Buying a Home? How Appraisals Work

If you’ve never bought a home before, you’ll soon find it’s a very involved process with a lot of different steps; especially if you’re seeking a home loan. If you apply for a home mortgage, your lender will likely require an appraisal. Without an appraisal, they can’t provide you with funding to make the purchase. 

What is a home appraisal?

At its core, an appraisal is an evaluation of the home’s value. It’s the lender that typically chooses a professional appraiser. The appraiser must be licensed or certified and is generally local. The value of the house can’t be determined by the structure itself (condition, materials used, square footage, and more). Value also depends on how much similar homes have sold for in the area as well as current local real estate market trends.

Why do you need an appraisal?

Lenders want professional property appraisals so they can compare appraisals to list prices. They want to ensure the appraisal isn’t well below what you’re planning on paying for it. If you’re overpaying significantly, the lender may have trouble recouping the loan if you default. They will have to foreclose on your home and sell it on auction but it’s unlikely they can get more than its appraised value, causing them to lose money.

As you can see, getting an appraisal is an important part of the home-buying process, especially if you’re taking out a home mortgage. 

Buying a Home from Another State? Tips for Finding a Local Real Estate Agent

If you’ve taken a new job or have been relocated to another state, then you may find yourself in a situation in which you’ll need to buy a new house in that state. Buying a house from another state can be a real challenge, which is why it’s important that you find a local real estate agent who will be able to help you. The following are a few tips to help you find a local real estate agent that can help you find a house to buy in an area you’re probably unfamiliar with:

  • Look for an agent with experience – Experience matters. It means that they will feel comfortable helping you even though you’re out of state. It also means that they will have a more established network within the area that they can rely on to find properties in the neighborhood you’re interested in. 

  • Look for an agent local to the area you want to buy in – When researching real estate agents in the area, be sure to use the keyword for the city or town you’re looking to move to. Not only do you want to make sure that they are living in that area, but that they are operating out of that area as well.

  • Ask for referrals – More specifically, ask for referrals from homeowners who bought houses in the area you’re looking at. Contact these referrals and ask them about their experience working with the agent. You could even ask the agent if they have any referrals from anyone who came in from out of state.

Buying a house from out of state can be challenging, but it doesn’t have to be if you have the right real estate agent. 

Buying a Home? What a Home Inspection Can Do for You

If you’ve found a house that you want to buy, then one of the most important things you need to do before signing on the dotted line is to schedule a professional home inspection. A home inspection will help identify any issues with the property that the seller may not have known about and that could potentially be costly. You’ll want to know about any repairs or replacements you have to pay for before you hand over a check for the house, after all. The following are a few things that you’ll want to know about home inspections in general:

What does a home inspection cover?

A professional home inspector will evaluate the condition of the home and look for safety issues, major or minor defects, items (such as HVAC units or appliances) that need to be replaced, items that need to be serviced or repaired, and items that are fine now but may need repair or replacement in the near future.

Can you back out of a sale agreement based on the inspection?

Generally speaking, most contracts contain contingencies that state that if significant problems are found during the home inspection that the buyer can back out without fear of losing any of their money.  

Are there any other solutions besides backing out?

You can discuss the situation with the seller. They may be willing to pay for any repairs or replacements. If they do this, you’ll want to agree to a date by which they will have it done before you buy the house. Alternatively, they can knock the cost of the repairs or replacement off the price of the house. 

A home inspection will help prevent you from buying damaged goods. For more home buying tips, be sure to reach out to us at Randy Lindsay today.

Can You Ever Buy a Home with Bad Credit?

If you want to become a homeowner, odds are you’re going to have to take out a home mortgage to do so. Few people can afford to pay for a house out of pocket, after all. In order to be approved for a loan, lenders will often check your credit. This is because your credit gives them an idea of how financially stable and how financially responsible you are. It can be difficult to secure a loan if you have poor credit. Fortunately, there are a few ways that you can buy a home despite having bad credit.

Look for Low Credit Loan Options

Some personal lenders may be willing to overlook your poor credit, especially if you have a standing relationship with them. However, you can expect to pay much higher interest rates as a result. In fact, you may even be required to make a larger down payment, which isn’t always possible. If your credit is well below what a traditional lender can approve, then there are a few loan programs that you might want to look into with low credit requirements. The most popular is the FHA loan.

The FHA loan only requires a credit score of 580 and a down payment of 3.5 percent. If your score is less than 580, you can still qualify, but you’ll have to pay a 10 percent down payment. You may also want to look into VA loans (if you’re a veteran) and USDA loans, both of which have minimum credit score requirements of 620 along with good terms.

Poor credit is not always your fault. Fortunately, there are some mortgage options that have low credit score requirements. For more information on what you need to secure a mortgage or to buy a house, contact us at Randy Lindsay today.

How to Calculate Your Offer Price – Getting it Right

There are few things as exciting in life as finally finding the perfect home for you and your family. However, the sticker price on the house you’re looking to buy isn’t set in stone. Immediately submitting an offer that matches the sticker price is usually not a good idea, especially if there aren’t any other interested buyers. You’ll want to submit a bid that the seller hopefully deems appropriate.

Getting Your Bid Right

Figuring out the right amount to bid is very important. You won’t want to overbid since you’ll want to save as much as you can on the house. Some properties may be overvalued by their owners, which means that even a bid that’s below sticker price may be too high. However, you won’t want to underbid either — if you bid too low, the seller won’t take you seriously and may even be insulted. The following are a few tips for determining how much you should bid:

  1. Figure out the market – You’ll have more room to negotiate if it’s a buyer’s market than if it’s a seller’s market.
  2. Look at comparable homes – Find out how much similar homes in the same area have sold for in the past six months.
  3. Look at sales trends – Find out if real estate in the area has been sold under, at, or above the list price in the past six months.
  4. Look into the seller’s situation – How long has the house been on the market? Does the seller need to move immediately? These impact their willingness to go below sticker price. Additionally, if they’re still paying off a mortgage, then they won’t go below a certain price.

Use these tips to calculate your offer price. To make sure you get your offer price right, work with a real estate agent by contacting us at Randy Lindsay today.

The Lowdown on Home Warranties – How Can They Benefit a Home-Buyer?

If you’re buying an existing home that wasn’t recently built, then you might want to consider looking for a seller that offers a home warranty (or requesting that the seller offer a home warranty). Buying a house is a huge investment. A home warranty can not only help protect your investment, but it can also provide you with peace of mind.

What does a home warranty cover?

A home warranty doesn’t cover damage done to the house itself. Homeowner’s insurance will cover that. Instead, a home warranty will cover the home’s major components, such as plumbing systems, HVAC equipment, electrical systems, and major appliances (such as refrigerators and washers and dryers). A home warranty will usually cover the cost of replacement or repairs to one of these components should anything go wrong with them.

While not usually necessary for new homes that have brand new systems and appliances installed, a home warranty is a good idea for older homes that have older and potentially outdated appliances and equipment. Repairing or replacing such equipment can end up being quite expensive without a warranty, and it’s not something that most homeowners want to pay for having just spent a significant amount of money on their down payment and closing costs.

A home warranty is purchased by the owner (seller) of the house and is an agreement between the owner and the warranty provider. The warranty provider will generally have an agreement with an approved service provider. This means that if something breaks down, you would call your warranty provider and they would send one of its service providers to inspect the issue.

If you’re buying an older home, a home warranty can be very beneficial. For more professional home buying advice, be sure to reach out to us at Randy Lindsay today.

MY BIO

Randy has enjoyed over 27 wonderful years in the Real Estate industry making dreams come true for homeowners.

Superior customer service is #1 to Randy and he provides this to all of his clients using knowledge, professionalism, integrity and persistence.

Randy is a successful and experienced real estate agent who expertly represents both buyers and sellers. Scores of Charlotte area residents have trusted Randy in the process of listing their homes to sell.

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