|
Before you start
looking for a home you should ask yourself a few questions. Where do you want to live? Do
you want to be close to schools, shopping, or work? What kind of house would you like
(need)? Are you looking for a particular style? How many bedrooms and bathrooms do you
want? Do you want a yard? How much house can you afford? Have you consulted a Realtor or
mortgage lender to determine the size of the mortgage you would qualify for? Here are a
few tips to help you get organized:
- Acquire a credit report on yourself and
make sure the information is accurate. If you find any errors take steps to correct the
immediately.
- Browse through real estate
advertisements in the newspaper and Homes magazines. This will give you a good feel for
the types of homes that are on the market and what they cost.
- In many communities, Realtors may have
interactive phone systems which will allow you to find valuable information.
- Visit open houses on the weekend. It
doesn't cost anything to look, and looking at a few different homes might give you some
ideas for things you'd like in a house but haven't considered.
- Start saving money - you'll need to
have cash on hand for a down payment and closing costs.
- Try not to incur any additional debt.
Pay down your credit cards - and do not apply for any new ones. Do not make any major
purchases on credit - buy the furniture or car later.
- Contact a Realtor. Your Realtor can
help you determine how much you can afford, and they can provide you with information on
homes that may interest you. A Realtor will also help you complete all of the necessary
forms when it comes time to make an offer.
Return
to the top of this page
How much house can you afford?
Simply put, you can
afford a house that costs as much as the largest monthly mortgage payment you qualify for.
A quick way to estimate the size of mortgage you qualify for is to take your gross monthly
income (before taxes and other deductions) and multiply it by .28. This works out to just
over 1/4 of your gross income. Mortgage companies use something called qualifying ratios
to determine how much they will lend you. Most mortgage companies use either a 28/36 ratio
or a 25/33 ratio. The first number in each pair is the percentage of your gross income
that the lender considers acceptable as a monthly mortgage payment (i.e. if you make
$3,000 per month, 28% of that is $840 per month). The second number in each pair is used
when all debt payments are considered, not just the mortgage. (i.e. if you make $3,000 per
month, but also have a $250 a month car payment, 36% of $3,000 is $1,080, minus the $250
car payment equals $830). As you can see, in this example the numbers work out almost the
same. If you have more debt you qualify for less.
Return to Top Return to Getting Starting
Why
you should work with a Realtor
Working with a professional Realtor to
buy your home is a good idea for several reasons:
- I will analyze your financial situation
to help you determine how much you can afford. I will recommend several lenders/loan
officers.
- I am familiar with the process of
buying a home and can explain the steps involved.
- I can easily access information on all
properties listed for sale.
- I will set appointments for you to see
homes that interest you.
- I will help you complete all the
necessary paperwork when it is time to make an offer.
- I will help you arrange financing.
Return
to Top Return to Why you should work with a Realtor
Choosing a
Realtor
Searching for your dream home can be a
time consuming experience. Working with a professional Realtor will make the process much
more efficient. Since most people spend a fair amount of time with their Realtor,
it's important to choose a Realtor you feel comfortable with, and one who is responsive to
your needs. The following questions will help you decide if a particular Realtor is right
for you:
- Do they return your phone calls?
- Do they ask you questions to determine
what you want/need in a house?
- Do they perform a financial analysis to
help you determine how much you can
afford?
- Do they explain things clearly?
- Do they suggest financing methods?
- Do they seem knowledgeable about the
community?
- Do you feel comfortable spending time
with them?
If the answer to most of these
questions is "Yes" - you've found yourself a great Realtor. If you find yourself
answering "no"to many of these questions, or to any individual questions that
are important to you, you should keep looking until you find a Realtor you feel
comfortable with.
Return
To Top
Return to Choosing a Realtor
How Can A Buyer's Agent Help?
Some agents represent
the best interests of the seller. Some agents act as "Buyers Agents" and
represent the best interests of the buyer. You need to know who you are dealing with. If
you decide on a Buyer's Agent, state law requires a signed agreement which creates this
relationship - your Buyer's Agent knows how to handle the paperwork.
What a Buyer's Agent
can do that a Seller's Agent cannot:
- Provide you with information and
guidance to help you make an informed decision about the "right" price.
- Help you negotiate the best deal for
you.
- Assist with structuring the many terms
in a sales contract.
- Keep confidential any information about
you which could hurt your bargaining position.
- Inform you about the desirability of
different areas, floor plans and resale characteristics.
- Point out reasons NOT to buy a
particular house. A Seller's Agent has a duty to promote their listings.
A Buyer's Agent has the
duty to find the right house for you regardless of who owns it. A Buyer's Agent has the
duty to protect your interests and disclose any "behind the scenes" information
which might affect your decision.
What does this service
cost? Usually nothing. The commission to your agent is almost always paid by the seller.
Want to learn more about buyer agency? If so click the text below
I want to learn more about
buyer agency.
or call 339-0615 if you are in Kansas
City or 800-391-BEST(2378)
tollfree if you are out of town.
If you own your current
home:
- Seek professional help in determining
probable sales price and net proceeds (after all settlement costs are considered). I will
be happy to assist you in pricing your home.
- Locate your buyer before you look at
other homes. You can usually set a moving date which will allow you enough time for house
hunting.
Look only at houses
that meet your price criteria. Know in advance what you will require in terms of closing
and possession dates, seller participation, inspections and repairs and Homebuyer's
Warranty. Understand the different levels of representation.
A Buyer's Agent is
generally your best bet. Thoroughly research an area's market values and trends, schools,
and potential zoning changes. Don't overestimate your level of personal "fix-up"
ability. Consider hiring professionals to inspect a minimum of the following items:
- Mechanical components
- Structure and chimney
- Roof
- Underground sprinklers
- Radon/Wood destroying insects
Market conditions vary
with location, time of year, and national economics. In a fast-moving market with a
terrific house where there is other buyer competition, the "right" price may be
over what the seller is asking. In more normal conditions, most homes sell within 3% of
the asking price. Here is a list of the factors that determine value: size,
location, condition, amenities - interior, exterior, neighborhood, time on market, seller
concessions,
transferability, zoning, environmental influences, particular site within community,
governmental influences, and social influences. All of these issues will have an influence
on the appraiser who is sent by the lending institution. Undoubtedly, however, the most
accurate way to determine the fair value of the home is to carefully analyze the recent
sale history in the particular area.
Once you have
determined the fair value of the property, the amount you offer
should be influenced by:
1) how bad you want the home 2) how "hot" the market is 3) how motivated the
seller is, and 4) how good is your offer (is it subject to the sale of your house,
financing or
other contingencies, flexible as to the close date, etc.).
Generally, your first offer should be within 10% of what you determine to be
the fair value of the home.
Return
to Top
Return to How Will I Know The
"Right" Price?
A warranty is your
PEACE OF MIND from unexpected repair costs. The typical warranty plan usually costs
between $300 and $400 for basic coverage. That was the bad news about a warranty... now,
here is the good news:
- Most warranty programs cover a
pre-owned home's plumbing, electrical, heating and cooling systems, appliances, lighting
fixtures, septic system, and more.
- Coverage typically lasts for one year
from the
date of your loan closing.
- For a small deductible, usually $50 or
$75 per occurrence, a service technician is called to repair the covered item and they are
typically available with 24-hour, 7-day-a-week service. A warranty can save you a great
deal of money spent for repair or replacement of your homes' major components.
Return
to Top
Return
to The Home Buyer's Warranty
You may wish to
click the button below or the corresponding text
to check out the Buyer/Seller
Resource Page.
Please bookmark this page for future visits.
Buyer/Seller Resource Page
If you are buying
and selling you may wish to click on the Seller Tips
button below(or the corresponding text).
Seller Tips
HOME
|