First Time Home Buyer Guide

 Today, real estate prices are lower than ever so it’s a great time to buy a new home. Yet few people are buying because they are afraid by the residential real estate market crash.

However, what they don’t understand is that the current economic condition has created a great market for those who are looking to buy homes. On the other hand, those who are looking to sell their homes are struggling.

There is an abundance of available homes on the market so buyers have a lot to choose from and at great prices. So as a buyer, you are in good shape!

If you have been pondering whether or not to buy, fear no more. This book is going to tell you everything you need to know about buying a house in this economy or any other market.

Understanding a Buyer’s Market vs. a Seller’s Market

In a buyer’s market, there are far more homes on the market than buyers. The supply of homes far outweighs the demand so home prices are much lower. Fortunately, for anyone looking to buy a home today, we are in a buyer’s market.

When the supply of homes exceeds the demand, prices drop considerably.  

Sellers become desperate to sell their homes because they are competing with a lot of other sellers. 

This means that the buyers can really get some good deals and bargains. In order to take advantage of a buyer’s market, you may offer less

than the asking price of the home and possibly get it.

If you are working with a real estate agent, do not listen to them if they tell you that you have to bid high or the people will be “insulted.” This agent is probably just looking to make as much money as possible instead of looking out for your best interest.

If the real estate agent says something to you like “I won’t even make an offer like that, it’s insulting,” thank them for their time and then tell them that you are going to find another agent.

Instead, work with an agent who is skilled at negotiating and can help you prepare an offer that is compelling for you and the seller.

Another advantage of buying a home in a buyer’s market is that you can get a new construction or much bigger home for less than you could in a seller’s market. Remember, there is an abundance of homes for sale on the market today and this includes brand new homes. Home builders are forced to slash their prices in this market, making a brand new, bigger home much more affordable.

A seller’s market is just the opposite of a buyer’s market. This usually

happens just as the economy gets a boost and after a recession.  Eventually, the market will flip back over to a seller’s market. But that’s still probably some time away.

The market turn usually happens when there’s a renewed faith in the economy. Interest rates drop considerably and a boom hits the housing market causing a price hike. This results in more buyers looking to buy homes than there are houses for sale.

The last true seller’s market in the United States was in the early to mid 2000’s when interest rates dropped and lending requirements were eased.

People began buying houses like mad. Lenders were very busy and you would have to make repeated calls to get them on the phone.

Title companies were overburdened with an onslaught of not only people purchasing homes, but actually for the first time, refinancing their mortgages.

The decade sprouted a whole bunch of new businesses and made way for a lot of new title companies and mortgage lenders. To give you an idea of what the seller’s market was like, a home would go up on the market and would be on there for only a few days before they would have a contract.

People would have “open houses” for their homes and get several different offers and have the opportunity of picking the best one. There were cases where people actually bid higher than the asking price for the home in order

to secure the home.

The seller’s market is obviously the best time to sell. Although we are not currently in a seller’s market, we still see a seller’s market in areas where it is very desirable to live.

There are still a few areas like this in the United States today, where they have a seller’s market. These are usually either upscale neighborhoods and homes or moderately priced homes in really nice areas.

Today, we are in a buyer’s market. So if you have been thinking about buying a house, there has never been a better time to do so than right now.

Getting an Agent

If you are going to buy a house, you have two choices. The first is that you can ride around neighborhoods that you like and look for “for sale” signs.

Then you can call the agent that has listed the home and ask to see the home.

The agent will be thrilled to show you the property as he or she represents the seller and will get full commission if you decide to purchase the home.

One advantage to this approach is that you will get to see a lot of homes and neighborhoods that you may want to live in.

The downfall of doing things this way is that gasoline is very expensive and you can spend a lot of time looking at homes that may already have contracts on them. It is not uncommon for the “sold” sign to go up only shortly before closing if at all.

The real concern, however, is that by calling the listing agent directly puts you in a situation where you may not be represented.

So to protect yourself throughout your first home purchase, you should really choose a buyer’s agent to work with. This way, you can assure that you are working with someone who has your best interests at hand.

When choosing a real estate agent as a buyer, choose one that you like and who will be ready to show you homes that fit your criteria. Having an agent that listens to you and shows you homes accordingly can really make the difference!

Also be sure to check out their credentials to make sure they are licensed to sell real estate in your state and have no negative marks on their record.

Do your homework to find an agent who will work for you and help you purchase the perfect home.

Finding A Mortgage Lender

Before you can make an offer on a home, you should have either a

pre-approval letter or be pre-qualified for a loan. Before you start looking at houses, it’s a good idea to already be qualified so you don’t waste your time.

It doesn’t take long to get pre-qualified.

Generally a lender can even do this over the phone. You are not at the point where you need to supply documentation. A credit check is usually run so that they know what your credit score is.

A pre-approval, on the other hand, means that you are willing, able and ready to close on the house. You have provided the lender with all necessary documentation and have been approved by the underwriter for the loan. You need only to find a home and close.  

A pre-approval letter is the best armor you can have when you begin looking for a house. This will give the seller an incentive to sell the property to you as you have already been approved for the loan and they need only get the appraisal, inspections and set the closing date.

When looking for a new home, you are better off to have a pre-approval letter from the lender than a pre-qualification.

You should have an idea of what amount you can spend on a home and how much your monthly payments will be. You should talk to a few lenders to find out their loan packages.

Since this is your first home, you have an option of getting a conventional

loan or an FHA loan. If you served in the military, you can also get a

VA loan. An FHA loan is backed up by the federal government and usually offers a lower interest rate than a conventional loan.

A lot of sellers don’t like dealing with FHA loans because of the fact that they are backed up by the government and require inspections. They may also require the seller to contribute towards closing and settlement costs.

A VA loan operates pretty much the same way only it is backed up by the Veteran’s Administration instead of the federal government.

Even though these types of loans give the buyers a break, sellers tend to shy away from them. However, because of the current market, sellers are much more open to federal backed loans because they’ll take any sale they can get.

If you put less than 20 percent down on a home, chances are that you are going to have to pay PMI. This is private mortgage insurance. PMI is not like home insurance or mortgage insurance for you - it s a policy that the lender is getting to insure them against loss if you default on your loan.

Because lenders are so eager to make loans with today’s market, make sure that you shop around for a good mortgage package. Be sure to ask what the bottom line monthly payment will be. The monthly payment quoted should include real estate taxes, homeowner’s insurance and PMI as well as the principal and interest of your mortgage.

Denton County and Dallas-Fortworth Real Estate Agent Patricia Young

 and the Integrity Team

Looking to buy or sell a home in the Dallas/Fort Worth areas?  Professional real estate agent Patricia Young specializes in helping buyers and sellers invest  in real estate in Denton County and in surrounding neighborhood."This "client first" philosophy has always been our approach and it requires us to continually improve our skills and ways of doing business.So when you decide that you'd like to buy or sell a home in the Dallas/Fort Worth areas, please contact us.

Rent Vs Buy

In most cases, the amount of money a renter spends can be about the same or less than the amount a homeowner spends on a mortgage. But then you add in the tax benefit for homeowners and the savings can be significant. After all, you build equity AND get to write off your mortgage interest. And if you play your cards right, when you sell you'll be eligible for one of the best tax breaks around.

Right now we have super-low interest rates, super-low home prices and an abundance of homes available for sale.  What more could a potential homebuyer ask for?

Feeding the housing craze right now is the panic over higher interest rates. With the rumor that rates have bottomed out and will be heading higher in the next few months, there is this rush to "get into" a house before rates rise. This is absolutely correct; interest rates are pretty steady right now but they will start to increase over the next few months. Higher interest rates mean a more expensive mortgage. Right now the interest rates are so low that homeowners are paying less than renters for more space and more freedom.

Logically why would anyone want to pay more to rent when you could save money by investing in something you own? Would you throw money away renting a car week-by-week when you could use that same amount of money to buy the car? And that’s an interesting concept because people will save up to buy the most expensive car but they won’t put that same amount of money towards a home investment. You know what they say about cars, “as soon as you leave the showroom floor it loses value.” But your home investment increases in value, especially when you buy low.

Let’s look at a real-world snapshot; although amounts will differ depending upon location;

• A renter will pay $1700 per month for a three-bedroom, 2.5 bath townhome; and that doesn’t include utilities

• A homeowner will pay $985 per month for that same townhome that includes property taxes and  homeowner HOA fees

• During tax season, the homeowner has tax write-offs because of their homeownership

• The renter has no homestead tax deductions

Basically, renters help owners build equity - you are helping the owner pursue their American Dream, while you really get very few benefits out of this deal (a roof over your head). All the money you put towards your rent could go towards your own American Dream.

The simple trick here is buying what you can afford and living comfortably while assuming all the advantages that are available for you.

Denton County and Dallas-Fortworth Real Estate Agent Patricia Young

 and the Integrity Team

Looking to buy or sell a home in the Dallas/Fort Worth areas?  Professional real estate agent Patricia Young specializes in helping buyers and sellers invest in real estate in Denton County and in surrounding neighborhood."This "client first" philosophy has always been her approach and it requires them to continually improve their skills and ways of doing business.So when you decide that you'd like to buy or sell a home in the Dallas/Fort Worth areas, please contact us.

The Fine Line Between Price And Value

Understand first of all that there IS a difference between price and value. Price is the amount you are asking for the property. Value is buyer perceived, and this perception of value is influenced by many factors such as location, features, condition, comparison to other purchase option, etc. By attending to details that can have a positive impact on the value, sellers can significantly increase their chance of attracting qualified buyers willing to pay the asking price.

Some tips to achieve a positive impact on value are:

• The perceived size impacts value, even more so than actual square footage. Open floor plans make a room feel bigger than larger spaces with smaller rooms. Showing property that is furniture free, or at reduced clutter, helps to make the space feel bigger.

• Vacancy increases sale-ability. Property is easier to show and easier to sell, and quicker to take possession of when it is vacant at the time it is offered for sale. Evidence of problems to take possession of the property -- such as encroachments, or tenants who won’t allow buyer tours -- negatively impact value. Vacancy also helps the buyer walk through the property imagining ownership. Sellers should remove personal trinkets and family pictures as well as being conveniently absent during a buyer tour.

Cosmetics are important:

Fresh paint will always add more value than it costs.

Clean or new carpet/flooring adds more value than it costs.

Landscaping adds more value than it costs. At the very minimum, make the entrance area neat.

If you can, add some colorful flowers and new sod.

Take care of the obvious! The spot on the ceiling from the roof leak takes thousands of dollars from the perceived value and the offer price.

Condition affects value. Do a seller's home inspection to identify and fix the problem BEFORE closing. No point holding up your check a few extra days; plus a failed buyer's inspection could cost you the sale. Buyers will often bargain down your asking price to accommodate for property condition and repairs.

If you can, remodel/update the kitchen and master bathroom. These two areas have a big impact on home buying decisions.

Strategic renovations impact value and your bottom line. Don't spend more money to renovate the place than you can recapture in value on the sales price.

Denton County and Dallas-Fortworth Real Estate Agent Patricia Young

 and the Integrity Team

Looking to buy or sell a home in the Dallas/Fort Worth areas?  Professional real estate agent Patricia Young specializes in helping buyers and sellers invest in real estate in Denton County and in surrounding neighborhood."This "client first" philosophy has always been her approach and it requires them to continually improve their skills and ways of doing business.So when you decide that you'd like to buy or sell a home in the Dallas/Fort Worth areas, please contact us.

Simple Living In A Mini Home

For a growing number of people today, simple is a whole lot better than your average 30 yr stretch of high mortgage payments.

Downsizing and living simple is taking place all around us. These micro homes are the next big thing in this saturated economic environment where everything that makes you save money is nothing less than great. There is nothing wrong in living in a home that is small but extremely cozy and fulfils all the functions of a normal house. Just how small depends upon how frugal you want to live.

What can a Micro House Give You!

These homes are about the size of 200 square feet. It might sound scary to think about living in such a compact but these homes are designed in such ways that along with being cozy, they provide enough space to provide a comfortable environment to relax and carry out all your routine chores. This fact can’t be neglected - you won’t be having a lot of free space to accommodate big furniture or let your kids to play freely, but if people will live in small houses, they will get more time to focus on living life freely instead of worrying about home.

In today’s world, people have become self-centered, more focused on what I have, rather than what I can afford or what I need. People have lost connections with the outside world and a small compact home with little upkeep makes you want to go out and take part in society.

Generally, a small home costs around $20,000 to $30,000 – Unbelievable! But there is always room for additions.

They Possess Equally Inspiring Designs and Architecture

These micro/mini homes can be divided and labeled in various terms. There are Wee homes that are just about the size of 125 square feet, but don’t be fooled by their size. Sometimes, these houses have architecture and design you can’t help but to fall in love with.

Then there are tiny tumbleweed houses, that can be comparatively larger in size and these houses are capable of fulfilling a lot of functions. They even can possess a home office, as they are available in varying sizes. And let’s not forget Sustain mini homes; designed keeping the green environment’s needs in mind. Along with being environmentally friendly, these homes have cute designs and impressive portability.

A friendly and interesting micro house type is Loftcube; this home doesn’t even require you to buy expensive land as it can be set on several roof top locations.

The micro/mini home isn’t just environment friendly, cheap and easy to attain, but their designs are amusing to the eyes and any one can fall in love with them and live life frugally and affordably.

Denton County and Dallas-Fortworth Real Estate Agent Patricia Young

 and the Integrity Team

Looking to buy or sell a home in the Dallas/Fort Worth areas?  Professional real estate agent Patricia Young specializes in helping buyers and sellers invest in real estate in Denton County and in surrounding neighborhood."This "client first" philosophy has always been her approach and it requires them to continually improve their skills and ways of doing business.So when you decide that you'd like to buy or sell a home in the Dallas/Fort Worth areas, please contact us.

First Time Home Buyer Tips

 

If you are currently in the market for your first home, you probably have lots of questions. You are about to be making an important decision for your future, a great investment of both money and time. I have a wealth of experience helping first time buyers like you make sound, informed decisions. Here are some tips that can help make your home buying process successful: · Tip #1: Do Your Homework The perfect home won't find you by itself. The key step in buying a home is doing the proper research. Educate yourself on local schools, neighborhoods, and the kinds of homes available. By reading available materials and talking with experts, you can start to put together your idea of the perfect home. · Tip #2: Start Planning Most decisions benefit greatly from proper planning, and home buying is certainly no exception. Start a filing system with sections such as home buying, home financing, and service providers. By forming a home buying plan you can more easily focus on the most important factors and help give structure to the entire process. My website is a great resource for property information. · Tip #3: Get PreQualified     Getting prequalified for a loan normally only requires a short phone conversation with a lender, and can greatly help your home search. Prequalification does not guarantee you a loan, but it does provide you with an estimated monthly payment and a price range to use as a guide when shopping for homes. Being prequalified can also often indicate to sellers that you are a serious, prepared buyer. · Tip #4: Look for Value     When shopping for homes, it's important to consider potential value. Even if you're not planning to sell the home some time down the line, it's a good idea to consider the future value of the home. Protect yourself against things like falling prices and gradual shifts in the nature of the neighborhood. You may not think of a new home as a means to make money, but it's an important investment that requires caution. · Tip #5: Decide What You're Looking For      Settle on the home features that are important to you (covered parking, hardwood floors, architectural style, etc.) and make an ordered list. Having well established guidelines will help narrow down your search and will prevent you from being shown properties that lack your key amenities. It can help you make the decision not to buy an attractive property that doesn't really fit your needs. My website has a search feature that allows you to filter thousands of listings based on attributes that you select. If you know you want a brick house with gas heat and a garage, you can get the results you're looking for. · Tip #6: Relax      You don't have to make an offer on the first home you see. Make sure to look at other listings in the area to get a feel for the marketplace. When you decide to make an offer on a house, consult with your real estate professional so that all of your questions are answered. · Tip #7: Shop Around for Your Mortgage   Deciding on the financing for your home can be as important as choosing a home itself. The first step is deciding what kind of loan best fits you: a fixed rate mortgage, or an Adjustable Rate Mortgage (ARM). There are benefits to each form of loan, and your real estate professional can provide you with more information. Next you'll want to begin to shop around for different lenders. · Tip #8: Protect Yourself      Be careful when signing a contract on a home that allows you to find financing, have the home inspected, and work through any problem areas that may arise. Paying for a quality home inspection is absolutely crucial! You can save yourself thousands in repair costs by being sure of what you're getting into. More information for first time buyers can be found on my website, or by giving me a call. I'm confident that I can provide the kind of exceptional service that will make this process an exciting one. Don't hesitate to contact me with any questions you may have, I would love to be of assistance to you.

Denton County and Dallas-Fortworth Real Estate Agent Patricia Young

 and the Integrity Team

Looking to buy or sell a home in the Dallas/Fort Worth areas?  Professional real estate agent Patricia Young specializes in helping buyers and sellers invest in real estate in Denton County and in surrounding neighborhood."This "client first" philosophy has always been her approach and it requires them to continually improve their skills and ways of doing business.So when you decide that you'd like to buy or sell a home in the Dallas/Fort Worth areas, please contact us.

Fixed Rate Mortgage

A fixed rate mortgage is one of the most common types of home loan in the USA. It’s very easy to understand and set up and helps people know exactly what type of commitment they are making financially.

It has one main benefit over all other types of loan. 

Stability. No matter what happens with fluctuating interest rates, you are guaranteed the same payment each month for the entire term of your loan.

This really helps give people peace of mind because they don’t have to wonder if their next loan payment will be higher than the previous one.

Some people are very meticulous when it comes to bills and don’t want to feel like they are gambling on the real estate market.

This is what helps make a fixed rate mortgage so appealing. The payments don’t change so you have a much better chance of being able to save up money for home repairs, vacations, and new purchases.

This loan is also good for people who have to travel a lot. Knowing your payment will be the same when you get back from a far away place can really help your state of mind.

Most lenders who will give you a fixed rate mortgage will give you the option to pay off some of the principal early without any penalties.

This can be a great way to lower your overall amount of payments or decrease the monthly payments. The interest you pay all depends on the real estate market when you get that loan.

It can help to talk to a real estate agent who can recommend if you should buy now or wait for a more suitable time.

Denton County and Dallas-Fortworth Real Estate Agent Patricia Young

 and the Integrity Team

Looking to buy or sell a home in the Dallas/Fort Worth areas?  Professional real estate agent Patricia Young specializes in helping buyers and sellers invest in real estate in Denton County and in surrounding neighborhood."This "client first" philosophy has always been her approach and it requires them to continually improve their skills and ways of doing business.So when you decide that you'd like to buy or sell a home in the Dallas/Fort Worth areas, please contact us.

Adjustable Rate Mortgage

Another common type of home loan is the adjustable rate mortgage or ARM. With this type of loan, the interest rate will fluctuate depending on the 6 different real estate indexes.

The interest rate changes so the lender of the loan gets a proper margin. That’s due to the fact that the indexes influence the cost of funding that loan in the first place.

Basically, your lender lets you take on a little bit of the interest risk instead of just the lender like in a fixed rate loan. This type of loan can be great if the interest on your home loan consistently falls for a long time.

You don’t have to worry that much about the interest rates because even if they jump drastically, there are limits on how much your payments will increase.

These limits are called caps and mean that no matter the size of the interest jump, you won’t pay more than a certain increase in a certain time period.

As an example, let’s say a lender gives you an adjustable rate mortgage. It has a 1 percent cap for any 6 month time frame and a 4 percent total cap for the entire loan.

Your payments can increase as much as 4 percent at the maximum until the loan is paid off. That’s not too shabby if you consider when interest drastically drops, you save a ton of money.

Every area in the country has different interest rates so you should read up on it before you opt to go with an adjustable rate mortgage.

Local newspapers usually include interest rates and predictions so that is a great place to go to keep an eye on things.

Denton County and Dallas-Fortworth Real Estate Agent Patricia Young

 and the Integrity Team

Looking to buy or sell a home in the Dallas/Fort Worth areas?  Professional real estate agent Patricia Young specializes in helping buyers and sellers invest in real estate in Denton County and in surrounding neighborhood."This "client first" philosophy has always been her approach and it requires them to continually improve their skills and ways of doing business.So when you decide that you'd like to buy or sell a home in the Dallas/Fort Worth areas, please contact us.