6 Tips to Secure Your Dream House

Westport has enjoyed a stellar Real Estate market in 2013. Sellers are looking forward to a continued uptrend. Competition amongst buyers is getting fiercer, so be prepared to put your best foot forward to obtain your dream home. Consider using these 6 methods when negotiating on your potential purchase.

Meet before you hit the street – Before you step foot in a single foyer, speak with a bank or Mortgage Broker to get pre approved or pre qualified.  Have your credit pulled and make sure it’s accurate. It is now more imperative then ever to stay on time with bill paying. Recent late payments hurt your report more than older ones.  Insure there are no mistakes, giving yourself enough time to correct any uncovered errors. Collect your tax returns and any statements the bank or Broker may need.  It is much easier to prepare in advance. A seemingly unending list of requirements is about to be requested and it is time consuming to collect all the paperwork.  If you are self-employed, give yourself extra time, since many business owners may show their income more creatively than banks prefer.  Your broker will be helpful in determining what you can be approved for, afford and potential monthly payments.

          Start too Low and Blow it – There are many tire kickers out there, and homeowners are more frustrated than ever with them. As agents, we are obliged to present all offers, and explain “it’s just business, don’t take it personally”.  But, how do you not take it personally when we are talking about someone’s family home of 20 years. It’s a competitive market, and if you start too low, you may waste precious time and lose the house. The owner may not trust your negotiations if they feel you are trying to “steal” their homestead.

3      Put your money where your mouth is – It is fairly standard to submit 10% of the purchase price when the contract is executed. A buyer who offers more than 10% can be pretty appealing to the seller. The buyer proves his commitment and ability to afford the home.L

      Less is more – Keep your contingencies to a minimum while still protecting your interests. Sellers worry about all the roadblocks ahead. If the buyer makes a clean and short list of requirements to meet until the deal is clean, the seller is more likely to accept the deal.

      Take it personally – Let the seller know how much you love their home. Write them a heartfelt letter recounting why you want to buy it. Of course, a seller isn’t going to sell their home for less than someone else is willing to pay just because you wrote them a note, but when things are equal or close, the personal touch will usually win out. 

      Time is of the essence – Work with the seller’s timetable to close when it’s best for them. If the seller feels like they are not being rushed out, or that the closing can be on their planned timetable, they are more likely to work with you.  The ability on the buyer’s part to move either fast or slow, based on the seller’s needs can make the difference between winning the house and losing it.

When purchasing a home, the right price is of course important, but it is not the only determining factor. Confidence, ease and timing may prove to be just as important to a motivated seller.  Work with your agent to get prequalified, and know real value when you see it. Then, make an offer that a seller can’t refuse. It doesn’t have to cost you more!

The ABC’s of Closing Costs

You’ve found your dream home, the seller has accepted your offer, your loan has been approved and you’re eager to move into your new home. But before you get the key, there’s one more step—the closing.
Also called the settlement, the closing is the process of passing ownership of property from seller to buyer. And it can be bewildering. As a buyer, you will sign what seems like endless piles of documents and will have to present a sizeable check for the down payment and various closing costs. It’s the fees associated with the closing that many times remains a mystery to many buyers who may simply hand over thousands of dollars without really knowing what they are paying for.
As a responsible buyer, you should be familiar with these costs that are both mortgage-related and government imposed.
· Appraisal Fee: This fee pays for the appraisal of the property. You may already have paid this fee at the beginning of your loan application process.
· Credit Report Fee: This fee covers the cost of the credit report requested by the lender. This too may already have been paid when you applied for your loan.
· Loan Origination Fee: This fee covers the lender’s loan-processing costs. The fee is typically one percent of the total mortgage.
· Loan Discount: You will pay this one-time charge if you have chosen to pay points to lower your interest rate. Each point you purchase equals one percent of the total loan.
· Title Insurance Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.
· PMI Premium: If you buy a home with a low down payment(less than 20%), a lender usually requires that you pay a fee for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once a new owner has 20 percent equity in their home, however, he or she can apply to eliminate this insurance.
· Prepaid Interest Fee: This fee covers the interest payment from the date you purchases the home to the date of your first mortgage payment. Generally, if you buy a home early in the month, the prepaid interest fee will be substantially higher than if you buy it towards the end of the month.
· Escrow Accounts: Your mortgage lender will usually start an account that holds funds for future annual property taxes. Taxes equal approximately to two months in excess of the number of months that have elapsed in the year are paid at closing. (If 6 months have passed, 8 months of taxes will be collected.)
· Recording Fees and transfer taxes: This expense is charged for recording the purchase documents and transferring ownership of the property.

Make sure you consult a real estate professional, to find out which fees—and how much—you will be expected to pay during the closing of your prospective home.