Buyer’s Guide
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Housing expectations for 2018
The NAR publishes some great data every year in regards to housing expectations.
Housing outlook
Existing Home Sales:
to 5.6M
Median Home Prices:
to 5.5%
Mortgage Rates:
to 4.4%
GDP Growth:
to 2.2%
Potential speed bumps
Tight inventory conditions
Increasing home prices
Rising mortgage rates
Waning consumer confidence
*THE CASE FOR OPTIMISM
New housing starts are only now returning to levels seen previous to the last major housing downturn, resulting in low inventory conditions that persist in single family home resales. Expect home prices to continue to climb throughout 2018.
7 Things to consider before buying a home
Buying a home is a big decision to make, and can have an impact on a variety of areas of your life. Here's our top 7 of our best suggestions to consider before committing to a purchase.
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Before you buy, strengthen your credits score
Remember, higher credit scores will have lower down and monthly payments. This can represent tens of thousands of dollars in savings over the course of a mortgage.
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Determine how much home you can afford, first
Buy housing that runs about two-and-one-half times your annual salary. Prior to looking at homes, speak with a reputable loan originator who can pre-qualify you.
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Know where you want to be
Think about your lifestyle, and how it is now. How it might be in 5-10 years? Will the location or property you are interested in still be adequate in that timeframe?
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Don't buy if you can't stay put
If you can’t commit to remaining in one place for at least a few years, then owning is probably not for you, at least not yet.
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Carefully review your offers and counter offers
Make sure you understand all facets of the offer to purchase, and any counter offers you may receive from a seller. Speak with your buyers agent about any questions you have.
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Get a home inspection
A home inspector will provide you a detailed report of the property condition and outline repair recommendations. Get this ordered early so you have time to carefully review the condition of the home prior to removing contingencies.
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Make sure you love your buyers agent
A great buyers agent can take the stress out of a home purchase. Our goal is to ensure you find the perfect property, get the best possible deal, and enjoy a worry free experience for the entirety of your purchase transaction.
Rent VS Buy
Which fits your style? Here's a breakdown of some of the differences that effect whether it's the right time for you to buy a home. Take a look at some of the categories, and ask yourself which side you fall under.
Length
I will be in my home for less than 3-5 years.
Length
I will be in my home for more than 3-5 years.
Lifestyle
I want to stay mobile or flexible.
Lifestyle
I want to start building home equity.
Time
I don’t have time for home maintenance.
Time
I have time for home maintenance.
Financial Situation
have debt and/or am repairing my credit situation.
Financial Situation
I have little/no debt, and good credit.
Money
I don’t have enough money for a downpayment and closing fees.
Money
I do have enough money for a downpayment and closing fees.
8 Steps to buying a home
Purchasing a home can be quite easy. If this is your first time you will find that there are only a handful of key decisions to make in order to hold the keys to your own home.
01
Get pre-approved by a mortgage lender.
02
Select a realtor.
03
Work with your lender to decide the right loan type.
04
Shop for the perfect property
05
Get an accepted offer on a property.
06
Open escrow, and complete all inspections, disclosures & terms
07
Work with your lender to complete the loan funding process.
08
Close escrow with the seller on your new home and ENJOY!
What you don't know about credit
You‘ll need a credit report to make sure your score and reporting are accurate. Work directly with a lender on your credit score. They can help provide recommendations, work with scoring agencies, and improve your score when you obtain your loan.
General Guidelines when it comes to a loan
Higher credit scores have lower borrowing costs.
Focus on your credit score long before your loan.
Credit score differences add up to thousands of dollars.
Pay close attention to your debt to income ratio.
How your credit score effects you
< 640
SLEEP ON THE COUCH Few quality loan programs exist. Improve your score.
620
BUYER BEWARE Subprime Mortgages are available, but carry high fees.
720
RECOMMENDED Mimium score for a loan with minimal charges. Get good terms with low fees.
750 <
GO SHOPPING Best loan programs and lowest borrowing costs on the market.
Other useful information
Points and Rate on a mortgage Borrowing money costs money. Loans require interest, which can be paid over time, or up front as additional points. Paying the interest ahead of time results in a lower overall monthly payment. This requires up front cash and is not a payment towards principal. Paying additional points is only recommended for purchases where ownership is long term.
You don’t need a 20% down payment Traditional loans requiring 20% down are no longer your only options. Plenty of public and private lenders off er a variety of loan programs that can provide you a great loan with as little as 3% down. First-time homebuyers have additional state and federal programs available.
Why you need a buyers agent
Purchasing a home actually involves a lot of legal contractual knowledge, organization and negotiating skill. Don't jump into any deal without consulting an expert buyers agent who can get you the best possible results.
An experienced advocate
A right agent can help with your purchase as well as recommend other trusted professionals.
Legal Safety
A local Realtor® will help you navigate the requirements of a written offer, as well as the complexities of closing of escrow.
Maximize your investment
Home upgrades, repairs, and resale questions can be investigated anytime.
Market Conditions
Your agent understands factors that impact you, and can provide advice on when, and how to purchase.
Answer questions after closing
You can still continue to communicate with your agent long after the close of escrow.
Local Knowledge
An expert in your desired neighborhoods will provide important details you may not know.
What not to do when buying a home
It is incredibly easy to mismanage funds or your alter credit and doing so during the loan and escrow period can greatly impact your both your borrowing costs and can even keep you from funding the loan in some cases.
Don’t apply for a new Credit Card!
Don‘t apply for any unsecured debt if possible during the loan and escrow period.
Don’t go furnish the home before you own it!
Nothing is set in stone until close of escrow. Do not make plans that cannot be cancelled if the deal fails to close.
Don’t buy a new Car!
Changes to your credit score of even a few points can mean thousands in fees.
Avoid Changing jobs!
Lenders are looking for job security. That new opportunity may need to wait.
Don’t close any Credit Accounts!
Always leave open credit available to you. this is part of your overall score.
Don’t get behind on Payments!
Make sure you stay on top of your credit card and rent payments.
Don’t Move Money Without A Paper Trail!
You will need to provide your lender documentation of your finances.
Don’t Spend Your Savings!
Your lender will want to see that you have something set aside for arainy day.
The home inspection
For a new resale home purchases, aprofessional home inspection is recommended. The inspection will include but ay not be limited to the following:
Appliances
Plumbing
Electrical
Climate
Ventilation
Roof and Attic
Foundation
General Structure
Don‘t expect the report to catch every minor defect. The inspector is looking for serious problems that require repair, or will lead to serious problems if a repair is not completed in a reasonable time-frame.
1. Pass or fail?
A home inspection is just a report of the repairs recommended for the property. It is not a pass or fail test. However, some lenders do require certain repairs be completed in order to fund the loan.
2. Handling the repairs found in a home inspection
A completed report can have an effect on the purchase price, your interest in the property, and which repairs need to be addressed prior to close of escrow. The seller may be willing to negotiate terms, and your lender may or may not require some repairs be completed in order to fund your loan.
3. Choosing the right inspector
Home inspections can vary by company, as well as by inspectors individually. Always use a trusted recommendation for a professional that will give you the information you need.
4. Be there!
The day of the inspection, be present with your buyers agent and the inspector. This will help you understand the items that appear on the report, and will give you an opportunity to see the home through the eyes of an objective third party expert.
Contract to close
Once your offer is accepted, the buyers agent will help coordinate with everyone needed to make sure purchase requirements and all quoted time frames are met.
Earnest money
This is a deposit that shows you are serious about the purchase. It is heldin the escrow account, and is non-refundable after contingencies are waived.
Document review
The inspection period will be specified in your accepted offer. During this time all property inspections, disclosures from the seller, and repair negotiations must take place.
Mortgage approval
Approval for your loan will require an appraisal. Your lender will send a neutral third party to prepare a determination of it’s current market value.
Obtain homeowner's insurance
Homeowners insurance is often required to obtain your loan. you may already do business with an insurance broker, or you may elect to use one recommended to you.
Home warranty
A home warranty id recommended for all at least the first 2 years of home ownership. The first year can often be negotiated to be paid by the seller during the escrow period.
Title insurance
Title Insurance protects you the lender from the possibility that the title is not free and clear. It is typically a requirement for the loan.
Final walkthrough
Just before close of escrow, a final walk-through of the home will be conducted by you and the agent. This is a check to ensure the condition has not changed.
The settlement statement
You will want to double check the settlement statement carefully for the various items you’ll need to pay for at closing. Have a check ready for the amount required.
Closing day
Closing day is usually straightforward. You will typically need to bring blank checks, your drivers license, and meet at the title company. Your homeownership awaits!
After the closing
An ongoing relationship with my clients
Despite closing escrow marking the end of the purchase process, it also marks the beginning of an ongoing relationship. Keeping in touch with the agent allows you to continue to use this valueable resource of information whenever you need, like referrals for plumbers, electricians, and several other service professionals.
Your referrals are key!
Maintaining an ongoing client relationship is just part of an overall commitment toprovide a level of service well above and beyond expectations. Your agent relies on word of mouth referrals for additional business, and good referrals allow the agent to devote more time to helping clients andd less time to finding them. If your experience is amazing, be sure to tell your friends!
