Dec. 24, 2018

Buying Advice: Insurance

INSURANCE

This section explains how homeowners' insurance protects your interests in the event of natural disasters and catastrophic events.

 

Homeowners' Insurance

Protecting your new home with insurance is a must. How well you do that depends on the details of your policy. And while you are not required by law to have homeowners' insurance, mortgage lenders require that you do.

A standard policy will suffice in most instances. It protects against several natural disasters and catastrophic events. However, it will not guard against earthquakes, floods, war, and nuclear accidents. The policy can be expanded to include these disasters as well as coverage for such things as workers' compensation. In fact, the lender may require that you purchase flood or earthquake insurance if the house is in a flood zone or a region susceptible to earthquakes.

 

Replacement-Cost Endorsement

You can also cover the depreciated value of personal property, such as televisions and furniture, by purchasing a replacement-cost endorsement. This is an extension of coverage that can enable you to replace the item with one of comparable material and quality. 

Posted in General Advice
Dec. 21, 2018

Buying Advice: Inpsection

INSPECTION

Home inspection is an important step in the buying process. This section offers helpful information that can help to avoid potential problems after the purchase is complete.

 

Home Inspection

Congratulations! You've made an offer and reviewed all the documents the seller has provided regarding the condition of the home. But, one important step before you finalize your real estate offer could help you avoid costly home buying mistakes. Hire a professional home inspector to give the house a standard inspection that includes:

  • Room-by-room review
  • Exterior home components
  • Electrical systems 
  • Foundation and structural components - both interior and exterior
  • Heating/air conditioning systems
  • Plumbing systems
  • Attic/basement/crawl spaces

Once you have arranged for a home inspection, plan to accompany the inspector for the entire procedure. You have the right to be there and leading home inspection companies will encourage your presence. It helps you to better understand the findings in the report and will reduce post-closing surprises. Don't forget your list of questions and items of concern. 

A thorough home inspection covers more than 1,000 items, everything from foundation to roof, and takes two to three hours depending on the size and age of the property. The report should reflect the condition of about 400 items. A typical inspection can range from $300-$600.

Some commons items a home inspection could uncover are: 

  • Maintenance problems such as rotting decks, paint chips, water damaged ceilings, etc.
  • Electrical problems (even faulty fuses can lead to bigger difficulties in the future)
  • Drainage problems, which could include water intrusions to below the home
  • Roof leaks and defects from aging
  • Poor ventilation, especially in an attic; this is the time to assure that all vents are clean and working properly
  • Excess air leakage due to poor weather stripping and subpar caulking around fixtures
  • Failed window seals, which are routinely found with dual pane windows
  • Environmental contamination caused by asbestos, mold, formaldehyde, lead paint, radon, soil contamination, and/or water contamination
  • Faulty lines in water heaters, overflow piping, and/or hazardous flue conditions

TIP: Structural damage caused by water seepage into the foundation, floor joists, and door headers should be discovered at the source, and can be easily identified with a home inspection. 

Posted in General Advice
Dec. 19, 2018

Buying Advice: All Cash

ALL CASH

If you are planning to buy a home with cash, this section provides some usual information to make your transaction a success. 

 

Buying A Home With Cash

Though most buyers don't buy a home with all cash, anyone considering such a move may be wondering how it's done. Because all cash buyers sidestep the time-consuming loan qualification process, the deal can close very quickly. The primary advantage of buying a home with cash is completely avoiding mortgage interest. Buyers also save money that would be spent on loan origination fees, required appraisals, some closing costs and various other charges imposed by the lender.

TIP: Take a look at other investments that are doing well, and determine if spending cash on a home is your best investment option. 

Posted in General Advice
Dec. 17, 2018

Buying Advice: Lease Options

LEASE OPTIONS

Looking to buy a home through a lease option? Learn about lease options here, or contact a CENTURY 21 Mountain Vistas Agent for complete support.

 

A lease option is an arrangement between the buyer and the seller to purchase a house after renting it for a specific period of time. A portion of the rent would be applied toward the purchase if the option is exercised. This is referred to as rent credit. Most institutional lenders will accept rend credit as part of the down payment, if rental payments exceed the market rent and if a valid lease-purchase agreement is in effect. A copy of the valid lease-purchase agreement must be attached to the loan applications. Read any lease option arrangement carefully for details about transferring the option and other important concerns.

TIP: For information on lease options, contact your CENTURY 21 Agent.

Posted in General Advice
Dec. 14, 2018

Buying Advice: Applying For A Mortgage

APPLYING FOR A MORTGAGE

Once you've made the decision to become a homeowner and picked the house, you may need to apply for a loan. This process might seem daunting, but your lender will guide you through it. The process will be even easier if you know what to expect and prepare for it. 

 

Here are the high-level loan application steps:

  1. Prepare required documents
    • Two years of employment history, current employment status, and salary are needed. Employment letters can be used to explain gaps in employment. 
    • Two years of W-2s (this does not apply if self-employed) and tax returns allow the lender to be sure that your salary is high enough to make the mortgage payments every month.
    • Most recent pay stubs for the last 30 days tell the lender that you're still earning money similar to the amount on your tax return (this does not apply if self-employed, but the lender will likely require a profit and loss statement).
    • List of assets, including bank statements, let the lender know that you have the money to cover the down payment, closing costs, and a reasonable emergency.
  2. Submit the application. Once you've prepared the required documents, the first step with the lender is to apply for the home loan. Of course, you will need to provide personal information, as well as information about the property you'll be purchasing, such as the address and estimated purchase price. 
  3. Provide your documents, such as pay stubs, W-2s, bank statements, and employment history.
  4. Get pre-approved in as little as 24 hours. Once your loan application is submitted, you should receive your pre-qualification in as little as 24 hours 

 

Posted in General Advice
Dec. 12, 2018

Buying Advice: How Much Do You Offer?

HOW MUCH DO YOU OFFER?

How much should you pay for the home? This section will help you to determine an appropriate amount to offer to secure a winning bid. 

 

How Much?

Your CENTURY 21 real estate professional can help you find out what other homes have sold for in the area, and how much money you might have to put into repairs or renovations. These considerations should be a factor along with the amount you're comfortable spending. 

In addition to sale prices of other comparable homes, there are several ways you can come up with a winning bid. For example:

  • The condition of the house. Is the home in move-in condition, in need of paint and other cosmetic improvements, or a fixer-upper that needs real work?
  • The market. If you are in a buyer's market - where there are more homes for sale than there are people to buy them - prices are probably stable or falling. If you are in a seller's market - where there are more buyers looking for homes than there are home for sale - prices are probably moving upward. 
  • Your ceiling. If you have a credit pre-approval, you know how much you can borrow for your home purchase. Of course, you may not be comfortable paying as much as you've been approved to borrow, so think carefully about your financial situation before making an offer. 

Next, decide how much you are willing to pay for a home. Remember, the advertised price of a house is just a starting point - it may take quite a bit of negotiating to arrive at a final cost. 

TIP: The value or disadvantage of certain features can help or hurt resale. In some areas, a swimming pool actually detracts from a home's value and makes it harder to sell. In neighborhoods with two-car, attached garages, a single-car detached garage may affect the home sale and future value. 

Posted in General Advice
Dec. 10, 2018

Buying Advice: Making An Offer

MAKING AN OFFER

Making an offer to purchase a home has its own set of factors. Rely on a CENTURY 21 Agent's experience and knowledge to make a successful home buying offer. 

 

Making a Home Buying Offer 

Once you've found your ideal house, it's time to get started with the financial and contractual side of the purchase. Let you CENTURY 21 professional guide you through this process. Purchase contracts vary in length and terms from state to state, and sometimes within a state. 

Multiple offers on the same home are not uncommon, so you may only get one chance to make an offer that the seller will consider. That's why it's important to think carefully about your strategy. In most cases, it is better to have your real estate professional present the offer. If you have any personal interaction with the homeowner, avoid sharing any information about your move, your current housing status, financial situation, or your feelings about their property - positive or negative. This could work against you in future negotiations

TIP: You and the seller have different goals, so it's important to consult with your CENTURY 21 Agent. He or she can bring order to the process and will know what questions to ask to help you reach a desirable outcome. 

Posted in General Advice
Dec. 7, 2018

Buying Advice: Shopping For A Home

SHOPPING FOR A HOME

A CENTURY 21 Agent can help you shop for a home, compare homes, and compile your unique wishlist to find the perfect home for you. 

 

Shopping For A Home

Buying a home is one of the most important decisions you will make. That's why it's in your best interest to choose an experienced real estate agent who listens to and understands your needs and has detailed knowledge of the area in which you want to live.

When you choose a CENTURY 21 agent, you're dealing with a professional who understands your concerns and will provide you with the personalized service that makes all the difference.

What should you expect in your first meeting with a real estate agent? A CENTURY 21 Agent will typically talk to you about the neighborhood where you want to live, home prices, schools, transportation, and the surrounding commercial and residential areas. They can also address the pros and cons of using a buyer's agent versus a sales or dual agent. 

When you're ready to visit houses, ask your CENTURY 21 Agent to help you with:

  • Arranging showings
  • Tracking the properties you've seen
  • Identifying homes that meet your criteria and keep track of your 'what's right for you' list

TIP: After touring each home, write down what you liked and didn't like. Your CENTURY 21 Agent can help you develop a rating system to narrow the field. For example, pick the house you like best on day one and compare all other houses to it. When you find a better one, use the new favorite as your standard. 

Posted in General Advice
Dec. 5, 2018

Buying Advice: Know Your Neighborhood?

KNOW YOUR NEIGHBORHOOD?

Evaluating a neighborhood and surrounding areas thoroughly is essential.

 

When you buy a home, you're investing in a community. You'll spend a significant amount of time and money supporting the schools, community organizations and commercial centers in the area. Before you make the final decision, take a good look at the location and make sure it fits your lifestyle. For example:

  1. Evaluate the property's proximity to other important locations in your life. How long will your commute time be? Is there a hospital or doctor's office nearby? What about schools, childcare, shopping, family and friends? 
  2. Consider all of your transportation options. A new home could lend itself to public transportation options or carpooling. Depending on the type of community, you may be able to find alternative methods of transportation. Take the time to drive from the new home to your community, you may be able to find alternative methods of transportation. Take the time to drive from the new home to your commuting destinations, to get a sense of what your daily life will be like. 
  3. Make sure you feel comfortable in the area. Drive around the neighborhood at different times of the day and night on multiple days of the week to observe activity and noise levels. An educated buyer is a happy one! 

CENTURY 21 real estate professionals are a tremendous resource. Ask your agent for a list of schools, shopping centers, parks or other amenities that are important to you. Buying a new home is about more than the structure and property. It's about your new lifestyle as well. 

TIP: Visit and understand the school district. Even if you don't have children in the school system now, you may someday. The district reputation could positively or negatively impact the selling price of your future home as well. 

Posted in General Advice
Dec. 3, 2018

Buying Advice: Already Have A Home?

ALREADY HAVE A HOME? 

Buying a home while selling an existing home has its own set of considerations; this section provides expert buying advice and can help you navigate these challenges successfully.

 

What If You Already Have A Home?

Buying a new home and selling an existing home at the same time has its own set of challenges. With knowledgeable planning, you can ensure everything goes smoothly. 

Before putting your house on the market or committing to buying a new one, take a look at the prices of houses in the areas where you'll be selling and buying. You'll need a realistic idea of sales prices for similar houses, so you can assess both your buying and selling position. 

What if you're unable to time the sale of one house with the purchase of another? You may own no houses for a time, in which case you'll need money in the bank and a temporary place to live. Or you may own two houses at once. That's why it's important to have a backup plan. Here are some options to consider:

  1. Research short-term rental and storage options (family, friends, storage facilities, containers).
  2. Bridge financing (a short-term loan) for the down payment on a new home backed by the equity in your old house. 

Buying A Second Home

Buying a second home isn't all that different from buying a first home. Affording it usually depends on your ability to qualify for a mortgage on the second home. Benefits include a getaway for the family on vacations or holidays, a future retirement home, or renters making your mortgage payments for you. 

Keep in mind that if you declare it as a rental, your mortgage might be slightly higher and your down payment requirements higher than a standard mortgage. Work with your lender to create a customized loan program with the best combination of rate, points, and closing costs to meet your needs. 

TIP: A second home can be a good investment. To make the most of the opportunity, be sure you factor in sources for your down payment and monthly expenses (including the costs of maintaining the property)

Posted in General Advice