10 tips for first time home buyers

If one of your goals this year is to make the shift from renter to homeowner, you should begin preparations now for an exciting emotional and financial adventure.

Before you start the home-buying process, make sure you are ready to buy a home where you will live for three to five years or longer, since it can take that long to build equity in a home and recoup your investment costs. Think about your dream home and your dream neighborhood, but recognize that you may need to sift through these dreams to find a community and a home that you can comfortably afford.

Anyone who has watched the news in the past few years should be aware that home prices have fallen in most real estate markets, and that interest rates are at historically low levels — both factors that make buying your first home more affordable.

Here are some tips to get you started on the step-by-step process of buying a home:

1. Check your credit score Lenders base your mortgage qualification on a variety of factors, including your income and assets, your debt-to-income ratio, your pattern of savings and your job stability. But the most important factor in today's tightened credit world is your credit score. Lenders tie the interest rate you must pay to your credit score, so that borrowers with a score of 720 and sometimes 740 and above are the only ones who will pay the lowest mortgage rates. Borrowers with a credit score below 620 may not qualify at all for a mortgage until they can improve their score.

2. Set your housing budget A lender will tell you how much you can borrow, but each potential homeowner should create a simple budget for themselves with income and spending to determine how much they are willing to spend on housing payments. Financial experts recommend that homeowners spend a maximum of about 30% of their gross monthly income on principal, interest, homeowners insurance and taxes. Don't forget to budget about 1% of the home price for condo or homeowner association fees and maintenance costs.

3. Start saving and stop spending Once you have an estimate of your mortgage payment, start saving the difference between that payment and your current rent every month. In addition to building your savings, this allows you to get comfortable with a higher housing payment.

4. Meet with a lender Get pre-qualified for a mortgage loan before you look at homes so you can avoid falling in love with a home you cannot afford. You may be surprised to discover you can afford something pricier than you thought since interest rates are so low. Make sure you ask your lender about your variety of loan options and get an idea of how much cash you will need for a down payment and closing costs.

5. Find a reputable realtor All buyers should have a realtor to represent their interests during negotiations and to help buyers recognize the value in different homes and neighborhoods. Your realtor should be experienced, knowledgeable and familiar with where you want to live. Trusting your realtor is vitally important to buying your first home.

6. Narrow your priorities Decide whether it is more important to you to live in a particular type of home (a single family home with a garage or a condo in a high rise) or in a particular neighborhood. If you cannot find or afford everything you want in your first home, you may need to make some compromises.

7. Choose a neighborhood Some neighborhoods hold onto their value more than others during a housing downturn. Work with a knowledgeable realtor to find a neighborhood that meets your needs - somewhere you will be happy as well as feel safe that home values are stable or rising.

8. Make a reasonable offer If you love a house and don't want to lose it, don't make a low-ball offer. Some sellers are willing to negotiate and others are not. A trustworthy realtor can walk you through the process to make sure you are dealt with fairly.

9. Have a home inspection Never buy a home without having it inspected. Not only are you looking for serious flaws in the home, but you can learn a lot about home maintenance and what to expect in terms of repairing or replacing systems and appliances as an owner.

10. Finalize the details After the contract has been signed, make sure to stay in constant touch with your realtor and your lender to be sure your financing is taken care of along with all insurance needs. A good realtor will have a checklist to make sure everything is accomplished in time for settlement.

The bottom line Buying your first home can be an exhilarating experience, provided you do some research, stay within a comfortable budget and work with reputable professionals who will guide you through the process.http://www.homeinspection247.com/searching-homes-for-sale-or-looking-to-buy-a-home.html

Why should I get a Home Inspection?

Before you buy a home, one of the things you should do is to have the home checked out by a professional home inspector. Buying a home is expensive enough as it is - why would you choose to fork over another $400 if you're not required to? In this article, we'll delve into what a home inspection can reveal and why you shouldn't forgo this optional procedure. 

The Home Inspection ContingencyYour first clue that a home inspection is important is that it can be used as a contingency in your purchase offer. This contingency provides that if significant defects are revealed by a home inspection, you can back out of your offer, free of penalty, within a certain time frame. The potential problems a home can have must be pretty serious if they could allow you to walk away from such a significant contract. 
What a Home Inspection ExaminesInspectors vary in experience, ability and thoroughness, but a good inspector should examine certain components of the home you want to purchase and then produce a report covering his or her findings. The typical inspection lasts two to three hours and you should be present for the inspection to get a firsthand explanation of the inspector's findings and, if necessary, ask questions. Also, any problems the inspector uncovers will make more sense if you see them in person instead of relying solely on the snapshot photos in the report. 

The inspector should note: 

• whether each problem is a safety issue, major defect, or minor defect 
• which items need replacement and which should be repaired or serviced
• items that are suitable for now but that should be monitored closely

A really great inspector will even tell you about routine maintenance that should be performed, which can be a great help if you are a first-time homebuyer. 
While it is impossible to list everything an inspector could possibly check for, the following list will give you a general idea of what to expect.

Exterior

• Exterior walls - The inspector will check for damaged or missing siding, cracks and whether the soil is in excessively close contact with the bottom of the house, which can invite wood-destroying insects. However, the pest inspector, not the home inspector, will check for actual damage from these insects. The inspector will let you know which problems are cosmetic and which could be more serious.
• Foundation - If the foundation is not visible, and it usually is not, the inspector will not be able to examine it directly, but they can check for secondary evidence of foundation issues, like cracks or settling.
• Grading - The inspector will let you know whether the grading slopes away from the house as it should. If it doesn't, water could get into the house and cause damage, and you will need to either change the slope of the yard or install a drainage system.
• Garage or carport - The inspector will test the garage door for proper opening and closing, check the garage framing if it is visible and determine if the garage is properly ventilated (to prevent accidental carbon monoxide poisoning). If the water heater is in the garage, the inspector will make sure it is installed high enough off the ground to minimize the risk of explosion from gasoline fumes mingling with the heater's flame.
• Roof - The inspector will check for areas where roof damage or poor installation could allow water to enter the home, such as loose, missing or improperly secured shingles and cracked or damaged mastic around vents. He or she will also check the condition of the gutters.

Interior

• Plumbing - The home inspector will check all faucets and showers, look for visible leaks, such as under sinks and test the water pressure. He or she will also identify the kind of pipes the house has, if any pipes are visible. The inspector may recommend a secondary inspection if the pipes are old to determine if or when they might need to be replaced and how much the work would cost. The inspector will also identify the location of the home's main water shutoff valve.
• Electrical - The inspector will identify the kind of wiring the home has, test all the outlets and make sure there are functional ground fault circuit interrupters (which can protect you from electrocution, electric shock and electrical burns) installed in areas like the bathrooms, kitchen, garage and outdoors. They will also check your electrical panel for any safety issues and check your electrical outlets to make sure they do not present a fire hazard.
• Heating, ventilation and air conditioning (HVAC) - The inspector will look at your HVAC system to estimate the age of the furnace and air conditioner, determine if they function properly and recommend repairs or maintenance. An inspector can also give you an idea of the age of the home's ducting, whether it might have leaks, if your home has sufficient insulation to minimize your energy bills and whether there is any asbestos insulation. 
• Water heater - The home inspector will identify the age of the heater and determine if it is properly installed and secured. The inspector will also let you know what kind of condition it is in and give you a general idea of how many years it has left.
• Kitchen appliances – The inspector will sometimes check kitchen appliances that come with the home to make sure they work, but these are not always part of the inspection. Be sure to ask the inspector which appliances are not included so that you can check them yourself.
• Laundry room - The inspector will make sure the laundry room is properly vented. A poorly maintained dryer-exhaust system can be a serious fire hazard.
• Fire safety - If the home has an attached garage, the inspector will make sure the wall has the proper fire rating and that it hasn't been damaged in any way that would compromise its fire rating. They will also test the home's smoke detectors.
• Bathrooms - The inspector will check for visible leaks, properly secured toilets, adequate ventilation and other issues. If the bathroom does not have a window and/or a ventilation fan, mold and mildew can become problems and moisture can warp wood cabinets over time.

Home Inspection ShortcomingsA home inspection can't identify everything that might be wrong with the property - it only checks for visual cues to problems. For example, if the home's doors do not close properly or the floors are slanted, the foundation might have a crack - but if the crack can't be seen without pulling up all the flooring in the house, a home inspector can't tell you for sure if it's there. 

Furthermore, most home inspectors are generalists - that is, they can tell you that the plumbing might have a problem, but then they will recommend that you hire an expert to verify the problem and give you an estimate of the cost to fix it. Of course, hiring additional inspectors will cost extra money. Home inspectors also do not check for issues like termite damage, site contamination, mold, engineering problems and other specialized issues.

SEE: 10 Reasons You Shouldn't Skip A Home Inspection
After the InspectionOnce you have the results of your home inspection, you have several options. 

• If the problems are too significant or too expensive to fix, you can choose to walk away from the purchase, as long as the purchase contract has an inspection contingency. 
• For problems large or small, you can ask the seller to fix them, reduce the purchase price, or to give you a cash credit at closing to fix the problems yourself - this is where a home inspection can pay for itself several times over. 
• If these options aren't viable in your situation (for example, if the property is bank-owned and being sold as-is), you can get estimates to fix the problems yourself and come up with a plan for repairs in order of their importance and affordability once you own the property.

The Bottom LineA home inspection will cost you a little bit of time and money, but in the long run you'll be glad you did it. The inspection can reveal problems that you may be able to get the current owners to fix before you move in, saving you time and money. If you are a first-time homebuyer, an inspection can give you a crash course in home maintenance and a checklist of items that need attention to make your home as safe and sound as possible. Don't skip this important step in the home-buying process - it's worth every penny. 

Do I need a Home Inspection?

Should a buyer get a home inspection for a home they are buying? Should a seller order a home inspection prior to putting the property on the market? There are advantages for both.

Simply put, a home inspection is a visual examination of both the physical structure and major systems of the entire home including: walls, ceilings, floors, decks, exterior covering, the roof, foundation, insulation and ventilation, plumbing, electrical, heating and air conditioning. It is not an appraisal to validate the value of a home, nor a pass/fail exam. A third-party inspector will give a report on the physical condition and suggest repairs.

Buyers

For buyers, a home inspection clause in the written offer that makes the purchase contingent upon the findings can provide peace of mind. If a serious problem is found, it allows room to renegotiate the purchase price or "opt-out" of buying the home altogether. However, this is usually uncommon. Typically, the seller will already have told the buyer about any major problems. 

More often, inspections reveal less serious defects that aren't enough to warrant backing out of the transition. However, knowing about these minor problems can prevent major disasters down the road.  In addition, if specified in the inspection clause, the cost of the repairs can be at the seller's expense.

Another advantage to having a home inspection is it offers buyers an opportunity to become familiar with their new home and learn about maintenance to help in its upkeep.  Although not required, it's recommended that buyers be present during the inspection. This allows them to observe the inspection; ask questions about the condition of the home; and receive an objective opinion.

Sellers

For sellers, conducting a home inspection (or pre-inspection) before listing their homes puts the control back into their hands.

When the buyer inspection finds problems, it can impede negotiations and cost the seller more in repairs. By having a pre-inspection, the seller can help eliminate any surprise findings after an offer has been made. The seller can make repairs before placing the home on the market and possibly even increase the value of the home.

A pre-inspection can also serve as a great marketing tool. Sellers are required by law to disclose any known defects in the home. Having a pre-inspection report available for buyers tells them that the seller has nothing to hide. It also gives them a clearer picture of the condition of the home.

If there are major problems found during the pre-inspection, it gives the seller an opportunity to disclose the condition up-front, making it less likely for the buyer to pull out of the deal or try to renegotiate the price.

Knowing the true condition of a home can bring peace of mind to buyers and sellers; and be one less hurdle in the home buying and selling process.  Ask your real estate sales professional for a list of certified independent home inspectors in your area.

Smoke Detectors Specifications Changed

Smoke Detectors Specifications Changed

Starting on July 1, 2014, the State Fire Marshall will not approve a battery-operated smoke alarm unless it contains a non-replaceable, non-removable battery capable of powering the smoke alarm for at least 10 years. This rule was originally slated to take effect on January 1, 2014. Until July 1, 2015, an exception to this rule applies to smoke alarms ordered by, or in the inventory of, an owner, managing agent, contractor, wholesaler, or retailer on or before July 1, 2014. Furthermore, starting January 1, 2015, the State Fire Marshal will not approve a smoke alarm unless it does all of the following: (1) displays the date of manufacture on the device; (2) provides a place on the device to insert the date of installation; and (3) incorporate a hush feature. A previous requirement for the smoke alarm to incorporate an end-of-life feature that provides notice that the device needs to be replaced has been eliminated. The requirements taking effect on January 1, 2015 was originally slated to take effect on January 1, 2014. The State Fire Marshal has the authority to create exceptions to these requirements. Senate Bill 745

List of Items Sellers Should Fix from a Home Inspection Checklist

Home Inspection Checklist Items Sellers Should Fix

If you have a choice, it might be smarter to hire your own contractors and supervise repairs. Before issuing a formal request to repair, consider the seller's incentive to hire the cheapest contractor and to replace appliances with the least expensive brands.

Although home inspectors are reluctant to and, in some cases, refuse to disclose repair costs, call a contractor to determine the scope and expense to fix minor problems yourself. No home is perfect. Every home will have issues noted or flagged in a home inspection. Even new homes.

A repair issue that will be be a deal breaker for a first-time home buyer, causing the buyer to cancel the contract, will not faze a home buyer versed in home repair. Talk to your agent, family, friends and call a few contractors to discuss which types of defects are minor. Perhaps a simple solution is available such as replacing a $1.99 receptacle, which can resolve many outlet problems.

Pat yourself on the back, too, for getting a home inspection. Some buyers feel a home inspection is unnecessary, especially if they are buying new construction. If a light switch doesn't work or the air conditioner blows out hot air, those are problems you can see and test. The problems that aren't readily identifiable to you such as code violations, a furnace that leaks carbon monoxide or a failing chimney, are the types of defects a home inspector could identify in a new home. Builders' contractors make mistakes, too.

10 Most Common Problems Found by a Home Inspection

The 10 Most Common Home Inspection Problems
TIP: Buyers can get extra protection and piece of mind by purchasing a home warranty insurance policy. Such policies may also be a way for sellers to protect themselves from post-sale claims by buyers for defects undetected in home inspections.

1. Faulty wiring—open junction boxes, amperage mismatches, no wire nuts on wires.

The cure: Fix junction boxes; upgrade to at least 100 amps.

2. Poor grading and drainage—spongy soil around the foundation, signs of leaking in basement.

The cure: Regrade so that grounds slopes away from house for 10 feet; remove porous material around foundation.

3. Faulty gutters—clogged or bent gutters, water not channeled away from house.

The cure: Preventive maintenance; gutters of adequate size, splash pans to divert run-off.

Each year the American Society of Home Inspectors conducts surveys related to inspections and U.S. homebuyers. Here are some of their latest findings:

In a 2012 survey, 88 percent of respondents say home inspections increase their confidence about the condition of the property.

In a 2011 study, the ASHI found that nearly 90 percent of all U.S. homebuyers believe some home inspections are a necessity, nto a luxury.

According to a 2011 survey, 72 percent of U.S. homeowners agree the home inspections they had when they purchased their current residence helped them avoid potential problems.

In 2010, the ASHI reported that 64 percent of homeowners said they saved a lot of money as a result of their home inspection.

4. Basement dampness—water stains, powdery residue on walls, mold or mildew.

The cure: Repair gutters to channel water away from house; apply waterproof coatings to basement.

5. Roof problems—brittle or curled shingles; broken or missing flashings.

The cure: Apply new shingle, or tear off if needed (usually after three re-roofs ); replacing flashings, especially around chimneys and other protrusions.

6. Foundation flaws—cracks in foundation, sloping floors, sticking doors or windows.

The cure: Fill cracks with silicon caulking or epoxy; apply waterproof coating to exterior.

7. Poor upkeep—needs repainting, worn carpeting, cracked driveway.

The cure: Give the house a minor facelift.

8. Faulty plumbing—inadequate water pressure, slow drains, signs of leaks on ceilings.

The cure: Clean and rout drains; reseat toilet with new wax ring, repair leaks.

9. Poor ventilation—extreme heat in attic, vapor condensation.

The cure: Ensure that roof soffits are not blocked; install additional roof vents; vent bathroom and kitchen fans outside.

10. Defective heating—cracks in the heat exchanger or water tank; carbon monoxide leaks.

The cure: Reseal chimney flues; replace sacrificial anode in water heater.

10 Eco-Friendly Home Improvements to Help You Go Green

10 Eco-Friendly Home Improvements

Renovating your home? Just want to make a few quick energy-saving updates? Here are 10 eco-friendly improvements that are good for the planet:

Switch On Energy Efficient Lighting – Upgrade your lighting to energy efficient LED or compact fluorescent lights.

Get the Drop on Drips – Fix or replace leaky faucets. Just one drop per second from a leaky faucet can waste as much as 10 gallons of water each week.

Go Low-Flow – Upgrade to low-flow toilets and showers to reduce water consumption.

Become a Fan of Fans – In cooler weather, use clockwise rotation to push down warm air that rises to the ceiling, and when the weather is hot, reverse to a counter-clockwise rotation to create a cooling breeze.

Re-use, Re-cycle and Re-purpose – Use reclaimed building materials instead of buying new and look for ways to re-purpose old materials.

Save With Solar – Install solar panels to offset energy costs. Common uses include heating swimming pools and pre-warming the household hot water supply.

Xeriscape Your Landscape – Conserve water by planting drought-proof plants and/or installing a rainwater system to get you through the dry months.

Conserve Energy – Upgrade insulation and seal any gaps around windows and doors. Don’t forget to turn the thermostat down or up a few degrees during the day and at night.

Go Green to Clean – Reduce indoor air pollution by using all-natural cleaning products.

Choose Natural and Renewable – Use natural fibers like wool or cotton for carpeting, window treatments and textiles, and sustainable woods like bamboo for flooring.