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It’s important that you choose an experienced agent who is there for you. Your agent should be actively finding you potential homes, keeping you informed of the entire process, negotiating furiously on your behalf, and answering all of your questions with competence and speed.
First, find an agent who represents you and not the seller. This is beneficial during the negotiation process. If you are working with a buyer’s agent, he or she is required not to tell the seller of your top choice. In addition, he or she is also focused on getting you the lowest asking price. Also, when you use a buyer’s agent, you will see more properties. Not only are they plugged into their Multiple Listing Service, but they are also actively finding homes that are listed as FSBO, or homes that sellers are thinking about listing.
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When purchasing a piece of property, it is important to be aware of any environmental liabilities associated with it. For example, you should find out if there are any registered underground tanks within several miles of the property, known contaminated properties in the neighborhood, or property owners who have been fined by the government for failing to meet environmental safety standards.
Before, it took a costly site investigation to acquire this type of information, but now there are online environmental databases available at a fraction of the cost. Anyone can access reports on otherwise hard to detect environmental issues. With these databases, it is possible to obtain a list of hazards near a property, or spills and violations attributed to businesses nearby. Some reputable databases include VISTA Information Systems, located in San Diego, California, which allows you to register and search the data bank for free, and E Data Resources, which is located in Southport, Connecticut. These services are all relatively inexpensive, but can provide you with priceless information that is useful before you make a purchase. Title Insurance: As a home buyer, the term is probably familiar - but is it understood? What is your dollar actually paying for when you purchase a title policy?
Title Insurers, unlike property or casualty insurance companies, operate under the theory of risk elimination. Title companies spend a high percentage of their operating income each year collecting, storing, maintaining and analyzing official records for information that affects title to real property. Their technical experts are trained to identify the rights others may have in your property, such as recorded liens, legal actions, disputed interests, rights of way or other encumbrances on your title. Before closing your transaction, the title company will proceed to clear those encumbrances which you do not wish to assume. This theory is different from that of most other insurance where, for example, rates and anticipated losses are based on actuarial studies and premiums are pooled on the assumption that a certain number of claims will be made. The distinction is important: title insurance premiums are paid to identify and eliminate potential risks and claims before they happen. Medical and casualty insurance premiums, for example, are paid to insure against an unpredictable future event, knowing that risks exist and claims will occur. Furthermore, title insurance involves a one-time premium, paid when you close the real estate transaction, while property, casualty and medical insurance require regular renewal premiums. The goal of title companies is to conduct such a thorough search and evaluation of public records that no claims will ever arise. Of course, this is impossible -- we live in an imperfect world, where human error and changing legal interpretations make 100% risk elimination impossible. When claims arise, professional claims personnel are assigned to handle them according to the terms of the title insurance policy. As in all competitive business environments, rates vary from company to company, so you should make comparisons before deciding on a particular title company. Your real estate professional can help you do this. In addition, there are many helpful customer services provided by title companies which you and your real estate professional may find helpful to your transaction. The issuance of a title insurance policy is highly labor-intensive. It is based upon the maintenance of a title plant, or library of title records, in many cases dating back over a hundred years. Each day, recorded documents affecting real property and property owners are posted to these title plants so that when a title search on a particular parcel is requested, the information is already organized for rapid and accurate retrieval. This investment in skilled personnel and advanced data processing represents a major part of the title insurance premium dollar. Two-thirds of US adults own a home, a milestone that is still viewed as a key part of the American Dream. Yet, in 2024, buying a house often feels out of reach.
The median price for a new home has jumped to $495,750, according to the National Association of Home Builders, pricing out 77% of US households. Meanwhile, the Census Bureau found that the median household income is $80,610. Given that gap, how do millions of first-time home buyers reach that dream every year? Despite the rising costs, experts say affordable housing options still exist, depending on where you look and how you plan. “The really obvious factor that affects housing affordability is the home price itself,” Danielle Hale, Realtor.com chief economist, said. “But there are two other factors that are really important for housing affordability. One is the mortgage rate. The other major factor is, of course, incomes. Those are the three legs of the housing affordability stool.” Mortgage rates have risen sharply since the pandemic, exacerbating the affordability crisis. “Home prices escalated out of control during the pandemic, and mortgage rates followed suit, climbing higher than what we were used to in the previous decade,” noted Logan Mohtashami, lead analyst at HousingWire. Read more: Should you buy a house? How to know if you're ready. There is some relief in sight with a Federal Reserve interest rate cut on the horizon, which indirectly results in lower mortgage rates. It can take several weeks for the full impact to be felt by prospective home buyers, however, so buyers shouldn’t race into the market out of fear of missing out. Home affordability is a deeply personal decision. Determining how much house you can actually afford starts with some basic details to help you figure out what your most important up-front and monthly costs should reasonably be. One of the best ways to figure out how much house you can afford is with a housing affordability calculator. For starters, you should have the following information ready: Lenders will want to know your debt-to-income ratio — the percentage of your monthly income that goes toward paying your debt — to assess whether you can handle a mortgage. Hale advises following the “30% rule,” which suggests keeping housing costs within 30% of your gross income. However, she recommends adjusting this figure based on your personal financial situation. After calculating your debt-to-income ratio, the next step is determining how much of a down payment you can afford. Usually, the down payment is the largest up-front cost when buying a home. For example, if you have $10,000 saved, that’s your potential down payment, minus any emergency savings you set aside. You’ll also need to factor in closing costs — a range of fees tied to the loan, title, and other costs — typically between 2% and 6% of the total purchase price. Next, consider the loan term. Mortgage terms typically range from 15 to 30 years. Mohtashami stressed the importance of meeting with a mortgage officer early in the process: “Go to a bank and find out exactly what you qualify for. Mortgage rates and home prices fluctuate, but you need to get that clear number first.” First-time buyers often have a variety of loan options, the most common of which are conventional loans and Federal Housing Administration (FHA) loans. “Conventional lending refers to anything backed by Fannie Mae or Freddie Mac, while FHA loans are backed by the Federal Housing Administration,” Hale explained. FHA loans are better suited for buyers with lower credit scores and higher debt-to-income ratios because they allow for a lower down payment. Conventional loans, on the other hand, require a higher credit score and a down payment of at least 3%. If you choose a conventional loan without putting down 20%, you’ll also need to pay for private mortgage insurance (PMI), which will add to your monthly costs. Read more: What are the best home loans for first-time home buyers? As an example, let’s assume a prospective home buyer has a gross annual household income of $100,000, monthly debt payments of $500, and a $10,000 down payment. Plugging this data into the housing affordability calculator, what home price would be affordable? Assuming a 30-year fixed-rate mortgage with a 5.795% interest rate, along with property taxes and PMI totaling $475 per month, the maximum affordable home price would be $329,728. This would result in a $3,000 monthly mortgage payment, leaving $3,500 each month for savings and other expenses. If this payment stretches your monthly budget, you can lower the home price option to ease financial pressure. Mohtashami reminds prospective buyers that many people start small: “Traditionally, you buy a smaller home, and as your family grows or your needs change, you move up or down in size.” This gradual approach is common for many homeowners. Owning a home may seem daunting, but with careful planning, it’s still possible. By understanding your financial standing, calculating what you can afford, and exploring different mortgage options, you can find a path to homeownership that works for you. It's important to note that buying a home is a transaction, whereas owning a home is an ongoing budgeting consideration beyond the monthly mortgage. Save 1% of your home’s purchase price for repairs and maintenance because those costs are yours too. A less predictable monthly expense is the impact of climate change and extreme weather conditions on buyers' ability to afford rising monthly insurance premiums or get coverage at all. “It takes time and preparation to get into the housing market, so make those little steps to save and prepare now to get your finances in order so that your credit score is in a good place and you can qualify for some of the best mortgage terms when you go to buy a house,” Hale said. “Then, of course, anything you can do to improve your income, whether that's focusing on your career or taking on a side hustle, can also help you realize that dream of home ownership sooner rather than later.” In addition, consider the cost of Homeowners Insurance and this is why we recommend going to InsurancePricedRight.com for quotes. By asking the right questions, and knowing exactly what your needs are, you can find the right loan for you. There are certain approaches that you can take while mortgage shopping that can cost or save you money.
It is still true that the better qualifications you have, the lower your interest rate will be. However, there are mortgages available for almost everyone; it's the interest rates or the down payments that vary. Before speaking with a lender, know what monthly dollar amount you feel comfortable committing to. Then when you discuss mortgage pre-approval with your lender, it is easier for you to determine the monthly amount and what value of home the monthly amount translates into. Do not put yourself in the position where you will be paying more each month than you intended simply because the dream home requires it. Do your research on the types of mortgages available to you and find the one that best suits your needs. There are a number of considerations to be made in terms of finding the best mortgage for each individual:
June 2010, I was contacted by the New York Times to be interviewed about Real Estate in the Dallas, Texas market.
That interview was fun and entertaining as they asked me questions about some of my Real Estate experiences. Here is the New York Times article: https://www.nytimes.com/2010/06/10/garden/10homesale.html If you would like to know more about the Texas Real Estate market, let me know or visit my website: http://www.robertjrussell.com There's something amiss in Florida's condo market.
"FLORIDA CONDO MARKET REMAINS IN CORRECTION MODE," Lance Lambert, co-founder of the ResiClub newsletter, posted at the end of last month, noting that condo prices were falling year over year in 18 metros in the state. Another post last month from Nick Gerli, CEO of Reventure Consulting, a real estate analysis firm, showed that the estimated value of a St. Petersburg, Fla., condo was 41% below its pandemic peak. "Talked to [the] realtor. She said it’s facing a $100,000 assessment due to structural work," Gerli later told me. They may be onto something. Overall, the median sales price of a condo in the state fell 1.3% in July, the latest figures available showed, marking the first year-over-year decline going back to at least July 2020, according to data accessible online from the Florida Realtors. That's a far cry from the double-digit annual price gains racked up until November 2022, and the decline continues downward as inventory piles up and demand wanes. The fall from grace has even outpaced the softening single-family housing market in the Sunshine State. Two of the major factors underpinning the decline — rising insurance costs and still elevated mortgage rates — are also pressuring single-family homes. But a third anchor — new condominium maintenance regulations that are increasing condo costs — is only weighing down condos. Still, despite the state's well-known boom-and-bust real estate cycles, there's no condo wip eout on the horizon like that of the early aughts, experts say. "It's a different situation. Prices are not cratering in any way," Lawrence Yun, chief economist at the National Association of Realtors, told Yahoo Finance. "There may be some price reduction, but keep in mind after major appreciation in prices over the last four years, the price decline is inconsequential." That may be, but if the depreciation continues, condo owners and buyers may get nervous. Just like every housing market across the country, the Florida condo market is still transitioning to a new normal under higher mortgage rates. Potential buyers remain on the sidelines, waiting for rates to fall further after the Federal Reserve indicated last month that it would cut its benchmark rate later this month. "They want to lock into a lower interest rate," Tony Baroni, CEO of the Tony Baroni Team for Keller Williams, said. At the same time, condo owners — as well as homeowners — are facing higher insurance costs, a deterrent for some would-be buyers. Insurance costs have spiked in recent years after major insurers stopped offering policies in the state, citing escalating claims from worsening natural disasters. Hurricane Ian in 2022 only exacerbated the problem after it caused $112.9 billion in damage — mostly in Florida — making it the third-costliest storm in the US. "It's decreased — substantially — affordability" for homebuyers, Baroni said. The third whammy, though, hits condos only. Following the deadly collapse of a condominium in Surfside, Fla., in 2021, state lawmakers toughened up rules regulating condo buildings. Condominiums that are at least three stories high must undergo an inspection after 30 years and then every 10 years after that. Buildings older than 30 years must complete those inspections by the end of this year. Other regulations stipulate how often condo associations must review their reserve funds and how much must be placed in reserve based on the inspection's findings. That means some potential condo owners are getting saddled with higher monthly condo fees or one-time assessments after their building's inspection turned up required maintenance or repairs. "Condo fees are rising $500 or more each month or there's a one-time cutting of a check up to $10,000," Yun said. "Many retirees who don't have access to funds are forced to list their properties to get out of it." That's added to the inventory of condos on the market. The number of active condo listings in July was almost double a year ago, rising 91.1%, according to the Florida Realtors. The extra supply is pressuring pricing, and any listing in a condo building that needs any major repairs would get hit even more. "Those buildings where we have excessive assessments, it certainly affects price," said Ron Shuffield, CEO of Berkshire Hathaway HomeServices EWM Realty in Southeast Florida. "A buyer has to allocate a certain amount a month for work. Only way to balance that is in the price." "It's definitely going to be something more common." Of course, the regulations only pertain to older buildings, Shuffield pointed out, noting that pricing on newer buildings and those in development may not be affected as much. That could help buoy the rest of the condo market from a price crash as long as demand remains strong. Yun believes it will because job growth in the state has outpaced the national average for some time, luring new residents to the Sunshine State. And as mortgage rates ease, buyers will be more willing to jump back into the market, further shoring up demand. The other key difference between this condo pullback and the dramatic one during the Great Recession so far is equity. While condo prices are down, they are well above where they were just four years ago. The median sales price was $315,000 in July, up 50% from $210,000 in July 2020, per the Florida Realtors. Only 1.1% of Florida homeowners owe more than their home is worth. That means if costs become an issue, condo owners have many choices. They can tap their equity to pay for a one-time assessment. If they bought when mortgage rates were higher, they can refinance as they drop. At worst, they can sell and still pocket some money. There won't be nearly as many distressed sales flooding the market. There were only 47 condo foreclosures and three short sales in all of Florida in July. "To me, that's the biggest factor," Baroni said. "People's homes are worth a lot more than what they paid and that gives them a lot of options no matter what." In today’s world of busy probate courts and exorbitant death taxes, the living trust has become a common manner of holding title to real property. The following may help you understand a few of the requirements of the title insurance industry if title to property is conveyed to the trustee of a living trust.
What is a trust?An agreement between a trustor and trustee for the trustee to hold title to and administer designated assets of the trustor for the use and benefit of one or more beneficiaries. Can a trust itself acquire and convey interests in real property?No. The trust is an arrangement between a trustee and the trustor. Only the trustee, on behalf of the trust, may own and convey any interest in real property. The trustee may only exercise the powers granted in the trust. What will the title company require if a trustee holds the title to the property which is part of the trust?A certification of trust containing the following information:
If there is more than one trustee, can just one sign?Maybe. The trust must specifically provide for less than all to sign. Can the trustee give someone a power-of-attorney?Only if the trust specifically provides for the appointment of an attorney-in-fact. What will the title company require if all the trustees have died or are unwilling to act?If the trustor is not able to do so, or the trust provisions prohibit the trustor from appointing a new trustee, the court may do so. How does a notary acknowledge the signature of the trustee?Title is vested in the trustee. Hence, if the trustee is an individual or a corporation, then the new general form of acknowledgment will be prepared to reflect the intrinsic nature of the trustee. How would the deed to the trustee ordinarily be worded to transfer title to the trustee?“John Doe and Mary Doe, as trustees of the Doe family trust, under declaration of trust dated January 1,1992.” Are there any limitations on what a trustee may do?Yes, the trustee is limited principally and most importantly by the provisions of the trust and, thus, may only act within the terms of the trust. The probate code contains general powers which, unless limited by the trust agreement, are sufficient for title insurers to rely on for sale, conveyance, and refinance purposes. An alternative to a non-conforming loan is the use of a land contract, which is allowed in some states. A land contract is an agreement between a buyer and a seller, where the buyer agrees to make periodic payments to the seller. The title to the property only transfers to the land contract buyer on fulfillment of the land contract obligations.
A land contract can be helpful for those who need time to establish or improve their credit rating. There are only small closing costs, and payment can help establish a good mortgage payment record. This can help establish an overall good credit rating, and it is possible for the buyer to later refinance the land contract with a conforming loan. On the other hand, there are risks associated with land contracts. Land contract purchases are not necessarily recorded in the public record, and there are no guarantees that the seller will be able to transfer a clear title to the buyer upon fulfillment of the land contract. There also is no lender assuring that the purchase price for the property is justified, and no inspection of the property’s condition. Another alternative to a non-conforming loan is assuming the seller’s mortgage. By assuming a mortgage, if the mortgage is assumable, it is possible to save on closing costs, and may allow you to obtain a favorable interest rate. Hot Market
This is an extremely competitive market and is advantageous to the seller. Sometimes, homes will sell as soon as they are listed or even before homes are listed. Typically, during a hot market, multiple offers will be made on each home and more often than not, homes will sell for more than the asking price. It is even more crucial to be prepared and to be ready as a buyer when the market is hot. It can be easy to get caught up in the bid for a home, but if you are prepared (pre-approved, solid in price range, realistic about your needs), it is easier to remain focused on your housing needs and price range. Normal Market In a normal market, there is a fairly large number of homes available and an average number of buyers. This market does not necessarily favor the buyer or the seller. A seller may not have as many offers on their home, but he or she may not be desperate to sell either. Again, it is the buyer’s responsibility to be prepared. During a normal market, the chances to negotiate are higher than in a hot market. As a buyer, you can expect to make offers at lower than the asking price and negotiate a price at least somewhat less than what the sellers are asking. Cold Market In a cold market, houses may be listed for more than a year and the prices of houses listed may drop considerably. This market is advantageous to the buyer. As a buyer, you have the time to make an offer that works to your best interest. It is not uncommon to low-ball and to find that sellers are accommodating to meet your needs. Keep in mind that even though this market is a great time for buyers, you do not want to lose your dream home by being unrealistic. Your goal is to get your dream home at the best possible price. |
AuthorRobert J Russell has been licensed in Real Estate since 2024. With Statewide knowledge as well as International Real Estate knowledge, our goal is to bring you the best of the best Real Estate Agents for referrals. ArchivesCategories |
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