Tag Archives: First time home buyers

Home buying process part 5

Make an Intelligent and Informed Offer

Part of the problem of looking at homes for sale is you are not viewing homes that have sold. Only the sold homes will provide you with adequate comparable sales to know if a home is overpriced, underpriced or just right. Sellers can ask any amount they want, the price needs to be substantiated.

  • Consider writing seller’s market offers in seller’s markets and buyer’s market offers in buyer’s markets. Cannot stress the importance of this enough. Your “lowball strategy” picked up from a popular TV show does not work in seller’s markets, for example.
  • Select a home offer price based on the amount you feel a seller will accept or counter. This price is generally based on the comparable sales, with input from your real estate agent.
  • If you are considering a lowball offer, ask your agent to verify this price for you. You will need to present a reason for the seller to accept this type of offer, and it can’t be based on whim.
  • Prepare for multiple offers if the home is considered desirable in a hot location. Don’t shy away from multiple offers. Somebody has to win. Why can’t that buyer be you?
  • If your offer is rejected, ask your agent to explain why and don’t repeat that mistake with your next offer. Also, don’t automatically blame your agent. Maybe the problem is you didn’t offer enough? If your agent steered you wrong, you need to engage in a frank discussion with that agent.

Home buying process part 4

Look at Homes for Sale

This is truly the fun part, the (relatively) non-stressful part of buying a home. Try to withhold judgment until you have toured a home in its entirety. And don’t dismiss potential homes because of superficial issues that could easily be remedied by a coat of paint or some landscaping. Go inside and look.

  • Ask your agent to look at homes for you before showing them to you. Not every agent will have the time for this extra service, but in some instances, agents will agree. Or an agent might tour homes on her own every week and have already viewed homes that meet your needs.
  • Narrow your search to those homes that fit your exact parameters to find that perfect home. This might be more difficult to accomplish in a market with tight inventory, for example.
  • Ask your agent to give you MLS print-outs of comparable sales in your targeted neighborhood. With printouts in front of you, you can take notes as your tour. Rate homes on a scale of 1 to 10. This will help to shorten your list to the best homes for you.
  • Consider all homes on the market, including fixer-uppers, REOs, foreclosures, short sales and those overpriced homes with longer DOM. You will find this approach helpful when your choices are slim.
  • Observe open house etiquette. If you go to an open house on Sunday, tell the hosting agent if you are represented by a real estate agent.
  • Tell your agent which online home listings you are interested in previewing and ask for additional input. Your agent can gather more information than the notes provide in MLS by talking to the listing agent, and will get more insight than you could, so don’t call the listing agent yourself. Let your agent earn his or her paycheck and do this for you.

Home buying process part 3

Get Your Finances in Order

Line up your financing, set aside a down payment and study the loan programs that are available. By doing your homework, you will know exactly how much you can pay and what it will cost you. Little is more disheartening than to learn in the middle of a transaction you cannot close.

You might ask your real estate agent for a lender referral. Lenders are not allowed to compensate agents for referrals, in case you are wondering. This means your agent will refer only the top lenders who perform well because your agent wants YOU to win.

  • Find a Lender. Check out places to get a mortgage and compare rates and fees. You might start with your own financial institution, then interview a few mortgage brokers and choose a loan product you completely understand. Realize everybody charges about the same rates, so pick a lender you trust, who communicates well and promises to meet your anticipated closing date.
  • Determine a Down Payment. The more you put down, the lower your monthly mortgage payment. There are at least a dozen places to find a down payment, only one of which is your own bank account. Your chosen loan program may stipulate the minimum down payment, but you can always pay more. The higher the down payment, the bigger your equity position.
  • Pick your loan program. Consider FHA Loans. FHA loans carry competitive interest rates, come with minimum down payment requirements and allow sellers to pay some or all of your closing costs. Some first-time home buyer programs utilize FHA loans as part of their financing and also lend you the money for closing costs and / or your down payment.
  • Get a Preapproval Letter. Showing the seller you are already preapproved for a loan gives you an edge during offer negotiation.

Home buying process part 2

Find a Agent to Help You

Whatever you do, don’t try to go it alone. Buying a home is not as easy as it looks. You will benefit from professional assistance, and it’s a free service for you. Not to mention, agents often see all the new listings before they are available online.

Do not call the listing agent in hopes that agent will do whatever it takes to earn twice the commission under dual agency. Agents are more ethical than the public gives them credit for. On top of which, you won’t get individual representation; you would either receive neutral representation or no representation at all.

Ask friends for a recommendation to a Realtor. Search for agents in your area on a search engine, look at agent websites, read reviews, and peruse blogs (as many agents write about their real estate market).

  • A agent will represent you and have a fiduciary responsibility to look out for your best interests.
  • Agents may ask you to sign a buyer’s broker agreement, but it is the seller who pays the commission. I know it sounds odd that a seller would pay your agent, but that’s generally how it works.
  • Interview agents until you find an agent you trust and with whom you feel comfortable. Possessing a real estate license is no guarantee your agent is competent. Agents come from all walks of life and some are much better than others.

Home buying process part 1

Let’s say one morning you wake up and realize that you’re ready to buy a home. You’re tired of paying rent with nothing to show for it, and you figure that it’s time to get into a home of your own. But you have reservations.

After all, if it’s your first time, you’ve got questions. You might be a little nervous that you’ll mess up, and it’s normal to feel that way — you are probably about to spend hundreds of thousands of dollars and make the most important financial purchase of your life.

So it pays to come into the home-buying process armed with as much information as possible.

Every state requires slightly different steps to buying a home, although they are basically very similar. Here are the basics.

Consider If Buying a Home Is Right for You

Many people harbor secret fears about buying a home, and some of those fears are justified. Not everybody is cut out to own a home, and if you’re one of those people, it’s better to find this out now than when you’re under contract.

  • Compare Renting vs. Buying. You might decide that renting is better for you than buying, because buying a home has its drawbacks.
  • Contemplate some of the reasons to buy. There are tons of benefits to buying and owning real estate; keep these in mind if you start to get cold feet.
  • Should you buy a home before getting married? If you are buying a home with a partner or significant other before tying the knot, you need to think ahead and consider potential financial consequences.
  • Ask yourself if you plan to stay with the same job or remain in the same city. If you’re a carefree person who desires the ability to move elsewhere should the urge hit, you might not be able to leave on a whim or quit your job if you own a home.

Why you need a realtor

While house hunting TV shows tour the neighborhood, close the deal and throw a housewarming party in 30 minutes, real life is not as streamlined. If you’re in the process of buying a home, here are signs it’s time to call a realtor.

1. You believe everything on the internet

While you can view tons of listings online, not all of the information is accurate or up-to-date. You’ll see outdated comps, conflicting forecasts and different ratings. With access to the MLS and insight on properties about to hit the market, a Realtor will make sure you’re considering all of the homes in your market that fit your criteria.

2. You’re juggling a hectic schedule

You don’t need to spend time sorting through listings and contacting sellers. An agent will do the browsing so you only visit the homes that best fit your needs and price range.

3. The biggest thing you’ve negotiated lately was your kids’ bedtime (and you lost)

As professional negotiators with years of experience, Realtors know how to create, present and negotiate the best offer. Remember, you’ll be going up against another professional negotiator: the seller’s agent.

4. You don’t know if a neighborhood is on the way up or down

An agent who knows the neighborhood can give you the scoop about local developments and changes that don’t always pop up in a Google search. He or she will also put them in context of larger market forces that could impact the future value of a home.

If you’re looking for an experienced professional to guide you through the home buying process, look no further than your local RE/MAX office. Find an experienced agent to work with here.

Why you need a home inspection

One of the best pieces of advice you can heed when it comes to buying a house is to order a home inspection. Regardless of whether you’re a first-time homebuyer or an old pro, you might have on rose-colored glasses when it comes to buying a house – your future home. Luckily, a certified home inspector has no emotional attachment to your new place and can impartially and appropriately identify structural, electrical and plumbing problems. Plus, this person can offer insight into the safety and value of the house.

During your home search, you’ll probably notice the great front yard, charming breakfast nook and spacious bedrooms. What you won’t notice, however, are the termites in the basement, nests in the chimney or cracks in the foundation. That’s why it’s important to speak with your real estate agent, who will be able to recommend inspectors who can reliably and responsibly check the nooks and crannies, walls and roofs.

The inspection will cost you several hundred dollars, depending on where you live, but it’s a small price to pay to ensure your home is worth the investment. Usually conducted after an offer is accepted, the inspection also provides leverage for negotiating concessions with the seller before the sale is finalized. Based on the inspector’s detailed report, you’re able to alert the seller to all issues you’d like fixed or addressed before the sale is closed.

In other words, a home inspection allows you to know exactly what you’re buying – and if it truly is the perfect place for you.

Starting the home buying process? 6 decisions to make.

In the market for a new home but have no idea where to start? There are several decisions you should begin to make before you even start your home search. By asking yourself the right questions, you can quickly pinpoint what you want – and can afford – in your next home.

1. What’s your budget? See how your finances stand up to the 28/36 rule, which lenders use to see what you can afford to pay each month. A financial adviser or your real estate agent also can help you crunch the numbers. Going through the mortgage pre-approval process lets you know how much lenders will allow you to borrow – plus it helps you show sellers that you have the funds to backup your offer.

2. What do you need in your new home? How many bedrooms or bathrooms do you need? What about a large kitchen, a home office or a playroom for the kids? How many cars need covered parking? It’s critically important to ensure the home you select meets your family and lifestyle needs.

3. Do you want a condo or single-family home? Condos come with much less maintenance. You typically won’t be shoveling snow in the winter or replacing the roof, but you’ll likely pay monthly association fees to cover services and repairs in the community. Houses, on the other hand, come with more privacy and freedom to customize. They also come with full responsibility for maintenance.

4. How do you feel about living under covenants? Depending on where you buy, you may have to pay homeowner association (HOA) fees in addition to your mortgage. There are benefits to HOAs, such as maintenance, community centers, and maybe even a pool or gym. But you also could be faced with more restrictive rules about the look of the outside of your home, down to the color of your front door, types of window coverings, and whether you can plant flowers in your yard.

5. What school district do you want to be near? Even if you don’t have children in the house, local schools will affect your property value. Prospective homebuyers tend to search with education in mind. Do your research on the schools in the areas you’d like to live in.

6. Should the home be move-in ready? Ask yourself how much elbow grease you’re willing to put into a home – or how much you’ll pay someone else to do the work. Fixer-upper homes can be great after the work is done, but you’ll want to figure out your renovation budget before you start your home search. A 203k home-renovation loan might be the right resource for you. If you’re not ready for the extra financial commitment of rehabbing a home, or you can’t or don’t want to wait for remodeling projects to finish up, then a home that’s move-in ready might be right for you.

After considering all these factors, you’ll be ready to start the home search with a clearer picture of where you’re headed. When that time comes, let a RE/MAX agent guide you all the way there.