Step 6: Get Funding....

Often the cost of real estate financing is routinely greater than the original purchase price of a home (after including interest and closing costs). Because financing is so important, buyers should have as much information as possible regarding mortgage options and costs.

What kind of loan?

There are thousands of loans available out there from a variety of lenders, but in general, the mortgage you choose will likely be determined by at least several key factors:

How much down?

Loans with 5 percent down or less are now widely available -- in fact, loans from major lenders with no money down have appeared in recent years.
If you place less than 20 percent down, lenders will want the mortgage guaranteed by an outside third party such as the Veterans Administration (VA), the Federal Housing Administration (FHA) or a private mortgage insurer (PMI, or private mortgage insurance, is required by lender to protect against any mortgage defaults). More than 2.5 million VA, FHA and PMI loans are generated each year.

How's your credit?

The best rates and terms are only available to those with solid credit. To get the best loans, make a point of paying credit cards, installment payments, rent and mortgage bills in full and on time.

Are you a first-time buyer?

It might seem that "first-time buyer" means someone who has never owned property before, but under most state programs, the term refers to those who have not owned property within the past three years. State-backed first-timer programs often feature smaller downpayments and below-market interest rates. For details, speak with your local REALTOR®.

How do you get a loan?

To obtain a loan you must complete a written loan application and provide supporting documentation. Specific documents include recent pay stubs, rental checks and tax returns for the past two or three years if you are self-employed. During the prequalification procedure, the loan officer will describe the type of paperwork required.

Where do you get a loan?

Mortgage financing can be obtained from mortgage bankers, mortgage brokers, savings and loan associations, mutual savings banks, commercial banks, credit unions, and insurance companies. A growing number of REALTORS® can also arrange financing.

Step 5: Choose a home.....

There's no doubt that choosing a home is a big decision and you want to do it right. As a buyer, here's what actually happens.

A home has been placed on the market for which the seller has established an asking price as well as other terms. In effect, this is an offer. At this point, you have three choices: accept the seller's offer and create a contract; reject it and not make an offer; or suggest different terms and make a counter-offer. If you choose this last option, the seller may accept, reject or make a counter-offer. No aspect of the homebuying process is more complex, personal or variable than bargaining between buyers and sellers.

This is the point where the value of an experienced REALTOR® is clearly evident because he or she knows the community, has seen numerous homes for sale, knows local values and has spent years negotiating realty transactions.

Can you really afford it?

Remember Step 2 - the preapproval process? Getting preapproved means you have a very good idea of how much you can borrow, what loan programs will most likely work best in your situation and how much home you can afford.

How reliable is a preapproval?

While preapproval is not a loan commitment, it's still necessary for lenders to check such items as appraisals and the latest credit reports. Despite fluctuating interest rates, preapproval nonetheless provides a reasoned, careful analysis of what you can afford. After all, loan officers are routinely paid only when loans are originated. It doesn't make much sense for loan officers to suggest high loan limits that later can't be delivered.

Step 4: Look at homes.....

Some 6 million new and existing homes are sold each year. There's no shortage of housing options, but with so many choices the challenge becomes finding the property which best meets your needs.

The housing market is complicated because the stock of homes for sale is always in flux. If it were possible to have a complete list of every home for sale at this very moment in a given community, such a list would become obsolete within seconds as new homes become available and properties now for sale are put under contract. In effect, buyers are looking at a moving target in a marketplace that is never static. Because of this, it is important to know as much as possible about the choices in preferred markets, and the way to do that is by working closely with a local REALTOR® who has a good "lay of the land."

What are you looking for?

A home is more than just a collection of bedrooms and bathrooms. Several properties -- each with four bedrooms, three baths, and the same price -- may well represent radically different designs, commuting distances, lot sizes, tax costs, interior dimensions, and exterior finishes. Each of us is different and so it's important to list the features and benefits you want in a home. Consider such things as pricing, location, size, amenities (extras such as a pool or extra-large kitchen) and design (one floor or two, colonial or modern, etc.).

Next, it's important to consider your priorities. If you can't get a home at your price with all the features you want, then what features are most important? For instance, would you trade fewer bedrooms for a larger kitchen? A longer commute for a bigger lot and lower cost?

Lastly, consider your needs in several years. If you'll need a larger home, maybe now is the time to buy a bigger house rather than moving or expanding in the future. If you expect your income to increase, perhaps you should consider a more expensive home financed with a loan program where monthly payments increase in the future.Where should you look?All neighborhoods and communities have a special nature that gives them identity and value. One community may be well known for historic homes while another offers both suburban living as well as easy access to downtown office areas.

From all of us to all of you.....

We wish you all a very Merry Christmas (yes, I said it) and a prosperous and healthy new year.

We'll see you on Wednesday. Hope you get something good! =-)

Step 3: Get Preapproved.....

Few people can buy a home for cash. According to the National Association of REALTORS® (NAR), nearly nine out of 10 buyers in 1999 financed their purchase, which means that virtually all buyers -- especially first-time purchasers -- required a loan. The real issue with real estate financing is not getting a loan (virtually anyone willing to pay lofty interest rates can find a mortgage). Instead, the idea is to get the loan that's right for you -- the mortgage with the lowest cost and best terms. REALTORS® routinely suggest that consumers start the mortgage process well before bidding on a home. Many lenders (the sources of money) and programs, for example, are available in the finance section of Homestore.com as well as through recommendations from local REALTORS®. By meeting with lenders -- either online or face to face -- and looking at loan options, you will find which programs best meet your needs and how much you can afford. REALTORS® also recommend preapprovals for another reason: Purchase forms often require buyers to apply for financing within a given time period, in many cases, seven to 10 days. By meeting with loan officers in advance and identifying mortgage programs, it won't be necessary to quickly find a lender, check credit, and rush into a financing decision that may not be the best option.

What is it?

"Preapproval" means you have met with a loan officer, your credit files have been reviewed and the loan officer believes you can readily qualify for a given loan amount with one or more specific mortgage programs. Based on this information, the lender will provide a preapproval letter, which shows your borrowing power. You can visit as many lenders as you like and get several preapprovals, but keep in mind that each one carries with it a new credit check, which will show up on future credit reports. Although not a final loan commitment, the preapproval letter can be shown to listing brokers when bidding on a home. It demonstrates your financial strength and shows that you have the ability to go through with a purchase. This information is important to owners since they do not want to accept an offer that is likely to fail because financing cannot be obtained.

How do you get preapproval?

Real estate financing is available from numerous sources, including lenders in the finance section of Homestore.com, mortgage companies that have worked with local REALTORS® and in some cases, individual REALTORS® themselves. Based on his or her experience, the REALTOR® may suggest one or more lenders with a history of offering competitive programs and delivering promised rates and terms. The loan officer will carefully review your financial situation, including your credit report and other information. The lender will then suggest programs which most-closely meet your needs. For instance, a first-time buyer may qualify for state-backed mortgage programs with little money down and low interest rates, while a repeat purchaser (someone who has bought a home before) with more equity (money invested in the home) might want to get a 15-year loan and the lower overall interest costs it represents. Typically, first-time buyers opt for the traditional 30-year loan, with either a floating interest rate or a fixed rate of interest over the life of the loan.

Buyer's Guid Step 2

Step 2 : Get a REALTOR®

More than 2 million people in the United States have earned real estate licenses. However, real estate is a tough business with a steep dropout rate, and the result is that only a small percentage of those with licenses actively help buyers and sellers. The National Association of REALTORS® (NAR) includes 750,000 brokers and salespeople, individuals bound together with a strong Code of Ethics, extensive training opportunities and a wealth of community information. NAR members are routinely active in PTAs, local government committees and a variety of neighborhood organizations. Being actively involved in community affairs provides REALTORS® with a better understanding of the area in which they are selling. Why?

Buying and selling real estate is a complex matter. At first it might seem that by checking local picture books or online sites you could quickly find the right home at the right price. But a basic rule in real estate is that all properties are unique. No two properties -- even two identical models on the same street -- are precisely and exactly alike. Homes differ and so do contract terms, financing options, inspection requirements and closing costs. Also, no two transactions are alike. In this maze of forms, financing, inspections, marketing, pricing and negotiating, it makes sense to work with professionals who know the community and much more. Those professionals are the local REALTORS® who serve your area.

How do you choose?

In every community you're likely to find a number of realty brokerages. Because there is heated competition, local REALTORS® must fight hard to succeed in your community. The best place to find a local REALTOR® is from REALTOR.com's® extensive listing of community professionals and properties. Other sources include open houses, local advertising, Web sites, referrals from other REALTORS®, recommendations from neighbors and suggestions from lenders, attorneys, financial planners and CPAs. The experiences and recommendations of past clients can be invaluable. In many cases buyers will interview several REALTORS® before selecting one professional with whom to work. These interviews represent a good opportunity to consider such issues as training, experience, representation and professional certifications.

What should you expect? (Working with a REALTOR®)

Once you select a REALTOR® you will want to establish a proper business relationship. You likely know that some REALTORS® represent sellers while others represent buyers. Each REALTOR® will explain the options available, describe how he or she typically works with individuals and provide you with complete agency disclosures (the ins and outs of your relationship with the agent) as required in your state. Once hired for the job, the REALTOR® will provide you with information detailing current market conditions, financing options and negotiating issues that might apply to a given situation. Remember: Because market conditions can change and the strategies that apply in one negotiation may be inappropriate in another, this information should not be set in stone. During your time in the marketplace REALTORS® will keep you updated and alert you to each step in the transaction process.

A guide for buyers....

I am beginning a series called "A Guide For Buyers" which will walk you step-by-step through the buying process. A Guide for Sellers will follow.

Step 1 : Are You Ready?

One of the keys to making the homebuying process easier and more understandable is planning. In doing so, you'll be able to anticipate requests from lenders, lawyers and a host of other professionals. Furthermore, planning will help you discover valuable shortcuts in the homebuying process.

Do You Know What You Want?

Whether you are a first-time homebuyer or entering the marketplace as a repeat buyer, you need to ask why you want to buy. Are you planning to move to a new community due to a lifestyle change or is buying an option and not a requirement? What would you like in terms of real estate that you do not now have? Do you have a purchasing timeframe? Whatever your answers, the more you know about the real estate marketplace, the more likely you are to effectively define your goals. As an interesting exercise, it can be worthwhile to look at the questions above and to then discuss them in detail when meeting with local REALTORS®.

Do You Have The Money?

Homes and financing are closely intertwined. (Financing is the difference between the purchase price and the downpayment, commonly referred to as debt or the mortgage.) The good news is that over the years new and innovative loan programs have evolved which require a 5 percent downpayment or less. In fact, a number of programs now allow purchasers to buy real estate with nothing down. In addition to a down payment, purchasers also need cash for closing costs (the final costs associated with closing the loan). Several newly emerging loan programs not only allow the purchase of a home with no money down, but also underwrite closing costs. Not everyone, however, elects to purchase with little or no money down. Less money down means higher monthly mortgage payments, so most homebuyers choose to buy with some cash up front. As to closing costs, in markets where buyers have leverage, it may be possible to negotiate an offer for a home that requires the owner to pay some or all of your settlement expenses. Speak with local REALTORS® for details.

Is Your Financial House in Order?

Those great loans with little or nothing down are not available to everyone: You need good credit. For at least one year prior to purchasing a home, you should assure that every credit card bill, rent check, car payment and other debt is paid in full and on time.

Where is everyone.......

I know it's been a few days since I last posted, but where are all my readers?

Have you deserted me? You used to send emails telling me things like "good post" or "I totally agree".

Are you breaking up with me?

But can you cook on it.......

One of the first things buyers change in their new homes is the appliances - followed by a close second flooring. Many older homes haven't been updated in years, and you may find yourself as the new property owner deciding if that avocado wall range is really worth keeping.

With the technological advances in appliance manufacturing, there are several choices available to the consumer these days. Besides the color or finish of the appliance, there are so many features to choose from that the average home owner could become confused.

I'm no appliance salesman, nor do I get a kickback from Lowe's or Home Depot. But I have bought appliances in the past and I can share a few of my criteria with you.

When choosing a refrigerator, make sure you measure the space in the kitchen BEFORE having it delivered. There's nothing worse than trying to slide your new refrigerator in place only to find that the unit is 3/4 of an inch taller than the cabinet under which it goes. I have employed soap to lubricate the top of the refrigerator and slide it into place.

Ranges offer convection and conventional cooking features these days. It pays to research both and decide which will work best for you. Do you cook large meals on the spur of the moment? Don't want to spend endless hours in the kitchen? Convection ovens are the way to go. I have to be honest here, I don't know anything about convection ovens and don't even know if this is the proper criteria. So, you caught me. Big deal.

Dishwashers I know. I hate to empty the dishwasher. And I hate dishwashers that offer the silverware tray attached to the door of the unit. It is inconvenient. Sure when I saw it in the store I thought it was a good idea - but quickly changed my mind when silverware falls to the bottom of the dishwasher, or the sliding drawers don't close properly because a fork is impeding its progress.

As for microwaves - plain is best. I personally have never cooked a meal in a microwave, but I do remember the microwave craze of the late 70s when microwave cookbooks and cooks were in abundance. It was a novelty. But now we know they are glorified coffee warmers and should be treated as such. The fewer bells and whistles on the microwave, the less there is to break.

I know this probably wasn't very helpful, but sometimes "fluff" content is better than none.

Have a great Monday. You deserve it.

Stop the bleeding....

Experts agree; this market is the perfect time for buyers to get a home they couldn't normally afford for many reasons. Mortgage rates are still historically low, with the Fed expected to lower the rate yet again by December 18. The median price of homes has decreased making larger homes with more amenities affordable.

And yet, things are still moving slowly. Who do we blame?

Well, point two fingers. One at the sellers and one at the Realtors.

I've said time and time again that this is NOT the market to make a killing or huge profit on the sale of your property. Sellers should expect that if they need to sell now, the home should be priced according to comparable sales within the past 6 months. You may not walk away from the closing table with much more than you owe the mortgage company, but if you need to sell, you'll be pleased not to BRING money to the closing table.

Realtors should also approach each listing as an opportunity to help the seller; not help their own bank account. Price the home sensibly. Don't price a home with the intention of submitting several price reductions in the near future.

Buyers are seeing all the "Price Reduction" signs and falling list prices and they are holding on to see where the bottom is. As long as prices continue to decrease, the buyer believes they are going to go even lower - and so they wait for the best possible deal.

To Sellers and Realtors: Be FIRM on your price. Buyer incentives still work in this market but you have to get creative. Instead of a $3000 credit toward closing costs, how about advertising two round-trip tickets to Paris? Sounds better, doesn't it?

Sensibility is the key to selling a home in this market. I'm optimistic.

All roads lead to.....

[Tarpon Avenue c. 1894]

Tarpon Springs has undergone a major face life over the past year. While inconvenient for many drivers and business owners (myself included), it has dramatically changed and improved the appearance of the city.

I was commenting to someone the other day that having grown up in Tarpon, you get used to the look and feel of the city. Then, when you see the improvements you can't believe how "ugly" the city was before.

The two major roads in Tarpon Springs, Pinellas Avenue and Tarpon Avenue have been repaved and planter medians put in place. New turn lanes and turn signals now exist at heavily travelled intersections, new sidewalks have been created with brick pavers and many overhead power lines have been buried. There are still some projects to be completed, such as landscaping in the medians and sidewalks.

All of these have given the city a cleaner and quainter look and feel. Now the appearance of the city, matches its character.

I want to thank all those involved in working so hard to make our city beautiful. If you haven't visited Tarpon Springs for a while, or ever, come on over!