Crucial Questions To Ask Before Buying A House

Whether you are buying a home in New York, New Jersey, or anywhere else, you need to ask questions. When viewing a home for the first time, some questions naturally pop into your head, such as, “What does this switch do?” and “when was this addition built?”

Another significant question—is there an existing mortgage on the property—can also help refine your initial offer. You can learn a great deal by asking how many offers the seller has received. Bear in mind, how- ever, that the seller is not obligated to answer every question. If the seller is less than forthcoming, it might be in your best interest to find an honest and reliable realtor who is qualified to guide you on how to proceed.

Those questions are fine, but there are many others that are way more important. The wrong answers to the right questions can make or break a deal. You need answers to these questions before you can make an offer, and certainly before the sale is final.

You must know how much the property is actually worth, because knowing the fair market value of the property and how long it has been on the market can better inform your idea of a starting point. A realtor can explain how the fair market value is determined.
Asking frank questions about the condition of the home is also vitally important. Certain small repairs may be inevitable, and should not break a deal or sway your decision, but necessary larger repairs can drive up the cost of the house.

Avoiding questions with general answers will work to your ben- efit. For instance, asking a property owner about the condition of the roof can generate a very subjective response. Instead, ask how old the roof is. The answer will give you a better idea of how long the roof might last without repairs. Depending on the type of roof, you can generally expect the lifespan to be of anywhere from 15 to 50 years. This gives you a better idea of the financial commitment you are expected to make in the years ahead.

A house should be well insu- lated from the cold, and interior wall insulation is essential if you want to keep the noise level down within the home. Good insulation is both environmentally friendly and financially beneficial, ensuring a home that is energy efficient. Poor insulation can lead to skyrocketing heating and cooling costs. So, be sure to ask about the type of insulation in the house.

If the seller is going to leave appliances for you, ask when they were purchased and if any war- ranties will transfer with the sale. Trendy appliances are often visually enticing, but are only worth having if they perform well. Appliances that have been replaced recently are a plus for a potential buyer.

If you’re not familiar with the neighborhood, ask about the proximity of grocery stores, restaurants and shuls. You can also ask about demographics—are homeowners on the block couples, small families, large families, or singles.

Even if you don’t have children, it’s still a good idea to inquire about the schools in the area. Good schools are a general indi- cation of a good neighborhood. Award-winning schools in highly-regarded school districts are often part of the backbone of the best places to live in New York, or anywhere else. You’ll also want to know if the property is located in a flood plain.

The best course of action is to write down all of your questions, before you go to look at a home. Since it’s easy to forget to ask them when larger buying decisions are looming on the horizon.

Knowing the answers to these questions will help you avoid buyer’s remorse; and will add to the enjoy- ment of your new home in the years to come.

Important Real Estate Terms

Buying a home is the inevitable step after marriage that is both daunting and exciting to take. It will be yours—not just as a couple—but as a family. Choosing a home where you’ll celebrate all of your children’s milestones, like their first day of school, their bar/bat mitzvahs, high school, college, and, eventually, marriages of their own—is not an easy task.

It’s important that when you buy your home (or sell one, if you have decided to move), you understand the information given to you in writing. Every profession has its own language that can be difficult to understand, but with a little help from the following guide, you can easily decipher real estate lingo and make your home buying experience a breeze.

Clear Title: This indicates the property is free of legal questions surrounding ownership. AKA belonging to you, no fuss or fight.

Chain of Title: Record of historical ownership of a property. This is important because the real estate lawyer will typically review this to determine who claims the clear title of the property.

Clouded Title: Any property that there is question in regards to ownership or change of title. Usually, there will be legal intervention in order to clear up confusion and set a clear title.

Comparative Market Analysis (CMA): a report that shows prices of homes, comparable to a home in a listing, that were recently sold, are currently on the market, or were on the market but not sold within the listing period. These are super convenient to check out when buying a home to give you an idea of what kind of homes you can afford within your budget. Any real estate broker should be able to provide you with a CMA upon request.

Deed: Like a title, it’s a document that signifies ownership of a property. It’s used to transfer ownership from one person to another.

Deed of Trust: Transfers title in a property. The deed of trust is a form of a loan that involves three parties—the buyer, the lender, and a trustee. The legal title of the house is held under the trustee, which holds it as security for a loan (debt) between a borrower and lender, but the equitable title remains under the buyer. Not to be confused with a mortgage.

Listing: An agreement between a broker and a homeowner that allows the broker to market and arrange for the sale of the owner’s home. The word “listing” is also used to refer to the for-sale home itself. A broker is required to be considered an official listing.

Mortgage: A loan taken out to buy a property; it involves only a buyer and a lender, commonly between a bank and you, the future homeowner.

Title: The title of a property signifies ownership interest. It can be found on specific legal documents including mortgages and deeds, and can be held by an individual, couple, or even a corporation.

You may have been surprised when looking over this list how many terms you did, or did not, recognize. Hopefully it provided some clarity for you, as a potential buyer (or seller).

In addition to understanding real estate terms, it’s always important to find a great realtor, attorney, and mortgage broker to protect your interests.

Wishing you the best of luck on your future home buying and selling decisions!

Your Perfect House May Be Right In Front of You

If You Separate Your Must Haves from Your Dreams

This article appeared in the Image Magazine September 2017 edition.

Whether we are looking for the TV remote or a favorite shirt, we often find “lost” items hiding in plain sight. The same principle applies to house hunting. Often, the perfect home may be the one you have looked at 10 times online, but did not see the potential or realize you were seeing your next home. While your first impression may be that the living room is too small, or the stairs are in the wrong place, or the eat-in kitchen isn’t the kitchen of your dreams, a closer examination may help reveal more positive than negative qualities; and it may spark your creativity. Maybe a wall can be knocked out to enlarge the kitchen. Maybe that dream bath is possible. And in all likelihood the cost of renovation may not be as much as you imagine.

Obviously there are scores of houses out there that clearly do not meet your needs; but when you find one that feels like it might, you owe it to yourself to run it by someone else you trust and get his/her opinion. Don’t be so quick to judge. Bring in your contractor, or your architect, or your best friend, or your mom, and run ideas past them. If you see the potential, chances are they will share your vision and help you make it a reality. You may need to move slightly out of your comfort zone, but the payoff could be the house of your dreams.

Too many house hunters create a mental image of the ideal house, and refuse to consider changing that image. They decide that the perfect home needs to be within a three block radius of the one they live in, and should meet all of their criteria, and come in under their price range. After a while, when that doesn’t happen, inertia takes hold and they forget their original plan. They substitute finding the perfect, for finding the right home. So, what do you do when you feel like you are compromising on your dreams?

Step back and reevaluate your priorities. Decide what is most important to you. Separate the must haves from the dream list. Is it possible to merge this list somewhere in the middle?

Reevaluate your financial situation. Have you searched for the perfect one family home, for six years, but keep falling about 10% under the selling price? If so, have you ever considered looking at a two or three family home? When doing this, you are able to afford more living space and you can use the income from the tenants to help pay your mortgage.

Are you stuck on a certain budget but you just can’t find anything even close to that in the area you are targeting? If you are weighed down by this, you actually have options available to you. Option A: Find out which areas actually do fit into your budget, and be more open to the possibility of expanding your search. Option B: Explore the possibility of increasing your budget slightly by talking to a mortgage broker.

Think outside the local box.

Are you stuck because you refuse to even consider expanding your geographic search area? Are you married to a certain block? Do you have to be next door to your parents? What’s holding you back? Sometimes, if you expand your horizons just a little bit, you may be surprised to see that you can find what you really want nearby. More options open up when you do!

Talk about what you want. If you are buying the house with your spouse, are you sure you share the same wish list? Very often we meet with home buyers who are more than eager to share their dream house ideas, but have never had the “must have list” conversation. Just knowing where to start can open up a whole new world of possibilities and ideas. Again, be open-minded to all options. The two-family he is looking at, may convert very easily into a great one family, and that renovation she needs in order to get that dream bath off the master bedroom may cost less than you think.

Be realistic. People often give up finding the right home too early in the search, because they let the idea of a dream home get in the way of reality. There may be homes out there that have a six-car garage and an indoor pool and five bedrooms, but how many people do you know who have that house? Unrealistic expectations may be preventing you from seeing the possibility in a house you have seen a dozen times online.

Find ways to lessen the stress. Are you looking to upgrade or downgrade, or move into something completely different? If so, this can add to the stress of the search.

Maybe you need to wait to put your house on the market until you know for sure you have found the one you want to move into. If this is the case, talk to your realtor. He or she can help you be ready to both make an offer and move quickly to sell your current home.

If you think you are ready to buy a home, ask yourself these questions, then hire an experienced real estate broker. Qualified, licensed brokers will give you tips on up and coming blocks, price trends, and future listings that may be available soon. They can be your best advocate and look out for you, sometimes better than you can look out for yourself. When searching, it’s best to select and stick to one agent, and work closely with him/ her throughout the process. He will be loyal to you, call you when the best deals come up, and walk you through everything you need.

Flip & Sell or Buy & Hold

The Real Estate Decision That’s Best For You

This article appeared in the Image magazine August 2017 edition.

When making the choice to invest your money in the housing market, the financial decisions you choose to make should depend on the financial goals you have, which varies among individuals. The question of whether to flip and sell, or buy and hold, has no correct answer, it’s based on a preference and your lifestyle.

RealtyTrac recently reported that the flipping trend, which reached a 10 year high in 2016, has a median gross return on investment of almost 50%, but that is not inclusive of renovations and holding costs. An investment that would provide continuous cash flow, however, would be purchasing a property and renting it out to tenants.

In order to make a well-informed decision, it is important to understand what each option entails, and which will prove more beneficial to you. To quickly sum up the processes of house flipping, you (the house buyer), would purchase, update, and quickly sell a property, in order to maximize profit and minimize “soft costs,” which include monthly bills, property taxes, and maintenance bills of any kind. It is important to acknowledge that the less time a house flipper owns a home, usually the better the profit.

As for the long-term real estate investor, you would hold onto the house you purchased for a longer period of time, and your profit would come from rent. After the monthly costs of financing, taxes, utilities, and other maintenance is covered by your tenant, the remaining funds can be pocketed. Noted, while both options are profitable, they do require expertise and willingness to take on risks concerning property conditions.

Without a doubt, with every investment there are pros and cons. Depending on the decision you make, different components will come into play. Some pros of house flipping include, first and foremost, quick cash. A project that can potentially take less than a year can bring about a fast profit. In addition, the return on investment is higher, and the loans taken out on purchasing the property, if it is very distressed, can be lower than a traditional bank loan on properties.

On the flip side (pun intended), there are still high costs involved, the short term capital gains tax is high, and if you are inexperienced in the field, additional expenses typically include hiring a professional with education and experience.

As for long term investors, the longer an owner holds onto a property, the greater the potential for accumulating wealth. Being a landlord comes with the pro of having a steady and reliable source of cash flow, and there is no need to immediately sell your property.

However, the value of the rental property and, ultimately, the profit you make, is dependent on the market itself, as opposed to you, the landlord. Additionally, finding good tenants is a difficult task that requires time, energy, and patience.

So, should you flip and sell or buy and hold? There is no definitive answer. The paramount factor of this investment decision is you. Your choice depends on what you are looking for financially, and your lifestyle. It’s a choice only you can make. You
can listen to the advice of others, but remember what worked for them, may not work be what’s best for you. The only way you can have true, well-informed input is by obtaining experience of your own, independent of the method you choose to begin with—flipping or renting.