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Monday, 01 January 2007
Guide to your Hassle-Free Home Purchase
We offer several reports on our websites that buyers can request,
I thought I would go ahead and post the one that is most requested
to help anyone that is thinking about buying a home this year
and get you started on How to buy a house Right!
HOW THIS POST CAN HELP YOU
Buying a home can seem like a frightening prospect. Whether it's your
first home or your fifth, so much is at stake; your savings, your credit
rating, and your financial freedom. It's difficult to find the courage to
sign on the dotted line even if you want that home very, very badly.
Not to mention the time involved and the actual moving itself and effects
it will have on your family.
How do you determine whether the purchase of a home makes sense?
What's the easiest way to examine the whole picture from emotions to
We suggest that you read this entire report before you go house hunting.
You'll learn how to separate wants from true needs. You'll discover how to
prepare a game plan for your real estate venture, how to research
effectively, choose wisely, finance appropriately, and survive the whole
procedure with little stress. Sounds to good to be true? The whole Real Estate
process is a business and when the right steps are followed happiness prevails.
Here we go...
SEVEN STEPS FOR SUCCESS
1. Establish your needs and your wants. (have to have vs wish list)
2. Determine how much you can afford. (keep wiggle room in this)
3. Get pre-qualified or pre-approved by a lender. (Huge time saver)
4. Find a good real estate agent to help you. (Trusted Adviser)
5. Find a home that meets your needs. (Determine neighborhood)
6. Make an offer to buy a home. (Determine correct value of home)
7. Save as much as you can on the purchase. (knowledge & negotiation's)
STEP ONE: ESTABLISH YOUR NEEDS AND WANTS
Begin your search for a perfect home by making a careful assessment of the
kind of home you need and want. We recommend that you write it down. Take
time, right now, to be as specific as you can about your particular
requirements. First, make a list of "necessities" in your home. Next, list
the features that you "desire".
STEP TWO: DETERMINE HOW MUCH YOU CAN AFFORD
Set up a budget for yourself. Decide how much you can really afford to
invest and be comfortable with, for your monthly house payment. Be
realistic. Most lenders suggest that your payments be no more than 28
percent of your total monthly income. Don't forget to include taxes and
insurance if you plan to escrow. Many brokers can give your good faith estimates
and a REALTOR can give you closing costs on a particular property before you even
put an offer in.
STEP THREE: GET PRE-QUALIFIED OR PRE-APPROVED BY A LENDER
You can save yourself time and heartache by meeting with a lender before
you start your search for a home. A lender can let you know what specific
loan programs would be best for you. He can also help you understand what
it takes to qualify for the loan that you want. By taking a look at your
financial situation and looking at your credit history, a lender can
usually give you a good idea if you can qualify for the loan amount that
you want. Many lenders call this 'Pre-Qualifying A Buyer'.
You should talk to 3 lenders, your bank if you have a good relationship and mortgage
brokers. Watch out for hidden fees from online lenders! Know what your credit score is
before you contact a lender.
To be absolutely certain that you can be approved for a loan, you may want
to ask to be "pre-approved". In the approval process, all of your
documentation is completed and submitted to an underwriter. The
pre-approval that you will receive is an actual loan commitment from a
lender - your guarantee of loan approval. (You might be able to get a better deal
because of this factor.)
STEP FOUR: FIND A GOOD REAL ESTATE AGENT TO HELP YOU
You can learn a lot about an agent by just letting him/her talk to you
about how he/she helps his/her buyers. Within a few minutes, you will
probably be able to determine if this agent's style is in line with yours.
The most important part of this relationship is trust. You must be honest
with all factors in the process for there to be NO SURPRISES!
Ask as many questions as you can up front. Finding a good agent will save
you huge amounts of time, effort, and frustration. Remember, a "buyer's
agent" is working for YOU! and save you $$$ with product knowledge and
STEP FIVE: FIND A HOME THAT MEETS YOUR NEEDS
Five tips for successful house hunting:
1. Keep an organized record of all your research data. Write down comments
about the homes that you see. Keep track of your likes and dislikes.
2. Make sure that your agent is aware of your time schedule and your
expectations. Do you like to look at one or two homes in a session? Four?
Eight? Discuss all of this with your agent.
3. Tell your agent about any homes that perk your interest and those you'd
like to know more about. Include those homes you discover as you explore
the area yourself or those you see advertised in the newspaper.
4. If you want to spend time driving around looking at homes for yourself,
ask your agent for a list of drive-by homes which you can consider first
from the outside. Your agent can than make appointments to show you the
interior of those that appeal to you.
5. Express your likes and dislikes to your agent after you see a home.
Honest communication is essential. Some buyers are shy and hesitant to
tell an agent what they really think of a house. They think the agent may
take it personally. Remember, the homes don't belong to the agent! You
must be straight forward about your likes and dislikes to enable the agent
to do the best job for you.
STEP SIX: MAKE AN OFFER TO BUY A HOME
Your real estate agent can help you make an offer to buy the home that you
select. It is important decide prior to viewing homes whether your agent
will represent you or the seller. Some agents work only for the seller. In
this case the agent may not be able to advise you in making a fair offer.
By looking at homes selling in the area and the length of time is takes to
sell, you should be able to get a good idea of value. Only a "buyer's
agent" can give you all the information necessary to make an intelligent
offer in your best interests.
STEP SEVEN: SAVE AS MUCH AS YOU CAN ON YOUR INITIAL INVESTMENT
There are only two major investments to consider when buying a home. These
are the initial investment (including down payment and closing costs) and
the monthly payment (including principle, interest, taxes, and insurance).
Here are some ways to save on your initial investment:
1. Choose a low down payment loan. You do not necessarily have to put 20
percent, or even 10 percent, down. You can put 5 percent, or even 3
percent, down on some loans. Ask whether or nor your loan includes
"private mortgage insurance" or FMI.
2. As part of your offer, ask the seller to pay some of your closing
costs. Sellers are usually allowed to contribute to a buyer's closing
costs. In many cases this is a negotiable item.
3. Shop around for your home insurance. A little shopping can save you a
significant amount of money.
4. You can deduct money paid for discount points from your gross income
before computing your tax, which would effectively reduce the cost to you.
Always check with your CPA to find out specific guidelines in your area.
Keep your monthly payments low
1. Get a loan with no monthly mortgage insurance premiums. You may be able
to reduce or eliminate them by paying a little more at closing. By putting
20 percent or more down, you can eliminate them entirely.
2. Choose an Adjustable Rate Mortgage. ARMs can be up to 3 percent lower
than fixed rates.
Remember that interest payments on a primary residential mortgage are
fully deductible in most circumstances. Your property taxes may also be
deductible. Tax rates definitely favor homeowners.
Now that you have read this long post, it is time to go out and find the
home of your dreams. Make sure that you cover all steps listed here in the
proper order so your home buying experience will be hassle-free. Feel free
to bookmark this page for future reference or email to someone that could
benefit from this information and Happy New Year!
Housing Information Overload?
I Hear You!
Take a look at the monthly housing breakdown for Feb. 2013 for insight into the current real estate market. Every month new information will be posted as a trusted souce for excellent advice. Any questions about local real estate in Plano? Just ask us
for expert advice.
J.W. & Terry Smith
Common name, Uncommon service
Licensed Broker - Owner, TX Realtors®
Smith & Smith Realty
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Property Tax Rates 2013
Sales Tax 8.25%
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