Archive for the ‘Home Buying’ Category.

Where you’ll pay the lowest loan fees

5th October 2008, 07:42 pm 55 views

http://realestate.msn.com/Buying/Article_bankrate.aspx?cp-documentid=10658478&GT1=35000

North Carolina is the place to be for the lowest closing costs on your home loan. But no matter where you choose to reside, it’s likely there are hidden ‘junk’ fees you should demand be removed from the total.

New York, Texas, Florida. For the second straight year, those are the most expensive states in which to get a mortgage.

Nationwide, the average origination and title fees on a $200,000 mortgage this year totaled $3,118, according to Bankrate’s annual survey of closing costs. The fees in the survey don’t include taxes, insurance or prepaid items such as prorated interest or homeowner association dues.

Fees in New York City were highest, averaging $4,016 in Bankrate’s survey. Houston came in second, with fees that averaged $3,975. After that came Buffalo, N.Y., with fees averaging $3,845, and then Miami, at $3,683.

North Carolina had the least expensive closing costs in the survey, at an average of $2,650. The previous year, Indiana took the last spot.

The annual survey of online lenders is conducted by obtaining fee estimates for a $200,000 mortgage in each state’s most populous city. Bankrate also surveyed Springfield, Ill.; Buffalo; San Francisco; and Sacramento, Calif., just in case Chicago, New York and Los Angeles were unrepresentative. It turns out that it didn’t matter much. Cities in the same state weren’t far apart in total closing costs.

Why New York is tops
New York tops the list for the fourth year in a row for two reasons. First, origination fees are swollen by taxes that the state levies directly on lenders, which are passed along to consumers. Second, lawyers customarily conduct closings in New York. Many closings are attended by at least three attorneys (for the buyer, seller and lender). In some other states, especially in the West, closings are conducted by title agents and escrow officers who charge less than lawyers.

When comparison shopping for a loan, pay attention to the origination and title fees. In most places, those are the costs that are subject to negotiation. Taxes aren’t negotiable, and most prepaid costs, such as prorated interest, vary depending on the day of the month when you close the loan.

Study the good-faith estimate
Even as the housing market has slumped in the last three years, fees have gone up, says Mike Kratzer, president of FeeDisclosure.com, a Bankrate company, which provides consumers with information to help cut their mortgage transaction costs.

He says appraisal fees have crept up recently, as lenders ask appraisers to do more thorough, time-consuming work. During the housing boom, lenders favored appraisers who did the job quickly and inexpensively. Above all, lenders favored appraisers who justified house prices that, in retrospect, were too high.

State-by-state closing costs

2008 rank

2007 rank

State

2008 closing costs

1

1

 New York - NYC

$4,015

2

2

 Texas

$3,975

3

N/A

 New York - Buffalo

$3,845

4

3

 Florida

$3,683

5

8

 Oklahoma

$3,558

6

9

 New Mexico

$3,466

7

7

 New Jersey

$3,432

8

4

 Pennsylvania

$3,411

9

16

 Alaska

$3,408

10

24

 Colorado

$3,358

11

N/A

 California - San Francisco

$3,321

12

5

 Ohio

$3,317

13

17

 California - LA

$3,250

14

35

 Kentucky

$3,213

15

27

 West Virginia

$3,201

16

11

 Connecticut

$3,200

17

25

 Michigan

$3,191

18

N/A

 California - Sacramento

$3,179

19

41

 Oregon

$3,161

20

6

 Hawaii

$3,134

21*

39

 Alabama

$3,130

21*

12

 Massachusetts

$3,130

23

19

 Maryland

$3,117

24

15

 Tennessee

$3,116

25

37

 South Carolina

$3,103

26

10

 Delaware

$3,098

27

46

 Arizona

$3,096

28

22

 District of Columbia

$3,086

29

33

 Idaho

$3,064

30

14

 Mississippi

$3,059

31

28

 Arkansas

$3,049

32

13

 Louisiana

$3,042

33

48

 Nevada

$3,039

34

38

 Washington

$3,028

35

20

 Virginia

$3,007

36

34

 Montana

$2,970

37

36

 Iowa

$2,940

38

44

 Wisconsin

$2,940

39

18

 Rhode Island

$2,932

40

26

 Minnesota

$2,930

41*

21

 New Hampshire

$2,922

41*

23

 North Dakota

$2,922

43

31

 Georgia

$2,900

44

43

 Nebraska

$2,891

45

32

 Utah

$2,882

46

51

 Indiana

$2,878

47

30

 Vermont

$2,872

48

49

 Illinois - Chicago

$2,869

49

N/A

 Illinois - Springfield

$2,826

50*

50

 Wyoming

$2,804

50*

36

 Iowa

$2,804

52

40

 South Dakota

$2,797

53

29

 Maine

$2,793

54

45

 Missouri

$2,758

55

42

 Kansas

$2,669

56

47

 North Carolina

$2,650

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7 biggest home price negotiation blunders

16th August 2008, 11:33 pm 165 views

Source

Emotion. Ego. Not doing your homework. Don’t let these or other bogeymen derail your chance at your favorite home. Here’s how to keep them at bay.

By Luke Mullins, U.S. News & World Report

With the national real-estate market in a deep slump — and homeowners scrambling to unload properties — consumers are in a great position to save some cash by bidding down asking prices. “It’s a feeding frenzy,” says Glenn Kelman, chief executive officer of online brokerage firm Redfin. But in the often-complex process of buying a home, negotiations can be tricky, and people considering doing so should make sure they understand what they are getting into. U.S. News spoke with five negotiation experts and came up with a list of the seven biggest mistakes you can make in negotiating to buy a house.

1. Not understanding the seller. In a home price negotiation, it’s essential to look at the deal from the opposite side of the table. “You want to make best use of the seller’s fears,” says Ed Brodow, a negotiation expert and the author of “Negotiation Boot Camp.” “So the question is: What are the pressures on the seller of this house?” Sellers today could be facing any number of anxieties. Perhaps the local housing market is even weaker than the sluggish national one. Maybe the seller has landed a job in another city and has already bought a home there. He or she could even be facing bankruptcy. Any information you can obtain about the local real-estate market or the seller will strengthen your negotiating position. WhenSteven Cohen, president of the Negotiation Skills Co., first visited a home that was for sale in 1981, he noticed that the property had no furniture or heat. “That gave us a little bit of a sense of the degree to which the people wanted out and gave us a heck of a lot more bargaining power,” Cohen says. “We offered tons less than what they were asking.”

The sellers eventually accepted the offer.

2. Forgetting your homework. Some of this needed information is readily available. You can get the sale prices of comparable homes and discover how long certain listings have been on the market from a real-estate professional, the Multiple Listing Service or an online resource, says Joshua Dorkin, the founder and chief executive officer of real-estate networking and information site BiggerPockets.com. To take the temperature of a local market, identify a couple of good real-estate blogs and click through them daily. To find out the seller’s motivations, try getting in touch with him or her directly. Some will refer you to an agent, but others will chat candidly. In addition, “researching who lives in and around the home you’re [considering] buying is of the utmost importance,” Dorkin says. By speaking with neighbors, you’ll gain a sense of what life is like in the community and perhaps even pick up some insight into why the sellers are moving. “You can never have enough information,” says Jim Camp, the author of “No: The Only Negotiating System You Need for Work and Home.”

3. Showing your cards. While looking for information on the seller, it’s important to divulge as little about yourself as possible. Any knowledge you provide could be used by the seller as leverage. “For example, you may want to pay cash for the house, but the sellers don’t have to know that,” Camp says. If you are capable of paying cash, the sellers may hold firm to their asking price, he adds, “because it means that you are a person of means.”

4. Not having options. When you begin negotiating on a specific property, make sure you have identified several other homes you’d be happy with as well. “Never negotiate without options,” Brodow says. “If you find a perfect house, find another house so you are not so desperate to buy [the first] house that you wind up giving in to whatever the seller wants.” Furthermore, it’s to your advantage to tactfully — either directly or through your agent — let the sellers know that theirs is not the only property you are considering.

5. Skipping the face time. Instead of handling the negotiation process by phone and fax, it’s important to meet the seller in person. “The most effective way to influence or persuade — which is what negotiation is all about — is to do it face to face,” says Tom Hayman, the president of Negotiation Expertise, which trains people in negotiation techniques. “Because then you get your words, you get your voice and you get body language — or nonverbals — all into the equation.” If the transaction is being handled by real-estate agents, the sellers should request that their agent get together with the buyer’s agent in person to discuss the prices. If your agent is unwilling to do so, he might not be the right agent for you. “A buyer should be looking for an agent who is going to do that kind of effort for them, because it always pays off better when it’s face to face,” Hayman says. (Buyers using agents should be aware that their agent gets a bigger commission on a higher sale price and therefore may have less of an incentive to push for a lower price tag.)

6. Offering a specific number. When extending an initial offer, present a range of figures — say, from $420,000 to $450,000 — rather than a hard number. An offer of a specific number that is considered too low could upset the seller enough to derail the negotiations altogether, Cohen says. A price range, however, affords you more flexibility. “In negotiating, you don’t want to adopt a position where you paint yourself into a corner,” Cohen says. “Because the only way you can get out of the corner is to lose face and perhaps lose a few bucks.”

7. Getting caught up in the game. Remember, your goal is to purchase a home — not beat the seller. “People often get so enmeshed in the negotiation game that they lose the house they like and could afford because they didn’t get the negotiation price they thought they could get,” says Daniel Shapiro, associate director of the Harvard Negotiation Project and coauthor of “Beyond Reason: Using Emotions as You Negotiate.” So what if the seller doesn’t bring the price down as much as you had hoped? If you really like the house, the price has been reduced enough to fit your budget, and you’ve given the negotiation process your best shot, consider declaring victory. “I hear a lot of situations where real-estate deals fail because one side or the other refuses to come down another $5,000,” Brodow says. “They don’t want to give in, and then it becomes an ego thing.”

Category: Home Buying  |  Comment