Buying Your First Home - A Guide for the Beginner

Becoming a first-time home buyer is a tremendous step in life. The sense of personal accomplishment, pride, satisfaction, and joy is irreplaceable. It is not without it's challenges, though. Because of the huge number of options available to you as a potential buyer, you need to take the time to become familiar with an overview of the buying process, the terminology used, and how to best approach buying your first home.

My strong suggestion to you as a first-time home buyer would be to seek competent, professional financial guidance. It is relatively inexpensive, and could save you from making a costly mistake. Buying a home is not right for everyone. Even if it is a good choice for your financial future, you may need to take the time to save money for a down payment, or to fix any issues with your credit. Be patient, and make your preparations carefully...

Below is a list outlining the buying process. Review it to become familiar with the steps involved. Oh, and one last, very important bit of information before you get started...Everything, and I do mean everything, in real estate is negotiable. Repeat that over and over to yourself and never forget, everything is negotiable...

Pre-Qualification

After making the commitment to buy a home and getting your finances in order, it is time to speak with a professional in the mortgage business. Ask your friends and family for referrals. Take the time to ask questions and get familiar with the basic terminology used, plus to discover any pitfalls. The terms of your mortgage will have a lasting affect on your financial well-being, so make sure you fully understand what you are being offered. Ultimately, you want to become pre-qualified for a reasonable, affordable amount of money with which you can purchase a home.

I personally recommend speaking to at least three mortgage brokers or banks to get your best deal. Also, I would avoid having your credit run during this process until you are ready for the next step. Most good mortgage brokers should be able to estimate your buying power from a short interview.

Pre-Approval

Prior to beginning an in-depth search for a home, I would suggest going beyond pre-qualification and getting fully pre-approved. In this step, the mortgage lender will take a detailed look at your credit, finances, income, and other factors to solidify the amount of money available to you for a home. The primary difference between pre-qualification and pre-approval is you are shopping for a mortgage lender and getting educated about the loan products available during pre-qualification, but you have decided to commit to a lender and submit to the complete application process during pre-approval.

List of Needs & Wants

Make 2 lists. The first should include items you must have (i.e., the number of bedrooms you need for the size of your family, a one-story house if accessibility is a factor, etc.). The second list is your wishes, things you would like to have (pool, den, etc.) but that are not absolutely necessary. Realistically for first-time buyers, you probably will not get everything on your wish list, but it will keep you on track for what you are looking for.

Representation by a Professional

It is very important that you can communicate clearly, honestly, and openly with any person who will directly affect your decision-making process. I know it is better to work with a real estate professional because of personal experience, plus feedback I constantly receive from clients and customers, so I highly recommend carefully choosing a representative to help you complete this important transaction.

A quick word about buyer representation. In a great majority of situations (95%+), a buyer's agent is compensated out of the seller's equity. In plain English, this means unless your agent requires a small administration fee for services, you will not be responsible for compensating your agent at all for their services. It is very important you fully discuss this with your Realtor®, as there are simple contracts available that will put this information in writing and help protect your interests should a dispute arise.

Also, just to anticipate and answer a question you may have on this topic, these costs are not passed back to the buyer through the sales price of the home. The reason for this is because the market, combined with a ready, willing, and able buyer sets the price for the home. The seller decides on an asking price, and may have a bottom line price, but you as the buyer ultimately decide what the home is worth. So, get a good Realtor®, study the market thoroughly, and make a fair offer based upon the comparable homes in the market. If the seller decides to accept your offer, you will have purchased the home at a fair price, and not one inflated to pay for the seller's costs or Realtor® fees.

Meeting with your Real Estate Agent

Come to the first meeting with your agent with an open mind and lots of questions. You should be doing a majority of the talking and your agent listening to gather all of the information necessary to help you find your ideal home. Make sure you share your list of wants and needs, plus the information you learned from the mortgage broker. Your agent should be taking notes and reiterating accurately whatever is discussed.

I want to talk briefly about the importance of effective communication with your real estate agent. Buying a home should ultimately be a fun, rewarding, educational, exciting experience. It will not be free from challenge, though. You will at times find yourself frustrated, discouraged, and confused. This is completely normal, especially considering the magnitude of the transaction. Your Realtor® needs to know this information, both good and bad. Without knowledge of your feelings and concerns, the usefulness of your agent can be nullified. Make sure you are comfortable enough with your Realtor® to tell them 'no', or to be completely honest with your needs and wants. Make sure your communication is effective by listening to what your agent says and ensuring it is what you are expressing.

Focus & Organization

In a convenient location, keep handy the items that will assist you in maximizing your home search efforts. Such items may include:

1. One or more detailed maps with your areas of interest highlighted.

2. A file of the properties that your agent has shown to you, along with ads you have cut out from the newspaper.

3. Paper and pen, for taking notes as you search.

4. A camera to help refresh your memory on individual properties, especially if you are attending a series of showings.

5. Location: It can be beneficial to look at a potential property as if you are the seller. Would a prospective buyer find it attractive based on school district, crime rate, proximity to positive (shopping, parks, freeway access) and negative (abandoned properties, garbage dump, source of noise) features of the area?

Visualize the House Empty & With Your Decor

Are the rooms laid out to fit your needs? Is there enough light? Will the home require any updating? Are the mechanicals in good shape? What about the roof? Try to keep accurate notes on both your feelings regarding the home, plus objective features that may or may not be positive. Keep in mind that it is always an option to ask the seller to gives allowances for updates or changes as part of the negotiation process, or to make the changes yourself for the right home.

Be Objective

Instead of thinking with your heart when you find a home, think with your head. Does this home really meet your needs? There are many houses on the market, so don't make a hurried decision that you may regret later.

It is important to know your personal strengths and weakness in the home buying process. Some people love the thrill of the hunt and seeing lots of homes looking for a positive feeling, while others are just interested in the facts and objective features the home offers. Some people are a combination of the two. Whatever your style or technique happens to be when searching for your new home, you must be honest with yourself and emphasize your strengths while seeking help with your weaknesses.

I recommend in the initial phases of the home buying process that you try to keep your time in any home you view short and focused on finding positive first impressions. There really is a difference between finding a house and discovering your new home and I believe emotion and feeling plays a role in the process, but don't let emotions cloud your judgment. Be relaxed and aware of your emotions in this initial phase.

Once you have narrowed your choices and become comfortable with the buying process, it is time to schedule second showings and to put on your objective hat. Now you are looking at the details from an investment standpoint, a functionality perspective, and determining whether or not there are any faults that would negate the viability of the home. It is here your Realtor® can be invaluable. Use your Realtor®'s experience and knowledge to help you step back and look at the home through the eyes of an investor. You may be surprised at what you find!

Make an Offer

Once all of the research is complete and you are certain you have found your new home, it is time to put together an offer. Again, the competent guidance of your Realtor® is critical at this point. Together, you must determine a fair amount of money to offer for the home, plus you must complete an accurate, comprehensive, legally-binding Sales and Purchase Agreement. Any mistake, error, or omission at this stage can become very costly in both dollars and emotions later. If you are at all uncertain or uncomfortable, seek professional legal advice before you sign any agreement.

A word about market perceptions. Today, we hear constant talk about it being a "buyer's market". What does that mean to you on the buyer's side of the transaction? I wish it meant that you could offer 15-20% below the asking price of the home and the seller would gladly accept, but that is rarely the case. Very simply, we find ourselves in a buyer's market due to an over-supply of homes and a lack of qualified, motivated buyers. It will affect prices in most areas, but the adjustment will be more in the neighborhood of 1-3%, if anything.

That being the case, what are the advantages of being in a buyer's market? Let me just name a few and you should be able to see many others. Besides the possibility of a reasonable savings on price, sellers are more willing to provide allowances for closing costs, updates, or other incentives to get you to purchase their home. In addition, you have a tremendous variety of homes from which to choose. Plus, fierce competition for the best homes is reduced, thus allowing you a greater chance of not paying an inflated price for the home of your dreams. When you hear talk that we are in a buyer's market, just imagine yourself in the seller's shoes...Most people are not going to give away their home for less than a fair market price, so look to negotiate other benefits from the deal.

Be Thorough

A few extra dollars well spent now may save you big expenses in the long run. Your real estate agent should competently guide you through this phase, but you should be aware that after you have an accepted offer, you still need to perform due diligence to ensure you are making a sound investment. Don't forget such essentials as:

1. Having the property inspected by a professional inspector.

2. Requesting a second walk-through to take place within 24 hours of closing to ensure the home has been left in the agreed upon condition.

Congratulations on your decision to educate yourself thoroughly regarding one of the largest financial transactions you will ever undertake! While the process may seem daunting and a tad overwhelming at first, with the help of a competent Realtor®, plus other industry professionals, you should be well on your way to a satisfying, positive, purchase of your new home. Good luck, and remember... This is supposed to be fun!
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Article sourced from:
http://www.articlecity.com/articles/business_and_finance/article_9177.shtml

The Growing Wave of Bankruptcies

Are you fond of using credit cards? If you are then I know you are aware that you have to be careful when using them. I’m a big spender and I often use credit cards to buy any item that catches my fancy. The problem is that I was getting so carried away with my shopping that I did not realize that I accumulated close to $20,000 in debts. As a result of my spending habits, I was having a hard time keeping up with paying my monthly bills. I was so worried with my predicament that when that new laws for bankruptcies were being passed, I was tempted to file.

Since the deadline for filing bankruptcies before the implementation of the new laws was approaching and I have yet to make a decision about filing, I decided to talk it over with my husband. After a long discussion I decided that I would not do it. I realized that I have to take responsibility for being careless with using credit cards. My conscience just couldn’t bear taking the easy way out. I was disgusted when I heard that a friend chose to file despite only having a few thousand in debts. They even have the nerve to purchase a brand new car and to go on a cruise on some tropical island before they filed. Since they charged the car and the cruise, they were able to enjoy them for free.

News about the passing of the new laws caused a 30% increase in the number of bankruptcies filed in 2005. More than two million people filed for personal bankruptcies, making it the highest number ever filed in a one year period. Those statistics means that millions of people found themselves in deep financial trouble last year. A number of reasons have been given for having severe debts including job loss, credit cards, and medical bills. Among them high medical bills seems to be the most frequent cause of huge debts. It just goes to show how important it is to have adequate health care. A major accident or illness can quickly put you into insurmountable debts.

Hopefully the new laws will be able to discourage people from taking advantage of filing bankruptcies. They should encourage people to be more responsible with their money. Filing will not bail them out from spending money on unnecessary furniture or luxury cruises. On the other hand the laws can also make it tougher for people who acquire uncontrollable debts from unexpected mishaps. Be more responsible with using credit cards and make sure that you keep an eye on your financial situation to avoid the complications of filing for bankruptcies.
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Article sourced from: http://www.articlecity.com/articles/business_and_finance/article_7892.shtml

Starting a Business

An interesting article I found recently on Articlecity.com regarding starting a business...
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Starting a Business
by: Vernon Anthony Johnson

Many people today are looking to own and run their own business. To do that they mainly have three main choices.

1. Buy a franchise
2. Start from scratch to develop there own type of business.
3. Buy an existing business.

When talking about capital to start or buy a conventional business we are not talking peanuts here; all these types of businesses will most likely require a substantial sum, perhaps in the hundreds of thousands of dollars.

They will usually require staff so suitable computer expertise for accounts and wagers and also people skills in the workplace are required. There are always some problems with staff which can cause difficulties.

In a conventional business you will require premises. If you have bought an existing business then probably rates and maintenance are your two main expenses with the existing building bought with the business. If you need to rent a premise then you may require a refit for your purposes which may cost tens of thousands of dollars. This would depend on the type of business which may require certain expensive machine or electronic devices which could be various and very expensive. Then you would need computers and office furniture in varying quantities. All quite expensive items. However you look at it there are considerable costs involved when starting a business some of which will be ongoing. i.e. interest on the loan, staff wages and rent etc.

If it comes to the worst and it all goes belly up look at what you might lose? The equity which was used to finance the loan - most likely the property you live in because you couldn’t pay off the bank overdraft. The fixtures and fittings which you purchased which now would be of use to you and any equipment you purchased which may have to be sold invariably at a loss.

So you sold everything to try and pay off your debt but that wasn’t enough so you have to leave the home you loved and look for rented accommodation. Then many years later you might crawl back to where you were before the time of the crash. The statistics for new conventional type business success are not good.

In a conventional business if you need advice you usually have to pay for it although with a franchise some is available free. With a franchise I understand it does not usually include business mentoring. So if it’s new to you, you may have to pay for that help. In MLM home based business with a good company the marketing help comes as part of the deal.

Why you may ask?

Well because the MLM I am recommending is structured so that the person who does the recruiting also helps the people they recruit. In making them successful they all financially benefit. This team building is the essence of success in MLM marketing and people who have done this for a few years reap large rewards without having taken a huge gamble to raise equity.

So if we look an MLM business which costs less than $2000 initially and potentially enables you to earn hundreds of thousands of dollars a few years down the track why wouldn’t that be much more attractive to you than risking your house?

There is the company which excels in all respects and is ideal for MLM people:

? It is debt free
? Publicly listed on the NASDAQ
? Achieved 1.5 billion turnover in the first five years
? Is a global business operating in ten countries and six more 2007.
? Ranked number 5 in the 200 Best Small companies by FORBES in the US.

If we summarise the benefits then we are talking about a business which:

1. Does not require a large amount of capital
2. Does not require you to hold stock.
3. Does not require staff.
4. Does not require you to rent or buy expensive premises because you can work from home perhaps from one room set aside as your office.
5. Enables you to make an income relative to your efforts which could be in the six figure bracket after a few years.
6. Does not confine you to office hours - you can work at a time convenient to you and your family.
7. Will still function once established without loss of income if you decide to take a long holiday.

Why then would anyone wanting to start a business not want to take the least expensive option?

The MLM choice comes without all the financial risk and headaches.

You can have the same earning potential as the conventional business with total support as part of the deal.
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Article sourced from: http://www.articlecity.com/articles/business_and_finance/article_8357.shtml