5 Tips for Buying a Home in a Down Market

Personal Finance by Bankaholic.com
The subprime mortgage bust has scared a lot of people away from the housing market. The nightly news is filled with images and stories of everyday Americans who are losing their homes because they made greedy and uninformed decisions, they were taken advantage of by predatory brokers, or a combination of these situations. However, the news isn’t all bad. This decline in the market has dropped prices and made housing affordable to many fiscally responsible renters who never considered home ownership to be an option. 

If you find yourself house-hunting, make sure that you follow these five simple steps to take advantage of this downturn in the market; if you don’t, you could be the next sad story on your local news. 

1. Accounting for Extraneous Expenses
As with almost any major purchase, there can be a number of fees associated with buying a home. Costs associated with property taxes, homeowner’s insurance, standard maintenance, and utilities should not be overlooked. In addition, if you buy a home that is part of a complex or attached to a homeowner’s association, you will have to pay annual fees as well. Make sure that you take these additional expenses into account when you are determining how much home you can afford. 

2. Acknowledging Special Assessments
Many homes require a number of regularly scheduled special assessments to be performed in order to satisfy local regulations and ordinances. These are fees that are required in addition to standard property taxes. In order to make sure that these costs don’t take you by surprise, obtain copies of prior bills for these services and inquire about any pending and future assessments that need to be done on the property. 

3. Finding a Manageable Mortgage
A good question to ask yourself before contacting your local banker to discuss a loan is, ‘how much is too much?’ While you might be tempted to try and get as much money as possible if you can find a good rate, you do not want to make the mistake of taking on a loan so big that your finances will be stretched to the point that you cannot make your payments. Traditional income multipliers are a good place to start. If you have a single income, 3.5 times your annual salary is the maximum that you should consider requesting and if you have dual incomes, the maximum should be about 2.75 times your joint salary. If these amounts will stretch your budget too far, then it is a good idea to consider borrowing less. 

4. Determining How Much Home to Buy
Now that you have a handle on all of the costs involved and have determined how much money you can borrow, it is time to figure out just what you can afford to spend on a new home. Whatever you do, don’t bite off more than you can chew; doing so could quickly lead down the road to foreclosure. Take into account your credit history, the closing costs on the loan, the amount of the down payment, and any preexisting debts. Weigh these against your income and savings before making a move. 

5. Welcoming Your New Home into Your Basic Budget
Once you have everything in order, set a budget and stick to it. While your new home purchase will undoubtedly become both your biggest asset and your biggest expense, you still have to eat. It is also important to make sure that you start building a rainy day fund in case of emergencies; one of the things that accompany a new home is the potential for substantial unforeseen expenses. Set a reasonable budget that includes an allowance for unexpected costs and you can live happily ever after in your new home. 

How to “stage” your  home to sell

You don’t have to spend thousands of dollars to “stage” your home to sell it. Here are a few inexpensive ways to allow prospective buyers to see all your home has to offer.
·        Start with the closets. Cleaning out your closets will give you more storage space. A well organized closet will show the buyer you have ample storage. Yes, buyers will be opening your closets.
·        Pre-move. Once you sell, you will be packing up all your belongings anyway, so why not get a head start. Consider renting a storage unit and store knick-knacks, holiday décor, out of season clothes, family photos and treasures.  Remove  anything you can to keep your home looking clean and well organized.
·        How is your curb appeal? Lawn watered and mowed? Keep entryway clean and welcoming. Put a potted flowering plant by the front door. Even consider power washing driveways and patios. If you have any patches of brown grass, buy some grass seed, sprinkle it on and water it. It is simple and makes a huge difference.
·        Arrange your living room and family room furniture in a way to make the room feel more spacious. If you have more furniture than you need, move some of it out. Move furniture off the walls and center it around a focal point like a fireplace or a window view.
·        Are your walls a neutral color? Paint is an inexpensive way to transform a room. A buyer may have trouble envisioning their furniture in an orange room.
·        Hide any evidence of a pet. Use air fresheners in every room. Vacuum daily. Remove the litter box  and bed for showings.
·        Toys, toys and more toys!  Selling a home with small kids can be stressful. Suddenly your home sweet home has become a listed property. To make living in a listed home easier on your family, buy a few matching baskets to quickly and easily throw toys in. You have enough things to do, so make this fun and allow the kids to throw the toys in themselves.
·        Keep wall art neutral. Remove family photos and, your children’s beautiful masterpieces.  Even though a family wants to sell, buyers psychologically do not want to buy and displace a happy family.
·        Remove any political or religious themed items, and any questionable or risqué pieces of art. This includes artful nudes.
·        Make you bed look like a fantastic place to sleep. Look at your bedroom through strangers eyes. Think of a hotel room. Focus on the basics- bed, dresser, and nightstand.  Consider buying a bed set complete with pillow covers and sham in neutral colors. Add a few accent pillows.
·        Kitchen. Remove EVERYTHING from the countertops. Remove magnets, notes and photos from refrigerator. Straighten out cupboards and pantries.
 

Property tax rates set

Council votes to maintain current levels; stage set for budget

WAILUKU — The Maui County Council set property tax rates for the 2009 fiscal year in a special hearing Wednesday, voting 5-0 for a resolution that will keep property tax rates at current levels in the coming fiscal year.

The action sets the estimated revenue base for the 2008-09 county budget, which runs from July 1 through June 30, 2009.

In a series of three hearings Wednesday, the council heard testimony on the property tax rates and on fuel taxes, for which there were no proposed changes.

Fuel tax rates, along with the motor vehicle weight tax and other county taxes and fees, will be taken up at the council’s first reading of the fiscal 2009 budget at 9 a.m. Friday.

Property tax rates as approved Wednesday will be as follows:

• Homeowner: $2 per $1,000 of assessed value.

• Improved residential: $4.85.

• Apartment: $4.55.

• Commercial: $6.25.

• Industrial: $6.50.

• Agricultural: $4.50.

• Conservation: $4.75.

• Unimproved residential: $5.35.

• Hotel: $8.20.

• Time share: $14.

Bill Tavares of the Committee on More Equitable Taxation said his group “happily agrees” with the decision to keep tax rates at current levels. But he urged council members to do away with an “outdated, costly, punitive, unfair tax system,” in which assessments are based on the market value of a property.

Tavares’ group has repeatedly advocated for tax assessments to be based on the original selling price of a home and he vowed to continue to pursue that goal.

If nothing is changed within his lifetime, he said, “I shall return as the phantom of this council.”

During a brief hearing on the fuel taxes, council members heard from Paul Lau’b, who urged them to do away with the county fuel tax, and to urge the state and federal government to stop taxing gasoline.

He said people were being hurt by a “war” with the Organization of Petroleum Exporting Countries.

“They are bleeding us slowly rather than cutting us off in one fell swoop,” he said.

Council Members Danny Mateo, Michelle Anderson, Gladys Baisa and Jo Anne Johnson were excused from Wednesday’s meeting.