Nolo’s Real Estate Tips for Home Buyers

A recent poll of residents of the world's eight richest cities reveals that over 40% of Tokyo's residents don't want to sacrifice a convenient lifestyle to prevent global warming. While these results may seem startling, consider that the average house size in Tokyo is 64.5 square meters, or 694 square feet (not to mention that many residents probably take public transportation to work, and drive cars that put American gas guzzlers to shame). To really make a positive environmental impact, those of us who are quick to pat ourselves on the back for our eco-friendliness must think beyond bringing our own bags to the store and driving hybrid vehicles.

And there's no better time to think about these issues than when buying a home, which leaves a (literally) big footprint. While some features -- energy efficient appliances, CFL light bulbs -- can be added later, some "green" features are permanent. Consider these important factors:

• The size of the home. A few months back, I read an article about a woman in California's Central Valley who installed solar panels on the 3,000 square foot home she lived in, apparently alone. She was quite smug about her positive environmental impact. But she could have had done even better by choosing a smaller home that took fewer resources to build and could be heated and cooled more efficiently.

• The age of the home. Older homes sometimes don't have energy saving features, but can often be adapted to include them. Two years ago I had better insulation sprayed into my attic; it almost paid for itself with the rebate from my utility company, not to mention my lower heating and cooling bills. Again, fewer natural resources are spent when an old home is updated than when a new one is built.

• The size of the lot. A large grassy lot could mean a great place for dogs and kids to play, or it could mean heavy water use, toxic weed killers, and hours of upkeep time. If you don't buy more lot space than you need, you'll save yourself hassle, money, and environmental impact to boot.

Has residential real estate bottomed out? Or, put another way, is this the time for home seekers to buy? My answer is yes, no, and maybe.

First, the yes: Relative bargains still exist in those certain areas where the foreclosure rate is low and are also located near good transportation links, which can be a great opportunity for today's buyer. I say "relative" because in many of these areas, prices have fallen less than 20% and are unlikely to fall much more. Why? In part, because many up-market sellers can afford to wait out the down market and simply not put their houses up for sale. And then there's the fact that in more affluent neighborhoods, few people took on risky, no-down payment, adjustable rate mortgages in the first place.

But the buying opportunities that exist aren't for everyone. With new mortgages still relatively expensive, you need to make a chunky down payment (often 20% or more) and have adequate, documentable income in order to play in this game. Many younger buyers deal with this by having a more affluent parent make a gift of part of the down payment (perhaps treating this as an advance on an eventual inheritance, to keep siblings from going ballistic), or the parents might guarantee the loan.

Now for the no: In overbuilt subdivisions, such as many in Nevada (especially the Las Vegas area), Florida and California, it's far too early to buy. That's because cash-strapped builders are still dumping new houses on the market, further depressing the prices of those built in the last few years. And with foreclosure rates still rising in many of these areas, prices have further to fall.

Other places to avoid are the lower-income areas of cities and suburbs. Because so many people who could never reasonably afford to make required payments got loans in these areas, this is where the housing bubble was the worst and foreclosure rates the highest. Or, put another way, lenders in these areas will be dumping more and more distressed properties on the market, meaning that prices have only one way to go.

But, as with any advice, there are caveats, exceptions, and qualifications when predicting the direction of real estate markets, especially given the peculiarities of local micro-markets. In short, when some factors point to an improving local market and others still point down, you may be looking at a "maybe" area.

Those McMansion-type newer houses in the outer suburbs are likely suspects for "maybe" areas. In some locations, prices for these 5,000-square-foot behemoths have fallen by a third or more, which would normally indicate a buying opportunity. But the furious rise in gas prices have put this normal conclusion in doubt (except for the few houses in this category that are near good public transit). Otherwise, many buyers suddenly faced with a dauntingly expensive commute are likely to say no, meaning that prices may still drop.

Also, in upscale locales where new houses are priced to reflect their location -- on or near a golf course or near some other large amenity -- you'll want to be sure that the supervising corporation is and will remain solvent, even with a large number of houses remaining unoccupied. Otherwise, you may find yourself overlooking a water-parched rabbit patch, which will do precious little to protect your investment.

Jake Warner, guest blogger

According to a recent article found at Inman News, Realtors® are making less this year than they did last. Those with two years of experience or less fared the worst, while those with 16 or more years of experience fared best.

Given the state of most real estate markets, these results aren't surprising. Experienced agents know what they're doing, so they know how to find business and get satisfied return customers. Even though they may be closing fewer transactions then they did last year, and even though each of those transactions may be worth a little less, they've weathered down markets before and will probably come out alright on the other side.

This is all good news if you're a buyer. After all, most agents aren't struggling to get enough listings, they're struggling to find buyers to purchase them. That puts buyers in a prime position to get the best possible service. Here are a few tips on what to look for:

• Personal service. As veteran Realtor® Mark Nash explained to me, the best personal service often comes not from the top producing agents, but the midrange producers. That's because top producers may have assistants that show you homes, answer your calls, and might handle everything up to writing the offer. As a result, the experienced agent or broker knows less about your needs and whether the home you're considering meets them. Make sure the person you hire is with you every step of the way.

• Experience and expertise. Veteran agents have years of experience, but you want to make sure they've been in your current market long enough to know the ins and outs. Also, ask about special certifications -- they may be an indicator of specific experience and a commitment to the profession.

• Lower fees. Though the seller's agent traditionally gets paid a 5-6% commission that he or she splits with the buyer's agent, there's nothing dictating these amounts. Don't be shy about negotiating for less, especially if you're thinking about buying a listing from the agent's brokerage. If this isn't your first purchase and you're staying in the area, you may be able to get a discount if you list your old home and buy a new one using the services of the same agent.

For many new homebuyers, one of the most exciting things about buying a house is having the space to garden. For the first time, you may have a little dirt to call your own, and a million ideas about how to fill it. That's great, but my advice is to take it slow. I'm living proof that if your ambition out-paces your knowledge of gardening realities, you could end up with a lot of dead plants.

When I bought my first home years ago, one of my first purchases was the Sunset Western Garden Book. I happily spent weekends weeding the overgrown backyard, buying and planting hundreds of dollars worth of new plants, and learning about mulch and ground covers. I was determined to turn my small yard into an English garden, and I succeeded (at least for a while).

But as time went on, I found myself enjoying gardening less and less. Money I used to spend on manicures and dinners out now went to new garden tools and the latest non-toxic snail bait. Rather than hike with friends in beautiful parks, I was alone in the dirt, nurturing my tomato plants. Gardening seemed the thing every new homebuyer should do, so why I was resenting it? Thinking I should scale back, I bought every book on low-maintenance landscaping, only to learn there's really no such thing. (Gardening's only easy is if you pay someone to do it all for you.)

I gradually started letting go and found myself happier shopping for vegetables and fresh flowers at the farmers market rather than growing my own. I started buying more novels instead of gardening books, and reading instead of weeding.

Before long, my once beautiful garden began to return to its original state of disarray. I looked for as many ways as possible to keep my little yard full -- outdoor play structures for the kids, a hammock, bird feeders, little lawn ornaments (though I didn't go so far as pink flamingos). My gardening friends were appalled: How could you let those perfectly good plants die? Well, like the person who finally admits they really don't like to cook (or shop, or redecorate), I have finally reconciled myself to the fact that I am not a gardener. At least with the recent emphasis on conserving water, I have an excuse when people inevitably ask, "What happened to your garden?"

Marcia Stewart

I must admit--I have absolutely no intention of moving anytime soon, but every now and then, I look at what's available. Just the other day I found a house that looked promising. For its size and location, it's underpriced by at least 10%. My interest piqued, I scrolled through the pictures. A pool. Ugh. I don't want a pool. (I promise, I'm not buying anytime soon. Even if I am picturing myself in each house I look at.)

It got me thinking about the buzz I hear now and again--does a pool add value? And the resounding answer? It depends. I grew up in the desert community of Lancaster, California--almost every house had one. But the house I was looking at is in a cooler, more eco-conscious northern California city. Does a pool add value in Lancaster? Yes. Does it add value where I live now? Probably not.

That's not the end of the story, of course. Even if you don't want a pool, a pool need not be forever. I have an aunt whose pool provided me with years of childhood enjoyment (it had the old-fashioned rough bottom, and my siblings and I stayed in until our toes bled, but it was worth it). Now in her 70s, she thought about moving out of the house so she didn't have to care for the pool anymore. Instead, she had it removed. Sure, it cost several thousand dollars, but it was a lot cheaper than the transaction costs of selling the house and moving to a place without one.

If you're house hunting and come across a house with a pool (or other undesirable feature) you don't want, don't automatically strike it from the list. Treat it like you would any other potential fixer-upper: weigh the cost of the fix-up (both in actual cost, and in the hassle and stress a project may bring) against the value you'll gain as a result.

Alayna Schroeder