Buyer – Page 3

What To Look For During a Walk Through

June 23, 2015 By Chris

Looking at houses that could potentially be your next home can be a lot of fun. It’s almost voyeuristic…you get full access to a stranger’s home. You can get lots of decorating ideas or peak into the owner’s lives through pictures and other items around the house. But you’re viewing these houses for a reason…to find one to call your own. Use our checklist for what to look for during a walk through.

Tip: assign a point value to each item depending on your priorities and the condition of the item, add the score up at the end of each walkthrough and use the score to help you decide which house meets your needs and wants.

Exterior

Roof
Siding/brick/stucco
Windows
Doors
Landscaping
Fencing
Sidewalks/driveway
Deck/patio
Pool
Garage/shed

Living Areas

Carpet/hardwood/tile
Windows
Doors
Walls
Molding and baseboards
Lighting (natural & electric)
Climate systems (heat & AC)
Closets & storage
Electrical outlets

Kitchen

Appliances
Fixtures
Cabinets
Pantry
Countertops
Flooring
Eat-in
Layout
Plumbing
Electrical outlets
Electric or gas hookups

Bedrooms

Number
Carpet/hardwood
Windows
Doors
Windows
Molding and baseboards
Lighting (natural & electric)
Closets
Electrical outlets
Size

Bathrooms

Number
Flooring
Window(s)
Door
Fixtures
Tub
Toilet
Mirror
Countertops
Storage
Shower stall
Lighting (electric & natural)
Electrical outlets

Miscellaneous

Privacy
Accessibility to transportation
Crime rate
School rating
Traffic
Parking
Neighborhood offerings (parks, playgrounds, rec centers)
Neighborhood condition (well maintained homes, low vacancy)

What Is Radon? And Should I Be Worried?

June 2, 2015 By Chris

Over the course of buying or a selling a home, you may hear about radon. Many people may ask “What is radon?” and “What’s the concern?” Radon is a radioactive gas that is virtually undetectable by our five senses. It’s the by-product of radioactive decaying uranium found naturally in rock, soil, and water. As the uranium breaks down it releases radon gas which rises through the ground into the air. It can also be dissolved into water.

Should I be concerned?

According to the Surgeon General, radon is the second leading cause of lung cancer among Americans, just behind smoking. Breathing radon gas and in some cases drinking radon in water over an extended period of time increases a person’s risk for health complications. The EPA has stated that any exposure over 4pCi/L is considered high and should be avoided. Uranium can be found in the ground in all fifty states and therefore so can radon. The EPA has classified the country into three zones depending on the levels of radon found in the area. Florida is classified mostly in zone 2 with a few counties listed in the higher zone 3. Radon gas can enter a home through cracks in the foundation, windows, utility fittings, and sump pumps.

What should homeowners do?

Homeowners and buyers should both educate themselves on radon. If a homeowner is considering selling their home, they can have the home tested prior to listing. Sellers should be aware that any radon testing and their results need to be disclosed at the time of listing. If a person is considering purchasing a home, a radon test can be requested as part of the home inspection. If the results come back 4 pCi/L or higher the EPA recommends that a plan to mitigate the radon be agreed upon. There are systems that can be installed and/or repairs made to the home to reduce the amount of radon entering a home.

While the EPA and Surgeon General have acknowledged radon is a serious issue, it doesn’t spell disaster for a home’s sale. Radon can be found in all types of homes, old and new. Mitigation systems and home repairs and modifications can reduce the levels in a home making it safe for occupation and an attractive property to market.

Prepare For Home Ownership

December 16, 2014 By Chris

It’s part of the American dream to own your own home but it may not always appear so simple to obtain that goal. Like any big undertaking, it takes planning and preparation to be successful. If home ownership is your goal for the new year, we have the steps you need to take that will help you prepare for that dream to become a reality.

Fine tune your credit. Analyze your credit report from each of the three major bureaus (TransUnion, Equifax, and Experian) for accuracy and areas that need resolution. If you have judgments or liens against your name, pay them in full or establish a payment plan with the creditor before you seek out a mortgage. If you find a error on your credit report, open disputes with the bureau(s) reporting the error and follow up to make sure the error is resolved. On average, lenders will want to see a credit score of at least 650. If your score is below this, make an extra effort to pay down outstanding debt on time, focusing on paying off debt with the highest interest rate first and close lines of credit you don’t use.
Determine how much house you can afford. Most buyers will need to finance their home purchase. A listing price can’t tell you everything you need to know about what you can afford. Depending on how much money you put down will affect how much money you will need to finance. You should evaluate your current monthly expenses (car payment, credit cards, student loans), then add in the monthly housing payment you want, and finally divide by your monthly gross income. (Example: $300 car + $250 credit card + $200 student loan + $1600 mortgage = $2350 / $5500 = 0.427 or 42.7%) The golden number for most lenders is 43%. This reflects the maximum debt-to-income ratio they’re willing lend to. If the number is at or below 43% you’ve found how much you can afford; if not you’ll need to readjust the amount of money you can afford to finance.
Start saving and continuing saving. Purchasing a home is not an inexpensive feat. In addition to the down payment, you’ll also need funds to pay closing costs. There are a multitude of small expenses, such as hiring movers or a rental truck and purchasing new furnishings, that add up immediately after a home purchase. Having a healthy savings account will help ease the burden on your daily living funds. You should make saving a priority by employing the “pay yourself first” rule and put a predetermined amount of money into savings every paycheck before any other bills are paid. If you’ve paid off a debt, such as a credit card, take the money you would have paid the credit card company and pay your savings account instead.
Play house. You’ve calculated out how much you can afford for a monthly mortgage payment but before you meet with a Realtor you should put your plans into action and live on the budget you’ve determined for three to four months. Doing so will allow you to get comfortable with the debt you’re about to undertake or show you where your budget needs adjusting before it’s too late.

Once you’ve prepared your financial house for an actual house, research and contact a lender to pre-qualify you and then begin working with a licensed Realtor who will help you find the house that will make all your preparations pay off.

Are You Ready to Buy a Home?

November 11, 2014 By Chris

Buying your first home will be one of the most memorable moments of your life. Before your Realtor ever shows you a listing, you should prepare yourself to be the best buyer and future home owner possible.

What’s your savings bottom line?

Aside from the necessary down payment, do you have a healthy savings account balance? Closing costs often surprise parties on both sides of the table. Aside from actual closing costs and down payments, do you have an emergency fund you can tap should the roof spring a leak or one of the appliances needs to be replaced sooner rather than later?

Find your realistic price range.

Mortgage pre-approval and a realistic price range can be two very different things. Just because you can pre-qualify for a mortgage of $500,000 doesn’t mean you can afford a home with the same asking price. Ruthlessly examine your budget to see how much of a mortgage payment and associated monthly home costs you can comfortably afford. Account for every cent you’ll spend over the course of a month and ensure you’ll have money leftover to do things like buying groceries and putting gas in your car.

Are you pre-approved?

Speaking of mortgage pre-approval, where is yours? A pre-approval letter will tell you the maximum amount of money a mortgage company is willing to lend you in order to buy a home. Almost every single seller is going to want a mortgage pre-approval before considering an offer. If you don’t have a pre-approval, why not? A pre-approval doesn’t lock in a mortgage rate, term, or note. If you’re unable to obtain a pre-approval for a mortgage company you should examine your financial health. Correct any errors on your credit report, work to reduce your debt to income ratio, and ensure you’re paying all of your debts on time. If you have liens or personal judgments, you will need to resolve these issues as soon as possible.

Know what you want in a home.

This can be a big hang up for many first time home buyers. Do you need multiple bedrooms or want a garage or a home located in a certain school district? Write a list of every feature you could possibly want in a home then prioritize those desires. Having a firm idea of what you really need versus what you want in a home will help your Realtor narrow down potential properties and save you both time.

How stable is your life?

Buying a home is an investment in not only money but time. The general rule in real estate is to expect to wait five to seven years before you recuperate the closing costs in the form of home equity, longer for a sizable return on investment. If your job security is questionable, you may want to hold off on your purchase. You may want to consider the same if you relocate often for your career. While the market is recovering, you’ll be hard pressed to find a profit in “flipping” a home that you could have seen seven and eight years ago.

Reviewing and addressing these topics before you start the search for your future home will make you a strong buyer when you decide the time is right for you.

Breakdown: Closing Costs Explained

September 16, 2014 By Chris

The day has come…it’s time to close on your home. It doesn’t matter if you’re the Seller or the Buyer; a real estate closing isn’t cheap. When you sit down at the closing table you’ll review and be asked to sign a HUD-1 Settlement Statement. This document itemizes every single charge and fee involved in the transaction and identifies who is paying for what. It can be overwhelming to see all those numbers and line item description. Below we’ve broken down the most common closing costs and fees you’ll see.

Commission (Seller)

Realtors earn their pay only when a property transfers owners at settlement. The amount of commission is calculated based on a rate previously negotiated by the Seller when the property was listed (usually 6% of the sales price).

Mortgage Fees (Buyer)

Mortgage fees vary widely from lender to lender. The most common charges you’ll see are “appraisal fee”, “credit report”, “processing fee”, and “origination fee or charge”.

In addition to these fees, there are certain monies the lender will require up front including the daily interest due on the loan from the day of closing to the end of the month, mortgage insurance premium for one year (if your down payment is less than 20% of the mortgage), homeowner’s and flood insurance premiums for one year and property taxes. If your mortgage includes an escrow account for taxes and insurance, the lender will require you make deposits into the escrow account at closing.

Title Insurance (Seller & Buyer)

Next to the mortgage, title insurance is such a crucial part of a real estate transaction. Title insurance protects the buyer’s ownership position (and the mortgage company’s lien position) in the chain of title (ownership). If a previous owner was to come back and try to claim the property was still theirs or a prior mortgage company claims their lien was not paid in full, the title insurance underwriter would defend, and in some instances pay out, on any loss you may experience.

It takes a lot of work to issue a clear title at closing that’s why you’ll see charges on your settlement statement labeled “owner’s title policy”, “lender’s policy”, “title exam/abstract fee” and “settlement fee”. Additional fees can be added if the property in located in a Condominium or Planned Unit Development and additional endorsements are needed for the insurance policy.

Recording Fees (Seller & Buyer)

After the Sellers have signed the Deed and the Buyers have signed the Mortgage, the title company will send the documents to the County Clerk’s office to have the documents recorded in the public record. This helps protect the integrity of the chain of title. Each County Clerk sets their own fee schedules so fees can vary county to county.

In addition to recording fees, the State’s Department of Revenue levies a Documentary Stamp Tax on Deeds and Mortgages, among other documents. The rate for Deeds is seventy cents ($0.70) per every $100 of the transaction and thirty-five cents ($0.35) per every $100 of the value of the mortgage. The title company is responsible for collecting these monies at closing and delivering them to the County Clerk at the time of recording. The Clerk will then submit the monies to the Department of Revenue.

Miscellaneous Fees (Seller & Buyer)

The title company and any third party vendors involved in the sale of the property will want to be reimbursed for charges they advanced to get the transaction to the table. These charges can include overnight fees, tax research service fees, survey, wire fees, notary fees, and flood zone research.

Each transaction is different but these are the most common items you will see on the settlement statement. If you have a question about a fee or charge, speak up and ask for an explanation before you sign.

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