Buying a home these days involves a lot of major decisions – one of which concerns some of the most important people in your life: your children. Having children changes the decision-making equation dramatically. There are several areas of concern associated with home-buying due to having children, and a wise homeowner and parent will address each when choosing which property to purchase – especially when considering the local neighborhood.

Here is a guide to picking out the right neighborhood when children are in the picture.

Environmental Factors

The surrounding environment – what is immediately around the home, what area of the city the home is in, etc. – has a lot to do with whether or not the property itself is desirable for a household with children. After all, it’s not just about the house itself. A great house can be a bad place to raise children if it isn’t in the right part of town.

Area

One thing to look at is the immediate area, in most places the neighborhood. Is the neighborhood kid-friendly? Are there clearly-posted speed limits, ample lighting, a lack of harmful obstacles, and other factors that make the neighborhood safe? Also, are there other children nearby?

Crime Rate

You do not want to live in a part of town that has a high crime rate if you can help it. This is not always the case, but for the most part, do your best to live as far away from a crime-riddled neighborhood as possible. At the least, try to choose a neighborhood that has an active community and a good neighborhood watch program.

Nearby Amenities

It always helps to have certain amenities nearby, like grocery stores, pharmacies, all-purpose shopping centers, banks and ATMs, gas stations, etc. If you like organic food, an organic food market is preferable. If you have very small children, a store that has infant supplies is a plus. Look for amenities that fit your family’s needs.

Emergency Center

No one wants one of your children to get hurt, but if one is injured, you want to be relatively close to an emergency center if at all possible. At the least, try and find a nearby walk-in clinic for all the ills, bumps, and scratches that kids collect.

Look for These Facilities in Your Area

In addition to the above, there are several facilities that have a major impact on the desirability of your property, and could even have an impact on the price of your home (as discussed later).

One of the main facilities parents want when choosing a home is a great school. Living in a good, solid school district – or being relatively close to a private school – is at the top of the list for many parents when choosing a property, and that is understandable; having a great school is one of the key steppingstones to success for a child. Know that a good school district is perhaps the single biggest factor outside of the property itself that determines the price of your home.

Hospitals, as mentioned above, are also very nice to have nearby, but so are daycare centers – particularly if you are a new parent or have young children. This also could have an indirect influence on how much properties in your neighborhood cost because it is frequently something parents look for when planning a home purchase.

Finally, a good play center nearby – such as a kid’s play zone, arcade, or other family-fun destination – is a blessing because your family will have a much-needed diversion whenever cabin fever sets in.

How the Area Impacts Pricing

If you have children and have never bought a house before based partly off of raising children in it, then you might be surprised to know just how much of a home’s price is determined by the area in which it sits – and how much of that price increase is due to the area being a child-friendly environment.

Simply put, homes in a good area will have a higher price tag than homes in areas viewed as less than desirable for families. Take the same exact home and place it in two different areas: one area is a good place for children, with a strong public school district, plenty of amenities, and a low crime rate; the other area is in a part of town with a troubled school district, lack of access to desired amenities, and moderate crime. The price for the first home will be noticeably higher.

The more centrally-located your home is, the more expensive it will be to purchase. But, by shopping around for great deals – especially with foreclosures – you can find homes that do not cost as much but are still located in great areas.

In the end, be aware of how pricing is directly and indirectly impacted by the environment in which the property sits due to children being involved in the decision-making process.

With the large number of bank sale properties on the market, many potential homebuyers are filling out home loan applications and seeking approval from their lender. We all know that getting approved for a home loan is a bit more difficult due to the strict lending standards imposed by banks after the real estate market crash. As a result, it’s crucial to understand what banks look at when approving a home loan.

How do Lenders Conduct a Credit Check?

Once lenders receive your application, they will obtain your credit score from the three major credit bureaus (Experian, Equifax, and TransUnion). After carefully analyzing and comparing these three credit scores, they take a closer look at your credit history to determine whether they believe you will be able to pay your mortgage payments on time.

What Stands Out in Your Credit Report?

Although banks will look at the credit scores, they will also take a closer look at your credit history to better determine if you should be approved for the loan. These lenders will look at everything from your credit history to your current debt balance. Lenders will examine your current debt balance and compare that to your monthly income to determine if the mortgage payment is feasible and within your budget.

For example, if you make $2,000 per month and you have a $600 car payment and multiple credit cards that are maxed out, a lender is less likely to approve you for a home loan that would require you to pay $1,000 per month on your mortgage. On the other hand, if you make $5,000 a month and only have a car payment of $600 and very little other debt, approval is much more likely. Therefore, the amount of debt you currently owe and the history of how quickly you pay off your debt are definitely taken into consideration by lenders.

Why is it Important to Understand what Lenders Examine?

Many people are searching for bank sale properties at the various listing services . However, many people are considering properties that are out of their budget. Therefore, understanding that banks closely examine your current debts and compare that with your current income can assist with helping you to ensure the home you are considering is within your price range.

You can obtain 3 free credit reports per year from the major credit bureaus– one per bureau per year – and get a better idea of what the lender is looking at when considering your home loan. Before even applying for a mortgage, check your credit score and current debts and locate a bank sale property that falls within your budget and is more likely to be approved by your lender.

In the end, banks do take your credit score seriously, but they also take a closer look than merely looking at the numbers provided by the credit bureaus. Lenders consider everything involving your credit history including your current debts and recent payments.

In today’s real estate market, many have turned away from living in the city – especially with rental rates skyrocketing – and have instead decided to purchase land and build new homes. This decision works very well for some, but is a very important decision that requires a lot of thought, just like buying a home.

Here we will discuss the benefits of buying land and offer tips for purchasing land and getting the right deal.

Benefits of Buying Land

There are plenty of benefits of buying land that we will cover, namely:

- Freedom of choice

- Distance away from city living

- Building your own home

Freedom of Choice

When polled, many land purchasers state that the freedom to pick the exact place where they want to live is a major plus and a driving factor behind their decisions to buy land instead of purchase a home in a pre-existing neighborhood. Buying land gives you that freedom and flexibility that is difficult to find when turning to existing homes – or even new homes on existing lots in a city or suburb.

Distance Away from the City

Many landowners also do not like living in or near a big city – or any size city at all – and prefer life away from the hustle and bustle of metro living. Even those that do not mind the city prefer to have distance away from the traffic and congestion that goes on in the city on a daily basis.

Additionally, the cost of land and home ownership decreases as you move away from the city itself. This is very enticing for those who want a more affordable way to build a modest home.

Building Your Own Home

Finally, the main reason why people prefer to purchase land is to build a new home to their exact specifications, rather than move into a new one.

In fact, this is perhaps the benefit of buying land – complete and total control over what your home looks like and contains. Custom home construction took a big hit after the 2007 housing crash, but it is slowly yet surely creeping back up – which means people who are looking for the right land are positioning themselves to benefit.

Considerations when Purchasing Land

If you have made the decision to purchase land, here are some considerations you should keep in mind when going through the process.

Utilities

Know what your utilities will be before you sign on the dotted line (or even get near that point). Rates for power, heating, cooling, sewage, and water vary greatly from region to region – and even, in some cases, area to area in the same county. This may not be a factor for some, but for most people, differences in utilities could really matter.

Additionally, some utilities may not be available. There may not be any sewage lines in that particular part of the county, for example, requiring your home to have a septic system installed. Internet is another example; without the right infrastructure, access to high-speed internet may be impossible.

Easements

An easement is essentially permission to use someone else’s land for a particular purpose. Land may have easements attached to it that allow other people to either use the land or move through the land (called a right-of-way), and this could be a major factor in your decision. Public utilities are common beneficiaries of easements. If you do not like the idea of easements, either on your land or surrounding parcels, that is something to consider. Of course, as a landowner you can grant easements to others, but cannot restrict access to easements on your property.

Elevation

Consider the land’s elevation and geographic profile when choosing a particular parcel, too. Without checking out the property – or at least looking at a relief map – it is difficult to get a good feel of how the land sits, which means you can purchase countryside land that has a ravine running through it. Or, you could be faced with building on a hill – something many people enjoy, but could be problematic for you.

Getting the Right Deal

Once you have decided to buy land, getting the right deal is your next step.

Believe it or not, there are land foreclosures just like property foreclosures. Foreclosed homes get all the attention these days, but you can also find foreclosed plots of land – they may just require a bit more research. Online directories have listings of foreclosed land so you can find cheap property where you want it.

Also see what neighboring parcels are fetching in sales and auctions. Use that as a bargaining tactic. Research the past value history of your prospective plot as well. Between this and shopping around for foreclosures, you are bound to find a great piece of property that you can afford.

Finding the right property to buy in today’s real estate market seems harder than it really is to most. After all, plummeting prices and doom-and-gloom news have made it seem like housing is a bad investment – but it isn’t. On the contrary, pre-foreclosure homes – homes that are facing foreclosure but haven’t yet started the process – are terrific opportunities to obtain great homes at incredible bargains.

Here is a five-step process to finding and purchasing a pre-foreclosure for your family or for an investment.

Finding the Property

The first step is, in many cases, the most time-consuming step, because it involves sorting through literally thousands of promising opportunities for the perfect property.

You are essentially looking for two very important qualities:

1. Price

2. Condition

But first, you have to actually find the properties that are facing foreclosure. Short of having an ear to the ground and connections in a particular neighborhood, the only consistent way to do that is to search for foreclosure listings online or through your county’s recorder office (they record all “Notice of Default” filings for foreclosures).

Narrow down the list by price and condition. If the home, for example, is clearly worth far more than you care to invest (or, similarly, isn’t worth nearly as much to be of interest to you), then it’s out. If the home is in poor condition and you don’t want to bother with renovations, it is also out.

Contacting the Owner

Once you have a prospect, you can then start the process of contacting the owner and beginning talks regarding the home. This can be an awkward or unpleasant part of the process for some, but in reality, homeowners often welcome the chance to avoid a nasty foreclosure proceeding, provided they are reassured you are not a scam artist and will offer a fair deal.

Written entreaties are best; do not show up to the front door one day and ask to see the house. Email also works, as do postcards. You need to take care to represent yourself as a legitimate buyer, not a con artist. This means making sure you sound realistic and tell them that nothing is guaranteed and any short sale may not be approved by the lender.

Ask the owner how many months they are behind on payments. Also ask about their selling price, to gauge how much room there may be for negotiations. At this stage, sometimes you will just have to cut yourself loose from an unrealistic owner who is holding out hopelessly for far more than he or she will ever receive.

Valuing the Property

Some in the pre-foreclosure business place this step above the previous one, but contacting the owner before attempting to value the property makes the latter step easier. In this process, you are attempting to determine the true value of the home, i.e. what you will offer the owner. There are other things to add in later – like outstanding mortgage payments, taxes, etc. – but for now, we are looking for that base price.

First, examine the condition of the home. Will it require extensive repairs? Does it have modern features that are attractive to buyers?

Next, take a look at the environment. Is the home in a good neighborhood, with a good school system? Are there other pre-foreclosures or foreclosed homes in the surrounding area?

What was the last purchase price for the property? This number only shows you what someone last paid for it – not what someone would pay for it now. Ideally, you will make your money when the market recovers, so that number could be your upside, but nothing is guaranteed.

How much are similar homes going for at foreclosure auctions in the surrounding area? This last part is key – if the bank believes it can save more money by selling off the home, it will.

Making the First Offer

This is the most important step in the entire process; if it goes south, it can be difficult to salvage a deal (even though the first offer, in all likelihood, may be rejected, sending you back to the drawing board for a second offer).

First, approach the owner and give them a fair offer that takes into account the value of the home, the present and expected market, and the lender. Once you obtain agreement with the owner, you can go to the lender and tender a written offer to them. Most banks use loss control officers to handle real estate transactions involving distressed properties. If you have a real estate broker helping – which is highly recommended – you can use their expertise in this step as well.

You are aiming for a price that gives you a great deal, solves the owner’s dilemma, and gives the bank enough financial compensation that they will not seek more money through the uncertainty of an auction. If you can convince them that your guaranteed money is worth more than the trouble and risk of pursuing more money that may not be there at auction, you will walk away as a new owner. Making a “cash up front” offer is also very helpful.

Financing

Paying for the property is the last step and the easiest for many who have made it through the process and have managed to make both the owner and the lender happy with the arrangement. You can always finance a pre-foreclosure purchase with a loan from a lender – even the same lender who is agreeing to the short sale in the process. In fact, some see this as a way to mitigate their losses even further by keeping business in house. They will make money off of your loan payments, and you will get a discounted house for your uses.

Ways to cut down the amount needed to finance involve reducing your offer in exchange for delivering a higher down payment. An adjustable rate, while risky, is preferable to some investors who intend on reselling the home before the rate resets. For others, though, locking in a low, fixed rate is best.

At the end of the day, investing in pre-foreclosure listings takes a lot of work and research, and doesn’t always pay off. When it does, though, you can obtain great properties with significant discounts for a fraction of the cost of other properties – all without having to go to a single auction.

A study surveyed metropolitan areas in the country and found that 42 metro areas – areas with over 200,000 people – that were undervalued, in that the price-to-income ratio was lower than the historical average. Let’s take Las Vegas, for example. In 2000, the median household income was $44,069, and the median home value was $137,000. This is a price-to-income ratio of 32%, or roughly 1-in-3. This means that the median home price was roughly three times the median household income, which was the norm for 1985 through 2000.

Now, the median household income is $53,000, and the median home price is $115,200. The resulting ratio – 46%, or roughly 1-in-2.2 – means that the average home is drastically undervalued. If your typical home costs only 2.2 times what a typical household makes now, whereas 11 years ago the home was three times the income, you know that home values have fallen dramatically.

This means that homes in these 42 metropolitan areas are, in a word, cheap. They represent homes that are very affordable for your typical American family, which means there is a lot of upside potential for investors looking to strike it rich in the real estate market. True, the report also revealed that many metro areas – namely Los Angeles and New York – are overvalued, but one can expect those values to be inflated no matter what the economy is like.

Detroit is another area that is severely undervalued. Median home prices are a jaw-dropping $78,000. They are rising, but they still have quite a ways to go before the price-to-income ratio is anywhere near the historical average. Right now, the median household income is $29,526, giving us a price-to-income figure of 37%. Even better is the fact that the median foreclosure sale price is $36,026 – a price-to-income figure of nearly 82%.

That is a lot of potential profit for an investor who wants to buy low and sell high when the real estate market recovers. It’s hard to imagine another time in the near future when homes will be this affordable.

Of course, investors and homebuyers can make the process even simpler – and save more money – by heading to the locations that offer the maximum leverage for a buyer. There are few markets that better suit this description than New York City.

Since 2006, thousands of properties in the Big Apple alone have been foreclosed on and repossessed by banks and other lenders. Due to the high volume of distressed properties in the five boroughs, banks have neglected many properties and simply left them abandoned – resulting in thousands of homes that sit vacant and rotting.

In NYC alone, there are currently 3,751 open violations on bank-owned properties. Approximately one-third are in Brooklyn; the rest are scattered between Manhattan, Queens, the Bronx, and Staten Island. These violations include everything from blocked exits (like the kinds that led to two fatalities in a disastrous fire last April) to faulty wiring and unlivable conditions.

Of course, many of these properties are multi-family properties, like apartment buildings, meaning that people still inhabit these structures even though the current owner – the bank – has failed to maintain them as required by law.

As a result of this scourge, buyers who are looking for great deals have an excellent bargaining chip on their side in New York City. The leverage is simple: Buyers are willing to take a property off of the hands of the bank, meaning the bank no longer has to deal with violations and upkeep; in return, the buyer receives a hefty discount on their investment.

Using this situation to your advantage is one way you can gain an edge and exercise pretty significant leverage in the current market. Prices are already depressed; offering to step in and relieve banks of some of their outstanding inventory is a way to make them go even lower.

Naturally, many of these properties will require renovations to get them up to code and free of violations. But, the price differential still looks extremely promising for many potential targets in the city that never sleeps.

For investors and homebuyers, the market has been anything but.

Numbers released today by the S&P/Case-Shiller report revealed that home prices across the country for the month of May fell by 4.5% on average from levels seen in May, 2010. Of course, this number is offset somewhat confusingly for the layperson by the fact that prices rose in May by 1% from April.

In other words, the past year has been a down year for the market when you look at the past 12 months. But when you look at the past two months, the market has had continual gains in prices.

What does this mean – and what should you do?

If you are an investor or homebuyer, you should break out your checkbooks, call your lenders, and head to the Internet to find your next property purchase. While that may be exaggerating things slightly, the core truth remains: Prices will increase, either this month or six months down the road or in 2012. When that happens, those who made investments today will profit and benefit.

And those who do not will miss a golden opportunity to purchase valuable properties with discounts near the bottom of the market.

Trying to time the market exactly is a flaw to which many investors succumb. It’s virtually impossible – we can no better tell you when the lowest point will be reached as we can the number of grains of sand on Malibu Beach – but we can tell you what trends and indicators reveal.

Judging by today’s numbers, the real estate market appears to be gaining traction.

Of course, some will say that the index is seasonal, and more people buy homes in the spring than at any other time during the year. And in fact, when you seasonally adjust it, the index is flat.

But after eight consecutive months of declines, two back-to-back flat months is still a positive indicator. Plus, what the market does over the next 6-12 months won’t eliminate the strong likelihood that the market will recover in the foreseeable future – soon enough to make current real estate investments profitable.

With foreclosures set to flood the market once more, and current new home housing sales mostly flat, we can expect home prices to drop still. But we can also expect a bottom to be reached – with real estate investments in the black.

Today the firm reported a mind-blowing profit increase of 243% in the second quarter from the first quarter. Blackstone made $703 million in profit from April to June of this year, compared to a relatively-small $205 million during the same timeframe last year.

This gargantuan performance comes on the back of a healthy and vibrant real estate investment strategy that was primarily built on commercial real estate, with residential real estate sprinkled in. Such a strong showing – especially when many other private-equity companies are struggling – raises interesting questions about the true strength of the real estate market as a whole.

For starters, how did Blackstone make a killing in the commercial real estate market – a segment of the market that is, by most accounts, far worse than the residential side of the house? By its own admission, Blackstone has made a lot of money by soliciting investment capital from investors looking to get in the game, and that comes in the form of investing in commercial real estate debt.

Approximately $2.5 trillion worth of real estate debt will mature between now and 2018; Blackstone is positioned to profit off of investors looking to gain a piece of ownership of this massive number and profit themselves in years to come.

In short, what Blackstone is doing with its commercial real estate debt fund is similar to what private investors do in the residential market by purchasing mortgage-backed securities – or, believe it or not, buying tax lien certificates and tax lien foreclosures.

Another interesting question is whether or not we can determine if the residential real estate market will recover like the commercial real estate market will – or at least, how Blackstone expects it to recover.

The answer to that question can be found in the actions of Blackstone Group and its competitors. All of the major private-equity firms in the country are raising money for real estate funds that involve residential real estate. – including foreclosures and distressed properties. Blackstone itself raised $3 billion; competitor Carlyle Group has raised $2 billion; and Lone Star Funds, based in Dallas, Texas, pulled in $5.5 billion for a fund that closed two months ago.

Clearly there is interest in the real estate market, both for residential and commercial properties. The success of Blackstone and others is a sign that both markets are expected to recover – and if the big boys think it’s a good move to invest, other investors and homebuyers probably should too.

How are you positioned to follow their lead and profit?

With all that considered, we may be in the beginnings of a new decade of real estate.

The reasoning for this is simple. For starters, what goes down will eventually come up, in the long run. From a short-term perspective, of course, everything looks messy. But from a long-term perspective, historically low prices means that there is a massive profit margin to be had if prices return to anything even close to their 2006 highs.

Plus, interest rates are historically low, and it is not for certain how long the Federal Reserve will be able to keep them at this level. Sooner or later, they will have to rise – but before they do, buyers have plenty of time to get financing that is, for lack of a better word, cheap.

Additionally, inflation will be set to rise over the next decade as deficit spending and debt continue to mount. Since inflation is almost an inevitability – the government’s fiscal policies to keep inflation in check can only go so far – “real” assets like gold and real estate become more valuable. Therefore, owning real estate is also a hedge on a devaluation in the dollar that may occur in the near future.

All of these reasons and more point to the notion that the next ten years may be marked by a real estate bottom, followed by a prolonged period of rising home values – and with that, profit.

Before delving into the great investment opportunities, let’s take a second to look at the causes for the continual decline of home prices across much of the country. Unemployment plays a huge role in the real estate market; as more people are unemployed, there is an increase in foreclosures and therefore decline in home prices. As foreclosures increase, homes have to compete with these incredibly low prices to sell their homes; therefore, home prices throughout the entire area begin to fall. In the end, this is incredible news for those looking to purchase a new home in the near future—there will continue to be great properties at unbelievable prices.

What if you are looking to purchase a home now before prices fall again? Fortunately, there is a surplus of opportunities in the current real estate market; however, these great deals may not be around much longer. If you are considering purchasing a home in San Francisco, Orlando, New York, Washington, or Dallas then it is time to buy! All five of these cities are expected to see an increase in home prices throughout the year.

In short, there are great foreclosure investment opportunities throughout the country that will continue to increase throughout the year; however, if you desire to live in one of the five cities expecting the biggest increases in home prices then you should consider investing now before it is too late.