Archive for the ‘Advice for Buyers’ Category

Components of a real estate offer: what a first-time home buyer needs to know

Our first-time home buyer has been pre-qualified with a Lender and has been shopping online and in person with his/her Realtor.

Now you’ve found the perfect house and are ready to make an offer.

The first thing your Realtor will do is prepare a CMA (Comparative Market Analysis) to show comparable properties in the neighborhood and what they have sold for. We study what has been sold in the past six months and use this data to determine a fair market value price. What you decide to offer depends on how quickly the properties are selling in that particular area, how long the property has been on the market and other factors – your Realtor representing you will advise you.

In the price range in which first-time home buyers are shopping, the pricing may not be as competitive as you might expect as we near the deadline to get under contract.

Although we consider the purchase price the largest component of a real estate offer, other components come in to play.

• Are you asking the Seller to contribute towards your closing costs?
• How quickly can you close?
• Are you asking for a residential service agreement and home repairs?
• Are you writing a large earnest money check to make your offer look attractive?
• What TYPE of financing are you using?

When the Listing Realtor presents an offer to his/her Seller, he/she will point out:

• Sales price
• Amount of earnest money
• Type of financing (FHA, VA, conventional, RD, cash)
• Amount requested in repairs
• Seller concessions (amount Seller may contribute towards Buyer’s closing costs)
• Closing date
• Other additional provisions

Components of a real estate offer: what a first-time home buyer needs to know

If you are looking at a home your heart is set on and it’s possible for it to receive multiple offers, you want to begin with a clean and attractive offer. If you have the funds available, write a STRONG earnest money check – in our area, 1% of sales price is typical, but I encourage first-time home buyers to write their earnest money check for a larger amount if they intend to make a “low-ball” offer.

If first-time home buyers NEED to ask the Seller to contribute to your closing costs, it may be necessary to offer more than list price. Keep in mind that the property must appraise for the amount you are going to borrow, and you don’t want to spend money on an appraisal and inspections if it’s not likely to appraise. Again, your Realtor can advise you in this area.

TYPICAL first-time home buyers are using FHA financing and paying the minimum 3.5% down-payment. Your closing costs can be $4,000-$7,000, depending on the price of the home.

The expenses you can expect to pay up front include:

• Appraisal $375-$400
• Earnest money: 1% of sales price
• Inspections: $300-$500

Some home inspectors will be willing to be paid at closing, but may expect a credit card on file, should your contract fall through.

Good luck to first-time home buyers in crafting your offer. Rely on the skills of a competent, full-time Realtor to advise you and represent you.

Lori is a residential Realtor serving the greater Tulsa area, and specializing in midtown Tulsa real estate. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.

Tips and Tricks for First-Time Home Buyers – just in time for the April 30, 2010 stimulus deadline!

Because I am working with so many first-time home buyers at the moment, I thought I would write one general outline for all to follow.

Your first step as a first-time home buyer is to speak to a Lender to determine what type of financing you should use, how much money you will need for a down-payment and how much you can spend on a home. Which type of financing you choose as a first-time home buyer will depend on your credit score, how much down-payment you can afford, etc. I am not a Lender and will not advise in this area, but I do list several excellent Lenders from which to choose on my Preferred Vendor list. My favorite Lender is Julian James-Thomas, of 1st Capital Mortgage, by the way, 918-274-1519.

Once you know the amount you can comfortably afford, search for a Realtor to represent you in your first-time home buyer home purchase transaction. DO NOT search the internet and call the Realtor who has the property listed. You will want to work with ONE Realtor who clearly understands your goals and objectives and who will represent only your interests. If you call the Realtor who has the property listed, he/she will represent both you AND the Seller. While this can be done ethically, don’t you think you’d be better off with your personal and exclusive representation? Remember that the Seller pays the Buyer’s Agent’s commission, so this representation IS FREE to you.

Ask friends for referrals, interview Realtors and ask for references. I pride myself on my negotiating skills, but don’t take my word for it – ask for contact information of my previous clients and read my testimonials! Do find a full-time Realtor and don’t be guilted into using your cousin who sells real estate part-time.

Start shopping online. Your Realtor can set up a customized search for you that is much more fine-tuned than the searches you can do on the internet. If you want a specific lot size, inside laundry, master bedroom on the first level – we can search for all this! Do a little shopping from home and narrow down your possibilities before you get in the car to actually visit homes.

Tips and Tricks for First-Time Home Buyers – just in time for the April 30, 2010 stimulus deadline!

Start shopping in person. Take your camera and a note pad. Ask questions. Is this home priced reasonably? How long has it been on the market? What is the age and number of layers of the roof? Have any major components been updated (heat, air, electric, plumbing, hot water heater) – these can be costly repairs down the road, so don’t fall in love with a house and ignore the sagging roof!

Fall in love with your future home and write an offer.

Follow your Realtor’s advice as to how much to offer, how much earnest money to put down, what to ask for in repairs and Seller’s concessions. I’ll write a bit more about this tomorrow. The housing industry is still strong in Tulsa and surrounding areas, and we’re not giving houses away yet – so be prepared to learn about the components of an offer and how to get yours accepted.

Good luck to all first-time home buyers! We’re excited for your future! 65 days until the deadline for first-time home buyers to get your contracts written – we can do it! Get started today!

Lori is a residential Realtor serving the greater Tulsa area, and specializing in midtown Tulsa real estate. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.

Countdown: 65 days until the deadline for first-time buyers to get your contracts written  – Do you feel the frenzy beginning as we approach the deadline for first-time buyers to get their contracts submitted to qualify for the stimulus credit? As of today, February 23, 2010, the April 30th deadline is 65 short days away.

The phone is beginning to ring daily with calls from first-time buyers just beginning the process. Yesterday I received a call from a first-time buyer who had yet to speak to a Lender.

First-time buyers – please take notes! You must speak to a Lender first to know whether you qualify and for what amount you can qualify. Unless you are using VA financing or a Rural Development loan, you will need a minimum 3.5% down-payment which can be gifted from a family member.

There are also closing costs associated with your home purchase, and while you can ask for Seller assistance for much of this cost, there are limitations.

65 days until the deadline for first-time buyers to get your contracts written

Are you prepared to purchase? Do you have money socked away for the down-payment and closing costs, earnest money, appraisal and inspections? Do call a Realtor or a Lender if you don’t know where to begin, but do it quickly.

The process of underwriting your loan is tedious and a good Realtor will NOT take you house-shopping until you are approved for a loan. You don’t want to look at $150,000 homes, only to find out that you can only qualify for a $120,000 home – you’ll be disappointed!

The stimulus credit is a great incentive for first-time buyers who can purchase a home and keep their mortgage payment (including property taxes and homeowner’s insurance) at or below the amount currently paid in rental payments.

The stimulus credit is a great incentive for first-time buyers who feel secure in their employment.

If you are just beginning the process of your home purchase, please visit my Preferred Vendor list to locate a mortgage Lender to call. In addition to getting qualified, you still have to shop, so 65 days is not a lot of time. Once you know how much you can spend, please call me to set up a customized home search for you.

65 days until the deadline for first-time buyers to get your contracts written – we can do it! Get started today!

Lori is a residential Realtor serving the greater Tulsa area, and specializing in midtown Tulsa real estate. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.

What Buyers need to know about FSBO (For Sale by Owner) properties

My favorite Lender, Juliana James-Thomas of 1st Capital Mortgage, contacted me about a client interested in purchasing a FSBO property – “for sale by owner.” She was concerned that he didn’t have his own representation and that he may be paying too much for the property. The Buyer feels rushed to make an offer on the property because the Sellers have offered to pay a portion of his closing costs and have come down from their original list price.

Juliana asked me to investigate to determine if the Buyer was indeed getting a good price on the “for sale by owner” property. He is getting pre-qualified in preparation to make an offer. Many Lenders wouldn’t care whether their client are actually paying a fair price, but Juliana takes a very personal and ethical approach to lending, which is why she builds client relationships for life.

I did some quick research on the property, and the “for sale by owner” property is over-priced by at least $10,000. In fact, the Sellers are asking almost $30,000 more than they paid for the property four years ago and from what I can tell from our MLS data (Multiple Listing Service), they have made limited improvements since their purchase.

Even IF Seller and Buyer agree on price, this property may have a problem appraising for the agreed-upon sales price, and that won’t be discovered until the Buyer has already spent $400 on an appraisal and possibly $500 on inspections. What happens then?

What Buyers need to know about FSBO (For Sale by Owner) properties

Often Buyers think they will get a better deal on For Sale by Owner properties because the Seller is not paying Realtor commissions. In actuality, Sellers rarely pass that savings along to the Buyer. Without having Realtor representation, a Buyer will often pay too much for a property and not negotiate needed repairs or know to ask for a residential service agreement.

Buyers, please take advantage of the many services a Buyer’s agent can offer you. We can access records to determine what was originally paid for a property, what improvements have been made, what the Sellers owe on the property and much more.

We help people buy houses every day, so we can craft an offer asking for the appropriate amount for repairs, closing costs, home warranties and more. We will be aware of what will likely be an appraisal requirement and will know if the house will appraise for the amount paid.

We will guide you through the buying process — the largest investment you will make in your life time.

With the deadline approaching for 1st-time home Buyers to be under contract by April 30th, please contact me if you are considering purchasing a home.

Time is of the essence and Buyer representation is PRICELESS.

Lori is a residential Realtor serving the greater Tulsa area, and specializing in midtown Tulsa real estate. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.

Here it is – straight from the horse’s mouth. This post is courtesy of David H Stevens, Secretary of the United States Dept. of HUD. This office oversees the FHA programs for Single & Multi-Family housing; HUD’s Healthcare programs (insurance for hospitals & nursing homes); manages regulatory policy for RESPA, Manufactured Housing, & SAFE. [Re-blogged with permission, January 21, 2010.]

Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area, including midtown Tulsa, downtown Tulsa, Broken Arrow, Owasso, Bixby, Sand Spring and Jenks, Oklahoma. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.

This is not a scare tactic – just information you need to be aware of. Lori

To buy or not to buy? – the 2nd wave of the stimulus package for 1st-time home buyers

It’s been an interesting experience working through the mad rush trying to find a home and get qualified in time to meet the deadline to qualify for the $8,000 stimulus refund. Now that the deadline is extended, the rush is back on. I love working with 1st-time home buyers, but now may or may not be the time for you to buy.

Here are my personal guidelines I offer home buyers on whether or not NOW is a good time to purchase.

Interest rates are still low and attractive and the stimulus package is a great incentive. However, home purchases are not right for everybody.

Do buy now IF:

• You have a steady job and believe it to be immune from lay-offs or down-sizing
• Your mortgage payment, including property taxes and homeowners insurance, does not exceed what you are currently paying in rent and rental insurance

Do NOT buy now IF:

• Your job is less than secure
• You don’t intend to remain in your new home for several years

Also keep in mind that once you become a home-owner, YOU will be responsible for that leaky roof or broken hot water heater. The best home inspections will not uncover every home defect and you should have some money set aside for the unexpected.

To buy or not to buy? – the 2nd wave of the stimulus package for 1st-time home buyers

If you have questions about qualifying for the tax stimulus refund, please give me a call – my represtation to you is free. Contracts must be written by April 30, 2010 and closing must occur by June 30, 2010.

Here is more information and links about the tax credit extension and expansion.

Here is a blog post I wrote about how to buy and sell at the same time – for those of you thinking about down-sizing or upgrading existing homes.

Lori is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa area, including midtown Tulsa, downtown Tulsa, Broken Arrow, Owasso, Bixby, Sand Spring and Jenks, Oklahoma. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.

FirsTitle & Abstract Services, Inc. – the Tulsa Oklahoma Title Company that ROCKS!

My guess is that most home buyers and sellers don’t know what all their title/closing company does for them, but REALTORS know that they earn every penny and in many most cases pull miracles out of their hats – always at the 11th hour!

My experience with FirsTitle & Abstract Services in Tulsa has ALWAYS been positive. I told Paty Seratte one time that I was going to get a trophy for her team with the inscription, “the lean, mean, lien-busting team!”

When an abstract is updated, you just never know what you’re going to find. What appeared to be a clear title four years ago may not be so clear today.

• Maybe a lien from a ten year-old lawsuit against your ex-spouse that you never knew existed?
• Maybe a title problem that was missed by the prior title examiner or attorney?
• Maybe a survey showing the city sewer in a different location than when the previous owner purchased the property?

Many times we go to closing with limited knowledge of the many hurdles surpassed during escrow.

Recommending FirsTitle to my clients is easy for me, because I know that they go above and beyond to ensure that the experience of the buyer, seller AND REALTORS involved is as pleasant and stress-free as possible.

Honestly, these ladies must live for challenges. What would normally put a Realtor, buyer or seller in a panic mode seems to always be resolved in a calm, professional and timely manner by the ladies at FirsTitle. My great appreciation goes to Paty Seratte, Kathy Griffith, Vickie Bargas, Kim Morrow and the many others working behind the scenes to ensure Tulsa home buyers, sellers and Realtors a smooth and successful closing.

FirsTitle & Abstract Services, Inc. – the Tulsa Oklahoma Title Company that ROCKS!

Serving Tulsa since 1984, FirsTitle’s personal and professional service can not be beat. I recommend them highly and of course, you will find them on my Preferred Vendor list – available on my web site as a resource for past, current and future clients! If you’re looking for a professional mortgage lender or banker, they’re listed there as well!

Lori Cain is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa Oklahoma area, including midtown Tulsa, Owasso, Broken Arrow, Bixby, Sand Springs and Jenks. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.

My first closing of the year: for these special 1st-time home buyers, it was POSSIBLE

On January 8th, my Buyers, Kas and Corey, closed on their beautiful and darling home in Tulsa’s Brookside area. They are indeed, first-time home buyers.

In addition to being long-time personal friends, Kas and Corey’s darling daughter Zoe is our Goddaughter. So, while we’re not blood-relations, we are definitely “family.”

Kas and Corey are quite typical parents wanting the best for their daughter – giving up much to afford school, piano lessons, camps and such. Home ownership was a dream that seemed so out of reach, if not impossible.

But it was possible. It was possible because of the stimulus package. It was possible because of the current low interest rates. It was possible because a local lender, Bank of Oklahoma, chose to be more flexible than the larger, national banks. It was possible because Bank of Oklahoma offers free appraisals to employees of our locally-owned grocery, Reasor’s, who is Corey’s employer. It was possible because of family and our community.

Yesterday was a great day for our family. Kas teared up at closing because she couldn’t believe it was really happening. As she and Corey signed their names on document after document, it finally sunk in that “yes, we ARE really buying our OWN home.”

So, we popped some champagne last night after closing while Zoe finished her piano lesson. I doubt they were deterred at all by the light snow fall we received this morning as they packed their belongings and furniture into the moving truck. “Snow? Did it snow?”

My first closing of the year: for these special 1st-time home buyers, it was POSSIBLE

I can’t remember experiencing a better closing and am grateful to start out 2010 with this particular closing. My heart-felt appreciation to all who made this POSSIBLE.

Lori Cain is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa Oklahoma area, including midtown Tulsa, Owasso, Broken Arrow, Bixby, Sand Springs and Jenks. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.

Most home buyers assume that all home sellers are desperate to sell – not so!

Since I represent both home buyers and home sellers in real estate transactions, I am able to see both sides of the coin. I am continually shocked to learn that most home buyers assume that all home sellers are desperate to sell.

I work as a single-party broker unless forced to work in the capacity of a transaction broker. If I’m representing the Seller, obviously my job is to “net” the most I can from their home sale for them. Conversely, if I am representing a home Buyer, my job is to get them the most desirable home at the lowest cost.

My tendency is to be rather inflexible when listing a home – get it move in ready and price it fairly and competitively. Don’t “pad” the price. Let the condition of the home and the comparables sell the home at the price listed.

Yet, I received an offer on a listing this week at almost ten percent below list price in addition to several other unattractive conditions in the contract. My knee-jerk reaction was to “reject” the offer, but after drinking a cup of coffee in my “relaxing chair” and giving the offer some thought, I came up with some reasonable suggestions for my Sellers to counter.

Most home buyers assume that all home sellers are desperate to sell – and that’s just not so!

My Sellers are not upside down financially – in fact, their mortgage is quite small. They are in no hurry to move. They are down-sizing and already own the smaller home they will move to – they only need to give their tenant thirty-days notice to move.

Yes, my Sellers want to SELL their home – that’s why it has a “For Sale” sign in the yard. But, they’re not going to GIVE their home away.

So, Buyers, I appreciate that you and your Realtor are looking for the perfect home at the lowest cost – that’s exactly my approach when working with Buyers. But, please take time to look at comparables, look up my Seller’s mortgage balance and investigate before making what can be perceived as an insulting offer.

It is always possible to make a real estate transaction a “win-win” for all parties if we simply do our homework and treat each other with a little respect.

Lori Cain is a residential Realtor with Chinowth & Cohen Realtors serving the greater Tulsa Oklahoma area, including midtown Tulsa, Owasso, Broken Arrow, Bixby, Sand Springs and Jenks. Please visit Lori’s web site, LoriCain.com or call 918-852-5036.