Real Estate Lingo – What do all those abbreviations and terms really mean?

Real Estate "Jargon"

Real estate listings and advertisements are usually full of acronyms and abbreviations that are unfamiliar to first-time buyers. Here's a cheat sheet to help you figure out what it all means.

Bedrooms (bds,bdrms,beds) - "Bedroom" usually means a sleeping area with a door, window and a closet, but the definition varies in different places. If a bedroom in the basement does not have an egress window, it cannot be considered a bedroom on the listing. So, if you see the home has 3 bedrooms, there may be a 4 room in the basement that can be converted into a bedroom by just adding an egress window.

Bathrooms (bth,bths) -“Full bathroom" is a room with a toilet, a sink and a bathtub (with or without a shower also). A "three-quarter bathroom" has a toilet, a sink and a shower. A "half bathroom" or has only a toilet and a sink.

Closing costs -- The entire package of miscellaneous expenses paid by the buyer and the seller when the real estate deal closes. These costs include the brokerage commission, mortgage-related fees, escrow or attorney's settlement charges, transfer taxes, recording fees, title insurance and so on. Closing costs are generally paid through escrow. Buyer and Seller each individually have their own costs related to closing that they are required to pay. In some cases the buyer may ask the seller to pay for some of their closing costs as part of the offer to purchase their home, talk to your lender to see how much you are allowed to ask for if you are considering asking the seller to pay for any closing costs. There are limits with each different type of loan and situation.

CMA – comparative/comparable/competitive market analysis. A CMA is a report that shows prices of homes that are comparable to a subject home and that were recently sold, are currently on the market or were on the market, but not sold within the listing period.

Contingency – “an offer contingent upon…” a provision of an agreement that keeps the agreement from being fully legally binding until a certain condition is met. One example is a buyer's contractual right to obtain a professional home inspection before purchasing the home.

Fixture (attached) -- anything of value that is permanently attached to or a part of real property. (Real estate is legally called "real property," while movables are called "personal property.") Examples of fixtures include installed wall-to-wall carpeting, light fixtures, window coverings, landscaping and so on. Some things may be secured to a wall but can be unsecured easily (i.e. shelving unit screwed to the wall with one screw for instance can be looked at as unsecured because the screw is simply holding it up, but yet it is attached to the wall so many of these items can be a “gray” area). Fixtures are a frequent subject of buyer and seller disputes. When in doubt, get it in writing.

FP/GFP -- fireplace or gas fireplace

Gen Tax – Property tax amount due yearly. When you have a mortgage, they usually collect this monthly with your house payment and then the mortgage company pays your yearly taxes.

Heat System – OHW,GHW,EHW,OFA,GFA,EFA, EBB, Dual Fuel/Off-Peak, Floor, Radiant, Multi-Zones – HW stand for Hot Water Heating which means the home has a boiler type furnace. FA stands for Forced Air which means there is a furnace with duct work to distribute the heat. EBB stands for Electric Base Board Heating. Dual/Off-peak means that there are two forms of heating and usually set up so that one system shuts off during high-peak hours and the 2nd system turns on during that time to cut down on heating costs during peak hours. Radiant heating are similar to baseboard heating but have been known to be safer and more cost effective, located closer to the ceiling instead of close to the floor. Floor stands for in-floor heating, usually under ceramic tile or under cement (i.e garage floor heat). Multi-Zones stands for multiple controls for different areas of the home to be set at different temperatures to regulate the heat separately in different areas of the home.

HDW, HWF, HDWD -- hardwood floors

Hollywood Bath – Means it is accessible from a bedroom and also from the main hall.

Listing -- an agreement between a real estate broker and a home owner that allows the broker to market and arrange for the sale of the owner's home. The word "listing" is also used to refer to the for-sale home itself. A home being sold by the owner without a real estate agent isn't a "listing."

HOA -- homeowner's association dues. But find out if its paid monthly or yearly and what it covers.

Lock box -- locked key-holding device affixed to a for-sale home so real estate professionals can gain entry into the home after obtaining permission from the listing agent

MLS -- Multiple Listing Service. An MLS is an organization that collects, compiles and distributes information about homes listed for sale by its members, who are real estate brokers. Membership isn't open to the general public, although selected MLS data may be sold to real estate listings Web sites. MLSs are local or regional. There is no MLS covering the whole country.

REALTOR® -- a real estate broker or sales associate who is a member of the National Association of REALTORS®. Not all real estate agents are REALTORS®.

Specials Unpd & Specials Inst – Specials Unpaid means the total amount of specials owed to the city on that particular property. Specials Installment is amount due to the city yearly. Just like taxes, if you have a mortgage, the lender usually figures this into your monthly payment and then pays your yearly specials payment for you.

Title Insurance -- an insurance policy that protects a lender's or owner's interest in real property from assorted types of unexpected or fraudulent claims of ownership. It's customary for the buyer to pay for the lender's title insurance policy. The buyer will usually be offered an “owner’s” title insurance policy at closing for an extra fee and will have 30 days after closing to decide whether to purchase at the reduced rate or not. After that it may still be available for purchase at a higher price. It’s a good idea to ask friends, family or a real estate attorney if they think you should purchase the policy for the particular property you are purchasing.

M,B,U,L – (floor levels) Main Floor, Basement, Upper Level, Lower Level (Upper and Lower are usually used in regards to bi-levels and multi-level homes.

Red River Flood Bill Voting SOON! Legislators Contact Info Here...

The bill could be up for a vote as early as next week!

Call your legislator!

Fargo Moorhead and Cass County have formed a coalition to create plans to protect area communities permanently from future floods. HB 1020 relates to the development of policies and procedures of the state water commission relating to the community water facility loan fund, the water-related topics overview committee and Fargo flood control project funding.

They need our help and support. The Red River has exceeded flood stage in 48 of the past 109 years including every year from 1993 through 2011. The coalition is planning a diversion channel and storage area around their communities.

THEY NEED OUR HELP - and HELP FROM THE LEGISLATORS!!

Please see full text of the bill at:

Bill - HB 1020

For a list of legislators and their contact information, please go to:

Legislators Contact Info

 and coming out of committee later this week so contacts the legislators with your opinions!  Your opinions COUNT!

Title Insurance – What is it and Should I Get it?

It is an insurance policy that protects a lender's or owner's interest in real property from assorted types of unexpected or fraudulent claims of ownership. It's customary for the buyer to pay for the "lender's" title insurance policy, this protects the "lender's" interest. Most if not all lending institutions require this and normally include this fee in your estimated closing costs.

What is not included in your estimated closing costs is "Owners Title Insurance", this protects the "owner"/you (the buyer). An Owners Policy protects the owner from title problems that were not disclosed by an examination of the public records and while a Lender’s policy only insures that the lender has first lien on the property. The buyer will usually be offered an “owner’s” title insurance policy at closing for an additional fee:

This is calculated by the purchase price of the home:

For example: With a purchase price of $150,000

Initial reduced rate would be $575.00 for ND & $637.50 for MN

You will have up to 30 days after closing to decide whether to purchase at the reduced rate or not. After that it may still be available for purchase at a higher rate. It’s a good idea to ask friends, family or a real estate attorney if they think you should purchase the policy for the particular property you are purchasing. This is a personal decision just like any other optional insurance policy (i.e. life insurance).

FM Title Company will answer all of your questions about title insurance, feel free to call them anytime if you have questions or if you would like a quote for owners insurance on your purchase.

FM Title Company 701-893-1000

Fargo Moorhead Real Estate Statistics UPDATE! April 2013

It appears the market is lacking for this time of year as far as New Listings on the market.  Yes, they are down from last year, but not as much as you would think...

Along with the number of listings being a bit lower, the amount of buyers have gone up!

Here are some of the Fargo Moorhead Real Estate Statistics as of yesterday!

New Listings from January 1st -April 7th
2013 - 1091 Homes Listed - 17.5% down from the last 4 yr average
2012 - 1284 Homes Listed
2011 - 1136 Homes Listed
2010 - 1674 Homes Listed
2009 - 1198 Homes Listed

(average over last 4 years= 1323 Homes)


Sold Listings from January 1st-April 7th
2013 - 600 Homes Sold - 23.7% up from the last 4 yr average
2012 - 542 Homes Sold
2011 - 408 Homes Sold
2010 - 490 Homes Sold
2009 - 390 Homes Sold

(average over last 4 years= 458 Homes)

We may have a lower number of homes listed, but we also have a higher number of buyers than we've had in the last 4 years and quite a bit above average.

If you're a seller, this is obviously a great time to list your home.  Contact us today and we'll give you a free market analysis of your home and help you get started!

If you're a buyer, rates are at unbelievable LOWS so its obviously a great time to buy also, but keep these statistics in mind while looking at homes.  Make sure to watch the new listings daily as there are just that many more buyers also watching for the same homes as you. The homes priced right and in good condition will sell QUICK!  Don't take your time, when you find the house you really want - move fast!

If you are interested in getting set up for the Fargo Moorhead MLS auto email service where you will receive new listings in your email the very first day they go up for sale!  We can set this up for you anytime.  We can narrow it down to your own personal search criteria so that you only receive new listings if they fit what you're looking for.

Contact us today - this service is free and very beneficial to all buyers!!  Dont wait, you could miss the perfect home!

Explain Assessed Value vs Appraised Value

Two Very Different Methods of Valuation, with Two Very Different Outcomes

I often hear homeowners ask me to give them an, "appraisal," of their property, or what I think the, "assessed value," or "assessment" is. So here you go.



Both of those terms sound similar but are often mistaken for one another and are not on not interchangeable. They are wholly different in who does them, how they are used and for what purposes.


An assessment, or assessor or assessed values are all terms surrounding tax valuations. Municipalities have to meet their budget obligations to provide services and infrastructure, perform repairs and replacements of buildings, and pay employees among a host of other duties like providing police, fire and public safety services.


Most counties or towns have an assessment office, in charge of collecting taxes from its citizens to pay for these budget items. Some of these offices have an assessor whose job it is to apportion the amount of taxes that need to be collected from each owner.


Owners typically pay taxes based on the size and value of property they own. These valuations are typically based on market value, but the assessments aren't updated often, so as the market increases and decreases in value, the assessment often doesn't change for a long time. That means that as the market heats up and houses sell for more money, the tax assessment may lag behind the market value. Conversely, as the market falls and homes are worth less, the opposite is true. Owners pay more than market value.


When municipalities fall short of their revenue needs, they have a few options in addition to lay-offs, reducing spending, etc. They can raise taxes. Sometimes an across-the-board percentage increase will be introduced, so that everyone pays their current market value plus some flat percentage. Sometimes a complete re-evaluation is done and homes get updated assessment values.


An appraisal is conducted by a state-licensed appraiser, usually for the benefit of a lender, to determine if the amount requested to be loaned is appropriate for the property. Banks want third-party knowledge and expertise to confirm that the property is worth the amount of money being loaned so that if the buyer defaults on the loan, the bank will have an asset upon which they can reasonably be expected to recoup their losses.


Appraisers are licensed by each state. Some appraisers are independent contractors; others work for small or large firms. Some appraisers specialize in residential appraisals, others in various aspects of commercial real estate.


Appraisers use current and past-market data to create valuations for properties. They look at the surrounding geographic area, other like-properties, and try to focus on properties that have recently experienced buying or selling activity.


Appraisers can also be hired by homeowners to get a value for a private sale, to determine the worth of a new or potential addition or renovation.


Real estate agents provide neither. Agents perform a CMA or Comparative Market Analysis for sellers to determine that starting selling price, or for buyers to gauge and guide an initial offer. Neither can be used to get a loan or pay taxes. CMA's are used to determine a home's selling price to potential buyers keeping in mind the competition and market trends.


Appraisals and assessments serve two different purposes, and done by two different kinds of people and are used for very different reasons. Be sure you're asking for the right person!

What does the yellow letter next to a listing mean? (contingent upon...)

As you are searching on the MLS for homes for sale, you will sometimes see a little yellow letter next to the listing. Here guideline of what those letters mean so you know what you're dealing with when you run across them. 

"P" means "pending" - this means SOLD, no contingencies, just waiting for closing day.

"I" means "contingent upon inspection" - not very often does it go back up for sale, but at any time until it is removed, they will accept back up offers.  During the inspection time frame, homes can still be viewed so it may be worth looking at and/or submitting an offer, hoping that they will run into some small issue that would give the seller the option to pass on their current offer and take the back up offer(s) that are submitted to them.  Usually the only time the back up offer even gets considered is if its a really good one.  If the current buyer requests any repairs (even small), then the seller would have the option of cancelling their current signed contract and moving on to the new backup offer. (This is a good thing to keep in mind if YOU are the buyer having the inspection, many buyers don't realize that once they request even the smallest repair to the seller that it opens the seller up to cancel their current contract and move on to any back up offers they may have.)

"R" means "right of first refusal", this means the sellers have accepted an offer from a buyer who has a home to sell and it is not sold yet.  At any time, these properties can be viewed and offers can be submitted.  In this case, offers have a better chance of getting accepted because the current buyers hands are sometimes tied and there's not much they can do in the time frame they've agreed to remove their contingency. Each situations time frame is different, it depends on what they agreed on at the time of the offer - usually 24,48 or 72 hrs is the time frame that the current buyer would have to either get their home sold, do a bridge loan or just decide to have 2 mortgages until they can get their home sold. If after the time frame passes, the buyer is unable to remove that contingency, then the seller would be able to take the offer that was submitted to them.

"B" means "accepting back up offers", this means they have a current accepted offer but are willing to take back up offers in case the current offer falls thru.  Usually the agent will put this on a listing they feel has the possibility of not making it all the way to closing for one reason or another. Sometimes they will put it on there for no apparent reason whatsoever which doesn't make sense to me but it happens and is potentially a waste of everyone's time, so if you are interested in a home that has this letter next to it, just let me know, it is best for me to call the listing agent to find out the details on that particular listing.

"S" means "see private remarks", private remarks are only viewable to realtors.  Contact us and we can let you know the details on that particular property.

If you have any other questions as you're searching, feel free to call us anytime, we'd be glad to explain things to you or get more information on any listing.  Good luck in your house search!

Remember... the national sites have a lot of inaccurate information: sold homes, spam, incomplete data, very few pictures and only "some" of the listings for the Fargo Moorhead Area.  The ONLY place you will find accurate and complete listings of all homes for sale is on the Fargo Moorhead MLS - you can access the full site here: www.fmrealtors.net

Call/Email or Text us an address if you would like to see ANY home listed by any company/realtor - we'd love to show it to you!

Happy House Hunting!

House-Hunting Tips

1. Location counts. You've probably heard the old real estate joke about "location, location, location," but the point still bears repeating. Location is crucial. How far are you really willing to commute to your place of employment? How good are the local schools, shopping centers, public transportation, seniors services and other public amenities? Will your new home be next to a vacant lot or a commercial property? Even a picture-perfect dream home can be a mistake if it's in an undesirable location, and a poor-location home can be a particularly bad choice if you anticipate reselling the home within a few years.


2. Make a list. Do you (and your spouse, if you're married) really know what you need and want in your home? You'll save yourself many hours of shopping (and potentially arguing) if you make a list ahead of time. Zero in on the features you must have, would like to have, definitely don't want and would prefer not to have. Your goal is to find the right home for your family without falling in love with one that doesn't suit your needs. Tip: Start compiling your wish list by thinking about what you like and dislike about your current home.
Moving?

3. Do your homework. Not long ago, consumers had very little access to information about recent home sales prices, market trends, homes on the market, neighborhood statistics and the home-buying process. Today, all this information and more is available on the Web. Go surfing. Get educated. Become empowered.

4. Get preapproved for a mortgage. Your top-dollar home price is a function of your household income, your creditworthiness, interest rates, the type of loan you select and how much ready cash you have for the down payment and closing costs, among other factors. Rather than guessing or estimating how much you can afford to spend, ask a lender or mortgage broker to give you a full assessment and a letter stating how much you're qualified to borrow. The true amount may be much more or much less than you think.

5. Use a checklist. Touring multiple homes is a confusing experience for most people. Rather than relying on memory, make notes about the homes you visit. Turn your priorities into a personalized home-shopping checklist and use it track the features of each home.

6. Wear comfortable clothing and sturdy shoes. House-hunting can be tiring, especially if you're relocating to a distant community and want to see a dozen homes in one day. There's no sense in torturing your feet unnecessarily.

7. Be prepared to make an offer. House-hunting can also be frustrating, especially if you know in your heart you're not really emotionally or financially ready to buy a home. If you're not ready, don't put yourself through the exercise. If you are ready, go through a blank purchase contract ahead of time so you'll know what decisions you'll face when you make an offer.

8. Relax. Granted, buying a home is a major life-altering event. But it's not worth making yourself insanely crazy or super-duper stressed. Save time at the end of your house-hunting expedition to unwind, calm your thoughts and emotions and keep the whole experience in perspective.

Source:

How a REALTOR® Can Help

A real estate agent can help you understand everything you need to know about the buying process.

The process of buying a home or investment generally starts with determining your buying power; that is, your financial reserves plus your borrowing capacity. If you give a real estate agent some basic information about your available savings, income and current debt, he or she can refer you to lenders best qualified to help you. Most lenders -- banks and mortgage companies -- offer limited choices.

Looking
Once you know how much you can and want to invest, the next step is to find the properties that most nearly fit your needs. This is the time to choose a real estate licensee. When picking a real estate agent look for one who is also a REALTOR®. A REALTOR® is a member of the NATIONAL ASSOCIATION OF REALTORS®, a real estate trade association, and all members agree to abide by a 17 article Code of Ethics. A REALTOR® has many resources to assist you in your search. Sometimes the property you are seeking is available but not actively advertised in the market. It will take some investigation by your agent to find all available properties.

Choosing a property
Your job is to make the final selection of the right property for you. This is when excitement and emotion run high. Your real estate agent can assist you in the selection process by providing objective information about each property. Agents who are REALTORS® have access to a variety of informational resources. REALTORS® can provide local community information on utilities, zoning, schools, etc. There are two things you'll want to know. First, will the property provide the environment I want for a home or investment? Second, will the property have resale value when I am ready to sell?

Negotiating
There are myriad negotiating factors, including but not limited to price, financing, terms, date of possession and often the inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement should provide a period of time for you to complete appropriate inspections and investigations of the property before you are bound to complete the purchase. Your agent can advise you as to which investigations and inspections are recommended or required.

Due diligence
With a negotiated agreement in hand, it is time to complete the evaluation of the property. Depending on the area and property, this could include inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank and well tests, just to name a few. Your agent can assist you in finding qualified responsible professionals to do most of these investigations and provide you with written reports. You will also want to see a preliminary report on the title of the property. Title indicates ownership of property. The title to most properties will have some limitations; for example, easements (access rights) for utilities. Your agent, title company or attorney can help you resolve issues that might cause problems at a later date.

Financing
As soon as you are reasonably sure the property is right for you, the process of obtaining financing begins. Your agent can help you in understanding different financing options and in identifying qualified lenders.

Closing or settlement
Finally, there is the closing, or settlement, as it is known in different parts of the country. Every area has its own unique customs. In some areas, the title or escrow company will handle this process. In other parts of the country, an attorney does it all. Again, your real estate agent can guide you through this process and make sure everything flows together smoothly.

Why use a REALTOR®?
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on their business cards or other marketing and sales literature. REALTORS® are committed to treat all parties in a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a high level of knowledge of the process of buying and selling real estate. An independent survey reports that 84% of home buyers would use the same REALTOR® again.

You be the judge
Real estate transactions involve one of the biggest financial investments most people experience in their lifetime. Transactions today usually exceed $100,000. If you had a $100,000 income tax problem, would you attempt to deal with it without the help of a CPA? If you had a $100,000 legal question, would you deal with it without the help of an attorney? Considering the small upside cost and the large downside risk, it would be foolish to consider a deal in real estate without the professional assistance of a REALTOR®!

Source: Realtor.com

Fargo Home Buyer Alert: What is a credit score.

Our credit score can mean the difference between being denied or approved for credit, and a low or high interest rate. A good score can help you qualify for an apartment rental and even help you get utilities connected without a deposit.

So what is it?

Your credit score is a three-digit number generated by a mathematical algorithm using information in your credit report. It's designed to predict risk, specifically, the likelihood that you will become seriously delinquent on your credit obligations in the 24 months after scoring.

There are a multitude of credit-scoring models in existence, but there's one that dominates the market: the FICO credit score. According to myFICO.com, the consumer website for the FICO score developer, "90 percent of all financial institutions in the U.S. use FICO scores in their decision-making process."

FICO scores range from 300 to 850, where a higher number indicates lower risk. What's a good score?

A consumer has three FICO scores, one for each credit report provided by the three major credit bureaus: Equifax, Experian and TransUnion. Unfortunately, consumers currently have access to only their Equifax and TransUnion FICO scores. Experian ended its agreement with myFICO.com in 2009.

What goes into a credit score?

Data from your credit report goes into five major categories that make up a FICO score. The scoring model weighs some factors more heavily, such as payment history and debt owed.


Payment history: (35 percent) -- Your account payment information, including any delinquencies and public records.

Amounts owed: (30 percent) -- How much you owe on your accounts. The amount of available credit you're using on revolving accounts is heavily weighted.


Length of credit history: (15 percent) -- How long ago you opened accounts and time since account activity.

Types of credit used: (10 percent) -- The mix of accounts you have, such as revolving and installment.

New credit: (10 percent) -- Your pursuit of new credit, including credit inquiries and number of recently opened accounts.

Personal or demographic information such as age, race, address, marital status, income and employment don't affect the score.


Different score impact for same missteps

How much does a specific change affect a credit score? The answer is usually "it depends," and for good reason. Credit score developers don't reveal the exact point deductions. The weight of any given activity can also vary for different credit histories.


Within a scoring model, there's more than one formula used to calculate a score, and each formula is designed for a category of consumers with similar credit profiles. The information in your credit report determines which formula is used. If you are new to credit, for instance, the scoring model will put you into a category for people with young credit histories, and use a scoring formula specific to that group. Such groups are called scorecards. Within that group, recent inquiries may cost more points than they would for a different group.

How to check your credit score

Federal law mandates the consumer's right to a free credit report annually from each credit reporting agency, but not to a free credit score. Use our FICO score estimator to get your score range free of charge. To get your exact number, you have to purchase it from a score provider, such as myFICO.com or one of the reporting agencies.

20 Signs You Need a Financial Makeover

1. You charge group dinners on your card and keep your friends’ cash to spend.

2. You spend more than 40% of your total income on rent.

3. You’re constantly transferring your balance to get 0% interest on your credit card debt.

5. Less than 10% of your income goes to your retirement savings. (Or worse, zero percent!)

6. You have a credit card that doesn’t give you anything in return, like cash back or airline miles.

7. You don’t know what IRA means.

8. You pay the minimum balance on your credit card each month.

9. You don’t open your credit card statement because you can’t bear to see how high the balance is.

10. You don’t keep receipts because they remind you of what you’ve spent.

11. You know your company has a 401k plan, but you have no idea what that is.

12. You withdraw cash frequently from ATM’s that aren’t affiliated with your bank.

13. The number of credit cards in your wallet is higher than the number of dates you’ve had this year.

14. You buy so much on eBay that they’ve awarded you VIP status.

15. You want to start a savings account, but then sale season starts again!

16. You don’t have an emergency fund to pay bills should you lose your job.

17. Your monthly extra cell phone minute charges are bigger than your monthly electric bill.

18. You overdraw on your checking account more than once a year.

19. You live paycheck to paycheck.

20. You spend more on new shoes annually than you save.nd see if you’re truly on track or not?

Read Full Article Here...

Home Prices Rise at Fastest Pace in Over Six Years

Home-price appreciation is accelerating in much of the U.S., offering the latest confirmation that the housing market is turning after the most severe property downturn since the Great Depression.

Prices rose by 8.1% in January from a year earlier, the largest such gain in 6½ years, according to figures from the S&P/Case-Shiller index of home prices in 20 major metropolitan cities released Tuesday. All 20 cities posted annual increases.

Take Charge When Buying a Home

If you approach the home buying process intelligently and with confidence, you are much more likely to emerge with a house you'll be proud to call home.

Approaching the task of buying your next home can be overwhelming. There's so much to consider.

How much house can I afford, and how can I find the best loan? Where will I come up with a down payment, and how much will I need? Should I buy a new or resale home, and which will go up in value? Should I use an agent or look at homes on my own?

And these questions are just the beginning. Buying a home is one of the largest financial transactions in your lifetime, yet we don't teach about it in school. You're just supposed to pick it up along the way.

Well, as you start down this road, let me give you a little advice. Here are the two most important things to remember no matter where you are on the road to ownership:

1. You can and should understand everything that is happening in the home buying process. There is nothing, and I mean nothing, that is so complex that it can't be easily explained to anyone with average intelligence, and you've got more than that. Just because we don't apply for a thirty year mortgage once a week doesn't mean we have to take the first one that comes along. You'll need to learn some new terms, apply some new concepts and take the time to understand what you're getting into. If anything happens at any point in the process that doesn't make sense to you, simply demand a full and complete explanation. If it still doesn't make sense, seek help from someone you trust like your CPA, your banker or maybe your friendly online real estate columnist.

2. In the world of real estate sales, YOU are the most important person in the entire process. It's easy to think that everyone else carries more weight than you. The agent talks fast and has an answer for everything. The lender may decline your loan application, and on and on. But the truth is that you, the buyer, are the one person in this transaction that makes it all happen. If you decide to not buy, the entire process comes to a grinding halt. So flex your consumer muscle and take command of this process. Surround yourself with a team of professionals that you have confidence in and make them work for you.

If you plan from the beginning to approach the home buying process intelligently and with confidence, you are much more likely to emerge at the end of the day with a house you'll be proud to call home, and the knowledge that you made the right decision.

Source:

Fargo Buyers Alert: Don't waste your home search time on Zillow,Trulia and Homes.com

Most real estate home buyers are obsessed with finding the next great deal.  So much so that they stay up into the wee hours of the night scouring the internet for properties,  As real estate agents know, our livelihoods depend on the accuracy of the data we analyze and for that reason I’m begging you to PLEASE stop searching for real estate on nationwide portals like Trulia, Zillow and Homes.com - amongst many others!

For the past 12 months brokerage after brokerage has decided to withdrawal their listings from the nationwide real estate search portals citing, among other things, horribly inaccurate information and in some cases outright scams.


Very Inaccurate Real Estate Search Results

National portals like Trulia and Zilliow are slow to show new listings.  When a property is listed for sale it hits the local MLS in a matter of minutes, usually about 15, but can take as long as 9 days to populate to nationally syndicated sites according to studies on the subject.  To real estate investors ready to pounce 9 days might as well be 3 months.  By the time the home owner sees the listing, sees the property and submits an offer sufficient time will have passed that there could be one or more competitive bids or quite possibly the property could have sold already.  A seasoned real estate agent knows how important timing is and getting all of your real estate listings even 24 hours later than your competitors will cause you to miss out on great deals.

Bad Data

The real estate company Redfin was hired recently to assess the accuracy of sites like Trulia and Zillow and their study found that approximately 36% of the listings shown as active on Zillow and Trulia were no longer for sale in the local MLS, compared with almost 0% on local brokerage websites.  The study further found that brokerage sourced listings using their local MLS feed displayed 100% of the MLS homes listed for sale on their websites but Trulia only displayed 81% and Zillow 79%.  So let me summarize – over 1/3rd of the listings you are seeing are NOT ACTUALLY FOR SALE and you only get to see 4/5th of the listings that are actually for sale.  LOL.  I could go on but really there’s no need.  Obviously anyone searching for properties in a city would like to have access to all of the listings that are for sale and none of the ones that aren’t.

What’s My House Worth? (Don’t Ask Zillow)

I considered writing an entire post of the accuracy…or inaccuracy, of real estate portal pricing tools like the famed Zillow Zestimate.  For those who aren’t familiar with Zillow the website offers an opinion of a listed house value called a Zestimate and it is prominently displayed on each property’s listing page.  Sounds great right?  Unfortunately the Zestimate values aren’t even close to the actual values that the properties sell for.  If you’re wondering how I can be so sure it’s because, to Zillow’s credit, they actually publicize the accuracy of their Zestimates city by city. To measure the accuracy of the Zestimate Zillow compares the actual home sale prices of homes with their Zestimate and they’ve found that the Zesimtate is within 5% of the actual sale price around 33% of the time and within 10% of the sale price around 50% of the time.  What To Do?

For real estate home buyers in need of accurate and timely data national search portals like Trulia and Zillow are not as reliable as other options available.  Instead of searching for properties on these websites real estate investors should focus on smaller, local brokerage based websites, establish relationships with local real estate agents or get a real estate license and pay to join the local MLS where they invest.  These steps will assure that you are getting the most accurate and up to date information and will give you a competitive advantage over those who are searching for real estate with websites like Trulia and Zillow.

Find out the value of your home from a local real estate professional, using local market data and accurate listing information. Find out your homes value here.

The only way to know you are searching ALL listed homes for sale and COMPLETE, up-to-date and accurate information is by searching the "Local MLS" (multiple listing service).  This service is used by ALL realtors to post their listings.  You can access the Full MLS HERE! 

"POWER SEARCH" ~ FULL ACCESS TO FARGO MOORHEADS MLS 

 

What do you think? Do you use Trulia or Zillow?

Buying A Home Plan for Younger People – Make Sure to Plan Ahead

Granted, few young people spend much time day-dreaming about buying their first home. They're naturally preoccupied with academics, athletics, parties, dating and future career possibilities. Nonetheless, there are a number of good reasons to start learning early in life about the costs of buying a home and the responsibilities of homeownership. For example, a college student's misuse or abuse of credit cards can preclude his or her buying a home later on.

Here are five recommendations for young people who want to position themselves for homeownership:

1. Establish good credit habits and a favorable credit history. Get a credit card and use it responsibly. Apply for an automobile loan and make your payments on time every month. If you're renting an apartment, put your own name on the lease and the utility bills and make sure the rent and the bills are paid every month. If you're already struggling with credit card debt or have large student loans, take a free workshop from the non-profit Consumer Credit Counseling Service. Call (800) 388-2227 for information.

2. Start saving for a down payment and closing costs. It's possible to purchase a first home in many parts of the country without much in the way of savings. But in high-cost housing areas, starting to save early can be enormously beneficial because you'll get the advantage of compounding interest and have a longer period of time to grow your investments. Open a savings account or a stock brokerage investment account and make regular deposits.

3. Read some books. Your local library and bookstore probably have at least a few shelves of books about financial management and buying a home. Take notes. Make a financial plan for yourself.

4. Research where you'd like to live. Many young people assume they'll continue living in their own home town when they get older, but people are more mobile than ever and chances are good you'll one day live in another city or even another state. Again, the library, bookstore and Web can be excellent resources for information about housing costs and homeownership opportunities around the country.

5. Tap your real estate agent relatives for advice. Parents, grandparents, aunts, uncles or older cousins in the real estate business can give you good information about the cost of housing in the area where you want to live and what it takes to buy a home. Questions to ask: Is housing affordable in this area? How much money would I need to save in order to buy a home? What advice would you give me about planning my financial future? Would you recommend some books that I might like to read about buying a home? Don't be shy. If you have a question, ask someone in a position to know the answer.

Source:

Search for Homes For Sale by School District

Click on the picture above or go to www.fargocityguide.com

How Much Money Do I Have to Save to Buy A Home?

The first thing to understand about buying a house is that you don't have to have all the cash saved up in order to make your purchase.

The good news is that there are lots of folks out there who are very interested in lending you as much as 95% of the purchase price of your home, at very favorable interest rates. Furthermore, they are willing to spread out the payments over a long period of time so that you can afford the house you want.

Just to cover the basics, let's elaborate on the points in the last paragraph:

If you have a steady job and a reasonable credit history, there is a good chance that you can find a home lender who will lend you most of the purchase price of your new house. Home loans are also called "mortgages," which comes from a Latin phrase meaning "pledge unto death." While lenders don't take your promise to pay quite that seriously, they DO expect to get repaid on time. Just to make sure you remember, lenders take an ownership interest in your house until the loan is paid in full.

Home loans typically are offered in amounts of 80%, 90% and 95% of the price you are paying for the house. You are expected to pay the remaining amount in cash from your own savings. As you might imagine, the lower percentage loans are somewhat easier to qualify for.

The reason the lender is willing to lend you up to 95% of the value of your house is that history has shown real estate to be such an excellent investment. Lenders expect that your home will be worth more in the future than it is today - so their investment in your home is considered very safe.

That's also why the interest rate you can obtain on a home loan is one of the best around. Consider that America's largest and strongest corporations borrow at what is called the "prime rate," and that today you can borrow a home loan - fixed at the same rate for many years - at substantially less than the prime rate. Lenders have found that home loans tend to be excellent investments, and you benefit every month when you make your loan payment.

Finally, home loans are available to be repaid over terms of usually 15 or 30 years. The shorter term loan offers a slightly lowered interest rate, so if you can afford the higher monthly payments, you'll save in interest costs by choosing the 15 year loan. At today's interest rates, a 15 year loan costs about 27% more than a 30 year loan in terms of your monthly payment. But the amazing thing is that lenders are even willing to offer a fixed rate loan for that time period. It's better financing than you can get on just about any other investment.

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Understand Your Credit - Find out about your credit and correct any errors now!

Thinking about buying a house? Then think about your credit history...the folks who lend money do!



How
well you have handled your credit obligations in the past is of utmost
importance to lenders today. The good news is that this information, for
the most part, is available to you.



Your credit
history is maintained by three different private companies called credit
reporting agencies: Equifax, TransUnion and Experian. Their websites
and phone numbers are listed at the end of this article. Everyone can
pull their own credit once a year for free at annualcreditreport.com. If
you’ve already done that or need to pull it again. You can order your
report by phone and charge it to your major credit card if you like. It
usually takes about a week to arrive. You can even order your report
online directly from each of the three agencies, but they have to verify
your identity before you can obtain any private information. By the
way, avoid services that offer to obtain all your reports for you in
exchange for a fee. You want the information directly from the reporting
agency, blemishes and all.



It's a good idea to get a
copy of all three reports, because if an error exists on even one of the
reports, it may negatively affect your chances of getting the loan you
want. Your credit report lists all the consumer credit that has been
extended to you over the past seven years. It will show what your
highest balance has been and what your current balance was on the date
last reported by the creditor. It will also show how many payments you
made on time and how many late payments were late. Late payments are
grouped into categories showing how late you were. For example, if your
credit card payment was over 30 days late one time, it might not be
considered too serious. But if payments were over 60 days late four
times, over 120 days late two times and over 180 days late one time, you
have had a serious problem. That problem is going to impact your
ability to borrow money.



It just makes sense to find
out about your credit and correct any errors now. Regardless of how many
credit problems you have had in the past, there are two good points to
remember.



First, negative credit information can be
reported in your credit file for only seven years. After that, it drops
out and cannot even be considered. The one exception is bankruptcy,
which can be reported for 10 years. But after that you start with
essentially a clean slate.



Second, lenders are much
more concerned about how you have handled your credit recently than with
what happened several years ago. Even if you have had a bankruptcy, if
you have kept your nose clean and paid your bills on time since then, it
is possible you could qualify for a loan after as little as two or
three years.



One of the best developments in the world
of lending has been risk-based pricing. That's a five dollar term for
the ability of lenders to offer higher priced loans to borrowers based
on their demonstrated ability to repay. In other words, even if you have
slightly fractured credit, you can still likely get a loan. It just may
cost you a little more.



Equifax (www.equifax.com) can
be reached at 800-997-2493. TransUnion (www.transunion.com) can be
reached at 800-888-4213. Experian (www.experian.com) can be reached at
888-397-3742.



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Calculate Your Income Vs. Debt

Most lenders don't want you to take out a loan that will overload your ability to repay everybody you owe.

As you think about applying for a home loan, you need to consider your personal finances. How much you earn versus how much you owe will likely determine how much a lender will allow you to borrow.

First, determine your gross monthly income. This will include any regular and recurring income that you can document. Unfortunately, if you can't document the income or it doesn't show up on your tax return, then you can't use it to qualify for a loan. However, you can use unearned sources of income such as alimony or lottery payoffs. And if you own income-producing assets such as real estate or stocks, the income from those can be estimated and used in this calculation. If you have questions about your specific situation, any good loan officer can review the rules.

Next, calculate your monthly debt load. This includes all monthly debt obligations like credit cards, installment loans, car loans, personal debts or any other ongoing monthly obligation like alimony or child support. If it is revolving debt like a credit card, use the minimum monthly payment for this calculation. If it is installment debt, use the current monthly payment to calculate your debt load. And you don't have to consider a debt at all if it is scheduled to be paid off in less than six months. Add all this up and it is a figure we'll call your monthly debt service.

In a nutshell, most lenders don't want you to take out a loan that will overload your ability to repay everybody you owe. Although every lender has slightly different formulas, here is a rough idea of how they look at the numbers.

Typically, your monthly housing expense, including monthly payments for taxes and insurance, should not exceed about 28% of your gross monthly income. If you don't know what your tax and insurance expense will be, you can estimate that about 15% of your payment will go toward this expense. The remainder can be used for principal and interest repayment.

In addition, your proposed monthly housing expense and your total monthly debt service combined cannot exceed about 36% of your gross monthly income. If it does, your application may exceed the lender's underwriting guidelines and your loan may not be approved.

Depending on your individual situation, there may be more or less flexibility in the 28% and 36% guidelines. For example, if you are able to buy the home while borrowing less than 80% of the home's value by making a large cash down payment, the qualifying ratios become less critical. Likewise, if Bill Gates or a rich uncle is willing to cosign on the loan with you, lenders will be much less focused on the guidelines discussed here.

Remember that there are hundreds of loan programs available in today's lending market and every one of them has different guidelines. So don't be discouraged if your dream home seems out of reach.

In addition, there are a number of factors within your control which affect your monthly payment. For example, you might choose to apply for an adjustable rate loan which has a lower initial payment than a fixed rate program. Likewise, a larger down payment has the effect of lowering your projected monthly payment.

Just plan on contacting and investigating a number of lenders to find a loan program that meets your needs.

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Making the Transition from Renting to Buying

Here are a few points to consider as you weigh the pros and cons of home ownership.

No doubt you've thought of how nice it would be not to write a rent check every month, but have you done the math? Nothing can make you feel more secure than owning your own house, unless buying a home will create financial problems of its own. Here's a discussion of the most important financial costs associated with home buying to stack up against your monthly rent check.

Instead of the standard deduction on your income tax return, most homeowners itemize their deductions, allowing them to deduct the following (and save on taxes): home mortgage interest, property real estate taxes, state income taxes, gifts to charity, medical and dental expenses over 7.5% of your income, personal property taxes, and most moving expenses.

Figure your monthly payments if you were to buy. Compare your monthly rent to a calculation of the following: purchase price and down payment of your home, your annual income (and debt!), property tax rate, home insurance rate, interest rate and length of loan. For best results, contact a home-buying specialist.

Other costs
Expect other costs to homeowning. Along with your monthly mortgage and down payment, there's property tax and homeowners insurance premiums, and fees known as "closing costs." These include everything from a credit check to "points"- interest paid up-front in return for a lower interest rate. Others: title insurance fee, survey charge, attorney/escrow fees, and loan origination. So do your research!

Long-term equity
No discussion of home ownership is complete without considering the long-term benefits of owning. What your house will be worth when you sell depends on the state of your mortgage and the housing market, in particular. Consult with real estate professionals, read up, and do your math to get a realistic sense of your future home value.

Lifestyle and mobility
Mobility is part of renting. Freedom to take the next job or move for a relationship is easy to come by when you rent a home. And when you do move, there's often more choice of specific location, and price, when you seek rental housing. Want an apartment near a park in western Philadelphia? You may find an easier time looking to rent than buy.

Many renters say they love knowing they're not tied down - and don't have to assume financial responsibility for their living space. This is of course a big difference from home ownership: who does the work.

Our home improvement section features how-to tips and important information about repairing and remodeling your home.

Who does the work
While you don't receive the joys of making a place truly "your own," you do have limited costs in renting. Landlords are responsible for general upkeep and safety, allowing you to focus on the fine points. Homeowning, in contrast, puts you in the driver's seat. You shoulder the expenses and reap the rewards of home improvement - both great and small. Think about whether you want to put in additional time and money.

Choices, choices
Whether you decide to take the step of home ownership is a personal choice with its own ups and downs. Hopefully we've helped dust off the magic ball a bit; what you see in your future is up to you!

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How to Get Your House Ready to Sell

Many homeowners are trying to sell but have trouble seeing their homes as products.

They don’t repaint the purple-walled kids’ room. They leave the tricycle in the driveway and old towels hanging in the bathroom. They don’t step back and look at their homes through the eyes of a potential buyer.