Category Archives: Tips for Home Buyers

How Much Waiting to Buy Could Cost You

If you’ve been on the fence about buying a home now or delaying your purchase until next year, you’ll want to pay attention to this: The house you can afford today may be out of reach a year from now due to rising interest rates and home price appreciation.

To put a dollar figure on it, Zillow applied next year’s forecasted home values and a 1 percentage point interest rate increase to the median home price in 35 metros around the country. We used that to calculate the difference in mortgage payments. The results may surprise you.

“More often than not, buyers do not understand the profound effect of rising interest rates on affordability,” said Erin Lantz, vice president of mortgages at Zillow. “Many buyers associate a 1 percentage point interest rate change with a 1 percent change on a piece of clothing or the price of a car, when in fact they are very different.”

As a rule of thumb, Lantz said, a 1 percentage point increase in mortgage rates reduces affordability by 10 percent.

Of course, buying a home is not all about the money. Making sure you are financially stable and ready to make a significant long-term financial commitment should always come first.

To see which metro areas would be most affected by a 1 percentage point increase in interest rates, see the graphic below. For a deeper analysis, visit Zillow Real Estate Research.

Mortgage1Percent_Zillow_Aug2014_c_02

 

Why Use A Real Estate Agent?

Why Use A Real Estate Agent? The road to homeownership can be bumpy, and it’s often filled with unexpected turns and detours. That’s why it makes sense to have a real estate pro help guide the way.

According to the National Association of Realtors 2013 Profile of Home Buyers and Sellers, 88 percent of buyers purchase their homes through real estate agents or brokers. That reliance on real estate professionals has steadily increased from 69 percent in 2001.

While real estate websites and mobile apps can help you identify houses you may be interested in, an experienced agent does much more.

Real estate agents:

1. Guide. Before you tour your first home, your agent will take time to learn more about your wants, needs, preferences, budget and motivation. A good real estate agent will help you narrow your search and identify your priorities.

2. Educate. You should expect your agent to provide data on the local home market and comparable sales. The home-buying process can be complicated. A good agent will explain the steps involved – in a manner that makes them understandable – and provide counsel along the way.

3. Network. An agent who is familiar with your target neighborhoods will often know about homes that are for sale – even before they’re officially listed. Experienced agents tend to know other agents in the area and have good working relationships with them; this can lead to smooth transactions. Your agent may also be able to refer you to trusted professionals including lenders, home inspectors and contractors.

4. Advocate. When you work with a buyer’s agent, their fiduciary responsibility is to you. That means you have an expert who is looking out for your best financial interests, an expert who’s contractually bound to do everything in their power to protect you. If you find yourself in a situation where the same agent represents both the buyer and seller, things can get trickier, advises Scottsdale, Arizona-based real estate agent Dru Bloomfield.

“A lot of people think they’ll get a lower price by going straight to the listing agent, but that’s always not true,” she says. “If I was representing both the buyer and seller, I’d be hard-pressed to take a low-ball offer to the seller. But, as a buyer’s agent I’d do it, because I have no emotional ties or fiduciary responsibility to the seller. Buyers should work with an agent who can fully represent them.”

5. Negotiate. Your agent will handle the details of the negotiation process, including the preparation of all necessary offer and counteroffer forms. Once your inspection is done, the agent can also help you negotiate for repairs. Even the most reasonable consumers can become distraught when battling over repair requests; an agent can do “the ask” without becoming overly emotional.

6. Manage minutia. The paperwork that goes along with a real estate transaction can be exhaustive. If you forget to initial a clause or check a box, all those documents will need to be resubmitted. A good real estate agent understands the associated deadlines and details and can help you navigate these complex documents.

7. Look out. Any number of pitfalls can kill a deal as it inches toward closing; perhaps the title of the house isn’t clear, the lender hasn’t met the financing deadline or the seller has failed to disclose a plumbing problem. An experienced real estate agent knows to watch for trouble before it’s too late, and can skillfully deal with challenges as they arise.

Professional real estate agents do so much more than drive clients around to look at homes. Find an agent you trust and with whom you feel comfortable working; you’re sure to benefit from their experience, knowledge of the local market and negotiation skills.

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Getting Ready; Five Tips For Home Buyers

GetMedia-42by Tracy Tkac

 

 

1. Get Loan Pre-Approval

 

This step is extremely important. It will help you to know what you can afford and determine if there are any glitches in your credit that need attention before buying. Talk with a few lenders to get rate quotes and to find one that fits your working style. After you are pre-approved, make sure to pay close attention to your finances and do not make any rash decisions or large purchases, such as a car, until after the purchase of your new home.  

 

2. Find An Agent

An agent will lead you through the process of the paperwork, negotiation strategies, inspections and ultimately settlement by placing offers, negotiating final prices and settlement terms and closing costs to settlement.

 Find a professional agent that is knowledgeable in the area in which you are looking to buy. In most cases in the MD, VA and DC area, if a home is listed in the MRIS, the area multiple listing system, then the commission is paid entirely by the seller- not the buyer. A Buyer Broker is an agent that advocating and working exclusively for your best interests.

By finding a knowledgeable real estate agent that you trust, you are likely to save money, purchase the home of your choice and have a smooth and successful transaction.

 

3. Prioritize Your Needs and Wants

While location and price range will dictate a lot about the home you will be looking for, you should also think about what amenities you hope for. Start big with the non-negotiables such as the specific communities you want to live in, the number of bedrooms and bathrooms you need, what style of homes you are interested in looking at, whether or not you need a garage, etc. After the larger must-haves are established it is easier to understand what is negotiable in the long run. If you are prepared beforehand you can assure that you are looking for everything that is necessary.

4. Look Into Potential Programs

In recent years there has been an increased effort by the government to try and stimulate home purchases. One of these efforts includes tax credits and benefits for first time homebuyers. During your home buying process, be sure to look and see if any credits or benefits are available for you. Some of these programs will allow savings on the initial purchase of the home and others will save money back in the form of a tax return. Either way, the saved money can be a major bonus and it is well worth the effort to find out. Your realtor and lender will help you determine if you qualify for any programs.

5. Inspect Your Future Home, Choose Your Settlement Company ect.

Research the companies you will want to use for your inspections and settlement. Your contract to purchase your home may be contingent on certain inspections such as termite, home inspection, radon or well and septic. Looking into the cost of these inspections and choosing what company fits your expectations will put in a position to be prepared to move forward. A choice of settlement company is generally the purchasers to make. There are many factors to consider, your agent will help you navigate the way to a successful conclusion!

 

 

301-437-8722/ 202-364-1700 Real Estate Professional Licensed in Maryland, Virginia & Washington, DC