Over the last 25 years, we have developed an innovative process for uncovering our buyers’ true preferences and needs so we can best help them find that perfect house to fit their lifestyle—and all in their time frame too! We will help you find a home to match your lifestyle and your budget while focusing on maximum resale value to help you make a smart decision!
Don’t worry when the process gets emotional or feels out-of-hand; we’re here to guide you through every step, to listen to you and consider your priorities, and to help keep your purchase on track. We want to make sure that your next home is one that your heart loves and that your brain does too!
Of course we want you to love your house, but increasing your net worth with your new property purchase is an important goal for us as well! By analyzing trends, floor plans, home modifications, repairs, and with over 4000 client interactions, we’ll help you make an informed decision
We work with hundreds of buyers and sellers every day with up-to-the-minute awareness of market trends and customer wants and needs; we are always operating ahead of the curve!
We have several key ways to save you time and make your buying process flow smoothly.
We want to understand what you are looking for and focus on those properties.
By helping you develop expertise in your niche, we enable you to better focus your searches and feel more knowledgeable and prepared to make a great decision.
We understand the market and property values.
When REALTORS® deal with M.Stagers Realty Partners , they consistently find us prepared, informed, and serious about our clients. Other REALTORS love dealing with us because we don’t waste their time and they respond to us with the same professionalism and promptness in return. Because we help you see houses faster and at more convenient times, sellers treat our offers with more gravity and promptness as well.
We have a solid reputation for genuine care and commitment to your purchase.
Our innovative process is designed to cut through the clutter and to focus on a systemized approach to find your new home, all while supported by a full team of trained, experienced individuals who help you along the way. We fully understand and embrace that we need a great team of people to provide the best service to our clients. Also, we are firmly aware of the importance of consistency and attention to detail, especially in this industry, and we have perfected our system over years of experience to provide our clients with an unparalleled buying experience.
We have a proven process.
We understand the challenges and uncertainties that accompany purchasing a new home, and we want to offer the benefit of our experience and expertise to help you avoid the pitfalls so that you may take this important step with confidence. We believe that buying your new home should be a fun, exciting, and stress-free process!
We know people.
You’ve probably heard that it’s not what you know, it’s who you know. Well, we believe it is both! Our many years of experience in this industry has provided us with the opportunity to meet, work with, and try out a wide range of service providers. Because we recommend only the best, our network of partners gets things done quickly with quality, integrity, and value. From inspections to financing, to home repairs and maintenance, we believe that working with people you know you can trust makes all the difference!
There are several ways to gauge how much you can afford to spend on a house.
But, before you go house-hunting, get pre-qualified for a mortgage so you’ll know in what price range you can shop.
It is not unusual for first-time buyers to be somewhat baffled about how to estimate what mortgage payment they will be able to handle each month, plus how much money they’ll need for a down payment and closing costs.
That’s why it is a good idea to get pre-qualified through a lender before you even start to look for a home. Pre-qualification lets a buyer know exactly how much a lender is willing to loan them. With pre-qualification in hand, the buyer can save a lot of time-and frustration.
Pre-qualification does not obligate buyers to take a loan from the lender, nor should it involve any fees (until later, when they actually apply for the loan).
At the same time, you must understand that pre-qualification is not pre-approval for a loan. A loan is a much more involved formalized process that results in an actual letter of credit from a lending institution for a specific loan. Depending on your unique circumstances, you may wish to consider pre-approval as an option, but it is not necessary-consult with your real estate professional to decide what is right for you.
The less formal process of pre-qualifying on the other hand is a tremendous tool for buyers to have when making an offer. Usually, pre-qualified buyers have an edge when making a purchase offer because the seller knows that the buyer is pre-qualified, and that there is at least one lender ready to make it happen.
In addition, it allows you the flexibility to choose the mortgage that is best for you at the time of actual purchase-which is sometimes months down the road. That can be important given the volatility of interest rates.
When a lender pre-qualifies, they are more concerned about the buyer’s paying ability than the price of the property.
For this reason, lenders are interested in more than just a buyer’s income. They also want to know how much existing debt a buyer has, what their ongoing financial obligations happen to be, and what the buyer’s monthly budget looks like.
Lenders use an established debt-to-income ratio, usually between .28 to 1 and .38 to 1, to calculate the amount of the loan they are willing to give to a buyer. For instance, a lender who uses a .3 to 1 debt-to-income ratio has determined that payments toward debt reduction-including existing debt plus new debt associated with buying a home-cannot be more than 30% of the buyer’s gross monthly income.
An important factor that may influence a lender to authorize a loan with a higher debt-to-income ratio – (where debt payments take a higher percentage of a buyer’s income) – is a larger down payment. Buyers who put a larger percentage of the purchase price down (5%, 10%, 15%, 20%, etc.) are considered better “risks,” because the theory is that the more a person has actually invested in the purchase, the less likely they are to default on the loan.
Buyers usually discover that the pre-qualification process will produce a home purchase price that is roughly 2 1/2-to-3 times their gross annual income. The 2 1/2 -to-3 guideline is only a general rule of thumb, however, and it doesn’t take a buyer’s full financial situation into consideration. Since the lender’s calculations will also consider a buyer’s actual debts and ongoing expenses, the loan pre-qualification amount may be higher or lower.
Regardless of the price bracket a buyer targets, they should keep pre-qualification in mind.
Aside from the down payment, the three largest expenditures involved with the purchase of a home are usually your monthly mortgage payment, insurance and taxes. Obviously, the amount of your mortgage payment depends upon your down payment, rate of interest and the price of the property.
Take, for example, a home that has a $200,000 mortgage. An 7% fixed mortgage for 30 years, will run approximately $1330 per month. What about taxes? The rate will often times vary from city-to-city, but generally you might expect your yearly tax bill to total around 1.25% of the purchase price. That means, for a home with a market value of $250,000, yearly taxes might run around $3125. A local real estate agent can help prospective homeowners refine these figures.
In addition, it is important to keep in mind that there are many additional expenses incurred with home ownership, some of the most obvious are utilities and trash collection. Smart homeowners should also budget for one other item: maintenance and upkeep of the home. If possible, a small amount should be set aside each month to pay for those “rainy day” repairs such as painting, plumbing (hot water heaters, garbage disposals), adding storm windows (to improve energy usage), insulation (in attics), etc.
But home ownership is not just a one way street-that is, aside from spending money on repairs and maintenance, homeowners can profit from their property. The most significant benefit is the tax deduction. It is no secret that among the last real income tax deductions available to consumers today are the interest paid on the home loan, and the property taxes. This can amount to thousands of dollars in deductions each year.
And, of course, the primary benefit of home ownership is appreciation-equity that builds every month. A home, aside from being a place that provides shelter, can be a profitable investment, and the rising value of the property oftentimes provides another “savings” account.
So, when it comes to buying a new home, remember one thing … the purchase of a property requires budgeting and planning.
The commotion of house hunting is finally over. You found just the right house, and your offer has been accepted. It was a great buy. Now, just one more hurdle-getting a loan-and you’re home free.
Often, buyers are so eager to get this “final detail” behind them, they rush through this portion of the transaction, and end up with less-than-ideal terms. Borrowers, however, have something lenders want-their business. This positions them to negotiate the best possible price (cost of loan), terms and service.
Let’s look at price, or the cost of the loan. The first thing to do is find out what the current rates are, information readily available on the internet, in your newspaper or from your real estate agent. When comparing rates, figure the annual percentage rate (APR), which includes interest, extra fees and costs accumulated over the life of the loan. Also determine the number of points, if any, that the lender will charge to make the loan. (A point is equal to one percent of the loan amount.)
Next, consider what loan options the lender offers. There are six or seven basic types of loans, which vary in their duration. Check how rates are calculated (fixed versus variable), and whether charges are fully accumulated over the life of the loan, or whether you’ll have to pay points up front and/or balloon payments at the end.
Which terms are best for you depends on factors such as what changes you expect in your income and what you predict will happen in loan rates in the years ahead.
For example, if you only plan to reside in the home for a year or two, starting with a lower Adjustable Rate Mortgage (ARM) might be the best choice. If you have no plans to move, and feel that inflation will rise rapidly, a fixed rate would obviously be better.
Finally, and perhaps most importantly, consider speed and service. Buyers shouldn’t have to wait days for approval and weeks for closing just because the lender is slow.
Remember, qualified buyers are great prospects for lenders – so give your business to the lender who demonstrates they not only want it, they deserve it.
Credit problems can make it harder to qualify, but it’s quite possible for buyers with poor credit to obtain a home loan.
Anyone who has had a financial problem-whether it was a matter of late credit payment, delinquent taxes, or even a judgment that was filed-should expect this data to be a factor when applying for a mortgage.
How critical a factor?
Minor lapses will probably have little to no effect. However, buyers with serious problems may still qualify for a loan, but they may have to pay a higher rate of interest or provide a larger down payment.
There are three steps that a person with past credit problems should take before applying for a loan.
First, request a credit profile from one of three major credit reporting agencies. To get copies of your credit report, start at: Credit Now – Credit Reports
Second, the buyer should optimize his or her credit profile by citing prompt payment of rent, utilities, and other bills not reported on the credit profiles.
Finally, the buyer should be prepared to provide comprehensive and candid explanations for any late payments to the loan officer. This is important because problems not reported by the buyer but discovered by the lender will reflect unfavorable.
Many lenders are understanding about one-time problems such as the loss of a job, a medical emergency, etc.
Buyers with patterns of delinquent payments might want to consider adding six months or a year of flawless credit to their track record before pursuing their home-buying plans.
So remember-if you are thinking about purchasing a home, but are worried about your past financial record-don’t give up.
There are solutions, lenders and agents who are in business to help.
A good home-buying decision is one that fits your lifestyle and your budget-a house you’ll be able to resell when the time is right. Sound simple? Not always.
Below are five common mistakes frequently made by first-time buyers.
LOOKING OUTSIDE YOUR PRICE RANGE
To avoid disappointment, contact a real estate agent who can help you pre-qualify before you start looking for a home. The agent can also provide valuable insight on taxes and other expenses associated with a home (utility bills, etc.)
BUYING ON IMPULSE
Buyers-especially first-timers-may be impressed by the first two or three homes they view. Look at a good selection. List the positives and negatives. Narrow the prospects to three or four, and then return for a closer look. Evaluate more than just the property. Look at the surrounding area and community amenities. Is this what you-and your family-want and need?
NOT PLANNING AHEAD
Think seriously about any personal changes you are planning in the next five to seven years.
For instance, if you are planning on having children, consider how the home will meet both your current and future needs. If a double-income is necessary to qualify for financing-and make your payments-do your plans foresee an income sufficient to continue making payments?
FAILURE TO FOCUS ON LOCATION
Don’t just focus on the house, examine the neighborhood. Is the area safe, well maintained, moderately quiet and close to work, stores, and schools?
Find out about zoning and what new construction is planned on any vacant land in the immediate neighborhood.
Will the property be easy to market when you are prepared to sell it?
FAILURE TO UNDERSTAND THE HOME BUYING PROCESS
Once you select a home, get involved. Find a real estate agent willing to spend time with you, and don’t hesitate to ask questions. Have them explain the negotiation, financing and escrow processes and other elements involved in the transaction.
Home-buying involves knowing the price, and what is inside and around the property. Consider all your options carefully. This may be the most important financial transaction of your life.
While each offers its own style and charm, the difference usually boils down to two things:
1. How the home fits into the buyer’s lifestyle.
2. The condition of the property.
Homes that are 10 years old or less are generally better insulated – or have dual-glazed windows or thermal panes – which translate into lower heating and cooling bills. And, in today’s rising energy cost environment, these considerations are significant. Although there are some exceptions, homes that have been built with all-electric systems, generally have higher utility bills.
Homes that range between 15 and 20 years old may be in need of new water pipes, especially if the old ones were galvanized and if a water softener was used. Water softeners and galvanized pipe can be deadly and, after 15-20 years, re- plumbing is usually required. Have a plumber or general contractor inspect the pipes. Needless to say, it can be expensive to re-plumb an entire system. Check the built-in fixtures and appliances for any signs of damage.
Flush toilets, test all the water taps and the electrical sockets, open and shut the windows, and try all the lights.
A window that will not open may be a sign of a more significant problem-for example, a wall may have shifted, or worse yet, it could indicate a problem with the foundation itself.
It is also a good idea to ask the seller for copies of past utility bills. Examine them for some insight into what you can expect monthly gas and electric costs to be.
Although newer homes may be free of significant physical or structural problems, there are other things to consider in making your decision.
Generally, room size and yard size tend to be smaller in some newer homes. While, on the other hand, they usually offer the benefit of the latest building and design technology. Many new homes also have more windows and natural light incorporated into their design plan, allowing for a more spacious feel and efficient energy usage.
Definitely. Hiring a professional home inspector can save a great deal of grief for buyers. The one exception would be when the home is new and carries a written warranty by the builder.
Many buyers mistakenly believe that the only reason to have a home inspection is to make sure that the house they’re buying doesn’t have defects serious enough to warrant backing out of the transaction. But there’s more to it than that.
Certainly, an inspection will usually reveal major problems that may even surprise the seller. The obvious ones are corroded plumbing, antiquated and unsafe electrical systems, or structural and foundation problems. And, the discovery of such problems may cause the buyer to re- think his or her offer.
Although a competent inspector can uncover deal-crushing defects, these problems are usually not commonplace. Typically, the seller will already have told the buyer about anything major. More often, inspections reveal less serious problems; problems that may not be serious but can be aggravating.
For instance, there could be a minor electrical defect, or inferior ventilation of a heating system or fireplace. If so, the buyer is usually in the position of having the purchase price reduced, or the defect corrected. More important, it also prevents the minor problem from developing into a major disaster a year or two down the road.
There is, of course, the possibility that the home inspection will produce another outcome: everything is fine. In this case, they buyer gains piece of mind, confident about the major investment he or she is about to make. That, too, is an enormous benefit for the cost of the inspection.
By asking their real estate agent, friends, or lender. You can also search for “Home Inspection Services” on Google to find a list of local inspectors in your area. But a quick word of advice: don’t hire a contractor. Contractors earn their living doing repair and renovation work, so their recommendations aren’t likely to be as objective as those of a professional inspector.
There are fewer investments that have shown a better return. However, the key to investing wisely in real estate is understanding how the industry differs from others.
For example, when the defense industry dips, it usually shows a national decline and the stock prices of defense-oriented firms drop across the board. The same is true of most industries, as they are also impacted nationally by various outside factors.
That is not the case with real estate, which is actually an industry and investment driven by local conditions. One community may suddenly lose a manufacturing facility, and almost overnight the market is flooded with properties for sale. An excellent example is southern California. Several years ago the government enacted a series of cutbacks in defense spending which resulted in families losing their jobs and putting their homes for sale. There was an excess of homes for sale which increased the supply and lowered the demand, leading to a buyer’s market. At the same time, Bakersfield, a community less than 150 miles from Los Angeles continued to experience high demand for real estate. With supply short, it was a seller’s market.
Obviously, the key to successful real estate investing, like stocks and bonds, is to buy low and sell high. But, how do you know when the “low” has been reached? Or, for that matter, how can you judge when your property may be peaking in value?
Some investors rely partially on the media. They read the daily newspaper, watch television and follow the trends. Although the media provides a good deal of information, remember that by the time things are printed or broadcast, the news may be old.
For instance, you will find statistics frequently quoted in the media that have been supplied by the National Association of REALTORS (NAR). But, NAR statistics-like most- tell you where things have been, not where they are going.
First, check local economic indicators. If, for example, a community depends on defense spending, and there is a government cutback, you can be assured that your area will be impacted.
Even if the community does not have a major defense contractor, it may have subcontractors.
The local chamber of commerce can frequently help. They usually have information on which companies are moving in and out of an area.
Logically, the relocation of a firm into a community generally indicates that demand for real estate in that marketplace will increase-while if firms are moving out of the area, housing demand will often shrink.
Aside from economic indicators, check real estate trends and cycles. Talk to a real estate agent. They can provide statistics on how quickly homes have sold, how prices have fluctuated in the past six to 12 months, and projections of future home sales. They can show you how today’s market compares to last year’s. Are sales headed up? Down? The same?
The answers will not only help you determine what the market is like in your area, but they will also be critically important in helping you determine when and where to make your real estate investment.
Sometimes. That’s because home warranties are often times misunderstood and not every warranty provides the same protection. All warranty companies are not equal, either.
Warranties, of course, were designed to protect buyers from problems that emerged after they moved into a dwelling. For example, if a major appliance breaks or the roof leaks, the ideal warranty kicks in and pays for the repairs.
On the surface, this sounds simple and straight-forward. But, most of the time it is not.
First, all warranties differ. Aside from the obvious differences, the amount of deductible required, they may also vary as what is covered and what is not. For instance, with some warranties if the hot water heater works on the day of closing, but suddenly does not work six months later, then it may be covered. And, with other policies, if the water heater was not in good working condition when the home was purchased, and it breaks a week or two later, there is no coverage.
Warranties can be critically important when it comes to new construction, too. Obviously, the reputation of the builder is an important consideration. However, problems with new homes can be enormously expensive if they are not covered by a warranty.
There are two types of defects when it comes to new homes – patent or latent.
Patent are those problems which can be seen. Cracked plaster, a fence that is off-kilter, etc.
Latent problems develop later, and may not show up for five or six months. Ground shifting, for example. Latent problems are usually more expensive than patent problems.
Thus, the warranty for a new home can be one of the most important documents executed during the buying process.
Whether you’re purchasing a new home or a resale, remember that warranties definitely have a place when it comes to protection and peace or mind in the real estate transaction, but make sure that you check them out carefully.
Yes, it is. The intent of a pre-closing inspection is to give the buyer one last opportunity to verify that they are getting all that was promised in the sales contract. Although buyers still have legal recourse if they discover-even after closing-that the condition of the home is not as it should be.
The best time to identify problems is before closing, when the seller will be motivated to correct any deficiencies in order to close the transaction.
Typically, a buyer takes possession of a property one to three months after signing the sales agreement. But, a lot can happen before the actual move-in. Appliances and fixtures can break down, and walls, carpets and doors can be damaged during the seller’s move-out. Sometimes the seller will simply have forgotten that he or she had agreed to leave the refrigerator or window coverings with the house. Whatever the reason, problems identified before closing have the best chance of being remedied.
If possible, schedule the inspection right before the closing, such as the day before. Ask your real estate agent to attend the inspection with you. What should you be inspecting? Using a copy of the sales contract as a checklist, first make sure that all items that should be in place (appliances, built-in furniture, window coverings, fixtures, etc.) are there.
Test each appliance to make sure they work properly. Test all electrical switches and the garage door opener, if there is one. Run the garbage disposal and turn on every water faucet, checking under the sinks for leaks. Flush the toilets. Inspect the floors, carpets, walls and doors for recent damage.
If you discover that something is damaged or missing, make a note of it and inform your agent immediately.
In most cases, the seller is usually able to take care of small problems immediately, either by making a needed repair or offering compensation to handle it. And, if there are major problems the seller can even sign a statement acknowledging the deficiency and agree to correct it. Although pre-closing inspections take time and may be inconvenient, they are important and well worth the buyer’s time.
A “contingency,” is an escape-clause that is added in-writing to a contract which allows a buyer to back out of the transaction if certain conditions aren’t met.
Some contingencies, often called “riders” – like attorney approval of the contract, or the passing of a home inspection-are obviously designed to protect buyers from a poorly written contract or a defective home.
Other purchase contingencies may hinge on the buyer’s current living situation, or his or her cash-flow. For example, when it comes to contingencies many first-time buyers can be better prospects for a seller’s home than move-up buyers. Why? Because offers from homeowners usually are contingent upon the sale of their present home. And, even if a move-up buyer has an offer for their home in-hand, their buyer’s offer may be contingent on another contingency (or sale) and so on down the line. If one transaction in the chain falls through, they all might.
Cash offers can also be more attractive to sellers.
Why?
After all, the seller will get their money at closing whether or not the buyer has cash or takes out a loan.
True, but cash offers don’t require lender approval, and loan approval is never a certainty and may delay or prevent closing. (Incidentally, for this reason, buyers who get pre-qualified for a loan have an edge over other buyers. A pre-qualified buyer is the same as a cash buyer.)
Buyers offering a larger-than-customary amount of “earnest money”, (a deposit that accompanies an offer) can be more appealing too. More money deposited with the signed contract often demonstrates greater sincerity and motivation to close the transaction.
10. You’re ready to stop paying your landlord’s mortgage payment, and start building wealth of your own.
9. You could use the property tax and mortgage interest deductions.
8. You want a vested interest in your community.
7. It’s mid-August and you can no longer tolerate waiting for your landlord to send someone to fix your air conditioner.
6. You are working at a job where you won’t leave the country every other year.
5. You want to provide your family with a sense of stability and plant roots.
4. There are more than twice as many people as bedrooms in your current residence.
3. You want to paint the walls of your bedroom any color you please.
2. You are tired of saving all your quarters for the laundromat.
1. When you say you are “going home,” you want to really mean it!
STEP 1 – DEFINE NEEDS FOR YOUR NEW HOME
Congratulations on your decision to purchase a new home! Your first step toward buying your new home will be to analyze your needs. Your real estate agent can help you determine exactly what you want your new home to look like and how it should function for you and your family.
First, write down why you are looking for a new home. For example, are you currently renting and would like to begin building equity? Maybe you recently married and have outgrown your current residence. Or, maybe you received a promotion that requires you to move to a new city. These factors will all have a bearing on how you approach your home search.
Second, establish a time frame for buying your home. Depending on your reasons for wanting a new property and the current state of the market in the area you are looking to buy, you should be able to come up with a rough guideline.
Finally, you probably have a mental picture of what your dream house looks like. Turn these ideas into two lists: one should describe your dream home and the other should list features that are absolute must haves. In a perfect world, your new home would fulfill both lists 100 percent, but it is more likely the two lists will turn into a list of priorities, as you get clearer about what you want and what is available.
STEP 2 – PRE-APPROVAL VS. PRE-QUALIFICATION
Now that you know what you want in a home, you need to find out what you can afford. There are two ways to go about this: prequalification or pre-approval for a loan. Either way, you can contact your agent about choosing a mortgage company. Prequalification is the simpler of the two processes. It can even be done online or over the phone. When you contact a mortgage company, they will ask you for some basic information about your finances, how much money you earn, your debt load, etc. They will take this information and give you a rough estimate of how much of a loan you might qualify for.
Pre-approval is a more in-depth process. The lender will perform an extensive check of your finances including your credit rating, whether or not you’re a first-time buyer, what your debt load is, how much money you have to put as a down payment, etc. This figure will be a much more reliable estimate of what you can afford.
In most markets, pre-approved buyers are preferred over those that are merely pre-qualified. Being pre-approved lets the seller know you have gone through an extensive financial background check and there should be no unexpected obstacles to you buying their home.
STEP 3 – NEIGHBORHOOD INFORMATION
Now that you have your list of needs and wants and know how much you can afford to spend, it’s time to look at some houses, right?! Well, don’t forget, people don’t just buy a house; they buy the neighborhood the house is in. Think about that…if you found the perfect house but it was in a neighborhood that was not to your liking, would you make an offer on it?
You will need to make another list for the type of area you want to invest in. Consider things like drive time to work and major destinations, amenities such as swimming pools, tennis courts, parking, etc., area schools and the demographics of the surrounding area.
STEP 4 – HOME SEARCH
At this point you will have a good idea of what you can afford and the type of area you will want to invest in. Taking that information into consideration, you are ready to embark on your home search. If you don’t know much about the city to which you are moving, you will want to start by finding areas that meet your criteria and then narrowing your search to particular properties in those areas.
There are a few ways to go about this. Possibly the most efficient way to find homes is to allow your real estate agent to keep you up-to-date on available properties that meet your criteria, and then allow your agent to screen them for you. When your agent presents you with a home that interests you, he or she can arrange for you to tour it at your convenience.
You can find available homes by reading local real estate publications, contacting local Neighborhood Associations, visiting the local Chamber of Commerce, looking on the Internet, or driving through neighborhoods that meet your needs. Driving around a particular area looking for a home that is for sale is good because you can actually see the house, but it can be very time consuming and very “hit or miss.”
STEP 5 – MAKE AN OFFER
Now that you’ve found your dream home, it’s time to make an offer. Your real estate agent will help you determine the offer price by reviewing recent sales of homes that are similar in size, quality, and conveniences and amenities. Your real estate agent will advise you on how to create an offer that will have the best chance of being accepted.
After consultation with you, your agent will create a written contract with your offer that meets all the local and national legal requirements. This document details what needs to be done by both parties to execute the transaction. It should protect the interests of both parties and will ensure your financial position as the buyer.
The contract should include, but is not limited to, the following:
Remember the legalities of this phase are very important. If you have any questions or concerns, be certain to address them with your real estate agent right away.
STEP 6 – NEGOTIATING TO BUY
Once your offer is made you may need to negotiate with the seller to reach an agreement. Keep in mind almost everything is negotiable when you are buying a house. This can give you a great deal of leverage in the buying process, that is, if you have adequate information and you use it in an appropriate manner.
Some things you may negotiate:
* Price
* Financing
* Closing costs
* Repairs
* Appliances and fixtures
* Landscaping
* Painting
* Occupancy time frame
Counter offers happen frequently. Remain in close contact with your real estate agent so you can quickly review any changes from the seller. Remember…bargaining is not a winner-take-all deal. It is a business process that involves compromise and mutual respect.
STEP 7 – SERVICE PROVIDER COORDINATION
After your offer is accepted, your agent will help you coordinate the activities of service providers and serve as your advocate when working with them. Your agent will make sure these vendors have access to the property to perform their procedures and will oversee the execution of those procedures on your behalf.
One service you may need is a home examination. An inspection of the property, the foundation, and the surrounding environment may be needed to make sure the property meets the standards set forth in your written agreement. If there are issues or inconsistencies brought to light during this time, it may delay or even nullify the contract.
Insurance is another item that will need to be taken care of. Experts recommend you obtain title insurance equal to the full replacement value of the home. This kind of insurance is purchased at closing and protects the buyers in the unlikely event that the title to the property becomes invalid. Homeowners insurance protects against theft, fire and liabilities. It often includes things such as bicycles, furniture and jewelry. Flood insurance is generally only necessary for flood-prone areas. The federal government issues this kind of insurance.
In addition to aforementioned types of insurance, you may want additional assurance for your new home. Home warranties are one way to protect yourself after you buy. Warranties for new homes protect against plumbing, wiring and structural defects. Existing home warranties cover things like major appliances and structural problems.
Having these procedures done in a timely and professional manner is a must. Investigate each service provider to make sure they are reputable and have a clean operational history. Your agent’s experience in this area will be invaluable.
STEP 8 – BEFORE YOU CLOSE
As the closing date (otherwise known as settlement or escrow) draws near you will need to be in contact with the escrow company or closing attorney and your lender to make sure all necessary documents are being prepared and will be delivered to the correct location on the appropriate date. Find out what form of payment you will need to bring to the closing for any unpaid fees. Make sure that your payment is made out to the appropriate party.
These days, buyers and sellers don’t even have to be in the same room to close a deal. Thanks to computer automation, signed paperwork can be delivered overnight to both parties.
STEP 9 – CLOSING ON A HOME
Closing is where ownership of the home is legally transferred from the seller to the buyer. It is a formal meeting that most parties involved in the process will attend. Closing procedures are usually held at the title company’s or lawyer’s office. Your closing officer coordinates the document signing and the collection and disbursement of funds.
In order for the closing to go smoothly, each party involved should bring the necessary documentation and be prepared to pay any related fees (closing costs). There may be more than one form of acceptable payment for your closing costs so ask the closing officer which form of payment will be required and to whom it should be paid.
Sellers sometimes pay for a portion or all of the closing costs, depending on local market conditions, terms of the purchase contract, and the seller’s cash and timing considerations. Any such concessions should be acknowledged in writing. Most lenders will allow a credit from the seller to the buyer for the non-recurring closing costs. However, they usually won’t allow a credit that reduces the amount of the buyer’s down payment or any of the buyer’s recurring costs, such as expenses for fire insurance premiums, private mortgage insurance (PMI) or property taxes.
STEP 10 – POST-CLOSING
Congratulations on the purchase of your new home!
Now that you have taken ownership of it you will need to have your electricity, cable and phone set up. Also be aware of typical homeowner expenses such as Neighborhood Association fees, landscaping costs, and annual taxes and budget for them accordingly.
Knowing whether or not your agent practices full time can help you determine potential scheduling conflicts and his or her commitment to your transaction. As with any profession, the number of years a person has been in the business does not necessarily reflect the level of service you can expect, but it is a good starting point for your discussion. The same issue can apply to professional designations.
2. Do you have a personal assistant, team or staff to handle different parts of the purchase? What are their names and how will each of them help me in my transaction? How do I communicate with them?
It is not uncommon for agents who sell a lot of houses to hire people to work with them. They typically work on a referral basis, and, as their businesses grow, they must be able to deliver the same or higher quality service to more people.
You may want to know who on the team will take part in your transaction, and what role each person will play. You may even want to meet the other team members before you decide to work with the team. If you have a question about fees on your closing statement, who would handle that? Who will show up to your closing?
3. Do you have a website that will provide me with useful information? Can I have your URL address? Who responds to emails and how quickly? What’s your email address?
Many homebuyers prefer to search online for homes because it’s available 24 hours a day and you can do it in the privacy of your own home. By searching your real estate agent’s Website you will get a clear picture of how much work you would be able to accomplish online.
4. Will you show me properties from other companies’ listings?
Some real estate companies do offer their buyers’ agents a higher commission if they are able to sell “in-house” listings. In such circumstances, there can be added incentive to limit the range of homes you are shown. This may impact your home search and how much your buyer agent’s fee will be.
5. Will you represent me or will you represent the seller? May I have that in writing? How will you represent me, and what is the direct benefit of having you represent me?
The goal here is to ascertain to whom the real estate agent has legal fiduciary obligation, which may vary from state to state or even locale to locale. In the past, agents always worked for sellers. Then the listing broker was responsible for paying the agent or sub-agent that brought a suitable buyer for the home. And even though the buyer worked ‘with’ an agent, the agent still represented and owed their fiduciary duty to the seller.
Although seller agencies still exists in certain areas, agents today almost always have a sense of moral obligation to buyers. Find out what is common in your area and understand what kind of agent you have before you begin to work with them.
6. How will you get paid? How are your fees structured? May I have that in writing?
In many areas, the seller pays all agent commissions. Sometimes, agents will have other small fees, such as administrative or special service fees, that are charged to clients, regardless of whether they are buying or selling. Be aware of the big picture before you sign any agreements. Ask for an estimate of buyer costs from any agent you contemplate employing.
7. What distinguishes you from other real estate agents? What is your negotiating style and how does it differ from others? What geographic areas do you specialize in?
Each agent has unique methods of overcoming obstacles and negotiating deals. The most important thing is to make sure your agent is an effective advocate for you.
8. Will you give me names of past clients?
Interviewing an agent can be similar to interviewing someone to work in your office. Contacting references can be a reliable way for you to understand how he or she works, and whether or not this style is compatible with your own.
9. Do you have a performance guarantee? If I am not satisfied with your performance, can I terminate our Buyer Agency Agreement?
In the heavily regulated world of real estate, it can be difficult for an agent to offer a performance guarantee. If your agent does not have a guarantee, it does not mean they are not committed to high standards. Typically, he or she will verbally outline what you can expect from their performance. Missy Stagers Realty Partners understands the importance of win-win business relationships: the agent does not benefit if the client does not also benefit.
10. How will you keep in contact with me during the buying process?
Some agents may email, fax or call you daily to tell you about properties that meet your criteria, while others will keep in touch weekly. Asking this question can help you to reconcile your needs with your agent’s systems.
In the past, real estate agents always represented the seller, whether the agent helped a seller to market and sell a home or helped a buyer find and purchase a home. In other words, agents were at one time legally bound to represent the seller in a residential real estate transaction. In that scenario, the seller paid both the listing agent and the agent who brought the buyer.
Today, agents either represent the buyer, or the seller. If you want to sell your home, you can work with a “seller’s agent.” If you want to buy a home, you can work with a “buyer’s agent.” Most states require real estate agents to disclose to consumers who they represent. Sometimes an agent will represent the buyer and the seller. A buyer who elects this situation should receive full disclosure on representation. The real estate agent you choose should fully disclose how they work with individuals and the options available to you.
Keep in mind that real estate laws differ from state to state and even from locale to locale. For more in-depth answers, talk with a knowledgeable real estate professional and ask about local practices. Be sure you understand and are comfortable with the services of the real estate agent you engage.
People generally have two kinds of needs during a home purchase. First are the transactional needs, such as searching for a home, obtaining financing, negotiating the terms of purchase, completing paperwork and legal documents, and arranging the move. The second are emotional needs, which can be more stressful than the financial ones. The following are some tips to help ease the stress.
PREPARE YOUR CHILDREN
Although you may have lived in your current home for just a few years, those few years could make up your child’s entire lifetime. Your home may be the only home your children remember. It’s where they feel safe and it’s probably the center of your son or daughter’s world.
Be sure to announce the move in a completely upbeat way. You might talk about how beautiful the new neighborhood is and how good the schools are. Bring your children to the new house, if that’s possible or positively describe it to them. Find out what your children’s favorite things are in your current home, and then try to re-create them in the new house. Keep your children actively involved. For instance, take them shopping for paint, bedspreads, carpets, and other items for their new room.
Your children are bound to have worries during the move. Help lessen these anxieties by finding ways to make parting pleasant. For example, plan a going-away party or create a photo album with pictures of neighbors, their house and the neighborhood.
GAIN KNOWLEDGE
As you begin the process, you may start to feel out of control, as though other parties to the purchase transaction are running the show. Your mortgage company, the appraiser, the inspector, and the seller all have certain powers to approve or disapprove of your overall plan to purchase this home and move successfully. To alleviate your feelings of helplessness, one of the best things you can do is to understand as much of the purchase process as possible. Work with your real estate agent to prepare yourself for the unknown and tie down loose ends.
TRUST THE PROCESS
There can be so much to do that it’s easy to panic. Buying a home may feel risky, but the truth is it’s an opportunity for you and your family. Even though you can’t predict what will happen every step of the way, your real estate agent helps people buy and sell homes as a profession! Your agent has been there before and understands that this is a major upheaval in your life. Trust that your agent is looking out for you on your way to a successful closing and move.
BE FLEXIBLE
Although your agent will do everything possible to prepare you for your home purchase, there is no such thing as a perfect world. The property inspection may reveal areas of concern, or closing may be delayed for some reason. Try to take a deep breath and be flexible in your thinking.
SEEK ENTERTAINMENT
Whenever you feel things are spinning out of control, find a diversion! Take a walk around your new neighborhood; go out of town or to a movie with your family. Whatever outlet works best for you, this is a good time to engage in it! Remember to take one “move” at a time.
When it comes to investing, everybody has certain goals and aspirations. However, we have found that there are certain guidelines every aspiring real estate investor needs to know:
Financial statistics only go so far; the best measure of a property’s market value is often the sale prices of nearby properties. The same holds true for area rents. A low price can often be justified by a reasonable rent; renters who can afford a high rent can afford to buy instead, so reasonably priced rent is a need.
Don’t base your tax investment on current tax laws. The tax code is constantly changing, and a good investment is a good investment regardless of the tax code. The right property with the right financing is what you should look for as an investor.
Start in a market segment you know. Whether you focus on fixer-uppers, foreclosures, starter homes, low-down payment properties, condominiums, or small apartment buildings, you’ll benefit from experience by specializing in one aspect of investment real estate properties.
Know the financial statements inside out. What are operating expenses? What are loan payments? Vacancy costs? Taxes? What does the cash flow statement look like? These are key issues that must be addressed before making a solid investment.
If the last rent increase was recent, your tenants may be considering a move. If tenants have a short-term lease, they may be living there simply to attract unsuspecting buyers. It is also important to collect the tenants’ security deposits at closing.
Taxes are an integral part of successful real estate investing, and they often make the difference between a positive cash flow and a negative one. Know the tax situation, and see how it can be manipulated to your advantage. It may be a good idea to consult a tax advisor.
If seller’s coverage is based on lower-than-current replacement value, your insurance cost may increase when you pay a higher purchase price.
Ask the local utilities to verify recent utility expenses, especially if any of these costs are included in your tenant’s rent.
Taxation is a key element of successful real estate investing, so be sure to find an accountant who is well-versed with the constantly evolving tax code.
Make sure that you always perform a thorough inspection of the property before buying it. Never, ever buy any property without at least examining the site. In some cases, hiring professional inspectors to examine the structural mechanical system may be a sound investment.
Do you want to get the best property you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one element in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller.
In years past, I always recommended that buyers get “pre-qualified” by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you “pre-qualified” and issues a certificate that you can show to a seller. Sellers are aware that such certificates are WORTHLESS, and here’s why! None of the information has been verified!
Many times unknown problems can come to the surface! Some of the problems I’ve seen include recorded judgments, alimony payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the client’s bank account long enough, etc.
So the way to make the strongest offer today is to get “pre-approved”. This happens AFTER all information has been checked and verified. You are actually APPROVED for the loan and the only loose end is the appraisal on the property. This process takes anywhere from a few days to a few weeks depending on your situation. It’s VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.
If you have a house to sell, sell it before selecting a house to buy! Contingency sales aren’t nearly as strong as one that comes in with a ready, willing and able buyer. Consider this scenario: You’ve found the perfect house – now you have to go make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller figures that this is a risky deal, since he might pass up a buyer who DOESN’T have to sell a house while he’s waiting for you. So he says OK, he’ll do the contingency but it has to be a full price offer! You have now paid more for the house than you could have because of the contingency, and you have to sell your existing house in a hurry! Otherwise you lose the house! So to sell quickly you might take an offer that’s lower than if you had more time. The bottom line is that buying before selling might cost you THOUSANDS of dollars.
If you’re concerned that there is not a house on the market for you, then go on a window-shopping trip. You can identify possible houses and locations without falling in love with a specific house. If you feel confident after that then put your house on the market.
Another tactic is to make the sale “subject to seller finding suitable housing”. Adding this phrase to the listing means that WHEN YOU DO FIND A BUYER, you will have some time to find the new place. If you don’t find anything to your liking, you don’t have to sell your present home.
Before house hunting, make a list of things you want in the new place. Then make a list of the things you don’t want. You can use this list as a guide to rate each property that you see. The one with the biggest score wins! This helps avoid confusion and keeps things in perspective when you’re comparing dozens of homes.
When house hunting, keep in mind the difference between “STYLE AND SUBSTANCE”. The SUBSTANCE are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan. The STYLE represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good SUBSTANCE, because the STYLE can always be changed to match your tastes. I always recommend that you imagine each house as if it were vacant.
Consider each house on its underlying merits, not the seller’s decorating skills.
Your agent should show you everything available that meets your requirements. Don’t make a decision on a house until you feel that you’ve seen enough to pick the best one.
Homes on today’s housing market typically sell only a few days after listing, highlighting the drastic difference between the minimal supply and surging demand. In this kind of market, some agents advise their clients to make an offer ON THE SPOT if they like the house. Before making any offer, ensure that it meets all of your needs and that there are no better alternatives still available to you.
Don’t forget to check into the SCHOOL DISTRICTS of the area you’re considering. Information is available on every school; such as class sizes, % of students that go on to college, SAT scores, etc. You can get this information from this web site.
Please note – ads are sometimes created to make the phone ring! Many of the homes have some drawback that’s not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What’s not mentioned in the ad is usually more important than what is.
For this reason, I want you to be very careful when reading ads. Remember that the person writing the ad is representing the seller and not you! The most important thing you can do is have someone on your side looking out for your best interests. Your own agent will critique the property with an eye towards how well it meets your needs and will point out any drawbacks you should know about. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer’s broker.
Once you become a client with all the rights, benefits, and privileges created by this agency relationship, and you’re no longer just a shopper. Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER? These “great deals” go to those people who are committed to working with one agent. When an agent hears of a great buy, who do you think he’s going to call? His client, who he has a legal obligation to work hard for you, or someone who just called on the phone and said “keep your eyes open”? So to get the best buy on a property, I always recommend that you hire your own agent and stick with him or her.
If you’re new to investing or real estate and don’t know the first thing about interest rates, here’s a good tip: the higher the interest rate, the more expensive it’s going to be. High interest rates mean you will have to pay back more on the money you borrow. Another good rule of thumb is that affordability increases if you use an adjustable rate mortgage (it’s easier to qualify this way). Of course, there will be a wide range of prices that you can choose from, depending on what kind of financing you choose.
The Federal Reserve holds a considerable amount of power, but they can’t control everything. Mortgage interest rates are affected by many unpredictable political, economic and social events. So there is no guarantee what direction interest rates will go, despite the forecasts of the experts. Therefore, make your financial decision based on where things are today including your budget, your needs and your future plans.
If you do decide you want to lock in at a certain interest rate, you will need to complete a loan application and send it to your lender as soon as possible. This must be done so that your commitment doesn’t runout before your loan is approved. Follow up and be sure that the lender is receiving all of the necessary documentation. Get a property appraisal, which usually costs about $300, through your loan agent as soon as possible.
Although rising interest rates can create more problems for home buyers, waiting and hoping for low rates is not necessarily a smart move. You may end up paying a higher price. Also, refinancing is always an option in the event that interest rates come down.
Real estate professionals also need to be knowledgeable about the community. They need to have a feel for the history of the area and the approximate price that people will be willing to pay. Also, real estate agents should know what the competition is and how much it will affect your sale.
NEVER choose a REALTOR® on price alone. Remember that a REALTOR® cannot magically raise the selling price of the house. Consider the buyer. The purchaser won’t willingly pay too much; it’s most likely that he or she will do research on the market and try to find the best product for the best price. The facts simply cannot be changed, no matter which REALTOR® you select. Despite these unchangeable factors, the REALTOR® you select must still be diligent and knowledgeable.
If your property does not elicit attention within several weeks, the cause can most likely be attributed to one of these three factors: location, condition, and price. The location obviously cannot be changed. You should consider examining the conditioning of your property and reevaluating the marketing strategy. Ask your REALTOR® to offer an explanation of the competition and your pricing strategy.
Tax incentives for real estate investors can often make the difference in your tax rates. Deductions for rental property can often be used to offset wage income. Tax breaks can often enable investors to turn a loss into a profit.
For which items can investors get tax breaks? You could claim deductions for actual costs you incur for financing, managing and operating the rental property. This includes mortgage interest payments, real estate taxes, insurance, maintenance, repairs, property management fees, travel, advertising, and utilities (assuming the tenant doesn’t pay them). These expenses can be subtracted from your adjusted gross income when determining your personal income taxes. Of course, these deductions cannot exceed the amount of real estate income you receive. In addition to deductions for operating costs, you can also receive breaks for depreciation. Buildings naturally deteriorate over time, and these “losses” can be deducted regardless of the actual market value of the property. Because depreciation is a non-cash expense — you are not actually spending any money — the tax code can get a bit tricky. For more information about depreciation and various tax alternatives, ask your tax advisor about Section 1031 of the U.S. Tax Code.
There are two kinds of positive cash flows: pre-tax and after-tax. A pre-tax positive cash flow occurs when income received is greater than expenses incurred. This sort of situation is difficult to find, but they are usually a strong and safe investment. An after-tax positive cash flow may have expenses that outweigh collected income, but various tax breaks allow for a positive cash flow. This is more common, but it is generally not as strong or safe as a pre-tax positive cash flow.
Regardless of what kind of real estate you choose to invest in, timely collections from your tenants is absolutely necessary. A positive cash flow — whether it be pre-tax or after-tax — requires rental income. Be sure to find quality tenants; a thorough credit and employment check is probably a good idea.
One of the most important factors in determining a solid investment is the amount of equity you are purchasing. Equity is the difference between the actual worth of the property and the balance owed on the mortgage.
While investing in real estate is relatively complex, it is often worth the extra work. When compared to other financial investments, like bonds or closing disclosures, the return on investment for real estate purchases can often be greater.
The key to real estate investing is equity. Determine an amount of equity that you want to achieve. When you reach your goal, it’s time to sell or refinance. Determining the proper amount of equity may require the assistance of a real estate professional.
Use the right boxes, and pack them carefully. Professional moving companies use only sturdy, reinforced cartons. The boxes you can get at your neighborhood supermarket or liquor store might be free, but they are not nearly as strong or padded, and so can’t shield your valuables as well from harm in transit.
Use sheets, blankets, pillows and towels to separate pictures and other fragile objects from each other and the sides of the carton. Pack plates and glass objects vertically, rather than flat and stacked.
Be sure to point out to your mover the boxes in which you’ve packed fragile items, especially if those items are exceptionally valuable. The mover will advise you whether those valuables need to be repacked in sturdier, more appropriate boxes.
The heavier the item, the smaller the box it should occupy. A good rule of thumb is if you can’t lift the carton easily, it’s too heavy. Label your boxes, especially the one containing sheets and towels, so you can find everything you need the first night in your new home.
Teach your children your new address. Let them practice writing it on packed cartons. You can lighten your load and reduce any storage space you need to rent by hosting a garage or yard sale.
Fill two “OPEN ME FIRST” cartons containing snacks, instant coffee or tea bags, soap, toilet paper, toothpaste and brushes, medicine and toiletry items (make sure caps are tightly secured), flashlight, screwdriver, pliers, can opener, paper plates, cups and utensils, a pan or two, paper towels, and any other items your family can’t do without. Ask your van foreman to load one of these boxes, so that it will be unloaded at your new home first. Why the second box? In case the movers are delayed getting to your house on the day of the move.
Keep your pets out of packing boxes and away from all the activity on moving day.
Let all your electrical gadgets return to room temperature before plugging them in.
Give the mover’s foreman your cellphone numbers and email addresses so you can stay in contact.
Read the inventory form carefully, and ask the mover to explain anything you don’t understand. Make a note of your shipment’s registration number, and keep your Bill of Lading handy.
If you’re moving long distance, be aware that your property might share a truck with that of several other households. For this reason, your mover might have to warehouse your furniture and belongings for several days. Therefore, ask your mover whether your goods will remain on the truck until delivered. If they have to be stored, ask whether you can check the warehouse for security, organization and cleanliness.
Every seller obviously wants to get the most money for his or her product. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property. Also, it may lead other buyers to expect more than what you have to offer. As a result, overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price.
Unfortunately, a re-finance appraisal may have been stated at an untruthfully high price. Often, lenders estimate the value of your property to be higher than it actually is in order to encourage re-financing. The market value of your home could actually be lower. Your best bet is to ask your REALTOR® for the most recent information regarding property sales in your community. This will give you an up-to-date and factually accurate estimate of your property value.
In spite of how frequently this mistake is addressed and how simple it is to avoid, its prevalence is still widespread. When attempting to sell your home to prospective buyers, do not forget to make your home look as pleasant as possible. Make necessary repairs. Clean. Make sure everything functions and looks presentable. A poorly kept home in need of repairs will surely lower the selling price of your property and will even turn away some buyers.
Buying a house is always an emotional and difficult decision. As a result, you should try to allow prospective buyers to comfortably examine your property. Don’t try haggling or forcefully selling. Instead, be friendly and hospitable. A good idea would be to point out any subtle amenities and be receptive to questions.
A prospective buyer who shows interest because of a “for sale” sign he saw may not really be interested in your property. Often buyers who do not come through a REALTOR® are a good 6-9 months away from buying, and they are more interested in seeing what is out there than in actually making a purchase. They may still have to sell their house, or may not be able to afford a house yet. They may still even be unsure as to whether or not they want to relocate.
Your REALTOR® should be able to distinguish realistic potential buyers from mere lookers. REALTOR®s should usually find out a prospective buyer’s savings, credit rating, and purchasing power in general. If your REALTOR® fails to find out this pertinent information, you should do some investigating and questioning on your own. This will help you avoid wasting valuable time marketing towards the wrong people. If you have to do this work yourself, consider finding a new REALTOR®.
It is extremely important that you are well-informed of the details in your real estate contract. Real estate contracts are legally binding documents, and they can often be complex and confusing. Not being aware of the terms in your contract could cost you thousands for repairs and inspections. Know what you are responsible for before signing the contract. Can the property be sold “as is”? How will deed restrictions and local zoning laws affect your transaction? Not knowing the answers to these kind of questions could end up costing you a considerable amount of money.
Your REALTOR® should employ a wide variety of marketing techniques. Your REALTOR® should also be committed to selling your property; he or she should be available for every phone call from a prospective buyer. Most calls are received, and open houses are scheduled, during business hours, so make sure that your REALTOR® is working on selling your home during these hours. Chances are that you have a job, too, so you may not be able to get in touch with many potential buyers.
Buying a home is one of the most exciting milestones of your life. To prepare yourself for this moment, you need to know what to expect during the process. This step-by-step first time buyer’s guide created by your agent will help reduce the stress of buying a home and help you enjoy the journey as much as possible.
Do you already know where you want to buy? If you want a condo, townhome, or single-family home? Which features do you like and dislike? What’s available on the market now? If you answered no to any of these questions, now is the time to start researching. In addition to looking for homes that interest you, also take note of any changes in asking prices. This could give you valuable insight into housing trends in specific neighborhoods and help you when the time comes to make an offer.
Notice I said to decide on your budget—not determine how much the mortgage company will give you. In many cases, a mortgage company will pre-approve you for more than you’re comfortable spending, which is why you need to determine the monthly payment you feel comfortable with before talking to a lender. This likely includes doing a full household budget and taking into consideration what changes other than a mortgage payment will occur once you move into your new home. If you’ve lived in an apartment or with roommates, you may overlook new expenses like garbage, water, or HOA fees that could easily blow your budget.
Just because you think you can afford a certain payment every month doesn’t mean the mortgage company will agree. Just as they may approve you for too large of an amount, they may also approve you for a lesser amount or deny you a mortgage altogether. Lack of time at a job, insufficient credit, past bankruptcies, or other financial issues can cause major problems when trying to secure a mortgage. Before you get your heart set on a home, talk to a mortgage professional to find out what amount you can qualify for. This will also be an advantage when you make an offer on a home, as some sellers won’t entertain offers from those who aren’t already prequalified for a loan.
Can you shop for, look at, and ultimately make an offer on a home without a real estate agent? Technically yes, but why would you when it costs you nothing for an agent like me to take much of the stress off your shoulders? Not only will I help identify properties you might be interested in, arrange showings, and ultimately handle the offer process, but I also have a knowledge of the market that you don’t possess. I may be able to steer you away from certain homes or neighborhoods, suggest hidden gems, or give you pointers that will help you find your dream home for the right price.
This should be the most enjoyable step of the entire process (other than moving in!). I will arrange showings of homes you’re interested in that are within your price range. Take notes about what you like and don’t like, and make sure to pay attention to details. Turn light switches on and off, open and close doors, and run the faucets in various rooms. Don’t limit your inspection to the home itself. Make sure to take time to explore the neighborhood and keep an eye on traffic at certain times of the day, the parking situation, and how close it is to necessities like schools and grocery stores.
Once you have selected the perfect home, work with your agent to craft a fair offer based on the value of comparable homes on the market. Depending on what the home is listed at and whether the current environment is a buyer’s or seller’s market, your offer may be below, at, or even above the asking price. I will be able to help you negotiate if you receive a counteroffer and reach an agreement. At this point, the house will go into escrow.
In most cases, your offer will be contingent on having the home inspected to ensure there is no major structural damage or large repairs needed. I can help you arrange this, and you can schedule it within days of making an offer. If there are no major issues, the process goes to step eight. If there is, you can renegotiate your offer based on what needs to be fixed, or you can withdraw it.
Now is the time to go back to the mortgage lender who pre-approved or pre-qualified you and choose your mortgage. You will be presented with various options based on your unique financial situation, including fixed-rate, variable-rate, 15-year, 30-year, or special programs such as VA loans or FHA loans. Work with your mortgage lender to select the option you feel the most comfortable with.
Your lender will have your new home appraised so they have their independent value of it. The appraisal is to ensure that all parties involved are paying a fair price for the house.
No one looks forward to all the paperwork involved in buying a home, but it’s a necessary part of the process. Fortunately, everything will be arranged by your lender and title company and, when you’re finished, you’ll know you are the legal owner of your new home.
After signing the final paperwork to complete the purchase, you are now the owner of a new house. It may take a few days for your loan to be funded once the paperwork has been returned to the lender, but once that check is delivered to the seller, you’ll be all set to move into the home of your dreams.
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