Passion Performance Possibilities

Is it time for you to buy?

When it’s time to buy a home

There’s a lot of controversy in the housing market today. A TV personality and author recently advised viewers to offer $100,000 less than asking price. We also keep hearing the market has not yet bottomed out.

On the flip side, there are between 1,200 and 1,600 real estate closings in Jacksonville each month, interest rates are at an all time low, and home prices are stable and normalized.

With this conflicting information, the real question is…IS IT YOUR TIME TO BUY?

• Are you renting and ready to start receiving the tax benefit of owning your home?
• Do you need more space? Or less space?
• Has your family grown or have the kids moved out?

If you’re thinking of buying or selling a home, I can help you answer any of your questions.

What’s on the market?

There are three different home options on the market today:

1. Builder’s Spec Homes: This is a brand new home that a builder constructed on a lot that usually has some upgrades. Builders refer to specs as inventory which keeps them in the game of general real estate. However, with no one living in the house (as you see in re-sale) the carrying costs are higher. Therefore, the builder is often motivated to negotiate a good price in order to get the home off their books and close out a neighborhood. When you buy a spec home without a realtor you have no representation in the transaction as the builder’s site agent is representing the builder. The upside of buying a spec home is that everything is new in the home; the downside is that you may have more closing costs. Realtors and site agents see a huge benefit in working together to close a spec home.
2. Existing Homes: One of the biggest upsides of buying an existing home is that you have the ability to find a house with the best lot, the best view and the best amenities without paying additional costs. Existing homes usually have all of the ceiling fans and blinds installed. If you want a pool, the chances are good that you can find a home you like that already has a pool installed. You also have the ability to move into a community you like that does not have new construction to compete with when its time for you to sell it in the future. Sellers have often performed upgrades to the homes that help the home compete with new construction. This is most often done by offering a home warranty. With that said, there also exist homes for sale that need “fixing up.” This is a great way to go into a home with equity, especially in this buyer’s market, make improvements to the home and live in the neighborhood you really want to live in.
3. Pre-construction: If you prefer pre-construction you can choose the builder, the neighborhood, and build from your plans or theirs. This is a lengthy process. Most builders will not take a contingency of your home selling prior to the construction of your new home. As a buyer, you must decide if you want to risk having two mortgage payments, if your current home does not sell. Or you can choose to sell your current home first and live in temporary housing until your new home is complete. Some buyers do like the inconvenience of this. The upside to pre-construction is that you get to choose absolutely every detail in your new home. You can incorporate the latest trends in cabinetry, flooring, and floor plans. While builders are not as motivated to make deals on pre-construction homes as they are spec homes, each individual builder determines if the market dictates a need for buyer incentives. Every builder I know welcomes the buyer in bringing a realtor into this process.

What is the process for finding and buying a home?

The first two steps in the process of buying a home are to one, find a realtor who will represent you in the transaction and two, work with a local loan officer for pre-approval of your new mortgage.

Your realtor should give you up to the minute information on what homes are available for sale that fit your criteria. You want to discuss with your realtor specific wants and needs for your new home. A good realtor will help you determine which of the wants are mandatory and which are on your “wish list.” This is helpful as you look at and compare many different homes.

One of the advantages of today’s home buying process is that much of the work can be done on your computer. There are photos, virtual tours and floor plans on-line that allow you to narrow down your choices before actually spending your time and gas driving around.

A realtor should provide you with a comparable market analysis (also know as a CMA) and assist you in determining an offering price. The realtor will also assist you in the negotiation process in terms other than price (i.e.-which appliances will be left, closing time and date, closing costs paid by the seller, etc.).

Your realtor will be with you every step of the way, from the moment you decide you want to look, to the settlement table. This is why it is so important to interview realtors and choose the one that best fits your style and personality in addition to having all the requirements and education that help the realtor work in your best interests.

How do I find a loan officer and what is the difference between being pre-qualified and pre-approved?

With all of the lending institutions out there (banks, mortgage companies, mortgage brokers) how do you know who to choose? Your realtor should be the first person you ask because they will have experience with these various institutions and who can recommend someone they know can get you to the closing table. Choosing your mortgage based solely on a rate is never a good idea. Every lender has the same programs, but they are not all equal when it comes to service, the cost to get the rate for your loan program and the ability to get you to the closing table on time.

When choosing a loan officer, ask the following questions:

• Does your loan officer know the many details of the loan process?
• Does the loan officer have access to a wide verity of loan packages?
• Will the loan officer be available to you during the process and will he/she attend the closing?
• Can the interest rates be locked in and for how long?

Once you find a loan officer you are ready to get pre-qualified and pre-approved.

Pre-qualification is the first step in getting a mortgage. Pre-qualification happens when a buyer discloses to a loan officer the amount of their income, the amount of their debt, and how much money they have to put down on a new home, to determine what their buying power is (how much money the loan officer thinks you can borrow for a home). This process also determines the type of financing you will receive (i.e.; conventional, FHA, or VA).

The pre-approval process takes the buyer a step further. At this point the loan officer does a credit check to determine whether you are credit worthy (meaning is your credit score good enough for you to be financed). The loan officer validates your ability to purchase by collecting required documentation (i.e.; pay stub, bank statements, verification of employment, etc.).

Some buyers tend to wait for loan approval until after they have found a home. I discourage this. Your power as a buyer increases when you are able to make an offer with pre-approval. By doing this, you let the seller know that you are capable and ready to buy their home. This is a huge benefit to the buyer and the seller.

Whether you are in the market for an existing home or for a new home, there is no better choice that Judy Hicks.   With the power of RE/MAX behind her, your choices for existing quality homes are endless.  In addition, Judy has an excellent relationship with many developers and builders who offer a multitude of new home choices in a variety of communities, designs, homesites and price ranges.    If you're like most people, buying a home is the biggest investment you will ever make.  A home search can be daunting but it doesn't have to be...remember you can have someone on your side.  Judy has the distinction of being one of the few Realtors in Jacksonville to have earned the Accredited Buyer Representative (ABR), this course teaches a Realtor in-depth skills in negotiation, buyer representation and effective marketing.  Remember, in the state of Florida you are not automatically represented in a real estate transaction and when you buy new construction without a Realtor you have no representation!  Why not take advantage of the experience of a local market expert for Jacksonville, Orange Park, Ponte Vedra Beach, Jacksonville Beach, Neptune Beach and the Atlantic Beach areas to make the most informed decisions you can, every step of the way!

The following articles provide useful information and are a great place to start if you're considering buying a home.