If you are thinking about buying or selling a home in the near future, what should you know before you make your move? Understanding the nuances of the real estate market can help you get the best possible deal whether you are getting rid of, or acquiring a piece of property.
How Do You Know How Much the House Is Worth?
How does a seller know how much to list a house for? The best way to do that is to look at what other homes in the area have sold for recently. If there are no recent home sales in the neighborhood, a homeowner can look up the last assessed value of the home.
If the home has not been appraised in several years, a new appraisal can be done to determine the current value of the house.
Who Pays the Closing Costs?
It costs thousands of dollars to close a home sale. Lawyer fees, title fees, and loan origination fees have to be paid to help the lender cover the cost of creating and processing the loan.
While the buyer typically pays these costs, the seller can be asked to make concessions to help the buyer get approved for a loan or to otherwise sweeten the deal. In some cases, the seller may be able to offer gift cards, extra appliances or other goods that could entice a buyer to purchase a property as soon as possible.
When Is the Sale Finalized?
At some point, the buyer is going to need a Toronto real estate lawyer to look at the closing paperwork to ensure that the deal is properly finalized. The closing contract should list the amount that the house sold for, who is paying the closing costs and if any taxes were paid or need to be refunded.
Ask a company like Sheldon L. Kasman & Associate LLP for the closing contract, which will also note when the new owner is allowed to take the possession of the property.
Having a lawyer ensures that all of the pertinent details are taken care of before the deal is finalized and that the buyer is not being swindled or taken advantage of in any way.
Understanding the housing market and the nuances of buying or selling a property could go beyond the scope of most people’s knowledge.
However, you can turn to your real estate agent or lawyer to help fill in the gaps and ensure that you know what you are buying or selling before the transaction is finalized.
Is Now A Good Time To Buy A Home?
Is now a good time to buy a home? Many are asking me this question. My answer has little to do with the fickle market and everything to do with you.
Two or three polls are sending conflicting information to home buyers right now, and it’s time we had a heart-to-heart.
Everyone wants to know: are property values rising or are they declining?
The local real estate news shows that all but one of the cities surrounding Lansing reported an increase in the average actual sale price of homes this past year. That seems like good news.
Robert Schiller, the creator of the Case-Schiller RE Index, said today that all 30 cities he analyzes annually have declined over the past year and that we could see another 15% to 20% decline in the housing market before we reach the bottom! Another 15 to 20 percent!
You may have also heard that the National Association of Realtors overstated the number of home sales over the past few years. Although it is very likely that the overstatement was minor, it does make you wonder.
Some say it’s up. Some say it could still go further down. Others say we don’t even have the right information.
So, what’s the right answer? Is it up, down, flat?
We want the truth. Not projections and predictions.
The truth is we don’t know what will happen in the next three years here in Michigan.
The truth is this: Only new and unknowable information can change the future.
What I do know is this:
- My client just purchased a home for $127,000 yesterday that still has a taxable value of over $80,000. That means the township thinks the home is worth more than $160,000. The home had a taxable value of $110,000 at its peak. Someone at some point paid over $200,000 for this same home not too long ago. This is true. This home is a far better deal today than it was three years ago.
- A 15% decline on a lower sale price is less of a dollar drop than the first 15% was. A home that was worth $200,000 and dropped in value by 15% saw a $30,000 decline in value to a new value of $170,000. The next 15% drop is not another $30,000. The next 15% drop is $25,000. 15% of a lesser number is a lesser number. Don’t let the statistician fool you. Remember, figures never lie, but liars figure.
- Homes purchased three years ago using a 30-year mortgage would have the same payment as the same home purchased today using a 15-year mortgage. This is a serious advantage to the buyer. Writing the loan in this way will cause the buyers home equity to rise over a three-year period even if the home’s value declines 15% during that same period. Home buyers can gain home equity in a declining market. This is true.
Even though markets are uncertain, you can have a good amount of certainty if you are asking the right questions.
Now is the time to be working with a local, full-time Realtor you trust and a lender who does not try to predict the future.
You don’t have to place your future success on the hopes of a rising market – you can succeed in any market if you structure the deal right and make the decision to buy a home that you can afford when you can afford it.
Be sure this time.
5 Factors That Affect Real Estate Buying Behavior
Whether you are a real estate professional or a person who plans to invest in land or homes, it is a must for you to have some understanding of the factors that influence buying behavior.
One main reason is that certain economic factors can predict your actions as a consumer or as a seller. If you are aware of such factors, you can evaluate yourself and your needs in a more in-depth manner so that you’ll come to a better decision.
This is especially helpful if you are in the process of deciding to buy something that requires a sizeable financial investment, such as a property or a house and lot.
1. Purchasing Power
Purchasing power or buying power is a person’s ability to use available financial assets in order to purchase certain products to satisfy his needs or wants. Someone with a limited income has a lower buying power.
This means that he usually just spends on vital necessities and rarely on other material things that are not considered as basic needs. On the other hand, a person with high buying power has the capacity to acquire more.
When it comes to real estate, it is particularly important to assess your buying power and to determine the factors that will probably affect it as well. For instance, interest rates, fixed assets, debts, and income all influence a person’s purchasing power.
2. Perceived Value
When you look at a certain item or maybe a house, how valuable is it to you? If an item is perceived to be of high quality or value, consumers are willing to pay more for it. In real estate, a property that has certain characteristics that make it more valuable to consumers will likely cost more.
3. Benefits versus Cost
Naturally, a consumer wants to take advantage of the benefits offered by a product but he also wants to lower related costs.
For buyers, this means that they might choose a generic brand over a branded item if they do not have enough money or if they believe that the generic brand works as well or maybe even better than the one with the expensive brand.
For someone who plans to buy a property, a cheaper house and lot may be more attractive than one that is more costly even though it is in a more affluent area particularly if both their features are more or less the same.
Buyers will also take a look at the condition of the property. They need to assess possible costs especially those related to repairs or needed renovations.
Marketing greatly influences consumers. Advertising can persuade people to buy. This is why real estate professionals need to create eye-catching ads that highlight the benefits of buying certain properties. Marketing is essential in disseminating info about products, services, and other valuable features too.
Location is very important in real estate. Residences that are in major cities are more expensive than properties that are farther away from the heart of a busy metropolis.
One reason for this is that places inside or near cities are also close to needed public facilities, business areas, transportation and communication centers, and other infrastructures.
What to Look for in a Mortgage When Purchasing a Home
Have you found a home that you are interested in purchasing? If so, you need to take a close look at your mortgage options. Most importantly, don’t settle for the first loan offer that comes your way. Instead, look for the five following things in your mortgage.
Is the mortgage lender reliable?
Do you know other people who have obtained a mortgage loan through the lender you are interested in? If not, this may be a good sign that the lender isn’t reliable; however, this is not always the case. With a simple online search, you should be able to determine whether or not the lender has a good reputation with Better Business Bureau.
Is the lender licensed?
Your home is most likely your most valuable asset. You don’t want to entrust your mortgage loan to the hands of someone who doesn’t know what he or she is doing. Instead, you need to look for a mortgage lender that employs licensed professionals.
Is the loan affordable?
If there is even a slight possibility that you can’t afford your mortgage loan, you need to search around for one that has more affordable terms. A great place to look for Low VA Rates is www.lowvarates.com.
Do they offer customer support?
Throughout the course of your loan, you will likely have many questions. Because of this, you need to make sure that you acquire a loan through a lender that provides continual customer support. No matter what your questions may be, you will find much comfort in knowing that you can get answers.
Do they offer a mortgage loan that fits your financial needs?
You need to keep in mind that there are several types of mortgage loans for you to obtain. The two most basic and common types include fixed rate loans and adjustable rates loans. If you prefer an adjustable rate loan, you need to make sure to partner with a lender who provides it.
Purchasing a home is a big decision. The necessity of partnering with the right mortgage lender should not be underestimated.
By asking friends and family, as well as conducting an online search, you will be well on your way to finding a lender that can meet your wants and needs. Just remember, the better loan you obtain, the more likely you will be able to avoid default on it.