The Real Estate Investment Market In 2006: Why Experts Are Excited And New Investors Are Nervous

Writen by Chris Anderson, PhD

Are you confused about where the real estate investment market is going and what you will do in 2006? Well join the club since many, many people are in your situation. I will tell you that many savvy investors are getting very excited BECAUSE the market is changing.

In this week’s article, we are going to conduct a little exercise to clarify what is really meant by The Real Estate Investment Market. Suppose that you read the below article in the New York Times. How do you react? As we go forward, let’s compare your reaction to this information with the reaction of savvy, real estate investors who have been there, done that.

Beach Front Condo Project Bankrupts Local Investors January 11, 2006, Pogomo Beach, FL (APE News)

The struggles of a new, 220 condo unit show the continuation of the real estate bubble. When local real estate agent Daffy Duck was interviewed, he said that some condo values have dropped over 40% in the period since July 2005. The last sale we had was at a high value of $850,000 but now you would be lucky to get $600,000.

APE News has learned that one investor is now having to make mortgage payments of up to $5,000/mo on each of their 3 units. In turn, this is forcing them into bankruptcy. Upon further analysis.

Before you read the rest of this article, I encourage to step back and jot down your knee jerk reaction to this news. Why? Because you will undoubtedly see such real estate investment headlines in the future. If you can sort of your feelings about these types of stories, then you will be miles ahead of most investors and determine how to best profit. People typically have two reactions to this article:

Reaction 1: Articles like this indicate that the overall real estate market is getting soft.

Reaction 2: In flat, soft, or declining real estate markets, it is very risky to invest.

Unfortunately both reactions will limit their ability to produce creative, profitable, real estate investments.

Let’s see how a more experienced investor might think. First, this article would tell the investor that the real estate investment market for $850,000 condos in Pogomo Beach Florida has probably dried up. On the surface, it would appear that both the rental and sales demand are low for THAT particular product in THAT particular area. We will use this knowledge to our advantage in a minute.

Second, the investor knows that this news tells them nothing about OTHER real estate products in Pogomo Beach. For example, the demand for affordable, $250,000, off beach townhomes could be blistering hot in Pogomo Beach. For that matter, who knows what is happening in the single family home market. THESE REAL ESTATE INVESTMENT SUBMARKETS CAN ACT COMPLETELY DIFFERENT THAN THE $850,000 CONDO MARKET.

Let me illustrate this point in real life. While writing this article, I am flying to Las Vegas to look at a development that is a condo conversion. Before I left, I have seen several news pieces about high end, on the strip condo developments terminating in Vegas; clearly not great news for high end condo, real estate investments.

On the other hand, we know that Las Vegas area still faces an issue with an ever increasing population, is land locked, and has a shortage of affordable housing. I also know that because of our group size at GetPreConstructionDeals.com, we are getting offered an interesting opportunity to get in first. Time will tell if this development is appropriate for our web site, but we know without seeing it that this submarket of Las Vegas has considerable potential; all the while the popular press has a dim view of the Vegas real estate investment market.

Another insight that the sophisticated investor knows is that huge returns can be made in soft or down real estate investment markets; i.e., they understand that all markets do not always go up but there is money to be made regardless of what the markets are doing. To understand this concept, let’s go back to Pogomo Beach and see what we can do.

Suppose your believe as an investor is demand for beach front condo’s will be extremely strong. Yes, there may be a hiccup for 12 24 months but the fact remains there is little beach front left and a lot of baby boomers who want to own it someday. When looking at the above news article, maybe the investor decides that if purchased for $485,000, then the Pogomo Beach condo would be quite attractive and likely to generate a nice return in time. But even at that price, maybe they are not ready to rush out and acquire a unit.

Next, maybe the investor understands that some people bought into this project very cheap at preconstruction prices and might be quite happy to get out with some profits rather than having to make mortgage payments month after month, deal with tenants, have to furnish the unit, etc. Quite possibly the investor might be interested in purchasing a unit if they can get the right price let’s say maybe $395,000. If somebody excepts that offer, then great, they have just bought themselves a great investment for a real estate product in a soft market. Yes, they are going to have to rent this out for a while to let the market catch back up to them but they know they have just purchased a great asset for a tremendous price.

Hopefully by using this fictitious article as a training example, you have gotten a better understanding of your believes about how to handle 2006. In addition, with this background, maybe the next time somebody asks you what the real estate market will be for [fill in the blank], you can give them a highly accurate answer: some people will make a boatload of money and some people will lose money. While this will not satisfy them, you know that it will be true in almost every active real estate market in the country.

Copyright 2006 Chris Anderson

Dr. Chris Anderson is the founder of http://www.GetPreconstructionDeals.com and is referenced in many venues including the New York Times and USA Today. Get his weekly, thought provoking articles by signing up today!

Real Estate Investing with No Cash and No Credit

Writen by Dr.Phil Speer

Lots of folks think it can’t be done.

How in the world can you buy a piece of real estate property without cash or credit? How is it possible to buy a $50,000 house or a $1 million dollar house if I don’t have an abundance of cash or an excellent credit rating?

Nothing stops a would be investor cold in his tracks like “no cash or credit.” The prevailing perception is that “I can’t start real estate investing” because (1) I sure don’t have any money and (2) my credit is horrible!

The typical way real estate investing is accomplished is with an earnest money deposit to accompany the Purchase Contract and a down payment at closing. Many real estate investing tycoons, in wanting an offer accepted, make large earnest money deposits so the property seller will recognize the buyer as a serious investor. And because many real estate investing tycoons use real estate agents as their purchasing liaison, they provide sizable down payments out of which the sales commission will be paid.

Well, when I started my real estate investing career, I had neither cash nor credit. I had a serious business failure prior to my start in real estate investing, so I had to conjure up a way to succeed outside the traditional norm.

While I was well aware of the accepted procedures of earnest money deposits and down payments in real estate investing, I was forced by my situation to find alternatives. I did not realize at the time that commercial property is often purchased without any cash outlay at closing or even a credit check of the buyer.

So without any pocket change or a savings account, I began offering a $10 bill as my earnest money deposit! And I began offering no down payment at closing. My Purchase Contract offered simply the assumption of an existing loan! (In the 1980s when I started my real estate investing career, wrap mortgages were common, whereas today other legal instruments accomplish the same purpose.)

I don’t have to tell you that real estate agents were not exactly fond of me. In fact, in my highest week of tendering offers, I submitted 235 offers on MLS houses, and got 235 rejections. I mean, the realtors and brokers were infuriated at my non traditional offers! Most went to great pains in writing “REJECTED” across the entire length (even both sides) of the legal size Purchase Agreement I had laboriously filled out for submission. The young man “running” my offers (and his broker) were verbally blasted out of the saddle! I got NO acceptances from my 235 offers. Yet, I still managed to buy two properties from the 100% (humiliating) rejection. Two property owners approached me later and said, “I can’t accept your offer on that property I had listed with my real estate agent, but I have another house you can have on the same terms!”

That break through began my trek into the Nothing Down Wilderness that made me a multi millionaire in three years. Once I realized it was persistence with a thimble full of know how, I forged on to discover motivated sellers who accepted my offers. I bought $1 million in properties that first year, another $1 million the second year, and $10 million by the 4th year.

It’s a shame that even some real estate investing tycoons don’t know how to buy with no cash and no credit. But the bottom line is that know how still makes possible the impossible.

Buying property of any price is still achievable with no cash and no credit. It’s done every day in residential and commercial property. And because it is achievable, anyone can enter the real estate investing arena, regardless of the size of his or her wallet.

Phil Speer, Ph.D., started his real estate investing career 25 years ago. Without the availability of credit and using only a $10 bill, he purchased $1 million in properties in his first year, and had accumulated $10 million in properties by his fourth year. He was featured in a Wall St.Journal editorial as most successful investor in the Nothing Down Real Estate Movement, and was honored with a Caribbean cruise as top investor of the year. In his hometown of Nashville, Tennessee, he has been a businessman and Human Resources Consultant for 30 years. He is an author, speaker and seminar director. To learn how to profit in real estate investing, even without cash or credit, read his report at at http://www.CashinHouses.com/. Subscription is free to his Fix up Ezine. He and other contributing authors provide free articles and resources on real estate investing at his online “Academy of Advanced Real Estate Investing Techniques” http://www.AAREIT.com/.

Turkey’s Hottest Property Spots

Writen by Dominic Whiting

Altinkum is a rapidly growing resort popular with British and Turkish tourists because of its sandy beach. It is close to Bodrum airport and offers some of the cheapest property on the entire Turkish coast, with apartments available from just

Condominiums Should You Consider Purchasing One

Writen by Raynor James

Condominiums tend fall into the love them or hate them position for buyers. Here’s primer on condominiums.

Condominiums

Condominiums are all about communal living, which can be good or bad depending upon your personal views. This type of communal living doesn’t refer to the failed experiments of the sixties wherein hippies packed into a structure and shared everything. Instead, the modern condominium community is all about sharing common spaces as well as rules, rules and more rules.

Condominiums come in all shapes and forms. Condos can be found in a single high rise building in a downtown area or in an apartment complex type of layout in a planned community. The structure isn’t the determining point. Instead, the issue is how the properties are owned.

Unlike a stand alone home, the property lines on a condominium are the walls of the structure. Essentially, you own everything inside the condominium as your individual property. Everything outside the condominium is owned jointly with the people who own the other units. These areas are known as common areas and are subject to group rule.

Every condominium has a homeowners association in one form or another. The association has rules set out by the original developer regarding landscaping and so on. Members of the community are then elected to the board of the association, whereupon the immediately become a focal point of aggravation from individual owners and often wonder why they took the thankless job.

The problem with the association and condos in general is the issue of uniformity. If you desire to change the exterior of your condominium in some way, you must comply with the rules of the association. This means you cannot paint your property a different color, do landscaping and so on. For some people, this isn’t a problem, but others are frustrated they can’t express themselves.

When deciding whether a condominium is a good option for your next purchase, you need to carefully weigh the restrictions of a particular association. If you consider yourself an individual and want to show it, a condominium is probably a very poor choice for you.

Raynor James is with the FSBO site http://www.fsboamerica.org FSBO homes for sale by owner. Visit our home buying page http://www.fsboamerica.org/buyer.cfm to view and buy homes, houses, condos, land and real estate.

Tips on Selling Your Property

Writen by Stuart Perryman

Parting with your property can bring lots of fun and excitement but it is also hard work.

You need to first fix up all those small problems that you have ignored for many years. You also need to decide if you are going to sell it by your self or to make use of a professional real estate broker. The transaction will take time, and will depend greatly on the local real estate market.

Some mental and emotional preparation is needed too. Are you looking forward to moving up to a new dream house or facing the uncertainty of a major move across the country? It might well be hard leaving the memories behind or you might be keen to start a new life without the house you have lived in the last chapter of your life.

To keep your feelings under control concentrate on the multitude of practical matters that need your attention.

There are many questions to be considered in order to influence whether your home will sell or stand empty and weigh you down like a millstone around your neck. A house for sale should be visually appealing and in good condition. It should attract potential buyers driving down the street so pay attention to the following:

 Are the lawn and shrubs well maintained?  Are there cracks in the foundation or walkways?  Does the driveway need resurfacing?  Are the gutter, chimney (if the house for sale has one) and walls in good condition?  Do the window casings, shutters, siding or doors need painting?  Are garbage and debris stored out of sight?  Are lawn mowers and hoses properly stored?  Are the kids toys tidied up?

It is important to clean up the mess inside as this will affect the descision of prospective buyers. These people prefer clean and comfortable homes. It is better to touch up the interior part of your homeby putting a fresh coat of paint in the most used areas for example. This will clean as well as brighten up the rooms and will help to dispense off unwanted odours.

Wash the walls where paints are not appropriate (for example wall paper, paneling and tiles). Wash all floor and bathrooms tiles. Clean or better yet shampoo dirty carpets (Again this is _very_ important to get rd of unwanted smells). Get rid of clutter. Clean out all closets, basement and attic. Use self storage if necessary. Replacing air filters and put some fresh plants in will help keep the dust down and the pleasant scents up.

It is natural that sellers want to get top dollar for their home, but know that this will scare off potential buyers. It may also cause the property to languish on the market for many months. A reduction in price later may lead buyers to wonder if there is something wrong with the home. Here are some factors to consider in putting in the right price for your home:

 The location  Economic conditions  Supply and demand in the local housing market  Seasonal influences  Local schools  Average home prices in the neighborhood  Home's extras (like pool, fireplace, central air etc)

In determining the value of the home, you will probably be better to seek the advice of an estate agent or appraiser. Agents can prepare a market analysis for you, showing the recent selling prices of three neighborhood properties comparable to your own. They can also help you adjust for the unique features of the home you’re selling.

If the seller has too little information about the home selling market, it’s better to contact a realtor. In finding a realtor, find someone that you feel comfortable with.

First ask your friends and acquaintances for any recommendations but make the final decision based on your needs. A realtor should show you research to support any recommendations, this includes information about recent sales, current listings and recent expired listing in your neighborhood.

The realtor will be knowledgeable in the area in which the home is located. They will get better co operation from other agents. You should ask for references from the realtor as he or she should be willing to give you names of previous clients. Look for a realtor who can tell you what he or she knows from experience in the market, and not what they think you want to hear.

These home selling tips can avoid headaches when selling your home. Do not make yourself regret everything for not doing the right thing. Don’t underestimate the demands of buyers as many people now wish to move in.

Stuart Perryman
Buying and Selling Real Estate
http://realestate.alluneedtoknow.info

Relocating to Tampa Bay - You’re Going to Love It Here

Writen by Robert Lipply

It’s no wonder that Florida’s Tampa Bay area has become such a popular choice for relocating adults and families to call home. The west coast of Florida has mile after mile of white, sandy beaches and magnificently, beautiful natural resources. These areas include the city of Tampa, Clearwater, St. Petersburg, as well as Palm Harbor, Tarpon Springs and Oldsmar.

Picture if you will, the opportunity for renewing your spirit any time you need a recharge. Dip your toes into the gentle, warm gulf waters of Tampa Bay. Let your troubles roll out to sea with the tides. As the waves return to once again touch the shores, let them bring you peace and a renewed sense of self. Now that you feel newly invigorated, perhaps you will want to head over to one of the areas more populated beaches, such as Clearwater Beach or St. Petersburg Beach, for some adventure. Take the whole family for a day of fun filled activities such as collecting sea shells, building sand castles, swimming, fishing, parasailing, or take a cruise for the chance for spotting a whale or a group of dolphins.

You will find exciting activities away from the beaches as well. You can spend the day shopping to find that unique gift for yourself or a loved one. Take in an art gallery or take the family on a historic tour of the area or even to one of the many museums you will find throughout Florida’s Tampa Bay area. When you get hungry, you will find plenty of fine dining and family restaurants to satisfy even the most finicky of eaters.

The Tampa Bay area is also home to some of the best theatre productions, live music, and sporting events to be found anywhere. Attend a play or watch in awe, the beauty of ballet, for a cultural experience your family will not soon forget. The sports fan will be delighted as a spectator at one of the Tampa Bay Buccaneers action filled football games. Those who like to gamble a bit might enjoy a little time spent betting, at one of the areas Greyhound Racing tracks.

You will find that life along Florida’s West Coast offers on one hand, an oasis from the hustle and bustle of everyday life, and even the influx of tourists that visit Florida each year: but also provides you with many recreational and educational activities to enhance the time that you spend with your family. And of course, you are just a short distance drive from family attractions such as Disney World, Busch Gardens, Universal Studios, Cypress Gardens, and Universal Studios. But unlike visitors who only get to experience some of what Florida’s West Coast has to offer, as a resident, you can discover and explore all that is here, at your own pace.

You can rely on your Tampa real estate representative to provide you with all of the information and assistance that you will need as you become an official “Floridian.” A real estate agent can help you select the neighborhood that best matches your living style and needs. Whether you’re looking for a suitable neighborhood to raise a family in, or a community for adults 55 and over, or looking to settle in where other single, middle aged people are already living: your real estate agent can help you locate these areas.

Together you and your agent can explore the many housing options available to you. From single family dwellings to single adult condominium complexes and retirement villas, so that you can choose the one that is best for you. These friendly and knowledgeable real estate representatives can also assist you in obtaining the financing you need to make your dream of relocating to Florida’s West Coast, a reality!

Bob Lipply is a top Real Estate Broker Associate in the Tampa Bay Real Estate area. He and his team have been helping families relocate to Florida and on the selling end get top dollar for their homes with great success. Lipply Real Estate also specializes in Clearwater Real Estate, visit his website where you can search the MLS for up to date available homes for sale.

Moving To Atlanta Georgia

Writen by Stephanie Bramwell

The city of Atlanta offers a variety of cultural and historical as well as entertaining events and attractions for the entire family including the Six Flags Amusement Park, the APEX Museum and a number of professional sporting events. The average home value in Atlanta is only $130,000 (U.S. Census) which makes it not only a fun, but also an affordable, place to live. Another great reason to buy a home in Atlanta is all of the surrounding parks. The city of Atlanta has 348 parks comprising over 3,000 acres! If you take the necessary time and effort you can find the home that is right for you and your family in Atlanta.

One of the attractions that make Atlanta a great place to live includes the Six Flags Amusement Park. If you are looking for an adventure for the whole family Six Flags is a great choice. The park has a portion entirely dedicated to children called Bugs Bunny World. Or for the more adventurous thrill seekers there are quite a few innovative, extreme rides available. These rides include the ski lift style Batman Ride, Superman, the South’s only flying roller coaster, and coming in April 2006 The Goliath, which will soar over 200 feet above the park. Six Flags Over Georgia

Atlanta is also home to the APEX Museum, (African American Panoramic Experience) which strives to help others appreciate the contributions of African Americans. The museum includes stories of African Americans from Georgia’s history, as well as a Hall of Achievement, which spotlights some outstanding African Americans and their remarkable accomplishments. This museum offers a great opportunity for you and your family to become immersed in the culture and history of Atlanta. APEX Museum

Some other very interesting places to visit include the CNN Center and World of Coca Cola Atlanta. At the CNN Center you can tour the CNN studio and see the history of the modern world through the events they covered. The World of Coca Cola Atlanta allows you to tour the history of one of America’s favorite soft drinks. You can view Coca Cola memorabilia from over the years and see the company’s previous advertising. The tour also lets you taste some of the Coca Cola products that are featured around the world. Finally, end your Coca Cola adventure with the Everything Coca Cola shop which offers a variety of Coca Cola brand merchandise.

For sports fans Atlanta is home to five professional sports teams; The Atlanta Braves (Major League Baseball), The Atlanta Falcons (NFL), The Atlanta Hawks (NBA), The Atlanta Thrashers (NHL), and The Atlanta Beat (WUSA).

Another great reason to live in Atlanta is the city’s focus on education. There are 16 colleges or universities within the Atlanta area. These colleges include: Georgia State University, University of Georgia, John Marshall Law School, and two women’s schools, Agnes Scott and Spelman College.

When looking for a home in Atlanta always remember the following tips:

• Make a list of your needs and wants in a home and then prioritize these specifications when looking for a house. Stay focused on the amenities that are most import to you.
• Find a Realtor who can help you in your search. They can help determine your needs and wants and then find great houses that correspond.
• Make sure you look into the educational systems and find a house within a school district that will fit the needs of your family.

Inside Atlanta Real Estate is a network entirely devoted to real estate information. The entire Inside Real Estate network has more than 100,000 pages of real estate for cities allover the United States. Inside Real Estate covers several topics from the basic “how to’s” of real estate to city specific real estate information.

Was That House A Good Investment? The Answer May Not Be So Obvious

Writen by Gary Beasley

I am surprised how many people don’t know the difference between “enterprise value”, which is the sales price of a home (debt plus equity), and “equity value”, which is what is left at the end of the day when you sell your home and pay off the mortgage. In determining whether this was a good investment for you, it is only the latter calculation that matters.

Most people simply look at how much the value of their home has appreciated since they bought it, and compare it to what they paid. Let’s say someone bought a home for $500,000 a year earlier and their neighbor’s identical home just sold for $550,000. Simple math would suggest a potential 10% return in one year (a $50,000 profit on a $500,000 purchase). This, while straightforward, is not an accurate calculation for several reasons.

First, it is critical to factor in transaction costs on the sale of your home and deduct them from the gross sales price to see how much of the sales price you have left. These include what it might cost you to prepare the house for sale (painting, landscaping, staging in some cases, etc.), as well as real estate commissions and other transaction related costs. Let’s say in our hypothetical example our seller would invest $10,000 in sprucing the place up for sale, and the real estate commission plus other closing costs on the hypothetical $550,000 sale might be another $33,000 (say 6% of the sales price). Thus that $550,000 sales price results in only $507,000 after these transaction related costs, implying a mere 1.4% return ($7,000 profit on a $500,000 purchase price), right? Wrong again.

To calculate your investment return you need to compare your profit (or loss) to the equity you have invested, not the entire home price. Let’s say you put 5% down to buy the home, which equated to $25,000. Your $7,000 profit in this case actually represents a very attractive 28% return on your investment in only one year.

One way smart homeowners can increase their returns is to appreciate how much the return on their invested equity can be enhanced by saving say 1% in the agent’s listing commission. In the example above, a 5% sales commission vs. 6% would have increased our hypothetical seller’s return on their $25,000 of equity investment from the 28% we just calculated to an astonishing 50% ($12,500 profit on the $25,000 investment).

A couple of basic takeaways from this: First, make sure to factor in all costs of a transaction. Second, understand the difference between the aggregate home value and the equity you have invested in the home, which is what impacts your true economic return. Third, appreciate the impact sales related costs can have on your return. While a $5,000 commission difference seems relatively insignificant in the context of a $550,000 home sale, it is VERY significant in relation to the equity investment in your home, which is the basis of determining your return on your investment.

ZipRealty, Inc. provides home sellers and buyers with an innovative real estate solution. By using the efficiencies of the Internet, we have streamlined the real estate process and are able to pass significant savings on to our clients. Our licensed ZipAgents have years of experience in the areas they serve, allowing you to save thousands, without compromising on service.

8 Steps to Finding the Right Real Estate Agent for You

Writen by Bill Carey

A plan is what’s necessary to finding your next home and finding the right person to work it with you is the first step to your success. You need an agent you trust someone who honestly wants to work with you. You should interview 2 or 3 agents to find this person. Working with the right agent can save you time and possibly thousands of dollars.

The Agent You Decide to Work With Should be Internet Savvy - have an excellent website that is easy to navigate and has plenty of free consumer information. It should be tied to a newsletter and other real estate related information that you can access without paying a dime.

Team Approach to Real Estate large team or small team the idea is to have specialists in different areas of the business. Affiliate team members a strong base of professionals’ mortgage brokers, attorney, inspectors, engineering and service contractors.

VIP Buyer Profile Program - house hunting service of daily or weekly emails to you of the homes that fit your criteria. Meet with your agent describe your wants and needs enter that information into the computer along with general area or location. You should receive emails updates to all new listing that match your entries.

Experience and Reputation experience in the business of real estate and has personally bought and sold homes, has an excellent reputation in and out of the real estate business, not just having a bunch of letter designations behind their name to impress other realtors nor do you need someone who is the number 1 of anything.

Someone You Trust you must feel comfortable with your agent trust what they say know that they are working for you. Have them draw up a buyer agency agreement where they are contractually responsible to you and not working for the seller. Your buyer agent can give you the insider information that you need to make an informed decision on your purchase.

Willingness to Work on Your Terms are you interested in working with someone who doesn’t have the time to devout to you or your little house? Someone who is so full of themselves, that they can’t see your needs or is more intent on impressing you than helping you. An agent who will prepare a CMA on the homes you are considering before letting you make an offer will research tax and ownership purchase records to show the value.

Knowledgeable and Competent not necessarily the person who has lived in town for the last 50 years. Pick someone who has knowledge about the area the schools businesses recreation shopping. Knowledgeable about houses new construction or resale knows the product and can offer suggestions as to why or why not of certain home styles or builders. Pick someone who has specific and personal knowledge of the home buying and selling process.

Performance Guarantees - your agent should back up all claims and promises with written contractual performance guarantees. Promises to save you money an example would be. Performance Guarantee “Save you $5,000 on your purchase or pay you $1,000 at closing”. Your agents should always backup what they say in writing.

Your Real Estate agent doesn’t necessarily need to be your best friend but must be the professional to help guide you through the purchase and sale process. You may be working together for 2 to 4 months so pick someone you like to be around.

Bill Carey with over 30 years in real estate sales, investments, and home building offers a unique perspective to the buying and selling process of residential real estate for F*R*E*E consumer information and reports log on to http://www.CharlotteNCExecutiveHomes.com and see “Insider Real Estate Secrets Revealed” …a must read for Home Owners and Renters! It’s a F*R*E*E 12 lesson e course covering more than 20 topics exposing the realities behind buying and selling a home. It Could Make(or Save) You Thousands of Dollars

See http://www.BillCareyRealtor.com and sign up for our monthly e newsletter with tips for buyers, sellers, home owners and soon to be home owners.

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Should You Buy New or Used?

Writen by Martin Lukac

There are many advantages to both new and existing homes. Which one you purchase depends on your preferences.

When it comes to buying a house, new can be very nice. But existing homes have many benefits as well. You should consider all of the benefits to each type of home before you make your decision.

Why buy an existing home?

When you buy an existing home, you are usually able to buy a larger home for your money. New construction is usually priced by the square foot, a more expensive way of determining value. Construction costs are greater today than they were 10 years ago. When you purchase an existing home, the square feet are not calculated based on today’s square footage parameters. The cost is based on the age, style and location of the home.

You are often able to find better quality of appliances and features in an existing home. Most new homes contain “Builder’s Grade” features. These are not the top of the line appliances and components. An older home has probably been modified and remodeled since it was built. Homeowners often upgrade their appliances and carpeting as they can afford to do so.

With an existing home, you are getting an established neighborhood. You know who the neighbors are before you move in. If you are moving into a new construction neighborhood, you don’t know what mix of people will move into the surrounding homes. This can affect the quality of the neighborhood and the housing values in the future.

Advantages of buying new

The first decade of a house’s life is its formative years. This is the time when the most price appreciation occurs. The new home has a lot of appeal. It needs little maintenance, doesn’t require immediate remodeling or upgrades and is an economical choice if you don’t have a lot of money for upkeep right now.

New homes usually come with warranties that cover many of the components of the home. For the first two years, the warranty can cover almost everything from appliances to carpeting and the heating and air systems. The first ten years will cover the structure itself from erosion, shifting and foundation problems. Warranties can save you a lot of money on home repairs.

Many homeowners take great pride at being the first to own a home. They can add options to the floor plan and create the home of their dreams. There are no hidden problems or dishonest sellers to worry about. When a new neighborhood is filled with new owners, a rapport can be built that is not found in established neighborhoods.

Buying a home, whether new or slightly used, is a very emotional decision. Look at all of your options when looking at homes to purchase. You may find that you like the appeal of an existing home’s charm or the starkness of a new home. The decision is ultimately yours to make. Whether new or used, owning a home is a truly rewarding experience.

Martin Lukac (http://www.MartinLukac.com), represents http://www.RateEmpire.com and http://www.1AmericanFinancial.com, a finance web company specializing in real estate/mortgage market. We specialize in daily updates, rate predictions, mortgage rates and more. Find low home loan mortgage interest rates from hundreds of mortgage companies!