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You’ll encounter special joys and hurdles when you’re alone in the deal. These 8 strategies will smooth your path to buying.

If you’re single and thinking of buying a home, you’re in great company. Solo buyers made a quarter of all U.S. real-estate purchases last year, according to the National Association of Realtors’ Profile of Home Buyers and Sellers 2012. Twice as many single women bought homes as did single men. 

Buying a home as a single person is much like buying with a partner. You shop, select and finance a piece of property, as all buyers do.

But there are distinct differences when you’re alone in the deal. All the joys and burdens are yours alone. The research, the shopping, the financing and, eventually, the bills and upkeep – yep, all yours. While that probably sounds obvious, there are implications you may not have considered.

Master of his domain
Carl Toll, a single, 36-year-old network technician, bought his 1,600-square-foot Denver home in 2007, after a bad roommate experience soured him on the rental life.

“This isn’t working out,” he decided after the housemate moved out without telling him. “I want to be the master of my own domain.”

Shopping and purchasing were pretty easy, he says. He thought through each aspect of his purchase carefully. He wanted a low-maintenance home: “I didn’t want to have to replace water heaters and furnaces right off the bat.” So he looked for something built recently.

He’s not a parent, but he shopped only in highly rated school districts to help ensure the resale value of his purchase. He has enjoyed the house, the neighborhood and the sense of independence that owning his own home gives him, he says.

Getting a mortgage alone
Toll’s experience was smooth, but many solo buyers face challenges. The recession has been one of the biggest. In the early recession years, single homebuyers enjoyed a boost from federal first-time-homebuyer tax credits in 2009 and 2010.

Stacy Erickson, a 29-year-old professional organizer, bought her 700-square-foot co-op apartment on Seattle’s Capitol Hill in 2009. “That was a really good year for people like me,” she says. “I was able to borrow some money for a down payment and then pay it all back with the tax credit.”

But by 2011, the recession hit solo buyers hard. “Single-income households are more reluctant to make big-ticket purchases in times of economic uncertainty,” according to the NAR’s Profile of Home Buyers and Sellers. Home purchases by singles fell an “unprecedented” 7% between 2010 and 2012.

The biggest hurdle for singles is qualifying for a mortgage. “In most cases that I see, it is more difficult for a single buyer to purchase than a two-person household,” says Craig Tashjian, vice president at Fairway Independent Mortgage in Needham, Mass.

One bonus: Singles aren’t dragged down by a partner’s credit score, loans or credit card debt. Tashjian says couples often get stuck with a higher interest rate because of one member’s low credit score.

Couples, though, usually have an advantage, says Marcus McCue, executive vice president at Guardian Mortgage Co., which operates in Texas and Michigan. Not only do they have two incomes but also, when sharing overhead, “one plus one usually equals more than two, as many expenses are joint and not duplicated.”

Difficulties in qualifying sometimes lead buyers, especially younger ones, to ask parents or other relatives for financial help.

“I have seen people choose to continue renting as a result of not wanting to involve any other parties in a purchase and pay more rent than they would if they purchased,” New York real-estate agent Brad Malow says.

Shopping solo — the triumphs
Single shoppers are alone with all the decisions required to buy a home. That can be harrowing. But there’s also a special sense of accomplishment to buying a home alone.

“I was the one who had to come up with all of the financing without support from a spouse or partner,” Erickson says. “However, I was also the one who got the choices and all of the decisions. I didn’t have to worry about someone else and what they liked or didn’t like.”

Homebuying is a means of self-expression, particularly for singles, says Jennifer De Vivo, an Orlando, Fla., real-estate agent. “It’s a way for singles to express their lifestyles and values. They are able to focus on the exact communities, home styles and features that cater to their individuality with much less compromise.”

Despite the exhilaration, buying solo can be nerve-wracking without a confidant and sounding board. To compensate, singles often work more closely with their agents. In the best cases, they form a tight bond.

“I find that I become more involved, like a friend,” says Jerry Grodesky, managing broker at Farm and Lake Houses Real Estate Inc. in Loda, Ill.

Watching the satisfaction that single buyers get from tackling one of life’s major milestones on their own is rewarding for an agent, Malow says. “I have to say that the closings with these buyers just thrill me.”

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original article by: Marilyn Lewis of MSN Real Estate

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Lenders look at other factors, not your credit score alone, before approving a condo loan.

Some lenders can make condo buyers with pristine credit feel like rejects. Blame it on the building.

Before making a loan to a would-be buyer, lenders comb through the building’s financial statements to see if too many condos remain unsold, or if units are mostly rentals instead of owner-occupied. Lenders also look to see if the building’s cash reserves, which help cover maintenance costs, are too low.

These factors — which have nothing to do with a potential buyer’s finances — can put a chokehold on a loan.

A lot of condo buildings don’t make the grade. At national lender EverBank, for instance, roughly 30% of condo mortgage applicants encounter a roadblock due to the building’s finances. “A perfect borrower can’t fix a bad project,” says Tom Wind, executive vice president of residential and consumer lending at EverBank.

Shaky condos have been popping up more frequently over the past two to three years, even in luxury buildings, says Zeke Morris, president of the Chicago Association of Realtors. Real-estate agents say they’re also prevalent in other markets, including Houston and Miami.

In general, lenders say they view condos as riskier purchases than other homes. Much of that stems from condo-association fees. If existing owners are behind on those payments or many units remain unsold, monthly fees are likely to rise to help cover costs.

At some point, lenders argue, those expenses could rise to a level where an owner can no longer afford to pay the fees and walks away from the property, leaving the lender with the outstanding mortgage. That’s why, currently, it is almost impossible to get a mortgage — regardless of your wealth — if more than 15% of condos in a building are behind on dues, says Jeff Gennarelli, president of Bridgeview Bank Mortgage Co., based in Lombard, Ill.

But luxury buyers have alternatives besides paying all cash for the condo. One is private mortgages, loans that lenders hold on their books rather than sell to the government. They tend to be larger than traditional loans, require larger down payments and are often offered only as adjustable-rate mortgages. Rates are also generally higher than traditional mortgages.

Private loans are sometimes the only source of financing for condos sold in luxury hotels and in buildings where more than 20% or 25% of the units consist of commercial space, like restaurants and shopping malls. They’re also common for a condo in a new building where a certain percentage of the units are still owned by the developer.

To find such a loan, borrowers should consider a community bank or other local lending institution where they have a lot of assets or where they have been banking for years, though an existing relationship isn’t always required. Or they can ask mortgage brokers who may know a lender willing to fund such a loan.

The opportunity for profit is partly why these lenders take on the risk when others won’t. Whatever leniency they offer on a building’s finances they often make up for by imposing strict lending requirements, including high credit scores, says Eddie Hoskins, president of First Florida Financial Group, a Fort Myers, Fla.-based mortgage broker that arranges such loans.

Some points to consider when applying for a condo loan:

Get an early start: Buyers should ask lenders for the list of criteria the building will need to meet; then real-estate agents can provide those answers when potential buyers shop for properties.

The type of building: Some condo buildings have a greater risk of not being approved for financing. Jonathan Cherry, senior mortgage banker at Wyndham Capital Mortgage based in Charlotte, N.C., says buyers who want to avoid financing complications might want to stick to mid- to larger-size buildings that are mostly owner-occupied.

Large down payments: With a private mortgage, borrowers often need to make at least a 20% to 30% down payment if it’s a primary residence. If it’s a second home, they could need to put down at least 40%. For investment purposes, cash is among the few options, since a mortgage may be impossible to get.

Rising costs: With adjustable-rate mortgages, rates could be low now but rise in a few years, thereby increasing the monthly mortgage payment. And borrowers could still end up with rising condo dues if the other owners in the building hit hard times.

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: AnnaMaria Andriotis of The Wall Street Journal

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When we were building our new construction home, the driveway almost seemed like an afterthought. With everything else so close to being finished, we walked around with a can of orange spray paint imagining the ideal path from the street to our garage doors.

So, if not in our experience, then generally speaking, the driveway occupies an important place in overall home and property design. When planning your driveway, there are several things to consider:

Budget
Sometimes money plays a big role in decision-making on materials. As you are thinking about budget, be sure to factor in the varying long-term costs associated with different types of driveways. While a paver driveway carries relatively high upfront costs, maintaining one isn’t expensive. Gravel, on the other hand, is perhaps the least expensive to install but requires the sort of regular maintenance that doesn’t come cheap. Before deciding on a material, make sure you understand what the driveway’s total cost will be over its anticipated lifetime.

Curb appeal
As viewed from the street, your driveway can make a big impression on the look of your house. And certain materials complement certain architectural styles more than others. A gravel driveway would make a nice visual accompaniment to a farmhouse cottage, whereas a herringbone-pattern brick driveway would better suit a colonial-style residence. In short, think about what your choice of driveway will add to, or take away from, curb appeal.

Climate
Some driveway materials may not be appropriate for the climate where you live. For instance, asphalt endures freeze-thaw cycles better than concrete. And heavy rainfalls can negatively affect driveway surfaces that are more prone to erosion, such as gravel and pea stone. Snow, humidity, rainfall and temperature changes are all factors that ought to influence your final decision. Do your homework.

Maintenance
Each material has its own maintenance requirements. For instance, asphalt requires resealing every three to five years. If you live in a place where plowing snow is necessary, a gravel drive will require replacement of moved material each spring. Is the maintenance required of a given material such that you can do it yourself, or will you need to contract someone to handle the work? A smart driveway design will take these questions into account.

Durability
What kind of traffic will your driveway be getting? Will there be lots of heavy trucks on it, or just passenger cars? Some materials are durable, others more finicky. And what’s the grade like? Gravel and pea-stone drives with a pitch are prone to erosion. Also, how long will the driveway be expected to last — 20 years? 40 years? And what kind of maintenance is required to maximize lifespan?

Whatever material you decide to use for your driveway, make sure you take time to lay it out right. If you’ll need space for guests to park, make sure to allow for that.

Once the rough grading is done, take a test drive into the garage from the street (and back the other way) to make sure it tracks comfortably for your biggest vehicle. You don’t want to swipe off your side-view mirror!

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.468.5753

Original Article By: Jennifer Noonan of BobVila.com

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Here’s just how seriously you should take the radiation emanating from your granite counters, among other potential home hazards.

Every now and then a news report gets people worked up about hidden dangers lurking in their homes. Should you be afraid that the radiation coming from your granite countertop or the flame retardants in your furniture are trying to kill you?

Granite countertops
A beautiful granite countertop can make any kitchen pop. Yet every once in a while people go into panic mode, freaking out about the fact that granite is a rock that can have some radioactive elements and could potentially give off radon, which can be harmful in high concentrations. But while the very mention of the word radiation is enough to stoke fears, you don’t really need to worry about this one. The EPA says that radon is more likely to come into your house from the soil than from your kitchen counters (and granite isn’t a very porous stone to begin with, meaning it doesn’t give out as much radiation as others).

Furthermore, any buildup of radon in the kitchen or bathroom is unlikely, as those rooms tend to have good ventilation systems. “It is extremely unlikely that granite countertops in homes could increase the radiation dose above the normal, natural background dose that comes from soil and rocks,” the EPA says.
Fear rating: Extremely low
Precautions: Be more worried about legitimate dangers in the kitchen, such as food safety and keeping sharp objects and cleaning solutions away from kids.

Particleboard and formaldehyde

Particleboard-based furniture may be great for furnishing your place on a budget. But pressed wood products such as particleboard tend to contain formaldehyde resins in the adhesives that hold the wood particles together. Formaldehyde is a surprisingly common volatile chemical, but it’s definitely not good for you. Luckily, good ventilation and keeping heat and humidity to a minimum can reduce the amount of formaldehyde released from furniture.

Fear Rating: Low
Precautions: Check what kind of adhesives furniture manufacturers used to make your products. Since the 1980s, when the EPA restricted the maximum allowable formaldehyde emissions from this kind of furniture, many companies have made efforts to substantially reduce the amount of the chemical in their production.

Flame retardants

A recent study found that 85% of couches tested in California contained flame retardants that have not been evaluated for human safety.

Couches in California are required to have flame-retardant properties, but some scientists worry that the chemicals used to prevent flaming sofas might be linked to hormone disruption, cancer and neurological issues — not to mention that these flame retardants aren’t necessarily present at levels in which they are effective at fire prevention.

No decisive link to health problems has been proved. The problem is that the replacements for pentabromodiphenyl ether, which the EPA banned from new products after 2005, haven’t been fully tested, according to study author Heather Stapleton of Duke University. Stapleton says that she and her colleagues are pursuing long-term health studies. The presence of these chemicals in the air outside the couch is worrying — especially as the same kinds of foam are currently used in baby mattresses and supplies.

Look for a label that mentions Technical Bulletin 117 — if it’s there then your couch probably has flame retardants. If it’s not, that doesn’t necessarily mean that there aren’t flame retardants, it just means that you don’t know for certain.
Fear rating: Medium
Precautions: Stapleton says that people worried about the dust should wash their hands frequently, especially before eating, to reduce chances of ingesting any toxic chemicals. Removing dust by cleaning regularly can help, too, but Stapleton cautions that vacuuming and dusting can cause some particles to become airborne.

 

Microwaves

Microwaves have been in our homes long enough to inspire lots of fear mongering, worries and urban legends. Rumors that microwaving plastic will poison your food, or that the radiation will disrupt pacemakers, have been around for years. According to the FDA, most of this is nonsense. No, you shouldn’t use some plastics in the microwave — because they could melt —but you can solve that problem by checking the bottom of the package to see what’s allowed; if the item is microwave-safe, there is sometimes a symbol (a box with wavy lines inside it) that indicates it is safe for microwave use. Pacemakers used to be affected by microwaves, but are now shielded. And you’re not going to get radiation injuries from a microwave; it just isn’t powerful enough to do any damage.

Interestingly, the FDA does warn about erupting hot water. Apparently, heating water in a clean cup for a long time can cause the water to get superheated. It reaches temperatures above the boiling point without the distinctive bubbling of a rolling boil. When anything is added to the water, or it is shaken, then it can erupt, causing burns.
Fear Rating: Medium
Precautions: Check labels, and don’t heat that cup of water for tea for too long.

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: Mary Beth Griggs of Popular Mechanics

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Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

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If you’re justifying home renovations thinking that you’ll recover the costs when you sell, you may want to recalculate.

Homeowners who want to remodel will find both joy and sorrow in the 2013 Cost vs. Value Report, recently published by Remodeling Magazine.

The joy comes from the report’s finding that remodeling projects overall could be expected to return a higher percentage of their cost at resale in 2013, reversing a six-year decline in the recovered value of such investments. Every project on the national list posted a higher return in 2012 than it did in the prior year. The sorrow is that while returns are higher than they were, they’re still far short of 100%.

The complete list included 22 midrange projects, ranging from a $1,137 steel entry door replacement to a $152,470 second-story addition, and 13 upscale projects, ranging from a $2,720 garage door replacement to a $220,086 master suite addition.

Best return

In the mid-range category, the least costly project — that steel entry door replacement — posted the highest return at 85.6%  of the cost.

Other midrange projects that returned 70% or better were an attic bedroom, basement remodel, wood deck addition, garage door replacement, minor kitchen remodel, vinyl siding replacement and vinyl window replacement. The lowest-returning mid-range project was a home office remodel, which recouped just 43.6%.

In the upscale category, the highest-returning project was a fiber-cement siding replacement, which recaptured 79.3%. Other upscale projects that returned 60% or better were a garage door replacement, foam-backed vinyl siding replacement and vinyl window replacement. The lowest-returning upscale project was the master suite addition, which recouped just 52.1%.

Money-losers

And in those figures also lies the sorrow. That steel entry door replacement was the only project in the midrange or upscale category that achieved at least an 80% cost recovery, nationally. The home-improvement projects returned only a 60.6% national average. That’s not much of an incentive, financially speaking, for home improvements.

Replacement projects generally were a better investment than remodeling or room additions. Cost-and-value-recapture percentages varied widely on a regional basis.

Contractors agree with the positive outlook

Remodeling contractors have high expectations for 2013, according to a fourth-quarter 2012 survey by the National Association of the Remodeling Industry in Des Plaines, Ill.

The survey found remodelers reported better business conditions, more inquires, more requests for bids, more conversions of bids into jobs and a higher value of total jobs compared with the prior quarter.

Tom O’Grady, chairman of the NARI strategic planning committee and president of O’Grady Builders, a remodeling company, in Drexel Hill, Pa., said in a statement that remodelers were anticipating major growth in their businesses.

“Many (remodelers are) saying that their clients are feeling more stable in their financial future and their employment situations; therefore, they are spending more freely on remodeling needs,” O’Grady said.

The 2013 Cost vs. Value Report is a snapshot of generic projects and shouldn’t be applied to individual homes. Instead, homeowners should get estimates from local remodelers and discuss home values with a local real estate professional.

 

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: Marcie Geffner, HSH.com

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The housing market seems to be turning a corner, with prices ticking up thanks to reduced inventory and a decline in foreclosure sales. But problems looming in the broader economy could roil this housing rally.

 

Will the housing recovery last? That’s the question some economists are asking, given the plodding growth in the economy, as well as the looming “fiscal cliff,” which threatens to raise taxes and cut jobs.

Tight inventory in many markets and a decline in foreclosure sales have lifted prices, and record-low mortgage rates eased some buyers off the fence, but weak job growth, lousy credit and the large number of buyers with little or no equity could conspire to flatten out the rebound, making this one of the longest, most excruciating recoveries in housing history.

That’s possible even if Congress manages to stave off the “fiscal cliff” in January that would take away the Bush-era tax cuts and raise taxes for most Americans.

“It’s clearly not sustainable,” says Sam Khater, deputy chief economist for real-estate analytics firm CoreLogic. “Real incomes are not growing. We are at the same level we were in the mid-1990s. [The recovery] is not sustainable until incomes recover.”

Some markets have yet to hit bottom, says Robert Shiller, the Yale economist who first warned of the looming crisis in real estate, and who — with Carl Case — created the S&P/Case-Shiller Home Price Index. Home prices have yet to turn positive in markets such as Milwaukee, Atlanta, Philadelphia and even New York City.

Shiller, for one, is still reluctant to call the recent improvement in the market a solid recovery.

“The question is how strong is it, and will … this rally fizzle or not? And I don’t know the answer to that,” Shiller said in a recent interview with NPR. “But I point out that this is the fourth time we’ve had a rally since the crisis ended.”

A good start
Still, there’s no question that the overwhelmingly negative news about the housing market has turned positive.

Existing-home sales jumped 11% in September from the same time a year earlier, while the median home price of $183,900 was 11.3% higher than a year ago — the seventh straight month of year-over-year increases, according to the National Association of Realtors.

With sales increasing, the supply of for-sale housing has dwindled to a healthy 5.9-month supply, down from the 8.2-month supply last summer. Of those homes on the market, far fewer are foreclosures, which typically sell for 20% to 30% less than traditional listings.

“When properties come on the market they move fast,” says Gary Bauer, a broker and blogger in Denver. “It’s not uncommon in the price ranges up to $750,000 for a new listing to get multiple offers.”

While new-home sales dipped slightly in August, the median price of a new home surged 11.2% to $256,900, the biggest one-month increase ever recorded. Prices have climbed 17% over the past year and are at the highest level since spring 2007, according to the Commerce Department, fueling some talk of a growing bubble.

It’s true that homebuilders are feeling more confident. New single-family home starts ticked up 5.5% in August from the previous month.

Add to that rising consumer confidence and record-low mortgage interest rates in recent weeks, and it’s easy to see why so many are starting to think the housing market has really turned the corner.

Too much excitement?
Of course, some things are missing for a robust and sustained rebound, including meaningful job growth, pay increases and enough affordable inventory in some markets.

Tight inventory helped pushed the NAR’s Pending Home Sales Index (based on signed contracts) down 2.6% to 99.2, despite being 10.7% higher than the same time last year.

Prices have yet to rise enough to make selling viable for those who bought in the past seven years, Khater says.

About 10.8 million, or 22.3%, of homes financed with mortgages were in negative equity at the end of the second quarter, according to CoreLogic. And 45% of all homes have mortgages with an 80% loan-to-value ratio, giving homeowners little to put down on another house.

Moreover, many foreclosures that would have wound up with a for-sale sign in front are being sold in packages to investors as rentals. While that’s good for propping up prices near term, this affordable inventory won’t make it to individual buyers.

And despite the record-low mortgage rates of late, qualifying for a loan can still be tough.

Paul Diggle of Capital Economics pointed out the growing gap between the NAR’s Pending Home Sales Index and its monthly sales figures in a recent housing report. As many as 15% of contracts don’t make it through to closing, he says, in part because of today’s tight lending environment.

But the real driver of the recovery, Khater says, needs to be jobs. Without meaningful growth in jobs — job creation that outpaces population growth — and stronger pay raises, the recovery could fizzle out.

“The economy is fundamentally very weak,” he says, “and that could keep the malaise out there for an extended period of time.”

Especially, he says, if Congress fails to push off the spending cuts and tax increases due to take effect at the beginning of next year. That could send the country back into a recession.

The road ahead
Of course, analysts say, there’s a chance that legislators could extend those cuts to keep the economic recovery on a firm footing or replace them with something else to help low- and moderate-income Americans.

But the economic uncertainty will keep many buyers on the sidelines, says Alex Villacorta, director of research and analytics at Clear Capital. Debt-ceiling brinksmanship pushed down consumer sentiment 14.3% last year, the largest amount since the end of the recession, and uncertainty over taxes could “throw a wrench into the recovery.”

The Federal Reserve did its part recently by announcing a third round of monthly mortgage-backed securities purchases, a stimulus designed to increase employment and keep mortgage rates low so more people will want to buy homes.

If consumer confidence can survive the weak economic news, Clear Capital predicts a strong market through the start of the spring buying season.

With prices rising in most markets, growing numbers of people who already own a home may be nudged into moving up to a larger one. First-time buyers will still need to be making enough money at their jobs to qualify for loans.

But with the large number of low-down-payment FHA loans available, and lower mortgage rates bringing down the cost of homes, would-be buyers won’t have to spend as much to get one.

Indeed, Diggle sees the high home-contract cancellation rate as a positive rather than negative for the housing market in the months ahead. The cancellations, he says, “reflect would-be buyers’ willingness to buy increasing at a faster pace than the bank’s willingness or ability to lend.”

In other words, you have an eager pool of buyers who might have less than perfect credit — good news if credit loosens a bit.

As far as supply goes, inventory should grow as more homeowners gain equity in the next year or two. CoreLogic says that just a 5% jump in annual home prices would be enough to get a significant number of those underwater homeowners into an equity position.

Still, that might not happen, he says, at least not in the next year. Local Market Monitor predicts values in the U.S. will remain relatively flat in the next year, with a larger increase — up to 7% — in the next 36 months.

“It seems as if we have a long recovery in order, given the slow economic growth and pace of hiring,” says Ingo Winzer, president of Local Market Monitor.

Compliments of: Martha Small | Austin Portfolio Real Estate | 512.587.0308

Original Article by: Melinda Fulmer of MSN Real Estate

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