating adventure that will (hopefully) result in the home of your dreams, if it's your first time, it can also be overwhelming.
To make sure you get your dream home, there are some things you should consider before choosing your home design plan, so think about your wish list and try to determine the practicality of your desires. Once that's taken care of, work with a designer to find or create the custom home plan that's right for you.
Some of the things you should consider - and work through with the other people who will be living in the home - include:
* Whether you want an open floor plan or a more traditional, divided plan * How many children will - or potentially could - live in the home? Are in-laws quarters necessary? How many bedrooms and bathrooms do you want? * How often do you entertain? What are the space requirements of the gatherings? In which rooms will the events usually be held? * Number of stories and the ease with which you can travel the stairways and halls * Exterior style - in general. Do you prefer modern or Cape Cod-style homes? Tudor or French Country? * What construction materials do you prefer? * Are there views you want to avoid or take advantage of? * Will your landscape include a raised-bed garden? A swimming pool? Built-in barbecue grill? * How important is the kitchen? Are you a gourmet who needs a large space for gadgets - or is your idea of cooking popping a frozen dinner into the microwave? * Do your hobbies require special considerations? * Do you need CAT 5 cable wiring to get the technology you crave? What about a central vacuum system?
As you go through the process, your custom home plan designer or consultant will ask you hundreds of questions (literally), so it's a good idea to consider these basics before jumping in. They will quickly narrow your field of options and give you - and your designer - solid ground on which to start.
Of course, if you don't quite know where to start, it helps to study model homes. They will give you a feel for square footage, materials, amenities and ideas for the various ways you can lay out the space and the rooms, so you can at least start working with your designer on a home design plan armed with an inkling of what you want.
In the end, practice patience. Deciding on a home - or working with a designer on a home plan - to suit your every need takes time. And patience, knowing what you like and the ability to compromise with your family and your budget are vital.
About the Author
Karen Crane is a mortgage broker who has learned about the world of custom home plans the hard way. Having gone through the process of building three homes, she has finally settled into her dream house. She found her perfect plan at www.OwnerBuilderSolutions.com.
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ERA Othello Realty can help you buy or sell your home. 732-364-2015. We offer relocation packages for corporate accounts, government accounts or for individuals. Whether you are moving from out of state to New Jersey, or you are within NJ and are moving north, south or lateral. We are your NJ Relocation specialists and we look forward to being challenged by your needs. From finding a house to selling your house, from moving companies to utility changes, and from school assistance to job assistance we are here for you every step of the way. We are the realtors NJ!
Why Real Estate Investing Will Always Be Very Profitable
In recent months there has been a lot of talk about a crash in the real estate market.
Analysts predict a housing bust. News reports indicate that home sales are declining in several markets all over the country. This paints the picture that real estate investing is no longer a lucrative business. Investors all over the country are advised to get out of the game as quickly as possible to avoid losses.
What analysts and news reports dont tell you is that every decade for the past forty years there has been some kind of warning about a crash in the real estate market. Each time these warning come out, people begin to mistrust real estate investing.
They turn their sights to other forms of investing. Analysts to preach this gloom and doom on the real estate market also do not understand that real estate investing is much different than stock investing. The same rules and trends do not apply.
Every decade when analysts state their predictions for a real estate market crash there are some real estate investors who heed this advice. These investors eventually regret doing so once they realize that there was no cause for alarm in real estate investing. Smart investors, on the other hand, realize that there is always money to be made in real estate investing and they know exactly why.
Humans have only a few basic needs. These basic needs never change, they never go away. These needs include food, clothing, and shelter.
The constant need for shelter lies at the root of the reason that real estate investing will remain profitable. Of course, there are some other key elements, but the least you need to know is that humans will always need real estate.
Even if real estate somehow dwindles from a structure with walls and a roof to a measly hole in the ground, it is still considered shelter. Someone has to provide these holes in the ground. Some holes will end up being better than other holes. Some people will have the means to buy and sell multiple holes. Real estate investing will continue to exist.
The real estate market alone will never experience a crash. In all the years that real estate has been around, the market has never crashed. The only time you will see a negative impact on the entire real estate market is when the general market experiences a downfall as well. However, when this happens, the value of all other commodities will decrease at the same time. Even in this case, real estate investing can still prove to be profitable.
You might see a local real estate market decline as a result of another catastrophe, such as New Orleans in the case of Hurricane Katrina. Because of a natural disaster, the majority of the real estate in the area was lost. There were no properties for homeowners to purchase. A key thing to know in real estate investing is that local markets always correct themselves. The disastrous loss in the New Orleans area created a huge opportunity for real estate investing.
Although the real estate markets in various cities might fluctuate from time to time, the real estate market as a whole will never experience a serious decline. This is the reason that real estate investing will remain a lucrative form of investing.
Records show that over the long term real estate has always increased in value and there is no good reason why this will not continue.
About the Author:
Claim a free e-book that will show you a system used to control $4.1million worth of real estate for just $22 - and you can follow this system to do the same. Comes with resale rights from: Free Real Estate Fortunes Ebook
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ERA Othello Realty can help you buy or sell your home. 732-364-2015. We offer relocation packages for corporate accounts, government accounts or for individuals. Whether you are moving from out of state to New Jersey, or you are within NJ and are moving north, south or lateral. We are your NJ Relocation specialists and we look forward to being challenged by your needs. From finding a house to selling your house, from moving companies to utility changes, and from school assistance to job assistance we are here for you every step of the way. We are the realtors NJ!
Real Estate Investing: Income, Leverage, Appreciation And Depreciation
Real Estate investing is not nearly as legally complicated, financially burdensome, or time consuming as you might think.
Every investor can invest for leverage, appreciation, income, equity and appreciation. The challenge facing every transaction is learning to recognize value.
Educated real estate investing is often knowing how to do deals. It does take time to get educated in this arena.
A typical real estate transaction involves understanding financing, negotitation and reognizing the risk and reward parameters of the investment. The truth is, real estate investing is a tough business, and even tougher if you're not fully aware of the time. However, when approached correctly this is a very exciting and lucrative business.
Several years ago a very good friend of mine purchased a duplex which needed a great deal of repairs. My friend fixed the property up themselves and rented out one part of the duplex and lived in the other part. The tennants rent payment covered the entire mortgage which alloweed my friend to live rent free. Since the time fo the purchase the property has also appreciated considerably. This experience has led my friend to really get educated in real estate investing.
Real estate investing is a business that you can run yourself, with little overhead, and finally achieve the financial freedom you desperately desire. It is not limited to wealthy tycoons. To be successful in real estate investing is to build long-term wealth. Sensible investing is a sure way to wealth, but not necessarily overnight.
For the prepared individual, foreclosures give rise to circumstances for profit. In some cities competition for foreclosures is fierce. Investing in foreclosures is a very popular subject, especially with new investors. Learning the foreclosure market requires a great deal of time and energy but the rewards are certainly well worth it.
Done correctly, real estate investing is a great way to take control of your life, and gain financial freedom. Crunch the numbers and learn as much as you can about this exciting arena. There are opportunities to profit for almost every type of investing style.
About the Author:
David Medley is an active real estate investor and webmaster of http://www.aboutreal-estate.info/
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If you would like to buy a house/home we are your source of thousands of available listings of real estate. As a native Licensed New Jersey Real Estate Broker we have many agents in our realty who are very familiar with the needs of New Jersey Real Estate buyers. If you are interested in selling your house, or any other NJ real estate, we are here to help you sell. Our experience real estate office staff will walk you through the whole house selling process. Get in touch with us and we will show you how we can help your sell your home in New Jersey. We are the realtors NJ! Great Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ.
Manufacturers Offer Products For an Extra Toasty Home
Muhamed "Mo" Zejcirovic doesn't exactly need heated floors in his kitchen, dining room, living room, family room and all three bathrooms, given that he lives in Laguna Hills, Calif. But he considers the $8,000 spent on radiant heating -- including a heated bathroom mirror and three heated towel racks -- "100% necessary." He's tired, the electrician says, of shuffling across his fancy marble floors in his ratty slippers because the stone was too cold for bare feet.
Earlier this fall, Mr. Zejcirovic was talking to a contractor who had installed towel warmers in a home nearby when a light bulb went off. Why stop at towels, he thought, when he could heat the rest of the home? Now, he says, the floors are a toasty 82 degrees. One casualty of the new fixtures: his slippers. "I threw them out," he says. "My wife's very happy about that."
It started with floors and towel racks. Then driveways got the hot treatment. Now, everything from windows to recliners is starting to sizzle. New shower walls that look unremarkable on the outside are hiding special plastic tubing that can ratchet up the heat -- even as the hot water's already making the room steamy. Contractors say they're installing heated kitchen countertops to keep hands warm while cutting vegetables. There are hot mattress pads with dual controls (he can sleep at 80 degrees, while she turns up the dial to 100), heated slippers and even heated door mats (they weigh 24 pounds but melt snow on contact).
New technologies are fueling the hothouse trend. Heated windows have a transparent film that conducts electricity, warming the glass to a balmy 100 degrees so families can comfortably gaze outside together on snowy nights. "Comfort brings you closer," read ads by Thermique, the company that makes the windows, which can be linked to the home's heating system.
Improvements in design mean heated driveways and floors can be installed by homeowners, with just a final hookup by an electrician. Watts Radiant, a manufacturer in Springfield, Mo., that sells radiant panels at Home Depot and Lowe's, recently produced a 20-minute how-to video for customers. It shows a couple embedding electrical wires into a floor and programming controls that regulate the system's heat output.
Dan Chiles, vice president for marketing at Watts Radiant, estimates 30% of the people who purchase his products are do-it-yourselfers. Once someone buys a radiant floor, they're more likely to move on to other surfaces, he says: "All of a sudden, the imagination lets go."
A decade ago, Dan Foley, an Alexandria, Va., mechanical contractor, says he figured out he could sell more heat in bathrooms by taking the radiant systems up the wall -- literally. He took the water-based tubing systems he'd been using on the floors and extended them vertically behind shower walls. Even though customers bathe in 110-degree water, Mr. Foley says temperatures of walls in extensively tiled showers can stay near 50 degrees -- "uncomfortably cold." Mr. Foley, who specializes in custom homes from $5 million to $50 million, says he installs preheated showers about five times a year. The feature "kind of puts you in a cocoon," he says.
The new hothouse builds on the popularity of radiantly heated flooring, which had been growing steadily for more than a decade, hitting $2.8 billion in sales in 2004, according to the Radiant Panel Association, a trade group. Last year, growth started to level off, a likely result, says the group, of a slowdown in new construction, where radiant heating is most often installed. Initially, the systems were water-based, but in recent years, electric systems suited for smaller spaces began to take hold, using increasingly durable cables that can now withstand 250 to 300 degrees -- enabling them to be installed in asphalt driveways, which are poured at around 250 degrees.
Some of these products are a stretch for people. Tom Silva first came upon heated kitchen countertops while renovating his own kitchen in Reading, Mass. The general contractor for the TV series "This Old House" thought they would be especially nice for dinner parties, since most people wind up congregating in the kitchen (though he admits he's melted a few sticks of butter by leaving them out on the 62-degree counters overnight). But when Mr. Silva, who also runs a construction company, brings up heated counters with his customers, some don't see the point: "Not everybody takes me up on it."
While some makers promise the technology can reduce heating bills by about 30%, many are simply pitching the toastiness factor. CosySoles makes microwaveable slippers that stay warm for up to 45 minutes, promising "freedom from frozen feet forever!" Jacuzzi in January will launch a line of drawer-style towel warmers that can fit under a sink or inside a cabinet, while Toto's latest line of heated toilet seats can hit 97 degrees with the click of a remote control.
Martinson-Nicholls, an Ohio distributor of floor products, this year began manufacturing a line of heated floor mats. In the past two months, the company says it has received $300,000 in orders for the mats, which can weigh 24 pounds and cost $199. "We think people are going to get inventive with it," says Dan Ruminski, company president, adding that they're ideal for placing in front of an outside grill for winter cookouts.
When Jason Nielsen hears his neighbors crank up their snowblowers at 5 a.m. this winter, he'll turn over in bed and keep sleeping. The real-estate agent from Emigration Canyon, Utah, says he was tired of putting on three layers every time it snowed and spending two predawn hours shoveling, so he and his wife spent $40,000 to install a heating system in 2,000 square feet of his driveway. Now they're also trying to get their bathroom and kitchen floors heated before winter hits: "We thought, 'Might as well.'"
By Kate Goodloe and Ellen Gamerman
From The Wall Street Journal Online
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If you are looking for homes for sale in Spring Lake NJ, Newark NJ, Marlboro NJ or any other area in New Jersey ERA Othello Realty are the real estate agents that you are looking for. Whether you are looking to buy or sell your New Jersey real estate they can help you. We list homes for sale in Manalapan NJ, Point Pleasant Beach real estate and many other New Jersey properties for sale. Aberdeen NJ Homes for Sale, Marlboro NJ Real Estate, Homes for Sale in Marlboro NJ, Marlboro NJ, and Information on Marlboro NJ. Search through thousands of houses for sale in New Jersey. We are the realtors NJ!
What to Do When a Builder Offers to Find You a Loan
Thinking of buying a new home in this softer market? Chances are your builder is going to try to sell you a mortgage.
Builders have long encouraged their customers to use their mortgage affiliate for financing, and not just to make a little extra money. It also gives them control of the transaction, making it less likely that a mortgage snafu will create problems at closing. Now, as sales slow and cancellations rise, builders are increasingly rolling out special deals that may be tied to using their affiliated lender.
But you may well be able to find a better deal on your own. Builders' mortgage offers "clearly are worse in all the cases I've seen," says Jack Guttentag, professor emeritus at the University of Pennsylvania's Wharton School and founder of the mortgage-advice Web site www.mtgprofessor.com.
When Randy Gowler, a Olathe, Kan., architect, wanted to buy a new four-bedroom home this year, the builder offered to pick up the first $8,500 in mortgage payments. The catch: Mr. Gowler had to use the builder's affiliated lender and pay the full $287,000 asking price. Mr. Gowler crunched the numbers and turned down the deal. Instead, he went with an outside lender that offered a lower interest rate and paid $274,000.
Unlike Mr. Gowler, most home buyers stick with the builder's lender. Pulte Homes Inc. says Pulte Mortgage provides financing for 90% of its buyers who need a mortgage. Centex Mortgage finances 80% of Centex Corp. customers. Most builders either have a mortgage affiliate or preferred lenders they work with.
Builders say their rates are competitive and that their mortgage affiliates give them more control over the sale. Indeed, getting a loan through your builder can be a plus if construction is delayed, says Greg McBride, a senior financial analyst with Bankrate.com, because a builder's mortgage unit is more likely to be flexible if there are construction delays.
As the housing market has cooled, many builders have sweetened the pot with special deals. A September survey conducted by the National Association of Home Builders found sharp increases from last year in the number of builders offering to pay closing costs and other fees and in those reducing home prices.
In many cases, home buyers must use the builder's financing arm to qualify for these offers. That's particularly true if the incentive is mortgage-related, such as when the builder pays closing costs or picks up several months of mortgage payments. Buyers may also be required to use the builder's mortgage unit to qualify for a reduced purchase price, builder upgrades or other concessions.
Some competitors say that these requirements put buyers at a disadvantage. "They prevent consumers from shopping to see if there's a better deal out there," says Marc Savitt, vice president of the National Association of Mortgage Brokers. The savings from incentive programs are often illusory, he says, because the home buyer is charged a higher mortgage rate or more in fees and closing costs by the builder's mortgage affiliate.
The builders disagree. "This is really about special interests trying to limit competition -- and increase their profits -- by legislating home builders out of the mortgage business," the National Association of Home Builders said in a statement.
Federal rules prohibit builders from requiring that home buyers use their mortgage affiliates. The rules also require that any discounts offered to buyers who use these affiliates must be true discounts and not made up through higher charges elsewhere.
The Department of Housing and Urban Development says it is getting more complaints not only from mortgage brokers, but also from consumers. One builder canceled a purchase contract and refused to return an $11,845 down payment after the buyer decided to use an outside lender. After HUD intervened, the builder's mortgage company agreed to buy down the rate to make the loan more competitive. Another builder agreed to waive $5,360 in mortgage-origination fees that a buyer was being required to pay in order to qualify for $13,450 in incentives.
To make sure you're getting a good deal, ask the builder not only for the mortgage rate, but also for details on closing costs, points, any fees that will be paid to the lender or third parties, and the terms of the loan. Prof. Guttentag advises comparing that offer to a quote for the same mortgage obtained on the same day from an online lender. He also suggests shopping for financing at the same time you look at houses.
Whether the builder's deal is worth taking can also depend on how long you plan to stay put. A slightly higher mortgage rate may not be a problem if you plan to move in a few years, but it could wipe out the benefits of any incentives if you plan to stay in your home longer. You should also check what comparable homes are selling for to determine whether the builder is offering a real discount.
It can pay to negotiate. When Scott Lazaroff, an engineer, bought a new home in Lyons, Colo., in September, the builder offered to knock an extra $15,000 off the price if Mr. Lazaroff used its affiliated lender. He decided to use his own lender, but still convinced the builder to reduce the price by $10,000. Dan Gracey, another Colorado home buyer, said his builder came back with a lower mortgage rate after he "pushed back" on its original offer, which was higher than the competition.
Jonathan Clements is on vacation.
By Ruth Simon
From The Wall Street Journal Online
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Housing Correction Has Further To Run, Realtors Predict
The housing market correction has further to run, with new-home construction expected to fall another 12% next year, a real estate industry group said Friday in an updated forecast for 2007.
While the market for existing homes will probably flatten out, the new-home market will probably continue to slow through next year, said David Lereah, chief economist for the National Association of Realtors.
Sales prices are expected to rise slightly. "Given the huge gains in home values during the housing boom, and this year's rise in housing inventory, overall price gains this year and next will be modest," Lereah said. Median existing-home prices are expected to rise 1.7% next year, while new-home prices are expected to rise 1.3%.
Housing starts will probably fall about 12% next year to 1.63 million after falling 11% this year, he said. Starts totaled 2.07 million in 2005.
The NAR forecast for housing starts for 2007 is close to the Blue Chip consensus forecast of 1.62 million. The Blue Chip forecast is derived from the forecasts of 54 economists surveyed by the publication Blue Chip Economic Indicators.
New-home sales will probably fall 8.7% next year to 975,000 after plunging about 17% this year, the realtors said.
Existing-home sales will probably fall 0.6% to 6.43 million next year after sinking 8.6% this year, he said, adding that sellers are becoming more realistic.
"We now have the most favorable market for home buyers in several years," Lereah said.
By Rex Nutting
From The Wall Street Journal Online
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It Is A Good Time To Decide
It sounds tired, trite, hackneyed, even a little specious, especially when it’s become little more than a marketing slogan used to describe just about any housing market, no matter how bleak or bright.
However, right now, the popular refrain, "It’s a good time to buy," resonates with a more resolute ring of truth.
Home sales are taking a dive, prices are tumbling, mortgage rates are relatively low, builders and sellers are offering concessions, and the most recent forecasts say the market is hovering just at or above bottom.
Given no one can actually pinpoint the bottom except in hindsight — after the market rebounds — waiting for that elusive place in time is as risky for buyers as it for sellers waiting for the market to peak.
But before you rush out the door in a frenzied attempt to stay one step ahead of the bottom feeders, remember that a "good time to buy" for you may not be the same "good time to buy" for someone else.
Personal considerations trump the generalities.
Instead of making the home-buying decision based solely on market conditions, consider it in a more holistic context.
It’s only a good time for you to buy a home, typically, when owning is cheaper than renting and a home purchase is a natural fit for your financial needs, goals, obligations and lifestyle.
Consider market conditions — it’s wise to buy low and sell high — but also examine your complete financial picture, other goals in life and plans for your family.
It’s not easy.
The current market offers a big carrot.
"Today, with the real estate market slowing in many parts of the country, all the market fundamentals show that buyers are now in the driver’s seat," said Jerry Howard, CEO of the National Association of Home Builders (NAHB), in a recently release.
"Consider the facts: prices are competitive, rates are low, the selection of homes is high in all price ranges and sellers are ready to bargain," he added.
Right now, however, if you take the plunge but can’t tread water until the market again surges with waves of home price appreciation, you could sink.
On the other hand, if you don’t take the plunge and home price appreciation swells, well, you could be priced out of the market — grounded.
"First-time home buyers who choose to ‘play it safe’ and keep renting are essentially postponing the opportunity to build household wealth. Currently, with rental vacancy rates tightening, they can probably expect to see an increase in the rent they pay. No one can accurately predict the peaks and valleys of the housing market. If you try waiting for the absolute best deal, you could end up literally waiting for years, missing out on the opportunity to become a homeowner while prices are moderating," NAHB advises.
It’s a real Catch-22.
Over the long haul, real estate prices and values rise, historically, by an average of about 5 to 6 percent annually. At that rate, the value of homes doubles every 13 years, says the NAHB. Your market may do better or worse.
Will it pay to buy and hold now or stick to your current investment and savings plans now and buy in the future? As you wait to buy, will your financial planning generate the same rate of return or more than you could expect from a home investment?
How will you compare the value of the tangible asset that comes with owning a home? It’s not just an investment, but also your own roof over your head.
You don’t have to make the decision alone, you probably shouldn’t, but you should make the decision.
Get professional financial planning help, expert tax advise and some experienced real estate and investment insight.
Maybe it is a good time for you to buy a home. Maybe it isn’t.
But current market conditions do indicate it is a good time to decide.
by Broderick Perkins
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All About Price?
When it’s time to set the list price on a property, the roles are clear. Real estate professionals provide detailed data and selling strategies relevant to the specific property and market. Property owners decide on the list price. One Canadian researcher wondered what trade-off between time-on-the-market and sale price is reflected in the choice of list price.
"It is important to identify which segment of buyers you want to attract," said Dr. Paul Anglin, currently an Associate Professor of Real Estate and Housing in the Department of Marketing and Consumer Studies in the University of Guelph’s newly-created College of Management and Economics.
"Do you set the list price high and wait for someone to come along, or does the high list price scare away buyers? There is a trade off between time and money and several parts of my research are trying to come to grips with high selling price versus quick selling time. Sometimes you just get lucky and sell for a high price in 2 or 3 days. How much is luck and how much is the listing price strategy? Distinguishing luck from good choices requires careful analysis of the data."
When Anglin was a member of the University of Windsor’s Economics Department, he undertook research based on 3 years (1997 to early 2000) of listing information provided by the Windsor Real Estate Board. Through the Board’s cooperation, data for more than 20,000 houses, including those that did not sell, was available for statistical analysis. The resulting study, entitled "House Prices and Time-till-sale in Windsor," attempted to quantify the trade-off between time on the market and sale price as a reflection of selected list price.
"The key step in our analysis was that we tried to compare to a benchmark," said Anglin, who used a three-bedroom/two-bathroom bungalow as the standard for comparison. "An increase in the list price has an effect relative to a benchmark."
Analysis revealed that, on average over that 3-year period:
- Smaller houses sold faster while increased time-til-sale (TTS) was the case for properties with 5 or more bedrooms.
- Bungalows and side-splits sold at the same pace, but condominiums, ranch-style and "rental" properties took more time.
- TTS differed significantly by location while properties outside the City of Windsor consistently had longer TTS.
- Descriptive remarks on the listing form had the following effects:
- The words "beautiful" or "gorgeous" reduced TTS by 15 percent and "beautiful" houses sold for more. "Landscaping" reduced TTS by 20 percent and "move-in" condition did so by 12 percent. However, "must see" and "vacant" houses apparently had no statistically significant effect.
- Houses identified as "Starter" homes sold in 9 percent less time, however, "Handyman Specials" sold approximately 50 percent faster. "Rental" properties were on the market 60 percent longer.
- Seller intent described as "motivated" or "must sell" were associated with a 30 percent increase in the average TTS while "moving" had no statistically significant effect.
- Following the research statistic "Degree of Over Pricing" (DOP), which measures the difference between the list price chosen by the seller and the average list price for that type of house, the DOP of unsold houses was roughly 4.5 per cent higher than those which sold.
Anglin believes his work is also relevant to "hot" markets and large cities like Toronto and Vancouver. According to his research, "Roughly 40 percent of listings in average markets around the world do not sell." The impression in a hot market is that all listings sell, but Anglin stresses that may not be true. Since the only way to be sure is to analyze other real estate board data, Anglin hopes to expand his research to a large centre like Toronto.
In an email follow-up to our interview, Anglin added: "I was looking at the website of the Calgary Real Estate Board and, even with the hot market that they have, the number of new listings is about 40 percent above the number of sales for the year to date. The data for the Edmonton Real Estate Board does not report new listings; thus, I cannot tell whether the data on the number of listings represents a lot of new listings that sell quickly or a few new listings that sell slowly and I cannot distinguish between the listings which sell and those which [expire] without selling."
Among owners who select a list price higher than current market data indicates are those who may be "testing the market" — content to stay in the property rather than sell for less. Real estate professionals who take on listings at prices that match inflated owner expectations may not fare well either. Anglin’s research reveals that houses which are listed, but do not sell, use up more of the real estate professional’s time and resources.
According to the study, owners setting a list price should bear in mind that wanting more may not result in more: "The single most important message that a seller can send to a buyer is their choice of list price. A high list price encourages potential buyers to inspect similar lower-priced houses, both those that are available currently and those which will become available."
Real estate sales data often make the news, but significant amounts of real estate knowledge remain tied to anecdotal evidence. Research directed at adding statistical weight to professional observation may prove useful to both real estate practitioners and property owners alike.
by PJ Wade
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How To Remain Bullish On Realty Investments
Despite recent gloomy housing market reports, including Commerce Department figures that show new home selling prices recently plunged by the greatest margin since 1970, home owners remain bullish about home values.
And investors say they should be. Current market conditions are no reason to shy from the housing market as an investment, provided you apply the basics.
The vast majority of home owners, 90 percent of them, expect their own home value to stay the same (27 percent) or increase (63 percent) during the next 12 months, according to a recent survey.
"There is a divergence of opinion among housing market experts today on how much prices might adjust," said Doreen Woo Ho, president of Wells Fargo’s Consumer Credit Group.
The statement came with a release announcing the Wells Fargo survey of more than 1,300 home owners it questioned in August, "Homeowners View Their Home as a Solid Financial Investment", which revealed 72 percent of home owners said equity in their home is their most important investment.
"This survey finding suggests that homeowners are seeing the conditions of their local housing markets and concluding that it is more likely that price declines will be moderate not steep," Ho added.
Real estate investors say, from an investment perspective, there’s much more to expect from the current market than moderate declines, provided you apply the fundamentals.
"Lower prices mean greater investment opportunities because there are more motivated sellers and more deals coming on the horizon. Now is definitely the time to buy — but to buy smart," says Nashville, TN-based real estate investor, author and frequent Learning Annex speaker Robert Shemin.
Among his strategies:
- Buy and Hold. The best approach to real estate investments is over the long haul. Holding property five to seven years or more is a good hedge against short-term price plunges.
- Buy Cash Flow. Buying properties that pay for themselves with rental income, helps offset lost value.
"A lot of people got stuck with the idea of buying with a negative cash flow, but now they don’t have any appreciation and are getting tired of writing checks," said Shemin.
Granted, finding cash flow properties in high-cost markets is difficult, but that just means investing in hot rental markets, a growing possibility in many areas nationwide.
- Leave The Herd. The National Association of Real Estate Investment Advisors keeps tabs on lesser-known appreciating markets which have included Ely, NV and Boise, ID, among others. Shemin points to Huntsville, AL and Nashville, TN and all of North Carolina as potential hot spots.
The key is seeking out areas that haven’t appreciated much in the past half decade, but are now steady and rising, often because of strong job growth. With jobs comes a demand for housing.
- Find "Hidden Markets." Markets within markets can be great investments. The ink is fading on many of Las Vegas’ new housing developments on the drawing board, especially those swanky, sky-scraping, penthouse-topped, dream-home towers, but the starter home market remains strong, says Shemin.
"So there is a strong market within a weaker one. Miami is the same. The Miami market is soft, but there is still strong demand for quality beach properties in the $500,000 to $3 million range," says Shemin.
- Buy Abroad. Real estate buying laws in other countries can be daunting, financing isn’t as flexible as it is in the U.S., and many European housing markets mirror the softening U.S. market, but there are opportunities abroad.
"My two favorite picks right now are the Dominican Republic and Nicaragua. Watch China and India. Their growth rates are five times that of the United States," said Shemin.
While real estate investments can provide a return in any market, it’s never a magic carpet ride to wealth.
The fundamentals apply.
Do your home work. Study markets. Get help from a professional. Find a mentor. Be patient. Real estate isn’t the only investment out there. Diversify.
by Broderick Perkins
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Relocating to Cheaper Housing
Moving to an area with lower housing costs often doesn’t pay off for low-income Americans, according to a study to be released today by the Center for Housing Policy, a nonprofit research group based in Washington.
The study, which looks at families with low to moderate incomes in 28 metropolitan areas, found that transportation costs in places with cheaper housing are often so high that they wipe out the savings from lower rent or mortgage payments. Such places tend to be farther from employers or short on public transportation, which makes commuting costlier.
The study found that housing and transportation costs combined eat up an average of 57% of annual income for "working" families, which the study defines as those with incomes of $20,000 to $50,000 a year. The combined costs ranged from 54% of income in Pittsburgh to 63% in San Francisco; in 25 of the 28 metro areas, the combined total was within three percentage points of the 57% average.
The findings contradict the common notion that many people would be better off financially if they moved from areas with high housing costs, such as California, to states like Texas or Georgia, where housing is much cheaper.
The median house price in San Diego, at $613,000, is four times that of Dallas. But the study found that working families in San Diego spend 59% of their income on housing and transportation, only slightly more than the 57% they spend in Dallas. Families in Dallas spent just 26% of their income on housing, compared with 31% in San Diego, but the Dallas families spent more on transport.
The study also found that moving to an inexpensive outer suburb, but continuing to work near a city center, often backfires. Typically, a move that adds more than about 12 miles to a one-way commute will result in a rise in transport costs that outweighs the savings on housing, the researchers found.
The data on housing and transport costs for working families come from the 2000 U.S. Census. Since then, both housing and transport costs have jumped, but Barbara J. Lipman, research director at the Center for Housing Policy, said the results are still valid. Housing and transport costs have grown by roughly similar amounts.
The center is an arm of the National Housing Conference, a nonprofit group that favors more spending on affordable-housing programs for low- and moderate-income people. The conference is funded by groups including the MacArthur Foundation and mortgage-finance companies Fannie Mae and Freddie Mac.
By James R. Hagerty
From The Wall Street Journal Online
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Using Retirement Money Now
Over the summer, my wife and I began living part of our retirement dream: We bought a small house on a lake about an hour from where we live.
In doing so, we threw down a meaningful chunk of our liquid retirement savings for the down payment on this property.
We're not looking to retire anytime soon, mind you; I'll be 41 in January, and Amy, my wife, is only 39. But we also know that buying the property means we're trading what would likely be faster growth in the stock market over the next 25 years for slower growth in real estate. And that means that when the time does come to retire, we'll have a smaller bundle of cash to live on -- cash we could have used at that point to buy a lake house, and more.
So why did we do it? Sometimes, when you examine what you want
From as long ago as I can remember and up through high school, my grandfather and two of his brothers owned a small, rustic cabin at the same lake where Amy and I now have our getaway. I spent a great deal of time there learning to fish, swimming with my friends, exploring the wilderness and attending family gatherings. That lake is such a part of who I am that for years I've had recurring dreams about the place; if I hear the distinctive trill of a red-winged blackbird today, I am instantly 10 years old, sitting in a small fishing boat with my grandfather, watching the sun rise over the lake.
Amy knows the pull this lake has on me. I've talked about it often, and when we were dating in college I'd drive her there on occasion to show her a piece of my history and to reminisce about what I view as the happiest part of my childhood. For my 40th birthday this past January, she surprised me with a weekend at the small bed-and-breakfast directly across the lake from the cabin where I spent so much time as a kid.
Driving around the lake that weekend, we noticed "for sale" signs on a few empty lots and houses. That got us talking. Wouldn't it be nice to have a place there for the weekends? Somewhere to spend time with our kids. Teach them how to fish and water-ski. Where we can enjoy holidays with friends and family. I told her that this particular lake is where I could see myself spending a great deal of time in retirement.
A real-estate agent we contacted to check on prices in the area ultimately showed us the perfect property -- a two-bedroom house with a great deck and a long path leading down a leafy hill to a small boathouse on the water.
We bought it.
Of course, the process wasn't nearly that simple or quick. We spent months debating, sometimes agonizing, over whether our vision of "wouldn't it be nice..." was worth the cost.
To a certain degree, the decision to buy the lake house was debated on financial grounds. Real estate has value and will generally increase alongside the rate of inflation over time. So it's not like we're cracking our nest egg to spring for something ultimately worthless like a sports car or a tony vacation. Our retirement stash will continue to work for us, so that if we ever needed to raise money to live on, we have an asset that's worth something.
The financial downside: It's likely that the lake house will appreciate more slowly than other investments we could have made. So we'll either have to save more for our retirement, or resign ourselves to having less at retirement than we might have had otherwise.
But as I said, there's a family variable that, for us, overshadowed the finances.
Every day I watch my son and daughter grow, and it's like watching another grain in the hourglass fall. I see this lake house as a means for building memories with our children...and for our children. Sure, Amy and I could have waited until we actually reached retirement to buy our retirement home, and at that point we might have a decade, maybe longer, to enjoy the place. But it would be a decade largely alone, with the kids visiting on major holidays, but other than that having no real ties to that house or the lake.
Or, we could buy the house now, when we'll get three or four decades of use from it -- and, most important, it will become part of the fabric of our kids' lives. They will look back on their years at the lake with Mom and Dad as fondly as I recall those moments with my grandfather. My ultimate hope: that we never have to sell this house because our kids love it so much, and they'll want to keep it when we're either too old to use it or gone.
And then there's this: In the event that either of us dies young, I don't want our retirement-savings effort to have gone for naught. This way, we're living part of our retirement dream together, now.
To be clear, Amy and I aren't made of money. Neither of us is tapping into a family trust, and we didn't win the lottery. To make this purchase work, we had to dig deeply into our retirement money.
That money exists because through our years together we've been aggressively saving -- sometimes excessively, Amy says. We have done it by living in affordable houses, replacing our cars infrequently and not taking blowout vacations. In short, we've made trade-offs our entire career with an eye toward our future.
Still, buying the lake house required even more trade-offs that we spent long hours discussing.
Longtime readers of this column might recall that a few yeas ago I wrote about an exercise Amy and I went through, where we separately wrote a list of our individual dreams for retirement. We compared our lists to determine how close we are in our visions and where we need to try to build a path toward one another. One patch of common ground: We both wanted a small apartment in Vancouver, British Columbia, a city we've come to adore over the years and where we'd like to spend extended time in retirement.
That dream remains on the list, but it has lost its former prominence. We realized we'd be happier with a house that we can drive to at any moment rather than one requiring advanced planning and a day's air travel to reach.
We've also scaled back some annual vacation expectations, willing to spend those days, instead, with the family playing at the lake.
Buying your retirement home 25 years before you ever reach retirement may not be the way many savers want to invest their nest egg, and I understand that. But the way Amy and I calculate the numbers, there can be no finer return on investment than to see the value of this house grow...in our kids' hearts.
By Jeff Opdyke
From The Wall Street Journal Online
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