Real Estate Diva Brenda’s – Buyer FAQ’s

IItt’ss MOVING SEASON!!! Yeahhh. Buyers, sellers, real estate agents, inspectors, appraisers, loan officers, Title Company agents are ALL excited. But, before you make that move, here are the answers to some frequently asked questions from home buyers.

Q: How much do I have to pay the agent? A: Nothing. As a buyer, you do not pay your agent, the seller does.
Q: Why do I have to sign an agreement? A: The Exclusive Buyer/Tenant Representation agreement is a mandatory document that protects YOU (the buyer) in that it affiliates you with an agent who is legally obligated to protect your interest in the transaction. The agreement also protects the agent who has worked so hard to secure you as a client and has helped you to find the home of your dreams.
Fortunately, all agreements have a way of escape through a mutual end date or a time frame in which you are able to terminate the agreement in writing. Please be aware that even if you sign the “hiring contract” or agreement for one day, a weekend, monthly, or for several months, it is a mandatory document that protects all parties involved.
Q: Why can’t I work with more than one agent?
A: The industry not only works to protect the consumer but it also demands moral ethics of agents. If the buyer or seller signs an agreement to work with a particular agent but has not submitted the termination in writing, no other agent is permitted to work with you.
Understandably, time is of the essence for buyers and sellers so partner with your agent and trust that the agent that you hired to work on your behalf has your best interest in mind or terminate the agreement in writing immediately.
Q: How much will buying a home cost me?
A: The average sales price for a home in Prince George’s County Maryland is $260k. As a rule of thumb, the buyer should save around $7k-$10k which is about 3-5% of the home sales price but also know that the cost of buying a house depends on many factors including interest rates, closing help, and the loan product. Each loan product has different requirements: FHA, 3.5% down; VA, 2-5% down; and 203k (reno), 3.5% down, etc.. Funds are always verified and you should ALWAYS ask the seller for closing help and ask the loan officer and agent about home buying programs.
Q: Am I able to continue looking at homes with my agent after I submit an offer on a house already?
A: Before you put an offer on any property, be absolutely sure that you will be happy living in the home and in the area for at least 30 years because when you submit the offer on a home you are essentially entering into a potential contract agreement. Unless your desire is to purchase two homes, the best thing to do is to wait until the contract is denied and then begin your search again.
Q: How much is it for an appraisal?
A: The price of an appraisal depends on what the company charges but appraiser is sent by the lender and the typical cost of an appraisal can range from $200-$600 depending on the size and the number of units. The amount is an upfront fee that is not deducted at settlement.
Q: How much is it for a home inspection? A: The cost of a home inspection varies from $150-$400+ depending on the square ft. of the home, the type of testing provided and how much the company charges. Shop around. The amount is an upfront fee that is not deducted at settlement.
Q: What if I don’t like the agent that I hired?
A: Communicate in writing (email, text (save), letter). Just remember that if the agent is the procuring cause of you finding the home, the agent is entitled to a commission. But fortunately, every agreement has an expiration date. If you want to terminate you must put it in writing.
Q: How much of an earnest money deposit should I put down?
A: When a buyer falls in love with a home, it can be an emotional roller coaster. The over excitement can cause one to believe that putting down a larger deposit will seal the deal and turn the odds in your favor but that is not necessarily true. A suggested deposit amount of course depends on you but $500-$1500 is sufficient. This amount can be held by the agent’s broker or by the title company. And yes, there are steps that you can take to get the deposit back but be certain that you will be comfortable living in the home for at least 30 years before you make an offer on any property.
Q: What credit score is needed to purchase a home?
A: An ideal credit score to purchase a home is 640 & up. However, I have seen some programs accept a score of 500 but require a larger down payment and of course there are higher interest rates. For the most part, the credit score depends on the loan product.
Q: My husband or significant other has bad credit. Can we get approved for a mortgage?
A: No. The lender won’t consider the score that won’t qualify. However, if you have great income and an acceptable score, you can apply for the loan alone and still add your spouse or significant other to the deed using an addendum provided by the agent.
Q: Where can I get a loan?
A: A buyer can get financing from several sources including banks, credit unions, private lenders, small lending agencies or organizations.
Q: Should I buy the car before the home? A: Making any large purchase that requires credit will jeopardize or change your debt-to-income ratio and thus stop the deal, even at the settlement table. So it’s best to get the keys in your hands first. Besides, if the seller pays for some or all of your closing costs and/or you get funds from special programs, you will have extra money in your pocket to celebrate.
Q: What is the current mortgage rate?
A: Mortgage rates constantly fluctuate and change by the hour. Which is why it is a great idea to lock in the mortgage rate by consulting and getting pre-approved through a mortgage professional.
Q: How long does it take to buy a home? A: A standard sale takes 30-45 days to purchase; a foreclosure can take up to 45 days; a short sale can take 60-90 days to purchase; and cash purchases can be as early as two weeks.
Q: My family member or neighbor is a Realtor. Can I buy or sell my home through him/her?
A: Absolutely. No one has your best interest in mind like a friend or family member and no one knows the neighborhood like one who lives in it and will be able to market the area well because they know the demographics personally.
Q: What is the home buying process?
A: 1. Conduct Research
2. Get pre-approved by a lender
3. Hire a Real Estate Agent
4. Find a home (know that there is no such thing as the perfect home but there’s a perfect home for you)
5. Make an offer/counter offer if necessary
6. Apply for the loan
7. Home Inspection
8. Appraisal
9. Closing/Title/Exchange of funds
Q: Is a foreclosed home cheaper to purchase?
A: With interest rates being so low right now, not necessarily. But first let’s clarify the difference between a REO (Real Estate Owned) and a foreclosure. Both are sold “as is.” But, an REO has already been through the foreclosure process but was passed up or not purchased by buyers including investors and so the bank holds the property in their possession until they can sell it. Many believe that REOs are safer to buy because the title is likely clear; there are no tenants so you don’t have to go through the eviction process; and the bank usually offers a 20% discount to the buyer so that they can get the property out of their inventory.
A foreclosed property is publically auctioned for sale at the county courthouse. Interested parties submit competing bids to purchase the property and usually the starting price is the remaining balance owed on the property. Whoever bids the highest amount wins the property.
Unfortunately, you are not able to do a pre-inspection, there could be multiple offers on the property that drive up the price (bidding war) and the home could be potentially flooded or damaged. Furthermore, the money that you may have to put into repairs could rise to market value or above and with interest rates being low right now, it’s probably better to look for a standard sale unless you really want to live in a desired neighborhood. Either way, ALWAYS get a thorough home inspection and always have your buyer’s agent give you a comparative market analysis (CMA) so that you can offer fair market value for the property.
Q: Should I buy a short sale?
A: A short sale is when a homeowner owes more on the mortgage balance than what the home will sell for (could be because of refinancing, getting a home equity loan, 2nd mortgages, slow market appreciation in that community, etc..). Either way, the homeowner will have to request permission from the bank or lender to sale the house for the lower amount.
But keep in mind that just because it is a short sale does not mean that there is anything wrong with the property and also be aware that a short sale is a long process with red tape to cut through and lots of parties involved. Therefore, it could take 60-90 days to get to closing but if the home is in a desirable location for you, it will be well worth the wait. But that will also mean that your home search stops, when you send an offer, until you are given the approval or denial.
Q: Should I do a rent to own or rent with option to purchase a home?
A: Admittedly, this is something that I am totally against because there is no protection for the consumer. In other words, there is no official federally regulated program that protects the buyer if something should happen; there are too many loop holes for buyer’s to fail; and the rent to own is a personal choice of landlord/investor and there are no consequences for default. During this rent to own or rent with option process, both parties enter into an agreement; the buyer agrees to pay an extra amount every month to go towards the purchase of a home (eg, rent is $1,300; w/rent to own the rent is an additional $300/per month = $1600/per month to landlord/$300 side aside for purchase).
First, you have no evidence that your money is being saved for the desired purchase and second, there are stipulations in the rental agreement and if you slip up just once, you have forfeited that extra money. So let’s say that the rental agreement states that the rent is due on the 1st of the month and you are doing well for the first 2 years but then life happens and unfortunately one month you pay the rent on the 2nd of the month. Well, using the example above, you have just forfeited $7,200 ($300 X 24 months (2yrs)) because you did not pay on the 1st of the month as the rental agreement stated (breech of contract). And unfortunately there is no federally regulated program with laws that protect you as the consumer.
I suggest that you save on your own. Visit a loan officer because sometimes you may qualify for special financing or so that loan officer can tell you exactly what you need to work on to purchase a home and give you some idea as to how long it will take. And then rent low (if necessary rental prices can be very high) and save the extra money to go towards the purchase of a home.
Q: Are there any home buying programs to help me purchase a home?
A: Absolutely. There are state programs, private organizations that offer help, programs based on occupation and also programs for first time home buyers. Reach out to your agent and/or a loan officer to get you started.
I hope that this helps. If you need answers to questions that are not mentioned, please send them to realestatedivabrenda@gmail.com and don’t forget to stay connected http://www.facebook.com/realestatedivabrenda
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Over Half of All Buyers Are Surprised by

Over Half of All Buyers Are Surprised by Closing Costs – According to a recent survey conducted by ClosingCorp, over half of all homebuyers are surprised by the closing costs required to obtain their mortgage. After surveying 1,000 first-time and repeat homebuyers, the results revealed that 17% of homebuyers were surprised that closing costs were required at all, while another 35% were stunned by how much higher the fees were than expected. “Homebuyers reported being mo… http://ow.ly/omiM509TUlC

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My House is Worth WHATT?!?!

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Have you ever received a comparative market analysis (CMA) from a real estate agent and were completely insulted by the suggested dollar amount?   Well, I must honestly tell you that a real estate agent does not randomly choose a dollar amount to give you. Moreover, I assure you that there is a method to the madness.

The harsh reality is that some neighborhoods or market areas appreciate faster than others. In fact, the value of your home today is NOT based on what you paid for upon purchase; it is not based on some improvements; the amount needed for you to relocate; the amount that you want; what your neighbors say; it is not what you owe; what you feel your home is worth; or the cost to rebuild the home. 

The pricing strategy revealed: a real estate agent objectively studies the local market area, specifically within a 1-2 mile radius.  The agent then considers the age of your property, the property features such as the number of bedrooms, the number of bathrooms, whether or not it has a finished basement, garage, etc.., the condition of the home, the home style: single-family, semi-detached, condo, etc…  The agent then compares your home to homes that are exactly the same and have sold within the last 90 days.  We also review the current competition (active properties) so that the pricing is competitive. 

Finally, the agent looks at what did not recently sell (expireds) because a home that did not sell could be the result of it being overpriced, poor condition, marketing efforts, or because of location. In short, an agent does  research to uncover the story of the neighborhood.

So for the most part, the suggested sales price is based on what buyers we recently willing to pay for a home that’s just like yours (SOLD).  

So before you get upset with the real estate agent who recommends a sales price that you don’t agree with, ask them to share the market research story of Your legal subdivision. 

And understand that the agent does not guess with your home is worth, instead we study the real estate market so that YOU can get the most amount of money and sell your home in the least amount of time.

And, as a result, we get to keep you as a lifetime happy customer and welcome the referral of your family and friends for generations to come – Everyone wins!

Until next time, Enjoy life’s journey!

Brenda Douglas Real Estate D.I.V.A. Distinguished. Indispensable. Valiant. Authoritative.
Keller Williams Preferred Properties http://www.realestatedivabrenda.com

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Thank You!

Happy Veteran’s Day! YOU ARE AWESOME!! #happyveteransday #veteransday #veteran #veterans #VeteranSalute

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Until next time, Enjoy life’s journey!

Brenda Douglas Real Estate D.I.V.A. Distinguished. Indispensable. Valiant. Authoritative.
Keller Williams Preferred Properties http://www.realestatedivabrenda.com

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You CAN do this!!

Believe in yourself even if

I have learned that not everyone will be there to encourage you, to provide a shoulder to cry on, to offer emotional support or to challenge you to be a better version of yourself but KEEP MOVING FORWARD!!  And remember that you are own greatest cheerleader!!!   Focus on your WHY (purpose, cause, or belief that inspires you to do what you do) and be determined to succeed and enjoy the journey regardless of who is in your corner cheering you on or not. You CAN do this! Even when you feel discouraged. You CAN do this!  Square your shoulders and move forward because You CAN do this!

Until next time, Enjoy life’s journey!                                                                                                Brenda Douglas Real Estate D.I.V.A. Distinguished. Indispensable. Valiant. Authoritative.
Keller Williams Preferred Properties http://www.realestatedivabrenda.com

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Reading is Fundamental… even in Real Estate

I met with the Managing Director and Real Estate Coach of the KW Luxury Division and I walked away with not one, not two, but three reading assignments. Oh my

1. The Millionaire Real Estate Agent     (KW “bible” for real estate success)
2. The New Gold Standard and
3. Rich Buyer, Rich Seller

Boy of boy.  I guess, even as adults, we never stop learning or reading. Check back in and I’ll share special inserts from each book. I guess reading is fundamental – even in real estate.

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Until next time, Enjoy life’s journey!

Brenda Douglas Real Estate D.I.V.A. Distinguished. Indispensable. Valiant. Authoritative.
Keller Williams Preferred Properties http://www.realestatedivabrenda.com

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Dues, Fees, Dues, I had no Clue!!

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Uugghh! Fees, Fees, and MORE Never-ending dues and fees. This is the time of year when real estate agents; not only review what they have accomplished and set new goals for next year, but this is also the time of year when fees for running your business are due.  While it is true that you must investment before you can get a return, I had no idea that it would cost me so much to maintain a real estate license.  DISCLAIMER: This information is NOT intended to scare you but it will definitely cause you to consider your motives for having a career in real estate.

Real Estate PSI Exam Prep (MD, State & Legislative portions) (one-time fee if pass)$59
MRIS (to list and search for  homes etc..; different cities have different Listing Services), $460 initially then $165 quarterly
Nat’l. Association of Realtors (NAR) membership  Includes: subscription to industry magazine, discount on services and courses, SentriLock Lockbox & SentriCard services; access to contracts & forms, $870-$905

NAR Breakdown of costs:
– $223, MD Association of Realtors,   (10-01-15 thru 10-31-16)
– $327, PG Association of Realtors,     (10-01-15 thru 09-30-15)
– $155, Nat’l. Association of Realtors, (01-01-16 thru 12-31-16)
– $65, Nat’l. Association of Realtors, (10-01-15 thru 12-31-15)
– $100, Processing Fee
– $35, Voluntary RPAC Contribution*

SentriCard Subscription (key to open electronic lockbox),$160
SentriLock Lockbox (to hold keys that open the doors for home entry), $150
RE Cont. Ed. Course: MD Legislative Update, $30-$40
RE Cont. Ed. Course: Maryland Ethics and Predatory Lending,
$30-$40
RE Cont. Ed. Course: MREC Agency – Residential, $30-$40
RE Cont. Ed. Course: Electives (#credits), $30-$40
Error & Omissions Insurance, $100-$250
To Activate or Transfer License to Broker, $110-$200
Pre-licensing Real Estate class- 60 hour course (one-time fee), $243

Honestly, these figures are not meant to scare or to discourage you from pursuing a career in real estate because 1.) The individual amounts are not due all at once and, in some cases, you can make payment arrangements 2.) You will recoup the money on your first transaction 3.) It is great to be informed so that you can count the cost prior to beginning anything 4.) Knowing this information will help you to make an informed decision 5.) these amounts, mileage/business use of your car, and much more can be tax write-offs (Check back for suggested websites that contain a list of tax write deductions); and finally, 6.) A real estate career is very rewarding!! If you have any questions, please contact me

Until next time, enjoy life’s journey!

Feel free to visit any of my websites and provide feedback, likes, or comments.

Brenda
Real Estate D.I.V.A.– Distinguished. Indispensable. Valiant. Authoritative Keller Williams Preferred Properties
realestatedivabrenda@gmail.com                                          Websites: www.realestatedivabrenda.com    Blogs: Diary of a Real Estate Diva, www.diaryofarealestatediva.com          ilovetheDMV, http://www.ilovethedmv.blogspot.com    Facebook Page: www.facebook.com/realestatedivabrenda                Google +: plus.google.com/u/0/+RealEstateDivaBrendaDouglas      Pinterest: https://www.pinterest.com/RealEstateDivaB/                              Twitter: https://twitter.com/realestatedivab                                    Instagram: https://instagram.com/realestatedivabrenda                                                      LinkedIn: https://www.linkedin.com/in/realestatedivabrenda                          Vimeo: www.vimeo.com/realestatedivabrenda                        Vine: https://vine.co/u/1186395941247287296  Homesnap: http://www.homesnap.com/real-estate-agents/Brenda-Douglas?viewas=self   YouTube Channel: https://www.youtube.com/channel/UC_BhLwql_ihoDuKi5IMgq4w

#realestatedivabrenda #realestate #brendadouglas #realtor #makememove #homebuyer #seller #buyingahouse #sellingahouse #realestatediva #realty #license

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