Like the video shows, “earnest money” is money you put down to demonstrate your seriousness about buying a home. It must be substantial enough to demonstrate good faith and is usually between 1-5% of the purchase price though the amount can vary with local customs and conditions.
If your offer is accepted the earnest money becomes part of your down payment or closing costs. If the offer is rejected, your earnest money is returned to you. If you back out of a deal, you may forfeit the entire amount.
Well, as this story shows, there isn't a definitive answer to this question. You should look at each home for its individual characteristics.
Generally, older homes may be in more established neighborhoods offer more ambiance and have lower property tax rates. People who buy older homes, however shouldn't mind maintaining their home and making some repairs.
Newer homes tend to use more modern architecture and systems are usually easier to maintain and may be more energy-efficient. People who buy new homes often don't want to worry initially about upkeep and repairs.
As you’ll see in this video, many of your questions should focus on potential problems and maintenance issues.
Does anything need to be replaced? What things require ongoing maintenance like paint, roof, heating and AC, appliances and carpet?
Also ask about the house and neighborhood focusing on quality of life issues. Be sure the seller's or real estate agent's answers are clear and complete.
Like the video says, ask questions until you understand all of the information they've given.
Making a list of questions ahead of time will help you organize your thoughts and arrange all of the information you receive. The HUD Home Scorecard can help you develop your question list and keep a record for each potential home.
There are some great tips in this video, like:
if possible, take photographs of each house: the outside, the major rooms, the yard and extra features that you like or ones you see as potential problems.
Write things down as you go. And don't hesitate to return for a second look.
Use the HUD Home Scorecard (www.hud.gov/buying/checklist.pdf) to organize your photos and notes for each house.
As we show you in this video, in addition to comparing the home to your minimum requirement and wish lists use the HUD Home Scorecard and consider the following:
Bring a tape measure to better answer these questions and write down your measurements.
Imagine the house in good weather and bad and in each season. Will you be happy with it year-round? Take your time and think carefully about each house you see. Keep the scorecard and notes for each one.
The video puts this in more visual terms, but basically, contact the local Chamber of Commerce for promotional literature or talk to your real estate agent about welcome kits, maps, and other information.
You can get information about school systems by contacting the city or county school board or the local schools.
You may also want to visit the local library. It can be an excellent source for information on local events and resources and the librarians will probably be able to answer many of the questions you have.
A state license is required to sell real estate. But roughly half of those licensed take the additional step of becoming a REALTOR®.
As we show you in this video, only members of the National Association of Realtors - NAR - are entitled to use that registered trademark and call themselves a REALTOR®.
As members, they adhere to a strict Code of Ethics and have access to classes, seminars and certification. Their aim is to be experts in their community aware of real estate trends and local and neighborhood issues. They apply that expertise to help buyers and sellers succeed.
You can find a certified REALTOR® by looking in local sources asking around or searching here.
Like the video says, the two don't really compare at all.
The one advantage of renting is being generally free of most maintenance responsibilities. But by renting, you lose the chance to build equity take advantage of tax benefits and protect yourself against rent increases.Also, you may be at the mercy of the landlord for housing.
Owning a home has many benefits. When you make a mortgage payment, you are building equity increasing YOUR net worth.
Owning a home also qualifies you for tax breaks that assist you in dealing with your new financial responsibilities like insurance, real estate taxes, and upkeep which can be substantial. But given the freedom, stability, and security of owning your own home they are worth it.
As you’ll see in the video, the lenders consider your debt-to-income ratio, which is a comparison of your gross (pre-tax) income to housing and non-housing expenses.
Non-housing expenses include such long-term debts as car or student loan payments, alimony, or child support.
According to the FHA, monthly mortgage payments should be no more than 29% of gross income, while the mortgage payment, combined with non-housing expenses, should total no more than 41% of income.
Lenders also consider cash available for down payment and closing costs credit history and the rest of your financial picture when determining your maximum loan amount.
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