Understanding Home Buying: The Mortgage Process

Published on Jan 27, 2015

The main steps of purchasing a home are actually very simple. First, you want to get a preapproval letter from your mortgage company so you know how much you qualify for. The next step is finding the right real estate agent who can lead you to the home that aligns with all your goals. After finding your perfect home, you’ll be ready to make an offer on the house. Once that offer is accepted, a purchase agreement is drafted and signed by both the buyer and seller. Now that everything is signed and turned into your lender, the underwriting process begins. To avoid any mistakes during the underwriting process, be sure to have all the proper documentation (e.g. tax returns, pay stubs, w-2s, and bank statements) verified. For more tips and advice on buying your first home make sure you visit our website at http://www.QuickenLoans.com/Blog

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Understanding Home Appraisal Adjustments | Quicken Loans Education


Published on Aug 26, 2016
Appraisal adjustments are one method home appraisers use to help determine the fair market value of your home. An appraisal adjustment is the process of identifying recently sold homes in your area and then estimating what those homes would have sold for if they had all the same characteristics as your home. To learn more about real estate mortgage appraisals, visit
https://www.quickenloans.com/appraisal-process

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6 Easy Things You Can Do to Make Your Home Purchase Smoother

Buying a home can be an emotional, time-consuming, and complex process. There are a few things that you can do to help make the process go as smooth as possible:

1.) Check your credit. Before you apply for a home loan, regardless of your credit, it’s a smart idea to obtain a copy of your credit report from the three major credit bureaus and review the information. If there are errors or things that need to be addressed, it’s easier to address them before you have found a house, than after you have found a house and are trying to close your loan.

If you know that there are a few blemishes on your credit, let your lender know what they are, why they are there, and why you are a still good credit risk. Lenders look at your credit to determine how likely you will pay back the loan. If you had extenuating circumstances – like a loss of a job or medical bills – let them know so that they understand that it is not likely to happen again in the future.

2.) Get approved before you buy. An approval means that a lender has reviewed your credit history, verified your assets and employment, and has approved your loan before you have found a home to purchase. As long as the home appraises for at least the purchase price, the loan should close.

Getting approved also gives you an advantage over other buyers. Your firm approval makes it easier for you to negotiate on the price of a home, than a person who is not approved or is pre-qualified.

While getting pre-qualified may sound official, it is really just getting an idea of what you can afford. Its having a person plug in a few numbers that you give them – your monthly income and your monthly debt – and getting an approximate payment calculated. From the payment, the calculator can approximate the house price range that you can afford. No information is verified. Because your assets, income or credit is not verified, a prequalification has little value when purchasing a home.

3.) Find a great exclusive buyer’s agent. Traditionally real estate agents represent the sellers in a transaction. When you are not working with a buyer’s agent, they are less likely to negotiate the best price or contingencies for you.

A buyer’s agent’s job and fiduciary responsibility (meaning legal duty) is to you, the buyer. Before working with an agent, establish if they are a buyer’s agent or a seller‘s agent. After spending a lot of time with a Realtor, it’s natural to feel like you’re a team. But if they are not negotiating for you, then they are not on your team.

4.) Learn about the neighborhood. Often times the house you find may be in a neighborhood that you’re not familiar with, which is ok. It just means that you’ll have to do a little more research. If you find a house that you like, ask for a list of the neighborhood properties that sold in the last year. How does your home rank? Is it at the top of the price range? If so, it might be hard to resell. Is it average or on the low end? If so, great – as the other home prices go up in value, they will pull your home’s value up as well.

Check out the schools – are they sought after? A good school district means your neighborhood will always be valued by families which is a great reassurance to purchase, not to mention the value-add if you have school-age children.

Next, contact the police station and obtain crime statistics? Are they acceptable to you? Sometimes, if they won’t give them to you, it could be a cause for alarm.

Talk to the neighbors. The more people you talk to, the better sense you will get of who makes up the neighborhood and how they will effect your time spent in it.

Check out the location of the shopping, police and fire stations, schools, and air traffic overhead. These are all things that might affect your property value or quality of your life.

5.) Protect Yourself. Ask your Realtor for a copy of the documents you will be asked to sign if you decide to buy the house. Read them ahead of time so that you’ll understand the questions that you will be asked, the things you need to know, and the decisions you will need to make.

6.) Have reasonable expectations. There is a lot of money at stake. No house is perfect. Understanding and remembering these two statements will help diffuse the negotiation stage, the inspection stage and the closing stage.

Emotions are high for both buyers and sellers. – The seller may have loving memories and years of sweat equity in the house. Maybe they are being relocated and don’t want to go. Understanding their motivations for selling will help you appreciate their situation and predicament during these emotional times.

There is a lot of money at stake for all the parties involved (and that includes the realtors) – Just remember that market value (the value of a home) is the price that a willing buyer and a willing seller can agree to. If you can not agree on a price, ask yourself: Is there something you missed? Are there comparables that support the price that they want? Are there motivations that might factor into the price they are demanding? In the end, does it matter?

What is the house worth to you today and what do you think you can reasonably sell it for based on the amount of time you plan to spend in it? Think about the answers to those questions before you make your move.

No house is perfect – Always get an inspection. It might be a few hundred dollars, but it’s worth it. It’s the inspector’s job to find any problems with the house that could cost you thousands to repair down the road. Some inspectors have a tendency to over play the importance of their role and the items that they find. Get objective opinions that you trust before making a decision on an inspection report. Likewise, if an inspector says a foundation is cracked but its nothing to worry about – get a second opinion. Ask a handyman for an idea of how much repairs will cost and how complicated they are. The home buying process is an emotional, complex and time-consuming process, but it is worth it. Nothing compares to owning your own home in a neighborhood that you chose.

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Common Selling Mistakes

MISTAKE #1 — PLACING THE WRONG PRICE ON YOUR PROPERTY

Every seller obviously wants to get the most money for his or her product. Ironically, the best way to do this is NOT to list your product at an excessively high price! A high listing price will cause some prospective buyers to lose interest before even seeing your property. Also, it may lead other buyers to expect more than what you have to offer. As a result, overpriced properties tend to take an unusually long time to sell, and they end up being sold at a lower price.

MISTAKE #2 — MISTAKING RE-FINANCE APPRAISALS FOR THE MARKET VALUE

Unfortunately, a re-finance appraisal may have been stated at an untruthfully high price. Often, lenders estimate the value of your property to be higher than it actually is in order to encourage re-financing. The market value of your home could actually be lower. Your best bet is to ask your realtor for the most recent information regarding property sales in your community. This will give you an up-to-date and factually accurate estimate of your property value.

MISTAKE #3 — FAILING TO “SHOWCASE”

In spite of how frequently this mistake is addressed and how simple it is to avoid, its prevalence is still widespread. When attempting to sell your home to prospective buyers, do not forget to make your home look as pleasant as possible. Make necessary repairs. Clean. Make sure everything functions and looks presentable. A poorly kept home in need of repairs will surely lower the selling price of your property and will even turn away some buyers.

MISTAKE #4 – TRYING TO “HARD SELL” WHILE SHOWING

Buying a house is always an emotional and difficult decision. As a result, you should try to allow prospective buyers to comfortably examine your property. Don’t try haggling or forcefully selling. Instead, be friendly and hospitable. A good idea would be to point out any subtle amenities and be receptive to questions.

MISTAKE #5 – TRYING TO SELL TO LOOKERS

A prospective buyer who shows interest because of a “for sale” sign he saw may not really be interested in your property. Often buyers who do not come through a realtor are a good 6-9 months away from buying, and they are more interested in seeing what is out there than in actually making a purchase. They may still have to sell their house, or may not be able to afford a house yet. They may still even be unsure as to whether or not they want to relocate. Your realtor should be able to distinguish realistic potential buyers from mere lookers. Realtors should usually find out a prospective buyer’s savings, credit rating, and purchasing power in general. If your realtor fails to find out this pertinent information, you should do some investigating and questioning on your own. This will help you avoid wasting valuable time marketing towards the wrong people. If you have to do this work yourself, consider finding a new realtor.

MISTAKE #6 — BEING IGNORANT OF YOUR RIGHTS & RESPONSIBILITIES

It is extremely important that you are well-informed of the details in your real estate contract. Real estate contracts are legally binding documents, and they can often be complex and confusing. Not being aware of the terms in your contract could cost you thousands for repairs and inspections. Know what your are responsible for before signing the contract. Can the property be sold “as is”? How will deed restrictions and local zoning laws affect your transaction? Not knowing the answers to these kind of questions could end up costing you a considerable amount of money.

MISTAKE #7 – SIGNING A CONTRACT WITH NO ESCAPE

Hopefully you will have taken the time to choose the best realtor for you. But sometimes, as we all know, circumstances change. Perhaps you misjudged your realtor, or perhaps the realtor has other priorities on his or her mind. In any case, you should have the right to fire your agent. Also, you should have the right to select another agent of your choosing. Many real estate companies will simply replace an agent with another one, without consulting you. Be sure to have control over your situation before signing a real estate contract.

MISTAKE #8 – LIMITING THE MARKETING AND ADVERTISING OF THE PROPERTY

There are two obvious marketing tools that nearly every seller uses: open houses and classified ads. Unfortunately, these two tools are rather ineffective. Less than 1% of homes are sold at open houses, and less than 3% are sold because of classified ads. In fact, realtors often use open houses to attract future prospects, not to sell the house. Your realtor should employ a wide variety of marketing techniques. Your realtor should also be committed to selling your property; he or she should be available for every phone call from a prospective buyer. Most calls are received, and open houses are scheduled, during business hours, so make sure that your realtor is working on selling your home during these hours. Chances are that you have a job, too, so you may not be able to get in touch will many potential buyers.

MISTAKE #9 – CHOOSING THE WRONG REALTOR®

Selling your home could be the most important financial transaction in your lifetime. As a result, it is extremely important that you select the realtor that is best for you. Experienced real estate agents often cost as much as brand new agents. Chances are that the experienced agent will be able to bring you a higher price in less time and with fewer hassles. Take your time when selecting a real estate agent. Interview several agents; ask them key questions. If you want to make your selling experience the best it can be, it is crucial that you select the best agent for you.

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9 Deadly Mistakes Homesellers Make

Some of our clients have to sell before they buy, here are 9 great tips to selling your home.

MISTAKE #1. USING A REAL ESTATE AGENT INSTEAD OF A REALTOR

When you’re looking for help buying or selling property, it’s important to remember that the terms “real estate agent” and “Realtor” are not synonymous. Realtors can provide an extra level of service and to be a Realtor you must be a member of the National Association of Realtors (NAR). The equivalent organization in Canada is the Canadian Real Estate Association (CREA). Both are non-profit trade organizations that promote real estate information, education and professional standards. The National Association of Realtors also has earned a strong reputation for actively championing private property rights and working to make home ownership affordable and accessible.

The NAR and CREA members adhere to a strict code of ethics founded on the principle of providing fair and honest service to all consumers. Realtor business practices are monitored at local board levels.

Arbitration and disciplinary systems are in place to address complaints from the public or board members. This local oversight keeps Realtors directly accountable to the individual consumers they serve and therefore the consumer is more likely to find better service and accountability by using a Realtor.

MISTAKE #2. COMPLACENT MARKETING WHEN SELLING A HOME

When selling your home there are no guarantees that the ultimate buyer of your home will have simply walked through the front door. In many cases you may have to bring your home to the buyer. Effective marketing will help ensure that your property receives maximum exposure to attract a ready, willing and able buyer in the shortest period of time.

Ask your Realtor to list for you all of the ways he/she intends to market your home and on what time-line. Also, be sure to ask about the home being advertised on the Internet.

MISTAKE #3. TAKING FOR GRANTED THE “CURB APPEAL” OF YOUR HOME

When you’re preparing your house for sale, remember the importance of first impressions. A buyer’s first impression can make or break whether they even want to go inside for a look. It is estimated that more than half of all houses are sold before the buyers even get out of their cars.

With that in mind, be sure to stand outside of your home and take a realistic “fresh look” and then ask yourself what can be done to make the “curb appeal” improve. Also ask your Realtor’s opinion as to how to improve the curb appeal. It could make a huge difference in your final sales price.

MISTAKE #4. FORGETTING ABOUT HEALTH AND SAFETY ISSUES

Be upfront and disclose to your Realtor any problems with the property. The problems are going to be discovered anyway. A decade ago, health and safety issues were rarely a part of the typical real estate transaction. Today, however, it’s common for inspections relating to health, safety, and even environmental concerns to be a part of most sales contracts.

Moreover, in many states, the seller must disclosure to the buyer any knowledge of existing property problems. In many cases, these issues have been or can be factored into the home’s listing price.

MISTAKE #5. FORGETTING WHAT YOU WOULD WANT TO SEE IF YOU WERE THE BUYER OF YOUR HOME

Remember that although people can be different in personality, they tend to be the same when it comes to expectations at someone else’s expense. In other words, a prospective buyer would probably like to see a perfect home from top to bottom, inside and out, when it comes to your home. Try to do as many of the following items as possible to improve the likelihood of your home sale in an expedient way.

On the outside 1) Sweep front walkway. 2) Remove newspapers, bikes and toys. 3) Park extra cars away from the property. 4) Trim back the shrubs. 5) Apply fresh, clean paint throughout. 6) Clean windows and window coverings throughout.
7) Keep plumbing and all appliances in working order. 8) Maintain all sealant (window, tub, shower, sink, etc.) in good condition. 9) Make sure roof and gutters are clean and in good condition. 10) Mow the lawn frequently and plant flowers. 11) Keep pet areas clean.

On the inside 1) The kitchen and bathroom should shine. 2) Quick once-over with the vacuum; carpets should be clean. 3) Place fresh flowers in the main rooms. 4) Put dishes away, unless setting a formal display for decoration. 5) Make all beds and put all clothes away. 6) Open the drapes and turn on lights for a brighter feel. 7) Straighten closets. 8) Put toys away. 9) Turn off television. 10) Play soft music on the radio/stereo. 11) Keep pets out of the way and pet areas clean and odor-free. 12) Secure jewelry, cash, prescription medication and other valuables. 13) Enhance the spaciousness of each room.

MISTAKE #6. THINKING YOU NEED TO BE IN THE HOME TO EXPLAIN THINGS TO A PROSPECTIVE BUYER

You will be better served if you allow your Realtor to do their job without you there. Most potential buyers usually feel more comfortable if they can speak freely to the real estate professional without the owners being present.

If people unaccompanied by an agent request to see your property, you should refer them to your real estate professional for an appointment.

MISTAKE #7. NOT KNOWING HOW TO PRICE YOUR HOME TO SELL

Perhaps the most challenging aspect of selling a home is listing it at the correct price. It’s one of several areas where the assistance of a skilled real estate agent can more than pay for itself. Listing the home too high can be as bad as too low. If the listing price is too high, you’ll miss out on a percentage of buyers looking in the price range where your home should be.

This is the flaw in thinking that you’ll always have the opportunity to accept a lower offer. Chances are the offers won’t even come in, because the buyers who would be most interested in your home have been scared off by the price and aren’t even taking the time to look.

By the time the price is corrected, you’ve already lost exposure to a large group of potential buyers. The listing price becomes even trickier to set when prices are quickly rising or falling. It’s critical to be aware of where and how fast the market is moving – both when setting the price and when negotiating an offer. Again, an experienced, well-trained agent is always in touch with market trends – often even to a greater extent than appraisers, who typically focus on what a property is worth if sold as-is, right now.

MISTAKE #8. NOT PLANNING YOUR MOVE EARLIER ENOUGH

Many sellers simply don’t plan their move early enough and then feel totally overwhelmed at the time of moving out of the house. If you are able to move at any time of the year, don’t wait until summer, the peak-moving season.

Consider also that the first and last few days of the month are extra busy. If you plan to sell your house, get it on the market as soon as possible. Keep a record of all expenses related to the move, some of which may be tax deductible.

Fill out the Personal Household Inventory for each room. This is important for establishing the amount of declared valuation for the shipment and as a permanent inventory for insurance purposes. List, as nearly as possible, the year of purchase and original cost of each item. Attach any invoices or records of purchase to the completed inventory.

Prepare a separate high-value inventory if the shipment will contain articles of “extraordinary” value. The following list includes items that might fall into this category:

* Antiques * Art Collections * Cameras * China Collections * Computer Equipment * Crystal * Figurines * Firearms * Jewelry * Manuscripts * Oriental Rugs * Silver * Stones Or Gems * Tapestries * TVs Or Stereos

Also, unless you have been given a binding moving estimate where a firm cost is established in advance, the exact cost of a move cannot be determined until after the shipment has been loaded on the van and weighed.

The weight on which charges are based is calculated by weighing the van before and after loading. The total cost of the move will include transportation charges, any charges for declared valuation, plus charges for any extra services performed at your request.

All of these charges are based on tariff rate schedules.

MISTAKE #9. USING A “CONVENIENT” REALTOR RATHER THAN USING AN EXPERIENCED REALTOR

When working with a real estate agent, it’s critical that you have full confidence in that agent’s experience and education. A skilled, knowledgeable agent should be able to explain to you exactly why your home needs to be priced at a certain level – compared to recent listings and sales of homes similar to yours.

Experienced agents also know exactly what the current pool of buyers are looking for in relation to particular styles and price ranges of properties. A skilled agent can recommend changes that will enhance the salability of your home, thus increasing the price – and/or decreasing the length of time before a sale.

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National Assocation of Exclusive Buyer Agents

Learn How The National Association of Exclusive Buyer Agents Can Help Home Buyers

The National Association of Exclusive Buyer Agents (NAEBA) is an organization of real estate professionals who have dedicated their business lives to representing only buyers of real estate. We don’t list homes for sale and never represent sellers. This restriction to one side of the real estate transaction stands out as vitally important in light of what has happened in real estate in the last decade or so.

Since several states discarded the common law of agency in the mid-nineties, the real estate agent’s duties of obedience, undivided loyalty, confidentiality and reasonable care have been greatly diminished. More importantly, most consumers are not aware of agency concepts. The net effect all too often has been that real estate salespersons, and frequently affiliated loan officers, have pushed home buyers and speculative investors into inappropriate loans. This practice went largely unnoticed and unregulated, playing a major role in the mortgage and financial crises that began in August of 2007. It continues to plague us today.

Real estate agencies that represent both sellers and buyers, known in the industry as dual agency brokers, maximize their income but shortchange both buyer and seller clients. Though dual agency is legal in almost all states, the ethics of such representation is questionable even when the seller and buyer understand and consent.

Disclosing whom the real estate agent represents is an accepted standard. The timing of such disclosure varies by state in a patchwork of requirements by law or regulation. However, as Blanche Evans pointed out in a 2006 article in Realty Times, a study by the National Association of Realtors revealed that only 30% of homebuyers received a disclosure statement at the first meeting, 28% when the contract was written, 22% didn’t receive one at all and 20% were uncertain if they received one.

First time home buyers, as a group, fared worse with only 23% receiving disclosure at their first meeting.

When you purchase a home, whether it’s your first or fifth, you deserve an agent who is trained and dedicated to serving only you the Buyer. The NAEBA members continue to provide full agency duties of obedience, undivided loyalty, confidentiality, full disclosure, accounting and utmost care to their clients. I hope that when you buy your next home you will choose one of our members and benefit from 100% representation 100% of the time.

Sincerely,

Benjamin Clark, 2009 – 2010 NAEBA President

via National Assocation of Exclusive Buyer Agents.

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