5 Terms You Need to Know as a Homebuyer

If you’re a first-time homebuyer, you need to know these five terms before you begin the process.

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We’re back again for another episode of Keeping in Tune With the Market. Today we’re going to discuss the five terms that first-time homebuyers need to know before going to look at their first house to make sure they are fully prepared: 1. Pre-approval. What’s the difference between a pre-approval and a pre-qualification? A pre-qualification is pretty informal and can be done over the phone. It’s more of a first-step type of thing. A pre-approval, on the other hand, will get you pretty close to the finish line as far as your loan is concerned. It’s more of a concrete step that takes all of your financial information into account and lets you know exactly how much you can afford. 2. FHA mortgage. FHA stands for the Federal Housing Authority. This is a federally backed loan that only requires buyers to put down 3.5% for their down payment. With a conventional mortgage, you need 10% to 20% down. If you don’t have a lot of money or a lot of credit, it still allows you to lock in an interest rate and buy a home.

These are five good terms to start with.

3. Down payment. A down payment is the earnest money that a seller gets from a buyer when they sign the contract. There’s quite a range on how large a down payment can be. It could be as little as a few thousand dollars, or it could go up to 20% of the purchase price, depending on the type of mortgage you get. This money cannot be removed by the buyer or seller arbitrarily until the sale is closed. 4. Appraisal. Many people don’t really know what an appraisal actually is. An appraisal happens when an authorized appraiser from a third-party source comes out to value the property. They are doing this on the buyer’s behalf to make sure that their lender is taking a good risk for a bad risk. The value they come up with is determined by other comparable sales in the neighborhood as well as the condition and location of the home. 5. Closing costs. We’re almost at the finish line when these come into play. Closing costs can vary greatly, and they might be higher than you’re expecting. However, you can benefit from these closing costs in the long run. They usually come out to be anywhere from 2% to 5% of the total purchase price of the house, but you should have your lender give you a good faith estimate so you know exactly what those costs will be. Although there are a lot more terms you’ll need to know as a first-time homebuyer, these five are good ones to start with. If you have any questions for us in the meantime, don’t hesitate to give us a call or send us an email. We look forward to hearing from you soon.

What Is an Inspection Contingency?

Welcome back to another episode of “Keeping in Tune With the Market.” Today’s question is: What is a home inspection contingency and how do I deal with it?

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Welcome back to another episode of “Keeping in Tune With the Market.” Today’s question is: What is a home inspection contingency and how do I deal with it? Imagine you’ve just found a great home or a great buyer for your home, and the time has come for the home inspection. A home inspection is usually done before an offer is made or accepted. A home inspection contingency is an addendum that is placed on a contract that states certain agreed-upon repairs must be completed within a given time frame. After a licensed home inspection company has completed the inspection, which takes about an hour, they will then submit a written report to the buyer. The buyer will turn the report over to the agent, who will then turn it over to the seller. Sometimes, structural or safety issues may be uncovered during the inspection. But it’s important to remember that not every item an inspector puts on the report is urgent. Some issues will just be cosmetic.

Not every item an inspector puts on the report is urgent.

But if there are major repairs, the buyer’s agent is going to make a repair request of the seller. A seller can obtain a second opinion from another professional at this point. Once the buyer and seller are made aware of the items on the inspection report, negotiations can begin. It’s critical that everyone approaches these negotiations reasonably. After everyone is in agreement, the seller must take care of the agreed-upon repairs prior to closing. The seller will need to provide the buyer with written receipts for any and all repairs. There is still the possibility of the contract being canceled by either party if they cannot reach a consensus on a given item. However, if the contract moves forward and all repairs are taken care of, then the inspection contingency will be removed. If a transaction is taking place between a good buyer and a willing seller, it’s best to take care of these issues as soon as possible. Additionally, if you’d like a free copy of our report on how to avoid 11 costly home inspection mistakes, send me a quick email at info@homesbydonovan.com or text me at (727) 595-8880. If you have any other questions or would like more information, feel free to give me a call or send me an email. I look forward to hearing from you soon.

The Role of Attorneys in Our Real Estate Market

What's the role of an attorney in a real estate transaction in the state of Florida? They usually only get involved when issues of legality arise.

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In today's episode of the "Keeping in Tune With the Market," I wanted to answer a question about your attorney's role when buying and selling real estate in the Tampa Bay area. In Florida, most buyers and sellers utilize a licensed Realtor to prepare a contract of sale. The form has been pre-approved by the Florida Association of Realtors and Florida Bar Association. The Realtor will fill in the form, which is then signed by the buyer and seller. At that point, we have a fully executed contract. The contract is then submitted to the title company for review so they can do a title search and make sure everything is legal so that a full warranty deed can be transferred from seller to buyer at the closing. That said, there are many times when an attorney needs to get involved, especially if your home is held in a trust or probate or you have legal issues like a divorce.

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Most buyers and sellers utilize a licensed Realtor to prepare a contract of sale.

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If you ever have a question for an attorney, you should absolutely ask it. There's no harm in doing it even after you've gone to contract to make sure you have everything answered. 

If you have any questions you'd like me to answer in a future episode of "Keeping in Tune With the Market," just give me a call or send me an email. I'll be sending a $10 Panera gift to Jan for having her questions answered. If you ask a question that I answer in future videos, you'll win a gift card too.

Until then, make it a great day!

Keeping in Tune With the Market: How to Get Your Offer Accepted Without Breaking the Bank

If you’re a homebuyer competing against other offers on the same home, here are three strategies you can use to make your offer stand out.

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Today I’m answering a question from Amanda Fabian, who asks, “How do I get my offer accepted when there are four other competing offers on a home?”

First of all, congratulations to Amanda, who will receive a $10 Panera gift card for her question being chosen.

To get your offer accepted when there are other competing offers on the same home, I have three strategies you can use:

1. Make your offer as competitive as you can without going over your budget. If you’re going with a higher financing amount, you must be competitive against someone who might be putting more cash into the deal. Also, make sure you have your pre-approval letter and that you submit it at the same time you put your offer in. Your offer must be as strong as possible.

2. Find out from the other agent or owner what their hot buttons are. In other words, does the owner want a quick closing or do they need extra time? When you structure your offer, make sure to add that in. Does the owner have a special appliance they want to take with them? Stress that the appliance can go with the owner and you don’t insist on having it stay.

3. Write a personal note from the heart. This one is my secret weapon. When you do this, find out a little bit about the owner and share with them some information about your family and how you will love the home as much as they did. If you have a cute little kid or puppy, include pictures of them in the note.

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Your offer must be as strong as possible.

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If you have a real estate question that’s on your mind, don’t hesitate to email it to me. If I answer it in a future video, you’ll receive a $10 gift card. Until next time, make it a great day!