FSBO Jane

Why do we feel the need to live in outrageously oversized homes? Do we really need master suites with bathrooms the size of a hotel room? Do we really need a home with an office, a den, a workout room, a toy room, a media room, a living room and a family room? Do we really need 20-foot vaulted ceilings? Do we really need both dining rooms and table areas in the kitchen?

The simple answer is no. That’s why lots of people are choosing to downsize during this tough economic time. But how do you know how much of a downsize you can handle? You decide how much space you really need to survive. As it turns out, not much!

This article from the Mother Nature Network displays the 10 smallest houses in the world. Let me tell you, they are small. Tumbleweed Tiny House Company has been making houses as small as most people’s closets, but somehow they still encompass a workspace, a bedroom, a bathroom with a toilet and shower, a living space and an outdoor porch, not to mention architectural appeal! Micro Compact Homes measure out to about 266 centimeters cubed and somehow still include two double beds, a bathroom, a lobby, a dining space for up to five, a kitchen and modern entertainment technology. Rollit homes turn like a mouse on a wheel. When you walk in the center of the home, the home turns and reveals different uses, such as a bed, a chair, a table, a toilet or a kitchen sink. One guy even created a trailer home that connects to his bicycle and includes a solar oven and a heating unit. It doesn’t get more eco-friendly than that!

What does this prove? People around the world are finding ways to live comfortably in smaller spaces. No, it doesn’t mean that you need to make a change this extreme. But it does definitely give you something to think about.

It’s an age-old real estate dilemma: when choosing a new home, do you go for size—more bedrooms, greater square footage, a big backyard—or setting—in a good school district, near work, near friends?

For many homeowners, the answer involves compromise, even in today’s buyers’ market.

A recent article in the Wall Street Journal pinpoints the issue by describing the story of a North Carolina couple faced with choosing between the house they wanted and the schools they wanted for their kids. In the end, Kiely and John Adams missed out on a compromise property that gave them some size in their desired location, due to complications with their own home “came up short on the appraisal.” Now they are staying put longer than expected, with their kids about to start a new school year.

The truth is, although not all home buyers look for locations with good schools, buying a home in a good school district is a smart investment. Why? Those areas hold their value better, even in tough markets.

I came across a helpful article recently, which explains what does and doesn’t make a motivated seller a good thing.

I know what you’re thinking: when would a motivated seller not be a good thing?

Well, according to the article, it’s obviously fantastic to buy from a motivated seller in cases where:

1) A bank is wanting to get rid of a foreclosure and sells it at a reduced rate, under market value.

2) The sellers are moving/relocating and need to sell quickly, so they offer it at a reduced price.

On the other hand, it’s not fantastic to buy from a motivated seller when:

The house is a disaster, filled with defects and in need of major repair.

Reading the article, I was reminded of the age-old wisdom, “If something looks too good to be true, it probably is.” While of course there are deals to be had in real estate today, it pays to be cautious. Just because something is a good price doesn’t mean it’s a good deal.

So how can you avoid getting stuck with a lemon of a house?

• Get a home appraisal and/or inspection done before purchasing.
• Be on the lookout for potential problems in the home.
• Find out why the sellers are selling.
• Don’t be in a rush.

What about your thoughts? Have any of you been at the good or bad end of a motivated-seller deal? I’d love to hear about it!

When it comes to the question of roommates, the pros and cons are obvious. On the plus side: more space, lower costs, often in a nicer area than one individual roommate could have afforded. On the minus side: living with other people and all the problems, compromises and inconveniences that can bring.

In Japan, according to a December Wall Street Journal article, the idea of roommates is gaining steam, particularly among young, female professionals:

Japan has no real tradition of roommates: People have preferred to live in their own tiny places. Now, fed up with a dearth of reasonably priced apartments in desirable Tokyo neighborhoods, a growing number of relatively affluent women in their 20s and 30s have started to create demand for a radical new segment of the Japanese real-estate market: apartments to share. (Wall Street Journal, 12/30/09)

The article goes on to say that these women sometimes find shared spaces a little uncomfortable, but that’s not to say they can’t work.

And finding roommates in order to afford housing is not only common in Japan. According to a study done by the Pew Research Center, an increasing number of young people are either moving in with parents or needing roommates to get out on their own.

So is it possible? Are roommates the new affordable housing? What do you think?

For most people, the thought of buying a home with 100% cash, no mortgage, seems like an impossible dream. But the benefits—no monthly payments, full equity, financial freedom to pursue other interests or opportunities—cannot be denied.

Perhaps that’s why some of today’s home buyers are doing just that: buying their homes with 100% cash. Take a look at these clips from around the Web:

• BuyaHousewithCash.com

  “For many people, the cost of renting or paying a mortgage is the biggest chunk of their monthly budget. When that cost is eliminated, you have the financial security that most people only dream about.
  People who own their own homes without a mortgage know that a minor downturn in the local job market or the national economy won’t put their home at risk of foreclosure. True home ownership may also allow you more financial flexibility. “

• Xin Lu at Wise Bread
  

  “You actually own your house - I think psychologically there is a big benefit in knowing that you own your house free and clear. You also free up quite a bit of income because you will have no rent or mortgage.”

• DaveRamsey.com
  

  “The most ideal way to buy a house is the 100%-down plan. Sounds weird, doesn’t it?! But think how much fun that would be! Don’t borrow money. Period. If I can’t get you to postpone the purchase that long, I strongly suggest you save a down payment of 20% or more, choose a 15-year (or less) fixed-rate mortgage, and limit your monthly payment to 25% or less of your monthly take-home pay.
  You want your new home to be a blessing, not a curse. If you buy a house with nothing down and a huge monthly payment, you’re inviting Murphy to move into the spare bedroom. You do not want Murphy as a housemate - believe me! Slow down and realistically think through everything before you jump head-first into making this major purchase. If you don’t, you’ll just be giving Murphy an open invitation to overtake the house.”

• MoneySavingMom.com
  

  “As you will recall, our big goal for this year is to save up enough to pay 100% cash down on our first home. This has been a long-time dream of ours and we’ve been actively working the past year towards this. In actuality, though, we’ve been dreaming and working towards this even before we got married.”

I have a lot of respect and admiration for people who pursue this goal. And I have to say - reading their thoughts only increases my faith in For Sale By Owner home selling. By selling with a reputable FSBO company, you get all the important exposure and advertising, while keeping the large chunk of commission that could have gone to an agent. By buying through a FSBO home, you get the best price possible, since 6% doesn’t have to be added on for commissions. Makes sense, doesn’t it?

Thinking of buying a new home? Worried about getting the best rate on your mortgage?

Take a look at the GuaranteedRate.com and Zillow.com!

Here’s how they work:

GUARANTEED RATE.COM*
1. Choose loan: purchase or refinance.
2. Pick the state in which you live.
3. Enter an estimated loan amount.

ZILLOW.COM*
1. Choose loan: refinance or home equity
2. Type in the purchase price of the house.
3. Enter your zip code.

In order to find the best rate, you begin the process the same way on each site entering the type of loan, your location and the estimated amount needed. However, while Zillow provides a list of lenders (leaving you to do all of the work), Guaranteed Rate does the work for you by giving you their result in addition to offering its competitors’ information up front to ensure that you’re getting the best rate possible.

*Neither service requires your Social Security Number.

MSN Real Estate recently pinpointed 10 of the nation’s most livable areas, based on findings regarding low unemployment, convenient commute times and culture.

Here are the 10 listed markets:

1. Des Moines, IA
2. Buffalo-Niagra Falls, NY
3. Oklahoma City, OK
4. Scranton-Wilkes-Barr, PA
5. Minneapolis/St. Paul, MN and Bloomington, WI
6. Little Rock/North Little Rock, AK
7. Ogden/Clearfield, UT
8. Columbia, SC
9. Houston/Sugar Land/Baytown, TX
10. Columbus, OH

To see the whole slideshow about these cities and to learn more about what qualified them for this list, go here.

According to bobvila.com, eight in 10 second-home buyers think that now is a good time to purchase a vacation home, even considering all of the economic factors involved. Still, it’s a tough decision to make. The availability of homes is high, and the price is reasonable, but why are so many present homebuyers trying to sell their vacation homes? Are people taking vacations? If you have thought about purchasing a vacation home as an investment opportunity, here are some of the pros and cons that bobvila.com provides as food for thought:

Pros:

• The availability is abundant, along with the choices. Most vacation-rich areas are full of houses that are available for purchase, and you can take your time shopping around to find what suits your preferences most.
• The prices are right. Along with the whole housing market, this arena has been affected by the economy, making the prices lower.
• Most prices are lower, but not significantly on clearance, which is a good sign. Current owners aren’t completely desperate to sell.
• In many vacation areas, such as Florida, Arizona, Nevada and California, 41.5 percent of houses for sale were bank-owned homes with significantly reduced prices. These cost less than they would to build them now and are a great deal to snatch up.
• As a vacation home owner, if you enjoy the area and residence, you could use it as investment now and turn it into a retirement home later. The opportunities are abundant for you.
• Most popular vacation destinations are offering discounted rates to attract visitors even during a financially troubled time. This factor keeps people coming.

Cons:

• So many more factors need to now be considered. Obtaining a mortgage is more difficult, interest rates have increased, underwriting is tight, and current or past debts are taken into consideration. The whole process is time consuming, and the result is not always positive.
• Mortgages for vacation homes are generally higher than regular homes, because if the owner experiences financial trouble, the vacation home is the first that he or she will give up on. More of an initial payment might be expected.
• Lots of research needs to be conducted by the potential buyer, to make sure that the investment is worth it. Research the area, the amount of visitors that it attracts and the future expansion that is planned for it. The best bet might be an area with low supply now, but significant growing plans for its future.
• Depending on the weather, the heating/cooling bill might be atrocious, and this is just one factor to consider. Also, think about the insurance costs! A house on the beach might sound perfect, but its insurance premium will be way higher than the house across the street from the beach.
• Vacationers might not want to stay in your home. What could go wrong? Natural disasters might keep people away, such as hurricanes, earthquakes or forest fires. Because of seasonal weather changes, the area might experience unpopularity at certain times of the year. Future construction plans might keep people away, such as a beach restoration. You can control the home itself, but not the future success of the home’s surroundings.
• You don’t know how much better or worse the economy will become, or when. Discount rates might not always be enough to allow people the chance to travel.

Though these pros and cons are factors that are affecting the current vacation home market, one factor will always remain the same: nothing is certain. Buying a vacation home will always be a questionable fate. If it’s a risk you’re willing to take for possible, sizable revenue, do it.

To read the article from bobvila.com in its entirety, visit here.

Let’s start with the acronym. F-I-C-O stands for the Fair Isaac Corporation, the organization that coined the term. So that’s where the term originated, but that’s not where the meaning ended.

Today, a FICO score is an important part of a credit report that helps lenders determine whether or not to extend credit and demonstrates the level of risk associated with a potential borrower.

It doesn’t only come into play with real estate; it can affect other bills you pay, where you live and even where you work.

What determines your score?
Several factors go into determining your FICO score, including payment history, amount of debt, length of credit history, new credit and types of credit.

What can you do to improve your score?
Establish a history of credit whereby you always make payments on time. If you’re about to apply for a line of credit for some reason, don’t make any big changes such as opening a new card, as those can temporarily lower your score.

For some home buyers, the condition and price of a particular house is what matters. For others, the general location is what matters. For the home buyers who are searching for a particular dream destination, this post is for you.

After conducting some research, I found Web sites that specialize in just about every type of location that one might want to live in. Whether you’re looking to move into a loft that overlooks a city, or a log cabin that overlooks a mountain, you’ll surely find one site from this list that fits your area of interest.

For golf enthusiasts who want nothing more but a championship golf course in their backyard: www.golfcourserealty.com/features/.

For boaters/fishers/water lovers who want nothing more than to live on a lake, ocean or river: www.lakehomesusa.com/, www.oceanhomesusa.com/, www.riverhomesusa.com/.

For nature lovers who only want the rural countryside to surround them: www.unitedcountry.com/.

For city lovers who can’t get enough of the hustle and bustle: www.cityrealty.com for New York, www.windycityliving.com for Chicago and www.losangeles.com/realestate/ for Los Angeles.

For investors or travelers who are looking to purchase a second home: www.escapehomes.com/.

For current or upcoming retirees who want to surround themselves with amenities, convenience and others in their age group: www.senioroutlet.com.

Even if your dream destination isn’t quite in your financial grasp as of late, you can still browse the sites and scrounge up ideas for the future! Still not sure what location best suits your needs and interests? Answer these eight simple questions from Kiplinger.com to see what area suits you most: http://www.kiplinger.com/tools/bestcities/index.php.