It Isn’t Just about Location Anymore: Finding a Home is Now about Lifestyle, Too

Posted on May 14, 2013 by Shiraz Kahn

The mantra of real estate has long been “location, location, location”. This mainly had meaning to realtors, and what the mantra means is that a big, gorgeous property won’t sell for as high a price in a less-desirable location as it would if it were placed in a more desirable location. Whatever the inherent value of the property is, its sales price — its market value — will rise or fall depending upon where it’s located.

Beautiful homes located in a flood zone or on the edge of a town that has become run-down and crime-riddled, for instance, aren’t as valuable in the market as those very same homes would be in a drier and more elevated areas or safer and more attractive neighborhoods. Consumers have often taken the trade-off of buying a great home in a lesser demographic or geographic setting for the sake of getting a lower price, however.

But as a potential home buyer with access to today’s technology, you can go far beyond discussing location with realtors. Now, your mantra should be “lifestyle, lifestyle, lifestyle”, of which location is only one part.

The Home Selection Process Has Gotten More Precise

Home buyers these days want their everyday needs and desires to be considered — not just impersonal possibilities like flooding, or low-brow neighbors moving in. And with the real estate apps that have been developed for our online, technologically advanced 21st century civilization, this consumer dream has become reality.

As a consumer who is a potential home buyer, what may be some of your everyday needs and desires with respect to the place where you decide to live? There are myriad possibilities, some of which may be:

● How highly rated are the closest charter schools?

● Is the home located in an upbeat university town?

● Is the home located in a place with a great sports scene?

● Would it be feasible for me to bicycle to work?

● Is there mass transit, and if there is is it highly regarded?

● What is the after-work life like in the vicinity?

● What are the local restaurants like?

● How accessible are interesting and fun things to do on weekends to get out of the house?

● Are the locals generally well-educated and concerned about having good taste?

● What is the overall cultural atmosphere in the area like in terms of things like “hipsterness”, trendiness, the arts and music scene, how late the people generally like to stay up hitting the town, and so on?

● How accessible are local merchants such as supermarkets, automobile repair shops, clothing stores, furniture stores, hardware stores, and so on?

● What is the local economy like?

● What are the seasonal variations like?

● Are local conditions good for keeping a garden?

Historically, pinpointed considerations like these were subsumed by geography and price. It usually proved too difficult, too costly, and too time-consuming for the usual person to compile sufficient data to make a lifestyle choice when buying a home. Today, that has changed. There are apps available which allow you to plug in trait after trait of what you desire in your dream-place, and then have the best possible home matches for you called right up and placed at your fingertips for your informed consideration.

While there isn’t really any “perfect” place to live, today you can optimize your happiness and satisfaction in your home buying choice, and do so rapidly and with ease. Your unique individuality and family matters can be realistically thought about in greater detail and incorporated more precisely into your real estate buying decision than anything that was possible in the past.

These days, you can live the way you want to as readily as you can live where you want to.

There’s no Place Like Home

Posted on May 14, 2013 by Shiraz Kahn

When it comes to moving to a new area it’s important that you choose the neighborhood before choosing the home because once you fall in love with the house it’s going to be harder to turn it down when you find out your neighbors are the wicked witch of the East and a bunch of flying monkeys. Make sure you’ve found the Land of Oz first then you can go and find the perfect house to match.

Best of Both Worlds

While there’s something to be said about small town living, it can be a little short on culture. On the other hand, if you live in a town with 300,000 people your kids are going to have to learn about farm animals at the local petting zoo and not on someone’s farm. Living on the outskirts of a city can sometimes give you the best of both worlds. Sure there may not be any large farms about, but at least if your kids see a cow they’ll know it’s not something that belongs in the zoo or the local wildlife park. For example, people living in the San Francisco Bay Area get the best of both worlds. If you want to see farm animals there are some petting farms where children feed the goats, cows, pigs, chickens and the occasional horse, and they see them where they should be seen, on a farm. If you want to get a little more exotic you can go to the zoo or the aquarium if looking at the fishes fascinate your kids. You get to experience the theater, the hands on discovery museums, the children’s science museums, miniature golf, and parks ranging from the very basic and simple, to the new- fangled water parks with an amazing array of fountains for the little ones to play in during the hot summer months.

When you live in close proximity to a city of close to a million people there is just more to see and do on a given weekend, or even day. Most cities like San Francisco have numerous unique neighborhoods with their own personalities and traditions like street fairs that cater to families with children of all ages. The great thing is, you don’t have to live in the hustle of the city to enjoy everything it offers. There are a number of towns that are just a twenty minute drive away that offer you small town living with a big city escape just across the bridge. Now I’m not saying every neighborhood, town, or city is like the Bay Area, you’d be surprised how many similarities there are in towns all across the US.

Take your kids, if you have them yet, and go hang out. Go to one of the children’s playgrounds and strike up a conversation with one of the mothers, fathers, or babysitters and find out what makes the town so special. Most moms and dads are all too willing to spill the beans about what’s not to love about the neighborhood in the interest of saving a fellow parent from making the same mistakes they made. On the other hand, if they love the place before long you’ll love it to through their eyes and you can’t wait to go house hunting.

Then Comes the House

After you fall in love with the neighborhood, town, and city, go ahead and start looking for your dream house; it’s bound to be there, and that’s the easy part. Now that you’re sure you love the neighborhood you’ll be able to really commit to the buying process without having any reserve. You’ll be more likely to find the right house for you and your family. When choosing a house you’ll of course talk to realtors, but they are of course going to be biased. You’ll get much more of an honest answer from the guy who lives across the street from where you are considering buying. He may also know some details about the home that the realtor doesn’t even know; like the constant problems the previous owners had with mold and mildew, or the house settling, or other things that do not always show up on an inspection. Maybe people are suspicious about the home for some unknown reason. I hate to use the old clichés, but maybe no one wants to live there because of some horrific crime that took place there and that could be why it’s such a bargain.

Click your Heels Together Three Times

…And say there’s no place like the home you just discovered, and it the perfect neighborhood to boot. Just make sure the neighborhood exploration was a thorough one and you will likely not have any unexpected and nasty surprises. Just remember, your best resource for finding out about the town or neighborhood you are thinking of relocating too, are the people already living there.

Successful Refinancing with Poor Credit

Posted on May 14, 2013 by Shiraz Kahn

Just because your credit is on the low side doesn’t mean you can’t refinance your home, and even get cash out to pay off some bills. You may however need some help. The lower your credit score, the more experienced a broker or mortgage consultant you will need to have working with you.

It’s all About the Packaging

An inexperienced loan officer/mortgage consultant may not know how to package your deal in a way that will get approved and funded on a timely basis. You can take a loan and package it one way and have it get turned down, and then someone else can take that same exact loan, package it differently and it will get approved and funded. It all about putting it together, and that can be a complicated process when it comes to non-prime lending. A newer broker isn’t going to know all the tricks on how to get difficult deals to fund.

Sub Prime Challenges

There are a number of different issues that often come up when working in non-prime borrowing. Here are some of the challenges that non-prime loans often have.

High Debt to Income Ratio: You debt to income ratio is very important and something you should figure out before your loan is submitted. Take the total of your monthly debt obligations and divide that number by your monthly income and that number is your debt ratio percentage. For non-prime lending it can be as high as 50 or even 55%.
High Loan to Value: The farther under 80% you can keep your loan in comparison to the value of your home, the better. Having a low Loan to Value (LTV) will also give you a lower interest rate and of course smaller loan amount means lower payment.
Low Credit Score: As long as your middle credit score is 500, there is hope. It can even dip below 500 for FHA loans, but usually what causes your score to go that low is also what causes your loan to be rejected. A creative, determined broker will have a good chance pushing your loan through even if you have a 500 credit score.
Appraisal Issues: In the interest of full disclosure, tell your broker or mortgage consultant any issues your home has, before the appraiser comes to inspect the home. Once an appraiser sees a problem he can’t un- see it and neither can your lender. Many loan stopping appraisal problems could have been taken care of if the loan officer would have known about it before the appraiser was sent to the home.
Income Verification Problems: It’s important to have enough verifiable income to get your debt ratio low enough to be acceptable. An experienced loan officer will know all the different ways to verify enough income to keep your loan from being turned down.

Communication is Key

Many times the reason non-prime loans don’t get approved is because there was a distinct lack of communication between the borrower and the person handling the loan; the broker, mortgage consultant, or loan officer. Many issues that kill loans can easily be taken care of if the broker is given the chance to take care of it. If you let your mortgage consultant get blindsided by a problem then he can’t help you. Tell your broker/mortgage consultant everything that is going against you so he can go to bat for you. If you cannot show enough verifiable income tell him. If you have holes in the carpet, mildew on the walls, and your bathroom toilet is on the blink, tell him.

Help your loan officer help you. That’s the only way many very difficult deals ever get done.

Top Five Websites for Checking Out a Prospective Neighborhood

Posted on May 14, 2013 by Shiraz Kahn

Moving to a new neighborhood is probably the one of the biggest emotional, cultural and financial investments that most people make in their lives. Neighborhoods are the wellspring for cultural affiliations, education opportunities as well as financial opportunity. So with so much on the line how do you get the information you really need to make a solid choice that benefits you and your family?

Today’s flow of information is clearly amazing. It is a boom of information flow that is unparalleled in the history of the world. But sifting through the amazing amount of information is often a daunting task. In addition, while there is a ton of raw information that is available for any neighborhood how do you find the right information that meets your needs?

Here are the top five spots on the web to get the information you really need to determine if a prospective neighborhood is right for you.

1. Good old Wikipedia

The encyclopedia for the world is a great and often overlooked tool for determining what is really happening in a neighborhood. Wikipedia city and town entries offer detailed demographic information about your neighborhood. Average income, racial and ethnic percentage breakdowns, male to female ratios, and much more. Never underestimate the power of the wiki.

2. Family Watchdog

While sex offences are an unpleasant reality inside of our society it is unfortunately a fact that should be investigated before you plunk down a sizable down payment for your new home. Found at www.familywatchdog.us Family Watchdog is a free service that allows you to locate registered sex offenders in your area. It also offers educational resources for learning about sex offenders and how to judge whether a new neighborhood is right for you.

3. The Chamber of Commerce

Another resource often overlooked in the digital landscape geared toward the commercial aspect of real estate such as Zillow. The good old fashioned chamber of commerce is still going strong wherever you are moving to and they are there to provide you with a wealth of material. Lists of schools as well as other educational opportunities, lists of cultural opportunities in the area, major employers and trends in employment is simply a small glance at the depth of information quality information waiting for you at the local chamber of commerce.

4. Great Schools

If you’re a parent chances are nothing is more important for you than making sure your kids have the best education that they can get. When you’re looking for at a new neighborhood Great Schools is a great way to check out the educational opportunities that are available in the area. Found at http://www.greatschools.org you simply type in the zip code of the area you’re thinking about moving into as well as the state and you’ll be brought to a page that details all of the educational opportunities. Click on a link of a particular school and you’ll have access to user reviews of the school as well as a star rating system. If you’re serious about your child’s education Great Schools is a website that you should really investigate.

5. Street Advisor.

When looking at a neighborhood nothing will give you a faster look at what the inside story of a neighborhood is like, like Street Advisor. Found at www.streetadvisor.com , Street advisor is a social media site for neighborhoods. Members will review and rate neighborhoods as well as offer inside information on what’s happening in the hood. If you have a specific question that’s not answered you can join and ask the question yourself. You can use the sites filters to look at the type of people in the area searching specific areas such as professionals, families, etc.

The 401(k) Plan; The Key to Your Retirement

Posted on May 14, 2013 by Shiraz Kahn

When it comes to saving for retirement, it’s important to be proactive. Do not leave your golden years up to chance and the hope that lady luck will smile upon you. Not only do you need to have the right type of retirement account, but you need to have the right investments in those accounts. It’s not enough to fill your 401(k) with cash and let it sit there until you turn 65. You’re going to need to do a lot more to ensure you have what you need to retire on.

The 401(k) Plan

One way that employers attract and retain employees is by offering benefits. One of those key benefits is the 401(k) plan. Not only can you make pre- tax contributions, but your employer can also match those contributions up to a certain percentage. As of 2013, your maximum contribution is $17,500 with a little more if you are over 50. That’s a lot more than a simple IRA. If you are starting a new job there is usually a waiting period before you become eligible for a 401(k) plan. The moment you are eligible you should max out your allowable contributions. Since you are putting pre-tax dollars into the account it reduces your taxable income. When your employer starts matching, well that’s just free money. Take everything you can get.

The Key to Having Enough

The key to having enough money in your 401(k) for retirement is time in the same job. The people with the really big retirement accounts are those who stuck with the same job for years. You lose way too much ground by changing jobs. Every time you change jobs you have to wait for the probationary period to be over before you are eligible for your new company’s 401(k). The waiting time depends on the company; it could be 90 days and it could be 6 months or more. The next thing you have to think about is the vesting schedule that comes with your account. Money that you have contributed is yours right away. Money or stock contributed by your employer vests over time and it usually goes by percentages. The longer you stay with the company the greater your percentage is until eventually, after a period of years you are fully vested and everything in the account is yours when you leave. So because of delays in the availability of a company’s 401(k) and the length of vesting schedules, every time you switch jobs you lose months if not years of money. The other nice thing about a 401(k) and similar accounts is the amount you can contribute. In a simple IRA you can put in only a couple grand, whereas in a 401(k) you can put in a percentage of your income and that can add up to be a pretty large sum of money.

It’s Just a Shell

What people don’t always realize at first is that a 401(k), or any retirement account is just a shell. You have to fill up the shell with cash, stocks, bonds, ETF’s, and mutual funds. Your employer may offer you stock options in their own company or they may offer cash or both. It’s important to diversify. People at Enron learned a hard lesson about diversification when the company went belly up. If your company offers stock options just make sure those options don’t make up a disproportionate amount of your retirement account. Most employers will offer a range of mutual funds as well to invest in. You choices are usually limited because the company still bears a fiduciary responsibility to its employees and they have to make sure they are not “helping” people invest poorly.

After You Leave

After you leave your company you get to keep the vested portion of your account. If you leave everything in the account you may be charged maintenance fees or the account may be liquidated and sent to you so the company does not have to be responsible for you or your account any longer. Probably the best thing you can do it to roll it over into an IRA. That will give you the most options as far as investments and there is no tax liability as long as the proceeds goes from one account to the next. It’s important that you not take the money out too soon. If you do take it out before retirement you will incur an IRS penalty of 10% and it will be taxed as ordinary income, so you will lose at least a third of your money by taking it out too soon. When you become eligible for any employer retirement account read up to make sure you don’t do anything that will incur a tax penalty.

A Final Thought

It bears repeating. Probably the most important things you can do to ensure you have enough for retirement is to take advantage of any employer retirement account offered, max out your contributions, and stay in one place. The amount of money you save by staying is significant. Invest wisely and don’t liquidate it prematurely.