For many reasons this is a good time for potential home buyers to purchase Virginia Beach real estate, and the large number of foreclosed homes available holds the promise of bargain prices.

Too good to be true? Perhaps. Buyers of foreclosed property, especially if it has been unoccupied and not maintained for some time, must be acutely aware of possible problems and trouble spots involved in such a sale and may have to realistically face some unpleasant facts. As Vince Mastronardi, president of On-Site Specialty Cleaning and Restoration, observes, “Buyers need to educate themselves about the potential pitfalls of purchasing distressed property. It’s not so much what damage occurred, but the sources of that damage and how long before the problem was addressed.”

A cautious buyer should look for signs which indicate that all is not well with a piece of Virginia Beach real estate.

1. The presence of mold. Once mold takes hold, it is almost impossible to get rid of. Look for places which have been excessively painted in an attempt to cover up mold.

2. Lack of heat for months in a home not properly winterized. Result? Burst pipes and water damage.

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Because it is both a resort town and a military community, investing in Virginia Beach real estate can be quite profitable and safe. Such a transaction can also be challenging, especially for first-time investors, and requires prior planning, a time commitment, realistic goals, and careful consideration of the following factors.

1. Selecting a property. First decide on a location and the type of property you are interested in. Bordering on both the Atlantic Ocean and the Chesapeake Bay and being the home to large military bases, a thriving Towne Center, and numerous medical facilities, Virginia Beach real estate offers a wide variety of desirable locations sought after by renters. You might also consider proximity to good schools, public services, shopping centers, highways, etc.

Another decision will deal with the type of property you want to own–a single family residence, a multi-family unit, or a vacation rental home. Discuss with you realtor and tax advisor the pros and cons of each to decide which will be most advantageous for you.

2. Examining your finances. In addition to a monthly mortgage payment, investment property expenses can also include taxes, property management fees, utilities, insurance for fire and floods, repair and maintenance costs, condo fees, and periods of vacancy. Be prepared to have cash on hand for a 20% to 30% down payment (or investigate other options).

Also keep in mind that long term (5 to 10 years) ownership is usually best for the average investment. The shorter the length of time you hold the property, the greater the risk.

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April 30^th seems like a long way off, but for prospective Virginia Beach home buyers who are on the fence about making a home purchase, the next few months represent a countdown of sorts as huge tax credits are about to expire. Here are important details for you to know:

Tax Credit for First-Time Home Buyers
First-time home buyers may be eligible for the tax credit. The credit is 10% of the purchase price of the home, with a maximum available credit of $8,000. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

Tax Credit for Current Home Owners
The tax credit program now gives those who already own a residence some additional reasons to move to a new Virginia Beach home. This incentive comes in the form of a tax credit of up to $6,500 for qualified purchasers who have owned and occupied a primary residence for a period of five consecutive years during the last eight years. Single taxpayers and married couples filing a joint return may qualify for the full tax credit amount.

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Although house sales usually slow down in the winter months, this year may be different. Because the Home Buyers Tax Credit deadline has been extended and the qualifying income levels have been expanded, this is an ideal time for both first-time and repeat buyers to purchase a Virginia Beach home.

Basic facts Home Buyers Tax Credit:

• The new deadline is April 30, 2010 (June 30^th with a binding, signed contract)

• First-time buyers are eligible for a tax credit of 10% of the purchase price–up to $8000.00

• Repeat buyers (those who have lived in one residence for 5 consecutive years of the last can receive a credit of up to $6500.00.

• Income levels–$125,000 for individuals; $225,000 for couples.

The credit may be claimed on this year’s tax return (for 2009).

***Remember that a tax credit is a dollar-for-dollar deduction in what a taxpayer owes. If the credit exceeds the amount owed, a refund will be issued.

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A simplified guide for buyers of Virginia Beach real estate.

 To a home loan shopper, there may seem to be an endless–and confusing–array of mortgage types. Of course you want to choose the option that is best suited to your current and future financial situation, but understanding the terminology, types, and monetary ramifications is not always easy. Mortgages generally fall into four categories (fixed rate, adjustable rate, step, and balloon) according to the interest rate and duration of the loan.

Basic terminology;

    Fixed rate–The interest rates do not change during the life of the loan, thus allowing you to know the amount of your payments.

    Adjustable rate (ARM)–the interest rate is tied to certain indexes plus a margin and can fluctuate up or down, thus affecting each payment,

    Step–the interest rate and monthly payment remain the same for a specified period of time. After that the interest will change to the prevailing rate and will remain there for the duration of the loan.

    Balloon–a loan payment that expands after a certain amount of time. Basically it functions similarly to a fixed rate mortgage in the earlier months/years with a delayed steep increase at the end.

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Are you tired of the same old promises you make to yourself every January 1^st but forget by February? Not this year! Here’s a 2010 resolution that’s so beneficial you simply must keep it: buy a Virginia Beach home! Now that the Home Buyer Credit Act has been extended and qualifying income levels have been raised, this is an ideal time to purchase a house. Generally advertised as a tax credit for first-time buyers, the new legislation actually benefits many current homeowners, also.

Basic facts:

• Changes: Originally slated to end in November 2009, the credit deadline has been extended to April 30, 2010. If you have a binding, signed contract and settle on a Virginia Beach home before July 30, 2010, you are also eligible.
• First-time buyers are those who have not owned a home in the last three years. They are eligible for a credit of 10% of the purchase price (not to exceed $800,000), up to $8000. Ownership of a vacation home or rental property not used as a prime residence does not disqualify a buyer as a first-timer.
• Repeat buyers, or those who have owned and lived in a principal residence for at least 5 consecutive years of the last 8, may qualify for a credit of up to $6500.

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As every homeowner knows, property insurance is a necessity. This is especially true in Virginia Beach, where many homes border the Atlantic Ocean, the Chesapeake Bay, or a myriad of lakes, rivers, and marshlands. The cost of adequate insurance may seem daunting initially, but there are certain steps you can take to reduce your costs to a reasonable level.

        1. Shop around for the best value. Check online for quotes from at least three reputable agencies. Be aware that some companies offer a discount of 30% to 40% if you buy online. Other possible discounts can result from insuring both the home and the contents or by insuring your home and your car with the same firm.

        Also know the replacement value of your home, taking into consideration any unique features that will be expensive to replace. Keep in mind probable inflation increases at renewal time. Does your insurer automatically adjust your coverage or do you have to request the change?

        2. Make periodic updates to your Virginia Beach home or property. Ways to reduce insurance costs include the following:

A) replacing the existing heating system to one which is safer and more cost-efficient.
B) keep plumbing in good working order and protect it from freezing
C) replace fuses. Inspectors are looking for circuit breakers and a safe wiring system
D) install fire detectors or even a central alarm system. Be sure to keep a record of all repairs/replacements and inform your insurance company of each one.

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A simplified guide for painless purchasing of your Virginia Beach home

Be patient. You’re getting close to the finish line and will soon be the owner of your first home. Just a few more steps to go…

1. Homeowner’s insurance policy

Adequate homeowner’s insurance is a requirement of all lenders, and it is certainly in your best interests to protect the investment you’ll be making in your Virginia Beach home. To find the policy that is right for you, you should shop around for the best value. Check online for quotes from at least three reputable agencies. Be aware that some companies offer a discount of 30%-40% if you buy online. Other possible discounts can result from insuring both your home and the contents or by insuring your home and your car with the same company. Check to see if you need flood insurance, as many properties in Virginia Beach do. Know the replacement value of your home, taking into consideration any unique features. Think about probable inflation increases at renewal time. Will your insurance agency automatically adjust your coverage, or will you have to request a change?

2. Preparations before closing

As the settlement date approaches, check with your lender and your closing attorney to make certain all necessary documents are in order and are being prepared. You will also want to contact utility services such as gas, electric, water, cable, and telephone to set up service in your name. Be sure to ask your real estate agent about the type of acceptable payment (usually a certified check) and amount to bring to the closing for any unpaid fees. It is also a good idea to gather all paperwork associated with your purchase (estimates, contract, proof of title search and insurance, home appraisal, and inspection reports) to take to the closing in case a question arises.

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A simplified guide for painless purchasing of your Virginia Beach home

Okay, you’ve made your lists of: must have” and “would be nice” features, and you’ve identified desirable neighborhoods with the schools and amenities that meet your needs. Now it’s time to seriously shop for your first-time Virginia Beach home.

Before you even step outside to begin the search, your agent will email to you listings which meet your criteria, and you can “visit” many of them online via a virtual tour. Once you have narrowed down your choices, your agent will arrange for you to look at–in person– your selected properties. A few bits of advice here:

1) Take notes on each home you tour. Too often individual details blur after you’ve seen four (or more) houses in a day.

2) Look past the owner’s furnishings and décor. Concentrate on the features you have identified as important and try to picture yourself actually living in the space.

3) If you have decided that you don’t need a “move-in ready” residence, look at the potential of the property. Would simple cosmetic changes make a considerable difference?

4) Listen to both your head and your heart. Sometimes a property really does “speak” to you, and you know you have found your new home.

Now it’s time to make an offer! Your agent will provide you with comparable prices (comps) of similar homes which have recently sold in the neighborhood to help you decide how much you are willing to offer. He/she will prepare a contract which will include price; amount of down payment and deposit (earnest money); your financing arrangements; inspection rights; conveyance of any appliances, window treatments, furnishings, etc.; the settlement date; and any contingencies you might want to add.

Once your agent presents you offer to the seller, negotiations may begin. The seller may counter your offered price or any other part of the contract, and you may, in turn, counter such requests. You may have to offer more money in price, but you can also ask the seller to cover all or some of your closing costs or to make repairs that ordinarily would not be covered. The best solution, of course, is to reach an agreement that makes both the buyer and the seller happy. A word of caution here: it is easy to get caught up in the excitement of buying your first Virginia Beach home and in the negotiation process itself. Stop often for a reality check. Don’t get so personally involved that you lose sight of what you really want–or can afford! Occasionally you may have to walk away from a potential deal, but keep in mind that there are hundreds more homes from which to choose.

More often than not, however, the deal is finalized, and you will quickly proceed to having a home inspection, a HVAC inspection, and an environmental test (asbestos, mold, radon). Your agent can arrange for these important inspections to ensure that the property meets expected standards. He/she will also deal with the seller to take care of any exposed discrepancies and/or unexpected problems

What‘s next? Preparation for your closing, a walk-through of the property, and then the actual settlement! Watch this space for the final installment of thus series.

Basic Steps for First-time Virginia Beach Home Buyers – PART II

Basic Steps for First-time Virginia Beach Home Buyers – Part 1

A simplified guide for painless purchasing of your Virginia Beach home.

Part I of this three-part series dealt with analyzing your financial situation, getting prior loan approval, and determining your real needs/desires in a first home. All that having been accomplished, you will now want to look for a mortgage and decide which is the most advantageous for you.

As with any major purchase, you will want to shop around for the best deal. Contact several lenders (bank, savings and loan, credit union, private mortgage company, or a state or federal government lender.) Before doing that, however, you need to familiarize yourself mortgage types, terminology, and options. Your real estate agent will be helpful in this mission, as will the internet. Keying in First-time house buyers, mortgage assistance, HUD, or Community Housing Partners, will result in innumerable informative sites, a wealth of information for you to consider, and, most likely, a list of questions for you to ask your realtor and/or potential lender.

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