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BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
WhoAreWe?
LEONARDREALESTATEGROUPLLCisarealestatefirmthatworksdiligentlyandconfidentially to ensure that our clients’ objectives are met and their desiredoutcomesareachieved.Withover30yearsofrealestateexperience,weprovidehigh-qualityprofessionalserviceandinsight.Wearededicatedtoevaluatingeachclient’suniqueneedsandfindingthemthatidealpropertydesignedjustforthem.Agreatdealbringspeopletogethersothatbothpartiesgetwhattheywant.Thatisourspecialty.WebelievethatMakingEducatedRealEstateDecisionsisimportantforresidentialand commercial buyers and sellers aswell as investors. To that end,we offerour Residential clients the most current educational resources and location-specificinformationthatcanhelpfamiliesavoidmakingmistakesandstartsavingmoney.Visitourwebsitewww.leonardrealestategroup.comandlookaround.For our Commercial clients, we offer over 25 years of practical EconomicDevelopmentexperienceinMiami-DadeCounty.Wehelpcommercialclientsandinvestorsunderstandthebigpictureandprovidevaluableprofessionalguidancethroughouruniquegovernmentalaffairsexperience.Regardless of what real estate services you need - buying, selling, residential,commercial,orinvestment-makeLEONARDREALESTATEGROUPLLCyourrealtorsofchoice.
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
BuyersGuideTableofContents
i) 10stepsthathelpinthehomebuyingprocess
ii) 3tipstobudgetandsaveforahome
iii) 3typesofhomeloans
iv) 8stepsinthefinancingprocess
v) 13necessaryfinancialdocuments
vi) 3financingcoststobuyingahome
vii) 10questionstoaskwhenchoosingarealestateagent
viii) Contact
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
STEPSTHATHELPINTHEHOMEBUYINGPROCESS
Buyingahouserequiresa lotoftimeandeffort,butthese10stepscanhelpmakethehomebuyingprocessmanageableandhelpyoumakethebestdecisionspossible.
1. StartYourResearchEarlyStartreadingWebsites,newspapers,andmagazinesthathaverealestatelistings.Makeanoteofparticularhomesinareasthatyouareinterestedinandseehowlongtheystayonthemarket.Also,noteanychangesinaskingprices.Thiswillgiveyouasenseofthehousingtrendsinspecificareas.AttachedisaReportaboutaMiamiSpringsproperty.Withinthereportyouwillfindallkindsofinformationaboutthelocalmarket,schools,businesses,educationlevel,andmore.Donothesitatetocontactus.Wewouldbehappytoputtogetherareportforyourproperty.
2. DetermineHowMuchHouseYouCanAffordLendersgenerallyrecommendthatpeoplelookforhomesthatcostnomorethanthreetofivetimestheirannualhouseholdincomeifthehomebuyersplantomakea20%downpaymentandhaveamoderateamountofotherdebt.
Butyoushouldmakethisdeterminationbasedonyourownfinancialsituation.UseamortgagecalculatororuseanAffordabilityCalculatortoseehowmuchhouseyoucanafford.
3.GetPrequalifiedandPreapprovedforcreditforYourMortgage
Beforeyoustartlookingforahome,youwillneedtoknowhowmuchyoucanactuallyspend.Thebestwaytodothatistogetprequalifiedforamortgage.Togetprequalified,youjustneedtoprovidesomefinancial informationtoyourmortgagebanker,suchasyour incomeandtheamountofsavingsandinvestmentsyouhave.Yourlenderwillreviewthisinformationandtellyouhowmuchwecanlendyou.Thiswilltellyouthepricerangeofthehomesyoushouldbelookingat. Later, you cangetpreapproved for credit,which involvesproviding your financial
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BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
documents(W-2statements,paycheckstubs,bankaccountstatements,etc.)soyourlendercanverifyyourfinancialstatusandcredit.
4.FindtheRightRealEstateAgent
Realestateagentsare importantpartnerswhenyou’rebuyingor sellingahome.Realestateagentscanprovideyouwithhelpfulinformationonhomesandneighborhoodsthatisn’teasilyaccessible to thepublic. Their knowledgeof thehomebuyingprocess,negotiating skills, andfamiliaritywiththeareayouwanttoliveincanbeextremelyvaluable.Andbestofall,itdoesn’tcostyouanythingtouseanagent–they’recompensatedfromthecommissionpaidbythesellerofthehouse.
5.ShopforYourHomeandMakeanOffer
Start touringhomes in your price range. Itmight behelpful to takenotes (using this helpfulchecklist)onallthehomesyouvisit.Youwillseealotofhouses!Itcanbehardtoremembereverythingaboutthem,soyoumightwanttotakepicturesorvideotohelpyouremembereachhome.
Makesuretocheckoutthelittledetailsofeachhouse.Forexample:
•Testtheplumbingbyrunningtheshowertoseehowstrongthewaterpressureisandhowlongittakestogethotwater
•Trytheelectricalsystembyturningswitchesonandoff
•Openandclosethewindowsanddoorstoseeiftheyworkproperly
It’salsoimportanttoevaluatetheneighborhoodandmakeanoteofthingssuchas:
•Aretheotherhomesontheblockwellmaintained?
•Howmuchtrafficdoesthestreetget?
•Isthereenoughstreetparkingforyourfamilyandvisitors?
•Isitconvenientlylocatednearplacesofinteresttoyou:schools,shoppingcenters,restaurants,parks,andpublictransportation?
Takeasmuchtimeasyouneedtofindtherighthome.Thenworkwithyourrealestateagenttonegotiateafairofferbasedonthevalueofcomparablehomesinthesameneighborhood.Onceyouandthesellerhavereachedagreementonaprice,thehousewillgointoescrow,whichistheperiodoftimeittakestocompletealloftheremainingstepsinthehomebuyingprocess.
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
6.GetaHomeInspection
Typically,purchaseoffersarecontingentonahomeinspectionofthepropertytocheckforsignsofstructuraldamageorthingsthatmayneedfixing.Yourrealestateagentusuallywillhelpyouarrangetohavethisinspectionconductedwithinafewdaysofyourofferbeingacceptedbytheseller.Thiscontingencyprotectsyoubygivingyouachancetorenegotiateyourofferorwithdrawitwithoutpenaltyiftheinspectionrevealssignificantmaterialdamage.
Both youand the sellerwill receivea reporton thehome inspector’s findings. You can thendecideifyouwanttoaskthesellertofixanythingonthepropertybeforeclosingthesale.Beforethesalecloses,youwillhaveawalk-throughofthehouse,whichgivesyouthechancetoconfirmthatanyagreed-uponrepairshavebeenmade.
7.WorkwithaMortgageBankertoSelectYourLoan
Lendershaveawiderangeofcompetitivelypricedloanprogramsanda reputation for exceptional customer service. Youwill havemanyquestionswhenyouarepurchasingahome,andhavingoneofourexperienced,responsivemortgagebankersassistyoucanmaketheprocessmucheasier.
Everyhomebuyerhastheirownprioritieswhenchoosingamortgage.Some are interested in keeping theirmonthly payments as low aspossible. Others are interested in making sure that their monthlypaymentsnever increase.Andstillotherspicka loanbasedontheknowledgetheywillbemovingagaininjustafewyears.
8.HavetheHomeAppraised
Lenderswillarrange foranappraiser toprovidean independentestimateof thevalueof thehouseyouarebuying.Theappraiserisamemberofathirdpartycompanyandisnotdirectlyassociatedwiththelender.Theappraisalwillletallthepartiesinvolvedknowthatyouarepayingafairpriceforthehome.
9.CoordinatethePaperwork
As you can imagine, there is a lotof paperwork involved inbuying ahouse. Your lenderwillarrangeforatitlecompanytohandleallofthepaperworkandmakesurethattheselleristherightfulownerofthehouseyouarebuying.
10.ClosetheSale
Atclosing,youwillsignallofthepaperworkrequiredtocompletethepurchase,includingyourloandocuments.Ittypicallytakesacoupleofdaysforyourloantobefundedafterthepaperworkisreturnedtothelender.Oncethecheckisdeliveredtotheseller,youarereadytomoveintoyournewhome!
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
TipstoBudgetandSavefor
aHome
Buyingahouseisexcitingandlife-changing.What'snotasmuchfunissavingforthedeposit.Butthemoremoneyyouputdownupfront,thelessyou'llhavetoborrow.
Therearemanyways to save forahome thatdon't requiremajor changes toyourlifestyle.Withagoodsavingsplanandsomediscipline,you'llsoonhavethedepositforyourhome.HereisagreatFinancialPlannerExcelspreadsheettohelpyouBudget.
1. WorkoutwhatyoucanaffordBe realistic. Youmay need to consider a smaller property, an older property, or aproperty inadifferentarea, justtogetyoustarted inthepropertymarket.Usethemortgagecalculatortoworkouthowmuchyoucanaffordtoborrow.
Mortgagecalculator
2. Waystobuildyourhomedepositfaster
Developaplantohelpyousavetowardsyourdeposit.UsetheTrackMyGOALSapptoseehowlongitwilltakeyoutosaveyourdepositandhowmuchyouneedtoregularlyputaside.
3. Cutbackontheextras
Theeasiestwaytoseewhereyoucancutbackisbydoingabudget.Writedownyouressentialcosts,suchasrent,billsandfood,andsubtractthisamountfromyourincome.Whatisleftoveriswhatyoucouldpotentiallysaveforyourdeposit.
Notsurewhereallyourmoneygoes?TryusingtheTrackMySPENDappforamonthtoseewhereyouspendyourcash.
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BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
Giveyourselfsomeleeway-ifyourbudgetistootight,itishardertoreachyourtarget.Sodon'tcutoutallyourfunexpenses.Agoodideaistosetsmallersavingsgoalsalongthewayandrewardyourselfwhenyouachievethem.
Readmoreonbuyingahome.
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
TypesofHomeLoans
1. ConventionalMortgage.Thisisthemostcommonlyusedtypeandusuallyhasthebest
rates.You’lltypicallyneedatleast10%foradownpaymentandgoodcredit.Canbefor15or30yearsor“interestonly”whereyouarenotpayinganyprincipalinyourpayment.“Interestonly” loanshaveabit lowerpaymentbut youdon’t payoff anyof the loanbalancewhenyoumakeyourregularpayment.
MortgageInsurance.Alright,thisisn’tamortgagetype,butyouneedtoknowaboutit!Ifyouputlessthan20%downonahome,mortgageinsuranceprotectsyourlenderincaseyouquitmakingpayments.ThecostvariesbytypeofloansoaskyourMortgageProfessionalaboutitwithevery loan you discuss. Mortgage insurance can now be a taxwrite-off depending on yourincomelevel,duetoarecentchangeinthetaxlaws.Also,onceyoubelieveyouhaveatleast20%equity,youshouldcontactyourlendertofindoutaboutgettingridofMortgageInsurance,alsoknownasPMI.
2. FHAMortgage.Thoughtofasthefirsttimehomeloanprogrambutactuallyavailabletoanyone.Thedownpaymentisonly3.5%andismoreforgivingoflowercreditscores.TheinterestratesarenotasattractiveasConventional,butqualifying for the loan isn’tastougheither.Hereisagreatin-depthlookatTheTop5thingsyoushouldknowaboutFHAhomeloansfromourfriendsatHomeownershipUniversity.FHAMortgagesarewhatmostpeopleconsidertobe“firsttimebuyerloans”.Notalllenderscanofferthem.
3. VALoan.Zerodownpaymentloan,butyoumustbeaveteran.
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BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
STEPS IN THE FINANCING PROCESS
Pre-Qualify
Interview
Housing Budget
Documents
Loan Application
Good Faith
Estimate
Loan Approval
Clear to Close
Closing
1. Pre-QualifyInterview
Priortothepropertyhuntingprocess,it’swisetomeetwithoneormoreLenderstobecomepre-Qualifiedforaloan.Thepre-qualifyprocessisnotanin-depthloanapplication.ItisadiscussionwiththeLendertodetermineyouroverallfamilyincomeanddebt.Theprocesscantakebetween30minutesandanhour.Theinterviewcanbeconductedoverthephoneorinperson.ThereisnofeeforthisservicefromtheLender.ThiswebsitehasagreatlistofPre-Qualificationquestions.
Westronglyrecommendthatyourefrainfromusingout-of-stateorInternetLenders.TheircostsareoftenexcessiveANDtherearemanyscamartistsoutthere.
At the end of the process you will receive a “Pre-Qualification” letter from the Lender,acknowledgingthatyouarequalifiedtopurchaseproperty“upto”agivenamount.Thisletterisneeded when you submit an offer for a property, to demonstrate that you are a capablepurchaser.
Onceyouhaveanacceptedagreementforthepurchaseofaproperty,youwillthencompleteamortgageapplicationwithyourlender.
2. HousingBudgetDuringtheloanpre-qualificationprocessyouwilldiscusswhatmonthlyHousingBudget you can comfortably afford. The budgetwill include an amount for themortgage itself, an amount for annual property and fire taxes and for propertyinsurance. Frequently, home buyers “qualify” for more house than they canactuallyaffordtopayfor.
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BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
It’s important that YOU tell the Lender the maximum loan payment (including taxes andinsurance)youarecomfortablewith-andthatwilldeterminehowmuchyoucanpayforyourproperty.
Tax Advantages: There are substantial tax savings when you own your own home. You candeductyourpropertytaxes, insuranceandupto100%oftheinterestyoupayaspartofyourmortgage(oftenthousandsofdollars).So,muchofthemoneyyoupayaspartofyourmortgagepayment,isdeductibleonyourtaxreturn.Thathelpsyouto“affordmorehouse”.
CAUTION–DoNotmakeANYpurchasethatwillabsorbyouravailablecash(someofwhichyoumayneedatclosing)OR,buyANYTHINGonpaymenttermsbeforeyoucloseonyourproperty.Itwillchangeyourcreditscoreandmaymakeyouineligibletopurchase.
3. DocumentsWhileyouareviewinghomestopurchase– this is the timetogetyour financingdocumentstogether–especiallyifsomeofyourfundsarecomingfromuntypicalsources–401K,loanfromaparent,retirementaccount,stocksandbonds.
YourLenderwillguideyou–but,attheminimum,youwillneedthefollowingdocumentswhenyouarereadytomakeyourloanapplication:
(a)TwoyearsofW2’s(b)Thirtydaysofpaystubs(c)Twomonthsofallbankstatements(d)Twelvemonthsofrentcheckpayments(e)Copiesofallapplicantsdriver’slicensesandsocialsecuritycards(f)Informationaboutretirementaccounts,401K,CD’s,socialsecurityordisabilityincome,childsupport,alimonyandmore.
Thisisalsotheperfecttimeto“cleanup”anynegativeissuesthatshowonyourcreditreport.YourLenderwillgiveyouacopyofthisreportandwillgiveyouguidanceonhowtogettheerrorscorrected.Theymayalsohelpyouthroughthisprocess.
4. LoanApplicationOnceyouhaveattainedanacceptedofferonyourpurchase,yourLenderwillwalkyouthroughtheLoanapplicationprocess.Therewillbeafeeforthisprocessoffrom$300.00to$400.00.Thisfeepaystoprocesstheloanapplication,anappraisalandotherrelatedcosts.
This is the point in time when you will need all of the documents that we have previouslydiscussed(andperhapsothers).Theloan“Originator”(thepersontakingyourloanapplication)willcompletealloftheproceduresneededtopresentyourapplicationtoan“Underwriter”(thepersonwhoworksfortheLenderandhasthefinalsayforapprovingyourloan).TheUnderwritersjobistodetermineifyourloanapplicationmeetsalloftheLenderandFederalagencyguidelinesandthatyourloanisariskworthtakingforthelender.
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
PleasedonothesitatetocontactMr.AldoSaavedraatASaavedra@firenzegroup.comHeisaverytrustworthymortgagebrokerwhocanhelpyouwiththisprocess.
5. GoodFaithEstimate
The“GoodFaithEstimate”isadocumentthatyouwillreceivewithindaysaftercompletingyourloanapplication.Thisdocumentwillprovideyouwithallofthedetailsaboutyourloan–thetermoftheloan,theinterestrate,the“points”(afeeyoupayforobtainingtheloan),the“ratelock”(howlongtheLenderwillguaranteethetermsofyourloanbeforeithastoberewritten).
6. LoanApproval
LoanapprovalbyyourUnderwriterislikelytocomewithasetof“conditions”.Theseconditionsareawholevarietyof“picky”butverynecessaryitemsthatyourloanOriginatormustobtainorsatisfybeforefinalapproval.
AtthispointyourOriginatorwillbeinclosecontactwithyouovertheseissues.Itisimportantthatyourespondtoanyofherrequestsquickly.
Oncetheseconditionsaresatisfiedyouwillreceivea“CleartoClose”fromtheUnderwriter.
7. CleartoClose
“CleartoClose”istheGOsignalforeveryonetogointooverdrive.Yourloan Originator will move loan information to the attorneys for thepreparationofalldocuments–yourTPNRealtorwillmoveanylastminutechanges toyourPurchase&Saleagreement to theattorneys - and theattorney’sparalegals(thosespecialpeoplewhodomostoftheattorneysworkandgetlittleofthecredit)gettoworkcreatingtheHUDstatementthateveryonereliesonattheclosingtosatisfyallregulations.
OncetheBuyerandSeller’sattorneyshaveagreedonallofthe“numbers”inthetransaction–adatewillbechosenfortheclosingandallpartieswillbeadvised.
8. Closing
“THEGATHERING”Thisisthedaywheneverythingcomestogether.Thebuyer–theseller–bothattorneys–theRealtors–sometimestheloanOriginatorwillbethereaswell.
OccasionallytheBuyerandSellerappearattheclosingatdifferenttimes.Normallythebuyer’sappearfirstbecausetheirprocesscantakefromanhourtotwohourstocomplete.Thesellerscanappearlaterbecausetheirprocessusuallytakesfrom30to45minutes.
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
It’sagreattime!We’veseentearsofjoyfrombuyersoftheirfirsthome–andtearsofnostalgiafromhomeownerswhoareleavingahomeof30or40years–wheretheirchildrengrewup-wherefamilymemoriesreside.
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
NecessaryFinancial
Documents
Exactlywhatdocumentsyou'llhave toprovidedependsonyourpersonal situation, includingyourcreditprofile,downpayment,workhistoryandthelenderyou'vechosen.Butifyouwantaloan,bepreparedtodocumentalltheinformationyouprovideforyourapplication.Herearethetop13:
1. W-2forms.Peoplewhohaveaconventional jobwillneedtoprovideW-2 forms fromtheiremployeroremployers,foroneortwoyears.
2. Paystubs.Expecttoprovideenoughpaystubstocoveramonthofemployment.Ifyou'repaidweekly,forexample,you'llneedthelastfour.
3. Bankstatements.Lenderswillwanttosee,ataminimum,yourlasttwomonthsofbankstatements.Keep inmindthat it's important toprovideall thepages,even if someofthemareblank.
4. Tax returns.Mostborrowerswill beasked for at least the latest year's tax return, allschedulesincluded.Ifyou'reself-employed,haveasidebusiness,ownrentalpropertyorhavealotofemployeebusinessexpenses,you'llprobablyneedatleasttwoyearsoftaxreturns,bothbusinessandpersonal,Flemingsays.
5. Identification.Adriver'slicenseprobablywillsuffice.Ifyoudon'thaveadriver'slicense,apassportorstate-issuedIDcardissuitable.
6. ProofoflegalU.S.residencyifyou'renotaU.S.citizen.Forpermanentresidents,thatmeansagreencard.PeoplewhoareintheU.S.onothertypesofvisasmaybeaskedtoprovideadditionaldocumentation.Lendersaren'tgoingtoofferaloantosomeonewhoisintheU.S.onlytemporarily,Flemingsays.
7. Proofofmilitaryservice.Ifyou'reaveteran,you'llneedyourDDForm214,CertificateofReleaseorDischargefromActiveDuty,ifyouwantaloanfromtheU.S.DepartmentofVeterans Affairs program. If your service was before 1950, the document may haveanothername.
8. K-1andbusinesstaxreturns.Ifyouownabusinessorareself-employed,youwillneedtodocumentalltheincomeyouclaiminyourloanapplication.Exactlywhatdocumentsyouneedwilldependuponyourbusinessstructure.Flemingrecentlyprepareda57-pagereport foraclientdocumentingthe incomehereceivedfrommultipleventures.Someself-employedborrowerswill be asked for a profit-and-loss statement for the currentyear.
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BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
9. Sources of funds. If your submitted bank statements include any large or unusualdeposits,you'llhavetoverifywhereyoureceivedthemoney."Lendersarerabidaboutthatrightnow,"Flemingsays."Youcan'tjustwritealetterofexplanationlikeyoucouldin theolddays." If yousold stockorotherassets, forexample, you'llhave toprovidecopiesofallthedocumentsrequiredtoverifythesaleandtheproceedsreceived.
10. Giftletter.Ifsomeonegaveyoumoneytohelpwithyourhomepurchase,you'llneedtodocumentit."Alotoffirst-timehomebuyersreceivegiftsfromfamilymemberstohelpthem,"Gutierrezsays.Thelenderwillwantagiftletterthatwillincludeinformationaboutthedonor'srelationshiptoyou,theamountofthegift,thedateandthepurpose.Thedonormaybeaskedtoprovethatheorshehastheresourcestomakethegift,probablybyprovidingbankstatements.Lendersmayalsohavegiftformsforthedonortosign.
11. Alimonyorchildsupportdocuments.Alendermaynotaskifyoureceivealimonyorchildsupport,butyouarewelcome tovolunteer that information if youwant touse thosefundstoqualifyfortheloan.Youmaybeaskedforyourdivorcesettlement,proofthatyourex ispayingregularlyandverificationthat thepaymentswillcontinue for twoorthreemoreyears.
12. Proofofreserves.Lenderswanttomakesureyoucanaffordtomakepaymentsonceyou'veclosed,andmostwillwanttoseeenoughcashtocoveratleastthreemonthsofpayments.Showingcashreservesandassetsisalsohelpfulifyouhaveaweakjobhistoryormediocrecredit,Flemingsays."Ifthere'sanyweaknessatallinthefile,showingmoreassetsisuseful,"hesays."Whenyoucloseescrow,wedon'twantyoutobebroke."
13. Cancelled rent checks. Buyers who don't own another home will be asked to provethey'vepaidtheirrentontime,especiallyiftheydon'thaveasignificantcredithistory.Thatcanusuallybedonewithaverificationformfilledoutbyalandlordor12monthsofcancelledrentchecks.
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
FinancingCoststoBuying
aHome
Ingeneral,thefeesassociatedwithahomepurchaseincludeclosingcosts,loandiscountpointsandprepaiditems.
1. ClosingCostsTheamountyouwillpayinclosingcostsvariesbylocationandtypicallycostsbetween2%and3%oftheloanamount.Closingcostsarenotcalculatedonapercentagebasis,but insteadarebasedonspecific line itemsrelatedtoyourloanapplicationandlenderfees.
Unlessyouhavenegotiatedtohavesomeoneelsepaythesecosts,theyareyourresponsibilitytopayatthesettlement.
Though we don’t believe Zillow is a great source for home shopping, they did compile anextensivelistofpossibleclosingcosts.Checkitoutherehttp://www.zillow.com/wikipages/List-of-Closing-Costs-and-Fees/
Someexamplesofclosingcostsinclude:
• Loanoriginationfee• Creditreportfee• Loanapplicationfee• Titleservicesfeeandlender’stitleinsurancepremium• Owner’stitleinsurancepremium
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BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
2. LoanDiscountPointsAdiscountpointisequalto1%ofyourloanamount.Youmayormaynothaveagreedtopaypointsforyourloaninordertolowertheinterestrate.Ifyouchosealoanwithdiscountpoints,thenyouwillpaythepointorpointsattheclosing.
3. PrepaiditemsMostlendersrequireanescrowaccounttobeestablishedwithyourloantocoveryourpropertytaxesandhomeownersinsurance.Eachofthosebillswillbeestimatedandthen,aspartofyourmonthlymortgage payment, you will pay a portion of those bills to your lender.When theinsuranceandtaxbillscomedueyourlenderpaysthemforyou.
Onsettlementday,lendersrequireyoutopayintoyourescrowaccountasumtocoverpartofyourpropertytaxesandhomeownersinsurance.Inaddition,youwillneedtopayforyourfirstyearofhomeownersinsuranceinfull.
Dependingonthedayofyourclosing,youwillalsoneedtomakeaproratedpaymentforinterestonyourmortgagefromtheclosingdateuntiltheendofthemonth.
The federalgovernmenthasrevisedtheHUD-1SettlementStatementmultiple timesandhasmadeaGoodFaithEstimatemandatory.Ifyouhaveanyquestionsorconcernsaboutanyfeesyouareexpectedtopayatyourclosing,youshouldconsultyourlender,yourtitlecompanyandyourREALTOR®foranexplanation.
**UsethisBuyingCalculatortohelpyoufigureouthowmuchyoumightneed**
BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
QuestionstoaskwhenChoosingaRealEstateAgent
Someofagentsaresmart,efficient,focused,versatileandwillingtogotheextramile.Andsomeofthemaren’t.Findinganagentwhowillsellyourhomeusingarangeofmarketingtoolstogetyouthebestdealpossibleinareasonableamountoftime,allwhilechargingafairrate,takessomeeffort.Hereiswhatyoucanask:
1. Howmuch?Askpotentialagentshowmuchtheythinktheycansellyourhomefor.Iftwoagentssay$600,000andthethirdsays$700,000,thinkhard.It’slikelythehighbidisanexaggerationtoattractyourbusiness.Inthetradeit’sknownasbuyingalisting.Intheend,you’llbetheonewhopaysbecausethehighpricewillscareawaypotentialbuyersbeforeyouinevitablydroptheprice.
TheLeonardRealEstateGroupcreatesafullmarketanalysisreportwhichwillshowarangeofvalueforyourhome.Wewillsitdownwithyouandexplainourfindingssoyouare100%satisfiedthatitistherightprice.HereisanexampleofaCMAReportwehavedone.
2. Howwillyoumarketit?Runningafewclassifiedadsinthelocalpaper,listingitontheInternetandholdinganopenhouseshouldn’tbetheonlyanswers.Thepractitionershouldbeabletotalkaboutwhatkindsofpeoplearelikelybuyersandhowhewillreachouttothosespecificpeople.
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BuyersGuide FORALLYOURREALESTATENEEDS
LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
3. Howhasyourbusinesschangedinthelastfiveyears?Ifshedoesn’ttalkaboutwebsitetoursandsmartphones,chancesarethisisnotahighlywiredagent.WhileLudditescanstillsellhouses,itisgettingharder.Andifthisisoneofthosepeoplewhodon’tevenusee-mail,you’relettingyourselfinforunnecessaryaggravation.Andyoumaycutyourselfofffromopportunities.
4. Tellmehowyourlasttwodealssurprisedyou?Everyagenthasasuccessstory,butthis
questionwillgiveyouamuchbetterfeelforwhatthispractitionerislikeasasalesperson.
5. What’s your specialty? If you’re selling a starter home in a community full ofyoungfamilies,hiringanagentwhospecializesinseniorsisprobablyabadidea.Itdoesn’tmeanthatifheonlysellscondosthathecan’tsellahouse,buthemaynotbegeareduptodothebestjob.6. Howmanypeopleareyousellinghomesforrightnowandwhatareyoudoingforthem?Itmaynotbeabadthingthatahigh-poweredagentisjuggling15homes,butdon’texperthertogiveyoupersonalservice,althoughherassistantshouldbeattentive.Ontheotherhand,bewaryofanagentwithnoothercustomersbecauseshemaylackexperienceandcontacts.
7. Whatdoyouexpectofme?Agoodsalespersonwillhaveexpectations.Hemaywantyou
to leave and take the dog when the house is shown, paint the garage, move somefurniturearoundandscrubthetileinthebathroom.Itshowsthathecanthinklikeabuyerandthat'sagoodthing.
8. WhatadvicewouldyouhaveformeifIgetanofferfromabuyerwhowantstousean
FHAloan?Itwasn’tverylongagowhentherightanswermightberuntheotherway,butthesedaysgovernment-guaranteedfinancingfromtheFederalHousingAdministration,the Department of Veterans Affairs and state and locally managed loan assistanceprogramscanbekeytosellingaproperty.Realestateagentsshouldn’tbepushingbuyerstowardtheirfavoritelenders,buttheyshouldbeabletohelpthemandyouwadethroughcomplexfinancingissues.
9. What’s your fee? Forty-six percent of sellers Consumer Reports surveyed this year
attemptedtonegotiatealowercommissionrate.About71percentsucceededandthosepeoplewerejustassatisfiedwiththeperformanceoftheirrealestateagentsasthosewhopaidthestandard6percentormore.Inshort,ifyoudon’task,youdon’tget.
10. CanItalktooneofyourpreviousclients?Youneverknow.Someclientsmaytellyouto
steerclear.Wearehappytoprovideyouwithreferencessoyoucanhearaboutsomeofourpastwork.
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LeonardRealEstateGroup 786.205.0187or305.726.8416 [email protected]
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SeanEganPascaleSalesAgent786-205-0187
Carlos(Charlie)LeonardPresidentBroker305-726-8416