School Information

School is one of the important factors for some home buyers. Agents from Legend Realty & Finance Group can help you. We can analyze what kind of school can fit your need. Also we can use a paid service to help you find properties in particular school. Here is a link you can find the school for any address: www.schoolandhousing.com/jsp/school_locator/index.jsp

How to Buy a Home

Even if you are not buying your first home, it is important to have a plan or a strategy.

The Basic Goals Are:
Determine your price range
Find the best Home for you
Negotiate the best purchase
More…

Determining your price range:
Buying your new home is probably the largest single purchase you will make. It will be important to get the best home for your money. To accomplish this we need to determine your goals early on so that most of our effort is focused on meeting them.
You do not want to study the market in an attempt to know as much as a Realtor. You have neither the time nor enough access to the necessary information. Focus on your goals…getting a good price on a home that meets your needs
Getting pre-qualification for a mortgage can be very helpful in two areas. You will gain a better understanding of your price range and you will gain an important asset when making an offer to buy a home. This is a first step towards developing an effective negotiating strategy
Finding the best home for you:
Often the first actual step searching for a new home is to review a list of homes currently offered for sale that cover your price range. If you have special needs such as a school district ratings, age of the home or the size of the lot, this may even determine which city is best to search. This review will give you a good idea of what type of homes are in your price range and will help you see if your goals are reasonable.
It is important that you work with a top real estate agent such as me. My experience will allow you to focus on finding your best home rather than finding out why a particular neighborhood is not your best choice. I can also help prevent you from missing the opportunity to buy the home that is best for you. If you spend too much time studying the real estate market, you will not be making effective offers on homes that you want and will see them sold to other more prepared buyers.

Negotiating the best purchase:
Homes are not always sold to the highest bidder. By matching your goals with the goals of home sellers, I can save you money. In addition, you may not be aware of other considerations such as taxes, which I can warn you about, improving your decision.

More:
After you have found the best home, have made an offer, have negotiated an offer both you and the seller agree to, there is still a lot of “red tape” that needs to be taken care of. I will show you ahead of time most of the steps that will be taken and give you an estimate of the times and cost associated with each. I am also a form of insurance that will help you overcome any obstacles. During the time between having an offer accepted and moving into your new home, many unforeseen events can occur. Most likely I will have dealt with most of these previously and will have both contingency plans and the knowledge to handle them the best way possible.

Contingencies

Contingencies: Safeguards and Troublemakers

Real estate agents often talk about the merits of a clean contract. A clean contract, or purchase offer, is simple and straightforward… one that’s not complicated by numerous contingencies, restrictions and conditions. A contingency in a real estate purchase is something that must be satisfied in order for the sale to go through. Contingencies protect buyers and sellers, but they also provide opportunities for real estate transactions to fall apart.

For example, the buyers may need to sell another property to come up with enough cash for the down payment. If their property sells, the deal goes forward. If it doesn’t, the deal is off. Other common contingencies are for inspections, for financing and for approval by other parties (like attorneys or accountants).

Less common contingencies are sometimes more difficult to satisfy. Perhaps the buyers only want to buy a property if they can modify it, or use it, for a specific purpose. For example, they might need city approval to run a child-care center.

Seller contingencies can also complicate matters. For example, a property that’s being sold to settle an estate might require court approval of the sale. In this case, the buyers don’t know that the house is theirs until the sale is confirmed in court.

Given the emotional nature of home buying and selling, most buyers and sellers prefer the cleanest contract possible. Buyers often shy away from buying homes which have complicating factors affecting the sale, likes a requirement for court confirmation. Sellers often reject an offer if it’s contingent on the sale of another property. In both cases, the degree of uncertainty is high. Being able to offer a clean contract may give you an advantage when negotiating with the sellers. This is particularly so if you find yourself competing with other buyers for a property. Put yourself in the seller’s shoes. The fewer strings attached to an offer, the better the chance it has of going through. The more contingencies there are, the more opportunities there are for something to go wrong

First-Time Tip
Even though a clean contract may give you a competitive edge, you shouldn’t delete contingencies from your offer if, in fact, you need to satisfy certain conditions in order to close the sale. For example, if you need to line up a mortgage in order to close, you will need a financing contingency. If you write your offer without a financing contingency, you may risk losing your deposit money if you can’t get the loan.

Rather than giving up the contingencies you need, shorten the time period required for satisfying these contingencies as much as possible. A typical financing contingency is about 30 days following acceptance. If you can shorten a financing contingency, you need to be planning ahead. Many buyers get preapproved for the loan they need. To get pre-approved you must submit a loan application and documentation such as verifications of employment and down payment. You must have your credit checked. Buyers who aren’t pre-approved when they enter into contract to buy a home will need to submit a loa application within a day or so of acceptance to get approved within 2 or 3 weeks.

The Closing
To make a clean offer, get your financing set up and take care of as many conditions as possible before you start negotiating.

Begin Shopping

Shop for a loan first, then for a house

WHY SELECT a loan before you begin looking at houses? Because what you can afford to spend for a home depends on the loan you get.

For example, suppose you’re earning $8,000 a month. The lender will let you spend 37 percent of your income for principal, interest, property tax and insurance. That’s $2,960 a month. Setting aside $560 for tax and insurance leaves $2,400 for loan payments. Get a 30-year fixed-rate loan at 7.5 percent interest and the $2,400 covers monthly payments on a $343,000 loan. If that’s 80 percent of the purchase price, you can spend $430,000 for your home.

The same $2,400 also covers payments on a $380,000 adjustable-rate mortgage (ARM) at 6.5 percent interest of the first seven years of the loan. That’s 80 percent of $475,000. The extra $45,000 could get you into a nicer home.

Whether you get a fixed-rate loan or ARM, here are some important questions to ask: How much money do you need? The best interest rates are on “conforming,” owner-occupied home loans of up to $417,000*. They are called “conforming” loans because they conform to guidelines established by the Federal National Mortgage Association (Fannie Mae) guidelines. “Jumbo” loans over $417,000 usually run about one half of 1 percent higher than conforming loans.

How long will you need to money? It’s foolish to pay a premium for a fixed rate loan if you intent to sell in four or five years. If you need a loan for a shorter period of time, investigate ARMs that have fixed rates for the first three, five or seven years and then adjust annually for the balance of the loan term. Rates on these loans are typically one half of 1 percent below fixed rate interest rates. Is there a prepayment penalty? Some ARMs and fixed rate loans have penalties of up to six months’ interest on the unpaid balance if they’re paid off within five years after the loan is made. All other things being equal don’t get a loan with a prepayment penalty.

Do you have rate protection? Fixed rate loan interest rates have risen by one half of a percent in less time than it takes to buy a home.

Loan discussions during pre-qualification are informational. You can’t actually apply for a loan until you find a home to buy. When that time comes, be aware that it’s possible to protect your loan’s interest rate from potential increases by “locking in” the rate. Some lenders protect the rate when the loan application is submitted. Others don’t lock the rate until the loan is approved, which could take several more weeks. Some lenders won’t lock in the rate until the sale closes.

*The U.S. Congress extended through 2010 conforming loan limits of $417,000 for most areas in the U.S. and $729,750 for high-cost areas, including many in California.

Avoid “rate shock”… the best way is to use a lender who’ll protect the rate when your request is submitted. What are normal charges associated with loan? Charges for a home appraisal and credit report, etc. don’t change much from lender to lender. Neither do title insurance and escrow fees. Loan origination fees (prepaid interest called “points”) are the biggest expense item. Each point equals 1 percent of the loan amount. Points vary widely. If a lender charges 2 points for a loan with the exact same interest rate and another lender will give you a loan for 1.5 points, use the less expensive lender. What about “no points” loans? While they always have higher interest rates than similar loans with points, they may be right for you. It depends how long you plan to keep the loan. Say the monthly payment on a $200,000 “no points” loan is $50 per month higher payment and you get 40. That means you break-even at 40 months. If you’ll keep the loan for less than 40 months, get the “no points” loan. If you’ll have it more than 40 months, you’re better off paying points. Again, watch out for prepayment penalties.

Which is better- an ARM or a fixed rate loan? Since ARMs are initially cheaper than fixed rate loans, they’re great if you plan to keep the loan four or five years. ARMs have caps to limit increases at periodic adjustment intervals and over the life of the loan. But, they’re still riskier than fixed-rate loans over the long haul. No one knows when inflation will come roaring back. If an ARM’s volatility bothers you, get a fixed rate loan. You’ll sleep better.

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