October 2008

FHA LOANS CALIFORNIA (california fha home loan)

Refinance Your Home Mortgage

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How Do I Choose A Real Estate Agent?

Selecting a real estate agent may be the most important decision you make when you buy a home. And it does not matter whether you are a first time buyer or if you have bought and sold many homes. Good real estate agents can mean the difference between getting the right home and the wrong one, paying a fair price versus too high of a price, and peace of mind during the process versus watching your stress levels, and your blood pressure, rise beyond healthy levels.

As a buyer, you need a real estate agent as a guide. This is someone who will listen to your concerns, help you weigh your wants and needs, and then lead you through a minefield of common mistakes that inexperienced—and overconfident—buyers often make. Let’s talk a little about what makes a real estate agent a “good” agent.

First, you need to understand what a real estate agent is. First and foremost, real estate agents are salespeople. This means that they get paid only on the completion of a successful transaction. For a buyer, the services of a real estate agent are paid by the seller at closing as part of the transaction—in other words, the services of the agent are essentially free to the buyer. In most instances, it is simply one of the costs of selling a home. Even in the case of a For Sale By Owner property, most sellers will gladly pay the buyer’s agent fee for bringing the buyer to the deal.

So now that we know that a real estate agent is at no cost to the buyer, how do I choose one? The key is to make a list of what you expect from the agent. For example, if you are a first time home buyer, you may want an agent who can serve as a mentor. Top producing agents may not be a good fit for you–they are busy closing transactions and do not have the time for hand-holding and educating clients.

On the other hand, if this business is old hat to you, you may want someone who is all business. So an agent that specializes in first time buyers will probably not meet your needs—you probably don’t want the hand-holding. So knowing exactly what you want is the first task at hand.

When you have defined what you want, you can start talking to people who have purchased a home. A five year old referral is no help, so focus only on people you know who have bought within the last year or so. People that are happy with their agent will gladly offer a referral. Be specific in your conversations and focus on the transaction itself–not the agent. You are interested in the agent’s work, not necessarily how nice and personable the agent was. Did the transaction go smoothly? Did the agent handle issues efficiently and quickly? Was all paperwork on-time and accurate? Was the agent’s advice on-target, clear, and precise?

After you have selected two or three agents, meet with them at a neutral site and don’t be afraid to put them on the spot. Present a scenario or two about buying a home and see if their answer matches yours. A great question is: “if we find a great home but the seller is not willing to come down in price, will you be willing to cut your commission to help us get the property?” It’s a tough question, but it can tell you a lot about the agent. Let’s face it, if the agent will give away their own money so easily, what makes you think they will be more careful with yours?

In the end, the agent you choose should match up with your expectations. And remember, although you are not paying them directly, you need to hold them accountable for their performance. Your home and your mortgage is one of the biggest decisions you will make, and it starts with choosing the right real estate agent.

Should I buy a home in today’s market?

For the average buyer, the state of the real estate market should not really be a major consideration when purchasing a home. If you treat a home like a stock and buy and sell each year, then buying low and selling high is obviously important. Most of us, however, treat a home as a place to live. That means we will, hopefully, live in our home for a while. The longer we live in our home, the less impact the initial purchase price makes on our investment because of appreciation and the pay down of the mortgage.

For many Americans, a home will eventually represent a sizeable portion of our wealth. This wealth, however, is generally built over many years through many up-and-down cycles in the real estate market. The single family home has survived as our biggest investment through many market scares, including most recently the savings and loan fiasco of the 1980s. The reason it survives as a vehicle for wealth is that we all need a place to live and over the long term the single family home has always appreciated in value. This means that even today, there are still buyers! You’re considering buying a home, aren’t you?

Let me answer the question “should I buy a home in today’s market” by finding out if you are ready to buy a home:

• Do you have stable income and is your source on solid ground?
• Is your credit in decent shape? Your credit score should be above 600 with no negative marks in the last 12 months.
• Are you living within your means? In other words, are you putting a little bit into savings each month?
• Do you have 5% of the purchase price saved up? For example, if the purchase price is $100,000, do you have $5,000 in savings? If not, is someone gifting this amount to you?

If you answered no to any of those questions, then you might want to get your financial situation in order before buying a home. Here’s why… Most foreclosures happen simply because the home buyer cannot weather a brief downturn in their financial situation. Moving into a new home is expensive and if you are not prepared for the added expenses, you can easily find yourself in a bad position.

If you answered yes to those questions, then the answer to “Should I buy a home in today’s market?” is a resounding yes! Today is a terrific time to buy a home! Inventory is high, prices are low, and mortgages are available to buyers with decent credit and steady income. What this means to a buyer is there are a lot of homes to consider and there are still mortgage companies with lots of money to lend to qualified buyers!

Also, now is a great time to sell if you are moving up in the market, in other words into a more expensive home. While you will probably sell your current home for less than you could have two years ago, those same forces are at work across the entire market? Because all sellers are taking a hit on the price of their home, you are trading your small hit as a seller for the bigger hit the seller takes when you buy! A savvy real estate agent can help you work this market to your advantage!

So are you ready to take the next step? Let’s discuss how to choose a real estate agent…

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