Home Buying Tips: Three Items to Watch out for in a Purchase Agreement Contract

August 22, 2014 by

Home Buying Tips: Three Items to Watch out for in a Purchase Agreement ContractThe purchase agreement is a vitally important document that outlines the provisions, terms and conditions for the transfer of property.

It should be read carefully and any ambiguities should be clarified prior to signing. It is a legally binding contract between the buyer and seller.

The purchase agreement may vary depending on the location. Most real estate agents use a form that has been approved by a state realtors association.

The seller may have a different version that was drawn up by an attorney. It should not be assumed that they are all the same.

Typically, the purchase agreement will include an inspection period. This allows the buyer time to verify the conditions stated on the purchase agreement. Three of the most important stipulations in the contract are listed below.

All Owners Must Sign the Purchase Agreement

In most cases, the purchase agreement should be signed by the legal owner of the property.

If there is more than one owner, each owner should sign the agreement. In many states, both parties in a married couple have an interest in a property even if the title is held in one party’s name alone. Therefore, the purchase agreement should be signed by both parties of a married couple.

In the event the property is being sold by a corporation, verify that the person signing the agreement is authorized to commit the corporation to the sale.

List All Fixtures to be Transferred with the Sale

The purchase agreement should list all items that are to convey with the property. “Fixtures” are considered items that are attached to the property.

Legally, they should be included with the sale, but more than a few buyers have been dismayed to find the property stripped of countertops, appliances and window coverings. Any fixtures and personal property that are part of the sale should be included in the purchase agreement.

Verify Zoning Ordinances

The purchase agreement may contain various stipulations. One should include the right to cancel the contract if zoning prohibits the use of the property as planned.

Zoning ordinances may restrict the use of buildings or land. This may prove to be an obstacle for someone who intended to include a workshop on the property. The buyer should be able to withdraw from the contract if they discover that zoning prohibits the intended use.

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Lowballing 101: How to Avoid Insulting a Home Seller when Making a Low Offer for Their House or Condo

August 20, 2014 by

Lowballing 101: How to Avoid Insulting a Home Seller when Making a Low Offer for Their House or CondoBuying a home is a huge step for people who are ready to make an investment in their future. Getting a great deal on a home is just as important and knowing how much to offer could be confusing. It is important to make sure the home seller is not insulted by the lowball offer and is ready to negotiate to make sure everyone wins.

Make a List of Necessary Improvements

One of the best ways to validate a lowball offer on a home is to list improvements that need to be made to the property. If the home needs a new roof or a new heating and air conditioning system, these are reasons to offer less than the asking price. Sometimes a home may also need new flooring, paint, or matching appliances which all cost money. The buyer can make a lowball offer stating additional expenses of making sure the home is move in ready.

Explain Any Issues with the Location

Another option when considering a lowball offer is to point out problems with the location. If the home is on a busy street or close to a manufacturing district, the buyer has legitimate concerns. In the offer, list the potential problems of living too close to fast food restaurants, train tracks, or airports. A less desirable location could equal a great buy on a new home.

Provide Pricing for Comparable Homes in the Area

A knowledgeable real estate agent can help compare homes that have sold in the area. When you are writing up a lowball offer, look at the lower priced homes that have sold in the same neighborhood. A seller will quickly realize that if he wants to sell the home, he will need to accept a reasonable offer or risk letting his house sit on the market for weeks or months.

Consider the Seller’s Reasons for Selling

Finally, the seller’s situation can also be key in getting a good deal on a home. If the seller is desperate to sell because of a job relocation or if he has already bought a new home this can be the perfect reason to make a low offer and take the home off the seller’s hands. Without insulting the seller, the buyer can make an offer for less than the asking price and agree to a quick closing.

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Experiencing ‘Purchase Anxiety’? How to Calm Your Nerves Before Committing to Buy a New Home

August 15, 2014 by

Experiencing 'Purchase Anxiety'? How to Calm Your Nerves Before Committing to Buy a New HomeWhether this is your first big purchase, or your family is moving to a new location or looking for more space, buying a home has its share of ups and downs.

It’s perfectly normal to feel anxious about whether or not you’ve found the right property. Here are some things you can do to make yourself feel more secure with your decision.

Do The Math

You’ve probably already done this, but it’s okay to go over it a number of times to be sure. Factor in your household income and all the bills you expect to pay every month. Add everything up.

It sounds like a stressful activity, but when you look at the numbers and realize that buying a home is actually doable, it can be a liberating feeling.

When you know for sure you can make it as a homeowner without getting underwater, you will feel more confident.

Meet The Neighbors

If you haven’t had the chance to knock on a couple of doors yet, you should spend some time saying hello to people in the neighborhood. The more you can get to talking with families that are just like yours, the more you will be able to picture yourself as a member of the community.

If you have kids, find out if there are other kids the same age nearby. That will help to ease their anxiety about moving as well.

Ask Your Agent

Don’t feel like you are being overly cautious if you ask your real estate agent and or mortgage professional your lingering questions. Make sure you’re getting a good price for the area, and make sure you know about any issues with the condition of the property.

You should be able to trust that your realtor and mortgage professional are excited for your decision.

Familiarize Yourself With The Neighborhood

Take a drive and figure out which stores you’re nearest to, the route you can take to get to work, and which other amenities you might take advantage of. Home buyers often underestimate how important living in a safe neighborhood with plenty of accessible businesses can be.

The more you can imagine yourself living at your new address, the better you will feel.

Remember, never sign the papers on a new home unless you feel one hundred percent secure in your buying decision.

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Five Absolute Truths About the Home Buying Process That You Will Need to Come to Terms With

August 8, 2014 by

Five Absolute Truths About the Home Buying Process That You Will Need to Come to Terms WithBuying a home is one of the most exciting times that an individual will undertake in life. However, a property purchase is not without its challenges, and these can cause frustration. In this article we’ll share five potential setbacks that home buyers will need to understand and come to terms with to make a successful purchase.

Homeowner’s Insurance is Necessary

Most lenders will require insurance before financing is approved. To fulfill these requirements, the policy should be for at least one year and proof that the policy has been paid for must be presented. Purchasing the policy is something that must be done before closing can take place, so if you’re sure that this is the home for you, don’t delay.

Some Sellers Are Firm, No Matter What

In an ideal situation, the buyer and the seller come to a mutual agreement very easily. However, in most cases negotiation of some type is likely to be a part of the process. As with most negotiations, to reach success both sides will need to compromise.

Probate Properties Have Special Terms

When the original homeowner has died, there are certain considerations to keep in mind that do not typically apply to other types of property. One is the fact that there is a special process that must be completed before the property can be sold, even though the heirs may advertise the property as being for sale ahead of time. Another factor to keep in mind is that a recently probated property may have been uninhabited for some time and will be sold ‘as is’.

Loan Offers May Not Be Set in Stone

A common pitfall for many buyers is the assumption that home financing will be approved without issue. Unexpected circumstances may arise that cause a mortgage loan to be denied, which can cause an unprepared buyer numerous issues. Many sellers, in anticipation of such problems, have a contingency requirement.

Expect Caution from Sellers

If a seller treats your offer with caution or trepidation, don’t take it personally. Many homeowners have been burned during previous sales, and you have no idea what the seller has been through with potential buyers this time around. If someone is exercising caution, there’s likely a good reason for it.

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Buying a House or Condo? Why the Home Inspection Process is One You Won’t Want to Skimp On

July 18, 2014 by

Buying a House or Condo? Why the Home Inspection Process is One You Won't Want to Skimp OnOnce you have found that perfect home with the right price and every little feature you were hoping for, it’s important to keep in mind that the home has been presented in a way that accentuates its highlights and shadows any flaws. For this reason, it is crucial that you get a home inspection before completing a purchase.

Many sellers also have inspectors investigate the home in order to determine its sale value. As such, they should be aware that a prospective buyer will want to request an independent inspection to verify the findings.

Reasons For Home Inspections

If you are the one purchasing the home, getting an inspection is likely to be the most important investigation you need to perform to ensure you are getting the best value. It can also help to know what reasons each party has for requiring a home inspection.

Buyers, for example, feel peace of mind knowing the home in question is safe. They also gain the ability to negotiate in the event a problem arises from inspection, or they can request repairs first. They can also opt out if the problems that arise are too overwhelming to deal with prior to or after the purchase. Finally, buyers can learn about the kind of maintenance and upkeep be required for the home in the long run.

Sellers, on the other hand, want to make the transaction as smooth of a process as possible to prevent issues that could slow down the sale. They can also learn about any problems they need to repair before putting the house on the market, and they can determine the sale price for the transaction. Lastly, this allows the seller to prove their transparency by having an inspection report available, even though he or she should expect that the buyer should be requesting an independent home inspection regardless.

It should be evident, having an inspection conducted is vital for buyers and sellers alike; though the price might seem costly at first, it is merely a small fee that is well worth the effort to solidify a home purchase.

Finding A Home Inspector

The first thing to keep in mind is that most states lack a licensing process for those who inspect homes. If your state does not have such criteria, finding an inspector in good standing with a nationally recognized organization can help as well.

It is very important not to take a seller’s inspection report at face value, no matter what kind of reputation they may have as a person. You might not even want to accept an inspector that someone else hires since they may have a vested interest that can influence the report.

Keep in mind that a general inspector is not typically licensed to check for specific issues like gas or pests. As such, you will need to either seek someone who is licensed for a full inspection or specificaly request inspection for pests, especially for those in high risk areas. 

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Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)

July 15, 2014 by

Three Ways That Your Credit Score Affects Your Mortgage (and Your Chance of Obtaining One!)If you’re thinking of buying a home, you’ve probably been thinking a lot about your credit score as well. Credit scores control so much of what we do in the world of finances, but what does your credit score really have to do with your mortgage? Here are three ways that your credit score could impact your mortgage application.

Your Credit Score Affects Your Ability To Get A Mortgage

The first thing your credit score tells a lender is whether they should lend to you at all. In some cases, if you have a very low credit score, you may not be able to obtain a mortgage at all.

Different lenders will have different criteria for determining safe and unsafe lending situations. Typically, if you have a score below the 600 mark, you’ll have trouble obtaining a mortgage.

If you’re worried about a low credit score, don’t despair – you can still get a mortgage, you just might have to work a little harder to get one. Some lenders will still lend to people with lower credit scores (just make sure you’re approaching legitimate lenders and not mortgage scam artists). Or, if time is on your side, you can work toward building up your credit score so that when it comes time to take out a mortgage, your score will be more appealing to lenders.

Your Credit Score Affects What Types Of Mortgages You Can Obtain

The second thing a lender learns from your credit score is which types of mortgages you qualify for. If a lender sees you as a higher risk, they won’t necessarily be willing to offer you just any old mortgage.

In most cases, if you have a credit score of less than 620, you won’t qualify for a conventional mortgage. In addition, if you have a lower credit score, you may have to make a larger down payment in order to qualify for the type of mortgage you want.

Your Credit Score Affects Your Interest Rate

The final thing that a lender learns from your credit score is what type of interest rate they’re willing to offer you. As a general rule, the higher your credit score, the lower the interest rate.

However, just because you have a high credit score, that doesn’t mean you’ll automatically get a great mortgage rate. There’s more that goes into the price of a mortgage than just the interest rate, so watch out for additional factors like extra fees, mortgage insurance, lock-in periods, and so on.

Your credit score tells a lender a lot about what type of borrower you are. Ultimately, a higher credit score means that you’ll be able to borrow money at a lower interest rate. But if your score is low, don’t worry – there’s a lot you can do to bring up that score before you apply for a mortgage, so don’t throw in the towel just yet!

Every financial situation is different, so if you want to find out more about how your credit score will affect your mortgage in your specific circumstance, talk to your mortgage professional.

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3 Common First Time Home Buyer Mistakes That Can Cost Thousands

November 20, 2013 by

3 Common First Time Home Buyer Mistakes That Can Cost ThousandsBuying real estate for the first time is a very exciting step in life. It is likely to be one of the biggest financial commitments that you make, so it’s very important to navigate the purchasing process wisely.

Many first-time home buyers make rookie mistakes that bring on negative consequences and a lot of frustration. Outlined below are common errors home buyers make, so you can learn from their missteps and avoid them yourself.

1. Buying More Than What You Can Truly Afford

Just because the bank says that you qualify a certain amount for a mortgage doesn’t mean that you have to choose a house at the very top of this price range. Many people get carried away and buy the most expensive house that they qualify for.

If something unexpected happens, they may find it difficult to keep up with their monthly mortgage payments later on.

Remember that you will also have student loan payments, vehicle costs, credit card bills, health insurance, groceries, retirement savings and other expenses, so make sure that your mortgage payments will comfortably fit within your budget.

2. Failing To Get A Home Inspection

Before buying a house, you should always have a professional inspection done. Not doing so is a big mistake. You don’t want to get stuck with hidden damage that could saddle you with the expense of ongoing repairs.

Hiring a professional to assess the home’s condition is absolutely essential before making your final decision.

3. Disregarding Your Future

When you are buying real estate, don’t just think about how the home will work for you in the immediate future. Also consider what your needs will be five, ten or even 20 years from now.

Find out the development plans for the neighborhood. Look for reputable schools if you intend to start a family. And consider whether the street’s home values are likely to increase or decline in the future.

Your Next Steps

Don’t let the home-buying process overwhelm you! Learn from these common first-time home buyers’ mistakes, so you can avoid them.

A great next step toward planning for your first home purchase is to consult with a trusted, licensed mortgage professional who is trained in providing the best advice on how a new home will affect your budget.

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5 Great Questions To Ask At An Open House

November 16, 2013 by

5 Great Questions To Ask At An Open House An open house gives you a great opportunity to look more closely at real estate you might be interested in buying. It also affords you the chance to chat with the owner or real estate agent so you can bring up any issues or hesitations you have with the home.

Knowing what to ask can be difficult, so below are examples of questions to ask at the next open house you attend.

Why Has The Seller Decided To Sell Now?

If you ask why the seller is moving, you could learn valuable information to help determine your offer or possibly whether or not you want to buy the home.

Knowing whether the owners are about to go into foreclosure, have experienced trouble in the neighborhood, or if they’ve retired and completely paid off the home can help you understand how urgently they need to sell their property.

Has The Seller Had Any Other Offers?

Don’t forget that you are not only negotiating with the seller for a price, you are also competing with other potential buyers. It really helps to know what you are up against.

It is important to understand that you might not get a 100% straight answer to this question as most sellers know that competition or perceived competition can cause a potential buyer to move forward more quickly and at a higher price.

If you’re comfortable in this discussion, you might want to try and see if you can find out the details of any other offers.

Does The Property Have Special Ownership Costs?

Ask the agent or owner about the other costs associated with owning the property, such as Home Owners Association fees within a condo complex or a gated community. It’s important to know about these extra expenses in advance so you can make an informed offer.

You may also want to ask about any pending litigation concerning the property. Litigation is not always a deal killer, but it’s better to know the details before you sign closing documents.

What Furniture And Appliances Are Being Sold With The House?

Most of the time, a seller will include their major appliances such as the refrigerator, stove and dishwasher with the home, but this isn’t always the case. If you don’t already have these items, it’s important to know whether they are included in the purchase price.

Is There Anything Else That You Want To Leave With The Home?

This is an important question to ask. Especially if there are specific things in the home that you have a strong interest in. Perhaps there is custom art work or a pool table that fits perfectly in the game room.

The seller may be eager to part with those items and include them in the sale of the home or sell them at a large discount. The open house is a great opportunity to learn more about a home before making the decision to buy it, so be sure you ask the right questions.

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Beware Of Zombie Titles

October 30, 2013 by

Beware Of Zombie TitlesWith the economic downturn, anyone dealing in real estate quickly became familiar with previously little-known terms such as foreclosure and short sale. Now that the housing market is picking back up and people are moving on, a new term is coming to light — zombie titles.

The Zombie Title

This is when a home has been vacated because the owners defaulted on their loan and their bank started the foreclosure process. However, for some reason or another the bank never completed the foreclosure and sold the home.

So, when the city starts fining someone for the overgrown grass and dilapidated structure, the homeowner who thought they were finished with the property gets the bill.

A Home That Keeps Haunting

Homeowners think they don’t own the property any longer and therefore try to move on by rebuilding their credit score and finding a new place to live. It can be a rude awakening to find out that not only do they still own a home they could have been living in, but also its long vacancy has caused it to fall into disrepair.

It‘s Spooking The Neighborhood

These vacant homes can decrease the value of a neighborhood. If the bank or the un-suspecting homeowner are neither one taking care of the property, then it can become overgrown and an eyesore on the block. It becomes a problem with no solution because the owner won’t want to invest any money in fixing up the property when the bank could come back with the foreclosure at any time.

Nail Shut The Foreclosure Coffin

Homeowners who have foreclosed on a home should double check that their bank actually followed through to closing on a sale. They could contact their lender or check public property records just to make sure. Otherwise, they could be haunted by their housing nightmare all over again.

Don’t let the zombie title of a past property haunt your future! Check with your bank to make sure you’re free and clear of your foreclosure. If you’d like more information on zombie titles or have other questions about local real estate, please contant your trusted real estate professional.

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Nail The Final Walkthrough Before Closing

October 15, 2013 by

Nail The Final Walkthrough Before ClosingBy the time you get to the final walkthrough on your property, the home buying process is almost complete. However, it is still important to pay close attention to this final step, as it will be crucial in the success of your home purchase.

The final walkthrough is your last opportunity to ensure that everything in the home is in working order and that there are no potential problems waiting for you when you take over ownership of the property.

While conducting a final walkthrough of the property, give yourself enough time to look carefully at everything and not be rushed. You are looking for any new issues that might have arisen since the last time you viewed the home.

Once you close on the purchase the previous owners will not be obligated for fixing any damage. For this reason, you should schedule your walkthrough approximately 24 hours before closing on a home.

What You Should Look For?

When you are performing your walkthrough, here are some of the important issues that you should be watching out for:

  • Are all major appliances in working condition? Do they all have their warranties and owner’s manuals?
  • Do all of the light switches and outlets work?
  • Have any of the fixtures or appliances gone missing, even though the seller agreed to leave them behind?
  • If you have agreed on any repairs, has the seller had these repairs completed?
  • Are there any signs of damage (i.e. scratched walls or floors) as a result of the previous owner moving out?
  • Do all of the water faucets and toilets function as they should?
  • Check the exterior of the house, especially if there has been a storm or strong winds since your last visit.
  • Did the previous owner leave any garbage, extra furniture or unwanted items behind?

What To Do If You Spot A Problem?

If you find a problem when you are going through your walkthrough, there are a few options of what you can do. If the issue is very serious, you might choose to walk away from the deal completely. However, if the issue is not that significant you might decide that it is not worth losing your dream home over.

You could simply pay for the repair yourself, or postpone the closing until the seller fixes the problem. If the repair was agreed upon during the negotiations, you have a legal recourse.

To find out more about buying property, feel free to contact your trusted real estate professional.

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