3 Big Myths About Home Buying

3 Big Myths About Home Buying

If youʼre serious about buying a home in Stuart, Florida, donʼt fall prey to these three big myths about the home shopping process. Donʼt learn the hard way…

Myth #1: “That house has been on the market so long I bet we can work the seller down easily.”

Not necessarily. Exceptionally high days on market could mean almost anything. The seller could be bullheaded about their price. The seller may not be particularly motivated to sell for emotional or other personal reasons. Donʼt forget: A sales-weary seller isnʼt likely to respond to your host of rational reasons why their house should be a bargain.

Myth #2: “I want to look at foreclosed homes because theyʼre a real bargain and the banks need to unload them.”

Banks, like entrenched sellers, donʼt always make decisions which seem rational based on obvious information. You can have a hard time divining the reason a bank chooses to reject an offer for a foreclosed or distressed property, and their decision
may be based on financials which seem counterintuitive. The truth is, many distressed sales can be longer and more fraught than regular sales, especially when it comes to unresolved disputes with local government agencies, taxing authorities, and home owner associations.

Myth #3: “I liked this house a lot, but with this market, I bet it will still be there if I decide to buy it.”

Itʼs very, very painful to see a client love a home but fail to make a move to purchase that home. If you fell in love with it, why wouldnʼt someone else? Just because a property has been on the market a little while doesnʼt mean it will stay on the market. The bonus myth in this one? Your “perfect” home is probably going to be a home with some small compromises. If you donʼt make an offer on a home, youʼre effectively saying, “Iʼm comfortable losing this home.”

My job as an agent is to represent your interests and do my best to protect you along the way. If youʼre pursuing a home purchase in the near future, please get in touch. There are many other ways I can lower your stress and help you find a great home.

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.

11 Questions for Home Buyers


11 Questions for Home Buyers in Stuart, Florida

If you’re thinking about buying a home, you can save a lot of time and effort by considering a few questions before you meet with a real estate agent. These questions not only give shape to your desire to buy a home, but they ensure your meeting with an agent will be productive.

1. How long have you been searching for a home?

2. When are you interested in purchasing?

3. What type of home are you looking for? Condo? Single-family? Etc.

4. What family needs do you currently have? How do you think that will change in the next few years?

5. How many homes have you seen so far?

6. What are you looking for that you haven’t found yet?

7. What is your present living situation?

8. Do you need to sell a home before you buy your next home?

9. What is your comfort zone in terms of price? Or to look at it a different way: What sort of monthly payment is within your budget?

10. Have you looked into financing at all yet?

11. Is there anything in particular you want/need to be close to? (I.e. job, other family members, major airports, etc.)

It’s OK if you don’t have answers to all of these questions. In fact, I’d be glad to walk you through any questions you don’t understand, or the implications of some of your answers. please feel free to get in touch.

 

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.

A Strategic Approach to Real Estate Contracts and Deadlines

A Strategic Approach to Real Estate Contracts and Deadlines

By Keith Loria

Whether you’re buying or selling a home, adding deadlines to the real estate contract process is a tricky subject. After all, if someone makes an offer on your house, you may think they’ll go to any lengths to buy it. On the other hand, a buyer may think that just because they’re putting a bid on a house that’s been sitting on the market, their bid will be accepted regardless of what it is. That’s why many real estate agents discourage their clients from putting a deadline within the contract because when they aren’t met, it becomes a frustrating endeavor.

And what happens if you place a deadline on your offer and the seller doesn’t meet it? Are you automatically going to withdraw your bid? Probably not. Bluffs don’t play very well in the real estate game, so if you set a deadline and then no consequences come from not meeting it, you may find the rest of the negotiations going the other person’s way.

Additionally, when you place an offer that must be decided on by 9:00 p.m., this will be seen by the other party (buyer or seller) as a hard-sell. While it might seem like a good negotiating strategy on your end, it might be the exact opposite from the perspective of the other party. If you want to include deadlines like this in your offer, you must be willing to walk away if they aren’t met.

That doesn’t mean the deal can’t be worked out down the line, but if you’re not going to stand by your deadline, it’s probably better to leave them out of the equation altogether. Speediness is the essential strategy here on both sides of the transaction.

When in the midst of a seller’s market, it may make sense for a seller to set a deadline for reviewing all offers, as this will alert all interested buyers that they need to have their best offer in to compete with any other offers. This type of deadline is actually helpful because buyers can view other homes and put together a bid before the deadline, understanding that the seller isn’t going to make a decision prior to it being submitted.

For buyers, negotiation techniques typically recommend that you add a drop-dead date so that the seller can’t shop your offer or drag things out forever. This will protect you from losing out on other homes that might interest you.

If you’re making an offer in the evening, be sure to make the expiration early the next afternoon so no competing offers are likely to roll in. Have your agent express that there are other homes on your list that you’re just as happy with, that you’re ready to make an offer on. In this case, a deadline can be used to your advantage.

Contact our office today to learn more about the pros and cons associated with incorporating deadlines into real estate transactions.

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.

New Opportunities Open Up for First-Time Homebuyers

In the coming year, more than 1.5 million consumers will purchase their first home. How do they do it — and how can you be one of them?

“First-timers now represent nearly 30 percent of all existing home purchasers,” said Ray Brousseau, executive vice president of a nationwide lender. “That’s a big percentage, but it could be a lot higher because there are many ways first-time purchasers can finance with little down and little hassle.”

Many of these buyers are able to afford a new home because they know that the mortgage marketplace has two separate ways to help them: First, there are traditional loan options. Second, there are more than 1,500 mortgage assistance plans for buyers purchasing a first home.

No Need For 20 Percent Down

The big barrier for many first-time buyers is cash. It takes cash for a down payment, and it takes cash to close. Lenders are generally looking for buyers with 20 percent down, but given that the typical home sells for more than $200,000, there are a lot of first-time homebuyers who have not accumulated the $40,000 or more that lenders prefer.

The good news: There are many ways around the 20 percent requirement with traditional loan options.

“It doesn’t take a lot of up-front cash to buy a home today,” said Brousseau. “FHA and conventional financing are all available with little down, while VA borrowers can qualify for mortgages that require no down payment.”

The way such programs work is that they substitute insurance for the 20 percent down that lenders would otherwise want:

• Conventional loans are available with as little as 3 percent down plus what is called “private mortgage insurance” or PMI.

• FHA mortgages require an up-front mortgage insurance premium (MIP), plus an annual MIP based on the outstanding loan balance. Mortgages backed by the FHA are available nationwide and typically require just 3.5 percent down.

• VA financing is available for those with qualifying service, such as military personnel, as well as officers in the Public Health Service and the National Oceanic and Atmospheric Administration (NOAA). VA loans are available with nothing down. There is an up-front “guarantee” fee, but no annual insurance cost.

“Instead of $40,000 for a down payment, many borrowers can get a $200,000 loan with $6,000 or $7,000 down, or even nothing down if VA-qualified,” Brousseau said. “That means qualified first-time homebuyers can buy a house today instead of waiting years to save 20 percent down.”

Mortgage Assistance Plans

According to DownPaymentResource.com, there are more than 1,500 assistance plans administered by more than 1,000 agencies nationwide for would-be buyers, many aimed specifically at first-time purchasers.

In looking at these programs it’s important to understand what the term “first-time buyer” means. It typically does not mean someone who has never owned a home; instead the usual definition for program qualification purposes is someone who has not had title to a home during the past three years.

This definition is important because it provides a way for people to re-enter the housing marketplace. For instance, suppose the Smiths owned a home and sold it to move to a job in a new community. Three years later they are “first-time” purchasers under the guidelines used by most assistance plans.

“Another important point about mortgage assistance programs is that many are specifically designed to encourage local home purchases by public-sector employees such as teachers, police, firefighters, nurses, and corrections workers,” said Brousseau. “There are millions of people who qualify for such assistance.”

The benefits available through mortgage assistance plans vary. For instance, borrowers may be able to get financing at below-market interest rates. Down payment grants may be available, essentially meaning that little or nothing down will be required. Another approach includes programs that offer tax credits.

Mortgage interest is generally deductible, but a “tax credit” is arguably more valuable. With what are called “mortgage credit certificates” or MCCs, borrowers can deduct directly from their actual tax bill. For instance, if you have $8,000 in mortgage interest you might be able to directly reduce your taxes by $1,600 while the remaining $6,400 can be treated as an itemized deduction.

“Given low interest rates and a firming housing sector, this is a terrific time to consider entering the real estate market,” said Brousseau. “With today’s financing choices, many buyers can own their own home a lot quicker than they might have thought.”

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.

Five Inside Credit Secrets for Getting a Great Mortgage

Five Inside Credit Secrets for Getting a Great Mortgage

With home prices rising and interest rates well below historic norms, many potential buyers would like to get into the marketplace but are stymied by one hurdle: credit.

“The credit process mystifies many borrowers,” said Ray Brousseau, executive vice president of a nationwide lender. “They worry that their credit may be imperfect or that a late payment from long ago will doom a loan application, when the reality is different.”

Brousseau explained that “lenders and borrowers have similar goals. They both want the mortgage application to go through. The lender will create a package to provide a full picture of the borrower’s financial status. In many cases, borrowers will be surprised that their credit standing is stronger than expected.”

So, how do you make sure you have tip-top credit when applying for a mortgage? Here are five strategies that can lead to a faster – and better – mortgage credit review.

First, prepare for your mortgage application.
Since 2010, most real estate financing has been in the form of “qualified mortgages,” loans that meet the standards outlined by Wall Street Reform. A qualified mortgage – or QM – must show that the borrower has the ability to repay the loan. To meet QM requirements, you can expect lenders to want signed tax returns or W2s for at least the past two years, year-to-date pay stubs from the past 30 days, plus complete copies of all financial statements, usually for at least the last two months. If self-employed, a lender might also want a balance sheet as well as a profit-and-loss statement. Having such information in hand can greatly speed the mortgage review process.

Second, check your credit report in advance.
The better your credit report, the better your credit score, thus the reason to check credit reports for errors and outdated items.
Under the Fair and Accurate Credit Transactions Act (FACTA), consumers can get one free copy of their credit report from each of the three nationwide credit reporting agencies every 12 months. This can be done in a few minutes by going to the official website, AnnualCreditReport.com. Print out your report or save it as a PDF.

Third, know how credit scores work.
In basic terms, credit scores weigh the answers to five questions:

Have you paid bills on time?
How much of your credit is now in use?
How long have you had credit and when was the last time you used selected accounts?
What is your mix of credit card debt, auto loans, student debt, mortgages, etc?
Have you recently opened additional lines of credit?

“Once a loan application is made, most lenders will automatically provide borrowers with a free copy of their credit score,” said Brousseau. “A good credit score can greatly help in the application process, and a lower score can often be overcome by selecting a certain type of mortgage product.”

Fourth, a lower credit score does not always mean no credit.
Borrowers can readily finance and refinance with an 800 credit score, but it’s also true that mortgages are available with lower credit scores. For instance, more than 40 percent of recent FHA borrowers had credit scores between 620 and 680.

Fifth, beware of surprise credit snags.
It used to be that lenders checked credit reports when a loan application was first made and then again just before closing. Now lenders have the ability to even check for daily credit report changes. When new debt or credit lines show up, lenders re-calculate the ability of borrowers to qualify for financing.

Avoid opening new lines of credit, making big purchases or getting more credit in the middle of the application process. When your credit reports are re-checked, and new credit activity shows up, that activity can sometimes scuttle a once-solid mortgage application.

Source: Carrington
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.

Choosing a Home with Your ‘Blended’ Family in Mind

Choosing a Home with Your ‘Blended’ Family in Mind

With 1,300 new stepfamilies forming each day, there is a constant flow of families starting over in a brand new home. The interior decorators with Decor&You, one of America’s leading, full-service interior decorating franchises, understand how difficult moving can be and share four key tips on how to handle one of life’s toughest transitions.

“The process of starting a life over with a stepfamily in a new home can be both exciting and challenging,” says Decor&You Founder and CEO Karen Powell. “Whether you are moving across the country or across town, the pressures of blending two families can be stressful on everyone. It’s important to make sure every family member has a voice in choosing the new residence and creating an environment that everyone can call home.”

Decor&You shares the following tips on how to create a smooth transition into a new home while taking your “blended family” into account:

1. Carefully consider the size and floor plan of the home you buy. While there is no single “right” home for a blended family, a house with as many bedrooms as bathrooms will allow the family the opportunity to learn how to live with each other without feeling too crowded. Allow the children to decide if they prefer to have their own bedroom or to share a bedroom with a sibling.

2. Turn a first-floor den into an extra bedroom. Turning the lower-level room into a bedroom allows teenage children or college students to feel independent and maintain their privacy.

3. Consider a renovated house with bedrooms at both ends. Buying a home with bedrooms on both ends and a common living space in the center allows blended families to maintain a degree of physical distance, while still meeting in the middle at mealtimes or for recreation.

4. Include everyone in the decorating process. Involving the entire family in decorating the new home makes starting over much easier and allows all members to feel included. Give a few options for different elements of shared spaces and let each family member share their opinion.

Source: http://www.decorandyou.com.

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.

Real Estate 101: Get Comfortable with Real Estate Terms

A Quick Reference Real Estate Glossary

Are you new to home buying or home selling (or getting back in the market after a really long time)? Get comfortable with real estate terms with our real estate glossary.

Below we’ve provided some simplified definitions for some commonly used (and commonly misunderstood) real estate terms.

Common Real Estate Terms & Their Definitions

Appraisal – The process of estimating or setting the market value of a piece of property, partially based on an analysis of comparable sales of similar homes in the area. An appraisal usually takes the form of a written report. Appraisals are usually required during the mortgage loan approval process.

Closing Costs – For buyers, closing costs consist of expenses that must be paid in addition to the purchase price of the home, like… For sellers, closing costs include expenses that will be deducted from the proceeds of the sale, like…

Commission – Compensation paid to real estate professionals for services rendered in connection with the sale or exchange of real property.

Comparative Market Analysis (CMA) – An in-depth analysis of nearby comparable home sales done by a real estate agent to estimate a home’s market value, usually performed to help select the most appropriate sale price.

Contingencies – Conditions written into a real estate contract that specify that the contract will cease to exist in the event of certain conditions. Contingencies, like requiring an acceptable property inspection report within a certain time period, must be met for a contract to be legally binding and carried out as written.

Contract – An oral or written agreement between competent parties who agree to perform or refrain from performing a certain thing. In real estate there are many different types of contracts, including listings, contracts of sale, options, mortgages, assignments, leases, deeds, escrow agreements, and loan commitments, among others.

Deed – A written, legal document that conveys or transfers property.

Escrow – The process in which an item of value, money or documents is deposited with and held by a trusted third party to be delivered upon the fulfilment of a condition. For example, the earnest money deposit is put into escrow the transaction is closed, at which time it is delivered to the seller.

Foreclosure – The process of taking possession of a mortgaged property as a result of a failure to keep up with timely mortgage payments. This can involve a forced sale of the property at public auction after which the proceeds of the sale are applied to the mortgage debt.

Home Inspection – A thorough inspection by a qualified professional who evaluates the structural and mechanical condition of a home. A home inspector may assess the condition of a property’s roof, foundation, heating and cooling systems, plumbing, electrical work, water and sewage and some fire and safety issues. In addition, the home inspector will look for evidence of issues that may affect the value of the property.

Homeowner’s Insurance – An insurance policy that combines personal liability insurance and hazard insurance coverage for a dwelling and its contents, often required by mortgage lenders.

Lien – A legal claim against the property as a result of a debt that must be paid off when the property is sold.

Mortgage – A legal document that specifies a temporary, conditional pledge of a property to the lender/creditor as security for the repayment of a debt, in this case a home loan.

Pre-approval – Pre-approval is a loosely used lending term that usually implies that a buyer has already talked to a lender. The lender has, in turn, checked the buyer’s credit history and income to determine that they will be able to get a loan up to a certain amount. The pre-approval helps a buyer find a home within their price range and submit a strong offer.

Short Sale – A short sale occurs when a property is sold at a moderate loss, as an alternative to foreclosure. The home is listed at a price lower than the amount owed on the mortgage. Buying a short sale home can require approvals from multiple lenders.

Title – A legal document evidencing a person’s right to or ownership of a property. A title report, often done by a title insurance company after an offer has been accepted, will show the history of the title as well as applicable encumbrances such as easements or liens.

 

As always, I am here to answer questions or help with your real estate transaction. Why not give me a call at 772-288-1765?

 

Authored by Eric Slifkin

Keller Williams Realty

772-288-1765

Tips to Ease First Time Homebuyer Jitters

Traditionally, spring marks a busy period of time for housing market activity. With the heat of summer seemingly only weeks away, BMO Harris Bank offers first-time homebuyers strategies for finding their ideal home while keeping financial priorities in check.

Buying a home can be the largest and most important financial decision one can make, so it is important to be aware of all the factors that go into making a responsible purchasing decision.

“The first step is figuring out how much you can afford to spend on homeownership, which means an honest assessment of the household balance sheet,” says Kevin Christopher, Head of Mortgages Sales, BMO Harris Bank. “Once you have a clear idea of where you stand financially, you can then make a responsible decision of what you can afford, including your down payment, monthly mortgage costs and other expenses like utility costs, property insurance and taxes.”

Here are tips for first timers:

Making an affordability assessment
Christopher noted that there are two rules of thumb first time homebuyers can use to determine what they can afford.

“First of all, housing costs, including mortgage payments, property insurance and taxes, should not take up more than one-third of your income. In addition to this, servicing your overall debt, including loans, utilities, credit card payments and lines of credit, should not account for more than 40 percent. If you can land safely within these parameters, then homeownership is an affordable and realistic option.”

Many banks offer free online tools to help you wade through the home lending process.

Coming up with the down payment
In general, the bigger the down payment you come up with, the less interest you’ll pay over the life of your mortgage. Financial institutions may offer special accounts designed to help you save for that first home. Consider opening a savings account specifically to fund your down payment. One easy way to save is to set up an automatic monthly deposit from your checking account to your savings account, allowing you to build the balance over time.

Choosing the right mortgage for you
Your mortgage needs to fit in with the rest of your financial priorities — which could mean increased flexibility or security. Consider the following when choosing your mortgage:

  • Choose a shorter amortization period – In general, the shorter the life of the mortgage, the lower the overall interest cost. Consider choosing a 20-year amortization rather than a 30-year amortization to save you money on interest costs and help you become debt-free sooner.
  • Fixed vs. variable – Variable-rate mortgages have been a winning strategy over the long term, but fixed rate mortgages (currently at historic lows) provide cost certainty and peace of mind.
  • Stress-test your mortgage payments – Use a mortgage payment based on a higher rate to stress-test your budget; total housing costs (mortgage payments, property taxes and insurance, etc.) should not consume more than one-third of household income.

Applying for pre-approval
A pre-approval establishes the amount you can reasonably afford to borrow towards the purchase of your first home. Consider the following benefits to getting pre-approved:

  • Have a good idea of your finances – You will receive a better idea of how much you are qualified to borrow, saving time looking at homes that meet your affordability range. Your term and amortization, as well as estimated monthly payments, are provided at approval so you can use these figures when planning your overall budget.
  • Moving quickly – If you are pre-approved for a mortgage, you’ll be able to move quickly to make an offer when you finally find the perfect home for you.

Source: BMO Harris Bank

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.