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Archive for the 'Buyers' Category
Home Buyer Tax Credit Extended
This is great for Jackson Mississippi home buyers and sellers. Not only has it been extended it has been expanded. Here are some important things to know about the Homebuyer Tax Credit. 
1. Expansion Now Includes $6,500 Tax Credit for Existing and Previous Homeowner….. To qualify for the new $6,500 homebuyer tax credit, you must have owned your primary home for at least 5 consecutive years out of the past 8 years.
2. Current $8,000 First-time Homebuyers Tax Credit Extended through June 30, 2010…. You must be a first-time homebuyer or a buyer who has not owned a home during the past three years.
3. Timeline Extensions…. You must have an executed contract before April 30, 2010 and close before June 30, 2010.
Get your tax credit today!!!!
Thinking of Buying or Selling Your Home?
Contact The Herrington Realty Co. Today or Visit Us Online at www.herringtonrealtyco.com.
Click here
for more GREAT neighborhoods in Madison, MS!
Home Buyer Tax Credit will Boost Madison MS Sales
Bringing the Dream of Homeownership Within Reach
As part of its plan to stimulate the U.S. housing market and address the economic challenges facing our nation, Congress has passed new legislation that:
- Extends the First-Time Home Buyer Tax Credit of up to $8,000 to first-time home buyers until April 30, 2010.
- Expands the credit to grant up to $6,500 credit to current home owners purchasing a new or existing home between November 7, 2009 and April 30, 2010.
Here is more information about how the Extended Home Buyer Tax Credit can help prospective home buyers become part of the American dream.
Who Qualifies for the Extended Credit?
- First-time home buyers who purchase homes between November 7, 2009 and April 30, 2010.
- Current home owners purchasing a home between November 7, 2009 and April 30, 2010, who have used the home being sold or vacated as a principal residence for five consecutive years within the last eight.
To qualify as a “first-time home buyer” the purchaser or his/her spouse may not have owned a residence during the three years prior to the purchase.
If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see: 2009 First-Time Home Buyer Tax Credit.
Which Properties Are Eligible?
The Extended Home Buyer Tax Credit may be applied to primary residences, including: single-family homes, condos, townhomes, and co-ops.
How Much Is Available?
The maximum allowable credit for first-time home buyers is $8,000.
The maximum allowable credit for current homeowners is $6,500.
How is a Buyer’s Credit Amount Determined?
Each home buyer’s tax credit is determined by tow additional factors:
- The price of the home.
- The buyer’s income.
Price
Under the Extended Home Buyer Tax Credit, credit may only be awarded on homes purchased for $800,000 or less.
Buyer Income
Under the Extended Home Buyer Tax Credit, which is effective on November 7, 2009, single buyers with incomes up to $125,000 and married couples with incomes up to $225,000—may receive the maximum tax credit.
These income limits have changed from the 2009 First-Time Home Buyer Tax Credit limits. If you or your client purchased a home between January 1, 2009 and November 6, 2009, please see 2009 First-Time Home Buyer Tax Credit.
If the Buyer(s)’ Income Exceeds These Limits, Can He/She Still Get a Credit?
Yes, some buyers may still be eligible for the credit.
The credit decreases for buyers who earn between $125,000 and $145,000 for single buyers and between $225,000 and $245,000 for home buyers filing jointly. The amount of the tax credit decreases as his/her income approaches the maximum limit. Home buyers earning more than the maximum qualifying income—over $145,000 for singles and over $245,000 for couples are not eligible for the credit.
Can a Buyer Still Qualify If He/She Closes After April 30, 2010?
Under the Extended Home Buyer Tax Credit, as long as a written binding contract to purchase is in effect on April 30, 2010, the purchaser will have until July 1, 2010 to close.
Will the Tax Credit Need to Be Repaid?
No. The buyer does not need to repay the tax credit, if he/she occupies the home for three years or more. However, if the property is sold during this three-year period, the full amount credit will be recouped on the sale.
Source: National Assocation of Realtors
Get a Home Inspection
Buyers “BE WISE” Get a Home Inspection
It will save you money in the long run!!!
Once you enter into a contract on buying a property you should get a home inspection within 5 to 10 days of contact acceptance. Make sure the home inspector you choose is a certified home inspector.
Why an inspection?
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To protect yourself in an important investment decision. |
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To be an informed buyer, knowing if there are any defects present, if those defects are serious and the potential cost to repair them. |
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To be an educated home owner, having seen your home through the eyes of an unbiased professional. |
Scope
See a Virtual Inspection.
When possible, an Alpha inspection includes your inspector walking on the roof, crawling in the attic and entering crawl spaces.
Inspectors inspect for:
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Safety concerns |
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Financial considerations |
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Maintenance issues |
Who should attend?
You, as the client, are welcome to include anyone you desire in the inspection. Along with you and any family members you may also decide to include your realtor and the listing realtor.
Time for the Final Walk Through
You’ve decided on your home. All paper work is in order. Now it’s time to do the final walk through. It’s important to remember that final walk-throughs are not a home
inspections. It’s not a time to begin negotiations with the seller to do
repairs, nor is it a contingency. A final walk-through is an inspection
performed anywhere from a few hours to five days before closing, and its primary
purpose is to make certain that the property is in the condition you agreed to
buy – that agreed-upon repairs, if any, were made and nothing has gone wrong
with the home since you last looked at it.
Buyers
are often pressed for time as the day draws near for closing, which means
buyers can be tempted to pass on the final walk-through. It is never a good
idea to fore go the final walk-through.
Here is a list of items to check on a final walk-through:
- Turn on and off every light fixture
- Run water & look under sinks for leaks
- Test all appliances
- Check garage door openers
- Open and close all doors
- Flush toilets
- Inspect ceilings, wall and floors
- Run garbage disposal and exhaust fans
- Test heating and air conditioning
- Open and close windows
- Make sure all debris is removed from the home
Sometimes
sellers don’t move out until the day the transaction closes or even a few days
after closing. In those situations, the buyers should do a final walk-through
in the presence of the seller. Why? Because the seller knows all the little
quirks about the home and can answer questions the buyers may have.
Ready to make your next move? Contact Herrington Realty today. Our Team of Experts is
waiting to assist you. We have several Homes for Sale
in Madison MS, Brandon MS, and Ridgeland MS.
Search the local MLS for
1000’s of homes in the Jackson, MS Metro
area.
If you’re
Relocating to Brandon MS or live in this area and
would like to view some of the homes currently listed on the market call
Herrington Realty
Co. today at 601-977-1114.
Looking for a home
on the Reservoir? You will
find everything you want in the Brandon MS area. The City of Brandon MS is a great place to
live and is served by the Rankin County School
District.
Seven Steps to Improve Your Credit Score
There are more than 30 million people in the United States with credit
blemishes severe enough (and credit scores under 620) to make obtaining loans
and credit cards with reasonable terms difficult.
Or maybe your credit is OK, but you’d like to make it better. After all, the
better your credit, the lower the interest rates you can secure on mortgages,
car loans and credit cards.
Know the Score
In order to improve your credit score, it’s important to
know where you stand currently. Despite all the media attention given to free
credit reports, you still have to pay to find out your credit score, the
three-digit number ranging from 300 to 850 that is the key to your borrowing
costs. You can obtain your FICO credit scores, the ones lenders use, from MyFico.com.
Now you’re ready to take the seven steps to speedy credit repair:
1) Pay Down Your Credit Cards. Paying off your installment
loans (mortgage, auto, student, etc.) can help your score, but typically not as
dramatically as paying down – or paying off – revolving accounts like credit
cards.
The credit-scoring formulas like to see a nice, big gap between the amount of
credit you’re using and your available credit limits. Getting your balances
below 30% of the credit limit on each card can really help.
While most debt gurus recommend paying off the highest-rate card first, a
better strategy here is to pay down the cards that are closest to their limits.
2) Use Your Cards Lightly. Racking up big balances can hurt
your score, regardless of whether you pay your bill in full each month.
What’s typically reported to the credit bureaus, and thus calculated into
your score, is the balance reported on your last statement. (That doesn’t mean
paying off your balances each month isn’t financially smart – it is – just
that the credit score doesn’t care.)
You typically can increase your score by limiting your charges to 30% or less
of a card’s limit. If you’re having trouble keeping track, consider using a
check register to track your spending, logging into your account frequently at
the issuer’s Web site, or using personal finance software like Microsoft
Money or Quicken, which can download your transactions and balances
automatically.
3) Check Your Limits. Your score might be artificially
depressed if your lender is showing a lower limit than you’ve actually got. Most
credit-card issuers will quickly update this information if you ask.
If your issuer makes it a policy not to report consumers’ limits,
however – as is the usual case with American Express cards and those issued by
Capital One – the bureaus typically use your highest balance as a proxy for
your credit limit.
You may see the problem here: If you consistently charge the same amount each
month – say $2,000 to $2,500 – it may look to the credit-scoring formula like
you’re regularly maxing out that card.
You could go on a wild spending spree to raise the limit, but a more sober
solution would simply be to pay your balance down or off before your statement
period closes. Check your last statement to see which day of the month that
typically is, then go to the issuer’s Web site about a week in advance of
closing and pay off what you owe. It won’t raise your reported limit, but it
will widen the gap between that limit and your closing balance, which should
boost your score.
4) Dust Off an Old Card. The older your credit history, the
better. But if you stop using your oldest cards, the issuers may stop updating
those accounts at the credit bureaus. The accounts will still appear, but they
won’t be given as much weight in the credit-scoring formula as your active
accounts, said Craig Watts, an executive at Fair Isaac & Co., one of the
leading credit scorers. That’s why Ferguson often recommends to her clients that
they use their oldest cards every few months to charge a small amount, paying it
off in full when the statement arrives.
5) Get Some Goodwill. If you’ve been a good customer, a
lender might agree to simply erase that one late payment from your credit
history. You usually have to make the request in writing, and your chances for a
“goodwill adjustment” improve the better your record with the company (and the
better your credit in general). But it can’t hurt to ask.
A longer-term solution for more-troubled accounts is to ask that they be
“re-aged.” If the account is still open, the lender might erase previous
delinquencies if you make a series of 12 or so on-time payments.
6) Dispute Old Negatives. Say that fight with your phone
company over an unfair bill a few years ago resulted in a collections account.
You can continue protesting that the charge was unjust, or you can try disputing
the account with the credit bureaus as “not mine.” The older and smaller a
collection account, the more likely the collection agency won’t bother to verify
it when the credit bureau investigates your dispute.
Some consumers also have had luck disputing old items with a lender that has
merged with another company, which can leave lender records a real mess.
7) Blitz Significant Errors. Your credit score is calculated
based on the information in your credit report, so certain errors there can
really cost you. But not everything that’s reported in your file matters to your
score.
Here’s the stuff that’s usually worth the effort of correcting with the
bureaus:
- Late
payments, charge-offs, collections or other negative items that aren’t
yours.
- Credit
limits reported as lower than they actually are.
- Accounts
listed as “settled,” “paid derogatory,” “paid charge-off” or anything other than
“current” or “paid as agreed” if you paid on time and in full.
- Accounts
that are still listed as unpaid that were included in a bankruptcy.
- Negative
items older than seven years (10 in the case of bankruptcy) that should have
automatically fallen off your report.
You actually have to be a bit careful with this last one, because sometimes
scores actually go down when bad items fall off your report. It’s a
quirk in the FICO credit-scoring software, and the potential effect of
eliminating old negative items is difficult to predict in advance.
Some of the stuff that you typically shouldn’t worry about includes:
- Various
misspellings of your name.
- Outdated
or incorrect address information.
- An
old employer listed as current.
- Most
inquiries.
If the misspelled name or incorrect address is because of identity theft or
because your file has been mixed with someone else’s, that should be obvious
when you look at your accounts. You’ll see delinquencies or accounts that aren’t
yours and should report that immediately. However, if it’s just a goof by the
credit bureau or one of the companies reporting to it, it’s usually not much to
sweat about.
Two more items you DON’T need to correct:
- Accounts
you closed listed as being open.
- Accounts
you closed that don’t say “closed by consumer.”
Closing accounts can’t help your score, and may hurt it. If your goal is
boosting your score, leave these alone. Once an account has been closed, though,
it doesn’t matter to the scoring formulas who did it – you or the lender. If
you messed up the account, it will be obvious from the late payments and other
derogatory information included in the file.
Thinking of
buying of selling? Call The Herrington Realty Co. Today or visit us online at
www.herringtonrealtyco.com
If you would like
to know what homes have sold for in your neighborhood and want a free market
evaluation on your home click on the Home Value Button now.
Ready to make your next move? The Herrington
Realty Co. has several Homes for Sale in
Madison MS, Brandon MS, and Ridgeland MS. We have a
Team of Experts
waiting to assist you. If you need to sell your home we can help with that
too. Contact us
today to start the process.
Search the
Local MLS for 1000’s of
Homes in the Jackson, MS Metro area.
If you’re Relocating to the Jackson, MS Metro Area or live
in this area and would like to view some of the homes currently listed on the
market call Herrington
Realty Co. today at 601-977-1114
Negotiating Your Real Esate Offer
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Negotiating is the most challenging aspect of the home
buying/selling process. The buyers are trying to negotiate the best deal for
them. You are trying to negotiate the best deal for you. Each offer should be taken seriously and every
effort should be made to successfully negotiate it into a contract.
There are three essential parts to a valid contract;
Offer, Consideration and Acceptance. The OFFER is what the seller wants to
receive for his CONSIDERATION. ACCEPTANCE is when both parties are in agreement to the terms, and consideration; in other words acceptance is what the seller is willing to give you in
exchange for what you are willing to give him.
Once your offer is
made, you and your Realtor may need to enter some negotiation in order to reach
an agreement. Keep in mind that almost everything is negotiable when you are
buying a house. This can give you a great deal of leverage in the buying
process – that is, if you have adequate information and you use it in an
appropriate manner. Your agent will have the market knowledge and negotiating
expertise necessary to make sure that your offer is accepted at the best price
and terms possible for you.
Some of the things that you may
have to negotiate are:
-
The price -
Financing -
Closing costs -
Repairs that need to be done -
Appliances and fixtures -
Landscaping -
Painting -
Occupancy time frame
There
are three outcome variables when a real estate contract is drafted by the buyer
and presented to the seller.
The seller
will accept the terms = contract.
The seller
will change the terms = counteroffer.
The seller
will reject the terms = the end, start over or walk away.
The
key to successful negotiating is keeping in mind that the end result must make
the buyer, and the seller happy. Otherwise, negative feelings will persist
throughout the remainder of the process and someone may walk away feeling that
they were not treated fairly.
Thinking of Relocating to Ridgeland MS, Brandon MS, or
Madison MS? The Herrington
Realty Company is committed to making the relocation process a
smooth transition. Our team of professionals consists of Madison MS,
Brandon MS and Ridgland MS Real Estate Agents that
will provide you with a complete RELOCATION PACKAGE
designed with your needs in mind. We help familiarize buyers with every
aspect of our city, from our schools and neighborhoods,
to local government and taxes.
We work with many nationally recognized relocation companies across the country
to assist and ensure that employees have a smooth transition into their new
homes and communities. Referrals from these relocation resources provide us
with qualified buyers who
will be among the first to learn about your home.
Understanding Your Credit Score
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The Fair Isaac Corp., the creator of the FICO credit score -
recently unveiled a new scoring model for determining credit scores. It is
being called FICO 08. The Better Business Bureau of Mississippi offers
the following information about FICO 08 and changes it contains can affect
consumers.
FICO scores range from 300 to 850, with higher scores being better. They are
based on consumer credit history and reveal the risk level on loan defaults. A
good credit score is anything higher than 700.
“A low FICO score keep consumers from getting loans to buy a house or car,”
said Bill Moak of Madison, MS president/CEO of the BBB of Mississippi. “Today,
many landlords, utility services and employers are now relying on these scores
as well. This means that a bad score can keep someone from getting a good
insurance rate, an apartment, or even a job.”
According to Fair Isaac, the new FICO 08 is more forgiving of minor slip-ups
and will more accurately predict a borrower’s risk of defaulting on payment
obligations. Factors included in the FICO score are: financial history,
indebtedness, length of credit history, and number of open lines of credit. The
new FICO 08 changes the weight for these factors.
Scores
will still range from 300 to 850 and will take into account the
same factors as the old version such as timely payment history, length of
credit history, amount of debt, ratio of debt to available credit, type of debt
(credit cards good, finance companies not so good), and any excessive amount of
recent new credit. There will also be a premium placed on the debt mix; that is
a consumer with revolving and installment credit will fare better than one with
nothing but (revolving) credit card debt.
Among the
big changes FICO is in the area of evaluating “authorized users.” An
authorized user is one who is not responsible for paying a credit card, but
that card’s history is reported on the user’s credit as well as on the owner’s
credit. Parents have for years made children authorized users of their cards in
order to help them build credit and many spouses derive all of their credit
histories from being authorized users of their husband’s or wife’s card.
“Consumers may see their scores go down if they have multiple delinquent
accounts. Their scores may go up if they have only one delinquent account and
demonstrate successful repayment on other debts,” continued Moak.
Due to the constant increase in Identity Theft, the Better Business Bureau
recommends that consumers check their credit report and score periodically to
be sure that they accurately reflect their credit record.
Are you looking
to relocate to Madison MS, Brandon MS, or Ridgeland
MS? Click here to receive your free relocation
package.
Ready to Buy
or Sell Your Home? Now is a GREAT Time! The Herrington Realty Company has
Madison MS, Brandon MS, and Ridgeland MS agents eagerly waiting to assist
you.
We have several
Homes for Sale in Madison MS, Brandon MS, and Ridgeland
MS. Search the local MLS for 1000’s of homes for sale in the Greater Jackson area.
Things Not to Do Before Purchasing a Home
No Major Purchase of Any
Kind
This includes furniture, appliances,
electronic equipment, jewelry, vacations, expensive weddings…and automobiles,
of course.When you get a raise or accumulate some
savings, you may find yourself confronted by an innate instinct of modern
civilized men and women…. the desire to spend money. It begins simply, by going out to restaurants, and then
accelerates to purchasing clothing, electronic gadgets, and since North
Americans have a special fondness for the automobile, you may even buy a
“brand new car.”
If you’re married or ambitious, a few
months later your thoughts eventually turn toward buying your own home. Or a
move-up home, if you are already a homeowner. Next, you contact a loan officer
to get pre-qualified for a mortgage loan. You
state your desired price and how much you can put down. You provide your income
and may even supply pay stubs and W2 forms. The loan
officer methodically crunches the numbers (by telephone, in person, or even
over the internet). “If only you didn’t have this car payment…”
Don’t Move Money Around
When a lender reviews your loan package
for approval, one of the things they are concerned about is the source of funds
for your down payment and closing costs. Most likely, you will be asked to
provide statements for the last two or three months on any of your liquid
assets. This includes checking accounts,
savings accounts, money market funds, certificates of deposit, stock
statements, mutual funds, and even your company 401K and retirement accounts. If you have been moving money between
accounts during that time, there may be large deposits and withdrawals in some
of them.
The mortgage underwriter (the person who
actually approves your loan) will probably require a complete paper trail of
all the withdrawals and deposits. You may be required to produce cancelled
checks, deposit receipts, and other seemingly inconsequential data, which could
get quite tedious.
Perhaps you become exasperated at your
lender, but they are only doing their job correctly. To ensure quality control
and eliminate potential fraud, it is a requirement on most loans to completely
document the source of all funds. Moving your money around, even if you are consolidating your
funds to make it “easier,” could make it more difficult for the lender
to properly document.
So leave your money where it is until you
talk to a loan officer.
How Changing Jobs
Affects Buying a Home
For most people, changing employers will
not really affect your ability to qualify for a mortgage loan. For some
homebuyers, however, the effects of changing jobs can be disastrous to your loan application.
Salaried Employees
If you are a salaried employee who does
not earn additional income from commissions, bonuses, or over-time, switching
employers should not create a problem. Just make sure to remain in the same
line of work. Hopefully, you will be earning a higher salary, which will
help you better qualify for a mortgage.
Hourly Employees
If your income is based on hourly wages
and you work a straight forty hours a week without over-time, changing jobs
should not create any problems.
Commissioned Employees
If a substantial portion of your income
is derived from commissions, you should not change jobs before buying a home.
This has to do with how mortgage lenders calculate your income. They average
your commissions over the last two years.
Changing employers creates an uncertainty about your future earnings
from commissions. There is no track record from which to produce an average.
Even if you are selling the same type of product with essentially the same
commission structure, the underwriter cannot be certain that past earnings will
accurately reflect future earnings.
Changing jobs would negatively impact your ability to buy a home.
The Herrington Realty Company realizes
that buying a home is big responsibility and we are committed to providing
others in our communities with information concerning homeownership.
If we can assist
you with your current property or help you select your next home, please
contact us and we will be glad to answer any questions you may have.
Our team of experts
specializes in making dreams come true in Brandon MS, Madison MS, Ridgeland, MS and the Jackson, MS Metro Area.
Building a Home in the Jackson MS Metro Area
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The first thing you should do when considering building your home is to
come up with a budget and STICK to it.
Your budget should be in place even before you decide on a builder. When you plan your budget first you know
upfront what you can afford to pay a builder.
When it comes to building your own home here are several things that
you will need to take into consideration.
You should take into consideration the cost of the house, the land and
any extras you may want to add to the house.
Be sure to take into consideration the landscaping you may want to do in
order to get the best curb appeal.
- Building
your dream home is both an exciting and a stressful time. Make sure
you talk openly and extensively with your Madison MS Real Estate Agent and/or builder on
the front end, before construction begins, to get all of your questions
answered. Take nothing for granted and do not make assumptions
about the building process. There are no foolish questions in new
construction! - Try to
plan your entire home in advance. Flooring, materials, appliances,
etc.. Many people are not aware that making changes during the
construction process is often very expensive and sometimes not even
possible. Planning in advance will help to lessen the chance of
disappointment. - Visit
showrooms, tour model homes. Go to open houses and read home building and
design magazines for ideas. Keep a scrap book or file of photos and
ideas you’d like to incorporate into your new home. Go over these
with your agent or builder early in the planning process. - Take
nothing for granted. Remember that just because you see something in
a different home your builder constructed, does not always mean you will
get that in your new home. Be sure and ask for a complete list
of standard features and amenities to clarify. - Understand
that most builders will provide a standard one year warranty, but you may
request an extended warranty that picks up where the other
leaves off. This is very important should the home ever have
any kind of major structural flaws. - Ask for
testimonials - If your
builder does not have any homes currently on the market or under
construction, ask if he will schedule an appointment for you to tour other
homes he has built in the past. Many homeowners will gladly and
proudly show off their new home, and you will have the opportunity to see
a finished product. - Average
turn-around time in new construction is 4 to 6 months. - Most stock
floor plans are customizable. You will save thousands of dollars
by going this route as opposed to having an architect design one from
scratch. - Many
builders can make plan changes “in the field” without your having to
pay additional architect fees.
If you’re considering building please contact The Herrrington Realty Co today. Our team of experts specializes in new construction and will be happy to assist you in finding a qualifed builder.
Not quite ready for the challenge of buidling? No problem!! We have several Homes for Sale in Madison MS, Brandon MS, and Riddgeland, MS. We want to assist you with your next move. Search the Local MLS for 1000s of New Construction Homes as our special guest. Once you’ve located your dream home in the Jackson MS Metro area contact a member of our team to begin the home buying process.
Relocating to the
Jackson MS. Metro Area? Our team of
realtors will be happy to help you in your move to Madison MS, Jackson MS, Brandon MS or
Ridgeland MS areas.
Steps to buying your Madison MS Real Esate Home
STEPS TO BUYING YOUR MADISON MS REAL ESTATE HOME
Purchasing
real estate is one of the biggest investments you will ever make. It is a
decision that will have lifelong implications, therefore it is very important
to understand the key factors to consider before purchasing real estate. Here
are 10-steps to give you some insight about the home buying process.
Step
#1 – What Can You Afford?
To
find out how much you can afford, it is best to speak with a Mortgage
Professional. To find a good mortgage broker consider consulting with you
friends and/or family members who currently own a home. After talking to a
Mortgage Professional you will know weather or not you need a down payment, how
much of a down payment you will need, your potential interest rate and all of
the necessary criteria required to qualify for a loan. Once you choose your
lender and provide them with the necessary documentation, you will be given a
Pre-Approval Letter that states how much you can afford, your interest rate and
the terms of the loan. Key Points: 1. Not all Lenders are
created equal so it is a good idea to shop around. 2. Make sure you are given a
Pre-Approval letter not a Pre-Qualification letter. 3. Beware of the bait and
switch technique. This is when lenders get your attention by advertising an
attractive interest rate only to increase it after you are locked in.
Step#2
- Choosing the Right Property For You
The
decision of what type of real estate you purchase will consist primarily of,
how much you can afford and your reasons for buying. After consulting with
a lender, you will know what you can afford in terms of a
Condo, Single Family Home, or a Multi-Family
property. The questions you should ask yourself is “What
are my goals for my real estate purchase?” This will help
you better define what type of property suits your needs. The financial
commitment is significant, and not every property fits the needs of its
potential suitor, so it is important that you consider the goals for your
real estate purchase, both short term and long term. For example if it is going
to be your primary residence, you want to make sure it can
comfortably accommodate your current and future family i.e. children
or in-laws. If the market takes an unfavorable turn and it become difficult
to sell then you can still live comfortably in your home until the market
recovers. Key Points: Always consider the short term and long
term goals of your real estate purchase. It all starts with your reasons for
purchasing real estate.
Step#3
- Finding a Home
Now
that you understand the lending process and have narrowed down the type of
property you are looking for, its time to start looking. So where do you
start? I would recommend finding a local real estate professional. You
will have professional representation at no cost to you, and it will surely
make the process a lot smoother. Buyers Agents are paid at closing
by the seller. The total commission is split between the buyer’s agent and the
listing agent
Step#4
- Attorney or No Attorney?
Real
estate brokers and agents are professionals at finding an ideal home and
negotiating the terms, but attorneys are experts at reviewing and explaining
contracts. As a result, it is best to have an attorney review all contracts
before entering into any agreements with the seller. The best way to find a
good attorney is to ask your real estate agent. Real estate agents regularly
work with a number of attorneys in many different capacities and know
which attorneys will be best based on your specific needs. It is in the
agent’s best interest to recommend an attorney that they know is competent,
trust worthy and focused on protecting their client’s interest.
Step#5
- Making an Offer
Before
placing an offer on a home you should know how much it is worth to ensure the
listing price is in line with the actual value. Ask your agent to provide you
with a CMA (Comparative Market Analysis). A CMA compares homes based on size,
location, condition and several other factors to estimate the value real estate
in a given area. As a result you will see what similar homes have recently sold
for. This will give you a better understanding of the market and help you to
better gauge your offer. It is also important to understand that everything is
negotiable. For example if you see any furniture, appliances, a chandelier or
anything that you like, include it in the offer. This strategy can sometimes
give buyers more leverage when negotiating. Even if the seller does not want to
sell their personal property, it gives you the buyer an additional negotiating
point. It also is important to include contingencies in the offer as well. The
most common types of contingencies are a mortgage contingency and an inspection
contingency.
Step#6
- Home Inspection
A
home inspection is an essential part of the home buying process. Every buyer
has a right to have a home inspection and it is extremely wise to take
advantage of that right, even if it is new construction. It is best to ask your
agent to provide you with a recommendation for an inspector. They work with
multiple inspectors and will likely refer you to an inspector that is right for
your needs. Purchasing real estate is the most significant investment many
people will make during the course of their lives. A home inspection will
validate that you are investing in a good home or uncover significant defects
that you would otherwise not have known about until moving into the home.
It is far more valuable to know what you are buying before you buy, than to
invest hundreds of thousands of dollars into a property that is not worth it.
So what happens when the inspector discovers defects? In most instances the
buyer and seller come to a mutual agreement on how to deal with the issues.
Sometimes the seller may agree to take care of the issues. In other instances
the buyer may assume the responsibility for a discount in the price. It really
just depends on the specifics of the defects. As a buyer, it is best to know as
much about your home before you purchase it as possible.
Step#7
- Mortgage Application
Once
of all the terms are finalized following the home inspection, it is now time to
complete your mortgage application. The first step would be to inform your
lender or bank that you have signed a P&S (Purchase and Sale
Agreement). They will ask for a signed copy of the P&S along with
other financial documents needed to complete your loan application. It is
important to get this application in as soon as possible so the bank has as
ample time to process your application. In accordance with the P&S, the
bank must provide the buyer with a commitment letter or a declination letter by
a specific date. The commitment letter states that the bank is going to give
you the loan. The declination letter states that you have been declined for the
loan and cannot purchase the property. If the lender does not supply this, they
buyer runs the risk of forfeiting their deposit if they are not approved or
declined for the loan within the given time. If you need more clarification on
this, ask your real estate agent. Key Points: Make sure the your
lender supplies you with a commitment or declination letter before the
commitment date. If not you could end up losing thousands of dollars.
Step#8
Insurance Binder
After
the bank provides a commitment letter, the only additional requirement is the
insurance binder. Before the bank can complete the loan the buyer must purchase
homeowners insurance. It is best to get three quotes when shopping around for
homeowners insurance. The first quote should come from the provider of your car
insurance. In many instances the insurance company will give you a discount for
insuring your home and automobile with the same provider. You should also
gets recommendation from friends & family and your Realtor. These are all
sources that you can trust and it will insure you get the best. The insurance
binder is then sent to the lender prior to closing. Now the funds are all set
to be released on the specified closing date.
Step#9
- Reviewing The Settlement Statement
1-2
Days before you close, the closing attorney, who represents the bank lending
you the funds, will provide you and the seller with a settlement statement
(also called a HUD) for your review. It is important that you, your attorney
and your Realtor review the charges, fees and adjustments to ensure everything
is correct. The HUD will have all of the information such as the closing costs,
tax adjustments, utility adjustments your real estate rebate and several other
fees. It will also state the amount you need to bring to closing. Any funds
brought to the closing should be done in the form of a certified or bank check.
Note: The seller will have to make sure the home meets the
local fire code and provide final utility bills prior closing.
Step#10
- Closing
So
what do you need to bring to the closing? you will need at least 2 forms of
identification, a certified or bank check for any additional funds and a good
pen for all of the documents that you will be signing. The closing is typically
attended by the buyer(s), seller(s), closing attorney, your attorney and the Realtors
involved in the transaction. Your attorney will explain all of the
documents to you prior to signing any of the disclosures at the closing. Once
you are finished signing, you will receive your keys.
The Herrington Realty Company realizes
that buying a home is big responsibility and we are committed to providing
others in our communities with information concerning homeownership.
If we can assist you with your current property or help
you select your next
home, please contact us and we will be glad to answer any questions you may
have.
Our team of
experts specializes in making dreams come true in the Brandon
MS and Madison MS area.
