by TheOlearTeam | Mar 25, 2017 | Buying A Home
So you’ve been searching for that perfect house to call a ‘home,’ and you finally found one! The price is right, and in such a competitive market that you want to make sure you make a good offer so that you can guarantee your dream of making this house yours comes true!
Freddie Mac covered “4 Tips for Making an Offer” in their latest Executive Perspective. Here are the four tips they covered along with some additional information for your consideration:
1. Understand How Much You Can Afford
“While it’s not nearly as fun as house hunting, fully understanding your finances is critical in making an offer.”
This “tip” or “step” really should take place before you start your home search process.
As we’ve mentioned before, getting pre-approved is one of many steps that will show home sellers that you are serious about buying, and will allow you to make your offer with the confidence of knowing that you have already been approved for a mortgage for that amount. You will also need to know if you are prepared to make any repairs that may need to be made to the house (ex: new roof, new furnace).
2. Act Fast
“Even though there are fewer investors, the inventory of homes for sale is also low and competition for housing continues to heat up in many parts of the country.”
According to the latest Existing Home Sales Report, the inventory of homes for sale is currently at a 3.6-month supply; this is well below the six-month supply that is needed for a normal market. Buyer demand has continued to outpace the supply of homes for sale, causing buyers to compete with each other for their dream homes.
Make sure that as soon as you decide that you want to make an offer, you work with your agent to present it as soon as possible.
3. Make a Solid Offer
Freddie Mac offers this advice to help make your offer the strongest it can be:
“Your strongest offer will be comparable with other sales and listings in the neighborhood. A licensed real estate agent active in the neighborhoods you are considering will be instrumental in helping you put in a solid offer based on their experience and other key considerations such as recent sales of similar homes, the condition of the house and what you can afford.”
Consider ways of making your offer stand out! Many buyers write a personal letter to the seller letting them know how much they would love to be the new homeowners. Your agent will be able to help you figure out if there are any other ways your offer could stand out above the rest.
4. Be Prepared to Negotiate
“It’s likely that you’ll get at least one counteroffer from the sellers so be prepared. The two things most likely to be negotiated are the selling price and closing date. Given that, you’ll be glad you did your homework first to understand how much you can afford.
Your agent will also be key in the negotiation process, giving you guidance on the counteroffer and making sure that the agreed-to contract terms are met.”
If your offer is approved, Freddie Mac urges you to “always get an independent home inspection, so you know the true condition of the home.” If the inspection uncovers undisclosed problems or issues, you can discuss any repairs that may need to be made, with the seller, or cancel the contract.
Bottom Line
Whether buying your first home or your fifth, having a local professional on your side who is an expert in their market is your best bet to make sure the process goes smoothly. Happy House Hunting!
by TheOlearTeam | Mar 22, 2017 | Buying A Home
If you’re looking for a home, especially for the first time, you’ll likely hear about numerous mortgage options. Today, with the help of a recent article published by Ruby One, we’ll take a look at VA loans for veterans.
- A VA loan is a mortgage guaranteed by the U.S. Department of Veterans Affairs (VA).
- The homeowner does not receive a mortgage loan directly from the VA. Actually, the VA provides loan guarantees to lenders, and the guarantee determines how much is paid to the lender should the borrower default on the loan.
- A VA guarantee allows the lender to loan money at a lower interest rate and eliminates the need for a borrower to make a down payment. It’s a zero down loan.
- VA loans assist active military members, veterans and eligible surviving spouses.
Please consult with your Realtor or mortgage lender to see if you are eligible for a VA loan … and thank you for your service to our country!
![Two myths that may be holding back buyers]()
by Michael Olear | Mar 18, 2017 | Buying A Home
Fannie Mae’s article, “What Consumers (Don’t) Know About Mortgage Qualification Criteria,” revealed that “only 5 to 16 percent of respondents know the correct ranges for key mortgage qualification criteria.”
Myth #1: “I Need a 20% Down Payment”
Fannie Mae’s survey revealed that consumers overestimate the down payment funds needed to qualify for a home loan. According to the report, 76% of Americans either don’t know (40%) or are misinformed (36%) about the minimum down payment required.
Many believe that they need at least 20% down to buy their dream home, but many programs actually let buyers put down as little as 3%.
Below are the results of a Digital Risk survey of Millennials who recently purchased a home.
As you can see, 64.2% were able to purchase their home by putting down less than 20%, with 43.8% putting down less than 10%!
Myth #2: “I need a 780 FICO Score or Higher to Buy”
The survey revealed that 59% of Americans either don’t know (54%) or are misinformed (5%) about what FICO score is necessary to qualify.
Many Americans believe a ‘good’ credit score is 780 or higher.
To help debunk this myth, let’s take a look at Ellie Mae’s latest Origination Insight Report, which focuses on recently closed (approved) loans. As you can see below, 54.7% of approved mortgages had a credit score of 600-749.
Bottom Line
Whether buying your first home or moving up to your dream home, knowing your options will make the mortgage process easier. Your dream home may already be within your reach.
by Michael Olear | Mar 8, 2017 | Buying A Home
Colorado Springs Real Estate recently published an excellent article on how to buy a house, step by step. Over the next few months we’ll break down that article into some easy tips to help guide you through the home-buying process. Today’s topic will be finances.
- Know your credit history. No matter your financial situation, you’ll need to check your credit history and know your credit status before buying a home. If you find something on your credit report that is incorrect, be sure to resolve it before entering the home-buying process.
- Calculate your debt. Your debt-to-income ratio is one of the main criteria for obtaining a mortgage. Carefully calculate your expenses and debts to help determine a desired monthly mortgage payment. A mortgage lender or experienced Realtor can offer assistance.
- Gather financial documents. When applying for a mortgage, you’ll be asked to provide tax returns, employment verification, bank statements and more. Gather this information before looking at homes.
- Find a mortgage lender. More importantly, find a loan officer and company that you are comfortable working with. Be sure to ask about closing costs, interest rates, speed of closing, etc.
- Get pre-approved for a loan. A pre-approval letter from your lender will make you a legitimate buyer when you’re out looking at homes. And, a full mortgage pre-approval will help guarantee that your financing doesn’t fall apart at any point during the home buying process.
by Michael Olear | Feb 11, 2017 | Buying A Home
Transitioning from tenant to homeowner can be an exciting time. It can also be an expensive time, as everything from small repairs to major home improvement projects are now your financial responsibility. Following are some tips to help you adjust courtesy of a recent article published by RISMedia.
• Before you sign on the dotted line, have an experienced inspector carefully examine the home and property. New homes shouldn’t have many issues, but that’s often not the case with older homes.
• Create a home maintenance budget. A basic rule of thumb for your budget, according to the article, is to put aside 1 percent of your home’s purchase price each year for maintenance. So, if your home cost $300,000, you should put aside about $250 a month for major home repairs.
• Once you’re in your home, stay atop of home maintenance issues by performing an annual survey of major appliances. This should include items such as your water heater, furnace or boiler, air conditioning unit, etc. You should also keep an eye on everything from roofing to plumbing.
• Owning a home also has tax implications. If you’ve recently purchased a home, this might be the year to turn to a tax professional.
