Use of private funds to purchase a home is becoming increasingly popular, especially among first time home buyers. With the right circumstances, both parties can benefit from this arrangement. Loans from family or friends can help you fund your down payment, first mortgage, or a second mortgage. Some of the reasons you might want to use family and friends for financing include:

1) Paying Less Interest While Still Receiving Tax Deductions – You can negotiate a more favorable interest loan with family members then with a regular lender. Savings can amount to thousands of dollars over the period of the loan if you pay 1 to 2% less in interest points. If you handle the paperwork correctly, you can receive the same interest tax deductions as a traditional loan. Consult with your tax advisor for details.

2) Adjustable Payment Arrangements – With a private loan, you can negotiate a flexible payment schedule compared to a traditional lender. You can arrange quarterly payments and even work in a grace period with no payments due until years later. You can also renegotiate your payment schedule should you become unemployed and lose your job. A traditional bank won’t be so understanding.

3) No Points Or Bank Fees – Banks can easily gouge you with thousands of dollars for loan application costs and other points. Your family and friends will spare you these high costs.

4) It Doesn’t Matter What Your Credit Score Is – While a traditional lender won’t consider you for a loan unless you have an impeccable credit score, a family member won’t be as concerned about your creditworthiness if they believe you’ll be responsible enough to pay back the loan.

5) Eliminate Private Mortgage Insurance – If a bank needs to lend you greater than 80% of the purchase price, you’ll be forced to purchase private Mortgage Insurance (PMI). With family and friends, you won’t need to pay this additional expense.

6) Less Paperwork – With a traditional bank, you’ll have to complete a lengthy application form and present documentation to prove the validity of your income, assets, and monthly expenses before they even take a look at your mortgage application. If you get a loan from your family and close friends, you won’t be subjected to this amount of harassment.

7) Take Advantage Of Great Deals – With private financing, you can fund and close a deal fast-enticing a time pressure seller into accepting a lower offer.
A House’s Physical Condition Isn’t As Important – When you apply for regular bank financing, there’s a good chance you’ll be required to complete all major repairs prior to closing. A private lender won’t be as stringent allowing you to take advantage of a profitable fixer upper.

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As you research areas to live in, one technique to quickly discover if a community suits your taste is to cruise the neighborhood by car. While your real estate agent may chaperone you around the key points of interest, you can find out the real qualities of a neighborhood by checking out the less popular areas. You may decide the community is perfectly suited to your needs or you may decide to drive away as quickly as possible.

Your primary step should be to obtain a local map and circle those areas you’re trying to buy into. Pay special attention to the outlying areas surrounding the community you want to reside in. Set aside time to methodically check out each neighboring street with your vehicle and decide if you’d feel secure residing close by. Pay attention to the fact a neighborhood can drastically transform for better or worse with in a distance of a block or following a stationary divider like a city park, highway, or home development.

Assess whether you would feel happy living in that neighborhood-would you feel safe going to the local bus stop or supermarket, or leave your children to roam in the front yard? Ponder these questions like:

1) How Well Are The Homes Kept?-Homeowners that keep their homes and yards and neat and in good shape take pride in their neighborhood.

2) Who Are Your Neighbors? – By watching who the residents are in a community, you’ll learn a lot about your potential neighbors-are there kids out and about or do you witness crowds of locals at the popular restaurants in town on Saturday night?

3) How Congested Is The Local Traffic? – Are drivers speeding past you with their stereos cranked up or are there a lot of Sunday drivers out and about. How bad is the local traffic during rush hour?

4) What Are The Local Amenities Like? – Established eateries, hip coffeehouses, and upscale dining may fit your particular taste, but if you don’t see your popular restaurants and hangouts, you’ll be unhappy residing there.

5) How Saturated Is The Home Market?-Are there a glut of home listings on the market? It could warn you residents are relocating because of a problem-could there be a new industrial plant under construction or are local robberies on the upswing? Depending on the reason, you could either pick up a hot deal or you may decide to look for property someplace else. Another possible reason could be you’re searching in a real hot market where homes are moving quickly.

If you see a community that appeals to you, use a different color highlighter to outline your preferred areas. This technique will help you sort through unwanted home for sale ads in areas you’re not interested in.

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In order to determine a property’s value, you need to figure out if you’re in a hot, cold, or evenly balanced market. When you visit open houses, are they bustling with buyers inspecting the house or is it quiet with only the agent present? You can also gauge the real estate market by asking friends who are currently shopping for a house if they’ve encountered stiff bidding competitions, or if it’s been easy to negotiate deals with sellers. These circumstances are just a few indicators of the temperature of the local market.

When the home market is really bustling, you’ll find a lot more buyers than Sellers, and fewer homes on the market to satisfy buyer demands. As soon as the house is listed on the market, it’s snapped up almost instantaneously with most sellers unwilling to budge on their listing price and other negotiated terms. When the home market is the hottest, sellers begin to fuel bidding wars, with the buyer making the highest offer, quickest closing, and easiest transaction winning the home.

When the market is cold, that means there are more sellers than buyers, and properties may sit on the market for many months before being sold. If a cold market accompanies a bad economy, you may see a hoard of foreclosures hit the market driving down home prices. Buying a home in this market allows you to negotiate a better deal since the seller may be desperate to unload the property after it’s been sitting for so long.

How you approach a seller to negotiate a deal will be dependent on whether the market is hot, cold, fluctuating, or somewhere in between. While figuring out whether the market is hot or cold may be relatively easy, it’s more difficult to judge if it’s going to fluctuate up or down within the next few weeks.

As you embark on your home search, you’ll quickly get the feel of the local market condition. As you check out new listings, if you’ve come to the point where you can consistently predict the seller’s price, you’ll know that’s a sign the market is pretty stable.

But when you begin to see an increase in open houses or price reduced signs starting to show up everywhere, you’ll know the home market is starting to cool down or plateau. An indispensable person to have on your home buying team is your local Realtor. He or she has quick access to the local multiple listing service and can tell you how long a home has been on the market and how many homes are for sale.

If you keep running into situations where other home buyers are consistently outbidding you and home prices are rising, that’s a sign the market is heating up and getting ready to take off, so you’ll need to move fast.

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In order to determine a property’s value, you need to figure out if you’re in a hot, cold, or evenly balanced market. When you visit open houses, are they bustling with buyers inspecting the house or is it quiet with only the agent present? You can also gauge the real estate market by asking friends who are currently shopping for a house if they’ve encountered stiff bidding competitions, or if it’s been easy to negotiate deals with sellers. These circumstances are just a few indicators of the temperature of the local market.

In a hot market, there are more buyers and sellers, with a low inventory of homes to meet buyer demands. The minute a property is listed for sale, it’s sold almost immediately with sellers being resistant to price changes and other negotiated requests. When the market is ultra hot, sellers may even encourage bidding wars, with the winner being the buyer who has the highest price, shortest closing, and easiest transaction.

When the housing market moves down, there are fewer buyers than sellers, and homes can linger on the market for several months before they’re sold. If you have a situation where the depressed economy accompanies a cold market, you may witness a rush of foreclosures hitting the real estate market. In this scenario, you can find some pretty good deals since sellers will be frenzied to dispose of the house since it has been languishing on the market for several months.

Deciding what strategy to approach a seller with hinges on whether the market is hot, cold, in transition, or somewhere in the middle. As you try to decipher what the true market condition is, keep in mind the market can also shoot up or down within the next few weeks. Other factors such as local and national economy, home costs and accessibility, supply and demand, lending interest rates, and more can affect the local market.

As you embark on your home search, you’ll quickly get the feel of the local market condition. As you check out new listings, if you’ve come to the point where you can consistently predict the seller’s price, you’ll know that’s a sign the market is pretty stable.

But when you begin to see an increase in open houses or price reduced signs starting to show up everywhere, you’ll know the home market is starting to cool down or plateau. An indispensable person to have on your home buying team is your local Realtor. He or she has quick access to the local multiple listing service and can tell you how long a home has been on the market and how many homes are for sale.

If you consistently have buyers beating you to the first offer, you’ll know the market is heating up and getting ready to explode so you’ll need to act quickly.

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After you figure out where to move, going through the physical steps to get you there is the next difficult part. Relocating takes supervising multiple steps to make the changeover as easy as possible. By spending time planning your relocation, you’ll avoid a lot of heartache, misery, and save lots of money.

Once you’ve resolved where to move, you need to call several moving businesses for an estimate. If you search through the local yellow pages or on the web, you’ll see many moving companies to select from. It’s essential to locate one that offers you good service at a reasonable price. Sadly, there are crooked moving companies that scam consumers so it’s important to select one with a solid reputation in the community. One good way to find a reputable mover is to check with your friends and family for referrals. Select from local mover’s if possible-that way you can physically check their place of operation. Be sure to have them show you their business permits and necessary licenses to prove they are legitimate. Also have them show you their liability insurance to be sure you’ll be protected.

After compiling a short list of moving companies, have them supply you with an estimate on how much it would cost to move your stuff. Estimates are usually done for free and usually involves having the moving company send a representative to your place for a personal estimate. Don’t trust a company that provides estimates over the phone. It’s very difficult to give an accurate estimate without visually checking the items you want to move.

To get the best estimate, your responsibility is to make sure you show the mover’s representative all the items you want to move. Don’t forget to include all items in the basement and the attic. Once the representative gives you an estimate, make sure he or she puts it in writing. If you already have several estimates from other moving companies and you received a substantially lower estimate from a particular company, be sure to inquire why their estimate is lower than the others. Ask the representative to show you how they calculated your moving charges. To reduce the chances of any misunderstanding between you and the moving company, always ask questions and verify their calculations against yours.

After you get a written estimate, be certain to verify their liability insurance. More often than not, mover’s will only provide basic liability coverage which means high priced items are not usually covered if they should suffer damage during the move. Make sure the company has additional insurance to cover a variety of items. This will make sure that your precious belongings and investments are protected.

Just because you have a written estimate doesn’t mean your final moving costs won’t change. Circumstances such as access to roads, physical weight, and elevator issues can alter the final estimate of your relocation.

Make sure you talk with your mover about the possibility of extra fees that can increase your estimate. If you find out that you need to change your movie schedule, give your mover as much advance notice as possible so they can recalculate your relocation costs if required.

It’s also important to know what methods of payment your moving company accepts. Most movers will take cash, credit or debit cards, bank and traveler’s checks, and personal checks. Relocating can be a stressful event, but employing a respectable business will go a long ways toward making your relocation easier.

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Relocating for a job can be filled with stress and anxiety. Most people dread moving because of the change that it brings into their lives. Some people don’t like relocating into another area just because they know it will take a lot of work to develop new relationships in a new community. Relocation also involves going far away from all your close friends and family members that you’ve interacted with for a long time. While moving can bring emotional consequences, there will be situations when you’ll be required to relocate.

There will be times when a person needs to move in order to find better paying job opportunities. Depending on the local business climate of the area, relocating can sometimes provide more job offers and higher pay.

If your circumstances demand that you search for a new job in another location, you should take advantage of opportunities to contact prospective employers to see if they offer relocation help for their new employees. With enough searching, you should encounter some employers willing to offer this type of help for their new workers. But this strategy is only as effective as the amount of time and effort a prospective jobseeker puts forth. Because relocating can involve a lot of cost, there will be fewer companies willing to offer this a sort of aid.

As you are searching for prospective jobs in other parts of the nation, it won’t take that much more effort to find out if an employer provides relocation assistance. Take advantage of every opportunity to find out if a future employer will be willing to cover your moving costs. If you run into a lot of dead ends finding a prospective employer with a moving program, you’ll have to figure these additional relocation costs into your budget when considering a new job.

One way to save considerable money when relocating is to travel light. Plan to take only the essential and necessary items when moving. This will reduce the amount of belongs you’ll need to transport. Unnecessary or items that are expensive to move are better left behind with friends and family, thus helping you save considerable money when relocating. Depending on the item, you’ll save more money repurchasing the items after you move.

Once you decide what to move, you’ll need to consider if you’ll need the services of a professional moving company. An experienced mover can make your relocation much easier if you can afford the cost. If you decide a professional mover won’t fit your budget, consider borrowing or renting a truck and using your friends to help you move. If you can get the help of several friends, your moving experience will be much easier.

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Once you decide where to relocate, carrying out the steps is the next challenging phase of moving. Relocating involves coordinating many activities together to make the transition as smooth as possible. By properly planning your move, you’ll save a lot of anxiety and headaches.

Once you’ve resolved where to move, you need to call several moving businesses for an estimate. If you search through the local yellow pages or on the web, you’ll see many moving companies to select from. It’s essential to locate one that offers you good service at a reasonable price. Sadly, there are crooked moving companies that scam consumers so it’s important to select one with a solid reputation in the community. One good way to find a reputable mover is to check with your friends and family for referrals. Select from local mover’s if possible-that way you can physically check their place of operation. Be sure to have them show you their business permits and necessary licenses to prove they are legitimate. Also have them show you their liability insurance to be sure you’ll be protected.

After narrowing your list down to a few moving businesses, contact them to give you an estimate on what it would cost to relocate your stuff. Most companies offer you an estimate at no charge and entails having a representative come out to your place. Stay away from companies that provide estimates via the telephone. It’s too hard to give an accurate quote without physically seeing the items you want to transport.

To get an accurate estimate, your obligation is to make sure all your items are visible to the mover’s estimator. Don’t forget to have the estimator check all belongings in the attic and basement. After the representative gives you an estimate, be certain he or she writes it down. If you’ve already received many estimates from other businesses and you get a really low estimate from a certain company, make sure you ask then to explain why their estimate is so low. Ask the estimator to reveal how they figured your moving costs. To eliminate the possibility of any miscommunication between you and the mover, always ask questions and check their numbers against yours.

After you get a written estimate, be certain to verify their liability insurance. More often than not, mover’s will only provide basic liability coverage which means high priced items are not usually covered if they should suffer damage during the move. Make sure the company has additional insurance to cover a variety of items. This will make sure that your precious belongings and investments are protected.

Be aware that just because you have a quote in writing doesn’t mean your final out of pocket costs won’t increase. Unpredictable situations such as road access, actual weight, and elevator malfunctions can alter the final price of your relocation.

Be sure you discuss with your mover the possibility of additional charges that can raise your estimate. If you discover a need to alter your moving schedule, be sure to give advance notice to the moving company so they can recalculate your moving costs if necessary.

It’s also important to know what methods of payment your moving company accepts. Most movers will take cash, credit or debit cards, bank and traveler’s checks, and personal checks. Relocating can be a stressful event, but employing a respectable business will go a long ways toward making your relocation easier.

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A hazard insurance policy is designed to reimburse you and the bank for damage to property resulting from fire and smoke, hailstorms, fierce winds, lightning storms, explosions, volcano eruptions, riot and vandalism, theft, water damage, and other so called Acts of God. If a tree comes crashing down on your roof from a wind storm or a burglar smashes your car window to steal your radio, your policy will fix the damage or replace the item. You’ll even come across insurance policies that protect belongings taken away from your home such as in your auto or to work.

The principle part of your insurance policy protects you against damage to your home and anything connected to it. However, the basic protection isn’t enough to adequately cover you. Your agent will give you the opportunity to buy extra coverage for:

1) Extra structures other than your home like the garage, outdoor shed, pool, separate guest unit, as well as attached fixtures such a stone walls, driveways, sidewalks, and wood fences.

2) Personal property such as clothing, special artwork, jewelry, coin collections, and electronics, up to a specified replacement value.

3) Home business property such as computers, workstations, and copiers. Business inventories can also be protected in a policy.

4) Loss of use-As a catastrophe will displace you from your home, your policy will provide benefits to pay for your rent, motel stay, and food, minus the amount you pay for daily necessities, while your property is being reconstructed following a natural disaster.

5) Landscaping like your fruit trees, perennials, evergreen bushes, and water fountains.

Even though you’re not obligated to purchase the above coverage, you’ll probably need to purchase the whole package to get the best protection for your home.

At first glance, you might think your hazard insurance policy provides detailed coverage for everything. However, if you hone in on the exclusions clause in the policy, you’ll find circumstances that aren’t covered such as flooding, earthquakes, mud slides, police activity, loss of electricity, sewage damage, and many more. You’ll have an impossible time locating a policy to ensure these risky, claims producing damages. But, you can locate some policies that will cover special situations like flooding or earthquake destruction. The best thing to do is buy extra coverage for hazards that caused major damage and have a high probability of happening such as an earthquake in certain parts of California.

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If you sign an agreement with a builder to construct a new home, you have every right to expect the completed project will be in beautiful condition. However, the reality is most new homes can suffer from bad workmanship and defects. You may be surprised to learn that 10% of newly built homes contain major fabrication issues.

A major cause of these workmanship flaws arise from homebuyer pressures to have the home finished as soon as possible or within the next several days. Homebuyer expectations have also increased demanding builders to fabricate fancy features such as high vaulted cathedral ceilings and large scenic windows. To add to the dilemma builders have a hard time finding good skilled contractors or subcontractors to complete the work. To make buyers happy, builders end up taking shortcuts by using inexperienced and untrained workers; or simply make thoughtless mistakes.

To make the situation worse, once a builder completes a community, they move on to the next project-ignoring customer calls and complaints from the previous development. Some builders are so crooked they even take great lengths to set up a false corporation during construction and then end up filing bankruptcy when everything is complete.

You’ll find some states have passed legislation allowing the developer time to correct the home before you litigate, without indicating an actual time period. Unfortunately this loophole allows a builder to procrastinate on your repairs.

The upside is you can take proactive steps to monitor the construction process before your home is completed. Be sure to schedule periodic inspections during construction, and a final inspection at completion. You may spend hundreds more for the extra inspections, but you could end up saving thousands of dollars over time. Statistics show the average new home needs repairs exceeding $5,000.

If you want to be sure your home is built right, hire an independent home inspector with years of experience to monitor your construction. Don’t assume you’ll receive an unbiased inspection from a city or builder’s third party inspector. Plus it’s the city inspector’s job to only make sure a house is built according to current building codes and not critique other important issues.

Common defects you’ll come across include bad weather proofing, improper grading of land, faulty sewer connections, issues with the roof, ventilation concerns, and building code violations.

Make sure you get the builder to include your rights to periodic inspections in your purchase agreements. Be committed in following up with these inspections. As a new owner you don’t want to move into a brand new house only to encounter a walled up chimney, improper sewage piping, and electrical wiring problems.

While your purchase contract may permit periodic inspections of the home during construction, expect the builder to fight you each step of the way. If the real estate market is hot, you’ll have a difficult time finding a builder willing to include these inspections, especially when another buyer in line after you is willing to take the home as it is. You’ll have an easier time finding a cooperative builder during a slow market. Don’t be afraid to exercise your homebuyer rights to make sure your home is constructed right.

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If you’re not familiar with what a closing agent does, you may be surprised to learn he or she is an important part of your homebuying team. The function of your closing agent is to direct and supervise the final phases of your purchase transaction and to make sure the buyer and seller complete their obligations of the sales agreement. It’s not uncommon for this agent to be hired by a title or escrow company.

While you may not meet your closing agent until far into the final steps of the sales process, your agent will be involved long before the end. And experienced agent will:

1) Make Arrangements For Title Insurance-One of the important functions your closing agent will do is order the title search. If your agent already works for a title company or is an attorney, they will personally conduct the search. When the report comes back, it will show if the seller has any outstanding liens, easements, and encumbrances that will need to be addressed prior to the close of the purchase transaction. Once the seller clears up all title issues, your closing agent will follow through to be sure you are issued the title insurance policy.

2) Coordinates Both Lenders-One important role of the closing agent is to supervise the payoff of the seller’s lender (if applicable) and the funding of your sales purchase.

3) Establishes An Escrow or Trust Account-Once the closing agent takes your deposit, they will put it into a special account with a local lending institution until the deal terminates and the funds are transmitted to the seller. Any funds allocated by the seller to fix the property will also be put into this account. In states permitting lawyers to represent both parties, the seller’s representing lawyer will open up the account.

4) Apportions Expenditures-Your closing agent will calculate the seller’s or buyer’s liability with regards to tax, interest, and insurance payments at the end of the transaction.

5) Follows Instructions-The agent will follow all written instructions provided by you and the seller and make sure everything will be completed by the closing date.

6) Records The Deed and Pays The Seller-At the time of closing, the agent will transfer funds to pay off the seller. Once that happens, the agent will make a public recording of the deed to transfer the house to you.

Your agent’s fee is paid as part of the closing costs. Depending on the region, a buyer or the seller will pay this fee; while in certain locations the fee is split equally. Ask your real estate agent what arrangement is customary for your area.

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