Provided By Realty Times
Appraisals allow for homeowners and buyers to establish what is fair market value of a property. In addition, an appraisal allows a lender to know how much they can safely lend.
According to The Appraisal Institute, a global membership association of professional real estate appraisers, "Appraisals are especially important because they are an objective and unbiased source of information. Unlike others involved in real estate transactions, the appraiser is an independent professional who performs a service for a fee rather than for a commission."
This process, however, can be trying and even frustrating. Recent declines in the housing markets have spawned scapegoats across the industry, including appraisers. And increased caution from lenders has slowed the buying process.
"Too many consumers in this struggling real estate market face problems with appraisals when attempting to buy or sell a home," said Appraisal Institute President Joseph C. Magdziarz, MAI, SRA. "But rather than passively endure delays in closing a sale, homeowners and buyers can take proactive steps to avoid pitfalls."
To reduce your stress during this time, consider these simple tips from the AI®.
•Understand the role of appraisals. It is neither in your interest nor the interest of your lender for you to purchase a property that is over-priced for its value.
•Make sure the lender hires a qualified appraiser (such as a designated SRA, SRPA or MAI member of the Appraisal Institute). The lowest priced appraiser does not necessarily equate with the most qualified. This is a time to get the numbers right.
•Accompany the appraiser during the inspection of the property if possible. The more active of a participant you are in the process, the more you will understand it, and be able to catch any errors.
•Request a copy of the appraisal report from the lender. Federal law requires that you receive a copy of the appraisal within 30 days.
•Examine the appraisal report and ask questions. Be sure to examine the report for errors. According to "Appraising the Appraisal: The Art of Appraisal Review," 2nd edition, common errors in appraisals include: misuse of adjustments to comparables, disregarding special financing and concessions, or miscalculation of gross living area.
•Appeal the appraisal if appropriate. Market conditions do change, especially in these economic times. If you feel that new information may change the appraisal, be sure to contact them!
•Ask the lender to order a second appraisal by a qualified and designated appraiser.
•File legitimate complaints with appropriate state board or professional appraisal organizations.
If you are selling your home and need advice call the experts at 972-772-7000 or email us at rockwall@kw.com.
Wednesday, January 19, 2011
Monday, January 17, 2011
Buying Your First Home
Finding the right first home starts with a price range and a short list of desirable neighborhoods. But there are many other factors you'll need to consider before investing in what may be your biggest asset.
Provided By Yahoo! Real Estate
Before You Start:
•Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
•Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.
•Think about your lifestyle and how it might affect your choice of home and neighborhood.
•Do a little research on current home prices in the neighborhoods you plan to target.
Buying Your First Home
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.
Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.
Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.
How Much Mortgage Can You Afford?
Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.
The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28 percent of your monthly gross income.
The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36 percent.
Many home buyers choose to arrange financing before shopping for a home and most lenders will "pre-qualify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.
In addition to qualifying for a mortgage, you will probably need a down payment. The 28 percent to 36 percent debt ratios assume a 10 percent down payment. In practice, down payment requirements vary from more than 20 percent to as low as 0 percent for some Veterans Administration (VA) loans. Down payments greater than 20 percent generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.
How Much Home Can You Afford?
Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28 percent yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).
Their total debt ceiling of 36 percent is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.
Costs of Buying a Home
Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3 percent and 8 percent of your purchase price.
Ongoing Costs
In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.
Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.
Choosing a Neighborhood
Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.
Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.
Finding a Broker
If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.
Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5 percent to 7 percent and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.
Home Buying Costs
Down Payment 0% - 20% of purchase price
Home Inspection $200 - $500
Points $1,000 and up for 1% - 3%
Adjustments 3% - 8% of purchase price
Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.
Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.
Summary:
•Buying a home can mean building significant value through the years.
•Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.
•Pre-qualifying with your lender is a good way to determine how much house you can afford.
•You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.
•In addition to your mortgage payments, you will also need to consider the other costs of home ownership.
•Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.
•Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.
•Remember to consider resale value when buying your home.
If you are ready to buy your first home, give us a call at 972-772-7000 or email us at rockwall@kw.com.
Provided By Yahoo! Real Estate
Before You Start:
•Grab your current household budget so you can consider your financial situation and your ability to make mortgage payments.
•Ask family and friends if they can recommend experts, like a lawyer and an inspector, who can help with the home buying process.
•Think about your lifestyle and how it might affect your choice of home and neighborhood.
•Do a little research on current home prices in the neighborhoods you plan to target.
Buying Your First Home
Home ownership is the cornerstone of the American Dream. But before you start looking, there are a number of things you need to consider. First, you should determine what your needs are and whether owning your own home will meet those needs. Do you picture yourself mowing the lawn on Saturday, or leaving your urban condo for the beach? The best advice is to look at buying a home as a lifestyle investment, and only secondly as a financial investment.
Even if housing prices don't continue to increase at the torrid pace seen in recent years in many areas, buying a home can be a good financial investment. Making mortgage payments forces you to save, and after 15 to 30 years you will own a substantial asset that can be converted into cash to help fund retirement or a child's education. There are also tax benefits.
Like many other investments, however, real estate prices can fluctuate considerably. If you aren't ready to settle down in one spot for a few years, you probably should defer buying a home until you are. If you are ready to take the plunge, you'll need to determine how much you can spend and where you want to live.
How Much Mortgage Can You Afford?
Many mortgages today are being resold in the secondary markets. The Federal National Mortgage Association (Fannie Mae) is a government-sponsored organization that purchases mortgages from lenders and sells them to investors. Mortgages that conform to Fannie Mae's standards may carry lower interest rates or smaller down payments. To qualify, the mortgage borrower needs to meet two ratio requirements that are industry standards.
The housing expense ratio compares basic monthly housing costs to the buyer's gross (before taxes and other deductions) monthly income. Basic costs include monthly mortgage, insurance, and property taxes. Income includes any steady cash flow, including salary, self-employment income, pensions, child support, or alimony payments. For a conventional loan, your monthly housing cost should not exceed 28 percent of your monthly gross income.
The total obligations to income ratio is the percentage of all income required to service your total monthly payments. Monthly payments on student loans, installment loans, and credit card balances older than 10 months are added to basic housing costs and then divided by gross income. Your total monthly debt payments, including basic housing costs, should not exceed 36 percent.
Many home buyers choose to arrange financing before shopping for a home and most lenders will "pre-qualify" you for a certain amount. Prequalification helps you focus on homes you can afford. It also makes you a more attractive buyer and can help you negotiate a lower purchase price. Nothing is more disheartening for buyers or sellers than a deal that falls through due to a lack of financing.
In addition to qualifying for a mortgage, you will probably need a down payment. The 28 percent to 36 percent debt ratios assume a 10 percent down payment. In practice, down payment requirements vary from more than 20 percent to as low as 0 percent for some Veterans Administration (VA) loans. Down payments greater than 20 percent generally buy a better rate. Lowering the down payment increases leverage (the opportunity to make a profit using borrowed money) but also increases monthly payments.
How Much Home Can You Afford?
Bob and Janet's combined income is $50,000 a year, or $4,166 a month. Their housing expense ratio of 28 percent yields a monthly maximum of $1,166 for mortgage, insurance, and taxes ($4,166 x 0.28 = $1,166).
Their total debt ceiling of 36 percent is $1,583 (4,166 x 0.36 = $1,500). Their monthly debt payments include a $200 car payment, credit card payments of $100, and student loan payments of $200. Subtracting this total of $500 from the $1,500 permitted leaves $1,000 in monthly housing payments.
Costs of Buying a Home
Many home buyers are surprised (shocked might be a better word) to find that a down payment is not the only cash requirement. A home inspection can cost $200 or more. Closing costs may include loan origination fees, up-front "points" (prepaid interest), application fees, appraisal fee, survey, title search and title insurance, first month's homeowners insurance, recording fees and attorney's fees. In many locales, transfer taxes are assessed. Finally, adjustments for heating oil or property taxes already paid by the sellers will be included in your final costs. All this will probably add up to be between 3 percent and 8 percent of your purchase price.
Ongoing Costs
In addition to mortgage payments, there are other costs associated with home ownership. Utilities, heat, property taxes, repairs, insurance, services such as trash or snow removal, landscaping, assessments, and replacement of appliances are the major costs incurred. Make sure you understand how much you are willing and able to spend on such items.
Condominiums may not have the same costs as a house, but they do have association fees. Older homes are often less expensive to buy, but repairs may be greater than those in a newer home. When looking for a home, be sure to check the actual expenses of the previous owners, or expenses for a comparable home in the neighborhood.
Choosing a Neighborhood
Before you start looking at homes, look at neighborhoods. Schools and other services play a large part in making a neighborhood attractive. Even if you don't have children, your future buyer may. Crime rates, taxes, transportation, and town services are other things to look at. Finally, learn the local zoning laws. A new pizza shop next door might alter your property's future value. On the other hand, you may want to run a business out of your home.
Look for a neighborhood where prices are increasing. As the prices of the better homes increase, values of the lesser homes may rise as well. If you find a less expensive home in a good neighborhood, make sure you factor in the cost of repairs or upgrades that such a house may need.
Finding a Broker
If you are a first-time home buyer, you will probably want to work with a broker. Brokers know the market and can be a valuable source of information concerning the home buying process. Ask lots of questions, but remember that most brokers are working for the seller, and in the end, their primary obligation is to the seller and not to you. An alternative is a so-called buyer's broker. This individual does work for you, and therefore is paid by you. Seller's brokers are paid by the seller.
Make sure that the broker has access to the Multiple Listing Service (MLS). This service lists all the properties for sale by most major brokers across the country. Brokerage commissions average 5 percent to 7 percent and are split between the listing broker and the broker that eventually sells the home. Don't be surprised if your broker is eager to sell you their own listing since they would then earn the entire commission.
Home Buying Costs
Down Payment 0% - 20% of purchase price
Home Inspection $200 - $500
Points $1,000 and up for 1% - 3%
Adjustments 3% - 8% of purchase price
Once you've determined a price range and location, you're ready to look at individual homes. Remember that much of a home's value is derived from the values of those surrounding it. Since the average residency in a house is seven years, consider the qualities that will be attractive to future buyers as well as those attractive to you.
Although it can be difficult, try to remember that you will probably want to sell this home someday. The more research you do today, the better your decision will look in the years to come.
Summary:
•Buying a home can mean building significant value through the years.
•Think carefully about how much you can afford to spend and consider borrowing guidelines like those used by Fannie Mae.
•Pre-qualifying with your lender is a good way to determine how much house you can afford.
•You will need cash for a down payment and closing costs. Generally speaking, the higher the down payment, the lower the interest rate and monthly mortgage payment.
•In addition to your mortgage payments, you will also need to consider the other costs of home ownership.
•Schools, taxes, services, crime rates, transportation, and zoning are important considerations when selecting a neighborhood.
•Brokers usually represent the seller, but they can be valuable sources of information for buyers as well. A broker that belongs to the Multiple Listing Service will be able to offer a wider variety of homes to choose from.
•Remember to consider resale value when buying your home.
If you are ready to buy your first home, give us a call at 972-772-7000 or email us at rockwall@kw.com.
Friday, January 14, 2011
The Hottest Home Improvement in 2011
Provided By Yahoo!
Saunas today are hot. Even in Texas.
"Afterwards you get a real calm feeling of well-being," he says.
That may surprise some of Mr. Hall's neighbors, who think that Dallas is often steamy enough. Mr. Hall says his sauna provides not only relaxation, but also a certain cachet with friends and colleagues. "We'll have clients over and instead of going some place for happy hour, we'll have a sauna, a couple beers," he says. "People think it's weird at first" but then are usually won over, he says.
Saunas have been at the core of Finnish culture for thousands of years, a traditional toasty respite in a cold and snowy climate, according to the nonprofit North American Sauna Society, whose members are fans and merchants. More Americans are making space for sauna rooms, clearing out basements, converting closets and even partitioning off backyard sheds. Florida Hot Tub and Sauna, of Ft. Lauderdale, says sauna sales this year are up as much as 40% over last year. Rozycki Woodworks, of Royalton, Minn., says sales of its handmade barrel-like outdoor saunas have been climbing about 6% a year for the past four years. Kalevi Ruuska, a Fishkill, N.Y., sauna dealer, says sales were up 50% this year.
"What I'm interested in is whether our American friends will sauna in the nude," says Leslie Kahn, an architect in Bethesda, Md. She and her husband are remodeling a basement bathroom in order to add a sauna. Her husband believes sauna sessions he experienced overseas helped with aches and pains. The couple also enjoys the social aspect and hopes eventually to entertain guests with sauna parties. The cost of the sauna, including installation, will be around $5,000, on top of about $12,000 for remodeling the bathroom, she says.
Besides the Euro-cool factor, saunas' growing popularity also is due to their practical appeal. They are less fussy to install than other spa-type amenities. The source of their intense, radiant heat is simply stones placed inside and on top of an electric heater. Some outdoor units are set up with a traditional wood-burning stove, requiring no electricity for heating (just a good stack of firewood).
Whether indoors or out, saunas typically are built using a light-colored wood able to withstand wide fluctuations in heat and humidity. In the U.S., western red cedar is popular and releases a pleasant scent.
Although saunas can be enjoyed dry, many people like to add humidity by sprinkling water on the rocks. There's no need to rejig water lines and plumbing-as homeowners often do when installing a jetted whirlpool tub-nor is there water quality to maintain, as with a hot tub.
Health concerns about jetted water in bubbly spa tubs may be also be helping saunas' popularity. A 2000 study at Texas A & M University tested 43 water samples from whirlpool tubs in hotels and homes nationwide and found all had some form of microbial growth, such as fungi or staphylococcus. The reason: The water in the jet-spray pipes tends to get trapped, and bacteria may accumulate. When the jets are switched on, microbes are forcefully blown into the tub where a person is soaking, carried on a bubbly mist that can enter lungs or open cuts, says Rita Moyes, microbiology professor at Texas A&M.
A sauna can be relatively affordable. Converting a closet into a two-person sauna might cost as little as $3,000, not including installation, while a "designer deluxe" model with digital controls and high-end lighting could climb to $10,000, says Keith Raisanen, president of Saunatec Inc., a Cokato, Minn., manufacturer and distributor. Most saunas, he says, fall in the $4,500-to-$8,000 range and seat from four to seven.
Social Venue
In Washington, D.C., a 10-seat sauna in the basement of the Finnish embassy becomes an evening hotspot, where journalists and politicos mingle on Friday nights about twice a month. Embassy spokesman Kari Mokko says he limits invitations to about 15 each time and regularly changes the guest mix. "The demand is so high," he says. The sauna was built into the embassy, which was completed in 1994. Parties, considered a useful vehicle for promoting Finnish culture, came soon after.
The room is walled in North Carolina white pine with benches made of cedar; it is heated to 190 degrees. Men sauna separately from women; each group takes its turn in an adjoining shower room. A buffet spread-think gravlax and meatballs in dill sauce- follows in an adjacent cocktail room, where a bartender serves vodka and cold beer.
Last fall, Don Orlic, a cardiovascular researcher, and Roxanne Fischer had an outdoor sauna built at their weekend retreat in Virginia's Shenandoah Valley, in a free-standing cabin about 75 feet from the main house. Dr. Orlic digitally sets the temperature in the sauna from inside the main house, allowing 30 minutes for the sauna to reach as high as 180 degrees. He relaxes there for 20 to 30 minutes at a time. On cold winter days, he says, he loves the contrast of brisk air and penetrating heat. "I love to make margaritas and have our friends over," Dr. Orlic says. "It's a social thing."
Reasonable Cost
The sauna, which comfortably seats five, cost about $10,000 for the basic preassembled unit. Installation-including underground electric lines and plumbing for a nearby outdoor shower and other custom elements-drove the cost up to $25,000. Dr. Orlic hasn't received his first post-installation electric bill yet. Art Glick, owner of sauna and hot tub distributor Almost Heaven Group, of Renick, W. Va., estimates a 5-foot-by-7-foot sauna might consume an average of five dollars a month in electricity.
Saunatec's Mr. Raisanen, whose grandparents emigrated from Finland, says he and his wife like to take a sauna at night, set at 165 degrees for 15 to 20 minutes. "We like a lot of steam," says Mr. Raisanen, who keeps a bucket and ladle next to the rocks.
A timer on the heater gets the sauna hot at 9:30 p.m. That's an ideal time, he says: It's a couple of hours after dinner (he advises against a sauna after a big meal), and the kids are in bed. Lights are kept low. "It's really our cherished quiet time," he says. "It's a shut-the-door-to-the-rest-of-the-world-type thing."
Mr. Raisanen sells prefabricated sauna units that can be assembled by a homeowner in hours and installed in a basement or workout room. His "custom cut" kits, in dimensions supplied by the customer, are made to be installed on pre-framed walls. Installation can be arranged through the dealer at extra cost, Mr. Raisanen says.
Going Infrared
"Infrared" saunas, with heaters built into the walls, are a fast-growing part of his business, Mr. Raisanen says. They have caught consumers' attention with lower prices: A two-person infrared unit might cost as little as $2,000. Humidity can't be adjusted the old-fashioned way, because there are no rocks. And they don't get as hot, a plus for some people.
There have been safety concerns about infrared technology, though. In 2008, the Consumer Product Safety Commission recalled about 225 infrared saunas after reports that some caught fire. Some distributors today refuse to sell infrared models. Others say the technology has improved. Initially reluctant to continue selling them, Mr. Raisanen says he has begun working with an exclusive supplier with high quality-control standards.
A Sauna Party Kit
* Sauna: An 8-by-10 footer can comfortably seat seven to 10 people.
* Towels: For guests to wear, or, if going au naturel, everyone can place them over the bench seats.
* Water: It's important to stay hydrated between 'innings,' or re-entry visits.
* Snacks: Serve post-sauna. It's not a good idea to sauna on a full stomach. Finnish fare includes smoked salmon and herring. Also beverages beer, vodka or fruit juices.
* Cold dip: For the full Scandinavian experience, a dip in an outdoor swimming pool or a lake is refreshing after a hot sweat.
Saunas today are hot. Even in Texas.
"Afterwards you get a real calm feeling of well-being," he says.
That may surprise some of Mr. Hall's neighbors, who think that Dallas is often steamy enough. Mr. Hall says his sauna provides not only relaxation, but also a certain cachet with friends and colleagues. "We'll have clients over and instead of going some place for happy hour, we'll have a sauna, a couple beers," he says. "People think it's weird at first" but then are usually won over, he says.
Saunas have been at the core of Finnish culture for thousands of years, a traditional toasty respite in a cold and snowy climate, according to the nonprofit North American Sauna Society, whose members are fans and merchants. More Americans are making space for sauna rooms, clearing out basements, converting closets and even partitioning off backyard sheds. Florida Hot Tub and Sauna, of Ft. Lauderdale, says sauna sales this year are up as much as 40% over last year. Rozycki Woodworks, of Royalton, Minn., says sales of its handmade barrel-like outdoor saunas have been climbing about 6% a year for the past four years. Kalevi Ruuska, a Fishkill, N.Y., sauna dealer, says sales were up 50% this year.
"What I'm interested in is whether our American friends will sauna in the nude," says Leslie Kahn, an architect in Bethesda, Md. She and her husband are remodeling a basement bathroom in order to add a sauna. Her husband believes sauna sessions he experienced overseas helped with aches and pains. The couple also enjoys the social aspect and hopes eventually to entertain guests with sauna parties. The cost of the sauna, including installation, will be around $5,000, on top of about $12,000 for remodeling the bathroom, she says.
Besides the Euro-cool factor, saunas' growing popularity also is due to their practical appeal. They are less fussy to install than other spa-type amenities. The source of their intense, radiant heat is simply stones placed inside and on top of an electric heater. Some outdoor units are set up with a traditional wood-burning stove, requiring no electricity for heating (just a good stack of firewood).
Whether indoors or out, saunas typically are built using a light-colored wood able to withstand wide fluctuations in heat and humidity. In the U.S., western red cedar is popular and releases a pleasant scent.
Although saunas can be enjoyed dry, many people like to add humidity by sprinkling water on the rocks. There's no need to rejig water lines and plumbing-as homeowners often do when installing a jetted whirlpool tub-nor is there water quality to maintain, as with a hot tub.
Health concerns about jetted water in bubbly spa tubs may be also be helping saunas' popularity. A 2000 study at Texas A & M University tested 43 water samples from whirlpool tubs in hotels and homes nationwide and found all had some form of microbial growth, such as fungi or staphylococcus. The reason: The water in the jet-spray pipes tends to get trapped, and bacteria may accumulate. When the jets are switched on, microbes are forcefully blown into the tub where a person is soaking, carried on a bubbly mist that can enter lungs or open cuts, says Rita Moyes, microbiology professor at Texas A&M.
A sauna can be relatively affordable. Converting a closet into a two-person sauna might cost as little as $3,000, not including installation, while a "designer deluxe" model with digital controls and high-end lighting could climb to $10,000, says Keith Raisanen, president of Saunatec Inc., a Cokato, Minn., manufacturer and distributor. Most saunas, he says, fall in the $4,500-to-$8,000 range and seat from four to seven.
Social Venue
In Washington, D.C., a 10-seat sauna in the basement of the Finnish embassy becomes an evening hotspot, where journalists and politicos mingle on Friday nights about twice a month. Embassy spokesman Kari Mokko says he limits invitations to about 15 each time and regularly changes the guest mix. "The demand is so high," he says. The sauna was built into the embassy, which was completed in 1994. Parties, considered a useful vehicle for promoting Finnish culture, came soon after.
The room is walled in North Carolina white pine with benches made of cedar; it is heated to 190 degrees. Men sauna separately from women; each group takes its turn in an adjoining shower room. A buffet spread-think gravlax and meatballs in dill sauce- follows in an adjacent cocktail room, where a bartender serves vodka and cold beer.
Last fall, Don Orlic, a cardiovascular researcher, and Roxanne Fischer had an outdoor sauna built at their weekend retreat in Virginia's Shenandoah Valley, in a free-standing cabin about 75 feet from the main house. Dr. Orlic digitally sets the temperature in the sauna from inside the main house, allowing 30 minutes for the sauna to reach as high as 180 degrees. He relaxes there for 20 to 30 minutes at a time. On cold winter days, he says, he loves the contrast of brisk air and penetrating heat. "I love to make margaritas and have our friends over," Dr. Orlic says. "It's a social thing."
Reasonable Cost
The sauna, which comfortably seats five, cost about $10,000 for the basic preassembled unit. Installation-including underground electric lines and plumbing for a nearby outdoor shower and other custom elements-drove the cost up to $25,000. Dr. Orlic hasn't received his first post-installation electric bill yet. Art Glick, owner of sauna and hot tub distributor Almost Heaven Group, of Renick, W. Va., estimates a 5-foot-by-7-foot sauna might consume an average of five dollars a month in electricity.
Saunatec's Mr. Raisanen, whose grandparents emigrated from Finland, says he and his wife like to take a sauna at night, set at 165 degrees for 15 to 20 minutes. "We like a lot of steam," says Mr. Raisanen, who keeps a bucket and ladle next to the rocks.
A timer on the heater gets the sauna hot at 9:30 p.m. That's an ideal time, he says: It's a couple of hours after dinner (he advises against a sauna after a big meal), and the kids are in bed. Lights are kept low. "It's really our cherished quiet time," he says. "It's a shut-the-door-to-the-rest-of-the-world-type thing."
Mr. Raisanen sells prefabricated sauna units that can be assembled by a homeowner in hours and installed in a basement or workout room. His "custom cut" kits, in dimensions supplied by the customer, are made to be installed on pre-framed walls. Installation can be arranged through the dealer at extra cost, Mr. Raisanen says.
Going Infrared
"Infrared" saunas, with heaters built into the walls, are a fast-growing part of his business, Mr. Raisanen says. They have caught consumers' attention with lower prices: A two-person infrared unit might cost as little as $2,000. Humidity can't be adjusted the old-fashioned way, because there are no rocks. And they don't get as hot, a plus for some people.
There have been safety concerns about infrared technology, though. In 2008, the Consumer Product Safety Commission recalled about 225 infrared saunas after reports that some caught fire. Some distributors today refuse to sell infrared models. Others say the technology has improved. Initially reluctant to continue selling them, Mr. Raisanen says he has begun working with an exclusive supplier with high quality-control standards.
A Sauna Party Kit
* Sauna: An 8-by-10 footer can comfortably seat seven to 10 people.
* Towels: For guests to wear, or, if going au naturel, everyone can place them over the bench seats.
* Water: It's important to stay hydrated between 'innings,' or re-entry visits.
* Snacks: Serve post-sauna. It's not a good idea to sauna on a full stomach. Finnish fare includes smoked salmon and herring. Also beverages beer, vodka or fruit juices.
* Cold dip: For the full Scandinavian experience, a dip in an outdoor swimming pool or a lake is refreshing after a hot sweat.
Wednesday, January 12, 2011
The Closing Process
Provided By The Lending Tree
Closing consists of all the necessary final steps involved in sealing the deal on a home purchase. It includes:
The offer to purchase
There's no foolproof way to make an offer that's guaranteed to be accepted by the seller. But once you find your perfect house, it's wise to move fast. A good rule of thumb is to make an offer that's eight to 10 percent below the asking price, though that might not work in some areas based on trends in the market. This gives you some room to negotiate, but don't top what you've predetermined to be the highest price you can afford.
The deposit
Also known as earnest money, this is a demonstration of good faith and commitment by the buyer to the seller. It is usually 1 percent of the home's purchase price and is included in an offer to purchase. Either the real estate agent or the seller's lawyer holds the deposit in trust until the deal closes. If you decide not to close on a deal once your offer has been accepted, you may lose your deposit and be sued for damages. If the seller does not accept your offer, your deposit will be returned. If the sale proceeds, your deposit is usually applied to your down payment.
Contingencies
These are certain requirements specified in a contract that need to be met before the buyer is required to close. Typical among them: the buyer's securing of financing and an acceptable house inspection. Generally speaking, an inspection contingency covers a 10-to-14-day period from the acceptance of the contract, and financing contingencies run for 30 days. But in a seller's market, buyers may be asked to fulfill their contingency requirements in shorter time frames.
Home inspection
In a home inspection, a professional conducts a thorough examination of a property to assess its structural and mechanical condition. The idea here is that a trained home inspector will be able to catch potential problems that a buyer might not detect.
The contract
This follows the acceptance of an offer by the seller, and it is a legal and binding obligation, on the part of the buyer, to purchase the property if any contingencies are met. It outlines the details of the transaction, including: a description of the property, the selling price, the date of closing, the possession date and any applicable contingencies.
Settlement sheet
Also called a "closing statement" or a "settlement statement," this is a document that the Department of Housing and Urban Development requires to account for all financial aspects surrounding the sale and purchase of a home. It provides an enumerated list of the funds that were paid at closing. Items on the statement include real estate commissions and initial escrow amounts (money or securities deposited with a neutral third party - the escrow agent - to be delivered upon fulfillment of certain conditions). The Real Estate Settlement Procedures Act requires that a copy of the settlement sheet be distributed to both parties at least one day prior to settlement.
Closing documentation
Before you can close on a house, some paperwork must be completed. This includes a title search to make sure the title is clear, title insurance to protect the buyer and the lender from an oversight regarding a claim on some aspect of the property and an application for homeowner's insurance (necessary for securing a mortgage).
Closing cost
The total amount of closing costs varies, but may include: a loan origination fee, an appraisal fee, the cost of a credit report, a lender's inspection fee, the cost of title insurance, a mortgage broker fee, taxes and a fee for document preparation. Your lender is required to give you prior notice of fees associated with your loan.
Final arrangements
Before the deal is closed and you take possession, you must make some practical arrangements regarding utility service and first mortgage payment.
Settlement
Settlement describes the payment of the balance of the purchase price the buyer owes on the property, and the transfer of the title. It takes place on the possession date specified in the agreement.
Are you ready to sell your home? Give the experts a call at 972-772-7000 or email us at rockwall@kw.com.
Closing consists of all the necessary final steps involved in sealing the deal on a home purchase. It includes:
The offer to purchase
There's no foolproof way to make an offer that's guaranteed to be accepted by the seller. But once you find your perfect house, it's wise to move fast. A good rule of thumb is to make an offer that's eight to 10 percent below the asking price, though that might not work in some areas based on trends in the market. This gives you some room to negotiate, but don't top what you've predetermined to be the highest price you can afford.
The deposit
Also known as earnest money, this is a demonstration of good faith and commitment by the buyer to the seller. It is usually 1 percent of the home's purchase price and is included in an offer to purchase. Either the real estate agent or the seller's lawyer holds the deposit in trust until the deal closes. If you decide not to close on a deal once your offer has been accepted, you may lose your deposit and be sued for damages. If the seller does not accept your offer, your deposit will be returned. If the sale proceeds, your deposit is usually applied to your down payment.
Contingencies
These are certain requirements specified in a contract that need to be met before the buyer is required to close. Typical among them: the buyer's securing of financing and an acceptable house inspection. Generally speaking, an inspection contingency covers a 10-to-14-day period from the acceptance of the contract, and financing contingencies run for 30 days. But in a seller's market, buyers may be asked to fulfill their contingency requirements in shorter time frames.
Home inspection
In a home inspection, a professional conducts a thorough examination of a property to assess its structural and mechanical condition. The idea here is that a trained home inspector will be able to catch potential problems that a buyer might not detect.
The contract
This follows the acceptance of an offer by the seller, and it is a legal and binding obligation, on the part of the buyer, to purchase the property if any contingencies are met. It outlines the details of the transaction, including: a description of the property, the selling price, the date of closing, the possession date and any applicable contingencies.
Settlement sheet
Also called a "closing statement" or a "settlement statement," this is a document that the Department of Housing and Urban Development requires to account for all financial aspects surrounding the sale and purchase of a home. It provides an enumerated list of the funds that were paid at closing. Items on the statement include real estate commissions and initial escrow amounts (money or securities deposited with a neutral third party - the escrow agent - to be delivered upon fulfillment of certain conditions). The Real Estate Settlement Procedures Act requires that a copy of the settlement sheet be distributed to both parties at least one day prior to settlement.
Closing documentation
Before you can close on a house, some paperwork must be completed. This includes a title search to make sure the title is clear, title insurance to protect the buyer and the lender from an oversight regarding a claim on some aspect of the property and an application for homeowner's insurance (necessary for securing a mortgage).
Closing cost
The total amount of closing costs varies, but may include: a loan origination fee, an appraisal fee, the cost of a credit report, a lender's inspection fee, the cost of title insurance, a mortgage broker fee, taxes and a fee for document preparation. Your lender is required to give you prior notice of fees associated with your loan.
Final arrangements
Before the deal is closed and you take possession, you must make some practical arrangements regarding utility service and first mortgage payment.
Settlement
Settlement describes the payment of the balance of the purchase price the buyer owes on the property, and the transfer of the title. It takes place on the possession date specified in the agreement.
Are you ready to sell your home? Give the experts a call at 972-772-7000 or email us at rockwall@kw.com.
Monday, January 10, 2011
Best Times to Buy
Provided By Yahoo! Real Estate
A Conventional wisdom says that you need to stay in a home a minimum of five years to ensure that you recoup your purchasing costs. But with some markets soaring, this advice doesn't always apply.
It's All About the Market
Market conditions play a huge part in any decision about when to buy. Housing market values have varied widely from region to region in recent years. While the Florida market has seen meteoric rises in home values, Ohio has seen its real estate prices go into negative territory in the last year.
Do not buy high and sell low - if your market is softening or has hit its peak and is heading south, you may want to wait on your purchase.
The magazine Smart Money has created a worksheet to compare the costs of renting vs. buying using market appreciation calculations to determine at what point you come out ahead. Plugging in the price, down payment, your income bracket, interest rate, and current market appreciation rates, the worksheet will break out what you will gain.
For example, say you were to buy a $400,000 house in Boulder, Colorado and you estimate the market will soften from the current 11% appreciation to about 9 percent annually. If you stayed in the house three years, you would recover $88,750 in equity at the end of that period; if you stayed five years, you'd realize
$120,360.
It's All About You
The top three reasons people file for bankruptcy are change of job status, divorce, and unforeseen health expenses. If you face any of these challenges and don't have a financial cushion, this may negatively impact your ability to pay a mortgage. Big life events dictate your readiness to buy now or to wait for a little more stability.
Signs you should not buy right now:
•Will you be moving within the next five years?
•Will you be having kids soon?
•Will you be making a job change?
•Have you recently filed for bankruptcy or is your credit score below 630?
If you answered yes to any of these questions, or you are experiencing other life-changing events like illness, marriage, divorce, or breakup, you may want to wait.
Your Financial Future
Aside from life events contributing to your decision, getting your financial house in order before you begin your home search is key. Even with all the programs available for buyers with a low-or-no down payment, if your debts are growing steadily and you don't foresee an increase in your income, you are putting yourself in greater financial risk by taking on a mortgage.
With only a few exceptions, many loans for people who are still repairing their credit or recovering from bankruptcy carry higher rates than those available once your credit is in better shape. So the question comes down to this: Do you buy now, before prices appreciate higher than you can afford, but do so with an expensive loan? Or do you wait and repair your credit, then get a favorable loan, and pay more for your home?
That's the sort of analysis you need to go over with a financial counselor or mortgage broker before you start hitting open houses.
Ways to Cushion the Blow
On the other hand, if you are willing to buy a home that needs a bit of work and, over time, you can afford to get it done, your home could appreciate faster, strengthening your financial position. If you are willing to take on a roommate or renter, you can also soften the expense of a mortgage, which almost always costs more than rent. Buying a home is a risk, and it's worth asking yourself hard questions about what you're willing to do to protect yourself from getting in over your head.
If you answered "no" the life-change questions, and have the down payment or equity from your current home, you still need to look at interest rates and at how buying affects your taxes. You can't time the stock market, but you can time interest rate hikes, as they are a little easier to predict. If they are going up fast, you can jump in before they rise too far; if they are already high, you will have to calculate how refinancing in the future affects your budget.
What to Do First
If you are anxious to get moving, be patient. You have a few things to do first:
1.Go to open houses - get the lay of the land
2.Talk to a mortgage broker to get pre-approved
3.Interview agents (You may want to find an agent at the same time as you look for a mortgage broker - a good agent can recommend reputable brokers and help you make sense of the terms of the loan)
4.Review credit report and scores with mortgage broker to determine if any repairs are needed
If you are ready to purchase a home and need an experienced real estate agent, give us a call at 972-772-7000 or email us at rockwall@kw.com.
A Conventional wisdom says that you need to stay in a home a minimum of five years to ensure that you recoup your purchasing costs. But with some markets soaring, this advice doesn't always apply.
It's All About the Market
Market conditions play a huge part in any decision about when to buy. Housing market values have varied widely from region to region in recent years. While the Florida market has seen meteoric rises in home values, Ohio has seen its real estate prices go into negative territory in the last year.
Do not buy high and sell low - if your market is softening or has hit its peak and is heading south, you may want to wait on your purchase.
The magazine Smart Money has created a worksheet to compare the costs of renting vs. buying using market appreciation calculations to determine at what point you come out ahead. Plugging in the price, down payment, your income bracket, interest rate, and current market appreciation rates, the worksheet will break out what you will gain.
For example, say you were to buy a $400,000 house in Boulder, Colorado and you estimate the market will soften from the current 11% appreciation to about 9 percent annually. If you stayed in the house three years, you would recover $88,750 in equity at the end of that period; if you stayed five years, you'd realize
$120,360.
It's All About You
The top three reasons people file for bankruptcy are change of job status, divorce, and unforeseen health expenses. If you face any of these challenges and don't have a financial cushion, this may negatively impact your ability to pay a mortgage. Big life events dictate your readiness to buy now or to wait for a little more stability.
Signs you should not buy right now:
•Will you be moving within the next five years?
•Will you be having kids soon?
•Will you be making a job change?
•Have you recently filed for bankruptcy or is your credit score below 630?
If you answered yes to any of these questions, or you are experiencing other life-changing events like illness, marriage, divorce, or breakup, you may want to wait.
Your Financial Future
Aside from life events contributing to your decision, getting your financial house in order before you begin your home search is key. Even with all the programs available for buyers with a low-or-no down payment, if your debts are growing steadily and you don't foresee an increase in your income, you are putting yourself in greater financial risk by taking on a mortgage.
With only a few exceptions, many loans for people who are still repairing their credit or recovering from bankruptcy carry higher rates than those available once your credit is in better shape. So the question comes down to this: Do you buy now, before prices appreciate higher than you can afford, but do so with an expensive loan? Or do you wait and repair your credit, then get a favorable loan, and pay more for your home?
That's the sort of analysis you need to go over with a financial counselor or mortgage broker before you start hitting open houses.
Ways to Cushion the Blow
On the other hand, if you are willing to buy a home that needs a bit of work and, over time, you can afford to get it done, your home could appreciate faster, strengthening your financial position. If you are willing to take on a roommate or renter, you can also soften the expense of a mortgage, which almost always costs more than rent. Buying a home is a risk, and it's worth asking yourself hard questions about what you're willing to do to protect yourself from getting in over your head.
If you answered "no" the life-change questions, and have the down payment or equity from your current home, you still need to look at interest rates and at how buying affects your taxes. You can't time the stock market, but you can time interest rate hikes, as they are a little easier to predict. If they are going up fast, you can jump in before they rise too far; if they are already high, you will have to calculate how refinancing in the future affects your budget.
What to Do First
If you are anxious to get moving, be patient. You have a few things to do first:
1.Go to open houses - get the lay of the land
2.Talk to a mortgage broker to get pre-approved
3.Interview agents (You may want to find an agent at the same time as you look for a mortgage broker - a good agent can recommend reputable brokers and help you make sense of the terms of the loan)
4.Review credit report and scores with mortgage broker to determine if any repairs are needed
If you are ready to purchase a home and need an experienced real estate agent, give us a call at 972-772-7000 or email us at rockwall@kw.com.
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