Buyers & Sellers
Do I Really Need To Use A REALTOR® ?
You can do your home search by yourself, but why should you? With an experienced Harry Norman sales associate at your side, finding the perfect home is easier, faster and a lot more fun.
And you'll save time. Yet many buyers still spend endless hours going through classified ads, driving all over town, and viewing dozens of unsuitable properties - simply because they haven't connected with a REALTOR® .
Some people think that if they have several agents looking for homes on their behalf, they'll find a house more quickly. Like most relationships, the buyer-agent relationship thrives on communication, loyalty and trust. By working exclusively with one agent, you'll improve both the process and the results.
How Much Home Can You Afford?
Before you go out looking for a home, it's good to get an idea of what you can afford. One quick way is to try our How Much Can I Afford? calculator. This handy tool will help you estimate how much mortgage you can handle before you start looking for a home.
Another thing to consider is your down payment amount. Think you can't buy a house without a 10% or 20% down payment? Thanks to more lenient government guidelines and new mortgage products, many people can now get into a house for as little as 3% down-or less. There are even some special programs for first-time buyers that help with closing costs.
The Benefits of Equity
Equity is the difference between what your home is worth and what you still owe on it. When you sell your home this equity can be used as a down payment on a new home. If you don't sell, this same equity can be used as collateral for a home equity loan. You can use a home equity loan to finance home improvements, a child's college tuition, or a new car.
Real estate is also a great way to keep a hedge against inflation. While some homes do appreciate in value more quickly than others, real estate usually keeps pace with inflation. (Your real estate agent can provide you with the housing appreciation rates in the areas in which you're interested in buying.)
That Wonderful Thing Called A Tax Break
As a homeowner, when filing your taxes you can deduct the interest portion of your monthly payment-and that can mean big savings. You can deduct your property taxes, too.
So look at what your monthly mortgage payment will actually be, taking your tax breaks into consideration. You may find out it's about the same as-or sometimes even less-than a rent payment!
With a 5% down payment, a $100,000 30-year mortgage loan at 8% interest (8.15% APR) requires a monthly principal and interest payment of $733.76. Assuming a 28% tax bracket and $150 for monthly property taxes, the after-tax monthly payment would be about $615! (This is only an example. Please consult a tax advisor regarding your own tax situation and current tax laws.)
Pre-Qualification vs. Pre-Approval
Pre-qualification is a rough estimate of how much you could afford. But with a pre-approval, it's just that: getting your mortgage approved prior to going out and looking for a new home. This critical step launches your home purchasing experience.
Your loan officer will show you which items you should bring to apply so neither of you will need to wait for various written income, asset and liability information. So you could get a loan decision in just days. And with a Trinity Mortgage Loan Consultant you can get your approval quickly!
7 Easy Steps To Buying a Home
1. Conduct a preliminary search on our Property Finder.
2. Contact a loan officer and get your mortgage pre-approved.
3. Contact us and we will connect you with an agent who will help you look for a house in your price bracket (and/or to list your current home if you also want to sell). Then begin looking for a home with your REALTOR® . Take along our handy checklist so you can evaluate and remember the differences between each home you see.
4. Once you find a home you want to make an offer on, you'll sign a purchase agreement and give the seller earnest money to seal the deal. If your offer is accepted (sometimes with contingencies), determine a date you wish to close and have the house inspected to ensure there's nothing seriously wrong with the property.
5. Notify your loan officer that you've found a property so they can begin the appraisal and title process. And, lock in your interest rate. Your loan officer will send you a new good faith estimate which shows your monthly mortgage payment as well as your estimated cash needed for closing. The REALTOR® or closing attorney will notify you of the time and date you close on your home and the items you'll need to bring to closing.
6. Notify your phone company, utilities (don't forget water and sewer), moving company, post office, newspaper and magazines, friends and family.
7. Pack and move!
First Time Home Buyers
With every rent check you write, you're helping to build equity in your landlord's property. That money could be going toward building equity in a home of your own. Today's rates are low enough that your house payment could be lower than your rent payment!
There are many advantages to owning a home, including:
Security | A feeling of security that comes from owning a home and the knowledge that your home is a safeguard against inflation.
Investment | Payments on your mortgage loan mean you are acquiring a major possession; instead of rent, you own more and more. The garden you plant, the permanent improvements you make - all enhance your way of living as well as the value of your home.
Tax Advantage | Your real estate taxes and the interest on your mortgage are deductible from your income tax.
Financial Independence | Most people start on the road to financial independence through home ownership. Your principal and interest payments remain the same for the full term of your mortgage while your rent usually goes up as the cost of living increases.
Environment | Your children grow up in the neighborhood of your choice.
Cash Equity | Better than a savings account, your home can appreciate to keep pace with inflation.
Satisfaction | Home ownership offers special advantages that make life more enjoyable - backyard barbecues, large family gatherings during holidays, a home workshop, a chance to enjoy your family's companionship in the privacy of your own home.
Most first time home buyers utilize the FHA loan process to finance their new home. However, Trinity Mortgage Services offers a variety of special financing programs, including loans with lower start rates, loans with little or no down payment, as well as special assistance programs to help resolve credit problems. Contact us today for more information!
In conjunction with Trinity Mortgage Services (a joint venture with Wells Fargo Mortgage), Harry Norman & Associates offers a step-by-step outline of the home buying process, which includes obtaining financing for the home of your dreams. We also offer some financing tips to help you along in the process.
Negotiating the Purchase
When you have selected the house you want to buy, your next step is to submit a signed real estate offer to purchase. Your Harry Norman sales associate will take you through a step-by-step process in order to prepare your real estate offer:
• You know the seller's asking price, but your buyer's agent will assist you in determining what the home is really worth by researching comparables and market statistics.
• Decide how much earnest money to offer. Your earnest money is usually held by the listing company until the sale is closed or the contract is broker. When the sale is closed, it is applied to the down payment or closing costs. But, if you fail to buy the house after the seller has accepted your offer, the seller has the right to keep this earnest money.
• Specify your desired closing date and possession date. Allow yourself enough time to obtain financing.
• Determine which items you may want to negotiate in the price you are offering.
Items the seller may not necessarily be leaving behind may include any of the following: appliances, light fixtures, chandeliers, gas logs, fireplace tools, window coverings and swing sets.
Your Harry Norman sales associate will present the offer to the seller's agent. The seller will accept, reject, or counter your offer with changes in the terms. If the seller submits a counteroffer, you may sign it as acceptance of the agreement, make another counteroffer, or withdraw your offer.
When both the seller and buyer agree to the terms and sign the document, it becomes a valid contract.
Home Inspection and Insurance
A fresh coat of paint or new carpeting may disguise serious flaws. That's why you want to make sure a professional inspects your new home. And to protect your most valuable investment, be sure to have homeowner's insurance.
Your home typically is the single biggest investment you'll ever make and by protecting it with homeowner's insurance you'll have financial protection against the unexpected. Aside from protecting your home and your possessions, it provides you with liability coverage.
A professional home inspector surveys the foundation and structure, roof, exterior, major systems (electrical, heating, cooling and plumbing), and appliances that will stay with the home.
Tour the house with the inspector, who will point out potential trouble areas, as well as what’s “sound." If the inspection does turn up some flaws, a seller is often willing to make repairs, but it may depend on market conditions.
Take notes as you tour. Get the inspection report in writing. This document will support or deny the contingency addendum to your agreement.
You can add a home inspection contingency to your purchase agreement. This requires the seller to make legitimate repairs - or if the seller is unwilling to do so, it allows you to cancel your agreement. According to the GAR contract, a seller is only required to repair those items that are considered a “defect".
An inspection may take a few hours and cost a few hundred dollars, but it can save you time and headaches in the long run. Your real estate professional can recommend a professional inspector. We always recommend you get own inspection with your own inspector.
Title Services - Meridian Title Services
You're finally in the home stretch. You've signed a purchase agreement and it's time to close on your new home. The closing (also called the settlement) usually takes place at a closing attorney's office. Your real estate professional will help coordinate a convenient date for you.
Understanding Title Insurance
A title is the document that verifies your legal right to your new home. To make sure there are no past errors or legal entanglements that might affect your ownership rights, all properties are subjected to a title search before closing. This optional one-time fee is one of the best investments you will make.
There are two kinds of Title Insurance: a lender's title policy and an owner's title policy.
To protect their interest in your property, mortgage lenders require buyers to purchase a lender's title policy. Such a policy, however, does not protect your interest, as a homeowner.
To protect your interest, you need an owner's title policy. This policy pays for all court costs and related fees associated with any claim that might come up. Also, if a claim is found to be valid, your actual loss - up to the face amount of the policy - is covered.
An inspection may take a few hours and cost a few hundred dollars, but it can save you time and headaches in the long run. Your real estate professional can recommend a professional inspector or you may want to look into homes that are inspected prior to sale.