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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!

Homeowners’ Association Pros and Cons

by Melissa Thompson

You’ve found your dream home!  The neighborhood is lovely, with well-kept lawns and freshly painted exteriors. There is a resort-like pool and a playground for the kids.  Awesome. Oh, and there is a  Homeowners' Association (HOA) that will cost you $500 a month.  Didn’t see that coming, did you?  It’s important to be informed about the pros and cons of living in a neighborhood with a homeowners’ association.

Pro - The neighborhood will look nice.  Most HOAs establish rules for residents that ensure keeping up the appearance of the neighborhood.  The guidelines might include keeping lawns manicured, whether you can have a fence (and the type and color of the fence), and what exterior paint colors you can use.  You may even have to get permission to remove or add trees and shrubs. What You Need to Know About HOA Rules & Regulations

Con - HOA dues.  They can be expensive, sometimes as much as $1,000 per month depending on what amenities are offered.  These fees need to be taken into consideration when deciding if you can afford a house in the neighborhood.  They will be included in your mortgage lender’s assessment of your monthly mortgage payment, so you will have to qualify for a loan amount that includes them.

Pro - Awesome amenities.  You will enjoy the amenities that come with your HOA fees.  Most HOAs offer luxuries such as a pool, a fitness center, play areas, parks and security gates.  That’s in addition to covering the expenses of landscaping and maintenance of the common areas.

Con - Needing permission to make changes to your property.  If you want to add a room to your home or modify it in some way, you will have to make a request that will go before the HOA board for approval.  If they don’t approve it, you will not be able to make the changes you want.

Pro - Maintenance costs are shared.  You won’t have to worry about the upkeep of the pool, fitness center or common areas.

Con - HOA financial problems could become your problem.  If your HOA is struggling financially, it could damage your ability to obtain a loan for a home and it could be detrimental to home sale prices in the community.

Pro - An HOA will handle disputes between neighbors.  If someone has a dog barking at all hours or loud parties, you can contact the HOA and they will contact the neighbor; especially if HOA rules are being broken.

Con - Keeping up with the dues.  If you fall behind on your HOA dues, it can do great harm to you financially.  You may even end up facing foreclosure. That’s why it is crucial that you include the fees when determining if you can afford a house. You may also be subject to late fees if you don’t pay on time.  In addition, HOAs can fine you for not following guidelines and rules, so it’s imperative that you can afford the upkeep required for living in the neighborhood.

It’s vital that you consider all these pros and cons before deciding to purchase a home in a neighborhood with an HOA.

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: conveyco.com

The Power of Negotiation

by Melissa Thompson

The Lost Art of Negotiation in the world of real estate is unfortunate because the truth of the matter is, if you don’t ask…you don’t get. While sellers want the highest price and buyers want the best deal, they must meet somewhere in the middle for the deal to close. Negotiation is a vital part of selling or buying a home because it is the largest asset people own and there is a lot of money at stake. Here are some guidelines for what sellers and buyers might ask for in real estate negotiations:

Price

Negotiating the best price means different things for sellers and buyers.  The seller wants the highest price and the buyer wants to pay as little as possible.  For a successful transaction, they must compromise and come up with a price that is acceptable to both.

Closing Costs

Prepaid closing costs are paid by buyers for their mortgage.  These are funds that the mortgage lender holds in escrow for expenses like taxes and insurance.  A buyer may ask a seller to cover some or all their closing costs either with a flat dollar amount or up to a percentage of what’s an allowable contribution for a lender.  If a buyer asks the seller to do this, they are likely going to pay a higher asking price.

Closing Date

Sometimes sellers want to get out of a home quickly because they need the capital from the house they are selling to put toward a new real estate purchase.  The closing date will also affect the buyer’s monthly cash-flow because when a buyer closes on a house, they skip the next month’s mortgage payment, therefore they may want to negotiate to close at the beginning of a month.

Financing Contingencies

When there is a financing contingency in place for a real estate transaction, it can tie up a seller’s property for a required 30 to 60 days.  For this reason, many sellers prefer buyers coming to the table with cash offers. If you are competing with cash buyers, you may want to figure out if you can drop the financial contingency, which will shorten the closing time line. You can do this by getting pre-approved for a home loan prior to making an offer.  Mortgage Preapproval shows that your finances are in order and you can afford the home.

Home Warranty

As a buyer, you can request a home warranty. As a seller, you can offer one. This home protection plan covers things like appliances and systems such as the hot water heater or air conditioning, in the event they need repair or replacement.

Leaseback

The moving process is stressful and labor intensive.  Sometimes a seller will need extra time to get into their new home.  When this happens, buyers can offer a zero-cost rent-back for 30 to 90 days to persuade the seller to accept their offer over others. 

Home Repairs

With a home that needs a lot of updating there comes ample opportunity for negotiation. Buyers need to consider the cost of bringing the home up to current standards and use the estimate of that cost to request a lower asking price.  The seller, on the other hand, can specify that the house is being sold “as is” and not offer any repairs.

Appraisal Contingency

A seller can push for a buyer to waive the appraisal contingency, however, if for some reason the appraisal falls short of the expected amount, they need to be prepared for the amount of cash they might have to pay should the bank only be willing to lend them money based on the appraised value.

Furniture

Personal property such as patio furniture, window treatments and chandeliers are all up for grabs. The buyer can ask for these things to be included in the contract. Sellers need to determine what they are willing to leave behind.  And any exclusions need to be specifically listed in the contract as well.

Appliances

Depending on the market, sellers don’t always leave every appliance for the buyer.  They may include the dishwasher, stove and built in microwave in the contract but not the refrigerator, washer, and dryer.  Sometimes they don’t want to give everything away up front so that they can use these as items for negotiation.

Inspection

When sellers waive inspection, they often find themselves with "buyer's remorse", but they can try to shorten the time frame for inspection, from ten days to five.  However, today’s lending practices and the TILA RESPA Integrated Disclosure (TRID) make this hard to do.

Condo/Co-op Assessments

These are fees that are used to maintain common areas in a community. If there is an open assessment, it can become a negotiation between the buyer and seller as to who will pay for it.

If you are looking for a professional Realtor to negotiate the best deal for you, call Melissa Thompson at 901-756-8900 today and let her help you with all your real estate needs!

Photo Credit: slideshare.net

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!

Upsizing! Finding the Home of Your Dreams!

by Melissa Thompson

We hear a lot about people downsizing and simplifying, but if you are looking for a larger home, now is a great time to sell your smaller home and move up to something that better suits your wants and needs.  Perhaps you have a growing family and need more space, or an additional income-earner has joined your household or maybe you have enough equity in your current home that you can now afford your dream home. Whatever the reason, movin’ on up is an exciting prospect!

Ok, now let’s contain that excitement a bit and think about what it means to purchase a more expensive house.  First, just because you can afford something on paper, doesn’t mean you should commit all your resources to the most expensive property on your radar.  It would behoove you to take a thorough look at your current budget and then play with the numbers a bit to determine how much more you’re willing to spend each month on a higher mortgage payment.  A dream house is wonderful, but being house-poor is not.  Think about your lifestyle and don’t make the mistake of getting into a financial bind that doesn’t allow you to do the activities you enjoy.

When financing your new home, you have a couple of options.  If you haven’t sold your current home yet, you can choose a Home Equity Loan or a Bridge Loan to make the down payment on the new home.  A home equity loan allows you to borrow against your current home’s equity and is usually less expensive than other loans.  A bridge loan is a short-term loan that is used until you can obtain permanent financing.  Because they are short term, the interest rates on them will be relatively high.

Before you put your house on the market and commit to purchasing a new one, educate yourself about the prices of houses in the areas where you will be selling and buying. Whether it’s a buyer’s market or a seller’s market, a professional Realtor will be able to assist you in navigating the process.  The goal is to sell high and buy low, and in today’s market that is an achievable dream!

Are you ready to move up into your dream home?  If so, contact Melissa Thompson at Your Key to Memphis or call her at 901-756-8900 and let her assist you in your home search 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

Displaying blog entries 1-10 of 118