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+).

Your time has arrived to get the house you have dreamed about in the location of your choice. With the state of the current market, buyers can negotiate better prices and terms on homes that have been on the market for an extended period due to a number of reasons, most leading back to the economy.  Sellers need to liquidate in order to make ends meet, prices are down, and interest rates low.  So here are a few tools to help with your search.

•  Use the eppraisal.com City Snapshot search to get more information about the area you are looking in, such as information about local schools, lifestyle, and market conditions.

•  If you’re looking to relocate and need a little guidance on what location would be a good fit, let Hoodeo help you find a neighborhood that best fits your lifestyle.

•  Now that you know where to look you can take a drive and use Trulia’s iPhone Application to find open houses near you on the fly.

Take your time and look for what you truly want. With so many houses on the market and limited buyers in this bad economy, you can have the pick of the litter. This is the perfect time to be in the market for a home.

By most accounts, California’s real estate market is in shambles. But real estate investors seem to see an entirely different picture. In fact, residential real estate investment activity in the state has grown more than 65 percent in the past year alone, according to a report by RightNow Consulting.

“We wondered whether investment activity might have increased in California given current market dynamics but were truly surprised by these results,” said Dan Miller, CEO of RightNow.

According to the company’s analysis, residential real estate investors are the most rapidly growing population of buyers in California. Preliminary July 2008 residential property data reveals that the percentage of residential purchases by investors has increased to 11.41 percent from 6.74 percent since July 2007.

Not only did the percentage of residential investment purchases increase, but Miller said the number of investor transactions grew by 16 percent from July 2007.

By any measure, the increases are an encouraging nod to the perceived long-term value of California real estate. RightNow claims that favorable interest rates and continued price declines might push the state’s real estate market toward recovery a bit sooner than expected.

Find out more about California’s local real estate markets.

As the adage goes, “What goes up must come down.” And all markets are cyclical, experiencing ups and downs. These truisms certainly fit the current real estate cycle, which is governed by its unique laws of gravity.

To catch the next wave as it’s cresting, you have to first understand and learn how to identify the four phases of any real estate market. Although cyclical by nature, let’s start with the growth and expansion phase, which is followed by saturation and contraction. Next, you’ll experience a decline followed by absorption, and the four-phase cycle is poised to repeat itself.

Growth and expansion
When an area’s housing supply and demand are balanced, that particular market is fairly stable or flat. Increasing demand from job growth and population migration are indicators of a market poised for expansion. And when demand trends upward, the values and rents begin to increase as vacancies decline, which tweaks investor interest.

As this heightened demand outstrips supply, builders and developers start filling the need with new construction.

Once values begin registering higher-than-average rates of appreciation, the media start hyping the market. There is a state of euphoria with what seems like nothing but blue skies ahead. Not wanting to miss an opportunity, investors and buyers jump on the bandwagon to turn a quick real estate profit.

However, the steady price increases make single-family homes less affordable to the average person. This imbalance is temporarily met with lower-cost housing, such as town homes, condos, and apartment-to-condo conversions.

At this point, the market is reaching the cycle’s apex. While the inexperienced are still leaping en masse from the sidelines to buy, the profit takers and experienced investors are selling.

Saturation and contraction
When a market reaches its zenith, it becomes saturated and begins to contract. The signs of a downturn can be subtle at first. For example, once supply has increased to meet demand, marketing times begin to increase and the pace
of appreciation slows. Other indicators such as values, rents, vacancies, and new housing starts also flatten.

To inexperienced investors, it can seem that the market has again reached a balance. However, a hidden element lurks and pushes the market over the edge. It may take time for builders to complete projects and this pent-up supply of new construction to hit the market. Facing increasing inventory and decreasing demand, desperate builders offer buyers previously unheard-of incentives, just hoping to break even.

Decline and recession
Now that the supply outweighs demand, prices will remain flat or start dropping. The decline intensifies with an increase in unemployment, which is often caused by the slowdown in new construction. The housing market plays a significant role in the overall economy, and the ripple effect can be felt in consumer spending, unemployment, interest rates, and revised lending practices.

The number of properties listed for sale and the days to sale increase drastically. Rents often fall and vacancies increase. Many homeowners struggle to pay the higher costs of ownership because of higher real estate taxes and increased infrastructure demands.

This all-too-familiar stage of the cycle had one additional factor that helped tip the scales in 2006 and ’07. The consequences of lenient lending standards and adjustable rate mortgages culminated in the subprime debacle, prompting an already weak market to spiral out of control. Unable to afford increasing payments in addition to discovering
they owed more than their properties were worth, homeowners and investors found themselves in default.

As in any decline and recession phase, record-number foreclosures followed, further increasing the supply and pushing values down. The once-rosy media reports are now full of doom and gloom. Politicians and economists are paying attention; they’ve begun brainstorming on how to band-aid the problems.

Absorption and recovery
Only after the oversupply is absorbed can a market move toward recovery. Properties become more affordable as values decline. With little new construction and foreclosures bottoming out, fewer homes are added to the area’s inventory, allowing demand to close the gap on supply.

Signs that a market is recovering include a drop-off in marketing times, movement toward a balanced vacancy rate, and a reduction in fire-sale incentives. The overall inventory of properties will also decrease. Often measured in months supply,
this number indicates how long it will take to sell the current inventory of properties at the current selling pace.

The shift from recovery to new growth improves greatly with monetary incentives that stimulate business and job development. Areas with strong local government, a solid economic base, and prospects for population growth will recover more quickly.

Putting it all together
The duration of each phase can vary, with a complete cycle averaging between seven and 18 years depending
on key indicators. The fundamental supply and demand levels are heavily affected by population migration and job growth. Other key factors include interest rates, lending terms, rents, vacancies, and investor demand.

Savvy investors know that markets expand, peak, contract, and hit rock bottom. By understanding the four phases, as well as their signs and influences, an investor can time his entry in and out of a market. Ideally the time to buy is at the bottom,
during the absorption phase, or early in the transition to a growth phase. And the time to sell is at the high point of growth, before saturation begins to have an effect.

It sounds simple in theory. Just buy low and sell high! However, timing your most profitable entry and exit points can be challenging in practice.

An investor must fight his natural tendency to follow the herd. When everyone else is in a euphoric buying mode, you might want to consider selling to lock in profits. Alternatively, when everything you read is negative and the vast majority of sellers seem to be slashing prices and unloading properties, it could be a good time to buy.

Rather than trying to time the crest or base of the wave, start targeting the signs that indicate a curve or movement
to a new cycle is imminent.

Source: Growing Wealth

eppraisal.com recently relaunched their Professional Directory, allowing people to search for real estate professionals in their hometown. The Directory includes more than 1.5 million real estate agents and home inspectors. Additional professionals will soon be added, such as mortgage brokers, contractors, and landscapers.

If you’re interested in buying, selling, or planning home improvements, search for a local professional who will meet your needs.

Search the directory.

Are you a real estate professional? Join the directory.

Finding the perfect home starts with knowing where to look.  There are characteristics to consider when choosing a neighborhood or community:

• Are you looking for a family-friendly area?
• Do you like the big city or more suburban environment?
• How safe will you be?
• What kind of climate do you prefer?
• Is it close to work?
• Are there good schools?

Before you start your search for a home, spend some time researching where to live.  As the Neighborhood Matchmaker, hoodeo is a good place to start.  Through a quick survey, hoodeo learns about your preferences then matches you to your top 10 “best places to live.”  For each match, you can search homes for sale in that area.

» Start your neighborhood search on hoodeo.