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Selling Your Property!!! Get Your
Free Market Evaluation !!!Mortgage
Buyers 10 Step Program: It is designed to help you
make the best decision when it comes to planning correctly on purchasing your
new home. Step
1 Out of Ten Knowledge and experience are the keys to
successful real estate transactions. REALTOR.com contains an enormous amount of
valuable information, and such data -- combined with the expertise, experience
and training of local REALTORS -- can be the essential keys to your success. One of the keys to making the homebuying
process easier and more understandable is planning. In doing so, you'll be able
to anticipate requests from lenders, lawyers and a host of other professionals.
Furthermore, planning will help you discover valuable shortcuts in the
homebuying process. Do You Know What You Want? Whatever your answers, the more you know
about the real estate marketplace, the more likely you are to effectively
define your goals. As an interesting exercise, it can be worthwhile to look at
the questions above and to then discuss them in detail when meeting with local
REALTORS. Do You Have The Money? In addition to a down payment, purchasers
also need cash for closing costs (the final costs associated with closing the
loan). Several newly emerging loan programs not only allow the purchase of a
home with no money down, but also underwrite closing costs. Not everyone, however, elects to purchase
with little or no money down. Less money down means higher monthly mortgage
payments, so most homebuyers choose to buy with some cash up front. As to closing costs, in markets where buyers
have leverage, it may be possible to negotiate an offer for a home that
requires the owner to pay some or all of your settlement expenses. Speak with
local REALTORS for details. Is Your Financial House in Order? For More Information On::
Next: Get a REALTOR More than 2 million people in the The National Association of REALTORS (NAR)
includes 1 million brokers and salespeople, individuals bound together with a
strong Code of Ethics, extensive training opportunities and a wealth of
community information. NAR members are routinely active in PTAs, local
government committees and a variety of neighborhood organizations. Being
actively involved in community affairs provides REALTORS with a better
understanding of the area in which they are selling. Why? But a basic rule in real estate is that all
properties are unique. No two properties -- even two identical models on the
same street -- are precisely and exactly alike. Homes differ and so do contract
terms, financing options, inspection requirements and closing costs. Also, no
two transactions are alike. In this maze of forms, financing,
inspections, marketing, pricing and negotiating, it makes sense to work with
professionals who know the community and much more. Those professionals are the
local REALTORS who serve your area. How do you choose? The best place to find a local REALTOR is
from REALTOR.com's extensive listing of community professionals and properties.
Other sources include open houses, local advertising, Web sites, referrals from
other REALTORS, recommendations from neighbors and suggestions from lenders,
attorneys, financial planners and CPAs. The experiences and recommendations of
past clients can be invaluable. In many cases buyers will interview several
REALTORS before selecting one professional with whom to work. These interviews
represent a good opportunity to consider such issues as training, experience,
representation and professional certifications. What should you expect? (Working with a
REALTOR) Once hired for the job, the REALTOR will
provide you with information detailing current market conditions, financing
options and negotiating issues that might apply to a given situation. Remember:
Because market conditions can change and the strategies that apply in one
negotiation may be inappropriate in another, this information should not be set
in stone. During your time in the marketplace REALTORS will keep you updated
and alert you to each step in the transaction process.
Step 3: Get
Loan Preapproval Few people can buy a home for cash.
According to the National Association of REALTORS (NAR), nearly nine out of 10
buyers in 1999 financed their purchase, which means that virtually all buyers
-- especially first-time purchasers -- required a loan. The real issue with real estate financing is
not getting a loan (virtually anyone willing to pay lofty interest rates can
find a mortgage). Instead, the idea is to get the loan that's right for you --
the mortgage with the lowest cost and best terms. REALTORS routinely suggest that consumers
start the mortgage process well before bidding on a home. Many lenders (the
sources of money) and programs, for example, are available right here in the
finance section of Homestore.com as well as through recommendations from local
REALTORS. By meeting with lenders -- either online or face to face -- and
looking at loan options, you will find which programs best meet your needs and
how much you can afford. REALTORS also recommend preapprovals for
another reason: Purchase forms often require buyers to apply for financing
within a given time period, in many cases, seven to 10 days. By meeting with
loan officers in advance and identifying mortgage programs, it won't be
necessary to quickly find a lender, check credit, and rush into a financing
decision that may not be the best option. What is it? Although not a final loan commitment, the
preapproval letter can be shown to listing brokers when bidding on a home. It
demonstrates your financial strength and shows that you have the ability to go
through with a purchase. This information is important to owners since they do
not want to accept an offer that is likely to fail because financing cannot be
obtained. How do you get preapproval? The loan officer will carefully review your
financial situation, including your credit report and other information. The
lender will then suggest programs which most-closely meet your needs. For
instance, a first-time buyer may qualify for state-backed mortgage programs
with little money down and low interest rates, while a repeat purchaser
(someone who has bought a home before) with more equity (money invested in the
home) might want to get a 15-year loan and the lower overall interest costs it
represents. Typically, first-time buyers opt for the traditional 30-year loan,
with either a floating interest rate or a fixed rate of interest over the life
of the loan. Step 4. Look At Home Some 6 million new and existing homes are
sold each year. There's no shortage of housing options, but with so many
choices the challenge becomes finding the property which best meets your needs. The housing market is complicated because
the stock of homes for sale is always in flux. If it were possible to have a
complete list of every home for sale at this very moment in a given community,
such a list would become obsolete within seconds as new homes become available
and properties now for sale are put under contract. In effect, buyers are looking at a moving
target in a marketplace that is never static. Because of this, it is important
to know as much as possible about the choices in preferred markets, and the way
to do that is by working closely with a local REALTOR who has a good "lay
of the land." What are you looking for? Each of us is different and so it's
important to list the features and benefits you want in a home. Consider such
things as pricing, location, size, amenities (extras such as a pool or
extra-large kitchen) and design (one floor or two, colonial or modern, etc.). Next, it's important to consider your
priorities. If you can't get a home at your price with all the features you
want, then what features are most important? For instance, would you trade
fewer bedrooms for a larger kitchen? A longer commute for a bigger lot and
lower cost? Lastly, consider your needs in several
years. If you'll need a larger home, maybe now is the time to buy a bigger
house rather than moving or expanding in the future. If you expect your income
to increase, perhaps you should consider a more expensive home financed with a
loan program where monthly payments increase in the future. Where should you look? REALTOR.com offers about 1.4 million homes
online. By any standard, it's the largest source for property information
online or off. You can look at homes to contact listing brokers, and you can
also search Realtor.com to find brokers who offer buyer representation
services. How do you find a house? Regardless of your choice, it's important to
target your search. By using basic measures such as general location and
affordability, you can refine your search and focus on homes that offer the
most desirable features. As a guide, you should maintain a file with
information on each of the homes you like. You can print out listing pages from
REALTOR.com and then make notes for each one -- what you like, questions,
REALTOR contact data, etc. Also Call Us About
Step 5. There's no doubt that choosing a home is a
big decision and you want to do it right. As a buyer, here's what actually happens. A
home has been placed on the market for which the seller has established an
asking price as well as other terms. In effect, this is an offer. At this
point, you have three choices: accept the seller's offer and create a contract;
reject it and not make an offer; or suggest different terms and make a
counter-offer. If you choose this last option, the seller may accept, reject or
make a counter-offer. No aspect of the homebuying process is more
complex, personal or variable than bargaining between buyers and sellers. This
is the point where the value of an experienced REALTOR is clearly evident
because he or she knows the community, has seen numerous homes for sale, knows
local values and has spent years negotiating realty transactions. Is it THE house? How do you know if a house is THE one?
Probably the best approach is to look at as many homes as possible, something
made easy by Realtor.com, where you can quickly and easily view huge numbers of
homes, check prices, take video tours and view extensive neighborhood
information. Once your choices have been narrowed, you can then contact a local
REALTOR to find specific information and options. Can you really afford it? How reliable is a preapproval? While
preapproval is not a loan commitment, it's still necessary for lenders to check
such items as appraisals and the latest credit reports. Despite fluctuating
interest rates, preapproval nonetheless provides a reasoned, careful analysis
of what you can afford. After all, loan officers are routinely paid only when
loans are originated. It doesn't make much sense for loan officers to suggest
high loan limits that later can't be delivered. Also Call Us About
Step 6. Get Funding Often the cost of real estate financing is
routinely greater than the original purchase price of a home (after including
interest and closing costs). Because financing is so important, buyers should
have as much information as possible regarding mortgage options and costs. Homestore provides consumers with extensive
mortgage information as well as a variety of loan calculators. Local REALTORS
can provide mortgage information, discuss financing options and recommend loan
sources. In addition, some REALTORS also originate loans. What kind of loan?
How do you get a loan? Where do you get a loan? Also Call Us About
Step 7. Make Am Offer REALTOR groups, working with legal counsel,
have developed forms that are appropriate for realty transactions in specific
communities. Such documents include numerous sale conditions and their wording
should be carefully reviewed to assure that they reflect the terms you want to
offer. REALTORS can explain the general contracting process in your community
as well as his or her role. While much attention is spent on offering
prices, a proposal to buy includes both the price and terms. In some cases,
terms can represent thousands of dollars in additional value for buyers -- or
additional costs. Terms are extremely important and should be carefully
reviewed. How much? How do you make an offer? Because counter-offers are common (any
change in an offer can be considered a "counter-offer"), it's
important for buyers to remain in close contact with REALTORS during the
negotiation process so that any proposed changes can be quickly reviewed. How many inspections? Structural inspections are particularly
important. During these examinations, an inspector comes to the property to
determine if there are material physical defects and whether expensive repairs
and replacements are likely to be required in the next few years. Such
inspections for a single-family home often require two or three hours, and
buyers should attend. This is an opportunity to examine the property's mechanics
and structure, ask questions and learn far more about the property than is
possible with an informal walk-through. Also Call Us About
Step 8. Get Insurance No one would drive a car without insurance,
so it figures that no homeowner should be without insurance. The essential idea behind various forms of
real estate insurance is to protect owners in the event of catastrophe. If
something goes wrong, insurance can be the bargain of a lifetime. What kind and how much? Title insurance: Purchased with a one-time fee at closing, title insurance
protects owners in the event that title to the property is found to be invalid.
Coverage includes "lenders" policies, which protect buyers up to the
mortgage value of the property, and "owners" coverage, which protects
owners up to the purchase price. In other words, "owners" coverage
protects both the mortgage amount and the value of the down payment. Homeowners' insurance provides fire, theft and liability coverage.
Homeowners' policies are required by lenders and often cover a surprising
number of items, including in some cases such property as wedding rings,
furniture and home office equipment. Flood insurance: Generally required in high-risk flood-prone areas,
this insurance is issued by the federal government and provides as much as
$250,000 in coverage for a single-family home plus $100,000 for contents. Local
REALTORS can explain which locations require such coverage. Home warranties With new homes, buyers want assurance that if
something goes wrong after completion the builder will be there to make
repairs. But what if the builder refuses to do the work or goes out of
business? Home warranties bought from third parties by
home builders are generally designed to provide several forms of protection:
workmanship for the first year, mechanical problems such as plumbing and wiring
for the first two years, and structural defects for up to 10 years. Home warranties for existing homes are
typically one-year service agreements purchased by sellers. In the event of a
covered defect or breakdown, the warranty firm will step in and make the repair
or cover its cost. Insurance policies and warranties have
limitations and individual programs have different levels of coverage,
deductibles and costs. For details, speak with REALTORS, insurance brokers and
home builders. Where to look. How do you get insurance? Go to any local courthouse and you can find
property records detailing real estate ownership in your community -- sometimes
records that date back hundreds of years. These records are important because they
provide today's owners with proof that they have good, marketable and insurable
title to the property they are selling. Equally important, such records enable
buyers to provide proof of ownership when they sell. The closing process, which in different
parts of the country is also known as "settlement" or
"escrow," is increasingly computerized and automated. In many cases,
buyers and sellers don't need to attend a specific event; signed paperwork can
be sent to the closing agent via overnight delivery. In practice, closings bring together a
variety of parties who are part of the "transaction" process. For
example, while the history of property ownership has been checked, it's
possible that the records contain errors, unrecorded claims or flaws in the
review itself, thus title insurance is necessary. At closing, transfer taxes
must be paid and other claims must also be settled (including closing costs,
legal fees and adjustments). In most transactions, the closing agent also
completes the paperwork needed to record the loan. What to expect. Whatever the case, the result is that title
to the property is transferred from seller to buyer. The buyer receives the
keys and the seller receives payment for the home. From the amount credited to
the seller, the closing agent subtracts money to pay off the existing mortgage
and other transaction costs. Deeds, loan papers, and other documents are
prepared, signed and filed with local property record offices. What you need to do. Before closing, buyers typically have a
final opportunity to walk through the property to assure that its condition has
not materially changed since the sale agreement was signed. At closing itself,
all papers have been prepared by closing agents, title companies, lenders and
lawyers. This paperwork reflects the sale agreement and allows all parties to
the transaction to verify their interests. For instance, buyers get the title
to the property, lenders have their loans recorded in the public records and
state governments collect their transfer taxes. |
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