5 Things To Do NOW If You Want to Buy A Home In 2012
Posted under: Home Buying,
Financing,
Credit Score
|
December 13, 2011 5:59 PM |
67,212 views |
83 comments
At this point in December, it can start to feel like the New Year – along with all our hopes, dreams, wishes and expectations for it – are barreling down on us. Personally, I’m a rabid 
Resolution-setter, and I have a pretty strong track record of making New Year’s changes actually happen – and stick. But what I know after years of using the New Year as a great excuse to set and meet some goals is that it’s very, very helpful to get a head start, ramping-up to new habits, behaviors and target goals achievements starting in December.
If you’re one of the millions who has an eye on 2012 as the year in which you’ll buy a home (first or not), here are five things you can do now to put yourself on the right path:
1. Check your credit. Take my word for it: there is no bad surprise worse than a bad credit surprise. Okay, maybe there is one thing worse – a credit surprise you receive while you’re in the midst of trying to buy a home!
Recent studies have revealed that a record high number of real estate transactions are falling out of escrow, and that credit “issues” are a leading cause of these dead deals. Your best chance at catching and correcting score-lowering errors and other derogatory items before they destroy your personal American Dream is to start checking and correcting while you still have time on your side.
2. Do your research. The more rapidly the real estate market changes, the more it behooves smart buyers to study up before they jump in. And now’s the time – you can start doing online and in-person research into topics ranging from:
· Target states, cities and neighborhoods. Whether you’re relocating or simply trying to narrow down the local districts to focus on during your 2012 house hunt, December is a great time to start your online research into decision-driving factors like tax rates, school districts, neighborhood character and even prices in various areas. Resident ratings and reviews sites like Trulia and NabeWise can help you make the neighborhood-lifestyle match.
Once you narrow things down and start speaking to local agents, ask them to brief you on the local market dynamics, including how long homes typically stay on the market and whether they generally go for more or less than the asking price, so you can be smart about how you search. (And yes, Virginia, there are areas where homes sell for more than asking, even as we speak!)
· Real estate and mortgage pros. If you don’t already have your pros picked out, now is the time to get on the horn or drop an email or Facebook message to your circle of contacts, asking them for a referral to a broker or agent they love. Follow up by: checking whether these pros are active in answering questions on Trulia Voices, searching for their name and seeing what sort of feedback on them you can cull from the web, then giving them a ring and launching a conversation about whether you and they might be a good partnership.
· Short sales and REOs. Distressed property sales are not for the unwary. If you want to target upside down or foreclosed homes, or are planning to house hunt in an area where many of the listings are described as short sales or foreclosures, get educated about what you can expect from a distressed property purchase transaction before you get your heart set on a short sale.
· What you get for the money. Online house hunting is a powerful tool – especially when it’s cold and wet! But there comes a point in your house hunt where you’ve got to just get out into the actual physical homes you’re seeing online in order to get a strong, accurate sense of what home features, aesthetics and location characteristics correlate with what price points.
· Mortgage musts. You can read a bunch of articles about mortgages and get yourself pretty far down the path toward qualifying for a home loan, but you can only get a personalized action plan for a smooth road ‘home’ by talking with a local mortgage broker and having them assess your basic financials. They might say you need to move funds around, pay a bill down or off or produce some sort of documentation from your employer. And the time to start all that is now.
3. Fluff up your cash cushion. So, you’ve saved up your 3.5 percent down payment. Perhaps you saved a little extra for closing costs. Or maybe you’re even one of those uber-aggressive 20-percent-down-ers. No matter how much you’ve saved, you’ll find that you could use more once you activate your home buying action plan. Mark my words – after closing, you’ll crave extra cash to do some repairs, upgrade a couple of things, buy appliances or even just to hold onto in order to minimize your anxiety about depleting your savings!
So, if homebuying is on your personal 2012 action plan, don’t go hog wild on holiday gifts. Instead, wait until next year and give yourself the gift of a home.
4. Shed some stuff. Sell it. Donate it. Give it to relatives who’ve always coveted it. Just get rid of it. If you do it before year’s end, you can kill three birds with one stone: (a) getting some cold hard cash to go toward your savings, (b) getting some tax receipts so you can deduct the value of your donations in January, (c) minimizing money spent on holiday gifts for loved ones and these two bonus birds – clearing the mental clutter that physical clutter creates and prepping for your move in advance.
5. Sit very, very still. Sometimes, the best way to further our goals is to stop tripping ourselves up. In that vein, commit right now to refrain from making any major financial moves until you buy your home. Don’t quit your job to start that personal chef business (yet), don’t pull a bunch of cash out of your savings account (without getting clearance form your mortgage pro first), and don’t start buying cars and boats on credit – even if you do love the idea of putting the red bow on the car you give your wife, like in the commercials.
I assure you, the bow you’ll be able to put on that house or condo will be much bigger, redder and more tax-advantaged!
P.S. - You should follow Trulia and Tara on Facebook!
Resolution-setter, and I have a pretty strong track record of making New Year’s changes actually happen – and stick. But what I know after years of using the New Year as a great excuse to set and meet some goals is that it’s very, very helpful to get a head start, ramping-up to new habits, behaviors and target goals achievements starting in December.If you’re one of the millions who has an eye on 2012 as the year in which you’ll buy a home (first or not), here are five things you can do now to put yourself on the right path:
1. Check your credit. Take my word for it: there is no bad surprise worse than a bad credit surprise. Okay, maybe there is one thing worse – a credit surprise you receive while you’re in the midst of trying to buy a home!
Recent studies have revealed that a record high number of real estate transactions are falling out of escrow, and that credit “issues” are a leading cause of these dead deals. Your best chance at catching and correcting score-lowering errors and other derogatory items before they destroy your personal American Dream is to start checking and correcting while you still have time on your side.
2. Do your research. The more rapidly the real estate market changes, the more it behooves smart buyers to study up before they jump in. And now’s the time – you can start doing online and in-person research into topics ranging from:
· Target states, cities and neighborhoods. Whether you’re relocating or simply trying to narrow down the local districts to focus on during your 2012 house hunt, December is a great time to start your online research into decision-driving factors like tax rates, school districts, neighborhood character and even prices in various areas. Resident ratings and reviews sites like Trulia and NabeWise can help you make the neighborhood-lifestyle match.
Once you narrow things down and start speaking to local agents, ask them to brief you on the local market dynamics, including how long homes typically stay on the market and whether they generally go for more or less than the asking price, so you can be smart about how you search. (And yes, Virginia, there are areas where homes sell for more than asking, even as we speak!)
· Real estate and mortgage pros. If you don’t already have your pros picked out, now is the time to get on the horn or drop an email or Facebook message to your circle of contacts, asking them for a referral to a broker or agent they love. Follow up by: checking whether these pros are active in answering questions on Trulia Voices, searching for their name and seeing what sort of feedback on them you can cull from the web, then giving them a ring and launching a conversation about whether you and they might be a good partnership.
· Short sales and REOs. Distressed property sales are not for the unwary. If you want to target upside down or foreclosed homes, or are planning to house hunt in an area where many of the listings are described as short sales or foreclosures, get educated about what you can expect from a distressed property purchase transaction before you get your heart set on a short sale.
· What you get for the money. Online house hunting is a powerful tool – especially when it’s cold and wet! But there comes a point in your house hunt where you’ve got to just get out into the actual physical homes you’re seeing online in order to get a strong, accurate sense of what home features, aesthetics and location characteristics correlate with what price points.
· Mortgage musts. You can read a bunch of articles about mortgages and get yourself pretty far down the path toward qualifying for a home loan, but you can only get a personalized action plan for a smooth road ‘home’ by talking with a local mortgage broker and having them assess your basic financials. They might say you need to move funds around, pay a bill down or off or produce some sort of documentation from your employer. And the time to start all that is now.
3. Fluff up your cash cushion. So, you’ve saved up your 3.5 percent down payment. Perhaps you saved a little extra for closing costs. Or maybe you’re even one of those uber-aggressive 20-percent-down-ers. No matter how much you’ve saved, you’ll find that you could use more once you activate your home buying action plan. Mark my words – after closing, you’ll crave extra cash to do some repairs, upgrade a couple of things, buy appliances or even just to hold onto in order to minimize your anxiety about depleting your savings!
So, if homebuying is on your personal 2012 action plan, don’t go hog wild on holiday gifts. Instead, wait until next year and give yourself the gift of a home.
4. Shed some stuff. Sell it. Donate it. Give it to relatives who’ve always coveted it. Just get rid of it. If you do it before year’s end, you can kill three birds with one stone: (a) getting some cold hard cash to go toward your savings, (b) getting some tax receipts so you can deduct the value of your donations in January, (c) minimizing money spent on holiday gifts for loved ones and these two bonus birds – clearing the mental clutter that physical clutter creates and prepping for your move in advance.
5. Sit very, very still. Sometimes, the best way to further our goals is to stop tripping ourselves up. In that vein, commit right now to refrain from making any major financial moves until you buy your home. Don’t quit your job to start that personal chef business (yet), don’t pull a bunch of cash out of your savings account (without getting clearance form your mortgage pro first), and don’t start buying cars and boats on credit – even if you do love the idea of putting the red bow on the car you give your wife, like in the commercials.
I assure you, the bow you’ll be able to put on that house or condo will be much bigger, redder and more tax-advantaged!
P.S. - You should follow Trulia and Tara on Facebook!
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Comments
in being a BUYER"S agent. Never ever use a dual agent [someone who is selling a house you are looking at.]
and make sure the offer you make has a one day life to it. DO NOT let YOUR agent hand it to the
seller's agent............Direct YOUR BUYER"S AGENT to give it to the seller direct [with the agent present]
and have your agent START TO NEGOTIATE. When your agent leaves, make sure your offer depicts that the offer expires--so it has to be
accepted by the seller before then.
Your posts are truly the best! Keep it up.
TG
http://phillyurbanliving.com/
Joanne Bernardini
Keller Williams Oceanside Realty
Ocean City, NJ
Vernae Burrell
I had an agent who wouldn't show me a piece of property out of my price range, even though I loved it. So I contacted the seller's agent, who had immediate contact with the seller, and gave him my low ball offer. I meant no insult to the seller; the house had been on the market awhile and I was giving him everything I had.
I bought the house and quadrupled my investment in 6 years.
When I sold it, my agent was the buyer's agent. My agent was the only liaison between us; she made it happen, and both buyer and seller came out happy because even at quadruple the price I paid for it, it was fantastic investment property.
Gail Hickman
gailjoe@cfl.rr.com
12/15/11
your Buyers and friends and past clients ready for the new world and new year. Thank You.
All 'deal-breakers', or 'buyers' -remorse' if NOT looked into . . . .
1. Is there any cautions here been so long on market.
2. I would like to offer 300K my agent is not giving me any sugestions.
Thnaks for your reply.
Here is my short list of techniques to attempt to prevent this from happening to me as the bubble continues to unwind.
In addition to these five points, start doing the following:
1) Learn to be aggressive with salesmen. Don't worry about being rude, force the so-called "Buyers agents" into being advocates for YOU the buyer instead of the listing agent who controls the listing. If a salesman can't take the heat, let them go back to selling used cars.
2) Research research and research. Ask yourself if the deal is so good why the estate agent won't make an offer. 90% of properties for sale are ALWAYS available to estate agents and their buddies FIRST. Ask yourself why.
3) Get familiar with your county recorder and tax assessor filings. Visit in person, and make a pest of your self until you understand the local operation. The result is a SMARTER and WISER buyer.
4) Why is the seller selling TODAY>? This is the most important question you can ask about pricing!!
Mr. Donald Trump and other Real estate tycoons talk about the five D's of Real estate Death Divorce Disease Destruction and Debt. If your seller has any equity in the property, that is they bought before 1998 AND they have no liens, Seconds or HELOCS and the house has not rotted away WHY ARE THEY SELLING TODAY? If it is one of these FIVE D's of real estate the pressure to sell is greater than the greed to get more money. The longer the house sits waiting for someone to buy it, the lower the house price! Any unsold house over 30 days on market is OVERPRICED! BY DEFINITION....that should tell you something about pricing. If it were correctly priced it would be sold or purchased by an estate agent! Believe this.
5) Be aware of hyperbole and false promises! Be aware of phoney OPTIMISM by any estate agent or seller. If the property is so "great"--- WHY ARE THEY SELLING IT? Watch for these key words used by con artists:
"opportunity", "imagine", "picture yourself", "this house is a blank canvas", "think about.... your family....your friends, entertaining guests ....blah blah and lie..." Be aware of descriptive words that say NOTHING .
Cozy, warm, fresh, open, cute, home, starter house (dump), talk about local SCHOOLS, talk about "who" lives in the neighborhood ...doctors, lawyers etc.
6) Scrutinize every word in as many online databases as you can including County Grantor-Grantee indexes, County tax records, all available MLS records, all available foreclosure and auction websites, any website you can find about the property. Many MLS listings expire. Its the fresh listings that sell quickly, so agents will frequently relist and hide the old listing. Google search the address to look at old postings or other information. I found a house I was looking at was drug lab with over a dozen arrests. All the estate agents knew it but "dummied up". Their job is To SELL at the HIGHEST price for the seller ..! It's in the listing agreement! Don't believe they are "giving you a break" ion the price.
7) Think about this...and talk to former owners of foreclosed houses and have them tell you THEIR STORY...because their story could be YOUR story in a few years. Who lied to them and got away with it? Learn how it happened to them to protect yourself.
8) Never never ever FALL IN LOVE WITH A HOUSE. Its only a house. Don't let anyone call it a "home". Don't look for property if you are pregnant! The agents KNOW you are in a hurry and need to make a "home". DO NOT BUT WHEN PREGNANT. The agents are waiting for you ...with big crocodile smiles.
9) TAKE YOUR TIME....analyze EVERYTHING. You better realize that NOTHING can be assumed. If you can't prove its "not broken", don't assume it is okay.
10) Pay for YOUR own termite inspector! Termite inspectors have a dirty job, but make sure they are WORKING FOR YOU. Pay them a cash bonus if they find something wrong...termites, wood rot, mold , insects, water damage. GET IT IN WRITING .
11) Be cautious of concrete slab construction! Inexpensive or cheaply built houses , many in the west , do not have a basement or raised foundation. The result is if concrete is poured over bad plumbing bad foundation, incorrect soil compaction or lot leveling you can face terns of thousands of dollars of HIDDEN DEFECTS OR damage to repair. Insist on your home inspector using GPR ---Ground Penetrating Radar. Its not cheap...but can save you tens of thousands of dollars. GPR is used in commercial sales inspections why not residential?
Hire YOUR OWN APPRAISER....as a back up...not to keep the house price high, but to get an HONEST opinion on price and value.
12) Don't EVER rely on a BPO ( Broker Price Opinion) or comp over 90 days old. These BPO's and comps can NOT SEE THE FUTURE...but are used to evaluate your property for the FUTURE , but are "good:" only for DAYS.
In a declining housing market like this, ALL BPO"S and comp's are looking at HISTORY...that is OLD...and mostly HIGHER PRICES. I have been a FULLY qualified buyer for several years and have not yet purchased.
Let's look at the houses I was prepared to buy, but did not when I found problems because of my DUE DILIGENCE in house research. Estate AGENTS HATE IT when you do your own research.
We need the following which will cause REAL PRICE DISCOVERY in housing:
1) The federal government needs to get out of the mortgage business. No more HUD, FHA and GSE's.
2) We need to eliminate the mortgage interest deduction. Eliminating this deduction will force housing to market prices. It will also increase tax revenue. Why should renters have to support homowners (really mortgage debtors---they don't "own the house)? Let them pay their taxes like renters pay their taxes. Shy reward house buyers who "play stupid" and overpay for houses that us taxpayers must bail out!
3) We need to allow mortgage interest rates to increase using market forces instead of using the fed to give free money to banks (nil overnight lending rates)/ How many people get tired of saving money in a bank---when they get effectively NO interest? Its cause by the federal reserves FREE money to banks policy. BANKS don't need savings accounts anymore. People don't save because they don't get interest on savings and instead they spend it on over priced cars and houses USING LOANS!
4) We need to bust up the MLS monopoly on houses. Many MLS's don't investigate the photoshopped or over hyped listings , instead they try to control the house market. We need someone like GOOGLE to take over the MLS function and more FOR SALE BY OWNERS will be the result...and fewer 6% commissions to people who only have three functions: 1) Talking...bragging 2) Keeping house prices high 3) Saying " intelligent" things like ...." Here is the kitchen where you can bake your bread"...or " here is the hallway that takes you down the hall"!??
I like this one---- " and here is the front porch where you can watch the gangs shoot at each other..." Oh yes! "Show and Sell"...."Curb appeal"...."spotty area" ...."open floor plan"...."cozy", "warm"...."cottage"
AND MY FAVORITE... " This HOME has nothing that MONEY CAN'T FIX...:" Oh yes!
http://www.newlistingsinthesouthbay.com, Anna Maria Kitras, Local Southbay and Los Angeles Realtor
Live the Southbay Lifestyle at http://www.southbayluxuryhomes.com
~~*~~
Thank you very much Tara!!
I am a Realtor in York, Pa and I would be happy to answer any questions you may have. Please feel free to contact me at bmiller@prudentialhomesale.com.
If so, I'd like to hear from those who have had positive experiences with their particular banks in CT.
Your photo scares me! You look so mad...but your info is great. You mentioned an estate agent and their buddies having first dibs on buying. What is an estate agent vs a regular agent?
Thanks,