Tips for First-Time Homebuyers

Home-price adjustments in markets around the country have opened doors of opportunity for many renters. If you are transitioning from renter to homeowner, the prospect of making such a large investment may be exciting, while at the same time overwhelming. But it doesn’t have to be. Here are six common mistakes to avoid.
1. Not understanding the homebuying process. Educate yourself. Find a homebuyer seminar that you can attend or research online. The U.S. Department of Housing and Urban Development Web site (www.hud.gov) has an entire section devoted to homebuyers with common questions of first-time homebuyers, mortgage and home-buying programs information, downloadable tools such as a wish list and home-shopping checklist, tips on selecting a real estate professional, etc. Likewise, Prudential Real Estate’s popular Web site, prudential.com/realestate, offers consumers brand-new tools for the homebuying process, such as free home environmental reports, Value Range Estimates and Property Profiles, among other resources.
2. Not asking questions. There are many facets and intricacies to the homebuying process, so although you may gain a basic knowledge, you will still have questions. Don’t hesitate to let your real estate professional know that you are new to the process. Make sure you choose a sales professional who is willing to spend time with you and walk you through the entire process. He or she will expect you to have questions at each step—from house hunting, to making an offer to the closing. Remember, this is one of the largest financial transactions of your life, so you want to have a clear understanding of what’s going on.
3. Buying on impulse. Don't feel pressured into making an offer on the first home you see. Buyers, especially first-timers, may be impressed by the first two or three homes they view. Look at a good selection. List the positives and negatives about each home. Narrow the prospects to three or four and then return for a closer look. When you decide to make a bid on a property, work with your real estate professional to get all of your questions answered before making an offer. But don't wait too long to make an offer. The longer you wait, the greater the chance other prospective buyers may place offers, making it harder for you to negotiate a good deal.
4. Looking outside your price range. Before beginning your home search, consider getting pre-qualified to so get an idea of how much you may be able to borrow. Use this information as a starting point in determining your price range. Then take into consideration other factors that will affect your monthly budget once you are a homeowner, such as property taxes, homeowners insurance, utilities, private mortgage insurance (PMI) and maintenance.
5. Not planning ahead. Think about personal changes you are planning in the next five to seven years. For instance, are you starting a family, and if so, is the home large enough and will it continue to be? If this will be a starter home or if you think you’ll be relocating in a few year, you’ll probably want to pay closer attention to appreciation and resale value. If a double-income is necessary to qualify for financing and to make your payments, do your plans foresee an income sufficient to continue making payments?
6. Failure to focus on location. Don’t just focus on the house. Examine the community. Does it suit your lifestyle? Is the area safe, well-maintained, close to work, stores and schools? Find out about zoning and what new construction is planned on vacant land in the immediate area. Also consider the property marketability when it’s time to sell.
Above all, remember knowledge is key. No question is a silly question. Your real estate professional can be an invaluable asset throughout the process. Making smart home buying decisions will make the home-buying process less scary and your first home purchase a rewarding experience.

What Buyers Should Know Before Making an Offer

Be it the real estate market in 2010 or any other real estate market for that matter, the structure of a real estate purchase contract offer can be the difference in it being accepted or rejected.
No, the offering price is not the only factor in negotiating a contract to purchase a home.
Regardless of the number of pages in the sales contract, a contract offer can be broken down into 3 separate parts which can be important to the seller: Price, Terms and Conditions.
Each has to be satisfactory in order to obtain seller acceptance. In some situations, full price offers are not acceptable due to the buyer's terms and conditions in the contract offer. In other instances, contracts get accepted and signed even though the offer was much lower in price than other competing offers, but was more favorable for the seller in terms and conditions.
What then is the secret in preparing and submitting a contract offer to buy real estate? This is where the value of an experienced REALTOR and Buyer's Agent is with providing assistance in preparing and structuring the contract offer in a manner that does not create questions or concerns for the seller and their listing agent when it is presented to them.
There is more to purchasing a home than just looking at houses, whether the home is in Crofton or Columbia, Maryland, in Anne Arundel County or any other state.
The first step toward purchasing a home is obtaining Mortgage Pre-Approval from a reputable Mortgage Lender (Mortgage Pre-Approval Versus Mortgage Pre-Qualification), and be sure a copy is included with the contract offer. Why? The first question to be asked by the seller and listing agent at a contract presentation will be "Does the buyer have Mortgage Pre-Approval? And this is where the benefit of a Mortgage Pre-Approval letter provides advantages over a standard Pre-Qualification letter.
Secondly, there is no cardinal rule that there must be some fixed amount that a seller will negotiate from their asking price. Home buyers need to obtain factual sales information about the market area, and section of Town, they are considering buying in before submitting an offer. While it is very likely that sale prices have declined in the past few years, they have not dropped equally in all Towns and in all neighborhood locations.
Remember Economics 101 from Grammar School: "What's true of the whole may not be true of the parts." That is what I am referring to here. Real estate values are local, and various factors influence market value such as buyer demand, amount of homes for sale, mortgage rates, local economic conditions and so on and so on. As important, similar design and size homes may differ in value due to condition and improvements.
In preparing a contract offer, it is important that a buyer obtain a Market Analysis for the property being considered. A report like this can be prepared by the buyer's agent and it should contain information comparing similar properties which are active on the market for sale, homes which expired and did not sell in the past six months, under contract sales and closed sales in the past six months. This information should also provide the asking price history and days on market before sold. With a report like this, a buyer can then have a better understanding of the real estate market and be better prepared when submitting a contract offer.
It is highly recommended that buyers obtain a blank contract of sale and addendums early in the home searching process. Contracts can be intimidating to many buyers. It would be much better to review the contract documents in advance of making a contract offer. Making a contract offer is an important decision. Being properly prepared is an important aspect of making a successful contract offer.
Thirdly, buyers should be completely aware of their personal finances and the total costs of purchasing a home. Buying a home involves down payment, expenses occurred during the purchase, such as mortgage application fee, inspection fees, and closing costs. It is important for buyers to obtain the estimates related to transaction expenses and closings costs. When a buyer is not properly prepared for expenses like these, they could have an affect on exactly how much a buyer has for the down payment which then could affect how much is needed in a mortgage to complete the purchase.
Buyers should be educated and informed when making an offer to buy a home.

Six Questions that Can Help You Gain Insight on a Prospective Home

Unlike an automobile, you can’t test drive a home before you purchase it. You have to base your decision on other factors such as layout, condition and much more. And, of course, the seller is obligated to disclose the property’s condition that may alert you to issues such as previous mold, defective water heater or leaky roof. Yet, that still doesn’t always paint the entire picture. Here are six questions you should consider asking the seller to gain additional insight about the prospective home before you make a final decision.

1. Why is the seller selling the house?
This question may help you evaluate the “real value” of the property. Is there something about the house the seller does not like? If so, you may be able to adjust the purchase offer accordingly.
2. How much did the seller pay for the home?
In some instances, the answer to this question may help you negotiate a better deal. However, it is important to remember that the purchase price is influenced by several factors, like the current market value and any improvements the seller may have made to the home. The original purchase price might not have anything to do with the current value of the house.

3. What does the seller like most and least about the property?
By asking the seller what he or she likes most and least about the property, you might get some interesting information. In a few cases, what a seller likes the most about a home might actually be something the buyer is looking to avoid. For example, if the seller describes his house as being in a “happening neighborhood,” the buyer might consider this a negative factor because the area may be too noisy or busy for his or her taste.

4. Has the seller had any problems with the home in the past?
It is also a good idea to ask the seller if he or she has had any problems with the home while living there. Has the seller had problems with a leakage from the upstairs bedroom in the past? If so, even if the leak has been corrected, the floor and walls around the bathroom might have been damaged. You should check that these items were repaired properly.

5. Are there any nuisances?
Use this question to find out about barking dogs, heavy airplane traffic or even planned changes to the community, such as a planned street widening. This may give you insight on why the seller is really moving.

6. How are the public schools in the area?
Because the value of a community is usually greatly influenced by the public schools in the area, finding out the buyer’s perception can give you some insight about the quality of the area’s schools.
Knowing all you can about a prospective home will help you make a more informed decision as well as offer. Your real estate professional can be a great resource in helping you get your key questions answered and give you advice on how to evaluate your findings.

Choosing the Right Community for You

If you are buying a home, one of the first things your real estate professional will do before taking you on home tours is interview you to determine the type of house you want such as a 2,000-square-foot four-bedroom, split-level with a formal dining room and two-car garage. But just as important is the type of community you want to live in. Knowing what your requirements are will help narrow your home search and save time.
To expedite the house-hunting process, start by making a list of the dream home factors that are most important to you and your family’s lifestyle. Consider style, location, proximity to work and schools, yard size, children in the community, and of course, price.
Price and location generally are the key factors you’ll use to identify the communities that best suit you. If you are moving within the same city, you may want to start your community search by getting in your car and exploring. There are also resources on the Internet that let you compare communities.
You’ll want to ask yourself critical questions, such as: Do you dream of something quaint and charming that can only be found in an older area? Or, do you prefer everything new? Are you willing to sacrifice size and space for architectural detailing? What about drive and commute time to the office and schools? Will you forgo the number of bedrooms and a big yard for proximity to a lake or other recreational areas?
Whether you have children or not, buying a home in a community with good schools is important. It not only adds value to your property, but also is an attractive feature when and if you decide to sell. There are plenty of resources available to get information about schools within the communities you are considering. Various Internet sites offer school reports and profiles. They provide statistical data such as graduation rates, college-bound percentages, and standardized test scores. You can also learn about special programs the schools offer. In addition to these reports, many schools have their own Web sites you can peruse. And of course you can always talk to people in the area or take a tour of the school.
Additional factors you’ll want to consider during your community search are crime, recreational activities, proximity to shopping and restaurants, and other specific family needs.
Once you’ve narrowed your search to two or three communities that fit your price range and lifestyle, make comparisons of price and sales activity. Your real estate professional can help you determine which communities are most sales-worthy at present, and which are more likely to continue to be.
There are many factors involved in selecting the right community for you and your family. Discuss your options with your real estate professional. This will provide the information he or she needs to help you find property listings to tour. Remember, a targeted approach to house hunting is less time consuming, less expensive and more efficient.

Getting Your Home Ready to Sell

As a seller, your No. 1 goal is to sell your home as quickly as possible at or near the listing price. In today’s market, where there is much more competition for buyers, it is important to put your best foot, or in this case, home forward because first impressions are vital.
Many of today’s prospective homebuyers have busy lifestyles and are looking for properties that don’t require a lot of work. Therefore a home in move-in condition is much more attractive. Before placing your home on the market, you may want to invest in making needed repairs.
To get started, inspect both the inside and outside of the home. Take inventory of practical and aesthetic repairs. You may want to apply a fresh coat of paint on the walls, doors, and shutters. Clean the carpet and buff and polish wooden floors. Tighten and polish hardware. Repair cracks in sidewalks and driveways, and clean any stains on them. Replace missing or warped roofing. Clean or re-grout kitchen and bathrooms. Repair dripping faucets and drains or plumbing fixtures that aren’t operating.
Fix sticking doors and replace old locks and doorknobs. Replace old bulbs and broken electrical sockets. Replace cracked windows and torn screens. Repair broken fencing and reseal the deck. Clean up stains on the tiles and countertops.
Some experts also recommend hiring a certified home inspector to thoroughly and impartially evaluate the property. (For a list of inspectors in your area, visit the American Society of Home Inspectors website, www.ashi.com, or ask your real estate professional for recommendations.) A standard report will review the condition of the home’s heating system, central air conditioning, plumbing and electrical systems, the roof, attic, walls, ceilings, floors, windows and doors, the foundation, basement and visible structure.
If there are recommendations for improvement, consult with your real estate professional in prioritizing the list of repairs.
Depending on your goals and budget, you may want to repair only items that could cause significant deterioration to the home, such as a leak. In addition, your local market conditions may dictate how extensive your repairs need to be. Let your budget and your real estate professional guide you.
However, be careful about major repairs. Sellers rarely recoup money on major remodeling projects, and you may want to save funds for your new home.
A home in good condition demonstrates pride of ownership. Taking the time to make small repairs to your home can go a long way in making sure that your home is presented to potential buyers in its best possible light. They also just might make the sale.