LOANS: Pre-Approval v. Pre-Qualification: What, How & When?

Let’s face it, it isn’t all that common that people can pay cash for a house.  This means they must get a loan, and that requires several factors.  Most people will jump into house hunting without knowing what to do or what to expect.  Let me start from the beginning with a couple definitions… THE […]

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Buying Your First Home? Know These 3 Things

First time home buyer

We love working with first-time home buyers. Helping you find your first home, learn the home buying process, and guiding you from house-hunting to move-in day is an exciting journey for us. Here are three things you should know before you start looking.

  1. Work with one real estate agent. It’s best to have one agent who is helping you with your search. Your agent will be dedicated to finding you the right property, and then negotiating on all the terms of your transaction on your behalf. You want that person to get to know you and your family’s needs and preferences, rather than starting over with someone new each time you go look at a house. Keep in mind that the agent who shows you a home is, ethically, the one who should continue the transaction. Also, when you call an agent from a yard sign or advertisement, you are dealing with the seller’s agent. While most real estate professionals are adept at handling both sides of a transaction professionally, it makes more sense to deal with someone you have already taken time to get to know and who has your best interests at heart as the buyer. You aren’t paying your agent; unless otherwise stated, he or she is paid by the seller upon closing. Still, you are hiring someone to work for you, so feel free to interview multiple agents and pick the one that you feel fits you best.
  2. You need to be pre-approved for financing. Unless you are paying cash for your home, you do need to talk to a lender before you start looking at houses. One reason is that it helps you set an accurate price range for house hunting. Looking at homes that you can’t afford to make an offer on just leads to frustration. A mortgage lender will not only tell you what amount you can borrow, but also your projected monthly payment, your closing costs, and what you should or shouldn’t do with your finances to maintain your eligibility throughout the lending process. Another reason for having an up-to-date pre-approval in hand is so you don’t lose out to another buyer. If you find the perfect house, you will want to get an offer in before someone else gets it, and that pre-approval letter must accompany your offer. We would be happy to provide you with names of mortgage lenders in our area who have provided excellent service to our clients.
  3. There are some up-front costs. When you find the right house, and you and the seller have agreed on the price and terms and have signed the contract, you will first need to make your earnest money, or “good faith”, deposit. This is money you are risking if you back out of the deal for reasons not protected in the contract. Your agent will help you with this during negotiations. The escrow/earnest money deposit counts towards the sales price.
    Next, you should have an inspection of the property done by a certified home inspector. This cost varies depending on the size, condition, age, and features of the home, but is usually a few hundred dollars. You will need to pay this at the time of service. You may elect to pay for other inspections based on the results of the initial inspection. For example, if the inspector notes an issue with the HVAC system, you may need to pay a service fee for an HVAC contractor to look at the system. You want to get as much information during your inspection period as you need to confidently move forward with the purchase.
    An appraisal and a survey of the property will be ordered, but these are usually added to your closing costs and not expected to be paid in advance. However, you may be asked to provide a credit card number to be charged in the event that the closing does not take place.

Our agents are willing and ready to guide you through all of these steps throughout your home buying journey. Ready to get started? Give one of us a call!

Signs of Damage in a House

appliances

It’s so easy to get distracted by the cute barn doors, the recessed lighting, and the ship-lap walls – that we miss the water damage on the roof! Luckily, the inspection period is written in the contract to give buyers a chance to hire an inspector to assess the property. However, it’s important to know the signs that something may be wrong before getting too invested in a home. Here are some signs that there may be big problems with a house.

Signs of roof damage:

  • Cupped, curled or warped shingles
  • Lots of shingle granules in the gutters
  • Cracked or broken tiles
  • Missing sections
  • Mismatched roof sections
  • Ceiling stains
  • Sagging roof deck

Signs of foundation damage:

  • Visible cracks in exterior or interior
  • Door jams/doors not shutting
  • Gaps on top of doors when closed
  • Windows not square
  • Wall corners not square
  • Cracks in driveway or sidewalks
  • Drainage not pointing away from the house
  • Large trees with roots close to foundation

Signs of water/mold damage:

  • Water stains on ceilings and walls
  • Cracks around windows
  • Bowed roof
  • Visible mold
  • Musty smell
  • Missing caulking or tile in baths
  • No bathroom vents
  • Wood rot around doors and trim
  • Peeling paint

Signs of electrical damage:

  • Exposed wires
  • Warm outlets
  • Damaged or rusted electric panel

Signs of plumbing damage:

  • Water stains in sinks, toilets, bath
  • Low water pressure
  • Screeching when turning on/off
  • Slow drains
  • Bad odors from sinks

A good real estate agent will be able to help you catch these things. Ready to start looking for homes? Contact one of our awesome agents today and get started!

Avoid Emotional Decision Making When Falling in Love with a Home

Avoid Emotional Decision Making When Falling in Love With a Home

Every home buyer hopes to find the perfect house. The one that, as soon as you walk through the front door, you know it is the one for you.

It happens, and when it does, I am really happy for my buyers. I always want my buyers to fall in love with the perfect house and live happily ever after.

Just like in relationships, however, emotions often come into play during the home buying journey…Emotions that may result in some not-so-loving feelings.

While I’m not a therapist, I can help you talk through your emotions about the homes we visit and help you identify if you are making decisions with your heart and not your head.

There are six basic emotions; let’s look at how they can affect your decision-making skills.

Fear: We have all learned that fear triggers a “fight or flight” response. In terms of making decisions, fear may cause you to “flee” from making any decision at all, which could make your home buying experience exhausting. If you are afraid you will run out of time, or that if you pass on a house you won’t find another one, you may “fight” by making a rash decision too quickly.

Sadness: Feeling sad can cause you to lower your expectations and settle for less than you truly want. You may decide you don’t need certain features that you previously wanted. Or you may settle for one of the first homes you see instead of persevering with the search.

Disgust: Disgust can cause you to eliminate choices that otherwise might have been in the running. You might find the perfect floor plan, style, or location, but if the home has a bad odor, a filthy floor, or some other off-putting defect, you might not be able to stomach it, even if it is a completely reversible problem.

Surprise: Surprise is an emotion that is fleeting– it happens quickly and then subsides. Surprises can be pleasant, like if you go to see a home you were not expecting to like and find it is much nicer than you expected. But if you are touring the home and a rat runs out of the pantry, you get a negative surprise. While surprise doesn’t last, the memory does, and it can influence how you feel about the event.

Happiness: We all want to feel happy when buying a home but be careful that your excitement doesn’t cause you to make bad decisions. When you are happy or excited, you tend to underestimate risks, assuming everything will work out. People also tend to spend more money than they planned when super excited.

Anger: Anger can also cause you to take bigger risks. Research shows angry people are more likely to make impulsive decisions. Anger can sometimes be helpful. If handled properly, anger can help you to identify your needs and outline action steps to get the information you need to act responsibly.

So, first let’s find a home to take a look at!  Go to our Home Search page and use our tools to find some options to choose from.

7 Things You Can Do to Qualify for a Mortgage

7 Things You Can Do to Qualify For a Mortgage

If you are thinking about buying a home this year and aren’t sure if you will qualify for a mortgage, there are several actions you can take to improve your chances of being approved for the amount you wish to borrow.

Lenders look at more than just your credit rating. They want to know that you have a steady income and are responsible with your money. Before you start home shopping, take some time to make sure you are fiscally stable.

  1. Stay at your present job. The bank will want to see, at minimum, your last two tax returns. If you want to buy a home this year, it’s not the time to start over in a new industry. If you are just getting started in the professional world, you may need to work a while longer in order to show a history of steady income.
  2. Put off buying a new car. Be careful about buying big-ticket items like a new car or boat or on credit until after you have closed on your home.
  3. Pay down credit debt. If you are carrying a balance on credit cards, work hard to pay those down or off. Try not to use credit cards if you can’t pay the balance off monthly.
  4. Pay your bills on time. Incurring late payments will reflect poorly on your credit report, so keep track of deadlines or set up automatic payments before they are due.
  5. Save up cash for a down payment. You have a better chance of being approved for a lower amount, so try to save up for a down payment to reduce the loan amount.
  6. Say no to cosigning for others. Now is not the time to cosign on any loans with family members or friends.
  7. Throw those credit card offers away. Each time you apply for credit, the provider will pull your credit history, which affects your score.

Not sure which lender to talk to?  Contact one of our agents to give recommendations on who to work with.  You can also try checking out a list here.