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Archive for the ‘Home Construction’ Category

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Forget The New Home: Short Sale Deals Reign Supreme

March 12th, 2009 by Matthew C. Keegan | 5 Comments | Filed in Home Buying, Home Construction

Home buyers who are interested in new construction may want to skip the second and third stage homes in their favorite housing development. That’s because houses built a year or two earlier in the same development (or similar one nearby) may have been foreclosed on our are on the market at a short sale price.

new homesA “short sale” or “short sell” as some people call them, is where a homeowner attempts to get out from underneath the burden of homeownership by selling his home for less than what it is worth, perhaps even for a price that is less than what is still owed on the mortgage. Of course, their home loan lender must agree to this practice, but in some markets lenders acquiesce because the costly alternative of a foreclosure looms large.

Go West For Bargains

California, Nevada and other states where home development was booming as recently as 2007 are among the places where short sales and cut rate specials are dominant. This is causing a big problem for developers who just a few years ago were able to command market price for whatever they were building. Now, prices have plunged making it a much better deal for home buyers to choose a home that may be just two or three years old while foregoing a similar style but much more expensive home nearby.

Yesterday, The Wall Street Journal published an article detailing the plight of the housing industry, from the vantage point of the housing developer such as KB Home, Pulte Homes, Centex among others. In, Foreclosed Homes Haunt Home Builders, the newspaper shared that bank-owned homes with warranties and low cost mortgages are also impacting their builders’ businesses, forcing them to slash prices or hold up future projects.

Moreover, after hitting an all time high in 2005, sales of new homes plunged to their lowest levels this past January, a resounding declaration that the housing market has collapsed.

Things To Keep In Mind When Buying Short Sale Or Foreclosed Property

While the price deals may be with the newer used home, there are some things consumers need to keep in mind before choosing a foreclosed property or one available as a short sale:

  • What about a warranty? Is the home that you are buying still under warranty? If not, will the seller offer one to you? Builders can generally offer a comprehensive warranty that will cover just about anything that will go wrong within the first year or two, an edge that they are quick to tout.
  • What kind of mortgage is being offered? You may be able to get a deal on a young home, but will your mortgage cancel out your savings? Some builders are offering fixed rate thirty-year mortgages at an extremely attractive interest rate, as low as 4.25% — savings will come over time, perhaps offering a better deal to the new home buyer.
  • Does the home need repairs? If the person who owned the home lost it to foreclosure, do you really think that they cared to keep it up, especially as it became apparent to them that they would lose the home?
  • What other incentives are being offered? Some builders are picking up closing costs while many states are offering tax credits to buyers. Recently, Congress passed and the president approved a bill which will also give first time home buyers a credit of $8000 if they purchase a home before December 2009.

For the person in a position to buy a new home this year, their options are excellent and choices quite good. Clearly, 2009 is the best buyer’s market in a generation, one that savvy consumers will want to take advantage of before market values shift in the seller’s favor.


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Housing Market Pummelled Once Again In January 2009

February 27th, 2009 by Matthew C. Keegan | 5 Comments | Filed in Home Buying, Home Construction, Home Financing, Home Selling, News

Are you thinking about buying your first home this spring? The federal government is offering first time home buyers an $8000 tax credit when they purchase their home. With home loan rates at fifty year lows and housing prices at their lowest levels in many years, now could be an excellent time for you to jump in.

Are you thinking about buying your first home this spring? The federal government is offering first time home buyers an $8000 tax credit when they purchase their home. With home loan rates at fifty year lows and housing prices at their lowest levels in many years, now could be an excellent time for you to jump in.

After a decent performance in some markets in December, the national housing market got slapped around in January as resales slipped by 5.3%. Resales include only sales of existing homes, not new construction.

According to the National Association of Realtors which tracks these numbers many buyers apparently decided to wait out the inauguration of Barack Obama to the US presidency before buying. Obama promised and has since delivered an important incentive to new home buyers in the form of an $8000 tax credit. This credit applies only to first-time home buyers, however.

Waiting on the Stimulus Package

Lawrence Yun, chief economist for the National Association of Realtors  said there was understandable hesitation by some home buyers. “Given so much stimulus package discussion in January, some would-be buyers simply sat out for clarity and certainty on the nature of housing stimulus,” he said. “The housing market will soon get a lift from very favorable buying conditions – not only from improved affordability, but also from the stimulus of an $8,000 first-time home buyer tax credit, and higher conforming loan limits that will allow more people to tap into 50-year low mortgage rates.”

And it is those lower rates which will likely cause many buyers to finally jump into the market this Spring.

Inflation Will Soon Arrive & Mortgage Rates Will Climb

Given that inflation is on its way, we’re not likely to see mortgage rates this low again for many years. Inflation is inevitable as the federal government prints more money to pay for expanded government services. That debt will have to be paid off eventually, but in the meantime the government will need to make interest payments. Most economists agree that the current low mortgage rates are not sustainable.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage fell to a record low at 5.05 percent in January from 5.29 percent in December; the rate was 5.76 percent in January 2008.

Bad News For Homeowners Is Good News For Home Buyers

Also in January the average price of an American home declined to $170,000 the lowest level in many years. For some homeowners, all of the gains they’ve realized over the past decade have been wiped out, leaving many more recent buyers under water with their mortgages. A mortgage is under water when the homeowner owes more on their home loan than what the home is worth.

Of course, this news is tough for homeowners, but it does present an opportunity for buyers. Though it is impossible to time the bottom of the market, the person who jumps in now and plans to hold onto their home for many years should find it to their advantage.

Source: National Association of Realtors

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Home Affordability Tips

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How To Hire A Home Contractor

September 5th, 2008 by Matthew C. Keegan | 2 Comments | Filed in Home Construction, Home Improvement

Your Home Remodeling Contractor

Are you looking for a home contractor? Youll want to choose someone who knows his stuff and can give to you the peace of mind that hell get the job done right, on time, and for a fair price.

Are you looking for a home contractor? You'll want to choose someone who knows his stuff and can give to you the peace of mind that he'll get the job done right, on time, and for a fair price.

If you’re planning to have any sort of renovation done to your home, whether that means rewiring the house, adding a family room, or replacing an aged deck, you’ll be dealing with professionals who will do the job for you. Electricians, carpenters, and plumbers can handle these tasks, but if your project is much more comprehensive than that, then a contractor should be used to oversee everything.

By using a home contractor who can supervise other professionals while overseeing your home addition or other major project, you’ll be entrusting him with getting the job done and done right. If you find the right contractor, your project will be completed as planned, but if you hire the wrong contractor you could be faced with the job from hell, a real nightmare that can cost you time, money, and a lot of heartache.

Find A Quality Home Contractor

You can find a quality home contractor if you plan out your project carefully:

Craft a plan — Avoid misunderstandings by detailing as much of the project in advance before asking contractors to bid on the job. A contractor who is worth his salt will guide you through the process while others will simply offer a bid and hope that you accept it.

Get recommendations — The best contractor for the job is the one who has completed jobs like the one you want to have done. Ask neighbors, check with nearby friends and family members, even consult co-workers to find out who they used.

Seek estimates — You’ll want to get at least three estimates for the job. Provide a detailed spec sheet for each bidder and have them base their estimate on your information. Rule out anyone who can’t get their bid in on time or whose estimate is incomplete or too low.

Furnish references — Contractors who are being considered by you should furnish local references, preferably for jobs completed within the past six months. Call them! Find out if the contractors’ customers were satisfied and, if you discover that there were problems, find out how they were handled.

Check licensing and insurance — Your town probably requires that your contractor be licensed and have insurance. Make sure that everyone who sets foot on your property is covered by the contractor or has their own insurance and is licensed.

Sign a written contract — Incomplete or verbal contracts can get you into trouble.  Price, cost of materials, starting and ending date, and all other details about the project should be outlined. Do not sign a contract until you are satisfied that it represents what you want done. Most states allow homeowners to cancel a contract within a certain amount of time, usually three business days.

Make payments — Never offer to pay for the job in full up front. Make payments in cash and increments — as each part of the job is complete, write out a check. Hold back your final payment until after the job has been completed and inspected to your satisfaction. Make sure that all subcontractors have been paid as you don’t want someone showing up at your door days later demanding payment.

You know you have an excellent home improvement contractor for the job when he meets all of your requirements and is available to you as the job progresses. If he explains himself clearly and listens to your concerns, then this is the type of person best suited to handle your job.


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Hurricane Recovery: Taking Action!

September 2nd, 2008 by Matthew C. Keegan | 1 Comment | Filed in Consumer Tips, Home Construction, Home Improvement
The aftermath of any storm can be the most trying time for homeowners. Make certain that whomever you hire to repair your home is local, reputable, and willing to work with you.

The aftermath of any storm can be the most trying time for homeowners. Make certain that whomever you hire to repair your home is local, reputable, and willing to work with you.

Our article yesterday covered the steps necessary for the homeowner to take when an approaching hurricane requires evacuation or at least preparation to hunker down and ride out the storm. Today, we’ll examine what to do next, assuming that you’ve left your home and are anxious to return.

Waiting For The All Clear Signal

Depending on just how badly the storm ravaged your area will determine when you can return to inspect your property. Washed out roads, impassable bridges, road debris, fallen trees, standing water, no electricity, and an insufficient police presence can hold off your return. When the “all clear” signal is given, you’ll want to gas up your car, perform simple maintenance on your vehicle (check tires, fluids), recharge your cell phone, get money out of the bank, bring along plenty of food and water, and start making the journey back home.

Expect heavy, slow moving traffic all the way home especially if hundreds of thousands of people also left their homes. With Hurricane Gustav, at least 1.9 million people exited communities across the Gulf Coast.

Photographs and Other Documentation

If your home escaped damage, then you may be able to stay depending on what the local authorities determine. During the aftermath of Hurricane Katrina, residents in select areas were allowed to return only long enough to secure valuables, check on pets, and retrieve important paperwork. It was days, even weeks and months later before some residents could return to their homes again.

While at your home, take pictures of the damage and keep this information for your records. Contact your insurance adjuster immediately to notify them of your damage. You may need to forward photographs to help the agent identify your property especially if all markers (i.e., house number, street signs, etc.) are missing.  A camera phone can help you quickly forward those photographs.

It can take several days before an adjuster is able to get to your home, but be prepared to meet him there when he arrives, having a copy of your insurance documentation at the ready. Your agent is trained to know what to look for, but don’t be afraid to point out damage; expect to receive a check covering at least some of your loss on the spot. If your home has been destroyed, you will need to get enough funds to rebuild — if dissatisfied with the insurance settlement you may need to do battle with your insurance company. Remember: your settlement will include what is due you minus your deductible.

Time To Rebuild

In many areas, you’ll have enough contractors coming by offering to help, but you’ll want to be very careful when dealing with any of them, especially out of state companies. It is best to deal with a local company, preferably one that is licensed and approved by the state. Hurricane Katrina victims who lost everything because of that storm often lost a lot more when they hired the wrong contractors. Unscrupulous people will often show up in the storm’s aftermath to separate you from your insurance money. Caveat emptor!

As anxious as you are to rebuild, you’ll want to verify contractors. This can be difficult to do if government offices are closed, the BBB unreachable, or power is still sporadic. Regardless, once you have secured your property from the elements, you’ll want to make sure that the right builder is hired. Remember, the work that this person does is something you’ll have to live with for a long time — it is better to be inconvenienced for the short term than to be stuck with a rebuilding project that doesn’t meet your needs or fulfill your expectations.

Getting Help

Lastly, if your insurance settlement isn’t sufficient to rebuild, then you may need outside help in order to move forward. Government bureaucracy can move maddeningly slow, but many church and civic groups will often lend a hand, sometimes at no cost to you. Contact Habitat for Humanity, Samaritan’s Purse, the Red Cross, Salvation Army, and other groups providing relief in your area for guidance.

Adv. — If your home has been damaged by a hurricane, what plans do you have to rebuild? Let’s Renovate has lots of cool ideas and project information to ensure that your renovation goes according to spec. Stop by today to get your next home improvement project off to a great start.

Photo Credit: Palmer W. Cook


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