Tag Archive: appraisals


Quiz: Am I Ready to Buy?

Carla Hill, Yahoo Real Estate

There are lots of eager would-be buyers out there. It’s no wonder why! The market currently offers many ideal buying conditions. Interest rates are still at historic lows (for those with excellent credit). Home prices are extremely affordable when compared to area median incomes. There is a large supply of homes available in most markets (more homes to choose from and buyer advantage at negotiations).

Yet, the questions remains. Are you ready to buy? Take a moment to answer this ten question quiz: Am I Ready to Buy?

1. What is your credit score? (a) less than 620; (b) between 730 and 850; (c) between 620 and 730.

2. Do you have cash for a 20 percent down payment? (a) how much?; (b) yes; (c) not yet, but we’re working on it.

3. Do you have cash totaling an 8-month emergency fund? (a) I live month to month; (b) we have funds to cover 8 months of expenses; (c) we only have savings to cover a few months.

4. Have you been pre-approved for a mortgage? (a) I figured I’d find the house I like first; (b) Yes, and I have a copy of the letter; (c) I played around with forms online.

5. Is your job: (a) temporary, part-time; (b) full-time and secure; (c) full-time, but our company is experiencing lay-offs.

6. Do you plan on staying in your current city for the next 3 to 5 years? (a) I won’t be here for that long; (b) Yes, most definitely; (c) I’m not sure.

7. Have you worked on buyer budgets? (a) I don’t have time to do frivolous budgets; (b) I have a spreadsheet showing different scenarios; (c) I’ve worked up a few, but haven’t spent much time.

8. How much space do you need? (a) I want a mansion. I’ll take nothing less. (b) We know within about 500 square feet; (c) we’ve given it some thought, but aren’t sure.

9. Are you and your spouse or partner on the same page? (a) it’s my way or the highway; (b) we’ve had several lengthy discussions and agree on most points; (c) we’ve talked, but have very different ideas.

10. Why do you want to buy? (a) I want a place i can show off; (b) I want stability for my family; (c) I want to be able to decorate like I want!

If you answered mostly a’s, then our experts recommend you take some time to get your finances in squeaky clean order before proceeding. Homeownership is a big financial responsibility, and with an unemployment rate over 9.0 across much of the country, it’s important that you have funds in place to take care of yourself and your family before you you buy.

If you answered mostly b’c, congratulations! You sound like a prime candidate for homeownership. Be sure to contact your local Realtor for advice on the next step.

If you answered mostly c’s, you are very close to being ready to buy. Take the next few months to check over your credit report and fix any errors. Talk to banks and lenders and see what rates you qualify for. Start putting buying at the forefront of your mind and your future planning. Make it a priority and it’ll happen!

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rPJ Wade, Yahoo Real Estate

Are you letting global uncertainty extinguish your real estate dreams without full consideration because money is an issue? Sometimes balancing livable compromises against researched options can help you achieve more than you may have believed possible.

Your future should not be entirely defined by what is affordable. When it comes to where you’ll live and how, concentrating on finances alone may short-change you in the long run.

One long-time reader is living proof that adapting your finances to achieve your dreams is a powerful alternative to designing your life around a lack of money.

When two people close to Tina Lowe (identity protected) died prematurely, Lowe promised herself she would not to spend her life sitting at a desk. She wanted to retire at 60 and start enjoying life.

“Friends and family couldn’t understand how I was doing it, but I did it anyway because that is what I wanted to do,” said Lowe, explaining how she achieved home ownership and early retirement without the million dollars that pundits say is essential to a successful future.

Lowe was almost 50 when her 30-year marriage ended, leaving her financially vulnerable. For a few years, Lowe held down two jobs to make ends meet. Eventually, a move to a small, less expensive apartment on the outskirts of town allowed her to quit the part-time weekend job.

Lowe invested time and effort in learning about money. She took advantage of her employer’s shared-contribution program and a loan from a friend to build up her Registered Retirement Savings Plan (RRSP). She also invested time in learning all she could about pensions, indexing, RRSPs, and, later, Tax-Free Savings Accounts (TFSA). From company seminars to reading anything she could find on the principles of investing, Lowe made sure she fully understood how money made money. By the time Lowe left work at 60, her RRSP fund totaled almost C$50,000.

Economic volatility did not shake Lowe’s determination to leave work on schedule. Meticulous planning and appreciation of the rewards of a simple lifestyle maintained her commitment. Creative back-up plans added security.

When Lowe noticed an advertisement for a condominium that could be carried for about what she was paying in rent, she revived the dream of home ownership that had been abandoned in favour of early retirement. Once again Lowes began researching diligently. She learned how condominiums work and what gave them sustainable value. When she discovered that prices increase with the number of amenities, square footage, and the higher in the building you are, she decided to buy at a smaller unit on a lower floor and in a less “lux” building. Lowe bought the location and neighborhood she loved and saved thousands of dollars. Lowe discovered a south-facing, self-contained fifth-floor, 344-square-foot unit with a balcony. Since the small building was free of fancy amenities, monthly maintenance fees remain affordable. The unit increased in value over her pre-construction purchase even before she moved in.

“It will be tight because it has been since day one, but I’m doing it,” said Lowe emphasizing that not smoking or owning a car stretches her income further. “It is important not to let anyone put you down or discourage you. When I first found this place, I had been to [a] real estate seminar and they got me going. Then I had one family member really put me down. Finally, a friend who is an accountant thought it was a good idea and encouraged me, and I thought, ‘I can do this.’ You must use knowledge to survive. It is very tight—I am not going to kid anyone, but I am still very happy I retired at 60.”

Knowledge is power. Take the time to understand which costs may become a challenge in the future. You may decide a part-time job will supplement investment or pension income. Consider housing like co-operatives where contributing skills and “sweat equity” may make the important affordable difference. Perhaps teaming up with friends or relatives will increase your buying power.

Continuing with income-generating projects will be increasingly commonplace, both out of interest and necessity.

Developers realize that they are creating new communities within the subdivision or high-rise they build. Some perceptive developers create work-live options that will provide services for residents while creating income streams for owners.

Churches, legions and other non-profit organizations have become community-builders in a “bricks and mortar” sense of the word by developing housing for their congregations, members and neighbors. Often this housing is below market value.

Communities involve varying numbers of people, but their strength lies in individual resilience, self-actualization and freedom. Property ownership is one outward symbol of these marks of individuality since no two properties – even condominiums, row houses etc. – are identical.

Over the past 20 years, the national home ownership rate has risen steadily. Although low interest rates, increasing disposable incomes, and stable employment conditions are credited with that improvement, the future still holds potential for growth. The wish for continued control over one’s home and life keeps increasing numbers of Canadians intent on investigating their all their options.

Waiting for great times to return is not a strategy, it’s a tragedy. Put your money to work for you in even the smallest ways. Think before you spend—“What else could I do with that money?—so you keep more of what you earn and continually move dreams closer to reality.

Remember, the impossible may take a little longer, but you can make it happen with perseverance. Today’s Local Market Conditions Report.

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Homes of the Future!

A Look Ahead at New Homes of 2015

By Erika Riggs, Zillow

If you had asked someone in the 1960s what the home of 2015 would look like, chances are they imagined something akin to The Jetsons’ home complete with Rosie the Robot and other space-age appliances that dressed and fed the family.

But, rather than space-age technology, the biggest thing that is expected to change in future single-family homes is the size.

“Homes will get smaller,” says Stephen Melman, Director of Economic Services at the National Association of Home Builders (NAHB) in Washington D.C. “We asked builders, ‘what do you anticipate the new home size would be by 2015?’ ”

According to the results of the study, surveyed home builders expect new single-family homes to check in at an average of 2,150 square feet. Current single family homes measure around 2,400 square feet, which is already a decrease from the peak home size in 2007 of 2,521.

While the decrease in home size has a lot to do with the recession, many believe that the real estate changes will stick around even after the economy and home values get back on solid ground.

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This Sherman Oaks, CA home has a great room, encompassing dining, living and family rooms.
Photo: Zillow

“Although affordability is driving these decisions, smaller homes are a positive for builders,” said Melman. “It allows for more creative design, more amenities, better flow. It’s an opportunity to deliver a better home.”

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Home digital control panels can help manage security and energy consumption.
Photo: Control4

Other things that make up the home of 2015? No more living room. According to the survey, 52 percent of builders expect the living room to merge with other spaces and 30 percent believe that it will vanish completely to save on square footage. Instead, expect to see great rooms — a space that combines the family and living room and flows into the kitchen.

Expect to see more:

  • spacious laundry rooms
  • master suite walk-in closets
  • porches
  • eat-in kitchens
  • two-car garages
  • ceiling fans

Expect to see less:

  • mudrooms
  • formal dining rooms
  • four bedrooms or more
  • media or hobby rooms
  • skylights

Many of these changes reflect a desire for builders and consumers going green. Smaller space means more efficient heating and cooling. Ceiling fans distribute heat evenly while skylights, on the other hand, release heat.

However, as builders look to go green, they’ll be installing energy-efficient windows and compact fluorescent and LED lighting, as well as water-efficient appliances and plumbing.

Additionally, many new homes will have the baby boomer population in mind with walk-in showers, ground-floor master bedrooms and grab bars.

“A bigger share of the new homes will be purchased by people 55 or 65 and older,” said Melman. “They’re more likely to have more cash for a down payment, but they’re empty nesters, so they don’t need five bedrooms.”

 

 

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