Choosing to enter the home buying process is likely the largest financial decision you will make in your lifetime, so it is not one that should be taken lightly. Ensuring that your other current and upcoming financial responsibilities are under control is crucial to having a smooth transaction and being able to enjoy your investment fully. These tips will help you prepare your budget for purchasing your dream home. Calculate your monthly income. How much money is coming in every month? This is the amount that is left after taxes, health insurance, and retirement savings are taken out of your monthly salary. Understand your current expenses. Make a list of all your current recurring expenses month to month. Don’t forget to factor in things like loan payments, gym memberships, car maintenance, groceries, self-care appointments, etc. Determine where you can find savings. Are there any ongoing memberships or subscriptions you don’t use that can be canceled? Can you cut out your daily coffee or eating out lunch? Make these adjustments right away to start saving more. Boost your financial standing. Before buying a home, it is recommended that you dedicate extra effort to paying off other debts and boosting your credit score. Taking these steps will help you during the loan approval process. Don’t move finances around. Your lender will review your bank statements during the pre-approval process and then again during underwriting. Any large withdrawals or deposits may throw a red flag so try to avoid these when possible. If you can’t, make sure you have proper documentation to explain the movement of money. Have any questions? I can help!
Iveth Caruso, your REALTOR in the North Atlanta Area Buying your first home can be an eye-opening experience in terms of encountering unfamiliar documents and forms. Fortunately, working with a qualified buyer’s agent like me makes it much easier to wade through the paperwork, understand the lingo, and successfully reach the closing table. After closing on your home, don’t be surprised if confusing and unsolicited correspondence related to your purchase starts arriving in your mailbox—or by email, phone, or text. Examine these inquiries cautiously, staying alert for potential scams! What sets the wheels in motion? After your purchase closes, the title company files the deed on your property with local government authorities, recording a change in ownership. Once this happens, your name and address become publicly-accessible information. Con artists rely on this information to execute various scams. Additionally, they may be trolling online social media posts or hacking into email accounts, searching for clues of upcoming or recently completed home purchases. Any related details or contact information can help execute their schemes, including real estate wire fraud, which targets about-to-close homebuyers and aims to strip them of everything they’ve saved to purchase a home. Five Homeowner-Related Schemes Con artists rely on tricking people into parting with their money or revealing sensitive personal information. Some scams are easy to spot, while others are more clever. Homeowners, in particular, should be wary of: 1. Fake utility bills. A new homeowner is threatened that their electricity (or other essential utility) will be shut off unless a payment is made immediately. If you’re in any doubt about the status of your account, look up the provider’s phone number and speak to a customer service representative. 2. Mortgage protection insurance. Similar to life insurance, mortgage protection insurance is designed to help a family stay in their home if a homeowner dies, by paying off the mortgage. Legitimate companies offer this product, but scammers also attempt to scare homeowners into buying fake policies. 3. Mortgage payment administration. Some companies offer to help homeowners pay off their mortgage faster by sending bi-monthly payments to an intermediary (and tacking on substantial administration fees). If you want to accelerate your mortgage payments, make direct arrangements with your lender. 4. Property tax payments. Scammers send a letter or place a call, threatening that you’ll lose your home if you don’t immediately pay overdue property taxes. Real estate taxes are typically calculated at closing (prorated between the buyer and the seller) and included in your monthly escrow payments. To verify your status, contact your local tax authority. 5. Home warranties. Many legitimate companies offer home warranties, which can help new homeowners protect themselves, in case a significant problem was overlooked during the inspection. Scammers, however, may attempt to sell fake policies to unsuspecting buyers. Note that several of these schemes aren’t limited to new homeowners. How can you fight back? In the U.S., the Federal Trade Commission (FTC) takes a leading role in collecting all types of complaints from consumers and sharing details with appropriate law enforcement agencies. Contact them at 877-FTC-HELP (382-4357) or ftccomplaintassistant.gov. Scams perpetrated by mail are considered mail fraud and can be reported to the U.S. Postal Service at 800-372-8347 or postalinspectors.uspis.gov Have any questions? I can help!
Iveth Caruso, your REALTOR in the North Atlanta Area You’ve found a house you’d like to purchase, and you’re ready to make an offer. It’s time to take a closer look at the purchase contract—perhaps the most important legal document for real estate transactions—and decide how you want to modify its terms, including adding various contingencies. Contingencies? Yes, it’s an uncommon word. The real estate industry is filled with unfamiliar terminology. A contingency refers to particular provisions in a standard purchase contract. If the condition isn’t met, you’re allowed to back out of the purchase, without penalty. Contingencies are a good thing, in terms of protecting buyers. They can also backfire if you insist on too many contingencies or are competing with less demanding buyers. Here are several key points to keep in mind. 1. Know the market. In a seller’s market (when there aren’t many properties in a specific price range or a particular geographic area for sale), contingencies will encourage sellers to find a more accommodating buyer. In fact, in a strong seller’s market, some buyers severely limit their contingencies and offer more than the seller’s asking price, potentially triggering a bidding war. In a buyer’s market (when there are more properties for sale than there are interested buyers), sellers are more likely to accept buyer contingencies. Don’t know what market your area is experiencing right now? That’s okay. I specialize in staying current on that information for your local market. Just ask me! 2. Understand which contingencies are common (and which aren’t). I can also provide the best advice on which contingencies are appropriate and commonly accepted in your market. Every area operates under different standards and conventions. A few examples: Home inspection - If something is seriously wrong with a house, you’ll want to know before you buy, not after the closing, when it’s too late to address the issue with the seller. Inspections are primarily designed to evaluate the structural and mechanical condition of a property, although specific conventions vary by market. Inspections may also check for mold, radon, pests, lead, septic systems, or other specific concerns. A home inspection (at the buyer’s expense) is a highly recommended contingency clause. Attorney review - The seller, the buyer, or both may request a certain number of days to have their attorney(s) review the contract for sale and the closing documents. Mortgage financing approval - Smart buyers secure a pre-approval letter from their lender before submitting an offer. However, your mortgage financing could still fail to reach final approval due to findings in the property inspection, a too-low appraisal, or a final review of your financial situation. Approval of homeowner association (HOA) documents - If you are buying a property governed by an HOA, you can request these documents before making an offer to ensure the HOA is on solid financial ground. Alternately, this can be a contingency item. Early occupancy (with payment of rent) or furniture move in - If your time frame requires a critical move-in deadline, such as the start of a school year, you may want to stipulate this as a contingency. Appraised value - The appraisal may come in lower than your offer, in which case an appraisal contingency can provide an option to attempt to renegotiate the selling price. Also, note that lenders can reject your mortgage application if an appraisal comes in too low. Home warranty - A buyer may make the sale contingent on their ability to secure a home warranty on the property. Be aware that some home warranties require a home inspection before purchase to prove that a warranty claim is not a pre-existing condition. Sale of a current home - This contingency requires the seller to agree to delay closing until you’ve found a buyer for your current home. It’s a tall request, especially in a seller’s market. If the contingency includes a “bump” clause or “kick out” clause, the seller can continue marketing their home in hopes of finding another buyer. 3. Watch those dates! If your contract includes deadlines related to contingencies, be sure to monitor them carefully. I will help you stay on top of these too. Dates matter, since even a one-day lapse could put you in jeopardy of non-performance of your contractual obligations, potentially resulting in the cancellation of your purchase contract and loss of your earnest money. Add any critical deadlines to whatever calendar system you rely upon, as well as alerts a couple of days before the deadline hits. Have any questions? I can help!
Iveth Caruso, your REALTOR in the North Atlanta Area Do you have any questions? I can help! Iveth Caruso, your REALTOR in the North Atlanta Area Do you have any questions? I can help! Iveth Caruso, your REALTOR in the North Atlanta Area |
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The information on this site is intended to be a free resource to provide general information to the public. The information is intended to supplement instruction from your legal, financial or real estate adviser. The information contained on this site should never be taken as a substitute for legal or financial advice from a licensed professional.
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