Home Buyer's Essential Checklist

 Your home is the single most important financial investment you will make in your lifetime.  Remember, your home is an asset and not a liability.  Your home appreciates in value over the course of years you own the property and the equity you build into the property enables you to realize a higher return upon its sale.

Here is a quick check list of essentials to help make the homebuyer process run smoothly.

1. Know your credit score - Today's lenders have tightened lending requirements and are seriously looking at a potential buyer's credit score to determine if they are a good loan risk.

2. Select a lender and get a preapproval letter - Shop around for a lender who is willing to offering you the best terms over the duration of your loan and once selected obtain a preapproval letter from that lender.  Seller's react more positively to buyers with preapproval letters than those without.

3. Find a real estate agent - Before you start looking at homes find a real estate agent.  You will need them to function as intermediaries for you with sellers in setting up viewing homes and completing the necessary paperwork to make an offer on a property.

4. View homes - With your real estate agent clarify your needs and limit your search for a home to those needs and your preapproval qualifications amount.  

5. Make an offer - In today's market, it is common for sellers to get full price offers and some buyers engage in bidding wars over properties.  Know your limit and stick to it.

6. Sign a contract - When you and the seller agree on a sale price, sign the contract.  Now, you can request the home inspection, appraisal, and a survey of the property.  If there are no problems with the home inspection, appraisal, or survey you can move forward to closing.

7. Closing on your home - You are in the final phase of the purchasing process.  You have secured property insurance, paid pro-rated property taxes, signed final closing documents, and paid your portion of closing costs.  You walk away with the keys to your new home.

Bottom Line - As you can tell, I have abbreviated the timeline in the process, but the key elements are in place.  Following this checklist will help you through the entire home buying process.  Here is to your success!

The Fear Of Missing Out (FOMO) in the current real estate market

 Are you a buyer desperate to purchase a home and finding this competitive market overwhelming?  Are you getting frustrated with higher prices, increasing interest rates and limited inventory?  Does the thought of not being able to purchase a home challenge your wellbeing?  Are you so anxious to purchase a home that you would be willing to extend your credit to the max? If so, you may be influenced by the Fear Of Missing Out (FOMO).

The Oxford English Dictionary recently added the term "fear of missing out" in 2013 and defined it as, "the uneasy and sometimes all consuming feeling that you are missing out -that your peers are doing, in the know, or in possession of more or something better than you".

This all consuming feeling has crept into the housing market especially as buyers struggle to secure a home during rapidly evolving economic times.  The buyer's prevailing thoughts is: "If I don't buy now at today's price, I may not be able to afford to buy at a later date."

Overcoming FOMO

1. Understand that the real estate market is cyclical.  The current real estate market has been driven by several internal as well as external factors that you have no control over.  When the pendulum swings to the other side and the market softens, inventory will increase, and deals will be there for the making.

2. Change your focus. If I can not jump in the market now, then become a student of the market and watch for signs the market is shifting - with preparedness comes opportunity.

3. Have a plan ready to implement.  Be practical and prepare for the coming change.  Position yourself to be ready to move with the flow of the market.  

Bottom Line:

The Fear Of Missing Out is real and the dangers associated with FOMO are real as well.  But overcoming the anxiety associated with FOMO may be easier than you think.

Seller Financed Real Estate

 When it comes to financing real estate deals most deals follow the familiar process of obtaining a bank loan.  But should traditional financing be unavailable or difficult to obtain, a buyer and seller may enter what is know as seller financing.

What is seller financing?

In plain English, the seller finances the house purchase for the buyer. It allows the buyer to pay the seller in installments rather than utilizing a more traditional mortgage from a bank, credit union or other financial sources.

Seller financing does several key things for the buyer:

 1. helps the home buyer qualify for a different mortgage opportunity.

 2. reduces the amount of "red tape" normally associated with traditional home purchase.

 3. improves the profit margins on lending.

How does Seller Financing work?

The seller and buyer draw up a promissory note detailing the interest rate, schedule of payments, and the consequences should the buyer default on the obligation.  Such documents should be drawn up by a real estate attorney to ensure the legality of the document.  Other terms and conditions for the transaction can include: how long the financing will run, a balloon payment at the end of a designated term, and the down payment.

While not all sellers might be interested in seller financing, it provides a means of purchase that should be explored.  

Three Key Factors in the 2022 Housing Market

Finding it difficult to purchase a home?  Perhaps you are a seller and are seeing your sale stalled due to your buyer's funding issues. You are not alone.  There are deals in limbo due to three key factors.

THREE KEY FACTORS

1. Inflation - The U.S. economy is reeling from over inflated prices and delays in goods production and delivery. Gasoline and diesel prices are climbing at uncontrolled rates.  Consumers are spending more and purchasing less.

2. Interest rates - In an effort to curb inflation, the Federal Reserve has raised the prime rate to over 5% currently. Rising interest rates continue to impact first-time buyer's ability to secure necessary funding for new home purchases.  Saving for the down payment may be a longer and more arduous process.

3. Inventory - It is a seller's market with inventory levels at all time lows throughout the U.S.  The demand for home is still evident by the higher asking prices and bidding wars to secure properties.  Many buyers are sitting on the sidelines waiting for the dust to settle.  Even though housing starts are on the increase, material costs and skilled worker shortages have slowed new home construction.

The turning point in the housing market is still unclear.  When will the shift to a more normal market happen rests with controlling these three factors.