Property Investor Guides: Property Mortgages

Buying a house is the biggest investment you're ever likely to make, so it's important to get all the information you need on mortgages and legal matters before you start. Here we take a look at the basics, from how much you can borrow to choosing the right mortgage for you.

Borrowing

As a general rule, mortgage companies will allow you to borrow three times your salary, or two and a half times your joint salaries if you're buying with someone else.

, in the current market there are many different types of mortgage available, some of which will let you borrow more than this. For example, some companies will allow two people buying together to borrow three times the greater salary and one times the lesser.

There are also many innovative schemes around, such as those that allow borrowers to add the rental income from letting one room to their salary before their income multiples are assessed.

It's worth seeking advice from two or three independent mortgage or financial advisers to find the best deal for you. Remember, though, that even if interest rates are low now, there's absolutely no guarantee they'll stay that way.

Never keep back any information on debts or county court judgements when securing a mortgage; it could come back to haunt you.

Deposits

It's worth trying to save as much as possible for an initial deposit, to secure the best repayment deals. With property prices as they are today, however, saving even a five or ten per cent deposit can be a real problem.

If your deposit leaves you flat broke, some mortgage companies will offer you the incentive of cash-back after completion, but you may have to pay a fee (redemption penalty) if you decide to pull out of the agreement.

If it's a choice between paying off expensive debts such as credit cards or personal loans and saving a deposit, it's often advisable to do the former and take out the best 100 per cent mortgage available. The choice and rates of such mortgages have become wider and more competitive in the past few years.

Mortgage Terms

It's only natural when buying a property to be more concerned with its size than with studying the small print on the mortgage agreement. But the wrong mortgage can cost you tens of thousands of pounds more than it should.

Mortgage providers often offer special deals to encourage people to take out a mortgage with them, and these are usually in the form of short-term introductory benefits on your mortgage. These benefits might be a discounted rate, a fixed rate, or a capped rate for a certain number of months or years, known as a 'tie-in period'. Mortgage providers will want you to stay with them for as long as possible, and, because of this, many mortgages may contain a 'redemption penalty'. This means that if you want to pay off your mortgage early, or move it to another mortgage provider, you will have to pay a fee.

Basically, the longer you borrow the money for, the more interest you'll pay. The other side of this is that the longer you take to pay back the loan, the less you have to pay each month.

The typical mortgage is lent for 25 years, so you need to be in your first property for five years in order to reap the benefits. This is because, if you have a repayment mortgage, most of your repayments during the first years are spent only paying interest. Also the cost of moving (solicitors, stamp duty, and so on) means that it's uneconomical to move regularly.

For example, if you pay off a �000 mortgage in 15 years, rather than the normal 25 years, you'll have higher monthly payments for those 15 years, but you could save a staggering �000 in interest payments.

Interest Rates

Your other big decision is what type of interest rate to have on your mortgage.

• fixed rate
• variable rate
• capped rate
• tracker
• discounted

Types of mortgage

The basic decision you have to make is how you're going to repay the money you've borrowed. Don't be confused - there are only two basic types of mortgage:

• repayment, where the capital is re-paid gradually over the term of the mortgage
• interest only, which, as the name suggests, is where you only pay the monthly interest of the mortgage. However, your lender will stipulate that you set up a repayment vehicle, such as an ISA, an endowment policy, or a pension plan which, when it matures, can be used to pay off the outstanding debt. If you take out this type of mortgage, check regularly that you're on target to pay off the mortgage when it's due. If not, then increase your savings.

100 per cent mortgages

By taking a 100 per cent deal on a repayment basis, first-time buyers can begin to repay modest amounts of capital almost immediately. Choosing a deal that allows overpayments to be made without penalty can also accelerate the amount of capital that's repaid.

A good 100 per cent mortgage can offer a viable solution for some, although borrowers should try to avoid the mortgage indemnity premium (MIG). If you have no, or only a small sum to put down, a lender may charge you this premium in order to cover himself in case you're unable to keep up the repayments. On a 100 percent mortgage, MIG usually works out as an additional cost of about three per cent of the amount borrowed, increasing the overall borrowing to 103 per cent. It could be cheaper to find a loan that does not require this.

Joint mortgages

If you're buying a property with a friend or partner, there are a number of issues to consider and steps to be taken to protect your investment before signing on the dotted line:

• Draw up a deed of trust with a power of sale. This means sale of the property can't be blocked by one party if you fall out or the person disappears without a trace.
• Decide whether you'll be joint tenants (the property is then owned 50:50 and passes automatically to one if the other person dies) or tenants in common (each owns a different share, so the person bringing in the larger salary can take a bigger share of any gains - and losses).
• Make wills. If one co-owner dies without having made a will (intestate), the remaining person will have no rights over that person's share of the property.
• Put both names on the deeds. And if a new housing arrangement is set up by the individuals after one already owns the property, the lender has to be informed.

If you and your partner aren't married and decide to buy a house together, it's important to realise there's no such thing as a common law wife or husband (except in some extremely obscure exceptions). In the absence of any other legal agreements, if you're not married the law sees you as two distinct individuals with no call on each other's money. That means if the utility bills are in your name, you're ultimately responsible for paying them. And if you pay into a savings account in your partner's name, the money's legally theirs.

The solution is to draw up a living together agreement. For day-to-day concerns, such as paying utility bills, sit down and talk it through. If one of you earns more than the other, for example, will that person pay a larger proportion or will you split the bills 50:50, with the richer one paying for more of the treats?

It's a good idea to open a joint current account, but it's important you both agree what the money is to be spent on. Spending the money on an expensive box of Belgian chocolates instead of paying a gas bill is sure to start a row.

Small print

Finally, take time to read all the small print. Always ensure you know what you're buying and check dates for when any discount or fixed rate runs out. And be particularly careful to check for penalties for paying your mortgage off early, moving to another provider before the tie-in period expires, or for missing a payment.

Mortgages should be straightforward - you borrow money to buy a house and pay interest on the loan. But after a few enquiries, you soon realise that it's not so simple after all.

In a hugely competitive market, building societies and banks are continually updating and extending their range of mortgages. The list is already extensive enough to baffle all but the most determined.

The most important points are how you pay back the capital you borrow and how you pay the interest on it.

Paying back the capital

You can either pay a little at a time as you go (repayment mortgage) or pay it all off at the end (Endowment, Isa and pension mortgages).

• Repayment mortgages - Each monthly payment pays off a little of the underlying debt, as well as interest on the loan. At the end of the term the mortgage is cleared.
• Endowment Mortgages - You use an endowment policy to provide life insurance and save funds to repay the loan at the end of the term (usually 20-25 years). If the investment performs badly, you could face a shortfall on your loan at the end of the repayment period.
• Individual Savings Account (Isa) mortgages - These work on the same principle as endowments, but use an Individual Savings Account as the loan repayment method. If your investment performs badly you could face a shortfall at the end of the mortgage term.
• Pension mortgages - Are similar to both ISA and endowment mortgages, but work on the basis that pensions (both private and company) provide tax-free cash on retirement. At the end of the mortgage term the loan is paid out of your tax-free lump sum. They are not often used as it can be risky linking pensions to other investments.

Paying the interest

You have to pay interest on any debt, and mortgages are no different. They differ only in the range of options offered.

• Variable rates - This means you pay the going rate on your loan. The mortgage rate changes every time interest rates change or, as in most cases, the overall effect of any interest rate changes is calculated once a year and payments are altered accordingly. Whatever kind of mortgage you start with, it is likely to change to variable rates at some point.
• Fixed rates - The interest rate is fixed for the period agreed - often two to five years. These are ideal for budgeting or if you think rates might increase. You do not benefit if rates fall, and will face penalties if you try to quit. Very low rates may tempt you, but they can be used to trap you into paying over the odds. See check how long you will have to stay with the lender before you can switch without penalty.
• Capped rates - These are fixed, but if rates fall you pay the lower rate. Such deals can be a good buy for budgeting.
• Cash back deals - This is when lenders offer money back if you take out a particular product.
• Discounted rates - Under this type of mortgage the borrower is offered a discount off the lender's variable rate. The rate paid will fluctuate in line with changes in the variable rate. The discount applies over a set term.

The 10 key points

The government has given homebuyers a list of vital checks to help them find their way through the mortgage maze.

The government suggests buyers should ask these 10 questions before agreeing a mortgage with a lender.

• How much can I afford to borrow? This deals with such questions as "What will the cost be each month?" and "What fees will I have to pay?"
• How can I tell which mortgage rate is best for me?
• What is the best type of mortgage for me? This deals with how to understand the jargon, such as "What do fixed rate, variable rate, discounted or low-start, and flexible mean?" and "Will this mortgage suit my circumstances now and in the future?"
• How should I repay it? "Why are you trying to sell me an endowment policy, or a pension or an Isa?", "Why is it best for my circumstances?" and "What commission are you being paid?"
• Can I make lump sum payments to reduce the size of the loan?
• Are there any redemption penalties?
• Does this mortgage come with compulsory insurance?
• What other charges will I have to pay?
• What happens if I can't pay?
• What about the small print?

Useful sources : The Property Investor Show & bbc.com

Property Investor Guides: Property Auctions

Many first time buyers are dipping their toes into the high risk market of Property Auctions.

Property Auctions are a good way to save money and get the property you want. Bargains can be snapped up well below market price allowing the first time buyer to make that first move onto the property ladder.

If you are unfamiliar with Property Auctions we would recommend you do your home work and research carefully.

• Visit a property auction - We would always suggest that you attend an auction to 'get a feel' for the auction process itself. It is also a useful opportunity to perhaps ask the auctioneer any questions you may have.
• Finance - Unlike an estate agent purchase, beforev you bid at the property auction you will need to have your enough funds to pay your deposit on the day of the sale (usually 10%) plus you will have to have your mortgage in place to pay the balance if you are successful which usually is due 28 days later.
• Survey - We would always recommend that you have a survey undertaken prior to attending the property auction to ensure that the property is sound. If you are taking out a mortgage your lender will wish to have their surveyor assess the property prior to the sale date.
• Choosing the right property at auction - It is important that you are careful in your selection of the property you wish to buy because any survey costs are payable by you, whether you are successful at the property auction or not. Research the market carefully to find a selection of properties and arrange with the auctioneer a viewing as soon as possible.
• Copyright © 2005 - 2010
  The Property Investor.net
  all rights reserved

Property Investor Guides: Property Exhibitions

Property Exhibitions can help you take the first step to realising your property investor goals.

At property exhibitions you will see our range of properties, and have the chance to chat to knowledgeable Local Area Consultants. Exhibitions take place at regular intervals around the country.

Property exhibitions are a great place to do your essential property investor research on your particular field of interest.

Property shows are dedicated property events for serious buyers at every step on the property ladder. So if you are considering buying for investment or residential purposes, in the UK or abroad, visit as many property shows and you will et all of your questions answered by property professionals.

Generally property exhibitions and property shows will feature property and property-related services from over 100 exhibitors including major house builders, developers, estate agents, lenders, brokers, designers, landlord associations and other leading property experts. A programme of information seminars will cover all aspects of buying, selling, financing and managing your property.

INVESTORS

Whether your primary interest lies in the UK or overseas property markets, put property exhibitions in your diary if you are a serious property investor. In addition to the range of investment opportunities on offer at property exhibitions, they are the ideal place to obtain reliable, up to date, market information at the beginning of what is predicted to be a new period of property growth.

Access to accurate and relevant information is central to successful investing. Its little wonder, therefore, property investor shows are the 'must attend' event for all investment professionals and first time buyers.

OWNER OCCUPIERS

You don't have to be a property professional to visit the property exhibitions. If you're an owner-occupier seeking to move to a new, larger or smaller property, you will find property exhibitions an invaluable resource.

Amongst the exhibitors are house builders, developers, estate agents, mortgage specialists and interior designers. Property shows provides the forum for you to talk to the experts. The best sources are available to help you make informed decisions as you plan your next move.

FIRST TIME BUYERS

Property exhibitions are the place to discover how to realize that dream of owning your own home. Despite shortages in affordable housing, opportunities really do abound for first time buyers to enter the housing market. Property shows will help you identify the options which match your circumstances, with supporting seminars tailored to provide essential insights to help you buy your own home.

UK and OVERSEAS OPPORTUNITIES

Property investors shows tend to have a larger proportion of overseas property on exhibition, the mix is usually 40% UK Property and 60% Overseas Property.

This mix will enable you to compare and contrast the opportunities available both inside and outside the UK. Whatever your reason for property purchase, be it for investment, residential, retirement or holiday purposes, the specialists you need to help bring your plans to life will be on hand to assist.

EXPERT LED SEMINARS TO ANSWER EVERY QUESTION

Property exhibition visitors rightly regard the seminar programme as an essential component of the show. Established topics such as 'Buying your first home', 'How to buy below market value' and 'understanding Buy-to-Let' will of course be covered. In addition the property exhibitions programme will usually highlight themes which are currently topical, including; 'How to buy below market value' and 'Identifying emerging Hot Spots'.

Property exhibitions take great care to ensure they put on truly informative seminars, not sales pitches. Both the speakers and their material are carefully vetted, to ensure you gain real insight and understanding from each session.

Copyright © 2005 - 2010
The Property Investor.net
all rights reserved

http://www.thepropertyinvestor.net/investmenttypes/propertyexhibitions.php

Property Investor information for: Qatar

Qatar was ruled by the al-Thani family since the mid-1800s, Qatar transformed itself from a poor British protectorate noted mainly for pearling into an independent state with significant oil and natural gas revenues. During the late 1980s and early 1990s, the Qatari economy was crippled by a continuous siphoning off of petroleum revenues by the amir, who had ruled the country since 1972. His son, the current Amir HAMAD bin Khalifa al-Thani, overthrew him in a bloodless coup in 1995. In 2001, Qatar resolved its longstanding border disputes with both Bahrain and Saudi Arabia. Oil and natural gas revenues enable Qatar to have one of the highest per capita incomes in the world.

The new international airport, estimated at a construction cost of QR18 billion, is earmarked for completion in 2007. The new green-field airport will be situated 4km east of the existing one. An extensive upgrade to the airport’s Duty Free Shop by 2006 will make it one of the largest duty free outlets in the world. Further Qatar Airways is building its route network to at least 60 destinations by 2005 and are set to double its fleet over the next two years - introducing A380s, additional A320s, A300s and A330s.

Qatar like many of its Middle East counterparts is a growing country with exciting new infrastructure and leisure projects.

The Property Investor Magazine and Website can help you do that all important research before buying investment property. Download our country and location Property Investment Case Studies for all the researched facts you will need. Also catch up on the latest property investor news and features online and keep up to date with our free subscription magazine.a

The hidden costs of owning a home

By Alexis A. Acacio, contributor
Inquirer News Service

"A YOUNG couple, prior to their house hunting, had a specific budget at hand. When they finally found a home that matched their requirements and their budget, they signed a reservation agreement with the seller in order to purchase the home. When the time came for them to fully pay the property, they were surprised to find out that they still needed a lot of money to be able to complete the transaction. The additional amount that they needed was about 15 percent of the total amount of their home. Obviously, they were not prepared for the additional expenses."

Should we blame the couple? Not at all but they should have known better. There are a lot of additional costs when buying a home and it is not just the selling price that one should look at. There are many hidden costs and sad to say, there are some developers and even realty brokers who never reveal this fact to their buyers until the closing date-when the buyers are now committed to the property.

The hidden costs of real estate transaction include:

• Transfer costs. These include the taxes that are to be paid to the government in order to transfer the ownership of the property. Among these are capital gains tax, documentary stamps, transfer tax and registration fees. If the seller is a corporation or a developer, other additional taxes are necessary. Prior to engaging in a contract to sell, make sure that the amount of transfer costs and who should pay them (whether the seller or buyer) should be clearly stated.

• Legal costs. You might need legal advice and documentation service so you will have to allot a budget for this. Prior to the engagement of help, make sure all professional fees are correctly agreed upon so as to prevent any future misunderstanding between the parties involved.

• Moving-in costs. Whether you are transferring from abroad or just within the area, moving your furniture would cost you money. Make sure they are insured since some of your belongings may break during shipping and transportation.

• Furnishing costs. Yes, furniture and accessories. Depending on your taste, your expense can be from a few thousand pesos to millions. A good rule of thumb is to allot about 10 percent of the price of the house for furniture. This budget however can easily double if you are inclined to buy high-end, European furniture.

• Loan/borrowing costs. If you need to borrow from the bank, then there are finance charges that you should consider. These include the mortgage registration fee, the documentary stamps and processing fees. Your bank or your lender can easily give you the financing charges that you would have to pay.

• Maintenance costs. Maintaining a home costs money and more so your time. For new homes, this may not cost as much but if you are moving in to a used home, you may have to prepare a regular budget for this. For a used home, some minor repairs (or even major ones) may be necessary before you can use the property.

In preparing your budget for your home, always allot an additional amount to cover the hidden costs. Setting aside about 15 percent would be a prudent move in which about five to 10 percent of the amount would go to the purchase of furniture.

When you like the land but not the house

By Alexis A. Acacio, contributor
Inquirer News Service

IN SEARCHING for the perfect home, remember that two critical elements should be present -- the right location and the right house. It can be really difficult to search for one and it requires many weekends of searching, a lot of time and most importantly, a lot of patience. One has to physically visit a place to be able to experience the feeling of living in a specific area.

In home buying, choosing the right location is usually the first step and as soon as you are decided on one, you now proceed with the next level of selecting what type of home to buy. This can be a single detached dwelling, a town home or a condominium unit.

There are four possible combinations of location quality and house quality you should be aware of. During your house hunting process, knowing which situation you are in will be very helpful for you in selecting the site for your home.

Bad house on good site

The bad house might turn one off but the property might just be a "diamond in the rough." As long as the location is acceptable and satisfactory to you, then a bad house can still be considered. A bad house description can be subjective and you might just need a few repairs to convert a bad house into a good one. In assessing a "bad house" always ask two important questions:

• Is the defect curable? There are defects in a house that can be repaired and there are some that are uneconomical to do so. A worn-out rain gutter, faded paint on a wall, a leaking faucet and dried plants in the garden-all of these can be repaired or redone and the house will look and feel new again. On the other hand, if you want a four-car garage when there is only one, a bath in every room when there is only one on the first floor, then curing the defect may mean that you may have to demolish the house and start anew.

• How much will it cost? There is no house defect that cannot be repaired at all. The only problem is that repairing the house may cost you more than tearing the house down and making a new one. If the cost of repair is too high, buying the home may not be viable at all. In buying a used home, never guess the amount of repair costs and it is always best to ask for a detailed estimate of repair from a professional architect or engineer.

Good house on bad site

A bad location for one might be a good location for another and it is really based on the needs and wants of the end user. Unless you are the speculative type, a bad location may be difficult to turn around. There are however real estate investors who invest on currently undesirable locations hoping that the surrounding infrastructure in the area will improve. The only problem with this line of thinking is that one can never be sure when the improvement will take place.

If the house you are planning to buy is in a bad location (based on your own definition), it may be a better idea to stay away from this type of investment.

Bad house on bad site

Forget it! Even if the property is being sold for a song, you may still end up losing money in the end.

In this situation, you have to deal with two defects. It is better to delay your purchase until you can find the home that you and your family will be comfortable living in.


Good house on good site

This is where all buyers would want to be. Finding a good house in a good location may take you several months (even years) but the effort will surely be worth it.

A good house means that it is well built at a reasonable price and with living spaces that fit your specific needs and lifestyle. It has all of the amenities that are important to you and you can easily imagine yourself living in the house.

A good location is one that is safe, convenient, accessible and, most of all, one with a community where you can enjoy life to the fullest. Remember that this community is where you will go home to every day and it better be a good one.

Different types of homes

By Alexis A. Acacio, contributor
Inquirer News Service

YOU have many choices when it comes to the type of house you can own. Looking at the various choices can confuse you and it would be best that you fully assess your real needs and real priorities (and your budget) in order that the buying or building process will be smooth and less stressful.

The various types of homes that you may own include:

Production homes

Production homes, as the name implies, are the manufactured homes that most real estate developers usually sell. With a few available models, usually about three or four to choose from, you can buy these homes "off the shelf," that is, what you see is what you get. Some of these homes are "bare" units and you have the option of doing the interior decoration yourself. There are production builders who offer different levels of finishes.

Production homes can be the easiest to purchase since they come in selected models and all you have to do is select the model that will suit your needs and that of your family. They are usually affordable since the seller or developer has the benefit of volume production or economies of scale.

Builders use the same plans over and over so they can become very good and efficient in producing these homes. A developed subdivision follows an architectural design theme so that the houses can blend with each other. For you to have an idea on how the finished units will look, different house models are usually shown to you complete with the interior decoration, furniture, lighting fixtures and appliances.

Custom-built homes

The theme and floor layout that you wish is followed in the custom home. It starts by engaging the services of a designer and telling him or her all of your requirements. You get to choose the materials to be used, the specific location of the rooms and even the sizes of the rooms. If there is a specific style that you may want -- Victorian, Spanish, Mexican, Mediterranean or any specific style -- you can have it in a custom home. A custom-built home requires that you spend time studying the design since you cannot preview how it will look like in a model home.

Your professional relationship with your designer and builder is very critical since you will be working together with them for about a year. Expect that custom-built homes are more expensive than production or semi-custom homes and the construction time usually takes longer.

Semi-custom homes

Semi-custom homes are homes that are built in a limited quantity and the developer or builder can accommodate minor changes. It is important, though, that you purchase these homes prior to their completion so that design changes can be done at the minimum cost.

This type of home is common for pocket developers or small volume builders. The color of the house interior or even the exterior can be selected as construction work progresses. Semi-custom homes are a cross between the production and custom home.

Townhouses

Usually located in areas in which the cost of land is high, townhouses are individual housing units that are attached to each other. The units are commonly separated by a common firewall and the entire area has a common architectural theme. Some townhouses have a common area where the facilities such as a clubhouse, swimming pool and a basketball court are located. Townhouses are usually near schools and commercial districts and are very accessible to main roads and public transportation.

Condominiums

Condominiums became popular in the 60s and were developed to accommodate urban living in areas in which the cost of land was high and building a single-detached house seemed economically impossible. It has a different concept of ownership -- absolute ownership of the condominium unit and co-ownership of the land and common spaces. Parking spaces are most of the time bought separately for most condominiums. A condominium certificate of title attests to ownership of a condominium unit.

Condominiums are located in business districts and accessibility to one's place of work is a common criterion in opting to live in one. They are usually high-rise, although a row of houses can also be a condominium. The condominium association in which all unit owners automatically become members manages the operation and management of the common spaces and utilities.

Mix-use infrastructure

Mix-use infrastructure consists of combined residential and commercial dwellings. For commercial areas, the units are for commercial use on the ground up to a few floors and then convert into residential use at the higher floors.

Mix-use dwellings can also be possible for medium-rise buildings in which the occupants live on the upper floors and their businesses are located at the ground floor. This type of setup is very common among self-employed individuals and entrepreneurs.

Used homes

Used homes (or condominiums, townhouses) are another option. You can buy them at a lower price and then renovate or repair them.

When buying a used car, buyers usually bring with them a mechanic to give an opinion on the overall mechanical condition of the car. In buying a used home, it is prudent that you bring along a design or construction professional who will give you a technical assessment of the property.

Knowing how much the repairs will cost prior to your purchase would give you an idea on the total cost of the property. Sometimes, tearing down the property and building a new one might be more economically feasible than repairing it.

Final advice: you have a lot of choices when it comes to deciding on what type of residential property to buy. Each type offers advantages as well as disadvantages. Assessing fully your real needs and how a specific property will satisfy these needs is a very important aspect of having your dream home.

Choosing the right apartment

By Dianne M. Villafuerte
Inquirer News Service

LIVING in an apartment building does not necessarily mean one has to give up practicing good feng shui, especially if one finds safety and security applying it to his or her home environment. There are still some things one should look into when choosing the right apartment building.

The main entrance to apartment buildings, as in a house's, should be proportional to the size of the building. A small building with a too large entrance will let inauspicious chi (energy) to enter the apartment while enabling favorable chi to escape. A large building with a too small entrance, on the other hand, will contain the unlucky chi inside the building while making it hard for beneficial energy to enter.

In feng shui theory, feng shui practitioner and writer Zaihong Shen says that it is ideal when there is a vestibule -- a passage or room between the outer door and the interior of a building -- in an apartment building's main entrance. The vestibule slows down good interior chi so that it will not quickly leave the building.

Questions to think about

Feng shui consultants also advise apartment hunters to consider even the building's lobby when searching for apartments. Shen shares with her readers the following questions to think about when looking at apartment lobbies:

• Is the lobby's size proportional to the building's size

• Is it inviting?

• Is there good air circulation?

• Is there good air circulation?

• Is the temperature controlled?

• Is the lobby kept clean and uncluttered?

• Is it in a good condition?

• Are the lobby's colors neutral and calming?

Why should apartment building lobbies matter? Because this place has the same purpose as a house's foyer. A lobby makes beneficial chi to linger much longer within the building while hinders the entrance of unfavorable chi.

Controlling noise

Remember that commercial whose jingle goes by the words, "Traffic / So bad nakaka-bad trip..."? That primarily sums up what every single one of us feels when caught in the middle of the famous and horrendous Metro Manila traffic. But just imagine what those living in an apartment built smack in the middle of a busy street feel every single day?

In feng shui theory, high noise levels are believed to cause irritability, frustration or aggression in people. In addition, excess noise drastically disturbs an apartment's energy which may also lead to headaches, depression, anxiousness and insomnia in the occupants.

Since those living in apartments have virtually no control over their street's traffic levels, Shen advises those living in apartment buildings in traffic-congested areas to reduce the noise coming into their apartments by installing double windows to isolate the apartment against noise, using a white noise machine to turn down street noise below, getting a small water fountain to add a soothing-sounding water element to the environment, or providing soothing and calming ambient music.

Home of your dreams

By Alexis A. Acacio, contributor
Inquirer News Service

IN LOOKING for the home of your dreams, there is a simple acronym that I have devised, to remind the smart real estate shopper on the qualities that they should look for in a real estate investment.

In helping you decide on your home purchase, you may follow the criteria of the acronym DREAM, which means:
(D)urable
(R)easonably priced
(E)nergy efficient
(A)ppealing
(M)arketable

Durable

By all means, your home should be durable. It does not exactly mean that because you have a limited budget, then the builder has a reason to make it weak and not durable.

Select materials that you feel would stand the weather and the environment in the area where you plan to build. If you want to build in the mountains and the weather is always damp and moist, then materials that are durable when continuously exposed to moisture and rain should be used.

If you are on flat ground and near the beach shoreline, then try to minimize the use of steel in your homes for these can corrode easily thereby shortening their design life. Perhaps you can select materials that are durable even when continuously exposed to seashore weather. Natural wooden materials are perfect for small beach homes.

Reasonably priced

It is always an issue of how much you are willing to pay for a specific home feature that you would want. If a modular kitchen system is very important to you, then your budget should be able to support this priority.

Affordability depends really on how much money you have and how much you are willing to spend. You are not really spending when you buy a home -- you are simply converting your cash into a real estate asset. Should you need to convert it into cash, you can even expect a gain due to the appreciation of real estate. But of course, the conversion would take some time.

Energy-efficient

If there is one thing that we have in the Philippines that is very scarce in temperate countries, it has to be lots of sunlight that we can enjoy. In planning your homes, more sunlight that comes in through the windows would mean the lesser need to use artificial lighting. Avoid cramped and dark corridors within your home.

Too much sunlight can also be harmful. Due to its intensity that hits the roofs of our homes, more cooling power is expected out of our air conditioners. So in design, there should be the right size of windows for natural light that can likewise make your air conditioner perform effectively and efficiently. Ask your home designer to study all of these for you.

Energy efficiency is a big concern for all of us. Our aim is to reduce electrical and energy consumption by careful design and planning. As an example, a double-glazed glass window might initially cost more but over the years, using it will save you a lot on air-conditioning bills since it reduces the heat that comes into your house through the windows. The proper choice of electrical appliances that we install into our homes also affects the way we use up energy. Be very careful in selecting what is best for your home. It is always a question of cost versus the benefit that it can provide.

Using insulation for the roofing system would keep you cool when it is warm outside. Insulation material does this by preventing most of the heat that is directed to your roof. By this you would need less cooling effort from your air conditioners. An insulated attic floor, coupled with wide windows that provide a lot of ventilation will reduce your cooling costs and you may not even need an air-conditioner at all.

Appealing

A well-designed home need not be expensive. We all have different tastes and a beautiful home for one may not be so for another. Always follow your heart's desire in choosing the architecture that you want. If you want a pink roof, then go ahead and make it so. To have the design and style that you want, it takes a lot of meetings and consultations with your home designer. Sometimes, schematic plans will have to be redone all over again. The secret here is to be patient and frank in telling your designer what you really need in the home of your dreams.

Marketable

The home that you will build today may no longer be your home after 10 years. Our needs change and so we have to renovate and upgrade our homes.

What I mean by having a marketable home is that you should design by selling in mind. In the future, when the time comes for you to sell your home, you should not have a problem convincing potential buyers because the layout is functional, practical and your house is well built.

Marketability can also be internal -- the home should appeal to the end users themselves. If in a few years you will have young adults in the house, the renovation of other spaces into other functional spaces for teenagers (like a billiard room) should be seen well in advance. By this you will save yourself away from the costs of demolition.

Follow the DREAM to build your dream!

How a real estate

By Alexis A. Acacio, contributor
Inquirer News Service

(First of two parts)

A REAL estate broker is your partner and adviser in your real estate transactions. Knowing the process in which the broker works can make one understand them better and therefore make the most of the relationship. As with any relationship, trust is very important and before this trust can be developed, the process on how brokers work can make us understand them better.

Real estate brokers are engaged in real estate transactions in behalf of a principal.

The broker expects a commission or a fee by negotiating for the sale, lease, purchase, mortgage or joint venture of real estate properties. He/she acts in behalf of a principal. The principal, in most cases, is the owner or developer of the property.

Real estate brokers involved in the selling and buying of real estate generally follow the following steps in going about their profession.

Secures properties for sale. The broker secures an authority from a seller to negotiate for the sale of a property. He/she may also secure an authority from a buyer of a specific property. A broker for the lease, mortgage or exchange of property also obtains a similar authority. This process is called obtaining a listing (meaning a list of properties to negotiate for). During this process, the broker assesses the type and condition of the property, the specific location and description of the property, where it is, the condition of the title (whether it is authentic, mortgaged or not, clean or with a lien. etc.). He/she gets an authority to negotiate for the sale of a property from the owner that can either be exclusive or nonexclusive.

In an exclusive authority, only one listing broker is authorized to negotiate the transaction. This is common for large development projects in which the developer assigns a sales organization to market, present and negotiate for the sale of real estate properties. The exclusive marketing agent then focuses all its efforts to sell the entire project. In return, the developer or owner gives full support to its exclusive marketing agent in terms of higher commissions, office spaces, tripping vehicles, sales incentives, etc.

In a nonexclusive authority, the owner authorizes two or more brokers to negotiate for the real estate transaction. This is dealt with on a first-come, first-served basis. Most single transactions involving brokers is the nonexclusive type-that is many brokers may be selling the same property so it is common that the same property may be shown to a prospective buyer by many other brokers.

Looks for interested parties. After securing a listing, the broker looks for interested buyers of the subject property. If the broker is a member of a real estate association or belongs to a circle of brokers, the listing is relayed to other brokers to increase the network of interested buyers. In real estate transactions, the sale or purchase of a property seldom involves a single broker. It is usually the effort of the seller's broker (the broker represents the seller) and the buyer's broker (the broker represents the buyer). In this case, the commission is split between the brokers in the transaction according to the agreed upon percentages.

A source of listing also includes the list of foreclosed properties that can be obtained from the asset management groups of banks and lending institutions. An advertisement in daily newspapers, radio and televisions is also a source of information for brokers. Try advertising your property in the classified ads and it is highly possible that of all the callers, there will be more brokers than direct buyers.

As brokers expand their network, they continuously secure available properties and they become known within an area among persons involved in real estate transactions.

Qualifies interested parties. After the real estate broker connects with the interested party, whether seller or buyer, the interested party should be a qualified one. A quick definition of a qualified prospect would be that he or she is able, willing and legally capable. If loan officers of banks have prequalifying criteria, so do real estate brokers. The criteria include:

· Real need. The reasons for buying real estate can be many-as a hedge against inflation, for use, for rental, as an investment and even to speculate that property values will go up in the future. The broker might not ask the buyer directly but would try to figure out the real reason the client would want to buy the property. A specific type of property satisfies a specific need.

· Capacity to pay. The client should have the capacity to pay. Based on my experience in marketing real estate, some buyers simply have the "want" or desire to own a property but they simply do not have the capacity. It is best that we have a realistic sense of the property we want and the property that we can afford. Want and affordability should match in order to make the real estate transaction a reality.

· Authority to buy. The person usually looking at a property is the buyer. But these days, some buyers buy for their busy relatives and their relatives abroad. It is common these days that the person paying for the property is out of the country and he/she simply relies on photographs of the property and other information that is sent to him/her. These people simply ask their relatives to buy in their behalf. Again, the person looking at a prospective property should have the authority to buy.

Do not get offended if your broker asks you details about some "personal" things especially when it comes to financial capacity. Brokers just want to make sure that they are not wasting their time on prospects who are not qualified. To show a piece of property to a client takes time-even days and the broker just wants to make sure that he/she is not wasting his/her time on a client who is only a "window shopper."

Brings prospective buyers to the properties. Tripping is the common term that real estate brokers use to show a prospective client a property that they feel would suit the needs and budget of their client. If the property being sold was a piece of gadget being brought to the customer's house, then it would be called a "demo." But since real estate is fixed and the customer should go and visit the property, then a trip is necessary, hence the word tripping is commonly used. Selling real estate is a long process and usually takes some time before a purchase decision is made.

During this process, the property is shown to the client and the features are explained in detail. If it is a vacant lot, the features of the lot are studied such as the topography, the shape, the boundaries and the other natural factors. If it is a subdivision lot, the entire subdivision is studied, the neighbors, the streets, drainage systems, availability of water supply, security, etc. If the property being considered is a structure such as a house, townhouse, condominium, industrial building or a commercial building, the various features of the structure are shown and discussed in detail.

A good broker should be quick to surmise when the property shown to a prospective client fits his/her needs. Some brokers simply force properties that clients do not want or simply could not afford. As a real estate broker myself, what I have discovered through the years is that it is best to be an adviser when it comes to fulfilling the needs of buyers. Brokers need to listen to the real needs of their clients before they can really sell.

Remember that your real estate broker is not your personal driver. Be courteous enough to arrange for a meeting site that would be convenient for both parties.

Once you have selected the property that you would want to own, it is now time to close in on the deal. This will be our topic for next week.

(Alexis A. Acacio is an associate professor of civil engineering at the University of the Philippines. He is also a marketing and technical consultant to various real estate developers and construction companies. For comments and advice you may reach him at aaacacio@pacific.net.ph or fax +632 932-6986.)

Do you really save by selling on your own?

By Alexis A. Acacio, contributor
Inquirer News Service

EACH one of would want to save money. If we can do something on our own, then why do we have to pay for services that we may never need? This thinking follows through when it comes to the real estate transaction. When one sells real property, there are always two paths to do it -- (1) sell on our own; and, (2) sell it with the help of a professional that is through a real estate broker or salesman.

Selling on one's own can offer advantages:

• You can save on commissions. Selling on your own can save you the commission that you may have to pay the real estate professional who will sell your property. This is why most house owners would want to sell on their own.

Certain situations also warrant that you can sell on your own:

• It is your profession. You may be in the sales and marketing profession only that it is not real estate that you are currently selling. You may want to try your skill in selling real estate. Remember though that if you are used to selling medium-priced items in the range of a few hundred pesos, selling a five-million-peso property with a lot of legal paperwork is entirely a different ball game. If you are in the legal profession, then going through the process of documentation and paying the necessary taxes can be easy for you.

• Your relatives or friends might buy the property. If you have a ready buyer who has been constantly telling you that should you decide to sell your property, they will buy it in a snap, then go ahead -- sell without an agent. In this situation, you already have a sure buyer.

If you think that you can sell your property on your own, ask yourself if you can handle these things:

• Do you know where your buyers are? Selling real estate requires that you reach able, ready and willing buyers. Knowing where to find them is half the battle.

Real estate professionals work together as a team and have a network to share and to exchange listed properties. It is then made known within the network that a certain property is for sale at a certain location at a certain price. If you do sell on your own, you cannot possibly use this network without having an agreement with a broker.

• Do you have the time? Selling your home will involve meeting the prospective buyer, showing them the house, answering questions and discussing financing possibilities. This can take a few hours and can easily take up the whole day especially if the property is located outside the metropolis. Showing the property means that you may have to take off from work and cancel some of your important appointments.

• Do you know the market value of your property? If you price too high, many prospective buyers would not even consider making an offer and worse, your property may not sell at all. If you price too low, then of course the property will sell in a flash but you will have lost money.

Having a real estate professional on board will give you a proper appraisal of the property so that you neither would price it too high nor too low.

• Do you know how to negotiate? Selling real estate involves a series of offers and counter offers until the buyers and sellers agree on the price and terms. This process can cause a lot of stress on those who are not used to negotiating.

Your real estate professional can negotiate in your behalf.

• Do you know the legal aspects? Selling real estate involves legal documentation and transfer of title. The process involves going to the various government agencies, filling up the necessary forms, paying the required taxes and picking up documents that you would need for the next process. This requires knowledge and experience and involves a lot of your valuable time.

Real estate professionals are very familiar with the process and can perform the tasks for you in a breeze.

• Do you know the process? Not knowing the process of selling real property especially the legal aspects can be a waste of your valuable time or much worse, can cause you legal problems. If you sell on your own, you would still need the advice of a real estate professional or a legal counsel that means that you will also spend money on professional fees.

Real estate research has shown that four out of five pieces of real estate property are sold through a real estate professional. If you think you can save money by selling on your own, just make sure that you are ready to face the risks of doing it on your own.

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