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Learn about the benefits of owning a home. Home Buying for the First Time: #2 in the series Here are a few quick tips and a bit of information to get started in the process of finding that right home: You have already worked on the first section of this series, so now it is time to go to the next piece in helping you find the right home. 1. You know what you can afford now so let’s find you some homes in your price range. Email me to get the process going, but before you do, let’s get the criteria right. This is the time to sit down with you family and discuss those things that are absolutely necessary and what would be nice to have. A. What do you need? Things to consider are: · How many bedrooms do you need? · Where do you want to live? How far do you want to be from your job? · How many bathrooms do you need? · What kind of home are you looking for, is a manufactured home okay? Do you need a one-level home or will a multi-level home be just fine? · Are you looking for a single-family residence or considering a condo? Do you need property? · Do you need a garage, outbuilding, or shop building? · How about a fenced in yard or other special feature? Are you willing to do the work or have it done? If you are, then put it in the want column. B. What do you want? Property features you might want in a home are: · Sometimes the preferences in the first list are not needs, but instead wants. Get that first column to the bare facts. What you absolutely, without question, must have? Next list those wants, features you can live without, but sure would like to find if you could. I will try my best to help you find a home that fits both columns, but ultimately the home is your choice. · Features you would like to have may include a soaker tub, family room, walk-in closet, or a particular neighborhood. Do you absolutely need these items? If you do, put them in your needs column. Remember I need to know your full dream, from the amount you can afford to what you need, what you want, and what you prefer to not be a part of your home and lifestyle. Make your email to me as concise as you can, but remember that I may not be able to completely filter all your desires in my search. I will make sure our search is as comprehensible as possible and don’t forget to add me to your trusted email list or they may go right into your bulk bin.
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Are you buying your first home or property? You might consider buying a home with an FHA home mortgage. You will have to qualify, but FHA could loan you up to 97% of your home purchase. I have contacts for a couple of lenders that can help you see if this is your right choice. Contact information is listed on my website: http://www.brendaknowstillamook.com/ or you can email me at tillamookrealestate@yahoo.com for more information. FHA loan limits have recently been increased. Below you will find the increases for Tillamook County and a link to FHA loans from HUD. Tillamook County Oregon One-Family $343,750 Two-Family $440,050 Three-Family $531,900 Four-Family $661,050 To read more about FHA loans (click here) For more on Mortgage Limits Increase (click here)
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Here are a few quick tips and a bit of information to get started in the process: As a rule of thumb, you should start with looking at how much money you make each year. You can multiply that number by three and this amount should be what you can afford in a new home, give or take a little bit. For instance, if you make $100,000.00 per year, you should be able to afford a home worth $300,000.00. Your next important step involves working with a reputable lender for a pre-approval. A discussion with a lender may show that you have some issues to overcome prior to beginning your hunt for a new home in earnest.
Listed below are some possible considerations to help you increase your buying power: - How is your credit? Do you have any unpaid bills, medical expenses, judgments, or liens against you? Clean this up first, making sure that the company you owe and pay reflect this toward your credit report. Don’t forget you can get a free copy of your credit report from the major credit services once per year and any time that you are denied credit. Another thing to look at when thinking of your credit is do you even have any at all. Have you bought anything on credit at all? Using credit and paying it off will show that you are a good risk.
- Now what about those fixed expenses? I am talking here about car payments, credit cards, lines of credit, insurance payments, boats, RVs, ATVs, and other sports vehicles. Do you pay more than what you need? Is it time to sell something to get one of those credit cards down to a zero balance? How many toys, cars, and the like do you have that have monthly payments on them? There is nothing wrong in selling your more expensive car now in order to purchase a less expensive one that you will not have payments on. Do you have more insurance than you need? Have you shopped around for insurance companies, making sure you are paying what you should and getting what you need? If you have credit cards and lines of credit, you can do something about those. You may consider lowering the amount you can borrow and paying them all down to at least less than 50% on the owed amount less than your card’s maximums. Lower your debt as much as you can to get the best home you can afford.
Please keep in mind that I am not a professional lender and am giving you my opinions on getting you prepared to search, find, and purchase that first home – or any home.
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Be careful not to negotiate against yourself. This may sound like a strange sentence, but really it’s a caution about pre-approval letters. You already know that it is in your best interest to talk to a lender before looking at homes so that you can know what you can afford. A pre-qualification letter is not worth the paper it is written on. As discussed in earlier TIPS, you want a pre-approval letter, based on the home appraising at the price negotiated. Your pre-approval letter should match the amount you are offering for the home. This should be less than what your approval qualifies you. For instance if you are looking at a home priced at $425,000.00 and your pre-approval letter says that you qualify for a loan for $450,000.00, but you are offering $410,000.00, your pre-approval just negotiated you to pay the price the home is listed. A savvy listing agent will take note of this and tell the seller to negotiate a higher price. The pre-approval letter should instead state that you are pre-approved for $410,000.00 – the amount you have offered. This puts you in a position nearly as strong as a solid cash offer. The listing agent will often suggest the seller take your solid offer with little or no negotiating of price. Remember you still will have some conditions about the home that will need to be met, such as septic approval, home inspections, and other negotiations. Only after you have established your buying power will you be ready to really look at homes in your price range and know what is your range. Now that you are ready to look at some homes and make an offer, drop me an email or give me a call. Let’s get started.
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With all of the mortgage problems that have been occuring, many would be home owners are looking towards getting out of the rent rat race and owning their own home. If you don't have much money to get started with, I have some possible options for you. Please keep in mind that I have not used any of these programs myself, so you will need to do your due diligence to find the program that will work for you. Here are the grant and gift places that I have been looking into: Section 8 Housing Choice Voucher program  Other possible avenues for assistance: Newsong Down Payment Assistance Program Access Loans
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The Section 203(k) program is the Department's primary program for the rehabilitation and repair of single family properties. As such, it is an important tool for community and neighborhood revitalization and for expanding homeownership opportunities. Since these are the primary goals of HUD, the Department believes that Section 203(k) is an important program and we intend to continue to strongly support the program and the lenders that participate in it. Many lenders have successfully used the Section 203(k) program in partnership with state and local housing agencies and nonprofit organizations to rehabilitate properties. These lenders, along with state and local government agencies, have found ways to combine Section 203(k) with other financial resources, such as HUD's HOME, HOPE, and Community Development Block Grant Programs, to assist borrowers. Several state housing finance agencies have designed programs, specifically for use with Section 203(k) and some lenders have also used the expertise of local housing agencies and nonprofit organizations to help manage the rehabilitation processing. The Department also believes that the Section 203(k) program is an excellent means for lenders to demonstrate their commitment to lending in lower income communities and to help meet their responsibilities under the Community Reinvestment Act (CRA). HUD is committed to increasing homeownership opportunities for families in these communities and Section 203(k) is an excellent product for use with CRA-type lending programs. 203(k) - How It Is Different Most mortgage financing plans provide only permanent financing. That is, the lender will not usually close the loan and release the mortgage proceeds unless the condition and value of the property provide adequate loan security. When rehabilitation is involved, this means that a lender typically requires the improvements to be finished before a long-term mortgage is made. When a homebuyer wants to purchase a house in need of repair or modernization, the homebuyer usually has to obtain financing first to purchase the dwelling; additional financing to do the rehabilitation construction; and a permanent mortgage when the work is completed to pay off the interim loans with a permanent mortgage. Often the interim financing (the acquisition and construction loans) involves relatively high interest rates and short amortization periods. The Section 203(k) program was designed to address this situation. The borrower can get just one mortgage loan, at a long-term fixed (or adjustable) rate, to finance both the acquisition and the rehabilitation of the property. To provide funds for the rehabilitation, the mortgage amount is based on the projected value of the property with the work completed, taking into account the cost of the work. To minimize the risk to the mortgage lender, the mortgage loan (the maximum allowable amount) is eligible for endorsement by HUD as soon as the mortgage proceeds are disbursed and a rehabilitation escrow account is established. At this point the lender has a fully-insured mortgage loan. Eligible Property To be eligible, the property must be a one- to four-family dwelling that has been completed for at least one year. The number of units on the site must be acceptable according to the provisions of local zoning requirements. All newly constructed units must be attached to the existing dwelling. Cooperative units are not eligible. Homes that have been demolished, or will be razed as part of the rehabilitation work, are eligible provided some of the existing foundation system remains in place. In addition to typical home rehabilitation projects, this program can be used to convert a one-family dwelling to a two-, three-, or four-family dwelling. An existing multi-unit dwelling could be decreased to a one- to four-family unit. An existing house (or modular unit) on another site can be moved onto the mortgaged property; however, release of loan proceeds for the existing structure on the non-mortgaged property is not allowed until the new foundation has been properly inspected and the dwelling has been properly placed and secured to the new foundation. One program specific to Oregon that should be looked at is the Community Development Block Grant (CDBG) Program Community Development Block Grant (CDBG) funds are the mainstay of the United States Department of Housing and Urban Development (HUD) community and economic development programs. Oregon Housing and Community Services (OHCS) receives CDBG funding to provide housing rehabilitation in rural Oregon. Rural Oregon cities and counties may apply for CDBG housing rehabilitation funds which are awarded on a competitive basis. All funds are distributed as grants to non-entitlement cities and counties following an annual application process. Ask your lender if they know of these programs and have used them successfully in the past. If they have little or no knowledge about these programs, please contact me and I will help you find a lender that does.
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Tip of the month for May : BUYING POWER: Want to be able to purchase the right listing when it comes on the market? The secret is to get pre-approval ahead of time. This single step increases your buying power and gets you focused on the right properties. It also saves time, energy, and money. SELLING POWER: When selling your home, you want to make your home stand out from the pack. One way to do this is to have your home inspected by a licensed home inspector and to fix any problems that he or she finds. This step shows that your home is a quality home and saves you money in the long run. Often buyers will try to have you give them as much as three times the cost to fix any problems that are found on their home inspections. If you can show that this problem or that problem was found and repaired by a licensed contractor, you don’t have to waste time, effort, and funds later negotiating and waiting for repairs to be completed.
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Perhaps you heard about it in the news. Banks are getting tighter about lending money. This is all related to subprime lending and predatory lenders. Watch out for the rip off artist. They are still out there. A client of mine recently purchased a home. This client will be making her first payment in a week or two. That's how recently she purchased her home. Already she has received a mailing that sounded to good to be true. This lender sent her a letter that at first she thought looked like it might be from her lender. It told her how they can save her a lot of money. Fortunately she was smart and called her mortgage banker who showed her the flaws in this plan that this lender had sent her and showed her that the lender in question was not her lender, just pretending to be. In my junk mail and sometimes in my in-box, I receive many offers to purchase my mortgage. These letters in my email are immediately trashed. That is what I urge you to do. Stay away from dot com lenders. Stay away from many of the mortgage brokers out there and look instead for mortgage bankers or real banks that you can visit in person. Mortgage Bankers differ from mortgage brokers in one major way. There is no middle man or woman between the Mortgage Banker and the funding source. It is the same with banks. Mortgage Bankers and Bankers will not usually direct you to adjustable rate mortgages or loans that will strangle you. Another great tip when looking to purchase property is to pull your credit yourself from the three major credit bureaus - make sure to order your credit score at the same time. It costs a few bucks, but it's worth it. You find out what your credit looks like and if you have problems. If you do in fact have problems, take care of those before considering to buy property. You want your credit to be the best it can. If you do not do this vital step - you will likely pay a lot more for your interest rate. On this same note, checking your credit and your credit score prior to applying for a mortgage allows you to talk to the lender without having them run your credit first. The more your credit is ran by lenders the lower your score becomes. Remember you want the highest score you can get. Do not damage that number by having your credit checked unnecessarily. I had one client that went to a particular mortgage broker. In their infinite wisdom, they decided to ask all of their lenders to take a look at the credit report. Rather than ordering one credit report and sending a copy of the report to each lender, this mortgage broker ordered a credit report for each of the lenders they work with. In all there were over 50 credit reports ordered in a two week span of time. My client could not get a loan because her report had been ran so many times. She had to wait two years for the dust to settle. I am happy to report that she subsequently went to the mortgage banker I recommended and got her loan without any hassle. Another piece of advice: You are wanting to purchase the property of your dreams. An offer has been written and accepted. Great news. You have been pre-approved for the loan. Wonderful. You decide that you are going to need new furniture for your new home, so before the sale closes you purchase several items on credit. Oops, you should not have done that. The lender orders a second report to finalize approval and you have new debt. Suddenly you find that you are no longer qualified for that loan. You lose your dream house. Don't let this happen to you.
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While most of the rest of the country has slowed some, I have discovered the my coastal market is still quite hot. Buyers are looking more toward affordable housing. Property and homes are both doing well. We do seem to have a few more listings this time of year this year versus last year. If you are looking for a home on the North Oregon Coast, this is a great time to purchase. With more to choose from and decent interest rates you should do well. Prices are pretty similar to last year at this time. If you are interested in selling a home or property on the North Oregon Coast, this is a great time for that as well. Buyer's are looking at and purchasing property. Understand that the right home at the right price in the right location are the right combination. Some homes may sit on the market a while. Others just fly off the shelf. Recently I listed a property in Netarts. I didn't even get a chance to advertise it as fully as I like and had four offers within a week. So if you are ready........So am I.
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Regarding an article written in Money Magazine"Is your realtor on your side?Make sure your agent gets you the best house at the best price.
By Stephen Gandel, Money Magazine senior writer"
My opinion of this article is as follows:
If you have read this article, it may have made you worry that your REALTOR(r) is not working towards your best interests. At best this article is irresponsible, at worst it's the home buyer's worst nightmare.
He doesn't seem to realize that the REALTOR(r) is there to help make the buying process easier and to support the buyer with his or her knowledge base. Does he really think that a buyer should go it alone without someone to watch out for them?.
Typically the seller pays all commission costs, unless other arrangements are made.
Sometimes the seller or the seller's Broker will offer the selling Broker a bonus, but I don't care if there is a bonus. I am here to help you, the buyer find a home in your price range that fits your needs and to watch out for you, my client. I am here to help you negotiate the best price.
We do have a code of ethics to live by and If a REALTOR(r) is failing in the ethics department, he or she should be reported. Licensees get fined, suspended, licenses revoked, and/or can face jail time or other civil penalties, soon this person is no longer doing business.
There are bad apples in this industry, just as there are in any other industry or group of people, but to suggest that one search and purchase a home on their own without someone to care for them and be diligent, is purely wrong. We work extremely hard for our money and must be diligent and trustworthy for and to our client.
Often we put in 60-80 hours per week and most transactions take 6 weeks or more to close. Although we don't spend all of the days, every day working on your transaction, we are behind the scenes making sure that everything goes well and catching potential problems so that they can be nipped in the bud..
We are held accountable for our actions. We must take classes to earn and keep our licenses. Running our own business is expensive. Everywhere we turn someone is nickeling and diming us. Running ads for one home on the market costs a minimum of $100.00 each month. We also have to pay to work for our company by either desk fees or commission splits. Does he think we work for free? Do you get paid? Does he?
It's bad advice on his part to suggest that the home buyer go it alone. Did you see the episode of "Home Inspectors" Sunday morning? It was so sad, in my opinion it's likely that this new home buyer couple bought the home from a For Sale By Owner, at a good price. Or was it a good price?
They really paid the price for lack of a home inspection, as they bought the home without any contingencies, including an inspection, hoping that the seller would find their offer to be the best. It turns out that it was the best offer, but this costly mistake of not having someone watching out for them ended up costing them, with the mold and the slide issue, up to about $16,000.00. They were lucky is wasn't more.
If they used an REALTOR(r), this transaction should be investigated. If their REALTOR(r) thoroughly explained to them the benefits of due diligence and they ignored that REALTORS(r) advice, then it is their own fault. Personally, I would rather walk away from this type of transaction, than allow them to continue without a home inspection, unless the inspection is a moot point, ie. removing an old mobile home from the property in order to build a new home on the site: inspection not necessary in this case. Diligence still necessary. Ethics sitill necessary.
If they would have had someone reliable watching over them, it would have cost only about $400.00 for a home inspection. Their REALTOR(r) would have negotiated repairs with and for them.
$16,000.00 vs. $400.00 - Hmm?
This type of thing occurs often when someone who doesn't know what they are doing listens to people like this reporter, who seems to have gotten burned by a bad apple, and ends up causing his or her own worst nightmare.
If we cause the nightmare, we are held accountable.
Go it alone? Not smart. Would you pull your own teeth? Do your own heart surgery? Be your own Attorney? Or would you look for a professional to help you?
I am on your side. I work on a commission only basis, with your referrals as a guide to how well I am doing.
Your referrals say to me "Thank you, you did a great job for me and I appreciate it."
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Buyers: Why not just buy that for sale by owner home now? You’ve been looking for property or a home. You’ve been working with a Realtor® in your search and she has sent you property after property that have been close, but just aren't quite your dream. Finally on “the list”, in the newspaper or somewhere similar, you find that "for sale by owner home" that seems just right and it’s at the right price, too. So you ask yourself, “Why shouldn’t I just purchase this home or property? – Do I really need to use a Realtor's® service?” and start thinking about the offer you are going to make, by yourself. Well, stop right there. Although this home looks like it's just the right home for you, unless you’ve been through the buying and selling process often, do you really know what you’re getting yourself into? Your Realtor® is trained to know the ins and outs of Real Estate. Perhaps an attorney could help instead, but whatever you do, please don’t do it by yourself. Use the knowledge for which Realtors® like me have been trained and get that help you deserve. We spend many hours and dollars each year in classes, getting our licenses, renewing our licenses, keeping our licenses, researching property, and many other fundamentals for you - the client. We are always in contact with escrow agents, mortgage bankers, and our local government. Do you know the area in which you are purchasing this property? Do you know what the geo hazards are in the area? Your savvy Realtor® should be doing the preliminary leg-work for you, researching for you and helping you contact the right person with whom to talk. What she doesn’t know, she’ll find out or help you discover. Do you know the closing process? Do you know the questions that should be asked? Your savvy Realtor® does and again, what she doesn’t, she can find out and get you together with the right person or government agency with whom to talk.
Please, please don’t make the mistake of purchasing a home without a Realtor® knowledgeable about the area, someone that has your back. Purchasing property is a big endeavor; savvy buyers utilize the help available.
Knowledge is power, be powerful when you look for a home. You may not regret that home ever, but you may when it's time to sell it.
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