10 Things to Take the Trauma Out of Homebuying - Installment 1

You a first-time buyer, or perhaps it's just been awhile since you've been in the market. Buying a home is one of the largest financial transactions you will likely undertake in your life. Knowing this can create a cloud of fear and hesitation in your mind and around the transaction; it is only natural.

How do you work through it and fulfill your plans to reach your goal of homeownership?

Consider these points below to help focus your search and set your goals within your financial plan for 2010.


1. The Inside Scoop to Hiring a REALTOR

Find a REALTOR that will represent you as a Buyer, and consider a Buyer's Representative contract to align your interests; The Argument for a Buyer's Representative Agreement Contract

In Idaho, without a Buyer's Rep Contract (Buyer Agency), your information does not need to be held confidential by your agent in negotiating...which can certainly work against you in the wrong situation! It guarantees the Buyer their personal information will be held confidential, surviving the transaction itself, and allows the REALTOR to negotiate on behalf of the Buyer. For example, when the REALTOR presents an offer to a Seller without a Buyer’s Rep in place, if the Seller’s Agent asks, “Can they offer more?” and the Agent knows they can and their circumstances, the Agent can respond, “Yes, I believe so, they have just received a large inheritance!” This obviously does not help the Buyer in negotiating! (More details of the Agency relationships in Idaho are in the Agency Disclosure Brochure, which may be found on my website here.)

Have you been in touch with a REALTOR and wondered why they stopped communicating with you? It may be they will not work without a Buyer's Rep contract in place. In addition to protecting the Buyer, the Buyer’s Rep contract also assures the REALTOR that the Buyer has committed to working with them, and is not still shopping other Agents or working with more than one. When an Agent puts the time into finding and showing homes to a Buyer and advising them along the way, the Agent is not going to be compensated for his/her time unless a transaction closes.

The Buyers Rep also sets out a clear set of expectations for both parties. If either party is dissatisfied with the service, typically either party may cancel the contract in writing. Confirm with your REALTOR that they have and support this policy.


Will I have to pay my Buyer's Agent?

If the home you are buying is listed in the MLS, the Buyer's Agent's commission is being paid by the Seller; therein, FREE to you, the Buyer. Sellers agree to pay this fee because this assures the Seller that the Buyer is represented, will be appropriately advised and pre-qualified, and once an offer is accepted it will be less likely to fall through as all the appropriate steps are being taken along the way. It also reassures them that the people who come into their home are “real” potential Buyers, that the Sellers are not taking the time to clean and prepare their home (disrupting their schedules) for a showing that is in fact just a curious looky-loo. Even For Sale by Owners are almost always willing to pay a Buyer’s Agent, as often they aren’t educated about the entire process anyway, and do not know the laws about what they are required to disclose about their home, etc, where to find forms, etc. 

Check for any designations the REALTOR has earned.


For example, are they an Accredited Buyer’s Representative (ABR)? Designations are additional education pursued by the REALTOR beyond the minimum continuing education credits required by the State of Idaho. The quality of their knowledge and education is an asset to you!


Consider your personality and your comunication style
 
Be sure you find a REALTOR with whom you are compatible. Homebuying is not only a big financial commitment, but also an emotional one. Do you prefer frequent phonecalls? Are you email and text only? Are you a numbers and charts person?
 
It’s critical that the agent you chose is both skilled and a good fit with your personality and that you bond with your agent in a way that you feel you can trust them. Remember, your agent has guided many transactions in his/her career, and will likely have some insight into the transaction options for you along the way.
 
NEXT: The Right Time to Buy?

Refinancing Drives Mortgage Activity

reposted from realtor.org/realtormag
Daily Real Estate News | December 9, 2009

Refinancing Drives Mortgage Activity

Mortgage activity rose last week to the highest level in about two months, mainly from borrowers locking in low mortgage rates by refinancing, the Mortgage Bankers Association said on Wednesday.

Nearly three of every four loan requests last week was for a refinancing rather than a purchase, the industry group said. Total mortgage applications, based on the group's seasonally adjusted market index, rose 8.5 percent to 665.6, the highest since early October.

Demand for loans to buy a home increased by 4.0 percent to 241.5, the highest since the last week of October, while refinancing applications jumped 11.1 percent to 3,185.9 last week to a two-month high, the industry group's indexes showed.

Average 30-year mortgage rates rose 0.09 percentage point to 4.88 percent but haven't moved much from all-time lows.The rate was down from 5.44 percent a year ago and compared with a record low of 4.61 percent set in March, according to the Mortgage Bankers Association.

Source: Reuters, Mortgage Bankers Association (12/9/2009)

New Homebuyer "Move-up" Tax Credit

Do you currently own your home? Have you been considering taking advantage of the lower pricing in the local market and "moving up" to a larger space?

> IT IS TRUE: a larger home is less expensive today that it was 2 years ago.

Have you owned your current home as your primary residence for at least 5 years?

If the answer to all of the above is 'yes', then you may qualify for the NEW tax credit! Not heard of it? As part of the extended first-time buyer credit that passed last month, the homebuyer credit has been expanded to include "move up" buyers that have been in their home at least 5 years. This tax credit is up to $6500 and is also refundable, meaning if you were to file your taxes after purchasing a new home and have a refund of $200 owed to you, you would with this credit have a refund of and additional $6500....in otherwords a $6700 refund!

Certainly, this tax credit alone is not a reason to sell your home and buy a new one, as there are transaction costs involved in buying and selling which are likely above $6500. HOWEVER, if you are considering trading up anyway to take advantage of market pricing, certainly it is worth getting it done in time to use this credit to offset some of these costs.

You have only until April 30th to be in contract on your new home to qualify. Not to sound dire, but while considering this, please also consider that the first offer you make on a home often does not go through! If you were to make your first offer on a home on April 20th and it was not accepted by the Seller, you may not find another home that satisfies your needs in time to qualify for this credit! Please do not leave yourself in a time pinch and "setttling" for your next home just to qualify.

PLAN AHEAD! Start today by contacting your tax advisor and me, your REALTOR!

View the document on my website for more details from the National Association of REALTORS.

Thinking of a friend or relative that may wish to take advantage of the tax credit? I am pleased to offer no-obligation, free consultations...please pass along my information and have them contact me today!

The worst they can say is 'no'....but it might be just what they need!