First-time home buyers have much to consider when deciding whether to give up renting and purchase a condo, townhouse, or other property rather than continuing to rent.
While interest rates for mortgages are historically low, and property values have dipped considerably as a result of the high number of vacant properties currently on the market, many prospective buyers are understandably hesitant about wanting to take that final step and become homeowners. This is understandable for many reasons, not least of which is the national focus on job losses and foreclosures, which could cause people to worry about the possibility of becoming another sad statistic.
For instance, although mortgage rates have dropped as low as 4.75 percent—something unseen since the 1960s, people with a few dings on their credit scores likely would not qualify for the best rates. Also, mortgage lenders are becoming more circumspect about giving loans. However, everything is relative, and a mortgage rate under 6 percent is still quite good.
The pressure to buy has abated since the first-time homebuyers tax credit was not renewed when its deadline ran out last spring. Now people can take their time looking without being under deadling pressure, although it would have been nice to get the extra tax rebate too.
Of course, no matter what the incentives are, depending on your individual situation, renting a condo is sometimes the best move for the time being. You have to consider whether you plan to settle down for at least a few years, or move in a short time, because a quick turnover might result in a loss of money. Rental condos are commonly found in upscale buildings in vibrant neighborhoods, and are usually much larger and amenity-rich than an ordinary apartment.
If you are looking forward to being a first-time homebuyer, but are just not in a good financial position right now, you have the option of looking for rent-to-own properties, which can be found all over these days because sellers want to have their properties occupied. Many people aiming for home ownership just have trouble saving enough for a down payment, and a rent-to-own agreement can help with that because part of your rent will go toward the down payment. During the rent-to-own contract, usually between 12 and 18 months, you can also work on repairing your credit score in order to qualify for a mortgage loan. In the meantime, you will be living in the home you are working toward buying, and the seller benefits too, because their property is earning them money rather than sitting empty.
Today’s real estate market is challenging to buyers, sellers and real estate agents and requires creativity to satisfy the needs of everyone. The rent to own program offered by OwnACondo.com satisfies that need.
You just purchased the home you have wanted your entire life but haven’t sold your current home. What can you do? Rent to own may be the solution to your problem. This scenario as well as many others, offer both buyers and sellers alike opportunities not often made available by traditional real estate brokers.
The rent to own program offers the seller the opportunity to sell their condo and enables buyers who might be cash strapped or have credit issues that can be addressed over time to buy.
The rent to own program works very much like a car lease. Each month the renter pays you a certain amount to live in the house. The program can be set up have a portion of the rent go toward down payment accumulating over time to enable the buyer to purchase. The seller is covering his expenses and feels secure the property is being taken care of because the potential owner is currently living there. The buyer is living in a property that might be his one day so he is saving toward a down payment and experiencing the neighborhood, schools, shopping and other amenities in the area.
There are definite advantages to the rent to own program and below are just a few.
- Potential buyers who have no down payment or credit issues may be able to purchase. They have time to build income and repair their credit.
- Depending on the agreement, a buyer may not exercise their option to purchase if there is something seriously wrong with the home.
- Monthly lease or rental amount may go toward down payment enabling the buyer to save for a down payment while living in the property.
- Potential buyers will be able to determine if the location is one in which they wish to live. They will be able to learn about the neighborhood, schools, shopping, transportation, etc.
The great American dream of owning your own home is alive and well if you know where to look and what to look for. A rent to own program can be the perfect solution for everyone and more and more people are seriously looking at it as a means to owning their own home.
While many people interested in buying condos take a break from their condo search during the holiday season, in part because of the winter weather, December is often a good time to get great deals from motivated sellers.
As the new year approaches, many sellers are very interested in finding buyers for their vacant properties, or renters as the case may be, before January rolls around. And qualified buyers can often find the home of their dreams at a discount, or with some sort of money-saving incentive. That benefits buyers and sellers, because everyone gets to enjoy a fresh start in January.
For instance, in addition to reducing the selling price of the condo, some condo owners, from the South Loop to the Gold Coast, and other attractive neighborhoods in Chicago and elsewhere, are now offering to give buyers a break on monthly assessments. Some are offering deals that would not require buyers to pay monthly assessments for the first three months of ownership, as long as the contract is signed before the end of the year. Imagine what a great holiday present that would be, worth several thousand dollars to a cash-strapped buyer.
In addition to those buying condos, in many cases people renting condos can also benefit by signing leases before the end of December. By doing so, they can often qualify for a reduction in rent for at least the first few months.
Many of these deals are not widely advertised, but working with one of our condo specialist Realtors ® at OwnACondo.com is a great way to find these sales. The condo specialist you are working with will know exactly what type of condo or townhouse you are looking for, in which towns or neighborhoods, and will be sure to negotiate with the seller to find the best deal possible for their clients.
Of course, many people with young families like to move during the summer so their children do not have to switch schools in the middle of the year. But to get the best deal, you wouldn’t have to move in this month, just sign the contract by then. So if you are ready to finance a condo now, don’t wait for the spring thaw because the sales might be over. When it comes to buying condos, December is as good a time as any to do it.
While everyone else is at the mall, you can get ready to ring in the new year on your own doorbell.
Buying real estate has been the great American dream since there was an America. It has long been regarded as one of the basic elements to being an American with all the rights and privileges we enjoy. Buying real estate is one of the biggest purchases most people will make in their lives, but it also encourages us to examine our goals, commitments and lifestyle. So is it any wonder that on the list of stress producing events in our lives, buying real estate ranks as one of the highest. Even with the stress produced with buying real estate the right guidance, advice, and an increased understanding of the many facets to buying will help you to identify your own objectives and make the whole buying process relatively easier.
People buy real estate for a variety of reasons from personal use to an investment in their futures and the steps and strategies followed will vary if you are a first-time homebuyer, upgrading or downsizing, or investing in income property. As said before buying real estate is typically one of the biggest investments in your lifetime and you will want to make sure you do your homework before committing to any sort of purchase.
There are several factors that need to be taken into consideration to reduce the stress and to feel confident you are accomplishing your primary goal.
- Get your credit checked and apply for a mortgage. Obviously you will need money or the promise of money to purchase any type of real estate and speaking with your bank or mortgage company to get a pre-approval is the first step to take. Sadly, too many people skip this step only to be disappointed when they find out they cannot afford the home they have already fell in love with.
- Identify what you are looking for and what is important to you. Any easy way to do this is to rank your “must haves” and those that are an “absolutely no go”. You might think a fixer upper is a “no go” but in the right location it might be exactly the right choice.
- Find a real estate agent. Sounds simple but when buying real estate it can make all the difference in the world. Traditionally real estate agents represent the seller even when showing buyers properties. Many potential home buyers are not aware of this and assume their agent is looking out for their best interests. To be certain you are being represented look for a Buyer’s Agent whose sole responsibility is to represent you and accomplish your goal of owning a home.
Buying real state is certainly a stressful activity but with the right examination of your goals and the right preparation you will end up accomplishing the great American dream.
An exclusive buyer agency representation is much different than being represented by a traditional brokerage that works with buyers and sellers. An exclusive buyer agency only represents buyers. The sole focus of the agency is buyers' and making sure that they get the home of their dreams at the price of their dreams. An agency of this representation will typically provide the buyer with a presentation so that the buyer understands exactly what services the buyer agency will provide.
The first step is discussing the buyer agency representation. You will be presented with all of the state-required agency forms to help you understand the legal relationship between the agent and the buyer. The agent will also discuss the advantages of an exclusive buyer representation. The next step would be to cover all of the resources the company has to offer to make the home buyer experience as easy and convenient as possible.
It is always important to make sure that the agent covers fair housing laws and equal opportunity to ensure the client that the agency takes this very seriously. The agent will cover some of the agency laws to make sure the client understands that there are some things an agent cannot do for them because it is against fair housing laws. The agent will then explain the process of mortgage pre-approval and the importance of getting pre-approved before the search process begins.
The next step is really to discuss the search plan. The agent will map out the process of locating the home to finding the right home to negotiating the best offer to purchase the home. This can often times be a lengthy process which can get side tracked very easily. It will be the agents’ responsibility to make sure the clients stay on track with the home buying process.
Once the contract gets accepted, it will be the real estate agents responsibility to ensure a smooth closing. The agent will explain the closing process and what documents are needed. The agent will also advise the buyer to contact a lawyer to represent the buyer legally throughout the closing process.
The agent will not only explain the process of securing a new home, but they will also cover the differences between an exclusive buyer agency and what one can do for you vs. a traditional brokerage that works with buyers and sellers. The agent will cover the advantages of working with an exclusive buyer agency. At the end of the presentation the buyer will have a clear understanding of the agency relationship.
Closing costs are something that must be considered when buying a condo or house, especially because they have been rising across the country in 2010.
However, many buyers, especially those going through the process for the first time, are not even sure what closing costs encompass. Essentially, closing costs are the fees that must be paid for items required by the lender as conditions of the loan. They include the cost of title searches, loan applications, recording the deed, appraisals, credit checks, homeowner’s insurance and mortgage insurance.
The total amount of closing costs vary because they are a percentage of the cost of the property being bought, usually between 3 and 6 percent. Prior to the closing, it is advisable to ask your lender for at least an approximate cost, so you will have an idea what to expect and will come prepared. In some cases, a motivated seller agrees to cover the fees for a cash-strapped buyer, but that doesn’t always happen.
Furthermore, the average mortgage closing costs have been increasing across the country in 2010, according to an online survey by personal finance company Bankrate Inc., which released its findings in August. For instance, the closing costs jumped 40 percent in Illinois in 2010. For instance, the origination and third-party fees on a $200,000 mortgage added up to $3,505 in the 2010 survey, up from $2,486 a year ago.
The story was similar across the United States, which saw, on average, a 36 percent increase in closing costs over 2009 numbers. Bankrate attributed one of the reasons for the increase to the new regulations implemented in January. Lenders now must provide an estimate of title and closing fees within 10 percent of what the final cost will be, or they will risk penalties. The regulations require more labor in getting a loan together, but they are meant to benefit people financing a condo by providing them with as much information as possible before the closing.
In the Bankrate survey, which assessed average closing costs in the 50 states plus Washington, D.C., Illinois ranked as the 43rd most expensive, and moved up to 31st with the increases this year. But still trails behind New York, which was found to be the most expensive, with an average fee of $5,623. The survey excludes property taxes, recording fees, homeowners insurance and prepaid items such as a partial month’s mortgage interest. It also does not include any discount points.
You want a Realtor with excellent negotiating skills to help you get the best deal possible. Because after all, if you have your heart set on buying a condo that you really like, you don’t want closing costs to be a deal-breaker.
The American dream of owning your own home has changed over the last couple of decades. The dream is still alive but the options have changed dramatically. One of the fastest growing segments of property sales today is condo sales. Owning a condo has many things in common with owning a traditional home, but it is the differences that count. It is important before you make that jump into home ownership that you know whether a traditional home or condo is right for you.
First of all, what is a condo? Condos resemble apartments in many ways. They can consist of several units in the same building or complex, with common areas like courtyards, lobbies, pools, etc. that are shared by everyone. But condos, as opposed to apartments are owned by the individual tenants and not just rented. When you purchase a condo you may be giving up some privileges but gaining in others. It is this balance of benefits that will be most helpful when deciding what type of property to buy.
One area that you need to investigate before you buy a condo is the prices of similar properties that have sold in the complex or complexes in the immediate area. Condo sales in the area can tell you if the price you are offering is too high or too low. A comparative analysis will also tell you how long units in that complex have been on the market, if prices have been reduced, how many units are for sale, and the prices in which they sold. With the ever changing real estate market it is important to be aware of all of these things to get the best value for your money.
Not all real estate agents are familiar with the nuances of condo sales. Real estate transactions are most likely the biggest financial investment most people will experience in their lifetime, so it is even more important to find the right person for the job. But how do you choose the right person for the job? First of all with most any financial transactions you will want to make a thorough search which can be done quite easily by attending open houses to see how agents work and to meet them first hand. Ask the prospective agent how long they have been licensed, how long they have worked in the condo market and how many sales they have closed in recent months. Ask for references and talk to your friends and family about who they would recommend and why. Once you have found the right agent you are well on your way to realizing the American dream of home ownership.
The Mold Disclosure is yet another disclosure that the buyer and seller should sign off on, during the process of writing a contract. Although the Mold Disclosure is not mandatory in Illinois, a home with mold is not to be taken lightly. There are ways to prevent mold and control mold if it is in your home. Controlling and/or preventing mold are very important actions because mold can be harmful if not treated properly.
Mold, fungi, mildew and other organisms may exist in a home. mold generally grows in places where there is excessive moisture. Typically mold is found where there has been a leak in roofs, pipes, walls, plan pots, or where there has been some flooding. Mold constantly reproduce by tiny spores and they float through the air and begin growing indoors whenever the spores land on wet surfaces.
Every home contains mold and while it is not possible to get rid of all the mold, it is possible to try to prevent it from the start. You can control the moistures in your home by not bringing any old clothing or water absorbent materials into your home. It is always a good idea to ventilate your home and/or air out your home to keep airflow moving through. You should fix leaks as soon as possible, and also re-caulk your home inside and out often. This keeps the heating and air conditioning and ventilation drip pans clean. If you have a humidifier, make sure that the humidity level doesn't exceed 60%.
Mold is dangerous and can cause serious health problems. Molds produce allergens which cause allergic reactions, and in some cases toxic substances that can cause death especially in children and individuals with weak immune systems. In the event you discover mold in your home, you should act quickly, because the longer you wait to clean it, the worse off you could be.
With this being said, although signing a Mold Disclosure is not mandatory in the state of Illinois, it is still a good idea to have a mold inspection done on your home. A regular inspection may not cover mold, so you may need to do a special inspection. You should always try to avoid health issues and prevent mold, if mold is already present in the home then make sure to clean it with water and bleach and make sure to dry it off when finished.
There are some important questions to ask before buying condos. Doing so is sometimes hard, especially for first-time home buyers, but our condo specialist Realtors® can help.
These questions include:
- What is the monthly assessment and what does it cover? To budget, you need to know the monthly fee and exactly what you are getting for it.
- What are the rules and regulations? Condominium rules can prohibit pets, your ability to rent out the unit, and renovate. Carefully review the rules and regulations, and have your attorney do the same. This includes the master deed, declaration of trust/by-laws, covenants, unit deed and floor plans to ensure compliance with state laws and other guidelines.
- How much money is in the capital reserve account and how much is funded annually? The capital reserve fund is for major repairs such as roofs and heating and air conditioning. Generally, the fund should contain at least 10 percent of the annual revenue budget—more for older developments. If it is poorly funded, a special assessment is more likely. Ask to see the last two years’ budgets, current reserve account funding level and any capital reserve study.
- Are special assessments pending or being considered? Special assessments are one-time fees for capital improvements payable by every unit owner. You need to know if you are buying a special assessment with your unit, because they can be costly. Reviewing the last two years of condo meeting minutes is a good way to see what the issues are.
- Does the condo association manage itself or have a professional management company? There are pros and cons to each avenue.
Other questions to ask before buying a condo include:
- Is the condo involved in any pending legal actions? In most states, you can search court databases to see if there have been any lawsuits. Legal disputes can lead to fee increases if the condo association is fined.
- How many units are owner-occupied? A large percentage of rented condos can create unwanted noise and neighbor issues, as well as re-sale and financing issues because Fannie Mae and FHA condominium regulations limit owner-occupancy rates.
- What is the condominium fee delinquency rate? A rate exceeding 15 percent could signal financial trouble, according to Fannie Mae and FHA.
- Do condo owners have exclusive rights to use common areas such as porches, decks, storage spaces and parking spaces? Knowing what areas are your responsibility is important, especially regarding maintenance and repairs.
One more question to ask before buying a condo is: “What does the Master Insurance Policy cover?” Usually, only common areas are covered so buyers should buy condo insurance to protect their belongings and the interior of the condo.
If you are a real estate agent the Multiple Listing Service is your guidebook or directory to all your business and you cannot live without it. Wikipedia defines “Multiple Listing Service (MLS) as a suite of services that (1) enables brokers to establish contractual offers of compensation (among brokers); (2) facilitates cooperation with other broker participants; (3) accumulates and disseminates information to enable appraisals; (4) is a facility for orderly correlation and dissemination of listing information to better serve broker’s clients, customers and the public.”
The Multiple Listing Service is where real estate agents go to find information about properties for their prospective customers or clients. If an agent is working with buyers then the MLS will enable the agent to find properties available for sale. Real estate agents who have access to the system can search specific areas, specific types of property, number of bedrooms and baths and much more. Today the Multiple Listing Service has become such a technologically advanced tool for real estate agents they cannot live without it. With the combination of many associations of realtors or groupings of associations into several large services a real estate agent has access to literally 10’s of thousands of properties for sale with such sophisticated search engines that finding the perfect property for your buyer is only several key strokes away.
Most Multiple Listing Services restrict their membership and access to only real estate brokers and their agents who are licensed in the state and are members of the local board or association. However, access is becoming more open due to the explosion of internet sites and the public’s increased interest in properties in their area. There has been a few legal cases involving the public’s access to their local MLS but at this point in time access is granted to licensed realtors and associate members, such as appraisers and mortgage providers.
The Multiple Listing Services database and software is used real estate agents who represent sellers to share information about properties with other brokers who may be working with potential buyers or wish to cooperate with a seller’s broker in finding a buyer for the property. The data contained on the MLS assists agents with searching out specific information provided by the seller which enables the real estate agent to find just the right property for their buyers. As stated above the Multiple Listing Service is the bible for real estate agents without which an already challenging job would become much more difficult.
