8 Simple Secrets to Avoid Costly Mistakes Buying Your South Bend Home

8 Simple Secrets to Avoid Costly Mistakes Buying Your Dream Home

So you’ve finally decided to buy your next home. Problem is while you were making up your mind, other fence sitters jumped into the home market too. Now you may be facing some competition for the best properties. What to do? Just because there are other buyers in the market doesn’t mean you can’t come away with your dream house. But to be a successful buyer in today’s real estate market you’re going to need help.

Your first best move is to know a few inside tricks. As experienced real estate professionals we have many more than eight ways to increase your chances of landing a prize property despite heavy competition. The following tested tips will increase your market savvy and sharpen your competitive position. Then you’ll be ready to act quickly the minute you see that perfect house.

Step 1: Get Pre-Approved

To be pre-approved for a mortgage loan is your first step. You will go through what amounts to a mini-application process (paperwork, credit check, etc.) prior to shopping for a house. Pre-approval is more effective than pre-qualification, which only gives you a rough idea of the amount a lender will lend you—assuming no hang-ups in the credit and income checking process. When you are pre-approved, it’s like carrying around a suitcase full of money. In the eyes of the seller, pre-approval makes you a very desirable “cash” buyer. That’s a real advantage over another buyer whose financing is uncertain.

Beat the Competition to the Newest Listings

Once you know your specific price range, your real estate agent can regularly do a computerized market sweep for new listings. You should receive a hot list of attractive properties as they come on the market. This will give you a head start on other buyers because you will get the listings before they are advertised. Timing can be a vital part of your home buying experience.

Do Your Research

Make yourself a “value expert” by investigating local properties to get an idea of price points, listing-to-sale-price ratios, hottest areas, and best places for a bargain. Once you know what your money will buy, your real estate agent can add up-to-the-minute knowledge of what comparable properties sell for in specific neighbourhoods and what impact specific features have on price. Working with a good agent will guarantee you the best price and terms.

Have your Agent Present the Offer in Person

Nobody wants their offer lingering on a fax machine in the listing agent’s office while other buyers are putting offers on the seller’s kitchen table. When the situation calls for that personal touch, you’ll gain an advantage by having your agent present your offer in person. He or she may pick up critical intelligence on any competing offers by being on the scene.

Prove you Mean Business

An excellent way of showing the seller you are serious about buying the house is to include a good faith deposit along with the offer you make. This deposit could be as much as 5% of the bid price and surely will attract the seller’s attention.

Stay Cool

When deciding on your dream home you do not have to over pay to get it. Sure, you may have to offer something other than the asking price, such as paying some or all points, inspections, closing costs, or offering a settlement date that fits the seller’s timetable. If you over pay now and have to sell your house in the future it will be harder for you to get back equal value.

Keep It Simple And Clean

You want to make sure that your contract isn’t sloppy or cluttered with contingencies such as repairs. Keep contingencies to a minimum. Even better, offer to be helpful, take care of repairs, order an inspection in 48 hours, or be willing to take care of any required local certificates such as smoke detectors and water safety. Be open and flexible to try to help accommodate the needs of the seller.

Don’t be a Lone Wolf

What you need most in today’s market is experienced professional guidance. As your neighbourhood real estate specialists we can help you get pre-approved, find a prize property, and negotiate the best deal on your next home no matter how heated the competition. Call us today. We’ll help you be a cool customer.

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Avoid these 9 home buyer trips in Michiana especially South Bend

9 Buyer Traps and How Novice Investor Can to Avoid Them in 2013

9 Buyer Traps and How to Avoid Them

Happy New Year! No matter which way you look at it buying a home in 2013, or any year for that matter, is a major investment. For many homebuyers however, it can be an even more expensive process than it needs to be because many fall prey to at least a few of the many common and costly mistakes which trap them into either:

  • paying too much for the home they want, or
  • losing their dream home to another buyer, or
  • (worse) buying the wrong home for their needs.

A systematized approach to the home buying process can help you steer clear of these common traps, allowing you to not only cut costs, but also secure the home that’s best for you.

This important report discusses the nine most common and costly of these homebuyer traps, how to identify them, and what you can do to avoid them.

Bidding Blind

What price should you offer when you bid on a home? Is the seller’s asking price too high, or does it represent a great deal. If you fail to research the market in order to understand what comparable homes are selling for, making your offer would be like bidding blind. Without this knowledge of market value, you could easily bid too much, or fail to make a competitive offer at all on an excellent value.

Buying the Wrong Home

What are you looking for in a home? A simple enough question, but the answer can be quite complex. More than one buyer has been swept up in the emotion and excitement of the buying process only to find themselves the owner of a home that is either too big or too small. Maybe they’re stuck with a longer than desired commute to work, or a dozen more fix-ups than they really want to deal with now that the excitement has died down. Take the time up front to clearly define your wants and needs. Put it in writing and then use it as a yardstick with which to measure every home you look at.

Unclear Title

Make sure very early on in the negotiation that you will own your new home free and clear by having a title search completed. The last thing you want to discover when you’re in the back stretch of a transaction is that there are encumbrances on the property such as tax liens, undisclosed owners, easements, leases or the like.

Inaccurate Survey

As part of your offer to purchase, make sure you request an accurate property survey that clearly marks your boundaries. If the survey is not current, you may find that there are structural changes that are not shown (e.g. additions to the house, a new swimming pool, a neighbor’s new fence that is extending a boundary line, etc.) Be very clear on these issues.

Undisclosed Fix-ups

Don’t expect every seller to own up to every physical detail that will need to be attended to. Both you and the seller are out to maximize your investment. Ensure that you conduct a thorough inspection of the home early in the process. Consider hiring an independent inspector to objectively view the home inside and out, and make the final contract contingent upon this inspector’s report. This inspector should be able to give you a report of any item that needs to be fixed with associated, approximate cost.

Not Getting Mortgage Pre-approval

Pre-approval is fast, easy and free. When you have a pre-approved mortgage, you can shop for your home with a greater sense of freedom and security, knowing that the money will be there when you find the home of your dreams.

Contract Misses

If a seller fails to comply to the letter of the contract by neglecting to attend to some repair issues, or changing the spirit of the agreement in some way, this could delay the final closing and settlement. Prepare a list of agreed issues, walk through them, and check them off one by one.

Hidden Costs

Make sure you identify and uncover all costs – large and small – far enough ahead of time. When a transaction closes, you will sometimes find fees for this or that sneaking through after the “sub total” – fees such as loan disbursement charges, underwriting fees etc. Understand these in advance by having your lender project total charges for you in writing.

Rushing the Closing

Take your time during this critical part of the process, and insist on seeing all paperwork the day before you sign. Make sure this documentation perfectly reflects your understanding of the transaction, and that nothing has been added or subtracted. Is the interest rate right? Is everything covered? If you rush this process on the day of closing, you may run into a last minute snag that you can’t fix without compromising the terms of the deal, the financing, or even the sale itself.

6 Things Michiana Mortgage Companies Might Not Tell You

6 Things Michiana Mortgage Companies Might NOT Tell You

6 Things You Must Know About Mortgages Before You Buy

Mortgage regulations have changed significantly over the last few years, making your options wider than ever. Subtle changes in the way you approach mortgage shopping, and even small differences in the way you structure your mortgage, can cost or save you literally thousands of dollars and years of expense.

“Get the Right Information”

Whether you are about to buy your first home, or are planning to make a move to your next home, it is critical that you inform yourself about the factors involved.

Industry research has revealed that there are 6 common mistakes that most homebuyers make in mortgage shopping that can have a significant impact on the outcome of this critical negotiation. If handled correctly, these issues could result in a mortgage that will cost you less over a shorter period of time.

Before you commit your hard earned dollars to monthly mortgage payments, consider these 6 issues. Effective consideration of these important areas can make your payments work much harder for you.

1. You can, and should, get pre-approved for a mortgage before you go looking for a home

Pre-approval is easy, and can give you complete peace of mind when shopping for your home. Your local lending institution can provide you with written pre-approval for you at no cost and no obligation, and it can all be done quite easily over the phone. More than just a verbal approval from your lending institution, a written pre-approval is as good as money in the bank. It entails a completed credit application, and a certificate that guarantees you a mortgage to the specified level when you find the home you’re looking for.

2. Know what monthly dollar amount you feel comfortable committing to

When you discuss mortgage pre-approval with your lending institution, find out what level you qualify for, but also pre-assess for yourself what monthly dollar amount you feel comfortable committing to. Your situation may give you a pre-approval amount that is higher (or lower) than the amount of money you would want to pay out each month. By working back and forth with your lending institution to determine what this monthly amount is, and what value of home this translates into at today’s rates, you won’t waste time looking at homes that are not in your price range.

3. You should be thinking about your long-term goals, and expected situation, to determine the type of mortgage that will best suit your needs

There are a number of questions you should be asking yourself before you commit to a certain type of mortgage. How long do you think you will own this home? What direction are interest rates going in, and how quickly? Is your income expected to change (up or down) in the near term, impacting how much money you can afford to pay to your mortgage? The answers to these and other questions will help you determine the most appropriate mortgage you should be seeking.

4. Make sure you understand what prepayment privileges and payment frequency options are available to you

More frequent payments (for example weekly or biweekly) can literally shave years off your mortgage. Simply by structuring your payments so that they come out more frequently, will significantly lessen the amount of interest that you will be charged over the term.

For the same reason, authorized prepayment of a certain percentage of your mortgage, or an increase in the amount you pay monthly, will have a major impact on the number of years you will have to pay and could shorten your payment term considerably.

These two payment options can cut years off your mortgage, and save you thousands of dollars in interest. However, not every mortgage has these prepayment privileges built in, so make sure you ask the proper questions.

5. Ask if your mortgage is both portable and/or assumable

A portable mortgage, where available, is one that you can carry with you when you buy your next home and avoid paying any discharge penalties. This means that you will not have to go through the entire mortgage process again unless you are making a move up to a much more expensive home.

An assumable mortgage is one that the buyer for your home can take over when you move to your next home. This can be a very powerful tool at the negotiating table making it much easier and more desirable for a buyer to buy your home, and again saves you any discharge penalties.

6. You should seriously consider dealing with a Mortgage Expert

Consider dealing only with a professional who specializes in mortgages. Enlisting their services can make a significant difference in the cost and effectiveness of the mortgage you obtain. For example they can make the process faster thereby avoiding costly delays. Typically there is no cost or obligation to inquire.

South Bend Property Investment - Credit Score and Payments

Chapter 8: Getting One’s Credit in Order before investing in a home

Before purchasing any home, homebuyers should get their credit in order. In today’s tough economy, many prospective homebuyers have less than perfect credit. Some have gone through foreclosures, others have had to file bankruptcy and some have had trouble meeting bill payments due to job loss and other difficulties. While bad credit may not hold buyers back when purchasing rent to own homes, homebuyers still need to get their credit in order, no matter the reason for the credit problems. Other homebuyers may not have any credit, which may require some work as well.

Why Credit Repair is Important

Buyers should not underestimate the importance of fixing their credit when preparing to purchase a home. The homebuyer’s credit score can determine the interest rates on mortgage loans and a credit score that is too low may make it nearly impossible to qualify for a mortgage, especially with the rigid lending specifications today. Rent to own homes allow potential homeowners some time to get their credit in order before applying for financing, but credit is still important, even with this window of time to fix bad credit problems. Wasting the time available and failing to improve credit may result in being unable to make the purchase, which will mean all the money spent on the lease option was in vain.

Clearing up Inaccuracies

Buyers that want to improve credit when buying rent to own homes need to carefully deal with any inaccuracies on their credit report. Many individuals investigate and find inaccuracies on their credit report that are affecting their overall credit and credit score. The good news for homebuyers is that clearing up these inaccuracies can help improve their credit. Buyers should start by checking their credit reports from each of the credit reporting agencies, including Experian, Trans Union and Equifax. After receiving the credit report, checking each entry for accuracy is essential.

If buyers find any inaccuracies, they can dispute them with the credit reporting agency. Individuals should compose a letter of dispute along with any information that proves the inaccuracy of the entry and send the letter to the credit reporting agency. Any inaccurate entries must be removed by law, which will help buyers improve their credit score so they are better able to attain financing for the lease option home they plan to purchase.

Important Considerations to Remember

One of the biggest factors when it comes to determining one’s credit score is past payments to creditors. If a potential homebuyer has been on time with payments to creditors in the past, that will count in a positive way toward the credit score. Even just a few late payments to creditors can really lower a homebuyer’s credit score. As a result, offered mortgage interest rates may be substantially higher than those offered to individuals with good credit.

In some cases, writing a letter to the lender explaining the problem may be helpful. The individual may have dealt with a job loss or an illness that led to the late payments. While not every lender will take this information into consideration, some lenders, such as FHA lenders, will keep that information in mind when deciding whether to approve the home mortgage loan.

Caution

While some credit repair companies can be helpful when homebuyers work to repair their credit, individuals must watch out for potential scams. Companies claiming to erase credit problems may be a scam. It is not possible for companies to completely eliminate every bad mark from a credit report. Only inaccuracies can be removed when disputed. When deciding to make use of a credit counseling or credit repair company, take time to research the company and what they offer to avoid becoming involved in a scam.

At a Glance

  • Getting one’s credit in order is essential to homeownership;
  • Fixing one’s credit is essential to obtaining a good credit score, which lenders consider;
  • Inaccurate in one’s credit report may adversely affect one’s credit score;
  • Homebuyers should be careful to avoid credit counseling or repair scams.
South Bend Property Investment Tip for homebuyers via Rent To Own

Chapter 7: Key Tips for South Bend Homebuyers and Property Investors

First, if you are an investor considering rent-to-own as an investment

Rent to own homes provide a great choice for buyers who have problem credit or difficulty qualifying for a home mortgage. In essence, rent to own homes allow many homebuyers to achieve the dream of home ownership, even if they cannot afford something as fundamental as a down payment.

However, before entering into a lease to own agreement, those considering lease option homes should become familiar with what they can expect after signing the contract. The following is a look at some important information that prospective buyers should know about rent to own homes.

Rent-To-Own Homes Make Moving In Easy

One of the reasons for the popularity of rent to own homes is the ease with which homebuyers move into them. Rent to own homes allow renters move into homes without any dealing with banks or the mortgage companies. Little paperwork is required, which also makes it faster for homebuyers to move into the home of choice.  Finally, many lease option agreements may not require a credit check or come with minimal credit requirements, making it easy to complete the contract and move right into the home of their dreams.

Home Sweet Home

Rent to own homes allow homebuyers to quickly make the property feel like home, which is quite different from a situation where an individual only rents the residence. In most traditional rental situations, the tenant normally needs to get any changes or improvements approved by the landlord before taking care of them. This is not the case with lease option homes, which is another reason they are so beneficial.

Most of the rent to own homes contracts allow the prospective buyer to make changes to the home and property, which includes renovating, painting and even landscaping it the way that is desired. This allows homebuyers to make the property feel like their own home. However, homebuyers must remember that money they spend on repairs or changes to the property will not be given back to them if they decide not to purchase the home at the lend of the lease period.

Credit Repair is Essential

Some homebuyers who enter into rent to own homes contracts will never end up purchasing the homes by the end of their contract. Those with credit problems need to take measures to improve their credit during the lease period if they want to qualify for financing for the home. Individuals can work on improving their credit on their own or they may want to use the services of a credit specialist. Failing to repair credit during the lease period may mean that homebuyers are still unable to make the final purchase in the end, which means they have spent money on the lease option fee, rent and improvements in vain.

Researching the Price is Key

Homebuyers must be aware that the prices on rent to own homes are often higher than homes sold traditionally. However, homebuyers still need to spend some time researching the price the seller is asking to ensure it is a reasonable price. This research includes checking out comparable homes in the area to see what they have been selling for, which helps homebuyers decide if the asking price is really a good deal.

Having the home assessed for value can help as well, since it gives prospective buyers an idea of what the home is currently worth before negotiating a purchase price. While paying a bit more for the benefits of lease option homes is to be expected, homebuyers should avoid overpaying too much on a home that may not increase in value over time.

Locking in a good price now can be beneficial to homebuyers, so doing a bit of research is important to ensure the seller is not charging an unreasonable price for the home being considered.

At a Glance:

  • Rent to own homes are favorable to people with bad credit scores;
  • Rent to own homes are relatively easy to move into;
  • The contracts of most rent to own homes are structured in such a way that the renter can actually start to improve the inside and the outside of the home as if it were already owned by him or her;
  • Chances for eventually buying the home can be increased by repairing credit;
  • Eventual buyers should ensure that the purchase price corresponds to the real value of the home.
Where to find Michiana Investment Property via Rent to Own

Chapter 6: Where to Find South Bend Rent to Own Homes

For homebuyers that decide to go the route of rent to own homes, finding these homes may seem difficult. Not only do homebuyers want to find a nice home, but a good landlord that offers agreeable terms. When traditional home financing is limited or restricted, homebuyers usually find it easier to find lease options. Rent to own homes are also common in a buyer’s market, but homebuyers still need to know where they can find these homes. Here is a look at some of the best places where these nontraditional homes can be found. 

Web Search

Homebuyers should make use of search engines, such as Google, when searching for rent to own homes. Using the search term “rent to own homes” or “lease option homes” along with the city and state of interest may provide excellent results. For example, a homebuyer who wants to buy in Houston, Texas should use search phrases like “lease option homes in Houston Texas” or “Houston Texas rent to own homes.” This will provide homebuyers will local results that may prove helpful when searching for these non-traditional home options.

Newspapers

Newspapers have fallen in popularity in age of the Internet in the 21st century, but in many cases, homebuyers may find rent to own homes in newspapers. The real estate classifieds section is the best place for potential homebuyers to search. Sometimes, sellers who are not comfortable with using the Internet will resort to the newspaper to advertise rent to own homes. Even though newspapers may seem “old school,” it never hurts to check, since they may offer some excellent lease option opportunities.

Driving through Neighborhoods

Consider driving through neighborhoods of interest when trying to find rent to own homes. Often, lease to own homes are scattered through different areas. Simply driving around and scouring neighborhoods to check for rental signs may provide an excellent way to find rent to own properties. Many sellers choose to use signage to advertise their home instead of using other costly advertising options, so it pays to drive through areas of interest.

Realtors

One of the last resorts for homebuyers seeking rent to own homes is getting in touch with a real estate agent who deals with rentals. These real estate agents often know about lease option homes in the area.  Quality agents have their finger on the pulse of the market, thereby making the search for a lease option property just a little bit easier.

At a Glance

  • John Tiffany and South Bend Invest can help;
  • Searching with a search engine may provide excellent local results;
  • Newspapers are also a great place in which to find ads for some rent to own homes;
  • Driving through local neighborhoods may yield potential lease option properties;
  • Lastly, getting in touch with an Integra Real Estate of Michiana realtor who can help.
South Bend Budgeting Rent To Own

Chapter 5: Figuring out a Budget for South Bend Rent to Own Homes

Budgeting is exceptionally important in all areas of finance, and this holds true when purchasing rent to own homes. In fact, effective budgeting can mean the difference between succeeding and failing when making this kind of an offer on a home. The following steps offer helpful insight to help homebuyers figure out a budget when deciding to purchase a lease option home.

 

Step 1: How Big a Home?

Buyers ought to evaluate just how much home they can actually afford. They will likely have to qualify for a mortgage when it comes time to purchase the home. Based on FHA guidelines, the residence they purchase must not exceed 29 percent of their earnings. Other things to consider are private mortgage insurance, homeowner’s insurance, basic rent payments and even homeowner’s association fees.

Step 2: Understanding the Market

Homebuyers need to investigate present-day rent to own homes in their local areas. Flyers, websites, real estate agents and even property management firms could help them discover rent to own homes that they can afford. RealtyStore.com offers helpful search engines for homebuyers looking for lease option homes in their area, allowing buyers to search by state, county, city and more. While looking at properties, prospective buyers should ask to have the utilities turned on so that they can see potential problems with the property.

Step 3: Review the Contract

Buyers must also get detailed information about the rent to own homes contract that they will be entering into. Learning more is important, since the contract may be established in several different ways.

  1. First, the seller may require a down payment from prospective buyers at the start of the contract.
  2. Second, the seller could also charge renters a fixed, monthly amount over the specific rental amount. If the seller does charge a renter extra, this amount is set aside so the renter can use it towards the down payment on the home when they make the final purchase. Finally, the seller could use both the down payment and the extra rental amount within a lease option contract.

Step 4: Considering the Risks

Comprehending the risk that comes with lease option homes is also part of the budgeting picture. If the deal falls through, the renter loses all the money put into the home. For instance, the seller could end up having to file bankruptcy or could sell the home to someone else. A seller could lose ownership of the residence by way of a foreclosure, or takes out a 2nd mortgage on the residence. In any of these situations, the homebuyer may not be able to purchase the home, which means their investment in that home could be lost.

Step 5: Inspecting the Property

A potential homebuyer must check the home he wants to rent for an eventual purchase very carefully. Obtaining an inspection of the residence via a 3rd party inspector is an excellent idea. For example, potential homebuyers should look out for peeling exterior paint, extensive roof or water damage, or drainage problems on the outside of the property. Inside the home, buyers should look for badly patched walls, cracks, damage from water and mold and pest problems.

Step 6: Timeframes and Fees

The renter must also inspect the contract and read the fine print before deciding on a budget and making the investment in the home. Buyers need to determine when the property title will be given to the renter. Every timeframe and every fee should be checked carefully as well.

Step 7: Paying the Funds

Finally, the prospective homebuyer should pay off any necessary funds at the signing. Usually, this will include the 1st month of rent and the initial down payment. Some sellers may just insist on certified funds, but after successful payment, the prospective homebuyer ought to receive the keys to the house.

At a Glance:

  • Buyers should evaluate how much home they can actually afford;
  • Prospective homebuyers should consider all rent to own homes options in their area;
  • Buyers must obtain detailed information on the contract into which they are entering;
  • Be familiar with the risk involved with rent to own homes;
  • Prospective buyers should inspect the inside and outside of their property;
  • Inspecting the contract is important;
  • Buyers should pay off due funds at the time of signing

Next: Where to find rent-to-own homes