5 Things to Look For When Choosing a Home Builder

5 things to look for when choosing a home builderWhether you are planning to buy a ready-to-live condo or build a customized home, it is very important to choose the right home builder. A beginner to the real estate market might find himself overwhelmed by flashy brochures and aggressive marketing that promise you the moon – and the stars. So how does one separate the wheat from the chaff? We have put together a list of 5 things that you should look for when choosing a home builder.

1.  Is there a match between your needs and the builder’s experience?

Does the builder’s overall experience match with what you are looking for? Many builders specialize in different categories such as luxury apartments for the upper class, compact modern apartments for the urban couple and so on. However, if you are planning to live in a traditional home with an old-world feel, you need a builder who has expertise in this area. This is hugely important because the building process and materials themselves may differ in each case. Find out if the builder has worked on similar designs in the past and ask to see previous constructions or model homes. If the firm is relatively new, find out if they have experienced professionals on their payroll.

2.  What do their previous customers say?

Most builders these days are ready to provide references. Though you can always talk to them, it would be better if you can search for others on your own. Set a day aside to visit his previous projects and talk to a few customers. Plan your visit mostly on a weekend when people are relaxed and willing to talk.

Ask the home owners whether they are satisfied with the builder, whether he kept his promises, whether they faced any problems during construction and after they moved in and so on. Try to find out if they are willing to buy another home from the same builder or to recommend the builder to a close friend or a relative and most importantly – their reasons for the same.

Visiting an actual home provides a better feel of the quality of construction. A model home is usually displayed fully furnished and can tend to distract you from the actual construction.

The local home builders’ association and consumer complaint forums may be other good sources of information on the builder and his reputation in the market. You may be able to determine whether there are any pending complaints against the builder or whether any previous customer has filed a legal action suit against him.

3.  Do they offer guarantees?

If you are buying a new property, find out if the builder is giving a long-term structural warranty or guarantee on the building. What is the standard response time that can be expected? Find out from previous customers whether the builder has been regular in his promised services, responses to complaints and maintenance. Are they ready to give it to you in writing?

If your builder’s warranty does not extend to even the minimum market standards, then I would recommend that you rethink your decision.

4.  Is the builder insured?

Are the builder and his contractors covered by insurance for job site injuries, accidents, storm damage or other hazards? Make sure that his policy offers protection against property damage and includes employers and public liability insurance.

Public liability insurance covers injury to the general public and third parties during construction (for example, a passing pedestrian is hit by a falling metal sheet). Employer liability insurance provides protection to the employee who is injured while working on the construction of your building. Make sure that your builder has this coverage, or you may find yourself dragged into unnecessary litigation. A contractors’ all-risk coverage will protect the under construction building against accidental damage.

Also find out if the builder is licensed and if so, by whom. Some areas require that you work with a licensed builder.

5.  Quality and resale value

A home is one of the biggest investments that you might make in your lifetime and hence it is important to do your homework carefully. The quality of the construction and products used will make a huge difference in its resale value down the years.

When you visit the builder’s previous or other ongoing projects, pay special attention to quality of construction and building materials. Are they signs of seepage or outward structural issues? Are his homes environment-friendly? Are the plumbing fixtures, electrical switches, woodwork etc. of good quality or is he trying to cut costs? Has he used the same products that he used in his model home? Some builders use well-reputed brands in their models and use substitutes in the actual construction. Read the fine print in their marketing brochures carefully. Don’t forget to ask what items displayed in the model home will be included in the standard pricing and what comes at an additional charge.

If you are venturing into real estate for the first time, read your contract carefully or have a real estate lawyer go through it. Never take a hasty decision while choosing a home builder or it may end up being a very costly mistake that you have to live with for the rest of your life. The cheapest may not always be the best option. You may end up spending more in the longer run on repairs and maintenance if the builder has tried to give you a cheaper quote by using substandard materials in his estimation.

You may also want to check with your builder at what stages before or during the building process you will be able to suggest additions and changes. Though some builders are not agreeable to changing their plans for a single owner, especially if you are buying into a condominium, there may be certain stages of the construction or before it when you can request for specific upgrades.

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Multiple Listing Services (MLS) Demystified

The MLS - Multiple Listing Service - Homes for Sale

If you are new to the real estate market and are interested in buying or selling property, a Multiple Listing Service (MLS) is the place to go to. But what exactly is the MLS and how does it fit into the real estate sector?

Multiple listing services are huge databases used by real estate brokers to share detailed lists of properties entrusted to them. Of course, the agent should have the consent of the homeowner before he adds the property to the service. Another real estate agent can bring a buyer and both agents will share compensation if a sale happens. Usually only licensed real estate agents or employees of a company which is a member of a Board of Realtors are allowed to become members of an MLS. A member is expected to post details of all properties with the service, unless the owner has said otherwise.

What are the benefits of MLS?

Real estate agents use comparative market analyses (CMAs) and reports provided by multiple listing services to arrive at a good price for a property that you may like to sell or buy. An agent may also be able to sell more properties than he would have if he was not a member of a multiple listing service. Transactions also happen much faster when there are more people working to identify and bring forward actual buyers for a property.

Who can use the MLS?

But is MLS only for real estate agents? No. As a seller you will be happy to know that listing your property on such a service gives it greater exposure and a bigger outreach than an advertisement in a newspaper. More interested buyers mean greater pricing power for the seller. Though you will have to work with only a single real estate agent, a number of other agents will also be working to find the right buyer for your property with the help of details given on the MLS system. The chances of your property being sold faster and at the best possible price are higher if your property is MLS-listed.

If you are a buyer, you have more options to choose from and get easier access to a larger number of property listings that meet your requirements. For example, coming up with a list of houses that match a specific price range, location or square foot area can be as easy as a few clicks. MLS systems are much more detailed than other similar tools in the real estate industry and include information such as condition of the property, history, renovations done, zoning information and so on. You can also see several properties listed under the service through a single agent instead of contacting different real estate companies for each property.

Search the MLS

A brief history of the MLS

Are multiple listing services a recent phenomenon? Not really. Hundreds of years ago, groups of real estate agents used to meet at local associations where they used to discuss properties known to them. If another agent was able to come up with a buyer and help speed up the sale of the property, they would agree to compensate him. The first MLS was thus born out of this unique spirit of sharing and mutual benefit in the real estate industry.

Initially MLS data used to be available only to real estate agents. Huge lists of properties were printed monthly and updates used to be sent out every week to all real estate agents who had registered for this service, showing which new properties were added to the list that week and which houses were sold. But today with the advent of internet, the process has become extremely simple and less cumbersome. There are more than 800 such services operating across the country. Many update their lists every hour so that current real-time information is available at your fingertips.

What’s more, today any ordinary person who has access to a computer and is interested in buying a property can search for listings on an MLS website on his own. Of course, some information is withheld from a prospective buyer for security reasons and made available only to authorized real estate agents.

What are FSBO listings?

A homeowner can directly list his property on an MLS without going through a real estate full service real estate broker by using an FSBO (For Sale By Owners) service. FSBO companies charge a fee to post your home for sale on the MLS.  Earlier you had to pay a percentage of the sale as sales commission if you wanted your property listed on MLS without an intermediary, but now many MLS websites allow you to submit your property details for a flat fee of a few hundred dollars and gain the same exposure you would have if you had gone through a Realtor.

Real estate listings and much more

Today MLS websites offer much more than a comprehensive listing of all properties available for sale or rent in your area. Current real estate news, analyses and resources, mortgage and tax calculators, free and paid property appraisals, virtual tours, interactive maps and detailed information about cities and neighborhoods are other features offered by such websites to help their customers ease into the process of buying or selling a house.  Most websites also send automatic emails to home buyers who subscribe to the service for free to update them of new listings that meet their criteria.

 Click here to search the MLS in any city in the USA

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8 Ways to Make Your Move Eco-Friendly

move eco friendlyThose who love and care for nature always find a way to incorporate environmental-friendly measures into everything they do. Even when you’re done searching for your new home and planning your move, there are options available to make a good part of the process environmentally friendly. Below are some of those options which help you keep a relatively low environmental footprint:

1. Find a moving company committed to environment protection as you.
Green moving is a trend that’s gaining in popularity, and responsible moving companies too are pitching in with their own innovations to make the move as environmental-friendly as possible. Bio-diesel trucks, moving pads composed of 100 percent recycled cotton, and rentable crates for packing your belongings are features that some moving companies offer to customers. Your first step towards making a green move is to find a moving service that shares your sentiments about nature. A bit of research will help you locate the best one.

2. Cut down on use of cardboard boxes.
The average move uses 60 cardboard boxes, that’s the equivalent of a half-ton tree. Studies reveal that 50 percent of cardboard ends up in landfill. If it is recycled, the process is energy and water intensive, and it produces toxic by-products. Reusing a friend’s cardboard boxes is a good first step. A good quality cardboard box can withstand three to 10 uses. However, there are some more eco-friendly alternatives to cardboard boxes, as well as other traditional packing materials.

3. Use eco-friendly packaging materials.
Ask your mover if they offer reusable bins made out of recycled plastic. Plastic bins can be used up to 400 times. Moreover, the moving company will provide you the bins well in advance on request and take them away after you have unpacked. If they don’t have plastic bins, you can consider alternatives to plastic bubble wrap, packaging peanuts, and foam wrap. Green packing peanuts are made from bio-plastics, a form of plastic derived from renewable sources like vegetable oils or corn starch. Geami wrap, a die-cut recycled paper split by a machine to form protective packaging, is another great alternative to bubble wrap.

4. Use what you have innovatively to pack things.
The most ingenious way to securely pack your fragile belongings is to wrap them with towels, bedding, and clothing you already have lying around the house. It’s definitely a win-win move because you need to pack these items anyway.

5. Consider these green moves seriously
The condition of the moving truck will greatly affect the amount of gas it uses and the carbon dioxide it emits. The load, the size of truck, and the way you drive will also make a difference. Greener moving options are being offered by many moving companies now. Their trucks run on biodiesel fuel. Use services that have made the upgrade. You, too, can contribute to the environment by discarding unwanted items and lightening the truck load. If you have to transport your car, transport it by rail instead of having it shipped by truck. Trains are four times more fuel-efficient than trucks.

6. Use eco-friendly cleaning supplies
You must leave the old home clean and tidy, and if your new place has been vacant for a while, you will want to clean it as well. Create a small cleaning kit that you can carry easily. If you plan ahead, you can ensure that the cleaners you use are biodegradable and non-toxic instead of shopping at the last minute for cleaning chemicals and harsh detergents.

7. De-clutter by holding regular garage sales
Instead of throwing out items that you no longer need or use, you can make garage sales a consistent event by holding them once every six months or maybe a year. This will help in reducing a good deal of unnecessary clutter in your home while allowing people to re-use the items instead of simply throwing them out.

8. Going green in your new home
The energy-saving habit must go on once you are in your new home by creating less waste and recycling. Replace incandescent light bulbs around the house with compact fluorescent lights (CFLs), or, better yet, light-emitting diodes (LEDs). CFLs require less energy than incandescent lights, but LEDs score higher in terms of efficiency. Moreover, unlike CFLs, they don’t contain mercury. Unplug appliances, electronics, and phone chargers when not in use. Buy power strips to make unplugging of a number of electronics at once, a one-switch process. Look for compost opportunities in your new home’s backyard.

Getting organized right from the start makes it easier for you to do things in an environment-friendly way in almost every area of your life.

Photo Credit: Meathead Movers

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FHA Mortgages to Buy a Home Stop If Government Shuts Down

As of this writing, the chances of averting a partial shutdown of the federal government are slim to none as members of House blamed the Senate, and members of the Senate blamed the House, for being unwilling to agree on a spending bill that keeps the government running. The Republican-controlled House of Representatives has passed a measure that ties government funding to a delay of President Barack Obama’s healthcare reform law, even as Senate Democrats vowed to defeat it. If a stop-gap spending bill for the new fiscal year is not passed before midnight on Monday, all non-essential government agencies and programs will close their doors for the first time since 1996.

That includes FHA mortgages. These loans account for about 90% of U.S. home mortgages, so if the pipeline stops, that flow could hurt the housing recovery.

Uncertainty Road Sign

The good news is that most government-backed home loans will be unaffected by a shutdown. Fannie Mae and Freddie Mac pay for their operations out of the fees that they charge lenders, so the loans that they purchase and securitize will continue forward.

Of course when someone says “the good news is”, that means there is a flip side of the coin, and that’s the case here. The bad news is that loans guaranteed by the Federal Housing Administration, the Veteran’s Administration and the rural development loans of the U.S. Department of Agriculture, won’t be processed. If an application for an FHA-insured loan has not been approved by the time the government shuts down, it will not be touched until after the shutdown ends.

FHA-backed loans accounted for 45% of all mortgages used to purchase homes issued in 2012, according to the Federal Reserve. In the event of a shutdown, FHA will be unable to endorse any single-family loans and FHA staff will be unavailable to underwrite and approve new loans. The FHA alone insures about 60,000 loans a month. That’s a big chunk of mortgages to just…  stop.

Many people who try to buy a home have no alternative to FHA, VA or USDA mortgages. First-time buyers in particular often lack the cash for the 20% down payments that most lenders require. FHA rules allow home buyers to make a down payment of as little as 3.5% of the selling price, which would be $7,000 on a $200,000 home, for example. A 20% down payment on a house of the same price would be $40,000. The FHA is also more flexible about borrowers who have had payment problems in the past, or who have short credit histories.

“The housing market is searching for recovery, and we’ve been seeing signs of optimism,” said David Stevens, CEO of the Mortgage Bankers Association. “This could have a sizable impact on the recovery.”

A slowdown in the processing of home mortgages would have ripple effects beyond the housing market. When people buy a home, it triggers economic activity in related industries. Home buyers have their newly purchased homes painted, floors or carpeting installed, new decks built, and landscaping completed. They also fill their homes with furniture and electronics. If a shutdown drags on for more than a few days, the impact on the real estate market and the economy could be quite significant.

No one agrees on what’s really going to happen next, though. Some people think we’re economically headed towards a cliff. Some people can’t believe the legislators would not come to an agreement before the deadline hits. I’m of the opinion that we can’t put anything past these rascals.

Are you ready to buy a home? We can’t do anything about the government shutdown, but we do have MLS listings search that you can use to find your dream house.

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5 Tips for Saving Up a Down Payment to Buy a Home

down payment to buy a homeAs home sales speed towards an apparent recovery and interest rates fluctuating, many first time home buyers feel like they need to get into the real estate market right now. Even as housing prices and interest rates rise, wages have been treading water, making the collection of a down payment difficult. To add insult to injury, banks are being particularly stingy with who they lend money to, making bigger down payments a necessity for more people than in the past.

Even if your heart is set on you buying a home, collecting a 20% down payment is a huge task that takes serious willpower. It’s tough putting money in the bank and not touching it, even when you are unsure about when you’ll be using it to buy a house you haven’t even started searching for yet. With some research, goal setting and good old-fashioned willpower, you can collect your down payment to buy a home.

The following are five tips to keep in mind as you save for a down payment to buy a house.

1. Determine What You Can Afford. First you have to know what your down payment savings goal is. What a mortgage lender tries to say you can afford may be different from what you can actually comfortably do. Dig into the research of how much your home mortgage loan payments would be every month. Calculators can be found on most bank websites and at the FHA website. As of August 2013, the median sales price for all housing types was $254,600, according to the National Association of Realtors. A 5% down payment for a home that price would be $12,730. A 20% down payment would be $50,920. If you can save the full 20%, lenders won’t require you to buy Private Mortgage Insurance, which would reduce your monthly housing costs.

2. Make a savings plan. Once you’ve set your goal, set smaller goals to help you get there. You may want to set monthly or quarterly goals, depending on how long you’ll need to save up to get your down payment. Divide your goal by months or quarters and set a certain amount to save during each period of time. As you reach these smaller goals, the positive reinforcement will help you keep progressing toward your final goal.

3. Trim away expenses. Examine your spending habits to determine where you can decrease your costs to augment your savings. If you are resolved to buy a house as soon as you can, put yourself on a shoestring budget. Pay off the credit cards and cut them up, clear out the cable extras (or cancel it altogether and go with a streaming service like Hulu or Netflix), switch to a more economical cell phone plan, use coupons and review other spending areas until you’ve pared back to just bare necessities. Check out some of the frugal living blogs out there that can help you accelerate your savings through spending less.

4. Make more money. I know that can be easier said than done, but increasing your cash flow is one of the best ways to hasten home savings. Make extra cash selling possessions you don’t need at a garage sale – this will even help reduce what has to be moved when you buy a home. You could also sell valuable items online on eBay or craigslist (be careful about meeting anyone!). Getting a second job is a time-tested way to increase income, whether it is retail work, food services or something that you can do at home like freelance writing or photography. The internet makes it easy to generate extra income online doing all sorts of things, including as a virtual assistant or transcriber. Anything you make will be a boon to your savings to buy a home.

5. Stay motivated. It’s going to take time to save the money to buy a home, however much your down payment will be. Staying motivated over such a long period of time, but if you want to reach your goal, you’ve gotta do something to keep you progressing. Visual reminders, like photos of pretty homes, placed at strategic spots in your home, wallet, cell phone and computer will remind you why you’re saving. A numbered calendar that counts down the days until you can searching for your dream home is another way if you’re feeling more creative.

The down payment requirements for getting a mortgage to buy a home are stiff and getting more rigid by the day. With these five tips in mind, you’ll be heading down the path to collect your full down payment. Sooner than you know, you’ll be on the search to buy your first home.

Are you ready to buy a home? Find your next dream home with our MLS search.

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