-via Luke Mullins, USNews.com (April 8, 2010)

As the selling season gets underway, many Americans will be looking to take advantage of the lower real estate prices, attractive mortgage rates, and federal tax credit by purchasing a home. But remember: Not all of the costs associated with homeownership are reflected in the listed price. Indeed, many buyers — particularly first-time buyers — may be surprised by the amount of cash they’ll need to set aside for housing-related expenses that they hadn’t previously considered. These often-overlooked expenses can include everything from title insurance to lawn mowing. To give would-be home buyers a better sense of the budget they’ll need to buy and maintain a home, U.S. News spoke with a handful of real estate experts and compiled a list of 12 hidden costs of homeownership:

1. Home inspection. Since a home purchase is likely to be the largest financial investment of your life, it’s a good idea to have it professionally inspected beforehand. A home inspector can point out areas of the property that may need repairs. Buyers can use this information as leverage during home-price negotiations or simply to determine whether or not the property is worth purchasing. “It’s not required, but certainly I recommend it to buyers,” says Judy Moore of Re/Max Landmark Realtors in Lexington, Mass. “It is actually very helpful in that [buyers] learn about the property and how to maintain it and it also alerts them to any potential issues that may be coming up in the near future or need to be taken care of.” The cost of a home inspection, which can run several hundred dollars or more, is typically incurred by the buyers before they go to closing, Moore says.   

2. Pest inspection. Buyers should consider obtaining a separate inspection for wood-destroying insects, such as termites. Although no laws mandate pre-transaction pest inspections and not all lenders require them, Greg Baumann, senior scientist for the National Pest Management Association, says buyers would be smart to have the procedure done prior to closing. “If you buy a house and you don’t have an inspection and the house is riddled [with termites], you go to closing and now the house is yours,” Baumann says. “It happens at a time in their lives when [homeowners] can least afford repairs.” Termite inspections typically cost between $50 and $200, Baumann says.

3. Appraisal fees. Before you can purchase a home, your lender will require you to have the property valued by a professional real estate appraiser. Lenders use such appraisals when determining the amount of money to offer mortgage borrowers. In years past, appraisal costs were often rolled into the fees that borrowers paid at closing, says Tom Vanderwell, a mortgage officer for Fifth Third Bank in Michigan. Today, however, he makes sure to collect this fee up front. “We’ve got to pay the appraiser whether the deal goes through or not,” he says. “And with the way that the market has been, there is certainly a substantial percentage of deals that are not going through.” After buyers pay the fee-which typically ranges between $350 and $400-it appears as a credit on their closing statement, Vanderwell says.

4. Closing costs. When you arrive to sign your closing documents, be prepared to pay thousands of dollars in assorted fees. Such expenses-known as closing costs-can include processing fees, underwriting fees, recording fees, survey fees, and title insurance fees. “This industry has done a bad job of explaining to people that there are legitimate fees which must be paid in order to grant you a mortgage loan,” says Keith Gumbinger, of HSH.com. “There are various service providers who are involved in this process-they have their costs and [lenders] have some of [their] own administrative costs as well.” But savvy consumers can limit these expenses. Gumbinger recommends that would-be buyers ask several different lenders for so-called good faith estimates, which outline closing costs in detail. (Lenders, however, are under no obligation to offer you such information before you apply, he says.) “If lender A charges a document preparation fee and lender B doesn’t, that might be one of the considerations,” Gumbinger says. Closing costs vary, but they usually range between 2 to 3 percent of the mortgage loan amount, he says.

5. Moving expenses. Buyers face an additional wave of costs once their home purchase is complete. Take moving expenses. Unless your new house is around the corner or you have a large group of helpful friends, you’ll likely need some professional help to transport your belongings. Such expenses can reach several thousand dollars or more, depending on the distance of the move. “Moving is a significant expense-particularly across the country,” says Gail Cunningham of the National Foundation for Credit Counseling. For those moving on account of a job, Cunningham recommends asking your new employer to chip in for some of the costs associated with the transition. “I know that people are probably so excited to get the job that they don’t want to rock the boat, but that’s a pretty normal question,” Cunningham says. “A lot of these companies have standing contracts so it is certainly a question worth posing because you don’t want to have to cough up that out-of-pocket expense unnecessarily.”

6. Furniture. Once you’ve lugged all of your furniture into your new property, you may find that your old sofa and dining room table aren’t nearly enough to fill out the house. “Maybe [the buyers] came from a one-bedroom apartment and they are buying a three-bedroom house,” Cunningham says. “They are really going to have some major expenses just to furnish the house with the basics.” The beds, lamps, and tables often needed to furnish additional rooms can add up quickly. “The expense of that can really catch you by surprise,” Gumbinger says.

7. Property taxes and homeowners insurance. If you have never had a mortgage, be aware that your monthly bill won’t simply reflect the loan amount plus interest. It will also reflect property taxes and premiums for homeowners insurance, which all mortgage borrowers are required to obtain. For that reason, housing experts encourage buyers to think of their baseline monthly mortgage payment as encompassing “PITI,” or principal, interest, taxes, and insurance. Annual homeowners insurance premiums typically range between 0.5 to 1 percent of the mortgage loan amount, Gumbinger says. Property taxes will vary a great deal, but can run several thousand dollars a year or more.

8. Supplemental insurance. Consumers who buy homes in areas exposed to flooding may have to purchase a supplemental insurance policy, says Guy Cecala, the publisher of Inside Mortgage Finance. “[For] just about any mortgage you get now that’s in the 100-year flood plain, you have to get flood insurance,” Cecala says. Buyers can use online tools to determine if the property they are considering is located in such an area. “There is no real cheap private alternative. You really have to get into the federal flood insurance program, and it’s relatively affordable,” he says. Premiums on such policies will cost most homeowners less than $20 a month, he says.

9. Homeowners association/condo fees. Consumers who buy into certain developments will have to pay an additional monthly fee on top of their payments for principal, interest, taxes, and insurance. Condominium and single-family developments often charge residents for services that benefit the community, like lawn mowing or employing a front-desk attendant. “Condo fees are specifically for condominiums. Home association fees can also be for single-family home developments,” Moore says. “They are essentially the same thing but different variations.” Such fees will vary, but can total more than $100 a month.

10. Utilities. You may be surprised by how much you’ll need to budget to keep your house warm and the water running. “You might have been renting an apartment and you [were] paying some portion of your utilities or maybe all of them, but the first cold winter you are in your house, you [might] say, ‘Wow, look at these power bills,’” Gumbinger says. “That’s one of the costs I think you really don’t think about.” Utility costs will vary by region and consumption. To get a sense of the costs, home buyers should ask sellers for monthly utilities estimates before they close the transaction.

11. Ongoing maintenance. Although that big backyard might be a great place to grill burgers, it’s also an expense. As a homeowner, it’s your responsibility to keep your property maintained. That means raking the leaves, mowing the lawn, trimming the hedges, and clearing out the gutters, among other tasks. (Unless, of course, you live in a development that handles these chores for you.) To maintain the exterior property, you may have to buy a lawnmower, a hedge trimmer, or other equipment that you didn’t need when you lived in an apartment. “If you are a first-time buyer, you may fail to appreciate just how much stuff you need to buy in order to manage your home,” Gumbinger says.

12. Repairs. Remember, when you move out of that apartment, there’s no longer a landlord to call when the sink backs up. Instead, it’s up to you to contact—and pay—the plumber. And the sink is just one of the many home features or appliances that homeowners may one day need to repair. Homeowners are encouraged to set aside funds to take care of such repairs when they become necessary. And because broken appliances can be a major hassle and a significant expense, Ron Phipps, a broker with Phipps Realty in Warwick, R.I., recommends that buyers put key appliances under warrantee. “What we really recommend is that the buyer negotiate into the transaction a home warrantee for one year,” Phipps says. “That’s about a $500 item, and if [the buyer] gets the seller to pay for it, that minimizes [the cost].”

Shared by:
Rommel Yema
http://ryema.prucal.com/

This has been one of the most frustrating and stressful experiences of my life.    As mentioned, I started talking with the bank in late 2008.    Around July of 2009, they told me that I had qualified for a certain type of loan modification.   They gave me my new payment amount and I started paying that amount.   I paid them faithfully every month thereafter.     I was concerned, however, because I never received any formal paperwork and, because real estate is my job, I knew something had to be wrong.    I called them constantly and they kept telling me there was no problem, everything was “in process.”   

I believe it was in January this year that I returned home to find a letter from the bank in my mailbox.   The letter indicated that I was in default and that if I didn’t pay them $35,000 by a certain (very near) date, they would start foreclosure proceedings.    Needless to say, I freaked out.      

After my initial panic, I went back to making my constant calls to them, re-submitted all of my paperwork and kept waiting to come home and find a foreclosure notice on my door or to find my house on the list of defaults that we get every week.   It was a terrible time.    

Luckily, in my case, after an incredible amount of phone calls I finally got an actual loan modification (notarized paperwork and all), dropping my mortgage interest rate to 2% for the first year, 3% the following year, capping out at 5% in 5 years.  

What troubles me is that I am a professional and knew who to call and that I had to be tenacious, yet I was at the end of my rope.   I can’t imagine how difficult it must be for those who are not in this business and don’t have the skills or tenacity to keep fighting.    Heck, or those who have regular jobs where they can’t sit on hold for 30 minutes every day waiting to talk to someone who actually knows nothing, repeating your story over and over for months (in my case a year and a half!)   

All I can say is, that if anyone out there is trying to get a modification….don’t give up.    Call them regularly, take notes from each call that you make and, to use my favorite quote from Winston Churchill…”Never, never, never give up.”

Kathy Wall
(415) 608-4168

Shokoofeh Nowbakht
www.shokoo.com

Median Price Of Properties Sold: +6%
Properties Under Contract: +69%
Properties For Sale: -16%
Average Days On Market: -7%
Average Monthly Supply Of Inventory: -63%

The numbers are very encouraging, it appears, while prices are slightly up, so is interest in them. Inventory has decreased and so has the amount of time properties are staying on the market. Simple supply and demand, demand is up while supply is down, means the prices properties are selling for have risen.

It is still a great time to buy or sell in the current market, much of it depends on your own personal needs.

Adam Chinn: Visit my website at http://adamchinn.com

So, the bad news – the decrease  in property tax will be minimal.  But the GREAT news is that    home prices in this particular area of South San Francisco seem to be stabilizing.  What the market will do in the next year is anyone’s guess, but it’s nice to have some snippets of hope here and there.

BTW, if you live in San Mateo County and feel that your home has declined in value since the last assessment and warrants a property tax decrease, you can visit the San Mateo County Tax Collector website for more details.  The county has been pretty proactive in doing reassessments without being asked by homeowners, but you never know.  Here’s the site:  http://budurl.com/smtax.  If you need help with a market value opinion, feel free to contact me or your favorite real estate agent.  Of course, for tax advice, you should always speak to your accountant or tax specialist.

Jean Joh:  Visit my website at www.jeanjoh.com or follow me on twitter at jeanjoh.

There may be no problems at all. But, I wanted to make sure there will be no issues from the FHA appraiser. I know “Peeling Paint” is a safety item and has to be fixed before the FHA approval. So, with the sellers permission, my client and I decided to get ready for the appraisal and bought some spackle and paint and spend a couple of hours working on the property. I pulled out the nails and screws off the wall, James filled in the holes with spackle and then painted over them. Oh, we also cleaned the tub and the shower, so there will be no dirty spots that may be mistaken for mold.

Everything looks good, or at least looks good to us. Let’s keep our fingers crossed for the FHA approval!

Shokoofeh
www.shokoo.com

I realize that a lot of this is happening because so many of our clients (even the very loyal ones,) are spending a great deal of time on the websites of our cut rate competitors, but I need to find a solution.    

I try to counter their requests with the very valid logic that you get what you pay for in this world, and that my many years of experience, negotiating skills and industry knowledge are well worth paying full price, but this is less and less successful.    Nor, do they care that I need to share my commission with the company.    

As one client said to me:   I’m looking in a very limited area, I research the properties myself, mostly go to see them myself, so why should I pay you a $1,000 an hour to write a contract?  (Please keep in mind, that I would very happily do the research and show him the houses, he simply prefers to do it his way.)   

When using the logic that they are not paying the commission, that the seller is, they, of course, point out that the commission is included in the price they are paying. 

This has become quite a challenging problem, because I need to sell houses.   Other than handling a few rentals here and there, this is my only source of income.    When I said no to one of them, he went to another broker and instead of getting some money, I ended up with nothing. 

What do you think fellow Realtors?   Customers…let’s here your thoughts, as well.

Kathy Wall
(415) 608-4168
www.michaelandkathy.com

What do these numbers mean? I am sorry to tell you, your home did not increase 20%. Buyers don’t get scared off and sellers don’t put your home on the market for 20% more than you paid last year.

These numbers are totally misleading. Prices are increasing in some areas and in some price points but not by 20%. Possibly 3-5%.

You can make numbers do whatever you want. First you need to know if the numbers are for Single Family homes or Condominiums or both. Then are they comparing it to the same month in a previous year or just the previous month.  Are they talking about median price or average price. The Median price is the price that is in the middle; there are an equal number of transactions above and below. These numbers are very general. It is interesting and might give a slight indication as to the market in the country, in your state, in your city but Real Estate is very localized down to the neighborhood in the city. If you want to know the value of your home call your Real Estate consultant.  

An example of Median prices: 

220,000
350,000
480,000
490,000
510,000

AVERAGE IS 410,000

MEDIAN =480,000

The numbers recently announced are really telling us that higher priced homes are beginning to sell. In San Mateo County 32% of Single Family homes sold in Feb. 2009 were under $500,000 that dropped drastically to 13% in 2010. Homes over $500,000 increased from 50% to 59% from Feb. 09 to Feb. 10, driving the median price up. Homes over $1,000,000 increased 11% from 17% to 28%.

The number that shocks me is that over 27% of all sales in the nine county Bay Area were paid in cash. That is with a median price of $354,000. Many people are taking money from the stock market and or IRA account and equity from their homes. Cash is King.

Please look at the numbers below. Inventory has decreased more than 10%, sales have increased almost 10% and the days on market has decreased a dramatic 25%. This is for single family homes listed on the MLS.  All the numbers are indicating good things ahead.

San Mateo Cty. Inventory Sales DOM
Feb. 2009 1576 208 83
Feb. 2010 1346 228 64

http://www.dqnews.com/Articles/2010/News/California/Bay-Area/RRBay100318.aspx

http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2010/03/19/BUG81CHVGJ.DTL

www.leesellsmore.com