Home Buying Tips for Same Sex Couples

When you find the perfect home that you and your partner would like to purchase, you will begin the process by making a purchase offer. The offer generally includes how much you are offering to pay for the home, contingencies to the purchase such as inspections or financing, and any conveyances you would like included such as furnishings or other assets. It may also include a good faith deposit, generally $500 or 5 percent of the home’s value, to show that you are serious about purchasing the home.

Sold-signBefore making your offer, there are some things that you should consider.

1. Find out why they are selling. If they are selling because they have to make a move for a job change or some other reason that makes them motivated to sell the home quickly they may be willing to negotiate on the asking price.

2. Do not make an offer that is a lot lower than the asking price if it is a fairly priced. This could insult the seller and make him or her unwilling to negotiate any further with you. If the home is fairly priced, you may consider offering a slightly lower amount if you are not buying in a fast paced market where you stand to lose out on the home altogether.

3. Do not show the seller that you are enthusiastic about buying the home. Doing so could    make the sellers think that you want it bad enough to pay a higher price than what you are offering. While this may open negotiations, the seller may be less inclined to lower the price or offer additional perks, such as paying closing costs or making a repair that you would like.

4. Be sure to include logical time frames for obtaining financing, inspections and other           contingencies that you can logically meet. For example, while you may believe that you can obtain financing within two weeks, there is no guarantee that it will happen. You may end up applying at a different mortgage company and miss the deadline. In that case, the agreement can be voided for noncompliance and the seller is free to sell the home to someone else.

The seller has the option of accepting your offer, making a counter offer with or without changes, or rejecting your offer altogether. Keep in mind that just because your offer may be the first, the highest or the best offer the seller has received, he or she has no obligation to accept it. In a few states, the seller is required to accept an offer or take it off the market if the offer is for full price with no contingencies. Generally, sellers have the authority to accept the offer that they prefer.

If the seller rejects your offer altogether, you have the option of submitting another offer. In that case, it would be wise to have your real estate agent, if you have one, find out why the offer was rejected in the first place. That knowledge will give you a base for making a better offer that may be accepted.

If the seller accepts your offer and all parties sign, a ‘meeting of the minds’ takes place and the contract becomes legally binding. This is why it is important to include any contingencies and conveyances that you would like included. Unless the seller is willing to negotiate and modify the purchase agreement, you will be legally liable to follow through on the purchase on the terms submitted in the offer.

If you are considering selling your home, you should consult with an LGBT real estate agent at GayRealEstate.com. He or she is in the best position to know and discuss the local market with you and guide you through the process of buying a home. In addition, an LGBT real estate agent has the knowledge to guide you through the process of making a purchase offer.

Is now REALLY the time to buy a house?

Have you noticed it yet? The growing murmur out there, getting louder every week, bubbling up in newspapers, on TV, and on news sites, and it’s telling you to buy a house in 2013.

OK, maybe that’s a bit of an exaggeration, but there are definitely a lot of experts (and non-experts) suggesting that now is the right time to buy a house  that is, in 2013. And that murmur may soon turn into a deafening roar. So let’s look at the questions you need to ask to determine whether 2013 is really the best time to buy a house.

Is Buying a House Right for You Right Now?

We’ll discuss the numbers in a second, but before we do that it’s important to get one thing straight: No matter what the national economic and housing market trends indicate, it only makes sense to buy a house if it meshes with your current place in life and your future goals.

For example, if you have a stable career and a job that pays enough to cover your living expenses (with some leftover for emergencies/retirement), and in addition you plan on being in the same place for 3-5 years or expect you could rent the house out if you were to move away, then you are probably in a good position to consider buying a house in 2013.

On the other hand, if you can’t imagine giving up your mobility, if you can’t count on having a steady income, or if you have substantial credit card debt or student loan debt (or are struggling to pay your bills each month) then it might not make sense for you to buy a home at this time.

Are Mortgage Rates the Best in 2013?

So let’s say you’ve decided that now is a good time for you personally to buy a house. The next question is whether it’s the right time financially. A big part of the answer has to do with interest rates. Lower interest rates are always better, obviously, because they save you money  even an interest rate that is 1% lower could save you $50,000 or more over the course of a 30-year mortgage.

And if you can lock-in a low rate with a fixed-rate mortgage (rather than an adjustable-rate mortgage) that’s even better.

So the question is, are interest rates low right now? The experts say yes. This graph shows average mortgage interest rates over the past 30 years:

Interest rate graph via St. Louis Fed
Interest rate graph via St. Louis Fed
As you can see, rates are currently at about 3.5% which is lower than at any other point in the past three decades. So clearly, it’s true that this is an opportunity to lock in low interest rates. But do we have any reason to expect them to increase in the near future? That’s hard to say. Some experts have been predicting inflation and rising interest rates for the last few years and it hasn’t happened yet. These kinds of predictions are notoriously difficult to get right. However, it’s probably not a bad idea to assume that these rates will increase at some point in the future.

That still doesn’t leave us with a complete picture though, because we haven’t looked at housing prices yet.

Are Home Prices the Best in 2013?

If you’ve been paying any attention to the news for the past five years, then you know about the housing market crash that coincided with (and partly caused) the global financial crisis that began in 2008. But have housing prices rebounded already, or are they still low? It depends on which city and neighborhood you’re talking about, of course, but we can get a sense of the national picture from this graph of the Case-Shiller index:

Case-Shiller graph via Wikipedia (click to enlarge)

Case-Shiller graph via Wikipedia

The graph is a measure of housing prices adjusted for inflation. As you can see, prices are still much lower than they were at the peak of the housing bubble. That doesn’t mean they couldn’t drop further in the coming years  or that they’ll ever return to their highs of the mid-2000s  but it is an indication that you should be able to get a reasonable price if you decide to purchase in 2013. The really important thing is to pay attention to housing price trends in the area you hope to buy a home (you can use sites like Zillow.com and Trulia.com to track prices for specific houses and neighborhoods). That data will be relevant to your decision more than the national data.

And remember, life contains many surprises, and if we learned one thing during the housing market bubble and crash, it’s that you should not bank on housing prices going up.

If you’re still thinking this is a good year to buy a house, be sure you understand the amount of work it will require and the upfront costs that you’ll need to pay. When you buy a house, it takes a lot of effort to (A) find the house you want, (B) make an offer and negotiate with the seller, and (C) go through the closing process. Even once you have the house, you may have to make repairs on certain items.

You will also need to have enough money to cover the closing costs, and you’ll need to be financially prepared for the regular costs of owning a home, which include property taxes and maintenance expenses.

With that said, 2013 may be the right time for you to buy a home. And if you think through the decision carefully and do the things that are necessary before buying a house, then you are more likely to have a positive experience. Good luck!

By Benjamin Feldman | Credit.com

How Much Cash Do I Need for a Down Payment when Buying a Home?

Getting pre-qualified before touring homes can be a great way to ensure that you can act fast in today’s real estate market.  When you’re on the prowl for that perfect property and are ready to pounce, the last thing you need is a pre-qualification delaying your offer.

One of the questions your mortgage professional with inevitably ask is, “How much do you want to put down?”  Your down payment can be a gateway into a variety of useful mortgage programs suited for a wide range of needs.

It’s important to note that mortgage program guidelines are always in a state of flux, so be sure to contact one of our real estate professionals to make sure you’re prepared with the latest information.

Mortgage Programs

There are three main mortgage programs you for which may qualify, based on your down payment amount and credit scores:

  • FHA (Federal Housing Administration)
  • Conventional
  • VA (Veteran’s Administration)

Down payment requirements for each program were consistently updated in relation to current market conditions.  In most cases, the more you put down on your new home, the more incentives the loan program provides.

Since most consumers are primarily concerned with interest rates (and rightly so), remember that the minimum down payment may not always get the best interest rate, while a higher down payment will expand your loan program opportunities.

Mortgage Insurance

If a lender is at a higher risk of loss when a buyer may default on a loan program, the lender will usually require you to pay for an insurance policy on their behalf called mortgage insurance (MI).

Traditionally, this is required on a loan with a down payment less than 20% of your new home’s purchase price.  VA loans, however, are exempt from paying MI.

Down Payment Tiers

There are three main down payment levels that will progress you through the various loan programs for a traditional single-family home.

  • No-Money Down (currently limited to VA loans only)
  • 3.5% down (FHA)
  • 5% down (Conventional

VA loans are limited to those currently enlisted in the military and veterans.  While there is no down payment requirement on VA loans, a funding fee will be required by law.  This fee can be reduced with a down payment of at least 5% down and also be financed with your loan if needed.

FHA financing will require a minimum of 3.5% down and an up-front mortgage insurance premium (UFMIP) to be paid.  This fee is also constantly revised through mortgagee letters issued by HUD, so be sure to check with your mortgage professional for the latest UFMIP amounts.

Conventional loans require a minimum of 5% down and have the largest variety of loan programs available.  A conventional loan is a traditional loan by a bank with competitive interest rates based on your credit scores.

Talk to your Real Estate and Mortgage Professional

As you can see, obtaining financing can be a difficult process if tackling it alone.  Luckily, our real estate agents have dedicated themselves to understanding this process completely and have teamed up with mortgage professionals who share the same passion.

Contact a gayrealestate.com agent today to get started.

Author Jeff Hammerberg is the Founding CEO of www.GayRealEstate.com offering Free Instant Access to Gay, Lesbian and Gay Friendly Realtors Coast to Coast.

Buy a Home Now or Rent First?

The American dream has always involved home ownership. For many individuals, renting is never an option, but it’s important to remember that each has its uses.

You Should Strongly Consider Buying

Take a moment and consider the following idea: You could be buying a home when prices and interest rates are at their lowest in history.  A real estate boom could be just around the corner and you could be poised to take full advantage of a wonderful financial opportunity.

First time homeowners should be rejoicing at today’s real estate market.  They don’t have a home to sell, so they’re not losing money listing a home in a competitive, down market.  They’re ready to take advantage of a mortgage with an incredible interest rate, and should they decide to not move for 5 to 10 years, possibly ride an upturn in a market that’s poised to bounce back very soon.

There are also other wonderful tax benefits to home ownership.  You can write off any taxes paid on your primary home and a vacation home, thereby lowering your taxable income and resulting amount due come tax time.  You’ll also enjoy the peace of mind of having four walls to call your own, rather than sharing one or two with an obnoxious neighbor.

When Renting is a Great Choice

Renting has unfortunately garnered a bad reputation in years past, but lately these beliefs are beginning to change.  There are many circumstances where renting is financially smarter than buying.  If you’re one of the lucky few to have made the decision to rent in the past 3-5 years, you avoided an unforeseen depreciation in the market.

Are you on a temporary relocation to a new area? Renting may also be a perfect choice for anyone who doesn’t know how long they’ll be in a particular market.  At the end of your lease, you’ll be given the option to renew or you can simply move on to another gorgeous home.  Many enjoy renting for this purpose alone; the thrill of moving into a new home every few years often outweighs any opportunity for equity gain.

In a down market, renting definitely has its perks.  Today’s real estate market is more volatile than in years past, and many homeowners are making a temporary decision to lease until the market makes a turn into the green.

In Conclusion

If you’re looking to buy or rent a home, consider contacting one of our real estate agents at www.GayRealEstate.com to discuss the pros and cons of home ownership in today’s real estate market.  We’ll coach you on what makes financial sense to your family in the long run and always be here to guide in you in the future when you’re ready for your next move.

Author Jeff Hammerberg is the Founding CEO of GayRealEstate.com ~ Free Instant Access to the Nation’s Top Gay, Lesbian & Gay Friendly Realtors, offering Free Buyers Assistance, and a Free Competitive Market Analysis to home sellers.

Now is the Perfect Time to Buy a Home

If you are thinking about buying a home, but you’re still a bit hesitant, then here is some great information that may help you decide to do it now. True, the economy appears to still be on the downside and we are seeing a lot of unemployment, but did you know that if you are stable enough financially, then now might be the right time to invest in a home. Hopefully the information presented here will open your eyes and understanding about the current status of the real estate industry.

Over the past 20 years, we have seen a boom in the real estate market. A lot of homes were built, and sellers were able to cash in on that increasing trend at the time. However, with the recent recession that hit our country, we are seeing a lot of unsold property in the market. The reason behind this is because it’s become increasingly difficult to get a loan and a lot of people are afraid to invest now because of the instability of the economy.

You see, the law of supply and demand is currently at play. On one side, there’s a huge supply of homes available. On the other hand, there aren’t a lot of buyers. This forces the sellers to drastically lower their prices, and even offer more incentives to buyers, such as paying all your closing costs, etc. There’s a chance right now, to get more value for the money you are willing to invest.

Another reason why you should consider buying a home right now is that you have the chance to accumulate almost instant home equity. Paying a monthly mortgage can build towards a home that you can call your own someday. Your growing equity can become your personal savings account, which you can eventually use to buy a better home in the future, or use a part of your retirement strategy.

Another big factor to consider is that interest rates are currently at historic low levels, and they won’t stay here forever. There are also very Low Money Down Programs that can be availed, as low as 3% granting that you have good credit standing. It’s very easy to get the best deals on home loans with most financial institutions. Although, they are a bit stricter now and choosy on who would be eligible for a home loan. But if you are on the stable side of the economy, with a good credit standing to boot, then there are no reason why a bank would not want to loan you the money with the most competitive interest rates available.

Yes we’ve seen a decline in the prices on real estate these past few years, but as of today in many markets, prices are on the upswing. So, instead of guessing where the bottom may be – take advantage of the many positive factors in today’s market. Waiting it out, you may find yourself out of luck in the near future when you finally decide on buying a home.

The time to decide on buying a home is now while the economy is still conducive for buyers. Now more than ever, you have the best opportunity to invest in a home with the lowest prices and interest rates. Home ownership and its long term benefits are enough to encourage even the most hesitant of buyers. 

Jeff Hammerberg is the Founding CEO of www.GayRealEstate.com the Nation’s Largest Free Database of Gay, Lesbian and Gay Friendly Realtors serving the LGBT Community.

Should I buy a home or keep renting?

Unfortunately, it is impossible to give an affirmative answer, either way, about buying or renting. Conventional wisdom assumes that property values always go up. In reality, home value is determined relative to many ‘x’ factors, which are susceptible to fluctuation. In addition, to turn a profit on a home those x-factors have to be consistently in the positive over the duration of your mortgage.

Some people erroneously associate renting with wasting money. Again, depending on your circumstances, renting may save you money over a lifetime. There are a few time-tested, predictive factors to weigh when deciding whether to buy or rent.

A few assumptions first…

Since we cannot predict the future, let’s assume a few things about the place we intend to live for the next thirty years. For renters, this is harder, but we cannot begin to do a cost-benefit analysis unless we level the playing field. Here, we must assume you continue to pay the same rent, or more, over thirty years. This figure is adjusted for assumed annual increases to your monthly rent payment.

Are homes still an investment?

You live in an apartment that is $1000 a month. You can reasonably expect, based on your exhaustive research, that your rent will rise annually 3%. You are considering buying a home that is $180,000 dollars. Your mortgage is at 4.8% and the value of your home is expected to appreciate steadily at 2% a year. Your down payment is $36,000. That means the principal on your loan is $144,000 dollars. You can expect to pay 102,000 dollars in interest on that principal across the lifetime of 30-year mortgage. The grand total of your fixed-rate, thirty-year mortgage is $246,000.

Very easily, we can presume at least another 500k in related costs, fees and taxes for $180,000k home. Over a lifetime, owning a home at this price point, we can assume a few other things that add up:  

  • Property taxes vary widely. If you were so lucky as to have property taxes steady at 1.35%, over thirty years, tack on additional $85,000
  • Again, utilities can vary widely, but based on the national average, you should expect to pay about 2,200 a year in utility. This is an additional 48,600
  • Renovations put value into a home, but they are expensive. Supposing you decide they are worthwhile, let’s calculate another 37,000.
  • Likewise, maintenance costs, frozen pipes, a flooded basement, a gas leak, on average will be another 37,000
  • Steer clear of the flood plain, and assume homeowner’s insurance costs you 34,000, over a thirty-year mortgage

All told, you can reasonably expect to pay $720,000+ (rounded here) dollars for your mortgage and homeowner related loans and fees. This is an astounding number at first glance. Owning a home is making life and life costs money. (We might reasonably overlook these “cost of living” expenses; you get a clearer picture this way.)

Assuming the value of your home rises steadily at 2% annually, you should expect to make about $80,000 dollars on your mortgage, for a property worth roughly $325,000. Once you decide to sell, deduct this price from your net mortgage and homeowner related costs and you have spent $395,000.   

For a thirty-year renter, paying $1000 a month and adjusting that for 3% annual raise in rent over thirty years, they can expect to pay about $570,000.

The homeowner has saved money in this cost-benefit assessment—nearly $175,000 in thirty years. That’s new cars, college, and vacations.

Renters save money in the short-term

The renter actually saves in the first six years in this thirty-year scenario at these percentage points. After six years, the homeowner will always save more than the renter. This is because the homeowner, having gradually reduced the principal of the loan is paying less per year in interest payments.

In other words, the yearly cost of ‘rent’ for the homeowner gradually reduces as they pay off the principal on their loan, and pay less in interest. As their investment appreciates in value, it effectively pays for part itself over the thirty-year term. The renter receives neither of these benefits.

Quality of life a factor not to be underestimated

A residence of any shape or size is an investment in your lifestyle. If you are a gay or lesbian prospect buyer or renter, there may be requirements that take precedence over the simple numbers of a rudimentary cost-benefit analysis. Gayrealestate.com is connected to thousands of gay-friendly real estate leaders that can do the math. More importantly, they make it their priority to calculate in the all-important intangibles of a neighborhood.

If you are looking for your first apartment in an established gay neighborhood or buying a dream home with your partner, Gayrealestate.com knows the communities they sell in and are adept financial experts.