Buyers & Sellers
For Buyers
Congratulations! You are thinking about purchasing a New Home!
Purchasing a home is one of the largest financial decisions you will ever make. Whether this is your first purchase or you are moving on to a different home that better meets your needs, working with an experienced, professional Realtor is vital to guide you through the process and protect your interest every step of the way. I proudly provide unmatched personal service, patience & diligence. Education is one of the most important and critical elements of a smooth transaction. I make available the most up-to-date and complete market information in order for you to make a great decision on your future home. I work with my clients from the initial meeting through the final closing and beyond to make this process as smooth and stress free as possible!
Buyers FAQs
Questions that buyers frequently ask us
Q. How many homes should I plan to view and how should I make the final decision?
A. Generally you should view a number of homes so you can become familiar with what you can expect to get for your money. When you find a home you really like, it's a good idea to go back and look at it at a different time of day. This will give you greater insight into what it will be like living in the home full time.
Q. How can I check my credit rating before I apply for a mortgage?
A. Your credit rating is based on a combined score generated from three credit bureaus that look at your credit history, amount of credit available, and recent inquiries to determine what's called your FICO score. A smart way to go is to have your Weichert Gold Services Manager check your rating for you and, if appropriate, suggest ways for you to improve your credit. For a small fee, you can get your score or review your credit report by going online to www.myfico.com or contacting the credit bureaus directly at:
Equifax, www.equifax.com
Experian, www.experian.com, (888) 397-3742
TransUnion, www.transunion.com, (800) 916-8800
Q. Why should I consider paying points?
A. Buyers often choose to pay a one-time charge called mortgage 'points' in exchange for a lower interest rate. Usually paid at closing, each "point" costs 1% of the mortgage amount, or $2,000 on a $200,000 loan. The lower rate reduces the monthly mortgage payment, and points paid in conjunction with the purchase of a home are generally tax-deductible in the year they're paid (see tax advisor). Monthly savings will often exceed what was paid in points in just a few years' time.
Q. What is the purpose of an attorney review?
A. In states where the real estate agent writes the contract, there may be an attorney review period. This specified period allows the attorney to cancel the contract or request it be altered. Both buyer and seller would then have to agree to the revised contract in writing. During this period, either party may void the contract without penalty.
Q. What is title insurance and why do I need it?
A. Basically, title insurance assures that you have clear title to the home you're purchasing. A title search is the primary component of "due diligence", a process that will be started either by your attorney, if you are using one, or by the title company you choose. The title search determines whether the seller actually owns the property and if there are any claims against it.
Q. What happens if the house I want to purchase does not appraise at the amount expected?
A. If the house doesn't appraise at the amount expected, other alternatives are typically found. A second appraisal may be sought, the buyer may be willing to put more money down, the seller may adjust the price or offer other concessions, or the two sides may negotiate to split the difference between them.
Home Purchase Guide
Buying a home can seem like a frightening prospect. Whether it's your first home or your fifth, so much is at stake: your savings, your credit rating, and your financial freedom. It is difficult to find the courage to sign on the dotted line even if you want that home very, very badly.
How do you determine whether the purchase of a home makes sense?
What is the easiest way to examine the whole picture, from emotions to economics?
I want to share with you my Seven Steps For Success plan. If you read this plan, you will learn how to separate whims from true needs. You will discover how to prepare a game plan for your real estate venture, how to research effectively, choose wisely, finance appropriately, and survive the whole procedure with your smile in place.
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7 Steps for Success
- Establish your needs and wants.
- Determine how much you can afford.
- Get pre-qualified or pre-approved by a lender.
- Find a good real estate agent to help you.
- Find a home that meets your needs.
- Make an offer to buy a home.
- Save as much as you can on your initial investment.
STEP 1: ESTABLISH YOUR NEEDS AND WANTS
Begin your search for a perfect home by making a careful assessment of the kind of home you need and want. We recommend that you write it down. Take time, right now, to be as specific as you can about your particular requirements. First, make a list of necessities in your home. Next, list the features that you desire.
STEP 2: DETERMINE HOW MUCH YOU CAN AFFORD
Set up a budget for yourself. Decide how much you can really afford to invest and be comfortable with, for your monthly house payment. Be realistic. Most lenders suggest that your payments be no more than 28 percent of your total monthly income. Don't forget to include taxes and insurance if you plan to escrow.
STEP 3: GET PRE-QUALIFIED OR PRE-APPROVED BY A LENDER
You can save yourself time and heartache by meeting with a lender before you start your search for a home. A lender can let you know what specific loan programs would be best for you. He can also help you understand what it takes to qualify for the loan that you want. By taking a look at your financial situation and looking at your credit history, a lender can usually give you a good idea if you can qualify for the loan amount that you want. Many lenders call this Pre-Qualifying A Buyer.
To be absolutely certain that you can be approved for a loan, you may want to ask to be pre-approved. In the approval process, all of your documentation is completed and submitted to an underwriter. The pre-approval that you will receive is an actual loan commitment from a lender - your guarantee of loan approval.
It is important that you are 99.9% sure you will get the financing needed and your lender will be able to perform according to the time limits in a purchase contract. If not, you could end up in the middle of an escrow and find out otherwise. If this happens, you could lose your deposit, which could be as much as 3% of the purchase price. Ask for current references and check them. Ask references if there were any problems during escrow and did escrow close within 30 days?
STEP 4: FIND A GOOD REAL ESTATE AGENT TO HELP YOU
You can learn a lot about agents by just letting them talk to you about how they help their buyers. Within a few minutes, you will probably be able to determine if an agent's style is in line with yours.
Ask as many questions as you can up front. Finding a good agent will save you huge amounts of time, effort, and frustration. Remember, a buyer's agent is working for YOU!
STEP 5: FIND A HOME THAT MEETS YOUR NEEDS
To find a home that meets your needs, consider these tips for successful house hunting:
Keep an organized record of all your research data. Write down comments about the homes that you see. Keep track of your likes and dislikes.
Make sure that your agent is aware of your time schedule and your expectations. Do you like to look at one or two homes in a session Four? Eight? Discuss all of this with your agent.
Tell your agent about any homes that perk your interest and those you'd like to know more about. Include those homes you discover as you explore the area yourself or those you see advertised in the newspaper.
If you want to spend time driving around looking at homes for yourself, ask your agent for a list of drive-by homes which you can consider first from the outside. Your agent can then make appointments to show you the interior of those that appeal to you.
Express your likes and dislikes to your agent after you see a home. Honest communication is essential. Some buyers are shy and hesitant to tell an agent what they really think of a house. They think the agent may take it personally. Remember, the homes don't belong to the agent! You must be straightforward about your likes and dislikes to enable the agent to do the best job for you.
STEP 6: MAKE AN OFFER TO BUY A HOME
Your real estate agent can help you make an offer to buy the home that you select. It is important that you decide prior to viewing homes whether your agent will represent you or the seller. Some agents work only for the seller. In this case the agent may not be able to advise you in making a fair offer.
By looking at homes selling in the area and the length of time it takes to sell, you should be able to get a good idea of value. Only a buyer's agent can give you all the information necessary to make an intelligent offer in your best interests.
STEP 7: SAVE AS MUCH AS YOU CAN ON YOUR INITIAL INVESTMENT
There are only two major investments to consider when buying a home. These are the initial investment (including down payment and closing costs) and the monthly payment (including principle, interest, taxes, and insurance).
Here are some ways to save on your initial investment:
* Choose a low down payment loan. You do not necessarily have to put 20 percent, or even 10 percent, down. You can put 5 percent, or even 3 percent, down on some loans. Ask whether or nor your loan includes "private mortgage insurance" or PMI.
* As part of your offer, ask the seller to pay some of your closing costs. Sellers are usually allowed to contribute to a buyer's closing costs. In many cases this is a negotiable item.
* Shop around for your home insurance. A little shopping can save you a significant amount of money.
* You can deduct money paid for discount points from your gross income before computing your tax, which would effectively reduce the cost to you. Always check with your CPA to find out specific guidelines in your area.
Keep your monthly payments low:
* Get a loan with no monthly mortgage insurance premiums. You may be able to reduce or eliminate them by paying a little more at closing. By putting 20 percent or more down, you may be able to eliminate them entirely.
* Choose an Adjustable Rate Mortgage. ARMs can be up to 3 percent lower than fixed rates.
Remember that interest payments on a primary residential mortgage are fully deductible in most circumstances. Your property taxes may also be deductible. Tax rates definitely favor homeowners.
Congratulations! Now that you have finished reading my Seven Steps For Success, it is time to go out and find the home of your dreams!
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Home-Buying Mistakes
There are 8 mistakes some home-buyers make, and some of them are huge! Do your best to avoid:
MISTAKE #1: Failing To Have A Plan
MISTAKE #2: Thinking, "I Can't Afford A Home"
MISTAKE #3: Failing To Properly "Screen" Your Realtor
MISTAKE #4: Failing To Get Pre-Qualified For A Mortgage Loan
MISTAKE #5: Choosing A Loan Based Only On The Interest Rate Myth
MISTAKE #6: Failing To Obtain A Home Inspection From A Qualified Inspector
MISTAKE #7: Not Knowing Your Rights And Obligations
MISTAKE #8: Failing To Make Your Own Inspection
Let me explain a bit about each of the classic buyer mistakes.
MISTAKE #1: FAILING TO HAVE A PLAN
Deciding to buy a home is probably the biggest financial decision you will ever make. It is an exciting decision, but it is serious business, too, and you deserve serious advice.
Zig Zigler, a famous motivational speaker, once said that people don't plan to fail, they fail to plan. With a game plan, you will eliminate many of the headaches involved in this complicated transaction.
You need a clear plan when deciding to buy a house. Evaluate your current situation. Do you currently own a home? If so, will it be necessary to sell before making another purchase? Are you renting? How much time is left on your lease? Do you and your family plan to use the back yard? What is important about the location of your house? Do you want to live within 10 minutes or one hour from the office?
Make a list of features which are important in your home. Write down desirable locations you would consider, an acceptable price range, number of bedrooms and bathrooms, and any other amenities. Be specific. It is unlikely that you will find a home that offers every feature you desire. However, without a wish list, it will be more difficult to recognize a home which meets your expectations.
Provide your list to your Realtor. Your Realtor will look for homes that match your criteria. This will save you time you won't need to look at homes that do not fit your needs and desires.
A proper game plan will save you time and reduce the hassle of shopping for a home. Spend a little time in advance and save a lot of time and money in the future!
MISTAKE #2: THINKING, "I CAN'T AFFORD A HOME"
Many people feel that they cannot afford a home, but affording a home has never been easier!
Mortgage rates are more flexible today than ever, and the tax laws favor homeownership like no other tax shelter.
Homeownership is a durable (real) investment. Although no one can say if a specific home will appreciate in value, generally speaking the odds favor the homeowner.
Numerous unique tax advantages are available to homeowners. The thousands of dollars you pay in mortgage interest are deductible. This tax deduction alone can sometimes make owning your own home cheaper than renting with after tax take home dollars. Check with your accountant.
See the dramatic difference that homeownership will make.
MISTAKE #3: FAILING TO PROPERLY "SCREEN" YOUR REALTOR
It is likely that you do not often interview people. Yet, in order to find the Realtor who is right for you, you may need to interview several. The quality of your home buying experience is dependent upon your skill at selecting the best qualified person.
It is interesting that in the real estate business, someone with many successfully closed transactions usually costs the same as someone who is inexperienced! Bringing that experience to bear on your transaction could mean a lower price at the negotiating table, buying in less time, and with a minimum of hassles.
Agents make it their business to provide every service connected with your home search, from expert advice in the early stages through careful monitoring of your settlement. The more closely you work with your agent, the better your needs are known and the more effectively you can be served.
*Your agent should be a skilled win-win negotiator!
* Your agent should have access to the MLS systems: a computerized system that will assist in locating the home that fits your needs and desires.
The purchase of your home could well be the most important financial transaction you have ever made. The person you select can make it a satisfying and profitable activity, or a terrible experience. It's your home. It's your money!
MISTAKE #4: FAILING TO GET PRE-QUALIFIED FOR A MORTGAGE LOAN
Don't waste hours searching for a home that is not in your price range! Save time and money by pre-qualifying for a loan.
Before you go shopping for a home, you need to determine how much you can afford. Once you are pre-qualified for a mortgage, you will know what your buying power is. You will save time by looking only in your price range.
This process is simple. A lender will ask you basic questions concerning your history, run a credit report, and determine your buying power. You can even get pre-approved for a loan! Imagine for a moment, if, when you and your Realtor initially draft your offer for the home you select, you are already approved for the loan - IN ADVANCE... No stress, no worrying about qualifying, no concern about your ability to qualify would stand between you and the home of your dreams.
In today's market, a pre-approval can be a powerful negotiating tool. The old system saw the buyer spending many hours locating the perfect home, carefully drafting an offer, awaiting acceptance of the offer, consulting a loan officer, filing the multitude of forms and applications, and sometimes this was all a waste because, for whatever reason, he was turned down for the loan.
You deserve peace of mind and negotiating power by getting an approved loan before you make an offer.
MISTAKE #5: CHOOSING A LOAN BASED ONLY ON THE INTEREST RATE MYTH
I have been told that a fixed rate mortgage at today's rate is the best mortgage loan. But many different types of loan programs are available. It is a mistake to think that just because Aunt Sue got an 8.5 percent 30-year fixed rate you should get the same loan.
You should get together with an expert who can explain the many different types of loan programs. Each program may have its own series of special benefits for you and your specific needs.
When considering such an important decision, it is best to explore all possibilities. It may well be that a fixed rate is the best type of loan program. It may also be that you can save a significant amount of money by exploring alternative adjustable programs.
A full-service lender with relationships throughout the mortgage industry is a must in today's market. Lenders need the flexibility of the small business owner with the clout of a large company.
Today there are almost as many different loan programs as there are housing options. A few considerations are:
* Anticipated time in the home
* Available asset base
* Current income situation vs. future income situation
It is wise to pick a program that fits YOUR lifestyle. Example: If you pay off a loan in fifteen years versus thirty years you will obviously save a lot of money in interest expense. It is important to note that this savings is due to repaying the loan in half the time. The savings is not due to a significant savings in interest rates. You would expect that there would be a much lower interest rate since the loan has a quicker repayment and, therefore, a loan with less risk. The difference in interest rate is not that significant. Rates on 15 year loans may be 1/4 percent to 3/8 percent better than 30 year rates. Payments on 15 year loans will be approximately 25 percent higher on a monthly basis.
MYTH: I should go to my bank to get the best loan at the cheapest interest rate. Typically a commercial bank will own a separate business entity which shares the bank's name and happens to offer mortgage financing. But this does not mean that you will get a special deal just because you are the bank's client. The bank's mortgage subsidiary has no special access to your financial records as you might expect. The bank's mortgage subsidiary must request your financial records from the bank just as any other mortgage company. Your mortgage loan process will not be simplified or viewed differently from any other applicant making a request.
The perception of most people who go to their bank's mortgage subsidiary is that their loan payments will always be made to their bank; thus, all of the individual's banking needs will be under one roof. However, most mortgage subsidiaries sell their loans on the secondary market and may sell the loan servicing just as any other mortgage company will.
Another important consideration is that a typical bank mortgage subsidiary works with a small number of mortgage products. You may not find a wide variety of loan programs and your loan officer may not have a good comprehension of all the different programs offered. It is doubtful that they can adequately advise you as to the best program for your needs. It is possible that you, or the property you are buying, may need to have special underwriting to approve your loan application.
Just as you should interview your Realtor, you should also interview your lender. Not all lenders look after your needs. Select a lender who is willing to discuss your needs and help you choose the loan program that is best for your situation, not the best for the Lender!
MISTAKE #6: FAILING TO OBTAIN A HOME INSPECTION FROM A QUALIFIED INSPECTOR
A home inspection reports on the structural and mechanical condition of the home. After the inspection, you will have the facts you need to make a decision about buying your home.
A well-qualified building inspector who has adhered to federal licensing standards can spot problems that you might not be able to see. Expect problems to be clearly explained, repair expenses closely calculated, maintenance costs estimated, and a written report delivered within a day or two.
Most home-purchase contracts are written conditional on the outcome of several inspections. These inspections may include several items, including inspection for wood boring insects, excessive amounts of radon gas, structural soundness, and the condition of the heating, wiring and plumbing. When the contract is written, it should identify who will be responsible if there are problems with the results of any of these inspections.
If well written, home inspections can create a safety valve for both the buyer and seller. If poorly written, the result can be heartbreak and lawsuits.
MISTAKE #7: NOT KNOWING YOUR RIGHTS AND OBLIGATIONS
Real estate law is extensive and complex. The contract for sale and purchase is a legally binding document. An improperly written contract can cause the sale to fall through or cost you thousands of dollars for repairs, inspections, and remedies for title defects.
* You must be certain which repairs and closing costs are your responsibility.
* You must know whether the property can legally be sold "as is" and how deed restrictions and local zoning will affect the transaction.
* If there are defects in the title, or if the property is in conflict with local restrictions, you or your Realtor must remedy them.
Otherwise, you could lose thousands!
I will assist you! I will make sure you understand the technical lingo in the sale of your home. A commercial for a local vendor states that "Our best customer is an educated consumer." How true! It is my job to know the laws governing real estate transactions. I am involved in an on-going training program to keep up-to-date with these laws.
You deserve to have an agent who is not only knowledgeable about the transaction but is also willing to educate you throughout the process so you will feel more comfortable.
MISTAKE #8: FAILING TO MAKE YOUR OWN INSPECTION
You probably would not want to rely on the seller to point out defects in a house he is attempting to sell. There may even be hidden problems of which he is unaware.
Be sure your sales contract is worded so that any "earnest money deposit" must be returned in the event the house fails inspection. If a major defect is found, you have the option to cancel the contract and have your deposit returned, bargain for a lower price to compensate for the cost of repairing the problem, or have the owner make needed repairs before the sale.
Even before you get to the point of a contract and having a professional inspector look at the house, there are many items you can check yourself as you are shopping for a home:
* Structure/Basement: Check the foundation for cracks or water marks.
* Floors: Are they level?
* Roof: Does it sag?
* Water damage: Look for unevenly painted ceiling or wall; mildew odor in basement; signs of re-plastering or re-tiling in just one area of a room.
* Water pressure: Flush the toilet and turn on both hot and cold water faucets at the same time to test.
* Plumbing: Ask what type pipes are installed and their age. If applicable, ask when the septic system was last inspected and cleaned. Stand near the tank to detect odor or soggy ground.
* Wiring: A 100-amp system is typical in modern construction and uses a one-inch main line; this can be seen leading to the fuse box. Appliances such as dryer or range require a 220-amp line. Notice if lights flicker or don't work. Check for electrical outlets... usually at least 2 in each room.
* Energy efficiency: Ask to check last year's heating and cooling bills. Determine if proper insulation has been used.
* Pests: Be alert for small accumulations of sawdust in the basement. This might indicate an insect problem. Obtain date and results of the last wood-destroying pest inspection.
A few final tips:
* Ask to see the seller's survey made when the seller bought the house.
* When you are shopping, take a copy of the "Home Buyer Checklist" to keep you alert to possible problem areas. Avoid "surprises" by keeping your eyes open.
* Be certain that you are clear on problem areas which convey with the property and repairs which the seller agrees to make. Have this list with you when you go for your walk-through.
You can be successful in the home-buying process. During the entire process you should remember to buy with "resale" in mind.
In short, be alert! Be curious!
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Top 10 Myths About Buying a Foreclosure
Trulia.com and RealtyTrac recently surveyed US adults to get some insight into what people *think* is involved with buying a foreclosure. Here are the Top 10 Myths that came up, and the facts to set the record straight:
- Foreclosures need a huge amount of work. 92 percent of consumers expressed that if they bought a foreclosure, they would be willing to make home improvements after they closed the deal, with 65 percent being willing to invest 20 percent or less of the purchase price. Although stories of foreclosures missing plumbing and every electrical fixture are very memorable, many foreclosed homes need only the (relatively inexpensive) cosmetics that many new homeowners want to customize no matter what kind of home they're buying: paint, carpet, etc.
- Foreclosures sell at massive discounts, compared to other homes. Almost every member '95 percent' of the surveyed group expected to pay less for a foreclosed home than for a similar, non-foreclosed home; 18 percent had realistic expectations of less than a 25 percent discount. However, 36 percent expected to receive a bargain basement discount of 50 percent or more off the value of a similar non-foreclosure. Reality check: while foreclosures might be discounted massively from what the former owner paid or owed, their discounts are much more modest when compared to their value on today's market and the prices of similar homes.
- Buying a foreclosure is risky. 49% of respondents said they perceived buying a foreclosure as risky. And yes - buying a foreclosure at the auction on the county courthouse steps can have risks, including the risk the new owner will take on the former's owner's liens and other loans. But most buyers looking for foreclosures are looking at bank-owned properties, which are listed on the open market with other, 'regular' homes. Buying these homes is really no more risky than buying a non-foreclosed home.
- You can't get inspections on the property when you buy a foreclosed home. County auction foreclosures don't often offer the ability for buyers to have the homes inspected. But virtually all bank-owned properties for sale on the open market not only allow, but encourage buyers to obtain every inspection they deem necessary. This is because almost every bank sells their foreclosed homes as-is, and they want to avoid later liability. It's in everyone's best interests to make sure that the buyer has full information about the property's condition before they close the deal.
- There are hidden costs to watch out for when buying a foreclosed home. Sixty-eight percent of survey respondents who felt there is a negative stigma to buying a foreclosure expressed the concern that buying a foreclosure poses the danger of hidden costs. At some foreclosure auctions, there are buyer's premiums and other hefty fees that can really add up and take a chunk out of the effective savings the buyer stood to realize. However, when you buy a bank-owned property that is listed for sale with a real estate agent, the closing costs are the same as they would be if you bought a non-foreclosed home. Overdue property taxes, HOA dues and other bills left behind by the defaulting homeowner are cleared by the bank that owns a foreclosed home before it is sold on the market, though these items should be watched out for if you buy a home at the county foreclosure auction.
- Foreclosures are more likely to lose their value than "regular" homes. Thirty-five percent of U.S. adults who believed there are downsides to buying foreclosed properties believed this myth. In fact, because foreclosures often offer a discount from the home's current market value, they may offer some degree of insulation from further depreciation. Whether a home loses its value or not has to do with the dynamics of the local market, including the area's supply of homes, demand for homes, interest rates and the health of the employment market not with whether the home was or was not a foreclosure at the time it was purchased.
- Most foreclosures happen when homeowners just walk away. Out of homeowners with a mortgage, only 1 percent said walking away from their home would be their first choice if they were unable to pay their mortgage. And a whopping 59 percent of mortgage-holders said they wouldn't walk away from their home no matter how upside down they were on their mortgage. Most foreclosures happen when the owners lose their jobs or their mortgage adjusts to the point where they absolutely cannot pay the mortgage, no matter how hard they try. Voluntary 'walk-aways' are simply not as popular as many people think.
- When you buy a foreclosure, you should lowball the bank - they are desperate to get these homes off their books. Stories about in the press abound about the large numbers of foreclosed homes the banks have on their books. We've all heard the adage that banks have no interest in owning these properties. But the real deal is that they're simply not desperate enough to give these places away. Also, the banks mostly service the defaulted loans - they don't own them. Various groups of investors do, and they hold the banks accountable to selling the bank-owned property at as high a price as possible, helping them cut their losses. Many banks won't even consider lowball offers, and many bank-owned properties actually sell for above the asking price. Before a bank will take a lowball offer, they will almost always reduce the list price first, and see if that attracts a higher offer than the lowball one they have in hand.
- You need to be able to pay in cash in order to buy a foreclosure. Again, if you buy a foreclosed home on the county courthouse steps, you might need to bring a cashier's check and be ready to pay for the place on the spot. By contrast, bank-owned homes are bought through a more normal real estate transaction, which means buyers can obtain a mortgage to finance the home just like they would if the home weren't a foreclosure. It is true, though, that in some markets, banks prefer offers from cash buyers, but this tends to be in situations where the property's condition is pretty dire, and the bank knows this may make it hard for a buyer to obtain financing.
- It is easier to buy a foreclosure with bad credit if you get a mortgage with the same bank that owns the property. Think about it: why would the bank want to end up with the same property as a foreclosure, again? Well, that's what would happen if they allowed buyers with low credit scores to buy their foreclosures just to earn the interest on the mortgage. In reality, many banks do offer incentives like lower fees or closing cost credits for buyers who use their bank for their mortgage. But the buyers must meet the same credit, income and other qualification standards as anyone else would to seal the deal.
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Real Estate Glossary
Real Estate has a language all its own. Here is some of the terminology you'll be hearing. Adjustable Mortgage Loans: Mortgage loans under which the interest rate is periodically adjusted to more closely coincide with current rates. The amounts and times of adjustment are agreed to at the inception of the loan. Also called: Adjustable Rate Loans, Adjustable Rate Mortgages (ARMs), Flexible Rate Loans, Variable Rate Loans.
Amortization: Payment of a debt in equal installments of principal and interest, rather than interest-only payments.
Annual Percentage Rate (A.P.R.): The yearly interest percentage of a loan, as expressed by the total finance charge actually paid (interest, loan fees, points). The A.P.R. is disclosed as a requirement of federal truth in lending statutes.
Buydown: A payment to the lender from the seller, buyer, or third party, or some combination of these, which causes the lender to reduce the interest rate during the early years of the loan.
Cap: In adjustable rate mortgages, the limit on how much the interest rate or monthly payment can change.
Closing: The final procedure in which documents are executed and/or recorded, and the sale (or loan) is completed. Closing Statement: The statement which lists the financial settlement between buyer and seller, and also the costs each must pay.
CMA: CMA, or Comparative Market Analysis, is a comparison of homes similar to a seller's home in terms of size, style, features, and location that have sold recently or are on the market. A CMA is prepared by a real estate agent to help set a home's listing price.
Contingency: Commonly, a stated event which must occur before a contract is binding. For example, a home sale may be contingent upon the buyer obtaining financing.
Deposit: A portion of the down payment given by the buyer to the seller or escrow agent with a written offer to purchase to show good faith.
Down payment: Cash portion of the purchase price paid by a buyer from his own funds as opposed to that portion which is financed.
Escrow: A procedure in which a third (neutral) party holds all funds, documents, etc. necessary to the sale, with instructions from both buyer and seller as to their use and disposition.
FHA Loan: A loan insured by the Federal Housing Administration, a part of the Department of Housing and Urban Development. FHA insurance enables lenders to loan a very high percentage of the sale price.
Graduated Payment Mortgage: A mortgage initially offering low monthly payments that increase at fixed intervals and at a predetermined rate.
Hazard Insurance: Otherwise known as homeowners' insurance. This is a usual requirement of a mortgage lender and an advisable safeguard for any homeowner to protect against loss.
Index or Rate Index: A measure of interest rate changes used to adjust the interest rate of an Adjustable Mortgage Loan. Example: the change in U.S. Treasury securities (T-bills) with a 1-year maturity, based upon their weekly average yield.
Lien: A legal claim or charge on property as security for payment of a debt or for the discharge of an obligation.
Loan-to-Value Ratio: The ratio "expressed as a percentage" of the amount of a mortgage loan to the appraised value or selling price of the property.
Lock box: A key storage system placed on a home entrance that is accessible only by active, licensed real estate agents who must abide by a strict set of guidelines when showing a seller's home.
Margin: In Adjustable Mortgage Loans, the number of percentage points the lender adds to the index rate to determine the new interest rate at each adjustment.
MLS: MLS stands for multiple listing service, by which member brokers cooperate in the sale of each other's listings. Sellers may choose not to allow their property into multiple listing, if they wish.
PITI (Principal, Interest, Taxes, and Insurance): Used to indicate the four major items included in a monthly mortgage payment.
Points: A fee charged by a lender as a service charge or as an amount needed to make the yield on a mortgage competitive with other types of investments. Each point represents 1% of the loan amount.
Price Trend Analysis: A tool developed and used exclusively by Weichert, Realtors to help set a home's listing price by projecting local trends, used in conjunction with a CMA, or Comparative Market Analysis. Because home values appreciate over time, a Price Trend Analysis maximizes listing prices.
Principal: Amount of debt, not including interest; the face value of a loan.
Private Mortgage Insurance: Insurance issued by a private company against a loss by a lender in the event of default. Private mortgage insurance is generally required for conventional financing whenever less than 20% is put down.
Second Mortgage: A mortgage which ranks after the first mortgage lien in priority.
Settlement: Same definition as closing.
Title Insurance: Insurance against loss resulting from defects of title of public record.
VA Loans: Loans partially guaranteed by the Veteran's Administration, enabling veterans to buy a home with little or no down payment.
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For Sellers
As a 40+ year resident of Hunterdon County, I have intricate knowledge of Hunterdon & Somerset Counties. Selling your home can be a stressful time, especially in a down market like we are experiencing. In today's market, you need an active, aggressive & professional agent who will present your home to as many potential buyers as possible. You need an agent who has complete knowledge of the market. I successfully market homes because I develop an individual plan for my clients to prepare their home for sale. Homes that are prepared for the market, priced competitively, and marketed professionally sell! I blend conventional methods with the most cutting edge technology, the newest most efficient marketing tools, and my personal attention and persistence. I specialize in working with my clients from the initial meeting through the final closing, step by step, in order to successfully sell their home, for the greatest price possible!
I constantly strive to earn your trust and my reputation as a highly ethical, responsive & professional real estate agent. I would welcome the opportunity to discuss working with you to get your home SOLD!
Seller FAQs
Questions that sellers frequently ask us Q. Why shouldn't I price my house a little high, since I can always drop the price later? A. That's a strategy that sounds good, but, in fact, is more likely to result in a lower price. Here's why. The first few weeks a house is on the market is when it will have the most activity. If a house is overpriced, it has to compete with houses at that higher price level, which are almost certainly larger or have newer/more luxurious features.
So the overpriced home is unlikely to attract an offer. Worse yet, those first weeks are when real estate agents preview the house. If it's overpriced, they may not even bother to show it to their buyers. Eventually, the seller will have to drop the price and may end up with an even lower price because buyers will wonder why the house has been on the market so long and may factor that into their offer.
Q. What is meant by the term "contingency" in a sales contract? A. Sales contracts typically contain several "contingency" clauses, or stipulations that the sale is subject to. For example, with a mortgage contingency, if the buyer is unable to obtain financing within the specified timeframe, neither the buyer nor the seller is required to complete the purchase. Among other common provisions in the "subject to" section are termite and other inspection issues and the purchaser's need to sell a current home first.
Q. What is an escape clause? A. An escape clause, also known as a kickout or knockout clause, is a provision that allows the party to void the contract. For example, the seller may retain the right to look for a more favorable offer, with the original purchaser retaining the right, if challenged, either to firm up the first sales contract (such as by waiving a contingency) or to void the contract. As another example, sellers might insist upon an escape clause in a contract that hinges on the buyers selling their home.
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Selling for Top Dollar!
Did you know? The best chance for selling your property is within the first seven weeks! Studies show that the longer a property stays on the market, the less financial return the seller will net.
There are 5 main factors to achieving your goal of getting top dollar for your property.
Factor 1: PRICING It is very important to price your property at a competitive market value right when you list it. The market is so competitive that even over-pricing by a few thousand dollars could mean that your house will not sell. I have found your first offer is usually your best offer.
An overpriced home: * Minimizes offers
* Lowers showings
* Lowers agent response
* Limits financing
* Limits qualified buyers
When you think about it, 80% of the marketing is done when we decide on what price to list your home.
For people unwilling to list a property at current market value, I usually recommend holding off on putting the property on the market for awhile.
Factor 2: CLEANING Most people are turned off by even the smallest amount of uncleanliness or odor when buying a home. Sellers lose thousands of dollars because they do not adequately clean. If your house is squeaky clean, you will be able to sell your home faster and net hundreds, if not thousands, of dollars more.
If you are planning on moving, why not get rid of that old junk now so that your house will appear larger? Make more space!
Odors must be eliminated, especially if you have dogs, cats, or young children in diapers, or if you are a smoker. You may not notice the smell, but the buyers do! Most agents have a difficult time communicating to their sellers about odor. If you employ an agent to get the most amount of money for you, please don't take offense if he/she must confront you about odor problems.
Factor 3: ACCESS Top selling agents will not show your home if both the key and access are not readily available. They do not have time to run around town picking up and dropping off keys. They want to sell homes! The greatest way to show a house is to have a key! When your home is being shown, be sure to do the following:
* Keep all lights on, including exterior "coach" lights by your front door
* Keep all drapes and shutters open
* Keep all doors unlocked
* Leave soft music playing
* Take a short walk with your children and pets
* Let the buyer be at ease and let the agents do their job
Factor 4: PAINT AND CARPET Paint is your best improvement investment for getting a greater return on your money. Paint makes the whole house smell clean and neat. If your house has chipped paint, exposed wood, or the paint looks faded, it is time to paint.
If your carpet is worn, dirty, outdated, or an unusual color, you may need to seriously consider replacing it. Many houses do not sell because of this problem. Don't think that buyers have more money than you do to replace carpet. They don't. They simply buy elsewhere.
Factor 5: CURB APPEAL The first impression a buyer gets of your home is from the curb.
Your front yard immediately reflects the inside condition of your house to the buyer. People enjoy their yards. Make certain that the trees and bushes are trimmed so the house can be seen from the street. Have the grass mowed, trimmed and edged. Walkways should be swept. The front door should be freshly painted or freshly stained.
Clean away debris. Remove parked cars. This all adds to curb appeal.
If a buyer does not like the outside, they may not stop to see the inside!
Well, now you know all of the 5 main factors to getting top dollar for your property:
Factor 1: Pricing
Factor 2: Cleaning
Factor 3: Access
Factor 4: Paint and Carpet
Factor 5: Curb Appeal
If you carefully consider these factors, you will maximize your chances of selling your property within the first seven weeks for top dollar!
Selling First Impressions
When selling your home there are no guarantees that a buyer will simply walk through the front door. In many cases you may have to bring your home to the buyer!
Certainly effective marketing will help ensure that your property receives maximum exposure to attract a ready, willing and able buyer. But the appearance and overall condition of your home contributes to a
buyer's crucial first impressions.
Appearance and condition apply to the outside of the home as well as the inside. So stand across the street from your house and review its curb appeal. Then walk into your home with inquisitive eyes of a home-buyer. Try to see your home as a buyer would, and take action accordingly.
Tips to improve your
curb appeal: * Sweep front walkway and driveway. Pressure-washing the front walkway and driveway will make them look like new!
* Remove newspapers, bikes and toys.
* Park extra cars away from the property.
* Trim back the shrubs.
* Apply fresh, clean paint throughout.
* Clean windows and window coverings throughout.
* Keep pet areas clean.
* Keep plumbing and all appliances in working order.
* Maintain all sealant (window, tub, shower, sink, etc.) in good condition.
* Make sure roof and gutters are in good condition.
* Mow the lawn more frequently, and plant flowers.
Tips to consider for the
interior of your home:
* Kitchen and bathrooms should shine.
* Quick once-over with the vacuum. Carpets should be clean and free of spots.
* Place fresh flowers in the main rooms.
* Put dishes away, unless setting a formal display for decoration.
* Make beds and put all clothes away.
* Enhance the spaciousness of each room.
* Open drapes and turn on lights for a brighter feel.
* Straighten closets. Clear out floors of closets to make them appear more spacious.
* Put toys away.
* Turn off television.
* Play soft music on the radio/stereo.
* Keep pets out of the way, and ensure pet areas are clean and odor-free.
* Secure jewelry, cash, prescription medication and other valuables.
Other important reminders and suggestions:
* Potential buyers usually feel more comfortable if the owners are not present.
* If people unaccompanied by an agent request to see your property, refer them to your real estate professional for an appointment.
* Leave a number where you can be reached if you are leaving town, even for a weekend.
Follow these tips to create the best first impression of your home. Improving your home's curb appeal and interior appearance can minimize your home's days on market and maximize your financial result!
