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Open houses can be a wonderful way to find your next house. They can be just as helpful in gathering intelligence about a neighborhood, getting a feel for its housing stock or simply scoping out real-estate agents that you might like to work with.

But what should you ask when you pay a visit? In this month’s Buying Advice, we consulted agents and other real-estate experts for their insights on how to navigate open houses.

We’ll also update you on the latest housing and mortgage stats, and see how most people are feeling about the housing market’s prospects. And real-estate author and blogger Ilyce Glink will answer one reader’s question about whether he can legally have two primary residences.

Open-house questions
If you play your cards right, an open house can tell you a lot more about a property than its floor plan or the condition of its floors. The key is asking the right questions, agents say. (Or if you’re looking with your agent, making sure they do it for you.)

Here are some questions to ask the listing agent and how these questions might help you in your purchase of the home:

Have you had any offers on the property? That lets you know if you have competition for the property, says Kim Drusch, an agent with Century 21 Award in San Diego. You’d also want to know if the sellers had rejected any offers and why, agents say. It could help you better craft an offer that will meet with their approval.

Has this house been in escrow? If it has, and didn’t sell, you’d want to know why. Was it an appraisal issue? Did a home inspection turn up some major damage? If it has been in escrow, ask if any inspections were done on the house. If there were, ask for copies of these reports, so you know what you’re dealing with, and what kind of secondary inspections you might need should you decide to make an offer.

How long has the property been on the market? If it’s getting a little stale, it might be ripe for a lower offer, experts say. Likewise, find out if there’s been a price reduction and when it happened.

Why are the owners selling? The agent showing the house is likely to remain mum on this one. But, then again, she might also let it slip if they are moving soon, are under financial pressure or are building another house and might need more time in the house if she’s a little desperate to move the property. Any information you can glean can help you decide how much to offer, when to close, etc.

Are there any liens on this property? You don’t want any surprises, so make sure there aren’t any construction liens, tax liens or other claims on the property resulting from unpaid debt, such as unpaid homeowners association dues.

Is the home going to meet a lender’s appraisal expectations? Do you have comparable sales in the last 90 days? These days, with prices on the decline, and more and more properties getting taken back by banks, appraisal at the listing price isn’t always a sure thing. Take a look at the recent comps and have your agent check pending sales to make sure you won’t get stuck once you’ve starting spending money on inspections and other aspects of the process.

Are there any other costs of ownership? Here again Drusch says you want to make sure there’s nothing to surprise you after closing.  If it’s in a condominium complex or other planned community, ask about association dues and additional taxes or assessments, especially if it’s a newer community. And if there is a homeowners association, get its phone number and call it to make sure there aren’t any rules that conflict with your lifestyle, pets, etc. You don’t want to find out, after the fact, that your husband can’t park his work truck in the driveway of your new home, Drusch says.

Have your agent follow up with the listing agent via fax or email to get it all on paper.

“Make sure everything is in writing,” Drusch says. And, as always, make sure you have your own home inspection done, even if you have been assured there are no problems with termites, plumbing, etc.

Home-sales update
Existing-home sales dipped 0.8% in April from the previous month and 12.9% from the previous year, when the homebuyer tax credit was in effect, according to data from the National Association of Realtors. The national median home price declined 5% from last April to $163,700.

Lawrence Yun, the NAR’s chief economist, says tight credit and low appraisals are putting the brakes on many home purchases.

“Although sales are clearly up from the cyclical lows of last summer, home sales are being held back 25% to 20% due to the very restrictive loan-underwriting standards,” Yun said.

Moreover, distressed homes, which trade at double-digit discounts to traditional listings,  are still weighing heavily on the market. Distressed homes made up 37% of sales in April, down from 40% in March, but well above the 33% posted at the same time last year.

Investors are the most excited about the still-floundering market. All-cash deals accounted for 31% of transactions in April, down from a record 35% in March.

Mortgage rates drop
The one bright spot for buyers is that mortgage rates continue to drop, increasing affordability. Fixed-rate mortgages declined for the fifth straight week, as of May 19, Freddie Mac said in its Primary Mortgage Market Survey, with a 30-year fixed averaging 4.61% and the 15-year averaging 3.8%.

Economists versus consumers: The outlook
Just don’t look for that investment to appreciate in value immediately. Economists don’t predict a return to home-price gains until early to mid 2012.

Fannie Mae, for one, expects the median home price to decline 6% in the second quarter of this year from the same time in 2010, with those losses slowly tapering off this year, until the market hits bottom in the first quarter of 2012.

Analysts at J.P. Morgan expect an additional 6% decline in prices from where the market stands today.

But perhaps most bearish are consumers themselves.

In a joint housing survey conducted by Trulia and RealtyTrac, released in mid-May, 54% of those polled said they don’t expect the housing market to recover until 2014 or beyond. Twenty-four percent expect a recovery in 2013.

It’s clear, says Fannie’s chief economist Doug Duncan, that despite low prices, low interest rates and improving job numbers, consumer attitudes have yet to rebound in a way that will really push the needle up on home sales.

“In spite of the positives surrounding the housing market, we see that consumers are still hesitant to take on a large financial obligation,” Duncan says.

Still, he says he expects home sales to rise some this year, as the economy gets on surer footing.

And for many, it might begin to make more sense to buy. According to Trulia’s most recent data, it is now more affordable to buy a home than rent a similar home in 78% of major U.S. cities.

You can read actual question from other readers at:  http://realestate.msn.com/june-buying-advice-what-questions-should-you-ask-at-the-open-house?page=2

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You’ve been out looking at homes with your real-estate agent all day. As you walk through the door of the last house on your list, your mouth falls open.

Finally, you’ve found “The One,” the perfect house. Stars shimmer in your eyes. You love the layout, the paint colors and the little powder room by the back door.

You make an offer and move in within the month. It’s not until things settle down that you discover that the roof leaks and that the foundation must be replaced — immediately. Suddenly, the stars dim as you face the prospect of several expensive repairs and unexpected home-improvement costs. Not fun at all. 

Homebuyers, especially first-timers, often are caught looking at the wrong things when they buy a house. They fall in love with all the things that are easy to fix and never think to look at the important clues that the house might be more trouble than it’s worth.

What should you do to make sure you’re not buying a lemon? Here are seven tips.

1. Check the foundation
A house’s foundation is probably one of the most expensive things to fix, which is why you must go down to the basement before you even look at the rest of the house. Do you see any cracks in the concrete or stone? If so, the foundation might be structurally unsound. If the basement is finished, look for cracks in the drywall, especially around windows and doors.

2. Inspect the HVAC equipment
While you’re down in the basement, look at the heating and cooling equipment. How old is it? Does it look like it’s running properly? Are the vents connected well? These are important questions to answer to make your home energy-efficient and to reduce your utility bills. Replacing a home’s HVAC system can cost tens of thousands of dollars, but many first-time buyers never give it a second look.

First, one-time occurrences, such as a basement leak, can happen again. Second, that water damage could have opened the door for mold, especially dangerous black mold, to grow.

Look for brown or white stains down the side of the basement walls. These can indicate a past leak. If the floor is bare, look for horizontal stains.

Be suspicious if the basement has been painted recently. Sellers often do this to hide water-damage stains. It’s also important to check the bathroom and under the kitchen sink. Look for stains that would indicate mold growth.

4. Check the electrical system
If you are looking at a home built before the 1930s, it still might have old knob-and-tube wiring. It can be a problem, if has been tampered with in any way. For example, if the attic has blown insulation sitting on top of the knob-and-tube wiring, this is tampering — and it’s a serious fire-safety hazard. Most insurance companies consider knob-and-tube wiring to be unsafe, so you’re going to pay more or be turned down for homeowners insurance if you don’t replace it. Replacing it means rewiring the entire house, which will cost tens of thousands of dollars.

5. Look at the house at least twice
Remember, when you first see that “perfect house,” you’re looking through rose-colored glasses. Always sit on the decision to make an offer and go see the house again a few days later.

6. Get a home inspection
This seems like old advice, but many people still don’t get a home inspection before they make an offer. If the home inspector says more research is necessary or files an inconclusive report, get a second opinion.

7. Consider that if the price is too good to be true, it probably is
Trust your gut here. If your dream home’s price is suspiciously low, there’s probably a good reason.

Beware. Buying a house is a huge decision and investment, especially if it’s your first home.

Don’t let first impressions and appearances sway you. Make sure you do your research and watch out for some of these pitfalls.

Read At:  http://realestate.msn.com/article.aspx?cp-documentid=27522974

Buy a house today if you can, but don’t sell one if you don’t have to, says George W. Johnson, a 97-year-old real-estate agent who has been working the Seattle market since 1936. Johnson, who is reluctant to call himself America’s oldest real-estate agent — he says he just learned of a 99-year-old broker in Florida — has seen his share of housing booms and busts since he hung his first real-estate shingle 74 years ago. “I’ve been through a lot of these ups and downs,” he says, remembering the property boom that followed World War II, as well as the deep downturn in the 1970s when Seattle’s biggest employer, Boeing, laid off thousands of workers. through it all, Johnson says he has learned many enduring lessons. Chief among them: After every housing recession, the market has “gone higher than the one before.” You have to have the stomach to hang on through all of the twists and turns, he says.

This market a ‘baby’ compared to days past

Johnson wasn’t always a real-estate guy. He was born to a farming family in South Dakota on Dec. 22, 1912, and moved to Seattle at the height of the Great Depression to attend college and pursue a teaching career. To make ends meet, Johnson juggled three jobs at one time. He delivered milk for a while. “Whatever you could do to get by with, you did it.”  Then, in 1936, he started dabbling in real estate. Unemployment hovered around 30%, soup lines stretched around blocks, homelessness was rampant. “You could have bought the best house in (the Seattle neighborhood of) Ballard for $3,500.” Times were tough. The current real-estate market, Johnson says, is “a baby” by comparison. “In addition to the Depression, we had the drought at the same period, so it was just compounded. You wouldn’t believe the things that happened during that period.” Johnson, a natty dresser who drives himself to work every day — including Saturdays – managed to carve out a niche as a service-oriented agent. When the economy turned at the end of World War II, he opened up his own shop in Ballard, north of downtown. He and his sons have run George W. Johnson Realtors ever since, weathering the ups and downs in the market with confidence that profits are there for the making.  “I’ve lost a lot of money in a lot of things, but I’ve never lost in real estate,” Johnson says. He remembers selling his first house in the 1930s for about $1,500. “It’s probably worth $300,000 now.”

4 real-estate tips from Johnson
You can’t thrive in the real-estate industry for this long without learning some useful lessons along the way. Here are some of Johnson’s pearls of wisdom:

Beware one-company towns: Cities dependent on a single company or industry are more vulnerable to jarring downturns if the economy goes south. The Rust Belt’s old factory towns have made that abundantly clear. The Seattle market turned particularly grim in the late 1960s and early ’70s when Boeing, the aerospace giant, laid off more than 60,000 people in the Seattle area. “Boeing was about the only major company we had other than (the University of Washington),” he recalls. “Now we’ve got a much broader base to help out … it is altogether a different proposition.” Johnson counsels homebuyers to look beyond real-estate values and investigate an area’s fundamental economy before making a purchase.

Don’t get greedy. Johnson blames “plain old greed” for the latest real-estate downturn — people got caught up in the enthusiasm of the moment and banks egged them on with cheap loans. “Everybody was out to buy a house, raise the price, double it and make a quick buck,” he says, shaking his head. “People signed up for stuff that they knew they shouldn’t have and they couldn’t pay (for) and of course the banks helped them.” Johnson is old-school in that way. At the heart of his real-estate philosophy is his fundamental belief in personal responsibility. “You’ve got to be able to hang onto a house until conditions are such that you can make a little money,” he says, emphasizing that each and every potential homebuyer should make an honest assessment of his or her financial potential and should be wary of offers that seem too good to be true. “People aren’t as dumb as the media is making them out to be. They knew what they were getting into,” he says. But he is compassionate for those who have run into honest trouble. “It’s tough on people who lost their jobs and are now losing their homes and that type of thing. It always is,” he says. Their pain, however, is the buyers’ gain.

Timing is everything. “In this market, any young person that hasn’t bought a house ought to buy one,” Johnson says. “A buyers market doesn’t come along that often … you just can hardly help but make money on whatever you buy today at the prices they are.” Johnson says rates are only going to go up over the long term, so borrowing will cost more.

If you don’t have to sell, hang on. Unfortunately, Johnson expects sellers to continue to suffer, at least for now. Buyers, on the other hand, “know it’s a buyers market – they are going to come in with offers below what we’ve appraised it at just because they know a lot of people have to sell,” he says. Despite the continued housing-market struggles, Johnson is confident that the latest downtrend is largely over. ”We are headed up,” he says, “but like I said, I think it is going to be slow. It will take a year or two at least.” And as the market heads up, Johnson hopes to be there helping his customers buy and sell homes just as he has for most of his life – out of a small, family office dedicated to service with a smile. “We’ve done a good job,” he says of his business. “We’ve been careful and honest and thorough and it’s been good service, and I think that will always produce, no matter what business you’re in.”

Read at: http://realestate.msn.com/article.aspx?cp-documentid=25369084&GT1=35006

The proliferation of services that help homebuyers and sellers complete their own real-estate transactions is relatively recent, and it may have you wondering whether using a real-estate agent is becoming a relic of a bygone era. While doing the work yourself can save you the significant commissions that many real-estate agents command, for many, flying solo may not be the way to go — and could end up being more costly than a commission in the long run. Buying or selling a home is a major financial and emotional undertaking. Find out why you shouldn’t discard the notion of hiring an agent just yet.

1. Better access/more convenience

A real-estate agent’s full-time job is to act as a liaison between buyers and sellers. This means that he or she will have easy access to all other properties listed by other agents and will know what needs to be done to get a deal together. For example, if you are looking to buy a home, a real-estate agent will track down homes that meet your criteria, get in touch with sellers’ agents and make appointments for you to view the homes. If you are buying on your own, you will have to play this telephone tag yourself. This may be especially difficult if you’re shopping for homes that are for sale by owner. Similarly, if you are looking to sell your home yourself, you will have to solicit calls from interested parties, answer questions and make appointments. Keep in mind that potential buyers are likely to move on if you tend to be busy or don’t respond quickly enough. Alternatively, you may find yourself making an appointment and rushing home, only to find that no one shows up.

2. Negotiating is tricky business

Many people don’t like the idea of doing a real-estate deal through an agent and think that direct negotiation between buyers and sellers is more transparent and allows the parties to look after their own interests better. This is probably true — assuming that both the buyer and seller are reasonable people who are able to get along. Unfortunately, this isn’t always an easy relationship. What if you, as a buyer, like a home but despise its wood-paneled walls, shag carpet and lurid orange kitchen? If you are working with an agent, you can express your contempt for the current owner’s decorating skills and rant about how much it’ll cost you to upgrade the home without insulting the owner. For all you know, the owner’s late mother may have lovingly chosen the décor. Your real-estate agent can convey your concerns to the seller’s agent. Acting as a messenger, the agent may be in a better position to negotiate a discount without ruffling the homeowner’s feathers. A real-estate agent can also play the “bad guy” in a transaction, preventing the bad blood between a buyer and seller that can kill a deal. Keep in mind that sellers can reject a potential buyer’s offer for any reason — including just because they hate his or her guts. An agent can help by speaking for you in tough transactions and smoothing things over to keep them from getting too personal. This can put you in a better position to get the house you want. The same is true for the seller, who can benefit from a hard-nosed real-estate agent who will represent his or her interests without turning off potential buyers who want to niggle about the price.

3. Contracts can be hard to handle

If you decide to buy or sell a home, the offer-to-purchase contract is there to protect you and ensure that you are able to back out of the deal if certain conditions aren’t met. For example, if you plan to buy a home with a mortgage but you fail to make financing one of the conditions of the sale — and you aren’t approved for the mortgage — you can lose your deposit on the home and could even be sued by the seller for failing to fulfill your end of the contract. (Keep in mind that the details of any contract may vary based on state law.) An experienced real-estate agent deals with the same contracts and conditions on a regular basis and is familiar with which conditions should be used, when they can be removed safely and how to use the contract to protect you, whether you’re buying or selling your home.

4. Real-estate agents can’t lie

Well, OK, actually they can. But because they are licensed professionals, there are more repercussions if they do than for a private buyer or seller. If you are working with a licensed real-estate agent under an agency agreement, such as a conventional, full-service commission agreement in which the agent agrees to represent you, your agent will be bound by law to a fiduciary relationship. In other words, the agent is bound by law to act in his clients’ best interest, not his own. In addition, most real-estate agents rely on referrals and repeat business to build the kind of client base they’ll need to survive in the business. This means that doing what’s best for their clients should be as important to them as any individual sale. Finally, if you do find that your agent has gotten away with lying to you, you will have more avenues for recourse, such as through your agent’s broker or professional association or possibly even in court if you can prove that your agent has failed to uphold his fiduciary duties. When a buyer and seller work together directly, they can — and should — seek legal counsel, but because each is expected to act in his or her best interest, there isn’t much you can do if you find out later that you’ve been duped about multiple offers or the home’s condition. And having a lawyer on retainer any time you want to talk about potentially buying or selling a house could cost far more than an agent’s commissions by the time the transaction is complete.

5.  Not everyone can save money

Many people eschew using a real-estate agent in order to save money, but keep in mind that it is unlikely that both the buyer and seller will reap the benefits of not having to pay commissions. For example, if you are selling your home on your own, you will price it based on the sale prices of other comparable properties in your area. Many of these properties will be sold with the help of an agent. This means that the seller gets to keep the percentage of the home’s sale price that might otherwise be paid to the real-estate agent. However, buyers who are looking to purchase a home sold by owners may also believe they can save some money on the home by not having an agent involved. They might even expect it and make an offer accordingly. However, unless buyer and seller agree to split the savings, they can’t both save the commission.

The bottom line
While there are certainly people who are qualified to sell their own homes, taking a quick look at the long list of frequently asked questions on most “for sale by owner” websites suggests the process isn’t as simple as many people assume. And when you get into a difficult situation, it can really pay to have a professional on your side.

Read at: http://realestate.msn.com/article.aspx?cp-documentid=25368603

1. Is your house in a high-traffic area? While many are advertised in the newspaper, on the Internet and in fliers, it’s still drive-by and foot traffic that brings most open-house visitors. Amanda Staines, a sales director from Atlanta and a former agent, says she plans to hold an open house every weekend until her newly renovated two-bedroom townhome sells. The reason? “Location, location, location. My house is off a major road, so the signage can really pull” people in, she says.

2. Does it have special features or was it recently renovated? An especially beautiful house can make buyers out of the most casual visitors.

3. What’s your home’s sale price? Many real estate agents say they no longer hold open houses for high-end homes, because they consider them a draw for thieves and gawkers. They prefer to schedule private tours.

4. How much time and money am I willing to invest in an open house? In some markets, much of the competition is using stagers and investing in costly upgrades such as painting and landscaping. If you aren’t wiling to spruce things up, an open house might not be worth it.

5. Is my real estate agent behind the idea? If they don’t think it’s a good idea for your home, or are unenthusiastic about it, it might not do much for you.

Read at: http://realestate.msn.com/article.aspx?cp-documentid=13108453