So, how do you choose a real estate agent to help you buy a house?
If you have a house to sell - it can be a very good idea to use the same agent who's listing your house. Some will even give a discount if you use them for both 'sides'. That's my policy. But sometimes, it's not a good idea to use the same agent.
For instance, if you are selling and buying in distinctly different markets, the selling agent may tell you it's all the same, but I would have to disagree. Urban properties are not the same as suburban properties are not the same as mountain properties. You should choose an agent who works in the type of market where you'll be buying.
You should also choose an agent who lives and works geographically close to where you hope to buy. Often, you're not sure exactly what city you'll end up in, and that's OK. There's some leeway here, but if your agent has to drive 45 minutes to show you a house, that will impact how much time they have to show you houses. What if you want to go back two or three times before you decide - will they have patience with you? What if there's only one house available to see - will they take half a day to show it?
Sometimes, I do go out of my own area to help people, but only if they say, "We really, really want YOU!" I never try to talk people into using me in places that are geographically remote. I often refer people to other agents who I know are wonderful and will help them the same way I would, if I believe those agents are a better choice for them. Which goes to show - I really do look out for your best interests, not the interests of my checking account!
If the agent listing your house has a lot of other listings, they may not have time for a lot of showings. In our current buyer's market, it's easier for agents to make money with listings - buyers are more work, more hours. Which would have more priority to that agent - driving you around, or taking an appointment to list another house? It's wise to choose an agent who truly enjoys working with buyers, and has the time to schedule at your convenience.
It's my policy to limit the number of buyers and sellers I work with at any one time. I lose sleep if I feel I'm not giving all my clients the attention they deserve, and I don't like that! So, I'll never be a mega-producer, but I will be a happy and stress-free kind of person to help you make one of the biggest decisions of your life!
Choose an agent who answers their phone, and who responds quickly to emails. 'Nuff said.
Choose an agent who respects your decisions, and who also respects your indecision. You should never feel pressured to make a decision before you're comfortable. I've had several wonderful people tell me they were sure they were my 'pickiest' clients. But guess what? Everyone is picky when they're buying a house. And in this market, they have the right to be. I will support you throughout it all.
You may have noticed that I didn't say a lot of what other agents say. For instance, 'Choose an agent who's been in business 'x' number of years', or who does a certain number of transactions, or who has certain designations (the letters that follow their names). What you really need is an agent who will work for you, who has time for you, and who you like being around.
I hope that turns out to be me - I really do love helping people find their new home!
Sunday, June 8, 2008
Step by Step to Your New Home
Congratulations on your decision to buy a house! I hope I can help you understand how the process works in Colorado, whether this is your first home or your twentieth. Even if you're just thinking about it, or dreaming for the future, feel free to call or email me with any questions that don't get covered in my posts. I'm a very good communicator, I check my email several times a day, and I always answer my phone if at all possible.
I'll outline the steps below, then write a separate post for each step. That way, you can skip the ones you're already familiar with. (See - I'm already thinking about how I can save you from wasting your valuable time!)
1. Choose a real estate agent and set up a game plan
2. Visit a lender and get pre-qualified
3. Start viewing properties
4. Pick one!
5. Work with your agent to structure the offer, and to respond to the counteroffer if you get one.
6. Review all documentation received and 'object' to any unacceptable conditions before the contract deadlines. This might include title work, HOA documents, seller disclosures, other reports.
7. Either in conjunction with step 6, or after everything gets worked out (depending on your time frame), schedule the inspection.
8. Negotiate any issues that are uncovered at inspection, or terminate contract.
9. After inspection resolution, notify lender to order appraisal. If appraisal comes in below contract price, enter into negotiations with seller or terminate contract.
10. Work with your lender to get full loan approval.
11. Closing!
Sounds so easy, right? Well, maybe not. But remember, I'll be with you every step of the way.
I'll outline the steps below, then write a separate post for each step. That way, you can skip the ones you're already familiar with. (See - I'm already thinking about how I can save you from wasting your valuable time!)
1. Choose a real estate agent and set up a game plan
2. Visit a lender and get pre-qualified
3. Start viewing properties
4. Pick one!
5. Work with your agent to structure the offer, and to respond to the counteroffer if you get one.
6. Review all documentation received and 'object' to any unacceptable conditions before the contract deadlines. This might include title work, HOA documents, seller disclosures, other reports.
7. Either in conjunction with step 6, or after everything gets worked out (depending on your time frame), schedule the inspection.
8. Negotiate any issues that are uncovered at inspection, or terminate contract.
9. After inspection resolution, notify lender to order appraisal. If appraisal comes in below contract price, enter into negotiations with seller or terminate contract.
10. Work with your lender to get full loan approval.
11. Closing!
Sounds so easy, right? Well, maybe not. But remember, I'll be with you every step of the way.
Thursday, June 5, 2008
Step by Step to Your New Home - Who's on Your Side?
Thinking about buying a home in the vicinity of Denver to Boulder, Colorado? If so, I'd love to be your agent. I'm different from other agents in a couple of ways. For instance, I like to educate my clients, so they'll have the best experience possible. That's what this post is about, and it's a little long, I know. So there's a couple of things I'd like you to know up front.
First, my services don't cost you anything - the seller pays their agent and a portion of that fee is 'co-opted' to me, no matter how much service I provide or how little.
Also, I am among the rare agents who actually limit the number of people they'll work with at one time. There's nothing more frustrating to a buyer than wanting to see a house but their agent's busy, and then the house is off the market before you've had your chance. I don't want that to happen to my clients, so I reserve big blocks of time for them as far in advance as possible.
And I don't believe any buyer is 'too picky'. As long as you are serious about buying, I recognize your right to find the right home for you. I know it's a huge decision.
Did you know that the term, ‘your agent’ has special meaning in Colorado? That's one of the ways buying a home in Colorado is different from most other states. It's an important term to understand, we're required by law to explain it, and there's a form we're supposed to have you sign, stating that we've done the job. (Let me know if you'd like a copy of this form.)
This is all about protecting you - the buyer. Otherwise you might find yourself in the vulnerable position of sharing private info with someone who is really working for the seller, when all along you thought they were working for you.
In Colorado, a person is not your agent - they are not representing you - unless you've signed a written agreement to establish an agency relationship.
Here's some examples: You find a house for sale on the internet, call the listor and ask to see it. The friendly listor meets you there, shows the house in its best light, and starts asking you questions. If that person is an agent for the seller, their goal at this meeting must be to sell you that house, not to find the best home for you. Be careful about sharing info that can put you in a weaker negotiating position, as this person would certainly share that with the seller.
If that person is an agent for the seller, they cannot be your agent too. They can switch to being a transaction broker if the seller allows them to (which requires them to treat buyer and seller equally). They are still not your agent - not looking out for your best interests.
You might stop in at the sales office in a new development. Remember that the person you meet there is working for the seller, not you. In my experience, this is the scenario where most homebuyers end up with bad loans and struggle to keep from losing their house just a few short years later.
Let's say you walk into an open house. Again, the person you meet there could be an agent for the seller. They could also be a transation broker. The thing to remember is that they are not your agent.
Let's say you like someone's web site and after meeting them you decide you'd like to work with them. If you don't sign an agency agreement, the person you're working with is a transaction broker and must treat you and the seller of any house they show you equally, no matter how much time they've spent driving you from house to house, and no matter how many touching personal stories you've shared.
I prefer representing buyers as their agent. As your agent I work solely on your behalf. Here's some things I can do as your agent, that I'm not supposed to do as a transaction broker or an agent for the seller.
Determine if the house is priced correctly - as your agent I would do a market analysis and give you my advice without being asked to do so. As a transaction broker, I'm not supposed to do something like this unless you ask me to, and even then you're on your own interpreting what it means. As agent for the seller, it would be your responsibility to get this information.
First, my services don't cost you anything - the seller pays their agent and a portion of that fee is 'co-opted' to me, no matter how much service I provide or how little.
Also, I am among the rare agents who actually limit the number of people they'll work with at one time. There's nothing more frustrating to a buyer than wanting to see a house but their agent's busy, and then the house is off the market before you've had your chance. I don't want that to happen to my clients, so I reserve big blocks of time for them as far in advance as possible.
And I don't believe any buyer is 'too picky'. As long as you are serious about buying, I recognize your right to find the right home for you. I know it's a huge decision.
Did you know that the term, ‘your agent’ has special meaning in Colorado? That's one of the ways buying a home in Colorado is different from most other states. It's an important term to understand, we're required by law to explain it, and there's a form we're supposed to have you sign, stating that we've done the job. (Let me know if you'd like a copy of this form.)
This is all about protecting you - the buyer. Otherwise you might find yourself in the vulnerable position of sharing private info with someone who is really working for the seller, when all along you thought they were working for you.
In Colorado, a person is not your agent - they are not representing you - unless you've signed a written agreement to establish an agency relationship.
Here's some examples: You find a house for sale on the internet, call the listor and ask to see it. The friendly listor meets you there, shows the house in its best light, and starts asking you questions. If that person is an agent for the seller, their goal at this meeting must be to sell you that house, not to find the best home for you. Be careful about sharing info that can put you in a weaker negotiating position, as this person would certainly share that with the seller.
If that person is an agent for the seller, they cannot be your agent too. They can switch to being a transaction broker if the seller allows them to (which requires them to treat buyer and seller equally). They are still not your agent - not looking out for your best interests.
You might stop in at the sales office in a new development. Remember that the person you meet there is working for the seller, not you. In my experience, this is the scenario where most homebuyers end up with bad loans and struggle to keep from losing their house just a few short years later.
Let's say you walk into an open house. Again, the person you meet there could be an agent for the seller. They could also be a transation broker. The thing to remember is that they are not your agent.
Let's say you like someone's web site and after meeting them you decide you'd like to work with them. If you don't sign an agency agreement, the person you're working with is a transaction broker and must treat you and the seller of any house they show you equally, no matter how much time they've spent driving you from house to house, and no matter how many touching personal stories you've shared.
I prefer representing buyers as their agent. As your agent I work solely on your behalf. Here's some things I can do as your agent, that I'm not supposed to do as a transaction broker or an agent for the seller.
Determine if the house is priced correctly - as your agent I would do a market analysis and give you my advice without being asked to do so. As a transaction broker, I'm not supposed to do something like this unless you ask me to, and even then you're on your own interpreting what it means. As agent for the seller, it would be your responsibility to get this information.
Actively seek out houses that meet your needs, and preview them for you - which saves you a lot of time. Otherwise, it would be your job to tell me what houses you want to see.
I think that's enough for now! I really feel strongly about this issue, and I'm very concerned that so many in my profession don't take the time to explain it. Please know that if you work with me, I'll work hard to make your experience as pleasant and smooth as possible, even if that means it takes more of my time to do it right!Tuesday, June 3, 2008
How Much Home Can You Afford?
Complete the worksheet below to determine whether you might qualify for a loan. But remember, the best thing to do is to visit with a qualified lender that you feel comfortable with. He or she will help you through the process, and give you good advice.
1. Add up the annual gross income of everyone who'll be on this loan:
_______________ (A)
2. Divide by 12 = Monthly Gross Income:
________________(B)
3. Mulitply line B by .28 for Allowable Monthly Housing Cost:
________________(C)
4. Price of home minus your down payment = Loan Amount:
________________(D)
5. Multiply price of home by .0025 for tax & insurance costs:
________________(E)
6. Monthly payment (Call me for the monthly payment or go to http://www.recolorado.com for a mortgage calculator.
________________(F)
7. Add tax & Insurance costs (Line E):
+ ________________(G)
8. Add applicable HOA fees:
+________________(H)
9. Total Monthly Housing Cost:
________________(I)
10. Multiply Line B by .36 for Allowable Monthly Debt:
________________(J)
11. Add up all other monthly debt payments (car, credit cards, etc.)
________________(K)
12. Add lines K and I for Total Monthly Debt:
________________(L)
Is your monthly housing cost in (line I) less than the allowable amount (line C)?
If the answer is no, you must either decrease the price of the home or increase your down payment.
If the answer is yes, the next step is to determine if your debt to income ratio qualifies.
Is your total monthly debt (line L) less than your allowable monthly debt (line J)?
If the answer is no, you probably should pay down some debt before you buy. However, it’s a good idea to talk to a helpful lender who is qualified to guide you. Sometimes, you can still get a loan, although the interest rate may be a bit higher.
If the answer is yes, it’s definitely time to fill out a mortgage application and get it to a lender. You’re on your way!
1. Add up the annual gross income of everyone who'll be on this loan:
_______________ (A)
2. Divide by 12 = Monthly Gross Income:
________________(B)
3. Mulitply line B by .28 for Allowable Monthly Housing Cost:
________________(C)
4. Price of home minus your down payment = Loan Amount:
________________(D)
5. Multiply price of home by .0025 for tax & insurance costs:
________________(E)
6. Monthly payment (Call me for the monthly payment or go to http://www.recolorado.com for a mortgage calculator.
________________(F)
7. Add tax & Insurance costs (Line E):
+ ________________(G)
8. Add applicable HOA fees:
+________________(H)
9. Total Monthly Housing Cost:
________________(I)
10. Multiply Line B by .36 for Allowable Monthly Debt:
________________(J)
11. Add up all other monthly debt payments (car, credit cards, etc.)
________________(K)
12. Add lines K and I for Total Monthly Debt:
________________(L)
Is your monthly housing cost in (line I) less than the allowable amount (line C)?
If the answer is no, you must either decrease the price of the home or increase your down payment.
If the answer is yes, the next step is to determine if your debt to income ratio qualifies.
Is your total monthly debt (line L) less than your allowable monthly debt (line J)?
If the answer is no, you probably should pay down some debt before you buy. However, it’s a good idea to talk to a helpful lender who is qualified to guide you. Sometimes, you can still get a loan, although the interest rate may be a bit higher.
If the answer is yes, it’s definitely time to fill out a mortgage application and get it to a lender. You’re on your way!
Step by Step to Your New Home - Prequalification
If you're planning to buy a house in the general vicinity of Denver to Boulder, Colorado, or even thinking about it, I'd love to help you every step of the way!
I realize buying a home can be stressful. Whether this is your first home or your twentieth, you want things to go smoothly, with no surprises.
The best way to make that heppen is to familiarize yourself with how the whole system works, and get as comfortable as possible about the home buying process. Colorado's laws and practices are unique in a couple of ways, and it's important that you understand these differences.
But the main thing to remember is that my services will save you time and money, and won't cost you anything!
The first step is to meet with the mortgage company to be pre-qualified for your loan (unless you are paying all cash). If you’ve never done this, or if you’ve had a bad experience, this step may make you feel nervous. But I can recommend lenders who will actually counsel with you as to how to reach your goals.
If this isn’t the right time for you to buy, a good lender will help you understand why. They'll also help you work through whatever’s holding you back, until you're ready to go shopping for your new home!
Once you're pre-approved, you can shop for your new home with confidence, knowing that you won’t have any problems getting the loan.
People who skip this step and just go out house hunting are unsure and nervous when they find a home that they like, because they don’t really know if they will be approved for the loan.
Loan underwriters have specific rules and guidelines they must follow. Many would-be homebuyers have been dismayed and disappointed to find out 2-3 weeks after they enter a contract that the lender has turned them down. I won't let this happen to you, as much as it's in my power to do so!
Please realize that's also one of the biggest fears a home seller has – they worry about entering a contract with a buyer and at the same time contracting for their new home, preparing to move, and then finding out the buyer didn’t qualify.
When you get pre-approved first, we'll obtain a letter from the loan company stating the amount that you are approved for. When shown to a seller, the letter makes the seller feel more comfortable, and will add more power for us in negotiations.
The bottom line is that getting pre-approved for your loan first means stress-free home shopping AND more leverage with the seller!
You can use any lender you wish, but I can recommend lenders I know and have worked with before. Call me for those names.
The home buying process is quite complicated, and nothing will throw a wrench into things faster than a mortgage company that drops the ball. So you need someone you can call for updates, and who makes themselves available to answer questions right away.
Here’s a list of items you may need for your loan application: Don't be surprised if your lender asks for even more documentation!
1) W-2 (2 years) & current pay stubs (2 months)
2) Employment information (2 year history)
3) All bank account numbers and balances
4) Last 3 month’s bank statements
5) Open loans and credit cards – names, addresses, account #, balances, monthly payments
6) All information on any other real estate loans
7) Drivers license or other photo ID
8) Certificate of eligibility or DD214 (VA loan only)
9) Self employed: Last 2 year’s complete tax returns, year to date Profit
& Loss and Balance Sheet
I realize buying a home can be stressful. Whether this is your first home or your twentieth, you want things to go smoothly, with no surprises.
The best way to make that heppen is to familiarize yourself with how the whole system works, and get as comfortable as possible about the home buying process. Colorado's laws and practices are unique in a couple of ways, and it's important that you understand these differences.
But the main thing to remember is that my services will save you time and money, and won't cost you anything!
The first step is to meet with the mortgage company to be pre-qualified for your loan (unless you are paying all cash). If you’ve never done this, or if you’ve had a bad experience, this step may make you feel nervous. But I can recommend lenders who will actually counsel with you as to how to reach your goals.
If this isn’t the right time for you to buy, a good lender will help you understand why. They'll also help you work through whatever’s holding you back, until you're ready to go shopping for your new home!
Once you're pre-approved, you can shop for your new home with confidence, knowing that you won’t have any problems getting the loan.
People who skip this step and just go out house hunting are unsure and nervous when they find a home that they like, because they don’t really know if they will be approved for the loan.
Loan underwriters have specific rules and guidelines they must follow. Many would-be homebuyers have been dismayed and disappointed to find out 2-3 weeks after they enter a contract that the lender has turned them down. I won't let this happen to you, as much as it's in my power to do so!
Please realize that's also one of the biggest fears a home seller has – they worry about entering a contract with a buyer and at the same time contracting for their new home, preparing to move, and then finding out the buyer didn’t qualify.
When you get pre-approved first, we'll obtain a letter from the loan company stating the amount that you are approved for. When shown to a seller, the letter makes the seller feel more comfortable, and will add more power for us in negotiations.
The bottom line is that getting pre-approved for your loan first means stress-free home shopping AND more leverage with the seller!
You can use any lender you wish, but I can recommend lenders I know and have worked with before. Call me for those names.
The home buying process is quite complicated, and nothing will throw a wrench into things faster than a mortgage company that drops the ball. So you need someone you can call for updates, and who makes themselves available to answer questions right away.
Here’s a list of items you may need for your loan application: Don't be surprised if your lender asks for even more documentation!
1) W-2 (2 years) & current pay stubs (2 months)
2) Employment information (2 year history)
3) All bank account numbers and balances
4) Last 3 month’s bank statements
5) Open loans and credit cards – names, addresses, account #, balances, monthly payments
6) All information on any other real estate loans
7) Drivers license or other photo ID
8) Certificate of eligibility or DD214 (VA loan only)
9) Self employed: Last 2 year’s complete tax returns, year to date Profit
& Loss and Balance Sheet
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