What is the first step of the home buying process?
Getting pre-approved for a mortgage is the first step of the home buying process. Getting a pre-approval letter from a lender gets the ball rolling in the right direction.
What does it mean to be prequalified for a loan?
Being pre-qualified means a lender has decided you will likely be approved for a loan up to a certain amount, based on your current financial situation.
To get pre-qualified, you simply tell a lender your level of income, assets, and debt. The lender will then take that information and determine how much you will likely be approved for.
How can I build equity into my house?
You can build equity in three ways. First, from market appreciation. Second, when making your monthly mortgage payment, if you can afford more, do so. This will go directly to the principal of the loan, rather than the interest. An important part of this is to make sure your lender knows to put the extra toward principal, and not the next month’s payment. The third way to build equity into your house is to make home improvements. There are many ways to make positive changes to the interior and exterior of your home.
What is the MLS?
MLS stands for Multiple Listing Service. It’s a network of real estate listings in an area, where
buyers can view what is available in their price range, and with the features they are looking for. It is a system usually run and supported by the local Real Estate Board that has details of almost every home, land, and business listed for sale with a real estate agent.
What is a Seller’s Market?
In sellers’ markets, increasing demand for homes drives up prices. Here are some of the drivers of demand: Economic factors, Interest rates trending downward and low inventory – meaning there are fewer homes on the market because of a lack of new construction. Prices for existing homes may go up because there are fewer units available.
What is a Buyer’s Market?
A buyers’ market occurs when the housing market favors home buyers. The market may be defined with any type of factor, such as a geographic region or price range. The market favors buyers when home prices are relatively low and there are a large number of homes available at a given time. When most homes take more than six months to sell, it is a buyers’ market.
What are closing costs?
Closing costs are processing fees you pay to your lender. Lenders charge these fees in exchange for creating and servicing your loan. Closing costs cover things like your home appraisal and searches on your home’s title. The specific closing costs you’ll need to pay depend on the type of loan you take and where you live.
Do you have contractors you can recommend for work needed on the house?
Any agent who has been in the business for a while will have a list of contractors that can help prepare for a home sale. It is not uncommon for real estate agents to refer sellers to many different vendors including:
- General carpenters or handyman
- Electricians or plumbers
- Home Stagers
What is Title Insurance?
Title Insurance insures a buyer that he or she is getting clear title to the property without any liens. A title insurance company researches the county records to see what has been recorded on the property. The title commitment will show what loans need to be paid off and what restrictions are on the property. The cost is determined by the sale price and varies with insurers. Typically, the seller pays for the policy, and any endorsements required by the buyer’s lender are usually a buyer’s responsibility.
What is Homeowners Insurance?
Also known as “hazard insurance”, homeowners insurance covers losses caused by fire, hailstorms, or other casualty on the property. Lenders usually require the buyer to have insurance in an amount equal to or greater than the loan amount. Flood insurance is required by the lender if the property is in a flood hazard area/flood plain. Condominiums and townhomes are somewhat different, as certain items may be covered by the homeowner’s association fees.
What is a real estate broker, and how does this differ from a real estate agent?
A real estate broker is someone who has taken education beyond the agent level as required by state laws and passed a broker’s license exam.
Similar to real estate agent exams, each state sets its own broker education and exam requirements. The extra coursework covers topics such as ethics, contracts, taxes, and insurance—at a more in-depth level than what’s taught in a real estate agent pre licensing course.
Prospective brokers also learn about real estate legal issues and how the law applies to operating a brokerage, real estate investments, construction, and property management.
What is mortgage insurance?
Mortgage insurance is an insurance policy that protects a mortgage lender or titleholder if the borrower defaults on payments, passes away, or is otherwise unable to meet the contractual obligations of the mortgage.
What is an appraisal?
An appraisal is the estimation of a home’s current market value. A licensed appraiser completes this estimation, which is calculated by comparing the recent sales of homes in the area as to the property that is being appraised.
What is a real estate closing?
A real estate closing is the final step in the real estate buying and selling process. Once an offer on a property is officially accepted by the seller, a purchase agreement is made and a closing date is set. Upon closing, the ownership of the property is formally transferred from the seller to the buyer, after which the buyer is free to start their move-in or renovation process.
What are some examples of home projects that will increase the value of my home?
1) Outdoor Structures
2) A Full Bathroom Remodel
3) Replacing Old Windows
4) Attic Insulation
5) Roof Replacement
6) Finishing Your Basement
7) Kitchen Remodel
What are home inspections?
When purchasing a home, it is important to perform a thorough assessment of the home’s structure, equipment, and surroundings. Real estate purchase contracts provide appropriate language to protect buyers from purchasing an unsound home, while at the same time protecting sellers from liability. An inspection can be made by an inspection service company, or a buyer may choose to inspect the home him or herself.
What is the opportunity zone?
The launch of the qualified opportunity zone program means that in return for rolling over profits from the sale of capital assets like real estate or company stock in certain economically designated areas, investors can delay paying capital gain taxes on those profits through 2026. Opportunity zones are similar in some ways to 1031 like-kind exchanges, which permit real estate investors to defer taxes on gains from the sale of a property by reinvesting the proceeds from the sale in another property within 6 months.
For any other questions about buying and selling processes, or general real estate questions, contact us at Michael Gailliot Homes.