Archive for Buying
Nov
08
Tips on Getting Your Lender to Listen
Posted by: | Comments
Kellie Frazier asked:
Have you already turned your lender off from listening because your anger has gotten in the way? If so here are a few tips to help you manage the anxiety that can come while getting your lender to pay attention.
Mortgage problems can come in all forms, or sizes, but getting someone to hear you is less difficult than you might think; but it’ll take effort on your part.
1. Understand your mortgage agreement – It may not be pleasant to read, but you MUST know what your agreement says in order to ask your lender for help in an intelligent way.
2. Use your monthly statement – Looking at your monthly mortgage statement you should see the address, email, website, fax and telephone number of your lending institution. If you don’t already know who to contact, you will want to call and find out who you would address a letter to, regarding your mortgage, and what’s the best form of communication to reach that person, or department. It is always best to get a name of an individual rather than a department.
3. Financial Statement – put together a financial statement with all your figures so they can see what you’re current situation looks like. If your income has decreased then show that on your financial statement. List out all of your assets (any rentals, income) and liabilities (outgoing bills) so the lender can see your situation as you see it.
IMPORTANT NOTE: If the lender has granted you a discount on your property through a “resolution to foreclosure”, the agreement might state, “payment in full without pursuit of any deficiency judgment”. If this verbiage doesn’t appear on the contract they could issue an IRS form 1099, using your financial statement, to pass the deficiency amount back to you as the homeowner. This can be attached to a homeowner’s new property mortgage and can remain with the homeowners for up to 2 years. It is very important that this verbiage appear in the contractual agreement with your lender if there was a discount granted to resolve a foreclosure.
4. Draft a letter of concern – This letter doesn’t need to be more than two or three paragraphs long. Banks look at numbers not stories so it’s vitally important to keep it short and to the point. An example of the meat of your letter could include: “Here are our numbers: As you can see we can’t continue payments of this amount. Please review and contact us immediately so we can begin discussions on working out a solution. We look forward to hearing from you in the next few days. Sincerely, Mr. & Mrs. Jones.”
Keep in mind that your numbers have to reflect your honest situation. Your integrity is vital.
5. Package it right – Put your financial statement, copy of mortgage statement, copy of any supporting documents (ex, layoff letter, monthly bills, student loans, etc) behind your financial statement and put your letter of concern on top. If putting this in a colorful folder will help keep the documents together, and get it noticed, then do so. The point is, you want it to be noticed! Banks and lenders are flooded with paperwork right now. Make yours thorough and organized.
6. Mail it in an appropriate manner – If the bank has suggested you fax it, then do so, if they said to snail mail or email it then do so, but whichever you select from their recommendation, do more than one. Fax and snail mail it or email and fax it, but NEVER mail out original documents!
7. Make an appointment right away – If your lender calls to meet with you today then it would be wise to clear your calendar, particularly if you are the one requesting their time. Bring your documents with you in case you need to refer to something yourself.
8. Know what type of resolution you are hoping for then discuss it with your lender and be sure to stay in contact over the next few weeks until you are satisfied with the results.
If you follow these tips, not only will it help your lender, but it will greatly help you to minimize your own anxiety while trying to get them to listen. Again, know your numbers, and how important it is to stay organized. Being pro-active about your future will lead to greater chances of success to live foreclosure free. What you will be doing is building a relationship of trust rather than anxiety and stress.
Investing in Real Estate?
Have you already turned your lender off from listening because your anger has gotten in the way? If so here are a few tips to help you manage the anxiety that can come while getting your lender to pay attention.
Mortgage problems can come in all forms, or sizes, but getting someone to hear you is less difficult than you might think; but it’ll take effort on your part.
1. Understand your mortgage agreement – It may not be pleasant to read, but you MUST know what your agreement says in order to ask your lender for help in an intelligent way.
2. Use your monthly statement – Looking at your monthly mortgage statement you should see the address, email, website, fax and telephone number of your lending institution. If you don’t already know who to contact, you will want to call and find out who you would address a letter to, regarding your mortgage, and what’s the best form of communication to reach that person, or department. It is always best to get a name of an individual rather than a department.
3. Financial Statement – put together a financial statement with all your figures so they can see what you’re current situation looks like. If your income has decreased then show that on your financial statement. List out all of your assets (any rentals, income) and liabilities (outgoing bills) so the lender can see your situation as you see it.
IMPORTANT NOTE: If the lender has granted you a discount on your property through a “resolution to foreclosure”, the agreement might state, “payment in full without pursuit of any deficiency judgment”. If this verbiage doesn’t appear on the contract they could issue an IRS form 1099, using your financial statement, to pass the deficiency amount back to you as the homeowner. This can be attached to a homeowner’s new property mortgage and can remain with the homeowners for up to 2 years. It is very important that this verbiage appear in the contractual agreement with your lender if there was a discount granted to resolve a foreclosure.
4. Draft a letter of concern – This letter doesn’t need to be more than two or three paragraphs long. Banks look at numbers not stories so it’s vitally important to keep it short and to the point. An example of the meat of your letter could include: “Here are our numbers: As you can see we can’t continue payments of this amount. Please review and contact us immediately so we can begin discussions on working out a solution. We look forward to hearing from you in the next few days. Sincerely, Mr. & Mrs. Jones.”
Keep in mind that your numbers have to reflect your honest situation. Your integrity is vital.
5. Package it right – Put your financial statement, copy of mortgage statement, copy of any supporting documents (ex, layoff letter, monthly bills, student loans, etc) behind your financial statement and put your letter of concern on top. If putting this in a colorful folder will help keep the documents together, and get it noticed, then do so. The point is, you want it to be noticed! Banks and lenders are flooded with paperwork right now. Make yours thorough and organized.
6. Mail it in an appropriate manner – If the bank has suggested you fax it, then do so, if they said to snail mail or email it then do so, but whichever you select from their recommendation, do more than one. Fax and snail mail it or email and fax it, but NEVER mail out original documents!
7. Make an appointment right away – If your lender calls to meet with you today then it would be wise to clear your calendar, particularly if you are the one requesting their time. Bring your documents with you in case you need to refer to something yourself.
8. Know what type of resolution you are hoping for then discuss it with your lender and be sure to stay in contact over the next few weeks until you are satisfied with the results.
If you follow these tips, not only will it help your lender, but it will greatly help you to minimize your own anxiety while trying to get them to listen. Again, know your numbers, and how important it is to stay organized. Being pro-active about your future will lead to greater chances of success to live foreclosure free. What you will be doing is building a relationship of trust rather than anxiety and stress.
Investing in Real Estate?
Nov
08
First Time Home Buyers Tax Credit
Posted by: | Comments
Gurmit Singh Toor asked:
First-time home buyers do not necessarily have to go through a real estate agent to receive the tax credit. Homes that are “for sale by owner” also are eligible. First-time home buyers who purchase a home in 2009 can claim the credit on a 2008 tax return, do April 15, 2009, or a 2009 tax return, do April 15, 2010. The credit may not be claimed before the closing date. First-time buyers can claim a credit worth $8,000. The bonus is that the credit is refundable, which means that filers will see a refund of the full $8,000, even if their total tax bill was less than that amount.
First-time home buyers purchasing any kind of home new or resale is eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009.
Taxpayers who qualify for the first-time home buyer credit and purchase a home this year (before Dec. This special feature can put money in first time buyers’ pockets right now rather than waiting another year to claim the tax credit. Taxpayers are urged to consult a professional to determine the tax consequences of a sale. Taxpayers buying a home who wishes to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
Taxpayers who file their taxes after receiving an extension can still file electronically, the IRS says. By e-filing and arranging for direct deposit, you can get your refund in as few as 10 days. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
File for the tax credit when preparing your 2009 federal tax documents by using Form 5405. You may also be eligible to claim your 2009 purchase on your 2008 tax filing. Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceed the phase-out limits.
FHA put up a mortgagee letter stating how the program was intended to work, and then took it down the same day. The details that were supposed to come out within the week didn’t come out. FHA has a list of approved lenders that can use the bridge loan type product.
Families can only access this credit after filing their tax returns with the IRS. The announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to ‘monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Families will now be able to apply their anticipated tax credit toward their home purchase right away.
Extend the time frame that the tax credit is, in effect, to somewhere near the end of 2010 depending on when the bill is passed (if it gets passed). The bill suggests that it be, in effect, for 1 year from its approval into law.
Owning a home can take a lot of time and expense but for many, its drawbacks are far more complicated than sticks, leaves, and paint. Owning a home can result in many tax advantages such as deducting mortgage interest and real estate taxes if you itemize deductions. The government’s recent attempts to stimulate our economy have included additional tax advantages for some first-time home buyers.
Ownership of non-primary residences such as rental properties or vacation homes does not disqualify a first-time home buyer from the $7500 tax credit. All you have to do is claim the tax credit on your federal income tax return.
Thank you for taking your time to read this article. Your comments on this article will be highly appreciated. To access hundreds of Gurmit’s articles, please visit his websites below.
Information shared here does not constitute financial, legal, or other professional advice, and no attorney-client or confidential relationship is or should be formed by use of the site. This article is intended to provide general information only and does not give advice, which relates to your specific individual circumstances. Information in this document is subject to change without notice. Any link-listing or ad-listing on this site does not constitute any type of endorsement.
Buying A Home?
First-time home buyers do not necessarily have to go through a real estate agent to receive the tax credit. Homes that are “for sale by owner” also are eligible. First-time home buyers who purchase a home in 2009 can claim the credit on a 2008 tax return, do April 15, 2009, or a 2009 tax return, do April 15, 2010. The credit may not be claimed before the closing date. First-time buyers can claim a credit worth $8,000. The bonus is that the credit is refundable, which means that filers will see a refund of the full $8,000, even if their total tax bill was less than that amount.
First-time home buyers purchasing any kind of home new or resale is eligible for the tax credit. To qualify for the tax credit, a home purchase must occur on or after January 1, 2009 and before December 1, 2009.
Taxpayers who qualify for the first-time home buyer credit and purchase a home this year (before Dec. This special feature can put money in first time buyers’ pockets right now rather than waiting another year to claim the tax credit. Taxpayers are urged to consult a professional to determine the tax consequences of a sale. Taxpayers buying a home who wishes to claim it on their 2008 tax return, but who have already submitted their 2008 return to the IRS, may file an amended 2008 return claiming the tax credit. You should consult with a tax professional to determine how to arrange this.
Taxpayers who file their taxes after receiving an extension can still file electronically, the IRS says. By e-filing and arranging for direct deposit, you can get your refund in as few as 10 days. Taxpayers who have already completed their returns can file amended returns for 2008 to claim the credit.
IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties. IRS Publication 919 contains rules and guidelines for income tax withholding. Prospective home buyers should note that if income tax withholding is reduced and the tax credit qualified purchase does not occur, then the individual would be liable for repayment to the IRS of income tax and possible interest charges and penalties.
File for the tax credit when preparing your 2009 federal tax documents by using Form 5405. You may also be eligible to claim your 2009 purchase on your 2008 tax filing. Participating in the tax credit program is easy. You claim the tax credit on your federal income tax return. Partial credits of less than $8,000 are available for some taxpayers whose MAGI exceed the phase-out limits.
FHA put up a mortgagee letter stating how the program was intended to work, and then took it down the same day. The details that were supposed to come out within the week didn’t come out. FHA has a list of approved lenders that can use the bridge loan type product.
Families can only access this credit after filing their tax returns with the IRS. The announcement details FHA’s rules allowing state Housing Finance Agencies and certain non-profits to ‘monetize” up to the full amount of the tax credit (depending on the amount of the mortgage) so that borrowers can immediately apply the funds toward their down payments. Families will now be able to apply their anticipated tax credit toward their home purchase right away.
Extend the time frame that the tax credit is, in effect, to somewhere near the end of 2010 depending on when the bill is passed (if it gets passed). The bill suggests that it be, in effect, for 1 year from its approval into law.
Owning a home can take a lot of time and expense but for many, its drawbacks are far more complicated than sticks, leaves, and paint. Owning a home can result in many tax advantages such as deducting mortgage interest and real estate taxes if you itemize deductions. The government’s recent attempts to stimulate our economy have included additional tax advantages for some first-time home buyers.
Ownership of non-primary residences such as rental properties or vacation homes does not disqualify a first-time home buyer from the $7500 tax credit. All you have to do is claim the tax credit on your federal income tax return.
Thank you for taking your time to read this article. Your comments on this article will be highly appreciated. To access hundreds of Gurmit’s articles, please visit his websites below.
Information shared here does not constitute financial, legal, or other professional advice, and no attorney-client or confidential relationship is or should be formed by use of the site. This article is intended to provide general information only and does not give advice, which relates to your specific individual circumstances. Information in this document is subject to change without notice. Any link-listing or ad-listing on this site does not constitute any type of endorsement.
Buying A Home?
Nov
08
Matt Brua asked:
Illinois provides an excellent landscape for first time home buyers with its largely diverse towns and cities as well as the dramatic changing seasons. Thousands of people relocate to Illinois every year in the hopes of enjoying all the benefits of living in the Midwest.
And for those looking to plant their roots in Illinois, there are also many opportunities for first time home buyers in Illinois. Depending on your desires and needs, there are homes of all kinds ready for the picking. In addition, for those craving the city life, Chicago is just a few hours from virtually any city in Illinois.
One great advantage for first time home buyers in Illinois are the extensive down payment and closing cost assistance programs that make it much easier to purchase a home here. These programs can assist you with anywhere from $2,500 to $5,000 or much more.
Some of these programs include:
1. City of Chicago Department of Housing grants
2. Illinois Housing Development Authority – Down Payment Assistance Program grants
3. Madison County Community Development grants
These are just three of the many down payment assistance programs that are available in Illinois. Once you are working with your professional loan officer and real estate agent, they should be able to direct you to some of the outstanding programs catered to make it easier for first time home buyers in Illinois to own their home with less money required out of pocket.
Now that you know at least three resources for down payment and closing cost assistance, don’t go at it alone. There is money available to help you buy your first home in Illinois.
Get Advise from a Scottsdale Realtor
Illinois provides an excellent landscape for first time home buyers with its largely diverse towns and cities as well as the dramatic changing seasons. Thousands of people relocate to Illinois every year in the hopes of enjoying all the benefits of living in the Midwest.
And for those looking to plant their roots in Illinois, there are also many opportunities for first time home buyers in Illinois. Depending on your desires and needs, there are homes of all kinds ready for the picking. In addition, for those craving the city life, Chicago is just a few hours from virtually any city in Illinois.
One great advantage for first time home buyers in Illinois are the extensive down payment and closing cost assistance programs that make it much easier to purchase a home here. These programs can assist you with anywhere from $2,500 to $5,000 or much more.
Some of these programs include:
1. City of Chicago Department of Housing grants
2. Illinois Housing Development Authority – Down Payment Assistance Program grants
3. Madison County Community Development grants
These are just three of the many down payment assistance programs that are available in Illinois. Once you are working with your professional loan officer and real estate agent, they should be able to direct you to some of the outstanding programs catered to make it easier for first time home buyers in Illinois to own their home with less money required out of pocket.
Now that you know at least three resources for down payment and closing cost assistance, don’t go at it alone. There is money available to help you buy your first home in Illinois.
Get Advise from a Scottsdale Realtor
Nov
08
Considering Buying a Home? Think FHA!
Posted by: | Comments
Marlon Baugh asked:
If you are considering purchasing a home, but you are having problems coming up with the necessary down payment, then FHA has your answer. FHA loans were once only considered for low to moderate income individuals, this however is not the case. If you are buying a primary residence and you want to put down a small down payment with great rates, then FHA is your answer. If you would like the idea of having someone else help you pay your mortgage payment or to buy an investment property like a duplex or triplex, you can still use an FHA loan for this transaction, however you must occupy one of the units for at least a year as your primary residence. Also with 2-4 unit properties, you can use the rent income from the property to help you qualify for the loan. This is great for the entrepreneurs/investor at heart as you can on the road to wealth even faster.
Typically the down payment requirements for an FHA loan will be 3-5% of the purchase price of the home. Now this down payment doesn’t necessarily have to come from you, it can be a grant, gift from family and even sweat equity. Most people opt for the down payment assistant grant that can cover up to 5% of your down payment, so think there weren’t anymore No Money Down Mortgage Loans? Think Again!
Now let us talk about other benefits to getting an FHA loan:
- FHA loans are fully assumable, now what does this mean you the home owner? Well went and if you decide to sell your home, the buyer does not have to qualify for a new loan but instead take over the current FHA loan on the property. Talk about have a great selling advantage, and also since FHA loans come with low interest rates, so selling especially when current interest rates are high will be an ease and you can demand your asking price whether it’s a buyer’s or seller’s market.
- FHA loans allow the seller to pay up to 6% of closing cost, which will more than cover all your closing cost for buying a home. Now if you don’t have a seller that is willing to do this then you can simply roll these costs into the loan, which will greatly reduce you out of pocket expenses at closing.
- If you decide to refinance in the future to reduce you rate or to get a shorter term mortgage, then there is no qualifying for the new loan as long as you have made you payment on time for the last 12 months. They don’t even require a new appraisal.
- Do you have less than perfect credit such as bankruptcy or foreclosure, then, FHA is the loan for you. As long as you can demonstrate you had extenuating circumstances and that you have developed a good track record since these incidents, normally a 1-2 year window, then you can qualify for low single digit interest rates and a low down payment.
Ok I am telling you all the benefits and I know you are saying it might sound too good to be true or what are the disadvantages?
There is one major disadvantage or to a certain extent called MIP (Mortgage Insurance Premium. MIP protects the lender in the event you can’t make you mortgage payments and it usually about 1.5% of the loan amount.
FHA has helped many renters realize the dream of home ownership for many years now. I want to caution you to not just by a home because you can get in with little or no money down or because you found a great deal, such as a foreclosure. Research shows the borrowers that put little or no money down are more opted to end up in foreclosure. So budget carefully, prepare for the worst and try and be debt free before buying a home.
Nov
08
House Hunting Tips
Posted by: | Comments
Matthew Young asked:
So you are thinking about buying a home huh? If you are a first-time home buyer, there are some important issues to take into consideration when beginning the journey of house-hunting. It is very easy to be bamboozled if you are someone that is young and single or even a married couple buying that first home if you don’t have someone that is very knowledgeable of homes and the pitfalls to avoid when buying. All too often people buy into a situation where a home has many problems that were unseen or don’t reveal themselves until well after the home is purchased. Unless maybe you are having a new home built, when you are house hunting, definitely go in with a “buyer beware” attitude with each and every home. If you are using a buyer’s agent, don’t count on them to weed out the pitfall homes for you. Buyer’s agents may appear to be on your side, but all they really want to do is get you to buy a home as quickly as possible so they can get that commission check and move on. About the only thing they are really good for is to use as a mediator between the buyer and seller when making an offer on buying a home. They will draft up the paperwork and do the talking for you. So here are some important suggestions to consider when buying a home:
1. The first thing you want to do is get a mortgage pre-approval letter from a mortgage lender. Find one with a good interest rate that you might use if taking out a mortgage. Just because they provide you with a pre-approval letter doesn’t mean you have to use them as a lender. But what it does mean, is that you are good for that loan amount and they will be ready right away to provide you with at a moments notice. In fact, most realestate agents won’t work with you if you don’t have a mortgage pre-approval. All too many times, people put offers on homes, but in the end are denied a mortgage anyhow. This wastes everyone’s time.
2. Get a buyer’s agent from a reputable realestate company. They are there to search out homes for you and then arrange for you to look at the home. They can arrange for the seller to vacate the home while you look through it. They will also mediate between you and the seller when it comes time to put down an offer. Most likely, the seller will have a seller’s agent.
3. This is a very important thing to remember: If you are buying a home that is not new, then about 85% of the time, the people that are selling it are definitely moving out for a reason. The other 15% are people that are either retirement age that are scaling down, people that have had their jobs relocated, or people who like the house but have come into some money and are simply moving “up”. From what I have found, the usual case is people put their homes up for sale because there is something that they don’t like about the home. The home might back up to a very busy street. I saw lots of those types of homes when I was home shopping. There could be major foundation problems. Heating and cooling problems. A bad home layout. A neighborhood with bad neighbors. Water issues around the foundation. The list goes on and on. It is issues like this that turn house hunting into a 3,4,5, or 6 month journey. You might look at 50 homes before you buy one.
4. Do not ever buy the first home you see. You have definitely got to have your agent show you at least several more homes if the situation arises where the first home you see is the one you want.
5. If you see a home you like that is within your price range, while you are looking through the home, definitely be looking for any problems as well. It is too easy to be distracted away from any problems or potential problems if you are too pre-occupied with looking at the home’s amenities. I will explain what problems to look for further down the page.
6. Because of the issues I mentioned above, such as the “85%” issue, defines a situation that I call a “hot house”. A “hot house” is a house that falls into the “15%” category of home sellers. These are homes that are priced reasonably, are in a good location, have a good layout, have been kept up very well, and are just a great buy. These are the types of homes that are put up on the market on a Friday, and sell by Saturday. Homes like this are not only nice to live in and easy to maintain, but are easy to sell if the time comes where you might want to move into another home one day. Typically, the selling agent of these types of homes already knows it is a “hot house”. Seller’s agent are also “buyer’s agents” as well. Being that they know it is a “hot house”, they will go find their own buyer for it and ignore your own buyer’s agent even if you want to make an offer on the house. They do this because if they can find their own buyer, they get all of the commission on the home. Typically, if a buyer’s agent is mediating with a seller’s agent, the buyer’s agent will get 2%-3% commission and the seller’s agent will get the other 2%-3% commission. The commission is based on the final selling price of the home. A selling agent that finds a buyer on his own will act as both the selling and buying agent. Therefore, he or she will get all of the 4%-7% commission of the home. So there is some conflict of interest when it comes to buying a home. Hopefully, maybe, the buyer’s agent that you hire is a seller’s agent as well. He or she might have a “hot house” they can sell you that you will get “first dibs” on.
7. Now, let’s say you find a home that you like. Check to make sure all the interior doors of the home close without rubbing on the door frames. This is an indication of foundation issues. Sometimes people will get deceptive and “sand down” the top portion of the door that rubs on the frame. So just because doors might close ok, there could still be foundation issues. Definitely go and look in the basement. Look for cracks in the wall. Look for signs of water leakage. Look for major cracking of the basement floor. Any of these issues could mean bad news. If the basement has a “dingey” feel or a moldy smell to it, stay away from the house.
8. Take note if the home’s interior is “up to date” and that the owners keep it cleaned and well maintained. If it appears like the owners have neglected the home’s maintenance, then that always means that they’ve neglected everything in the home. Problems that won’t present themselves until later.
9. Definitely take a look at the home’s exterior. Check to make sure none of the window sills are rotted. Check for any wood rot around the exterior of the home. Also find out how old the roof is.
10. Do not make an offer on a home without a seller’s disclosure. By law, the sellers are to fill out a form called a disclosure to answer questions about the home and leave this in plain view of the buyer when they are looking at the home. Read the disclosure. It will give answers to questions such as how old the roof is, whether or not they have foundation issues, termite issues, rodents, or any other problems with the house that even might affect the home insurance premiums. For instance, a home that I had bought had two layers of roofing on it. The first layer was never removed when the second new roof was put on. It was done this way because it was “cheaper”, but insurance companies will charge a slightly higher premium because it will cost more to replace the roof if the roof is ever damaged. It takes more labor to remove two roof layers than one.
11. Only take seller’s disclosures with a grain of salt. People do lie, or sugar-coat things to try and sell the house. Once you’ve decided to make an offer on the house, have a home inspection done. Make the offer on the house contingent upon that the home inspection comes out clean. You will have to hire a home inspector to do this. They typically charge $250 – $450 for an inspection. Do not ever use an inspector that the realestate agent recommends. These inspectors will be working for the interest of the agent, and not yours. However, that doesn’t mean that the inspector that you found on your own still won’t be working for the interest of the realestate agent anyways. He might want to have that realestate agent use his name for recommendations. Home inspectors are like everyone else. They are in the business to make money and get their name out there.
12. If you are able, walk around with the inspector while he is inspecting the home. He will point things out to you. Do NOT let the realestate agent distract you during this time. The agent will be present also while the inspector is performing the inspection. After the inspection, review the report. If something minor needs fixing, then have a new contract offer written up to have whatever issues were found corrected. If any major issues were found, such as foundation issues, termites, etc., then avoid the house. Better to have paid an inspector $ if it means saving you from buying a money-pit house.
13. Lastly, if you had an inspection, and something major turns up, but you still really really like the house and you don’t want to walk away from it, then just about anything can be fixed these days. Even major foundation issues can be fixed in this day and age. You can re-adjust your offer to include in the price that the seller pay for those issues to be fixed. Or, either reduce your offer drastically and then have extra money escrowed or take out a home equity line of credit and have the issue repaired. Also, upon putting down an offer, ask your realestate agent for a market comp. A market comp is a report of final selling prices of homes in the area that you are buying. You can compare the prices with the home’s price that you are looking at. It will give you an idea if the home is being priced appropriately. And do check out the county’s appraisal of the home as well. If a house is in tip-top shape and has had some remodeling and updating done over the years, then typically it might go for $15K – $20K over county appraisal. All too many times home owners will try and get dollar for dollar return on their improvements. This is a no-no. Home owners should not expect dollar for dollar return on improvements. At most, maybe a 60% return. But usually only about a 25% return. Depends on how hot the market is. The situation you do not want to walk into is to pay full price for a home, (county appraisal and above), and then find out that you have to shell out more $ to make repairs. The most important thing, is to educate yourself on homes or to at least have someone that you know such as a parent, friend, or relative that is knowledgeable about homes go home-shopping with you. You can’t fully count on the realestate agent nor the inspector to ensure that what you buy is within your best interest. I urge everyone to go buy a good book on home buying and read it before buying that first home. Or even second home for that matter. Too much “bamboozling” going on these days.
Scottsdale Real Estate Market
So you are thinking about buying a home huh? If you are a first-time home buyer, there are some important issues to take into consideration when beginning the journey of house-hunting. It is very easy to be bamboozled if you are someone that is young and single or even a married couple buying that first home if you don’t have someone that is very knowledgeable of homes and the pitfalls to avoid when buying. All too often people buy into a situation where a home has many problems that were unseen or don’t reveal themselves until well after the home is purchased. Unless maybe you are having a new home built, when you are house hunting, definitely go in with a “buyer beware” attitude with each and every home. If you are using a buyer’s agent, don’t count on them to weed out the pitfall homes for you. Buyer’s agents may appear to be on your side, but all they really want to do is get you to buy a home as quickly as possible so they can get that commission check and move on. About the only thing they are really good for is to use as a mediator between the buyer and seller when making an offer on buying a home. They will draft up the paperwork and do the talking for you. So here are some important suggestions to consider when buying a home:
1. The first thing you want to do is get a mortgage pre-approval letter from a mortgage lender. Find one with a good interest rate that you might use if taking out a mortgage. Just because they provide you with a pre-approval letter doesn’t mean you have to use them as a lender. But what it does mean, is that you are good for that loan amount and they will be ready right away to provide you with at a moments notice. In fact, most realestate agents won’t work with you if you don’t have a mortgage pre-approval. All too many times, people put offers on homes, but in the end are denied a mortgage anyhow. This wastes everyone’s time.
2. Get a buyer’s agent from a reputable realestate company. They are there to search out homes for you and then arrange for you to look at the home. They can arrange for the seller to vacate the home while you look through it. They will also mediate between you and the seller when it comes time to put down an offer. Most likely, the seller will have a seller’s agent.
3. This is a very important thing to remember: If you are buying a home that is not new, then about 85% of the time, the people that are selling it are definitely moving out for a reason. The other 15% are people that are either retirement age that are scaling down, people that have had their jobs relocated, or people who like the house but have come into some money and are simply moving “up”. From what I have found, the usual case is people put their homes up for sale because there is something that they don’t like about the home. The home might back up to a very busy street. I saw lots of those types of homes when I was home shopping. There could be major foundation problems. Heating and cooling problems. A bad home layout. A neighborhood with bad neighbors. Water issues around the foundation. The list goes on and on. It is issues like this that turn house hunting into a 3,4,5, or 6 month journey. You might look at 50 homes before you buy one.
4. Do not ever buy the first home you see. You have definitely got to have your agent show you at least several more homes if the situation arises where the first home you see is the one you want.
5. If you see a home you like that is within your price range, while you are looking through the home, definitely be looking for any problems as well. It is too easy to be distracted away from any problems or potential problems if you are too pre-occupied with looking at the home’s amenities. I will explain what problems to look for further down the page.
6. Because of the issues I mentioned above, such as the “85%” issue, defines a situation that I call a “hot house”. A “hot house” is a house that falls into the “15%” category of home sellers. These are homes that are priced reasonably, are in a good location, have a good layout, have been kept up very well, and are just a great buy. These are the types of homes that are put up on the market on a Friday, and sell by Saturday. Homes like this are not only nice to live in and easy to maintain, but are easy to sell if the time comes where you might want to move into another home one day. Typically, the selling agent of these types of homes already knows it is a “hot house”. Seller’s agent are also “buyer’s agents” as well. Being that they know it is a “hot house”, they will go find their own buyer for it and ignore your own buyer’s agent even if you want to make an offer on the house. They do this because if they can find their own buyer, they get all of the commission on the home. Typically, if a buyer’s agent is mediating with a seller’s agent, the buyer’s agent will get 2%-3% commission and the seller’s agent will get the other 2%-3% commission. The commission is based on the final selling price of the home. A selling agent that finds a buyer on his own will act as both the selling and buying agent. Therefore, he or she will get all of the 4%-7% commission of the home. So there is some conflict of interest when it comes to buying a home. Hopefully, maybe, the buyer’s agent that you hire is a seller’s agent as well. He or she might have a “hot house” they can sell you that you will get “first dibs” on.
7. Now, let’s say you find a home that you like. Check to make sure all the interior doors of the home close without rubbing on the door frames. This is an indication of foundation issues. Sometimes people will get deceptive and “sand down” the top portion of the door that rubs on the frame. So just because doors might close ok, there could still be foundation issues. Definitely go and look in the basement. Look for cracks in the wall. Look for signs of water leakage. Look for major cracking of the basement floor. Any of these issues could mean bad news. If the basement has a “dingey” feel or a moldy smell to it, stay away from the house.
8. Take note if the home’s interior is “up to date” and that the owners keep it cleaned and well maintained. If it appears like the owners have neglected the home’s maintenance, then that always means that they’ve neglected everything in the home. Problems that won’t present themselves until later.
9. Definitely take a look at the home’s exterior. Check to make sure none of the window sills are rotted. Check for any wood rot around the exterior of the home. Also find out how old the roof is.
10. Do not make an offer on a home without a seller’s disclosure. By law, the sellers are to fill out a form called a disclosure to answer questions about the home and leave this in plain view of the buyer when they are looking at the home. Read the disclosure. It will give answers to questions such as how old the roof is, whether or not they have foundation issues, termite issues, rodents, or any other problems with the house that even might affect the home insurance premiums. For instance, a home that I had bought had two layers of roofing on it. The first layer was never removed when the second new roof was put on. It was done this way because it was “cheaper”, but insurance companies will charge a slightly higher premium because it will cost more to replace the roof if the roof is ever damaged. It takes more labor to remove two roof layers than one.
11. Only take seller’s disclosures with a grain of salt. People do lie, or sugar-coat things to try and sell the house. Once you’ve decided to make an offer on the house, have a home inspection done. Make the offer on the house contingent upon that the home inspection comes out clean. You will have to hire a home inspector to do this. They typically charge $250 – $450 for an inspection. Do not ever use an inspector that the realestate agent recommends. These inspectors will be working for the interest of the agent, and not yours. However, that doesn’t mean that the inspector that you found on your own still won’t be working for the interest of the realestate agent anyways. He might want to have that realestate agent use his name for recommendations. Home inspectors are like everyone else. They are in the business to make money and get their name out there.
12. If you are able, walk around with the inspector while he is inspecting the home. He will point things out to you. Do NOT let the realestate agent distract you during this time. The agent will be present also while the inspector is performing the inspection. After the inspection, review the report. If something minor needs fixing, then have a new contract offer written up to have whatever issues were found corrected. If any major issues were found, such as foundation issues, termites, etc., then avoid the house. Better to have paid an inspector $ if it means saving you from buying a money-pit house.
13. Lastly, if you had an inspection, and something major turns up, but you still really really like the house and you don’t want to walk away from it, then just about anything can be fixed these days. Even major foundation issues can be fixed in this day and age. You can re-adjust your offer to include in the price that the seller pay for those issues to be fixed. Or, either reduce your offer drastically and then have extra money escrowed or take out a home equity line of credit and have the issue repaired. Also, upon putting down an offer, ask your realestate agent for a market comp. A market comp is a report of final selling prices of homes in the area that you are buying. You can compare the prices with the home’s price that you are looking at. It will give you an idea if the home is being priced appropriately. And do check out the county’s appraisal of the home as well. If a house is in tip-top shape and has had some remodeling and updating done over the years, then typically it might go for $15K – $20K over county appraisal. All too many times home owners will try and get dollar for dollar return on their improvements. This is a no-no. Home owners should not expect dollar for dollar return on improvements. At most, maybe a 60% return. But usually only about a 25% return. Depends on how hot the market is. The situation you do not want to walk into is to pay full price for a home, (county appraisal and above), and then find out that you have to shell out more $ to make repairs. The most important thing, is to educate yourself on homes or to at least have someone that you know such as a parent, friend, or relative that is knowledgeable about homes go home-shopping with you. You can’t fully count on the realestate agent nor the inspector to ensure that what you buy is within your best interest. I urge everyone to go buy a good book on home buying and read it before buying that first home. Or even second home for that matter. Too much “bamboozling” going on these days.
Scottsdale Real Estate Market
