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Why Every Home Buyer Should Use A Buyers Guide
How can a buyer’s agent help me?A buyer’s agent usually owes certain duties to their home buyer, such as care, confidentiality, full disclosure and accurate accounting. These responsibilities are defined by state laws, the REALTORS Code Of Ethics, general principles of agency and court decisions.
That’s the legal definition. But what does a buyer’s agent actually do for the home buyer? Like other agents, a buyer’s agent will show the buyer available homes, point out the property’s features, provide financing information and submit the offer to purchase
But that’s not all. As your representative, a buyer’s agent will share valuable and essential information with you if the agent knows it, such as:
Whether the seller would accept a lower price;
The seller’s reason for selling and timetable;
How long the home has been on the market;
Previous offers and counteroffers for the property;
Strengths and weaknesses of the property.
Most important for many buyers, you can ask a buyer’s agent for advice and assistance in setting your offering price and structuring the other terns of your offer. What’s more, you’ll have peace of mind knowing an advocate is working on your behalf to help you buy at the best possible terms. A buyer’s agent goal is to help you buy the home you want – and buy it at the right price. / Who need a Buyer’s Agent?
If you want to make sure you buy smart, you need a buyer’s agent. If you’re a first-time home buyer, if you’re relocating or unfamiliar with the local real estate market, if you’re buying for investment and want negotiating help, or if you need purchase anonymously, you’ll be best served by a buyer’s agent who puts your interest first.
Also, if the real estate professional helping you find a home is a relative close friend or business associate or you previously were the agent’s home-selling client, chances are you’d expect the agent to represent your interest and should establish a buyer agency relationship. Or, if you just want to get the best value in a property and an agent, you owe it to yourself to be the most knowledgeable buyer you can be.
What Can A Seller Agent Do To Help Me Buy?
Without a buyer’s agent, you’re really on your own. Keep in mind, the seller’s agent is actually working for the seller and is the seller’s legal representative. Yes, a seller’s agent can offer buyers some services, including a diligent search to find the right home, an explanation of available financing, calculation of monthly payments, estimation of settlement costs, presentation of your offer to buy.
What a seller’s agent cannot do is disclose information not in the best interest of the seller such as an opinion of the home’s real value or what price and terms the seller would accept.
By law, the seller’s agent must negotiate on behalf of the seller and may not withhold from the seller information that could strengthen their bargaining position. That means you, as a buyer, should be careful not to disclose to the seller’s agent any financial or personal information that could be used against you.
Buying a home is a time of enormous possibilities and intense preparation. Doing some preliminary planning before you begin your home search will make the entire process more manageable and less overwhelming. S part of your initial game plan, you should:
Fine-tune your credit rating;
Explore mortgage pre-qualification and pre-approval;
Become an educated buyer; and
Make a wish list to learn what you need, want and don’t want in a new home.
Check your Credit Rating
Even if you’re sure you have excellent credit, it’s wise to double-check at the outset. REALTOR.COM makes ordering a cop of your credit report easy. Straightening out any errors or disputed items now will avoid troublesome holdups down the road when you’re waiting for mortgage approval
You may see disputed items, in addition to errors caused by a faulty social security number, a name similar to yours, or a court ordered judgment you paid off that hasn’t been cleared from the public records. If such items appear, write a letter to the appropriate credit bureau. Credit bureaus are required to help you straighten things out in a reasonable time (usually 30 days).
TIP: Make sure that any outdated derogatory entries are deleted from your credit file. Diverse credit information is not supposed to be reported or included on your credit report after seven years (except bankruptcy information, which can be reported u to ten years).
TIP: Officially cancel inactive credit cards. If you have an inactive credit card with a $5000 limit, even though you owe nothing on it, some mortgage lenders will consider that a potential future debt. Too many inactive credit cards with significant credit limits could keep you from obtaining a mortgage loan. Don’t just cut up your extra cards; officially cancel them, and do it now so there will be time for the news to reach the credit bureaus.
Buying a home is a time of enormous possibilities and intense preparation. Doing some preliminary planning / TIP: Hold off on making any major credit card or car purchase while you’re waiting to apply for a mortgage. Monthly payments you’re obligated to pay will be counted against you, and reduce the amount of the mortgage loan you’ll be offered. Even if you’ve been pre0approved for a mortgage, that approval is subject to last-minute evaluation of your financial situation, and a spending spree for appliances, furniture and other goodies intended for your new home may wreck your chances for buying it.
Pre-qualification and Pre-approval on a Mortgage
Any reputable real estate broker will “pre-qualify” you for a mortgage before you start house-hunting. This process includes analyzing your income, assets and present debt to estimate what you may be able o afford on a hose purchase. Mortgage brokers or a lender’s own mortgage counselors can also calculate the same sort of informal estimate for you.
Obtaining mortgage “pre-approval” is another thing entirely. It means that you have in hand a lender’s written commitment to put together a loan for you (subject only t the particular house you want to buy passing the lender’s appraisal).
Pre-approval makes you strong buyer, welcome by sellers. With most other purchasers, sellers must tie the house up on a contract while waiting to see if the would be buyer can really obtain financing.
The down side is that you must pay application fees to cover the lender’s paperwork in verifying your employment, income, assets, debts and credit rating. If you later decide not to use that particular lender, you’d have to start all over again everywhere – with no rebate.
Pre-approval will also speed up the entire mortgage procedure once you’ve found the house you want. He only remaining question will be whether the house will “appraise” for enough to warrant the loan.
Research Neighborhoods, Read Ads and Visit Open Houses
If you were changing cities, the standard advice used to be to subscribe to the local newspaper in the new town and start reading local news and classified ads to get a feeling for different neighborhoods. Although that’s still a good idea, you can simplify and streamline the house hunting process by using the Internet to Find a Home, Find a REALTOR®, Find a Neighborhood, and Find Resources.
For local moves, you have the advantage of driving around neighborhoods that interest you and looking at lawn signs. Particularly on weekends, you will see, “Open House” postings. Don’t hesitate to walk in, even if you’re not ready to buy yet. Visiting open houses is an excellent way to familiarize yourself with the market and judge various real estate agents you may meet along the way, and it won’t put you under obligation to anyone.
Your Wish List
Making sure you end up with the right home involves figuring out exactly what features you need want and don’t want in a home. Before starting your search, you should make a “wish list” to decide which features are absolutely essential, which are nice “extras” if you happened to find them, and which are completely undesired.
The more specific you can be about what you’re looking for from the outset, the more effective your home search will be. Also keep in mind, that in the end, every home purchase is a compromise.
Create you own personalized Wish List and when you’re finished, print it, fill it out, and take it with you to your real estate agent.
You can also begin assessing your finances to see exactly how much house you can afford… / Advantages of Home Ownership
- Leveraging: The ability to only invest 20 percent, 10 percent or less and still control 100% of the property. If the property increases in value the owner reaps the full value of the growth in equity.
- Tax Benefits of Ownership: The State and Federal Governments have encouraged the ownership of principal residences by providing income tax deductions for the payment of mortgage interest ad property taxes. These benefits often reduce the net out-of-pocket cost of home ownership below that of renting. Your REALTOR® should be able to illustrate the tax benefits of home ownership for you.
- Equity Build-Up: Each mortgage payment made consist of principal and interest components. While during the early years of ownership the principal accumulation is relatively small it does increase with every payment. If the loan is paid for its full term the original amount of the loan plus appreciation, if any, will form the owner’s equity in the property. This money can be used to leverage into a larger property.
A.CREDIT
- Acquire a credit report from the three Credit Bureaus.
- Any unpaid debts in the “Public Records” section of your credit report, such as collections, judgments, liens and garnishments must be paid in full.
- After satisfying delinquent credit, the buyer should re-establish credit to strengthen his or her credit history:
- Some mortgage financing programs will not allow the buyer to purchase until one year after the delinquent debt has been paid in full
- SAVINGS
- The buyers, saving are required for application, fees, hazard insurance and settlement fees. However, interest must be paid on the borrowed money.
- Some financing programs allow the buyer to finance most of the set fees. However, interest must be paid on the borrowed money.
- INCOME STABILITY
- A lender requires that the applicant be employed at least two consecutive years before he or she applies for a mortgage loan.
- A lender will consider additional income from a part-time job if the applicant has worked for at least six months.
- Six months of unemployment constitutes a break in employment stability.
- AFFORDABILITY
- If the Buyer’s income is low, he or she can only afford a low sale price.
- Long-term debts decrease affordability.
- As interest rates decline, affordability is increased. However, as these rates increase, affordability is decreased. With this in mind, the buyer should secure financing that offers the lowest interest rate.
FIVE THINGS BUYERS SHOULD LOOK FOR IN AN AGENT
- YOU WNT AN AGENT WHO KNOW TH ECOMMUNITY.
Choose an agent who really knows the neighborhoods, and can point out the schools, parks, playgrounds, shops and more.
- You Want An Agent Who Can Show You More Of The Houses Available Throughout The Area.
Choose an agent who subscribes to at least one Multiple Listing Services (MLS). This means you’ll have access to information on about 90% of all homes for sale in the community.
- You want an agent who can provide all the services you need.
Choose an agent who have the products, services and know how to find the home that’s right for you… and market your present home for a faster more profitable sale.
- You want an agent who can offer you protection against unexpected repair bills in our new home.
The last thing a new homeowner wants to worry about is spending cash to cover a major repair expense. Choose an agent who can offer you warranty protection on our new home.
- You want an agent who listens to your needs…and responds to you, “Just the kind of help you’d expect from a friend.”
Choose an agent who really listens, and shows as much interest in your satisfaction as in making the transaction. This commitment comes naturally to Irena and Selma, Real Estate Specialists. We often say the most rewarding aspect of our work is the chance to help people. That means we’ll listen carefully to you, and then work hard to help you find the home that matches all your needs and your dreams.
THE HOME INSPECTION
FIRST TIME BUYER’S GUIDE
Your home inspection company should, at a minimum, provide the flowing services
It is not enough to rely solely on an appraisal inspection or home warranty policy.
ROOF
The company should have liability insurance coverage for inspectors to go up on the roof to examine the following
* Roof surfaces* roof ventilation* gutters
* Chimneys* downspout
ELECTRICAL
Inspect circuit and fuse boxes to determine the following:
If there are over-fused circuits
Double-tapped circuits
Underground circuits
Test all electrical outlets for proper grounding; detect non-functional outlets and false outlets (wall mounted extension cords/plates); look for exposed wiring, and open junction boxes; note any potential code violations.
PLUMBING
Determine the type of water pipes in the home i.e.
Galvanized
Cooper
Galvanized and cooper
The inspector should also note any occurrences of PVC (plastic) pipes that may be subject to recent manufacturer recalls, and the condition of the sewer line (cracks, leaks, etc.).
PROPERTY GRADING
Determine if the property is sloped sufficiently to allow proper water drainage away from the property’s foundation. Poor grading can contribute to a wet basement.
FOUNDATION
Examine exterior foundation for any major cracks and/or damaged due to water penetration.
HEATING AND COOLING UNITS
The inspector should be familiar with various types of heating and cooling systems. The heating systems should be thoroughly tested to ensure that it is operational to include examining the flame/pilot light. The cooling system should be tested to ensure that it is operational. However, the outside temperature may restrict the testing of the unit. The hot water hearer should be tested and flame examined.
THE FINAL WALK THRU INSPECTION
Who is going to remove the boat?
Before the closing takes place, it is customary that the buyer makes a final walk thru inspection of the property. Is the property in the same condition as when the buyer initially saw the home? Is the yard the same? These questions should be answered prior to the actual day of closing, but often times it is not possible, as the seller may be moving out the day of closing, and not able to get everything done at the time of inspection. What happens when the buyer makes the final inspection and man items found in an inspection report have not been corrected or the old boat in the yard has still not been removed? Who is responsible for making these corrections and should the closing be held up?
The first answer that would come to Ind would be to delay the closing until the seller has repaired or cleaned up the property, including removing a boat or any other piece of equipment left in the backyard or anywhere in the house. This may often not be possible for several reasons. The buyer may be obtaining a new mortgage n the property and the interest rate on the buyer’s loan may have been “located in” by the lender or the mortgage broker. This locked in interest rate ma expire on the day of closing. I not closed on time, the buyers would have to go back to the lender to renegotiate a new interest rate and they would generally be charged a “redraw” fee few new loan documents. The seller may have purchased a new property, and he may need the sale proceeds from his previous house to buy his new home, so a delay on the sale would delay his new home sale. The best solution is to try and come up with a compromise at the closing table.