TIPS TO GUIDE YOUR HOME BUYING SEARCH Research before you look. Decide what features you most want to have in a home, what neighborhoods you prefer and how much you’d be willing to spend each month for full and complete home expenses. Be Realistic. It’s OK to be picky, but don’t be unrealistic with your expectations. There is no such thing as a perfect home. Use your list of priorities as a guide to evaluate each property on its good and bad points. Get your finances in order. Review your credit report and be sure you have enough money to cover your down payment and closing costs, then talk to a lender and get prequalified for a mortgage. Don’t ask too many people for opinions. It will drive you crazy. Select one or two people you trust if you feel you need a second opinion, but be ready to make the final decision on your own. Think long term. What type of home are you thinking of buying and how long do you plan to own it. This decision may dictate what variety of home you buy and what type of mortgage terms will best suit you. Insist on a home inspection. Florida real estate contracts usually call for the seller to fix deficiencies up to a point before selling. Get help from a realtor. Hire a real estate professional who specializes in buyer’s representation. Unlike a listing agent, a buyer’s rep is loyal only to the buyer and their fees are paid from the seller’s commission payments. BUYERS TIPS Get prequalified or pre-approved for a mortgage. You’ll be able to make a firm commitment to buy quickly and the offer will be more desirable to the seller. Stay in close contact with your real estate agent to find out about the newest listings or recent price reductions. Try to see homes when they just go on the market. Scout out listings yourself. Use the internet to your advantage. Look at both local and national web sites that list homes in the area you want to buy. Browse the local newspapers and drive through neighborhoods you like. Use your buyer’s agent to provide further in-depth research on any home and set up a showing for you. Be ready to make a decision. Spend a lot of time in advance deciding what you most want in a home so you won’t be unsure when you have a chance to make an offer. Bid competitively. Use your buyer’s agent to give you the prices for all recent “solds” in this neighborhood. Have them compare offers and sold prices for similar homes. Many times the type of market you are in will help determine your initial offer. Keep contingencies to a minimum. Restrictions such as needing to sell your current home before you move, or wanting to delay the closing until a certain date can make your offer unappealing to the seller. Have your buyer’s agent get a feel for the seller’s motivation. COMMON CLOSING COSTS FOR BUYERS You will be responsible for a variety of fees and expenses that you and the seller will have to pay at the time of closing. Your lender must provide a good-faith estimate of all settlement costs prior to closing. The title company or other entity conducting the closing will tell you the required amounts for each item. Down Payment Loan Origination Points or Discount Fees Home Inspection Appraisal Credit Report Private Mortgage Insurance Premium Insurance Escrow For Homeowner’s Insurance Property Tax Escrow Deed Recording Title Insurance Policy Premiums Land Survey Notary Fees Prorations For Your Share of Costs CLOSING DOCUMENTS YOU SHOULD KEEP On closing day, expect to sign a lot of documents and walk away with a big stack of papers. Here is a list of documents you should keep in a file for future reference. HUD-1 Settlement Statement. This itemizes all costs Truth In Lending Statement. This summarizes the terms of your mortgage. Mortgage and Note. This spells out the legal terms of your mortgage obligation. Deed. This transfers ownership to you. Affidavits. These can be binding statements by either party. Riders. These are amendments to sales contracts that affect your rights. Insurance Policies. Your legal record of proof of your coverage. WHAT A HOME INSPECTION SHOULD COVER Home inspections will vary depending on the type of property you are purchasing. A large home will require a more specialized inspection than a small condominium. For complete information visit the web site of the American Society of Home Inspectors www.ASHI.org. Following is a list of basic elements that a home inspector should check. Structure Exterior Roofing Plumbing Electrical Heating Air Conditioning Interiors Walls, Ceilings and Floors Steps, Stairways and Railings Countertops and Cabinets Garage Doors Ventilation and Insulation Fireplaces QUESTIONS TO ASK HOME INSPECTORS Ask your real estate professional to recommend a few home inspectors they have worked with. Here are some questions to ask the inspectors before you hire one. Will your inspection meet recognized standards? Do you belong to a professional home inspector association? How experienced are you? How do you keep your expertise up to date? Do you focus on just residential inspection? How long will the inspection take? What’s the cost? What type of inspection report do you provide? Will I be able to attend the inspection? WHAT’S A HOME WARRANTY? A home warranty is a service contract, normally for one year, which helps protect home buyers against the cost of unexpected covered repairs on their major systems and appliances. Most warranty policies cover repairs or the full replacement costs of items. Some of the items they cover are: Plumbing Electrical Systems Furnace Water Heater Heating Ducts Air Conditioning Dishwasher Garbage Disposal Stoves/Ovens Microwave Refrigerator Washer/Dryer SOME THINGS TO KNOW ABOUT TITLE INSURANCE Title insurance protects the holder from any loses sustained from defects in the title. It is required by most mortgage lenders. It protects your ownership right to your home from fraudulent claims against your sale and from mistakes made in earlier sales. It’s a one time cost usually based on the price of the property. It’s usually paid by the sellers, although this can vary in some states. There are both lender title policies, which protect the lender, and owner title policies, which protect you. Discounts on premiums are sometimes available. Ask your title company about this. SOME THINGS TO KNOW ABOUT HOMEOWNERS INSURANCE Know about exclusions to coverage. Know about dollar limitations on claims. Know the home replacement cost. Know the actual cash value. Know the liability coverage. YOUR FINAL WALK-THROUGH Things tend to get a bit hectic just before a closing. You should always find the time for a final walk-through. Your goal is to make sure that your home is in the same condition you expect it to be. Usually the sellers have already moved out. This is your chance to check that all systems are in working condition and that agreed upon repairs have been made. In your walk-through, make sure that: Repairs you’ve requested have been made. Obtain copies of bills and warranties. There are no changes to the property since you last viewed it. All items that were included in the sale price are there. Screens and storm windows are in place or stored. All appliances are operating. Intercom, doorbell and alarm are operational. Hot water heater is working. No plants or shrubs have been removed from the yard. Heating and air conditioning system is working. Garage door opener and other remotes are available. Instruction books and warranties on appliances and fixtures are available. All personal items of the sellers and all debris have been removed. WHY YOU SHOULD WORK WITH A REALTOR Buying a home can be complicated. Find a real estate professional to use as your buyers agent. Some of the reasons for this are: You’ll have an expert to guide you through the entire process. You will have someone on your side, loyal just to you, not the seller. You will get objective information and opinion. They will help you find the best property available. You will benefit from their negotiating experience. Buying a home can be emotional, your realtor will help you stay focused. A buyers agent’s fees are paid by the seller, not the buyer. Realtors assist home buyers all the time. They know the process. ______________________________________________________ TIPS FOR SELLING YOUR HOME FIVE THINGS TO DO BEFORE PUTTING YOUR HOME ON THE MARKET Have a pre-sale home inspection to learn what repairs to make. Organize and clean. Potential buyers want to see a house that shines. Get replacement estimates for big-ticket items. Find your warranties. Spruce up the curb appeal. EIGHT QUICK FIXES TO INCREASE VALUE Buff up curb appeal. Enrich with color. Upgrade kitchen and bathroom. Add old-world patina. Screen hardwood floors. Clean out and organize closets. Update window treatments. Hire a home inspector. HOW TO IMPROVE ODDS OF AN OFFER Price it right. Prepare for visitors. Be flexible about showings. Anticipate the offers. Don’t refuse to drop the price. WHAT IS APPRAISED VALUE? Appraisals provide an objective opinion of value, but it’s not an exact science so appraisals may differ. For buying and selling purposes, appraisals are usually based on market value  -  what the property could probably be sold for. Other types of value include insurance value, replacement value and assessed value for property taxes. Appraised value is not a constant number. Changes in market conditions can dramatically alter appraised value. Appraised value doesn’t take into consideration special considerations, like the need to sell rapidly. Lenders usually use either the appraised value or the sale price, whichever is less, to determine the amount of the mortgage they will offer. UNDERSTAND CAPITAL GAINS IN REAL ESTATE When you sell a stock, you owe taxes on your gain  -  the difference between what you paid for the stock and what you sold it for. The same holds true when selling a home (or a second home), but there are some special considerations. Since 1997, up to $250,000 in capital gains ($500,000  for a married couple) on the sale of a home is exempt from taxation if you met the following criteria: You have lived in the home as your principal residence for two out of the last five years. You have not sold or exchanged another home during the two years preceding the sale. You meet what the IRS calls “unforeseen circumstances,” such as job loss, divorce, or family medical emergency.