The Importance of Getting Pre-Approved

In today’s real estate market, it’s essential to get pre-approved before starting your home search as it allows you to:

•    Understand your financial condition
•    Understand how much home you can afford before you begin your home search
•    Strengthen your purchasing power when making your offer

A full-service mortgage company with a proven and trusted track record, can help you determine your purchasing power before your home search gets underway.  The company will show you a variety of financing types (FHA, conventional, jumbo, super jumbo, etc.) and will determine how much you qualify for with each type.  Based on your desired payment level and the funds you have available, the company can determine your purchasing power and design a loan that will work for you.

•    Getting pre-approved puts you in a better negotiating position by letting the seller know you are committed and financing is not in question
•    In cases where there are multiple offers for homes, buyers who are pre-approved have a better chance of an accepted offer on the house they wish to buy.

To find out what you should take with you when you visit your lender, click here.

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Documentation Needed to Apply for a Loan

1. Most recent 30 days of pay stubs.
2. Last two years Federal Tax Returns. (1040) including W-2’s.
4. Most recent two months’ asset statements for any accounts used on the loan.
NEED ALL PAGES:
Checking accounts, savings accounts, money market accounts, CDs, stock market accounts, mutual funds, and retirement accounts (401k & IRA’s).
Accounts with quarterly statements only need the most recent statement.
5. Most recent mortgage statement, homeowner’s insurance declaration page. (Refinance only)
6. Copy of driver’s license.
7. Copy of social security card for VA & FHA Loans Only
8. DD-214 for VA Loans Only.

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Why use an Accredited Buyer’s Representative (ABR®)

Buying a home is no small matter. Besides being the largest financial transaction you may ever undertake, it’s probably also the most complex. There are many good reasons to work with a qualified real estate professional—especially a trained professional who has earned the Accredited Buyer’s Representative (ABR®) designation, representing best-in-class buyer services.

When you look for an ABR® before you look for a home, you’ll be served, not sold. Your interests become their interests. And you’ll be working with someone who has gone the extra mile by completing specialized training in delivering the best in buyer-representation services. Plus, a REALTOR® who has an ABR® designation also has an established track record, with proven experience in representing the concerns of home buyers.

The ABR® designation is awarded through the Real Estate Buyer’s Agent Council, or REBAC, which was founded in 1988 to promote superior buyer-representation skills and services. REBAC is an affiliate of the National Association of REALTORS® (NAR).

Find a Buyer’s Rep – Directory of ABR®s and other buyer’s reps working to achieve this designation.

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Buying a New Home

Buying a home is one of life’s most important investments and exciting adventures. As your Coldwell Banker Residential Brokerage Independent Sales Associates, we will guide you every step of the way by:

  • Helping you get pre-approved and establish your purchasing power
  • Helping you determine your home preferences
  • Helping you determine your offer
  • Negotiating the offer and contract
  • Facilitating the financing process
  • Initiating the property evaluation and inspection process
  • Explaining the title search process
  • Preparing you for the close of escrow and associated
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Five tips for first-time buyers

No matter how much time you spend on researching and educating yourself about your home purchase, it’s hard to cover every detail. Here are a few tips for avoiding rookie mistakes with your first home purchase.

  1. Save as early as you can: Even if you think you’re years away from buying your first home, try to start saving for your down payment. It makes a huge difference in your monthly payments, and helps avoid paying Private Mortgage Insurance.
  2. Be thorough with mortgage shopping: There are countless resources out there that can help you get the best terms for your mortgage. It may seem like a lot of work to shave less than a point off your mortgage rate, but it’ll save you thousands in the long run.
  3. Consult a skeptic: You’re likely to fall in love with a home, and that can make it difficult to take problems seriously. Bring along a skeptical friend or family member who can give you an honest opinion.
  4. Be patient with getting settled: You’ll be anxious to make your new home your own, but take some time to see how your budget truly shakes out. In other words, hold off on big furniture purchases and remodeling projects.
  5. Make sure you’re happy with the neighborhood: The house may be perfect, but don’t discount the surroundings. You don’t want to end up in the suburbs if you’re going to miss walking to your favorite coffee shop, and you don’t want to settle for the city if you’re looking forward to some peace and quiet.
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8 Things NOT to do when Buying a Home

DON’T BUY OR LEASE AN AUTO!

Lenders look carefully at your debt-to-income ratio. A large payment such as a car lease or purchase can greatly impact those ratios and could prevent you from qualifying for a home loan.

DON’T MOVE ASSETS FROM ONE BANK ACCOUNT TO ANOTHER!

These transfers show up as new deposits and complicate the application process. You must disclose and document the source of funds for each new account. The lender can verify each account as it currently exists. You can consolidate your accounts after your loan closes, if you need to.

DON’T CHANGE JOBS!

A new job may involve a probationary period, which must be satisfied before income from the new job can be considered for qualifying purposes.

DON’T BUY NEW FURNITURE OR MAJOR APPLIANCES FOR YOUR “NEW HOME”!

If the new purchases increase the amount of debt you are responsible for on a monthly basis, there is the possibility this may disqualify you from getting the loan, or cut down on the available funds you need to pay the closing costs.

DON’T USE YOUR CREDIT CARDS UNNECESSARILY

Only use your credit cards for normal purchases as you have done in the past. A new credit report will be ordered at the close of escrow. This could affect your approved loan if your credit ratios increase.

DON’T IGNORE WHO RUNS YOUR CREDIT REPORT!

This will show as an inquiry on your lender’s credit report. Inquiries must be explained in writing.

DON’T ATTEMPT TO CONSOLIDATE BILLS BEFORE SPEAKING WITH YOUR LENDER!

The loan officer can advise you if this needs to be done.

DON’T PACK OR SHIP INFORMATION NEEDED FOR THE LOAN APPLICATION!

Important paperwork such as W-2 forms, divorce decrees, and tax returns should not be packed with your household goods. Duplicate copies take weeks to obtain, and could stall the closing date on your transaction.

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Mortgage Calculator

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What Buyers Don’t Know Can Hurt

by Ruth Jones Online on Wednesday, June 1, 2011 at 11:26am

So often as real estate agents we take it for granted that our buyers understand the purchasing process, what their agent does for them and even how we get paid. This is not always the case. I have put together a summary to help buyers understand how the process works, so they can make choices that fit their needs. The goal is to form a mutual relationship based on respect, designed to last well beyond their purchase.

Before you shop….Select that agent

Like any profession… Real Estate agents come with different level of skills involving communication, education, professionalism, even accessibility. Make a list of what is important to you.

Work hours– If you are someone who is only available during evening hours or on weekends, make sure that your agent is willing to work during those time frames.

Communications– Do you prefer text, email or phone? Make sure you and your realtor are comfortable with the same method of communication. Also discuss the frequency of communication.

Education and Experience– Don’t be afraid to ask about experience and education. Continuing education is a licensing requirement for real estate agents. In addition to basic continuing education hours, there are certifications that can be earned with a focus on a certain aspect of real estate, such as commercial, negotiations, working specifically with buyers or sellers. Examples are the “ABR” Accredited Buyer Representation, or ”GRI” Graduate Institute of Realtors, or EPro, with a technology focus. Typically a realtor will list these certifications on their business cards, but don’t hesitate to ask.

Personality– Even if an agent meets most of the above criteria, you will want to select an agent that blends well with your own personality. Common sense will prevail here, if you feel there is something annoying with an agent, then move on to another. Your relationship should be based on trust and compatibility.

Understanding how a real estate agent gets paid.

When a seller lists their property, they contract with the listing company to pay a commission, most often based on a percentage of the sale price, when the home is sold. This is paid at closing, and typically split between the listing agency and the buyer’s agency (referred to as the selling office commission). As a buyer you are not responsible to pay any portion of the real estate commission, but your agent does get paid as a result of your purchase. It is important to look at this as a business relationship between you and the agent you have chosen to work with. Many clients/realtor relationships last a lifetime.

Working with your agent.

Once you find an agent, it’s time to get down to business. You and your agent will discuss what you want to purchase, your budget, how you are planning to pay for it, and any timelines you might be working within. After which, your agent will begin the process of weeding through potential properties, calling agents, verifying lending and setting up appointments. It’s common for an agent to put in several unseen hours researching, selecting and scheduling to set up a single afternoon of viewing homes. Rarely do buyers find the perfect home on their first journey out with an agent, but each appt helps fine tune the buyer’s likes and dislikes. Purchasing a home is a large investment and it can take time to find the perfect fit.

Loyalty and Trust.. Win Win

Understanding how your agent gets paid can prevent unintentionally leaving your agent out on payday. The agent that writes the contract on behalf of the buyer is the agent that gets paid the “selling office commission”. So if you have an agent investing hours, gas and working hard to find you a home and you want them to be the one getting paid, they need to be the one who writes the contract. Navigating from agent to agent or using two agents, means someone is doing a lot of work and is not going to be compensated. The relationship with your realtor can last a lifetime. Someone you can seek advice from well beyond your initial purchase. Your agent will keep you informed on the market as your investment grows, and be there when you are ready to sell or purchase again.

Dedicate yourself an agent. If it turns out that the relationship with the agent you selected is not working, then make it clear and find one you can work with.

Using the seller’s agent?

Understanding the reasons a seller is willing to pay a commission to sell their home will help you understand the role your agent will play.

1) Exposure being the obvious reason a seller would want their home listed

2) Laws. There are a lot of legalities that go with selling a home in order to protect both the buyer and seller.

3) Contracts can be complicated and although designed to protect everyone, can be written with more protection or to meet specific needs of either the buyer or seller.

4) The right price. No one wants to get a year down the road to suddenly discover they sold too low or paid too much.

5) The listing agent has been contracted to represent the seller and put the seller’s needs above all others. To ensure you have someone putting your needs first, work with an agent you know and trust. Remember the listing contract is set and ready to compensate both the listing and the buyer’s agents (selling office commission). Working towards a clean professional transaction is the goal, and everyone wins.

Shopping in another area?

If you find yourself relocating out of the area, or shopping in multiple areas, your agent can refer you to equally trusted agent with similar skills and personality in those other areas. Agencies are linked and so are agents with certain certifications, networking back and forth. Your agent will likely suggest a trusted agent from a linked agency to cover the other areas. Referring agents often share or split commissions so that everyone is compensated and you remain in good hands. Don’t hesitate to tell your agent that you are looking in multiple areas.

Looking for an agent to represent you and your needs? Call your Real Estate Action Team today.

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