This article answers many questions from Home Buyers with topics like financing, low-income programs, foreclosures, FSBO’s and more!
Branson Home Buyer’s Questions Answered
These are some thoughts and ideas from many years in the real estate business! This is meant to be a guide or a checklist of things to notice when you look at a house for sale.
First things first when you want to know How to Buy a Home?
- #1 – Find a Realtor! Preferably an Exclusiv Buyer’s Agent who can work exclusively with you. Let this person put you in touch with a good lender. Whatever you do – don’t go to an online lender for your financing. Horror stories!! Find a local lender and you’ll have someone to go to when you have a problem or question. They know the ‘buck stops with them’. On-line lenders are a voice on the phone and, in my experience, you get a different person every time you call. It’s a good idea to compare rates and loan programs – but too many people pulling your credit can lower your score. Once you have the lender of choice – get a pre-approval letter, which will tell you how much you can afford. Then you can begin your search – armed with the facts. It’s disappointing to do your search before getting pre-approved, only to find that you can’t afford the house that you have fallen in love with!
- Your lender will ask for your financial documents – so be sure to have them available. Don’t delay in getting ALL the required documents to your loan originator!
- You’ll need 2 years of bank statements, W-2’s (perhaps tax returns), any child support or alimony, divorce or bankruptcy papers. Provide any 401k, retirement or stock accounts. Just think ‘anything financial’.
- Discuss any financial changes with your lender BEFORE making them. Don’t transfer money from one account to the other – or ANYTHING without asking first. There has to be a paper trail for any money involved in the transaction…so just ask your lender how to go about doing it and all will be fine. The same with paying off an existing account – you will have to have documentation in hand because it may not reflect in your credit report in time to close on the house.
- If it’s a seller’s market – you’ll have to work to stay on top of things. Have your Realtor put you on a listing alert so you will know when a house hits the market. And be prepared to move quickly, especially in our current market. Know what you want – and grab it when you see it! Delay means someone else is most likely going to live in your dream home.
- Let’s Learn How to Look at a House. Home inspections are costly – so do everything possible to avoid having the home inspector give you surprising bad news! If you decide not to buy – then you’re off to another house and another home inspection fee. It’s a good idea to look for red flags when you are viewing a property. You will certainly need a professional home inspection, but taking a critical look for yourself can save a lot of money! By no means, am I implying that you shouldn’t buy the house if you notice any of these things. Just be aware. Only you know how much upgrading you can do. And, sometimes you can get a much better deal on the house if there is deferred maintenance. Use this for a checklist of items when you are walking through:
- General condition of exterior and yard. Has it been maintainted? Or can you see that no one has taken care of it? What about the roof – Obvious signs of disrepair? Are the downspouts allowing water to seep into the crawl space or basement? Water should be diverted AWAY from the foundation at all costs. What about the door and window frames? Any soft or rotting wood? What about the condition of the paint? Any obvious cracks in the foundation or brick? Grading? The soil should slope away from the foundation. Remember that water is the enemy of a house! You can determine many things just by looking around.
- When you walk inside – do you notice any obvious smells? Cigarette smoke? Musty odors? Pet odors? Room fragrances can be a sign that they are trying to cover up an odor. Remember that these smells are hard to get rid of.
- Appliances? Are they outdated or neglected? Be sure of what applianes are remaining with the house. Flooring? Carpet stains, torn vinyl or cracked tile? Take a look at flooring under windows and exterior doors for signs of water stains. If there are area rugs, sneek a peek under. Sometimes they are covering up something.
- Plumbing? Any obvious water drips? Notice any water stains on the ceiling as well that could indicate water problems upstairs. Flush the toilets. Step around the base of toilets to check for any soft spots. What about the age of the water heater?
- HVAC? Check the age. Ask about obtaining the service reports. *Note: Most home inspections won’t cover anything more than checking the air temperature…so you should do a HVAC inspection in addition to your home inspection.
- Windows? Do they open and close easily? Do you see any clouding that would indicate a broken seal? Are screens important to you? Make sure they are either installed or stored in the attic. People often remove the screens for a clearer view and they somehow disappear.
- Zoning? Do you want a restricted community? Or would you like to have a few chickens? Better check the zoning and/or HOA restrictions. Self employed? Any restrictions that would prohibit you from working from home?
- Neighborhood? Notice traffic patterns (perhaps at different times of the day), noise or power lines? What about amenities? Is there enough parking for your family and friends? Would the location of the garage cause a traffic jam if you had company?
- Your lifestyle? Is there enough closet/storage space for your family? Do you need a home office? Is the kitchen big enough? Do you have unusual pieces of furniture? Take your measurements along just to make sure they will fit into a space in the new house. Just imagine yourself living there and see if it fits!
- Staging? Sometimes homes are staged to sell. Statistics show that homes that look better sell better. Just look at those beautiful model homes, for instance. But, what you get is an empty house that you will have to furnish and decorate yourself. Try to ‘filter out’ all the ‘stuff’ – and envision the house empty, or with your furniture!
More Home-Buyer’s Questions Answered
More questions answered about How to Buy a House in Branson
So many people have questions about buying a house, so I’ll try to answer some of them:
How to Buy a House with no Money Down?
There are several programs available. The USDA rural housing loans are a great way to get into a new home with no money down. There are income limits that apply, and will change depending on the county. These homes have to be in the more rural areas, but you can have a surprisingly wide range of choices. This program allows the seller to pay up to 6% toward your closing costs. This becomes another issue depending on whether the seller will or can agree to do this. Also, you may have to show reserve funds for several months of expenses after closing. Your lender can explain this if they require it. But, these are good programs and you can get into these homes with little or no money down.
Another way to buy with no money down is to use a VA loan. You have to be an eligible veteran with VA entitlements, but this is a great way to go if you qualify.
How to Buy a Property with Low Income?
If you are in a low income bracket, you can certainly buy a house. Ask your lender what programs are currently available…because they change fairly often. There are the ones mentioned previously…USDA Rural Housing and VA. The rules can change depending on the situation, but generally these are for first time homebuyers. First-time homebuyers can be defined as someone who has not owned a home within the past three years. Everyone on the loan must qualify as a first-time homebuyer. FHA is also a good option.
How to Buy a House As-Is?
Buying a house ‘as-is’ means that you are buying it in its’ present physical condition without expecting the seller to make any repairs. But, be careful! This can also mean that you are buying it in its’ present legal condition as well. What if it doesn’t have a clear title? Or other encumbrances? It’s best to word this properly in the purchase and sale agreement. I usually avoid the term ‘as-is’, and simply state that the buyer will do a home inspection – but not expect the seller to make any repairs.
How to Buy a House if You are Self-Employed?
If you are self-employed, you will be required to provide more financial documentation to the lender. It’s great to have all those deductions when filing your tax returns. But when you’re buying a home, those same adjusted gross figures will determine how much you can afford. You will need to provide at least 2 years of tax returns and bank statements. You may need a P&L. The requirements depend on the lender you choose, but it will be more stringent than if you have W-2 income.
How to Buy a House in Foreclosure?
Buying a house in foreclosure is much like buying any other house…except for the physical condition. If you’re purchasing with cash, it’s no problem at all. But, when you finance, it’s a little more tricky. If you buy foreclosures to fix-up and re-sell, you most likely already have a good banking relationship and you can easily get the funds you need. If not, a conventional loan would be the easiest way to go. Their appraisal isn’t nearly as stringent as goverment funding such as FHA and VA loans. If the property is in decent shape, goverment loans might be ok. But, if there are any repair issues…don’t expect the seller to make or pay for any repairs. If the appraiser orders repairs – they will have to be done BEFORE closing. You will be the one to have to make these repairs! And what if anything happens causing you not to close the deal? Then you’ve spent this time and money for nothing, and will lose whatever you have put into the house. In my opinion, it’s just not worth the risk. It’s sad, but often people that are losing a home will be angry at everyone. I’ve seen a lot of damage done to a house by the people that are in foreclosure. Look out for the plumbing because sometimes Quikrete will be poured down the drain with a little water, and you know what that means. I’ve seen pool liners cut and paint poured over a brick fireplace. You just have to be careful!
Can My Parents Help Us Buy a House?
Yes, they can. However, it must be done with a gift letter. This means that they will have to show that they have the money in the bank, and they are giving it to you without expectation of re-payment.
Can I Buy a House before Mine Sells?
It depends. Can you afford and qualify for both house payments? If not, then yes, you will have to sell your existing house before closing on another one. If you find one that you want to buy before yours is sold, they the contract will most likely become contingent upon the sale and closing of the existing one. In this case, the seller will leave the house on the market. If they receive another acceptable offer, they will have to give you 48-72 hours to decide to let the house go or set a closing date. The exact number of hours is specified in the contract when it is written, and this all has to be in writing and signed by all parties involved.
Can I Buy a House Without a Realtor?
Yes, you can. But why would you? A buyer’s agent usually costs you nothing extra and they will most likely get you a better deal. In my experience, when a seller tries to sell the house ‘For Sale by Owner’ – they are trying to save half of the Realtor’s fee. The sellers almost always work with buyer agents, and they usually pay the buyer’s agent fee, so it shouldn’t cost you a dime. A Realtor has all the required forms and can tell you whether the price is good and will see to it that you have every advantage. They will handle the entire process for you! You will be glad you had representation in the home purchase!
What is a Short-Sale?
A short sale occurs when the seller owes more than the house is worth. In this case, sometimes the mortgage holder agrees to allow the house to be sold…and take the loss. Many times, there is a 2nd mortgage involved, which complicates things even further. One thing to note: The price on the listing is what the Realtor thinks it will bring. Most times, the lending institution has not set this price. I’ve seen people wait as long as six months for an answer to their full-price offer, only to be turned down by the bank. Trying to buy a short sale property will require a lot of patience, so don’t be in a hurry.
I hope this has answered some of your questions. If not, please call or contact us and we’ll find your answer! We’re here to help find your new home – and we have the experience to do the job! Want to know more About Us?