Winning in a Seller’s Market

It’s a buyer’s market, huh? That’s true for a lot of places, but in many areas, the huge number of buyers makes it a seller’s market – they don’t have to accept “just any offer” – there are many from which to choose. If you’re looking to buy, be sure to read these tips from CNN Money – they could be the difference between getting the house and continuing the search.

Size up your town. First you’ll need to determine whether you could be in for a bidding war. Rising price tags are a sign that sellers are gaining ground, but prices often lag the market.

Two other stats, available on real estate site Zillow, can mean an area’s heating up: a drop in the percentage of homes with list price cuts, and an increasing ratio of sales to asking prices.

Don’t skimp on credit. With many sellers worried about deals falling through, you’ll need the bank’s blessing right away. Don’t waste time on prequalification, which is an estimate of how much you might be able to borrow.

Get a veteran on your side. Finding an experienced agent is even more important in a competitive market; you’ll want a pro who specializes in working with buyers and who knows the local players and pricing trends.

“One of your first questions should be whether the agent has experience in multiple-offer situations,” says Herrera, adding that it’s also important to get details on the deals she’s closed recently. A good agent can help you determine whether a home is fairly priced, advise you on how much to offer — and back up her counsel with data and examples.

Make a clean offer. When you take the leap, remember that “the best offer isn’t always the one with the best price,” says George Miller, the Johnsons’ Sarasota agent. “It’s the one with the fewest hassles and outs for the buyer.”

Make yours as straightforward as possible. If it’s contingent on selling an existing home, for example, you’re unlikely to win a bidding war. Set on a certain closing date? Consider whether it’s worth blowing the deal. In this market, the answer is probably no.

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How to Prepare for Homeownership

Homeownership has so many positives, it’s easy to get lost in them! But it also comes with a ton of responsibility, and it’s important to prepare yourself even before you sign on the dotted line. Here are a few things you need to do before starting your home search:

First, have a frank conversation with yourself or your significant other about how much home you can truly afford. You should take into consideration a wide range of scenarios. What if one of you loses your job? What if you become disabled? How long are you planning on living in this area?

You should also calculate the costs of homeownership — the real costs. You will need to consider closing costs, homeowners insurance, maintenance and repairs, and even decorating costs.

Next, assess the status of your credit report and score. Identity theft runs rampant today. You should make sure that everything on your report is accurate. You should also take a gander at your score. This will give you a good idea what sort of rate you may qualify for. The higher the score the better the rate.

In a final step of groundwork, you should speak to a bank or lender about getting pre-qualified and then pre-approved. Pre-qualified means that the lender is willing to write you a loan. Pre-approval gives you a more exacting budget and proves to a seller that you mean business. Get your paperwork in order for this step. You’ll need W-2’s, paystubs, and other financial documents.

Want more tips? Check out this article from Realty Times – or give us a call!

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When Paying Your Mortgage, Faster is Better

It’s no secret that paying off your mortgage before the loan term is up can save you some big bucks. Putting a little extra money toward your principle each month can really add up, saving you thousands over the life of your repayment. Don’t believe me? Check out this chart from Zillow.com, which shows the difference between paying your mortgage bi-weekly vs. monthly:

That’s right, you’d shave FOUR YEARS worth of payments!! That’s a HUGE savings!!

I know that not everyone can make bi-weekly payments on their mortgage, but consider putting down any extra money you can – and the key phrase here is “if you can.” Here are some questions to ask yourself before deciding to put your cash toward a quicker mortgage repayment:

1. Does your employer match any retirement funds you save?
2. Do you have any debt other than your mortgage?
3. Do you have at least 24 months of living expenses in liquid assets?
4. Do you currently owe more on your mortgage than your home is worth?
5. Does the amount of your mortgage bother you?
6. Do you think you could get a better return on your money if you invested it in other things?

Depending on the answers to these questions, putting your extra money toward the mortgage may or may not make sense.

Have you suddenly come into a large lump sum of money? Perhaps a bonus or inheritance? If you’re going to put some of that money toward your mortgage, remember the cardinal rule – Faster is Better. The sooner you make those payments, the less interest you’re paying from that point forward, since interest amounts are calculated by multiplying the interest rate by the principle amount. Lower principles = lower interest amounts. It’s simple math, but commonly overlooked.

We’re happy to help answer mortgage questions and refer you to a credible lender. Give us a call today!

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4 Reasons NOW is the Time to Buy

“It’s hard to argue against buying a house now, assuming you can get a loan,” writes John Waggoner, a columnist with USA Today. Sure, Waggoner says that getting a credit check for approval of a mortgage can be a “only slightly less intrusive than a CIA background check,” but for those who are able to qualify, a lot of analysts say that now can be a good time to purchase a home.

So, why is now the “right” time? There are several factors:

1) Price. Home prices have never been lower – in fact, the median home price in the U.S. is the lowest it has been in 10 years (since the dot-com bust). Today’s median home price is only $154,600 – and at the peak of the housing market in 2006, it was $230,900. Talk about a great investment strategy!

2) Buying is cheaper than renting. Money is tight for many Americans, and no one can afford to throw away their hard earned dollars. So stop renting! In many markets – including the Houston area – it’s far cheaper to buy than to rent. What are you waiting for?

3) Supply and demand. It’s the first thing you learn in any economics class – the more supply, the lower the price. Right now, inventories of for-sale homes are shrinking – so you’d better jump in head first, rather than sticking your toe in the water.

4) Mortgage rates. It’s no secret that mortgage rates are lower than they’ve ever been before – so why wouldn’t you want to buy a house right now? No one likes to pay interest on anything, so be sure and lock in the great rates that will minimize your interest payments over the life of your loan.

For more information, check out this article in USA Today.

 

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What is Character Lending??

You’ve heard it’s hard to get a loan in today’s market – in fact, most banks won’t even consider you if your FICO score is less than 620 (and that’s just one of many considerations)! But have you heard of Character Lending? It could be your answer if your credit score isn’t as high as you’d like it to be.

It sounds too good to be true – bad/no credit, no money for a down payment and seeking a loan for up to $200,160 – but getting approved? It IS possible, through Character Lending. Lenders look at your financial discipline for the last 2 years and how you managed your money. If you meet their criteria, you can be approved for certain areas within a 100 mile radius of Houston.

Even better news – RE/MAX Rewards can take you to the qualifying areas! We know what homes are eligible for Character Lending approval, and you can be on your way to home ownership. However, there are more factors to consider before determining your eligibility – here are the program’s general guidelines:

1. You must provide your Social Security Number or ITIN number
2. No applicant or household member can own another home at the time of closing
3. On time payments for all accounts during the most recent 12 months including utilities or explanations for any late payments
4. No overdraft changes in the most recent 90 days
5. Debt to Income ratio 40% or below
6. All charge offs and collections that occurred in or have had activity on the past 24 months have a zero balance or an approved payment plan with on-time payments for at least six months
7. All liens, judgements and defaulted federal debts (child support, back taxes, student loans) must be resolved.
8. Provide past two years of rental history and verify most recent 12 months rent payments or have residence letter covering 12 months.

Interested in learning more? Think you may qualify for Character Lending? Give us a call today and we’ll discuss your options and start your home search!

Source: HAR.com

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