Beware! 13 Extra Costs
13 Extra Costs to be Aware of Before Buying a Home 13 Extra Costs Before Buying a Home Whether you’re looking to buy your first home, or trading up to a larger one, there are many costs — on top of the purchase price — that you must figure into your calculation of affordability. These extra fees, such as taxes and other additional costs, could surprise you with an unwanted financial nightmare on closing day if you’re not informed and prepared. Some of these costs are one-time fixed payments, while others represent an ongoing monthly or yearly commitment. Not all of these costs will apply in every situation, however it’s better to know about them ahead of time so you can budget properly. Remember, buying a home is a major milestone. Whether it’s your first, second or tenth home, there are many important details to address, during the process. The last thing you need are unbudgeted financial obligations cropping up hours before you take possession of your new home. Read through the following checklist to make sure you’re budgeting properly for your next move. 1. Appraisal Fee Your lending institution may request an appraisal of the property which would be your responsibility to pay for. Appraisals can vary in price from approximately $175 – $300. 2. Property Taxes Depending on your downpayment, your lending institution may decide to include your property taxes in your monthly mortgage payments. If your property taxes are not added to your monthly payments, your lending institution may require annual proof that your taxes have been paid. 3. Survey Fee When the home you purchase is a resale (vs a new home), your lending institution may ask for an updated property survey. The cost for this survey can vary between $700-$1,000. 4. Property Insurance Home insurance covers the replacement value of your home (structure and contents). Your lending institution will request proof that you are insured as it protects their investment on the loan. 5. Service Charges Any new utility that services your hook up, such as telephone or cable, may require an installation fee. 6. Legal Fees Even the simplest of home purchases should have a lawyer involved to review all paperwork. Shop around, as rates vary greatly depending on the complexity of the issues and the experience of the lawyer. 7. Mortgage Loan Insurance Fee Depending upon the equity in your home, some mortgages require mortgage loan insurance. This type of insurance will cost you between 0.5% – 3.5% of the total amount of the mortgage. Usually payments are made monthly in addition to your mortgage and tax payment. 8. Mortgage Brokers Fee A mortgage broker is entitled to charge you a fee in order to source a lender and organize the financing. However, it pays to shop around because many mortgage brokers will provide their services free to you by having the lending institution absorb the cost. 9. Moving Costs The cost for a professional mover can cost you in the range of:• $50-$100/hour for a van and 3 movers, and• 10-20% higher during peak demand seasons. 10. Maintenance Fees Condos charge monthly fees for common area maintenance such as groundskeeping and carpet cleaning in hallways. Costs will vary depending on the building. 11. Water Quality and Quality Certification If the home you purchased is serviced by a well, you should consider having your water checked by your local experts. Depending upon where you live, determines whether or not a fee is charged, to certify the quantity and quality of the water. 12. Local Improvements If the town you live in has made local improvements (such as the addition of sewers or sidewalks), this could impact a property’s taxes by thousands of dollars. 13. Land Transfer Tax This tax is applied whenever property changes hands and the amount that is applied can vary.
27 Seller Tips
27 VALUABLE TIPS You Should Know To Get Your Home SOLD FAST And For TOP DOLLAR! Because your home may well be your largest asset, selling it is probably one of the most important decisions you will make in your life. To better understand the homeselling process, a guide has been prepared from current industry insider reports. Through these 27 tips you will discover how to protect and capitalize on your most important investment, reduce stress, be in control of your situation, and make the most profit possible. 1. Understand Why You Are Selling Your Home Your motivation to sell is the determining factor as to how you will approach the process. It affects everything from what you set your asking price at to how much time, money and effort you’re willing to invest in order to prepare your home for sale. For example, if your goal is for a quick sale, this would determine one approach. If you want to maximize your profit, the sales process might take longer thus determining a different approach. 2. Keep the Reason(s) You are Selling to Yourself The reason(s) you are selling your home will affect the way you negotiate its sale. By keeping this to yourself you don’t provide ammunition to your prospective buyers. For example, should they learn that you must move quickly, you could be placed at a disadvantage in the negotiation process. When asked, simply say that your housing needs have changed. Remember, the reason(s) you are selling is only for you to know. 3. Before Setting a Price - Do Your Homework When you set your price, you make buyers aware of the absolute maximum they have to pay for your home. As a seller, you will want to get a selling price as close to the list price as possible. If you start out by pricing too high you run the risk of not being taken seriously by buyers and their agents and pricing too low can result in selling for much less than you were hoping for. Setting Your Home’s Sale Price. If You Live in a Subdivision — If your home is comprised of similar or identical floor plans, built in the same period, simply look at recent sales in your neighborhood subdivision to give you a good idea of what your home is worth. If You Live in An Older Neighborhood — As neighborhoods change over time each home may be different in minor or substantial ways. Because of this you will probably find that there aren’t many homes truly comparable to your own. In this case you may want to consider seeking a Realtor® to help you with the pricing process. If You Decide to Sell On Your Own — A good way to establish a value is to look at homes that have sold in your neighborhood within the past 6 months, including those now on the market. This is how prospective buyers will assess the worth of your home. Also a trip to City Hall can provide you with home sale information in its public records, for most communities. 4. Do Some “Home Shopping” Yourself The best way to learn about your competition and discover what turns buyers off is to check out other open houses. Note floor plans, condition, appearance, size of lot, location and other features. Particularly note, not only the asking prices but what they are actually selling for. Remember, if you’re serious about getting your home sold fast, don’t price it higher than your neighbor’s. 5. When Getting an Appraisal is a Benefit Sometimes a good appraisal can be a benefit in marketing your home. Getting an appraisal is a good way to let prospective buyers know that your home can be financed. However, an appraisal does cost money, has a limited life, and there’s no guarantee you’ll like the figure you hear. 6. Tax Assessments - What They Really Mean Some people think that tax assessments are a way of evaluating a home. The difficulty here is that assessments are based on a number of criteria that may not be related to property values, so they may not necessarily reflect your home’s true value. 7. Deciding Upon a Realtor® According to the National Association of Realtors, nearly two thirds of the people surveyed who sell their own homes say they wouldn’t do it again themselves. Primary reasons included setting a price, marketing handicaps, liability concerns, and time constraints. When deciding upon a Realtor®, consider two or three. Be as wary of quotes that are too low as those that are too high. All Realtors® are not the same! A professional Realtor® knows the market and has information on past sales, current listings, a marketing plan, and will provide their background and references. Evaluate each candidate carefully on the basis of their experience, qualifications, enthusiasm and personality. Be sure you choose someone that you trust and feel confident that they will do a good job on your behalf. If you choose to sell on your own, you can still talk to a Realtor®. Many are more than willing to help do-it-yourselfers with paperwork, contracts, etc. and should problems arise, you now have someone you can readily call upon. 8. Ensure You Have Room to Negotiate Before settling on your asking price make sure you leave yourself enough room in which to bargain. For example, set your lowest and highest selling price. Then check your priorities to know if you’ll price high to maximize your profit or price closer to market value if you want sell quickly. 9. Appearances Do Matter - Make them Count! Appearance is so critical that it would be unwise to ignore this when selling your home. The look and “feel” of your home will generate a greater emotional response than any other factor. Prospective buyers react to what they see, hear, feel, and smell even though you may have priced your home to sell. 10. Invite the Honest Opinions of Others The biggest mistake you can make at this point is to rely solely on your own judgement. Don’t be shy about seeking the honest opinions of others. You need to be objective about your home’s good points as well as bad. Fortunately, your Realtor® will be unabashed about discussing what should be done to make your home more marketable. 11. Get it Spic n’ Span Clean and Fix Everything, Even If It Seems Insignificant Scrub, scour, tidy up, straighten, get rid of the clutter, declare war on dust, repair squeaks, the light switch that doesn’t work, and the tiny crack in the bathroom mirror because these can be deal killers and you’ll never know what turns buyers off. Remember, you’re not just competing with other resale homes, but brand-new ones as well. 12. Allow Prospective Buyers to Visualize Themselves in Your Home. The last thing you want prospective buyers to feel when viewing your home is that they may be intruding into someone’s life. Avoid clutter such as too many knick-knacks, etc. Decorate in neutral colors, like white or beige and place a few carefully chosen items to add warmth and character. You can enhance the attractiveness of your home with a well-placed vase of flowers or potpourri in the bathroom. Home-decor magazines are great for tips. 13. Deal Killer Odors - Must Go! You may not realize but odd smells like traces of food, pets and smoking odors can kill deals quickly. If prospective buyers know you have a dog, or that you smoke, they’ll start being aware of odors and seeing stains that may not even exist. Don’t leave any clues. 14. Be a Smart Seller - Disclose Everything. Smart sellers are proactive in disclosing all known defects to their buyers in writing. This can reduce liability and prevent law suits later on. 15. It’s BetterWith More Prospects. When you maximize your home’s marketability, you will most likely attract more than one prospective buyer. It is much better to have several buyers because they will compete with each other; a single buyer will end up competing with you. 16. Keep Emotions in Check During Negotiations. Let go of the emotion you’ve invested in your home. Be detached, using a business-like manner in your negotiations. You’ll definitely have an advantage over those who get caught up emotionally in the situation. 17. Learn Why Your Buyer is Motivated. The better you know your buyers the better you can use the negotiation process to your advantage. This allows you to control the pace and duration of the process. As a rule, buyers are looking to purchase the best affordable property for the least amount of money. Knowing what motivates them enables you to negotiate more effectively. For example, does your buyer need to move quickly. Armed with this information you are in a better position to bargain. 18. What the Buyer Can Really Pay. As soon as possible, try to learn the amount of mortgage the buyer is qualified to carry and how much his/her down payment is. If their offer is low, ask their Realtor® about the buyer’s ability to pay what your home is worth. 19. When the BuyerWould Like to Close. Quite often, when buyers would “like” to close is when they need to close. Knowledge of their deadlines for completing negotiations again creates a negotiating advantage for you. 20. Never Sign a Deal on Your Next Home Until You Sell Your Current Home Beware of closing on your new home while you’re still making mortgage payments on the old one or you might end up becoming a seller who is eager (even desperate) for the first deal that comes along. 21. Moving Out Before You Sell Can Put You at a Disadvantage. It has been proven that it’s more difficult to sell a home that is vacant because it becomes forlorn looking, forgotten, no longer an appealing sight. Buyers start getting the message that you have a another home and are probably motivated to sell. This could cost you thousands of dollars. 22. Deadlines Create A Serious Disadvantage. Don’t try to sell by a certain date. This adds unnecessary pressure and is a serious disadvantage in negotiations. 23. A Low Offer - Don’t Take It Personally. Invariably the initial offer is below what both you and the buyer knows he’ll pay for your property. Don’t be upset, evaluate the offer objectively. Ensure it spells out the offering price, sufficient deposit, amount of down payment, mortgage amount, a closing date and any special requests. This can simply provide a starting point from which you can negotiate. 24. Turn That Low Offer Around. You can counter a low offer or even an offer that’s just under your asking price. This lets the buyer know that the first offer isn’t seen as being a serious one. Now you’ll be negotiating only with buyers with serious offers. 25. Maybe the Buyer’s Not Qualified. If you feel an offer is inadequate, now is the time to make sure the buyer is qualified to carry the size of mortgage the deal requires. Inquire how they arrived at their figure, and suggest they compare your price to the prices of homes for sale in your neighborhood. 26. Ensure the Contract is Complete. To avoid problems, ensure that all terms, costs and responsibilities are spelled out in the contract of sale. It should include such items as the date it was made, names of parties involved, address of property being sold, purchase price, where deposit monies will be held, date for loan approval, date and place of closing, type of deed, including any contingencies that remain to be settled and what personal property is included (or not) in the sale. 27. Resist Deviating From the Contract. For example, if the buyer requests a move-in prior to closing, just say no. That you’ve been advised against it. Now is not the time to take any chances of the deal falling through.
Best Financing Rates
Best Financing: A 3-Point Plan Buyer Beware When you’re looking to buy a home, the first thing most homebuyers do is start the process of househunting. However, experience proves that this is one of the last steps you should be taking if you want to get the most home for the least amount of money. In fact, shopping for the best financing should start long before you start shopping for a home. This report outlines 3 important steps you should take to obtain the best financing rates when you buy a home. Read on to find out where you can enquire, what questions you should ask, and how to manage the process to your personal advantage. 3-Point Plan 3 Critical Questions to Ask When you’re looking for an agent to assist you in finding a home, make sure you find out the answers to these important questions: Can you get me quick, easy and FREE mortgage preapproval? Can I get preferred access to special low down payments, monthly payments and interest rates? Can I get special advance notice of listings that computer-match my homebuying criteria? You owe it to yourself to benefit from these cost saving benefits. 1. Get Preapproved for a Mortgage . . . Getting preapproved for a mortgage will give you a number of important benefits including emotional security in the house-hunting process, and insurance against rising interest rates in the market place. Preapproval is easy, and can give you complete peace-of-mind when shopping for your home. Mortgage brokers can obtain written preapproval for you at no cost and no obligation. More than just a verbal approval from your lending institution, a written preapproval is as good as money in the bank. It entails a completed credit application, and a certificate which guarantees you a mortgage to the specified level when you find the home you’re looking for. Preapproval means no last minute shopping around for money and rates. With a preapproved mortgage, if rates go up, you still get the preapproved rate, but if rates go down, you receive the lower rate. 2. Receive Preferred Access to Special Low Financing . . . Agents that conduct hundreds of real estate transactions every year may be able to offer you certain negotiating advantages with lending institutions. These lenders are often anxious to do business with such agents and their clients, and may be willing to extend better than average rates. This can make purchasing a home much easier and more affordable for many buyers to qualify for a minimum down payment, and low monthly payments. Therefore many more buyers can own the home of their dreams much sooner than they ever thought possible. 3. Househunting Service... Most agents offer a house-hunting service to make it easier for you to find the home you want. Through these programs you can find out in advance which homes on the market match your homebuying criteria. To do this you simply provide your agent with a brief description of the type of home you’re looking for, for example, number of bedrooms, price range, neighborhood and so on. Then you should receive advance notice (including pictures) of all the homes for sale that match your requirements. This will give you the competitive edge to find out before other buyers which homes that are likely to be of interest to you. Because you are there before most other buyers, perhaps you can even negotiate a better price. You can then drive by these homes, without the assistance of an agent, to see which ones you want to view. Then it’s simply a matter of you advising your agent about which homes you like and want to see.
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