Great Tips for Home Buyers

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Tips for Home Buyers

A lot of work goes into getting to the closing table when you are purchasing a home. Here are tips you should adhere to to help thwart any last minute glitches or hitches that could come between you and your new home – or your cash.

4 Ways to Avoid Surprises at the Closing Table

Halt Major Money Moves

From pre-approval to closing, lenders are watching your credit report. Avoid any major changes to account balances, credit limits, or other money-related activity that could change your financial status in any way. This includes large deposits (other than your normal income) that come in before or during escrow. If you have them, be prepared to explain them and document their source or they could stand in the way of your loan. Other common last-minute money hang-ups include new credit accounts and new collections or judgments.

Tell the Whole Truth

Be up front and honest with your agent and loan officer from the beginning and you’ll be much more likely to be successful when it’s time to close the deal. Loan underwriters will verify and re-verify the facts on your loan application including credit, assets, marital status, employment, and more until the last minute. New mortgage guidelines have created a virtual gauntlet of multiple application reviews by multiple underwriters before you close the deal, so be sure you tell the truth.

Closing Documents: Read Ahead

Get and review your closing documents in advance so you can confirm important details like the interest rate and monthly payment, ask questions, and initiate any corrections in advance. With more than 300 pages to review, chances you’ll be scrutinizing every line at the closing table are slim – and if you do catch an error, the time it can take the lender to revise and reissue a set of papers can throw your moving calendar entirely out of whack and potentially cost you more money.

Watch the Calendar

To avoid additional fees at the closing, stay on top of important deadlines for approvals, offers, inspections, and others. Also, make sure your real estate and mortgage brokers are in close communication, and ask them to keep you apprised of how any closing date changes affect your bottom line. A change in closing date can affect interest rates, closing costs, and other factors that adjust over time and ultimately have an impact on the size of the check you’ll have to write to close the deal.

Thanks Trulia for some great info!

Are Foreign Buyers Taking Our Homes?

Did you know….

More foreign buyers are seeing attractive opportunities in the U.S. housing market. A National Association of Realtors (NAR) survey revealed that home sales to international buyers were up 24% for the 12 months ending in March. Finally, a Mortgage Bankers Association (MBA) survey showed demand for purchase loans was up 13% for the week and up 4% from a year ago. This put it at the highest level in more than six months!

Does anyone have any thoughts on this? Do you think it takes away from buyers looking for homes to owner occupy? I am a bit torn on this one. Recently, I have had a few Canadian investors contact me that have cash to buy homes. They want to purchase to rent out. On one hand I welcome the business and realize that for most Bank Owned and HUD homes investors must wait a set amount of time to give owner occupied first preference. On the other hand I worry since our inventory is so low that it will further put a squeeze on the homes available here to first time home buyers and folks relocating here for jobs. I would love to hear your opinion and thoughts?

How To Avoid The Top 9 Buyer Traps

 

9 Buyer Traps and How to Avoid Them


” A systemized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that’s best for you.”


No matter which way you look at it buying a home is a major investment. But for many homebuyers, it can be an even more expensive process than it needs to be because many fall prey to at least a few of the many common and costly mistakes which trap them into either:

  • paying too much for the home they want, or
  • losing their dream home to another buyer or,
  • (worse) buying the wrong home for their needs.

9 Buyer Traps

This important report discusses the 9 most common and costly of these homebuyer traps, how to identify them, and what you can do to avoid them:

1. Bidding Blind

What price should you offer when you bid on a home? Is the seller’s asking price too high, or does it represent a great deal?  If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.

2. Buying the Wrong Home

What are you looking for in a home? A simple enough question, but the answer can be quite complex. More than one buyer has been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too big or too small. Maybe they’re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down. Take the time upfront to clearly define your wants and needs. Put it in writing and then use it as a yard stick with which to measure every home you look at.

3. Unclear Title

Make sure very early on in the negotiation that you will own your new home free and clear by having a title search completed. The last thing you want to discover when you’re in the back stretch of a transaction is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.

4. Inaccurate Survey

As part of your offer to purchase, make sure you request an updated property survey which clearly marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown (e.g. additions to the house, a new swimming pool, a neighbor’s new fence which is extending a boundary line, etc.). Be very clear on these issues.

5. Undisclosed Fix-ups

Don’t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector’s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

6. Not Getting Mortgage Pre-approval

Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams.

7. Contract Misses

If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement. Agree ahead of time on a dollar amount for an escrow fund to cover items that the seller fails to follow through on. Prepare a list of agreed issues, walk through them, and check them off one by one.

8. Hidden Costs

Make sure you identify and uncover all costs – large and small -far enough ahead of time. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub”-total – fees such as loan disbursement charges, underwriting fees etc. Understand these in advance by having your lender project total charges for you in writing.

9. Rushing the Closing

Take your time during this critical part of the process, and insist on seeing all paperwork the day before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted. Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last minute snag that you can’t fix without compromising the terms of the deal, the financing, or even the sale itself.

Did you know us Americans want BIGGER homes??

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Americans are now expanding their vision of how big a home they want to live in. The Census Bureau reports the average size of a newly built home in 2011 was 2480 square feet. That was 3.7% bigger than the average size in 2010 — and the first annual increase since 2007! Record-low interest rates are also allowing buyers to move up in size for virtually the same mortgage payments. The trend helped boost the average new home price in April to $282,600, up more than 5% over a year ago.