WORKING WITH AN AGENT

Listed below you’ll find answers to all your questions about why working with one of our agents is so important and beneficial! You can read more about our agents here.

Why do I need a Real Estate agent? In today’s ever changing home buying and selling markets, an experienced Real Estate professional is essential.  They can act on your behalf and not only save you time and money but teach you some valuable lessons.  Information on the internet is not always accurate. An agent has a variety of resources available to help you gain current sales that are comparable, how long a property has been on the market as well as what price a property has previously sold for. Yes, you think that you know it all but like any profession, the top producers in Real Estate are continually on a learning quest to better service their clients. Credentials like GRI, ABR, ePro, SRS, CRB, are just a few important designations that are offered. You should ask your perspective agent if he or she has mastered any of them.  And just remember…. Experience does make “cents”!

I am purchasing within a gated community “they have on-site agents why do I need an agent? Many people feel that this is just a convenient method for buying however these on-site agents only represent the developer. With so many different communities out there today representation for you is critical. Having a buyer’s agent will offer guidance not to succumb to pressured tactics and will be able to offer you a broader selection to fit for your real estate wants and needs.

How long does the loan process take? The number of days from the time you apply to the actual closing/recording of the deed may vary from lender to lender. Factors in play such as loan type, amount that you are borrowing, appraisals and title search will play a role in the timing. Promptly providing your documents to the lender as requested, curtail making new loans or large purchases until your loan is secured, and maintain all sources of income that are on your application are just a few steps to insure prompt and cooperative action from your lender. Allowing anywhere from 45 to 60 days to close in today’s financial climate is not unreasonable.

What is the difference between a loan that has been Preapproved and Prequalified? Prequalified only means that you are potentially approved for the amount stated, assuming that all of the information that you stated or supplied to the lender is accurate and true.  If your loan has been Preapproved, this means that you have completed the extensive background check that lenders undertake to assure them that you will be able to repaid the loan. This includes review of several years of Federal and State tax returns, financial statements, balance sheets, employment verification and credit history.  Most Preapproved letters from lenders will qualify this with a clause such as “Pending Appraisal”.  In no way do either one of these totally guarantee you that a loan will be made. Caution signing any contracts that do not take this matter into consideration

What does PITI stand for? This is the total monthly payment that you will pay on a home purchase. Principal-Interest-Taxes-Insurance

What is debt-to-income ratio? There are two parts to this ratio:

 The first is called a housing ratio or front-end ratio. This is to show what percentage of your income would go toward your housing expenses, including your monthly mortgage payment, real estate taxes, homeowner’s insurance and any association dues. To calculate this, add up your expected housing expenses and divide it by how much you earn each month before taxes (your gross monthly income). Multiply the result by 100 and that is your front-end DTI ratio. For instance, if all your housing-related expenses total $1,000 and your monthly income is $3,000, your DTI is To calculate the front-end ratio, add up your expected housing expenses and divide it by how much you earn each month before taxes (your gross monthly income). Multiply the result by 100 and that is your front-end DTI ratio. For instance, if all your housing-related expenses total $1,000 and your monthly income is $3,000, your DTI is 33 percent.

The second is called the debit ratio or back-end ratio.  This shows what portion of your income is needed to cover all of your monthly debt obligations. This includes credit card bills, car loans, child support, student loans and any other debt that shows on your credit report that requires monthly payments, plus your mortgage payments and other housing expenses. To determine this debt ratio, add up your monthly debt expenses with your housing expenses and divide the result by your monthly gross income. For instance, suppose you pay $200 per month for a car loan, $50 per month in student loans, and about $100 per month in credit card bills. That adds up to $1,350 in monthly debt obligations, including housing expenses. Based on a monthly income of $3,000, your back-end ratio would be 45 percent. Most lenders feel that the the ideal front-end ratio should be no more than 28 percent, and the back ratio, including all expenses, should be 36 percent or lower

How important is my credit score to buying a home? VERY. There are three major credit reporting bureaus (Experian, TransUnion, and Equifax) that offer credit scores to buyers.  Yes, your lender will put a heavy emphasis on this score because it paints a picture of the risk a bank will take in lending you money and being able to repay this debit obligation to them within the terms of the loan agreed upon. Such items as public records, late payments, credit lines currently open, credit inquires, bankruptcies, and open balances are reported. Exactly how this formula or score is calculated is a well-guarded secret.  It is very important that you check your credit report, mistakes can be found that will drastically alter this score and should be correctly at once.

Is it better to buy a NEW home or an OLDER one? There are clearly advantages and disadvantages to each. This really is a matter of choice and what exactly fits your budget and life style? Mature landscaping, charm, elegance and the timeless beauty of a mature neighborhood may be a selling point for an older house.  Many people like the fact that taxes are sometimes lower on an older home and they generally cost less.  A good Home Warranty plan can protect you from unexpected repairs to appliances, plumbing, HVAC, home systems and more for a full year after you buy a home.  Older homes may lack modern features such as wiring for cable and or computers?  Lack closet or storage space, and may have outdated plumbing fixtures or kitchen cabinets and appliances. Calculating the cost to upgrade an older home may put the price out of reach? A great negotiating point! A New home may have a more modern floor plan, be in an up and coming area and be built to a newer set of building codes. Energy-Star rating may be available adding a cost savings with appliances, HVAC unit, construction materials such as windows and insulation.  You can usually choose wall colors, carpets, cabinets, appliances for a new home helping you make this feel more “you”, New homes on the other hand generally lack mature full grown landscaping, which may take many years to achieve, higher taxes, higher square footage prices. You also may be a new area where construction traffic and noise will continue for many years.  Whatever your choice is for buying a home, remember that your Real Estate professional is there to help you!