Nolo’s Real Estate Tips for Home Buyers

For anyone who was counting on getting FHA help with lining up a home mortgage -- via the FHA loan program, in which borrowers who present higher risks than others, most likely due to low credit scores, may qualify for a loan backed by the FHA -- that plan is starting to look a little more tenuous.

The FHA has tightened up its standards, including:

• requiring down payments of at least 10% for anyone whose credit score is less than 580
• cutting the allowable amount of seller financing to 3% of the transaction price, and
• requiring buyers to pay a higher mortgage insurance fee at closing.
  

For a good summary of these provisions and their implications, see Al Heavens's article in the Philadelphia Inquirer, "On the House: FHA alters borrowers' guidelines."

If you're a home seller, don't panic. The changes don't address all borrowers, but only those who were having trouble finding and closing on a loan in the first place. Qualified buyers are still out there, and in some regions of the United States, eager to find a home. Research your local market before drawing any conclusions on whether now is a good time to put your home up for sale. 

It's the biggest purchase of your life, wrapped up personal aesthetics and visions of how you'll live, now and in the future. So is it any wonder some couples find it difficult to agree on a house, or get annoyed at the other one's approach to the hunt?

Click here for an interesting analysis in the Boston Globe's real estate blog of how to make the most of different personality styles.

As long as you're house hunting, how about a little house dreaming? Prices on those luxury properties are lower than they've ever been, which can make the dreams seem almost real.

Fancy a castle? Check out www.castles-for-sale.com/buy/. Some of them cost less than a two-bedroom, one-bath house in San Francisco did just a couple of years ago! (But the heating bills will kill ya.)

Or how about your own island? See Private Islands Online. I see a little one in Scotland for only 65,000 Euro. (Then again, it looks like one wave could wash away anything you build there.)

And for general luxury everywhere, don't miss www.luxuryrealestate.com/. Let's see, should I search for "chateaus" or "estates?" What I could do with a few million dollars . . . .  

Yesterday, while out on a quest for the elusive urban blackberry, I stopped to admire the view over a chain link fence into a local golf course. Compared with busy Oakland, the green rolling lawn and elegant clubhouse looked like a mirage from another time.

But my next thought was, "What are the odds that a stray golf ball will come flying at my skull?"

If you've ever contemplated buying a house by a golf course -- and perhaps been additionally tempted by low prices by developers eager to move their properties -- you should be weighing both types of sentiments. And as for those odds, check out this article from Steve Pajak, of The Sacramento Bee.

My favorite account is of the guy who was told upon buying that golfballs would hit his house "occasionally," and it's turned out to be ten times a day on average. But the article also offers some useful tips on safest locations in relation to the course.

With house prices so low, people who might not have thought about buying a first -- or second -- home a couple of years ago are entering the fray. And they're no doubt curious about what kinds of deals new-home builders can offer them.

Unlike sellers who live in existing homes, house and condo builders can't just settle in for a while and wait for the market to pick up -- they've in many cases got empty inventory to move. Indeed,  they seem eager to make irresistible offers, complete with a flat-screen TV and a Hawaiian cruise in some cases.

But that makes now a good time to remind readers that if you show up "just for a look," without a real estate agent, and then decide to buy, many builders will argue that you can't bring an agent into the deal -- after all, the agent didn't help you find the place, the builder's own marketing lured you in. And having no agent by your side could be a distinct disadvantage if problems arise.

Don't let the low rates blind you to the fact that the builder is struggling in this market, too. Some go bankrupt, others just string the buyers along. (Fortunately, you can hire an attorney at any time -- but this probably isn't the way you were hoping the deal would go.)

For a good example of what I'm talking about, see the question posed to Tara-Nicholle Nelson of Inman News, and her very sensible answer. 

That's what Habitat for Humanity found in Charlotte, North Carolina, at least. The charity has long been known for building houses with the help of volunteers, then selling them to needy homeowners-to-be at a reasonable cost.

But Habitat's mission, as explained on their website, is a little broader than just homebuilding: The organization seeks to "eliminate poverty housing and homelessness from the world and to make decent shelter a matter of conscience and action."

The best way to do that in some areas is, apparently, to buy and repair vacant, foreclosed homes. The details are described in the article, "Habitat finds buying is cheaper," published in the Charlotte Observer on July 5, 2009. The organization takes pains to reassure the interviewer that they aren't kicking anyone out of their home!   

Thanks go to Money magazine's annual "Best List" for mentioning this website in its "Best Way Not to Sell Your House" category: Lovelylisting.com.

My coworkers have probably wondering why I've been giggling at my desk for the last ten minutes, and this is it. The website collects listing photos that would cause most home buyers to run in the other direction; you'll see photos dedicated to showing off giant cracks in the flooring, cleaning equipment seemingly tumbling down a steep staircase, obviously Photoshopped giant tulips in an otherwise drab yard, and more.

There were times when I was writing our recent book, Selling Your House in a Tough Market, that I worried our advice about making the place look good was too obvious to merit space on the page... but I've just put those fears to rest.

That's right, I'm now the owner of a new (but old, made of recycled wood), Audubon-specification-compliant wren house.

Actually, I think I spent more time with this choice than with the house I'm living in. As with human houses, the particular bird houses I was checking out were all unique, made by Berkeley Rustic Birdhouses. I had to carefully consider price range, size (the entry, in particular, can't be too big if you want to attract wrens), aesthetics, and -- trying to get into the mindset of a small bird here -- which one might feel like "home." Sound familiar?

Mounting it became another lesson in home ownership -- there's nothing so valuable as a friendly neighbor with power tools! (Thanks, Joe.)

Now I'm suddenly shifting into the mindset of a home seller. Will any birds take a look? Will they peer inside in delight and say, "This is it!" or just look for signs to the next open house? I'm told it could take a year or more (for one thing, the birds need to feel sure I'm not going to move this new object tomorrow), but of course I want some to move in right now...

It's been about a year since I posted a blog wondering whether it wasn't time for homeowners to start checking out possible rises in sea level before buying a house near the coast -- and I still haven't found a website that lets you figure out how high the water is predicted to rise in local areas.

But wait, it looks like scientists may be changing the way they calculate rising amounts anyway.  In fact, they're saying some areas may experience higher rises than others (watch out Washington, DC). Find out more here.

Too bad it's not freshwater levels that are rising -- my plants are suffering in this California drought.

With the economy down, you might assume you can no longer afford the "luxury" of a home built using green construction techniques and materials. But the latest reports show that other buyers who've done the math are still convinced that the energy-saving features of green construction make it a good deal.

See, for example, this article by Mari Saito in the Philadelphia Business Journal, describing one condo buyer's shock that her monthly electricity bill went from about $280 per month in her former loft to just $76.

And in a related article by Diane M. Fiske, the Journal describes how one local developer is coming up with efficient ways to build homes that are both affordable and energy-saving. An important part of the strategy is the use of SIPS, or "standard insulated panels." These panels are made of wood (either young farmed trees or leftover wood flakes) and a foam insulating material. They're precut to the designer's specifications and put together on site, like a giant puzzle. They're getting high reviews for environmental friendliness (like reduced wood waste) and tight, heat-conserving qualities.

By the way, if you're building your own house, SIPS might be a good option as well. For more information on SIPS, see:

• http://www.toolbase.org/Technology-Inventory/Whole-House-Systems/structural-insulated-panels
• http://www.sips.org/content/technical/index.cfm?pageId=20
• http://www.usa-sips.com/faq.htm