Purchasing a home can be a complicated and confusing process, especially for first-time buyers. Throughout the process, first-time home buyers will encounter a variety of unfamiliar real state terms. There are several key terms associated with purchasing real estate that are helpful to learn.
For example, many buyers confuse the terms broker and salesperson. A broker is a properly licensed individual, or corporation, who serves as a special agent in the purchase and sale of real estate, a salesperson is an individual employed or associated by written agreement by the broker as an independent contractor. The salesperson facilitates the purchase or sale of real estate.
Once you decide to purchase, a salesperson will prepare a sales contract to present to the seller along with your earnest money deposit. The sales contract is the document through which the seller agrees to give possession and title of property to the buyer upon full payment of the purchase price and performance of agreed-upon conditions. The earnest money is a buyer’s partial payment, as a show of good faith, to make the contract binding. Often, the earnest money is held in an escrow account. Escrow is the process by which money is held by a disinterested party until the terms of the escrow instructions are fulfilled.
After the buyer and seller have signed the contract, the buyer must obtain a mortgage note by presenting the contract to a mortgage lender. The note is the buyer’s promise to pay the purchase price of the real estate in addition to a stated interest rate over a specified period of time. A mortgage lender places a lien on the property, or mortgage, and this secures the mortgage note.
The buyer pays interest money to the lender exchange for the use of money borrowed. Interest is usually referred to as APR or annual percentage rate. Interest is paid on the principle, the capital sum the buyer owes. Interest payments may be disguised in the form of points. Points are an up-front cost which may be paid by either the buyer or seller or both in conventional loans.
In general, there are two types of conventional loans that a buyer can obtain. A fixed rate loan has the same rate of interest for the life of the loan, usually 14 to 30 years. An adjustable rate loan or adjustable rate mortgage (ARM) provides a discounted initial rate, which changes after a set period of time. The rate can’t exceed the interest rate cap or ceiling allowed on such loans for any one adjustment period. Some ARMs have a lifetime cap on interest. The buyer makes the loan and interest payments to the lender through amortization, the systematic payment and retirement of debt over a set period of time.
Once the contract has been signed and a mortgage note obtained, the buyer and seller must legally close the real estate transaction. The closing is a meeting where the buyer, seller and their attorneys review, sign and exchange the final documents. At the closing, the buyer receives the appraisal report, an estimate of the property’s value with the appraiser’s signature, certification and sporting documents. The buyer also receives the title and the deed. The title shows evidence of the buyer’s ownership of the property while the deed legally transfers the title from the seller to the buyer. The final document the buyer receives at closing is a title insurance policy, insurance against the loss of the title if it’s found to be imperfect.
Buyers should plan on a least four to twelve weeks for a typical real estate transaction. The process is difficult and at times, intimidating. A general understanding of real estate terminology and chronology of the transaction, however, will help any real estate novice to confidently buy his or her first home.
Tuesday, December 16, 2008
Thursday, December 11, 2008
Austin's Housing Outlook? Outstanding!!
The local housing market continues to serve as a font of good news for the Central Texas economy. According to Housing Predictor, which offers housing forecasts for 250 markets, Austin ranks sixth among the 10 Most Promising Housing Markets. These markets boast healthy regional economies and show a strong potential for increasing prosperity.
Other cities on this list include Biloxi, Mississippi; Salem, Oregon; Bismarck, North Dakota; Spokane, Washington; Yakima, Washington; Grand Junction, Colorado; Fargo, North Dakota; Mobile, Alabama; and Albuquerque, New Mexico. These metropolises are expected to enjoy steady and dependable growth into the foreseeable future
Other cities on this list include Biloxi, Mississippi; Salem, Oregon; Bismarck, North Dakota; Spokane, Washington; Yakima, Washington; Grand Junction, Colorado; Fargo, North Dakota; Mobile, Alabama; and Albuquerque, New Mexico. These metropolises are expected to enjoy steady and dependable growth into the foreseeable future
Wednesday, December 10, 2008
Give Your Home a Facelift for a Quick Sale!
One of the great challenges to selling a home can be showing all of its space, decor and natural light potential. For example, every home has crowded closets and dead space. Sellers should be aware that areas such as these are easy to spruce-up with a little elbow grease and old-fashioned innovation.
Begin by evaluating your closet/storage space, determine which areas can cut-down in clutter. Go through old clothes, shoes, etc., and get rid of anything that will not be used and in turn create more space. Consider organizing shelves and other areas to make better use of your storage space, including your garage and basement. Also, try to throw out or give away any old furniture that is no longer of use. All of the discarded items can be given to Good Will, Salvation Army or even sold at a yard sale.
"Although most sellers keep their homes clean and well-decorated, it can be difficult to convince a buyer of a home's potential when clutter is noticeable. As brokers, it's our responsibility to offer any tips that will expedite the sale and make the experience more enjoyable for the seller," Jefferson Kimbrough REALTOR.
Once you've eliminated the unwanted items and furniture, begin the 'renovation' process. For non-storage spaces that could use a little more decor, consider adding a small bookshelf complemented with a cozy reading chair. Always be sure you're filtering as much light into your property as possible. Open or replace curtains. For example, light from a window overlooking the backyard offers a room more color, a great view and the illusion of more space.
Always maximize the potential of existing decor; wash old curtains, re-stain old wood casings, anything that refreshes and emphasizes all the potential of the space and decor of the home.
Prospective buyers are often more drawn to homes with features that they don't have, those with clutter-free closets, open sunny rooms, and cozy little corners. To ensure you've realized all of the above characteristics the last step should be to bring in a friend and observe their reaction. Make sure it's an honest friend, who will offer suggestions as well as notice the improvements. Seeing your own home through someone else's eyes is a great way to make a home optimally attractive and more sellable to prospective buyers.
Be diligent in your efforts and be sure the renovations improve the aesthetic appeal of the home. All the hard work will be worth the reward of a successful sale.
Begin by evaluating your closet/storage space, determine which areas can cut-down in clutter. Go through old clothes, shoes, etc., and get rid of anything that will not be used and in turn create more space. Consider organizing shelves and other areas to make better use of your storage space, including your garage and basement. Also, try to throw out or give away any old furniture that is no longer of use. All of the discarded items can be given to Good Will, Salvation Army or even sold at a yard sale.
"Although most sellers keep their homes clean and well-decorated, it can be difficult to convince a buyer of a home's potential when clutter is noticeable. As brokers, it's our responsibility to offer any tips that will expedite the sale and make the experience more enjoyable for the seller," Jefferson Kimbrough REALTOR.
Once you've eliminated the unwanted items and furniture, begin the 'renovation' process. For non-storage spaces that could use a little more decor, consider adding a small bookshelf complemented with a cozy reading chair. Always be sure you're filtering as much light into your property as possible. Open or replace curtains. For example, light from a window overlooking the backyard offers a room more color, a great view and the illusion of more space.
Always maximize the potential of existing decor; wash old curtains, re-stain old wood casings, anything that refreshes and emphasizes all the potential of the space and decor of the home.
Prospective buyers are often more drawn to homes with features that they don't have, those with clutter-free closets, open sunny rooms, and cozy little corners. To ensure you've realized all of the above characteristics the last step should be to bring in a friend and observe their reaction. Make sure it's an honest friend, who will offer suggestions as well as notice the improvements. Seeing your own home through someone else's eyes is a great way to make a home optimally attractive and more sellable to prospective buyers.
Be diligent in your efforts and be sure the renovations improve the aesthetic appeal of the home. All the hard work will be worth the reward of a successful sale.
Monday, December 8, 2008
How to Spot a Good Value in Austin!
Beauty is in the eye of the beholder, particularly when buying a home in Central Texas! Features that attract one home buyer, may repel another.
However, the one feature of interest to every home buyer is price. Getting the most home for your money is paramount. The real problem is figuring out whether that fixer-upper on one street is a better buy than the home in next-to-new condition two blocks away. That's why knowing what to look for before you buy can save you time, energy, and money down the line.
The first step is figuring out what kind of house you need. A good buy is only a good buy if it meets you current and future living requirements. Before shopping for a home, decide how much space you and your family require. How many bedrooms, bathrooms? Is a family room necessary? Do you need a layout that will accommodate a lot of entertaining? Do you prefer a spacious or compact work space in the kitchen? If you have small children, can the house easily be childproofed?
Evaluate the front and back yards. Is there enough space to accommodate your children and pets? Do you like a park-like or garden setting? Do you enjoy yard work and gardening, or do you want a low maintenence yard? Take into consideration the cost of extensive landscaping and upkeep.
Next, determine how much work is required to make the house you are considering livable. Make an honest assessment of your fix-it abilities. How much work are you willing to do or pay someone else to do? Do you have basic decorating, carpentry and plumbing skills? If you plan to learn as you go, make sure you have accurately determined what you are getting into. Ask an experienced friend, family member or your real estate agent for their opinion, and be sure to consider how much remodeling inconvenience the rest of the family can handle.
Unless you are ready and able to tackle a major remodel, look for a house or condominium that needs only cosmetic improvements. These include painting, wallpapering and replacing items like flooring, window treatments, bathroom and kitchen fixtures, light fixtures, cabinet and interior door hardware and appliances. Remember that even these simple changes can be costly if you have to make many of them.
Beware of improvements that seem easy enough at first glance buy may turn into major headaches and require a lot of money once you’ve moved in. Remodeled kitchens and bathrooms, changes to the floor plan, room additions and redesigned landscaping are examples of seemingly minor changes that can easily eat away the money you thought you saved by selecting a so-called “bargain priced” home. Of course, you may be perfectly willing to spend whatever money is needed to customize the house to match your tastes and needs.
Make sure major systems in the house are in good working condition. The furnace, air-conditioning and plumbing should be up to date, since repairs can be costly. Your agent can arrange to have a professional inspector determine whether the electrical wiring and any room additions are to code. Local utilities often offer free or low-cost inspections to tell you if the house is energy-efficient.
Look for a house with universally popular selling points. If you’re impressed, the next buyer down the line is bound to be, too. For example, a roomy, modern east-to-clean kitchen is the best selling point a home can have. A house with only one bathroom is less desirable than a house with two or more. Many buyers expect at least three bedrooms, with a master bedroom that offers a feeling of privacy. Lots of storage space and closets, especially walk-in closets, will be a real selling point. Family rooms or “great rooms” also are desirable. On closer examination, a house that looks like a bargain may lack some of these key features.
Don’t forget the old adage: location, location, location. Unless you’re looking for a fixer-upper, the house should be in a condition that is comparable to other homes in the neighborhood. Avoid buying the biggest or fanciest home on the block. Consider the amount of traffic or noise. Homes located in a quiet area away from a busy street will command a higher price. Make sure the schools in your district have a reputation for quality education and safety. Nearby supermarkets, gas stations, restaurants and theaters also will make a location more desirable.
Good community facilities also add appeal; pools, athletic fields, community centers, libraries and hospitals all add to a neighborhood’s value and desirability. Transportation needs also should be considered. Is local public transit available? How long are typical commutes to places of current and potential employment? Are there several alternate route? How close is a major airport? All of these can affect a home’s pricing.
Consider the cost of living in a home. It’s important to consider not only purchase price but the monthly cost of living in a home. Estimate your utility and maintenance costs. For example, will the house need to be painted on a regular basis and will you need to spend money maintaining a swimming pool? Ask your agent about the property tax rate and whether increases are anticipated. Will you have to pay special assessments for a homeowner’s association? Consider the point in the life cycle of major household systems, such as the furnace, air conditioning, roof and kitchen appliances.
You can find a bargain! Your first step should be to seek out a knowledgeable real estate agent with experience in the market areas where you wish to purchase a home. Your agent can help you locate those properties that truly are “bargains” and help find the home that most closely matches your desires and needs.
However, the one feature of interest to every home buyer is price. Getting the most home for your money is paramount. The real problem is figuring out whether that fixer-upper on one street is a better buy than the home in next-to-new condition two blocks away. That's why knowing what to look for before you buy can save you time, energy, and money down the line.
The first step is figuring out what kind of house you need. A good buy is only a good buy if it meets you current and future living requirements. Before shopping for a home, decide how much space you and your family require. How many bedrooms, bathrooms? Is a family room necessary? Do you need a layout that will accommodate a lot of entertaining? Do you prefer a spacious or compact work space in the kitchen? If you have small children, can the house easily be childproofed?
Evaluate the front and back yards. Is there enough space to accommodate your children and pets? Do you like a park-like or garden setting? Do you enjoy yard work and gardening, or do you want a low maintenence yard? Take into consideration the cost of extensive landscaping and upkeep.
Next, determine how much work is required to make the house you are considering livable. Make an honest assessment of your fix-it abilities. How much work are you willing to do or pay someone else to do? Do you have basic decorating, carpentry and plumbing skills? If you plan to learn as you go, make sure you have accurately determined what you are getting into. Ask an experienced friend, family member or your real estate agent for their opinion, and be sure to consider how much remodeling inconvenience the rest of the family can handle.
Unless you are ready and able to tackle a major remodel, look for a house or condominium that needs only cosmetic improvements. These include painting, wallpapering and replacing items like flooring, window treatments, bathroom and kitchen fixtures, light fixtures, cabinet and interior door hardware and appliances. Remember that even these simple changes can be costly if you have to make many of them.
Beware of improvements that seem easy enough at first glance buy may turn into major headaches and require a lot of money once you’ve moved in. Remodeled kitchens and bathrooms, changes to the floor plan, room additions and redesigned landscaping are examples of seemingly minor changes that can easily eat away the money you thought you saved by selecting a so-called “bargain priced” home. Of course, you may be perfectly willing to spend whatever money is needed to customize the house to match your tastes and needs.
Make sure major systems in the house are in good working condition. The furnace, air-conditioning and plumbing should be up to date, since repairs can be costly. Your agent can arrange to have a professional inspector determine whether the electrical wiring and any room additions are to code. Local utilities often offer free or low-cost inspections to tell you if the house is energy-efficient.
Look for a house with universally popular selling points. If you’re impressed, the next buyer down the line is bound to be, too. For example, a roomy, modern east-to-clean kitchen is the best selling point a home can have. A house with only one bathroom is less desirable than a house with two or more. Many buyers expect at least three bedrooms, with a master bedroom that offers a feeling of privacy. Lots of storage space and closets, especially walk-in closets, will be a real selling point. Family rooms or “great rooms” also are desirable. On closer examination, a house that looks like a bargain may lack some of these key features.
Don’t forget the old adage: location, location, location. Unless you’re looking for a fixer-upper, the house should be in a condition that is comparable to other homes in the neighborhood. Avoid buying the biggest or fanciest home on the block. Consider the amount of traffic or noise. Homes located in a quiet area away from a busy street will command a higher price. Make sure the schools in your district have a reputation for quality education and safety. Nearby supermarkets, gas stations, restaurants and theaters also will make a location more desirable.
Good community facilities also add appeal; pools, athletic fields, community centers, libraries and hospitals all add to a neighborhood’s value and desirability. Transportation needs also should be considered. Is local public transit available? How long are typical commutes to places of current and potential employment? Are there several alternate route? How close is a major airport? All of these can affect a home’s pricing.
Consider the cost of living in a home. It’s important to consider not only purchase price but the monthly cost of living in a home. Estimate your utility and maintenance costs. For example, will the house need to be painted on a regular basis and will you need to spend money maintaining a swimming pool? Ask your agent about the property tax rate and whether increases are anticipated. Will you have to pay special assessments for a homeowner’s association? Consider the point in the life cycle of major household systems, such as the furnace, air conditioning, roof and kitchen appliances.
You can find a bargain! Your first step should be to seek out a knowledgeable real estate agent with experience in the market areas where you wish to purchase a home. Your agent can help you locate those properties that truly are “bargains” and help find the home that most closely matches your desires and needs.
Friday, December 5, 2008
Looking for the Right Agent?
Whether you're a first-time buyer, selling your home, or relocating to a different part of the country, the support of a qualified, knowledgeable real estate agent can alleviate many of your concerns and ensure a smooth transaction. A professional agent can market present residence, help you locate the home of your dreams and assist in making your transfer to an unfamiliar area easier.
To find a trained sales associate or broker, you may need to look no further than your own neighborhood or home town. If a well-established brokerage is involved in many listings and sales, this is a good sign. Speak with some of the agent's past customers about the quality and integrity of service and performance. Successful real estate agents rely heavily on referrals and will therefore strive to provide the very best in customer service and satisfaction.
Set up "appointments" to interview agents and brokers much like an employer would interview a prospective employee. Inquire about their training, marketing programs and specific service policies. Also determine how many years of experience they have, the number of listings they have had, and the number of homes they have sold within the past few years. More importantly, find out how well they know the area. Ask for references, and check them out.
Your goal is to determine just how knowledgeable the agents are. Question them on financing, closing costs and/or local market conditions, depending on whether you are a prospective buyer or seller, to determine their expertise. If they know their stuff, they should be able to answer your questions effortlessly.
If you're selling your home, learn what they will do if you decide to list with them. How do they plan to market your home? Will they provide you with a market analysis to help you determine the most effective listing price for your property? Will they supply regular progress reports and assist with negotiations once you've received offers?
If you're relocating to a different part of the country, is your agent connected with a national relocation service that will not only expose your present property to incoming transferees, but assist with your search for a new house?
A qualified real estate agent should be able to answer all your questions and provide you with quality service that is courteous and responsible. Finding the right person may take time and patience, but when buying or selling your home... the selection of a dependable agent should be tops on your list.
Thursday, December 4, 2008
Selling your Austin Home in the Winter.
In Austin, selling your home in the winter months can be a challenge. Dreary, cold weather and end-of-the-year holidays can keep buyers away and heighten fears of your home staying on the market longer than expected.
However, there are a few things you can do to enhance "curb appeal". And when that happens, buyers will take notice.
For example, if your home has been on the market for more than six months, it's probably time to change the sales approach. There are several factors that could reviewed with your real estate agent to determine improvements that can be made. Ask for a reassessment of the sales price; it may be too high for the current market. Also, ask the agent for a new or updated marketing plan and ask for a specific explanation of each activity. Marketing your home goes far beyond a few ads in the newpaper and a listing on the Multiple Listing Service (MLS); a good agent will do more to get your home sold.
If your current agent doesn't respond to your satisfaction, you should contact the real estate broker (the owner of the office) and ask for a different sales agent- or, if you're no longer under any contractual obligation to the firm, it might be time to change real estate offices entirely. When setting the asking price through a comparative market analysis, compate similar homes sold during the winter months. Many owners set their asking price too high because of comparisons with sales prices during peak seasons. Always try to compare like properties sold at the same time of year.
Once you've settled on an asking price, it's time to spruce up the interior and exterior of your home. Many real estate agents recommend opening as many curtains as possible to add light and color to rooms. Also, it's suggested you keep spring and summer photos of your home out on tables and in clear view. Photos of front yard flowers or the backyard shade tree in full summer bloom can help swing many buyers in favor of a purchase.
Staying on top of winter maintenance is another sure-fire way of adding value to your home. In Austin, we don't have to worry too much about snow and ice, but it's a good idea to make sure all walkways are clear of ice or snow. Make sure the furnace is in good working condition and and the room temperature is kept at a comfortable level.
Take yourself on a tour of your house. Walk through the front door like you were a prospective buyer. More than likely, you'll see many previously undiscovered cluttered spaces and needed repairs that can turn off prospective buyers.
One last thing, enjoy the holidays! But don't overload your home with holiday decorations either. The buyer should have the chance to see your home in its everyday condition.
However, there are a few things you can do to enhance "curb appeal". And when that happens, buyers will take notice.
For example, if your home has been on the market for more than six months, it's probably time to change the sales approach. There are several factors that could reviewed with your real estate agent to determine improvements that can be made. Ask for a reassessment of the sales price; it may be too high for the current market. Also, ask the agent for a new or updated marketing plan and ask for a specific explanation of each activity. Marketing your home goes far beyond a few ads in the newpaper and a listing on the Multiple Listing Service (MLS); a good agent will do more to get your home sold.
If your current agent doesn't respond to your satisfaction, you should contact the real estate broker (the owner of the office) and ask for a different sales agent- or, if you're no longer under any contractual obligation to the firm, it might be time to change real estate offices entirely. When setting the asking price through a comparative market analysis, compate similar homes sold during the winter months. Many owners set their asking price too high because of comparisons with sales prices during peak seasons. Always try to compare like properties sold at the same time of year.
Once you've settled on an asking price, it's time to spruce up the interior and exterior of your home. Many real estate agents recommend opening as many curtains as possible to add light and color to rooms. Also, it's suggested you keep spring and summer photos of your home out on tables and in clear view. Photos of front yard flowers or the backyard shade tree in full summer bloom can help swing many buyers in favor of a purchase.
Staying on top of winter maintenance is another sure-fire way of adding value to your home. In Austin, we don't have to worry too much about snow and ice, but it's a good idea to make sure all walkways are clear of ice or snow. Make sure the furnace is in good working condition and and the room temperature is kept at a comfortable level.
Take yourself on a tour of your house. Walk through the front door like you were a prospective buyer. More than likely, you'll see many previously undiscovered cluttered spaces and needed repairs that can turn off prospective buyers.
One last thing, enjoy the holidays! But don't overload your home with holiday decorations either. The buyer should have the chance to see your home in its everyday condition.
Tuesday, December 2, 2008
FHA increasing Minimum Down Payment
The new year is approaching fast and with it, so are the changes made by FHA. Due to the signing of the Housing Resolution Bill, FHA will be increasing the minimum down payment from 3%, to 3.5%. Unless you've entered into a contract before January 1st, 2009, you will be required to pay this increase. So, if you're thinking of buying a home- now is the time!
Is There Help For My Down Payment on My House?
Yes... depending. On what? On your income and where you want to live. Here's how it works- This money comes in the form of an interest-free loan of $8325. And, if you live in the property for 5 years, the loan is forgiven altogether! You do not have to be first time homebuyers but you will be required to take a free 8-hour homebuyer-training course. You are also required to spend $500 of your own money at closing.
The primary limitation of the program is the eligible areas. The home purchased must be in Travis County, but cannot be in the Austin city limits. That somewhat limits the inventory, but there are still lots of properties out there in eligible areas like Manor, Webberville, Pflugerville, Lago Vista, etc.
The income limits vary depending on family size. Here they are:
1 Person $39,850
2 Persons $45,500
3 Persons $51,200
4 Persons $56,900
5 Persons $61,450
You can also use this program concurrently with MCC. What a great combination!
My past experience with the folks at Travis County Housing Finance has been pretty good. They’ve always been friendly and responsive.
With the problems folks are having coming up with the cost at closing now required by FHA, this program is a godsend, especially since FHA is raising their minimum down payment to 3.5% on January 1st. I'll blog more about this increase later.
Please contact me anytime with your Real Estate questions!
Jefferson Kimbrough REALTOR
The primary limitation of the program is the eligible areas. The home purchased must be in Travis County, but cannot be in the Austin city limits. That somewhat limits the inventory, but there are still lots of properties out there in eligible areas like Manor, Webberville, Pflugerville, Lago Vista, etc.
The income limits vary depending on family size. Here they are:
1 Person $39,850
2 Persons $45,500
3 Persons $51,200
4 Persons $56,900
5 Persons $61,450
You can also use this program concurrently with MCC. What a great combination!
My past experience with the folks at Travis County Housing Finance has been pretty good. They’ve always been friendly and responsive.
With the problems folks are having coming up with the cost at closing now required by FHA, this program is a godsend, especially since FHA is raising their minimum down payment to 3.5% on January 1st. I'll blog more about this increase later.
Please contact me anytime with your Real Estate questions!
Jefferson Kimbrough REALTOR
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