Home Buying Glossary

 

Are you in the market for a new house or already in the process of buying a house?  There are some  terms you should be familiar with:

 

Appraisal ­ - The estimated market value of a property. Appraisals take into account the features of the property and the condition of the local market.

 

Balloon Loans ­ - A type of loan where the regular monthly payment is followed by another payment, called “balloon” payment, of the total remaining balance.

 

Closing -­ (also called a SETTELMENT) IThe official transfer of a property's ownership from a seller to a buyer. It usually has a form of meeting between the seller, the buyer, the settlement agent and the buyer’s and seller’s agents.  At closing, the seller receives the payment for the house, the buyer signs the mortgage (if applicable) and the buyer or/and seller pay closing fees.

 

Depreciation ­- Refers to the decrease of the market value of the property over time (due to market changes, changes of the property due to damages etc.)

 

Fixed-Rate Mortgage ­- A mortgage with payments that stay the same during the entire life of the mortgage. The interest rates of the loan are not influenced by the changes of the market.

 

Origination Fee ­-  A fee paid to the lender at closing to cover the administrative costs of making the mortgage. The fee varies depending on the lender and the type of mortgage.

 

If you want to learn more terms associated with the home buying process, we encourage you to keep coming back to our blog.

 

If there are any terms associated with the home buying process that you are unfamiliar with, contact us or leave us your question below.

 

 

First Drop Expected for Home Prices This Year

 

The national median price for existing homes is expected to drop this year for the first time since the National Association of Realtors began keeping records in the late 1960s.

 

The NAR is forecasting a 0.7% dip in 2007 for the national median price for existing homes after a 1% gain last year.

 

NAR spokesman Walter Molony said "most areas should see modest gains, but some will see price declines. On balance, he said, prices should be flat.

 

The national median new-home sale price is projected to rise 0.4% after a 1.8% gain last year, according to the association. 

 

According to Molony, new-home prices did decline 2.4% in 1991.

 

What is your opinion about the condition of the real estate market in U.S. now? Share your opinion with us.

 

 

Plastic Pipes: Concern for Buyers?

 

Polybutylene plastic pipe was commonly installed in mobile homes and low-budget housing, mainly during the 1970s and 1980s, and is prone to leakage.   This can occur as slow seepage at loose fittings or as a major outpouring from broken lines.  A water pipe may simply rupture, causing a torrent to spew wildly within a wall or inside the attic.  Surprise leaks can happen at any time, or not at all.

 

Rarely do sellers repipe a home simply for the sake of marketing.  If you choose to repipe, that's OK, but keep in mind that many buyers are willing to assume risks that are fully disclosed.  Some might insist on a repipe or ask for a price reduction on the property.  A few might withdraw their purchase offer entirely.  On the other hand, you might find a buyer who was planning to remodel the home anyway.  There is no single decision that fits all situations. 

 

If you're selling a home with polybutylene piping, repipe if you prefer, but if not, fully inform buyers of the inherent risks of polybutylene pipe.

 

If you're buying a home, a home inspection should note whether the home you're considering includes polybutylene pipes.

 

Do you have any experience connected with the use of the polybutylene pipes? Share your opinion with us.

 

 

More on Homebuyer's Tips

 

In the real estate market timing is the most crucial factor.  For most properties in most areas it’s a buyer’s market, therefore this spring and summer is the best time to buy real estate. The wide choice of properties in the market now can be both a blessing and a curse for a homebuyer.  In order for you to get the best deal on a house this year we present you with these useful homebuyer tips:

 

Make a list

 

Making a list may really help you to narrow your search in the market with many choices.  We encourage you to make a list of things that you really need in the house, things you may find useful, and things that would be a deal-breaker.  If you are buying a house with a spouse, you both should make your own separate lists and then try to integrate them.

 

Do research

 

In order to avoid buyer’s remorse we encourage you to do a research of the community before you buy a property there.

•  You may easily study the quality and the cost of living in a given community by doing the shopping in some of the grocery stores there and buying gas in the area. Check also for libraries, health clubs, bookstores etc.

 

•  Test the commute. You should do the test drive in the area during the rush hours on Monday.  If you are planning to use public transportation you should also check your options.

 

• If you have children or planning a family, you should check the schools in the area. How do they look?  What reputation do they have?

 

• A great source of knowledge about the community is also the local newspaper.

 

Don’t insult the seller

 

Insulting the seller and the property he is offering is a mistake if you want to get a good price on the house.  Instead of saying, “this ancient kitchen should have been demolished a decade ago”, you might say “Other houses in the market have been more updated in this matter and that is an important factor for me.”  This way you make a base for negotiation without making the seller angry and unwilling to cooperate.

 

Stay informed

 

Keep up with the market trends while you are shopping so you are prepared when it is time to make an offer.  Look for the for-sale signs in the neighborhood ­ how long are homes staying on the market?  Use the local newspaper to analyze the relationship between the sales price, value and asking price.

 

Pull all extras in your first offer

 

Negotiations are always more elastic at the beginning when both, buyer and seller wish to make a deal.  Thus, you should present your entire ist of things that need to be repaired; concessions at the beginning of the negotiations, not wait until the very end.

 

If you have any questions or comments concerning this article, leave us your opinion below.