Monday, June 30, 2014

Your Journey “Home” – Get good advice.

It’s time, you have decided to purchase that first home.  Excitement, Anticipation, A little anxiety. You’re probably feeling a mix of all these emotions, especially if you have started to look at houses online, but what do you need to know about the process? After years of working with buyers I get the same questions over and over …. And they are good questions.   So here goes the first in a “Road Map” to purchasing your home.

Up front there are 2 big decisions that you must make and they go hand in hand.  The choice of a Buyer’s Agent (your Realtor) and your choice of a lender.  You need to feel confident that these individuals are truly looking out for you. They should be willing to spend the time that you want and need to find you your home.  You will probably be spending several days with that your realtor looking at houses, and hours talking to them when it comes to negotiating the purchase and bringing the transaction to a close. As for your lender, you will be telling them all about your finances as they work to get you the best financing available. 

Your Buyer’s Agent should have a “counseling session” and walk you thru the process.  Purchasing a home isn’t just about looking at houses and writing an offer.  When selecting a Buyer’s agent ask about their experience and if they have any advanced real estate certification.  Now don’t get me wrong, we all had to start in this profession somewhere and being a new agent isn’t terrible, but you want your agent to be able to answer your questions and give you the right information.  If your agent is new to the business ask him or her if they have a mentor.   A good Realtor will be able to spot possible pitfalls before they even occur.   It’s about thinking “down the line”  - as I tell buyers while they are looking at the size of the closets and updates, I’m looking at a Seller’s Disclosure to see how old the mechanicals are, and was the roof replaced in the last 10 years.  No matter how good a home looks, there will be some kind of issues that come forth after an inspection.  While I’m not an inspector, it’s my job to point out that yes, there is new granite in the kitchen, and the seller (who says they’ve lived in the house for 10 years) cannot tell you how old the roof is – or when the furnace was last cleaned.  I’d much rather sell a house, that while may not be updated with the current “must haves” does have new mechanicals and other big-ticket items. 

As for a lender … this again needs to be someone that will take the time to “walk-you” through the process.  Mortgage lending has become so very complicated with changes to lending regulations (yes, there are regulations that the lenders MUST adhere to) that the process can be very intimidating.  It always seems as if there is one more document that the lender wants, and sometimes it’s not the lender that you are talking to who wants some obscure document, but the dreaded “underwriter”.  Now in 25+ years I’ve never spoken to an underwriter, but they seem to always want something and that something can derail a purchase in a heartbeat. 

So my advice is to “interview” several Realtors and Lenders.  Start first by asking for referrals - we all know someone who has just finished purchasing a home – so ask, were they happy with their realtor and or lender?  If not, why? Purchasing a home is an emotional journey and you need to understand that there may be some diversions along the way. 

It’s the role of the Realtor and the Lender to keep the transaction on track and reach a successful conclusion.  Once you have chosen a Realtor and Lender the fun begins ….  Searching for a home,  and we’ll cover that in the next post....

Monday, June 16, 2014

Buying a Home …. Credit Pitfalls That Buyers Need to be Aware of: The time has come and you are looking to purchase a home. Whether it’s your first home or if you have purchased before, you have done all the right things or so you think, but here are some pitfalls that can trip up a buyer, especially if it’s your first home.

1. You have talked to a lender and have been pre-qualified for a purchase and that’s a good step forward, but once you get pre-qualified and are looking for your house, do not make any new significant purchases during the time of the search or after you make an offer.  Lenders will recheck the credit report 24hrs before the closing and if a new installment  payment shows up on the report, the lender will not be able to do the loan

Remember:  Don’t take on new debt during the mortgage-approval process no matter what. I tell buyers not to even pull out their credit cards until the closing.

2. Don’t change your job.  Sounds pretty self-explanatory, but during the time of making an offer and a closing making a significant life change like a new job can derail you purchase.  Especially if it’s a new job in a different field from what you are currently in.  So if a great offer comes along your way, somehow put off that change until after the closing, lenders are looking for a stable “track record” of employment when it comes to mortgages.  This does not apply to people who are moving because they have been relocated by their company, a job promotion is different than a new job.  However if you are moving for a new job that is significantly different that the one you held before there could be more questions to answer and documents to provide a lender.

Remember:  Don’t switch careers or take drastically different employment paths.

3. Don’t pack away important financial documents.  Lenders will need financial documentation during the critical time between mortgage pre-approval and the closing or settlement. Lenders need copies of bank statements and pay stubs for up to 6 months, and back tax records for 2 -3 years.  They may also need proof that obligations have been paid off, and while you may have sent those documents to someone earlier, an underwriter may want those documents at the last moment. 

Remember: Keep important paperwork where you can easily access it until the transaction is completed and you’re in your new place.

4. Get a copy of your credit report as soon as possible and check for debts.  Identity theft is up, and many people have items that are on their credit report that do not belong to them.

Remember: Have your credit fully checked at the very beginning of the process.  If there are items that do not belong to you, you have time to correct any issues.