How to Stop Renting
and
Own Your Own Home
Are you tired of making your landlord
wealthy? If you are paying rent every month,
that is exactly what you are doing! Enough
already! Buying a home today is easier than
ever before. Many people who thought that
buying a home was simply out of their reach
are now enjoying a new lifestyle in their
very own home! That's right. No more rent
and the benefits of home ownership like
equity build-up and tax advantages. For most
homeowners, buying a home is the smartest
financial decision they will ever make.
Let's get started... KNOWLEDGE is the key!!
Check out my video on how to finance and buy a home
at
www.monkeysee.com/jeffthomas
Click on the following subjects for more
information:
The
Benefits of Ownership
Finding
Your New Home
Important Questions to ask the Seller
Contract and Negotiation
Closing and Moving In
The
Benefits Ownership
In fact, most American home owners would be
financially broke at retirement if it wasn't
for one saving grace - the equity in their
home. Real estate values have risen
steadily over the last 60 years. Of course,
sometimes there are peaks and valleys, but
in the long term the trend is a consistent
increase.
This means that every month when you make a
payment, the amount that you owe on the home
goes down. PLUS, since values typically
increase, it is worth a little bit more
every month too! This worth more, owe less
situation is called equity build-up. Equity
is simply the difference between how much
the home is worth and how much you owe on
it. For example, if your home is worth
$200,000 and you owe $150,000, the equity is
$50,000.
Additionally, all of the interest and
property taxes that you pay on your home are
fully tax deductible! (Check with an
accountant or tax specialist.) It is easier
than you may think! There are lots of ways
to buy a home, and often for the same or
less than you are paying in rent. Even if
you have little money for a down payment or
credit problems, chances are that you can
still buy a home! It just comes down to
knowing the right strategies, and working
with the right people.
Let’s look at some of the general things
you'll need to know more about buying a
home. This is important because once you
discover that you can indeed buy a home, you
need to understand the process.
Approached properly, buying a
home can be a fulfilling experience.
Unfortunately, for many people, buying a
home ends up being anything but enjoyable.
For many, it turns into a terrible,
stressful ordeal. In addition, making the
wrong decisions can end up costing you
thousands of dollars. It doesn’t have
to be this way!
The key to avoiding the pitfalls and traps
that plague many home buyers comes down to
one thing... May the Real Estate Buyer
Beware. This means don’t jump in your car
and tear down the street to find your dream
home. Your patience here will pay off later
because there will be fewer headaches down
the road.
Taking the time to do things right will save
you many hours of frustration and thousands
of dollars. What happens if you take off on
a journey without having a map or plan - not
knowing where you’re going? That’s right…
YOU GET LOST!! Same thing when buying real
estate. Except that the thing that gets lost
is not you, it’s thousands of your
hard-earned dollars!
The purpose of this report is to make you
aware of the common mistakes that home
buyers fall into, and how to avoid them!
Having the right information leads to making
smart decisions.
It doesn’t matter if this is your first home
or if you’ve bought a dozen before. No
matter what, it makes sense to be armed with
the facts! There is an old saying, and
although things have changed a lot from the
old days of the traveling salesmen, it still
applies today when you enter the home buying
game -BUYER BEWARE! There are lots of
people out there that are only too happy to
take your money if you are not savvy enough
to ask the right questions or make the right
choices.
It’s not that there is a lack of information
out there about buying real estate, it’s
just that a lot of it is a bit misleading.
Ask the same question from two different
so-called “experts” and you’ll get two
different answers… and probably a bunch of
technical mumbo-jumbo that you don’t even
understand!
The number one mistake made by home buyers
that causes them to make bad decisions and
waste thousands of dollars is failing to
have an organized plan. The number two
mistake is almost as bad. The mistake is
letting their emotions get out of control!
Of course it is impossible to completely
remove all of your emotion, after all, if
you didn’t have some emotion you wouldn’t
want to buy a home in the first place. The
key is to remember that you are entering
into a complex real estate business deal,
one that can effect your financial situation
for years to come. Just try to keep as
focused as possible on the dollars and
cents, and don’t allow yourself to "get
caught up in the moment," and make foolish
decisions that you will regret later.
As I mentioned before, having a step-by-step
plan will make the entire process much
easier to handle. Here is the basic 8-step
real estate home buying plan that has saved
thousands of dollars for many people like
yourself:
-
Determine if buying a home
now is smart for you
-
Get pre-approved for your
loan, and study the real estate market
-
Identify neighborhoods you
like
-
View specific homes
-
Pick a home that meets your
needs
-
Analyze the value
Once you have examined your personal
financial situation and given yourself the
green light to buy real estate, the next
step is to get pre-approved for a mortgage.
Getting pre-approved is smart for two
reasons. First, you’ll have less stress and
more confidence while home shopping because
you’ll know exactly what you can afford.
Secondly, you’ll have better negotiating
strength with the seller when you can show
them a pre-approval letter from the lender.
We’ve been talking about how
having a plan will allow you to keep on
track to get where you are going. In the
area of financing, having a plan is
critical! If you don’t have a plan of
your own, you will fall into someone else’s
plan! Like the Boy Scout motto says,
BE PREPARED.
The first thing that will happen when you go
in for a loan appointment is you will be
asked probing questions.
There are no hard and fast
rules to answer all of the many questions
you’ll be faced with. That’s because
everyone’s situation is unique! What’s best
for you will probably be different than what
is best for the family down the block.
The only way to know for sure what is in
your best interests is to take a good look
at your overall financial picture and your
goals for the future.
There are several questions that you need to
ask your loan officer before you decide to
do business with them.
-
Exactly what fees will be you
be charging me?
-
When can I expect an answer?
-
Will you put everything in
writing?
-
Given my goals, what loan
program do you recommend and why?
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Finding Your
New Home
Once you thoroughly understand real estate
financing and have been pre-approved for
your loan, it’s time to do the leg work
necessary to find your home and get the best
possible price on it.
First, identify neighborhoods that you like
and that are in your price range. If you
have lived in your area for a while, you may
have some already in mind. Think about what
you really want in a house. Are you looking
for a big yard, or something with less
maintenance? A new home, or a place more
mature and established? One story or two?
Contemporary, Tudor, Colonial, Spanish?
Also decide how many bedrooms and baths you
need, along with items such as a den, garage
space, fireplace, swimming pool, etc.
Hopefully, you’ll be able to find what you
want and stay in your price range. If not,
you may need to adjust either what you want
or your budget. While you are looking, keep
one thing in mind - THERE IS NO SUCH THING
AS THE “ PERFECT” HOME.
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Important Questions to Ask the Real Estate
Seller
You certainly want to make sure that the
home that you buy meets your needs, but you
will drive yourself crazy if you go through
dozens and dozens of homes searching for the
“perfect” home. Make a list that includes
your price range, all the items you must
have in your home, along with the items you
don’t want. Take it with you whenever you
look at homes, so you don’t get sidetracked.
You will want to thoroughly research the
real estate values in your area. You need to
know what people are asking for their homes,
and most importantly, what they are selling
for. You want to be on the lookout for and
avoid areas that are experiencing
depreciation in value.
Although you certainly don’t have to use
one, the services of a good real estate
agent can be quite valuable during this
stage. They can pull up all of this
information in minutes by pushing a few
buttons on their computer.
Once you have a home that you are interested
in, you need to find out more information.
There are several questions that you must
ask the seller before you start any
negotiations. You need to know as much as
possible about the real estate seller’s
position and motivation.
1. Why are you selling?
The answer to this question will tell you a
lot about the seller. Everyone selling their
home has a reason. The seller may have been
transferred, bought another home, be going
through a divorce, or need the cash to pay
off debts. All of these things can be to
your advantage when negotiating!
2. Are there any defects or structural
problems with the house?
Watch the seller very carefully when you ask
this question. If they look away or get
nervous, HIT THE ROAD! Most states now have
mandatory property disclosure laws that
require the seller to fully disclose any
problems with the property.
3. How long has the home been on the
market?
If the home has been on the market for many
months, you need to find out why. Is it
simply because they are asking too much for
it, or are there much deeper problems? Also,
the seller may be more anxious to sell as
the months go by – a big plus for you.
4. Are you offering any special financing or
assistance?
The real estate seller may have an assumable
loan, or be willing to finance the purchase
and carry the mortgage themselves. They also
could pay some of your loan costs or points
to help you get a lower interest rate.
5. Are there any repairs you
were planning on doing?
This question is similar to number 2, but
still needs to be asked. The answers to this
question can give you valuable insight as to
how the home has been maintained, and also
give you some negotiating leverage.
When you have answers to these questions,
you will have a good feel for the sellers
situation and the house itself. You’ll be in
a position to decide if you want to move
forward with the house or not.
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Contract and Negotiation for Real Estate
If everything looks good, you may want to
proceed with the home buying process. The
next step is to write up an offer to
purchase. This is where the information you
learned from questioning the real estate
seller can be quite useful. For example, if
the seller has been transferred to another
city, they may be very motivated to sell.
There are many different strategies for
negotiating, but the one that I have seen
produce the best results is not all that
difficult. It starts by studying the market
data to determine what the fair market value
is for the house. Your objective is to make
your offer at a price that is lower than
what the real estate seller has in their
mind as their “bottom line”, but is close
enough that they say, “Oh, I guess we will
go ahead and take it”.
Keep in mind the three basic options that a
seller has when presented with an offer:
1. Accept the offer
2. Reject the
offer
3. Make a counter offer
The seller will always want
to accept the offer if possible, because if
they sign it, they will have a deal that the
buyer is bound to. If they make a counter
offer, the buyer is “off the hook”, and is
no longer obligated contractually. The
price is always the focal point of the
offer, but there are lots of additional
areas that you need to address and pay close
attention to also. In your offer, be as
specific as possible about every aspect of
the transaction. Details that are not clear
or are left out can lead to big problems
down the road.
Some of the items that you want to be sure
to spell out in detail when putting together
your offer include:
Spelling out every detail can save lots of
confusion and misunderstandings, and keep
you out of a costly court battle! One area
where you need to be especially careful is
real estate contingencies. These are things
that must or must not happen in order for
the transaction to be valid. For example,
the purchase may be contingent upon you
getting approved for your financing, on
getting a favorable inspection report, or
many other things. Make sure to spell out
the contingency clearly, as well as what
specifically will happen if the contingency
is or isn't met.
The important thing is to keep your goals in
mind throughout your negotiations. This will
guide you, and help keep you from making bad
decisions based on emotion. Keep one
important fact in mind: There is always
another home to look at!
If you start to feel pressured or
uncomfortable, step back and review your
goals. Don’t let yourself be bullied around.
Remember that the seller usually needs to
sell that house a lot more than you need to
buy it!
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Closing and Moving In Your Property
After all of the terms and conditions of the
contract have been mutually agreed upon by
both you and the real estate seller, you
still need to stay on your toes. Many people
tend to relax and end up dropping the ball.
There are at least a hundred things that can
go wrong and foul up the sale.
Stay in contact with all parties involved in
the real estate transaction – mortgage
company, real estate agent, title company,
appraiser, inspector, etc. You will want to
make sure that all of the terms of the
contract have been met, and do a
“walk-through” inspection of the home prior
to closing. All of your preparation and
planning will pay off handsomely when you
move into your new home!
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contact me.
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download a printable loan application below or call 703-830-9808 to
review the application over the phone.
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loan application,
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