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First Time Home Buyer’s Checklist
Make Sure You’re (Really) Ready
– Can you see yourself living in the same town for
the next 5 to 10 years?
– Be prepared for the extra work that comes with
homeownership.
Create Your Home Wish List
– Check out different neighborhoods, home styles to
get a feel for what’s most important.
Figure Out What You Can Afford
– Determine the down payment amount.
– Calculate how much you’ll need in reserves for
maintenance and repair costs.
Gather Necessary Documents
– Last Tax returns and proof of employment.
– Bank and Investment statements.
Research Mortgages
– Compare fees charged and shop for loans.
– Get a pre-approval letter from the lender. Many
Sellers will not consider and offer without one.
Assemble Your Team
– Find a real estate agent you trust and
communicate well with.
– Ask a friend or family member for second
opinions as you go through the buying process.
COMPARATIVE MARKET ANALYSIS
A Comparative Market Analysis is how we arrive at a recommended listing price for your home. It is both an art and a science.
THE SCIENCE
Find and analyze the comparable neighborhood homes by number of bedrooms, bathrooms, square footage, lot size and an untold number of additional features. Using the information on how much those homes listed and sold for, can determine your home’s fair market value.
THE ART
Decisions must be made about how to adjust the value of your property as it compared to other homes. EXAMPLE: if an active listing as been on the market for over 30 days, it’s safe to assume it’s overpriced for the condition or features. On the other hand if the property is the only one on the block with a view, its value goes up, compared to others.
The Comparative Market Analysis (CMA) requires technical experience, neighborhood knowledge, and critical thinking. A poorly executed CMA might compare your home to properties that are not similar enough, or it could draw the wrong conclusion from incorrect data.
5 Criteria for Pricing a Home
When you put your home up for sale, one of the best ways to determine the asking price is to look at comparable sales. There’s rarely a perfect apples-to-apples comparison, so a pricing decision often relies on comparisons to several recent sales in the area. Here are five criteria to look for in a sales comparison.
Location: Homes in the same neighborhood typically follow the same market trends. Comparing your home to another in the same neighborhood is a good start, but comparing it to homes on the same street or block is even better.
Date of sale: It varies by location, but housing markets can see a ton of fluctuation in a short time period. It‘s best to use the most recent sales data available.
Home build: Look for homes with similar architectural styles, numbers of bathrooms and bedrooms, square footage, and other basics.
Features and upgrades: Remodeled bathrooms and kitchens can raise a home’s price, and so can less flashy upgrades like a new roof or HVAC system. Be sure to look for similar bells and whistles.
Sale types: Homes that are sold as short sales or foreclosures are often in distress or sold at a lower price than they’d receive from a more typical sale. These homes are not as useful for comparisons.
Top Tips for House Hunting Online
Hunting for a new home online is a great place to start your search, but it should not be your end all be all. Good listing agents are excellent at highlighting the best features of the home, but keep in mind there may be more than meets the eye. To make the most of your time and efforts and gather a well-rounded picture of home listings online, keep the following three things in mind.
- Stay up to date. When you start your search, make sure you find a site that pulls up-to-date listings directly from the multiple listing service (MLS) where real estate agents actively post their most current homes for sale. Many online resources update less often or fail to remove listings that are off the market, making it more difficult to sort through the clutter.
- Pictures can be deceiving. Real estate photographers are experts at showing a home in the best possible light. Many use tools and strategies to boost appeal, such as a fisheye lens to make areas look larger and creative editing to make colors and textures really pop. But, often listings will not contain photos of unappealing parts of the home, like small closets or outdated bathrooms.
- See it to believe it. Once you find what appears to be your dream home online, call up your real estate agent and schedule a showing. You want to take the opportunity to vet the home in person and explore every part of it before beginning the offer process. Your real estate agent will help you cover all your bases and will ask questions you may not have thought of.
5 Negotiating Tactics That Kill a Sale
Negotiation is a subtle art in real estate, but skilled negotiators can usually find some common ground that satisfies all parties. On the other hand, using the wrong negotiation tactics can sink a deal pretty quickly. Here are some negotiation tactics buyers (and real estate professionals) should avoid:
- Lowball offers: Going far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept, and if you’re not even approaching the low end of that range, they won’t even consider the offer.
- Incremental negotiations: Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities.
- “Take it or leave it”: Try not to draw a line in the sand with your initial offer. The seller can get defensive and consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it.
- Nitpicking after inspection: Obviously if inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate.
- Asking for more, more, more: Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to build up resentment and think that you’re being greedy.
3 Steps to Effective Decluttering
Spring cleaning is a ritual that most homeowners find themselves tasked with annually. While some people enjoy the activity, others find it tedious and difficult. When attempting to sell your home, you may be even more wary, as such daunting tasks can cause added anxiety and stress. Here are a few tips on how to help get rid of your stuff:
- Look For Support. Friends and family are often great motivators for getting rid of clutter. Think about asking other people’s opinions on what should stay and what should go. If your in the process of selling you home, ask your Realtor. They have experience helping people prepare their homes for prospective showings.
- professional Help May Be Necessary. Sometimes the task may be too much for the homeowners to handle. So enlisting the help of a professional organizer could go a long way to quickly prepare your home.
- Consider Your Options. When you are actually ready to declutter, the question becomes: where should all the stuff go? Here are a few options to think about.
- Sell. Some things you may want to sell, such as antiques or collectibles.
- Donate. Clothes and furniture that you don’t use anymore may be better suited for others in need.
- Store. Consider getting a storage unit off-site, for the things you’re unsure of getting rid of.
- Trash. Some items you have stored have no value or are damaged. Throwing them away is a quick way to create much needed space.
WHAT CLOSING COSTS ARE ALL ABOUT
SOME OF THE ITEMS ASSOCIATED WITH CLOSING COSTS ARE:
- Title Insurance Premium – Fee paid by an individual to ensure he has a marketable title or (in case of a lender) to ensure its lien position
- Real Estate Commission – Fee paid to a real estate company for services rendered in listing, showing, selling and consuming the transfer of property.
- Transfer and Assumption Charges – Fees charged by a lender to allow a new purchaser to assume an existing loan.
- Recording Fees – Fees assessed by a county recorder’s office for recording the documents of a real estate transaction.
- Loan Fees – Fees charged by a lender in connection with the processing of a new loan. These may include points, origination fee and credit report.
- Escrow Fees – Fees charged by a title and/or escrow company for services rendered in preparing documents necessary in the consummation of a real estate transaction.
- Additional Settlement – Taxes, home insurance, impounds and interest pro-ration, and termite inspection fees.
ALL FEES AND CHARGES WILL BE REVIEWED BY YOU BEFORE YOU SIGN DOCUMENTS AND TAKE OWNERSHIP.
Selling a Home – Frequently Asked Questions
WHY DO I HAVE TO PAY INTEREST ON MY LOAN PAYOFF PAST THE DATE OF CLOSING?
Your lender continues to charge interest until they receive funds in the amount necessary to payoff your loan in full. Sometimes that takes 1 to 2 business days from when they receive your funds.
WHEN DO I CANCEL MY HOMEOWNERS INSURANCE?
Do not cancel your homeowner’s insurance until escrow has closed.
WHAT IS A STATEMENT OF INFORMATION?
This is the form we use in order to distinguish you from others with similar names. After obtaining certain information, we can then identify the true buyer and seller in order to disregard any judgements, liens or other matters on public record that have nothing to do with our customers.
WHAT IS A DEED OF RECONVEYANCE?
The Deed of Reconveyance is a recorded document issued by your lender once you note is paid in full. This document is recorded in the county in which the property is located and shows that the Deed of Trust (mortgage) that has been recorded in your name has been released.
WHEN DO I GET A REFUND FROM MY PREVIOUS LENDER FOR MY IMPOUND ACCOUNT?
Normally, your lender will send any balance left in your impound or escrow account with them within 30 – 60 days once their loan has been paid in full. If you have any questions regarding you impound or escrow account please contact you lender.
HOME INSPECTIONS
Once a buyer has decided to make an offer on your home, it will usually be contingent upon a professional inspection of the entire property, including improvements. The home inspector looks beyond the cosmetics to make sure that the home’s general systems operate properly. The inspector will also look for large repairs that are needed and report on the condition of the home.
The standard home inspector’s report will review the conditions of the home’s heating and cooling systems; interior plumbing and electrical systems; the roof, attic and visible insulation; walls, ceilings, floors, windows and doors; foundation, basement and visible structure. The inspector will also look for cracks in cement walls, water stains that indicate leakage, and any indication of wood rot.
A home inspection also points out the positive aspects of a home, as well as the maintenance that will be necessary to keep it in good shape.
As the seller, you can also elect to hire an inspector to evaluate your home prior to putting it on the market. Many times an inspector can point our major or minor issues with your home that you may be unaware of and that may affect its value.
As your Windermere agent, I’m familiar with home inspection services and can provide you with a list of names from which to choose. Another good way to find a home inspector is to ask a friend, or perhaps a business acquaintance, who has had a home inspection and can recommend a home inspector they were satisfied with.
Remember, no home is perfect. If major problems are found, I will help you negotiate through the process.
Buying a Home – Frequently Asked Questions
WHAT IS THE DIFFERENCE BETWEEN PREQUALIFIED AND PREAPPROVED?
These terms refer to the status on the loan approval process. Prequalification is a determination of your probable ability to obtain a loan. preapproval means that the mortgage lender has already verified and approved your credit and income. Obtaining a preapproval will make your offer more attractive to the seller.
WHAT IS EARNEST MONEY?
Earnest money is a “good faith” deposit submitted with your offer and shows the seller you are serious about purchasing their home. Earnest money is generally a required part of the offer. There is no set amount that is required, but the amount sometimes make a difference in the negotiation process.
WHAT ARE CLOSING COSTS?
Closing cost are charges paid to various entities during the real estate transaction. They can include escrow fees, document preparation fees, and lender fees.
WHAT IS A POINT?
A point is equal to one percent of the loan principal. Some lenders charge points, in addition to interest and fees, at closing.
WHAT IS TITLE INSURANCE?
Title insurance protects against loss from any defects in the legal title, liens against the property or other adverse claims. The lender usually requires title insurance.
