Buying and Selling Real Estate is said to be one of the most stressful things that a person does in their lifetime-right next to divorce or a death in the family. It is certainly one of the most important decisions you will ever make. It can be a very exciting, happy transaction, or it can be overwhelming. The following tips are designed to help you make it a wonderful stress free experience.
WHEN BUYING A HOME
First do a thorough analysis of your personal needs.
Where do you work?
What is reasonable as far as commuting time?
Will schools, medical, shopping, church or entertainment be important to you?
What is your Family’s special needs? Personal life style? Family hobbies?
What would your ideal property look like?
What size home do you really want?
How much land do you really want?
Now that you have your dream property defined, let’s get down to the business of figuring out how to make it happen.
First determine how much cash you can afford to put down at closing, and how much you are comfortable with as a total monthly payment?
When evaluating the cost of home ownership do not forget to evaluate the total cost of living wherever your dream property is located.
The things to consider are:
Principal
Interest
Taxes
Insurance = PITI (principal interest taxes insurance) for the normal total monthly payment
Sometimes you have to pay for mortgage insurance which only insures the lender in the event that you default.
Other costs include:
HOA (Home Owners Asso.) or POA (Property Owners Asso.) fees
Utility Bills
Cost of Commuting
Maintenance of the property
To start to get the right answers first you need to understand credit. Normally the higher your credit score the lower your interest rate, but there are other factors that affect your ability to get a home mortgage.
The four basic questions that will determine your qualifications are:
Fico Score
Income to debt ratio
Length of time on your job.
Amount of available cash to put down.
If you have a high rating in all four of these categories you will qualify for the lowest interest rate available and normally the lowest closing cost.
Most Home loans are amortized over a 30 year, or 360 month time frame.
Example:
100,000 @ 4% = 477.42 principal and interest per month
100,000 @ 6% = 599.55
100,000 @ 8% = 733.76
100,000 @10% = 877.57
This is an example of how much your credit score and the type of loan you get will affect how much you can afford to pay for your home. Currently mortgage interest rates are low, therefore, now is a good time to buy a home.
A knowledgeable Mortgage Broker or Mortgage Banker can help you understand your credit and the different types of loans available. They can also help you understand how to improve you FICO score if needed.
Each person’s special circumstances, as well as the type of property, will determine which kind of loan is best for the individual transaction.
If you are working with a knowledgeable Realtor, they should help you evaluate your options and the estimated total cost of owning a specific property.
Real Estate is one of the best investments one can make. Owning your own home is extremely rewarding. Do not be afraid to ask questions- the more you know about the home buying process the better decisions you will make and the better the quality of life your family will have.
MOST IMPORTANT
Find a Realtor who will help you find the best property for your needs and a Lender who will help you get the best loan that you can qualify for.
When buying Ranch land, development property, commercial or investment property, the rules change. However the basic fundamentals remain the same.
Interest rates and down payments are normally higher. Amortization schedules are normally shorter. Each transaction must be evaluated on a case by case scenario.
WHEN SELLING YOUR HOME
When preparing to sell and move, there are tons of things to consider:
How much is your property truly worth?
What will you have to pay for a replacement property?
How long will it take to sell? How long will it take to close on the new property?
How will you transition from selling to buying and where will you live if you sell before you buy.
Do you have to sell in order to buy?
Talk to a GOOD LENDER who can help you understand what options are available to you. Plan on making your new purchase so that you can get the best terms available on your new loan. Refer to tips (WHEN BUYING A HOME)
Hire a professional REALTOR who will help you understand the selling process, and what to expect when negotiating with buyers.
Most people get a loan which means that your home will have to appraise and pass inspections.
Age, Condition, Location, Sq. Ft. type of construction and the size of your tract will effect the value. Become familiar with your market and your competition. If there are 10 homes available in your area, how does your home compare?
Your Realtor should do a Current Market Analysis for you.
Try to price your home so it will be shown. Over priced properties just serve to establish the GOOD DEAL on the ones that are at true market value.
First impressions are crucial, do your best to have the lawn mowed and if possible have a few flowers, either in the yard or potted. A nice warm inviting front door helps.
Inside be sure that there are no bad odors. Even heavy cleansers or over whelming potpourri can turn off a buyer. Fresh clean and warm homey smells or best
Put away the clutter. Freshen up the decorating, make repairs as best you can.
Now relax and let the Realtor do their job. Know that you will never please everyone so don’t try. There is a match for every home. Some people like bright colors some want all neutral. Some like lots of pets, others do not want a pet at all. It is part of what a good Realtor does to match up the right buyer with the right property.
The more available you make your home for showing the faster it will sell. At least 50% of my successful sales happen without a planned appointment. Keep the property ready and be as accommodating as possible.
Expect people to make strange request and sometime insulting offers. Do not get upset, just let your Realtor explain the bottom line and decide how to respond without turning the buyer completely away. Some buyers just test the sellers but will come around to a reasonable contract terms with some negotiations.
Once you are under contract it is time for the buyer to do inspections. Be aware of the terms in the contract regarding repairs, lender requirements and option times. A fair percentage of the contracts will fall apart for one reason or another.
If your Realtor is knowledgeable and on top of the details, He or She can often save a transaction that hits a snag.
When hiring a Realtor be sure that they are available. Buyers are shopping weekends and some evenings as well as during the week. If your Realtor can not be reached you may miss selling because the buyers will go on to other properties.
Be sure that your Realtor is familiar with the market in your area and that she will advertise your home well. Multiple Listing Services are crucial. A nice sign is also very important.
Four things to look for in choosing a Realtor are:
Knowledge of the market
Availability
Ethics
And the way they advertise
