DIY RENOVATION TIPS

If you’re thinking of buying a fixer-upper for the first time, whether to live in yourself or to flip, doing some of the renovations yourself can be satisfying and economical. You’ve watched plenty of television shows where novices remodeled a house in two or three days, so how hard could it be? But, before you start tearing out walls and ripping up flooring, there are a few important renovation blunders to avoid.

Know your limitations

Despite what you’ve seen on TV, until you have some experience under your tool belt, you won’t know your own strength, endurance and patience for the time, difficulties and potential setbacks you’ll encounter. Often what seem like minor projects can turn into major issues if you run into mold, mildew, old wiring and other costly issues.

The best strategy is to start with one small project to see if you

  • Enjoy doing it.
  • Can complete it in a timely fashion.
  • Don’t run into difficulties or problems you cant solve.

Know who to call

Before tackling a project, take time to contact an experienced friend, family member or helpful neighbor to get their advice. If you don’t have a knowledgeable acquaintance, visit your local DIY or neighborhood hardware store and speak to their department expert. Many times, they offer weekend classes to teach the basics of home improvement projects.

Know if you need a permit

Most people know that they need a permit for a major construction or home addition, but manymunicipalities require permits for smaller changes you may not realize or consider. Some cities require permits for projects as simple as replacing the front door or changing the exterior color. Often, homeowners assume that interior upgrades don’t require permitting, but if you add a kitchenette to your game room or create a mother-in-law apartment, many times you’ll need a permit.

Neglecting getting a permit may derail your home’s sale or add costly changes and repairs later on.

Know which tools you need

Home renovations are not the opportunity to try your “MacGyver” skills. Repurposing tools and household objects seems great … until you’re in the middle of your project with drying mastic trying to hold tiles in place with your knees and toes. Tools are expensive. If you don’t have the right tools, and can’t afford to buy them, see if you can rent them from your DIY, rental or farm store. Some local libraries offer tool rental too, so check out all the options before you need that pipe wrench, specialty saw or clamp.

Purchasing specialty tools for a single renovation project may make it cost prohibitive. In that case … hire an expert.

Know the resale value

According to the Remodeling annual cost vs. value report, less expensive upgrades like entry door, garage door and window replacements perform better on resale over more upscale changes to kitchens or bathrooms.

Renovations need to be appropriate for the neighborhood to add true resale value, according to Bob Vila. So, while you may love a gourmet kitchen, and want it in your own home, don’t plan to recoup the expense when the time comes to sell.

Compliments of Virtual Results.

SPRING MEANS SERVICING YOUR AIR CONDITIONER

In preparation for warmer summer days, spring is the perfect time to have your air conditioner serviced. With regular service, air conditioning units can continue to function in the most efficient and effective way possible. Neglected units are more costly to run and deliver poorer air-cooling quality.

DIY air conditioner maintenance

Several components of your air conditioning unit are easy for you to maintain. According to the US Department of Energy, the most important item is to check your filter. A dirty or clogged air filter reduces normal airflow. When airflow is reduced, the filter no longer outputs cool air at optimum levels. In addition, the blower may force some air around the filter, so the air entering your rooms may have dust particles, pollens and other allergens that a clean HEPA filter would block.

Some air conditioner filters are reusable and can be removed and rinsed out with a hose. Others require replacement, so you may need to check them more than once during the warm season. You especially may need to replace them after times of high pollen or dust, or if your pet sheds. Some filters are located in the air conditioner unit itself, and some are located in the grates or grills. Filters in room air conditioners typically are located behind the grill that faced the room.

Another component that homeowners can easily care for are the coils. As dirt and grime builds up on the coils, they become inefficient at absorbing heat. Clean the evaporator coils, located in the unit, annually.

Check outdoor condenser coils, usually enclosed in a cover with fins, and clean dirt and debris from the fins gently with a broom. Better yet, purchase a fin comb at a local big box retailer or HVAC dealer to clean built-up debris from your air conditioner’s fins. If any of the fins are bent, they can block airflow and reduce your efficiency. The fin comb will straighten bent finds, opening up the airflow. Remove any weed or plant overgrowth from the coil casing. Trim foliage at least 2 feet away so that the condenser has adequate airflow.

If you have a room air conditioner, check the seals that connect to the window to make sure there are no leaks. Use foam window sealing strips to fill in the space so that no warm air enters around the cooled air.

If you have access to your air conditioner’s drain channels, clean them with a stiff wire occasionally to make sure water deposits do not block them and cause excess humidity in your home.

When to call an expert

Always call an expert if your air conditioning unit makes strange noises, does not cool at all, or cycles too frequently. A certified HVAC technician will inspect wiring, mechanical parts like fans and motors, and test and refill the refrigerant lines.

Servicing your air conditioning system now will insure that your home is comfortable once temperatures hit the 80s.

Compliments of Virtual Results

CAN I AFFORD TO BE A LANDLORD?

According to Freddie Mac, the Federal Home Loan Mortgage Corporation (FHLMC), multifamily rent growth should level out to its long-term average performance as interest rates increase. That does not mean that investing in a multifamily property is a bad idea, it just means that the supply and demand conditions are varying by location and adjusting to job growth or stagnation. Since most rental housing demand comes from 25- to 34-year-olds, the FHLMCexpects the need for rental property to grow by up to 1.6 million as the employment picture improves.

You do not have to be a high-level investor to participate in the expected rental housing increase. Younger investors, especially those in the under 40 range, might consider purchasing a property and renting out rooms, or buying a duplex, living in one side and renting out the other. While being a landlord has some hazards and pitfalls, having a constant income stream that helps to pay the mortgage, offers some tax advantages and also provides a place to live might be a great start to your real estate investment future.

We can help you locate potential single-family homes with multiple bedrooms to let to students or others, or multi-family properties that might be an excellent investment for you. Location is important since many renters prefer to live nearer to where they work, shop, worship or attend school, while owners often are more willing to live further away in order to afford their mortgage.

Is a Duplex a Good Investment?

Buying a duplex, for example, might take a little more work than a single-family home, but the process is similar. In fact, FHA (the Federal Housing Administration) will loan up to 96.5% of a duplex’s value as long as the owner intends to occupy one of the units for at least a year. The Federal Housing Administration credits the buyer with as much as 75% of the rental income as part of their qualifying income and will finance as much as $347,000 for a two-unit property in some locations.

The most obvious advantage of owning a duplex is help with the mortgage payment via the rental income. In addition, however, duplexes are more affordable than larger apartment complexes, and often cost the same as a single-family home. If you have an elderly parent or adult child, you can rent to them so that family members have privacy, but share in the cost of the family property.

Disadvantages include close proximity to your tenant. If you have a needy tenant, you might find yourself continuously interrupted by a knock on the door. Your rental income is not a guarantee since there is no certainty that you will find a tenant, and when the unit is vacant, you are still responsible for your entire mortgage.

Landlord Responsibilities

Just as in your own home, you are responsible for all of the repairs, upgrades to appliances, maintenance and general upkeep of either a single-family rental unit or a duplex or multi-family unit. Since most states and counties—and some cities—have specific rules about cleaning, repainting and other costs between tenants, make sure you know the rules and regulations for your location.

So, whether you are looking for a single-family home to rent or a duplex to live in while you rent the second unit, we can help you with the information you need to find the best property for your needs.

REAL ESTATE TERMINOLOGY: RATIOS, THE THIRD IN A SERIES

In the vocabulary of real estate, various ratios help buyers and mortgage services determine the viability of a purchase. A ratio is a way of expressing the relationship between two values or amounts. Usually, ratios compare how much of one thing there is to another such as a 20 to one student-to-teacher ratio. Expressed as 20:1 or 20/1, it means that on average, there are 20 students for every one teacher. In real estate, there are many sets of ratios used to determine the value of a purchase or sale. Different ratios apply to homebuyers, investment property buyers, sellers, and mortgage lenders. Since ratios are guidelines that can make or break a deal, knowing how ratios affect you and how you can control them will make your real estate transactions smoother. Three that apply to homebuyers are the debt-to-income ratio, the loan-to-value ratio and the price-to-income ratio.

Debt-to-Income Ratio (DTI)

The most important ratio to homebuyers is the debt-to-income ratio. Also called the debt-service ratio, it expresses the relationship between how much money a borrower makes monthly and his monthly long-term debt obligations. Lenders use these figures to determine the maximum amount of monthly mortgage payment you can handle.

The first number, known as the front or top ratio, is the percentage of your monthly before tax (gross) income, and any other regular payments (child support, rental income, trust disbursement, etc.) used to pay your housing expenses, including mortgage principle, mortgage interest, property taxes, mortgage insurance and association dues.

The second number, the back, or bottom ratio, uses the same income and housing expenses as the front ratio, but also adds in any long-term obligations such as school loans, vehicle loans, and other consumer debt (like that couch you bought on a three-year note). It is the percentage of your income used to pay housing and long-term debt expenses.

A commonly used ratio is 33:38 (or 33/38), which means that you spend 33 percent of your income for housing, and no more than five percent more is obligated to consumer debt service. That leaves 62 percent of your income to live on (food, auto, health and life insurance, utilities, clothing and other expenses).

If you make $6000 per month from all sources, for example, you have $1980 (33%) available to spend on housing, and another $300 (5%) available for long-term obligations. As you can see, if your housing costs go down (lower mortgage payment) you can have more available for long-term debt. FHA guidelines are 31:41, and VA guidelines do not have a front-end ratio, but do have a back end of 41. While ratios are simply guidelines, it is important to know where you stand before seeking a mortgage. Since the debt-to-income ratio is entirely in your control, if you are thinking of buying a home in the future, let us help you figure out where you are and put in place some strategies to get you where you need to be to qualify for a loan.

Loan-to-Value Ratio (LTV)

The loan-to-value ratio is a comparison between the mortgage amount and either the appraised value (for refinance) or purchase price (for new purchase) of your home. Lenders factor your loan-to-value ratio into their underwriting considerations. A lower LTV typically allows the borrower to get lower interest rates while a higher LTV is riskier for the lender, so the borrower might pay higher interest rates. A high LTV also often requires private mortgage insurance (PMI) to protect the lender.

To figure your home’s LTV, divide the mortgage amount by the purchase price or appraised value. A conforming loan typically requires an 80% loan to value, so if your purchase price is $200,000 then an 80% loan would be $160,000 and you would need a down payment of $40,000. If the LTV ratio is very high, where the loan amount is higher than the appraised value, the home is “upside-down” (worth less than the mortgage amount).

Price-to-Income Ratio or Price

While the DTI is based on your personal income, and the LTV is based on a specific home’s value, a price-to-income ratio is based on the affordability of housing for a given geographical area. Typically, it is the ratio of median home pricing to the median household disposable income. This numbers lets you determine if a home is over- or under-priced for an area, or if it is a potentially good investment if you plan to sell your home after a short time. It also gives lenders one more factor in determining risk for the size of loan they might offer.

We can help you determine if an area is right for your budget, if your debt-to-income ratio is on target, and if the price-to-income ratio for the community you’re looking at has affordable pricing for the families living there. Call us and we’ll help set you on the right path to home ownership.

SMART SELLING TO TODAY’S HOMEBUYERS

If you’re considering selling now that the housing market outlook is improving, take a few moments to consider how buyers have changed what they look for in the home buying process. During the past six years, changes in how buyers communicate, share information, research, and decide what they’re looking for, mean that you need to provide them with the information and buying experience they seek. We can guide you in each of these areas because we know the strategies that are working best in your home’s neighborhood.

Today’s younger homebuyers have survived the housing turbulence just as you have. They have watched prices go up and down and up again, foreclosures rise, interest rates drop, rules and requirements from mortgage lenders change, and the availability of information increase. According to USA Today, they are beginning to buy, but they are both smart and cautious. Most of all, they are used to waiting. Research supports the idea that Gen X and Y homebuyers begin investigating as much as a year and a half ahead of when they’re ready to buy. That indicates you won’t find a sense of desperation: instead, you’ll find that they will research, compare and make careful offers. Since we are professionals with inside information on the local market, we can help you navigate the new terrain.

Set the Right Price

A wrong price can derail a home sale, adding days to its time on the market and making it less desirable to savvy buyers. The mistake many sellers make is setting the price too high. Of course, you want to get the most from your home that you can, but if you choose too high a price at first, a potential buyers’ online search criteria might exclude it. Assuming buyers will make a lower offer from which you can negotiate does not take into account the vast amount of data now available to buyers. These days, homebuyers can see what the home originally sold for, what price all the houses in the area most recently sold at, if the home was ever a rental, and a vast amount of information about both the property and the neighborhood.

Conversely, lowballing the price in hopes of a quick sale make turn off many prospective buyers. Their inherent skepticism will make them suspect potential problems that they have neither the time nor inclination to deal with. Since we deal with pricing information all day long, rely on us to help you set the right price to get your home sold.

Pay Attention to Images

Online shoppers make quick decisions based on the images they see. If the photos of your home are blurry, busy, cluttered, or dark, they may pass over them in search of home postings with better, brighter photos. Worse yet is a listing with no photos at all. Gen X and Gen Y homebuyers are skeptical of listings without images. We can guide you in how to prepare your home for a photo shoot. Remember, for many modern buyers, the online images are their version of an open house, so take time to put away personal objects, clean windows to make the inside brighter, and pay attention to curb appeal. When online images don’t satisfy homebuyers, you won’t get them to look further.

Staging Your Home

The information age and reality TV have changed younger buyer’s perceptions of how a home should look. Be sure your home looks it’s best before you put it on the market. According to Money Smarts, savvy online shoppers may use older images via Google Street View or Bing 3D to check out curb appeal, nearby homes or businesses, and to see if the home shows improvements. Check out the street view yourself by searching on your address in Google or Bing and choosing the various views. If the street view is out of date—such as old fencing or exteriors, overgrown landscaping, or empty lots, make sure your description addresses the improvements and changes.

Put yourself behind the buyer’s computer screen. That is, make sure you know that the buyer is seeing before you put your property on the market. Remember that younger buyers’ caution means they arm themselves with information before they make an offer. We can help you address any issues relating to how your home shows up in searches, images, and other online locations, so give us a call and we can get started.

REAL ESTATE TERMINOLOGY: APPRAISAL VS. ASSESSMENT VS. MARKET VALUE, THE SECOND IN A SERIES

In the vocabulary of real estate, there are three terms that indicate a home’s valuation: the Appraised Value, the Assessed Value and the Market Value. Rarely are these three values the same amount, so it is easy to confuse them when considering buying a home, obtaining a mortgage and contemplating ongoing costs of ownership. We’ll tackle them one at a time and then show you how they relate to each other.

Appraised Value

An appraisal is a valuation report completed by a licensed professional appraiser to determine property value at a given point usually for the purpose of obtaining a mortgage. It is an underwriting tool used by banks and other lenders to determine if the property is appropriate collateral for the loan they would be extending to a buyer for an original mortgage, or homeowner for the purpose of refinancing or obtaining a line of credit.

The appraiser uses recently sold comparable properties in the evaluation, accounting for differences in specific amenities such as square footage, the age of the roof, exterior and interior materials, the type and age of heating and cooling equipment, and a variety other factors to set a basis for the appraisal. The appraiser combines these numbers with other valuation methods such as the cost to rebuild the property (similar to the cost basis for homeowner insurance), or in the case of investment properties, the potential for income from rents or leases.

These numbers are not fixed. That is, there is no single list of values from which the appraiser draws. The appraisal relies on the appraiser’s own experience, understanding and knowledge of the area and property type. For the buyer, the appraisal that the mortgage lender uses is important because it determines how much money the lender is willing to extend to the borrower for the property. For an existing homeowner, an appraisal gives an indication of what a home will sell for, or the amount of a line or credit or second mortgage a bank will extend. During a home sale or refinance, the appraiser typically is the choice of the lender but paid for by the borrower. Having a proper appraisal is important to both the buyer and the seller since it determines the loan-to-value (LTV) ratio.

Assessed Value

An assessed value most often is performed by the taxing agency of a municipality—tax assessor—for the purpose of determining the tax basis of the property. The “assessment” is a percentage of the assessed value that the homeowner pays to the municipality as tax for capital improvements to roads, water and fire services, schools, and other essential services. Typically, the percentage amount of an assessment is the result of a vote on a levy.

Different from an appraisal where amounts are based on comparables, an assessment determines values for an entire neighborhood, city, or county during the evaluation period. The assessment is then an assigned number value to which the dollar amount may fluctuate as the municipality has need of more or less income. Therefore, while the actual tax rate may change from year to year, the assessment only changes when the values become outdated due to larger changes in the municipality’s structure, such as an increase in fire or 911 services, for example. Some cities or states only reassess homes when they are sold or transferred to new owners.

Market Value

In real estate, market value is not the same as assessed or appraised value. For example, the price of popcorn at a movie theater might be $5.00 per bag, while that same amount of popcorn at a convenience store might be $2.00 and a similar bag at the grocery store would be just $.50. We are willing to pay each of these prices based on the location and convenience to ourselves at that place and time. In the same way, the market value of a home is the price for which a specific property will sell under a specific set of circumstances in its current condition at a specific time—typically 1 to 3 months.

There is no actual way to determine exact market value, given that if any of the circumstances change, the market value changes. The seller’s circumstances may change, the property circumstances may change (tornado, hurricane, imminent domain), the buyer circumstances may change (new business relocates to area), the community circumstances may change (school loses funding, commercial or industrial building built nearby) or any of a myriad of factors. So true market value is the price a house will sell for in the 30 to 90 day period. It is not what it will sell for in one week—that would be a price below true value—nor the price of the house if it hasn’t sold for 90 days—the price is higher than the market value.

How the Assessment, Appraisal and Market Values Relate

While each of these may be similar in amount to each other at a specific point, a property’s assessed may trail behind the appraisal and market values if the municipality has not upgraded the assessment in some time. Additionally, the appraisal must relate to comparables that the appraiser can prove to the lender, but cannot account for buyer-perceived value in a specific neighborhood, street or development. For example, if all of a buyer’s friends or family live in a two-block radius and a home becomes available in that neighborhood, the perceived value to that buyer may be higher than to another buyer. A motivated buyer may be willing to pay a higher price for a home than its appraised value, thereby adjusting the true market value.

WHAT GEN Y LOOKS FOR IN A HOME TO BUY

If you’ve lived in your home for some time, you notice when the neighborhood around you is changing to a younger demographic. Thinking this might be a good time to sell, you wonder what was so appealing about the house down the street to the young couple that just moved in.

The first thing you need to understand is that trying to put Gen Y’s—or so called “Millennials”—into a box may only lead to frustration when trying to sell your home. According to Forbes, the millennial generation, those born between 1980 and 2000, accounts for 4 in 10 of the US population. So before you run to the local DIY or call a contractor, talk to us first. We can help you determine the most important changes, upgrades or improvements to put your home on the Gen Y radar. Using recent comparables in your neighborhood, we can show you how your home stacks up, and recommend the appropriate fixes.

Functional Spaces

The most important prized priority in a home is functionality. Informality rules the day and a flexible layout strikes a positive chord with millennials that want room for a home theatre, game space, and home office rather than a formal living or dining room. So, even if you have formal spaces in your home, staging them so that a Gen Y buyer can see dual or multi-purpose can add appeal. They may not otherwise visualize an office in the corner of the dining room opposite a game table if your formal dining suite completely fills the space. Add shelving and a small desk area to a corner of the living or dining room, or even in a kitchen nook.

Entertainment Space

The second item a younger buyer looks for is entertainment space. For some, a patio with a hot tub and barbeque pit fills the bill, while others prize an open kitchen with room for guests to socialize over food preparation. Stage your kitchen with a mobile island and stools, if they’ll fit.

Bright Hues

Generation Y tends to lean toward brighter colors and signature pieces of art. If your home already has color, just refresh it with a new coat of paint. Conversely, if your home is mostly white, consider changing up the color to a warmer hue like these, or adding bright pops of color with pillows, strategically placed flowers, a bowl of apples or pomegranates.

Retro-Style

Many millennials are drawn to older styles in homes, decor and even vehicles. Many have adopted decor from the 60s and 70s in to their homes, and some even draw inspiration from the 50s. If your home is older and has original craftsmanship, detailing, or fixtures, don’t be afraid to highlight those when describing your home’s features. In fact, if you have covered over some of those architectural details, now might be the time to revisit that decision and bring them back out in the open.

Low Maintenance Exteriors

When thinking about changes to the exterior of your home, consider reducing the amount of upkeep required. This generation is all about the experience of life, so while they may want to put in their own vegetable garden, they usually don’t want to have to worry about annually repainting the house. If you are thinking of replacing siding, for instance, consider fiber cement siding that mimics wood, brick or stone, but is impervious to termites and fire, doesn’t require painting, and won’t rot. Before making a change, though, talk to us about the best return on your investment, not just its appeal to one group of buyers.

We can help you put your home in the best light to appeal to Generation Y, Generation X and even Boomers, so give us a call and we can talk about what you need to do next to sell you home.

REAL ESTATE TERMINOLOGY: ABATEMENT, THE FIRST IN A SERIES

Every industry has its own vocabulary, and real estate is no exception. If you are newly in the home-buying market, you may find yourself stumped by the lingo, acronyms, abbreviations and jargon commonly used in real estate sales materials, online listings, contracts and the like. We do not want you to be confused, so in this series of posts, we will define several terms for you in everyday language. Abatement is one real estate term or expression with which to become familiar.

Abatement

In general legal terms, the word abatement means removal or diminishing of something. In residential real estate, the term most refers to property tax in the form of a property tax abatement. Since property taxes are ongoing annual homeowner expenses even after you completely pay off a mortgage, having access to a property tax abatement or real estate abatement is a valuable savings when buying a home. For example, if a city, county, state or other property-tax entity offers a tax abatement, it could reduce the monthly housing costs by up to 3% during the abatement period.

Property tax abatement programs make it easier to qualify for a mortgage by reducing your income/debt to housing cost ratio. In addition, as long as the abatement continues in effect, it adds to the attractiveness of your home when you decide to sell.

Certain abatements are for one-time improvements to an existing property can vary widely depending on the area. They can be as for upgrades or enhancements as different as:

  • Installing a green roof or other environmentally friendly additions
  • Renovation that increase the property value
  • Conversion of non-residential buildings to residential use

Improvements must conform to the abatement requirements, building codes and permitting processes, so if you are planning to purchase a home that you intend to renovate, make sure that we know so that we can advise you on the abatements in effect for the properties that we show you.

In addition to state and local abatements, there are even some federal tax incentives for restoring and preserving homes designated as historic of historical civic value. Other abatements are for qualified newly constructed homes.

Some cities have property tax abatements in effect for years. These most often are set in place to attract buyers to neighborhoods or areas that are under redevelopment, in the process of revitalization, or have lower demand. The specific qualification requirements for abatements differ from area to area, so be sure to talk with us about access to potential abatements when you are house hunting.

Asbestos and Lead-Paint Abatement

Other uses of the word abatement relating to real estate include certain expenses associate with buying older property, or property being repurposed from commercial to residential. For example, when purchasing a home built before 1978, any renovations or improvements to a home might need to conform to lead paint abatement requirements. Another potential abatement cost is asbestos removal. Prior to the 1970s, asbestos was used as insulation in ducts and pipes, as vermiculite attic insulation, in wall and ceiling acoustical tiles, concrete exterior siding, floor tiles and other common home materials contained asbestos. The Environmental Protection Agency regulates asbestos removal, so if you plan to make changes to an older property, we can help you navigate the ins and outs of asbestos abatement and recommend qualified professional asbestos removers. Certain homes may qualify for an asbestos or lead paint removal grant.

Call us …

We can help you determine what the home you are considering buying might qualify for, so be sure to ask us about both tax abatements and asbestos or lead paint abatement grant programs when you call.

CONDO? CO-OP? APARTMENT? TOWNHOME?

Which is which?

Although all are part of the common-interest housing category, condos, co-ops, townhouses, and apartments may mean different things to different buyers, so here is a breakdown of what each word means and the advantages or disadvantages of one over another for the homebuyer.

First, let’s get the low-down on what makes up the common-interest housing real estate category. Common-interest housing is composed of areas owned individually and areas shared by all owners. The shared or common areas typically include landscaping, pools, parking, and clubhouses, but may also include exteriors, fences, and roofs of certain types of properties. Any community development that has shared property, including individually separate homes in developments with shared playgrounds and pools, falls into this category. Often, a management service or homeowners’ association manages the common areas.

Specifically, a condo—or more properly, a condominium—is a single housing unit within the shared property owned by the homeowner. This may be a unit in a tower building (also called an apartment) or a conjoined house with its own ground floor exterior entry (often called a townhouse, although a townhouse is not always a condominium), a single family home or a mobile home in a planned community. The term “condominium” is a legal term in the United States and so is governed by laws of real estate ownership.

In a condominium-style common-interest development (CID), the homeowner owns the interior space of the property independent of the other units and may buy or sell the real estate property as the sole owner of that specific unit.

A co-op—or cooperative housing development—differs in that “owners” own shares in the corporation that owns the real estate development rather than owning an actual unit. Each shareholder has a vote in the real estate corporation and share ownership authorizes the occupancy of a specific unit. Typically, shareholders pay a “share” of the monthly expenses of the real estate corporation. As with a condominium, cooperatives may be apartment-style units in a single building, townhomes or patio homes, single family homes, or even mobile homes. The legal term “cooperative” refers to the real estate ownership structure rather than the property type.

So, what is an apartment? Or a townhouse?

A townhome is a style of house connected on at least one side of the structure to another house. It may be individually owned real estate or part of a CID. A true townhome will have independent sidewalls even though they may touch the walls of another townhome. That being said, many condominium, cooperative, and rental unit designs mimic townhomes, with individual groundfloor entries, back patios or yards, and even differing faces and rooflines. These units may share a wall or roof, however, as part of a single structure.

An apartment is another matter. In common usage, “apartment” is a rental unit rather than privately owned real estate. The person occupying the unit does not own it, but leases it from the owner of the entire real estate development. But in legal terms, an apartment is a part of a residential structure occupied by one housing unit (family, roommates, etc.). An apartment, then, can be a rental, but it may also be a condominium unit (homeowner owns the interior space and shares the other spaces) or a cooperative unit (owner owns shares of the entire development equal to the unit being occupied).

Consult your real estate professional to see which type of CID is the best fit for your circumstances in your local real estate market.

OPEN HOUSE PITFALLS, TIPS AND ETIQUETTE FOR BUYERS

So, you’re thinking of buying a home … where do you begin? Potential buyers new to the real estate market may not know exactly what they want in a home, or where they want to live. The dream homes in magazines are a great way to get ideas, and looking at pictures of homes online can narrow down some likes and dislikes for you. However, to get the feel of the right home for you and your family, and a sense of what is important for your new home to have, plan to take advantage of open house events.

Here are some tips for making the most of your open house visits.

DO dress comfortably. You may be climbing stairs, checking out basements and attics, or walking from home to home in a single neighborhood, so wear clothing appropriate for both in and out-of-doors.

DO allow plenty of time for each home you plan to visit. If you like the home, take time to drive or walk through the neighborhood afterward.

DO bring your list of likes, dislikes and must-have’s. Make sure to add to your list options or new ideas you see in an open house. These will help your real estate agent find the right home for you.

DO sign in. However, if you already have a real estate agent, or plan to use a specific agent, be sure to inform the host. Remember, this is how an agent makes his living. You don’t want your home-buying experience marred by conflict between agents each having a claim on your purchase.

DO make a list of questions for your real estate agent to ask the selling agent.

DON’T bring children to an open house. Most often, the open house is still the homeowners’ home and contains their belongings, which might be an unintended tempation to small hands.

DON’T expect an open house to be childproofed.

DON’T bring pets to an open house.

DON’T look in cupboards, closets or drawers that the host indicates are off-limits. Your agent can arrange for a more in-depth viewing at another time.

DON’T be deceived by air fresheners and other masking odors. Each of us responds to differentodors subconsciously. If you sense an overabundance of deodorizers, the source simply may be a recently removed litterbox, or it could indicate a deeper problem like mold. Make a note to look for the source on a private visit to the house with your real estate agent.

DO ask permission before pulling out your camera phone. Respect the seller’s privacy.

DON’T ask questions about what type of offer the owner will entertain. Those negotiations are your real estate agent’s job. The selling agent represents the interest of the seller, not the potential buyer. Write down your questions and follow up with your own real estate agent as soon as possible.

DON’T arrange a follow-up visit with the host unless she is your agent. Let your own agent arrange for a return viewing.

DO collect the host agent’s business card and contact information to pass on to your agent.

If you want to make an offer on the home, DO call your agent as soon as possible.