Sharpbuyers.com 10 Steps To Buying A Home

How to Buy a home Step By Step

For most people, purchasing real estate will be the biggest investment they will ever make. It is a decision that will have lifelong implications. These effects can be either positive or negative. This is why it is important to understand the key factors to consider before purchasing real estate. As a result, SharpBuyers.com has provided this 10-step guide to give you some insight about the home buying process.

Step#1 - Figure Out How Much You Can Afford

To find out how much you can afford, it is best to speak with a Mortgage Professional. I would advise that you go your primary bank first. Your primary bank is an institution you can trust and they should be able to answer all of your questions about financing. You can also talk to a Mortgage Broker. To find a good mortgage broker you should consult with you friends and/or family who currently own a home. After talking to a Mortgage Professional you will know weather or not you need a down payment, how much of a down payment you will need, your potential interest rate and all of the necessary criteria required to qualify for a loan. Once you choose your lender and provide them with the necessary documentation, you will be given a Pre-Approval Letter that states how much you can afford, your interest rate and the terms of the loan. Key Points: 1. Not all Lenders are created equal so it is a good idea to shop around. 2. Make sure you are given a Pre-Approval letter not a Pre-Qualification letter. 3. Beware of the bait and switch technique. This is when lenders get your attention by advertising an attractive interest rate only to increase it after you are locked in.

Step#2 - Choosing the Right Property For You

The decision of what type of real estate you purchase will consists primarily of , how much you can afford and your reasons for buying. After consulting with a lender, you will know what you can afford in terms of a Condo, Single Family Home, or a Multi-Family property. The questions you should ask yourself is "What are my goals for my real estate purchase?" This will help you better define what type of property suits your needs. The financial commitment is significant, and not every property fits the needs of its potential suitor, so it is important that you consider the goals for your real estate purchase, both short term and long term. For example if it is going to be your primary residence, you want to make sure it can comfortably accommodate your current and future family i.e. children or in-laws. If the market takes an unfavorable turn and it become difficult to sell then you can still live comfortably in your home until the market recovers. Key Points: Always consider the short term and Long term goals of your real estate purchase. It all stars with your reasons for purchasing real estate.

Step#3 - Finding a Home

Now that you understand the lending process and have narrowed down the type of property you are looking for, its time to start looking. So where do you start? I would recommend finding a local real estate professional. For help finding a realtor, log on to SharpBuyers.com. The best part about this is that it is free. You will have professional representation at no cost to you, and it will surely make the process a lot smoother. Buyers Agents are paid at closing by the seller. The total commission is split between the buyer's agent and the listing agent. If you choose a buyers agent through SharpBuyers.com, you can receive up to 50% of their commission at closing. It is truly the best of both worlds. Professional representation and money in your pocket. Key Points: It is best to hire a Buyer's Agent. It is free and it will save you time and money in the process. SharpBuyers.com will refer you to a local real estate agent that will provide professional assistance and a real estate rebate at closing!

Step#4 - Attorney or No Attorney?

As a real estate professional I would strongly advise all buyers to seek the advice of an attorney before entering into any negotiations. Real estate brokers and agents are professionals at finding an ideal home and negotiating the terms, but attorneys are experts at reviewing and explaining contracts. As a result, it is best to have an attorney review all contracts before entering into any agreements with the seller. The best way to find a good attorney is to ask your real estate agent. Real estate agents regularly work with a number of attorneys in many different capacities and know which attorneys will be best based on your specific needs. It is in the agent's best interest to recommend an attorney that they know is competent, trust worthy and focused on protecting their clients interest.

Step#5 - Your Offer, Negotion 101

Before placing an offer on a home you should know how much it is worth to ensure the listing price is in line with the actual value. Ask your agent to provide you with a CMA (Comparative Market Analysis). A CMA compares homes based on size, location, condition and several other factors to estimate the value real estate in a given area. As a result you will see what similar homes have recently sold for. This will give you a better understanding of the market and help you to better gauge your offer. It is also important to understand that everything is negotiable. For example if you see any furniture, appliances, a chandelier or anything that you like, include it in the offer. This strategy can sometimes give buyers more leverage when negotiating. Even if the seller does not want to sell their personal property, it gives you the buyer an additional negotiating point. It also is important to include contingencies in the offer as well. The most common types of contingencies are a mortgage contingency and an inspection contingency.

Step#6 - Home Inspection

A home inspection is an essential part of the home buying process. Every buyer has a right to have a home inspection and I highly advise buyers to take advantage of that right, even if it is new construction. It is best to ask your agent to provide you with a recommendation for an inspector. They work with multiple inspectors and will likely refer you to an inspector that is right for your needs. Purchasing real estate is the most significant investment many people will make during the course of their lives. A home inspection will validate that you are investing in a good home or uncover significant defects that you would otherwise not have known about until moving into the home. It is far more valuable to know what you are buying before you buy, then to invest hundreds of thousands of dollars into a property that is not worth it. So what happens when defects are discovered by the inspector? In most instances the buyer and seller come to a mutual agreement on how to deal with the issues. Sometimes the seller may agree to take care of the issues. In other instances the buyer may assume the responsibility for a discount in the price. It really just depends on the specifics of the defects. As a buyer, it is best to know as much about your home before you purchase it as possible.

Step#7 - Mortgage Application

Once of all the terms are finalized following the home inspection, it is now time to complete your mortgage application. The first step would be to inform your lender or bank that you have signed a P&S (Purchase and Sale Agreement). They will ask for a signed copy of the P&S along with other financial documents needed to complete your loan application. It is important to get this application in as soon as possible so the bank has as ample time to process your application. In accordance with the P&S, the bank must provide the buyer with a commitment letter or a declination letter by a specific date. The commitment letter states that the bank is going to give you the loan. The declination letter states that you have been declined for the loan and cannot purchase the property. If the lender does not supply this, they buyer runs the risk of forfeiting their deposit if they are not approved or declined for the loan within the given time. If you need more clarification on this, ask your real estate agent. Key Points: Make sure the your lender supplies you with a commitment or declination letter before the commitment date. If not you could end up losing thousands of dollars.

Step#8 Insurance Binder

After the bank provides a commitment letter, the only additional requirement is the insurance binder. Before the bank can complete the loan the buyer must purchase home owners insurance. It is best to get three quotes when shopping around for home owners insurance. The first quote should come from the provider of your car insurance. In many instances the insurance company will give you a discount for insuring your home and automobile with the same provider. You should also gets recommendation from friends & family and your Realtor. These are all sources that you can trust and it will insure you get the best. The insurance binder is then sent to the lender prior to closing. Now the funds are all set to be released on the specified closing date.

Step#9 - Reviewing The Settlement Statement

1-2 Days before you close, the closing attorney, who represents the bank lending you the funds, will provide you and the seller with a settlement statement (also called a HUD) for your review. It is important that you, your attorney and your Realtor review the charges, fees and adjustments to ensure everything is correct. The HUD will have all of the information such as the closing costs, tax adjustments, utility adjustments your real estate rebate and several other fees. It will also state the amount you need to bring to closing. Any funds brought to the closing should be done in the form of a certified or bank check. Note: The seller will have to make sure the home meets the local fire code and provide final utility bills prior closing.

Step#10 - Closing

So what do you need to bring to the closing? you will need at least 2 forms of identification, a certified or bank check for any additional funds and a good pen for all of the documents that you will be signing. The closing is typically attended by the buyer(s), seller(s), closing attorney, your attorney and the Realtors involved in the transaction. Your attorney will explain all of the documents to you prior to signing any of the disclosures at the closing. Once you are finished signing, you will receive your keys. Now its time to figure out how your going to spend your real estate rebate provided by SharpBuyers.com! Congratulations!

The Future of Real Estate Rebates in relation to home buyers.

As websites like Trulia and Zillow offer buyers more and more tools to make educated decisions in purchasing their ideal home, the pool of buyers that seek the assistance of Realtors is dwindling. Although the information on Trulia and Zillow may not be 100% accurate, many buyers see it as the real estate gospel and that is all that matters. If Zillow says it is worth X then its worth X. Innovative technology is great but the hard reality is that it is changing the real estate industry. With this in mind it is important to have products and services that cater to these buyers. SharpBuyers.com understands this dynamic and as a result, we offer the incentive of a real estate rebate to homebuyers. Some may call this selling out, but the in truth the real estate industry of tomorrow will require a different set of skills for brokers to succeed. Obviously quality customer service and an understanding of the industry are priceless but it will take much more than that to be a top producer 10 years from now. Here’s some food for thought: What good is it if you have all the knowledge in the world and no one to share it with?

Boston Real Estate Report By SharpBuyers.com

Boston Real Estate Report By SharpBuyers.com

As we enter into the slowest time of the year for real estate sales it is important to keep a closer eye on the market. This is why SharpBuyers.com is providing this vital report that gives consumers an in-depth look at the real estate market. There are several different ways this information can be utilized. For buyers, declining home prices may be an indication to wait until the market bottoms out before purchasing. The flip side of that philosophy is that the only way to know when the market has hit rock bottom is when it starts to come back up. Hence, you run the risk of missing out on great deals by trying to perfectly time the market. My advice, buy today with the intent to hold. Many investors forget that real estate is a long term investment due to the unprecedented property value appreciation that was the theme of the early twenty first century. Now it is time to get back to basics.
As a seller, attempting to sell in a declining market this time of year is a daunting task. Plain and simple, it can be down right demoralizing. But even in the midst of these tough circumstances, there are options. The first and most obvious option, don’t sell. If you can afford to make your mortgage payments it is probably best to hold until the Spring. The longer a property is listed on MLS the less the “perceived” value. I use the word perceived because nothing about your home changes to decrease the value but when a home lingers on the market buyers see it as additional leverage for negotiating a better price. In the winter there are less buyers looking to purchase real estate and as a result homes tend to sit longer on the market. So hold through the winter and list in the spring. This strategy will typically get you the optimal sales price for your home. It all goes back to supply and demand. Although the amount of homes on the market greatly increases, so does the amount of buyers, thus increased sales volume drives home prices up. If you absolutely must sell in a declining market and in the winter, the most effective strategy is to reduce the sales price. So how do you go about a price reduction? The first step is to talk to a real estate professional that understands the local market. Ask them to provide a CMA (Comparative Market Analysis) to determine the market value as well as a month to month market trend report. If the market is declining at a month to month rate of 2% you would want to get ahead of the trend and reduce your price by at least 3% - 4%. This enables you to price your home at a competitive price and attract more of the buyers that are currently in the market for real estate.

Boston Home Single Family Home Sales Data:
Single Home Sales:
December 07: Single Family Median Home Values: $332,500 Volume: 60 Homes Sold

This represents a -4.3% Decline in value from November 07 and a -9.6% Decline from December 2006. Volume is also down -25% and -38% respectively.