In many markets across the country, the amount of buyers searching for their dream home greatly outnumbers the amount of homes for sale. This has led to a competitive marketplace where buyers often need to stand out. One way to show you are serious about buying your dream home is to get pre-qualified or pre-approved for a mortgage before starting your search.
But even if you are in a market that is not as competitive, knowing your budget will give you the confidence to know if your dream home is within your reach.
Freddie Mac lays out the advantages of pre-approval in the My Homesection of their website:
“It’s highly recommended that you work with your lender to get pre-approved before you begin house hunting. Pre-approval will tell you how much home you can afford and can help you move faster, and with greater confidence, in competitive markets.”
One of the many advantages of working with a local real estate professional is that many have relationships with lenders who will be able to help you with this process. Once you have selected a lender, you will need to fill out their loan application and provide them with important information regarding “your credit, debt, work history, down payment and residential history.”
Freddie Mac describes the 4 Cs that help determine the amount you will be qualified to borrow:
Capacity: Your current and future ability to make your payments
Capital or cash reserves: The money, savings and investments you have that can be sold quickly for cash
Collateral: The home, or type of home, that you would like to purchase
Credit: Your history of paying bills and other debts on time
Getting pre-approved is one of many steps that will show home sellers that you are serious about buying and it often helps speed up the process once your offer has been accepted.
Bottom Line
Many potential home buyers overestimate the down payment and credit scores needed to qualify for a mortgage today. If you are ready and willing to buy, you may be pleasantly surprised at your ability to do so as well.
Over the past several weeks we’ve been presenting tips for selling your home faster and for the best price. Today’s tips are simple reminders, yet very important to the process.
• List your home online extensively. Today’s home buyers use today’s technologies to their advantage, so be sure your Realtor lists your home on as many search engines as possible. There are over 200 of them. Add beautiful photos, a map, contact information and important selling points to make the connection with potential buyers that much easier! Let me emphasize — the photos must be perfect, bright, low density for easy download and the frame needs to be free of distracting items.
• Host an open house. There’s nothing like good old-fashioned foot traffic to build interest in a property, but remember the all important first impression. Be sure to keep the house clean and clutter-free … and priced in line with the neighborhood comps. Your Realtor should be providing a wealth of information and advice. Your best strategy is to do this early on in the process, often with a hold on showings for a couple of days to start the listing. Take the demand that is already present and turn it up a notch with this technique.
• Ask for feedback. Every time your Realtor shows the house, he or she should be collecting feedback on the look and feel of the property, the price, and anything else that you can use to help sell the property. This can be extremely helpful if the listing period evolves past a couple of weeks. Be open minded to truly reach your objective.
Proper pricing, extensive exposure and reasonable condition will always result in maximum dollars in the minimum amount of time.
Paperwork, meeting deadlines, assets, debts, insurance. These are just some of the things you’ll have to deal with if you’ve been appointed executor for a close friend or family member.
One of the very first responsibilities of the executor is to notify the funeral home, insurance company, the deceased’s attorney, etc. of the passing. Soon after, you’ll need to begin to compile an inventory of everything he or she owned. If the deceased only owned a single-family home or lived in an apartment, this may be a relatively easy task. But in some cases — for example, when multiple homes and properties are owned — this can be an exceptionally difficult and time-consuming process. Regardless of the situation, this inventory of assets must be submitted to the county’s surrogate court in timely fashion, typically within a six-month period.
It is also the responsibility of the executor to secure the assets of the deceased. For starters, new locks should be installed on all properties, and the addition of an alarm system should be considered. A phone call to your local police station to inform them of the situation regarding the property is also a good practice.
You’ll also want to make sure the property is prepared for the weather at hand. Does it need to be winterized? The last thing you’ll want to deal with is a case of frozen pipes!
Also, did the deceased leave a will? Unfortunately, not everyone does, and this can easily add months (if not years) to the probate and disposition period.
If you find yourself feeling overwhelmed, an estate attorney can help make the process much easier. But, just like selecting a tutor for your child or a wedding photographer to capture your big day, you’ll want to first make sure the estate attorney is someone you will be comfortable working and communicating with over a long period of time.
The role of the executor is vital and it should be taken very seriously. Think of it as the ultimate and final favor for someone who placed your trust second to none.
We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own a home differ for each buyer, but there are many basic similarities.
Eric Belsky is the Managing Director of the Joint Center of Housing Studies (JCHS) at Harvard University. He authored a paper on homeownership titled The Dream Lives On: The Future of Homeownership in America. In his paper, Belsky reveals five financial reasons why people should consider buying a home.
Here are the five reasons, each followed by an excerpt from the study:
1) Housing is typically the one leveraged investment available.
“Few households are interested in borrowing money to buy stocks and bonds and few lenders are willing to lend them the money. As a result, homeownership allows households to amplify any appreciation on the value of their homes by a leverage factor. Even a hefty 20 percent down payment results in a leverage factor of five so that every percentage point rise in the value of the home is a 5 percent return on their equity. With many buyers putting 10 percent or less down, their leverage factor is 10 or more.”
2) You’re paying for housing whether you own or rent.
“Homeowners pay debt service to pay down their own principal while households that rent pay down the principal of a landlord.”
3) Owning is usually a form of “forced savings.”
“Since many people have trouble saving and have to make a housing payment one way or the other, owning a home can overcome people’s tendency to defer savings to another day.”
4) There are substantial tax benefits to owning.
“Homeowners are able to deduct mortgage interest and property taxes from income. On top of all this, capital gains up to $250,000 are excluded from income for single filers and up to $500,000 for married couples if they sell their homes for a gain.”
5) Owning is a hedge against inflation.
“Housing costs and rents have tended over most time periods to go up at or higher than the rate of inflation, making owning an attractive proposition.
Bottom Line
We realize that homeownership makes sense for many Americans for an assortment of social and family reasons. It also makes sense financially. If you are considering a purchase this year, let’s get together and evaluate your ability to do so.
Let’s face it … everyone who lists their home for sale hopes it will sell quickly and for the asking price, if not more. Well, sometimes that does happen, especially when you use your head to sell smart!
For example, recent statistics show that more than 90 percent of homebuyers are using the internet in their housing search. And what helps sell a home quickly on the internet? Crisp, clear and colorful photos. While some individuals and Realtors are handy with a camera, many others are not. (Think of all those photos taken on your last family vacation where the tops of the heads were all cut off!) If you can afford it, hire a professional photographer to photograph your home so you can show if off at its very best. If that’s not in the budget, ask a friend or family member who enjoys photography as a hobby if they would be willing to lend a hand.
As we’ve mentioned many times before, you only get one chance to make a first impression (either with photos or an in-person visit), so you’d better be prepared to nail it! Additionally, consider listing your home on a Thursday or Friday to catch the early birds who are already making plans as to which houses to visit over the weekend.
Today’s last tip is to price your home appropriately … and we can’t stress this enough! Ask your Realtor for a comparative market analysis so you can see how similar homes in your neighborhood were recently priced. When in doubt, a good strategy is to actually list your home slightly lower than the comps with the ultimate goal of creating a bidding war among several interested parties. This can be tricky, so be sure to consult with an experienced Realtor.
For more information on preparing your home for sale, please visit www.olear.com.
We have reported many times that the American Dream of homeownership is alive and well. The personal reasons to own a home differ for each buyer, but there are many basic similarities.