The Pros And Cons Of Closing At The End Of The Month

If you are in the process of buying a house, you are probably wondering when you should close on your new home.  You may have heard that it is best to close at the end of the month.  Setting your closing date for the end of the month is a very common practice.   However, there are pros and cons for closing at the end of the month.  So let’s discuss both so that you can make an informed decision.

Pros for closing at the end of the month:
1.  This will lower your initial out of pocket costs because it minimizes the amount of prepaid interest you will have to pay on your mortgage loan at closing.
• the interest on a mortgage starts the day your transaction closes but almost all loans are due on the first so when you close you are essentially prepaying the interest that has accrued between your closing date and the end of the  month
• if you close on the 28th of September,  you will only prepay three days of interest to cover the last three days of the month
• example:  if you close on the 28th of September you will prepay three days of interest which covers the September interest – then your first payment will be November 1st in which you will actually be paying for Octobers interest

Cons for closing at the end of the month
2.  Closing at the end of the month is only a short term benefit.
• if you close towards the beginning of the month you will have to pay more money up front.  If you close at the end of the month,  your first mortgage payment will be due sooner than if you had closed toward the beginning of the month
• example:  if you close on the 28th of September, your first payment would be due November 1st.  This is not a very long period of time between your closing and your first mortgage payment; however, if you close on the 3rd of September, your first payment would not become due for almost two months later.  Your mortgage will still be due on November 1st but you have a longer period of time between your closing and your first mortgage payment

So how do you decide whether to close towards the beginning of the month or at the end of the month?  Well, it depends on how much up front money you have.  It will take less initial cash if you close at the end of the month which is a huge benefit for most people.

Talk to your realtor about your situation and ask them for their advice about what type of closing would be best for you.  Your realtor deals with all kinds of closings every month and will be able to help you with a recommendation.

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To Buy or Rent

Its a buyers market, therefore we say BUY! Home prices have dropped and will only go up. Minimal interest rates and the cost of rental properties on the rise, now is the time for renters to really consider buying house. HouseSavvy, a premier real estate & relocation organization agrees with us.

When housing bubble burst in 2006, the cost of buying a house was higher then renting, but now the tables have turned. Rental cost had remained on the higher side in many communities. If you combine the decrease in home prices, high rental costs and historically low interest rates; the time may be ideal for renters to consider buying.

Deutsche Bank recently did a study that reported the share of income Americans are now paying to own their homes is 9.8% after mortgage, further says that in 28 out of the country’s 54 major markets, its now less expensive to pay a mortgage and other major housing costs than to rent the same house.

If you are still on the fence, make your own analysis. Make a list of the total cost to rent a home or apartment, include tenants insurance, and maintenance/association fees. Then make a list to determine the cost of buying a house. You are going to have to do some research, search for houses for sale in your price range and find out the prices of comps or similar homes that have been selling recently. Your Realtor can also help you to do this. Once you figure out a price for the home ask you Realtor to estimate what the real estate taxes and utilities and insurance cost for a home at this price. Then lastly talk to a local bank or mortgage broker to find out the cost and availability of the mortgage needed to buy the home.

Common Misconceptions About A Home Appraisal

If you have ever bought a house or are in the process of buying a house, you are probably aware that you will need a home appraisal.  However, many people have some misconceptions about how the appraisal process really works.

Here are some of the common misconceptions about real estate appraisals.

Misconception #1:  The purpose of the appraisal is so a buyer doesn’t pay too much for the house.

Truth:  The appraisal is to protect the lender so they don’t lend too much money on an overpriced property.  That is why the appraisal is done before your loan is approved.

Misconception #2:  Appraisers use an exact formula to determine the value of the house.

Truth:  There are many different things that factor into the home appraisal.  Each appraisal will have different circumstances that will determine the value of that particular home.  Such as the location, how close it is to schools,  the size of the lot, the condition of the home and the market comparables for that area  etc.

Misconception #3:  A realtor’s input about the condition of the home will influence the appraisers final decision about the value of the home.

Truth:  The appraiser’s final determination about the value of the home cannot be influenced by the realtor.

Misconception #4:  A clean home will improve the appraised value of the home.

Truth:  An appraiser does not look at the cleanliness of a home.  However, they will look for signs of neglect.

Misconception #5:  Anyone who knows a little something about houses can be an appraiser.

Truth:  Federal law requires states to have minimum standards and licensing practices in place for all appraisers.  In some states an appraiser will have to take several courses, pass an exam and complete thousands of hours of on the job training before they will be issued their license.

Misconception #6:  Appraisers are not obligated to disclose every  known home defect to the buyer.

Truth:  If the home will be insured by the FHA, then the appraiser must disclose all possible defects to the buyer.  However, if the mortgage is a non-FHA mortgage, then the appraiser has no obligation to disclose his findings.

Misconception #7:  The appraisal is the same thing as the home inspection.

Truth:  The appraisal is formulated for the lender.  The home inspection is a report of the homes condition that is formulated for the buyer.

Misconception #8:  If the appraised value comes out to be lower than the sale price of the home the loan will not be approved.

Truth:  There are several ways to overcome a low appraisal.  The seller could lower the price of the home, the buyer could put down a larger down payment.  Talk to your realtor about the other options that are available for overcoming a low appraisal.

10 Decorating Tips for A Stress-Free Home

Create a Clutter Free Environment
Most people tend to store stuff they don’t really need such as piles of newspapers or trash bags full of garbage or outgrown clothes. Take a little time to designate a specific area or container for items that need to be taken out of the house and another container for you to place items that you bring home. Do you really need a lot of end tables and clutter in your living room? If you confined, then you most likely will feel stressed. Also, re-arrange areas that limit your walking ability such as a coffee table that fits close up to your couch. You will lessen the chance of stubbing your toes while trying to relax.

Have Less Lighting
Everyone knows that low lighting can be more relaxing. Rather than have a bright overhead light on in your living room or bedroom, bring in a few lamps to place around the room. You will instantly feel more at ease thanks to the softer glow of lamp lights.

Be Less Bold in Your Color Choice-
If you truly want a relaxing stress-free home to come home to then you should consider keeping bright colors and bold patterns to a minimum. If you want to add a little color that is fine, a bright red throw pillow or something on the couch is fine, but your walls should be painted a more neutral earthy tone. If your eyes are busy focusing on all the bright colors in the room, you will have a harder time relaxing. If painting a room isn’t something you want to do, then focus more on pale colored lamp shades, throw pillows, and other decorative items.

Express the Nature Lover in You
One very important decorating tip for a stress-free home is nature and incorporating natural elements into your home. House plants, mirrors across from windows and natural landscape artwork will bring a relaxing and fresh feeling to any room inside your house.

Surround Yourself with Home
You may also want to consider putting a favorite item such as an old cabinet with photos of your family on it, a vase of flowers etc. near your front door or the main area you walk into when you first get home. This will remind you that you are home as soon as you walk in the door and you will instantly feel more relaxed. This idea can also be incorporated into other areas of your home. It is always good to “feel at home”, your photos and other favorite things will emphasize the “home” feeling.

Say Good Night to Electronics
If you have a TV in your bedroom or a computer that stays on all night or blinks while in standby mode, you are telling yourself to stay awake and not relax. This will increase your stress level throughout the night cause you didn’t get the sleep you should have and the next morning, you will start the day filled with tension.

Create Your Idea of Paradise
In your bedroom, living room; bathroom, etc. wherever you want to feel at ease, surround yourself by the essence of paradise for yourself. If you love walking on the beach during the summer months, why not surround yourself with things that remind you of those long walks? If your idea of heaven is a mountainous terrain or a cabin in the woods, bring in rustic furniture or paintings of trees and mountains, gentle streams, etc.

Pets Help with Relaxing
Incorporating a fish tank into your home will also serve to create a stress-free area. You will enjoy sitting back watching your fish swim around their tank and it will calm you. If space allows, other pets can relax you as well. Everyone loves to come home to a welcoming committee and your beloved dog or cat can do as much for you as your spouse and children

A Corner for Yourself
Create a corner or a special area inside your home for you to go to when you need a moment to unwind. This can be in the bedroom or a spot in the living room. Tell your kids that when you are in this area that you are taking time to relax and ask them to not bother you while you are there.

Natural Lighting Sooths the Soul
Eliminate the dark window blinds and curtains in your home, even in the bedroom. You will feel more at ease and peaceful waking up to natural light coming in the windows. You will also be more willing to wake up when the alarm clock starts buzzing because your body will see the morning light and take it as a clue to get the day going.

When considering all the tips for decorating stress-free home, it can be as simple or as complicated as you want. Nothing has to cost you a fortune and there is nothing you shouldn’t do while creating your haven as long as you feel relaxed when you’re surrounded by it.

Author Bio- This post has been written by Tresssy Jones. She loves to write about Home Improvement. She is evangelist at Atlanta Ductless Air Conditioning. They provide best heating and air conditioning services.

Spring Season Starting Early for Home Buyers

Realtor.com just recently posted its February & March data on the U.S. housing market. 

February:

National Data

• In February, the total number of single-family homes, condos, town homes and co-ops for sale in the U.S. (1,494,218) increased by 1.15 percent month-over-month. On an annual basis, however, inventory was down by 15.97 percent.

• The national median list price for single-family homes, condos, town homes and co-ops ($189,900) increased by 1.01 percent year-over-year and 1.55 percent month-over-month in February.

• The median age of inventory of for sale listings fell to 98 days in February, down 9.26 percent from January and 11.71 percent below the median age one year ago (February 2012).

Local Data

• Nearly all of the markets with the largest year-over-year declines in their for sale inventories in February were in California, where declines averaged 48 percent. The list includes Sacramento, Stockton, Oakland, San Jose, Orange County, Los Angeles, Seattle, San Francisco, Riverside and Ventura. These markets also experienced a dramatic decline in the median age of inventory, falling to an average of just 31 days, or 53 percent lower than it was one year ago.

• On an annual basis, February median list prices were up by 5 percent or more in 51 markets while they were down by more than 5 percent in 11 markets. The number of markets experiencing a year-over-year list price decline in February (39) is significantly below the number of declines observed in January (50). California markets continue to dominate the list of areas experiencing the largest year-over-year increases in their median list prices, representing nine out of the top ten best performers.

• The ten markets with the longest time on the market continued to include the coastal areas of the Carolinas and the resort communities of Santa Fe, NM and Ashville, NC. In addition, five older industrialized areas also appear on the list: Reading, PA; Portland, ME; Albany, NY; Philadelphia and Trenton, NJ. California markets continued to dominate the list of top ten areas with the shortest time on the market, although the median age of inventory was also at record lows in Denver and Seattle. Median time on market in these areas averaged just 28 days, 51 percent lower compared to one year ago.

March:

March data on the U.S. housing market shows growing optimism and confidence among potential sellers. Realtor.com’s March 2013 data indicates that while national housing inventory decreased 15.22 percent since last year, the number of listings increased 2.36 percent since February 2013. This month-over-month increase indicates a renewed willingness in sellers to put their homes on the market as list prices increased .05 percent both year-over-year and month-over-month to a national average list price of $190,000. The data also showed that the median age of inventory dropped to 78 days—a decrease of 20.41 percent since February.

A month-over-month inventory increase of 2.36 percent reflects a rise in new property listings since February 2013, but there are drastically fewer homes on the market compared to this time last year (15.22 percent less). While the median age of housing inventory continues to decline year-over-year by 12.35 percent, the amount of time houses are sitting on the market has decreased dramatically by 20 days since February, suggesting that a broad-based housing recovery is beginning to take hold.

A new trend in median list price has emerged in 2013. Since the beginning of the year, a growing number of the 146 markets realtor.com monitors have experienced an increase in list price year-over-year, while the number of markets that have experienced a list price decrease since last year declined. The March data shows that out of the 36 markets that registered a year-over-year decrease in median list price in the month, only six markets had a decline that was more than 5 percent, implying that these markets appear to be within easy striking distance of experiencing house price appreciation in 2013.



			
		

Mastering the Art of Negotiation

Before the Negotiation
Before you enter any kind of formal negotiation, make sure you know exactly what the expectations are. It helps to put down on paper exactly what you will do and accomplish. You should map out every scenario out to your client, but remain optimistic.

Also finding potential weaknesses in the opposing part is ideal, to negotiation tactics. Knowing the opposing’s weaknesses shows that you have done your homework and it shows you have valid information to back up your points, or why the negotiation should lead in your favor. This may also help both parties to find a middle ground. Another tip, is to come up with a list of reasons why your proposal would be beneficial to the opposing party. For example, one Realtor may bring up that their offer is more favorable, although it is offering a lower price, it is an all-cash offer, as opposed to a riskier financing. By specifically laying out the advantages  the negotiator increases the odds of getting the deal done in their favor. 

The Negotiation
In Person
Ideally, each party should state exactly what their objective is coming into the negotiation. This allows each party to understand where the other stands. It also establishes a basis for a give-and-take conversation. At this point, each party may then offer its fall-back proposals and counter proposals in order to hammer out a deal.

Body language analysis can help you to understand how the negotiation is going. Was your proposal well received? Positive signs include nodding of the head and direct eye contact. Negative signs include folding of the arms (across the chest), aversion of the eyes or a subtle head shake as if to say “no”.

By Phone
Negotiation by phone, can be a little more difficult, because body language can not be determined. This means that the negotiator must do his best to analyze his counterpart’s voice. But this also means, their is less emotion and you don’t have to sit face to face with one another, and makes it easier to stand your ground. As a general rule, extended pauses usually mean that the opposing party is hesitant or is pondering the offer. However, sudden exclamations or an unusually quick response (in a pleasant voice) may indicate that the opposing party is quite favorable to the proposal and just needs a little nudge to seal the deal.

By Mail
Here are some tips for negotiations done through the mail (such as residential real estate transactions):

  • Words or phrases that leave ambiguity may signal that a party is open to a given proposal. Look specifically for words such as “can”, “possibly”, “perhaps”, “maybe” or “acceptable”. Also, if the party uses a phrase such as “anxiously awaiting your reply” or “looking forward to it”, this may be a signal that the party is enthusiastic and/or optimistic that an agreement may soon be reached.
  • When the opposing party makes an initial offer or a counter proposal, see if you can incorporate some of those ideas with your own and then ink a deal on the spot. If compromise on a particular issue is not possible, propose other alternatives that you think would be favorable to both parties.
  • Finally, while all agreements should be sealed with a hand shake, a more formal contract memorializing the negotiation is a must. To that end, have an attorney draft a formal contract soon after the negotiation process is completed and make certain that it is signed by all parties in a timely manner.

No Agreement? No Worries
If an agreement cannot be reached in one sitting or phone call, do not panic. It may take sometime for both parties to think about the offers on the table. Leave the door open for future negotiations or plan another meeting, this will come across as though you sincerely believe that a deal can be worked out and you are willing to work to make that happen. Maybe all it takes is for the party to realize that there are no other offers or that your party has provided the best possible offer. Regardless, never under any circumstances, burn your bridges.

Celebrating Earth Day

Happy Earth Day!

What does this mean for you and your household. It can simply mean turning off the lights when there not in use, or don’t keep the water running when not being used. Today you can make the decision to go a little more green and save money along the way, here are some household tips to achieve that:

Power off

  • The screensaver on your computer uses the same amount of power as when it’s on and being used. Switch your PC off if you’re going to be away for a while.
  • Turn down your water heater. By lowering the temperature on your water heater from 140 to 120 degrees will reduce your water heating costs by 6-10%
  • 50-70% of a household energy costs come from heating & cooling according to the Department of Energy.
  • Installing a programmable thermostat will save you approximetly $150 a year.
  • Aim for 78 degrees of higher when you are at home while reducing your cooling loads 10-20%. When you are away from home make it 85 degrees, and save an additional 5-12%.
  • In cold weather for every degree you lower the thermostat you will save between 1 and 3% of your heating bill. 
Unplug
  • Unplug unused chargers, plugged in cellphones, laptops or anything for that matter. Americans throw away about 8% of our annual electric bill from having objects just simply plugged in.
  • The easiest way to save is to buy a surge protector that can plug in multiple units, that way you can turn off more than one charger in one switch.
Light Fixtures
  • Install CFL’s, the spiral-shaped bulbs known as compact fluorescents use less than a third of the energy regular bulbs use and last 10x longer. 
  • If every household in the U.S. replaced just on regular bulb with a CFL, the amount of energy saved could light 2.5 million homes for a year.

Water Fixtures

  • Buy low-flow toilets, they use less than a gallon of water, brands such as American Standard, Toto and Kohler. Toilets used to use about 5 gallons per flush, so if your toilet is outdated it may be time to make this change.
  • Buy low-flow shower heads, which can decrease water usage by 50-70%. They only cost about $8
  •  install low-flow faucets.
  • Wash clothes in cold water whenever possible. As much as 85 percent of the energy used to machine-wash clothes goes to heating the water.
  • Use a drying rack or clothesline to save the energy otherwise used during machine drying.

Upgrade to Energy Star Appliances

  • Look for the blue and white label which means the item uses at least 10-50% more efficient than standard models. more than 18,000 products have the Energy Star design.
 
Other
  • Use a water filter to purify tap water instead of buying bottled water. It will save you money & help you live a more green lifestyle.
  • Bring a reusable water bottle, preferably aluminum rather than plastic, with you when traveling or at work.

By making these small changes you can save money & make for a cleaner Earth one household at a time