Blog. Valuable Tips and Advice: Home Buyer Tips

You Don’t Have to Wait Until Spring to Buy a Home

As Spring arrives, buyers that want to buy a home this year will start seriously searching in an effort to beat the spring rush of buyers that are watching and waiting to grab the perfect home as soon as it hits the market. Should you wait to have choices of homes or start looking now? The right answer is to do what’s best for you and here are some thoughts to help you decide.

While more homes will start hitting the market the further we get into spring, the drawback is that more buyers are also looking at that time too. This creates more competition and can drive up prices when sellers receive multiple offers on a property. Even if no one else is interested in the home at the exact time you are, because so many buyers are looking at homes then, sellers might not be willing to negotiate very much since they may feel like more buyers will come along soon.

Agents will get much busier in the Spring as so many people want to look at houses meaning they may have less time to spend with you. This may mean you miss out on the hot new listing when it goes under contract before your agent has time to show it to you. Start looking now while your agent is less likely to be over scheduled.

Because there are fewer buyers looking at homes right now, sellers may be willing to negotiate more. With few buyers scheduling appointments to see their home, a seller will take your offer more seriously knowing it is very likely that they may have to wait until Spring for a buyer if they don’t work out a contract with you.

Just like real estate agents get busier in the Spring, so do the other professionals that will be necessary when you buy a home. Closing agents, home inspectors and mortgage lenders along with other professionals will have very busy schedules making it harder for you to get the attention you need from the top tier experts.

Industry experts predict mortgage rates will slowly rise as we get further into 2019, meaning you will likely pay more for the same house this summer as opposed to now when there is less competition and lower rates.

Ultimately, none of this matters if this isn’t the right time for you to buy a home or you can’t find the right home for you. Make sure you are making the best decision for you and not one that will benefit someone else.

Christine Topham
RE/MAX Unlimited

Doing More from For Sale to SOLD! That’s the sign of a RE/MAX agent!

Let’s Connect, Socially!

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Paying for Your Home Without a Traditional Mortgage

If you are planning to buy a home, finding a mortgage will be one of the biggest parts of the home buying process. Most buyers will select a traditional mortgage with a 15 or 30-year term and a fixed interest rate for the life of the mortgage but there are other options if you are looking for something that may be more beneficial to your specific situation. Two options you may want to consider depending on your situation and the type of property you are buying is a 1031 exchange and a FHA 203K mortgage.

An FHA 203K loan is a government backed loan that allows you to include both the initial purchase price of the home as well as any renovation costs. You have one loan and one closing rather than a series of micro loans and one big loan.

As with other FHA loans, you are required to put down at least 3.5 percent of the total value of the loan. Other FHA requirements are also in effect. You will need a credit score of 620 or higher, a maximum debt-to-income between 41 and 45 percent and the full loan amount cannot exceed the maximum FHA loan value cap for your area.

In addition to the typical paperwork that goes along with an FHA loan, you will be required to provide a detailed proposal covering the improvements you plan to make to your new home, a thorough cost estimate and a timeline for when those improvements will be completed.

Before the lender agrees to finance your purchase and proposed renovations, an appraiser will value the home as it is and give an estimate of the market value of the home after your proposed improvements are complete.

FHA 203K loans require the homeowner to begin repairs within 30 days of closing and all repairs to be completed within six months of closing. All forms of repair and rehabilitation are allowed with an FHA 203K loan with the exception of luxury items like saunas, swimming pools and other luxury additions.

While an FHA 203K loan can be a simple way to purchase a home that needs some work, there are some other things to consider. You will be required to stick to your proposed schedule and cost estimate. There will also be regular inspections of the work site. You will also be required to pay mortgage insurance for a minimum of 11 years, increasing the cost of your loan significantly and the interest rate will also be higher than a traditional FHA loan. Closing an FHA 203K loan takes longer and is more expensive than a traditional FHA loan. There is additional paperwork involved and an additional processing fee of $350 or 1.5% of the rehab costs, whichever is higher.

With a 1031 exchange, you will sell a property that you already own and reinvest the proceeds immediately in another property while deferring all capital gains taxes that are currently owed. By immediately reinvesting your home equity in another property with a 1031-exchange, you can increase your down payment and your overall buying power. Depending on your current situation, you may be able to exchange one large property for multiple smaller properties or several properties into one larger purchase. While a 1031-exchange is not something you should handle on your own, it can offer some unique benefits if you have significant equity in a property. Take the time to talk to an expert on 1031-exchanges about your overall investment strategy if this is something you are considering.

While both of these options will require some additional time and paperwork to be executed properly, the benefits can be worth the added time and effort depending on your situation. Feel free to contact me for an appointment today and I will be happy to answer any questions you may have, help you find a loan expert to help with your situation and help you find your next dream home.

Christine Topham
RE/MAX Unlimited

Doing More from For Sale to SOLD! That’s the sign of a RE/MAX agent!

Let’s Connect, Socially!

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Why You Need Pre-approval in a Seller’s Market

Buying a house is an exciting time in a person’s life, especially if it is their first home. It can also be a stressful time with all of the requirements to meet before closing. Get a step ahead of the game by being pre-approved for financing. While this is recommended any time you want to put in an offer, it’s critical in a seller’s market.

What is Pre-approval?

Being pre-approved for a home loan means you have provided requested documents and information to your lender, and it has been reviewed by an underwriter. You’ll receive a letter stating how much you’ve been approved for, which is your budget for buying a home.

Many lenders also talk about pre-qualification, but this is not the same as pre-approval. With pre-qualification, all you do is provide verbal information about your income and debts. The lender uses a program to determine how much you could qualify for. It’s much more informal than a pre-approval.

What is a Seller’s Market?

A seller’s market is where there are more buyers than homes for sale and the seller will likely receive multiple offers on a property. The buyers compete for the homes they want, with the most qualified buyer often getting their offer accepted.

If you want to stand out from the other buyers who are interested in your property, you need to have a pre-approval letter you can include with your offer. Once the seller sees this letter, they will be more likely to consider your offer because you are a safer bet than someone who hasn’t gone through the pre-approval process.

What to Do Before Getting Pre-approved

Take the time to shop around and find a lender you want to work with. This should be someone experienced in closing home loans, and a company with the right loan product for your situation. Sit down with them and go over your application and find out what other information they need for pre-approval.

Provide all of the paperwork requested in a timely manner, and your pre-approval should take less than a week. Then, you can focus on searching for the home you want to buy. Contact me today for a consultation. I will be glad to answer any questions you may have, and/or help you find your dream home.

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Important Questions to Ask Sellers

You have been house shopping for months and have finally found a home that you think might be the one. After looking at so many houses that weren’t quite right, it may be hard to know if you have found the home for you. As you investigate the home to determine if it is what you are looking for, you probably have a lot of questions that you want answered. Who better to ask then the person selling the home? Here are some questions you will likely want to get answers to.

  • What is your favorite thing about the house and what is your least favorite thing about the house?
  • What changes or upgrades did you make to the house while you owned it? Do you have receipts for any of the recent work you have completed?
  • Will you share a list of the home professionals you have used to help you take care of the house? This could be anyone who has made repairs along with landscaping professionals, painters and housekeepers.
  • Do you have or have had children in the local school system?
  • Where and when does trash and recycling get picked up?
  • Is there anything currently wrong with the house that needs to be repaired? You may not get an honest answer here but it can’t hurt to ask.
  • Why are you moving?
  • Will you provide the average cost of your utility bills?
  • Where do shipping carriers leave packages?
  • What will you miss the most when you move?
  • Make sure you receive copies of the seller’s property disclosure for your review.
  • Is it an active neighborhood to live in?
  • How long have you owned the home?

The seller may not want to answer your questions or may answer some of them but shy away from others. Don’t let this upset you. Like any kind of research, do the best you can to find out everything you would like to know but don’t lose focus if the seller won’t tell you where their packages get left or why they are moving.

Christine Topham
RE/MAX Unlimited

Doing More from For Sale to SOLD! That’s the sign of a RE/MAX agent!

Let’s Connect, Socially!

Are you Ready to Close on Your Home?

When you are buying a new home, there are lots of preparations you will need to make so that you are prepared when it is time to close. If you haven’t bought a home before or it has been a while, you may not think of everything you need to take care of. Here are some things you won’t to make sure you don’t forget.

  • Cleaning supplies gathered for initial cleaning or a cleaning crew scheduled. While the sellers should leave your home relatively clean, there are likely some areas you may want to clean yourself to make sure they meet your standards. Have your supplies ready so you can do this right away and get started moving in sooner. If you are using a professional, confirm their availability and make arrangements to meet them at the property to let them in.
  • Pack what you will need for the first few days (or longer if your mover is scheduled later) so that you have the things you can’t live without in case it takes you a little while to sort through all of your boxes. These items should include a wide variety of things so you have the basics such as toiletries and medicine, a few days worth of clothes, toilet paper, some snacks and drinks, pet care items if you have pets and anything your children can’t live without like a special stuffed animal or toy. Also, pack your chargers and necessary electronics separately so you can get to them easily.
  • Have you taken care of transferring all of the utilities into your name? Most companies will just make the switch on the day you request and don’t need to come out but take care of this in advance in case they need some time to get the transfer scheduled. You should plan to have everything in your name as of the day of closing. While you are handling utilities, make sure you have taken care of any necessary insurance. Your mortgage lender will need this information as well so this should be done in advance but if you aren’t getting a mortgage, don’t forget this step.
  • Do you plan to have the locks changed on the house? Go ahead and schedule a locksmith to come to the home so you can get this done right away.
  • Are there any appliances that you need to purchase? Go ahead and make arrangements for those. If you are purchasing them, don’t open any new credit accounts or spend significant amounts of money that might change your credit situation. Your mortgage lender will do a final credit check before closing and new accounts may change your credit score and cause an issue with your loan. If you need to open a new account to make your purchase, do your research and select your appliances and wait to finalize the purchase after closing.

All of these items will help you make sure you are ready for closing and don’t have any surprises that you aren’t prepared for.

Christine Topham
RE/MAX Unlimited

Doing More from For Sale to SOLD! That’s the sign of a RE/MAX agent!

Let’s Connect, Socially!

Image courtesy of photomix-company/pixabay.com

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TEAM CHRISTINE  | Associates of RE/MAX Unlimited  | Main Office: 770.386.0076  | Christine@TeamChristine.com  

RE/MAX Unlimited 5205 Stilesboro Road #110 Kennesaw, GA 30152 | 770.419.1986