Buying New Constrcution..Do You Know What You Are Signing?

I remeber the day I bought my first new construction home. It had a contract that was about ten pages long. Today the contract is substantially longer than that as lawyers have put in every conceivable clause to protect the builder. So, the question remains the same. Do you know what you are signing?

The questions always loom as to why someone buys a new home without representation. The sale person represents the builder and gets paid by the builder. They are looking out for the builder's best interests. Having your own representation costs the buyer nothing. The builder pays the buyer's agent.

Well, the other day a client of mine decided on a new home that was pre-built. We went to sign the contract on the house and it was 55 pages long. After reading it extensively there were charges showing up that should have been paid by the seller/builder that were showing as incurred costs to the buyer. I advised my buyer fothe charges and the ramifcations of them paying for it as additional out of pocket expenses that should not be incurred by the buyer.

In addition, the builder was promoting their finace option to the buyer. Offering a premium discount toward closing cost with the buyer using their preferred finacning. Well, the buyer had already shopped around and received a better quote for interest rate and terms than the builder preferred program was offering. In fact over the period fo 30 years the buyer saved an additional $38,000 in interest over the life of the loan by calling a recommended mortgage professional I gave them.

In total the cost of the home saved my buyer an additional $41,000 over the course of 30 years by using a buyer's agent unaffiliated with the builder to represent them. And the total cost to the buyer in this case was ZERO. The information and savings were priceless.

Dave diCecco
Realtor/Broker
www.davedicecco.com

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Dave dicecco
Realtor/Broker
www.davedicecco.com

Buying Rental Property...What To Look For?

In these economic times more people are looking to buy investment homes. Homes they can purchase and rent. The goal being that they get a tenant that will take care of the place, pay the mortgage and leave them with a little extra money each month. But, what are you looking for when you decide to venture into the rental market?

The first thing is affordability. You need to know what the average home prices in the area are and the rental rate for that area. If the numbers show you losing money each month then it is not a viable option. You do not want to just break even either. You have to factor in cost of repairs, potential increase in taxes and Homeowners association dues (if you are purchasing a home in one) and insurance.

Second, what the rental market for the area is like. Charlotte currently is a popular booming rental hot spot according to various indexes. But, what is the average rental rate for the area. Are there a lot of renters where you are looking to buy? or is the area and neighborhood mainly made up of homeowners with a scattering few rentals in it? These all will factor in to what you can command for rent and the chances of renting it out quickly....

Third, schools. If you are looking to purchase a home that is going to be tailored toward a family this is a vital part of your research. Families make a lot of descsions of where to rent and live based on affordability and the schools. We all want our kids to go to the bet possible schools. You are going to want to check out the schools that are slated for the home you are looking to buy. This will help give you a good indication of what to expect. The better the schools the greater the applciant pool is likely to be.

Fourth, crime rate. Though it may not seem important. It can be detrimental to renting a home. Fortunate, most cities have crime stats on their websites now. They break them down by the types of crimes. No area is going to be free of crimes; ( that would be utopia) but you want to know what types of crime are happening and the frequency of them.

Fifth, proximity to stores, public transportation and highways. We all hate the commute time. This can be a factor in whether someone chooses your home over another. Proximity to everyday shopping and work or highways is a factor that needs to be factored in when looking to purchase a rental home.

Sixth, amenties the neighborhood offers. Is the home you are buying in a community with a pool? Does it have a playground for children? Are there parks close by? All can help or hinder your chances fo renting a home out.

Last, the resale value of the home. Depending on how long you plan on keeping the house; this can be an important statistic in your equation. I always recommend to investors looking to hold onto a home for a period of three to five years to look at the trends of home prices going back seven to eight years. This will give you a picture of the pre boom home prices, the boom home prices and the post boom home prices. You will be able to see where you would land on the wide spectrum of the home price range if you needed to sell.

Dave diCecco
Realtor/Broker
www.davedicecco.com