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Home Closing 101

by Melissa Thompson


Congratulations!  You’ve found your dream home; the inspection has been completed and all your ducks are in a row.  Now your just one more step to get through before you are officially a homeowner.  The closing.  The name sounds ominous, but you don’t have to worry.  If you have everything in order, your home closing should go smoothly.  Here is what you should expect on your big day:

CHOOSE THE RIGHT DATE FOR YOUR CLOSING

When you are thinking about when to schedule your closing, there is a lot to think about. For example, you want to keep in mind that it might take longer than an hour, so don’t try to schedule it on a lunch break from work. Consider taking half a day off or even just a few hours at the end of the day so that you will have plenty of time and won’t feel rushed.  In addition, you will want to think about what time of month you want to close.  Many people want to close as close to the end of the month as possible to save on up-front cash because the later you close, the less interest is owed to the lender.  However, closing late in the month has its disadvantages too. Because so many people are doing it, everyone is rushed -  from escrow companies, to appraisers, to surveyors, to insurance agents and even lender. They are all pushing to get a lot of work done in a short period of time.  And when people are rushed, mistakes are made.  Also, the later in the month you close, the sooner your first full mortgage payment will be due. So, you will want to keep all that in mind when deciding on your closing date. Closing Early Has Its Advantages

DO A FINAL WALK-THROUGH

Buyers are usually allowed to do a final walk-through before closing.  This isn’t a Home Inspection. Your home inspection should already be complete by now.  But a final walk-through will allow you to be sure that the property is in good condition and that nothing has changed or been damaged since the last time you saw it.  The final walk-through is generally arranged by your Realtor to happen anywhere from one week to 24 hours prior to closing.  Check the property thoroughly and bring a checklist with you to make sure you don’t miss anything.

Buying a House? Here's Your Final Home Walk-Through Checklist

CLOSING DAY PARTICIPANTS

Not sure who will be present at your closing?  There may be several people there in addition to the home buyers:

  • The seller and their Realtor
  • A representative from the title company
  • Attorneys (yours and your lender’s, if you have one)
  • A closing agent who conducts the meeting
  • Sometimes your lender will be there, but not always

DOCUMENTS

There are lots of documents involved in the mortgage process, and sometimes they can be overwhelming.  The bulk of your closing will be reviewing and signing various documents.  You should bring any documents you have received throughout your home buying process, including proof of home owner’s insurance, a copy of your inspection reports and any other documents your lender requested during the approval process.  Also, be sure to bring a photo id and a cashier’s check or certified check for down payment and closing costs. 

You will also receive many documents the day of your closing. The seller will sign documents that transfer the property ownership to you.  You will also get documents that pertain to your mortgage agreement and property ownership. 

Real estate transfer documents include:

  • A deed, which transfers the property from seller to buyer
  • A bill of sale
  • Transfer tax declarations

Mortgage loan documents include:

  • A mortgage note, which is your promise to repay the lender
  • A mortgage agreement that puts the property as collateral in case you can’t repay your loan
  • A loan application to review for accuracy
  • A loan estimate and closing disclosure

It’s vital for you to have an understanding of your closing documents prior to your closing so that you will understand what you are reading and signing.  Review them ahead of time and you will be ready to go on closing day.

Once you have reviewed and signed all the necessary documents, you will receive your keys and officially be a home owner. That’s another reason to take time off work…because now it’s time to celebrate!!

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor, Melissa Thompson, and let her help you with all your real estate needs. Give her a call at 901-729-9526 today!

Photo Credit: realtor.com

A How-To Guide to Finding Your Dream Home

by Melissa Thompson


With interest rates and home prices expected to rise in 2019, now is the time to start your search for a new home. Here are some tips to help you find your dream home:

  • Make a list of priorities. Ideally, your dream home would have everything you want in it, but it’s still a good idea to make a list of what you want in order of importance to you. What are you most concerned about?  Location? Square footage?  Private backyard? You may have to give up one thing to get another, so you want to be prepared with your priorities so you will know what is non-negotiable for you.  Also, think about desires verses needs when making your list.  For example, a home might not have the vaulted ceilings that you love, but meets your needs and wants in every other way. Those vaulted ceilings are a “want” more than a “need”.
     
  • Think ahead.  How long do you plan to live in the home?  If you are single or newly married you may want a starter home that you will only stay in for a few years while you save for a larger home.  But if you are expanding your family or planning to work from home, make sure you factor in the space that you will need.  Don’t buy a house that will only suit your needs for a year if you think you may live there for ten years.  There is always the chance that things will change, but plan for what you know for sure now.
     
  • Decide on your “most lived in” spaces. Where do you spend the most time in your current home?  If you love to cook, chances are the kitchen is going to be the most important room for you.  If you are a homebody who likes to kick back and watch movies, your den or family room might be the room to focus on.  It might be challenging to find a home where you love every room, but you can give a little on the others if the one you use the most is perfect for you.
     
  • Stick to your budget. While searching for your dream home, it may be tempting to extend your budget a bit. Don’t do it. A standard goal is to keep your mortgage payment (with taxes and insurance included) at around 25% of your monthly household income.  Make sure that you have looked at your overall monthly budget to see what you can truly afford, and then limit your house hunting to properties in your price range.  Refrain from looking at houses 1-2 price ranges above yours. You don’t want to get excited about a property that you can’t afford. In addition, once you have seen them, the houses that you can afford won’t look as good in comparison.  The exception is that if it is a buyer’s market, you might be able to negotiate a lower price, so it is ok to look at homes just slightly above your budget. How to Budget for a New Home
     
  • Decide if you want to do renovations or if you want a move-in ready home.  If you are handy, you might see a diamond in the rough that you want to fix up yourself.  Make sure if you do this that you are not shopping at the top of your price range because you will need extra funds for doing the renovation.
     
  • Try to see through the “ugly”.  It’s easier said than done for some people, but try not to just pass on a home because of cosmetic reasons.  Look at the bones of the house and imagine its potential. Focus on layout and flow rather than paint and décor.  If it’s the right home for you, cosmetic changes are easy and will give you the opportunity to make the home your own.
     
  • Don’t give up!  It might take a while to find exactly what you want.  Be patient and don’t settle for something just because you’re tired of looking.  You never know when just the right house will go on the market.  It will be worth the wait when you move into the home of your dreams!

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor, Melissa Thompson, and let her help you with all your real estate needs. Give her a call at 901-729-9526 today!

Who’s Who in the Home Buying Process

by Melissa Thompson


Buying a home is not something you do alone. There are a lot of players that participate in the process.  You will work together with several people who will use their professional expertise to guide you along the way to home ownership.  It might seem a little overwhelming, but once you understand the role each of these individual’s will play, you will realize the benefit of having them on your team.  Are you wondering who these people are?  Here is a “who’s who” list of the professionals you will meet along the path of your home buying journey:

  1. Mortgage Lender - Meeting with a mortgage lender is something you can and should do prior to even starting your home search.  Getting a pre-approval for a mortgage loan is a great way to make yourself stand out to sellers.  Your mortgage lender could be an independent lender, a credit union, or a bank.  Meet with several so you can choose the one that suits you best.  Once you choose, you will work with an individual Mortgage Banker who will be your guide through home loan process.  Your mortgage banker will help you determine how much you can afford to spend and assist you in filling out your loan application.
     
  2. Realtor - Navigating the home buying process will be much easier with an experienced Realtor on your side. A professional Realtor will not only help you find the perfect home, she will also be your advocate throughout the whole process; before, during and after you close on the home.  Take the time to interview several Realtors to find the one whom you feel comfortable with.
     
  3. Home Inspector - Trust me when I say that you don’t want to skip the home inspection. No matter the age of your future home, having it inspected can save you from buying a one that has issues that could cost you a lot of money in the long run.  A Home Inspector is trained to carefully check the home’s structure, electrical, HVAC, plumbing, and roofing among other things in order to provide you with a detailed report on the condition of the home.  This report will have an impact on your decision to continue with the purchase of the home and may help you negotiate for repairs by the current owners before the sale is completed.
     
  4. Appraiser - The home appraiser plays a crucial role in the home buying process.  This is the person who will make sure that you are not overpaying for your new home. He or she will look at the condition of the home and make a comparison to similar home sales in the area to come up with the fair market value. Guidelines for Home Appraisals
     
  5. Title Searcher - A Title Searcher will review public records for your property to make sure there are no issues that will be problematic for the home sale.  The research things like overdue taxes, zoning restrictions or liens against the property that prevent the issue of a clean title on your new home. The title company facilitates the closing on the home and provides the documents involved.  Finally, they will make sure that the new home’s title records are appropriately filed.
     
  6. Insurance Agent - As a home owner, it is required that you have home owner’s insurance when you obtain a mortgage.   This insurance will financially protect you and your home should there be a disaster.  Be sure to do your research prior to submitting your mortgage application so that you can find the best insurance policy for your needs.

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor, Melissa Thompson, and let her help you with all your real estate needs. Give her a call at 901-729-9526 today!

Now is a Great Time to Buy a House! Here are 5 Reasons Why

by Melissa Thompson

Buying a home during the holiday season might sound like a crazy idea, but the truth is now is a great time to purchase a home!  Here are 5 reasons to purchase a home during the holidays:

  1. Less Real Estate Market Activity: With lots of family, school, and work activities happening during the holidays, fewer real estate transactions are taking place.  Because fewer people are looking for houses, there is less competition for buyers.  And with less competition, buyers have more leverage when negotiating purchases.  People selling homes during the holidays must often lower asking prices or make other concessions to sell.  So, if you buy this time of year, you might get a bargain!
     
  2. Highly Motivated Sellers:  If someone is selling their house at the end of the year, it’s because they need to.  Usually sellers avoid the end of the year due to shorter days and cold weather, so if they are selling this time of year they are likely under pressure and motivated to make a deal. Motivated Sellers
     
  3. Lower Interest Rates: Because of limited demand during the holiday season, there is greater competition among lenders so there is a general trend of lower rates. 
     
  4. Tax Perks: Buy a house before the end of the year and you can deduct any points you paid upon closing.  You can also deduct property taxes and mortgage interest.  Learn about the tax benefits of purchasing a home and find out if it is to your advantage to buy before year’s end. While your decision to buy a home shouldn’t be made solely for tax reasons, you certainly want to take advantage of the perks that exist! Tax Benefits of Buying a Home
     
  5. Faster Closings: Everybody involved in the home buying/selling process has incentive to complete transactions before the end of the year.  Lenders want to close their books; Realtors want to receive their commissions before the new year and sellers are anxious to move on.  Since everyone is so motivated, and there is less real estate activity, closings should happen quickly and efficiently.

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor, Melissa Thompson and let her help you with all your real estate needs. Give her a call at 901-729-9526 today

Photo Credit: realtor.com

Tips for Buying a Home FAST!

by Melissa Thompson

If you are in the market to purchase a home right now, I am sure you would like to be moved in and settled by the time the holidays arrive.  Does that sound too good to be true?  Well, no promises, but there are steps you can take to buy a home fast.

Whether you are buying a house for the first time, or you have navigated the home buying process before, chances are you know that it can be lengthy and complicated.  But there are certain strategies you can use that will speed things up. Here are some tips to help you get started:

           - Chose the right type of house.  There are certain types of homes you will want to avoid if you’re in a hurry.  Co-ops, for example, can be problematic because it can take six to eight weeks to get a board interview scheduled, finalized and approved.  You should also avoid bank-owned homes or foreclosures, which generally take much longer to close.  The fastest way to go is to focus on condos or new developments. Closings for condos and new developments can take as few as three to four weeks to happen.

           - Get pre-approved for a mortgage.  This is a strategic move that will give you a head start so that when you do find a house you want to purchase; you will already be approved for a mortgage loan and can make an offer right away.  This will also help you to stay within your budget when looking at homes because you won’t want to waste time looking at properties that cost more than what you are pre-approved for. 5 Things You Need to Get Pre-Approved for a Mortgage

           - Have your documents in order and ready to go.  Get all the paper work that you will need organized so that it is ready and waiting when you find the right home.  Generally, a home buyer will need the following: federal tax returns for the past two years, supporting information such as W-2, 1099, or other tax forms for the past two years, two months’ worth of bank statements for your checking, savings, 401K, retirement and other accounts, and pay stubs from the past month. Closing Day: What a Buyer Needs to Do and Bring

           - Find the right Realtor to guide you through the process.  You will want an experienced, professional Realtor who knows the area well and can use their expertise to get you into a home quickly.

           - Offer to shorten contingency deadlines.  Don’t risk waiving home inspection or financing contingencies, but consider a shorter time frame to effect a faster closing.

           - Be prepared for your move.  Don’t wait until you have closed on your new home to start packing and preparing for your move.  Start early so that as soon as you close, you are ready to go!

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor, Melissa Thompson and let her help you with all your real estate needs. Give her a call at 901-729-9526 today!

Home Ownership - A Dream that Can Come True!

by Melissa Thompson

The idea of purchasing your first home is exciting, but can also feel overwhelming.  Before starting your home search, you need to figure out how much you can afford.  If you’ve been hesitant to move forward because you’re afraid you won’t have enough cash for a down payment or that you won’t qualify for a loan, you shouldn’t despair.  There are programs available that can help you!  So, stop padding your landlord’s pockets and take advantage of programs that will assist you in making a sound financial investment in a home of your own.

The Tennessee Housing Development Agency  has two programs designed to assist people with down payment assistance once they have qualified for a Great Choice Home Loan:

  1. Great Choice Plus Loan - Anywhere in Tennessee, all homebuyers who qualify for a Great Choice Home Loan can also apply for down payment assistance in the form of a Great Choice Plus second loan worth a maximum of 5% of the home’s purchase price.  The beauty of this program is that this loan has no monthly payments and no interest for as long as you own and live in your home.  You won’t have to pay back any of it unless you move out, sell or refinance. If you do move out, sell or refinance, you will only have to pay back exactly what you borrowed.
     
  2. HHF-DPA -  If you are purchasing a home with a Great Choice Home Loan in one of the Participating Zip Codes, you can apply for the HHF-DPA program, which offers $15,000 in down payment assistance.  If you’re approved, your financial assistance comes in the form of a forgivable $15,000 second mortgage loan on your home.  This second mortgage has a 0% interest rate a defers monthly payments for a ten- year term.  The loan is forgiven at 20% per year in years 6-10.  If you do not sell, refinance or move out in that ten-year period, you will get full loan forgiveness.  This loan is only available on purchases of existing homes (no new construction) and again, only available to homes purchased in participating zip codes. 

    You must complete a THDA Homebuyer Education Course to participate in these programs.

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor, Melissa Thompson and let her help you with all your real estate needs. Give her a call at 901-729-9526 today!

Home Buyer “To Do” List

by Melissa Thompson

If you are thinking about purchasing a home, there are several things you should do before you even start your home search.  While it’s exciting to look at properties and imagine what your life will be like in a new house, you might be setting yourself up for disappointment and heartbreak if you aren’t prepared for all the steps involved in the home-buying process.  So, do your homework and make sure you are truly ready to find the home of your dreams!

  1. Determine What You Can Afford - You don’t want to find the perfect property and then find out it’s out of reach for you.   Determine how much you can afford for a mortgage payment and create a maximum budget for what you are willing to pay for a house. Your mortgage payment should take up no more than 28% of your income.  If you are currently paying rent or a mortgage payment that is less than what you anticipate for your future home, start saving the difference each month to make sure you are willing and able to live on that.  You don’t want to be house poor.  Home Affordability Calculator
     
  2. Check Your Credit - You can request free credit reports from Annual Credit Report .com.  Check the reports thoroughly for any errors or negative information.  Take the steps needed to improve your credit score.  A higher credit score will possibly qualify you for lower interest rates, which will make your purchase more affordable.
     
  3. Meet with a Lender - Getting pre-approved for a mortgage is vital to the home-buying process, especially in a seller’s market where there might be bidding wars.  Sellers are more likely to choose a potential buyer who has already been pre-approved over one who hasn’t.  It will also help you identify the documents you will need for the final loan application. 
     
  4. Save For a Down Payment- Your meeting with the loan officer will also help you determine how much cash you will need for a down payment.
     
  5. Get Organized - Gather documents you will need for your final loan application and start a house-hunting binder.  As you start looking at homes, you can add any materials you collect along the way.
     
  6. Start Considering Where You Want to Live - If you don’t already have a specific neighborhood in mind, start investigating different areas within your price range.  Visit neighborhoods at different times to get a feel for what it might be like to live there.  Consider things like what your work commute will be and what amenities you want.
     
  7. Take a Home Buyer Education Course - If you are a first-time home buyer, these classes can help you prepare for the responsibilities of being a home owner.
     
  8. Find a Realtor - Choose an experienced real estate professional like Melissa Thompson to represent your interests.

Taking these steps before you start your home-search will make the whole home-buying process easier!  Call Melissa Thompson at (901) 729-9526 and let her guide you through the home buying process today!

Photo Credit: mentalfloss.com

Finding the Right Home for You and Your Family

by Melissa Thompson

Purchasing a home is such a huge decision, you definitely want it to be the right one.  Before even starting the home search process, it’s important to think about what it is you want from your new home. 

For many the location of a property is the priority.  Perhaps you have your heart set on a charming neighborhood that you have always loved.  Or maybe you want a specific school district for your children. Whatever the reason, location is as important financially as it is emotionally. You are making an investment and future resale value should be taken into consideration. Figuring out where you want to live is the first step in finding the house that is right for you and your family.  Once you have an idea of where you want to live, you may discover that you might have to compromise a bit on the type of house you want.  For example, perhaps you like the idea of a ranch style home with a big yard, but there is nothing like that available in the area you chose.  If your priority is a certain style of home, you may have to compromise on the location. Location: The Most Important Factor in Real Estate

Looking for a home based on architectural style can be challenging, especially if you are moving to a new area that you are not familiar with.  One way to do it is to use the key word option on real estate search sites to type in descriptive words.  Once again, you may have to adjust your expectations because you might find a house you love in a neighborhood that you don’t like so much.  Perhaps new construction is the way to go for you.  That way you can choose where you want to live and build to your specifications. 26 Popular Architectural Home Styles

Often finances will dictate where you can search for a house based on what you can afford.  If you’re handy and don’t mind the idea of a fixer-upper, you might be able to find a diamond in the rough for a great price.  Just keep in mind the future expenses of renovating it. If a move-in ready home is what you’re looking for, maybe you should consider a town-home or condo, especially if the amenities that often come with those types of homes appeal to you.

There are so many questions to ask yourself before you begin looking for a house.  Do you want a big yard or do you hate yard work?  Do you want to be able to walk to restaurants and shops or do you prefer country living?  Do you mind a long commute to your job or do you want to live near where you work?  Take time to think these things through before you start your home search. Trust me, it will go more smoothly and be much more enjoyable if you go into it knowing what you want!

If you are in the market to buy or sell a home in the Memphis area, contact professional Realtor, Melissa Thompson and let her help you with all your real estate needs. Give her a call at 901-729-9526 today!

Don’t Get Blindsided by Unexpected Expenses!

by Melissa Thompson

Buying your first home is exciting.  After getting approved for a mortgage loan, working with a professional realtor and finding your dream home, it’s time to settle in and start enjoying your new digs.  Then BAM!  The shock of an unexpected expense slaps you in the face.  Don’t let that happen to you.  Being informed about the possible expenses of being a homeowner will not make spending the money any more fun, but at least you will be prepared.  Here are some ancillary costs of homeownership that you should be aware of:

  • CLOSING COSTS - When closing on your mortgage you will be presented with a long list of costs: mortgage taxes, lender application fees, attorney’s fees, title insurance, recording fees and any potential real estate tax reimbursements if the seller has paid them up front.  Altogether, closing costs are an average of 2 to 5 percent of the total cost of the home.  They will vary state to state.  Closing cost information for Tennessee can be found here: Tennessee Average Closing Costs
     
  • HOME MAINTENANCE - Now that you are a homeowner, you are solely responsible for the maintenance and upkeep of your property.  Everything from yardwork to cleaning; pressure washing to clearing the gutters…it’s all in your hands and on your dime.  Oh…and fixing things.  Yeah.  When the AC isn’t working or there is a leaky faucet, you will be footing the bill for repairs.  This all sounds a bit scary, but the key is to be prepared.  Go into your home purchase knowing that you will likely be spending about 1% of the purchase price of your home on maintenance annually.
     
  • PROPERTY TAXES - Property taxes vary by state and can also vary based on city, ordinance, and even specific house.  You can utilize a Property Tax Calculator  to get an idea of what your taxes will be when planning for your expenses.
     
  • UTILITIES - If you’re coming from a rental where your utilities were included with the rent, you may not have considered how much you will need to set aside to pay for electricity, gas, water and sewage costs.  Added to internet, cable and phone bills, it can be quite a chunk of change.  Planning for utility costs is crucial to making sure you can afford to live in a home of your own.
     
  • HOMEOWNER'S INSURANCE - When you get a mortgage, you must get homeowner's insurance as well.  Be sure to do your homework and shop around for the best possible price.  You can get discounts for things like security systems, working from home or bundling coverage for your home with your auto insurance policy.  Educate yourself on what your insurance policy covers so that you’re not left disappointed when you must pay for something you thought would be taken care of.

Don’t let these expenses scare you off from purchasing a home.  Again, the key is to be aware of them going in so that you won’t be caught off guard when they come up.

If you are ready to purchase your first home, let professional Realtor Melissa Thompson  assist you in your home search. Give her a call at 901-729-9526 today!

Photo Credit: moneyweek.com

Guide to Buying a Home - Summer 2018

by Melissa Thompson

Purchasing a home is likely the largest financial commitment you will ever make. It’s not one to be taken lightly. But while it can be overwhelming and a little scary, it is also smart.  Owning a home is an investment in your future, and with that in mind, you want to make sure that you are making educated decisions so that you get the best deal possible.

Summer is a popular time for home shopping. But before you start your home search in earnest, it’s vital that you understand what the real estate market is like for buyers right now.  While existing home sales and list prices have risen this year, there are still perks to starting your home search. These tips will help you get the most out of the 2018 summer housing market!

  • Prices sometimes drop during summer.

While summer is a busy home-buying season, it’s not nearly as busy as spring. Because of this, prices may drop between May-October.  Waiting until late August may mean that you can snag a sweet deal! The Best Time to Buy a Home is in August & September

  • PMI is getting more affordable.

Private Mortgage Insurance is getting cheaper with PMI lenders MGIC and Radian having lowered their rates this spring.  That means other PMI companies will become more competitive, which will bring all of them down.  With PMI required when homebuyers put less that 20 percent down, lower rates mean that purchasing a home will be affordable for more home buyers.

  • Don’t discount older listings.

Don’t make assumptions about houses that have been on the market for a long time.  There are many reasons why a house may not sell quickly.  Often if might just be due to a buyer getting cold feet and pulling out on a deal, or perhaps financing fell through. That doesn’t mean it’s a “bad” house.  And remember…if it’s been on the market awhile, the price is likely to come down, meaning you will get a better deal!

  • Consider a fixer-upper.

Flexibility on your part is a must in a busy market.  You may have been dreaming of a sparkling, move-in ready home, but a fixer-upper could possibly be the dream house you’ve really been looking for.  There is definitely more to choose from if you’re willing to take on a fixer-upper.  The number of starter homes on the market is shrinking, but there are more fixer-uppers among them than there were six years ago.  Choosing a fixer-upper will also give you more time for decision making.  Move-in ready homes go quickly and competition for them is fierce, so if that’s what you want you are going to have to be prepared to move quickly!

  • Get to know the neighborhood.

When the market is competitive, it’s tempting to make an offer on any property that appeals to you.  This can be misguided if you haven’t even checked out the neighborhood.  If you end up in a great house in the wrong neighborhood for you, it will never truly feel like home.

  • Make a good offer.

Now is NOT the time for a low-ball offer.  But keep in mind that the strongest offer is not necessarily the highest one.  If you have the funds available, a lower cash offer can often win out over a higher one that is being financed.  Of course, coming up with that kind of money may not be feasible, but there are other ways to strengthen your offer without upping the amount.  Generous contingencies, like a shorter closing or inspection period or Writing a Winning Offer Letter can also help you stand out to sellers.

If you are considering buying or selling a home this summer, call Melissa Thompson at 901-729-9526 and let her help you with all your real estate needs!

Photo Credit: realestateclipart.com

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