5 Questions Every Buyer Should Be Ready to Answer

It’s important to always be crystal clear on the direction you are wanting to take and your preferences. Know where you stand and share this with us when you call on us as your agents so that we are all on the same page!

Here are 5 questions you should be ready to answer:

1. Why are you buying and why is now the right time to move? When do you want/need to be in your new home?

KNOWING WHY YOU are buying a new home at this specific time is very helpful in tailoring our real estate services to fit YOUR needs. For instance, you may have a home to sell. We can help you with that, of course. Or, your lease may end soon. No matter what your timing is, we will be prepared to see you through the entire Buying/Selling process.

Everyone’s timing is different.


2. How many houses have you already seen and what are your 3 favorite areas?

This question helps us gain a better understanding of your recent real estate experience. Also, we would like to know your 3 favorite areas – this is an easy way to begin discussing the importance you place on schools, demographics, and where you want to live.


3. If we found your perfect home tomorrow, what would you do?

We would ask this question so we can evaluate your readiness to actually move and better grasp your preferred timeline. If you are a first-time home buyer, we will go over the closing process and any other details that you need to know about buying a new home.

4. Are you working with a lender?

We would like to know if you are pre-approved. If so, who is your lender? And if you have not been pre-approved, we would be happy to refer you to a local lender with whom we have had good results.

It is important during the home-buying process that we are able to keep in touch with your lender and provide them information to help a smooth loan process.


5. What would be a deal breaker?

Please tell us what you DON’T want! Specifically, what features, or lack of, would immediately rule out a home for you? This will save tons of time and energy while finding the best home for you. Everyone has different preferences when it comes to their next home, and understanding what to omit speeds up the buying process.

DID YOU KNOW?

A home buyer can get an FHA loan as little as 3 years after a foreclosure and 2 years after a bankruptcy.

7 Steps to Take Before You Buy a Home

By doing your homework before you buy, you’ll feel more content about your new home.

Most potential homebuyers are a smidge daunted by the fact that they’re about to agree to a hefty mortgage that they’ll be paying for the next few decades. The best way to relieve that anxiety is to be confident you’re purchasing the best home at a price you can afford with the most favorable financing. These seven steps will help you make smart decisions about your biggest purchase.

1. Decide how much home you can afford

Generally, you can afford a home priced 2 to 3 times your gross income. Remember to consider costs every homeowner must cover: property taxes, insurance, maintenance, utilities, and community association fees, if applicable, as well as costs specific to your family, such as day care if you plan to have children.

2. Develop your home wish list

Be honest about which features you must have and which you’d like to have. Handicap accessibility for an aging parent or special needs child is a must. Granite countertops and stainless steel appliances are in the bonus category. Come up with your top-five must-haves and top-five wants to help you focus your search and make a logical, rather than emotional, choice when home shopping.

3. Select where you want to live

Make a list of your top-five community priorities, such as commute time, schools, and recreational facilities. Ask your REALTOR® to help you identify three to four target neighborhoods based on your priorities.

4. Start saving

Have you saved enough money to qualify for a mortgage and cover your downpayment? Ideally, you should have 20% of the purchase price set aside for a downpayment, but some lenders allow as little as 5% down. A small downpayment preserves your savings for emergencies.

However, the lower your downpayment, the higher the loan amount you’ll need to qualify for, and if you still qualify, the higher your monthly payment. Your downpayment size can also influence your interest rate and the type of loan you can get.

Finally, if your downpayment is less than 20%, you’ll be required to purchase private mortgage insurance. Depending on the size of your loan, PMI can add hundreds to your monthly payment. Check with your state and local government for mortgage and downpayment assistance programs for first-time buyers.

5. Ask about all the costs before you sign

A downpayment is just one homebuying cost. Your REALTOR® can tell you what other costs buyers commonly pay in your area—including home inspections, attorneys’ fees, and transfer fees of 2% to 7% of the home price. Tally up the extras you’ll also want to buy after you move-in, such as window coverings and patio furniture for your new yard.

6. Get your credit in order

A credit report details your borrowing history, including any late payments and bad debts, and typically includes a credit score. Lenders lean heavily on your credit report and credit score in determining whether, how much, and at what interest rate to lend for a home. Most require a minimum credit score of 620 for a home mortgage.

You’re entitled to free copies of your credit reports annually from the major credit bureaus: Equifax, Experian, and TransUnion. Order and then pore over them to ensure the information is accurate, and try to correct any errors before you buy. If your credit score isn’t up to snuff, the easiest ways to improve it are to pay every bill on time and pay down high credit card debt.

7. Get prequalified

Meet with a lender to get a prequalification letter that says how much house you’re qualified to buy. Start gathering the paperwork your lender says it needs. Most want to see W-2 forms verifying your employment and income, copies of pay stubs, and two to four months of banking statements.

If you’re self-employed, you’ll need your current profit and loss statement, a current balance sheet, and personal and business income tax returns for the previous two years.

Consider your financing options. The longer the loan, the smaller your monthly payment. Fixed-rate mortgages offer payment certainty; an adjustable-rate mortgage offers a lower monthly payment. However, an adjustable-rate mortgage may adjust dramatically. Be sure to calculate your affordability at both the lowest and highest possible ARM rate.


By: G. M. Filisko

Why Congress Should Care About Middle Class Home Ownership

In a May 21 article appearing in Roll Call, 2014 NAR President Steve Brown urged Congress to embrace policies that will stem the decline in middle class home ownership.

“For decades, the purchase of a first home was the hallmark of middle class arrival and the foundation of financial security for aspiring families,” Brown said in his commentary, Middle-Class Home Ownership Must Be a Bipartisan Priority. “Steadily growing home ownership rates were seen as a proxy for the nation’s progress in making the American Dream a reality for as many Americans as possible. Moreover, broad-based home ownership exemplified the uniquely American sentiment that ordinary people could control their own destinies and move ahead through hard work and responsibility.”

Today, the rate of home ownership in the United States stands at 65 percent, the lowest it has been in nearly two decades, Brown said. He called on Congress to preserve the mortgage interest deduction; take prudent steps to improve credit availability, address the student-loan debt crisis, and provide national leadership on promoting home ownership.