Buying Real Estate

Focus On Facts

3 Common Myths About Real Estate Short Sales

There is a lot of misleading and incorrect information about Phoenix real estate short sales.

Many people don’t have a clear understanding of the purpose of short sales or how they actually work.

Essentially, a short sale is when one sells their home for less than the balance remaining on the mortgage attached to the property.

The proceeds from the sale are used to repay a pre-negotiated portion of the balance to settle the debt.

A short sale can be a solution for homeowners who really need to sell their home but owe more on the mortgage than the home is worth.

Understanding the short sale process can help make the most out of a real estate sale.

Here are some common myths and why they are false:

A short sale damages one’s credit record as much as foreclosure

In many cases a short sale is less damaging to your credit record than a foreclosure. Some lenders may think that the short seller acted in a more responsible manner than simply walking away from the property.

Although the amount paid may have been less than the mortgage balance outstanding, the loan was settled with the lender. Opting for foreclosure is often seen as a lack of responsibility.

To qualify for a short sale one must be behind on payments

This might have been true in the past, but it’s not anymore.

You just need to be able to prove that you are in financial hardship, which could be due to death in the family, divorce, job loss, mortgage rate hike or even loss of property value.

After a short sale you can’t buy again for five to seven years

This may be true in some cases, but not all. In certain situations the waiting period can be reduced as low as two or three years before you are allowed to purchase another home.

It would be wise to speak with licensed real estate professional or home financing specialist to get the most current options in the marketplace.

Pass it on

These are just a few examples of commonly believed short sale myths. A clear understanding of the short sale and the benefits it  can provide is important for financially strapped homeowners.

Feel free to pass this important information on to someone that you feel would benefit from it.

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Do I Need Private Mortgage Insurance on Your Mortgage Loan?

Insurance_Stamp_2[1]Have you heard the term Private Mortgage Insurance (PMI) when looking to finance real estate?

You may be wondering what PMI is and how you know when you need to purchase it.

These answers can be hard to find among all the real estate jargon you might be hearing lately.

Below is the short version of what you need to know.

What is Private Mortgage Insurance?

Private Mortgage Insurance is an insurance premium required by some lenders to offset the risk of a borrower defaulting on their home loan.

When you put down less than 20 percent of the real estate’s purchase price, the lender will generally require that PMI is added to the loan.

It is usually added into the monthly mortgage payment until the equity position in the real estate reaches 20 percent. However, there may be other options available in your area.

Under the current law, PMI will be canceled automatically when you reach 22 percent equity in your home, if you are current on your payments.

If you aren’t current, the lender may not be required to cancel the mortgage insurance because the loan is considered high-risk.

After getting caught up on your payments, the PMI will likely be cancelled. Any money that you have overpaid must be refunded to you within 45 days.

What if Your Real Estate Increases in Value?

With a conventional loan, it may take as many as 15 years of a 30-year loan to pay your balance down 20 percent making the minimum monthly payment.

But, if property values in your area rise, you might be able to cancel the PMI sooner.

Some lenders may be willing to consider the new value of your home to determine the equity in your home.

You may, however, be responsible for any fees, like an appraisal, that are incurred to assess the new value of your property.

In the end, private mortgage insurance is likely a good option if you can’t afford a down payment of 20 percent of the purchase price.

Now May Be A Very Good Time To Take Action

With all of the activity happening the housing market, now may be the best time for you to purchase your new home.

A smart next move would be speaking with a qualified home financing professional to learn which programs and down payment options are available in the Mesa area.

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Just Listed: Scottsdale 4 Bedroom Home with Pool for Sale

**REGULAR SALE** This Gorgeous Scottsdale home is a must see. Featuring over 2000 square feet, 4 bedrooms, 2.5 bath, 2 car garage & in a central Scottsdale location. This move in ready home features two separate living rooms, laminate wood floors, a kitchen with all appliances, granite countertops, upgraded cabinets and a sit up breakfast bar & more… Enjoy the fully remodeled and enlarged master bedroom suite w/brand new bathroom & large walk-in closet. Step outside to an oversized backyard with huge covered patio, low maintenance artificial grass and a sparkling pebbletec diving pool (with removable fence). What a great location… Walk to Chaparral Park, playgrounds, the greenbelt and minutes from the 101 freeway and Old Town Scottsdale. Come check out this home you wont be disappointed

See More Information Here: Property Details

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Canadian Financing in Arizona

With the large influx of Canadian residents interested in buying real estate in the Phoenix and Scottsdale area, financing options for non-US citizens are somewhat limited, however there are financing options available for Canadians and other foreign nationals with select lenders throughout the valley.  

A few highlights of the Canadian Citizen financing include:

  • 15,20,25 and 30 year fixed rate terms available
  • 3/1 or 5/1 adjustable rate terms available
  • $50,000 minimum loan amount
  • Will loan up to 75% for both purchase and refinance transactions up to $1,000,000
  • No prepayment penalties
  • Borrowers must have a BBVA Compass Bank checking account or open an account prior to closing
  • Loans <= $1,000,000 require one full appraisal

Eligible Property Types For Canadian Citizen Financing:

  1. Single family residences
  2. PUDs/CONDO must meet FNMA/FRMC guidelines
  3. Non-warrantable condos must have an LTV of 70% or less
  4. Property must be located in a market area served by a Retail Compass Bank Branch

Canadian Citizen Documentation Requirements:

  1. 2 years Canadian T1, T2’s and/or T4’s. 
  2. Business balance sheet and income statement (if applicable)
  3. Passport
  4. 60 days of bank statements
  5. 60 days of Paystubs 

For more information on Canadian Financing please email or call me at 602.708.0296. 

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10 Home Buying Tips For Your Next Real Estate Purchase

Tis’ the Season and that means it is a time for giving… And one of the best gifts you can receive, at any time of the year, is good sound advice. In the spirit of this Holiday Season, I am writing this article to do my part in helping Buyers get the best tips for your next Real Estate Purchase.-in.

Our top 10 Home Buying Tips

1. Choosing the right agent. Seems simple enough and everyone out there seems to know a Realtor. But when choosing an agent, you shouldn’t necessarily be using your aunts friend who practices Real Estate on the side. A good agent is supposed to be knowledgeable and have experience in transactions so they can help relieve some of the stress that comes with buying a Home and make sure your best interest are protected.

Get recommendations from friends, family and co-workers in your area.   Interview a couple of agents to find the right chemistry and knowledge of the area you are looking in. Once you have found somebody you like, make sure she is willing to communicate with you in the form you want (email, phone, text, etc.) and as often as you want.

2. Getting preapproved for a loan.  There are not a lot of quality homes on the market right now and contrary to what you may read in the paper, the nice homes are moving fast and most likely you will have competition on the deal. So getting pre-approved allows you to make sure you are looking within your budget, and when you do find a home, you are ready to act quickly and with a strong offer.

3. Don’t look at too many homes. I know looking at homes can be fun but at the same time it can be very overwhelming and confusing if you look at too many homes or seek too many opinions from friends and relatives. No home is going to have everything you are looking for or be perfect, so I suggest making a “must have” list including the features that are non-negotiable, versus just “thing you wants. From there, have your agent help narrow down the field. There’s a lot of inventory out there, but there is not a lot of inventory that fits your specific criteria.

4. Keep an open mind. Everyone out there has their vision for their new home and what it will look like and in what area. Many buyers will want that perfect single story home in a certain neighborhood only to find that the features and amenities they crave are in a two-story home. Be open to suggestions from your real-estate agent, who might show you something you didn’t know existed or that you may love.

5. When you find a home you like, learn about the neighborhood. Once you find a home that you could see yourself in, the next step is to make sure you the neighborhood fits your lifestyle and needs. Keep in mind the amenities, schools, access to freeways and neighbors where you live. These will all be vital day to day places you will have go and do.

6. Never buy a home without a home inspection. It is vital that every home buyer gets a home inspection for a licensed inspector.  You should never just rely on what you see in a walk-through or what your brother the handyman points out. Problems hide under carpeting and inside walls and attics. Always get that home you’re buying checked over by a certified home inspector and follow through on any additional inspections he recommends.You’ll be glad you did. I cannot emphasize this enough!

7. If you don’t understand something, ask. The home buying process is very complex with many moving parts. Ideally, your agent will have run through the homebuying process and what to expect at the outset of your search, but i can all but guarantee that there will be something that comes up that was not covered. It is very common and expected as it would be impossible for the agent to cover every scenario. So  if you don’t understand any part of the paperwork, process or terminology, ask.

8. Submit your highest and best offer upfront. Now this can be up for debate and varies greatly depending on the condition of your current market, but I cannot tell you how many times I have had buyers who have tried to play the negotiating game with a seller only to have the seller accept another offer during negotiations.  Like I mentioned above, in most markets there are not a lot of quality nice homes on the market, meaning you are competing with every other buyer out there who probably has interest in this home. The quality properties often will receive multiple offers, so you have to  make sure it’s a realistic offer and submit it with a list of comparable sales to support it. You do not want to lose the home over a couple thousand dollars.

9. Be prepared to compromise. Every home that is over a week old will have issues… So don’t expect sellers to consent to repairs that amount to upgrades or remodels. Be realistic for the home you are buying and don’t lose a house you love over something small like carpet, appliances or countertops. It’s not these things that will make or break your experience in a house, it’s the big things such as layout, size and location.

10. Don’t get emotional. It’s easy to get caught up in the excitement and tension of buying a home. But you should never over extend yourself, no matter how much you love the house. Make sure that you do your due diligence and don’t let things slide that are non-negotiables because you “Love the House”. I promise you will come to regret it.

I hope you enjoyed this posting and it helped shed some light on the home buying process and provided some good insight for your next real estate purchase. As always, feel free to contact me with any questions and have a GREAT HOLIDAY SEASON!

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Finding and purchasing your home can be exciting — and overwhelming. You may be relieved once you finally take possession of your new house but be aware that the financial responsibilities of home ownership are just beginning. So the real question is there more to Home Buying?

Finding and purchasing your home can be exciting — and overwhelming. You may be relieved once you finally take possession of your new house but be aware that the financial responsibilities of home ownership are just beginning. So the real question is there more to Home Buying?

Make Your Mortgage Payments on Time

Whether monthly, biweekly or weekly, be sure that you always make your mortgage payments on time. Making late payments (delinquency) may result in late charges and negatively affect your credit rating. Failing to make payments can even lead to more serious consequences like foreclosure.

A good way to prevent late payments is to have the amount automatically deducted from your account every month and to put at least three months’ worth of mortgage payments in savings for emergency situations. If you are having trouble making payments, discuss the situation with your lender.

Costs of Operating a Home

Besides your mortgage, property taxes and insurance, there are many other ongoing costs related to operating your home. They include maintenance and repair, costs for services such as a security alarm, snow removal and gardening (if you wish to pay for these). If you have a condominium or strata, some of these expenses may be included as part of your monthly maintenance fee.
Saving for Emergencies

Even if you know how to do repairs yourself, there are costs involved. Every building has a life cycle, which means that all parts of a building age and require major repairs or replacement at some point. For example, you might know that your roof will have to be replaced in a few years simply because of its age. Repairs like these are expected and can be planned for. However, many repairs are unexpected and can sometimes be costly.

Set aside an emergency fund to deal with unexpected problems ranging from major repairs to illness and job loss. A good guideline is saving 5% of your take-home pay and putting it in a special account.
Living Within Your Budget

Prepare a monthly budget and stick to it. You should monitor your spending every month and evaluate your progress in meeting your financial goals. If you continue to spend more than you are bringing in, you must find ways to cut back. If you are having trouble sticking to your budget, don’t hesitate to ask a professional money manager for help.

Use the Household Budget as a Homeowner worksheet to create your own household budget.

Tips on Home Repair and Maintenance Once you’ve finally settled in, you may start to view your home with a more objective eye. Perhaps there are things you’d like to change — the kitchen cabinets or the flooring, for instance. Perhaps there are things that require repair or replacement, such as the plumbing or the windows. You will soon realize that maintenance, repair and renovations are a normal part of home ownership.

Do Regular Maintenance and Repair

By doing regular maintenance and taking care of small repairs right away, you’ll avoid more costly repairs down the road.

One of the best things you can do is get to know your new home. Here are some things you need to know:

  • Your home is made up of various components that work together. These include mechanical systems (heating, air conditioning and ventilation) and the building envelope (foundations, floors, walls, windows, doors and roof ).
  • You need to learn enough about the major mechanical systems of your home to be able to perform routine maintenance and handle various emergencies. Every adult member of your household should know the location of and how to operate the following:
    • Main shutoff valves for water and fuel (oil or natural gas);
    • Emergency switch for the furnace or burner;
    • Hot water heater thermostat and breaker;
    • Main electrical switch;
    • Fuse box or circuit breaker box.

Renovations targeted at increasing energy-efficiency may affect appliances venting by a chimney. Check chimney performance if you tighten the envelope or add exhaust fans.Remember that homes, like people, get old. It’s a good idea to inspect your home regularly and replace or repair parts and materials that wear out with use and time. And remember that since different components of your home work together and affect each other, minor repairs can quickly become major ones if they are not immediately taken care of.We have included a Maintenance Calendar at the end of this Step that will help you know just what to inspect and when to inspect it.You will probably be able to do many of the repairs yourself. However, if you feel you cannot handle the job on your own, it is best to call an expert. No matter who carries out the repair, remember that the work has to be well done. Bad materials and poor workmanship will end up costing you more in the end. Don’t forget to keep records of any repairs and improvements you make.

Home Improvements

Besides doing regular maintenance and repairing your home, you will also want to consider renovating or making improvements. These changes will not only make the home more pleasant for you to live in, they may also increase its value.

Change is good but be careful not to go overboard unless you plan to stay in your home for many years. If you are planning to sell your house, you also have to ensure that the changes don’t make your home worth a lot more than the other homes around you. Remember that the value of your home is closely related to the other homes in your area.

Here are some things to keep in mind when planning a change or renovation:

  • Think about how changes would appeal to someone buying your home in the future. You can make very personalized changes with paint because it is inexpensive and can easily be changed. However, things like flooring, cabinets and countertops have a longer life — make choices that will also be appealing to others.
  • Think about getting your home energy-rated. This will tell you how energy efficient your home is and what improvements are possible. Visit the Natural Resources Canada Office of Energy Efficiency at www.oee.nrcan.gc.ca/residential to learn more about the eco ENERGY Retrofit program.
  • Updating the bathrooms and kitchens in an older home can increase its resale value.
  • Don’t underestimate the importance of landscaping. The right planting can improve the appearance and value of your home.
  • Updating your exterior paint, installing new roofing, resurfacing your walkways and driveway, adding attractive mailboxes and front-yard planting will also help make your home more appealing.
  • Over time, some renovations can practically pay for themselves, especially if they result in savings on utility bills, a higher selling price or years of greater comfort and enjoyment in your home!
  • Make Sure Your Home is Fully Secure
    • Change all the locks when you buy a new home.
    • Add dead-bolt locks and window locks where necessary.
    • Consider getting a security system. Your property insurance rate may be lower if you have one.
    • Get fire extinguishers for each floor in the house.
    • When you are away from home, use lights and radios on automatic timers and arrange to have your mail and newspapers picked up or discontinued. This way, people won’t be able to tell that you are not home.
    • Get to know your neighbors and keep an eye out for each other.
    • Be Prepared and Stay Safe

Have a fire evacuation plan and make sure everyone in your home knows how to get out of the home from each room in case of a fire. If you have a second floor, you need a special escape plan to get to the ground. Check to see that windows have not been painted shut. Although doors and windows should always be securely locked, you have to be able to open them in an emergency.

A few tips:

Fire extinguishers must be easily accessible at all times. If you have a twostorey home, there should be one on each floor. Remember to check your fire extinguishers at least once a year, and to replace them if they are 10 years old or older. To help you remember, make a habit of doing it when you set your clocks to Daylight Saving Time.

In some areas, it is a legal requirement to have smoke alarms in your home. Even if it is not a legal requirement, you will still want them in your home. Check the batteries at least once a year. Carbon monoxide detectors are also important to have. They will let you know if there are high levels of carbon monoxide in your home and can save you from illness or death. To make sure that they are working properly, check them at least once a year. It is a good idea to make a habit of checking your fire extinguishers, smoke and carbon monoxide detectors at the same time.

Paper, paint, chemicals and other clutter can be a fire hazard. Make sure they are stored in a safe place. If you no longer need them, hazardous materials must be disposed of at a community toxic waste center. Never put them in the garbage.

Collect your important papers and store them in a safe place — for example, a fireproof box or a safety deposit box.

Keep a list of emergency phone numbers (including 911, poison prevention line, doctors, relatives, neighbors and friends) close to the phone and make sure your children are aware of it.

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So, you’ve decided that home ownership is right for you. Now you need to determine if you are financially ready to buy a house. In this Step, you will find how much house you can afford and the maximum home price that you should be considering and if you truly are ready to buy a home.

* How much can you afford?

* Getting Mortgage Approval

* Will you have trouble Qualifying?

* Other helpful strategies

* Importance of credit rating

* Lack of credit history

* Fixing a Credit Report

So, you’ve decided that home ownership is right for you. Now you need to determine if you are financially ready to buy a house. In this Step, you will find how much house you can afford and the maximum home price that you should be considering and if you truly are ready to buy a home.

To avoid any future surprises, you can do some financial exercises to see where you stand. They include calculating your net worth, determining your current monthly expenses and what your current monthly debt payments are.

Knowing your debt to income ratio is important because you will need this information when you discuss a mortgage with your mortgage professional. Your debt to income ratio is the amount left over once you’ve subtracted your total liabilities from your total assets. It will also give you a snapshot of your current financial situation and show you how much you can afford to put as a down payment.

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How Much Can You Afford?

Now that you have a clear picture of your current financial situation, it’s time to find out what you can afford in monthly housing costs. Lenders follow two simple affordability rules to determine how much you can pay.

The first affordability rule is that your monthly housing costs shouldn’t be more than 32% of your gross household monthly income. Housing costs include monthly mortgage principal and interest, taxes and insurance— known as P.I.T.I. for short. For a condominium, P.I.T.I. also includes the monthly condominium fees.

Lenders add up these housing costs to determine what percentage they are of your gross monthly income. This figure is known as your Gross Debt Service (GDS) ratio. Remember, it must be 32% or less of your gross household monthly income.

The second affordability rule is that your entire monthly debt load shouldn’t be more than 50% of your gross monthly income. This includes housing costs and other debts, such as car loans and credit card payments. Lenders add up these debts to determine what percentage they are of your gross household monthly income. This figure is your Total Debt Service (DTI) ratio.

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Get a Mortgage Pre-Approval

Once you’ve made the necessary calculations and feel that you are ready to obtain a mortgage, it’s a good idea to select a lender to get pre-approved. This means that the lender will look at your finances to establish the amount of mortgage you can afford. At that time, the lender will give you a written loan status report signifying preliminary loan approval.

Some buyers may not wish to pursue a mortgage pre-approval until they have found the home they want to buy. However, having a pre-approved mortgage amount makes the search for your new home much easier and less time-consuming because you have a good price range in mind.

Some of the things you will need to have with you the first time you meet with a lender are:

* Your personal information, including identification such as your driver’s license
* Details on your job, including confirmation of salary in the form of a letter from your employer
* Your sources of income
* Information and details on all bank accounts, loans and other debts
* Proof of financial assets
* Source and amount of down payment and deposit
* Proof of source of funds for the closing costs (these are usually between 1.5% and 4% of the purchase price)

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Will You Have Trouble Qualifying for a Mortgage?

Your calculations may show that you will have trouble meeting monthly debt payment and that you will likely have trouble getting approved for a mortgage. Here are some things you can do:

* Pay off some loans first
* Save for a larger down payment
* Revise your target house price

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Other Helpful Strategies

Meet with a credit counselor who can help you minimize your debts.
* Buy your home through a rent-to-own program provided by the builder, a non-profit sponsor or a government sponsor.
* Find out about programs through which you can help build your own home.
* Ask the housing department of your municipality about any special programs available.

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The Importance of Your Credit Rating

Before approving you for a mortgage, lenders will want to see how well you have paid your debts and bills in the past. To do this, they simply get a copy of your credit history (credit report) from a credit bureau. This provides them with information on your financial past and use of credit. Before your lender sees your credit history, you should get a copy for yourself to make sure the information is complete and accurate. Simply contact one of the three main credit-reporting agencies (Equifax, TransUnion, Experian) to get a copy of your credit report. There is often a fee for this service, although there are free services out there.

Lack of Credit History

If you have no credit history, it is important to start building one by, for example, applying for a standard credit card with good interest rates and terms, making small purchases and paying them as soon as the bill comes in.
Fixing a Credit Report

If you have bad credit, lenders might not want to give you a mortgage loan until you can re-establish a good credit history by making debt payments regularly and on time. Most unfavorable credit information, including bankruptcy, is dropped from your credit file after seven years. If you have bad credit, you may want to consider credit counseling.

Despite your poor credit history, you might still be able to get a mortgage loan if you have a relative such as a family member willing to be a guarantor or co-signer on the loan. This person must meet the lender’s borrowing criteria, including good credit history, and is legally obligated to make the mortgage payments if you do not.

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Once you have figured out the home price range you can afford and the type of mortgage you qualify for, you will need to calculate all of the associated costs of the transaction to make sure you are financially ready.

How much does buying a home really cost?

Once you have figured out the home price range you can afford and the type of mortgage you qualify for, you will need to calculate all of the associated costs of the transaction to make sure you are financially ready.

Up front Costs

You will need to plan ahead to cover the many up-front costs of buying a home. Timing is important to help make sure things go smoothly.

Mortgage Loan Insurance Premium. If yours is a high-ratio mortgage (less than 20% down payment), your lender may need mortgage loan insurance. Your lender may add the mortgage insurance premium to your mortgage or ask you to pay it in full upon closing.

Appraisal Fee. Your mortgage lender may require that the property be appraised at your expense. An appraisal is an estimate of the value of the home. The cost is usually between $250 and $350 and must be paid when you contract for those services.

* Earnest Money. This is part of your down payment and must be paid when you make an Offer to Purchase. The cost varies depending on the area, but it may be up to 5% of the purchase price. If you wish to make a down payment of 5% and you give a deposit of 5%, then your down payment is considered to be made.

Down Payment. With an FHA loan you can own your home with as little as 3.5% down payment. At least 20% of the purchase price is usually required for a conventional mortgage.

Home Inspection Fee. We always recommend that you make a home inspection a condition of your Offer to Purchase. A home inspection is a report on the condition of the home and generally costs around $250 to 350, depending on the complexities of the inspection. For example, it may be more costly to inspect a large home or one where issues such as moisture problems, pyrite, radon gas or urea-formaldehyde are suspected.

Prepaid Property Taxes and/or Utility Bills. To reimburse the vendor for prepaid costs such as property taxes, filling the oil tank and so on.

Property Insurance. The mortgage lender requires this because the home is security for the mortgage. This insurance covers the cost of replacing your home and its contents. Property insurance must be in place on closing day.

* Water Tests. If the home has a well, you will want to have the quality of the water tested to ensure that the water supply is adequate and the water is potable. You can negotiate these costs with the vendor and list them in your Offer to Purchase.

* Septic tank. If the house has a septic tank, it should be checked to make sure it is in good working order. You can negotiate the cost with the vendor and list it in your Offer to Purchase.

Title Insurance. Your lender or lawyer/notary may suggest title insurance to cover loss caused by defects of title to the property.

If you feel you cannot cover all of the up-front costs, you can ask the seller to contribute to these.
Other Costs

Besides up-front costs, there are other expenses to consider:

1. Appliances. Check to see what comes with the house, if anything.

2. Gardening equipment.

3. Window treatments. Check to see what comes with the house.

4. Decorating materials. Paint, wallpaper, flooring and tools for redecorating.

5. Hand tools. You will need some basic hand tools for your new home.

6. Moving Expenses.

7. Renovations or Repairs.

8. Service connection fees. Charged for utilities — telephone, gas, electricity, cable TV, satellite TV, Internet and so on. You may be asked to pay a deposit for some utilities.

9. Condominium Fees. You may have to make the initial payment for these monthly fees.

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Try to buy a home that meets most of your needs for the next 5 to 10 years, or find a home that can grow and change with your needs. Use the Home Features Checklist to see what you want, need and may potentially need in the future.

Your Current and Future Needs

Before you start searching for a home, you need to think about your needs both now and in the future. Here are some things to consider:

* Size requirements. Do you need several bedrooms, more than one bathroom, space for a home office, a two-car garage?

* Special features. Do you want air conditioning, storage or hobby space, a fireplace, a swimming pool? Do you have family members with special needs? Do you want special features to save energy, enhance indoor air quality and reduce environmental impact?

* Lifestyles and stages. Do you plan to have children? Do you have teenagers who will be moving away soon? Are you close to retirement? Will you need a home that can accommodate different stages of life?

Try to buy a home that meets most of your needs for the next 5 to 10 years, or find a home that can grow and change with your needs. Use the Home Features Checklist to see what you want, need and may potentially need in the future.

Choosing a Location That Is Right for You

Even if the home you choose has everything you need, the location might not be appropriate. When deciding where to live, you should consider:

* Whether you want to live in a city, a town or in the countryside

* Where you work, how easy it will be to get there and the commuting costs

* Where your children will attend school and how they will get there

* Whether you need a safe walking area or recreational facilities such as a park nearby

* How close you would like to be to family and friends

For more information, please contact me to get information pertaining to specific neighborhoods.

New Home, Previously Owned or Build Your Own?

When thinking about the kind of home you want, the first thing you should consider is whether you want a previously owned home (often called a resale) or a new home. Here are some characteristics that may help you decide:

New Home

* Modern design. A new home has an up-to-date design that takes into account the latest trends, materials and features.

* Personalized choices. You may be able to upgrade or choose certain items such as siding, flooring, cabinets, plumbing and electrical fixtures.

* Up-to-date with the latest codes/standards. The latest building codes, electrical and energy-efficiency standards will be applied.

* Maintenance costs. Lower maintenance costs because everything is new and many items are covered by a warranty. You should still set aside money every year for future maintenance costs.

* Builder warranty. This is a warranty that may be provided by the builder of the home. Be sure to check all the conditions of the warranty. A homebuilder’s warranty can be important if a major system such as plumbing or heating breaks down.

* New Home Warranty programs. Generally new home warranty programs are provided by provincial and territorial governments, but there are private new home warranty programs. These warranty programs are not available in Nunavut and the Northwest Territories. Check with your real estate agent or lawyer/notary to find out what the new home warranty program in your province or territory covers.

* Neighborhood amenities such as schools, shopping malls and other services may not be complete for years.

* Extra costs. You may have to pay extra if you want to add a fireplace, plant trees and sod, or pave your driveway. Make sure you know exactly what’s included in the price of your home.

Resale Home

* You can see what you are buying. Easy access to services. Probably established in a neighborhood with schools, shopping malls and other services.

* Landscaping is usually done and fencing installed. Previously owned homes may have extras like fireplaces or finished basements or swimming pools.

* Possible redecorating and renovations. You may need to redecorate, renovate or do major repairs such as replacing the roof, windows and doors.

Building Your Own Home

Some people prefer the challenge and flexibility of building their own home. On one hand, you make all the decisions about size, design, location, quality of material, level of energy-efficiency and so on. However, you should expect to invest lots of time and energy.
Deciding on the Type of Home to Buy

There are many types of homes to choose from and each has its advantages and disadvantages. Think about your needs before making a decision. Don’t forget to look beyond the walls. The environment surrounding your home can be almost as important as the environment inside of it.

Single-family Detached

A home containing one dwelling unit, that stands alone and sits on its own lot thereby offering a greater degree of privacy.

Semi-detached

A single-family home that is joined to another one by a common wall. It can offer many of the advantages of a single-family detached home and is usually less expensive to buy and maintain.

Duplex

Two single-family homes located one above the other in a building. Often, the owner lives in one unit and rents the other.

Row House or Townhouse

Many similar single-family homes, side-by-side, separated by common walls. They can be freehold, condominiums, or rental units. They offer less privacy than a single-family detached home but still provide a separate outdoor space. These homes can cost less to buy and maintain — but they can also be large, luxury units.

Stacked Townhouse

Usually consists of two-storey homes stacked one on top of the other in a row of four or more homes. The units may have more than one level. All units have direct access from the outside.

Manufactured Home

A factory-built single-family home that is transported to your chosen location and placed on a foundation. The term manufactured home has replaced the term “mobile home.”

Condominium

A condominium is a form of ownership, not a type of construction. Condominiums can be high-rise residential buildings, townhouse complexes, individual houses and low-rise residential buildings. Condominiums are known as stratas in British Columbia and syndicates of co-ownership in Quebec.

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In this guide I will walk you through the planning process and the Steps to Buying a home step-by-step , to help you determine which home is right for you and how to strategically find your next home. You’ll develop a better understanding on mortgages, viewing homes, the offer, closing details and moving in.

It is important as you start your home search you work with someone who has the experience, professional expertise and integrity to make your next real estate transaction pleasurable and stress-free. Whether it is your first home or your tenth, you need an agent who can inform you on the process and work on your behalf.

In this guide I will walk you through the planning process and the Steps to Buying a home step-by-step , to help you determine which home is right for you and how to strategically find your next home. You’ll develop a better understanding on mortgages, viewing homes, the offer, closing details and moving in. Understanding the home buying process and knowing what to expect can make it a pleasant, stress-free experience.

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Making the Decision to Buy

The purchase of a home is one of the largest expenditures that most people make in their lifetime. It should be an informed and cautious decision regardless if is your first home, vacation home, or rental property.

The first two questions you should ask yourself are:

1. Can you afford to buy a home right now? You have to analyze your budget to make sure you can afford the cost associated with home ownership. This goes beyond making the monthly mortgage payment. You must account for repairs, maintenance, and potential income loss in the future.

2. Is it a good time for you to buy a home?

There are several factors that you should consider before making the decision to buy a home.

    1. Make sure that you are able to hold or stay in the home for several years after your purchase.
    2. Make sure your employment status should be secure.
    3. Analyze market conditions and use realistic expectations on where the market is at and where it is going.
    4. What financing options are available to you and at what cost.

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Steps to buying a Home

When you plan to purchase a home, there is a series of steps necessary before you move forward. Below you will find all the steps needed when purchasing your next home.

1.  Financing– If you plan on financing your purchase, getting financing lined up is the first and most important thing you need to do. This will help determine not only if you qualify to buy a home, but at what cost. At the very minimum most lenders will need the following information from you. You should start compiling this information to give to your lender as you will need a preliminary approval to submit any offer moving forward.

    • bank account statements (last 2 months)
    • Documentation of any other loans you may have (school, installment, car, etc)
    • Any investment accounts you may have
    • Last two pay stubs
    • Tax returns for the last two years

If more than one buyer is involved, this information should be included for each individual.

2. Credit score- Your lender will pull your credit as it will play a big role on obtaining a loan approval.. The higher your score is, the better your chances are for securing loan and the better the interest rate you should be able to get. A credit score above 620 is generally considered a good score. Ideally you would like to be over a 720.

It could be beneficial to have your credit report and score in your hand when you apply for a home loan to have a better understanding of what is on there and to make sure there are no discrepancies that you have to fix beforehand.

3. Get pre-qualified  Once your lender receives all this information from you they should be able to issue you a pre approval and give you an idea of what you can afford and at what rate. This pre-approval shows how much you can afford to comfortably spend on your home purchase, how much of a down payment you will need to have, and how much money you need for closing costs.

In Arizona, buyers are required to submit a Loan Status Report or LSR (a standardized pre-approval letter from a lender containing relevant information) along with any contract to purchase a property.

4. When Purchasing a Home in Arizona what Documents are used or required

In Arizona, the purchase of a home involves several different types of documents that buyers should understand. All forms that are needed should be provided to you by your real estate agent. Most of these are standard forms issued by the department of real estate which include:

    • Real Estate Agency & Disclosure– a document that clarifies the relationship between the buyer (and seller) with the real estate agency.
    • Loan Status Report (LSR) – a standardized pre-approval letter from a lender containing relevant information.
    • Loan Status Update- a three-section document that provides updates on the buyer’s loan status.
    • Lead Based Paint Disclosure- a document disclosing the presence or lead-based paint provided by the seller and signed by the buyer.
    • Arizona Purchase Contract- several pages that are completed with the intent to purchase the property.
    • HOA Addendum- a required document stating the current amount of HOA fees (including transfer fees) when the Arizona home is situated within a Homeowner’s Association or HOA.
    • Buyer’s Inspection Notice & Seller’s Response (BINSR)- a document detailing the buyer’s request for repairs along with the seller’s response.
    • CLUE Report/Loss History Report- a report detailing insurance history regarding home losses.
    • Cure Period Notice- a three-day notice allowing one party to provide the other with a three-day extension for all dates/times listed within the real estate contract.
    • Final Walk Through- a document dealing with the condition of the property regarding the seller’s representation of it that is completed by the buyer.
    • Other forms can include: HOA addendum, Short Sale addendum, As-is addendum, etc.

Finding which home to purchase

Once you have qualified to purchase a home, it is time to begin your home search. Most buyers have a general idea of what they are looking for and the location.  We will then set up a customized search portal for you that will keep you up to date on any properties that come on the market that fit your criteria. After viewing the properties, you then can take the next step to making an offer.

Making an Offer to Purchase

Once you have found the home you would like to purchase, you need to present the Seller with an Offer to Purchase or an Agreement of Purchase and Sale. As your home is probably your biggest investment, it would be wise to work with your real estate agent and/or a lawyer/notary in preparing your offer. Remember that the Offer to Purchase or Agreement of Purchase and Sale is a legal document and should be carefully prepared.

Any offer or agreement will typically include:

* Your legal name, the name of the vendor and the legal civic address of the property.

* The purchase price offered.

* The chattels that will be included in the purchase price (for example, window coverings, appliances). Whatever items in or around the home that you think are included in the sale should be specifically stated in your offer.

* The amount of deposit.

* The closing day (date you take possession of the home) — usually 30 to 60 days from the date of agreement. It can also be 90 days or longer. Generally, an Offer to Purchase obliges the purchaser to take possession of the house and property on a certain date. As of the closing date, the purchaser is responsible for taxes, utilities, repairs and maintenance.

* Request for a current land survey of the property.

* Date when the offer becomes null and void — that is, it is invalid.

* Any other conditions that go with the offer, including property inspection and approval of mortgage financing.

The process of making an offer, receiving a counter-offer and then revising it again is not uncommon. The whole process can seem like a roller coaster ride — exciting, but stressful. It’s all part of making the deal work best for you and the vendor.

If Accepted, Whats Next….

Once your make the offer on the property and it is accepted, you need to take care of several important issues on a time table set by the contract.

1. Opening escrow- Once your offer to purchase is accepted, you have to open escrow through a title company. The title company is hired to act as an unbiased or neutral third party to the transaction. The title company will handle the transaction from this time to closing. They will conduct research on the property to ensure that the title is free and clear of old encumbrances and liens. Title will also hold all documents and conduct and signing that needs to occur.

The title company charges fees that are paid by either the buyer or the seller depending on the terms of the contract.

2. Setting up a home inspection- During the due diligence period (usually the first 10 days after contract acceptance) is when you should get one or more professional inspectors out to evaluate the entire home including but not limited to  plumbing, electric, and heating. Depending on the terms of the contract, you may be able to go back to the seller and ask for repairs for things found wrong in the inspection. Your realtor will help you through this process.

3. Arranging for your financing- Simultaneously with your inspection, you will need to begin finalizing financing.  This includes ordering an appraisal. You will need to work with your lender diligently and in a timely manner to make sure the process moves along and in the time line needed for closing.

4. Closing- If all goes well with the above items, you should be well on your way to closing. Your title company will arrange with you a time to sign all documents needed as well as provide you with a final closing statement. The title company will walk you through all required forms and ultimately will take  care of having the transaction recorded for you.

Move into Your New Home and make sure to get all utilities transferred into your name!

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