Best Money Spent

One of the most misunderstood concepts of purchasing a home is the contingency for a home inspection. Homes don't pass or fail inspection. Instead, inspectors simply document the conditions found at a home and then a buyer must decide if they can tolerate the findings of the inspection.

In most cases, purchase contracts are written so that a buyer cannot cancel a contract based on the findings of an inspector. Instead, the buyer must first give the seller an opportunity to correct the defect and if they refuse, then the buyer may then cancel the contract.

Everybody has a different tolerance level for repairs. I've seen buyers freak-out at a dripping faucet and others that are not swayed by a roof needing replacement. Having an inspector that does a thorough inspection and can communicate clearly and calmly about findings is key to buyers making decisions that are best for them. And whether the inspection report leads to a canceled contract, neogiated repairs or simply a better night's sleep, nearly all my cliets report that the $300 or so dollars spent on their inspection was the best money spent.

I've asked inspector Adam Backus with Pillar to Post to join this blog because I like the way he works. He has agreed to provide home maintaince tips and other information of interest to individuals considering buying and selling real estate.

And should you need a home inspection, I encourage you to call on Adam. He can be reached at 585-346-9560.

A Holiday Gift For First Time Home Buyers

A recent client of mine was struggling with coming up with all the funds necessary to purchase his first home. He had a steady job, good credit but was short of money. To help him out, I put together a list of organizations that provide support to first time home buyers in Rochester and surrounding areas. He was so appreciative, that I thought this would make a good holiday gift for my readers.






NeighborWorks
570 South Ave
Rochester, NY 14620


(585) 325-4170 Ext 316



Providence Housing Development Corporation
1136 Buffalo Rd
Rochester, NY 14624


(585) 328-3228 ext. 1319


Marketview Heights Association
308 North Street
Rochester, NY 14605


(585) 423-1540


Rochester Housing Development Fund Corp
183 E. Main Street, Suite 900
Rochester, NY 14606


(585) 423-6326


Urban League of Rochester - Home Store
265 North Clinton Ave
Rochester, NY 14605


(585) 325-6530 ext 3078


Bishop Sheen Ecumenical Housing Foundation, Inc.
935 East Ave, Suite 300
Rochester, NY 14607


(585) 461-4263 ext 102


Rural Opportunities, Inc.

Monroe County (585) 340-3302


Genesee & Orleans Counties (585) 343-7297


Ontario & Wayne Counties (585) 234-3565

Each of these programs have unique criteria to qualify for assistance and they provide a wide assortment of services, from education & counseling, grants, matched savings to inspections and home repairs. I have a complete packet of information, so for more details drop me an e-mail.

Please have a safe and joyous holiday season!

Mary Shelsby

p.s. the cardinal photos were taken in Highland Park just after last weekend's snow storm.

Closing Costs Take 1!

Hi everyone! Today I'd like to take a moment to talk about a topic that can be confusing for first time home buyers. Many times home buyers will mistake the term "closing costs" with the "Total Money Required to Close". When in fact "Closing Costs" are just one of two or three components of whats required at closing. I say "two or three" because sometimes home buyers are not coming up with a "Down Payment", which would eliminate your first component. Some mortgage products offer 100% financing, but most often, home buyers are putting down a certain percentage of the purchase price. In summary, component 1 is the down payment.

The 2nd component is the "Closing Costs" or the actual cost to get the mortgage. This includes the banks junk fees, such as the; application fee, underwriting fee, tax related service fee, flood certification, and so on. Lender fees are not dependent on the actual loan size, compared to title insurance and mortgage tax. Those two fees are state specific and based on the loan size. Mortgage tax can differ from county to county. When shopping different lenders this is the area or component to keep your eye when comparing, as well as the rate of course.

The final component is the "Prepaid Items". This is the property taxes, home owners insurance, and interest on the loan for the closing month. In NY, when escrowing your taxes, you must come to closing with at least 1 full year of the property taxes. Some of that will reimburse the seller, and the rest will go towards setting up your escrow account for future tax bills. Home owners insurance must always be paid in full before closing whether you escrow or not.

Well hopefully that clears up some confusion about "Closing Costs". Stayed tuned for "Closing Costs Take 2" when I go into detail about the cost to get a mortgage, and what an average amount you should pay per fee.

Rochester Public Market

"Location, Location, Location," is what it is all about when you are thinking about investing in real estate. Investors and want-to-be investors are often asking me what's the current "hot spot" for investing. Usually, once it is a "hot spot" property values have started going up and there are no real bargains to be found.

So how do you find a hot spot before it's a hot spot? Generally, you need to pay close attention to the news so you know where new projects are planned. Then you need a ton of guts and a lot of luck as you scope out what is on the market.

In recent weeks, there have been numerous articles about the Rochester Public Market area and the newly opened Station 55. I went exploring this morning to try to figure out if this might become the next Rochester Hot Spot.

First stop was the Public Market, all decked out for the holidays, llama included. It was cold, but a lot of fun, with great food and plenty of hand-made holiday decorations.

Then we stopped at Station 55, and was glad we did. It's located on Railroad Ave, just down the street from the public market. Downstairs, the old warehouse has been tastefully converted into an indoor market and they had a holiday sale going on. Future plans are for the market to be open Thursday through Sunday mornings. Upstairs are loft apartments. I didn't get to tour the apartments but I saw some photos and they look very nice. I'm rooting for this endeavor to become a huge success.

Then, we drove the neighborhood, up and down the streets that surround the Public Market. It's a very, very poor neighborhood. I lost count of the houses in poor repair as well as deserted and boarded up structures. Back home at the computer, I found nearly 30 houses for sale in this area, many in the $30,000 to $50,000 range, some of which were two family units with decent rent coming in.

So, is this the next South Wedge? I'd say it is worth watching this area. If you want a list of what is currently on the market in this area, send an e-mail to MShelsby@rochester.rr.com.

Mary Shelsby

ReMax First

Three Things to Keep in Mind About Foreclosures

Lots of people are talking about foreclosures these days. There are those with variable interest rates on their mortgage that are worried about loosing their home to foreclosure and there are those who hope to buy foreclosures at a bargain price. I have a few pointers for those considering buying bank-owned and government owned foreclosed property.



First off, budget for extra closing costs. In the Rochester area, it is normal for the seller to pay for a survey, updating the abstract and transfer tax. With foreclosures, most banks and government agencies will NOT pay these expenses and so they must be paid for by the BUYER. Transfer taxes on a $100,000 home run $400 and survey and abstract could cost in excess of $1000. You will also want to be sure there are no back taxes due on the property.



Foreclosures are almost always sold in "as is" condition and not all foreclosures are a good deal. Often, when a homeowner is struggling to keep up with mortgage payments they will neglect important maintenance schedules. When buying foreclosures, it helps to have a working knowledge of what are minor repairs and what costs a fortune to fix. When doing an engineer inspection of a foreclosure, if the utilities are off, the buyer must turn them on in his name and then turn them off and re-winterize the property after an inspection.

Finally, the best place to search for foreclosures is in the normal websites that feature all the mls listings. (http://www.rochestersbesthomes.com/ is my favorite!) Services that charge to send you foreclosures are making money on information that is out there for you for free. You can recognize most foreclosures by the language in the listing. Some of the common phrases in foreclosure listings are: "Buyer to verify all information including zoning and C of O ordinance", "Proof of Funds with offer", "To be sold in 'as is' condition", "Seller Will Not Provide Abstract, Survey or Searches" and "Taxes Estimated." If you suspect that a listing is a foreclosure, have your realtor check so that you can budget for the extra closing costs.

For additional information about buying foreclosures, give me a call at 585-414-5513.

Mary Shelsby, Re/Max First

Never Do This if Your House is on the Market!

A couple of weeks ago I was in the middle of showing a house when the phone rang. I continued to show the house, pointing out the deep closets and hardwoods in good condition, when the answering machine turned on.

"This is Joe. Leave a message," we all heard.

"This is a collect call from an inmate at the Monroe County Jail. Do you accept the charges?" was the message that was left!

We all looked at each other and quickly left. Negotiating with a seller who is buddies with local inmates didn't appeal to my clients.

The moral of the story is if your house is on the market, either turn off the anwering machine or hit the mute button!

Hey Future Home Buyers, Easy on the Holiday Shopping!

I can't count the number of times I pre-approved people before the Holidays, only to see their credit scores have dropped by the time they find a home during the Spring market. The culprit you ask, why its excessive Holiday spending of course. Lets face it, we as red blooded Americans spend to much money, a lot of which is credit debt. This just in, revolving trade lines (i.e. credit cards) that have a balance of more than 50% of the limit WILL LOWER our credit scores. Credit cards that are maxed out with consistent minimum payments is a sure fire way to have the old credit scores in the low 600s. I won't bother to insult your intelligence by telling you the impact of late payments on our precious ficos.

I know what your thinking, "but Steve, I'm doing a conventional loan with 10% down and the rate is the same whether my credit score is a 600 or an 800." Well not any longer! New guidelines from Fannie Mae and Freddie Mac for most conventional mortgage products state that rates will be based on credit scores. If your credit score is under a 680, your rate will be higher. If your credit is below 680 and you desire to have a rate dictated by a 680+ score, it will require an additional fee in the way of "Discount Points". That fee will represent exactly where your score is.

I want wish everyone a "Happy and Safe Holiday Season"!

Buying Based on Property Taxes

"The biggest disparity between New York and the rest of the country is the property tax."

That's what the front page of today's Democrat and Chronicle reported! No sh#%t!!! I talk to people all the time that are considering relocating to New York and once they get a peak at the property taxes, well, I need to bring out the smelling salts!

Case in point, last week I got a call from Costa Rico from a gentleman considering waterfront property in the Finger Lakes. He picked out two properties, similarly priced, located about a mile apart. One has annual property taxes of approximately $8799 and the other tax bill runs about $11,500. Interestingly, the house with the lower taxes has an asking price of $11,000 more than the other and from the questions that this buyer was asking, I got the feeling that he was leaning towards the more expensive house with lower taxes.

The house with the lower taxes was assessed for approximately $90,000 less than it's competitor. The reason, it has approximately 1800 sq feet of living space compared to 2500 in the other house. Both houses have similar lots and were close in age. So, while no one likes paying higher taxes, the larger house with the lower list price is probably the better deal.