Monday, July 21, 2014

Why use an agent to search for homes for you

Why use an agent to search for homes for you


I have helped countless first time home buyers find their home and many of the could have saved themselves plenty of hassle when first starting out. A lot of buyers start out using sites like Trulia or Zillow. Many people do not know this but those sites are third party vendors that purchases their information from databases like the one I belong to. A lot of the information and homes on that site are outdated, not even on the market, or have the wrong information wasting the valuable time of home buyers like you.

The easiest and best way to search for homes is to have an agent like myself run a search and set up a portal in the MLS for you. It is free of charge as is the services of any buyers agent. The MLS or Multiple Listing Service is the database that we as realtors list the homes we have for sale. It is the only place to get the most updated and accurate information about homes on the market.

What I do when I set up a portal in the MLS for you is get your name and email address. I then find out what criteria you are looking for in a house. Things like the area or school districts you want, square footage desired, number of bedrooms or bathrooms, whether you need a garage or basement, price range etc.... Once I have all that, I enter it into the database and the system will pull out EVERY home on the market that matches your search criteria and send it to your email in a easily viewable report with all the information on the homes that you need. It's by far the easiest way to search for homes. Saving you time and frustration.

The best part of it is you will also receive an email alert the minute a home that  matches your search criteria goes on the market giving you the upper hand in being able to see the property before many other home buyers. You will also receive a link to the portal where you can save the homes that you are interested in to easily view them later or delete the ones that you don't like.

Believe me when I tell you that is by far the simplest and simplest way to search for homes. If you are interested in getting set up with a free home search, just email me at jamesgrennay@remax.net or call me at 810-893-2288 and I will get you set up that day.

Getting a home inspection

Before you buy a home, one of the things you should do is to have the home checked out by a professional home inspector. Buying a home is expensive enough as it is - why would you choose to fork over another $200-$250 if you're not required to? In this report, we'll delve into what a home inspection can reveal and why you shouldn't forgo this optional procedure.



The Home Inspection Contingency

Your first clue that a home inspection is important is that it can be used as a contingency in your purchase offer. This contingency provides that if significant defects are revealed by a home inspection, you can back out of your offer, free of penalty, within a certain timeframe. The potential problems a home can have must be pretty serious if they could allow you to walk away from such a significant contract. I always put this into my purchase agreements for my clients.
What a Home Inspection Examines

Inspectors vary in experience, ability and thoroughness, but a good inspector should examine certain components of the home you want to purchase and then produce a report covering his or her findings. The typical inspection lasts two to three hours and you should be present for the inspection to get a firsthand explanation of the inspector's findings and, if necessary, ask questions. Also, any problems the inspector uncovers will make more sense if you see them in person instead of relying solely on the snapshot photos in the report.

The inspector should note:

  • whether each problem is a safety issue, major defect, or minor defect
  • which items need replacement and which should be repaired or serviced
  • items that are suitable for now but that should be monitored closely
A really great inspector will even tell you about routine maintenance that should be performed, which can be a great help if you are a first-time homebuyer.
While it is impossible to list everything an inspector could possibly check for, the following list will give you a general idea of what to expect.

Exterior

  • Exterior walls - The inspector will check for damaged or missing siding, cracks and whether the soil is in excessively close contact with the bottom of the house, which can invite wood-destroying insects. However, the pest inspector, not the home inspector, will check for actual damage from these insects. The inspector will let you know which problems are cosmetic and which could be more serious.
  • Foundation - If the foundation is not visible, and it usually is not, the inspector will not be able to examine it directly, but they can check for secondary evidence of foundation issues, like cracks or settling.
  • Grading - The inspector will let you know whether the grading slopes away from the house as it should. If it doesn't, water could get into the house and cause damage, and you will need to either change the slope of the yard or install a drainage system.
  • Garage or carport - The inspector will test the garage door for proper opening and closing, check the garage framing if it is visible and determine if the garage is properly ventilated (to prevent accidental carbon monoxide poisoning). If the water heater is in the garage, the inspector will make sure it is installed high enough off the ground to minimize the risk of explosion from gasoline fumes mingling with the heater's flame.
  • Roof - The inspector will check for areas where roof damage or poor installation could allow water to enter the home, such as loose, missing or improperly secured shingles and cracked or damaged mastic around vents. He or she will also check the condition of the gutters.
Interior

  • Electrical - The inspector will identify the kind of wiring the home has, test all the outlets and make sure there are functional ground fault circuit interrupters (which can protect you from electrocution, electric shock and electrical burns) installed in areas like the bathrooms, kitchen, garage and outdoors. They will also check your electrical panel for any safety issues and check your electrical outlets to make sure they do not present a fire hazard.
  • Heating, ventilation and air conditioning (HVAC) - The inspector will look at your HVAC system to estimate the age of the furnace and air conditioner, determine if they function properly and recommend repairs or maintenance. An inspector can also give you an idea of the age of the home's ducting, whether it might have leaks, if your home has sufficient insulation to minimize your energy bills and whether there is any asbestos insulation.
  • Water heater - The home inspector will identify the age of the heater and determine if it is properly installed and secured. The inspector will also let you know what kind of condition it is in and give you a general idea of how many years it has left.
  • Kitchen appliances – The inspector will sometimes check kitchen appliances that come with the home to make sure they work, but these are not always part of the inspection. Be sure to ask the inspector which appliances are not included so that you can check them yourself.
  • Laundry room - The inspector will make sure the laundry room is properly vented. A poorly maintained dryer-exhaust system can be a serious fire hazard.
  • Fire safety - If the home has an attached garage, the inspector will make sure the wall has the proper fire rating and that it hasn't been damaged in any way that would compromise its fire rating. They will also test the home's smoke detectors.
  • Bathrooms - The inspector will check for visible leaks, properly secured toilets, adequate ventilation and other issues. If the bathroom does not have a window and/or a ventilation fan, mold and mildew can become problems and moisture can warp wood cabinets over time.
Home Inspection Shortcomings

A home inspection can't identify everything that might be wrong with the property - it only checks for visual cues to problems. For example, if the home's doors do not close properly or the floors are slanted, the foundation might have a crack - but if the crack can't be seen without pulling up all the flooring in the house, a home inspector can't tell you for sure if it's there.

Furthermore, most home inspectors are generalists - that is, they can tell you that the plumbing might have a problem, but then they will recommend that you hire an expert to verify the problem and give you an estimate of the cost to fix it. Of course, hiring additional inspectors will cost extra money. Home inspectors also do not check for issues like termite damage, site contamination, mold, engineering problems and other specialized issues.

SEE: 10 Reasons You Shouldn't Skip A Home Inspection

After the Inspection

Once you have the results of your home inspection, you have several options.

  • If the problems are too significant or too expensive to fix, you can choose to walk away from the purchase, as long as the purchase contract has an inspection contingency.
  • For problems large or small, you can ask the seller to fix them, reduce the purchase price, or to give you a cash credit at closing to fix the problems yourself - this is where a home inspection can pay for itself several times over.
  • If these options aren't viable in your situation (for example, if the property is bank-owned and being sold as-is), you can get estimates to fix the problems yourself and come up with a plan for repairs in order of their importance and affordability once you own the property.
The Bottom Line

A home inspection will cost you a little bit of time and money, but in the long run you'll be glad you did it. The inspection can reveal problems that you may be able to get the current owners to fix before you move in, saving you time and money. If you are a first-time homebuyer, an inspection can give you a crash course in home maintenance and a checklist of items that need attention to make your home as safe and sound as possible. Don't skip this important step in the home-buying process - it's worth every penny.



                               

Thursday, July 17, 2014

Rural Development Loan

USDA Rural Development loans are designed by the government to help medium income Americans living in rural and suburban communities buy a new home. They are the most competitive loan in the market
  • NO money down
  • Low interest rates
  • 30 year fixed rates
  • Government guaranteed
  • You have the ability to roll in your closing costs into the loan
  • Flexible credit guidelines

The Rural Development Home Loan is a 30 year fixed rate loan available for low to moderate income families who are looking to buy, build, improve, repair, or rehabilitate homes in rural areas. If a buyer has had ownership of a primary residence in the last three years, they are not eligible for the program. To qualify for a Rural Development loan buyers must meet the MSHDA (Michigan State Housing Development Authority) sales price, income limit, and first time home buyer eligibility guidelines. All adult members of the new home must apply jointly for the loan.

The Rural Development loan is known as the no money down home loan.

This is because applicants can borrow 100% of the home’s cost! The Rural Development Loan is the only zero down loan offered to those who have not served in the military. The maximum amount guaranteed by Rural Development can include closing costs, prepaid/escrow items, and the RD guarantee fee. Most Rural Development Loan applicants receive almost all of their earnest, also known as good-faith deposit, back after closing. However, the maximum loan amount cannot include repairs and/or improvements to the property.


Who applies for a Rural Development Loan?
 
Those wanting to stop renting and buy a home with zero down.

Families and individuals looking for their first home.

People in rural areas.
 

What areas are considered Rural Development Areas?
 
Rural Development Loans are offered in areas with a population of 20,000 or less people. Right now, the areas that qualify are and home in Genesee county North of Stanley rd., any home West of Elms Rd., Any home East of Potter Rd., and any home South of Grand Blanc Rd.
 
 
What Properties are eligible?
New homes or builders’ models that have not been previously occupied

New condominiums approved by the FNMA or FHLMC

Existing homes that have been previously occupied

Existing Condominiums that have been previously occupied.

New manufactured homes approved by RD.

**All must be in Rural Development Areas**
 


Income Limits
Household income cannot exceed 115% of the median household income of the area.

A family of 1 – 4 cannot exceed an income of $74,050

A family of 5 – 8 cannot exceed an income of $97,750
 


Occupancy Requirements
Borrower(s) must occupy the property within 60 days of closing.

VA Loans

      VA Loans: What Are They? What Are the Advantages?



What Is a VA Loan?


VA loans are home loans for the purchase of a primary residence available to consumers who have served or are presently serving in the U.S. military. While the Department of Veterans Affairs (VA) does not lend money for VA loans, it backs loans made by private lenders (banks, savings and loans, or mortgage companies) to veterans who qualify.

Who Is Eligible for a VA Loan?
  • Veterans
  • Active-duty personnel
  • Reservists/National Guard members
  • Some surviving spouses
What Are the Benefits of a VA Loan?
  • No down payment required (unless required by the lender or the purchase price is more than the reasonable value of the property).
  • Buyer informed of reasonable value.
  • Negotiable interest rate.
  • Ability to finance the VA funding fee (plus reduced funding fees with a down payment of at least 5 percent and exemption for veterans receiving VA compensation).
  • Closing costs are comparable with other financing types (and may be lower).
  • No mortgage insurance premiums.
  • An assumable mortgage.
  • Right to prepay without penalty.
  • For homes inspected by VA during construction, a warranty from builder and assistance from VA to obtain cooperation of builder.
  • VA assistance to veteran borrowers in default due to temporary financial difficulty.
How Can Veterans Get VA Loans?

Veterans can apply for a VA loan with any mortgage lender that participates in the VA home loan program, but will need a Certificate of Eligibility from the VA to prove to the lender they are eligible for a VA loan. Lenders can also get the certificate on behalf of their clients.
 
How to Apply for a Certificate of Eligibility and What Evidence You'll Need to Get the Certificate

Click here for eligibility requirements
 
How Big of a VA Loan Can a Veteran Get?
 
2014 VA County Loan Limits : According to the VA there is "... no maximum that[1] an eligible veteran may borrow using a VA-guaranteed loan." However, there are county limits that must be used to calculate the VA's maximum guaranty amount for a particular county. Generally, an eligible veteran can get a loan up to $417,000 with no money down and in some high-cost places, up to $1,094,000.
Other Resources
General info about VA loans, click here.
General FAQ page for VA loans, click here.

FHA 203K Loan ( Rehab Loan)

FHA 203k Loans: What Are They? What Are the Benefits?

Getting a Mortgage Loan for a Fixer-Upper: A Primer on FHA 203k Loans

The idea of buying a fixer-upper and turning it into your dream abode can seem so perfect -- every nook and cranny just to your specifications! The reality, however, can be harsh. When you realize how much it will cost to remodel, you often also realize that you can’t afford it. Or you find out that a lender won’t give you a loan because the home is considered “uninhabitable” as it is. That’s where an FHA 203k loan comes in.

An FHA 203k loan is a loan backed by the federal government and given to buyers who want to buy a damaged or older home and do repairs on it. Here’s how it works: Let’s say you want to buy a home that needs a brand-new bathroom and kitchen. An FHA 203k lender would then give you the money to buy (or refinance) the house plus the money to do the necessary renovations to the kitchen and bathroom. Often the loan will also include: 1) an up to 20 percent “contingency reserve” so that you will have the funds to complete the remodel in the event it ends up costing more than the estimates suggested and/or 2) a provision that gives you up to about six months of mortgage payments so you can live elsewhere while you’re remodeling, but still pay the mortgage payments on the new home.
 
Which repairs qualify?

There are two main types of FHA 203k mortgage loans. The first is the regular 203k, which is given for properties that need structural repairs such as a new roof or a room addition; the second is the streamlined 203k, which is given for non-structural repairs such as painting and new appliances. Among the other repairs that an FHA 203k will cover: decks, patios, bathroom and kitchen remodels, flooring, plumbing, new siding, additions to the home such as a second story, and heating and air conditioning systems. The program will not cover so-called “luxury” improvements such as adding a tennis court or pool to the property.
 
How much money can you get?

The maximum amount of money a lender will give you under an FHA 203k depends on the type of loan you get (regular vs. streamlined). With a regular FHA 203k, the maximum amount you can get is the lesser of these two amounts: 1) the as-is value of the property plus repair costs, or 2) 110 percent of the estimated value of the property once you do the repairs. With a streamlined loan, you can get a loan for the purchase price of the home plus up to $35,000. To determine the as-is value of the property or the estimated value of the property post-repair, you may need to have an appraisal done. You can read details on how these estimates are made here. You will be required to put down 3.5 percent, but the money can come from a family member, employer or charitable organization.
 
What kinds of properties qualify?

Qualifying homes include: a one- to four-family home that has been completed for a least a year; a home that has been torn down, provided that some of the existing foundation is still in place; a home that you want to move to a new location. The home cannot be a co-op, but some condos are eligible. For a full list of eligible properties, see this. Your property will also have to qualify under the usual FHA requirements. For example, its value cannot exceed a certain maximum amount, which depends on where you live.
 
What are the pros and cons of these loans?

The main benefit of these loans is that they give you the ability to buy a home in need of repairs that you might not otherwise have been able to afford to buy. Plus, the down payment requirements are minimal, and often you get decent interest rates (note that the interest rates and discount points will vary by 203k lender, so it’s important to make sure that you’re getting a good deal on the loan).

The downsides are that not all properties qualify, there are limits on the funding you can get and applying for the loan isn't easy. For example, to apply for the loan you may need to hire an independent consultant to prepare the exhibits required (to get the loan, you have to provide a detailed proposal of the work you want to do and cost estimates for each item).


FHA Home Loan

What is an FHA Loan?
An FHA loan is a mortgage loan that is insured by the Federal Housing Administration (FHA). Essentially, the federal government insures loans for FHA-approved lenders in order to reduce their risk of loss if a borrower defaults on their mortgage payments.

The FHA program was created in response to the rash of foreclosures and defaults that happened in 1930s; to provide mortgage lenders with adequate insurance; and to help stimulate the housing market by making loans accessible and affordable. Nowadays, FHA loans are very popular, especially with first-time home buyers.
 
What Are the Advantages of FHA Loans?

Typically an FHA loan is one of the easiest types of mortgage loans to qualify for because it requires a low down payment and you can have less-than-perfect credit. An FHA down payment of 3.5 percent is required. Borrowers who cannot afford a traditional down payment of 20 percent or can’t get approved for private mortgage insurance should look into whether an FHA loan is the best option for their personal scenario. Another advantage of an FHA loan is that it can be assumable, which means if you want to sell your home, the buyer can “assume” the loan you have. People who have low or bad credit, have undergone a bankruptcy or have been foreclosed upon may be able to still qualify for an FHA loan.

FHA Loan Requirements
  • Must have a steady employment history or worked for the same employer for the past two years
  • Must have a valid Social Security number, lawful residency in the U.S. and be of legal age to sign a mortgage in your state
  • Must make a minimum down payment of 3.5 percent. The money can be gifted by a family member.
  • New FHA loans are only available for primary residence occupancy
  • Must have a property appraisal from a FHA-approved appraiser
  • Your front-end ratio (mortgage payment plus HOA fees, property taxes, mortgage insurance, home insurance) needs to be less than 31 percent of your gross income, typically. You may be able to get approved with as high a percentage as 46.99 percent. Your lender will be required to provide justification as to why they believe the mortgage presents an acceptable risk. The lender must include any compensating factors used for loan approval.
  • Your back-end ratio (mortgage plus all your monthly debt, i.e., credit card payment, car payment, student loans, etc.) needs to be less than 43 percent of your gross income, typically. You may be able to get approved with as high a percentage as 56.99 percent. Your lender will be required to provide justification as to why they believe the mortgage presents an acceptable risk. The lender must include any compensating factors used for loan approval.
  • Minimum credit score of 580 for maximum financing with a minimum down payment of 3.5 percent.
  • Minimum credit score of 500-579 for maximum LTV of 90 percent with a minimum down payment of 10 percent. FHA-qualified lenders will use a case-by-case basis to determine an applicants' credit worthiness.
  • Typically you must be two years out of bankruptcy and have re-established good credit. Exceptions can be made if you are out of bankruptcy for more than one year if there were extenuating circumstances beyond your control that caused the bankruptcy and you've managed your money in a responsible manner. See this page for more details.
  • Typically you must be three year out of foreclosure and have re-established good credit. Exceptions can be made if there were extenuating circumstances and you've improved your credit. If you were unable to sell your home because you had to move to a new area, this does not qualify as an exception to the three-year foreclosure guideline.
Property needs to meet certain standards:

Also, an FHA loan requires that a property meet certain minimum standards at appraisal. If the home you are purchasing does not meet these standards and a seller will not agree to the required repairs, your only option is to pay for the required repairs at closing (to be held in escrow until the repairs are complete).
Keep current on the premium costs for FHA loans by visiting the U.S. Department of Housing and Urban Development (HUD).
 
FHA Loan Limits

There are maximum mortgage limits for FHA loans that vary by state and county. In certain counties, you may be able to get financing for a loan size up to $729,750 with a 3.5 percent down payment. Conventional financing for loans that can be bought by Fannie Mae or Freddie Mac are currently at $625,000

Monday, July 7, 2014

The Preapproval Process

What is a pre-approval?
A pre-approval is a commitment letter from a lender or loan officer that confirms a borrower will qualify for a particular loan amount based on income and credit information.  Most pre-approval letters are good for 60 to 90 days.  Most sellers won’t entertain an offer without an accompanying pre-approval letter.
Why you should get pre-approved?
The most important reason for getting pre-approved is to have an accurate idea of how much house you can afford.   This will ensure that you only look at homes that are truly in your price range.   If you know what you can afford before you start looking, you will not become discouraged down the line.  Nothing hurts more than finding that perfect dream home only to discover  that you can not afford it.
A pre-approval letter is also essential in this competitive real estate market.  If you make an offer on a house without a pre-approval, your offer will not be taken as seriously as an offer from another person with a pre-approval (or more likely will be rejected entirely).   All offers are sent out with a pre-approval letter, source of funds, and credit scores.  The exception is for all-cash buyers who only need to show proof of funds and omit credit scores and pre-approvals entirely.
Documents you’ll need to provide to get a TRUE Pre-approval
  • Your W2 from the past two years
  • Your paystubs for the past three months
  • Your tax returns from the past two years
  • Your checking or savings bank statements for the past three months (this will likely have your down payment funds in them as well)
  • Your statements for all your other assets (stocks, bonds, retirement accounts) for the last two months
  • Your current mortgage, tax, insurance and HOA documents if you already own and are purchasing a second home/investment property.
  • If you are self-employed: Your business tax returns for the past two years in addition to your year-to-date profit and loss statement and year-to-date balance sheet
  • Your credit report and score (which I will run for you)
If anyone offers to pre-approve you without ALL of the above documents, you should run!   There is no way to provide a TRUE pre-approval without analyzing all asset and income documentation.
Get Pre-Approved!
Contact me to get pre-approved today.  After looking at your asset and income documentation I can determine your qualification within minutes (with all the necessary paperwork provided).  Once you are pre-approved you can confidently start looking for the perfect place to call home.  Contact me to set up a consultation or if you have any  additional questions about the buying process.

Home Loan Tips

  • Determine what monthly payment fits your budget
  • Determine how much money you have available for down payment, closing costs, prepaid expenses and property inspections.
  • Get your financial ducks in a row before you spend a lot of your time, or your Realtors time, looking at homes - Get preapproved for a home loan.
  • Know what price range you can afford so you don not spin your wheels looking at homes that you cannot afford.
  • We will run your application through our preliminary underwriting process, for a detailed loan preapproval and not just a simple prequalification.
  • It is not necessary for you to pull a credit report before doing a mortgage application. Lenders are required to disclose your credit scores within three days of loan application. We go beyond just giving scores and provide every applicant who completes a mortgage application a complimentary copy of their 3 bureau credit report.
  • Low down payment loan programs – as low as 3.0%, and the down payment money can be a family member gift
  • We have options to help you cover some, if not all, of the closing costs and prepaid expenses
  • Don’t do any other major financial transactions while you are in the home shopping or buying process (i.e. buy a new car, open a credit card etc.).
  • Getting a home inspection is like utilizing the services of a Realtor - Both are optional but highly recommended for most home buyers.
  • For Sale By Owner (FSBO) situations may seem like a better deal but they usually are not.
  • Find a Realtor to assist you with the home buying process as a good Realtor will prove to be worth their weight in gold to a home buyer. Your Realtor can help you identify properties that meet your home buying criteria much faster than you can search for homes on the internet and their service to Buyers is basically free as the Seller pays the Realtor's fee.
  
  

First Time Home Buyer Loan Options

  
Many first time home buyer loan programs advertised as "special first time buyer loan programs" are frequently just a smoke and mirrors marketing tactic. We probably have the same first time buyer loan program but we just don't put a fancy name on them for marketing purposes. Give us a call to discuss your options!
    
Conventional
Down payment as low as 5% of the purchase price and monthly PMI is not required with a 20% down payment or equity gift.
         
FHA
Down payment as low as 3.5% of the purchase price and the down payment can be a family member gift. FHA is usually a little easier on credit requirements than some other loan programs..
        
VA
As little as 0% down payment required. This is one of the best 100% financing home loan programs available today. It's only for qualifying Veterans and their spouses.
      
Rural Housing
A terrific 100% purchase program with low monthly mortgage insurance. Available for home in qualifying areas only. Household income limits apply.
 

Tips on buing a foreclosed home

For those looking to score a deal on a home, foreclosed properties can offer a great opportunity. Lenders are looking to unload the property and will often offer up a deep discount to do so quickly. But the process of buying a foreclosed home can differ a little from traditional home sales. Here are some things to consider before you make an offer on one of these properties.

The “As-Is” Sale

Disgruntled homeowners in foreclosure can feel like they have nothing left to lose. Faced with the prospect of losing their house, homeowners sometimes leave the place stripped of anything valuable or useful, including door knobs, fixtures and wiring. In cases like this, the lender is unlikely to make repairs and will sell the home as-is. While you can get the place at a steep discount, it might only be a bargain if you’ve got some DIY skills. This shouldn’t necessarily discourage you from buying, but you’ll need to figure out if the cost of repairs will offset the discounted offer price.

Not Knowing What You’re Getting Into

With most homes, you’ll likely get some disclosure from the current owners. A helpful homeowner might give you a little advice, like the best place to start a garden, or offer you a heads up on minor repairs, like a bathroom door that sticks.  And when it comes to big repairs, such as a shoddy foundation or termite damage, the owners might be legally required to let you know before you buy the place. But a lender has no history with the home, so don’t expect to get a run-down of problems before you move in. A foreclosure might be a good deal, but it can also turn into an unexpected adventure.

Don’t Assume They’ll Take Any Offer

While a foreclosed home can often be a bargain, you shouldn’t expect the lender to accept a lowball offer. Even in a market flooded with foreclosures, a bank might balk at a low offer, preferring to wait until housing prices bounce back rather than take a huge hit on the investment. However, you can use local foreclosures to your advantage. Take a look at recent sale prices for homes sold by lenders — which are often called real-estate owned, or REO sales — to help you price the place.

It Takes More Time

Most mortgages are backed by big banks and financial institutions, which means you will likely run smack into a large, slow-moving bureaucracy when trying to buy a home in foreclosure. With a traditional home sale, you can expect to find out if your offer has been accepted within a day or two. But when buying from a financial institution this process can take weeks. So have patience and don’t freak out if you don’t immediately hear back from the seller.

A Different Kind of Sale

Banks have their own processes and procedures for selling a home in foreclosure, which can make the purchasing process feel a bit foreign for experienced buyers. Banks work with real estate agents to show and sell the home, and often these agents can be dealing with dozens or foreclosures at a time, leaving them little time to tend to you. You shouldn’t expect the same careful attention when dealing with a foreclosure, but that’s the price of getting a good deal. The bank might also have its own contract that protects it should the home turn into a money-pit. To make sure you don’t end up feeling shortchanged, hire a good building inspector and insist on tagging along so that you can find out as much as possible about the home

Home Buyer tips

Have a moderate approach when you negotiate while buying real estate. A lot of people want to get a good deal, and begin acting aggressively; they end up doing themselves more harm than good. You can have a firm idea of what you want to pay, but let the Realtor and lawyers have some leeway.
TIP! All real estate agents should contact any past clients during the holidays, and at the anniversary of that person’s purchase date. When they hear from you, they will remember how much you helped them out.

Like most things in life, before you attempt to do something, you need to be educated about it, and that pertains to real estate buying too. Knowing your stuff not only gives you more power at the negotiating table, but can also improve your own future, as well as your family’s. The following article will guide you in learning about real estate purchasing.
When you have kids, or are planning to start a family in the future, make sure you buy a home that can accommodate everyone. Don’t neglect safety issues as well, especially if there is a swimming pool or stairs in the home you’re considering buying. A house that was previously owned by a family with children might feature a lot of built-in safety devices.
TIP! If you are considering purchasing a house in a new neighborhood, you should look up information about the neighborhood using resources on the Internet. Almost every town has plenty of information online.

Have a moderate approach when you negotiate while buying real estate. Often, people who are too aggressive about trying to make the best possible deal work against their own best interests. Be firm with your wants, but allow your lawyer and Realtor to be present at your negotiations since they have experience with these battles.
Just because the seller chose not to accept your offer, it does not mean that you cannot find a way to compromise. So, do not lose hope yet. The seller may offer to make some repairs that you want done or pay for closing costs.
TIP! When you want to make a good investment with real estate, consider repairing and remodeling. The value of your property will go up quickly.

If you sell a home to a client, don’t lose touch. Contacting customers on each anniversary of the day they bought the home and during holidays allows you to stay in touch without seeming intrusive. When you contact them, they will recall how you helped them with their real estate experience. At the end of your message, let them know you work on referrals and would love it if they passed your information on to their friends and family.
You are already aware of an asking price on a potential home, but you should also have your offer firmly in mind. By talking to the seller, both parties can come to a final, mutually agreeable price.
TIP! When you make an offer on a home, consider asking the seller to contribute toward the closing costs or give you some other type of financial incentive. For example, it may be to your advantage to ask for an interest rate “buy down.

Get a partner that you trust when you want to make the step and buy an expensive commercial lot. It will make it easier to qualify for the loan that you need to buy the property. You may be able to qualify for a loan that you cannot qualify for alone by having a partner. A partner may be able to help with a down payment as well as lowering your debt-to-income ratio.
Check the online registry for local sex offenders prior to purchasing a home in an area. While the sex offender registry is public, you had best check it yourself, as the agent and seller are unlikely to voluntarily disclose this information. Research it yourself for peace of mind.
TIP! Before you purchase a home, make your own measurements of its dimensions. You should always verify that the owner’s listed square footage matches with information in public records.

Just because the seller chose not to accept your offer, it does not mean that you cannot find a way to compromise. So, do not lose hope yet. Explore options such as incorporating closing costs into the deal or asking for improvements to the home, prior to purchase.
If you are considering renting a home or apartment that has a garden, don’t sign a lease agreement until you find out from the landlord who is responsible for tending the garden. Sometimes rentals require that you handle it yourself, or for you to hire a gardener or yard person. However, this service is included with some rentals, with the cost of it already incorporated into the rent.
TIP! Take a realistic approach to your real estate options once you make the decision to start searching. A long while can pass before you locate a property which fits your goals and strategy.

When in the market to purchase a new home, always consider your long-term situation. You might not have children right now, but if you are going to stay in this house for a long time and you will one day want kids, you should check out the schools that are in the area and make sure you would want your future kids to go there.
When purchasing a foreclosure, it is to your benefit to hire an attorney. Because problems can occur during pre-foreclosure or foreclosure deals, a legal representative is a good person to have on your side. A good legal eye can spot problems and solve them, saving you money overall.
TIP! Determine which goals are important when you are under negotiations for a real estate contract. Clarify the nature of each issue and create well-defined expectations for each specific concern.

You may have to be flexible in order to close on a home. Sometimes you must choose between two major features if the price of having both falls outside of your price range. Consider all of the options that are available and weigh them out in terms of your preferred location, the desired features of the house and how much you can pay.
Before moving into a new home, you need to purchase a homeowner’s insurance policy. If you put this off, you may not be covered for any losses that may occur, and you never know what Mother Nature has in store.

Closing Costs

The appraiser that you choose for your real estate should always have a lot of experience; five years at the least. Hire an appraiser independent of any real estate office. There is possibly a pretty stern conflict of interest. Make sure that any appraiser you deal with has a state license.
TIP! There may be programs that will assist you with your down payment. You should do your research to see if you are eligible for them.

When you purchase a property, extra funds should always be available for unexpected costs that are bound to arise. Buyers will often calculate the final closing costs by combining the amount for the down payment, any points that go to the bank, as well as any prorated taxes for real estate. Closing costs might consist of extra fees such as taxes, bonds, or fees based on the local area.
Look at your credit report before you start looking for a house. After you obtain a copy of your history, carefully look through it and report any issues that you see. Your credit report should be in good standing when you are going to buy a home.
TIP! Using a calculator on the web helps you determine what is affordable for you to spend. These tools allow you to input how much money you make, your daily expenses and any debt that you have.

If you want to purchase real estate for investment purposes, the likelihood of performing remodel and repair work is high. You’ll have a rapid return on investment, thanks to a little elbow grease. Sometimes your property value will increase more than the money you put in.
You should make certain that you have funds available to meet the required minimum down payment set by your mortgage company. If you can’t make a traditional down payment, then you may have to get private mortgage insurance. This means you have to spend extra money every month just to prove you can afford your payments without actually working toward paying back your mortgage.
TIP! You may not be required to get a home inspection, but you should schedule one anyway. This is important because you simply never know what’s really going on under the surface of a home.

When buying a house, make sure you understand your options when it comes to the term of your loan. If you know how the term of the mortgage ties in with your payment and the final cost of the house, you will not be surprised later.
Make sure that you get a letter of approval first before you even make a bid on a house. On the other hand, if you are not approved, this can extend the timeline of the purchasing process, which can result in additional costs.
TIP! Keep an eye out for pre-foreclosure properties. In the event you are able to spend substantial time searching for investment opportunities, you may want to give pre-foreclosure properties a look.

Taking the time to get educated about buying real estate is one of the smartest things that you could have done. Real estate agents will help guide you, but you must be ready to make smart decisions for yourself. Having a great deal of knowledge about real estate will give you the confidence to make necessary decisions.
Get as much information about potential rental properties as possible. If you are thinking about buying rental property, hold off on purchasing it until all records have been reviewed for at minimum the past 24 months. The reason for this is that you have to make sure that the seller has made full and accurate disclosure regarding the property’s potential for income. Your lender will probably want to view verification of income prior to issuing the property’s purchase loan.

Pre Approval Tips

Getting pre-approved should be the very first step when buying a home. Michigan first time home buyers are facing enough competition already without compounding the problem by not getting pre-approved or worse, getting a bad pre-approval.

Depending on which publications or websites the buyer may trust for information, there will be mixed opinions on where the Real Estate market is heading for the first time home buyer in Michigan. While there are still great deals to be had on homes for sale in Michigan, first time buyers are facing fierce competition from repeat buyers as well as investors.
In fact, for the past five years, the percentage of homes purchased by first time buyers has been steadily declining. Four years ago, first timers were responsible for more than 50% of the homes purchased whereas, today, they account for less than 35%. While this statistic is based on nationwide data, similar declines are represented in the Michigan housing market as well.

“Michigan Mortgage Solutions speaks with, and pre-approves, a lot of first time buyers and one of the most common issues they face is competition. With a lower inventory of homes for sale, it’s extremely important for the first time buyer to know where they stand so they can craft a solid offer. Getting pre-approved by a knowledgeable lender will put a first time home buyer in the best position possible to bid aggressively on their dream home” says Jason Nolan, President of Michigan Mortgage Solutions.

Since the average Michigan home offered for sale is usually under contract within the first two weeks of being listed, knowing what you can afford is imperative. This is why the first step in the home buying process should always be to get pre-approved.

A pre-approval letter is often needed prior to putting an offer on a home anyway, so starting there only makes sense. To complete the pre-approval process, the lender will review a borrower’s income, credit, and assets to determine which mortgage programs they are eligible for, how much home can they afford and also how much money they will need at close to cover down payment and costs.
Knowing the total costs prior to putting in an offer will allow the first time buyer to know their financial limits. If they determine they will be short money to close, they can request a seller’s concession to cover some if not all of the costs. In Michigan, the average purchase transaction has a seller’s concession of 2% of the loan amount which can be used to cover the buyers closing costs and pre-paid expenses.

A good mortgage lender should be able to break these costs down for the buyer prior to them offering on a property. However, some lenders take short cuts and use estimates which can be misleading and cause huge problems as the transaction proceeds. Make sure to question the lender on whether they are using estimates or real numbers for items like property taxes, tax pro-rations, title fees, and homeowners insurance since these will be the majority of the costs.

“Numbers are extremely important in a mortgage transaction and taking the time to dial things in as accurately as possible is imperative. Doing this allows buyers to know exactly what they are getting themselves into and what will be due at closing. This eliminates the nightmare closing scenarios you read about online” says Jason Nolan, President of Michigan Mortgage Solutions.
Michigan Mortgage Solutions is a licensed mortgage lender and broker specializing in first time home buyer programs in Michigan. They offer a wide range of mortgage products including conventional financing, FHA loans, and also 100% financing with the VA and USDA Rural Development Loans. Make sure to call 248 630-3489 for more info on getting qualified to purchase your first home.




Wednesday, June 25, 2014

Why use a buyers agent to help you find a home

There are many reasons to use a buyers agent to purchase property.

Never call the selling agent on the sign to look at a home. They are paid by the sellers to give them the best deal. Instead use a buyers agent to work and negotiate on your behalf to get you the best deal at no extra cost to you...

What's the difference between a Buyer's Agent and a Seller's Agent?

Traditionally, all agents involved in a real estate transaction legally represent the Seller (both the "Listing Agent" and the "Selling Agent.") When a Buyer's Agent is involved, the person buying the property is represented by the "Selling Agent," who is known as the "Buyer's Agent."

How does the agent get paid?

The agent gets paid with commissions that come from one of two places:
Out of the total commission being paid to the listing agency, or
As a reduction in the selling price equivalent to the Buyer's Agency commission, thus enabling a direct payment from the Buyer to the Buyer Agency. Typically, the Buyer's Agency Commission is paid from the proceeds of the closing.

What will it cost me?

No additional cost! In fact, a Buyer's Agent can save you money by being able to negotiate with the Seller and Selling Agent to work toward obtaining the lowest price and best terms for you, the Buyer. The buyers agent commission comes out of the listing agents commisson. It costs you 0....

What are the Benefits of Buyer's Agents?

Advise and counsel a Buyer with unrestricted assistance.
Prepare an estimate of value and future salability to insure the true value of the property.
Investigate any situation that might jeopardize the best interest of the Buyer.
Negotiate with the Listing Agent and Seller to obtain the lowest price.
Show all properties on the market, regardless of whether they are listed with Multiple Listing Service.
Help you search for homes that interest you on the MLS which the general public does not have access to.
Represent you at the closing after the purchase and help guide you through the closing documents.
The agent will accompany the inspector during the home inspection and will help point out problems that come up during the inspection to the listing agent to possibly get them fixed by the seller or lower the price.

The Competitive Edge

A Agent is able to show properties that are not listed in the Multiple Listing Service. This allows you to have a greater selection to choose from. If an inspection reveals a problem, a Buyer's Agent can make a crucial difference. He or she protects the Buyer's interests and helps negotiate a fair and equitable agreement for the property. Legally, a Buyer's Agent is obligated to provide complete confidentiality of the Buyer's personal motives and financial intentions. Without this confidential duty, a Seller might gain a competitive bargaining edge.