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Hints for Buying a Home:
Buying a home is one of the biggest decisions you will probably make in your life. Below I will be able to provide you a wealth of information that should make this process a million times easier. If you have any questions about any of the information listed on this page feel free to contact me. Once you've taken the time to read through the wealth of home buying resources listed, feel free to search for
The Heart of the Matter
At times I feel torn between playing cupid (helping you find a house to fall in love with) and your accountant (finding a house that you can afford). Buying a home is both a matter of the heart and the pocketbook. One really does not outweigh the other. As your real estate agent, I'll help you find a happy balance between the two.
First, you'll benefit from the wealth of experience I bring successfully negotiating and closing deals in the Branson real estate market. I'll help you find the house and the neighborhood that will meet your emotional and financial needs for today and tomorrow.
Next, I'll do everything I can to take the stress out of your home buying experience. There are hundreds of details that go into each real estate transaction, let me handle those for you. And let me help you find a lender, inspector, appraiser and all the other service providers that make for a smooth and worry-free transaction.
Whether you are a first-time buyer or a "real estate veteran", I'm ready and happy to answer all your questions about the Branson market and the home-buying experience. You'll get honest answers, just ask.
Selling One, Buying Another
In a perfect world, you sell your old home and buy the new one on the same day. Given that things rarely turn out perfectly, here are some things to keep in mind as you negotiate the sale of one house with the purchase of another.
Time it right
Fall and spring are the best times for homes to move and you want to consider the season of the year when buying and selling. And if the closing dates aren’t going to coincide, a gap – rather than two mortgages – is the better. It’s easier and usually cheaper to find temporary housing than juggle two mortgages.
- Selling your home before buying a new one minimizes financial hazards. Even if you have to find temporary housing, it’s generally cheaper than two mortgages.
- Get an appraisal first thing off the bat. That way you’ll have a good idea how the sale of your home will effect your purchasing power on the new one. This will help keep you from over extending your mortgage abilities.
- Get pre-approved on a loan for the new home.
- Until most of your contingencies have been met, wait to put an offer on a new house. You don’t want to be left holding the bag, or in this case, the house.
- If you’re ready to accept an offer on your home, but haven’t found the right new home, negotiate a long escrow or a sale/lease back. This will give you more time to look for the new home. Otherwise, look for temporary housing.
It happens. You’re only thinking of buying, and suddenly the right home shows up. Now you have to sell your old home quickly. Here are some tips on making things work in your favor:
- Negotiating a long escrow on this side of the sale works, too. You can also make the purchase contingent on your house selling. This will work better in a slow market, but it’s worth a try in any market. You never know what may also work best for the seller of your new home.
- Try and schedule the closing date of your current home prior to the closing on your new home. Temporary housing is generally a better situation than two mortgages.
- Take a close look at what price you’re going to ask for your home. Make sure it’s realistic in the current market.
- When you get an acceptable offer, check the buyer’s credit history. You don’t want any surprises that are going to delay things. If you’ve closed on the new home, but haven’t sold the old one, consider renting it out, or taking it off the market until the next season (or until the market improves).
Same Market or Across Country
Generally, if you’re buying and selling in the same market, you can negotiate closing dates to work for you. But when you’re dealing with a cross country move, it’s a lot harder. A real estate professional really comes in handy at this point. Legal documents can be faxed or sent via overnight courier and your focus won’t be stretched to the limit. You may end up renting one home or the other, or have to consider a bridge loan. But with someone local in the market on your side, it will hopefully be less stressful.
Show Me the Money
Make sure you have a tight hold on, and a clear understanding of, your financial situation. Cash reserves are always helpful, but never more so than during the purchase of a home. Two to three months is the recommended reserve, but if you don’t have it, this is where the bridge loan comes in handy. Some lenders are more inclined to make a loan if it’s for the purchase of a home. If you’re a smart shopper/seller, you’ll accept an offer from someone who’s flexible about move-in dates. It can save you money in the long run. Too many moves with storage costs can quickly eat up any profit you may have made in the transaction.
Home Buyer Checklist
The Home Buyer Checklist identifies some of the important factors to consider when choosing a home. In addition to an affordable sales price, you will also want to be sure that the neighborhood and house meet the needs of your family.
Take this checklist along when you go shopping for your house. It will help you evaluate the neighborhoods and assess the availability and condition of various features of up to three homes in a side-by-side comparison. If you would like for me to send you a checklist feel free to contact me!
Tips on Reading an Inspection Report
When interviewing a home inspector, ask the inspector what type of report format he or she provides. There are many styles of reports used by property inspectors, including the checklist, computer generated using inspection programs, and the narrative style.
Some reports are delivered on site and some may take as long as 4 - 6 days for delivery. All reporting systems have pros and cons.
The most important issue with an inspection report is the descriptions given for each item or component. A report that indicates the condition as "Good", "Fair" or "Poor" without a detailed explanation is vague and can be easily misinterpreted. An example of a vague condition would be:
Kitchen Sink: Condition - Good, Fair, or Poor.
None of these descriptions gives the homeowner an idea what is wrong. Does the sink have a cosmetic problem? Does the home have a plumbing problem? A good report should supply you with descriptive information on the condition of the site and home. An example of a descriptive condition is:
Kitchen sink: Condition - Minor wear, heavy wear, damaged, rust stains, or chips in enamel finish. Recommend sealing sink at counter top.
As you can see, this narrative description includes a recommendation for repair. Narrative reports without recommendations for repairing deficient items may be difficult to comprehend, should your knowledge of construction be limited.
Take the time and become familiar with your report. Should the report have a legend, key, symbols or icons, read and understand them thoroughly. The more information provided about the site and home, the easier to understand the overall condition.
At the end of the inspection your inspector may provide a summary with a question and answer period. Use this opportunity to ask questions regarding terms or conditions that you may not be familiar with. A good inspector should be able to explain the answers to your questions. If for some reason a question cannot be answered at the time of the inspection, the inspector should research the question and obtain the answer for you. For instance, if the inspector's report states that the concrete foundation has common cracks, be sure to ask, "Why are they common?" The answer you should receive will be along these lines: common cracks are usually due to normal concrete curing and or shrinkage. The inspector's knowledge and experience is how the size and characteristics of the cracking is determined.
We recommend that you accompany your inspector through the entire inspection if possible. This helps you to understand the condition of the home and the details of the report.
Read the report completely and understand the condition of the home you are about to purchase. After all, it is most likely one of the largest investments you will ever make.
Before you reach the closing day, you will want to make a decision as to how you will "hold title" to the property. This decision has legal, tax and estate planning ramifications. Therefore, it may be prudent to consult an attorney or certified public accountant (CPA).
The following information is supplied for informational purposes and should not be relied upon as legal definitions.
* Sole Ownership
o A single individual who has not been legally married.
o An unmarried individual who was married and is now legally divorced.
o A married individual who wishes to acquire title in his or her name alone. At the time of closing, the spouse of the buyer will be required to specifically disclaim or relinquish his or her right, title and interest to the property.
* Living Trust
A living trust is created while an individual is alive and gives the individual control of the distribution of his or her estate. The individual transfers ownership of his or her property and assets into the trust.
Buying with Others
* Tenancy in Common
Enables each partner in the property to sell, lease or will to his/her heirs that share of the property belonging to him/her.
o Who can take title? Any number of individuals.
o Ownership Division: Any number of interests, equal or unequal.
o Who holds title? A separate legal title to his undivided interest is held by each co-owner.
o Possession: Equal right of possession.
* Joint Tenancy
Property owned by multiple individuals where if one of the owners dies, the remaining owners acquire the share of the deceased owner automatically.
o Who can take title? Any number of individuals.
o Ownership Division: Interests cannot be divided.
o Who holds title? There is only one title to the whole property.
o Possession: Equal right of possession.
* Community Property
Property owned equally between a husband and wife. Each must sign all agreements and documents of transfer.
o Who can take title? Only a husband and wife.
o Ownership Division: Interests are equal.
o Who holds title? Similar to title being in a partnership, title is held in "community."
o Possession: Equal right of possession.
Additional Ways to Hold Title
A corporation is a legal entity, created under state law, consisting of one or more shareholders but regarded under law as having essentially the same as those of an individual. The entity has continuous existence until it is dissolved according to legal procedures. Land owned by a corporation cannot be attached for personal debts or judgments rendered against any of its shareholders.
* A Partnership
A partnership is an association of two or more persons who can carry on business for profit. A partnership may hold title to real property in the name of the partnership with partners having an equal or an unequal interest in the property.
* A Trust
A trust is an arrangement whereby legal title to property is transferred by the grantor (or trustor) to a person called a trustee, to be held and managed by that person for the benefit of the people specified in the trust agreement, called beneficiaries.
What Closing Costs Can the Seller Pay?
Many buyers (particularly first-time buyers) are short the cash they need for the down payment and closing costs. One way to overcome this cash shortage is for the seller to pay a portion of the closing costs. How much the seller is allowed to contribute depends on the type of mortgage loan.
On a conventional loan, the seller can only pay non-recurring costs. These do not include pre-paid items or items to be paid in advance (such as mortgage insurance or hazard insurance). The seller's contribution is limited to the amount the buyer is putting down. If the buyer puts 10 percent or more down, the seller may contribute up to 6 percent. If the buyer puts less than 10 percent, the most the seller may contribute is 3 percent.
On a VA loan, the seller may pay all the closing costs (this is known as a "VA-No-No" - the buyer pays no down payment and no closing costs). Sellers who agree to pay the closing costs often put a ceiling on the amount they will pay.
On a FHA loan, the seller may pay all the closing costs. However, the buyer must make a minimum 3 percent investment in the property - whether as part of the closing costs, a down payment or pre-paid items. The 3 percent can be from the buyers own funds or from a family member's gift.
Asking the Seller to Pay a Portion or All of Closing Costs
The seller's willingness to contribute to closing costs is often driven by market conditions and the way in which the request is made to the seller.
As your real estate agent, I will help you prepare an offer that balances the purchase price and request for closing cost assistance with the dynamics of the current marketplace. For instance, in a seller's market we may increase the offered purchase price to offset the request for closing cost assistance.
Remember - When you ask the buyer to pay a portion or all of your closing costs, in essence you are financing the closing costs. This is because the seller's contribution is typically offset by a higher purchase price. And it is this higher purchase price that is financed with your mortgage loan.