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“Be not afraid of life. Believe that life IS worth living and your belief will help create the fact.” –  James Truslow Adams

Standing in the model home sales office, leaning on the padded edges of the builder’s “topo” board, you stare at the little shapes, numbers and street names as the builder’s sales consultant explains their new home neighborhood layout. You’ve chosen the floor plan that flipped your switch, and now it’s time to select a home site for it. Although you’ve driven around the community’s empty streets and half-built rows of homes, you’re having a tough time making a decision between lots # 47, 49, or 52.

There is only so much selection and so much assistance production homebuilder personnel can give you when choosing a home site. Faced with the prospect of making a decision from among the available lots it’s ultimately up to you. You must study each of the home sites’ liabilities and opportunities for the home you have chosen. Identifying the site characteristics that both please you and disappoint you before any structure has even been started takes some time and forethought. To do this, you may want to ask the following questions and see what answers both you and your sales consultant find in the process:

1. What direction does the house face? Study the home’s floor plan and where the sun rises and sets in relation to the rooms. Is direct sun shining on the front of the house in the mornings or afternoons? How will either orientation affect life in that area of the home at different times of the day? If you’re planning a pool in the back yard, how long will the sun linger there? Will the home’s energy efficiency be affected by its orientation?

2. What will your windows overlook? If you are buying in a production home neighborhood, will you be privy to activities through a neighbor’s bedroom windows, or will they be able to see into yours? (Decide just how much of the “American Beauty” lifestyle you can take.)

3. Does anything have the potential to block views you consider worthwhile keeping? What are the builder’s plans for homes around you? What may be planned by the city for the area around this new home area that can eventually be visible from the home site?

4. Is the home site in a low-lying area? If so, what is the potential for flooding from higher grounds and homes above?

5. Is the home site level, gradually sloped, or dramatically sloped? How steep will your driveway be, and how can that affect you, your family, your visitors, and your vehicles? If you are working with an architect and considering choosing a home site for a custom home, get him involved in the selection process to answer these questions.

6. How is the lot shaped, and how will the home you choose fit on it? Have the agent, consultant, architect, or homebuilder plot the house’s “footprint” onto a mini-map for you, giving you backyard, front yard and side yard distances from the house to the property lines. These will dictate how much room you have for recreation, boat or RV parking, courtyards and patios and privacy from neighbors. Also ask about the approved setbacks for that area.

7. If the property has a slope to be retained, how will it be treated? Redwood? Concrete blocks? Railroad ties? How high will retaining walls be and what is required by the city? As the agent or builder to explain slope ratios to you and also explain how much usable yard space may be robbed by retaining walls.

8. How will the site drain? If you are in an elevated area, you can be held liable if your lot’s grading causes low-lying homes to flood in heavy rains. Find out where the water goes and how the swails are arranged to avoid this phenomenon.

9. Where does traffic go when it passes the home site? If you have small children, corner lots can be desirable size-wise, but offer little protection from cars whipping around curves. If the home site is at the entry to a community, you can count on a busy home front at certain times of the day. Homes located at the back of a subdivision get the least amount of traffic when the neighborhood is an enclave.

10. Ask the agent to fully explain easements for access, utilities and any other purposes that created their existence. Generally speaking, you are not allowed to build any structure over an easement, so make sure this is not space your would plan for pools, outbuildings, or eventual add-ons.

Getting as much information as early as possible is the key to making a wise choice in the location of your home. If you can’t get immediate answers to your questions, it may be wise to wait until they are answered to make a final decision. The choice you make may make a huge difference in your own family’s comfort and well-being and affect your future property value as well.




“How we think shows through in how we act. Attitudes are mirrors of the mind. They reflect thinking.” –  David Joseph Schwartz

Years ago, people used charts and simple multiplication to calculate the time value of money. Then, Hewlett-Packard introduced its ubiquitous hand-held financial calculators, and those “time value of $1” charts faded from memory. The latest incarnation is the Web-based mortgage calculator, provided online by real estate brokerages and agents, lenders and mortgage brokers and such companies as Bankrate Monitor and Nolo Press, among others. Calculators pose intriguing questions: How much can you afford to borrow to buy a home? How much will your monthly mortgage payment be? Should you refinance your mortgage? And so on.

Do mortgage calculators work? Yes and no. Calculators plug user-entered data into complex equations that would be daunting for the average not mathematically inclined person to solve by hand. However, the results lack real-world reliability and can vary from one calculator to the next. Some calculators are so suspect, in fact, that they’re accompanied by small-print disclaimers warning consumers not to rely on the results. If you want to use online mortgage calculators, keep these caveats in mind:

Mortgage calculators rarely reveal their behind-the-scenes assumptions.
Few mortgage calculators are accompanied by any explanation of how they work or what assumptions are used. Does the monthly payment include mortgage insurance, if required? Does it include an impound account for property taxes and casualty insurance? Is the equation adjusted to reflect a higher interest rate on a jumbo loan or a non-owner-occupied property? The more questions you’re asked before you click “calculate,” the more reliable the outcome is likely to be, but that’s assuming the information you enter is correct.

Mortgage calculators can’t predict payments on hybrid or adjustable-rate mortgages (ARMs) beyond the initial fixed-rate period.

The interest rate on a traditional 30-year mortgage is a fixed constant that can be plugged into an equation, but the interest rate on a hybrid or ARM is unknown beyond the first adjustment, which might occur in one month, six months, a year, three years, five years or 10 years, depending on the mortgage. There’s no way for a calculator to account for this unknowable factor. Some calculators tackle the worst-case scenario. That’s useful up to a point, but again, the reliability of the results still depends on secret internal assumptions and formulas and the accuracy of user-entered data.

Refinance calculators usually ignore the longer term on the new mortgage.
Many people refinance their existing mortgage with the goal of lowering their monthly payments. However, if you’ve been making payments on your existing mortgage for some time and the new mortgage will be amortized over a full 30 years, refinancing can cost more over the lifespan of the loan even if the monthly payments are lower. Mortgage calculators that purport to show whether you should refinance tend to focus on the monthly payment and the payback period for the refinancing costs, while ignoring the longer term of the new mortgage. This flaw is fatal.

Mortgage calculators can be fun and possibly educational.

The positive side to mortgage calculators is the ability to make rough comparisons among various scenarios. Plugging different numbers into one calculator can give novice borrowers good insights into the interplay between the cost of the home, the interest rate, the downpayment percentage and the monthly payment. But again, it’s important not to make real-world decisions solely on the basis of these numbers



“Hold yourself responsible for a higher standard than anybody expects of you. Never excuse yourself.” –  Henry Ward Beecher

The kids are warring over bedroom space — even the dog wants more room! So one Saturday you innocently load everyone into the car, in search of a larger home. Emotionally, it makes sense.

But financially, are you prepared to part with some of your hard-earned equity (not to mention a bit more of your paycheck) in order to purchase a larger home? It’s going to cost you money to move up.

Simply explained, equity is the difference between what you owe on your home (all its mortgages, liens, etc.) and what you could obtain on the open market LESS YOUR COSTS OF SALE. (And the last part of that sentence is often overlooked by over-zealous move-up buyers!) But looking before you leap can make the difference between a financially prudent new purchase and a haunting economic disaster! Let’s evaluate the costs.

1) Some increased costs of purchase are obvious: You’ll be paying a larger mortgage payment monthly to own a larger home (depending on your down payment) your taxes will increase, and yes, even your home owner’s insurance will be more. And if your down payment isn’t at least twenty percent of the purchase price, you may even have private mortgage insurance to pay. It all adds up; but

2) Some increased costs of purchase aren’t so obvious: What about upkeep and maintenance? Utilities? Even the extended period of time it takes to clean the home on the weekend, taking time away from your family and other “fun” things—are you prepared for that?

3) One category most of us overlook when taking the “move up” plunge is to evaluate the chunk of equity it will cost us to sell our existing home, pay our buying costs, and move into another. Since 80% of all sellers hire a broker to sell their existing home (often saving money overall in doing so), you’ll no doubt benefit by that cost. You’ll add to it the additional sales costs of title insurance, transfer taxes, deed preparation, tax pro-ration—-basically all the costs paid by the seller when you purchased the home.

So should you move up? The answer depends on what you’re trying to achieve. If you’re purchasing a home that will appreciate faster than your current one, gives you more space, is in a better neighborhood, and/or will make you psychologically happier, it may make sense to move. It’s true that happiness becomes the over-riding factor to the move-up buyer. Yes, you may want different features than you have in your current home; but you also know that housing is housing— but being happy where you live is paramount!

The bottom line is that homebuyers purchase with their “gut” and justify the purchase with their wallet. Long after you’ve crunched the sales cost numbers and consulted with an expert to evaluate a new neighborhood, you’re still likely to follow your gut instincts and purchase the home that tugs hardest on your heart-strings. After all, it’s what living the American Dream is all about.



“Give whatever you are doing and whoever you are with the gift of your attention. ”   –  Jim Rohn

Unsophisticated home-shoppers tend to select a real estate agent based on a chance encounter at an open house or a friend-in-the-business referral. Savvy home-shoppers, on the other hand, do their homework, contact several successful agents and prepare lists of questions to ask these agents during how-can-you-help-me-buy-a-home interviews. Some of the questions should concern how involved the agent is in the high-tech aspects of real estate. All other qualifications being equal, here are six reasons why a tech-savvy agent can be a good bet.

1. High-tech agents use e-mail to keep in touch with their clients.
If you want to communicate with your agent via e-mail about houses for sale, purchase negotiations and the status of your real estate transaction, you obviously need an agent who not only is equipped to send and receive e-mail messages, but also actually uses e-mail. Even better would be an agent with a laptop computer, alphanumeric e-mail pager or other on-the-go e-mail capability.

2. High-tech agents have great access to information.
It’s no secret that the Web contains massive amounts of pertinent, informative and helpful information about real property and the business of real estate. A high-tech agent can find neighborhood profiles, mortgage qualifying calculators, real estate news, markets trends reports and much more with a few mouse clicks.

3. High-tech agents can steer you toward educational Web sites.
First-time home buyers, in particular, need to educate themselves about the wide world of home-buying and homeownership. A high-tech agent can recommend Web resources that explain everything from how to shop for a mortgage and why you need title insurance to how to pack your belongings and where to get seeds for your vegetable garden.

4. High-tech agents can help you house-hunt on the Web and by e-mail.
The days of squinting at tiny blurry pictures in a proprietary MLS book, then driving around for hours in the agent’s car are fast coming to an end. A high-tech agent can point you to the best and biggest house-hunting Web sites and use e-mail to zap new listings that meet your criteria directly to you.

5. High tech agents network online with other high-tech agents.                                  E-mail is becoming a popular means of communication for real estate agents, who use it to promote their listings to one another and keep in touch with market developments. In some communities, agents who don’t use e-mail are falling out of the loop.

6. Coming soon: High-tech agents will be able to organize and manage your transaction in cyberspace.                                                                                                             A number of real estate companies and organizations are vying with one another to be the first to launch a truly comprehensive real estate transaction service on the Web. These networks of real estate service providers promise to reduce paperwork, speed up communication and bring buyers and sellers to the virtual closing table faster than ever before.



“Always bear in mind that your own resolution to succeed is more important than any other. ”  –  Abraham Lincoln

Consumer credit information is obtained and stored in the United States by three major credit bureaus, Experian, formerly known as TRW, Trans Union Corporation and Equifax.

Credit reports contain significant information on more than 190 million Americans, about the entire adult population of the United States. These reports include your name, date of birth and social security number.

Offered in the reports for lenders to see are your lists of credit card accounts, including credit limits, your outstanding balances, payment history (late payments) for each account, your current loans, and any bankruptcies, civil judgments or liens against you. The credit report should also state the name of any company who has requested a copy of your report.

The biggest complaint that most people have about these credit reporting services is that they are often inaccurate, and getting the problem corrected is time-consuming and often difficult. An astonishing two out of five people are reported to have one or more errors on their consumer credit reports, so the odds of your having an error are high. When credit reporting companies make a mistake, they don’t incur any penalty, but you well might.

Although these credit reporting services include instructions and contact information so that you can correct mistakes on your reports, the damage could already be done. An inaccurate report that cannot be quickly cleared up can cause you to miss getting a loan on time to get your dream house. You may have to wait as long as 30 days to hear that a complaint has been corrected. And you will have to supply the corroboration that the account is in fact paid in full, or paid on time, etc. A canceled, dated check will do nicely.

Not anticipating that there might be a problem, people often wait to check their credit reports until they apply for a loan. Then they find out from the lender that there is a problem. If you are able to show proof that the report is in error, the lender will usually proceed with the loan, but s/he will insist that the credit reporting service post the correction before the loan goes through. If the lender is not satisfied that this has been done before closing, s/he may opt to close the loan at a higher rate or put off closing until the information has been posted.
As you can see, either way, it will be a nightmare for you if there is a problem. That’s why you should review your credit report before you go to a lender.
You will have to see the reports from each of the credit reporting services. One report isn’t enough. Again, you will be surprised at how often they are out of date, or inaccurate. And they don’t accept information from each other. If you call Experian and say that Trans Union’s report is correct but Experian’s isn’t, they will still make you prove the error.

So you have a choice – contact each of the credit reporting companies separately or use a new service which offers access to all three from one convenient site. QSpace, makers of, is the first service to deliver credit reports in real time over the Internet. gives Internet users the ability to access their credit files at any time, determine if their report contains information or inquiries that they do not recognize, and challenge inaccuracies more rapidly. allows users to instantly receive their personal credit reports over the Internet for $8 a report. offers users a quick and secure method which includes the highest encryption protocols for securing transmissions, for users to monitor their personal credit records online. The proprietary system authenticates your I.D., then will release credit information to you in a secured environment.
In order to ensure privacy on the user’s side, the service does not use unsecured connections such as email, nor doe it store credit reports on its servers once the transmission is complete.

Watch Out for Credit Scoring

Lenders also get more than the credit report when they access credit rep orting company records – they get a score or a credit rating on the borrower. The score indicates a statistical probability that the borrower will default on the loan.
According to real estate columnist, Robert Lee, innocent maneuvers to consolidate your debts can inadvertently cause your score to go up. Lee advises caution when canceling many cards with small balances and then shifting the debt to a single or fewer cards.

“The maneuver will effectively raise the ratio of your unpaid balances to the maximum credit lines available on fewer cards. To the software (used by the online lenders,) it appears as if your financial situation has tightened,” says Lee.
So not only do you have to worry about your balances but the score they produce.

Lee explains that quick fixes won’t help you get the loan, but that there are some strategies you can follow to raise your score. One of them is paying a visit to Fair, Isaac and Co. Inc., a company which developed credit scoring for mortgage applications. The site includes consumer information on credit scoring. Used by both the site offers information on how credit scores are developed and used and how they can be improved.

Once you obtain a credit report, even if it is all in order and your credit is good, you will not be able to use the report to get a loan. Your lender will still want to run his/her own credit check, but at least the report will be a step in the right direction toward getting you pre-qualified and prepared to buy.

A word of caution. The reason lender fees are so high for credit report checks is that they typically will run your credit report a second time, right before closing. So when you hear that your loan has been approved, don’t do anything foolish like go out and run up a lot of bills. Every action will show up on the credit report.

Many closings have been delayed or canceled because the lender has found out something new that changes the dynamics of the loan. Don’t allow your closing to be one of them.


“To live is the rarest thing in the world. Most people exist, that is all.”  –  Oscar Wilde

The prospect of a newly remodeled home, while certainly tempting, often ignores the requisite headaches that come with the territory. Take, for instance, the kitchen, one of the most frequently remodeled rooms by virtue of its functionality and the amount of time families spend there.

Homeowners rarely stop to consider the imminent chaos that will befall them when they decide to remodel their kitchens. For starters, you’ll be asked to remove everything in your cabinets and drawers. That means all silverware, plates, cups, pots and pans, cookbooks, and depending upon whether or not you’re a pack rat, possibly other items, as well. Before long, your kitchen is draped in plastic, your forks are sitting on your living room coffee table, your spices are in the bathroom cabinet, and now the contractors are moving your refrigerator to the dining room so that they can reach the wall behind it. Need to microwave your breakfast? You’ll have to head to the spare bedroom. That’s where the microwave is now. It’s balanced precariously on a bar-stool by the computer desk. And you’ll need to figure out where to wash your breakfast dishes, because your kitchen sink is either filled with construction dust and tools, or it’s not there altogether. Your dishwasher is sitting in the foyer, so you won’t be able to use that, either. Garden hose, anyone?

No, it’s not a pretty picture. The chaos can be exacerbated by the time of year. For families with school-aged children, it’s probably best to begin remodeling jobs during the school year. Otherwise, you’ve got the kids underfoot, and it’s a matter of time before your patience is wearing thin. If you’ve never lived through a remodeling job, and you’re about to begin the process in your own home, you’re undoubtedly experiencing some trepidation. Aside from the obvious money-induced butterflies, you may be asking yourself to what extent your home life will be turned upside down during the remodeling process, which — depending upon the project — could last anywhere from several weeks to several months.

How on earth are you going to retain your sanity during this messy period? You could go with the obvious answer, of course, and find yourself a motel room with a kitchen or even a reasonably priced corporate apartment if you’re looking at several weeks’ worth of chaos. But that’s assuming you have disposable income left, and that’s a big if with most of us who are embarking on what could very well be one of the biggest investments of our lives. If it’s within your means to stay at a motel for even a short period of time (you may want to wait until the messiest phase of construction begins if you’re on a limited budget), just make sure that you find yourself some accommodations near your home so you’ll be able to make frequent and unannounced visits to monitor progress. If you’re lucky, you might have family or friends in the area who will either volunteer a spare bedroom or two, a sofa, or at least an occasional respite from the sawing, hammering, drilling and dust.

No, you’re going to stay and tough it out, you say, and so will the kids. It’ll be a character-building experience for everyone involved. Yes, it will, but you can make it easier on everyone by attempting to carve some semblance of organization into an otherwise haphazard household. If you have a spare bedroom, convert it into your temporary living quarters. Move the furniture against the wall, and set up your microwave and a card table and chairs. If you don’t already own inexpensive shelving, purchase some temporary shelves to store your plates, cups and silverware. You may want to seriously consider using paper plates, cups and utensils for the time being, because the question of where to wash your dishes can be a hassle to solve. If you own a dorm-sized refrigerator, move it into the bedroom. Purchase bottled water. Resign yourself to eating out as much as possible within the constraints of your budget, electing to spend breakfast in your makeshift kitchen, giving the kids lunch money for school, and then heading to an inexpensive restaurant for dinner.

It’s important to note, however, that if you decide to stick around during the remodeling process, you’re going to reach a point at which your absence is required. Many paints, glues and other materials commonly used in the construction process contain fumes that could be harmful to your family if inhaled. Ask your contractors up front when they plan to use materials that emanate potentially hazardous fumes. Plan to clear the house at those times — overnight, if necessary. This may, indeed, be the occasion during which you head to a motel for the sake of your family’s safety. Make sure that before you leave, you speak to your contractors about keeping your home properly ventilated before, during and after the application process.

Another reason you should keep a close eye on your contractors — regardless of whether or not you’re going to be remaining in your home during construction — is that you’re going to have to take steps to protect your home from damage. Even the best contractors have been known to scratch or cause other damage to a wood, tile or linoleum floor or track mud onto the carpet. Cover as many of these sensitive surfaces as possible before construction begins, and check to make sure they remain covered throughout the project’s duration. In addition, your breakables and other valuables — including fine China, vases, artwork and even your television, stereo and other electronics — should be removed from the immediate area and stored until the project is completed.

While these measures won’t inoculate you from the temporary inconvenience inherent in the remodeling process, they’ll help you keep your lifestyle as normal as possible until the dust has cleared and the plastic is lifted on your brand-new kitchen. And regardless of how long you have to wait for that moment, it’s nearly always worth the headaches required to get there.



“What you do speaks so loudly, that I cannot hear what you say”
– Ralph Waldo Emerson

While the Internet has proven to be an invaluable tool for any first-time home buyer, the wealth of information posted on the Net can cause a new buyer stress. The Web has countless sites that target new buyers, and all of them claim to offer the most accurate data. And what about e-mail? It’s both a blessing and a curse. E-mail is a fantastic medium, of course, for Realtors and their clients, although it can never replace the value of face-to-face communication. Where e-mail becomes problematic for new buyers is when it creates an information glut. Consumers who have been surfing the Net for information about home-buying may unwittingly find themselves placed into large databases for e-mail. These victims of “spamming” arrive home each night to as many as 50, 60 or more ads in their Inbox. And while some of them advertise legitimate businesses, just as many of them don’t.

The bottom line is that new home-buyers are deluged in a sea of information. Some of this information is presented in alarming terms, making it seem as if new buyers are up against considerable odds, and behind every corner during the real estate transaction is a disaster waiting to strike, not the least of which is mortgage-induced financial doom. Perhaps its little wonder, then, that many professionals in their late 20s and early 30s are a bit hesitant about buying, even if their finances would allow it. What is unquestionably a complex process seems that much more daunting thanks to this information glut. Which questions is a new buyer supposed to ask? What elements are critical in a residential real estate transaction? How does a buyer protect his or her own best interests?

One of the best lines of defense you’ll have during the real estate transaction is a trusted Realtor. Sounds simplistic, and yet, its so vital to ensuring that your interests are protected. Like any other field, loyalty to one’s friends is often expected in real estate, and falling victim to that burden can cost you. Consider this chapter pulled from my own home-buying storybook: When choosing a Realtor, I had the option of selecting 1) an acquaintance with 15 years of experience and an outstanding reputation, and whose services a colleague had used and praised wholeheartedly; or 2) a close friend who just eight weeks before made the decision to pursue a career change and become a Realtor. I chose Number 1, and it cost me Number 2. But when you’re a first-time buyer preparing to make the most significant financial commitment of your life, you’d better make sure you’ve got a Number 1 on your side to guide you through the process.

A question you need to ask yourself is what you absolutely must have in a home, what you’d like to have and what you can do without (but, of course, it would be nice if the home had those amenities). You’re probably going to find that as you get into your home search, that list of “must haves” is going to shrink. Nevertheless, you’ll help yourself and your Realtor save considerable time in the home-search process, so that the both of you can spend more time looking at homes that present real potential. It’s a good idea to have a discussion with your Realtor about your lists, too. Although you may not have written “extra bedroom” on your “must-have” list, your Realtor will probably advise you to choose a home, if it’s financially feasible for you, that has at least two bedrooms — mainly for resale purposes. So your Realtor can help provide you with some perspective on that list, which you may want to reorganize after your discussion.

Know What You Need And What You’ll Concede. What is essential to one home buyer may be of no value to another. Creating “need-to-have” and “nice-to-have” lists can be helpful. Your first “need-to-have” list may be very different from your final version; still, it serves as a starting point for you to discuss and decide upon those features that are the absolute essentials. For instance, public transportation to shopping areas might be a “need-to-have” if you do not own a car, while it is another person’s “nice-to-have.” If someone in your family is disabled, a one-level home with wheel chair access may be a necessary feature. However, you may decide that adding a customized ramp after the home purchase is more cost-effective. Identifying what you want and what you need helps your real estate agent pinpoint your ideal home.

If you don’t understand the mortgage process, by all means, ask for help both from your Realtor and your loan officer. If you’re a first-time buyer, “mortgage-ese” is going to sound like Greek to you, and while it’s sometimes difficult to admit your lost, the sooner you ask for help with translation to English, the better. Once your loan has been approved, closing soon follows, and you’re going to want to keep those lines of communication open among yourself, your Realtor and your loan officer during that process. It’s complex, it’s expensive, and you have a right to know what you’re signing — even if the title company representative is flying through your closing (you’re probably one of many clients that day). Don’t be afraid to ask questions before, during and after the closing. Rest assured that your questions are ones your Realtor and loan officer have heard before and are quite used to answering.

The average first-timer will have more questions than the ones raised during this article and its preceding piece, but this gives you a good starting point for moving forward with your transaction. The best insurance you have is to align yourself with a Realtor in whom you trust your future. If they have an excellent reputation and seasoned experience in your market, he or she will have the connections you need to complete the your transaction, and will stand by you during and after the home buying process. When it comes to home buying, it is, indeed, a jungle out there. You don’t need to be paralyzed with fear, but you do need to find yourself the proper Realtor and demand the answers you’re seeking. It will make the difference between a positive first-time purchase and one filled with regret.

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