Winning Home Buying Strategies from Industry Insiders

Winning Home Buying Strategies

Winning Home Buying Strategies and Secrets from Industry Insiders

Thinking about buying a home? Since it’s likely the single biggest investment you will ever make, being prepared will help you make a smarter purchase decision. Don’t make an offer until you read and understand these real estate insider tips.   Download PDF

Know your buying power

What is buying power? It is the combination of how much you can realistically pay for a home and your credit-worthiness. You’ll need money saved for the down payment — which is typically between 10% – 20% of the price — as well as cash for closing costs, such as transfer tax, PMI, title insurance, and legal fees. For ongoing mortgage and maintenance, your monthly obligation shouldn’t be more than 36% of your monthly gross income.

A good credit score is usually 720 or above. A loan professional can help you figure out your buying power and give you a clearer idea of if your score is in the ‘good’ range. Have them check your score for you so that you don’t inadvertently lower your score by checking it yourself. You want to clean up your credit as soon as you can, and definitely before you get a mortgage pre-approval.

Don’t try to time the market

Even within a city’s limits, there can be micro markets that are increasing or decreasing in value. A knowledgeable buyer’s agent can provide you with a buyer’s market analysis report, outlining which neighborhoods are still up and coming — with potential for increased property value — versus those that have peaked with inflated home prices.

There’s never a perfect time to buy a home, even if you’re in a hot market. It can take a while to know what you like, and you may need to see 10 or more houses before you decide. Another good reason to be patient: you might find a better deal. Look for expired listings, which may offer more price flexibility and accept a lower-than-list offer. Don’t bother with FSBO (for sale by owner) listings though — since they’re not represented by a professional, they are often overpriced.

Be ready to make a stand-out offer

If you love it, make the offer. Otherwise, that dream home may disappear faster than you think, and especially if you’re buying in a hot market. Have your buying agent contact the listing agent before you submit an offer so that they can decide what’s important to include in the offer. If you’re serious about putting in an offer, you want to increase the chances that it’s accepted.

Show that you’re serious about the purchase by creating a buyer’s offer packet. It should include your lender’s preapproval letter, a screenshot of your down payment money in your bank account, and comps that support the rationalization of the offer you are presenting.

Once you’re in the negotiation process, have the inspection conducted before it’s too late to back out of a deal. If there are any major structural issues, you may be able to make the seller repair them as a contingency to your offer. Minor issues that you can repair on your own may be points for negotiating a lower offer.

Work with a professional for insider exclusives

If you’re thinking about buying a home soon, or even in the near future, let me know the details. I may have just what you’re looking for in an exclusive listing not available to the general public – so get in touch today!

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Is It Smart to Buy A Fixer-Upper as Your First Home?

Contributed by William Giakoumatos
Buying your first home can be very exciting. Among all the decisions you’ll have to make when you seek that home is whether you want to buy one that’s ready to move into and live in as is, or one that needs a little work. Many people buy fixer-uppers because of the lower cost, but sometimes those kinds of homes can end up costing you a lot more in the long run. Here are some things to consider when you’re trying to decide whether it’s smart for you to buy a fixer-upper or not.

1. What can you get in your price range?
Many first-time homebuyers are on tight budgets. They don’t have a lot of money to spend, and they want to live in a good area. Overall, location is more important than the house, because the house can be changed. If you can’t get into a good area without buying a fixer-upper, it may be worth considering. Just be sure you’re really buying in a location you like and one that you want to remain in for a while so you can get the best deal and turn your house into a solid investment. Look at several houses, both fixer-uppers and finished, before deciding.

2. How handy are you, really?
There’s a big difference between painting a room and fixing that plumbing leak. When you’re considering a fixer-upper for your first home, make sure you’re honest about your skill level. Don’t buy into more than you can fix, or than you can afford to have fixed. By getting a good, thorough home inspection, you’ll have a better idea of what kinds of improvements really need to be made. That can help you make the right decision based on the work you’re able to do on the home.

3. How much savings do you have to use for repairs?
Repair budgets rarely get adjusted downward. Typically, it will cost more than you expect to repair a home. Even if you have plenty of savings, it’s a good idea to get some repair estimates before committing to buying. That way, you’ll have realistic numbers you can look at when you’re trying to decide if that home is the right one for you. Surprise expenses can still crop up, but there will be fewer of them to contend with.

4. Do you have friends and family who can help?
If your uncle is a contractor and you have a niece in the design business, your odds of doing well with a fixer-upper just got better. When you have people who are in skilled trades and can help you work on your home, you can save a lot of money in labor costs and protect your investment more easily. It’s not a requirement to have people like that in your family when you buy a house that needs work, but it can certainly help the process.

5. How long do you plan to live in the home?
Renovating a home takes time. If you don’t plan to live in your first home for a long time, you might not want to buy something that requires a lot of work. You don’t want to get into the middle of a renovation and decide that you need to move. It can be very difficult to sell a home that’s in the middle of renovations, and you’re likely to lose a lot of money in the process. Don’t buy a fixer-upper you aren’t really committed to keeping for years.

6. How is the market where you’re looking?
If it’s a buyer’s market in your location, you may be able to get a great home for a much lower price. With that in mind, you could get into a home that needs less work and still not have to break your budget. Markets that favor the seller are going to have higher home prices, so buying a fixer-upper to get into a better neighborhood could be the way to go. There’s nothing wrong with buying a house that needs some work, as long as you’ve done your homework and are prepared to handle the changes that need to be made.

7. Are the home’s issues cosmetic or something more?
Cosmetic issues are things that can be lived with, even if you’re not crazy about the way they look. If you have structural issues, though, you can’t just leave those alone and not worry about them. They have to be fixed. Finding out which the home has and how much it will cost to correct any structural problems is very important if you’re considering a fixer-upper for your
first home.

William Giakoumatos is the current vice president of American Custom Contractors. They are a commercial and residential contractor company in the Washington, D.C. Metro area. Servicing businesses and homeowners for more than 40 years, ACC prides themselves with the added value from their work.

This post was originally published on RISMedia’s blog, Housecall. Check the blog daily for winning real estate tips and trends for you and your clients.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2015. All rights reserved.

Know Before You Owe: More Homeowner Insights

By John Voket

I am always thrilled to hear when folks make the jump to homeownership. And it’s important for prospective homeowners to know about all the resources available to them to help the experience go as smoothly as possible, especially when it comes to financing.

In the first of this two-part report we clued potential homeowners in on the U.S. Consumer Finance Protection Bureau’s new (consumerfinance.gov) report that featured some revealing data – particularly that almost half of consumers do not shop around for a mortgage when purchasing a home.

Among the key findings were:

  • Almost half of consumers who take out a mortgage fail to shop prior to filling out an application for a mortgage.
  • While half of consumers shop around to see who advertises lower rates, fewer than one in four actually end up submitting a loan application to more than one lender or broker – NOT filling out applications with multiple lenders to see which one can offer them the best deal.
  • 70 percent of consumers report relying on their lender or mortgage broker a lot to get information about mortgages.
  • The survey found that among all borrowers – those who shopped and those who did not – 42 percent said having an established banking relationship with the lender is “very important.” Since most borrowers likely only have a few banking relationships, this likely inhibits shopping.
  • Consumers who are confident in their knowledge about the mortgage process are more likely to shop around prix viagra en pharmacie.
  • Consumers who are confident about their knowledge of available interest rates are almost twice as likely to shop as consumers who are unfamiliar with available interest rates. The survey found that 55 percent of shoppers said they were very familiar with mortgage rates, while 30 percent of shoppers said they were not at all familiar.

Following this report release, as part of its “Know before You Owe” mortgage initiative, the CFPB announced it was releasing “Owning a Home,” an interactive, online toolkit designed to help consumers as they shop for a mortgage.

Anyone in the process of – or anticipating buying a home in the near future can access this virtual toolkit by clicking here. 

 

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2015. All rights reserved.

Do You Know What Questions to Ask when Joining an HOA?

By John Voket

It's been awhile since I reported about homeowner associations or HOAs.

Neighborhood Link (neighborhoodlink.com) defines a HOA or Homeowner Association is a legal entity created to manage and maintain the common areas of a community. Typically these "common areas" consist of things like pools, clubhouses, landscaping, parks, streets and roads.

HOAs are typically set up by the original developer of the community with a set of rules called "Declaration of Covenants, Conditions, and Restrictions" otherwise known as "CC&Rs". One of the primary functions of the HOA is enforce and ensure that these "CC&Rs" are adhered to by the individual homeowners.

One Boulder, Colorado real estate blog (taylorrealtygroup.net) recently posted a helpful punch list of questions to ask if you are buying a house or condo that is governed by a HOA.

According to the Boulder blog, those questions should include:
 

  • How much are the dues?
  • What is the history of the due increases?
  • Does it include building insurance or not?
  • What are the specifics of the insurance and what insurance will you be required to carry vs. the HOA carries it for you?
  • Are there HOA budget reserves for things like concrete repair, deck repair, staining/painting/etc? Also, look at maintenance contracts like landscaping, security, snow removal etc. Do they look reasonable to you? Is one of the HOA members also one of the contractors?
  • If you haven’t already—find out how much the transfer fees and capital reserve requirements are when you close and negotiate to have the seller pay for them (unless you have already agreed otherwise)
  • Find out how many units are owner occupied versus rented out. The HOA will know this. If it’s higher than about 10 percent rentals then the blog advises: don’t buy it.
  • Find out the current status of all the membership dues. How many units are in the HOA and of that, how many are past due. How much?
  • Get the minutes from the past years HOA meetings and read the to see what kind of stuff they talk about and this will tell you how picky they are and what type of violations spur actions against residents.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2015. All rights reserved.

Is Your REALTOR® Sharpening an Axe?

By Lynn Pineda

“If I had five minutes to chop down a tree, I’d spend the first three sharpening my axe.”

-Abraham Lincoln

Preparedness in anything can greatly increase our effectiveness and chance for success. In real estate, the same holds true. When the time comes to hire a REALTOR® that’s prepared to assist you in selling or buying your home, what should you expect? How should your REALTOR® sharpen his or her axe to be of greatest value to customers?

As a REALTOR®, it goes beyond simply getting a real estate license. Preparedness involves the desire to be the best that they can be; a true spirit for real estate. It requires the genuine desire to service their customers. This advocacy for their customer will result in home sellers and homebuyers being so thrilled by their real estate experience that they will want to scream their REALTOR’s® name from the rooftop. So how do REALTORs® get such acclamation? What gives those with spirit the edge in real estate? It begins with the following:

Stay on top of the real estate market, trends and news.

This means not only being aware of overall real estate industry news and trends, but knowing the local real estate market and trends as well. Real estate is local. The real estate market can differ from one city to another. Where is the market headed? Your REALTOR® needs to know your local market. What type of market are you in: a seller’s, balanced or buyer’s market? If you’re selling a home or buying a home, knowing the type of market will make all the difference in how you set yourself up for success. How long does it take homes to sell? What are the absorption rates? At what price points are homes selling? What is the ideal price point for you to position the home you’re selling? What can you expect to pay for a home as a homebuyer?

Frequent reporting by industry experts who share their insights on the real estate market keeps any REALTOR® informed of where the market is trending, and it’s important to seek out this information.

Be well aware of the mortgage industry.

Knowing mortgage options and the effect interest rates will have on the home buying process enables a REALTOR® to guide a prospective homebuyer. It also enables a REALTOR® to advise home sellers what to expect from the demands of homebuyers.

Network with other real estate industry professionals.

Networking with those at the top enables a REALTOR® to learn from the best. What better way to learn a profession than from those who have gone before and succeeded before. It isn’t always necessary to reinvent the wheel. Networking with real estate professionals can also make the REALTOR® top of mind, when a referral is needed in the city they service. This can bring you a top notch REALTOR® when a networking REALTOR® gets referred to you. Had this network never been established, you may not have had the opportunity to have such a skilled REALTOR® representing you.

Be at the forefront of the Web, social media and its trends.

Your REALTOR® needs to know the power of the Web, as its power contributes to the effectiveness of the home-selling process. Selling a home is about getting your home seen by qualified buyers. Over 92 percent of homebuyers start their home search online, after all. Having these homes seen by the masses will first require that REALTORs® have a strong online presence. REALTORs® accomplish this by knowing the importance of developing their websites/blogs with the proper SEO (search engine optimization) techniques that will showcase a REALTOR’s® experience, customer reviews, character and skill – evidence that they sell many homes and sell them well.

Having a strong social media presence will also be key. You’ll want to find them providing quality real estate content and interacting on Twitter, Google+, Facebook, Pinterest and LinkedIn, to name a few.

Be leery of any REALTOR® that isn’t on the first page of results when you Google their name. Today, buyers and sellers are online seeking real estate information and it’s up to any REALTOR® to make sure they’re providing online real estate value; smart, informational, up-to-the-minute, tech savvy information. Buyers and sellers will be drawn to REALTORs® who are clearly visible on the web. REALTORs® not found on the web should make you question their marketing ability. If they can’t market themselves, how will they ever market your home?

Hone in on skills necessary to be competent and efficient.

Expect your REALTOR® to be proficient in their ability to price a home, negotiate, problem solve and communicate toward the successful completion of a real estate transaction. Pricing a home is an art and demands a good understanding of the local market, and knowing how recent home sales, pending sales and active homes for sale compare to your home. Selling and buying a home requires in-depth negotiation skills from the moment a contract is presented, to contract acceptance, to inspections and right through to the day of closing. Problems will surface and having problem-solving abilities can smooth out any potential issues, keeping it from killing a sale. Last but not least, excellent communication skills are a requirement when dealing with so many different parties in a real estate transaction. You will have different personalities and emotions coming in from all angles and processing them will be key. Being good at reading people will direct the communication by simply reading their level of optimism or pessimism.

Continuing education

More education is required for both professional real estate licensing and for one’s own inquisitiveness and innate desire to stay in the know. Staying abreast of regulatory changes, housing regulations, real estate contract changes, along with any legislative updates are all critical, need to know facets of the business in order to ethically represent any seller or buyer.

In short, all of these real estate fundamentals will prove that preparedness and an ongoing eagerness to be the best at your craft will always benefit the customers being represented.

Lynn Pineda is a licensed Southeast Florida real estate agent.

View this original post on RISMedia’s blog, Housecall.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

Real Estate FAQs: Should I Avoid an Adjustable Rate Mortgage?

Financing Your Home Purchase

 

Mortgage Info

Q:  Should I Avoid an Adjustable Rate Mortgage?

A:  Because adjustable rate mortgages, or ARMs, fluctuate with the market, they offer less stability than fixed-rate loans.  If an ARM is adjusted upward, monthly payments will increase, and for a lot of people that can be too big a risk to take.  On the other hand, should rates drop dramatically, homeowners can reap the benefits of lower rates without refinancing, thereby saving thousands of dollars.

Lenders first introduced ARMs in the 1980s when interest rates soared into the double digits, forcing many people out of the home buying market.  They tied the rate to a variable national index, such as U.S. Treasury bills.

Today, many first-time buyers who have difficulty qualifying for a home loan, still settle for adjustable rate loans because the initial, “teaser” interest rate of the mortgage is normally two or three points lower than a fixed rate loan.  ARMs are particularly attractive if you plan to be in your home a short time.  They tend to adjust yearly or every three years, usually within certain limits, or caps, that prohibit the interest rate from shooting up too high.  Make sure terms such as these are spelled out in any ARM agreement you choose.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

How to Buy a House with Less than 20 Percent Down

When many people start the process of buying a house they assume putting 20 percent down is required. However, this is not the case and many lenders and mortgage brokers offer options for borrowers looking for mortgages that have a small down payment. Don Frommeyer, CRMS, President of NAMB (The Association of Mortgage Professionals), shares his advice for potential homeowners searching for mortgages with less than 20 percent down payment.

“There are a couple of things you’ll want to make sure you have before researching mortgages, including solid credit standing and a steady income,” says Frommeyer. “The options are out there and exist to make sure that people have the ability to buy and invest in real estate, even in today’s competitive housing market and tight credit environment.”

Frommeyer suggests the following tips when buying a house with a low down payment:

– Maintain a Strong Credit Score: Credit score is one of the first things lenders look at when determining who is a qualified borrower. Make payments on time and keep in mind that even small mistakes may take some time to clear from credit scores.

– Look Beyond Your Local Banks: There are many options available outside of traditional bank mortgages. Mortgage brokers offer a wide range of mortgage loans with zero down payments; an example is VA Loans. Veterans of the military and qualified retired veterans are eligible to use this benefit for a 100 percent loan. They also offer FHA loans to qualified borrowers for as little as 3.5 percent down. And in rural areas, the U.S. Department of Agriculture offers low down payment options with financing to 100 percent. A good mortgage broker will have all of these options available and will have a variety of lenders that they can put these through to stay competitive in the market. And even conventional loans have the ability to do loans with 5 percent down payment.

– Document Income and Assets: Lenders look for a steady income and sufficient savings to ensure borrowers can meet monthly payments. Make sure to have all account statements ready to establish proof of funds; lenders look for savings accounts that indicate the borrower will be able to cover a few months of payments. In addition, hold jobs for at least two years or within the same industry to demonstrate longevity and stability.

– Be Prepared to Pay More Monthly: When you do loans with limited funds down, most will require some sort of mortgage insurance to complete the loan. Conventional loans require Private Mortgage Insurance on loan to values above 80 percent. FHA loans have Mortgage Insurance on all of their loans and the VA only has a funding fee.

– Explore Options: Frommeyer suggests going to at least two lenders to be able to compare good-faith estimates. This allows you to look at two completely different options and this will help talking to more than one source when looking for a mortgage. Compare the fees, estimates, closing costs, etc. thoroughly before selecting any loan.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2014. All rights reserved.

I Can Haz Real Estate?

I Can Haz Real Estate?

An Millennial’s guide to the home buying process in Stuart, Florida.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

How to Buy a House – As Told by Real Estate Memes

Buying and Selling a Home at the Same Time?

By John Voket

A home sale transaction can present one of the most stressful situations a person will encounter in their entire life. So what about those forced into situations where they are selling and buying at the same time?

Agent Teresa Hamilton of Lafayette, LA (teresahamilton.com/Blog) points out that if the timing of either transaction is thrown off by issues out of their control, sellers may find themselves either owning two homes at the same time or with no home at all and desperately searching for a short term rental.

Hamilton says closing on the sale of both homes simultaneously allows the seller to avoid a multiple move scenario. They also avoid having to secure a temporary residence and other hassles related to selling their old home before closing on a new one, and the expense of carrying two mortgages, two sets of utilities, and the care of a vacant house or management of a rental.

Anthony Lamacchia (mlrealtyne.com) out of Waltham, Mass., offers the following tips for homeowners in this situation:

-Negotiate a longer period until the closing date when you obtain a buyer for your home. Instead of the typical 45-day closing try to negotiate 60 or even 90 days so you have time to find the home you want.
-Disclose in your listing that closing the deal is “subject to seller finding suitable housing” to alert buyers that you have to find a home to move to.
-Or if you don’t disclose the above contingency publicly in your listing on MLS, you can still try to negotiate it into your offer and purchase and sales agreement.
-Sell your home to a buyer and request that they allow you to rent it back from them for a month or two until you find a home.
-Consider temporarily living with family or even try a short term rental.

Lamacchia believes this last alternative is actually the least stressful way to buy because the seller has the money in hand which makes it easier to buy. There is also less stress in doing one thing at a time.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2013. All rights reserved.

Benefits of Real Estate Investment vs. Stocks and Bonds

As the economic recovery continues to build, Americans are again able to consume and invest; and with recent reports from the U.S. Census Bureau noting 34 percent of American households are rental units, investors are taking notice and rushing to reap benefits of placing investment funds in single- and multi-unit residential property.

“Investor demand for single family properties remains strong,” says Kirk McGary, CEO of Real Property Management, citing a recent study from Zelman & Associates that found investor demand for residential properties ranking at 60.9 on a scale of 0-100. “Trends like this in the housing market have created significant demand for property management companies like ours, as investors choose to put their money in real estate as opposed to the alternatives.”

Although there are many investment options available, real estate vehicles offer the ability to finance a portion of the purchase price to leverage the initial investment to control an asset valued much higher – unlike stocks, bonds and CDs. With lower interest rates available, a small increase in the value of a leveraged property investment can carry a greater return than an unleveraged investment — approximately 12 percent gross according to the same study by Zelman & Associates.

Investing in real estate also offers tax benefits where earnings from investments in CDs, bonds and stocks are taxed. By making deductions from the profit on mortgage interest, cost of property repairs and depreciation, property owners are writing off depreciation of an asset that is actually ascending providing yearly benefits to a long-term investment.

Most importantly, ownership of property improves cash flow. Subsidizing the investment with consistent rental income puts money in the investor’s pocket, covering the mortgage, repairs and additional homeownership costs.

Being able to minimize tenant turnover through timely and concise management reflects on the bottom line, maximizing the return on investment overtime.

This post has been authored by Eric Slifkin, REALTOR® serving South Florida’s Treasure Coast. You can reach me at 888-288-1765, or visit my Web site. As your resource for information on new or resale homes throughout the Treasure Coast, please be sure to contact me about any home you may find on the Web, yard sign or ad and I will research the property, arrange showings and handle all the details.

Reprinted with permission from RISMedia. ©2013. All rights reserved.