It’s not surprising that pools are most popular in California, Arizona, and Florida, where the summers are hot and the year-round temperature warm. But even though the National Association of REALTORS® say pools can add as much as 8 percent to the value of a home in these states, not all home buyers will see the value. Families with young children, older home buyers, or those not interested in the upkeep of a pool may not even consider a pool home. Of course, in areas where the winters are cold, a pool can even detract from the home value.

Yet, it’s hard to overlook the benefits of a pool, especially when you live in Florida like I do. It’s a great way to cool off in hot weather, they are a great focal point for entertaining, and let’s face it, kids love them. So if you’re thinking about installing a pool, do it for the fun factor if it’s something you desire, not as a tactic to increase your home’s value or attract buyers.

As the national housing market continues to crunch, first time home buyers have a unique opportunity to capitalize on the American Dream of owning a home at a rock-bottom price. While this is an unfortunate situation for the homeowner in distress, first-time home buyers have a solid chance at buying desirable homes for massively reduced prices.

There are actually a few different ways for home buyers to take advantage of the record amount of foreclosures deals available on the market right now. Let’s review each scenario individually.

Preforeclosure
Homes in preforeclosure have not been foreclosed on. This type of home or property has a Notice of Default (NOD) (also referred to as Lis Pendens) filed against it. The NOD is filed by the lender anywhere between three to six months of non-payment on the loan. NODs are filed with the County Recorder’s Office.

Homeowners in preforeclosure typically are trying to sell before the home is foreclosed on and sent to auction. In certain situations, a first-time home buyer can pick up a nice home for an incredible value by buying the home for the amount remaining on the home loan.

For example, if a borrower had a piece of property in preforeclosure with a market value of $150,000, but only owes $100,000 on the loan, the real estate buyer could pay the $100,000 for the home and come out ahead.

Foreclosure
After the NOD has been filed against a home, an additional three months usually passes before for the home is scheduled for public auction. At this point, the borrower has just several days before the foreclosure auction to correct the situation or sell the property. After that, the home is considered in foreclosure and sold at auction.

This again presents an opportunity for first-time home buyers. When the property is processed through a foreclosure auction, anyone can attend and bid at the event. Buying a home at auction is considered a bit risky in comparison to other methods of purchasing a foreclosed home. However, if the bidder does his or her homework, it can be done.

Some things to keep in mind when purchasing at an auction are as follows:

Don’t go into the situation blind. Research the home to determine if there are any unpaid taxes, construction debts or liens. This can be done by ordering a title search on the land prior to the day of the auction.

• Review how the auction process works and what rules you must follow.
• Visit the area before the auction and look for any existing problems such as toxic waste issues or zoning challenges.
• Attend a handful of foreclosure auctions to see how they work.
• Determine a maximum bid and stick to it.
• Make arrangements for financing before the auction. Winning bids are typically due just days after the auction ends.

Purchase After Foreclosure
When a home is not sold to an outside party at the foreclosure auction, it ends up in the bank’s hands. Banks are not in business to be homeowners.  So as one can imagine, a foreclosed home is a lot like a hot potato.

Typically, the bank will pay for miscellaneous debts associated with the home, including IRS taxes, property taxes and so on. Banks also have the ability to negotiate price of the property, down payment, and closing costs with the first-time home buyer. Because it is ideal to sell the home, the buyer has a better chance at snapping up a dream home for an ideal price.

Purchase a HUD Home
When a federal Housing and Urban Development (HUD) or Federal Housing Administration (FHA) mortgage forecloses, the home is sold through a HUD program. HUD homes are pre-approved for an FHA mortgage, which means they are appraised and ready for sale.

Additionally, HUD homes can be purchased for less than market value, saving the first-time home buyer money. The downfall to HUD homes is they are sold on an “as is” basis. Real estate shoppers must also navigate the HUD program with the assistance of a HUD agent or broker who can submit an offer on behalf of the buyer.

Whether it is shopping preforeclosures or bidding on a HUD home, there are several ways for first-time buyers to realize the dream of owning a home without breaking the bank.

To find a home at an affordable price, search for foreclosure listings in your area.

Homes and buildings built before 1980 still maintain the chance of containing asbestos materials. If you are a potential home buyer, are remodeling or foreclosing older homes, those involved in real estate should make sure to inspect for asbestos. Exposure to the substance can cause significant health concerns.

Frequent exposure to airborne asbestos fibers can increase the chances of developing asbestos-related illness such as malignant mesothelioma, a fatal lung ailment. The only known cause of mesothelioma is associated with asbestos exposure. Many symptoms of the disease may not show up for 20 to 50 years, making it incredibly difficult for doctors to diagnose potential carriers.

Removal of asbestos in all locations must be performed by licensed abatement contractors who are trained in handling toxic materials. The Environmental Protection Agency has set strict regulations and standards in regards to asbestos abatement and disposal. It administers a number of programs which are aimed at preventing asbestos exposure in public facilities, workplaces and homes. The type of contractor performing the inspection will determine the type of removal method needed. Despite knowledge asbestos problems, many communities throughout the country still find themselves constructed atop asbestos deposits.

Green alternative options need to be given serious consideration such as lcynene, cellulose and cotton fiber. Research demonstrates that these new forms of insulation such as cotton fiber can reduce energy costs significantly every year. The United States Environmental Program states that the use of recycled building materials can reduce energy use by 25 to 35 percent. These asbestos alternatives will reduce energy costs and allow a lifestyle that is free of health damaging materials.

The image below shows areas where asbestos may reside in home.  Click to enlarge.

Ever heard of a home warranty policy or considered applying for one? Well pay attention so you don’t get burned by this not-so-ethical industry.

What is a home warranty?

• A home warranty is a service contract that covers the repair and replacement costs of home appliances. For an annual fee of $250 to $600 the warranty generally covers equipment and appliances such as dishwashers, plumbing systems, electrical systems, etc. that fail due to normal wear and tear. Air conditioning, pools, spas, wells, and sometimes roofs can typically be added to the basic policy for an extra fee. Coverage varies significantly across warranty companies.

How it works.

• The warranty company contracts with local repair companies to provide service. If something breaks, the homeowner calls the warranty company, who arranges with the local company to dispatch a repair technician.

Here is the problem (loophole).

•  When applying for a home warranty many companies don’t require any documentation on the current condition of the home or inspections. They simply take your word for it. Yet when it comes time to file a claim on a faulty item covered on your policy, the company sends out a technician to verify the claim. If the technician finds a pre-existing, condition the claim is denied. There is your loophole — companies that don’t require documentation or inspections leave themselves a safety net to reject your claim since there was no documented proof that everything was in working order originally. It’s your word against the warranty company’s technician. The company will usually side with the technician every time.

Here are some useful links featured on Squidoo with home warranty information for consumers.

Home Warranties Not Always What They Seem

My Three Cents

Consumer Affairs.Com

Article at Home Warranty Reviews

Warranty Firm Probed for Fraud

Complaints.com – Home Warranty Complaints

American Home Shield Complaints

Complaints Board

As home prices and mortgage rates continue to fall, acquiring the home of your dreams may be possible. Homes that were unaffordable for many during the real estate bubble are now within reach for those fortunate to be in the position to snatch them up. Of the 705 counties tracked by eppraisal.com nationwide, more than 140 have experienced a drop of 30 percent or more in median sales price since their peak.

In San Diego County, California, which consists of cities such as San Diego, Carlsbad, and Encinitas, the median sales price has dropped by almost half, from $660,000 at its peak to $350,000. Those seeking the good life on the West Coast of Florida should turn to Collier County, home of sought-after Naples and Marco Island. Median prices have dropped almost 45 percent from $454,000 to $250,000.

If coastal living is not ideal, it’s not surprising that the Denver area is our next pick. Median prices are down to $162,000 (but don’t be fooled, ski lift tickets are still $90+).