For RTS Orlando Faculty and Students
An Online Real Estate and Housing Resource for the Reformed Theological Seminary Community in Orlando.
Brought to you by David Gallup
An Online Real Estate and Housing Resource for the Reformed Theological Seminary Community in Orlando.
Brought to you by David Gallup
Buying a home can seem like a daunting prospect. Whether it's your first home or your fifth, so much is at stake; your savings, your credit rating, and your financial freedom. It can be difficult to know where to start so that your home purchase goes as smoothly as possible with the least amount of time and money.
We suggest that you read this entire report before you go house hunting. You'll learn how to separate whims from true needs and examine the whole picture from emotions to economics. You'll discover how to prepare a game plan for your real estate venture, how to research effectively, choose wisely, finance appropriately and survive the whole procedure with your smile in place.
Begin your search for a perfect home by making a careful assessment of the kind of home you need and want. We recommend that you write it down. Take time, right now, to be as specific as you can about your particular requirements.
First, make a list of "necessities" in your home. Next, list the features that you "desire." Rank them in order of importance, so if you need to make a tough choice between several homes, you'll have your priorities right in front of you to help you make the best decision.
Set up a budget for yourself. Decide how much you can really afford to invest and be comfortable with your monthly house payment. Be realistic. Most lenders suggest that your payments be no more than 28 percent of your total monthly income. Don't forget to include taxes and insurance if you plan to escrow (have money automatically set aside by the lending institution) for these costs to be paid at the appropriate times.
You can learn a lot about an agent by letting him talk to you about how he helps his buyers and how he does business. Ask him what percentage of his business comes from repeat cliets or has been introduced to him by his existing clientele. Within a few minutes, you should be able to determine if this agent's style is in line with yours.
Ask as many questions as you can up front. Finding a good agent will save you huge amounts of time, effort, and frustration. Remember, a "buyer's agent" is working for YOU!
You can save yourself time and heartache by meeting with a lender before you start your search for a home. A lender can listen to your needs and goals and let you know what specific loan programs would be best for you. He can also help you understand what it takes to qualify for the loan that you want. By taking a look at your financial situation and looking at your credit history, a lender can usually give you a good idea if you can qualify for the loan amount that you want. Many lenders call this 'pre-qualifying' a buyer.
To be certain that you can be approved for a loan, we suggest you ask to be "pre-approved." In the approval process, a credit report is pulled and all of your documentation is completed and submitted to an underwriter. The pre-approval you receive is a commitment from a lender - your guarantee of loan approval.
In light of how competitive the current Orlando area real estate market is, we strongly suggest that you take the step of becoming pre-approved for a mortgage before you make an offer on a property because it will strengthen your hand in the negotiating process. With many homes receiving multiple offers on them, you will want to be able to prove to the seller that you are ready, willing, and financially able to purchase the home.
It is also important that you are 99.9% sure you will get the financing needed and your lender will be able to perform according to the time limits in the purchase contract. If not, you could end up in a situation where your lender won't be able to close the loan. If this happens, you could lose your deposit which can be very painful and unnecessary.
It is also very much to your benefit to work with a local mortgage banker or broker who has a good relationship with your Realtor. This will make the communication regarding your transaction flow more smoothly. Also, the Realtor can have more influence with a lender he knows and trusts to tell the lender about any special situations or needs to expedite the loan process. A local lender may also have working relationships with reputable property appraisers who have thorough knowledge of the local market. A non-local lender may not know which appraisers are experts on the neighborhood you need, or have any influence with the appraiser if there is a problem with the appraisal.
We can provide you with the names of reputable mortgage bankers or brokers who we've worked with successfully in the past.
about what your necessities and desires so they can get the picture that is in your head into theirs. This will better enable your agent to show you only the types of houses that you really want to see.
comments about the homes that you see. Keep track of your likes and dislikes. If your priorities change, communicate this with your agent.
expectations._** Discuss all of this with your agent.
you'd like to know more about. Include those homes you discover as you explore the area yourself or those you see advertised.
on areas that have homes that would meet your criteria. Your agent can then show you properties in the areas that you would most prefer to see.
market conditions in the Metro-Orlando area, homes sometimes sell very fast.
home._** Honest communication is essential. Some buyers are shy and hesitant to tell an agent what they really think of a house. They think the agent may take it personally. Remember, the homes don't belong to the agent! You must be straightforward about your likes and dislikes to enable the agent to do the best job for you.
Your Realtor should put together a Current Market Analysis to show you the prices of homes selling in the area and the time it takes to sell so you get a reasonable idea of value. They will also research the necessary information to make an intelligent offer that will be in your best interest. They should discuss your options, give you a list of the estimated costs for the purchase, and create an offer to buy the home that you select.
Enhance your chance of getting the home of your choice by doing the following:
when you submit your offer. This helps the the seller know that you are serious and on the ball about purchasing their home.
multiple offers. Whenever possible, include a substantial earnest money deposit. Acceptance of an offer is sometimes determined by the amount of the deposit. A larger amount will often signify a bigger commitment to the seller.
stronger the offer.
In the current market conditions in the Metro-Orlando area, homes often sell very quickly. Because of this, be prepared to make decisions quickly and be accessible to change the terms instantly if necessary. Buyer and agent need to have instant communication access via office phone, voice mail, text, email or cellular phone.
A home inspection reports on the structural and mechanical condition of the property. After the inspection, you will have the facts you need to make a decision about purchasing the home. A well-qualified building inspector who has adhered to federal licensing standards can spot problems that you might not be able to see.
Expect problems to be clearly explained and a written report delivered within a day or two. Most contracts are written conditional on the outcome of a home inspection and a Wood Destroying Organism inspection (also called a WDO or Termite inspection). These inspections may include several items, including inspection for wood boring insects, structural soundness, and the condition of the heating, wiring and plumbing.
Your Realtor should write your contract addressing who will be responsible if there are problems with the results of any of these inspections. Unless you are purchasing a home in 'AS-IS' condition, the contract will most likely be written that the seller is responsible for repairs up to a certain dollar amount. The contract should also be written so that if you are displeased with the results of the inspections or the estimated cost of repairs is above what the seller is required to take care of that you can exit from the contract and get your earnest money back.
A thorough home inspection by a qualified inspector can prevent a lot of extra cost and heartache by giving you a thorough picture of the condition of the property you are purchasing. If it is in great condition, the inspection will confirm that and give you even more peace of mind. If the inspection brings up a handful of items, you can have as many as the contract allows fixed by the seller and know exactly what you are dealing with. Finally, a good home inspection can save you from buying a 'lemon' that has serious structural, mechanical, or pest infestation issues.
You are always welcome to choose whichever inspection company you wish. However, as a courtesy, we can give you the names of inspectors whom our clients have successfully used in the past.
There are two major financial factors to consider when buying a home. These are the initial investment (including down payment and closing costs) and the monthly payment (including principle, interest, taxes, and insurance).
Choose a low down payment loan. You do not necessarily have to put 20 percent, or even 10 percent, down. You can put 5 percent, or as little as 3 1/2 percent, down on some loans. Ask your lender whether or nor your loan will include "private mortgage insurance" or PMI.
As part of your offer, you can ask the seller to pay some of your closing costs. Sellers are usually allowed to contribute to a buyer's closing costs. In many cases this is a negotiable item. Ask for your Realtor's guidance on whether requesting the seller to pay for closing costs would be a wise option given the particular circumstances surrounding the home you wish to purchase and the current market conditions. If so, what would be the best way to ask the seller for these costs?
Shop around for your home insurance. A little shopping can save you a significant amount of money.
You can deduct money paid for discount points from your gross income before computing your federal income tax, which would effectively reduce the cost to you. Always check with your CPA to determine the specific guidelines.
Keep your monthly payments low:
Get a loan with no monthly mortgage insurance premiums. You can reduce or eliminate the mortgage insurance premium by putting more down at closing. By putting 20 percent or more down, you can eliminate it entirely.
Ask your lender if an Adjustable Rate Mortgage or 'ARM' would be right for your situation. ARMs can be significantly lower than fixed rate mortgages.
Remember that interest payments and property taxes on a primary residence are fully deductible in most circumstances as are your property taxes. The Federal Tax Code definitely favors homeownership.
Once you have a home under contract, be attentive to the steps that the real estate contract requires you to take, and complete them in a timely manner. Your Lender and Realtor will keep you informed of what you need to do. These steps include:
Giving the earnest money deposit check(s) to your Realtor to deposit in the escrow account by the deadline(s) specified in the contract.
Calling to set up a home and/or termite inspection of the property within the time allotted in the contract (usually 3 or 5 days).
Attending the inspection, if at all possible.
Signing and initialing addendums and memorandums to the contract in a timely manner.
Making sure that your lender has all of the documentation that he requests from you.
Your Realtor and lender will keep you informed at each step of the process as to what you need to do and when you need to do it. Being responsible to meet the obligations of the contract in a timely manner will enable your transaction to progress as smoothly as possible. Failing to fulfill the terms of the contract in the time frames that are specified can put your earnest money deposit at risk, and you may lose your chance to purchase the home.
The Hardworking Nice Guy's Team is Here for You!
I'm David Gallup, your friend in the real estate business - a very resourceful and reliable real estate consultant with RE/MAX 200 Realty. Over the past 27 remarkable years, I've confidently motivated and guided 994 clients in creating financial security for their families by successfully investing in residential property. I lead a fun loving and well trained team of very dedicated and extremely conscientious people who show up each day to serve you at our state-of-the-art facility centrally located in beautiful Winter Park, Florida.
As a result of treating our clients with extraordinary care, over 85 percent of our business comes from those who are working with us on a repeat basis or have been introduced to us by their family and friends. We greatly appreciate the opportunity to serve you.
RE/MAX 200 Realty
Each Office Independently Owned and Operated
954 S. Orlando Ave., Winter Park, FL 32789
(407) 629-6330 x215 or (800) 458-6863 x215
