What to Negotiate When Purchasing a Home

Buying a home can be an exciting but daunting experience. Getting the right price is just one of the pieces to the negotiation puzzle. Here are eight things you can negotiate other than just the purchase price.

Number one is the closing date. Some buyers are in a hurry to close while others need more time. Many don’t realize that the closing date can be negotiated. Buyers might need to move in quickly because of a new job or might need to push the date back because their kids need to finish up the current school year. As long as the date is good for both the seller and buyer the time table can be flexible.

Second comes the closing cost. There are many factors that play into the closing cost. These include the inspection fees, appraisal fees, loan origination fees, recording fees and the lender title insurance.

The buyer is typically responsible for these one-time fees that are paid on the closing day. The buyer can negotiate for the seller to pay all or some of the closing cost. This has become more common as the home prices have continued to rise.

Third are the contingencies. Contingencies are basically an agreement on things that must be met before the real estate contract becomes binding. Contingencies can be based on financing, the home inspection, repairs, appraisals and more. A common contingency is the sale of a potential buyers old home before they can close on the home under contract.

Inspections are the fourth thing on the list and are an important factor when purchasing a home. No buyer should purchase a home without a professional inspection. If a seller refuses an inspection and wants the buyer to purchase as is, this can be a red flag.

The next thing that can be negotiated is repairs. Home inspections are there for the buyer’s protection. They can potentially reveal problems or defects that need to be resolved. The seller and buyer can negotiate who is responsible for repairs and what needs to be completed before the sale is finalized. Ways in which you can work this out with a seller is for them to make the repairs at their cost or negotiate a lower sales price of the home.

Number six is the appliances. Large appliances are usually included in this negotiation tactic. Make sure to ask what appliances the seller is willing to include in the sale of the home. A buyer should always know exactly what they are purchasing. It can work to both advantages. A seller might be willing to negotiate the washer and dryer into the sale or the buyer might want to make sure the seller does not leave a certain large appliance behind.

Seven is the taxes. When a property changes hands, many states require transfer taxes and fees. The buyer or seller can pay these fees. Before a real estate contract goes through, it should be decided who will pay the cost. In a seller’s market, the buyer usually pays the taxes and in a buyer’s market the buyer insists that the seller pays the taxes. A great way to get a leg up on the competition is to offer to pay the taxes as the buyer.

Last is the furniture. Usually the seller takes all the furniture when they sell their home. If a buyer loves the decor or a piece of furniture they can negotiate it into the sale of the home.
When negotiating on the purchase of a home it is always wise to use a Realtor. A real estate agent always has great bargaining skills and can get you the best deal on a home.

Click Here For the Source of the Information.

Taking Care of the Details During the Closing Process

You’ve found or had a builder build your perfect home for you, and now it is time for you to complete the transaction and close on your home.  Closing day, if you have never done it before, can be a nerve-wracking process, so this article will help you with the requirements for that day.
In the original sales contract, there will be a “close-by” date that doesn’t necessarily mean the actual day that you will close on your home. This date is established to make sure that the contract is completed in a reasonable time period that is acceptable to both the buyer and the seller.  That way, there is a deadline to sell or buy the actual home.  The close-by date can be a “goal” of sorts to close

on your home. Much will determine the final closing date, mostly the time it takes for the appraisal, loan application, mortgage approval, and a final walk-through if you are building a new home.  The title company is the actual entity which sets up the closing for the home.  A title search / abstract is done on the property or the home itself to ensure that you have a clear title upon closing.  This process can also affect the timing of the closing.

Once the title company and you have received your closing disclosure from the lender, then any financial questions, closing cost questions, or tax questions are answered, and the closing is ready to happen.  The title company and lender work closely together to make sure that both parties are able to make the final closing date. So, ideally, you, as the buyer, should be able to set your closing date, but it typically ends up being more of a lender / title company decision.

In order to avoid additional interest and closing costs, you may want to suggest at the beginning of the process that the closing date be as close to the end of the month as possible.  A closing date after the 20th of the month can move out the date of your first payment and save the cost of daily interest until the first loan payment is due.

Another thing that you can take care of on your end is to make the move from your old place to your new place as smooth as possible. As soon as you can find out your closing date, you can make sure that you will be able to move out immediately afterwards so that you don’t incur anymore charges at the place where you are currently living.

For the closing day itself, you might want to bring your closing disclosure which the lender will typically send you 3 days prior to closing with you on the day of closing.  That way, you can compare what you previously received and the final closing documents to make sure that they match.  Also, if you feel like you will have questions or issues at closing, you can make sure that a representative of the lender and your Realtor (if you used one) shows up at closing to support you.

Buying a new home or a previously owned home can be an exciting adventure, but you will have to be prepared to take care of all of the details of the buying process with the help of your Realtor, the lender and the title company.  Since everyone involved in the transaction benefits financially, don’t hesitate to reach out to them to ask any questions or get the help you need during the closing process.

Click Here for the Source of the Information.

Reasons to Stay in Your New Home 5 Years

Whether you are buying your first home or your 4th home, the time you spend in your home before downsizing or upgrading makes a financial difference in your investment.  Most people start out in the real estate industry when they buy their first home.  Unless they come from a very wealthy family or have won the lottery, the home is priced modestly or on the low end and is built that way as well – smaller square footage, less bedrooms and baths, in an up and coming neighborhood.  First time

home buyers can be single professionals who are successful, in a steady job, with an income that is rising each year, but most people who buy a home for the first time are couples looking to start a family. These couples eventually would like to move out and move up to provide more space for their growing family.  They are “getting their foot in the door” with their first home to establish credit and create equity opportunity to eventually sell and move up to something bigger.

The biggest question then, to ask is this – how long do you stay in your home in order to make sure you aren’t losing money and to build enough equity to become a “move-up buyer?”  The answer to this depends, but it is typically about 5 years.  Below are the reasons for this number:

1.  Closing Costs: Whether you are buying a new or previously owned home (resale) or refinancing your home, you are going to “run into” closing costs.  Closing costs is the profit for loan originators, title companies, and the state in which you live (recording fees) which are charged during the loan process.  Every company needs to make money, and closing costs are how they make theirs.  Closing costs are, most of the time, added to the principle of your home, increasing your loan amount and shrinking your home’s equity.  Each time you make a real estate transaction, you are charged these costs.  Staying in your home approximately 5 years “pays off” these closing costs enough for there to be enough equity in your home (most of the time) to have money for a down payment when you move to your next “move-up” home.

2.  Interest: Even with the historically low interest rates in the market today, the mantra in real estate still stands, “The Bank Gets Paid First.”  When you are paying your monthly loan payments, you will notice on your mortgage statement that the amount of principle being paid on your home is significantly less than the amount of interest being paid.  You can also see this on your amortization schedule during your closing.  As your loan “ages,” the amount of interest balances the amount of principle and eventually ends up being less than the amount of principle during the last years of your loan.  If you only stay in your newly purchased home for a short period of time – say 3 years – the amount of principle you “pay off” will not be enough to merit a sale and move unless you are making extra principle payments each month.  The recommended period of time to stay in your home, reduce the amount of interest charged, and pay off as much principle as you can in order to gain equity during a sale is 5 years.

3.  New Vs. Used: The type of home you buy can also make a difference in how much time you spend in it before you upgrade to something bigger and better.  If you are buying a new home, it really doesn’t make that big of a financial difference in the time you spend in the home because typically, in a new house, you don’t end up with much maintenance on the home until about 4 – 5 years in.  On a previously-owned home, resale home purchase, however, there may be a significant amount of upgrade and upkeep that you will expend when you first move into the home.  Depending on the age of the home and the last time it was renovated, big system items, such as hot water heaters, condensers, garbage disposals, ductwork, roofing, etc. could end up needing to be repaired or replaced.  If you look at the amount of money you spent on renovating the home, the amount of interest you pay on your monthly mortgage payment, and the amount of closing costs you paid during the initial purchase; you may see that it would behoove you to stay in the house for about 5 years (or more) to get the equity out of the home to pay off your financial investment.

4.  Appreciation: The “golden days” of “instant appreciation” are fewer and farther in between when it comes to purchasing your first home in an “up and coming” area.  During the real estate boom of the early 2000’s, subdivisions were seeing appreciation in their homes from the beginning and build out of Phase I to the commencement of building Phase II.  You have probably seen the prices on the signs change from Phase I to Phase II where the exact same floorplan started selling $10,000 – $20,000 higher in Phase II than it did in Phase I.  Those days of instant appreciation are very rare, so when you purchase your home in an area you expect to experience residential and commercial growth, you, as a homeowner, may have to wait a little bit longer for that long-anticipated

appreciation to come about.  Along with the other factors mentioned above, this is yet another reason to wait approximately 5 years before selling and moving to a bigger and better home.

Ron Lee Homes, a home builder in St. Tammany Parish, specializes in 2nd home (and above) move-up homes.  Whether you are looking to build a semi-custom or fully custom new home in Mandeville, Covington, Madisonville, or Abita Springs, Ron Lee Homes will work with you and provide base floorplan designs for your consideration.  Buying or building a new home can seem a little challenging, but working with the team at Ron Lee Homes will make your home buying / building experience a pleasant and satisfactory process.  To get started with the plans for the home of your dreams today, Contact Ron Lee Homes at 985-626-7619 or E-mail Info@RonLeeHomes.com.


Click Here for the Source of the Information.