P.
Barton Erickson
e-PRO, SFR, SRS
REALTOR since 1987
Co-Founder of the HouseJeanie
Team
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LAMON Assoc.
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| Real Estate Questions: | |
How Do Electric Heat Pumps Function? How Do I Overcome Credit Barriers? How should I check contractors references? How will buying a home help me save money on taxes? If I am buying a home, can I really trust the real estate agent with confidential information? What is PITI? Who Determines the Market? |
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| Q. Who Determines the Market? | A.
Conditions in the real estate market generally favor either the buyer or
the seller. The market is always changing, so it is important to have a
Realtor who diligently monitors the listing in your neighborhood or
where you want to relocate. Realtors keep track of the number of days each home is on the market. A typical market is one in which it takes three-to-six months to sell a home. Whenever there is more than a six-month's inventory, there is a "glut" of homes on the market. In a buyer's market, there are too many homes on the market for the number of buyers. Homes take longer to sell and prices fall. Sellers must work harder to sell to sell their homes, often adding incentives such as owner financing or a redecorating allowance to attract buyers. Buyers may increase their demands, such as asking sellers to cover some of the closing costs and contingencies. Sellers may get little or no profit from the sale of their home. In a seller's market, there are fewer homes for sale than there are buyers. Prices tend to rise, and the homes sell in a mater of hours or days. Sellers often will get "top dollar" for their homes, which eliminates some buyers who can't afford the higher costs. A particularly attractive home may receive several offers, some even higher than the list price. Buyers must be completely ready to buy when the inventory is low and competition is high. Many factors can affect the real estate market. If you're preparing to buy or sell a home, contact me (B. Jean Erickson, CRS, GRI) to find out what the market conditions are and how we can plan a successful strategy for you. |
| Q. If I am buying a home, can I really trust the real estate agent with confidential information? | A.
Yes. In fact, most real estate agents will say that the more you tell
them, the better they can negotiate on your behalf. However, be sure you understand the legal nature of your relationship with the agent. A real estate agent can represent (1) the buyer exclusively, (2) the seller exclusively or (3) both the buyer and seller in a dual agency situation. The nature of the relationship may determine what you should reveal. For example, telling the seller's agent what your uppermost limit on a house price would be is foolish because the seller's agent can reveal that information to the seller. That would hurt your negotiating position. Both a buyer's agent and a dual agent are prohibited from sharing this kind of information. State laws require agents to disclose all possible agency relationships before they enter into a residential real estate transaction with you. |
| Q. What is PITI? | A. Principal, interest, taxes, and insurance (PITI) are the four components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that are paid into an escrow account each month for property taxes and mortgage and hazard insurance. |
| Q. How will buying a home help me save money on taxes? | A. Homeowners enjoy substantial tax benefits, starting with the closing costs. Points, or loan origination fees, are deductible for buyers or sellers, whoever pays them. The interest payments on your mortgage payments are tax deductible. If you decide to remodel or add on to your home, you can obtain a home equity loan to pay for the expenses and interest on that loan is deductible, too. Finally most homeowners don't have to pay capital gains tax on the appreciation of their home. For married couples, the first $500,000 in appreciation is tax exempt, $250,000 for single homeowners. The Internal Revenue Service has useful pamphlets regarding home ownership. Call 1-800-TAX-FORM to order "Tax Information for First-Time Homeowners," or "Selling Your Home." |
| Q. How Do I Overcome Credit Barriers? | A.
Mortgage lenders approve loans based on the borrower's income, assets,
liabilities, employment history, and credit history. It used to be that a
poor credit history or a high debt-to -income ratio made it almost
impossible to buy a home. The 1996 Home Mortgage Disclosure Act cited
credit history as the number one reason for denying a mortgage
application. More options are available than ever before for people with
less-than-perfect credit.
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| Q. How Do Electric Heat Pumps Function? | A.
Electric heat pumps move heat from one place to another. In winter, heat
is extracted from the outdoor air, and introduced to the indoor air and
then distributed through the home. In summer, the process is reversed -
excess heat is removed from the home and pushed outdoors. In this process
the efficiency can be as great as three times more than other heating
systems. However, and this can be an expensive "however." The heat pump only works when the outdoor temperature is above 40 degrees Fahrenheit. Under 40 degrees the heat pump becomes inactive and the base heating system starts to operate. (Some manufacturers call this the emergency heat.) Most heat pump base heating systems are electric heat therefore when the outdoor air temperature is below 40 degrees Fahrenheit your system is an electric heating system. |
| Q. Hire Contractors carefully. | A.
Getting your home ready for sale? Today's buyers want homes in pristine
condition so before you put your home on the market, fix anything that is
showing wear-and-tear. That may mean hiring a contractor. The National
Association of the Remodeling Industry (NARI) says one of the most
important steps in hiring a qualified contractor is checking references.
NARI suggests homeowners ask references the following questions:
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Do you know someone who is thinking about buying or selling a home? Please send them to this WebSite: http://www.housejeanie.com or e-mail me at info@housejeanie.com |
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