Steps in Home Buying Process9/23/2019 The process of buying a home can be different based on the price range and whether a mortgage is needed. While some things are different, others are similar regardless of price, financing or local customs.
Each year, the National Association of REALTORS® surveys buyers and sellers who have purchased or sold in the previous twelve months in order to identify the process and steps taken. It provides a lot of information for the people who will be going through the process now and in the near future. 44% of all buyers looked online for properties for sale. This might be considered a logical first step to determine the prices of homes in certain areas and what features they offered. 17% of all buyers stated that their next step was to contact a real estate agent. In another REALTOR study, it is reported that 87% of all buyers purchased their home through a real estate agent or broker. Buyers identify a wide range of services the agents offer that is considered valuable in the purchase of a home. The next step identified by most buyers is to look online for information about the home buying process. In many cases, agents share this information in their first substantial meeting but since it is identified as the third highest steps taken by buyers, some people may not be getting adequate information from their agents or they are verifying the process as explained to them. The fourth step identified by buyers is to contact a bank or mortgage lender. The position this step takes place is interesting because many real estate professionals suggest that it be one of the first things buyers should do. The reason is to find out how much mortgage they can qualify for, so they are looking for homes in the right price range. This can save a lot of time and frustration. The three next highest steps included driving by homes and neighborhoods, talking with a friend or relative about the home buying process and visiting open houses. The buyers in this study mentioned that they depended on several sources for information during the home search. The most frequently used were online website, their real estate agent, mobile search device, open houses and yard signs. The three most difficult steps listed were finding the right property, the paperwork and understanding the process and steps. You can download a Buyers Guide that has a lot of interesting information. We have an array of Financial Apps that can provide insight on things like Rent vs. Own, Mortgage Payment and Your Best Investment. And of course, I'd be happy to schedule an appointment with you to go over all these things and talk to you about finding your next home. Call me at (808) 345-6192.
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Money You Saved for a Down Payment9/9/2019 Occasionally, buyers who can qualify to purchase a home decide to "take a break" and wait to purchase a home. When the focus of buying a home is relaxed, other uses for the money that was going to be used for the home are considered. Maybe they think how much fun it would be to have a Sea Doo or a motorcycle or a new car. It is amazing how many people would like to buy a home but either don't have the down payment, the income or the good credit to make it possible. Instead of spending the money, consider investing the money for two years until the time is right to buy a home. Let's look at putting the money in a certificate of deposit that earns 2% or in the stock market that could average a 5% return. Assume you were purchasing a $295,000 home on a FHA loan with 3.5% down payment. The $10,325 would grow to $10,742 in the CD which isn't a big increase but at least it is safe and secure, and it will be available when you're ready. If the same amount were invested in a safe stock or mutual fund that earned 5%, it would grow to $11,383 in the same two-year period. It earns more but there is more risk involved. Alternatively, if you invest the same amount in purchasing a home that appreciates at 3% a year, the equity would be $38,871 two years from now. The dramatic increase is due to leverage, being able to control a large asset with a small amount of cash. The appreciation is based on the purchase price not the down payment.
Another factor is that there is principal reduction with each payment that is made. Make your own projections with Your Best Investment. Jennifer R. Rhodes (R), BIC RB-22809 (808) 345-6192 RhodesToKona@gmail.com AuthorRead helpful articles and real estate resources shared on behalf Realtor® Broker, BIC Jennifer R. Rhodes of Premier Island Properties LLC Archives
June 2020
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