Where Should I look for Financing for my home?
Shop... Shop... Shop... Interest Rates are very competitive, so be sure to check with banks, financial institutions, and even the internet.The rates are the lowest in 41 years.
Why should I use a Realtor to sell my home?
Marketability. An agent can market your home in many different ways, through a network called Multiple listing service (M.L.S.) Agents have excess to all homes for sale. Instead of one person selling for you, have hundreds of people selling for you!
Is now the time to buy?
The market may never be better than it is right now. It can go up and down depending on the area. Your agent may be able to advice you regarding the market in your area.
Can I afford a new home?
Investment in a new home can be quite high and can include other costs such as appliances, furnishings, and maintenance. You will want to add your own touches to your new home. Purchasing a new home is one of the single most important investments you will make. Your agent can advice you each step of the way.
How much down payment do I need to buy a home?
To get the best interest rate, 20% down payment is often needed, but at today's low rates, even a low down loan can have affordable rates. Your loan type determines the minimum amount necessary to put down. A typical Conventional Loan will need 20% down, a typical FHA Loan requires 3%. Both of these loans will have closing costs, and may have "points" (one point is 1% of the loan amount). A typical VA Loan requires 0 down, with the seller paying closing costs. There are over 100 different types of loans with different terms; a lender will help you find the right one for your situation
Do we need to see a Lender before looking at houses?
Yes. (Unless you have well over 30% down payment). Your eventual offer will be stronger if you already have an approval and know what your loan amount and terms will be.
What will my monthly payment be?
That depends on several factors, your rate of interest, property taxes, and your insurance premiums. Currently the common mortgage rate is 7.25% which is just under $7.00 per thousand dollars of loan. Example: $100,000 mortgage will be $682.18 a month for a 30 year loan. Your yearly tax can be included as well as your insurance, (it's called PITI for Principal, Interest, Taxes and Insurance).
How do I know if property will qualify for a new loan?
The home should have a whole house inspection, and/or pest & dry rot report. An appraisal insures you and the lender the property is worth the price.
What kind of crime is in the area?
Like questions about schools, you can check community and/or police web sites.
What are the utility costs?
Average cost for electricity, gas and wood heat varies greatly based on where the home is sited, number of windows, insulation, square footage, and type of heat as well as individual lifestyle. In our area, Pacific Power can provide a history of electrical costs for a particular property.
Will the Seller take less?
Price is often negotiable. The only way to know is to write an offer at a price acceptable to you. There will always be some motivation behind the Seller's decision to sell their property, and they may or may not show flexibility. But, a good Realtor will make every effort to place the home on the market with a price that is competitive and priced to attract buyers.
How do I choose a Realtor?
You should choose a Realtor who specializes in the type of property or area you are looking for, as well as interviewing to see how comfortable you feel with them. Above all, when you select an agent, tell them honestly your needs and limitations. Agents will reward your loyalty to them with hard work on your behalf.
Should I price my home high enough to allow for expectations of low offers?
No! A well priced home will more likely get a full price offer, while too high a price eliminates buyers interest, leading to more time on the market and inviting "lowball offers". Overpriced homes almost invariably end up selling for less than properly priced properties.
Will I need money up front for closing costs or repairs?
Generally, no. Bills for repairs can be sent to the escrow company to be paid out of the seller's closing proceeds. This needs to be arranged in advance with any contractors, however.
What are the most important improvements I can make to my property?
Any improvements you make should be made to improve your enjoyment of your property. It is rare that any improvement will return its cost in the short term. The most cost effective improvements are kitchen counters and appliances (75%), a bath or family room addition (72% & 70%). Replacing shabby carpets or drapes and repainting, however, may make an otherwise unattractive home much more saleable. This is less an improvement than correcting deferred maintenance. You can make the home more saleable by "detuning" the home; that is removing clutter, too many pictures, and taking out bulky furniture items. This makes the home seem larger and more airy.
How much is your commission?
Commission fees are not set by law. They are negotiated between the seller and broker through the agent. Fees are nearly always based on contingency: if the property doesn't sell, no fee is owed. Fees are based on the cost of doing business, such as administration of the office, marketing costs, fees to the listing agent, and fees offered to cooperating brokers and agents. Fees have to be high enough to cover costs and attract capable professionals to work on marketing the property. Naturally, brokers and agents also hope to earn a profit for their risk and efforts. Full service realtors and agents have higher costs of preparing flyers, advertising, marketing and overhead and the level of service they provide to sellers, and earn those by better pricing, marketing and negotiating on behalf of their clients. Like anything, quality costs more but is less expensive in the long run.
How long will it take to sell my home?
It depends on your location, the property's uniqueness, condition of the property, and listing price. If you price your property at Fair Market Value it should take between 2 to 4 months. Lower priced properties priced at market often sell within days or weeks. Higher priced properties or truly unique properties may take as much as a year or even more, unless they are very attractively priced.
How do I know the roof is good?
It depends on the age of the roof, and whether it has been kept free of leaves and moss. Look for curled, broken or missing shingles, obvious wear where the tar shows through asphalt shingles, or heavy moss buildup. If the home is over fifteen years old, it is wise to have a roofing contractor do an inspection for estimated remaining life (most lenders are satisfied if the roof has a three year life or more).
Does it cost me anything to buy a property through a realtor?
Typically not. Realtors are usually paid by the seller. In some rare circumstances, however, you may be responsible for your realtor's fees. Make sure you discuss these possibilities with your realtor.
Is it better to own or rent?
It depends on your circumstances and lifestyle, but in most cases it is better to own. When you own a property, your monthly payments go toward an investment. Over time property values typically appreciate, making you money. In addition, the interest on your mortgage payments is tax deductible.
How should I prepare to buy in a competitive market?
A competitive market, or hot market, is usually defined as one where there is a relative shortage of marketable properties coupled with an increase in demand for those properties.
There are three things you need to do in order to buy successfully in such a market. First, you need to make sure you are up to speed with what your buying dollar will purchase. In other words, you need to be familiar with the Fair Market value for the type of property you want in the area that you are looking in, so you know a good buy when you see it. Secondly, you need to have all the financing preapprovals in place. Thirdly, you need to have a quality, experienced Realtor on your team to help educate you to the market, find the right property and position your offer to purchase for success. In this type of market it is not unusual to have multiple offers on the same property brought in at the same time.
How do I determine what is a reasonable price for my property?
It's critical to price your home right in relationship to the current real estate market and to the conditions prevailing in your local marketplace. Since the real estate market is continually changing, and market fluctuations have an effect on property values, it's imperative to select your list price based on the most recent comparable sales in your neighborhood. A Comparative Market Analysis (CMA) provides the background data on which to base your list price decision. Study the comparable sales material presented to you by the different agents you interviewed initially. If the CMAs are over two or three months old, have your agent update the report for you. If all agents agreed on a price range for your home, go with the consensus. Experts recommend that more than one agent come and do the analysis. Watch for an agent whose opinion of value is considerably higher than the others.
What is a seller obligated to disclose?
It varies from state to state. Under the most restrictive state, the seller and the sellers' broker, if there is one, are required to disclose all facts materially affecting the value or desirability of the property which are known or accessible only to him and which are not known to, or within reach of the diligent attention and observation of the buyer. In the case of residential properties, the seller must provide the buyer with a Real Estate Transfer Disclosure Statement, which specifies the existence and condition of all known physical attributes of the property. Sellers are responsible for disclosing only information within their personal knowledge.
What are the typical contingencies in a purchase offer?
There are two typical contingencies in a offer:
A financing contingency, which makes the purchase conditional on the buyers' ability to obtain a loan commitment from a lender.
An inspection contingency, which allows the buyers to have professionals inspect the property to their action.
A deposit could be forfeited by the buyers under certain circumstances, such as the buyers backing out for a reason not provided for in the contract. The purchase contract must include the sellers' responsibilities such as passing clear title, maintaining the property in its present condition until closing, and making any agreed upon repairs to the property.
What qualifications should a Realtor Agent have?
He or she should be registered with the Estate Agents Affairs Board. You may ask to see proof of their certification.
How long does the buying process take?
It varies depending on the location and type of property (investment or owner occupied). The first step is to research and acquire financing. An approval can take 24 hours or weeks depending on the type of mortgage, your financial position and available records.
What is a "buyer's market"?
A buyer’s market occurs when home sales are slow. Here are some of the ways to determine if the home market in your area is a buyer’s market:
-Is it taking longer and longer to sell homes?
-Are foreclosures increasing?
-Are there large reductions in home prices?
-Has there been a decline in the number of
building permits issued?
-Is unemployment increasing?
These factors indicate a “soft” market for home sales. A soft market tends to make sellers anxious and puts buyers in a stronger position than sellers. In a soft market, buyers have many homes to choose from and can demand special considerations from sellers.
What is a "seller's market"?
The best time to sell your home is when homes are selling fast, there are few homes on the market, and the local economy is good. These are all characteristics of a seller’s market and operate to move home prices upward. Sellers can and do demand high prices for their homes and often dictate the terms of the contract. In a seller’s market, sellers often receive several competing offers and are in a position to sell quickly, perhaps in a matter of days or weeks.
If you are a potential seller in a seller’s market, you’re well situated to sell quickly and at your price. On the other hand, if you’re a potential buyer in a seller’s market, you’ll want to be particularly careful that you don’t rush into a decision that you may later regret. The best way to avoid this situation is to do your homework to ensure that you know what you want and what you can afford.
What's the difference between market value and appraised value?
Appraised value is a certified appraiser's opinion of the worth of a home at a given point in time. Lenders require appraisals as part of the loan application process; fees range from $200 to $300.
Market value is what price the house will bring at a given point in time. A comparative market analysis is an informal estimate of market value, based on sales of comparable properties, performed by a real estate agent or broker.
What are the standard ways of finding out what a house is valued at?
A comparative market analysis and an appraisal are the standard ways consumers, lenders and realty agents deterimined what a home is worth.
Your real estate agent will be happy to provide a comparative market analysis, an informal estimate of value based on comparable sales in the neighborhood. You also can research "the comps" yourself by checking on recent sales in public records. Be sure that you are researching properties that are similar in size, construction and location.
This information is not only available at your local recorder's or assessor's office but also through private companies and on the Internet.
An appraisal, which generally cost $200 to $300 to perform, is a certified appraiser's opinion of the value of a home at any given time. Appraisers review numerous factors including recent comparable sales, location, square footage and construction quality.
Will a neighbor problem reduce the value of my property?
While it may not reduce the actual value, a cluttered landscape can detract from the positive aspects of your home. Review your local laws, which should be on file at the public library, county law library or City Hall.
A typical "junk vehicle" ordinance, for example, requires any disabled car to either be enclosed or placed behind a fence. Most cities also prohibit parking any vehicle on a city street too long.
It also may be worthwhile to check into local zoning ordinances. An operator of a home-based business usually is required to obtain a variance or permanent zoning change in residential areas.
In addition, if a neighbor's repair work produces loud noises, he may be breaking local noise-control ordinances, which are enforced by the police department.
Before bringing in the authorities, you may want to make a copy of the pertinent ordinance and give it to your neighbor to give them a chance to correct the problem.
Who gets the furnishings when a home is sold?
Fixtures, any kind of personal property that is permanently attached to a house (such as drapery rods, built-in bookcases, tacked-down carpeting or a furnace), automatically stay with the house unless specified otherwise in the sales contract. But you can consider anything that is not nailed down negotiable. This most often involves appliances that are not built in (washer, dryer, refrigerator, for example), although some sellers will be interested in negotiating for other items, such as a piano.
What kind of home insurance should I get?
A standard homeowners policy protects against fire, lightning, wind, storms, hail, explosions, riots, aircraft wrecks, vehicle crashes, smoke, vandalism, theft, breaking glass, falling objects, weight of snow or sleet, collapsing buildings, freezing of plumbing fixtures, electrical damage and water damage from plumbing, heating or air conditioning systems, according to the Insurance Information Institute, a Washington, D.C.-based nonprofit group for the insurance industry.
Such policies are "all-risk" policies, which cover everything except earthquakes, floods, war and nuclear accidents.
A basic policy can be expanded to include additional coverage, such as for floods and earthquakes and even workers' compensation for servants or contractors. Home-based business-coverage, an increasingly popular rider, does not cover liability associated with the business.
Insurance experts recommend that homeowners obtain insurance equal to the full replacement value of the home. On a 2,000-square-foot home,for example, if the replacement cost is $80 per square foot, the house should be insured for at least $160,000.
For personal items, homeowners can increase their coverage beyond the depreciated value of items such as televisions or furniture by purchasing a "replacement-cost endorsement" on personal property.
Some experts recommend an inflation rider, which increases coverage as the home increases in value.
What is the best time of year to buy?
Because many buyers prefer to move in the spring or summer, the market starts to heat up as early as February. Families with children are anxious to buy so they can move during summer vacation, before the new school year begins.
The market slows down in late summer before picking up again briefly in the fall. November and December have traditionlly been slow months, although some astute buyers look for bargains during this period.
What is the return on new versus previously-owned homes?
Buying into a new-home community may seem riskier than purchasing a house in an established neighborhood, but any increase in home value depends upon the same factors: quality of the neighborhood, growth in the local housing market and the state of the overall economy.
One survey by the National Association of Realtors shows that resale homes do have an edge over new homes. The trade group's figures show the median price of resale homes increased 3 percent between 1994 and 1995, compared to 0.8 percent for new homes in the same period.
What is the Mortgage Credit Certificate program?
The Mortgage Credit Certificate program allows first-time home buyers to take advantage of a special federal income tax credit. This program allows buyers credit in qualifying for the tax advantage they'll receive after they purchase the home.
The amount of the credit is tied to a local formula that every city with an MCC program must follow. An MCC credit, which can total $2,000 or more, reduces the borrower's federal tax liability by an amount tied to how much one pays in annual mortgage interest. Both the borrower's income and the purchase price of the home must fall within established guidelines.
To see if your community has an MCC program, call your local housing or redevelopment agency. You also may inquire with your real estate broker or the local association of Realtors.
Are taxes on second homes deductible?
Interest and property taxes are deductible on a second home if you itemize. Check with your accountant or tax adviser for specifics.
What home-buying costs are deductible?
Any points you or the seller pay for your home loan are deductible for that year. Property taxes and interest are deductible every year.
But while other home-buying costs (closing costs in particular) are not immediately tax-deductible, they can be figured into the adjusted cost basis of your home when you go to sell (any significant home improvements also can be calculated into your basis). These fees would include title insurance, loan-application fee, credit report, appraisal fee, service fee, settlement or closing fees, bank attorney's fee, attorney's fee, document preparation fee and recording fees.
How does the home mortgage deduction work?
The mortgage interest deduction entitles you to completely deduct the interest on your home loan for the year in which you paid it. You must itemize deductions in order to do this, which means your total deductions must exceed the IRS's standard deduction.
Another point to remember is that the amount of interest on your loan goes down each year you pay on your mortgage (all standard home-loan formulas pay off interest first before significantly paying into principal). That's why paying extra on your principal every year can help you pay off your loan early.
Are there tax credits for first-time home buyers?
Many city and county governments offer Mortgage Credit Certificate programs, which allow first-time home buyers to take advantage of a special federal income tax write-off, which makes qualifying for a mortgage loan easier.
Requirements vary from program to program. People wanting to apply should contact their local housing or community development office.
Here is a list of four general requirements to keep in mind:
* Some credit may be claimed only on your owner-occupied principal residence.
*There are maximum income limits, which vary by locality and family size.
* You must be a first-time home buyer, which means you must not have had any kind of ownership interest in a principal residence during the past three years. This restriction may be waived, however, if you are buying property within certain target areas.
* Allocations must be available. A local MCC program may have to decline new applications when it runs out of funds.
Can I deduct fees and assessments from my homeowner's association?
Homeowners association fees are considered personal living expenses and are not tax-deductible. If, however, an association has a special assessment to make one or more capital improvements, condo owners may be able to add the expense to their cost basis. Cost basis is a term for the money an owner spends for permanent improvements throughout their time in the home and is used to reduce eventual capital gains taxes when the property is sold. For example, if the association puts a new roof on a building, the expense could be considered part of a condo owner's cost basis only if they lived directly underneath it. Overall improvements to common areas, such as the installation of a swimming pool, need to be considered on a case-by-case basis but most can be included in the cost basis of any owner who can show their home directly benefits from the work.
How do property taxes work?
Property taxes are what most homeowners in the United States pay for the privilege of owning a piece of real estate, on average 1.5 percent of the property's current market value. These annual local assessments by county or local authorities help pay for public services and are calculated using a variety of formulas.
Are property taxes deductible on my income tax return??
Property taxes on all real estate, including those levied by state and local governments and school districts, are fully deductible against current income taxes.
Who determines the actual closing date when you have sold your house?
The closing date is a condition of the sales contract that should be agreed upon between buyer and seller prior to signing the contract. This is a negotiable point although it is typically the buyer. The purchase may be contingent on the buyer obtaining a mortgage or closing on a home so if the seller demands a date that the buyer cannot meet then you have no deal.
How does the interest rate factor in securing a mortgage loan?
Lower interest rate allows you to borrow more money than a high rate with the same monthly payment. Interest rates can fluctuate as you shop for a loan, so ask lenders if they offer a rate "lock-in" which guarantees a specific interest rate for a certain period of time. Remember that a lender must disclose the Annual Percentage Rate (APR) of a loan to you. The APR a mortgage loan by expressing it in terms of a yearly interest rate. It is higher than the interest rate because it also includes the cost of points, mortgage and other fees included in the loan.
What happens if interest rates decrease and I have a fixed rate loan?
If interest rates drop significantly, you may want to investigate refinancing. Most experts agree that if you plan to be in your house for at least 18 months and you can get a rate 2% less than your current one, refinancing is smart. Refinancing may, however, involve paying many of the same fees paid at the original closing, plus origination and application fees.
What is an escrow account? Do I need one?
Established by your lender, an escrow account is a place to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner's insurance, mortgage insurance (if applicable), and property taxes. Escrow accounts are a good idea because they assure money will always be available for these payments. If you use an escrow account to pay property taxes or homeowner's insurance, make sure you are not penalized for late payments since it is the lender's responsibility to make those payments.
Do I need to be there for the home inspection?
It's not required, but it's a good idea. Following the inspection, the home inspector will be able to answer questions about the report and any problem areas. This is also an opportunity to hear an objective opinion on the home you'd like to purchase and it is a good time to ask general maintenance questions.
Are other types of inspections required?
If your home inspector discovers a serious problem, another more specific inspection may be recommended. It's a good idea to consider having your home inspected for the presence of a variety of health-related risks like radon gas, asbestos, or possible problems with the water or waste disposal system.
Do I need a lawyer to buy a home?
Laws vary by state. Some states require a lawyer to assist in several aspects of the home buying process while other states do not, as long as a qualified real estate professional is involved. Even if your state doesn't require one, you may want to hire a lawyer to help with the complex paperwork and legal contracts. A lawyer can review contracts, make you aware of special considerations, and assist you with the closing process. Your real estate agent may be able to recommend a lawyer. If not, shop around. Find out what services are provided for what fee, and whether the attorney is experienced at representing homebuyers.
Do I really need homeowner's insurance?
Yes. A paid homeowner's insurance policy (or a paid receipt for one) is required at closing, so arrangements will have to be made prior to that day. Plus, involving the insurance agent early in the home buying process can save you money. Insurance agents are a great resource for information on home safety and they can give tips on how to keep insurance premiums low.
What steps could I take to lower my homeowner's insurance costs?
Be sure to shop around among several insurance companies. Also, consider the cost of insurance when you look at homes. Newer homes and homes constructed with materials like brick tend to have lower premiums. Think about avoiding areas prone to natural disasters, like flooding. Choose a home with a fire hydrant or a fire department nearby.
Other ways to lower insurance costs include insuring your home and car with the same company, increasing home security, and seeking group coverage through alumni or business associations. Insurance costs are always lowered by raising your deductibles, but this exposes you to a higher out-of-pocket cost if you have to file a claim.
What other issues should I consider before I buy my home?
Always check to see if the house is in a low-lying area, in a high-risk area for natural disasters (like earthquakes, hurricanes, tornadoes, etc.), or in a hazardous materials area. Be sure the house meets building codes. Also consider local zoning laws, which could affect remodeling or making an addition in the future. Your real estate agent should be able to help you with these questions.
What is earnest money? How much should I set aside?
Earnest money is money put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price (though the amount can vary with local customs and conditions). If your offer is accepted, the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your money is returned to you. If you back out of a deal, you must forfeit the entire amount.
Can I pay off my loan ahead of schedule?
Yes. By sending in extra money each month or making an extra payment at the end of the year, you can accelerate the process of paying off the loan. When you send extra money, be sure to indicate that the excess payment is to be applied to the principal. Most lenders allow loan prepayment, though you may have to pay a prepayment penalty to do so. Ask your lender for details.
Are there special mortgages for first-time homebuyers?
Yes. Lenders now offer several affordable mortgage options, which can help first-time homebuyers, overcome obstacles that made purchasing a home difficult in the past. Lenders may now be able to help borrowers who don't have a lot of money saved for the down payment and closing costs, have no or a poor credit history, have quite a bit of long-term debt, or have experienced income irregularities.
What happens after I have applied for a loan?
It usually takes a lender between 1-6 weeks to complete the evaluation of your application. It's not unusual for the lender to ask for more information once the application has been submitted. The sooner you can provide the information, the faster your application will be processed. Once all the information has been verified, the lender will call you to let you know the outcome of your application. If the loan is approved, a closing date is set up and the lender will review the closing process with you. And after closing, you'll be able to move into your new home.
What can I expect to happen on closing day?
You'll present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspection, warranties, etc.
Once you're sure you understand all the documentation, you'll sign the mortgage, agreeing that if you don't make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You'll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed.
You'll pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner.
What is, being "Pre-approved"?
When a purchaser has been "pre-approved" for a mortgage, the lending institution has already analysed his or her financial situation, and determined the amount of money they would qualify for. This amount, plus your down payment, will give you an idea as to how much you are able to afford in the purchase of your home.
What benefit do I have by being "pre-approved"?
Besides knowing your comfort level of affordability, being "pre-approved" could help in the presentation of your offer. For example, if there are two offers on a property, the offer that has the best terms and conditions for the owner, would be accepted. Thus, if both offers were identical, except for subject to financing, the offer without the subject would be looked at more carefully by the owner. Because you are "pre-approved", it would not be necessary for you to put a subject to financing clause in your offer. It is important you have a letter from your lending institution confirming your approval.
Is the term and amortization of a mortgage the same?
No. The term of a mortgage refers to the period of time that your interest rate is calculated before renewing. For example, 6 month, 1 year, 5 year, etc. Before the pre-determined term expires, you renew at the current rates in effect at that time.
The amortization of a mortgage means the number of years (or months) that it takes to repay the mortgage by making regular mortgage payments. This is calculated with the current rate of interest you have chosen with the term. Then your payments (principle and interest) are blended over the amortization of the mortgage.
How can I reduce my mortgage without penalty?
Talk to your lending institution to find out, in writing, what pre-payment privileges you are allowed on your mortgage. Some pre-payment privileges that may be available, are:
Paying an extra 10% of the original amount of the mortgage, or less (every little bit extra, saves), on each yearly anniversary date.
Making bi-monthly payments instead of one payment a month.
Reducing the amortization period upon renewal.
By taking advantage of these privileges, you could save thousands of dollars in interest over the life of the mortgage, and own your home quicker
What expenses could I have when I purchase Real Estate?
Here are a few:
The Property Transfer Tax of 1% of the 1st $200,000 and 2% of the balance. (First time buyers may be exempt)
Lawyer, appraisal, survey, inspection, mortgage application fees must be paid in cash on completion.
Mortgage Insurance fees, may be added to the mortgage principle.
Any statement of adjustments calculated by your lawyer (taxes prepaid by owner, etc.).
This is a basic expense list. Each property purchased will have different expenses. Check with the appropriate authorities, or better still, ask a realtor to assist you.
Should we use several realtors in our search for a property?
Generally speaking, sit down with a few Realtors and discuss your plans and what it is you are looking for. After the initial meetings, try to select a Realtor that you feel most comfortable with, and arrange to view properties with him or her.
By using one Realtor, you may reduce the time necessary to find that special property, because that Realtor will know and understand your wants and needs, thus you will avoid viewing unnecessary properties. Also, when you have found that special property, you and your Realtor will have established a rapport, and you will feel more comfortable in making an offer with someone you have spent a lot of time with, and who understands your financial situation.
How do we establish "value" in making an offer?
After viewing properties that best suit your needs, you will develop a sense of value of one property over another. Your Realtor will also assist you in determining an offer, by showing you comparable sales or similar properties for sale now, thus establishing a range of values for the property you are interested in. When you are ready, realtor will write an offer with the proper terms and conditions that suit your needs, and negotiate with the seller on your behalf.
Why don't search results match my search criteria?
With the exception of price, bed/bath and square footage, all search criteria are preferences. These preferences function like a sort criteria, putting homes that meet your preferences at the top of the search results, without excluding homes that only partially meet your preferences.
What Is a realtor?
A real estate agent is a realtor when he or she is a member of the National Association of Realtors, The Voice for Real Estate® -- the world's largest professional association.
The term realtor is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of Realtors and subscribes to its strict Code of Ethics.
Founded in 1908, NAR has grown from its original nucleus of 120 to today's 720,000 members. NAR is composed of residential and commercial realtors who are brokers, salespeople, property managers, appraisers, counselors and others engaged in all aspects of the real estate industry. Members belong to one or more of some 1,700 local associations/boards and 54 state and territory associations of realtors. They can join one of our many institutes, societies and councils. Additionally, NAR offers members the opportunity to be active in our appraisal and international real estate specialty sections.
Realtors are pledged to a strict Code of Ethics and Standards of Practice. Working for America's property owners, the National Association provides a facility for professional development, research and exchange of information among its members and to the public and government for the purpose of preserving the free enterprise system and the right to own real property.
How do real estate agents get paid?
Real estate agents or brokers are generally paid through the sales commission paid by the seller when a transaction closes. Agents have expenses and financial obligations just like you, so it will be to your mutual benefit if you choose a real estate agent and stick with that person. The agent will respect your loyalty and respond with a sincere commitment to you.
What are the tax advantages of home ownership?
Four key advantages are:
Mortgage interest is tax deductible.
Real estate taxes are tax deductible.
Local tax benefits are available in many areas.
You can enjoy tax-free profits of up to $500,000 from the sale of a primary residence that you have occupied for two of the last five years if you are married and filing jointly. If you are single or married and filing separately, you can enjoy tax-free profits up to $250,000. Moreover, you can use the exclusion as often as you meet the qualifications.
What are the investment benefits of home ownership?
Five key benefits are:
You build equity over time, which you can take in cash when you sell your home.
The profits from home investment are often greater than from many other investments.
Because you can borrow against it in most states, home equity can be a source of emergency funding.
Land appreciation adds to the value of your home.
For many, home ownership is an important part of retirement planning.
What's the difference between appraised value and market value?
Appraised value is an opinion of a property's market value, based on an appraiser's knowledge, experience and analysis of a property. Comparative market analysis is an informal estimate of market value performed by a real estate agent or broker. It is based on sales of similar homes in the area and generally offers a range of values, including probable market value.
If I use a real estate agent, what fundamental obligations are owed to me?
Typically, the common law obligations owed to you are to: Put your interests above anyone else's; Keep information confidential; Obey your lawful instructions; Report anything that would be useful; and Account to you for all money involved. Nonetheless when you start working with a realtor, ask for a clear explanation of your state's current regulations so that you know where you stand on these matters.
How often should I expect to hear from my realtor?
This will depend on the circumstances of your sale, however you should be kept fully informed on all activities regarding your sale. This includes feedback on all showings, new competitive listings in your area, sales of competitive listings, and general market conditions impacting on your sale. At the very least, you should hear from your realtor every week. Your realtor should also stay in touch long after your sale is completed.
Will it cost me any money to use the services of a real estate agent when buying a home?
No. Real estate agents earn their commission only on the house they sell.
How does a home go into foreclosure?
Foreclosure proceedings usually begin after a borrower has skipped three mortgage payments. The lender will record a notice of default against the property. Unless the debt is satisfied, the lender will foreclose on the mortgage and proceed to set up a trustee sale.
When I buy a home, how quickly can I close and take possession?
The first factor is a date agreeable to both Buyer and Seller for closing and possession. This date is set when the offer to buy is negotiated and can be changed after that only by agreement of both parties.
Once the date has been established, the next factor is the contingencies in the offer to buy. These generally includes financing and inspections. You must allow enough time to release these contingencies. Depending on the type of financing, this can take a few days up to thirty days. Inspections can take from a few days up to a couple of weeks.
The final factor is the legal work that needs to be done prior to closing. The Seller must have the abstract (history of title) brought up to present. The Buyers' attorney must prepare a title opinion showing what must be done to give clear title. This can be accomplished in as short a time as five working days and should not take more than two weeks.
Closings may take place as quickly as a week from the day the offer to buy was accepted. Thirty to sixty days from date of acceptance of an offer is fairly common. Anything longer than that is usually caused by Buyer or Seller needs for a later possession date.
Disclaimer: These answers are in general terms and may vary with specific factual circumstances.
What can i do to make my more marketable?
Make sure your entranceway says, “Hey, look at me!”
Prune dead limbs from trees.
Paint (or touch up) exterior, and repair screens and windows.
Clean your windows.
Check A/C and heating systems.
Fix leaky faucets, toilets, and faulty lights.
Vacuum drapes and carpets.
Repair wall cracks, re-caulk bathrooms and kitchen.
Clear out closets.
Remove excess furniture.
Keep cats and dogs out of visitors’ way.
Mow lawn, edge driveway and walkways.
Ensure windows, doors, and locks work smoothly.
Weed flower beds and trim shrubs.
Throw out junk from garage and storage areas.
Clean lawn furniture.
If you have a pool, make it crystal clear.
What makes a house sell?
This entire web-site could be devoted to answering this question. But to be as concise as possible, a successful sale requires that you concentrate on five considerations: your price, terms, condition, location, and exposure. Since you can't control all of them, you may have to overcompensate in one or more areas to offset a competitive disadvantage in another.
What's the difference between Fair market value and asking price?
Generally, speaking, the owner's asking price - the advertised price of a house when it goes on the market - is set slightly higher than fair market value.
How flexible should I be about the asking price?
Most buyers also leave room for negotiation when they make an offer. Thus, a certain degree of flexibility is usually called for on the part of both the buyer and the seller.
Is an older home as good a value as a new home?
It's a matter of personal preference. Both new and older homes offer distinct advantages, depending upon your unique taste and lifestyle.
New homes generally have more space in the rooms where today's families do their living, like a family room or activity area. They're usually easier to maintain, too.
However, many homes built years ago offer more total space for the money, as well as larger yards. Taxes on some older homes may also be lower.
Some people are charmed by the elegance of an older home but shy away because they're concerned about potential maintenance costs.
What do I need to bring along when I'm looking at homes?
Bring your own:
Notebook and pen for note-taking
Flashlight for seeing enclosed areas
Tape measure for checking room sizes, clearance, etc.
Be prepared to "snoop around" a little. After all, you want to know as much as possible about the home you buy. Sellers understand that because their home is on the market, it will be looked over pretty thoroughly.
If you need to go back to a home for another look, most homeqwners will be happy to schedule an appointment. Also, be sure to ask any questions you have about the home, even if you feel you're being nosey. You have a right to know.
What questions do I ask a home seller?
When you find a home you may be interested in buying, make sure you ask the owner the following questions:
How much money do you pay for monthly utilities?
Have you had any problems with water or dampness in the basement?
Are there any defects or problem areas that need to be fixed right away?
How old is the furnace and central air conditioning system?
How old is the roof? Have you experienced any leaking?
Should I be present during the inspection?
Yes. It's not required, but it is very much to your advantage. You'll be able to clearly understand the inspection report, and know exactly which areas need attention. Plus, you can get answers to many questions, tips for maintenance, and a lot of general information that will help you when you move into your new home. Most important, you'll see the home through the eyes of an objective third party.
Are there any other inspections that I need to have done?
In addition to the overall inspection, you may wish to have separate tests conducted to check for termites, or the presence of radon gas. Check the phone book for information about these tests, and companies in the area that perform them.
Do I need to use a lawyer to buy a home?
Because the legal contracts and other paperwork involved in buying a home are complex, and can be confusing to the general public, many people prefer to work with an attorney.
Your attorney will review contracts, make you aware of special considerations and potential problems, and can accompany you to the closing, to help make everything go as smoothly as possible.
Do I need to talk to my insurance agent?
Yes, and the sooner, the better. Most insurance professionals have a lot of experience in working with home owners, and can offer useful tips about home ownership, particularly regarding home safety and keeping your premiums low.
Once you've found a home, work together to develop a homeowner's policy that meets your individual insurance needs. You'll need to bring your paid-up policy for your mortgage lender when you come to closing.
What should I look for on my final walk-through?
In most cases, you'll be given the opportunity to inspect the home immediately prior to closing. This time, it's important to check on any work the seller agreed to have done in response to your initial inspection. You should also carefully check the condition of walls and ceiling from which window treatments, pictures, or any other attached furnishings have been removed. If you find any problems, don't hesitate to bring them up at the closing. It's the seller's responsibility to correct them.
Is there anything I should do immediately after closing?
The first thing you'll want to do is have the locks changed. Also, put your deed and other important paperwork from the closing in a secure place, preferably a safe deposit box. Even though it's all on file with the county, it's smart to know where your copies are and have access to them at all times.
Should I move myself or use a moving company?
In almost every case, you can save yourself time and energy by using a reputable moving company to help you move.
Ask your agent, friends, and co-workers for recommendations, then get estimates from several companies. Don't choose a mover based on price alone--consider the reputation and professionalism of the company, too.
Work closely with the moving company to coordinate your efforts and your move will be achieved with premium efficiency.
What is a mortgage, and what are the benefits of different kinds of mortgages?
Simply put, a mortgage is a loan that a home buyer obtains directly from a lender to purchase real estate. The mortgage is a lien on the property that secures a promissory note (promise to repay the debt) that states the terms of the loan, including the interest rate, and the number of payments.
The most popular mortgages available to home buyers today can be divided into two general categories: those which offer fixed interest rates and monthly payments, and those where one or both of those factors are adjustable.
Fixed rate/fixed payment loans are more traditional, and remain the most popular home financing method, currently accounting for about two-thirds of all residential mortgages. their advantages are well-known: You always know what your monthly principal and interest payment will be, so your basic housing cost will remain unaffected by interest rate changes until the mortgage is paid off.
Mortgages that entail flexible rates and/or payments have grown in popularity in recent years, primarily during periods of high interest rates and/or rapidly rising home prices. Many, including the popular ARMs (Adjustable Rate Mortgages), offer lower-than-market initial interest rates that allow buyers a measure of affordability unavailable in fixed-rate loans. The tradeoff may be higher interest rates and higher monthly payments later on.
Is the lending process regulated by the government?
Most definitely. there are many laws and government regulations that all lenders must follow to ensure that all applicants are given fair and equal treatment. For example, in 1968, Congress passed the Truth in Lending Law, which requires that lenders provide borrowers with information about a loan's true interest rate. By law, lenders must reveal a loan's annual percentage rate (APR).
The law also stipulates that for refinancing and second mortgage loans, the borrower has up to three days after closing to change his or her mind and call the deal off. The lender may not disburse money until the three-day recession period has passed.
What is APR, and how is it calculated?
The annual percentage rate is a calculated rate of interest for a loan over its projected life. This rate includes the interest, all points (which are considered prepaid interest), mortgage insurance, and other charges associated with making the loan that the lender collects from the borrower.
The APR is calculated by a standard formula that all lenders use. This enables the borrower to comparison shop between lenders and/or loan products.
What does my monthly mortgage payment include?
The bulk of your monthly mortgage payment goes toward paying off the principal and interest of your loan. In additional, most lenders require that you pay a sufficient amount to cover your local real estate tax. plus your homeowner's or hazard insurance. This amount is placed in an escrow account, from which your lender then pays your tax and insurance bills as they come due.
Can I pay off my loan early?
If you can afford it, and are interested in the considerable advantages of having more equity and/or owning your home free and clear at the earliest possible date, the answer in most cases is yes.
The FHA, VA, and even some states do not allow lenders to charge penalties for paying mortgages early or refinancing. In fact, many lenders now include space on monthly statements for borrowers to itemize any additional principal payment they wish to include with their regular payment.
What can I do if I have a fixed rate loan, and interest rates go down?
When interest rates drop significantly, the homeowner should investigate the financial advantages of refinancing. Essentially, this means taking out a new loan to pay off your existing loan.
Refinancing may require paying many of the same fees paid at the original closing, plus origination fees. Most mortgage experts agree that if you can get a rate 2% less than your existing loan, and you plan on staying in your home for at least 18 months, refinancing is a good investment.
I'm a single mother. How would I go about buying a home?
Although you won't have the benefit of two incomes on which to qualify for a loan, there's no reason that you can't become a homeowner. Become familiar with the process, pick a good real estate broker, and think about getting pre-qualified for a loan. You might want to contact one of the HUD-funded housing counseling agencies in your area to talk through your options. And you also might want to think about buying a HUD home - they can be very good deals. Also, contact your local government to see if there are any local homebuying programs that could help you. Look in the blue pages of your phone directory for your local office of housing and community development or, if you can't find it, contact your mayor's office or your county executive's office.
