• Week Twelve – Tying Up the Loose Ends

    You are almost there! But there is still more to do before you cross that finish line.

    Many times, after the inspection, issues will arise that result in another round of negotiations. You may request the seller does repair work or ask for a credit in lieu of repair work. Try to only bring your biggest issues to the forefront. Sellers tend to be less agreeable when you come to them with a laundry list of items and usually pick the smallest ones. 

    Once final negotiations, the appraisal, and the title search have all been completed your loan will be submitted it to underwriting for final approval. Underwriting will do a final review to make sure all conditions are met and the loan is solid before approval. Expect loan approval to come close to closing. 

    At least three days prior to closing, you should receive your Closing Disclosure. This is a disclosure your lender is required to provide to you showing the final loan terms and all the closing costs associated with your loan, as well as the final amount you will need to bring to closing. You should review this and direct any questions to the lender immediately. 

    Now you are ready…It’s time to schedule that closing and become a homeowner!

  • Week Eleven – 3 Reasons You Need an Inspection

    Last week I mentioned that an inspection on your new home will cost you around $350 – $750 depending on the size of the home. Now I know you may be thinking, 

    “Wow, that’s a lot of money. The home looked great when we toured it, and it was recently remodeled. I really don’t see a reason for spending a bunch of money for nothing.”

    Well, let me stop you right there. There is NO perfect home. Let me say that again…There is NO perfect home. 

    Even a brand new construction home is bound to have at least one mistake or issue because it is, after all, build by the human hand (and human make mistakes). 

    But if that knowledge does not sway you, here are three reasons you need a home inspection:

    1. Some of the most costly issues in homes cannot be seen. A busted sewer pipe, foundation issues, and termite damage can be difficult to spot but can cost you thousands of dollars to fix. 
    2. You cannot put a price on safety. Safety issues can be easily overlooked and sometimes completely invisible to homebuyer. Radon gas, carbon monoxide, and mold can be extremely deadly if not detected and treated. 
    3. Inspections allow you to make a wise decision. Whether it is avoiding a home that needs costly repairs, negotiating repairs with the seller, or ensuring you have the necessary funds for future repairs, an inspection can give you the information that will allow you to make an informed and wise decision about your new home. 

    While you don’t get your money back on the inspection if the contract falls through, I always suggest getting an inspection on your new home.

  • Week Ten – You Are Under Contract! Now What?

    Once you are under contract, you will begin working your way through the due diligence period and contingencies on the contract. There is A LOT going on during this time period, but you will have your real estate agent right by your side to walk you through the whole process. 

    Here are a few of the things that will happen once you are under contract:

    The Inspection. You have the opportunity to have someone come in and inspect the home for any issues. An inspection on your new home by a professional will cost you around $350 – $750 depending on the size of the home but is well worth it to avoid major issues down the road.

    The Appraisal. Your Lender will want to ensure they are not lending you more money than the home is worth, so an appraisal is ordered to determine the market value of the home by an independent third-party. 

    Title Search. A Title Company will search all records of the home to verify that the title is indeed transferrable and all liens and loans on the home are paid off during closing ensuring you do not have future issues. 

    Home Insurance. Your lender is going to require that you maintain home insurance to protect their investment. You will want to secure a home insurance plan to commence on the closing date. Make sure you have applicable certificates that your lender may require (i.e. flood insurance). 

  • Week Nine – How To Make an Offer that Stands Out

    You have found THE ONE. Now how do you ensure you get that home?

    Making an offer on a home may be one of the most daunting parts of real estate. But do not fear – your real estate agent will help you review recent comparable sales in the neighborhood, as well as other factors about the home and other potential offer to help you structure an offer and negotiate a price and contract you are happy with.

    As you put your offer together, here are a few things to think about: 

    Always Put Your Best Foot Forward. Everyone wants to get a deal on their new home, but in our current market, that may not be possible. You may be competing with multiple other offers. So make sure that you put your best offer forward. You may be thinking that you will start lower so you can go higher if need be, but you may not get that chance and lose out entirely. 

    Cash Will Always Be More Attractive. If you have it, use it. If you are getting a loan to buy the home, offer to put more money down or offer a higher earnest deposit so the sellers know you are committed. 

    Ask the Seller What They Want. While purchase price is huge when it comes to your offer, there may be other factors that are more important to the seller. If they are building a new home, they may prefer a later closing or a rent back. Make sure you ask what they are looking for and include it in your offer. 

    Shorten Inspection Period and Offer a Quicker Close – unless the seller requests otherwise. A shorter inspection period will mean less time off the market should the contract fall through. A quicker close means, the seller gets their money sooner – and probably has to pay less on their loan, insurance, and utilities. 

    Now it’s time to get you under contract!

  • Week Eight – How Do You Know You Have Found THE ONE?

    Your head is now spinning from all the homes that you have toured. You are pretty sure that you have found the ONE. But now the gravity of the situation has now settled upon you, and you are starting to question everything. Don’t worry – this is completely normal. So how do you know this is truly the one?

    Here are some pretty good “green flags”:

    • It checks all the NEEDS boxes.
    • You cannot stop thinking about it.
    • You have already told your friends and family about it. 
    • You compared every other home you see to this one. 
    • You keep looking at all the photos over and over again. 
    • You have already arranged all your furniture in it in your mind. 
    • You have already talked about your first Christmas there. 
    • You’ve driven by the house about 12 times since your showing. 

    If you find yourself here, it is a pretty good indicator that you have found the one. To sum it up, no one else can tell you which house is the one, and when you know, you really do just know.

  • Week Seven – Five Things to Remember when Touring Homes

    Now that you have your list, you are ready to start seeing some of these houses! 

    Touring homes can be both exhilarating and scary. It is easy to let your emotions take control, so before you step foot in a house, keep these touring tips in mind. 

    1. Before you head out for showings, review your needs and wants list. Keeping these things in mind will help you determine more quickly if this home will work for you.
    2. Take your time during your showing. It’s okay to check out the kitchen more than once. This is a big decision. 
    3. Take photos. It can be tough to remember all the details once you have left the showing. So take pictures to help jog your memory when you sit down to review them.
    4. Do not let staging, decor, or paint colors distract you. All the staging and decor will be gone when you move in and paint colors can easily be changed. So do not let these things overshadow what really matters. 
    5. Remember location, location, location. You can change paint colors and even knock down walls, but you cannot change the location of the home.
  • Week Six – How To Decide Which Homes to Tour

    Woohoo! We have our wants and needs list, and now it is time to start seeing some homes!

    Your real estate agent should set you up on an MLS search to help you find some homes, but I know you will probably want to do some searching of your own – everyone always does.

    So here are a few tips to keep in mind as you look at homes to narrow down your list…

    Keep your search filters broad. For instance, if you need four bedrooms so you can use the fourth one as an office, you may want to include three bedrooms in your search as well. Perhaps, there is a three bedroom home out there with a den that would work perfectly for your office. This to say, narrowing down your filter might make you miss the perfect house.

    Be mindful of absolute filters. Make sure you are putting in a buffer when you enter your filters. A   search to include homes with 2,500+ square feet will not show you that home with 2,499 square feet.

    Expand your geographic search. Opening up your search to include just a little bit further may give you more options. 

    Don’t let pictures fool you. Keep in mind that photographs can be deceiving, so don’t base everything on what the pictures look like. Some agents use professional photographers who filter the MLS photos while other agents are snapping blurry photos on their iPhones. Review the entire listing before nixing it simple based on the photos. I’ve seen beautiful homes with really bad photos and vice versa. 

    As you begin to pick out homes to tour, your agent will set up showings to see them. 

  • Week Five – How To Create Your Wants & Needs List

    Starting the home search can be so exciting! You are probably daydreaming of tall, tray ceilings with huge windows and tons of light. You can’t wait for that chef-inspired kitchen with the luxury appliances and an island worth of its own spot on a map. And what about those showers you will take in oversized, spa-like master bath with the rainfall shower head and one of those Moen dials that let’s you set the temperature just like you saw in that model home. 

    Yes, those are amazing things to dream about, but we need to come back down to reality for a bit. Unless you have a limitless budge, it’s pretty hard to find the perfect home, dare I say impossible. This is why it is imperative to have a list of your wants AND your needs. 

    But what is the difference?

    Well, you want a 10 minute commute to work, but you need it to be at least within 30 minutes.

    You want 4 bedroom home so you can have room for each kid and a guest room, but you need a 3 bedroom home (let’s be honest, do you really want guest staying with you?).

    You want a huge backyard, but you really need to stay in the school district for your kids.

    Be very clear on these wants and needs, and make sure you don’t overlook a need just because a home has one of your big wants. That home theater in the basement may be everything you have ever dreamed of, but it won’t replace the headache of having to commute 30 minutes to take your kids to school. 

    Take some time to prepare this and be open and honest about these things with your real estate agent. 

  • Week Four – What Should You Ask Your Lender?

    Before you start your home search, you will want to sit down with a lender, get your finances in order, determine how much you can afford, and get a pre-approval. 

    Before you sit down with a Lender, make sure you have these documents ready to go…

    • Social Security Number for all borrowers who will be listed on the loan
    • Proof of Employment
    • Proof of Income (usually your two most recent pay stubs)
    • Bank Account Statements
    • Your W-2 Statements for the last two years
    • Your Tax Returns for the last two years
    • Self-Employment Documents
    • Place of Residence (typically for the last 5 years)
    • Gift Letters (if someone is gifting you funds for the down payment)
    • Your Credit History & Score (this will be pulled by the lender from the credit bureaus)

    Now that you have your documents, it is time to set up a meeting. If you have never met with a lender, it may seem pretty daunting. So here are 5 questions to ask your lender to make sure you understand the process and are getting a mortgage you are happy with. 

    What type of mortgage do you recommend?

    Conventional? VA? FHA? What is the difference? While a FHA loan will usually allow you to put less money down and offer a slightly lower interest rate, a conventional loan won’t require private mortgage insurance, potentially making it a better option. Differences such as these are why it is so important to talk with your lender about the difference of each mortgage they recommend – including the benefits and drawbacks – to determine which one is best for you.

    What will my downpayment be?

    Of course, you need to know how much money this is going to cost you up front. However, it is also important to understand how much flexibility you have with that, particularly in a competitive market that sees multiple offers.

    What is my interest rate and APR?

    This number tells you how much a mortgage will cost you over the life of the loan. The higher the interest rate, the money money you are paying to borrow. While applying for a loan, it may be wise to shop for the best interest rate.

    How long can I lock my interest rate in for?

    Once your interest rate is locked in the time starts ticking. If you lock your interest rate in, make sure you know how long you have before the lock expires to ensure you do not have to pay a rate lock extension fee.

    What will my closing costs be?

    While not all closing costs are directly related to the lender – such as title fees and recording fees – a large portion of your closing costs as a buyer will be dictated by the lender. This will vary from lender to lender, so while shopping, make sure you consider.

    Once you have your pre-approval in hand, you are ready to start home-shopping!

  • Week Three – What Does the Buying Process Actually Look Like?

    Buying a home can seem extremely daunting. Where do you even start? 

    Here is a quick overview of the buying process timeline…

    Find the Right Agent. You never want to start the home search without a knowledgeable real estate agent in your corner. Find someone who knows the market, how to negotiate, and the ins and outs of a transaction. And you’re in luck…you’ve got one right here!

    Get Pre-Approved. Before you start looking for your new home, you want to sit down with a lender and get pre-approved. This will help you determine your price range and set you up for success when making an offer.

    Find Your Home. Once you have a pre-approval, the search is on! Your real estate agent will help you not only search for homes and show them to you but help answer questions and prepare the strongest offer when the time comes.

    Make an Offer. When you find the perfect home for you, your agent should help you review comparable sales, as well as other factors like inspections and repairs, and help you structure an offer and negotiate a price and contract you are happy with.

    Inspection and Appraisal. Once you are under contract on your new home, you will want to have the home inspected, appraised, and review other due diligence documents to insure you are comfortable with the home purchase.

    Finalize Negotiations & Repairs. Final negotiations will be made regarding any inspection, appraisal, or other issues, and the loan will be put through final underwriting.

    Closing Day! Once the loan is approved, you are ready to head to the closing table. Real estate documents and loan documents will need to be signed and money collected before you get those keys in hand.

    And that’s it! You are a homeowner!

  • Week Two – Is It Time for You to Fire Your Landlord?

    Alright, I’ve gotten you excited about homeownership and all it’s benefits, but it is time for you to finally take the plunge?

    As we talked about before, it is no secret that the benefits of owning a home far outweigh those of renting in the long run. And while those sound absolutely fantastic, does that mean are you really ready to make that commitment? 

    Let’s face it. It isn’t just about the financial commitment. Buying a home is also a very emotional decision. So before you start home shopping, take a few minutes and ask yourself these questions: 

    1. Can I afford to buy a home? Take a look at your big financial picture. Do you have enough money saved up to afford the downpayment, closing costs, and maintenance? How does your DTI (debt to income) look? If you are already living month-to-month because of debt, taking on a new commitment might not be the best option. 
    1. Are you ready to put some roots down? Buying a home is a long-term decision, so you want to make sure you are ready to commit to staying in one place for at least the next few years.
    1. Are you happy with your current job? Lenders want to see stability when you are making such a big purchase, so make sure you are happy where you are.
    1. Do you really want to buy a home? Is this something you really desire, or are you just doing it because everyone else is or tells you to? This is a big decision, and the only thing that matters is how you feel about it.

    If you have answered yes to all these questions, you are ready to go, my friend! Next step is for us to chat about your time frame. 

    And don’t forget to follow along as we talk about the next steps!

  • Week One – Why Should You Buy Rather Than Rent?

    Are you thinking of taking the plunge into homeownership but not sure if it is the right decision?

    If you have done any research on the matter, it is no secret that the benefits of owning a home far outweigh those of renting in the long run. I could go on and on with all the statistics out there, but let’s just highlight a few of the pros and cons.

    Here are the pros…

    1. Rent increases over time. However, when you buy a home, your mortgage will not increase over the life of the loan, which is typically 30 years. This means you don’t have to worry about rent increases during every renewal.
    2. Interest rates are relatively low right now meaning owning could be more affordable. Home prices may be high, but low interest rates mean that your monthly mortgage payment could actually be lower than your monthly rent.
    3. Every month, a portion of your payment goes towards your principal, helping you build equity in your home. When you are renting, your rent pays your landlords mortgage and helps them build equity.
    4. You have the ability and freedom to customize or renovate your home. No need for those renter friendly hacks, because you are in control.
    5. Real estate tends to increase in value over time, meaning you can build wealth with real estate.

    However, the cons:

    1. Owning is a long-term decision. If you are not ready to commit to one home for at least a few years, renting may be the better option. 
    2. Owning can be more costly upfront because of your downpayment and closing costs. Renting typically only requires a deposit and first and last month’s rent.
    3. Owning is more responsibility. There is no landlord to call if the refrigerator breaks. However, there are programs like home warranties out there that can help with this, but we will talk about that later. 

    If the pros excite you, stick with me as we answer the question…Is it time for YOU to fire your landlord?