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New home or resale? Here are 5 things to consider.

Whether buying new or resale homes, choices abound in todays home buying market. Buying a newly constructed home may be top of mind as many factors come into play. One reason buyers go the new home route is that they are given plenty of choices and options in the level of customization of their home. These options may range from being able to choose color schemes, upgrades like trim moldings, kitchens finishings, selection of flooring options throughout the home, home automation and more.

Among other factors that home buyers should think about when purchasing a new home vs. a resale home are:

Buyers input:

New home buyers have plenty of choices in features and amenities. New home buyers can have their builder add their personal touches that satisfy their personality, personal tastes and needs. Being able to choose homes fixtures, carpet type and colors, wall covering designs, countertop finishings among other things, gives greater flexibility and control for a home buyer who is looking to build their home, their way.

No home repair cost:

This is a significant factor when buying new. Home repairs on a new home are kept at a minimum. And even if repairs are needed, todays builders include warranties for certain period of time. Most builders cover home repairs for the first year you live in the new place. In addition, many builders offer complete warranties covering both inside and outside the house. Resale homes in other hand, can offer warranties, but often are limited in the items it covers. Many times these warranties need to be purchased separately by the buyer. In the case of new homes, the extended warranties provided by new home builders can give the buyer peace of mind when it comes to potential home repairs and maintenance.

Home automation:

Home automation also makes buying a new home that much more appealing. In the case of a resale home, implementing todays new technologies may be cumbersome and not necessarily cost effective. Since more and more builders are integrating new technologies on new home designs, the costs savings can be dramatic. Technologies such as wireless internet access, intercom systems, and surround sound are just some of the aspects of new home technologies that can be expected in the todays new home designs.

Home construction considerations:

Materials found in older homes can be hazardous to your health. From lead-based paint to asbestos insulation, the materials found in resale houses can be costly replace, many times impossible to replace. New homes are subject to more stringent building codes and safety requirements than what older homes have. In addition, materials used in new construction, asbestos and lead have been eliminated. This in turn benefits the new homebuyers and their families from hazardous materials or unsafe environments. Then there is less risk of fire in today’s new home construction. Wiring systems have improved as well. In addition, most of todays new homes have hard-wired smoke detectors with battery-powered backup.

Energy efficiency:

As home buyer become more conscious of the environment, having a home that is energy efficient, has become an important factor when buying new. The appliances available today are far more energy efficient than they were 10 years ago. Energy efficient solutions found in today new homes can help greatly reduce overall energy cost. This in turn helps to save in utility bills. Improved heating and cooling systems and better insulation techniques in new constructions offer greater efficiency than older homes. This can in turn offset the cost of a new home.

New home buyers after having considered all the hidden costs of resale homes, may actually save money by buying new. The level of customization, home automation, energy efficiency and construction durability as well as safety, are among the many benefits that buying a new home would bring.

Building a house is a landmark event in any person’s life. The decision to build a house comes after a long analysis of the sources of funds to facilitate the process. Luckily, there are a lot of lending companies that offer loans targeted at new home construction. New home construction loans and stated income construction loans are the two types of loans that are offered to people in the process of constructing a new home. Both types of loans offer funding for new home construction, but the difference lies in the way in which they can be obtained.

The first and very crucial step in obtaining a home construction loan is choosing a lender. New home construction loans are offered by all major national lenders and can also be obtained from regional banks or mortgage companies. The important point to note is that the lender must be kept informed of anything and everything that has been planned about the home construction. Typically, the interest for a new construction loan is paid over a period of 12 months, and then replaced by a mortgage, once the home’s construction has been completed.

New construction loans themselves are of two types. The first type is known as the all-in-one loan, in which the loan is automatically converted to a regular mortgage on completion of the construction of the home. The second type is the construction-only loan, which as the name suggests covers only the construction costs of the home. This type of loan is due as soon as the construction is done and must either be paid off or replaced by a mortgage. Lenders have very specific ways of paying for the construction of the home. The payment of funds is divided in to several “draws”. The home-owner must draw up a plan at each stage of the building process clearly stating how much funding was used at that particular stage of construction. For example, a draw can be done after the pouring of the foundation of the home, or maybe during the framing of the home. This drawn up plan is then sent to the lender, who examines it and allocates the funds to be paid.

The other type of home construction loan, called the stated income construction loan is a loan that does not require the verification of the home owner’s income. This type of loan is a boon and is best suited for self employed individuals. Anyone who cannot produce verification documents for their income, or chooses not to reveal their earnings can benefit from this kind of loan. The benefit of a stated income construction loan is that it is generally approved much faster than other kinds of loans. The downside to this type of loan is that the interest rates associated with it are much higher than other loans. Correspondingly, the down payments are also significantly higher. The procedure to apply for a stated income loan is quite simple and all it requires is an online application or a direct application at the office of the chosen lender.

There are many techniques to negotiating a new home purchase. Almost everyone has their own brand and approach to negotiating, as evidenced by the dozens of books written on the subject. There really isn’t a right or wrong way to negotiate as long as you have the basics down. The biggest difference in negotiations is the personality and egos of the people who are negotiating.

That being said, I thought I would chime in and share some of the negotiating tips I have learned over my last 15 years in the mortgage business. These are what I would call “the basics”, with a twist of my personality added for good measure. I hope you enjoy.

The Golden Rule

Negotiating is a game of leverage, meaning the person that has the advantage in a negotiation is most likely the one to emerge victorious in that round of the negotiations. I emphasized “that round” for a reason, because when buying a home, the price is only the first battle in a long string of negotiations. Knowing who has the advantage in each round of negotiations is a key factor to winning the war.

For example:

Let’s assume that you and your wife have found a home that you love and want to buy. Whether you know it or not, when you make an offer on a home you are negotiating from a position of weakness. The owner knows that you want to buy the house or else you wouldn’t be making them an offer to buy it. Apart from those sellers that are in bad financial shape, the seller will usually win the first battle. Advantage seller

However, most people forget that the negotiations last throughout the length of the sale until the deal is closed. A mortgage transaction could take as long as a month and maybe longer to close. You still have appraisals, home inspections, mortgage issues and many other negotiating battles to be fought and won. So, don’t be too hard on yourself if you didn’t come out of the first round of negotiations “smelling like a rose,” just get ready for the second round.

Meanwhile, the seller has put a chunk of his own money down on a new home in anticipation of you buying his home. He has scheduled movers, picked out drapes, and applied for a mortgage. The savvy negotiator realizes that the once reluctant seller is not so reluctant anymore. The power in the negotiations has now shifted, just in time for the home inspector. It’s now the seller that needs you to do something for him, namely buy his house. Advantage buyer.

Deal with a motivated seller:

Have you ever began negotiations with someone who has the attitude like “I don’t really care to sell this, but make me an offer anyway?” That’s usually just a negotiating gambit used to get the buyer to make the first offer. Much like the home shopper who plays coy with the realtor or home owner as to how badly they really want the home. However, there really are people in the market who really don’t want to sell and whole-heartedly expect you to make them a ridiculous offer. Your first job in negotiation is to be able to distinguish between the two. If you are dealing with the latter, you should walk away or be prepared to pay a lot for the home.

Know when to walk away:

I have walked away from a dozen homes in the last 15 years, partially over the mechanics of the deal but primarily over emotions. Personal emotions have no place in a negotiation, and I should know since I have blown quite a few good deals over my ego. The point I am making is for you to be prepared to walk away. I tell most couples in the market for a new home “that after you find the perfect home, go find another one that is near to perfect.” If you are using a realtor, don’t let on which home you want to buy until you have the two homes picked out.

To negotiate price from a position of power, you must be prepared to walk away and you must do it if you don’t feel you have a good deal. Some of the best deals I have made on properties materialized two weeks after negotiations had broken down. Don’t get me wrong, you won’t always get that second call and that great deal, most often you won’t. However, one way to improve your chances of getting that second call is to always leave the negotiations in a civil manner. I always like to use the “oh shucks” method which basically says “I really like your property, and it is probably worth every dime you’re asking, but I just can’t afford it and thank you anyway.” This will leave the door open for further negotiations.

Ask for it all and then some :

Everyone likes to think that they are a shrewd negotiator and **** to feel like they have lost in the negotiations. The best negotiators in the world get exactly what they want and leave their opponents smiling at the table. The way to do this is to make a fair offer on the home, and by fair I mean a price a little higher than you would like to pay. Then, attach a laundry list of things you would like the seller to address. Ask them to fix the roof, put in carpet, leave the refrigerator, paint the inside and anything else you can dream of.

This creates a myriad of issues that you and the seller can each give and take on. By offering the seller a fair price, you have their attention and haven’t insulted them with a low opening offer. I wince when I see new homebuyers, aided by inexperienced real estate agents, throw a low-ball number at a home owner and expect them to capitulate. The entire negotiation will end with two counter offers and be decided by an impasse on price. If someone could say “I’ll pay that price, but you give me the roof and carpet,” each negotiator has an opportunity to win.

My last bit of advice is that you pick a good experienced Realtor who isn’t going to pass you off to one of her newbie buyer’s agents. Begin your negotiations with her commission and keep in mind that you want her to work for you. This means if you beat her up too bad on the commission, she will email you houses from the MLS and call you every two weeks. Pay her a fair commission and make her earn it.

There are three things you should look at first. Are you are thinking about buying a new home, have a good credit score, and plan on living in that home for a couple of years? If you fall under these three categories you should go out and purchase a new home today.

Builders are offering exclusive deals on the purchase of a new home. The incentives that builders are offering are incredible. Some builders are knocking tens of thousands of dollars of the purchase a new home. In Arizona you can find homes for as low as $99,000. Are you kidding me! Builders are bending over backwards to sell a home. The inventory of move in ready homes is high. This is obviously a good thing for home buyers. Get your free pool, upgrades, or take off thousands of dollars off the price. Some of these incentives are exclusively to people with good credit.

If you have good credit you can take advantage of most if not all of these great specials. Builders and lenders will give you prime savings on your home/loan. This is the case with all big purchases, but especially applies to your purchase of a new home. I know of one builder who will shave up to $100,000 off the price just to get rid of the home. Everyone is scared to make such a big buy when the market is the way it is. But if you plan on staying in your new home for a few years, you will be able to take to collect on these savings.

Yes, the Real Estate market is down all over the nation. As you know the economy is strong in America and will bounce back. There is a lot of hype that it will stay this way for a few years. Though not impossible I believe this to be highly unlikely. The powers that be will not let the economy fall any lower and I think that we are getting close to stabilizing. If you are buying solely for a home for you and your family then now is the time. You can get into a home for cheap and watch the value of your home increase drastically over the years. Most think that if they buy a new house now it will only decrease in value. This is why most are not buying right now.

The market will not get any worse. Actually, I believe that the market will begin to stabilize in the next few months. With the FED reducing the interest rates and rumors that it will lower them again. We will start to see prices plateau and then start to increase. Do you fall in to these three categorizes then you should go out a purchase your new home today.

Buying a new home is great! You get to choose where your home will be built, add a sunroom here, third garage bay there and before you know it you are moving into your dream home. With all the options to choose from it is very easy to overlook crucial elements to your new home buying experience that could cost you greatly in both time and money.

Choosing upgrades with the lowest ROI or too many upgrades, period. - This is truly the most common mistake made by new home buyers who don’t consider the resale value of their home in the future. When buying a new home be sure to stick with the essential upgrades like two sinks in the master bathroom, high quality cabinetry and above all else, top quality padding under the carpeted areas.

Not examining your lot choice thoroughly enough. - A recent United Feature Syndicate by Lew Sichelman highlights some very important aspects to choosing a lot for your new home to be built on. Among them are: terrain, noting that people psychologically feel more secure looking down at the street rather than up, location and lot shape which can affect your surroundings including the possibility of facing the rear of a neighbor’s home.

Finding communities first, vitals second. - When you are buying a home you have to shop differently than you would if you were buying a car or shopping for clothes. To save yourself much heartache and frustration, be sure to hammer out your lifestyle requirements before even searching for a community to build a home in. For example, if you commute to New York City and have school age children you would want to find a school district that you approve of in an area with multiple mass transit options (train, bus, highway) and then locate new home communities within close proximity to both.

Overlooking the “inspection” clause in builder contracts. - A dirty little secret in the new home industry is the fact that some builders, national builders included, send out contracts with a clause stating that they don’t allow home inspections by an independent, third party home inspector until after you close on and own the home. They offer to do a walkthrough of the home with you before you close but chances are, unless you are a licensed home inspector with many years of experience, you won’t notice any red flags beyond the superficial.

Not using a buyer agent. - When looking for a new home, be sure to find a buyer agent who specializes in new homes. There are numerous important steps when buying a new home that a new home buyer agent will be prepared to work with such as price negotiation, lot choice, researching future development around the community and the pros and cons of building materials your builder will use in the construction of your new home. At present, the buyer agent’s services are paid for out of the builder’s marketing budget.

Using the builder endorsed financing company out of convenience. - Many large builders have their own in-house financing company and they often offer incentives on their products by tying in the use of the incentives to financing through their in-house lender. In some instances you will find that the builder’s in-house lender financing and incentives will cost you more money in the long run than if you had financed your purchase through an outside lender. Rule of thumb: Always check your financing options with the builder’s in-house lender, a mortgage broker and a loan officer for a direct lender before committing.

Believing everything you read in advertisements. - If it looks too good to be true, it probably is. Always verify everything you read in real estate advertisements including newspaper ads and the community’s standard features list. Aside from the obvious typographical errors that occur I have also seen blatant false advertising. For example, I have seen new home community literature advertising the community’s short “less than an hour” drive to New York City despite the fact that it would take at least 90 minutes on a good day from that community.

Buying a new home is a wonderful, dazzling experience that will cater to your every need. By using reasonable care and professional guidance you will enjoy many great years in your new home and reap substantial rewards from your diligent buying efforts when selling your home in the future.

This year Californian home builders are pulling up stakes and moving on. The number of new house starts planned for 2008 is the lowest number planned for over 50 years. Before you think this must spell out more doom and gloom for California - think about it - it is good news!

It means that the inventory of homes on the market will not be inundated with new properties and all the incentives that can be offered with their sale. New homes are proving more difficult to sell, perhaps because most people seem to prefer to buy an established home. Of course, the favorite is still a new home, but not a brand new home. Why is this? What are the advantages of buying a home has already been lived in?

The idea that everything in the home is brand new and pristine can be offset by the fact that you have to traipse through mud to reach your front door and arrange for land fill and diggers to level out your garden.

A new home is inevitably more expensive than buying an established home and you often have to add on the price of appliances and finishes. A spokesman for one of the larger home builders in the country compared the prices recently. A new home is reckoned to be more expensive than a fifteen year old home, but it will offer more amenities.

Today’s brand new homes are mostly being built bigger, although with the energy and environmental situations this may soon change. In the eighties and nineties homes were still being built to around 1200 square feet, whereas in 2008 the average square footage was nineteen hundred.

The vogue in bathrooms has also changed, with homes jumping up from being built with only one and a half baths to sometimes as much as three bathrooms and one of these often being an over-size bathroom.

Brand new homes come with wiring for multiple phones, multiple technology points that are secured and everything is often concealed in the walls during construction. The price may be higher, but it may also reflect value.

However, buying an established home does have advantages, one of them being the mature neighborhood. You have no need to worry if the undeveloped land nearby will turn out to be a skate boarding arena, because the whole area is already developed.

Another joy that can only be appreciated by those who have experienced the alternative: the yard is landscaped. It may sound like an exciting challenge to transform heaps of mud, weeds, slopes and stray concrete into a horticultural dream, but it doesn’t come without a few back aches!

Other plusses are that your appliances are already in place, the neighbors can help you with ‘local’ questions and you do not have to worry about ’settling’ cracks.

You also have a better chance to negotiate a good discount with a home owner, whereas a builder has boundaries that usually limit his discretionary discounts. His home was built reflecting current labor costs, whereas fifteen years ago wages were lower.

Whether you choose new or established, with these low mortgage interest rates and lower house prices, the idea would be to just BUY before prices and financing all jump out of your reach!

Arizona residents enjoy little rain, many months of great weather and tons of inexpensive real estate. These factors, and many others, have helped Arizona grow over the past two decades. Currently, Arizona has a population of more than 6 million and is experiencing annual growth of more than 100,000 people. This continued growth causes a need for thousands of new homes and hundreds of new communities. The competition between home builders to provide home buyers with quality homes at affordable prices has left Arizona with stunning communities in great locations.

New Homes in Arizona are affordable and can be found throughout Arizona. National and local home builders have made it possible for home buyers to purchase single family, condominium, custom or active adult homes that meet any budget, need or want. These homes range in size and begin in the low 100s. For the luxury home buyer, Arizona is home to numerous multi-million dollar opportunities in several different cities.

Arizona communities are amenity rich often having several parks, walking trails, bike paths, basket ball courts, volley ball courts and community pools. Master-planned communities in Arizona feature the many amenities found in traditional communities and much more. Within master planned communities residents will find a variety of new Arizona homes from several home builders along with large community centers, schools and commercial centers. The competition among home builders has left Arizona residents with value and beauty. Arizona residents can find attractive Arizona new homes in Metro Phoenix, Metro Tucson, Yuma and much of northern Arizona.