Simplify the Home Buying Process

Real estate checklistBuying a home is an intimidating endeavor. The process can be time-consuming, it has its own language of unfamiliar terms and acronyms, and it involves one of the largest outlays of cash you’ll likely make in your lifetime.

Deep breaths. By doing your homework and thinking about the process as four smaller stages, shopping for a home can be less complicated and, perhaps, even enjoyable.

Step 1: Gather and prepare

Even before you start perusing real estate websites or visiting open houses, you need to find a local real estate agent you can trust. Get recommendations from friends and family; Zillow’s agent reviews can also be a great resource. Interview several agents before deciding which one you want to work with. You’ll want to hire an agent who is knowledgeable about the buying and selling process, knows your area and makes you feel comfortable. Once you’ve settled on an agent, you should set up a meeting to analyze your wants and needs.

Just as with your agent, you’ll want to shop around for the best possible lender. Again, rely on recommendations from friends and family, use sites such as Zillow to read online reviews and check with the Better Business Bureau to ensure potential lenders haven’t been fraught with complaints. Interview at least three mortgage lenders. In addition to technical knowledge you, again, need to find someone who puts you at ease.

Once you settle on a lender, you need to get pre-approved. A pre-approval is a preliminary commitment in writing from a lender stating that you will qualify for a particular loan amount based on your income and credit information. Getting pre-approved will give you an accurate idea of how much you can afford.

Step 2: Find

After meeting with your agent, you should both have a clear picture of which neighborhood you want to live in and the size home you’re after. Do you want a single-family home? Are you open to looking at condominiums or town homes? Do you need to be in a specific school district or near public transit? Is outdoor space important to you?

It’s likely you’ll do a portion of your house hunting online. Sites like Zillow allow you to look for properties within specific neighborhoods, price ranges and size parameters. These online searches can help you eliminate homes that don’t fit your needs and point you in the direction of more promising properties.

Once you’ve found a property you love, be sure to visit it at all times of the day. A street that’s quaint and quiet during the day could turn into party central on the weekend. Neighbors, too, can provide insight about your potential dream home.

Step 3: Buy

Your agent will write your offer to purchase. Most sellers price their homes a bit high with the expectation that back-and-forth negotiations will take place. A decent place to start is about 5 percent below the asking price. Your agent can tell you how much comparable homes have sold for, which will help you determine what you’re willing to pay. After you’ve made your offer, it’s likely the seller will make a counteroffer, to which you can also counteroffer. Once you’ve agreed on a price, you’ll make an earnest money deposit, which goes in escrow to give the seller a sign of good faith.

Typically, purchase offers are contingent on a home inspection to check for signs of structural damage or things that may need fixing. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage. Both you and the seller will receive a report on the home inspector’s findings. You can then decide if you want to ask the seller to fix anything on the property before closing the sale. Before the sale closes, you will have a walk-through of the house, which gives you the chance to confirm that any agreed-upon repairs have been made.

While the inspection is being arranged, you need to work with your lender to choose a mortgage. Many different types of mortgage programs are available. Three of the most common for first-time buyers are:

  • Adjustable-rate mortgages (ARMs). These mortgages have an introductory interest rate that lasts a set period of time and adjusts annually thereafter for the remaining time period for a total of 30 years. After the set time period your interest rate will change and so will your monthly payment. The monthly payment amount is usually subject to a cap.
  • Fixed-rate mortgages. Issued for 15, 20, 25 or 30 years, these are fully amortizing mortgage loans. The interest rate on this type of loan remains the same throughout the term of the loan, as opposed to loans where the interest rate may adjust.
  • Interest-only. Both fixed and adjustable-rate mortgages can have an interest-only payment, which means for a period of time during the loan term, you’re allowed to pay only enough to cover the interest portion of your payment. You can still pay principal when you wish, but you don’t have to if your budget is tight. The benefit to interest-only mortgages is that you increase your cash flow by not paying principal.

Ask questions and provide a complete picture of your finances so that your lender can help you determine which type of mortgage is right for you.

Step 4: Close

Your real estate agent will help set a closing date that is agreeable for both you and the seller. Optimally, you’ll want to schedule your closing date to coincide with taking possession — either to move in or to begin renovations. You’ll also want to try to coordinate closing with the move-out date of the property you’re leaving so you don’t have to pay for temporary housing before your move.

Be sure you talk to your agent and lender so that you have a clear understanding of all the costs associated with closing. Closing costs likely will include your down payment, escrow deposit, title fees, loan origination fees, appraisal fees, survey fees, attorney fees, inspection fees, recording fee and points you may have bought to buy down your interest rate. Typically, home buyers pay between 2 percent and 5 percent of the purchase price of their home in closing costs. So, if you bought your home for $200,000, you might pay between $4,000 and $10,000 in closing costs.

Once the papers have been signed and the deal is closed, it’s time to move in. Whether you use a professional moving company is up to you and may depend upon your financial situation, how many boxes you have to move, how far you’re moving and whether you have friends who are willing to help for free.

Buying property is not without challenges, but by assembling an experienced and knowledgeable team of advisers, you’re taking the first step toward homeownership.

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Mary Boone is a freelance writer for Zillow Blog. Read more from her here.

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Top 10 Tips to Prepare Your Home for Spring after Severe Winter

gutter_repairAs much of the United States recovers from one of the harshest winters in recent history, it is important to inspect your home for damage and plan for home maintenance, repair and remodeling projects. Winter weather can be particularly damaging to a home and the tips from NAHB Remodelers can return your home to top condition after the severe winter.

“Winter weather can damage homes in ways that aren’t easily visible,” says NAHB Remodelers Chair Paul Sullivan, CAPS, CGR, CGP, of Waterville Valley, N.H. “Home owners should protect their investment and hire a professional remodeler to repair or replace damaged components now, before spring storms create more problems.”

NAHB Remodelers recommends these top 10 tips for home owners to inspect for damage and make sure your home is ready for spring from top to bottom:

• Inspect roof—Check your roof for loose, warped or missing shingles and make sure the chimney flashing and skylight seals are intact.

• Clean and repair gutters—Clear winter storm debris from gutters and downspouts, and check that they are still securely attached to the house. Blocked or loose gutters can allow water into your home and damage trim.

• Look for leaks—Common culprits for hard-to-find leaks are attics, crawl spaces and washing machine hoses. Inspect these areas, look under sinks for damage from frozen pipes and check your water heater for signs of corrosion.

• Clear exterior drains—Remove leaves from underground or exterior drains to clear the way for spring showers and prevent backups.

• Inspect siding—Inspect siding for pieces that have come loose during winter storms.

• Check window and door seals—Examine the exterior caulking on door and window seals to ensure it remains watertight.

• Patch cracks—Patch cracks in concrete driveways, sidewalks and steps to keep water out and prevent further expansion.

• Paint the exterior—Painting or touching up paint on the exterior of your home not only makes it look better, but will also help protect the home from the elements.

• Inspect the HVAC—Hire a qualified technician to service your home’s HVAC system to make sure it is running properly before hot temperatures call for air conditioning. Now is also the time to replace your HVAC filters.

• Check your home’s grading—Ensure the grading of your yard slopes away from your home’s foundation to keep excess moisture at bay.

Don’t wait to inspect your home and get damage fixed. Many professional remodelers not only renovate homes; they repair or replace damaged or deteriorating roofs, windows, doors and other home features. Remodeling and repair projects can require your home to be open to the elements and companies may have a backlog of work due to the length and severity of the winter season. Choose your repair and renovation projects for the year ahead and start planning now.

For more information, visit nahb.org/remodelerdirectory.

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5 Signs That You’re Ready to Buy a First Home

first_home_couple_keys(MCT)—Buying your first home takes stamina, desire and commitment not only to navigate the complicated and time-consuming purchase process, but also to learn the ropes of being a responsible homeowner.

Maybe you’ve dreamed about buying. Or perhaps you’ve researched for-sale homes online, tried to calculate how much you can afford to spend, or peeked inside a few open houses.

But are you really ready, emotionally and financially, to step up your game and make your move? Here’s a look at what mortgage and real estate pros know about who’s good to go and who needs more time to prepare for homeownership—five ways to know if you’re ready to buy your first home.

PLAN TO STAY: Buying a home might seem like a no-brainer if your mortgage payment would be less than the rent you’re paying.

But that comparison doesn’t account for other costs of homeownership, including down payment, mortgage-related fees and home maintenance and repair expenses, says Ed Conarchy, a mortgage loan originator for Cherry Creek Mortgage Co. in Gurnee, Ill.

With those factors considered, short-term homeownership rarely makes sense.

“When you buy a home, you should know you’re going to stay for a minimum of five to seven years, and longer is better,” Conarchy says. “If you try to do everything you need to do to make that house yours and then you turn around and sell it after three years, you’re not going to break even.”

If your employment situation feels secure and you’re prepared to stay in one place for a while, you might be ready to buy.

GET PRE-APPROVED: Very few people have enough cash to buy their first home without a mortgage. Rather, most need financing to afford today’s home prices.

REALTORS® know that all too well, which is why many won’t spend much time with would-be buyers who haven’t had a serious talk with a mortgage professional.

As Jay Dacey, a mortgage broker in Minneapolis, explained, “A good REALTOR® will ask you what your criteria are and set up a search through the MLS for you, but a good REALTOR® is also going to say, ‘The next step is for you to contact a mortgage professional and make sure you’re pre-approved.’ ”

The loan approval process is no different for first-timers than it is for experienced home purchasers, Dacey added.

READY, SET, FLEXIBLE: Timing is another crucial element in homebuyer readiness, says Amy Butterworth, an associate broker in Boston.

A time frame that’s too long doesn’t make sense. But neither does a time frame that’s too short. For example, if your lease doesn’t expire for many months or you need to move within 30 days, buying a home might not be practical for you right now, Butterworth says.

The ideal situation is to be ready to buy and able to wait, especially if your housing market is a hotbed of multiple offers.

“There’s no place in the market for a buyer who’s hesitant,” Butterworth says. “But they can’t only be ready and raring to go because there will be disappointments — that’s just how the market is right now. You have to go into it with realistic expectations.”

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Reality Star Nicole Richie Lists Spanish Colonial

Source: People.com

Source: People.com

Recent life changes for reality starlet Nicole Richie go beyond the purple hair she sported for a magazine shoot. She and musician husband Joel Madden are selling the Spanish Colonial Madden has owned since before they married in 2010.

Now the couple have two kids and two busy careers in the spotlight: Madden as the lead vocalist for his pop-punk band Good Charlotte and Richie as the star of a televised version of her YouTube show, “#CandidlyNicole.” The VH1 series will feature her “unfiltered tweets and amusing points of view” as she goes about her daily life, according to E!

Perhaps that will include some news about the family’s new living arrangements. The couple’s restored 1930s home at 1516 Hillcrest Ave, Glendale, CA 91202 is listed for $1.875 million. The 4-bedroom, 4-bath spans nearly 5,000 square feet and boasts Spanish details including thick crown moldings, beamed ceilings, an arched entryway and a custom-tiled fireplace.

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Emily Heffter, a reporter and writer for Zillow Blog, covers celebrity real estate, unusual properties, and other real estate topics. Read more of her work here.

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‘Eat, Pray, Love’ Author Ready to Leave Her ‘Skybrary,’ Find the Next New Thing

Full House

Elizabeth Gilbert has lived and worked out of the 19th-century home since 2008.

No undisclosed address here. This home is listed for sale by owner, and she isn’t hiding behind a trust. In fact, “Eat, Pray, Love” author Elizabeth Gilbert is refreshingly candid and unpretentious in a video tour of her home, laughing when she realizes she forgot to make her bed.

But that doesn’t mean Gilbert’s home isn’t getting the celebrity real estate treatment.

Rayya Elias, a broker and friend from New York City, is helping Gilbert market the property. “People must fill out a registration form with their cash status, whether they plan to get financing — all that,” Elias explained. “If they want to see the house bad enough, they have to give us all their information.”

The 1869 Italianate Victorian has been on the market for about a week, and it’s already generated a ton of interest. “It’s a beautiful country home and priced really well for being an hour outside New York City,” Elias said.

The 4-bedroom, 3-bath residence is on the market for $999,000, which is a steal compared to real estate prices in the Big Apple but 228 percent more expensive than a mid-priced Frenchtown, NJ home.

Over the past six years, Gilbert and her Brazil-born husband have made custom updates to the property, likely contributing to its high price. Features of note include a giant steam shower in the master bathroom, a 500-bottle wine cellar in the basement and a 1,400-square-foot attic library known as the “skybrary.”

The whimsical “skybrary” is filled with secret nooks and crannies.

Gilbert asked a master wood artisan to make the skybrary feel like it had grown, not like it was artificially built. Lined with bookshelves that were hand-carved to look like vines, the space looks like a whimsical treehouse. In the center, a 14-foot-long desk built out of an acacia tree is where Gilbert wrote “The Signature of All Things.”

A ladder from the skybrary leads up to an 8-foot-square room at the very top of the house. This is where, looking out over the Delaware River, Gilbert wrote “Committed: A Love Story.”

With so many memories in the home, Gilbert is the first to admit it seems crazy to move. But, she says she’s selling for two reasons.

“The first reason, which sounds very adult, is that my husband and I are downsizing into a smaller house to make our lives easier as travelers,” she said. “The second reason, which is completely irrational but more true, is that I need to move every few years. It’s been six years since I moved — time for the next new thing!”

She already chronicled her year traveling across Italy, India and Indonesia in the best-selling novel “Eat, Pray, Love.” Time will tell where the Connecticut native travels next.

“History has proven to me again and again, my favorite house is always the next one,” she said.

Photos courtesy of Elizabeth Gilbert.

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Catherine Sherman, a real estate writer for Zillow Blog, covers real estate news, industry trends and home design. Read more of her work here.

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