If yes, buying your first home is one of the most exciting things you will ever do. If you have spent years living in apartments, there is nothing more satisfying than owning your own property.
The home buying process can be a little lengthy and confusing, so I've put together the following tips that will help a first time home buyer get through a sometimes difficult and very stressing process.
The first thing a first time buyer should do is talk to a real estate agent about the home buying process. It should not be a sales meeting and you should be able to find an agent that will agree to meet with you about the basics without having to sign a sales agreement with them.
If you can’t find a good agent to talk to, you might want to consider talking to a loan officer at your bank or a mortgage broker.
An equally important tip for a first time home buyer is to get their finances in order before they apply for a mortgage. Order a copy of your credit report so you can check it for accuracy.
Mistakes are common and you want to make sure that there is no fraudulent activity. You have the right to dispute errors on your credit report. If you come across something that you know is an error, circle it and send it to the reporting agency along with a letter of dispute.
Next, first time home buyers should really study the mortgage industry. Take the time to really get familiar with the mortgage lending process. It could save you a lot of time and money!
You need to be able to find the right loan and lender most suitable for your needs. Familiarize yourself with industry terms like debt to income ratio and adjustable rate mortgage. Learn the difference between pre-approval and pre-qualified. It will all seem foreign at first, but taking the time to learn the business will spare you from headaches in the future.
Also, you need to figure out what your wants and needs are. What kinds of amenities are you looking for? How many bedrooms do you want? Do you want one story, but prefer a two story home? First time home buyers also need to consider the size of the down payment and figure out what they need to do to come up with the money for it.
You must also learn about how real estate agents work. There are buyer’s agents and seller’s agents. The goal of the seller’s agent is to get the price that the seller most desires. However, a buyer’s agent’s responsibility is to negotiate the best deal for the buyer. So, it can be in your best interest to go with a buyer agent arrangement.
The best way to find the right agent is to ask your friends for suggestions. They have all probably been in the same boat, so they can probably recommend a good real estate agent. When meeting with a potential agent, pay attention to how they treat you.
Make sure they listen to you when you talk about what you want. Also, how are their follow up skills? Do they take the time to return your calls or emails? If they don’t take the time to respond, move on. There is a better agent out there for you.
When looking for a home, consider all of the possibilities. Look up real estate agent’s websites. Don’t rule out For Sale by Owner Properties and foreclosed homes. Housing and Urban Development (HUD) homes can often be found for very reasonable prices.
However, it is important to find an agent that is approved to sell HUD homes if you choose to take that road to home ownership. Better yet, you need to find one that is well versed in the HUD property buying process, as it can be very complicated.
Even as a seasoned real estate sales pro I always felt like a dummy whenever I pursued buying or selling HUD properties. It really is a specialty unto itself, so finding an agent who knows the process can make your HUD property buying experience a more successful one.
Now, before you even think about making an offer you need to consider the resale value. You might plan on being there for a long time, but you just never know. You might opt for a different climate to alleviate your allergies or you could simply be transferred by your company. You want to pick a good location that will be attractive to others, so when it's time to resell and move on it will be as desirable to others as it was to you.
Another issue that cannot be ignored is the deed restrictions, which govern what you can and cannot do with the property. If it has always been your dream to have a pool, you need to make sure that you don’t buy a home in a subdivision that won’t allow it because of deed restrictions.
Home inspections are an important part of the equation. Talk to your agent to find out when the inspection will be performed. It varies state to state. Sometimes the inspection will be right before the contract is signed and other times, they are performed right after an offer is made.
Finally, make sure you stay on top of things. Any number of problems can crop up at the last minute and delay the purchase of your home. If you aren’t sure about something with the paperwork, don’t be afraid to ask questions. Purchasing a home is a time consuming task, but it is well worth it when you have your own "home sweet home."
http://www.real-estate-marketing-talk.com/first-time-home-buyer.html
Tuesday, September 4, 2007
Ten Things To Avoid If You’re A Home Buyer
Are you a home buyer looking to purchase a home sometime soon?
If so, there are several things you should avoid when you enter the home buying process. And if you aren’t careful to avoid them it is possible that your closing will be delayed or even canceled. Your adherence to the following rules will put the keys to the house in your hands quickly.
First, don’t damage your debt to income ratio by making a major purchase before closing. If you decide you can’t live without that brand new Benz, you might have to wait on owning a home. The bank could easily determine that your sky high car payment would hinder your ability to pay your mortgage. Wait until after you get the house to do some spending. No one expects a brand new house full of furniture and a sports car in the driveway unless you are a famous sports figure or Donald Trump.
Secondly, don’t change jobs if you don’t have to. The lenders like to see consistency versus constant job hopping. If you are just miserable with your job, maybe you can switch to a different job within the same field. Or you can tough it out until you have the house and then start putting out resumes.
Also, a home buyer should never surrender their earnest money to a For Sale by Owner Seller. There isn’t anything stopping the sellers from spending the money before the transaction goes through. If the deal should fall through you’ll have to fight tooth and nail to get that deposit back. You should put the deposit into a trust account. You should be able to find an attorney willing to hold the deposit for you until the transaction is finalized. Your contract needs to state what will happen to the deposit in the event that the transaction falls through.
In addition, never let emotions guide you. Stay practical and realistic during the home buying process. Some sellers are willing to fix some of the problems with the home and others may not be as willing. Don’t let that refusal close the door on your dream home. Conversely, you shouldn’t let your loyalty to the home blind you to costly repairs down the road. You certainly don’t want to be in a money pit.
Furthermore, don’t forget to have the utilities activated. The utility companies might need a few days to switch the service. Don’t forget to cancel the service at the old residence. That seems simple enough, yet many people forget that step entirely.
Another costly mistake a home buyer might make is forgetting to secure hazard insurance. Talk to your insurance company right away because the lender will want to see proof of coverage for the new home at closing. Failing to line up the insurance will lead to delays in closing.
You should not get too personal with the seller. After all, this is a business transaction, so it should be treated professionally. If you get into too many personal discussions, you might say something that could be taken the wrong way by the seller. You might have been joking about the ugly green carpet in the guest bedroom, but the seller might have taken that as offensive. In the end, it could hurt the dynamics of the transaction. You should be friendly, but professional.
If the appraisal comes in too low, don’t freak out. There are several solutions to this dilemma. The seller might be willing to come down on the price of the home. The buyer can put more money down if they are committed to that home. The buyer and seller can negotiate the deal or the appraisal can be disputed.
Don’t forget to use your agent. It is the agent’s job to keep up with the daily details of the deal, including the lender, the seller, and the seller’s agent. It is also your agent’s responsibility to set up a final walkthrough prior to closing.
Lastly, don’t forget to take care of your end of the deal. You must be on the same page as the lender. Provide them with the paperwork they need and answer their questions in a timely manner. Failure to do so will keep you from opening the front door of your new home.
These are some of the most common mistakes home buyers make. Educating yourself about the process will ensure a smoother transaction and a definite housewarming party.
http://www.real-estate-marketing-talk.com/home-buyer.html
If so, there are several things you should avoid when you enter the home buying process. And if you aren’t careful to avoid them it is possible that your closing will be delayed or even canceled. Your adherence to the following rules will put the keys to the house in your hands quickly.
First, don’t damage your debt to income ratio by making a major purchase before closing. If you decide you can’t live without that brand new Benz, you might have to wait on owning a home. The bank could easily determine that your sky high car payment would hinder your ability to pay your mortgage. Wait until after you get the house to do some spending. No one expects a brand new house full of furniture and a sports car in the driveway unless you are a famous sports figure or Donald Trump.
Secondly, don’t change jobs if you don’t have to. The lenders like to see consistency versus constant job hopping. If you are just miserable with your job, maybe you can switch to a different job within the same field. Or you can tough it out until you have the house and then start putting out resumes.
Also, a home buyer should never surrender their earnest money to a For Sale by Owner Seller. There isn’t anything stopping the sellers from spending the money before the transaction goes through. If the deal should fall through you’ll have to fight tooth and nail to get that deposit back. You should put the deposit into a trust account. You should be able to find an attorney willing to hold the deposit for you until the transaction is finalized. Your contract needs to state what will happen to the deposit in the event that the transaction falls through.
In addition, never let emotions guide you. Stay practical and realistic during the home buying process. Some sellers are willing to fix some of the problems with the home and others may not be as willing. Don’t let that refusal close the door on your dream home. Conversely, you shouldn’t let your loyalty to the home blind you to costly repairs down the road. You certainly don’t want to be in a money pit.
Furthermore, don’t forget to have the utilities activated. The utility companies might need a few days to switch the service. Don’t forget to cancel the service at the old residence. That seems simple enough, yet many people forget that step entirely.
Another costly mistake a home buyer might make is forgetting to secure hazard insurance. Talk to your insurance company right away because the lender will want to see proof of coverage for the new home at closing. Failing to line up the insurance will lead to delays in closing.
You should not get too personal with the seller. After all, this is a business transaction, so it should be treated professionally. If you get into too many personal discussions, you might say something that could be taken the wrong way by the seller. You might have been joking about the ugly green carpet in the guest bedroom, but the seller might have taken that as offensive. In the end, it could hurt the dynamics of the transaction. You should be friendly, but professional.
If the appraisal comes in too low, don’t freak out. There are several solutions to this dilemma. The seller might be willing to come down on the price of the home. The buyer can put more money down if they are committed to that home. The buyer and seller can negotiate the deal or the appraisal can be disputed.
Don’t forget to use your agent. It is the agent’s job to keep up with the daily details of the deal, including the lender, the seller, and the seller’s agent. It is also your agent’s responsibility to set up a final walkthrough prior to closing.
Lastly, don’t forget to take care of your end of the deal. You must be on the same page as the lender. Provide them with the paperwork they need and answer their questions in a timely manner. Failure to do so will keep you from opening the front door of your new home.
These are some of the most common mistakes home buyers make. Educating yourself about the process will ensure a smoother transaction and a definite housewarming party.
http://www.real-estate-marketing-talk.com/home-buyer.html
Buying a First Home - A Tutorial for First-Time Home Buyers
I painfully remember buying my first home. Specifically, I remember visiting dozens of websites to find the information I needed, thinking to myself "somebody should roll all this up into one website."
That's what I've created in Home Buying Institute, a one-stop shop for anyone buying a first home (and hungry for information). By adding new articles and resources on a daily basis, I'm able to offer first-time home buyers what I never had -- a complete and convenient home buying education.
Buying a First Home - The Various Stages
You'll find the information on this website is organized in a way that logically coincides with the home buying process. It starts with financial self-assessment and ends with the real estate closing process. In between, you'll find a complete education that will be a huge help when buying your first home.
First-Time Home Buying Selections
Below, I've gathered below some of the home buying articles I think you should start with. I consider these articles to be required reading for anyone buying their first home. I've selected articles that (A) focus on first-time home buyers, (B) offer plenty of helpful information, and (C) cover each step of the home buying process.
So without further ado, here is my list of required reading for first-time home buyers.
http://www.homebuyinginstitute.com/homebuyingprocess_article12.php
That's what I've created in Home Buying Institute, a one-stop shop for anyone buying a first home (and hungry for information). By adding new articles and resources on a daily basis, I'm able to offer first-time home buyers what I never had -- a complete and convenient home buying education.
Buying a First Home - The Various Stages
You'll find the information on this website is organized in a way that logically coincides with the home buying process. It starts with financial self-assessment and ends with the real estate closing process. In between, you'll find a complete education that will be a huge help when buying your first home.
First-Time Home Buying Selections
Below, I've gathered below some of the home buying articles I think you should start with. I consider these articles to be required reading for anyone buying their first home. I've selected articles that (A) focus on first-time home buyers, (B) offer plenty of helpful information, and (C) cover each step of the home buying process.
So without further ado, here is my list of required reading for first-time home buyers.
http://www.homebuyinginstitute.com/homebuyingprocess_article12.php
Renting vs. Buying a Home - How to Decide
Renting vs. buying a home is a decision that many home buyers face. There's certainly no shortage of advice on the subject of renting vs. buying a home, but the final decision can become more difficult to come by for home buyers.
One of the best ways to determine if you should rent or buy a home is to look at the pros and cons on each side of the issue. After reviewing the pros and cons, you can determine which option makes the most sense for you.
The question of renting vs. buying a home usually centers on the following topics:
* Financial considerations (costs)
* Tax benefits
* Overall life plan
Financial Considerations of Buying a Home
For a lot of home buyers, the financial considerations are the most important factors in making the decision. Many potential home buyers are shocked to learn they can buy a home for nearly the same amount as (or even less than) what they pay in rent each month. When the money is nearly equal, the question of whether to rent or buy a home becomes a lot easier to make!
The Home Equity Factor
When buying a home instead of renting, you also benefit from the equity that builds in your home. As a renter, you pay for the right to live in the home for a period of time, but that's it. At the end of the lease period, you have nothing to show for it expenditure, other than the fact you lived in the home for that period of time.
Homeowners build equity as the amount they owe on their home decreases and the value of their home increases. Equity contributes a lot to a person's overall financial picture. For instance, the ability to take out home-equity loans is a major financial benefit to buying a home.
Tax Benefits of Owning a Home
Home ownership comes with significant tax benefits. It's wise to speak to your accountant or tax advisor about the benefits of owning a home and paying a monthly mortgage (instead of a rental payment). Home buyers often receive tax deductions and can also build up equity in their home. This brings greater financial freedom and opportunities.
The Big Picture
A lot of people who choose renting over buying make the decision based on misinformation. For instance, they may think that buying a home is beyond their financial reach, when it's really within reach. When choosing between renting and buying a home, the best thing to do is research your options, speak to professionals, and then make an informed decision.
http://www.homebuyinginstitute.com/homebuyingprocess_article16.php
One of the best ways to determine if you should rent or buy a home is to look at the pros and cons on each side of the issue. After reviewing the pros and cons, you can determine which option makes the most sense for you.
The question of renting vs. buying a home usually centers on the following topics:
* Financial considerations (costs)
* Tax benefits
* Overall life plan
Financial Considerations of Buying a Home
For a lot of home buyers, the financial considerations are the most important factors in making the decision. Many potential home buyers are shocked to learn they can buy a home for nearly the same amount as (or even less than) what they pay in rent each month. When the money is nearly equal, the question of whether to rent or buy a home becomes a lot easier to make!
The Home Equity Factor
When buying a home instead of renting, you also benefit from the equity that builds in your home. As a renter, you pay for the right to live in the home for a period of time, but that's it. At the end of the lease period, you have nothing to show for it expenditure, other than the fact you lived in the home for that period of time.
Homeowners build equity as the amount they owe on their home decreases and the value of their home increases. Equity contributes a lot to a person's overall financial picture. For instance, the ability to take out home-equity loans is a major financial benefit to buying a home.
Tax Benefits of Owning a Home
Home ownership comes with significant tax benefits. It's wise to speak to your accountant or tax advisor about the benefits of owning a home and paying a monthly mortgage (instead of a rental payment). Home buyers often receive tax deductions and can also build up equity in their home. This brings greater financial freedom and opportunities.
The Big Picture
A lot of people who choose renting over buying make the decision based on misinformation. For instance, they may think that buying a home is beyond their financial reach, when it's really within reach. When choosing between renting and buying a home, the best thing to do is research your options, speak to professionals, and then make an informed decision.
http://www.homebuyinginstitute.com/homebuyingprocess_article16.php
The Home Buying Process: Your 14-Point Path to Success
I remember going through my first home buying process. I also remember the confusion and frustration of not having a "big picture" in my mind of how the process should work. That's why I'm giving you what I never had, a start-to-finish road map of the process.
Home Buying Process - By the Numbers
In reality, there's no way to predict exactly how the process will go for you. There are too many variables along the way. But there's a general pattern to the process, and that's what we will examine here.
1. Decide to buy a home
It all starts with this spark. And since you're reading this article, we can assume you're already past this point.
2. Conduct a financial self-assessment
Some people put this step later in the home buying process. But it belongs at the beginning. Before you start looking at houses and shopping for mortgages, you need to take a good look at your financial situation. You can start by ordering a copy of your credit report, and reviewing it for errors.
3. Make a home buying wish list
Once you have an idea how much you can afford, start writing down the things you'd like in a house: style, size, features, location, price, etc. Prioritize each item as either a "must have" or "would like to have."
4. Get pre-approved for a loan
Pre-approval is the process of applying for a loan and getting approved for a certain amount before having a purchase agreement (contract). Having a pre-approval letter also shows sellers you're serious about buying their house.
5. Find a real estate agent
It's rarely a good idea to buy a first home without professional help. If you're an investor and you've purchased a half-dozen homes in the past, you might be comfortable enough to go it alone. But when buying your first home, it's in your best interest to hire an agent.
6. Begin House hunting
Now comes the fun part, the house-hunting process. If you follow the steps I've outlined here, you can shop confidently (knowing that you have a pre-approval letter, a price range, and an agent to represent you).
7. Make an offer
How much you offer will depend on the asking price, the market, comparable sales in the area and other factors. Your offer might be accepted, rejected or countered. You might be the only buyer, or you might have to compete with others. You won't know until the time comes, which is another reason to have an agent help you.
8. Request approval for the loan amount
If the seller accepts your offer, you must then go back to your chosen mortgage lender and submit paperwork for loan approval. In most cases, it's easiest to return to the lender who gave you the pre-approval letter, but it's not mandatory.
9. Get a home appraisal
Your lender will require a home appraisal to make sure the home is worth the price you've agreed to pay. In the event that you can't make your mortgage payments, the lender will foreclose on the home and resell it. It's not a pleasant thought, but it's reality. So the home appraisal is how the lender protects its own interests.
10. Get approved for the loan
If the house appraises at a value equal to your loan amount (and provided all other factors are well and good), your mortgage lender will then approve the loan.
11. Get a home inspection
On average, home inspections cost between $300 and $600. That's a small price to pay for the peace of mind it brings. Get a home inspection as soon as possible after the sellers accept your offer, and make the contract contingent upon the inspection. That way, if the inspector finds a problem you're unwilling to accept, you have a legal way out of the contract.
http://www.homebuyinginstitute.com/homebuyingprocess_article1.php
Home Buying Process - By the Numbers
In reality, there's no way to predict exactly how the process will go for you. There are too many variables along the way. But there's a general pattern to the process, and that's what we will examine here.
1. Decide to buy a home
It all starts with this spark. And since you're reading this article, we can assume you're already past this point.
2. Conduct a financial self-assessment
Some people put this step later in the home buying process. But it belongs at the beginning. Before you start looking at houses and shopping for mortgages, you need to take a good look at your financial situation. You can start by ordering a copy of your credit report, and reviewing it for errors.
3. Make a home buying wish list
Once you have an idea how much you can afford, start writing down the things you'd like in a house: style, size, features, location, price, etc. Prioritize each item as either a "must have" or "would like to have."
4. Get pre-approved for a loan
Pre-approval is the process of applying for a loan and getting approved for a certain amount before having a purchase agreement (contract). Having a pre-approval letter also shows sellers you're serious about buying their house.
5. Find a real estate agent
It's rarely a good idea to buy a first home without professional help. If you're an investor and you've purchased a half-dozen homes in the past, you might be comfortable enough to go it alone. But when buying your first home, it's in your best interest to hire an agent.
6. Begin House hunting
Now comes the fun part, the house-hunting process. If you follow the steps I've outlined here, you can shop confidently (knowing that you have a pre-approval letter, a price range, and an agent to represent you).
7. Make an offer
How much you offer will depend on the asking price, the market, comparable sales in the area and other factors. Your offer might be accepted, rejected or countered. You might be the only buyer, or you might have to compete with others. You won't know until the time comes, which is another reason to have an agent help you.
8. Request approval for the loan amount
If the seller accepts your offer, you must then go back to your chosen mortgage lender and submit paperwork for loan approval. In most cases, it's easiest to return to the lender who gave you the pre-approval letter, but it's not mandatory.
9. Get a home appraisal
Your lender will require a home appraisal to make sure the home is worth the price you've agreed to pay. In the event that you can't make your mortgage payments, the lender will foreclose on the home and resell it. It's not a pleasant thought, but it's reality. So the home appraisal is how the lender protects its own interests.
10. Get approved for the loan
If the house appraises at a value equal to your loan amount (and provided all other factors are well and good), your mortgage lender will then approve the loan.
11. Get a home inspection
On average, home inspections cost between $300 and $600. That's a small price to pay for the peace of mind it brings. Get a home inspection as soon as possible after the sellers accept your offer, and make the contract contingent upon the inspection. That way, if the inspector finds a problem you're unwilling to accept, you have a legal way out of the contract.
http://www.homebuyinginstitute.com/homebuyingprocess_article1.php
The Home Buying Process: What Steps To Take
There are several steps to take in the mortgage process. The following is a list of the best steps to take in order to ensure a smooth and simple transaction.
1. Get Pre-Approved First
During the pre-approval process all the information necessary to complete a mortgage transaction will be collected. A pre-approval is substantially different from a pre-qualification. A pre-approval is the process of actually getting approved for a mortgage without having an actual property picked out yet.
Having a pre-approval helps substantially and will also help in negotiating with a seller. After all, a pre-approval tells the seller that your offer is already approved and informs them that you are ready to move forward with the purchase.
2. Making Verbal Agreements
There is simply no such thing as a verbal agreement in Real Estate. If there is something that you would like the seller to agree to, make sure they agree in writing. If there is a verbal agreement made, there is no feasible way to prove that that agreement was made. On the sales contract make sure everything that you are requesting is either agreed to or denied.
3. Find Your New Home
Now, with your pre-approval letter in hand it is time to search for your new home-to-be. Look at several properties, even if the first one you see seems as though it may be, "The one." Once you have chosen your new home write a sales contract and give a deposit. Then forward the sales contract to your broker to accompany the rest of the documentation you have provided. Due to the fact that you already have a pre-approval the loan process should be relatively quick.
4. Lock in Your Rate
It is important to notify the mortgage company that you would like to lock in your rate. Once a rate is locked you have a certain amount of time to close. You can lock a rate for 15 days, 30 days, 60 days, and in some cases 90 days. Once you have locked the rate, you are guaranteed that the rate will not fluctuate.
You also have the option to float the rate. If you float the rate and the rate goes down you could then lock at a lower rate. If the rate goes up you would be subject to a higher payment. It is always suggested that you lock the rate due to the volatility of interest rates. You may ultimately have to pay a higher payment if you decide not to lock your rate and rates increase.
5. Get a Professional Home Inspection
It is always wise to have a home inspection done. A home inspection is done by an independent home inspector. A home inspection involves the home inspector going through the home prior to purchase. In some cases a house that looks beautiful from the outside may have some underlying issues that may be unseen. It is important to know ahead of time if there are any issues with the property.
A home inspector will make sure all of the outlets work, that there is no water damage, and that all of the appliances work. They will assess all of the homes mechanical systems and make sure everything is in working order. They will also let the home buyer know of any current issues or any items that could become issues.
6. Close on Your New Home
Get a copy of all of the loan documents prior to closing. It is important to be able to read through all of the documents as time may be limited during the closing. Always call your broker ahead of time with any questions. Never close on a property without having ample time to review the closing documents.
After reviewing all of the documents set up a closing with the seller and your attorney. At the closing table make sure you have all the required checks and documentation. You should receive a checklist prior to closing. Remember, never sign anything you do not understand, and ask plenty of questions to make sure you understand.
http://www.homebuyinginstitute.com/homebuyingprocess_article2.php
1. Get Pre-Approved First
During the pre-approval process all the information necessary to complete a mortgage transaction will be collected. A pre-approval is substantially different from a pre-qualification. A pre-approval is the process of actually getting approved for a mortgage without having an actual property picked out yet.
Having a pre-approval helps substantially and will also help in negotiating with a seller. After all, a pre-approval tells the seller that your offer is already approved and informs them that you are ready to move forward with the purchase.
2. Making Verbal Agreements
There is simply no such thing as a verbal agreement in Real Estate. If there is something that you would like the seller to agree to, make sure they agree in writing. If there is a verbal agreement made, there is no feasible way to prove that that agreement was made. On the sales contract make sure everything that you are requesting is either agreed to or denied.
3. Find Your New Home
Now, with your pre-approval letter in hand it is time to search for your new home-to-be. Look at several properties, even if the first one you see seems as though it may be, "The one." Once you have chosen your new home write a sales contract and give a deposit. Then forward the sales contract to your broker to accompany the rest of the documentation you have provided. Due to the fact that you already have a pre-approval the loan process should be relatively quick.
4. Lock in Your Rate
It is important to notify the mortgage company that you would like to lock in your rate. Once a rate is locked you have a certain amount of time to close. You can lock a rate for 15 days, 30 days, 60 days, and in some cases 90 days. Once you have locked the rate, you are guaranteed that the rate will not fluctuate.
You also have the option to float the rate. If you float the rate and the rate goes down you could then lock at a lower rate. If the rate goes up you would be subject to a higher payment. It is always suggested that you lock the rate due to the volatility of interest rates. You may ultimately have to pay a higher payment if you decide not to lock your rate and rates increase.
5. Get a Professional Home Inspection
It is always wise to have a home inspection done. A home inspection is done by an independent home inspector. A home inspection involves the home inspector going through the home prior to purchase. In some cases a house that looks beautiful from the outside may have some underlying issues that may be unseen. It is important to know ahead of time if there are any issues with the property.
A home inspector will make sure all of the outlets work, that there is no water damage, and that all of the appliances work. They will assess all of the homes mechanical systems and make sure everything is in working order. They will also let the home buyer know of any current issues or any items that could become issues.
6. Close on Your New Home
Get a copy of all of the loan documents prior to closing. It is important to be able to read through all of the documents as time may be limited during the closing. Always call your broker ahead of time with any questions. Never close on a property without having ample time to review the closing documents.
After reviewing all of the documents set up a closing with the seller and your attorney. At the closing table make sure you have all the required checks and documentation. You should receive a checklist prior to closing. Remember, never sign anything you do not understand, and ask plenty of questions to make sure you understand.
http://www.homebuyinginstitute.com/homebuyingprocess_article2.php
Learn How to Evaluate a Seller's Asking Price
Let's face it. Not every property's listed asking price is really what the property is worth. In fact, the asking price for a property can be dependent upon multiple issues, none of which are truly related to current market value.
Evaluating an owner's asking price is crucial to your investment.
There are many investment strategies in commercial real estate, and different players in the industry look for different characteristics of a property, including asking price.
For the majority of people in commercial real estate, they are looking for a fair, good deal with a property that is marketed at retail or just below retail. They are not usually willing to purchase a property for more than it is worth (of course, there are exceptions).
I understand there are people who will purchase a property because they are so in love with it, that it does not matter what it is really worth. They will pay whatever they need to in order to get the property they have their heart and mind set on.
There are other people in commercial real estate who look for properties that are far below retail value. Whatever the investment strategy, you must be able to evaluate a seller's asking price and find out how it relates to the property's true market value. This is the only way a commercial real estate player can decide if the property is worth paying a certain amount, dependent upon their investment strategy and goals.
The seller can set the asking price at whatever he or she wants. There are no laws or rules that must be followed when setting an asking price for a property. In fact, there are numerous strategies for pricing a property that can be related to motivation, negotiation, emotional investment in a property, and so many others; the list is infinite.
Let's first look at some possible seller strategies for pricing a property so we understand how pricing can be dependent upon so many issues.
The seller could have an idea in his or her head as to what the property is worth, and, without any consultation, pick a price out of thin air. Or they could look at comps (comparable sales) of properties that have sold near the property to determine a fair market value. They can then price the property higher or lower, depending on how motivated the seller really is.
If there are no comps to compare properties, the seller may have to judge a property's worth based on a different type of property, property that sold a long time ago, and adjust for appreciation, or even look at neighboring, comparable cities that could indicate what the property is actually worth.
A truly fair seller could get appraisals done by a few different people, and take the average of the values.
Keep in mind, however, appraisals can be very expensive and are at best a guesstimate as to what a property is worth.
Unfortunately, appraisers can be swayed to appraise higher or lower if there is any sort of personal interest of the appraiser, or possibly a relationship between the seller and appraiser. Of course, this is ill-advised, but justifying an appraised value to a certain dictated number is easier than one thinks.
A seller could price a property much higher than the current market value in hopes that someone will actually pay that much, or leave a lot of wiggle room for negotiations. Other sellers may simply price a property so low they literally just want the property off their hands.
As you can see, the asking price for a property can be a conundrum. Now that we understand just a few of the many possible pricing strategies, let's look at how you can evaluate the seller's asking price, so you can purchase properties in alignment with your own investment strategies and goals.
The best way to evaluate a seller's asking price is to blatantly ask the broker, agent, or seller, how the price was determined, and to give supporting evidence.
You may find yourself in a situation where the broker has a pile of comps, perhaps an appraisal, and supporting documentation as to why the property is priced at what it is. If you find yourself in this situation, beyond validating and verifying the supporting documents, you will very easily be able to evaluate if the asking price is above, at, or below market value. This is the easiest situation in which to find yourself.
Unfortunately, although this previous example is how every property should be presented to a buyer, it is not always realistic. You may have to ask the broker for comps and do the research yourself in order to evaluate the seller's asking price.
You will need to determine motivation by asking the broker why the owner is selling. You will need to compare land values similar to and close to the subject property. You may even need to speak to the city, engineers, and other builders, developers or investors in the area who know the land value better than you do.
If the property is in your own community, then, as a real estate insider, you should know your commercial real estate market inside and out. However, if you are searching in an unfamiliar area, you will need to request the services of other commercial real estate players.
If you do decide that the seller's asking price is in alignment with your investment strategy and goals, and you put the property under contract, the next step would be to get an appraisal done by an independent party that has no interest in the subject property whatsoever, in order to validate your assumptions.
This appraisal, after all, will be similar to a bank's appraisal and help to determine how much money can be loaned on the project. The closer you are to the bank's appraisal, the better shape you will be in to meet project costs, debt service and make your desired profit.
Knowing what a property is really worth and evaluating the seller's asking price are two major ways that you can approach making a sound and final decision regarding an investment. Always have supporting and verified documentation for the subject property so you know exactly what you are getting and for what price.
http://www.homebuyinginstitute.com/homebuyingprocess_article9.php
Evaluating an owner's asking price is crucial to your investment.
There are many investment strategies in commercial real estate, and different players in the industry look for different characteristics of a property, including asking price.
For the majority of people in commercial real estate, they are looking for a fair, good deal with a property that is marketed at retail or just below retail. They are not usually willing to purchase a property for more than it is worth (of course, there are exceptions).
I understand there are people who will purchase a property because they are so in love with it, that it does not matter what it is really worth. They will pay whatever they need to in order to get the property they have their heart and mind set on.
There are other people in commercial real estate who look for properties that are far below retail value. Whatever the investment strategy, you must be able to evaluate a seller's asking price and find out how it relates to the property's true market value. This is the only way a commercial real estate player can decide if the property is worth paying a certain amount, dependent upon their investment strategy and goals.
The seller can set the asking price at whatever he or she wants. There are no laws or rules that must be followed when setting an asking price for a property. In fact, there are numerous strategies for pricing a property that can be related to motivation, negotiation, emotional investment in a property, and so many others; the list is infinite.
Let's first look at some possible seller strategies for pricing a property so we understand how pricing can be dependent upon so many issues.
The seller could have an idea in his or her head as to what the property is worth, and, without any consultation, pick a price out of thin air. Or they could look at comps (comparable sales) of properties that have sold near the property to determine a fair market value. They can then price the property higher or lower, depending on how motivated the seller really is.
If there are no comps to compare properties, the seller may have to judge a property's worth based on a different type of property, property that sold a long time ago, and adjust for appreciation, or even look at neighboring, comparable cities that could indicate what the property is actually worth.
A truly fair seller could get appraisals done by a few different people, and take the average of the values.
Keep in mind, however, appraisals can be very expensive and are at best a guesstimate as to what a property is worth.
Unfortunately, appraisers can be swayed to appraise higher or lower if there is any sort of personal interest of the appraiser, or possibly a relationship between the seller and appraiser. Of course, this is ill-advised, but justifying an appraised value to a certain dictated number is easier than one thinks.
A seller could price a property much higher than the current market value in hopes that someone will actually pay that much, or leave a lot of wiggle room for negotiations. Other sellers may simply price a property so low they literally just want the property off their hands.
As you can see, the asking price for a property can be a conundrum. Now that we understand just a few of the many possible pricing strategies, let's look at how you can evaluate the seller's asking price, so you can purchase properties in alignment with your own investment strategies and goals.
The best way to evaluate a seller's asking price is to blatantly ask the broker, agent, or seller, how the price was determined, and to give supporting evidence.
You may find yourself in a situation where the broker has a pile of comps, perhaps an appraisal, and supporting documentation as to why the property is priced at what it is. If you find yourself in this situation, beyond validating and verifying the supporting documents, you will very easily be able to evaluate if the asking price is above, at, or below market value. This is the easiest situation in which to find yourself.
Unfortunately, although this previous example is how every property should be presented to a buyer, it is not always realistic. You may have to ask the broker for comps and do the research yourself in order to evaluate the seller's asking price.
You will need to determine motivation by asking the broker why the owner is selling. You will need to compare land values similar to and close to the subject property. You may even need to speak to the city, engineers, and other builders, developers or investors in the area who know the land value better than you do.
If the property is in your own community, then, as a real estate insider, you should know your commercial real estate market inside and out. However, if you are searching in an unfamiliar area, you will need to request the services of other commercial real estate players.
If you do decide that the seller's asking price is in alignment with your investment strategy and goals, and you put the property under contract, the next step would be to get an appraisal done by an independent party that has no interest in the subject property whatsoever, in order to validate your assumptions.
This appraisal, after all, will be similar to a bank's appraisal and help to determine how much money can be loaned on the project. The closer you are to the bank's appraisal, the better shape you will be in to meet project costs, debt service and make your desired profit.
Knowing what a property is really worth and evaluating the seller's asking price are two major ways that you can approach making a sound and final decision regarding an investment. Always have supporting and verified documentation for the subject property so you know exactly what you are getting and for what price.
http://www.homebuyinginstitute.com/homebuyingprocess_article9.php
Home Buying Tip: How to Make an Offer
So you've weeded out all the "maybe" houses and found "the one." The next logical step is to make an offer. This is a critical step in the home buying process and should be considered carefully.
This is when you put pen to paper and specify how much you're willing to pay for the home, and under what conditions you will buy (i.e. repairs requested, move-in date, etc.).
A written offer usually includes the following:
* Complete legal description of the property
* Amount of earnest money
* Down payment and financing details
* Proposed move-in date and closing date
* Price you are offering
Making a Smart Offer
When calculating your offer, you should consider several factors: what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation. By this time, you should also have a good idea how much you can afford to pay each month.
Work closely with your agent when making your offer. ItÂ’s a critical part of the process and not something you want to rush through or handle on your own.
On the other hand, if youÂ’re in a hot real estate market where houses are selling fast, youÂ’ll want to get your offer to the seller as soon as possible. Your agentÂ’s expertise will prove invaluable in such circumstances — he or she will help you put your offer together quickly and accurately!
Before making your offer, compare the house to recent sales in the area. Your agent should have this information readily available. If the sellerÂ’s asking price is above recent sale prices in the area, you should bid lower than their asking price, citing this difference as your reason.
Lastly, be prepared to negotiate and have a plan for doing so. What will you do if the seller turns down your initial offer? What happens if there are offers from multiple buyers and a bidding war develops? Consider these possibilities before making your initial offer. Have a plan in place for each scenario.
And when in doubt, follow your agentÂ’s advice!
http://www.homebuyinginstitute.com/homebuyingprocess_article8.php
This is when you put pen to paper and specify how much you're willing to pay for the home, and under what conditions you will buy (i.e. repairs requested, move-in date, etc.).
A written offer usually includes the following:
* Complete legal description of the property
* Amount of earnest money
* Down payment and financing details
* Proposed move-in date and closing date
* Price you are offering
Making a Smart Offer
When calculating your offer, you should consider several factors: what homes sell for in the area, the home's condition, how long it's been on the market, financing terms, and the seller's situation. By this time, you should also have a good idea how much you can afford to pay each month.
Work closely with your agent when making your offer. ItÂ’s a critical part of the process and not something you want to rush through or handle on your own.
On the other hand, if youÂ’re in a hot real estate market where houses are selling fast, youÂ’ll want to get your offer to the seller as soon as possible. Your agentÂ’s expertise will prove invaluable in such circumstances — he or she will help you put your offer together quickly and accurately!
Before making your offer, compare the house to recent sales in the area. Your agent should have this information readily available. If the sellerÂ’s asking price is above recent sale prices in the area, you should bid lower than their asking price, citing this difference as your reason.
Lastly, be prepared to negotiate and have a plan for doing so. What will you do if the seller turns down your initial offer? What happens if there are offers from multiple buyers and a bidding war develops? Consider these possibilities before making your initial offer. Have a plan in place for each scenario.
And when in doubt, follow your agentÂ’s advice!
http://www.homebuyinginstitute.com/homebuyingprocess_article8.php
You CAN Buy Your New Home Before You Sell Your Old One
Buy Before You Sell. Too Risky Right? Wrong!
Myth 14: I can't buy a "new" house without first selling my "old" one.
This is a common myth. That is the way it is supposed work ... right? You can't have a new house without getting rid of the "old" one. Not so.
Take for example, the story of one of our clients. They had a house (beautiful house, worth about $600,000) and had no intention of leaving.
However, one day this house in their neighborhood went on the market. You know the house. It is the one where every time you go by, you wish it was yours. Unfortunately, this house would never be for sale.
Out of the blue, the unbelievable happens: the house goes up for sale.
Now most would call this a stroke of luck, then it would dawn on them...
"We can't have that house. Obviously, something unforeseen as happened, and they'll want a quick sale. Waiting for us to sell our house first, won't be acceptable to them. I guess we are out of luck."
Luckily, this client called us to structure a safe way for him to get his dream home today, buy some time to get his "old" house sold, make both homes affordable during the marketing period, and leave him the exact same long term financing on the "new" home he otherwise would have had!
Now that's a tall order! But we did it. And, so can you!
Here are 2 ways to buy a new house without selling your "old" one first.
Pull the equity out of your existing house using a Home Equity Line of Credit or a 2nd mortgage. If you could snap your fingers and sell your home, this would be what you'd use the buy the "new" home anyway. So just get it out now.
Now, reserve enough of this money to make your "old" house payment for 6-12 months. Your house will take this long to market and with the money set aside you won't be tempted to take a low-ball offer. Use the remainder to as down payment and get your new first mortgage to complete the purchase.
When the "old" house sells, both mortgages are liquidated and you are left with one house and one mortgage ... the exact same situation you'd have had you sold your "old" home before you bought the "new" one. But you accomplished it without the wait and the missed opportunity!
Another way to achieve the same result minus the "old" house payment reserve is to use an 80% first mortgage and a 20% 2nd mortgage also called 100% financing, to buy the new house. You won't have to put any money down and when your "old" house sells, you use the proceeds to pay off the 2nd.
The only difference is you don't get any "extra" money to use to offset two house payments during the marketing period. Many of you, have existing lines of credit or other sources, so this may not be necessary.
Both scenarios leave you with great permanent financing on the new house.
The 80/20 or 100% financing scenario costs a little more in discount points than a traditional structure, but it's only to the costs and not the rate. Refer to our website to learn more about 100% financing in our free report called, "Buy With Zero Down!".
The biggest hurdles you'll need to clear are 1) making two housing payments and 2) getting loan approval with two housing payments.
Here's how you do both:
When you pull the money from your existing house, reserve enough to cover up to 12 months mortgage payments for the "old" house while it is on the market. That way you don't have to come out of pocket for the payment. Gee, that was easy! Hurdle 1 cleared!
Since most loans are approved through a computer these days, you'll need a mortgage broker who knows how to use the automated approval computer systems that FNMA and other agencies and lenders use. These approval systems are a Godsend when it comes to creative financing in today's modern mortgage arena. It may seem strange to you, but to the computer, your financial picture and your need for financing, are simply numbers. It doesn't care that some of those numbers include 2 housing payments. The new systems are allowing many of our clients an approval with abnormally high debt ratios, sometimes as high as 60%! This is very prevalent, especially with clients who have strong credit and assets after closing ... like a 401K. This is your window for approval. Now, you know you'll not be spending 60% of your income on debt, because you put the money aside in Step 1 to cover the "old" house payment, but the computer doesn't know that or care. If done right, you'll get the approval even with very high debt ratios.
Note: Beware! Don't let an unscrupulous mortgage broker get you to commit mortgage fraud just so you can buy before you sell. Stick with our plan. If you get approved fine. If you don't, live with it. One way they'd break the rules to get you approved is to "doctor up" a lease agreement on your "old" home to offset the payment and show the computer a lower debt ratio. Don't do it ... it's a Federal crime!
How do you start?
1) Get approved through the computer system
2) If you need to pull equity out of existing house; start it now
3) Write offer on new house
4) When offer is accepted, put existing house up for sale; not before
At Integrity First Mortgage, we use these strategies to get our clients into houses every day. So don't worry. It is ok to step out of the box sometimes and put away some of the outdated concepts about financing a house.
Lastly, don't forget you can net a lot more for your "old" home with our revolutionary way to sell your house without paying a real estate commission, (6% commission on a 600,000 house is $36,000!).
Happy House Hunting!
http://www.homebuyinginstitute.com/homebuyingprocess_article10.php
Myth 14: I can't buy a "new" house without first selling my "old" one.
This is a common myth. That is the way it is supposed work ... right? You can't have a new house without getting rid of the "old" one. Not so.
Take for example, the story of one of our clients. They had a house (beautiful house, worth about $600,000) and had no intention of leaving.
However, one day this house in their neighborhood went on the market. You know the house. It is the one where every time you go by, you wish it was yours. Unfortunately, this house would never be for sale.
Out of the blue, the unbelievable happens: the house goes up for sale.
Now most would call this a stroke of luck, then it would dawn on them...
"We can't have that house. Obviously, something unforeseen as happened, and they'll want a quick sale. Waiting for us to sell our house first, won't be acceptable to them. I guess we are out of luck."
Luckily, this client called us to structure a safe way for him to get his dream home today, buy some time to get his "old" house sold, make both homes affordable during the marketing period, and leave him the exact same long term financing on the "new" home he otherwise would have had!
Now that's a tall order! But we did it. And, so can you!
Here are 2 ways to buy a new house without selling your "old" one first.
Pull the equity out of your existing house using a Home Equity Line of Credit or a 2nd mortgage. If you could snap your fingers and sell your home, this would be what you'd use the buy the "new" home anyway. So just get it out now.
Now, reserve enough of this money to make your "old" house payment for 6-12 months. Your house will take this long to market and with the money set aside you won't be tempted to take a low-ball offer. Use the remainder to as down payment and get your new first mortgage to complete the purchase.
When the "old" house sells, both mortgages are liquidated and you are left with one house and one mortgage ... the exact same situation you'd have had you sold your "old" home before you bought the "new" one. But you accomplished it without the wait and the missed opportunity!
Another way to achieve the same result minus the "old" house payment reserve is to use an 80% first mortgage and a 20% 2nd mortgage also called 100% financing, to buy the new house. You won't have to put any money down and when your "old" house sells, you use the proceeds to pay off the 2nd.
The only difference is you don't get any "extra" money to use to offset two house payments during the marketing period. Many of you, have existing lines of credit or other sources, so this may not be necessary.
Both scenarios leave you with great permanent financing on the new house.
The 80/20 or 100% financing scenario costs a little more in discount points than a traditional structure, but it's only to the costs and not the rate. Refer to our website to learn more about 100% financing in our free report called, "Buy With Zero Down!".
The biggest hurdles you'll need to clear are 1) making two housing payments and 2) getting loan approval with two housing payments.
Here's how you do both:
When you pull the money from your existing house, reserve enough to cover up to 12 months mortgage payments for the "old" house while it is on the market. That way you don't have to come out of pocket for the payment. Gee, that was easy! Hurdle 1 cleared!
Since most loans are approved through a computer these days, you'll need a mortgage broker who knows how to use the automated approval computer systems that FNMA and other agencies and lenders use. These approval systems are a Godsend when it comes to creative financing in today's modern mortgage arena. It may seem strange to you, but to the computer, your financial picture and your need for financing, are simply numbers. It doesn't care that some of those numbers include 2 housing payments. The new systems are allowing many of our clients an approval with abnormally high debt ratios, sometimes as high as 60%! This is very prevalent, especially with clients who have strong credit and assets after closing ... like a 401K. This is your window for approval. Now, you know you'll not be spending 60% of your income on debt, because you put the money aside in Step 1 to cover the "old" house payment, but the computer doesn't know that or care. If done right, you'll get the approval even with very high debt ratios.
Note: Beware! Don't let an unscrupulous mortgage broker get you to commit mortgage fraud just so you can buy before you sell. Stick with our plan. If you get approved fine. If you don't, live with it. One way they'd break the rules to get you approved is to "doctor up" a lease agreement on your "old" home to offset the payment and show the computer a lower debt ratio. Don't do it ... it's a Federal crime!
How do you start?
1) Get approved through the computer system
2) If you need to pull equity out of existing house; start it now
3) Write offer on new house
4) When offer is accepted, put existing house up for sale; not before
At Integrity First Mortgage, we use these strategies to get our clients into houses every day. So don't worry. It is ok to step out of the box sometimes and put away some of the outdated concepts about financing a house.
Lastly, don't forget you can net a lot more for your "old" home with our revolutionary way to sell your house without paying a real estate commission, (6% commission on a 600,000 house is $36,000!).
Happy House Hunting!
http://www.homebuyinginstitute.com/homebuyingprocess_article10.php
Home Buying Process - Pointers
Before you rush out to purchase a home, there are a few tips that might help you get a great deal on the home of your dreams.
First, before anything else, it would be in your best interests to talk with a lending company and receive a pre-qualification letter. This letter will let you know exactly what your maximum mortgage amount can be.
Many times, the lending company will ask that you put up a "good faith" payment that will be put in an escrow account; this money shows the home seller that you are serious about purchasing their home.
Next, you should have a home inspector to go to the home that you wish to purchase. Even if the home seller and the real estate agent already has one for you to see, you should invest the money into getting a home inspector of your own.
The inspector will note any problems that he sees with the home in the way of repairs and you should look over this very carefully before signing any contracts. You do not want any surprises like a bad foundation or a leaky roof.
Look for a location that fits your lifestyle, such as proximity to schools, the beach, work, or any other activities that you enjoy. You may wish to find a home close to the elementary school, near a shopping centre, or even away from all the noise of the big city.
Visit the neighborhood at different times during the day and in the evening and night to see what goes on in the neighborhood before you purchase. Do not take anyoneÂ’s word on how quiet the neighborhood really is. You can also find out the crime statistics in the area to ensure you are seeking a home in a safe area.
You can talk with a realtor and learn what homes are going for in the same neighborhood with similar amenities to make sure the home you wish to buy is not overpriced or under priced. If the property is way under market value, you should try to learn why before signing any type of contract.
If the property is overpriced, you can always try to negotiate with the seller to try to get them to lower the price to a more reasonable price.
http://www.homebuyinginstitute.com/homebuyingprocess_article3.php
First, before anything else, it would be in your best interests to talk with a lending company and receive a pre-qualification letter. This letter will let you know exactly what your maximum mortgage amount can be.
Many times, the lending company will ask that you put up a "good faith" payment that will be put in an escrow account; this money shows the home seller that you are serious about purchasing their home.
Next, you should have a home inspector to go to the home that you wish to purchase. Even if the home seller and the real estate agent already has one for you to see, you should invest the money into getting a home inspector of your own.
The inspector will note any problems that he sees with the home in the way of repairs and you should look over this very carefully before signing any contracts. You do not want any surprises like a bad foundation or a leaky roof.
Look for a location that fits your lifestyle, such as proximity to schools, the beach, work, or any other activities that you enjoy. You may wish to find a home close to the elementary school, near a shopping centre, or even away from all the noise of the big city.
Visit the neighborhood at different times during the day and in the evening and night to see what goes on in the neighborhood before you purchase. Do not take anyoneÂ’s word on how quiet the neighborhood really is. You can also find out the crime statistics in the area to ensure you are seeking a home in a safe area.
You can talk with a realtor and learn what homes are going for in the same neighborhood with similar amenities to make sure the home you wish to buy is not overpriced or under priced. If the property is way under market value, you should try to learn why before signing any type of contract.
If the property is overpriced, you can always try to negotiate with the seller to try to get them to lower the price to a more reasonable price.
http://www.homebuyinginstitute.com/homebuyingprocess_article3.php
Buying a Home: What Happens Next?
The offer on the home of your dreams has just been accepted! What happens now? The steps below are generally what happen after the contract has been accepted by the sellers.
Step 1: Contract Acceptance - Yippee! - Celebrate (briefly, and then let your Realtor get to work!)
Step 2: Escrow Opens - Selecting a title company is most often done by the sellers and the selling agent generally opens the escrow. Occasionally opening of escrow will be done during the listing period.
Step 3: Loan Application and Income/Employment Verification - Most buyers have started this process before looking for a home and if you were pre-qualified much of this work is complete. Make sure your Realtor and Lender are working together.
Step 4: Inspections - Most transactions require the seller to provide a Pest Inspection and good Realtors insist their buyers get a Home Inspection to verify the house systems are in working order and the building is in compliance with local regulations. Generally sellers will pay to have all section I items on the pest inspection repaired. Section II items on the pest inspection and items that need repair or replacing as found in the home inspection may be subject to further negotiation.
Step 5: Disclosures and More Disclosures - The mandatory sellers disclosures include California Statewide buyer/seller advisory, Supplemental Statutory Disclosure (SSD), Transfer Disclosure Statement (TDS), Natural Hazard Disclosure (NHD) , Lead Paint Disclosure. Your Realtor will make sure you get and understand each of these.
Step 6: Preliminary Title Report - Provided by the title company this report will alert you to liens, easements, taxes and other items filed on the property.
Step 7: Property Appraisal - This is ordered by and is primarily for your lender to confirm the value of the property. Most often the appraised value will be the amount you have agreed with the seller to buy and sell. Read this report carefully, there is a wealth of information about your new home.
Step 8: Removing Financing Contingencies - Unless otherwise stated in the California Purchase Agreement this happens 17 days after the contract is signed.
Step 9: Removing Inspection/Property Contingencies - You, as the buyer, have, unless otherwise stated, 17 days to have the home inspected and review reports before you must remove this contingency.
Step 10: Deposit Increase - If asked this will happen after the inspection period and removal of property contingencies.
Step 11: Selecting and Obtaining Hazard Insurance - This is coordinated with the Lender and Title Company but it is your task to make happen. If this is your first home your Realtor and Lender will be able to guide you.
Step 12: Home Warranty - If the sellers agreed to acquire a Home Warranty as part of the purchase, now is the time for it to be ordered. If the sellers are not buying the policy, you may order and pay for one. They generally cost between $300 and $400 and are well worth the expense.
Step 13: Signing Documents - This will be scheduled by the title company and most often will be in their office or if you are not is the same town can be done at a title company in your city. If you have a good Realtor or Lender they will be there to help answer any questions you have. You will be signing more documents than you ever imagined!
Step 14: Final Walk Though - This is an important inspection made by you to make sure the home is in the same or better condition as it was when the Purchase Agreement was signed. Make sure your Realtor is with you and has a check list of items to review. This is where you can verify the seller made required repairs agreed to under the contract and subsequent amendments.
Step 15: Close of Escrow - This happens when all conditions of the escrow have been met including the receipt by the title company of "good" funds.
Step 16: Title Transfer - Often referred to as "Recording," this is when the actual title of the property is transferred from the seller to the new owner. It is at this point, you will have access, unless otherwise arranged, to your new home.
What I have described in the steps above is a typical transaction between a buyer and seller. The steps may happen in a different order or in the case of issues, which are not abnormal, may happen more than once. For example it is not uncommon for a property appraiser to re-inspect the property if there were code or safety violations.
http://www.homebuyinginstitute.com/homebuyingprocess_article4.php
Step 1: Contract Acceptance - Yippee! - Celebrate (briefly, and then let your Realtor get to work!)
Step 2: Escrow Opens - Selecting a title company is most often done by the sellers and the selling agent generally opens the escrow. Occasionally opening of escrow will be done during the listing period.
Step 3: Loan Application and Income/Employment Verification - Most buyers have started this process before looking for a home and if you were pre-qualified much of this work is complete. Make sure your Realtor and Lender are working together.
Step 4: Inspections - Most transactions require the seller to provide a Pest Inspection and good Realtors insist their buyers get a Home Inspection to verify the house systems are in working order and the building is in compliance with local regulations. Generally sellers will pay to have all section I items on the pest inspection repaired. Section II items on the pest inspection and items that need repair or replacing as found in the home inspection may be subject to further negotiation.
Step 5: Disclosures and More Disclosures - The mandatory sellers disclosures include California Statewide buyer/seller advisory, Supplemental Statutory Disclosure (SSD), Transfer Disclosure Statement (TDS), Natural Hazard Disclosure (NHD) , Lead Paint Disclosure. Your Realtor will make sure you get and understand each of these.
Step 6: Preliminary Title Report - Provided by the title company this report will alert you to liens, easements, taxes and other items filed on the property.
Step 7: Property Appraisal - This is ordered by and is primarily for your lender to confirm the value of the property. Most often the appraised value will be the amount you have agreed with the seller to buy and sell. Read this report carefully, there is a wealth of information about your new home.
Step 8: Removing Financing Contingencies - Unless otherwise stated in the California Purchase Agreement this happens 17 days after the contract is signed.
Step 9: Removing Inspection/Property Contingencies - You, as the buyer, have, unless otherwise stated, 17 days to have the home inspected and review reports before you must remove this contingency.
Step 10: Deposit Increase - If asked this will happen after the inspection period and removal of property contingencies.
Step 11: Selecting and Obtaining Hazard Insurance - This is coordinated with the Lender and Title Company but it is your task to make happen. If this is your first home your Realtor and Lender will be able to guide you.
Step 12: Home Warranty - If the sellers agreed to acquire a Home Warranty as part of the purchase, now is the time for it to be ordered. If the sellers are not buying the policy, you may order and pay for one. They generally cost between $300 and $400 and are well worth the expense.
Step 13: Signing Documents - This will be scheduled by the title company and most often will be in their office or if you are not is the same town can be done at a title company in your city. If you have a good Realtor or Lender they will be there to help answer any questions you have. You will be signing more documents than you ever imagined!
Step 14: Final Walk Though - This is an important inspection made by you to make sure the home is in the same or better condition as it was when the Purchase Agreement was signed. Make sure your Realtor is with you and has a check list of items to review. This is where you can verify the seller made required repairs agreed to under the contract and subsequent amendments.
Step 15: Close of Escrow - This happens when all conditions of the escrow have been met including the receipt by the title company of "good" funds.
Step 16: Title Transfer - Often referred to as "Recording," this is when the actual title of the property is transferred from the seller to the new owner. It is at this point, you will have access, unless otherwise arranged, to your new home.
What I have described in the steps above is a typical transaction between a buyer and seller. The steps may happen in a different order or in the case of issues, which are not abnormal, may happen more than once. For example it is not uncommon for a property appraiser to re-inspect the property if there were code or safety violations.
http://www.homebuyinginstitute.com/homebuyingprocess_article4.php
Basics of Home Buying
The most important investment you will ever make is probably the purchase of a home. Finding the right home for you can be a long and arduous process, but there is no getting around that.
Know Your Wants And Needs
Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:
- Location (in a particular city, school district or neighborhood)
- Size -- how many bedrooms and bathrooms
- Parking -- a 1-car garage or 2?
- Style -- 2-story house or ranch style home?
- Heating -- central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- high-traffic area.
- high noise area (airport, train station or highway in close proximity)
- maintenance -- major repairs needed
As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt.
Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
The most important investment you will ever make is probably the purchase of a home. Finding the right home for you can be a long and arduous process, but there is no getting around that.
Know Your Wants And Needs
Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:
- Location (in a particular city, school district or neighborhood)
- Size -- how many bedrooms and bathrooms
- Parking -- a 1-car garage or 2?
- Style -- 2-story house or ranch style home?
- Heating -- central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- high-traffic area.
- high noise area (airport, train station or highway in close proximity)
- maintenance -- major repairs needed
As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt.
Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
Get Pre-Approved For A Loan
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
http://www.homebuyinginstitute.com/homebuyingprocess_article5.php
Know Your Wants And Needs
Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:
- Location (in a particular city, school district or neighborhood)
- Size -- how many bedrooms and bathrooms
- Parking -- a 1-car garage or 2?
- Style -- 2-story house or ranch style home?
- Heating -- central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- high-traffic area.
- high noise area (airport, train station or highway in close proximity)
- maintenance -- major repairs needed
As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt.
Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
The most important investment you will ever make is probably the purchase of a home. Finding the right home for you can be a long and arduous process, but there is no getting around that.
Know Your Wants And Needs
Before embarking on your journey of house hunting, you must know what you really want to find. Sit down with pen and paper and list all the features you care most about, such as:
- Location (in a particular city, school district or neighborhood)
- Size -- how many bedrooms and bathrooms
- Parking -- a 1-car garage or 2?
- Style -- 2-story house or ranch style home?
- Heating -- central heating and/or air conditioning?
Equally important, on a new sheet of paper list all the features you absolutely do not want in a house. For example:
- high-traffic area.
- high noise area (airport, train station or highway in close proximity)
- maintenance -- major repairs needed
As you look at houses, keep both lists in mind. Your lists may change over time as you do more looking. You'll want to add or remove features, or perhaps you'll become willing to make compromises. Realize that you most likely will not find the "perfect" home. Experienced homebuyers will tell you, perfect homes are not found, they are made perfect through hard work.
Get Your Credit Report In Order
Prior to looking at properties, you must get your finances in order. This is the time to review your credit report and clean it up, if need be, to maximize your credit score. Many people do not realize how important it is to check your credit report periodically to make sure it is accurate. You should pay off any past due amounts, or negotiate a settlement price to close the debt.
Get such agreements in writing, before paying any settlement. Keep all receipts for any settled items from your credit report since it may take months to get the debt actually removed.
Research Your Home-Buying Options
Decide what kind of property you are interested in. Do you want a HUD property, a foreclosure, real estate, or property for sale by owner?
A number of web sites list homes according to city, state, or price range. Visit these sites to see pictures of homes, many with virtual tours, and review the listing features.
Get Pre-Approved For A Loan
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
You're ready now to find a lender and get yourself pre-approved for the loan. Being pre-approved offers a number of advantages. It will clarify the price range you can afford. Also, once you find the home you want, you can place an immediate offer. If you have to wait for pre-approval, someone could buy the house right out from under you.
Several special programs are often available from lenders, such as the FHA or Ameri-Dream, that can save you money in the closing. Ask the lender about any special programs before you decide on a loan.
Find A Good Real Estate Agent
It is wise for the first time homebuyer to work closely with a real estate agent, no matter what type of property you're looking for. A knowledgeable real estate agent will make your house-hunting much easier. A good real estate agent is usually a good negotiator, and will be able to help you with the complicated paperwork involved in placing an offer on a house or in closing a deal.
It's essential that you have a real estate agent working for you as the buyer, rather than relying on the seller's agent for the house you want to buy. The latter can involve a conflict of interest, which usually works to your disadvantage.
To select a real estate agent, you should check with your friends and neighbors for recommendations. Find an agent you feel comfortable with and who is knowledgeable about the area you hope to buy in.
These are just the basics of home buying. You will find many details you need to master as you move through the buying process, but having these basics under your belt will give you a head start.
http://www.homebuyinginstitute.com/homebuyingprocess_article5.php
5 Ground Rules for Home Buying Success
There are few purchases in life that carry the financial and psychological weight of buying a home.
Whether you are buying your first home, moving up to your dream home, or downsizing your home and your life after the kids have gone, it is important to understand the ground rules for success in the world of buying a home.
Making the wrong decision in buying a home can have devastating and long lasting effects, while making a wise decision in home buying can greatly enhance the overall value of the investment. It is necessary to learn all you can about the world of home buying and mortgages before setting out to purchase the home of your dreams.
While there are plenty of web sites designed to help first time homeowners learn all they can, most financial experts say that there is no substitute for the good old one-on-one learning. Fortunately, most mortgage lenders, home inspectors and real estate agents will be able to provide this kind of one-on-one learning.
When buying a home it is often best to use a systematic approach as this is often the best way to be sure that all decisions are based on information and reason, not on impulse or emotion. Buying a home can be an emotional process, nevertheless it is imperative to keep your emotions under control and not let them cloud your judgment.
There are five basic ground rules when it comes to buying a home and shopping smart, and they are:
#1 – Get your financing before you get your home
There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding. While the desire to get out there are search for that great home is understandable, it is vital to line up the financing you will need before you start shopping for a home.
Getting the financing ahead of time has a number of important advantages, including knowing how much you can buy and gaining more respect from the listing agents. By knowing how much home you can afford before you shop you will avoid wasting your time looking at unaffordable properties, and the listing agent will be more than willing to show you the homes in your price range.
It is also important to take a good look at the various types of mortgage on the market before getting started in the home buying process. These days, mortgages come in far more choices than the typical 15 or 30 year. For that reason, potential home buyers need to understand how each type of mortgage works, and to gauge which mortgage is the best choice for their needs.
#2 – Look at the community, not just the home
It is a good idea to look at the entire community, instead of focusing on a single home. This can be a particularly important thing to consider for those moving to a new metropolitan area, as these buyers will be unfamiliar with the local climate and lifestyle. It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and local shopping opportunities.
We have all heard that location is the key consideration when it comes to real estate, and that is certainly the case. Buying a house in the wrong area can be a big mistake, and it is important to choose the location as well as the home. Potential buyers can learn a great deal about the nature of the various neighborhoods simply by driving around town, as well as by talking to other residents.
#3 – Be fair with your first offer
Trying to lowball a seller on the first offer can backfire, as can paying too much. It is important to carefully evaluate the local market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for.
Comparing the sales of comparable homes, what are known as “comps” in the industry, is one of the best ways to determine what is fair, and to make sure that you neither overpay or underbid on the property.
#4 – Always get a home inspection
Always investigate the home for any possible defects before making an offer. Compared to the cost of the average home, the price of a quality home inspection is virtually negligible. Hence, get a good home inspection done before you buy.
To find the best home inspector, it is a good idea to seek out word of mouth referrals as many of the best home inspectors rely on word of mouth advertising.
#5 – Do not alienate the sellers of the home
Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller. It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale.
Keeping the good will of the seller will help the transaction go smoothly, and it will provide the best environment for seller and buyer alike.
http://www.homebuyinginstitute.com/homebuyingprocess_article6.php
Whether you are buying your first home, moving up to your dream home, or downsizing your home and your life after the kids have gone, it is important to understand the ground rules for success in the world of buying a home.
Making the wrong decision in buying a home can have devastating and long lasting effects, while making a wise decision in home buying can greatly enhance the overall value of the investment. It is necessary to learn all you can about the world of home buying and mortgages before setting out to purchase the home of your dreams.
While there are plenty of web sites designed to help first time homeowners learn all they can, most financial experts say that there is no substitute for the good old one-on-one learning. Fortunately, most mortgage lenders, home inspectors and real estate agents will be able to provide this kind of one-on-one learning.
When buying a home it is often best to use a systematic approach as this is often the best way to be sure that all decisions are based on information and reason, not on impulse or emotion. Buying a home can be an emotional process, nevertheless it is imperative to keep your emotions under control and not let them cloud your judgment.
There are five basic ground rules when it comes to buying a home and shopping smart, and they are:
#1 – Get your financing before you get your home
There are few things in life as disappointing as losing out on the home of your dreams due to not being able to secure funding. While the desire to get out there are search for that great home is understandable, it is vital to line up the financing you will need before you start shopping for a home.
Getting the financing ahead of time has a number of important advantages, including knowing how much you can buy and gaining more respect from the listing agents. By knowing how much home you can afford before you shop you will avoid wasting your time looking at unaffordable properties, and the listing agent will be more than willing to show you the homes in your price range.
It is also important to take a good look at the various types of mortgage on the market before getting started in the home buying process. These days, mortgages come in far more choices than the typical 15 or 30 year. For that reason, potential home buyers need to understand how each type of mortgage works, and to gauge which mortgage is the best choice for their needs.
#2 – Look at the community, not just the home
It is a good idea to look at the entire community, instead of focusing on a single home. This can be a particularly important thing to consider for those moving to a new metropolitan area, as these buyers will be unfamiliar with the local climate and lifestyle. It is crucial to determine the areas of town that are most desirable, and to consider things like distance from work and local shopping opportunities.
We have all heard that location is the key consideration when it comes to real estate, and that is certainly the case. Buying a house in the wrong area can be a big mistake, and it is important to choose the location as well as the home. Potential buyers can learn a great deal about the nature of the various neighborhoods simply by driving around town, as well as by talking to other residents.
#3 – Be fair with your first offer
Trying to lowball a seller on the first offer can backfire, as can paying too much. It is important to carefully evaluate the local market, and to compare the asking price of the home with what similar houses in the neighborhood have sold for.
Comparing the sales of comparable homes, what are known as “comps” in the industry, is one of the best ways to determine what is fair, and to make sure that you neither overpay or underbid on the property.
#4 – Always get a home inspection
Always investigate the home for any possible defects before making an offer. Compared to the cost of the average home, the price of a quality home inspection is virtually negligible. Hence, get a good home inspection done before you buy.
To find the best home inspector, it is a good idea to seek out word of mouth referrals as many of the best home inspectors rely on word of mouth advertising.
#5 – Do not alienate the sellers of the home
Many real estate deals have fallen apart due to the personal animosity of the buyer and the seller. It is important to avoid alienating the seller of the home during the process, and to avoid nitpicking every little detail during the sale.
Keeping the good will of the seller will help the transaction go smoothly, and it will provide the best environment for seller and buyer alike.
http://www.homebuyinginstitute.com/homebuyingprocess_article6.php
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