Real Estate Information

by Michelle Neal

This is an exciting time in real estate, especially if you are a buyer. With low interest rates and a plentiful inventory of homes, it is a great time for people to buy real estate.  For those buyers who are new to the process, here are a couple of quick pointers.

Get a copy of your detailed credit report early in the process.  It is important to know your credit score, as it plays an integral part in determining your interest rate.  Also, you want to make sure you are not faced with obstacles later in the buying process.  It is best to be proactive in identifying credit items to pay off or correct.  Most lenders are able to partner with buyers and help them get credit issues corrected.  They can also help to establish a realistic time-frame after which you will be able to purchase.

Researching real estate websites is a great way to tap into valuable resources.  As you might expect, some websites are better than others.  Real estate websites (such as this one) often will be able to provide access into the Multiple Listing Service so you can become familiar with the inventory of homes in various areas.  Many of these websites also allow the user to organize and save their selections to their own "notebook" or "favorites".  Some of the more advanced websites will also provide GPS mapping functions and links to public records (County Auditor sites).   In addition, most real estate websites have links to school district information.  Getting familiar with the school systems in the areas in which you are interested is a very important part of buying a home.

Lastly, it is important for you, as a future homebuyer, to track your expenses to really gauge what you are able to "comfortably" afford.  Determining how much money you have coming in and tracking your expenses each month will help to identify what monthly mortgage amount you can realistically afford.   It will also help you to analyze where you may be able to cut back in order to save up for your down payment.

by Nicki Campbell

I am writing this from Albuquerque, New Mexico, where I am visiting my daughter and her fiance to get ready for their June wedding in Santa Fe.  They bought their first home, a 1600-sq. ft. townhouse in the foothills, in September and they are having fun decorating and furnishing it.  They have the basics -- a bed, table and chairs, inexpensive couch, TV, Target plates, utensils and glasses (service for four), some towels, and miscellaneous "art objects".  Like most young soon-to-be-marrieds,  they have registered at Pottery Barn and Crate and Barrel for lots more "cool" things and are saving up for some of the big ticket items.

As I look around their house with its half-empty cupboards and rooms, I am a bit envious.  We are at the other end of this scenario -- we are choking on "stuff".  Our basement is full of toys no one has used for ten years, bikes no one rides, boxes and boxes of Christmas decorations, exercise equipment that is gathering dust and on and on.   Our kitchen is chock full of pots and pans and baking dishes and gadgets and our closets are overflowing with clothes we should give to the Kidney Foundation.  And we aren't as bad as a lot of our friends and neighbors!

It seems like we spend the first half of our lives feverishly accumulating material possessions and the second half trying to get rid of them.  The 80-20 rule is true: you use 20% of your possessions 80% of the time.  The rest is pretty much a waste of money and space.

So I would like to tell my daughter and her fiance to be very judicious in accumulating things, to take it slowly, and don't rush to fill your closet with things you don't need.  Enjoy the freedom you have now.  The freedom from too many possessions. 

by Jo-Anne LaBuda

Consumers need to remember that in real estate it is always a Buyers' or a Sellers' market.  It is never evenly matched.   Both of these come with their pluses and minuses.  Obviously it is better to be a buyer in a buyers' market and a seller in a seller's market.  Many people are both, so they can benefit on one side or the other.

The time to buy or construct your plan to buy is always "now" if you are a first-time buyer.  This allows you to take advantage of the "owning real estate" benefits which include tax benefits among other things.

We currently are experiencing a buyers' market, which means there are more homes on the market than buyers.  this is the case today, but it could begin to change tomorrow.

Here are some terrific reasons to own or purchase real estate in Columbus, Ohio.  (This information comes from the Columbus Board of Realtor.)

Home prices are very affordable.  This is not necessarily true in other parts of the country where prices have come down but still remain unaffordable for most people.  The average price of a home in Central Ohio in 2007 was $172,531 vs. the median price nationwide of $218,900.  Some economists have actually said that Central Ohio homes are undervalued!

Interest rates are very low.  The 30 year interest rate is only slightly more than 5% as of this posting.  WOW!  The lower the interest rate, the lower the payment.

Despite the gloom and doom in the newspapers, buyers can still get loans.  Terms have simply gone back to the way they were about 5 years ago.  Thank goodness!  Buyers need to borrow a comfortable amount at a rate that will remain constant over the life of the loan.  Again, thank goodness!  There are still plenty of mortgage programs available to fit a particular buyer's needs.

Please give me a call if you'd like to discuss any of this or anything that has to do with real estate.  We like to help buyers and sellers get the information they need to make a decision about whether it is right for them to buy or sell.  We do not push anyone into anything. We consider ourselves consultants, not sales people.  We offer you the information and it is up to you to decide when and if you are ready to make a move.

by Erin LaBuda

It's usually after the first $100 service call that first-time home-buyers begin to realize there is more to owning a home than choosing new paint colors and buying that new couch.  Here are a few simple things that a homeowner can do to make sure they are optimizing the performance of their major expenses:

• Change your furnace filters monthly.  This extends the life and efficiency of the furnace.  Plus the cost of replacing 24 filters (one each month) equals the cost of one HVAC service call.
• Drain your water heater annually.  It can feel overwhelming at first, but by draining the sediment out with the water it will prolong its life and save you time and money.
• Check your circuits bi-annually.  Just flip the circuit breakers off and on.  If a circuit keeps shutting off with normal use, call an electrician and get it fixed immediately.
• Check for leaks periodically.  take a look under your sinks and toilets to make sure you are not experiencing any leaks.  Catching a small leak is an easy fix.  Letting one go will cost you a bundle.
• Don't wait until the last minute.  It's usually fairly obvious when a major mechanical is on its last legs.  Make the calls and get the estimates before your furnace goes out in the dead of winter or your water heater explodes all over your basement.  It happened to me and it was a tough lesson learned!
• Keep your attic and basement dry.  By adding dirt around the perimeter of your house that slopes away from the home and by making sure your downspouts are connected and gutters are draining properly, you can save yourself a lot of heartache and expense from basement issues.  Also, keep an eye on your roof.  If it starts looking a bit worse for the wear, contact a reputable roofing company (or ask your Realtor for a referral) and get it checked out.
• Maintain your fireplace and chimney.  Cleaning and inspection of your chimney on a regular basis is a must to make sure you are operating a safe fireplace.  Also, watch the exterior for major mortar cracks and/or loss of caps.  Water intrusion in the chimney is caused by both of these things and can lead to rebuilding and/or relining a chimney or flue.

by Lynn Nadler

Your credit score, also known as your FICO score, is a very important number and one you should know.  Three quarters of all lenders use FICO scores when considering requests for loans or credit.  This score will determine your interest rate, the amount of your down payment and the kind of mortgage available to you if you buy a house.  It will even determine your ability to get a car loan, the premium on your auto or home insurance and is often even considered when you apply for a job.

FICO scores range between 300 and 850, with the average score being 675.  Ratings are as follows:

Over 750 - Excellent

720 or more - Very Good

660-720 - Acceptable

620-660 - Uncertain

Less than 620 - Risky

When determining your FICO score, the information upon which the formula is based includes: payment history, amount you currently owe lenders, the length of your credit history, the number of new credit accounts and the mix of credit accounts (mortgages, credit cards, installment loans, etc.)

Once you know your FICO score, there are ways to improve it, although this can take time.  Make sure you pay your bills on time, especially your mortgage.  Keep the amount you owe on credit cards low.  If the limit on a card is $2,000, make sure you stay well below that.  If you have a large number of credit cards, cancel ones you don't use and keep just 2 or 3.  If you do cancel, make sure you tell the company to note that the card was cancelled at the customer's request.

To find out your FICO score, there are a number of companies that will give you a report for free.  Do this and then follow these suggestions so that when you're ready to buy a house or a car or look for a job, you will be prepared.

by Michelle Neal, Buyer's Agent

In today's Buyer's Market, everyone seems to be looking for a "deal".  Many buyers are under the misconception that they are going to get a great home in top condition at a steal of a price.  Although this can occur once in a while, more often than not the deeper the discount on the property, the less pristine is its condition.

There are two main kinds of sellers in today's market.  The first is the private seller.  This person lives in the home as his or her primary residence, he may have raised his family there and he takes pride in the property.  Often, the private seller has already adjusted to the market by pricing it competitively against other homes in the neighborhood.

The other kind of selling situation occurs when the property is owned by the bank, an absentee seller or is HUD-owned.  These homes may offer a deeper discount, but they have often sat vacant, have been neglected or even mistreated.  Typically, these homes will need cosmetic work such as total carpet replacement, fresh paint, possible replacement of light fixtures, window treatments and appliances, etc.

It is important for buyers to clarify what they are looking for as far as a "deal".  They need to evaluate their true home-buying goals.  Today's buyers should make sure they are represented by a Realtor who is knowledgeable about replacement costs, effective in getting necessary inspections and estimates, and has a solid network of reputable vendors who can assist the buyer in truly maximizing this Buyer's Market.

Housing prices are down.  Interest rates are unbelievably low.  Inventory is high so there are lots of great homes to choose from.  Many people are looking at homes right now but waiting to buy.  So the question is this: what are they waiting for?

The word on the street is that they are waiting to see if home prices drop even lower.  But, you might ask, how will they know when they have hit rock bottom?  The answer is they won't know.  No one knows when  that magic moment has arrived when home prices are as low as they are going to go so smart people can invest in a home, breathe a sigh of relief, and sit back while  prices start to climb again.  Just as with the stock market, a lot of people have lost a lot of money  trying to "time the market". 

At this point, it's  important to mention an obvious fact:  This is Columbus, Ohio, not San Diego, California.  We never experienced the huge housing bubble that resulted in housing prices becoming hugely inflated.  The good news about that is that we will not see the drastic drop in home prices that California and Florida and Arizona have seen.   For that reason, Forbes.com ranked Columbus third in the country in the most stable real estate markets.

The message is coming from everywhere right now -- newspapers, television, financial planners, etc. -- that this is a great time to buy a home.  If you are a first-time buyer and have no home to sell or if you are looking to buy investment property, the conditions couldn't be any better.  If you do have a home to sell, put it on the market at the right price and in the right condition and plan on making your money on the home you purchase.  But be careful about waiting around for the low point.   You might regret it later.

by Jo-Anne LaBuda

I just read yet another article about the state of the current real estate market and oh, how I wish I had written it!

It did, however, spur some thoughts:

Don't believe everything you read in a newspaper or hear on television.  Remember, even they call them "stories".  How often do you read or see a "story" in a newspaper or on TV that isn't negative or sad news?  There is a lot of good news, but it doesn't often get reported.  So here is some good news about the Columbus real estate market.

• Interest rates have never been better!  What a great time to invest in your first home or investment property! What a great time to purchase a larger home for your family!  Or, if you are empty-nesters, what a great time to downsize or buy that dream home!  It's also a wonderful time to refinance your current residence.
• There is a great inventory of wonderful homes for buyers to choose from!
• Homes are selling.  Yes, they need to be conditioned well and priced to the market, but they are selling!
• Many of the mortgage companies and real estate agents that got into the market to make a "fast buck" are gone.  Hurray for the consumer and hurray for us experienced and ethical Realtors who take our fiduciary responsibility to our clients seriously.

So if you are interested in being an investor, or want to purchase your first home or a bigger home or are ready to sell for whatever reason, contact your Realtor now.  Or better yet, contact me!  I promise to give you an honest opinion of your options whether it be best for you to go ahead now or make a plan to do it later.  Then it's up to you.

It's a great time to be in real estate!

by Erin LaBuda

A question many buyers ask me when we are touring different Central Ohio communities is: what determines the tax base and "real" property value?

Property taxes -- the principal source of revenue for cities, counties and school districts -- are calculated by multiplying the nominal property tax rate by the assessment ratio (the percentage of the value of the property that is taxes) by the value of the property. Ohio's tax rate averages 1.34% of property value (source: MSN.com) -- 15th in the country.

Real property tax rates vary with the taxing jurisdiction. The total tax rate includes all levies enacted by a legislative authority or approved by the voters for all taxing jurisdictions in which the property is located (e.g. county, township, municipality, school district). A particular school district may place a levy on the ballot, which will increase the property taxes for homeowners living in that school district. It is then up to the voters to determine if the proposed increase is necessary to provide the school district with adequate funding to maintain a certain level of excellence. If the levy fails, the school district receives no additional funding. If it passes, a homeowner's property tax goes up and the schools receive their funding.

Why, many buyers ask, do the property taxes vary so much from one Central Ohio community to another? There are many factors that affect property value, but the primary one is the quality of the schools.

With funding for things like extra-curricular activities, advanced placement courses, extensive course offerings, infrastructure maintenance and teacher recruitment, the desirability of a particular community increases. This, in turn, creates a higher demand for properties in that school district. Other factors that create demand for a particular community are things like access to shopping, recreational facilities, arts centers, local area businesses and community programs. All of these factors directly impact property value because the demand to live in communities with these benefits will always be high.