F.A.Q.s – Buyers

FAQ - Buyers

I came across this list of questions and answers while navigating through the CityWorth Properties website.  The content below is provided courtesy of their website (www.cityworthproperties.com).  This is very valuable information for any buyer looking for a new home.

Q:  Is an older home as good a value as a new home?
A:  This is really just a matter of preference, but both newer and older homes offer distinct advantages, depending upon your unique taste and lifestyle.

Older homes can generally cost less than new homes, however, there are many cases where new homes can also cost less then older homes. Most new homes will not have any backyard landscaping and some don”t include any front landscaping either. With an older home, the landscaping is normally already completed and could have 10”s of thousands of dollars in landscaping done, which is included in the purchase price.

Taxes on some older homes may also be lower. Some people are charmed by the elegance of an older home but shy away because they”re concerned about potential maintenance costs. Consider a home warranty to get the peace of mind you deserve. A good Home Warranty plan protects you against unexpected repairs on many home systems and appliances for a full year or more after you move in.

In a new house, you can pick your own color schemes, flooring, kitchen cabinets, appliances, custom wiring for TV”s, electrical, computers, phones and speakers, etc., as well as have more upgrade options. Modern features like media rooms, extra-large closets and extra-large bathrooms and tubs are also more attainable in ground-up construction. In a used home, you rely largely on the previous resident”s tastes and technological whims, unless you plan to farm thousands into a remodeling and rewiring.

New-home designers can use new building materials such as glazed Energy Star windows, thicker insulation and other technology that will lower future energy costs for the owner. Most states now have minimum energy-efficiency requirements for new construction. Kitchens and laundry areas in new homes are designed to house more efficient energy-saving appliances. Older homes, unless they have undergone an energy retrofit, usually cost much more per square foot to air-condition and heat.

Builders have to follow very strict guidelines in new-homes and additions, especially in the West and Northwest, where earthquake safety standards must be observed. In general, new homes are usually more fire-safe and better accommodating of new security and garage-door systems.

Older homes can be better judged for their quality and timeless beauty. New homes that now possess a smooth veneer might reveal the use of substandard building materials or shoddy workmanship over time.

As you can see there are advantages and dis-advantages to each, but it really comes down to what fits you and what you are looking for in a home.

Q:  What are closing costs?
A:  Closing costs are expenses incurred by buyers and sellers in transferring ownership of a property.

Q:  What does FSBO mean?
A:  FSBO stands for For Sale By Owner. A for sale by owner property usually indicates that the property is being sold without a real estate agent.

Q:  What is a broker?
A:  An agent who is authorized to open and run his/her own agency. All real estate offices have one principal broker.

Q:  What is a contingency?
A:  A contingency is a provision included in a sales contract stating that certain events must occur or certain conditions must be met before the contract is valid.

Q:  What is a debt-to-income ratio?
A:  A debt-to-income ratio is the percentage of a person’s monthly earnings used to pay off all debt obligations.

Q:  What is a Multiple Listing Service (MLS)?
A:  A multiple listing service is a computerized listing of the homes for sale in an area listed with a realtor. Agents are granted access to the MLS and can use it to find a house in a particular price range or area.

Q:  What is a REALTOR?
A:  A REALTOR® is an agent or agency that belongs to the local or state board of REALTORS and is affiliated with the “National Association of REALTORS” (NAR).They follow a strict code of ethics beyond state license laws and also sponsor the Multiple Listing System (MLS), which is used to list houses for sale.

REALTOR is a trademark of the National Association of Realtors.

Q:  What is an escrow officer?
A:  An escrow officer is the person that walks you through the closing process.  They are usually employed by the title company that you are working with. They are a neutral third-party, responsible for overseeing the escrow process. They typically perform the title searches, prepare final paperwork, witness the document signings as well as ensure that the transaction is executed properly and legally.

Q:  What is a Homeowners Association (HOA)?
A:  Homeowners association is a nonprofit association that manages the common areas of a condominium or “planned unit development” (PUD). Unit owners pay a fee to the association in order to maintain areas such as a pool or playground that are owned jointly.

Q:  What is the difference between being prequalified and preapproved for a loan?
A:  If you’re prequalified it means that you POTENTIALLY could get a loan for the amount stated to you, assuming that all of the information you provide to the bank is accurate and true. This is not as strong as a preapproval.

If you’re preapproved, it means that you have undergone the extensive financial background check, which includes looking at your credit history, previous tax returns and verifying your employment – and the lender is willing to give you a loan, basically meaning you’re approved!

You will usually be provided an accurate figure which shows the maximum amount that you are approved for.  Most sellers prefer buyers that have been preapproved because they know that there will not be any problems with the purchase of their home.

Q:  What is title insurance?
A:  Title insurance is insurance that protects the lender and buyer against any losses incurred from disputes over the title of a property.

Q:  What’s the difference between a “Listing Agent” and a “Selling Agent”?
A:  Listing Agents usually deal with sellers, and are the ones who will list a property for sale on the Multiple Listing Service.

Selling Agents (also Buyers Agents) mostly deal with the homebuyers, usually only listing just a few homes for sale. They will sell the homes (which have been placed in the MLS) via the listing agents.

The majority of agents will focus on one or the other. Some agents will also divide their time between sellers and buyers and are usually regarded as the best ones since they are dealing with both sides of the coin.

If you phone an agent from a magazine or newspaper ad, you are usually contacting the listing agent. These agents will place ads to show the seller that they are making an effort to sell their home. Also their advertising efforts can draw others who may decide to sell their homes.

Q:  Why should I use a real estate agent?
A:  A real estate agent is more than just a sales person.  A real estate agent may act on your behalf, providing you with advice and guidance when buying or selling a home. Due to the constant changing of the market, the information available on listings is not always 100% accurate.  There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with a real estate agent.

If you are in the market to buy, it would be advisable to use a Buyer’s Agent.  They can make recommendations on what terms and prices to offer as well as negotiating a deal with your best interest in mind.

If you’re looking to buy or sell in the Metro Atlanta area, please give me a call at (404) 641-5920!

 

 

Home Search Worksheet

Before you begin your home search, you need to have a clear idea of what you want.  This will save you and your Realtor a lot of headaches and time.  Below is a worksheet that you can use to write down your wish list of features.  Make sure to send a copy to your Realtor when you’re done.

HomeSearchWorksheet – Realtor.Com

Please give me a call at 404-641-5920 for all of your real estate needs!!
–Audrey Williams
(Broker/Owner)

WORKING WITH A REAL ESTATE PROFESSIONAL

Provided courtesy of Realtor.com …..

Many real estate professionals are buyer specialists focused on helping you successfully land and
finance your dream home. One benefit of using their services is gaining the inside track on listings
right when they come on the market – in fact, sometimes even before they’re on the market. And
that’s just the beginning.

Buyer specialists will:

  • Educate you about Buyer Agency, outlining their professional responsibilities to you, including complete Disclosure, Loyalty, Confidentiality, Obedience and Accountability
  • Help you explore your financing options and, if required, refer you to the right mortgage professionals to help you make the best possible decision
  • Save you time by regularly searching the market for affordable homes that meet your criteria
  • Email your desired home requirements to top producing agents in the area so they know they have a qualified purchaser
  • View homes with you and provide comparative analysis
  • Refer you to expert home inspectors that will provide more in-depth analysis and advice, if you desire
  • Provide consultation in relation to your written offer to purchase a home, with all terms approved by you
  • Negotiate the best possible price and terms for you and take care of all the documentation details
  • Keep you fully informed about all activities leading to the transaction closing
  • Assist you, if necessary, in finding any home-related services you need

The bottom line is that you will receive invaluable, comprehensive, high-quality service, and peace of mind throughout the process.

Please give me a call at (404)641-5920 for all of your real estate needs!!
Audrey Williams – Broker/Owner

FINANCING YOUR HOME – THE LOAN PROCESS

Provided Courtesy of Realtor.com …..
The Loan ProcessPaying all cash for your home isn’t a realistic option for most. So, finding the right lender and mortgage product is integral to buying.

There are many types of lending institutions, offering a wide range of loans and special programs.  To secure the best mortgage for your needs:

1. Educate yourself about your options
There are a host of loan types and programs available through thousands of banks, finance
companies, credit unions, and other assorted lenders. Additionally, there are as many sources
of information about mortgages.
Websites like realtor.com®, books, news articles, seminars, mortgage brokers, lenders, and
knowledgeable real estate professionals can all help you navigate the labyrinth of financing
possibilities. In short, do your homework before signing your name on the dotted line.

2. Sincerely examine your financial situation
Along with educating yourself about loan options, ask yourself how much mortgage and down
payment you can really afford. Answer yourself with complete honesty and be sensible. Be sure
to weigh the risks and opportunity costs.
Some lenders will qualify you for the maximum they’re willing to lend which may be more
than you can comfortably afford. Be sure to factor all related taxes, insurance, improvements,
homeowner fees and all other potential costs into the equation. Make a list of your monthly
expenses, and project your financial commitments during the life of the mortgage. This will
provide a realistic figure of what you can afford.

3. Find a reputable lender or mortgage broker
When shopping for a loan you should consider two main sources – direct lenders and
mortgage brokers.
Direct lenders have the money and make the decisions, but have a limited number of in-house
products to offer. Brokers are intermediaries who charge a fee, and can provide you with loan
options from many sources, which may save you money overall. Consult with your real estate
professional as they often have beneficial connections.

4. Determine the right mortgage option for you
Generally, there are two ways to go: a fixed-rate mortgage with an interest rate that remains the
same for the life of the loan, or an adjustable-rate mortgage (ARM) with a rate that adjusts up or
down, depending upon economic trends.

The advantages of fixed-rate mortgages – particularly if you lock in at a low rate
1- they protect you against the risk of rising interest rates
2- their stability can also make it easier for you to plan and budget

The downside of fixed-rate mortgages: they generally have higher rates than ARMs at any given
time, and by locking in you run the risk of being trapped at a relatively high rate if interest rates fall.

Another consideration with a fixed-rate mortgage is the term. Shorter-term mortgages, like a
15-year, have lower rates than a 30-year. The shorter term and lower rate mean that you’ll pay less
interest over the life of the loan, although your monthly payments will generally be higher.

In contrast, the rate of an adjustable-rate mortgage (ARM) is commonly based on the U.S. Treasury
index for a one-year Treasury bill, although it may also be geared to other indexes. Generally,
lenders add 2-4% to the index rate to get their ARM rate. Initially, the rate is lower than the fixed rate
by a quarter point to two points or more. This rate will periodically adjust within set limits or “caps”
that are specified by the terms of the loan.

Finally, it must be reiterated that the loan you ultimately qualify for will depend on your credit status.
The best rates and terms are only available to those with solid credit so, if possible, pay off your credit
cards and make all other bill payments in full and on time.

5. Get your documents ready, then apply!
Once you’ve reached a pending agreement with a seller to buy a home you’ll be ready to formally
apply for a mortgage. Your chosen lender will need you to provide information about your household
income, job tenure and stability, assets and existing debt, and regular expenses to complete the
application. This may take the form of pay stubs, bank and investment statements, tax returns and
other documentation.

The lender will check your credit status during the application process, and you’ll review the different
loan options and programs you qualify for, as well as finalize the size of your down payment. If you
place less than 20% down, the lender may require the mortgage to be guaranteed by a third party
such as the Veterans Administration (VA), the Federal Housing Administration (FHA) or a private
mortgage insurer (PMI).

Since so much is at stake, remember to bring all of your questions to the table. You may find it
reassuring to have a trusted and knowledgeable real estate professional by your side to explain every
aspect of the mortgage contract. Lastly, if you qualify for the loan you’re seeking, the lender will often
have the home you’re buying professionally appraised to ensure that it’s worth the purchase price.

Give me a call at 404-641-5920 for all of your real estate needs!!
-Audrey Williams
Broker/Owner