1. How are you doing? Buying a house is a pretty spooky adventure whether it's your first, second, or etc. purchase. There is a Proverb that reads "My People Perish For A Lack Of Knowledge" and so it is with us when we don't make good decisions. I have put together a few ideas to make your journey a positive adventure and fun. I tend to acknowledge God when making my decisions and with a little common sense it all seems to work out. Let's start at the beginning, shall we?

Good information is available though all the standard resources like the library, book stores, newspapers, (I like the Sunday Examiner) real estate magazines, lenders, driving to different neighborhoods, surfing the Internet, and real estate professionals. By the way, I have a lot of cool Internet addresses for you surfers. But how do you make sense out of all this stuff? Well, for starters read this report to the end, but first let's discuss a little philosophy.

When I came into the real estate business 23 years ago my broker told me how to make good decisions. He said, "Larry, When you have a decision to make and you don't know what to do use your gut feeling. If your stomach is knotted up, it's not a good choice. However, if your gut feeling is relaxed, move forward." This advice has helped me and it will help you too. Don't move forward unless you feel good about the choices you are making.

You say, I am still scared. Let's do some mountain climbing for a minute. Making good decisions is like mountain climbing. You can't doubt your next move. As you move up the face of the mountain of decisions, don't assume anything. Ask Questions! Asking questions is like the climber who checks with his hand the piton he just hammered into a crack in the rock face. When he really feels the piton is secure he then puts his carabiner (metal loop) on the end of the piton. He then passes his rope through the loop and puts his full weight on the rope. Here is a tip. Don't look down! Trust in the good information you received and move forward.

Decisions sometimes come in the form of Good, Better, and Best. All can be acceptable. I say go for the best. Did you ever hear of a tree that grew half as much as it could? Trees grow as tall as they can. Example: Financing. Many lenders believe the best loan is a fixed rate. Why? Because they raise the standard for qualifying, ask a million questions and document everything (you would feel they want blood type). May be a better decision would be an adjustable loan indexed to the 11 District Cost Of Funds because the interest rate doesn't move radically up or down. A good loan is any you can get without giving your soul. The best loan for you is based only on two words "It depends".

2. You may know what type of neighborhood and schools you would like. But at the end of the day it usually comes down to affordability. The best way to locate the finest neighborhood you can afford is to get pre-qualified with a lender or mortgage broker of your choice. Consider getting pre-approved. This will give you negotiating strength when making an offer. Get out a map and with an experienced Realtor you can quickly locate the communities where that price range can be found. The best hassle free way to equate price with location is surfing the Internet and working with a good agent.

3. Doesn't it bug you when you get hassled while trying to get information from calling a real estate office? Agents know when you call on a real estate magazine ad, newspaper ad, or sign, their job is only to get your name, address, phone number and to make an appointment. Their job is not to give you information. They think you will hang up after you get what you want. This leads to considering the benefits of using a Realtor you can call on all material and get you hassle free information. A salesperson can be pushy because they feel they won't get a second chance.

4. It is hard to believe all the claims you hear real estate agents make. Everyone seems to be #1 at something and is the greatest. Just the lack of humility that most agents show in their boasting is enough to make you throw up. The best agent for you is an agent you can trust and feel comfortable with. Skill level is important but only after you are at peace with the character of the Realtor you choose. I believe after good character, is skill and then experience. Test the character and skill of an agent by asking for a resume and letters of testimony. Also, ask for a list of their last half dozen clients they closed sales with. Feel free to call these folks. Look for client referrals on that same list. It is an indicator of happy customers. Next, the agent's attitude should be that of a servant. When it comes to finding the right house, the agent needs to be patient regardless if it takes 3 days, 3 months or 3 years. Committing to one agent is far less risky to you than landing on a random chance relationship with a person you don't know anything about.

5. Real estate prices have gone up approximately 10% in the last six months. What is going on you ask? I have observed that real estate goes in 10 year cycles. 1976-1979 prices went up. 1986-1989 prices went up. Now guess what? We are in 1996-1999 and I think the prices are again going up. So, what's new? The market is rebounding from what prices were in 1979. It looks to me that the higher prices will stay here for a while because rents have also gone up about 10% to 20% during the same last 6 months. Questions: How do you know what to offer on a house for sale? You can learn from making offers on listings and risk losing one or two transactions because someone out bid you. Try looking for the pulse in the market place. I do this by reading the number of homes for sale versus the number of homes sold. If houses are selling faster than they are being listed prices are going up. This works well also for reading when prices are stable or moving down. It may take a few months to pick up a trend but now you are ready to make your offer. Question: What do I do when everyone is out-bidding each other? Try to anticipate what the seller wants and what the other offers might be. Read the inventory and put your offer in now. You may have only one chance to get your dream house. Sometimes you are the only offer on a listing, in that case, make your offer based upon the past comparable sales but still read the supply and demand of inventory. Do not get hung up on past comparable sales in a price accelerating market. I know of offers that have been accepted by the sellers that were far above the asking price. Many times, comparable sales do not reflect the present value.

6. Today you hear all kinds of noise about no loan fees (no points) and no closing costs. You can expect to pay approximately 1 point (1 percent of the loan borrowed), plus $450. The average total closing cost on a transaction is 3.2 times the sales price. The lender is often passing the so called "no points or closing costs" on to you in the form of either lousy terms and/or/ higher interest rate. Sellers will often pay your closing costs but it usually reflects in a higher sales price to you. Believe it or not all of the above can help the right buyer get in with a lot less cash, but usually with higher payments in the long run.

7. The seller should be looking at a relationship of price, terms, condition, and location of their home in order to price their property correctly. Prices of present sales help predetermine their asking price. Buyers are pushing prices by out-bidding the asking price. Sellers are getting the hang of this now and will start anticipating increases in value each month. The pent-up demand of the last 7 years is pushing the present market.

8. The paperwork is perhaps the most intimidating and scary part of buying a home. The truth is that contracts are designed to keep people from backing out without just cause. Most folks don't have a clue what they're signing. Most agents have trouble explaining it. Most attorneys are waiting for someone to get pushed out of shape when things don't go right. Your agent needs to have a good grasp of contracts to lead you into the best terms and conditions. You can expect to sign an Agency Disclosure Form, Earthquake and Environmental Hazards Disclosure and Receipt of Booklet, Lead Disclosure Form and Receipt of Booklet, Smoke Detector Disclosure, Hot Water Heater Earthquake Compliance, Sellers Affidavit of Non - Foreign Status, Sellers Disclosure Statement and Supplements, Sign and Approve All Inspections, Buyers Instructions, Tons of Loan Documents etc. So, when it is all said and done you will sign anything to get it over with. Just blame your agent if something isn't understood.

9. Trust me, your real estate agent wants you to get any inspection you want or can afford. I do suggest that a termite and roof inspection should be performed on every purchase. I have known of new construction that had foundations below soil grade, wood construction debris under the house and new roofs that where installed incorrectly. Another inspection that is good to get is a contractors or home inspection. This inspection gets you a birds eye view of the over all condition of the house. Sometimes these inspections can help you renegotiate the sales price and terms. I say, get the inspections! If you decide not to buy the house because of all the work that needs to be done, you got your monies worth.

10. Well, do you still want to buy a house? Let's assume you say, ok. Question: What's better to buy a fixer upper or a cream puff? You can figure to pay at least 5% more for the cream puff over the same plain Jane house in the same neighborhood. One advantage of buying a cream puff is that the improvements and repairs are usually bought for less than their actual retail costs. Another benefit is that the improvements you bought are financed in the new first loan. The fixer upper should be bought for at least 5% to 15% below the costs of the same house in a given neighborhood (with an average condition). This is a good way to go if you don't have the time or money to improve a house.

I do feel all the questions and concerns you must still have. However, I hope this consumer report on 10 Topics In Buying A Home With Confidence is helpful to you. Your housing needs are unique and special to your circumstances. Buying a home is fun when you purchase with knowledge. The fear takes a hike when you move into action. Please, feel free to give me a call. I would feel honored to share my expertise in real estate with you. I pray God will give you direction and encouragement. You are appreciated!

Warmly yours,

 Larry D. Blair, GRI

Broker Associate

Century 21 Alliance

(650) 991-5267

"Developing Client Relationships for Life"

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