Wheaton Homes For Sale - New Houses vs. Old: How Do You Know Which is Right for You?

Finding your perfect home is not always as easy process. With the surplus of homes for sale in most cities, buyers may find there are many properties –both new and old - that meet their search criteria. Choosing whether to renovate an old house or buy a new one can be a tricky decision for some.

Should I Completely Renovate an Old House or Buy a New House?

When deciding on which type of house is right for you, it’s important to take into consideration the following factors:

Style – For many, the allure of an older home is its character and uniqueness. Many of the homes being built today are tract houses that lack personality and quality of construction. An older home will have the charm that many buyers are looking for, rather than being a “cookie cutter” model that someone else has. However, they require a lot of TLC that many buyers aren’t cut out for. Knowing whether to choose an old house or buy a new one largely depends on your style preferences. Do you prefer clean lines, open concepts and a modern look, or are you into a more traditional floor plan with closed rooms, built-ins and nooks?

Lifestyle – Think about how you like to spend your free time. Do you enjoy working on projects, building or creating things at home? Or would you rather spend the evenings and weekends outside of the house, traveling, hiking or shopping? If you answered the latter, an old house may not make sense for you in the long-term as they typically require more maintenance and care.

Resources – Aside from the funds needed to purchase the home, do you have the budget and resources to update and maintain an old house? Even an older home that has been updated can be expensive to maintain due to scarce availability of certain building materials and original fixtures. Many buyers become “house poor” after making their down payment and buying a house. With no savings they have little budget left over for these house updates. If you don’t have the resources to dedicate to updating and maintaining the home, it may be a better choice to buy a new house. Newer houses typically need no initial repairs, no additional budget and are move-in ready.

Patience – Old houses have character, but maintaining that sense of charm doesn’t come easy. Unless they were recently updated, older homes require time and energy to restore. Because they were built in a different time period, older houses may require custom or hard-to-fit materials, appliances and fixtures that many contractors are not skilled in using. These material and construction delays can greatly extend your project deadlines.

Knowledge – Are you knowledgeable about construction and home improvement? Knowing how long restoration and maintenance projects will take and how much they will cost is a major prerequisite for purchasing an older home, especially if you’re planning to completely renovate an old home. If you’re tight on budget and resources, are you able and willing to do some of the work yourself?

An older home can be a quality investment with long-term potential and timeless style. A newer home can be a no-hassle, peaceful retreat that doesn’t require extra money or time to move in. If you do the right planning and homework ahead of time, you’ll be able to find the house that fits your needs, budget and lifestyle and relax, knowing you made the best decision in choosing your new home.

To search for homes for sale in Wheaton or an area near you, visit the Wheaton Homes For Sale and enter your search criteria.

5 Cities Buck Real Estate Trends While Housing Market Still Struggles

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The Debate Over Fannie and Freddie 

Does the answer to falling home prices and rising foreclosures lie in empowering Fannie Mae and Freddie Mac?

That’s what the Federal Reserve thinks. The Fed told Congress this week that part of the remedy for the long ailing housing market could be in allowing the mortgage Goliaths to extend their customer base by providing more cheaper mortgages to a wider population. Cheaper rates mean more people buying homes. Which in turn translates to more sales, less foreclosures and price stabilization.

At a time when lending has been stifled with stricter rules and consumer confidence shot, this does seem like a good suggestion. But its not one that will be embraced and applauded by lawmakers. After all, the two companies don’t have stellar records. Since their rescue by the government in 2008, taxpayers have spent $169 billion to sustain the companies, Reuters said. The Obama Administration, too, supports reducing the government’s role in home financing, the story said. Thus the Fed’s suggestion doesn’t look like it will go very far, experts say.

"It comes at a time that Congress has become quite skeptical of Fannie and Freddie and their role, and seems to be looking for ways to diminish their long-run role in housing finance, not increase it," David Resler, chief economic adviser at Nomura Securities International, told Reuters.

But a weak housing market is a huge barrier against economic recovery, the Fed said. And it made other recommendations that would allow borrowers to get credit, stem the tide of foreclosures and encourage home sales.

Single Family Homes an Attractive Investment

Tightened credit and a dismal economy may have turned many consumers away from their dream homes. But, the one bright spot in the battered housing market is it’s ripe for investors. With home prices plummeting and mortgage rates for consumers with good credit below 4 percent - a 30-year low - single family homes are an attractive investment these days, says a Wall Street Journal story headlined “Where to put your money in 2012.” The one crucial piece of advice the story suggests is whatever you pour your money into, make sure that you keep your investment at a minimum. “That is especially important in a low-return environment,” the story says.

The Five Shining Stars of the Housing Market

While the rest of the country is seething in the gloom and doom of a battered housing market, five cities are high-fiveing and toasting to bucking the industry trend. The common denominator for the winners is a stable local economy, where unemployment is low and job opportunities ripe. These cities have also been able to check foreclosure activity. Here’s a look at five real estate success stories as detailed in TheStreet.com.

• Fort Myers/Cape Coral, Fla: The market here took a heavy beating during the downturn with prices falling more than 60 percent, the story said. But the Fort Myers/Cape Coral area is back with a vengeance. Foreclosure filings are depleting and investors are rising. Median prices skyrocketed more than 20 percent during the first 11 months of 2011, according TheStreet.com. The gain was contributed by investors rushing in to grab the sweet deals.

• Shreveport/Bossier City: Median price in this Louisiana community climbed 7.1 percent. Low unemployment and job opportunities along with affordable prices have helped the numbers, the story said.

• Washington D.C.: In the first 11 months of 2011, median prices of homes were up more than 5 percent in the Washington D.C. market and its surrounding Virginia suburbs. The political nerve center of the country benefits from its large pool of government and government-related jobs, Paul Bishop of the National Association of Realtors told TheStreet.com.

• Fort Wayne: Median prices of homes in this Indiana town climbed 5 percent. Affordable homes and job growth has helped the numbers, according to Bishop. Fort Wayne has also seen a drop in foreclosures and found a place in Realtor.com’s “Top 10 Turnaround Cities” list for the third quarter.

• San Antonio: Home prices rose a little over 4 percent in this Texas city. Job growth, population growth and diminished foreclosures contributed to the rise in median home prices.

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Foreclosures and Second Properties

What does it Mean to Buy and Bail?

Buying and bailing refers to the act of buying a second property and allowing a first home to fall into foreclosure. Homeowners who purchase second properties in this scenario are typically upside down on their primary residence, meaning they owe more on their first home than it is worth in the current market. It's likely that they had an adjustable rate mortgage and their monthly mortgage payment grew to a payment they could no longer afford. For some, an easy solution appears to be buying a second property at a depressed price with a fixed rate mortgage in order to lower their monthly mortgage payments. At the same time, they let their first home fall into foreclosure hence the term buying and bailing.



You may wonder why a lender would loan someone money for a second property when they are already having difficulty making the mortgage payments on their first home. Typically, the buying and bailing homeowners will state in their loan applications that they intend to rent out the first property, but it should be noted that lying on a loan application constitutes fraud. Fanny Mae and Freddy Mac have instituted rules to curb the practice, but it continues. In addition to fraud, homeowners could get themselves into deep water when dealing with foreclosure and second properties.

Things to Consider About Foreclosure and Second Properties

There are two different scenarios that can occur with foreclosures and second properties. The first is the buy and bail situation explained above where the homeowner buys a second property and allows the home that has been his primary residence to go into foreclosure. The second is where a homeowner has a second property, perhaps a vacation home, and allows that second property to go into foreclosure.
When a home goes into foreclosure it will be auctioned off, usually for a much lower amount than what is actually owed on the property. The difference between the amount owed and the amount received at auction is called a deficiency balance.

How the settlement of the deficiency balance will be handled varies greatly depending on where you live and your state's laws regarding foreclosure and the enforcement of deficiency balances. In about two-thirds of U.S. states, deficiency balances are treated like all other unsecured debts, and lenders may pursue a borrower after foreclosure by seeking a deficiency judgment. This allows a lien on the second property for the amount still owed on a previous mortgage. In states such as California and Arizona there are restrictions on lenders, and they may not have that option if the original home was a primary residence.

If you have a vacation home that goes into foreclosure, and end up owing a deficiency balance after foreclosure on that second property, the lender may file a lawsuit against you to collect the debt. This could result in garnishment of your wages, levies on your bank accounts, and/or liens placed on your property, including your primary residence, depending on your state's laws relating to the enforcement of judgments.
After foreclosure, the lender, otherwise known as the judgment creditor, may be able to force the sale of your primary residence to obtain the money needed to pay off its judgment depending on the state in which you live. Judgment creditors are more likely to pursue a forced sale of your property if you have a lot of equity in your home. Therefore, if you have a substantial amount of equity in your primary residence, you may want to think long and hard before allowing a foreclosure on your second property. A consultation with an attorney specializing in real estate law is advisable before deciding to let a foreclosure on a second property to occur.

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Provided by Katie Oakes with Keller Williams Premiere Properties