BUYERS TIPS

PREPARE PRIOR TO START LOOKING FOR A HOME

1.Determine your Budget.

2.Contact a lender to provide you with information you need as loan rates and loans available. Get Pre-Qualified before you begin your new home search.

3.Get professional help find an agent you can trust and who’ll help you with the buying process, a Real Estate Professional will assist you with the buying process from beginning to end.

4.Take the time to search for a home that suits you and meets your personal/financial needs.

5.Become familiar with your rights as a home buyer.

6.Learn more about the area market you are interested in.

7.Get a home inspection – When making the decision to not invest in a home inspection, you’re risking incurring extra expenses and possibly hidden defects in your house.

8.Make sure a home protection plan is included in the sales transaction.

Typically, completing a real estate transaction in today’s market involves multiple steps. Learn more about what’s necessary to prevent potential negative situations.

Tips for buying a house

The top 10 things you need to know when buying a home.

1. Don’t buy if you can’t stay put.
If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet. With the transaction costs of buying and selling a home, you may end up losing money if you sell any sooner – even in a rising market. When prices are falling, it’s an even worse proposition.

2. Start by shoring up your credit.
Since you most likely will need to get a mortgage to buy a house, you must make sure your credit history is as clean as possible. A few months before you start house hunting, get copies of your credit report. Make sure the facts are correct, and fix any problems you discover.

3. Aim for a home you can really afford.
The rule of thumb is that you can buy housing that runs about two-and-one-half times your annual salary. But you’ll do better to use one of many calculators available online to get a better handle on how your income, debts, and expenses affect what you can afford.

4. Down-payment. If you can’t put down the usual 20 percent, you may still qualify for a loan. There are many programs available to assist buyers, contact a lender and inquire about what will work for you. There are a variety of public and private lenders who, if you qualify, offer low-interest mortgages that require a small down payment.

5. Research the School Districts.
In most areas, this advice applies even if you don’t have school-age children. Reason: When it comes time to sell, you’ll learn that strong school districts are a top priority for many home buyers.

6. Get professional help.
Even though the Internet gives buyers unprecedented access to home listings, most new buyers (and many more experienced ones) are better off using a professional agent who will have your interests at heart and can help you with strategies during the bidding process.

7. Choose carefully between points and rate.
When picking a mortgage, you usually have the option of paying additional points  a portion of the interest that you pay at closing ,in exchange for a lower interest rate. If you stay in the house for a long time ,say three to five years or more, it’s usually a better deal to take the points. The lower interest rate will save you more in the long run.

8. Before house hunting, get pre-approved.
Getting pre-approved will you save yourself the grief of looking at houses you can’t afford and put you in a better position to make a serious offer when you do find the right house. Not to be confused with pre-qualification, which is based on a cursory review of your finances, pre-approval from a lender is based on your actual income, debt and credit history.

9. Do your homework before bidding.
Your opening bid should be based on the sales trend of similar homes in the neighborhood. So before making it, consider sales of similar homes in the last three months. If homes have recently sold at 5 percent less than the asking price, you should make a bid that’s about eight to 10 percent lower than what the seller is asking.

10. Hire a home inspector.
You should hire your own home inspector, preferably a licensed professional with experience in doing home inspections in the area where you are buying. His or her job will be to point out potential problems that could require costly repairs down the road.

WHEN BUYING A FORCLOSURE

1. Beware the Current Owner
If the homeowner who defaulted is still living in the home when the auction takes place, the buyer has two potential headaches to worry about: evicting the former owner, and the potential for vandalism. it’s not unheard-of for resentful owners to vandalize the house before being evicted.

2. Get Pre-qualified
Get a letter of prequalification from a lender before you start house-hunting. The foreclosure market is fast-moving and surprisingly competitive, since so many people are looking for bargain-basement prices. A seller is going to prefer working with a buyer who’s already secured financing rather than wait around for one who needs to get loan approval and take the risk that it won’t pan out. Don’t expect the bank selling the home to provide you with financing (they’re trying to get rid of the house, after all).

3. Expect a Low Appraisal
Even with financing secured, getting the foreclosed house of your dreams isn’t a guarantee. As with any home purchase, the amount for which a foreclosure is appraised is the determining factor for the size of the loan you can get. Foreclosures tend to appraise lower than other properties with similar features, because neglect or vandalism may have contributed to damage.

4.Prepare to Spend Extra on Maintenance
Factor the cost of any necessary repairs into your budget, since foreclosures are generally sold “as-is.” “Be aware with these REO or Bank-Owned properties that a lot of them are in pretty poor condition.” The bank that owns the title isn’t going to make needed repairs for you before the sale, and it’s unlikely to lower the price to compensate you for repair expenses you’ll incur. Of course, you can try to negotiate the price down, especially if the house has been on the market for a long time.

WHEN BUYING A SHORT SALE
A lot of potential home buyers are interested in short sales because they want to get a great deal. But short sales can sometimes be complicated and take longer than traditional sales.
The first thing any buyer must know when submitting an offer on a short sale is that very few of them actually get closed. I look at the number of closed short sales each month compare to the number of pending short sales each month to calculate this ratio. I do have to agree with other agents that the banks seem to be improving their short sale processes. Unfortunately, while the process and the communication has improved the results are unpredictable.
The short sale process may be too long. The house that you fell in love with, and wrote an offer on starts to look less appealing after about 30 days. The average short sale process is probably in the range of four to six months. At the end of that process the bank can say no. This is one outcome I believe most buyers are prepared for, but does not happen that often. The more likely outcome is that the bank approves the deal, but wants more money from someone. They may look to the seller to bring cash to closing, and the seller may be unable or unwilling to do so. This can end the deal, unless the buyer is willing to bring the extra cash.
The two most common situations that seem to bring the transactions to a halt are the contract expiring prior to short sale approval and the buyer walking away; and the sale is approved, but the seller rejects the banks offer.