5 Home Buying Tips: Buying Your First Home

Thought you learned all you needed to know from “Property Virgins” on HGTV? Here are a few things to consider as you begin to look for you first home.
1) How much you get off the list price does not equal how good of a deal you get. In order to see what really is a fair deal have your agent pull up recent sales from the neighborhood. Make sure to look at only sales from the last few months for homes that are similar in size and condition.
2) Hire the right real estate agent. Ask family and friends for references. You may be able to find an agent online, but that doesn’t mean they will know they area/price range that you are interested in. You want someone who is actively working in the field every day so you can get the best deal possible. For example, if you are interested in purchasing a foreclosure, make sure to ask how many foreclosures your agent has sold in the last year. You don’t want to be the test subject.
2) Shop interest rates. It can be very confusing as you begin your search for a home loan. Remember that rates change every day and the rates different lenders charge may vary as well. In addition, the costs each lender charges to close the loan will vary. You should get at least 2 or 3 quotes. Ask each lender for a “good faith estimate” which will give you a break down in costs so you can compare.
3) Bring your parents if they are going to have input. I see it happen all the time. A young couple will spend months going through homes and when they find the perfect home they bring mom and dad through…and they tear it apart. If they haven’t seen anything else in your price range it will be hard for them to know how other homes in the price range compare. Sure, your $100,000 house has a few cosmetic issues compared to their $250,000 house.
5) Have a home inspection. This is a must for any buyer. Make sure you hire a professional, not just your dad’s cousin’s friend who used to build houses. If you find a major problem, you will be glad to have spent a few hundred dollars up front versus having thousands of dollars of cost down the road. There are no licensing laws for home inspectors in Michigan, so make sure to ask if your inspector is FHA certified.

Lansing Real Estate: Buying a Foreclosure

There is a lot of talk out there about foreclosure property within Lansing real estate. On one side of the coin people are talking about how horrible foreclosures are. And they are. No doubt. But a savvy buyer can turn this crazy market into real opportunity if they are not afraid to get a little dirty. So what follows is some tips and advice from one Realtor who is on the foreclosure front lines to potential foreclosure buyers.
1) Sweat Equity- Basically this is a nice way of saying that the house is going to need some work. Certainly there is the rare exception, but the vast majority of homes have some “deferred maintenance issues” which is Realtor-speak for nobody has been taking care of the regular home maintenance for quite some time. Remember that the foreclosure process itself is quite lengthy and by the time the bank puts it on the market, it easily could have been sitting empty for a year or more. That is a year or more of no one taking care of the lawn, running the plumbing, etc.

2) Inspection, inspection, inspection – While you should ALWAYS do a home inspection when you purchase a property, it becomes even more important when purchasing a foreclosure property.  Don’t be suprised if the bank requires that you pay $100-200 to “dewinterize” the property for the home inspection.  Basically this just means that they will hire someone to come out and get the utilities on, which includes pressurizing the plumbing system.

3) Negotiating – Best to defer to your agent on this one.  It is true that you know the bank is going to sell the house, don’t automatically assume that they are asking too much for the house.  Just as often as I see overpriced homes I see properties selling with multiple offers on the property and the price actually gets bid up.  Have your agent pull up recent sales from the neighborhood to see what homes are actually selling for.

4) Hire an expert – Buying a foreclosure can be quite a road to navigate, so it is especially advisable to hire a real estate agent who has been selling foreclosure properties.  Remember you can hire a buyer’s agent at no cost to you since the bank has already agreed to pay the commission!

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How Much Should I Put Down For My First Home Down Payment?

As you begin your search for Lansing real estate, you may have heard in the news, the mortgage industry has been turned on its head in the last year or so.  Gone are the days of 100% financing (with few exceptions).  Gone are the “stated income” loans and we are getting back to basics.

As you think about your first home purchase, financing can be one of the most confusing topics.  For first time home buyers there are still lots of loan options available.  The lowest down payment loan out there is called an FHA mortgage.  This is a loan that is insured by the government, thus banks are willing to loan a larger percentage of the value of the property.  Currently with this type of mortgage you will need a 3.5% down payment.  With an FHA mortgage when you make your monthly payment every month you are actually paying for five separate expenses: principal, interest, property taxes, home owners insurance, and mortgage insurance.

In order to avoid the cost of mortgage insurance every month you can choose to put down a 20% downpayment.  This is called a conventional loan.

So for you first home, if you can swing it, it is best to put down 20%.  For most people, however, this is just not realistic and they opt for the more affordable 3.5% downpayment.

Photo Source: American Mortgage Relieft Services