10 Ways to Prepare for Homeownership
Date: Friday November 14, 2008Posted in: real estate, Realtor, real estate buyers, buying a home, homeownership, Morgan Hill Real Estate
1. Decide what you can afford. Generally, you can afford a home equal in value to between two and three times your gross income.
2. Develop your home wish list. Then, prioritize the features on your list.
3. Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account items such as schools, recreational facilities, area expansion plans, and safety.
4. Start saving. Do you have enough money saved to qualify for a mortgage and cover your down payment? Ideally, you should have 20 percent of the purchase price saved as a down payment. Also, don’t forget to factor in closing costs. Closing costs — including taxes, attorney’s fee, and transfer fees — average between 2 and 7 percent of the home price.
5. Get your credit in order. Obtain a copy of your credit report to make sure it is accurate and to correct any errors immediately. A credit report provides a history of your credit, bad debts, and any late payments.
6. Determine your mortgage qualifications. How large of mortgage do you qualify for? Also, explore different loan options — such as 30-year or 15-year fixed mortgages or ARMs — and decide what’s best for you.
7. Get preapproved. Organize all the documentation a lender will need to preapprove you for a loan. You might need W-2 forms, copies of at least one pay stub, account numbers, and copies of two to four months of bank or credit union statements.
8. Weigh other sources of help with a down payment. Do you qualify for any special mortgage or down payment assistance programs? Check with your state and local government on down payment assistance programs for first-time buyers. Or, if you have an IRA account, you can use the money you’ve saved to buy your fist home without paying a penalty for early withdrawal.
9. Calculate the costs of homeownership. This should include property taxes, insurance, maintenance and utilities, and association fees, if applicable.
10. Contact a REALTOR®. Find an experienced REALTOR® who can help guide you through the process.
What to Leave for the Buyers
Date: Saturday November 8, 2008Posted in: real estate, Realtor, real estate buyers, buying a home, homeownership, close of escrow, home selling
When I represent sellers in a transaction, they often ask me what they need to leave with the house. Unless negotiated otherwise, all fixtures attached to the house must remain, as according to contract. Most Realtors have a story about the dining room chandelier “accidentally” disappearing or the $1000 custom copper kitchen faucet that is replaced with a shiny new stainless steel faucet from Home Depot just before close of escrow. Obvious no-nos.
Beyond this, I always hope that the sellers and buyers can briefly meet at the property shortly before close of escrow. I have attended many of these meetings with my clients and it is very advantageous for the buyers to hear all of the seller’s tips regarding the care of the home and the property. Sellers like these meetings also because if they have a prize rose bush, for example, that needs special care, this is an opportunity to give the special instructions to the buyers. Then I recommend that the sellers never return to the property just in case that rose bush is replaced with a built-on barbecue….
I always give my buyers the necessary utility and media numbers they need to get everything up and running right away. But in addition to this it’s nice if the sellers can leave the following for the buyers of their property:
- Owner’s manuals and warranties for appliances left in the house.
- Garage door opener.
- All sets of house and mailbox keys.
- Code to the security alarm and phone number of the monitoring service if not discontinued.
- Any personal property that the seller and buyer agree on such as paint, spare tiles, etc. that the buyer may need in the future.
Seven Reasons to Own Your Home
Date: Tuesday October 28, 2008Posted in: real estate, home, wealth, buying a home, tax benefits, homeownership
1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, as well as some of the costs involved in buying your home.
2. Appreciation. Real estate has long-term, stable growth in value. While year-to-year fluctuations are normal, median existing-home sale prices have increased on average 6.5 percent each year from 1972 through 2005, and increased 88.5 percent over the last 10 years, according to the NATIONAL ASSOCIATION OF REALTORS®. In addition, the number of U.S. households is expected to rise 15 percent over the next decade, creating continued high demand for housing.
3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.
4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.
5. Predictability. Unlike rent, your fixed-mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will increase.
6. Freedom. The home is yours. You can decorate any way you want and benefit from your investment for as long as you own the home.
7. Stability. Remaining in one neighborhood for several years gives you a chance to participate in community activities, lets you and your family establish lasting friendships, and offers your children the benefit of educational continuity. Online resources: To calculate whether buying is the best financial option for you, use the “Buy vs. Rent” calculator at http://www.ginniemae.gov/.
Purchasing a Home? Why Use a Realtor?
Date: Saturday August 16, 2008Posted in: real estate market, Realtor, housing market, buying a home
The reasons for using a real estate agent are both many and very significant. They include, but are not limited to the following:
1. The seller of the home will have a qualified Realtor looking out for their best interests. They do not pay their Realtor to look out for you. That is my job.
2. Real estate is all that I do. I am constantly monitoring the market and actively looking on your behalf daily. Through my networking, I often have information on new listings before they hit the market.
3. As a Realtor, I have access to information that the public often finds difficult to obtain. I can research any home on the market before my client writes an offer to ensure that my client isn’t paying too much.
4. Negotiating isn’t much fun for the average home buyer. This is one of my strengths and I love to do it. I negotiate on property all the time when an average home buyer will only negotiate on a few homes throughout their entire lives. I save my clients money.
5. Besides price, there are other terms in the contract that also require negotiation. I am completely familiar with the real estate contracts in use and know the ins and outs of negotiating the various terms.
6. Contracts can sometimes seem overwhelming and confusing. I work with these contracts on a daily basis. I will assist you with understanding the components of the contract and ensure that you are protected.
7. There are many other details relating to the purchase of a home to deal with. I align myself with other professional service providers to make the purchase easy. I have great alliances with mortgage brokers, title and escrow officers, and home inspectors. You don’t have to worry about much of anything…I do it for you.
8. My services don’t cost you anything. I work on your behalf for free!
