Monday, January 30, 2012

Going it Alone: Do You Need an Agent?

It’s 2012. You can find nearly anything and anyone on the Internet. Do you really still need a to put an agent in the middle of your real estate transaction? What’s to stop you from finding a home online, going straight to the source, and saving yourself a few percent on the commission?

Nothing at all. But before you decide to buy or sell a house without an agent, take this to heart: You’ll probably lose money on the deal. A lot of it. We’ll repeat that for emphasis. Even if you save on commission, you’ll probably lose money in the end. Why? For the same reason you don’t represent yourself in court, or fix your own transmission. You’re not an expert.

There’s nothing shameful about that. No one can be an expert in everything. You should certainly educate yourself as much as possible about your market (it’s your house, after all), but you don’t spend all day, every day working in the field. You may have researched comparable homes in your area, but you don’t know what other buyers and sellers are thinking. You don’t know what’s hot, what’s not, and what other opportunities might be steering prices up or down.

A real estate agent is a negotiator who knows the ins and outs of your market. She knows what buttons to push, how to remain objective, and when to move on. She’s also done this dozens of times before, and can guide you through legal and regulatory issues that could cost you tens of thousands of dollars. If you’re dealing with a short sale, a foreclosure, a rental unit, or any other property with special guidelines attached, this guidance is critical.

You can certainly buy or sell your own home, but doing so will cost you time, money, and frustration you could save by handing the job to a pro–letting you focus on finding the perfect home.

Tips for First Time Homebuyers

Tips for First-Time Homebuyers
Posted on January 24, 2012 by Realty Executives

Your first home purchase is exciting, but it can also be stressful. Here are some tips to limit the trauma and help you find the home of your dreams the first time around. The most important step in selecting a home is knowing how much you can spend. If you already use an electronic budgeting system, you’re ahead of the game. If not, track your expenses for the past several months to a year. Try to quantify the “gray areas” of cash withdrawals that disappear on small purchases. Now add up your current rent and other related expenses. If you’ve been saving money toward your down payment, note that, as well. Finally, ask yourself where you can tighten your belt with your existing discretionary purchases. This is the maximum amount you could pay per month. Now ask yourself if this is reasonable, given your current savings and possible expenses.

Only you know the answer to that. When you’ve arrived at a comfortable number, write it down, and save your calculations. You’ll take this to the bank when you apply for loan preapproval. For now, you have an estimated payment you can use while shopping online. Set your Criteria A home is the biggest purchase you’ll probably ever make. Stay focused and don’t let emotion guide you. If you have one child and no plans for more, four bedrooms are probably a waste. Write down a list of must-haves, nice-to-haves, and can’t haves before you start visiting homes. You’ll save time, help your agent work more productively, and keep yourself from getting carried away—into the wrong house.

Important criteria include:
■Age of house
■Number of bedrooms and bathrooms
■Size of lot / yard
■School district requirements
■Type of street (Are busy streets OK, or do you want a cul de sac? Do you need to be near a bus or light rail line?)
■Type of home (Single-story? Mutli-level? Are there any dominant architectural styles in your area that you refuse to buy?)
■Central heating and cooling
■Expensive additions, such as in-ground pools Make a list of Homes After you’ve made this list, search online and find several representative homes.

If you have time and you’re fairly local, drive by a few of them to get a feel for the neighborhoods. Write down your impressions. This will help you understand home much of a home’s description is fact versus fluff, and give your real estate agent a good idea of your likes and dislikes.
Find a Realtor® Most home buyers select a licensed Realtor® to represent them, and they are almost always happy they did. Realtors® are real estate agents who subscribe to a strict code of ethics and are acknowledged experts in the field. A Realtor® knows your local market, and can help you through every step of the home buying process, from finding your dream home to negotiating the best possible terms, explaining everything along the way.

Bring a Camera Your Realtor® will take you on a number of open houses, and your opinions can be lost in the blur. To keep things straight, bring a digital camera on your trips. Take a picture of the street number of each property, then photograph each room during your walk-through. Photograph a house even if you decide it’s wrong for you—there may be furnishings, construction tips, or other features you notice later that could come in handy when you find the right home.

Friday, January 20, 2012

Closing Costs

Closing costs are the actual expenses that the lender incurs in the origination of a new home loan. Some of the costs are related to your loan application, such as the expense of a credit report on all applicants. Other fees are related to the house itself, such as the property appraisal. Others are payment to the lender for processing your application, such as the loan origination fee. Unless the seller offers to pay them for you, these expenses are charged to the buyer and often runs between 2 and 3 percent of the amount being borrowed. Because different states have different fees and taxes that are a part of these costs, it's impossible to generalize nationwide. Common closing costs can include processing and underwriting fee, mortgage insurance premium, appraisal fee, the cost of a credit report, tax service fee, application, commitment, wire transfer fee, etc. Escrow accounts are often required for many loans for homeowners insurance, real estate taxes, and homeowners associations and require cash deposits at closing. After your initial meeting with a mortgage professional, you should receive a Good Faith Estimate that includes all the estimated costs to close your loan.