7.   Your Real Estate professional can provide you with a list of items you’ll need to  
        complete your loan application so you’ll be prepared.

   8.   A homeowner can exclude up to $500,000 of capital gains tax if married and filing 
        jointly or up to $250,000 if single or filing separately.  The home must have been  
        the taxpayer’s principal residence for the previous two years.

   9.   Beginning with May 07, 1997, there is no longer a requirement to purchase
        another home more expensive than the one sold.  Homeowners are free to buy up
        or down with not tax consequences assuming their gain is less than the
        allowable amounts.

How to get THE home at THE price.

Whether you are buying your first home or your fifth, the process of buying a home can be an emotional, time-consuming venture.  Feeling that, in the end, you made the right decision and got a good deal can make all the difference. As with most major decisions, the amount of work and research you undertake before you start shopping can have a dramatic effect on how well you do in the end. #1 Do you really need that backyard tennis court? Everyone can picture their ideal home.  If you haven’t thoroughly prepared yourself prior to viewing houses, chances are that you will find what you think is your ideal home, and will wind up paying too much for it. It is essential to treat the buying process in a slightly detached manner.  Those who fall in love with houses usually pay too much. That’s why it’s recommended that you develop a list of needs and one of wants.  When looking at houses, make sure that they cover all of your needs – things like adequate space, a good neighborhood, perhaps a garage – and then have fun with items on your wants list.  Treating the process in a regimented manner will help you to make a rational, informed decision. #2 Get pre-approved Visit your lending institution prior to shopping.  Be sure to get a mortgage commitment in writing. Being pre-approved gives you a solid price range, and lets your Realtor® and potential sellers know that you are serious and not just a browser. #3 Get the right people behind you Buying a home is a complicated process, with many people involved.  Having the right people on your side can make a big difference.  An experienced, dedicated, and knowledgeable Realtor® can put a team of advocates, including lenders, lawyers, home inspectors and movers, on your side immediately. #4 Communicate The more you share with your Realtor®, the better he or she will be able to represent you.  Letting your representative know exactly what you’re looking for, in terms of needs/wants, price range, and location, can eliminate unnecessary trips to unsuitable homes and that focus can help ensure that you wind up in the right home. #5 Location, location, location It’s still true.  The desirability and resale value of your home depend on location more than any other factor. People want a desirable community that includes character, quality of schools, access to work, major transportation arteries, recreational facilities, etc. On your viewing trips, take a careful look and ask the following questions: How does this home compare to others in the neighborhood? Are yards fenced? Are there many children playing in the streets? Are the front and back yards and the exteriors of the homes properly maintained?  The less expensive houses in a better area tend to appreciate faster than the most expensive houses in a less desirable area. Additional factors that affect the property value of a home include traffic, sounds, smells, zoning bylaws, and many others. Be objective. Be sure you are completely satisfied with the neighborhood. If you choose a neighborhood with problems, you likely won’t get as much as you hoped with it comes time to sell. #6 Use your Realtor’s® knowledge Your Realtor® is trained in all aspects of real estate, including understanding supply and demand, economics, and the neighborhoods of the city in which they practice. A professional Realtor® can do much of the work for you, by reviewing your needs, reviewing available properties, and making an informed match. A comprehensive knowledge of the available homes in your neighborhood is one of your Realtor’s® strongest assets. With the aid of computerized systems, a Realtor® is notified within hours when a home becomes available. #7 Pay attention to red flags When evaluating a home, be sure you know the difference between acceptable and unacceptable problems. Cosmetic items like peeling paint, worn carpeting, or unattractive wallpaper can be easily remedied, and can be used as negotiation items, as there will be costs involved in updating the home. Major problems, however, are clearly red flags.  Look for items such as major foundation cracks, water damage, outdated electrical systems, and inadequate plumbing. These items could be too expensive to remedy to make the home a worthwhile investment. #8 Hire a home inspector A home inspection is an inexpensive way to gain peace of mind, and guard your pocket book. A proper inspection will cover all areas of the house including foundation, electrical, heating, plumbing, floors, walls, ceilings, attic, roof, siding and trim, porches, patios, decks, garage and drainage. A professional inspector can give you an objective view of the property, with a written report, indicating the present condition and items that will need repair. #9 Be cautious with fixer-uppers Sometimes, a fixer-upper can be purchased below market value, and once sufficient repairs are made, can be sold at a significant profit. However, not all fixer-uppers will bring in the profits you might expect.  Consumers often overestimate their level of dedication to doing extensive renovation work, and underestimate the costs associated with such work.  A wall that needs to be replaced can often lead to the discovery of faulty plumbing, electrical, or other major undertakings.  Your Realtor® and home inspector are your best allies when it comes to cost-benefit analyses. #10 Consider your future needs A move can be a major undertaking.  Take a good look at your current lifestyle and consider the future. Will you need extra space for a home office, a child, or perhaps a child moving back home? Perhaps it may be easier and less expensive if you purchase a home that can meet these needs now, rather than moving up to a larger home a few years down the road. #11 Proceed quickly When you’re ready to buy, act.  Good properties sell.  This is especially true given the current state of most real estate markets. However, when you work with a Realtor®, you have access to the latest technology. As part of the MLS and Agent Handshake networks, a Realtor® has access to properties within hours of when they are listed. Technology works to your advantage. Many Realtors® now have personalized websites which allow you to sign on as a client, and receive notification of new listings via email. You save time and effort, and you can view only those homes that come closest to meeting your needs. #12 Clarify relationships In any real estate transaction, be very clear about who is working for whom, and what the relationship represents. Unless otherwise stated, an agent represents the seller in transactions for the sale of a home. This agent, as part of his or her fiduciary duty, must ensure that the seller’s (and not your) position is represented throughout the entire process.  Get a buyer’s agent on your side, or ensure that someone is acting in your best interests. #13 Ask for a written CMA A Comparative Market Analysis (CMA) is an analysis of comparable homes in a given neighborhood. It shows you the sale prices of comparable homes in the neighborhood, along with asking prices of other homes in the area currently on the market. A Realtor® can request this report for any home and neighborhood.  Ask for this report in writing. With this valuable document, you’ll have solid, reliable information about how fairly a home is priced compared to its real market value. #14 Know the seller Understanding a seller’s reasons for moving could work to your advantage during negotiations.  For instance, a seller who has been transferred to another city may be more motivated to sell than someone who is still shopping for a new home.  A vacant house, or a house that has been on the market for several months and has been reduced in price, could also provide the opportunity for lucrative negotiations. #15 Keep it impersonal Conversely, information could be used to your detriment. Information about your mortgage, size of down payment, move-in deadline, or circumstances for buying could be used to the seller’s benefit in negotiations. While you want your Realtor® to know these details, maintain your poker face and keep your cards hidden with the sellers and their agents. #16 Measure twice, sign once While you definitely want to move quickly once you’ve made the decision to purchase, you don’t want to cave in to pressure for a quick close. Someone who is trying to pressure you into buying a home is likely doing so for a reason. Make sure the reasons for you to buy a home are your reasons, not theirs. #17 Exercise your negotiating skills Even if you prefer not to haggle, it’s worth it, especially when it’s your home and one of your biggest investments. Most people expect to haggle over the price. There is always room for negotiation, and your Realtor® should be a professional negotiator. #18 Avoid bidding wars In some cases, the seller’s Realtor® may use scare tactics to rush the sale or increase the price. Falling for this trap could cost you money. If there is another buyer, or some other reason this pressure is being applied, whoever wins also loses because they tend to overpay. Let reason be your guide, not passion. #19 Get it in writing Legally, sellers must disclose all known material defects of a property. Ask for this in writing. Also be sure to consider the ramifications of these defects. Will they be costly down the road? Are they “serious” defects? #20 Be aware of hidden costs While Realtors® often tempt first-time buyers with rent/mortgage comparisons, there is more to a home than simply the mortgage. You will be responsible for other items including mortgage insurance, appraisal fees, legal fees, inspection fees, transfer taxes, title insurance, inspections, property tax, increased bills, etc. Your Realtor® can give you a good idea of the costs associated with buying a home that are beyond its final negotiated price. Bad Or Bruised Credit?  Don’t Give Up! You Can Still Buy A Home! How to Add Positive Credit to your Credit Report Maybe you’re young and haven’t used any credit yet… Maybe you’ve recently come out of a bankruptcy or other tough financial situation.  You may be tempted to pay for everything in cash not wishing to repeat you’re past mistakes… Maybe you think that debt is bad and have always paid for everything with cash…   Many people think that being debt-free is a positive trait valued by lenders.  Nothing could be further from the truth.  A borrower with no credit is almost as bad as one with bad credit.  A creditor wants to see a history of how you handle debts.  A person just out of a bankruptcy needs to show potential lenders that they have learned their lesson and are now committed to improving their credit habits.   Building or re-building a credit report is not a quick-fix situation.  It takes a year or two to complete.  Don’t fall for promises of a “glowing report in a matter of weeks” from credit repair agencies or other scammers.  Just follow the basic outline presented here.   1.     Clean Up Your Credit Report as Much as Possible First, you must make sure that your credit report is as clean as you can get it.  Begin by obtaining a copy of your credit report and examining it thoroughly for errors.  Having your report in tip-top shape will help you immensely when you begin to apply for new credit.   2.     Get New Credit Once you’ve cleaned up your credit, you are ready to start building a positive credit profile.  Follow any or all of these techniques to stack your report with A-1 listings.  But be prudent.  If you stack too many open accounts, you may be denied new credit based on your debt-to-income ratio; if you show excessive credit inquiries, you may be denied for that.   3.     Get a Secured Credit Card Ask your local bank if they offer secured cards; many national banks are starting to offer this service.  Your past credit is less important to these people as you will be opening a savings account to secure the credit line on the card.  You can get this card even if you still have the same bad credit on your credit file.  By putting $500.00 into a savings account, you will be allowed to charge up to $500.00 on the card.   4.     Seek Easy Credit Many stores extend credit without tremendous regard for the credit standing of the applicant.  These stores usually can be found in industries with small products or traditionally high mark-ups.  Here are lists of creditors who will often extend credit to those with much credit history:   Fingerhut   Radio Shack   Jewelry stores    Furniture stores  Easy credit auto dealerships    Appliance stores    Gas companies    Tire store   5.     Keep the Accounts Active Once you’ve successfully received new lines of credit, it is important to have some activity going on each month.  We don’t suggest you pile up large debt- maybe $50 or so in a balance.  Pay the minimum when the bill arrives even though it will cost you a little in interest charges.  And pay it on time.  This is what future loan officer and other creditors want to see.  (Inactive accounts with a zero balance aren’t displaying a tendency to handle existing debts.)   You need to display at least one year of positive credit habits to be taken seriously, especially by a mortgage company.  Start now or you will always be a year or two from good credit standing. Myths about Divorce Decrees It’s both a shame and a crime, but most divorce lawyers do not advise their clients correctly about what exactly divorce decrees cover, as far as liabilities for existing debts.  Most clients are assured that the divorce decree, in which the responsibilities for an existing debt(s) are assigned to one spouse, relieves the other of its liability.   Many people find themselves in situations like the example that follows: Hello, I was divorced 4 years ago, and in the division of our debts, my divorce decree specified that my ex-wife was responsible for the mortgage. She gave up some equity in investments so she could keep the house, which I  Quit Claimed over to her. My new wife and I applied for a mortgage recently. To my surprise we were turned down because my ex is currently 90 days late on the mortgage, and it’s showing up on my report.  I contacted the credit bureaus to dispute this, but they won’t take it off.  What can I do to get this off my report?  The debt isn’t mine. Worried Ex Dear Worried Ex: Unfortunately, you can’t do anything, if the mortgage is still in your name; you are still legally responsible, no matter what the divorce decree says. So what’s the deal here?   Myth #1 – A divorce decree can relieve a spouse from financial obligations of joint debts. Fact: - Debts that were obtained in the name of both spouses before a divorce (meaning both husband and wife signed a document or application saying that they were responsible for the debt) remain the obligation of both parties after a divorce, no matter what a divorce decree says. Why?  Because both of you sign a legally binding contract between you and the creditor, and the divorce decree does not amend this contract.  Amendment of any contract requires agreement by all parties (including creditor).  Proof of the amendment requires the signature of all parties.  During a divorce, the creditors are not even consulted, let alone a part of the divorce courts, and therefore the original agreements and contracts stand.  Therefore, if your ex-spouse does not pay a debt that he/she was assigned in a divorce decree then YOU are responsible for it.   Myth #2 - A divorce decree protects my credit if my ex-spouse doesn’t pay the debts they were assigned in the divorce. Fact: - If you have a joint financial obligation with your ex-spouse, and your divorce decree states that your ex-spouse is responsible, and your ex-spouse is delinquent on paying, your credit as well as his/hers is affected.  As stated above, your legal responsibility for a debt does not go away because a divorce decree assigns responsibility for a debt to your ex-spouse.  Along with a legal responsibility to pay comes the right of creditor to report a debt delinquent on your credit report if it is not paid as agreed in the original contract. Period.   Especially tragic situations where one ex-spouse files bankruptcy and includes many joint debts in the bankruptcy.  The spouse not filing bankruptcy is left holding that bag for these joint debts, and many times they are not notified of the ex-spouses filing until months or years down the road when it is too late to correct the situation.  So not only is the spouse who didn’t file responsible for the unpaid debts (and can be legally sued for them), but the non-filing spouse’s credit is also ruined, something that cannot be corrected, as the credit bureaus have the right to report them delinquent.