Guides & Tips

For most persons, purchasing a home is the largest investment they will ever make. It is no wonder then that many home buyers employ professionals to inspect the structural and mechanical systems of the home and report to them on their condition. Sometimes sellers also employ Home Inspectors to alert them to problems with their homes which could arise later in the transaction. But normally Home Inspections are employed by buyers.

A publication can be obtained by visiting the North Carolina Real Estate Commission.

This information provided here is designed to give consumers a better understanding of the home inspection process. What a home inspection is, who can perform an inspection and what to expect. If you have further questions regarding home inspections and Home Inspectors, you should contact the North Carolina Home Inspector Licensure Board, 322 Chapanoke Road, Suite 200 Raleigh, NC 27602, Phone # 919-662-4480

Q:    What is a home inspection?

A:    It is an evaluation of the visible and accessible systems and components of a home (plumbing system, roof, electrical system etc.) and is intended to give the client (usually a home buyer) a better understanding of their condition. It is also important to know what a home inspection is not! It is not an appraisal of the property’s value; nor should you expect it to address the cost of repairs. It does not guarantee that the home complies with local building codes (which are subject to periodic change) or protect you in the event an item inspected fails in the future. [Note: Warranties can be purchased to cover many items.] Nor should it be considered a “technically exhaustive” evaluation, but rather an evaluation of the property on the day it is inspected, taking into consideration normal wear and tear.

Q: Can anyone perform a home inspection?

A:    NO. Only persons licensed by the North Carolina Home Inspector Board are permitted to perform inspections for compensation. To qualify for licensure, they must satisfy certain education and experience requirements and pass a state licensing examination. Their inspections must be conducted in accordance with the Board’s Standards of Practice and code of Ethics.

Q: Why should I have the home inspected?

A:    Most home buyers lack the knowledge, skill and emotional detachment needed to inspect homes themselves. By using the services of a licensed Home Inspector, they can gain a better understanding of the condition of the property, especially whether any items do not “function as intended” or “adversely affect the habitability of the dwelling” or “ warrant further investigation” by a person who specializes in the item in question.

Q:    In my home purchase I have chosen to sign the standard Offer to Purchase and Contract* form which many real estate and legal professionals use. It states that I have the right to have the home inspected and the right to request that the seller repair identified problems with the home. Will the home inspection identify all of these problems?

A:    Yes and No. Home Inspectors typically evaluate structural components (floors, walls, chimneys, foundations, etc.) mechanical systems (plumbing, electrical, heating/air conditioning, installed appliances and other major components of the property. The Home Inspector Licensure Board’s Standards of Practice do not require Home Inspectors to report on wood-destroying insects, environmental contamination, pools and spas, detached structures and certain other items listed in the Offer to Purchase and Contract form. Always ask the Home Inspector if he covers all the things which are important to you. If not, it is your responsibility to arrange for a n inspection of these items by the appropriate professionals. For a description of the services to be provided by the Home Inspector (and their cost), you should read carefully the written contract which the Home Inspector must give you and which you must sign before the Home Inspection can be performed.

Q:    How do I request a home inspection and who will pay for it?

A:    You can arrange for the home inspection or ask your real estate agent to assist you. Unless you otherwise agree, you will be responsible for payment of the home inspection and any subsequent inspections. If the inspection is to be performed after you have signed the purchase contract, be sure to schedule the inspection as soon as possible to allow adequate time for for repairs to be performed.

Q:    Should I be present when the home inspection is performed?

A:    Whenever possible, you should be present. The inspector can review with you the results of the inspection and point out any problems found. Usually the inspection of the home can be completed in two to three hours (the time can vary depending upon the size and age of the dwelling). The Home Inspector must give you a written report of the home inspection within three business days after the inspection is performed (unless otherwise stated in your contract with the Home Inspector). The Home Inspector may only give it to you and may not share it with other persons without your permission.

Q:    Are all inspection reports the same?

A:    NO. While the Home Inspector Licensure Board has established a minimum requirement for report-writing, reports can vary greatly. They can range from a “checklist” of the systems and components to a full narrative evaluation or any combination of the two. Home Inspectors are required to give you a written “Summary” of their inspection identifying any system or component that does not function as intended, or adversely affects the habitability of the dwelling, or appears to warrant further investigation by a specialist. The summary does not necessarily include all items that have been found to be defective or deficient. Therefore, do not read only the summary. Carefully read and understand the entire home inspection report.

Q:    What should I do if I feel something has been missed on the inspection?

A:    Before any repairs are made (except emergency repairs), call the inspector or inspection company to discuss the problem. Many times a “trip charge” can be saved by explaining the problem to the inspector who can answer the question over the phone. This also gives the inspector a chance to promptly handle any problems that may have been overlooked in the question.

Q:    If, following the home inspection, the seller repairs an item found in the home inspection, may I have the Home Inspector perform a “re-inspection”?

A:    Yes, Some repairs may not be as straightforward as they might seem. The inspector may be able to help you evaluate the repair, but you should be aware that the re-inspection is not a warranty of the repairs that have been made. Some Home Inspectors charge a fee for re-inspections.

I hope this information has helped you make an informed decision.

Planning:    Mortgage, inspections, APR’s- Oh my! If the idea of buying your own place ties you up in knots, just follow this road map and we’ll walk you through every step of the process. Repeat after us: There’s no place like home…

Buying vs. Renting:    What makes more sense economically? In a nutshell: If you plan on living in the same city for at least five years, it’s usually worth it to buy. See Calculators!

Advantages to Owning:    Over the long term, real estate is rarely a bad investment. The recent market downturns in some areas just give you more choice and additional negotiating room. You’ll build equity and establish a good credit history, and you won’t have to deal with a landlord. (Read:Grow your assets)

Disadvantages:    You’ll have to take care of all your own maintenance and improvements (hello, hardwood floors-Good by linoleum) and pay property taxes. Situations in which you should hesitate to buy: If your current rent is unusually low; if you’re considering a co-op or condo apartment that has high maintenance costs that aren’t tax deductible (these will be noted in the listing); if you think you might get laid off or be relocated in the near future; if your credit is so bad that you can qualify only for loans with very high interest rates. To help you make the right decision: Check out the “Buy vs. Rent Calculator” , where you can plug in all the numbers and see a comparison. The results can be shocking. For example: If you’re paying $1,500 a month in rent and thinking of buying a place for $200,000 (with 10% down payment), buying now could save you $110,000 over the next 10 years.

How Much can you afford?    A mortgage calculator (see calculators) is the simplest way to get a ballpark idea. You punch in the loan amount, interest rate, and length, and it spits out your estimated monthly payment. ( Just keep in mind that insurance, property taxes, and maintenance will add to your costs.) If you want to find out for certain what your upper allowable limit is: Get preapproved (not pre-qualified) for a loan. Find a certified mortgage broker (see closing the deal later in this document), who will have you fill out a loan application. Based on your income, debt, and credit score, you will receive a letter stating the maxium amount a bank is willing to lend you.

Bonus:    Pre-Approval will give you an advantage over other buyers because the seller will know you definitely have the money available to make the purchase. Beyond the banks: Calculators and lenders don’t take your lifestyle into consideration. Do your own detailed budget that includes all nonessential expenses, from movies to mocha lattes, and talk to a tax pro to see how home ownership can add up for you. Then ask yourself how much you can comfortably spend on your mortgage each month. For peace of mind,be sure you stick with that figure, even if a bank will give you a bigger loan with a larger payment.

Down Payments:    Putting 20% down is great if you can swing it. You’ll start with more equity, pay less total interest, and avoid some fees. But if you have high credit card debt, consider putting down less and using the rest of the money to pay off your cards-mortgage interest is tax deductible, but credit card interest isn’t.

If you’re broke:    Don’t panic! You are not a lost cause. Check to see if you qualify for a Housing Finance Agency program in your state that helps first-time buyers (ncsha.org). Another option is to ask a family member or friend to lend you some money interest free, or to cosign the mortgage. You can also save by negotiating for the seller to pay closing costs, which can add up to 3%-6% of the house price.

Checklist: Have these things handy when just starting out.

• This Guide
• Financial Information to begin loan pre-approval: recent bank statements,tax forms, and pay stubs, plus employment history.
• Notebook and Pen
• Digital Camera to document house visits
• Map or GPS to find and remember locations

The Department of Housing and Urban Development recommends of things to note: such as proximity to good restaurants.
Glossary of Basic Terms:

Mortgage banker: A lender, banker, or company that provides loans.

Mortgage broker: A person or firm that arranges loans from multiple lenders.

Pre-Approval: A lender’s promise (subject to final guarantee) to supply you with a specific loan amount for a mortgage.

Pre-Qualification: A lender’s informal estimate of the maximum you’d be allowed to borrow.

Credit bureau score: A number showing how likely you are to default on a loan, based on your credit history (see yours at annual credit report. Check it and correct any mistakes, which can foil your mortgage plans.

Down Payment: The amount of a home’s price you pay in cash; usually from 0%-20%.

85% of home buyers used a Real-Estate AGENT to help them during their search for a HOUSE.

Prepping for a PREFAB

“Prefab” (technically, modular) homes are becoming increasingly popular – especially modern styles, which can be hard to find already constructed. They are generally less expensive, quicker to erect, and more eco-friendly than traditional homes, but you have to find, buy and prep the land first. It can be a time-consuming process (walking parcels of land is required) so think ahead.

Turn Your “I Can’t” Into “I Can”: Don’t be so negative! there are some good reasons to rethink your usual excuses for not buying a home.

“I don’t have enough money, For a 20% Down Payment.” “Some loans- especially for borrowers with excellent credit and finances- allow you to finance up to 90%, or even 100% of the purchase price. “Ask your broker about them”.

“I’m waiting for the Market to Improve” “Prices may not come down much more, interest rates could go up, and -if you’re renting now- the immediate tax benefits you’ll get may offset any savings you would reap from waiting.”
“I don’t have a significant other To Buy A House With Me.” “Neither do many people who who buy homes.” “Get pre-approved for a loan before you assume you can’t afford it. And find a good mortgage broker who’ll know creative ways to work with limited budgets.”

“My Credit Score is Bad” “How bad is bad? Scores are based on all kinds of info.” “Yours may be low because your credit card balances are high- pay them down to a third of your limit.” Go to credit.com for more information.

“I don’t have time to Look at Houses All Day.” “Then don’t.” A good Realtor will be able to narrow down choices and e-mail you all the pertinent data, including photo’s and complete descriptions. See only the ones you like.

Looking:

Okay- we’re off to see the wizard! this part of the journey can end quickly if the right house practically drops out of the sky, or it can become an arduous, multi-year process. Ready buyers can expect to spend one to six months pounding the pavement- make that the Yellow Bricks.

Where to start:

Bury yourself in listings to get familiar with the local market. local newspapers, broker websites, craigslist.org- they’re all good. Websites like Realtor.com provide access to the multiple listing service(MLS) that licensed real-estate agents use. Zillow.com, besides having national listings of homes for sale from brokers and owners, also offers aerial satellite views. If you’re looking in an unfamiliar area: Realtor.com’s “Find a Neighborhood” tool shows an area’s average income, school rating, and hip factor.” Zillow.com allows you to compare house features and prices within any specific area. But also be sure to spend some actual time in the field-if you are relocating to an unfamiliar place, it may be smarter to rent there before you go ahead and buy.

If you’re in a competitive market: Don’t blow off open houses. Most homes that put up for sale start with an open house and can be sold quickly, so don’t miss out. It’s a good idea to devote a few hours on Sunday for the foreseeable future to checking them out. And it’s a great way to see a lot of places very quickly.

How to find a good real-estate agent: A buyer’s agent represents you, where -as the listing agent, who appears on the ads, represents the seller. A buyer’s agent works for you as your project manager throughout the whole process. At RESNC a Buy’s Agent is NO COST TO YOU. Realtors are generally your best bet because, as members of the National Association of Realtors, they have agreed to abide by a strict code of ethics above and beyond what is required by law(and can be disciplined if they do not). Don’t forget the interview: You’re going to be working together closely, so you better make sure you get along with your agent. Spend a day seeing properties with him/her. Ask about his process and what he will do for you. In addition to the obvious(helping you find houses to see), an RESNC agent will provide objective advice on properties and prices, negotiate for you with sellers, and direct you to other qualified pros, such as lenders and inspectors. If your Realtor asks you to sign a Exclusive Buyer’s Agreement. This simple contract is the Realtor’s way of ensuring he is paid a commission if he finds you a house, and that you will use him exclusively. At RESNC there is NO COST to the buyer for this service.

While visiting homes: If you think you might be interested in buying a place, do not show your hand by saying “This is very reasonably priced!” or ” This is so much better than everything else I’ve seen!” Comments like these could make negotiating more difficult. Ask the seller’s agent(or the seller if he/ she is present) a lot of prying questions. For example, is the seller closing on another property and looking to wrap up quickly? make sure to note the location: Is it near train tracks, an airport,or a frat house? Is the street so dark that you’ll be scared to come home late at night? Does it have desirable amenities, even those you don’t need? (Picking a neighborhood with good schools,regardless of whether you have kids or not, will make the house easier to resell.)

⇒Lesson Learned: ” I Wish I Had Asked About The Neighbors. We’ve experienced some bad ones. Good neighbors make you feel great about your purchase, but bad ones add a lot of stress to your life.”

How to Decipher HOUSING ADS (and avoid disappointment): Examples: “Cute”, “Starter home”, “Exciting neighborhood.”

ac= acre–a/c= air conditioning–appls= appliances–ba=bath–br/bd=bedroom–bring your decorator=Bring your wrecking ball–charming/has character=see “bring your decorator”–clsts=closets–converted 2 bedroom=one bedroom,1/2 living room,and a closet.–cute=small–desirable location=expensive–dk=deck–dr=driveway–d/w=dishwasher–FSBO=for sale by owner–gracious=totally meaningless–home office=room with no windows–lr=living room–fdr=formal dining room–exciting neighborhood=next to a night club–no expense spared=tacky–occ=occupancy–partial views=if you lean out the window you can see it–pkg=parking–peaceful/oasis=far from everything–showcased home= some decorator’s twisted fantasy–spac=spacious–starter apartment/starter home=a grown-up should not live like this–stu=studio–terr=terrace–totally renovated=cheap fixtures and 49 coats of paint–unique=too weird to buy–w/d washer/dryer–w/w cpt=wall to wall carpet.

Home styles:

Ranch: A single story/ split level with an attached garage usually rectangular, L-shaped,or U- shaped.

Colonial: A architectural style that includes many early 18th century homes; symmetrical and square, often with a large chimney or two.

Victorian: Two or three stories high, with an asymmetrical porch, highly detailed accents, and sometimes-hued paint scheme.

Cape Cod: Generally 1-1/2 stories with a rectangular frame, steep gabled roof, and large center chimney, popular in the Northeast.

Modern: From early 20th century to present day, typically has large windows, an open floor plan and an irregular often boxy shape.

Tudor: Characterized by a steep roof, decorative half timbering, tall windows and stucco walls; based on English Tudor styles.

Farm House: Often two stories, with a few decorative details and a porch; typically found in a rural setting but gaining traction elsewhere.

Apartment: Self-contained unit with a common entrance, noisy neighbors,and the joy of someone’s stray underpants in the laundry room.

What about houses that are “For Sale By Owner”?

No broker? No problem! Except: Keep in mind that Joe Blow seller is not bound by any code of ethics, so he’s not risking his real-estate license if, say, he tells you the boiler is brand new when it’s really 40 years old. We will do our ‘do-diligence’ for you and find the skeletons behind thwe scenes. At RESNC, our agents will negotiate their fees with the FSBO.

49% of People between ages 25 & 35 own their own Home.

Glossary of Basic Terms

Comparative market analysis: Also known as “Comps.” A comparison of the value of a specific home with other similar properties in the area, based on sales and offering prices. Your agent will put this together when you start to zero in on a house you’re interested in buying.

Back on market(BOM): A property that’s re-listed because a previous deal fell through. Often described as “no fault of seller” to assure buyers that nothing’s wrong with the house.

Annual percentage rate (APR): Yearly interest on a loan, expressed as a percentage. Includes fees and other costs so you can compare offers from different lenders. The lower the APR, the better.

Appraisal: An estimate of a property’s value; a lender usually requires an appraisal, and won’t approve a loan for more than this figure.

Closing attorney or escrow agent: A neutral party, she works with all parties- the lender,title insurance company,buyer and seller- to make certain all the details of the closing come together without a glitch.

Lock-in: A lender’s guarantee that you’ll get a specific interest rate if your loan is closed within a certain period. Interest rates can change at any time, so if you think you have a good rate, be sure to lock it in.

Private mortgage insurance(PMI): Protects the lender if you default on a mortgage; only required if you down-payment is less than 20%. You might avoid paying it with a “piggyback” loan ( see “Which Loan is for You?” later in this letter).

Closing The Deal

This part can get scary, but there are lots of people to hold your hand along the way, from your Realtor to your mortgage broker to your lawyer. Just use your brain, listen to your heart, and keep your courage up- you’ll be waking up in your dream house in no time.

Making an offer: Nothing quite gets the adrenaline pumping like a few hundred grand on your first house. Rely on your Realtor to help you arrive at a fair price and strategize about the bidding(see “How to Negotiate Like a Pro,” below). Once you’re ready to submit an offer, your agent will deliver it to the seller’s agent, along with a check for your “Earnest Money”– otherwise known as your “Good Faith” deposit. The seller will then either accept the offer or come back with a counteroffer, which you can accept or counter. Remember, if you go back and forth for too long someone could swoop in and outbid you, because no matter how many you’ve shaken hands, nothing is legally binding until both parties sign a contract.

Extra’s worth asking for: Sometimes sellers will give in to requests for things other than a price reduction. Ask if they’ll include appliances(or take them away if they are too old) or give the place a new paint job if it needs it. Don’t get greedy, but do keep in mind that everything is negotiable. Before you sign an Offer: Make sure it has at least two key “contingencies”, also known as get-out of the deal-free cards:(1) The sale should depend on the results of the home inspection(in case problems turn up);and (2) The lender must actually give you the mortgage(Pre-Approval is not a guarantee). Otherwise, you could end up obligated to pay for the house or its problems yourself- or lose your down payment because you have to back out of the deal.

Picking a Mortgage broker: Now’s the time to settle on a mortgage broker(and if one pre-approved you for a loan, it’s not too late to choose someone else). Instead of applying for mortgages directly with specific banks, she will send out queries to numerous lenders to try and get the best rate. Ask people you trust for recommendations. You can also search for references on the “state affiliate” sites listed with the National Association of Mortgage Brokers– NAMB has a strict code of ethics and business practices that all members agree to follow. When you talk to a potential lender, try to negotiate not to pay application fees- you should aim to pay only for the home appraisal and possibly a credit report. Ask for details about the pros and cons of the loans you’re considering to check whether the broker is willing to spend the time to help you understand the process.

Hiring a real-estate attorney: Once again,personal recommendations are the way to go. But, ensure she specializes in real-estate. Ask her to estimate how much she will charge to complete everything involved (usually a few hundred dollars). You can search abanet.org to find a real-estate lawyer in good standing in your state.

Hiring an Inspector: Your real-estate agent can probably make a good recommendation or you may search for one listed on HUD. What to look for: Ask for a simple report to judge whether the information is clear and easy to understand(it should include write-in sections instead of just check boxes). Note whether any areas such as the roof and appliances, are excluded (they shouldn’t be). What happens if the inspector misses something that you find later on- does the company have insurance covering such instances? A typical single-family house should take two-three hours to inspect, so if the inspector estimates 45 minutes, go with someone else. Be present for it if you can.

$Pocket Money$: With a substantial down payment, figure on 18% to 24% of the purchase price to close the deal. An example: Price of house $250,000 cash needed on hand $48,027.

Closing costs: $10,000, about 3%-6% of the house price; generally includes loan fees,title,and settlement fees, taxes and pre-paid items such as home insurance and attorneys fees.

Professional inspection: $350.00 (usually $200-$500 to evaluate the condition of the house.

Private mortgage insurance(PMI): $177 at least two payments of this monthly insurance are generally required when your down-payment is less than 20%.

Down Payment: $37,500. 15%; most people pay something less than the standard 20%.

How to Negotiate Like a Pro

Set a limit-and stick to it. If you don’t establish your cap, chances are good that you will exceed it.

Make a low offer, but not too low. Some experts suggest 5% below the asking price as a good place to start-if the market justifies it. Some say any low-ball offer could upset the seller, Ask your Realtor for advice.

Point out defects. Note anything that could be seen as reducing the value of the house, even if it’s actually not at all important to you, and ask the seller to come down on the price accordingly.

Be open to compromise. The idea is for both parties to come out of the deal feeling satisfied, not screwed.

Act as if you don’t care. you’ll have an emotional advantage. If the sellers think you are dying to live there, they’ll probably be less flexible with the price.

Think it over. When the offer/counteroffer process reaches a point where you’re seriously considering sealing the deal, slow down. Try not to agree to anything until you’ve had one night to think it over. Remember you will believing with this decision for a few years.

Be ready to walk away. FOR REAL!

Which Loan Is For You? There are a huge variety of mortgages out there. Some of the main ones to know about:

• Fixed Rate: Interest rate never changes, and you pay the same amount every month. Good if: Rates are low and you plan to stay in one place for a long time.
• Adjustable Rate (ARM): Rate fluctuates, usually after a fixed period- for example,a 5/1 ARM is fixed for 5 years, then it fluctuates every year after that based on current lending rates. Good if: you are expecting to sell within a couple of years.
• Interest Only: Allows you to pay only the interest for a set number of years-usually 5,7 or 10- If you prefer. Good if: you think you’ll bearing more in a few years or your income fluctuates.
• Piggyback: Combines two mortgages, a financing trick that allows you to put less than 20% down without having to pay PMI. Good if: you’re short on cash.
• FHA: Insured by the government’s Federal Housing Administration, making it easier for you to get approved even if you can’t afford a 20% down payment; limited to certain maximum amounts, which vary by location. Good if: you’re cash poor or have a rotten credit history.
• Balloon: Has a low fixed monthly payment for a set number of years, usually 5 to 7, after which one large payment (the “balloon”) is due for the remaining balance. Good if: you expect to sell the home before the final payment and expect the property to appreciate quickly. Extremely risky and not usually recommended.
• Lesson Learned: “Always Have Selling In The Back Of Your Mind When you’re looking to buy.’Curb Appeal’ is not a cliche’-even in a bad Real-Estate Market”.

Here it is… “The Countdown To Closing.

Going-Going, Sold! Here at its fastest, is what happens and when:

• 3-4 Months get a copy of your credit. Make a budget and determine how much you can afford. Pick a motgage broker. Pick a real-estate agent.
• 2-3 months to closing, Apply for mortgage preapproval, Pick a real-estate attorney, make an offer.
• 1-2 months to closing once offer is accepted. Sign a purchase contract, Have the home inspected, Submit a formal loan application.
• 3-5 Weeks to closing. Get Homeowners’ Insurance, arrange for utilities at new home, Receive official mortgage commitment letter from lender.
• 1 week to closing, get a cashier’s check for closing costs
• 1 Day to closing, Arrange a final walk-through of the house.

Closing Day: Closing, crack open Champagne. Your done.

Building a House

Triangle home buyers will be pleased with the many options they find when deciding where they want to live and with whom they want to build. The region’s variety of builders and diversity of home sites offer home styles and upgrades for everyone. Ultimately, buyers will have a choice of going custom or buying a “spec” home. Knowing what you want before you start building will allow you and your builder more time in the details of your new home.

These days a custom home is no-longer within reach of only the very wealthy. Customization can mean anything from individually made, one of a kind up fits or just simply combining one or more plans together. Up grading from a standard builders product to the one of your choice, color style etc… The question is should I choose a custom home builder or a production or “spec” home builder?

The answer: It depends. It depends on whether you want to choose a plan or work with a builder on designing one of your own, from interior to the exterior.

Custom (vs.) Spec. How do you decide? Ask yourself these questions:

Do you have land already? Is having a unique home that important? If any of these answers are yes, then you might want to consider a “Custom builder”. A good contractor or builder will help you stay within your budget. Custom builders work with you to create a home specific to your needs. Interview several before just picking one, check around for references. Once a builder is chosen, it is a good idea to bring any plans you might have to the table to use for ideas or as a guide to help build your house. Your builder might have to make modifications as necessary. Remember to stay focused on the fundamentals. Once the plan is agreed upon all the finishes must be ironed out as well.

Always remember to discuss warranty issues before you sign a contract. And be sure you choose the right contract for what you need. Beware of what gets paid upfront and at what stages you should expect to pay any other out of pocket expenses. You want to be sure of as many details as possible before you begin.

Working with a “spec” builder is a little different. The only difference is that you will be working with them to agree on a floor plan already designed, He or she may already have a lot picked out or not. Bear in mind any changes must be done early to accommodate the builder as to your custom changes to the already designed home.

One advantage of using a production builder is buying a pre-existing, or market, home. These homes are already built, and have never been occupied, and can include: single family homes, condo’s, townhouses. With repetition these homes can be constructed fairly quick, if most of the materials are pre-fabricated, which help keep costs down. As with any builder you choose just make sure you understand the warranty issues and contract terms.

Most builders whether custom or production have their own signatures. Signatures such as their special features, or decorating touches.

In the Triangle, many popular interior trends seem to be media rooms, home theater rooms, gourmet kitchens, bonus rooms. On the outside: low maintenance exteriors, fiber-cement boards, vinyl siding, and Brick are the most popular and in high demand.

If buying a spec home see other neighbors and ask questions to see if they were happy.

A useful resource before building or buying a home is: Home Builders Association of Raleigh and Wake County, The Builders Association of Durham and Orange Counties, these organizations can give you a heads up in your search.

Helpful Tips for First Time Home Buyers:
If you are in the search for your very first home and wondering which direction to go, then you have come o the right place; RESNC.

In any case, you’ve got a lot of company. According to the National Association of Realtors, about 40 percent of existing homes are purchased by first-time buyers every year, with sales of new homes to first-timers adding to the total. That’s nearly three million sales to first-time home buyers annually.

Overall, the desire for home ownership continues to appeal to a big majority of us. Statistics compiled by the U.S. Census Bureau show that home sales rose to record levels five years in a row. In the fourth quarter of 2006, the national home ownership rate was 68.9 percent, a near record high.

In addition, home ownership knows no boundaries when it comes to sales to newcomers to our shores. U.S. Census Bureau data indicates that foreign-born Americans are as likely to buy homes as native-born Americans, and it may surprise you to learn that the home ownership rate for immigrants who have lived here for 30-plus years exceeds the national average.

Perks for Purchasing:
So, what is it about owning a home of one’s own that so many of us find attractive? The first answer that comes to mind for most of us is the financial advantages. As a home owner, you can build equity in your property over time, and you can benefit from the substantial tax advantage of the deductibility of the interest portion of your mortgage payment.* In addition, upgrades and improvements to your home can add value, as well as add to your comfort and enjoyment for years to come.

That said, the appeal of home ownership can be as much about the intangible benefits as about the cold hard facts of investment potential and tax savings. Your home is, well, yours, a means of expressing your personal taste and satisfying a fundamental need for shelter and security for yourself and your family. It also represents a solid connection to community, and instills a sense of place and participation in community life.

• Individual tax savings vary. Consult your tax adviser for details about potential tax consequences.Navigating your way to the Starting Line
  The most daunting part of choosing your first home is simply getting started; it’s a complex process full of uncertainties and unknowns that can seem overwhelming at times. If you’ve ever felt that way, don’t worry, those feelings are part of the process too.

  The best way that we know to keep you on the path that leads to the door of your first home is information, a lot of which you’ll find right here on www.resnc.us, some from research elsewhere on the Internet, talking to friends and co-workers, and – perhaps when you’ve narrowed down your choices to a specific area, town or neighborhood – from working with a local RESNC Real Estate professional.

  You’ve already made one smart step toward home ownership by putting the power of the Internet to work for you. Used wisely, the Internet can help you do an amazing amount of research on all the things it takes to find the home that’s right for you in an amazingly short time. That’s why nearly 80% of searches for a home begin on the Internet; and that percentage continues to grow.

  Helpful Hints to keep you Straight:
  Of course, the potential downside of all that searching is a quick trip to information overload, and a heapin’ helpin’ of frustration. Here are a few tips on what to look for that should help keep your search for your first home on track:

  Wants vs Needs: It’s easy to get distracted and lose sight of your basic needs once you’re in the middle of searching for your first home. Early in the process, it’s helpful to list your basic needs; minimum square footage and number of bedrooms and bathrooms, as well as proximity to schools, shopping – whatever you think you must have in your new home.

  Write down your ‘wants’. — Now that you’ve got a firm handle on the needs, make a second list of the ‘nice to haves;’ things like a bigger garage, extra bedroom, in-ground pool, etc. Between these two lists, you’re already off to a great start on zeroing in on the home that’s right for you.

  What is your Budget? –– In general, the answer to this question is a function of how big a down payment you can put down and how much you are able to borrow, based on your credit score and other factors as determined by a lender. There are many loan calculators on the Internet to help you determine what you can afford; none of these is a substitute for discussing your needs with a reputable lender. A common rule of thumb is that your annual mortgage payments, taxes and homeowner’s insurance should not exceed 28% of your gross annual income.

  Note: In addition to a down payment, you should keep up to 5% of your home’s purchase price in reserve to cover closing costs and contingencies.

  Credit Report Time: … know your debt. This would be a great time to obtain a copy of your credit report from a credit service bureau and make sure that your credit history is in order. Most lenders breathe easier when your total monthly debt service from all sources – including homeowner’s insurance, property taxes and your mortgage payment – will be below 40% of your gross income.

  Note: Consult a credit counselor to inquire if you should cancel credit cards you never use; the credit line, even if unused, can raise a flag with lenders.

  What are your favorite communities? The Internet makes it a snap to research economic, demographic and a whole host of other data about specific communities and neighborhoods with a few mouse clicks. The sites of area Chambers of Commerce are excellent sources.

  Availability: Searching online for homes in the area of your choice will return online listings, virtual tours, and an endless array of photographs, aerial views and maps of homes and the surrounding area. Check the listings against your list of ‘must haves’ and ‘nice to haves’ and decide whether prices are in your ballpark.

  Check it Out… Once you’ve settled on the type of home and neighborhood you’re looking for, it’s time to make the move from ‘clicks to bricks’ and start looking at properties. We believe that the using services of a real estate professional like RESNC is the best way to successfully get you through the emotional and often complex process of choosing and purchasing your home.

  A real estate professional will listen to your needs, and show you homes that fit your particular desires; homes that may even be new to the market and whose listings are not yet generally available online. In addition, a real estate professional is dedicated to taking care of the seemingly endless details that buying a home entails and keeping the process on track to a successful conclusion at the closing table.

  Note: Bring a camera and a copy of the listing when you view a property, and take notes on your likes and dislikes.

  Shop for Financing …with the availability of fixed rate, adjustable rate, hybrid, interest-only, etc., etc. programs for financing your first home, entire books can (and are) written on the subject of financing your home. In short, research financing options while you’re researching potential neighborhoods, and shop for financing as soon as you’re ready to begin viewing properties.

  Note: Competition for choice properties occurs regardless of market conditions, and the potential buyer whose mortgage line of credit is pre-approved often walks away with a signed contract for their dream home.

  A Final Tip: When you find the first home that’s perfect for you, buy it with the help of an RESNC Agent.
  

Financial Readiness: It’s always good advice, but making sure your finances are in order before you begin looking for a home is crucial. Here are three ways to help make it happen:

• Know how much you have available for a down payment; and the source(s) of the funds; it’s very handy information to have on hand when you’re applying for financing.
• Avoid major purchases until you’re in your new home; they could affect the amount you’ll be able to borrow.
  Postpone that new credit card; and cancel cards you use very rarely or not at all. The availability of a line of credit will reduce what a lender is willing to offer you.
• Get pre-approval for your mortgage loan; It’s easy to get pre-approval from your lender, and it costs you nothing but a little of your time. Don’t underestimate the importance of this tip. Sure, you think it’s a “buyers market” – at least until a seller is considering multiple offers on your dream home.

Closing Attorney: If you’re moving out of your area and don’t have an attorney to represent you, it makes sense to secure the services of an attorney before you’ve found your next home; your RESNC Realtor can refer you to experienced attorneys in the area.

List Your “got to have’s” and “not so much” – List the features you must have in your next home and the “must have” amenities in the surrounding area, as well as the things you’d like to avoid (a multi-story home, or a home of a particular architectural style, for example).

Cruise the ‘net’: -About 80 percent of home searches begin on the Internet. The Web sites of leading real estate brands (resnc.us, for example!) are a great place to begin your search. Look for:

• The ability to search for homes in a particular area
• Photos and descriptions of available properties
• Virtual tours
• Local information
• Useful information for buyers and sellers
• Contact information for a real estate professional who serves your area of interest
• Test drive the area – Once you’ve settled on your next neighborhood, contact a real estate professional and look at properties that meet all or most of your “got to haves”.

In addition, take as much time as you can to explore the neighborhood on your own. Dine at an area restaurant, pick up a copy of the local paper and talk to the locals. Before you’ve even had your offer accepted on your next home, the next chapter of your life will already be well under way.

• Home ownership is an investment in your future.
• Home ownership offers immediate benefits and long-term value. It helps build wealth over the long term and has been shown to reduce crime, improve education and increase community involvement.
• For many people, now really is a good time to buy a home. Inventory is high, prices are down and mortgage rates are near 50-year lows.
• Owning a home is one of the best ways to build long-term wealth, providing both equity accumulation and tax benefits over time.
• Home ownership strengthens communities. Homeowners are more likely to be involved and engaged in local issues and move less frequently than renters. This helps prevent crime, improve childhood education and support neighborhood upkeep.
• It offers immediate benefits and long-term value.

Background:

Home ownership is how many American families begin to accumulate wealth. According to the most recent data from the Federal Reserve Board, a home owner’s net worth is 46 times that of a renter’s. (Median net worth of $234,200 for owners versus $5,100 for renters.)

According to the 2009 NAR Profile of Home Buyers and Sellers, buyers most often cite the desire to own a home as the primary reason for their recent home purchase. First-time home buyers made a median down-payment of four percent, while repeat buyers who financed their purchase put 15 percent down, indicating the wealth-building effect of home ownership.

Home ownership provides important social benefits. It provides shelter and security to families, and fosters involvement in community life as well as participation in democratic institutions. Homeowners are more likely to vote and they volunteer time for political and charitable causes more frequently than renters, according to the NAR study, Social Benefits of Home ownership and Stable Housing.

According to data from the U.S. Census Bureau, owners do not move as frequently as renters, providing more neighborhood stability. In turn, involvement in community quality-of-life issues helps prevent crime, improve childhood education and support neighborhood upkeep.

The children of the baby boomer generation, often called echo boomers, are the second largest generation in U.S. history, comprising about 75 million people born from 1982 to 1995. The oldest of these echo boomers are now entering the years in which people typically buy a first home, while the country’s 78 million baby boomers remain in peak earning years. The sheer size of the echo boom generation is expected to give a powerful boost to long-run housing demand.

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