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Seema's Questions & Answers

in Beauty & Fashion, Food & Drink& Personal Finance & Tax

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Total Points: 53264

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Questions Asked: 26

Best Answers: 42

How to Buy a Government House at Auction?

Asked by karn singh in Personal Finance & Tax at 3:04 PM on January 30, 2009

Seema's Answer

Open your web browser and visit govsales.gov. This website contains everything you need to know regarding government auctions including government seized property auctions, government surplus auctions, and foreclosed homes.

Click on the link that says "Houses." This is the section of the government auction website that can help you find a home through government auction.

Scroll down until you see a map of the United States. Click on the state where you would like to buy a home through government auction.

Next, choose the city in which you would like to purchase a home through government auction.

Choose how many bedrooms and bathrooms you would prefer the government house to have.

When you are finished, click "Search for Properties." You will be presented with a list of forclosed or seized government houses.

Click on the property that interests you.

Look at the pictures and read details about the government owned house. Use the information on the page to place a bid if you are interested. Good luck. You may find just the home you were looking for!

Answered at 3:45 PM on January 30, 2009

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How to Buy a Foreclosed Home?

Asked by karn singh in Personal Finance & Tax at 3:04 PM on January 30, 2009

Seema's Answer

Some states provide information about foreclosed homes through their local courthouse, and others with county records.

You can also use commercial data-base to obtain information on these homes. These may require a small fee obtain a list or to search their websites.
The Federal Housing Administration, the Veterans Administration and the Department of Housing and Urban Development (HUD) also have information on foreclosed homes. (http://www.hud.gov/homes/home sforsale.cfm)
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After you have chosen a property you need to pay someone to inspect it. Make sure there are no structural problems that require a large investment.

Look for pest problems and other issues that may affect home value.

Obtain information about houses and their values from local realtors to ensure you are getting a good bargain.

Find out if back taxes are owed or if there are any liens on the property that were held by the current owner, because these will be transferred to you.

Make sure that the house is up to code and that there are no problems with lax permits or structures that need to be altered or destroyed.

Answered at 3:44 PM on January 30, 2009

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How to Buy a "REO" Foreclosed Home?

Asked by karn singh in Personal Finance & Tax at 3:03 PM on January 30, 2009

Seema's Answer

Foreclosure homes are usually priced slightly under what the current market is selling for in its demographic, for this reason the bank may receive multiple offers for the home you are looking to purchase. The bank may throw out most of the offers but keep the best two. One way to stand out from the rest is to ask your agent to find out the price the bank purchased at from the trustee deed or sheriff's deed. The amount is noted on the document itself which can be obtained on the tax rolls of any title company. Compare that price to the price the bank is asking.

Now here is where your investigation begins, look at the amount of loans ever secured to the property and the amount. Now here is where it becomes tricky. The bank will usually accept somewhere between the original amount the house was purchased at and the foreclosed sale price.

Ask your agent to find out if there are any other offers on the foreclosed home. If there are no offers on the home you may be able to offer less for the home than it is listed for. If however their are multiple offers, you may need to increase the price you had originally offered in order to be considered. One point to remember is that banks love cash offers and may consider these first. If you are obtaining financing for the purchase you may need to increase the amount you wish to offer above the cash offers being considered by the bank.

You will need to submit a pre approval letter to the bank. One from your own lender and I highly recommend getting one from the lender who owns the property. Banks will trust their own pre-approval departments and tend not to trust others.

Do not ask for repairs when submitting an offer. Although some banks will pay for repairs they will not agree to repairs at the time of the offer. You can try to negotiate after your offer has been accepted and after you have done a home inspection

Have a clause in your offer to be subject to a home inspection. This will be a wise decision on your part because some sellers who go into foreclosure may have stripped the assets off the home before they left the premises.

These are just some of the things you should know when planning to purchase a REO home. Good luck with your purchase!

Answered at 3:43 PM on January 30, 2009

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How to Buy Home Warranty Insurance when Purchasing a Home?

Asked by karn singh in Personal Finance & Tax at 3:02 PM on January 30, 2009

Seema's Answer

Know the difference between homeowner’s insurance and a home warranty. A homeowner’s insurance typically protects the house from fire, theft, or other damages. It can also include liability coverage if someone is injured on your property or by a family member. A home warranty repairs or replaces the appliances in your home when they break, such as the stove, refrigerator, air conditioning, or for roof or plumbing issues.

Understand that home warranties are typically purchased when buying a home. The buyer or seller can pay for the warranty. It can be renewed at the end of the year, yet it is typically more expensive.

Consider a home warranty if you are selling a home. Some companies will cover your house for free, while your home is listed for sale. If anything breaks down during that period (if it is covered in the policy) the warranty company will pay for the repairs or purchase a new appliance. When the house sells, you will then purchase the policy for the new owners.

Read the fine print. Standard policies do not repair everything. You may have to pay for an upgraded policy to cover the swimming pool or air conditioner.

Compare prices. Policies normally have a service fee, which you will be charged when the repairman comes out to make repairs. This might be $35 or $50 or some other amount.

Ask your real estate agent to recommend a good policy. Specifically ask them how good the different companies have been on making repairs for their other clients.

Read the policy. Know what you are buying. Do not expect the home warranty to do something that is not expressly stated in the policy.

Answered at 3:42 PM on January 30, 2009

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How to Buy A First Home?

Asked by karn singh in Personal Finance & Tax at 3:04 PM on January 30, 2009

Seema's Answer

Buying A Home Doesn't Require The Use Of A Realtor.
With that said, I wouldn't suggest your first home purchase with out a professional realtor unless you have a very honest mentor, someone who you can trust for good sound advice. Someone who has nothing to gain from your purchase and is very familiar with buying a house.
But before you run out and find just any realtor...

Ask everyone you know for recommendations to a good honest realtor.
Just like with any business that uses commission only sales people, you must be cautious. The best way to find a good honest realtor to assist you with your first home purchase, turn to friends and family members who have personally used a realtor, be sure to only get recommendations from people who have actually purchased a home from the realtor they are referring.

Before you seek out to purchase or buy your first home, sit down with a mortgage professional. Get pre-qualified, know what you can afford and be sure to stay with in your own person means.
My suggestion is to not spend as much as you can, I suggest seeking out a home that is at least 10% less than you qualify for.
Why finance the maximum and worry about making those hefty payments?
Be a wise first time home buyer and purchase a good house in a great neighborhood.

Answered at 3:44 PM on January 30, 2009

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How to Bid on a New Home ?

Asked by karn singh in Personal Finance & Tax at 3:02 PM on January 30, 2009

Seema's Answer

Find a neighborhood you'd love to live in. You can do internet searches on the "BEST CITIES TO LIVE IN" or do a drive-thru or if you know what city you'd like to live in, search the MLS or Multiple Listing Service.

(RealtyTrac.com is the largest supplier of foreclosed homes. On their site they offer resources such as, "Best Neighborhoods to buy in" and "How to buy a foreclosed home".)

Keep in mind that because homeowners are losing their homes to foreclosure everyday, these resources may not be up to date. Even RealtyTrac states that banks are taking longer to place their foreclosures on the market.

Sometimes you can tell a home that's been foreclosed on by the lack of lawn care. The home probably won't have a sign on it yet.

Once you find the home you'd like to buy, find out who owns it. If it's a normal home on the market being sold by a real estate agent, then you're lucky because much of the research is done for you by the agent.
If you are looking to buy a foreclosure, you can go to the local banks and ask to see their lists of foreclosures. Or visit the Department of Vet Affairs as they have lists of their properties. There is not just one list. Some may try to sell you a list but currently the lists are expanding faster than they can print them.
If you find a run down foreclosed home, another way to find the owner is to go to the County Assessor's Office with the address in your hand. They have the most up to date information on the home you are looking at. If the home hasn't gone through the foreclosure, the current owner may be in dire circumstances and will accept his mortgage pay-off as the selling price. It can't hurt to talk to the owner.

If you work with a real estate agent, great! They can give you a ball-park figure to bid on your dream home. In today's market, I would go even lower than what the agent suggests, simply because you don't know the circumstances the homeowner is in and they may accept a much lower price, especially if they are looking at losing their home through foreclosure. Keep in mind the real estate agent is there to make money. Go lower than what they suggest. By law, they must submit any offer ou make to the homeowner.
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If the home is bank owned, contact the bank and ask their asking price. Usually banks only want the owed balance of the mortgage that was defaulted on.
Example- a $350,000 home with a defaulted mortgage of $250,000. Usually the bank just wants the $250,000. Lately, mortgages owed are much higher than the actual fair housing price of the property, in which case you may bid much lower.
Example--That same house may be in a neighborhood where the prices have declined to $150,000. Lucky you! Make an offer!

With today's decline in prices and homeowners panicking to sell their homes, you can pretty much set your own price. This is a buyer's market. Go low!

Answered at 3:40 PM on January 30, 2009

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How to Become a Home Owner?

Asked by karn singh in Personal Finance & Tax at 3:01 PM on January 30, 2009

Seema's Answer

Find out how much house you can afford. This doesn't mean simply how much house you think you can pay for- it also means how much house you can get a loan approved for. The days when you could buy way too much house and put no money down are over. You will need to save up a down payment and possibly earnest money to hold a house until the deal is ready. You will have to contact banks and talk with them about how much you can be pre-approved to borrow.
Use a home mortgage calculator to figure out about how much your monthly payments will be. Most economists suggest that your mortgage payment should be about one-forth of your monthly income. Most banks require it to be about one-third or less of that amount. Major economic problems can occur when a mortgage payment is half of your monthly income or even more- that's one reason that the foreclosure rate is so high right now. To be safe, make sure it is one-third or less.
Find a good real estate agent. Your real estate agent won't just be able to find houses for you, she will also know a lot about the local housing market, she will know what certain areas are like, what the good school systems are (important for resale value), and she'll have contacts with house inspectors, real estate lawyers and other people you will need later.
Get a home inspection on any house that you have a serious interest in buying. There are no exceptions to the rule. No matter what the current owners say, no matter what your friends say, never buy a home unless you have a home inspection done on it. If you make an offer on a home, make it contingent on the outcome of a home inspection. This means that the offer is valid as long as no major issues are found in the home inspection. If there are issues, the homeowner may have the option of fixing the problem in order to keep the offer.
Make sure everything you are promised is in writing. If the home owner promises to do something, it means nothing if it is not a part of the contract.
Ask your real estate agent for their recommendation on a real estate lawyer. The lawyer will be the one who conducts the closing and has both parties sign the paperwork. He or she will be able to explain anything in the contract that you don't understand.
Make sure that any loose ends are ties up during the closing. If the previous owners have not already vacated the home, add their move-out date to the contract. There have been cases of owners who refused to leave the home after it was sold. Also make sure you are given the keys and garage door openers during this time.

Answered at 3:37 PM on January 30, 2009

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How to Bid at Auctions ?

Asked by karn singh in Personal Finance & Tax at 3:01 PM on January 30, 2009

Seema's Answer

Register
For most auctions, you will need to get bidding paddle with a number on it. To get this, you will have to register with the cashier and may have to show ID or give a refundable deposit or leave your credit card. This is to ensure that you pay before you leave with your item and to show that you do have enough money to participate.

Watch and listen
Each auctioneer is a bit different. Listen for a while before getting into the action to get used to the auctioneer. Otherwise you may end up bidding much more than you thought you were.

Buyer Beware--No Returns
Check out the goods carefully before buying. Depending on the goods, you may be able to do this well before the auction. This is the case with real estate in which case you can search the title and deed. Most sales such for a car auction or collectibles give a few hours before the auction to look over goods. If you come late, sometimes you can look among the unsold items during the auction.

Choose paddle movement
In most auctions, bidders do not wildly wave their paddles. Many bidders try to be discreet so as to keep people from running up the bid and making them pay more than necessary out of spite. The auctioneer learns to recognize the signals of regular bidders. It may be a paddle in front of the chest, a slight head nod, or raising the hand to shoulder level. Just make sure you are noticed and your bid taken.

Buying the lot, one piece, bidder takes all?
If the auctioneer is selling several like items, be careful to hear whether you are bidding one price for the whole lot; bidding on one item; or bidding for one item but buying the whole lot. For example, if 4 dining chairs are for sale, are you bidding $100 for all 4 chairs for a total price of $100 ($25 per chair) OR are you bidding $100 for 1 chair but “bidder takes all” meaning you have to take all 4 chairs for a total of $400.

Stay within limits
Auctions are fast paced and exciting. Auctioneers are skilled at trying to get the most out of an item for the seller. To keep your head, you need to decide ahead of time what your maximum bid will be and make sure you don’t go above that.

Answered at 3:39 PM on January 30, 2009

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How to Begin Living in a New Home?

Asked by karn singh in Personal Finance & Tax at 3:01 PM on January 30, 2009

Seema's Answer

Pick the right area. Choose an area that exhibits pride of ownership, few if any slum properties, an absence of nearby vacant commercial spaces, neighborhood schools with high performance ratings, and a community with a low crime rate. Though a pretty house is nice, location is the main concern. I’ve always operated on the premise that the worst house in the best neighborhood beats the best house in the worst neighborhood.
Avoid a hazardous mortgage. If you finance your home with an adjustable loan, there’s a likelihood that your payments will rise in the future. For this reason, opt for a fixed rate loan. It’s true, of course, that your initial rate will be higher, but if you can handle a 15-year fully amortized loan, you’ll come close to getting the best of both worlds.
Don’t stint on the down payment. There is temptation to lever into as expensive a home as you can with the least cash possible. I recommend against this. The specific percentage down payment to aim for is 20 percent. Loans not exceeding 80 percent of a home’s value normally carry lower interest rates, and are exempt from mortgage insurance that adds a premium of about ½ percent per year.
Hold title wisely. Married couples traditionally hold title to their homes in joint tenancy so that in the event of a death, the surviving spouse receives automatic title to the property without the inconvenience of probate. Although this solves one problem, there is an inherent disadvantage. Only half the property takes a stepped up basis as of date of death. The other half remains at the original acquisition basis, which can result in the imposition of an eventual capital gains tax. This problem is resolved if title is held, instead, as community property, where the full property takes the stepped up basis. Check this with your counsel.
Be slow to remodel. Now that you’re sitting in your very own home, you see all the things you want to change. Certain items of repair may be required at once for simple habitability, but except for these, go slowly. It’s best that you live in a structure for awhile to get a feel of what you really want. A home will grow on you with time, and ideas concocted during your first week of occupancy often seem outlandish by the third month. Spend the first six months in planning, measuring, sketching, collecting prices, inspecting other homes and models, and enthusiastically fantasizing. At the end of that time you may be ready to proceed.

Answered at 3:38 PM on January 30, 2009

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How to Avoid Risking Your Mortgage After a Divorce?

Asked by karn singh in Personal Finance & Tax at 3:01 PM on January 30, 2009

Seema's Answer

Decide if you want to stay in the house or sell it. You need to think of both the financial and emotional repercussions. Will you feel safer in your home or better to leave it behind?

Even if you do decide to stay in the house, be aware that divorce decrees have no hold on mortgage companies so if a partner defaults on the mortgage awarded to him or her by the divorce decree, the mortgage company can still come after the ex-partner and ruin his or her credit standing or even foreclose on the property. The best way to handle this is for the partner who is not awarded the home to have their name removed from ownership by novation (the term for having one's name removed from an existing mortgage document -- something rarely awarded), refinancing or selling the property and paying off the mortgage.
There are a number of cautions to be aware of involving property during and after a divorce. Despite the emotional trauma, it is important to seek professional advice right away about your real estate mortgage.
There is some information compiled by experts that can help. "Divorce: What you Need to Know about your House, your Home Loan and Taxes" can be found by calling 1 800 787-8019 and entering an identification number of 1098. Or check under the 'divorce and your property' link I've listed as an Additional Resource. The article includes an application for the pamphlet.
Sometimes divorced or separated couples continue living together in the same house to handle the financial problems of joint real estate ownership. Whatever you decide, make sure mortgage payments will continue in a timely manner and protect your credit. Not everything ends with the divorce decree.

Answered at 3:36 PM on January 30, 2009

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