Wayne Semprini's Blog
No one wants to face a homebuying dilemma. Yet problems may arise during the homebuying journey that make it tough for an individual to find and buy his or her dream residence. Lucky for you, we're here to help you prepare for potential homebuying dilemmas and ensure you can quickly address these issues.
Now, let's take a look at three tips to help you avoid a homebuying dilemma as you search for your ideal house.
1. Craft a Homebuying Strategy
If you intend to embark on a home search, it often helps to enter the real estate market with a plan in hand. That way, you can streamline your house search and boost the likelihood of finding a quality home that matches your expectations.
Think about where you want to live, as well as the features you want to find in your dream home. Then, you can create a homebuying strategy designed to help you discover the right house.
2. Get Pre-Approved for a Mortgage
Obtaining home financing may prove to be problematic for some people. However, if you apply for a mortgage today, you can start your search for your dream home with a budget at your disposal.
There is no shortage of mortgage options available to homebuyers nationwide. Adjustable- and fixed-rate mortgages are two of the most popular options for homebuyers. Meanwhile, banks and credit unions can teach you about adjustable- and fixed-rate mortgages and other home financing options at your convenience.
If you meet with banks and credit unions, don't hesitate to ask mortgage questions, either. If you learn about all of your mortgage options, you can make an informed home financing selection that may serve you well for years to come.
3. Hire a Real Estate Agent
There is no telling when a homebuying dilemma will crop up during your search for your dream residence. Fortunately, if you hire a real estate agent, you can receive expert assistance with any homebuying dilemma, at any time.
A real estate agent understands the challenges commonly associated with buying a home. Therefore, he or she will do everything possible to help you address these challenges as you navigate the homebuying journey.
Typically, a real estate agent will help you craft a property buying strategy, narrow your home search and establish realistic homebuying expectations. He or she also will set up home showings, teach you about different aspects of the housing market and provide homebuying recommendations and suggestions.
If you discover your dream residence, a real estate agent will help you put together a competitive offer to purchase this home too. And if your homebuying proposal is approved, a real estate agent will help you finalize your house purchase as quickly as possible.
There is no need to stress about homebuying dilemmas. If you take advantage of the aforementioned tips, you can get ready for potential homebuying problems and resolve these issues before they escalate.
If you’re getting ready to buy a home, you know it will be one of the most significant purchases of your entire life. However, are you fully prepared for all of the expenses that buying a home will bring? You don’t want to buy a house to find out that you can’t afford it after all.
Many expenses go into buying a home that you can plan for ahead of time. Other costs aren’t as exact that you will need to add in your budget. Read on to learn more about many of the expenses that throw first-time home buyers for a loop.
Closing costs encompass a whole bunch of expenses that you’ll incur buying a home. These include:
- Application fees
- Attorney fees
- Title insurance
- Recording fees
No matter what the closing costs include, you should plan for these expenses to be about 2-5 percent of the price of your home. Costs can vary widely, but it’s good to have a bit of extra cash on hand.
Maintaining Your Home
While most homebuyers are prepared for the initial costs of buying a home, they don't know how much it costs to maintain a home. Each year, things will come up on your property that needs to be addressed continually. These tasks include:
These routine tasks are independent of other costs like replacing a stove or fixing a furnace. Homeowners need to be prepared for these expenses as well.
Taxes can increase or decrease for any given year. You can lookup taxes in the area where you’re planning to buy a home in order to prepare yourself. You should make sure that your property taxes are comparable with that of other homes in your area.
Utilities are what your home runs on. Depending on the climate you live in the number of utilities you pay can vary. Take into account these things:
- Air conditioning
Most neighborhoods have one or two choices for services, so you can ask people in the neighborhood what providers they [refer and how much their bills are each month.
You’re required to have homeowner’s insurance when you get a mortgage. Even if you don’t take out a mortgage and pay cash for a home, it’s a wise decision to protect your investment. Estimate how much a yearly policy will cost you ahead of time.
This insurance will protect your property from things like theft and fire. You can shop around for the best rates based on policies that suit your needs. It’s easy to price out policies online. See where you can save including discounts for security systems or multiple policy discounts.
If you live in an area where floods or earthquakes are prevalent, you should be aware. You’ll find you need additional policies to cover damage in the event of these disasters. The most important thing about your homeowner’s insurance policy is that you check the details for all of the fine print.
In a competitive housing market--like the one we have today--sellers are fielding numerous offers, especially in desirable urban and suburban hubs.
If you’re hoping to buy your first or second home, it can be tough to make offer after offer with no success.
However, there are some things you can do to help ensure your time house hunting is well-spent and to increase your chances of getting your offer accepted.
In today’s post, I’m going to give you a few tips on how to win a bidding war on your dream home.
The most effective way to ensure that your offer is accepted is to make it in all cash. Cash offers drastically simplify the real estate transaction process, making things easier on the seller.
Most buyers, especially first-time buyers, won’t be able to make an all-cash offer on a home. However, people who are downsizing after their children moved out or are buying a retirement home may find themselves in the ideal financial situation to be able to leverage a cash offer.
If that sounds like you, consider a cash offer as part of your bidding strategy.
Waive the financing contingency
If you’re new to real estate contracts, you might be wondering what a contingency is. Essentially, a contingency is an action that needs to be completed before the contract becomes valid and the sale becomes final.
There are a number of different contingencies that can be found in a real estate contract. However, the most popular are for inspections, appraisals, and financing.
If you’re planning on taking out a mortgage to purchase the home, a financing contingency protects you in case you aren’t able to secure the mortgage in time. In other words, you’re not on the hook for a home you can’t pay for.
In some special situations, buyers might decide to waive the financing contingency, signaling to the sellers that there won’t be any hang-ups or delays from the buyer regarding financing the home.
Waiving this contingency comes with risks (namely, being responsible for coming up with the money to pay for the home). However, there are ways to safely waive a contingency.
The most common approach is to get a fully pre-approved letter from a lender. The important distinction here is that your mortgage needs to be pre-approved and underwritten (not just pre-qualified), otherwise you again risk getting denied the mortgage in the last moments before buying your home.
Crafting a personal letter
Sometimes all it takes to win a bidding war is to be the seller’s favorite candidate. Take the time to write them a personalized letter. Explain what you love about their home and why it’s perfect for your family.
Avoid talking about big changes you’ll make. Remember that they probably put a lot of time and money into the home, making it exactly the way they want it, and won’t appreciate you making huge plans to undo their work as soon as they’re out the door.
Using one, or a combination of, these three techniques, you’ll be able to give yourself an edge over the competition and increase your chances of getting your offer accepted.
The US government has been helping Americans achieve their goal of homeownership for decades. Through programs offered by the Federal Housing Authority, the USDA, and the Department of Veterans Affairs, millions of Americans have been able to afford a home who would have otherwise struggled.
The focus of today’s post is one such service: loans offered through the USDA Rural Development program.
If you’re hoping to buy a home in the near future but are worried about being able to save up enough for a down payment or build your credit score in time, USDA loans could be a viable option.
Let’s take a look at some of the common questions people have about USDA loans:
Do I have to live in the middle of nowhere to get a USDA loan?
The short answer is “no.” rural development loan eligibility for your area is laid out on a map provided by the USDA. Most of the suburbs outside of major cities, as well as nearly all rural areas, are covered by the rural development program.
Can I qualify for a USDA loan if I’ve previously owned a home?
Yes. You may be eligible for a loan as long as you’re not the current owner of a home that was purchased through the rural development program. So, for example, if you own a home financed through the USDA and wanted to buy a second home and rent out the first one, you wouldn’t be able to finance your second home through the USDA.
How does the USDA loan guarantee work?
When you buy a home, a lender asks you to make a down payment. If you don’t have a down payment, the government (USDA, VA, or FHA) insures the down payment on your home rather than you paying it up front.
Will I have to pay mortgage insurance?
Unlike other subsidized loans, rural development loans require a “guarantee fee” rather than PMI (private mortgage insurance). The guarantee fee is 1% the total mortgage amount and this can typically be financed into the loan (so you don’t have to pay up front). In addition to the guarantee fee, USDA loans also charge an annual premium for the lifetime of a loan.
What are the qualifications for a USDA loan?
To find full eligibility information, complete the survey on the USDA’s eligibility website to find out if you qualify. However, the general qualifications are:
Buying a home in a qualifying area
24 months of income history
A credit score of 640 or higher for streamlined processing
Income high enough so that your monthly payments do not exceed 29% of your monthly earnings
What is the direct loan program?
The USDA really offers multiple urban development loans. The guarantee program, for which most single families utilize, and the direct loan program. Direct loans are designed for families who have the greatest need. You can also find out if you’re eligible for a direct loan by filling out the questionnaire on their website.
If you want to buy your dream house, you'll likely need to submit a competitive offer from the get-go. That way, you can boost the likelihood of receiving a "Yes" from a home seller and proceed along the homebuying journey.
Putting together a competitive homebuying proposal can be simple. Now, let's take a look at three tips to help you prepare a competitive offer to acquire your ideal residence.
1. Look at Your Homebuying Budget
Entering the real estate market with a budget in hand generally is beneficial. This budget will enable you to narrow your house search to residences that fall within a certain price range. Plus, your budget can help you define exactly how much you can offer to acquire a residence.
When it comes to mapping out a homebuying budget, you should meet with several lenders. These financial experts can help you get pre-approved for a mortgage. And with a mortgage in hand, you'll know exactly how much you can spend on a house.
2. Review Housing Market Data
Housing market data can make or break a homebuying proposal. If you assess real estate market data closely, you can uncover a variety of patterns and trends. Then, you can use this information to craft a competitive offer that accounts for the present real estate market's conditions.
Of course, it helps to evaluate the age and condition of a house as well. Learning about all aspects of a house will help you determine whether to submit an offer at, above or below a seller's initial asking price for his or her residence.
The more information that you obtain about a residence and the current housing market's conditions, the better off you will be. Because if you take a data-driven approach to buying a residence, you can define a competitive offer for any home, in any housing market and at any time.
3. Consult with a Real Estate Agent
A real estate agent is a difference-maker, particularly for a homebuyer who is uncertain about what differentiates a competitive home offer from a "lowball" proposal. In fact, a real estate agent will go above and beyond the call of duty to ensure that you can acquire a great house at the lowest-possible price.
Typically, a real estate agent will provide you with a wealth of housing market insights. He or she also is happy to teach you about the real estate market and respond to any of your homebuying concerns or questions.
A real estate agent can offer recommendations about how much you should offer to pay for a house too. He or she will provide honest, unbiased homebuying suggestions to help guide you in the right direction throughout the homebuying cycle.
If you want to purchase your dream house as quickly as possible, there is no reason to delay any further. Take advantage of the aforementioned tips, and you can prepare a competitive offer to purchase your dream residence.