Do You Use QR Codes?

Posted on March 8, 2012 by Bud Cooke

A type of advertising now being implemented by more businesses every day involves the use of “QR” codes, which are very similar to bar codes in that they can contain a lot of data. Real Estate advertisers are using the codes to provide mobile links to their web sites to advertise homes for sale. Anyone that owns mobile devices that permit the installation of applications can find many QR Code readers on iPhones, Android phones, Microsoft phones and others. I personally use QR Droid on my Android phone.

These peculiar codes used in the real estate market normally point to a site that displays information about a single listing or even listings close to the user. I use them on my listing signs and the company I use uses gps to locate the closest listing in my personal inventory to take you to the correct listing. It offers links to the photos, listing information, my contact information and also to other listings close by.

I’m also able to use a site specific code for my listing on flyer, blogs and other paper or virtual advertising. This code is for a totally rehabbed home I have listed in St. Petersburg, FL. If you have interest in finding a home, look for these codes to help in your search.

Happy hunting!

Bud Cooke
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com

Are you looking for the perfect search site for West Central home listings? Go to:
http://www.Buying-Pinellas.com

No Related Posts

No Condo Maintenance Fees… Good Deal or Not?

Posted on March 5, 2012 by Bud Cooke

With all of the foreclosures on the market these days, buyers are finding a different game in the condo market. Condo associations have suffered due to the loss of fees while managing properties. Some have even gone out of business. For communities with amenities, this can be a real problem until the court’s referee can pull together the mess and finally hire a new management company.

For those small triplex and quadplex buildings without any substantial common amenities, like pools, etc., it might not appear at first blush, to be a big deal. A buyer might look at the opportunity to pick up an inexpensive unit with no monthly maintenance fees as a real opportunity.

Not so fast. It would be wise to take a close look at the covenant declarations and restrictions very closely to see how much of a headache you might be buying if portions of the common roof leak or other problems become apparent in the future.

Any time there are obvious issue that could eventually require legal action, it is always best to be safe rather than sorry and hire a professional real estate attorney BEFORE you purchase.

Bud Cooke
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com

Good Faith Deposits (Escrow)

Posted on November 2, 2011 by Bud Cooke

In this issue I’ll discuss “good faith deposits” sometimes referred to as “escrow deposits.”

I would be missing a step if I don’t mention the closing process. In Florida it is common for sellers and buyers to hire the services of a “Title” or “Closing” company to research the title, provide the title insurance and handle other closing functions to get the transaction to a successful close. While some real estate offices will act as the escrow agent, most have given up that function to the title company’s or associated law offices.

Generally, the buyer’s agent will discuss your options at the time of the decision to make an offer, and based on your decision for the amount of the deposit, will collect your personal check or bank check and deliver it to the title company you’ve decided to use. The title company will act as the escrow agent and will provide a dated receipt to show compliance with the rules for handling escrow funds. It is also a convenience since the title company will be closing the transaction and will already have immediate access to those funds. The deposit is credited toward your purchase at the close.

On most sales not involving distressed homes, such as short sales or banked owned homes, an initial $1,000 deposit is sufficient. The deposit is intended to show good faith to complete the sale. If you make the deposit too low, you risk having the seller question how serious you are about the purchase. If the home has other offers, it may cause the seller to dismiss your offer out of hand. Even if they decide to counter asking for more, they likely will ask for more than you might have deposited had you not submitted a low deposit offer. As long as you submit a fairly strong loan pre-approval or cash offer, $1,000 is a fairly acceptable deposit for homes in the average market price range. If you are making offers for million dollar homes, a larger deposit would certainly be in order.

Even with a $1,000 deposit and a strong pre-approval, don’t be surprised if the counter offer includes a request for a second $1,000 deposit at the end of the inspection period. Seller’s often become uneasy if they’ve had a transaction that has fallen out because of financing problems and it causes them to want to tie future potential buyers more to the transaction. Everything is up for negotiation and you should get good advice from your real estate professional.

When dealing with bank owned homes, they want a quick close and will often demand a minimum of 10% as a good faith deposit. Just know that this is a fairly common requirement. There are hundreds of investors/lenders so there are almost as many different requirements. Begin by doing what is normally acceptable, but be prepared if they ask for more. Most lenders require either cash or a conventional loan that can be closed within 30 days of approval. While FHA requires only 3.5% down for qualified buyers that plan to live in the home, FHA buyers have a tough time getting their loans closed quickly enough to satisfy the bank owners.

Nearly all bank/owner addenda added to your contract will include a clause that says if you exceed the time period they require for the closing, you agree to pay a “per diem” of $xxx per day for every day exceeded if it is the fault of the buyer. Make certain you read their addenda carefully. It may be a good idea to have your attorney review the document before signing. If you are not willing or able to post the 10% or whatever they are asking, try to get it lowered but don’t expect to succeed. They are pretty tough on these addenda and normally refuse to allow any changes in them.

On short sales in Florida, you can have your offer written indicating that the clock does not start counting off inspection period, escrow deposits or any other “time is of the essence” requirements in the contract, until the bank gives written approval to the transaction. This doesn’t prevent this portion of the contract from being negotiated but I’ve not had it modified in any of the many bank owned contracts I’ve written thus far. This allows you to not have your money at risk for the long period of time these transactions normally take. It can often take 6 to 9 months for the banks to give their approval. There is no reason to have your money at risk until you know the bank will approve the transaction.

To summarize, with the exception of timing on the deposit for short sales, expect to provide a check as a good faith deposit, typically for a minimum of $1,000 at the time you either make the offer or at or close to the time the offer is accepted in Florida. And, yes, they will cash that check immediately.

Next time I’ll discuss “Accepting the Contract”

Bud Cooke
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com
MLS Search at http://www.BelleairHomesForSale.com

Viewing Homes

Posted on October 25, 2011 by Bud Cooke

Home Search

In this segment we’ll review the best way to make the most of your home search time. In order to select homes of interest, you need a systematic way of find homes for sale using your Wants and Needs list.

Your agent should be able to set you up with a good home search tool. In our area there are three great tools to use, both with pros and cons. Your choice should have either a direct connection to the MLS or be directly from the MLS. Here in Central Florida our choices of direct connect search tools include ListingBook, agent IDX websites and a direct search from your agent in the Multiple Listing Service (MLS).

LISTINGBOOK

First, keep in mind that ListingBook may or may not be available in your area. If available, ListingBook.com is an excellent way to search for homes. It includes many great features that allow you to search for your home and permits you to make your own modifications directly. ListingBook is updated when changes are made by the selling agent within minutes. Not only can you setup (if you wish) your own account, but you can see a listings tax information, local sales information and track the number of days the home has been on the market. (DOM) You will find that you can not only search for the homes, you can save listing as favorites as well as reject listings.

Each morning you will receive a “Morning Report” showing you all of the new listings as well as changes to listings meeting your criteria. You can even ask your Realtor® questions about listings and get answers right on the website. Your Realtor may withhold some information in your settings until you establish a good relationship with one another. They have concerns that you will use their time and resources and then use another Realtor® to look at and purchase a home. Some Realtors® like myself simply provide all information immediately. Realtors® get paid at closing and incur expenses until that occurs. We have to trust that if we provide good service and not focus our attention on only getting paid, people will notice and decide we are worth working with. I’m always going to concern myself with helping you first. Nothing else matters in the end.

There is only minor down side to ListingBook. For highly complex searches, it does not allow all fields used by each individual listing service. This should not deter 99% of home buyers, however. I would recommend trying this great product and if your search requires a more detailed search, your Realtor® can convert your search to a direct MLS search.

You can try it out by going to my ListingBook account at http://www.Buying-Pinellas.com.

Search For Homes

REALTOR® IDX WEBSITES

Another home search source includes Realtors® websites which have a direct connection to their area multiple listing service. Not all Realtor® sites do. Some site show listings and allow you to search, but the search actually only includes listings that are shared by other users of the same website service. An example are the sites built by Point2. I happen to have one of those sites at http://www.BudCooke.com. It should be noted that Point2 also sells Realtors® a direct IDX connection to the Realtor’s® local Multiple Listing Service. Be aware that only some Realtors® actually purchase that service. I have a second website at http://www.BelleairHomesForSale.com that is an IDX connected website. Feel free to visit and try it out. Although it is called http://www.BelleairHomesForSale.com, you can actually search the entire area. You will find that you can not only search for homes, you can save listings and create ’alerts’ that are saved searches that notify you daily, weekly or monthly of all new listings meeting your criteria. You can also leave a message about a listing when you’re on these sites.

It should be noted that even on my Point2 site, (http://www.BudCooke.com) I offer a search form connected to my IDX website. (http://www.BelleairHomesForSale.com)

These types of search sites have some of the same advantages of ListingBook and also share the same disadvantage. Anytime you can create your own search, there will be some fields not available to help make the more complicated search possible. Again, this only means that you will need to have your Realtor® take your search directly to the MLS.

DIRECT MLS SEARCH

The third option is of course, having your Realtor® create your search in the MLS. Some Multiple Listing Services offer additional features as well. You can normally select “Possible”, “Favorites” and “Reject” with your own web page. This option doesn’t allow you to control your own search but for the more complicated searches, it’s the best option. All REALTORS® are

Search Central Florida

happy to set these up for you. Please be aware that the MLS is the primary source of most listings on the web. Other sites that advertise listings are typically simply manually pulled information and relying on Trulia or Zillow or like sites for up to date information is not a good idea. Often they show listings as active when they may have expired or been sold even months before. You can visit my direct MLS Search site at http://budcooke.mfr.mlxchange.com/

CHECK OUT THE NEIGHBORHOODS

Once you have a system working and you’re using your “wants and needs sheet” to select homes, begin by prioritizing the homes you believe would be at the top of your list. Do a little leg work to begin. Visit the neighborhoods you find most interesting. Drive through while homeowners are at home. See if the home you looked at has the same charm it had in the photos. Stop and talk to the neighbors and ask questions.

Are there any potential problems in the neighborhood.
Do they like living there.
What services are provided and how well do the services work out for them.
If you can talk to the neighbors directly adjacent to the home of interest and it’s vacant, what can they tell you about any problems with the home that they were aware of?

You will probably have more questions. The answers can help you make a decision about the neighborhood even before you invest time in looking at the home.

BEING ORGANIZED DURING SHOWINGS

Once you begin looking at homes with your REALTOR®, make sure to take plenty of notes on a small notepad. Also carry your camera with you. Please remember that non-foreclosure homes should not be photographed for the purpose of posting on the internet. Privacy rights require that you not display photos or movies of homes where permission has not been granted by the owner. There are issues involving security, etc., that can cause you to be subject to great liability. Consult your attorney before submitting yourself to such liability. I recommend that your sole purpose for taking photos it to keep a reminder of what you’ve seen for future reference.

If you like a home enough to put it on your “A” list, it is a good idea to record the size, brand name and other pertinent information on appliances which are noted to come with the home. It’s not unheard of to see nice appliances, and after the sellers move out are mysteriously replaced by lesser quality appliance or older used appliances. Keeping good notes can help be specific when writing your offer.

ESTIMATE ANY NEEDED REPAIRS

Many REALTORS® have experience working with investors, or as investors themselves. They probably have a good idea of how to provide a rough estimate the cost of necessary repairs. I can provide an estimate sheet to help buyers get an idea of what repairs will cost. The idea is not to necessarily have an exact amount but to get a rough guess so the buyer is able to determine if they will be able to get the funds necessary to purchase AND live in the home.

Once you determine a rough amount that will be needed to repair, you might consider working with a lender or broker that is versed in FHA 203k rehab loans. It is possible to get both your mortgage and an addition loan for repairs rolled into one loan. Talk to your lender about this possibility.

DECIDING YOUR BOTTOM LINE

Once you’ve picked a home that meets your needs and wants and you’ve decided it is the home you would love to own, sit down with your agent and review all of the comparable sales for the area.

Determine the highest amount including any necessary “terms” and their value, you can possibly pay for the home. Also determine the target price you want to try to get it for. Determine any other terms you might want or need included. You should determine the correct value for those “terms” so that you can see the total value of the concessions you are asking the seller to make from the value they have placed on the home when arriving at the list price. For instance, if you are asking for $20,000 off the list price, plus $4,500 in seller paid closing costs and a $500 home warranty paid by the seller, you are now asking for $25,000 off the list price. Sometimes it is smart to begin with the idea that a single concession is actually a negotiating tool and may be something you never thought you would get, but threw in just to have a tool to discard during the negotiation. Make that decision before beginning the process. I’m always delighted when I end up getting that so called throw away for my client.

Next, we’ll review the process of writing an offer and submitting a “Good Faith Deposit” (GFD or Escrow Deposit)

Make it a GREAT DAY!

Bud Cooke
GRI, SFR, ABR®, e-PRO®
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com
MLS Search at http://www.BelleairHomesForSale.com

Obtaining Financial Assistance

Posted on September 27, 2011 by Bud Cooke

Clearwater Real Estate

In this segment I’ll be discussing some options for getting financing. I discussed in my prior segments, the importance of seeing your lender early on in the process and why you should get a pre-approval rather than just a pre-qualification. In this segment we’ll review some of your options regard the actual loans. This will be very general information. I encourage you to take the time to visit your lender, ask questions and even attend workshops before settling in on one type of loan.

Who Do You Call?

You may or may not know that you have options for home loans. There are various types of lenders of course; but there are options with how you get to the lender’s loans. What I mean is, you can go directly to a bank or Credit Union but they are only a part of the lending community. There are also private lenders and others that supply cash for specific needs. When you go to your bank or credit union, you must fit into their portfolio of loan products. Another solution is to use a qualified Mortgage Broker. Mortgage Brokers have access to most of the same bank products as well as private lenders and other sources of mortgage financing. They can often provide you with a solution that the banks don’t have access to.

Basic Loan Categories

Most people are aware that there are 3 primary types of loans available. They include Conventional Loans, FHA Loans and VA Loans.

VA Loans - The loans are reserved for military veterans and require a certificate of eligibility. The Department of Veterans Affairs does not directly originate VA loans; instead, they establish the rules for those who may qualify, dictate the terms of the mortgages offered and insure VA loans against default. They offer the buyer no down payment loans and even some purchase savings. There are certain typical closing costs normally paid by the buyer that the VA requires the seller to pay, rather than the buyer. VA loans are guaranteed loans, unlike FHA loans which are insured loans. On the surface this appears to be a thin distinction but when a guaranteed loan fails, it’s paid with tax payer money. When an insured loan fails, it’s paid by the insurer.

FHA Loans -A FHA insured loan is a Federal Housing Administration mortgage insurance backed mortgage loan which is provided by a FHA-approved lender. FHA insured loans are a type of federal assistance and have historically allowed lower income Americans to borrow money for the purchase of a home that they would not otherwise be able to afford. To obtain mortgage insurance from the Federal Housing Administration, a mortgage insurance premium(MIP) equal to a percentage of the loan amount at closing is required, and is normally financed by the lender and paid to FHA on the borrower’s behalf. Depending on the loan-to-value ratio, there may be a monthly premium as well. Borrowers are able to obtain loans with as little as 3.5% down and with a little lower credit score than conventional loans require.

Conventional Loans - By definition, a conventional loan is any mortgage that is not guaranteed or insured by the federal government.

This wraps up this segment. Next we’ll discuss selecting and viewing homes. Now the fun begins!

Bud Cooke
GRI, SFR, ABR®, e-PRO®

Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Fax: (866) 848-3718
Bud@BudCooke.com
http://www.BudCooke.com
MLS Search at http://www.BelleairHomesForSale.com

How to Decide What You Want In Your New Home (Part 3)

Posted on September 16, 2011 by Bud Cooke

Once you know how much money you can borrow and have an estimate of your closing costs, you’ll know the price range you can afford. You might already have your “dream home” in mind. Perhaps you want to settle down in a particular neighborhood, or maybe you just need more space for your growing family.

Even if you know exactly what you’re looking for, the house hunting process can be overwhelming. It takes time. If you set your mind on having every feature you want, you may make the search even more difficult than necessary. It is important that you divide the features into a realistic list that separates the “Needs” from the “Wants.” Many people find using a “T” Chart helpful.

First, begin with a blank sheet of paper and horizontally across the top, draw a line. Then down the center draw a vertical line dividing the sheet into two sides. At the top, label the left side “NEEDS” and the right side, “WANTS”. See the example below.

NEEDS WANTS

3 bedrooms

2 bathrooms

No immediate work needed

etc, etc, etc

Particular subdivision

Home with no carpet

Hot Tub

etc, etc, etc

With each feature, think very carefully about whether you could live without the feature if it the home had other items that you really must have. While we do spend a great deal for a home, it is possible to make finding our “dream home” impossible to find if we list every feature as a need, when we could actually live without some of the items.

An example is a couple I worked with a couple of years ago that insisted that the home have a complete rehab, enough parking to handle the RV, boat, truck and car. They had to have a pool. They also did not want to be in any flood zone area and one of the primary search areas that they needed was St. Petersburg. They were only qualified to borrow up to $145,000. These were all “Needs” on their list. Although I attempted to council them to better define their list, they stuck by their guns. We never found that perfect home and they missed out on several good homes that were at great prices during the six months we looked. Had they taken my advice, they would own a wonderful home today. I came to a time where I was simply unable to help them. I checked the county records by name before publishing this article and they still do not own a home in this county. I wish that I could have convinced them to even give up at least one of their requirements. Accepting a less risky flood area with the low cost of flood insurance could have solved the problem. Two beautiful homes in St. Petersburg met all of their other requirements!

Now, some of the problems with this search are apparent to most people. For instance, not many homes in St. Petersburg are not in a flood zone that doesn’t require flood insurance. Buying a fully rehabbed home requiring no further work, with a pool for less than $145,000 would certainly be a challenge. What might be a little less obvious was that they didn’t actually have the boat or the RV yet. That was just one of their long range goals.

Keep in mind that national statistics show that the average adult moves every seven years. Many of us move even more frequently due to job changes, changes in our family situations and a number of other reasons. While you may want to love the home you’re buying today, chances are you will be hoping someone else loves it in the not so distant future. Try to be realistic about the real “Needs” in your new home before beginning your search. It will reduce your stress and make the process more fun. J

Make it a GREAT DAY!

Bud Cooke

GRI, SFR, ABR®, e-PRO®
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com

MLS Search at http://www.BelleairHomesForSale.com

Testimonials

Steps to Buying a Home (Part 2)

Posted on September 5, 2011 by Bud Cooke

How Much Can I Afford? (Part 2)

In the last post, I discussed the “Mortgage to Income Ratio” or, as it is sometimes call, “the front ratio.” Today we explore the second basic review the lenders require, the “Debt to Income Ratio” or “Back Ratio.”

Obviously, determining the front ratio doesn’t tell the lender very much about your ability to pay. The more personal debt you have taken on prior to considering a home purchase can cause you to be unable to afford more debt for a home. By requiring that you account for all of the other obligations you must pay each month, the lender more information about your ability to pay.

What is Included?

The primary categories of debt include:

Other Mortgage Payments

Include principal, interest, taxes, and insurance (PITI).

Installment Accounts

Do not count installment loans that have less than 10 months remaining. Except for Freddie Mac loans. They count everything

Revolving Accounts and Credit Cards

Include the minimum payment on all open accounts

Co-Signed Loans

You will have to include these also unless you can show twelve months of cancelled checks from the person that is paying the loan and the loan must not have any late payments

Child Support
Loans From a Previous Marriage

Must be counted if you are getting a conventional conforming loan. However, If your divorce papers clearly divide up the liabilities, FHA and non-conforming loans do not count them.

It’s important to talk to your lender or mortgage broker to learn more about the requirements you will have for documenting your request for a home loan.

Once you have provided the necessary information, your total income will be divided by your total debt to determine the ratio. If you are within the appropriate requirements for a conventional, FHA or VA loan, then the front ratio will tell you the amount of loan you are qualified for. This can all be done quickly and easily by meeting with your lender early on in the process. Don’t ask a Realtor® to show you homes prior to taking this step. If you attempt to get a Realtor® to show you homes before this stage is completed, and they agree to do so, it’s a sure sign you have the wrong Realtor®. After you spend time and energy looking at homes and find the one you love, you are far more likely to run into frustration and disappointment. Seeing your lender first will prevent that. Serious buyers are smart buyers!

Next Edition we’ll discuss how to decide exactly what you want and need.

Make it a GREAT DAY!

Bud Cooke
GRI, SFR, ABR®, e-PRO®
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com
http://www.BudCooke.com
MLS Search at http://www.BelleairHomesForSale.com

Steps to Buying a Home (Part 1)

Posted on September 1, 2011 by Bud Cooke

Someone once wrote that without a map, you can go anywhere, and usually do. With that said, it should be noted that as with any important decision in our lives, a good plan includes knowing what to expect. During the next several posts, I will attempt to give you an idea what to expect when purchasing a home. The general topics I will write about today and in coming days include the following:

• How Much Can I Afford?
• What Type of Home Do I Want?
• Where Do I want To Live?
• What Are My Wants, Needs, and Don’t Wants?
• What Are The Sources of Listings?
• What Are The Benefits of Buyer Representation?
• What Are The Pros & Cons of Bank Owned & Short Sale Homes?
• What Are The Additional Costs Associated With Buying A Home?
• I’m Going With My Realtor® To See Homes – What Do I Need To Know?
• I’ve Found A Home & Signed An Offer – Now What?
• My Offer Was Rejected – Now What?
• My Offer Was Accepted – Steps To A Successful Closing

How Much Can I Afford? (Part 1)

The easiest and most efficient way to determine your affordability is to contact your lender or mortgage broker and let them help you make the decision. They can cover two steps that are necessary for you, including determining the amount you can get financing for as, well as providing you with a letter of either “Pre-Approval” or “Pre-Qualification.” Because the financing is normally the largest issue with buying a home, this portion of the topic will be done in more than one segment.

By the way, you might want to know the difference between a mortgage broker and a lender. I mortgage broker usually has several lenders with different types of mortgage programs available, whereas the lender has whatever programs their company provides. It’s best to examine the additional costs the lender or broker charge so you know which provides not only the best rates, but the best overall value.

If you want to check your own qualifications and determine roughly how much you have to spend on a home each month, here are the general requirements:

Conventional loans and FHA loans have two ratios that consider:
1. Mortgage to Income
2. Debt to Income

Mortgage to Income

Mortgage to Income is often called the “Front Ratio” or “MTI.” This ratio is pretty straight forward. Conventional conforming loans allow your monthly housing payments to be 28% of your income. If your monthly income is $5,000 x 28% = $1,400. FHA loans generally allow up to 29%. VA loans only use the subject of the next topic, the Debt to Income or “Back Ratio.”

Mortgage Payment includes principal, interest, taxes, and insurance (PITI).

Income includes just normal income and only includes bonuses, overtime under certain circumstances. Generally you must be able to show two years of consistency and in some cases have a letter from your employer stating they expect it to continue.

If you are paid by commission sales, you must have two years of time and taxes in the field (a track record) and generally only the bottom line of your last two tax returns after all deductions, are considered. There are things you can add back such as depreciation but to be perfectly honest, most self employed people have difficulty achieving the required monthly gross income because of all the tax write offs. Again, that is why it is so wonderful that there are non-conforming loans that allow higher debt to income ratios and no-income verification programs. Check with your broker or lender for those types of loans. If your spouse works in the corporate world and get’s a regular pay check and you both have a decent credit score, you may be able to get a FHA or conventional loan with no problems.

Next Edition we’ll outline the requirements for the total debt to income ratio.

Make it a GREAT DAY!

Bud Cooke
GRI, SFR, ABR®, e-PRO®
Charles Rutenberg Realty, Inc.
Phone: (727) 459-5460
Bud@BudCooke.com

http://www.BudCooke.com

MLS Search at http://www.BelleairHomesForSale.com

Steps to Buying a Home (Part 2)

Which is Better When Buying? Call the Listing Agent or Hiring Your Own Representative?

Posted on August 27, 2011 by Bud Cooke

I had a lady call me recently, asking for another Charles Rutenberg Agent’s number she found on a listing. I asked her if she was represented by an agent and she said no. I asked her why she wanted to call and work with the listing agent. I explained to her that the listing agent is trying to get the most for the home possible for the seller and that by hiring another agents with motivation to do a good job and help her to pay the least, she might want to reconsider, especially since it doesn’t cost her more to do so.

While we all act for the good of the transaction, it’s just much more likely that the seller’s listing agent will try to get the buyer to pay as much as possible.

Many buyers don’t understand how the commission works. They often believe that by going to the seller’s agent, they will get a lower price because there’s less commission to be paid. The truth is that the seller agrees to the total commission including enough for both the buyer’s agent and the seller’s agent. All they end up doing is helping that agent, which has a conscious or subconscious predilection for getting the highest price possible for the home.

That’s just my opinion…

Bud Cooke, Realtor®
Charles Rutenberg Realty, Inc.
(727) 459-5460
Bud@BudCooke.com
http://www.BelleairHomesForSale.com

How to Buy a House Before Your Other House Sells

Posted on August 26, 2011 by Bud Cooke

In a buyer’s market, the inventory of homes for sale can be astounding. Deciding on a home to buy is difficult enough, but what happens when you have one to sell beforehand? Many times, especially in a soft real estate market, a buyer may get into a situation where they find a new house before their current house sells. Acting as a buyer and a seller in separate transactions can be tricky business, especially if you need the equity from your current home to pay for the new home. Luckily there are some best practices that can help show you how to buy a house before your other house sells.

Consider a Bridge or Home Equity Loan. There are many financing options available when it comes to home buying, and bridge loans can be an easy way to finance a new home sale before your existing home closes. A bridge loan is one that is used to provide funds needed for a short period until another source of funds becomes available. Sometimes called a “swing” loan, it allows a homebuyer who needs the equity in his old home to pay for the new one to close on the new home purchase before closing on the old home sale. The interest rates on these loans are typically high. However, because the loan will be paid off in a short period of time, this should not be a huge problem for buyers. In a similar vein, you might consider a home equity loan on the house you already own. This is a bit riskier, but provides the same benefits.

Rent your current home. If you can find short-term or month-to-month tenants who are willing to rent your current home until it sells, you can avoid having to worry about the house sitting vacant while you are moving into the new home. This can help you avoid having to winterize or de-winterize the property and stage the home for showings. You will also be able to apply the rental income to your existing mortgage on the house, to alleviate the financial burden of paying two mortgages.

Work with the Seller. In a soft market where buyers are limited, sellers are often willing to work with the buyer on a purchase agreement that works for both parties. If you’ve already found the house you want to buy, but haven’t yet sold your existing home, it may be possible that the seller will allow you to make a small down payment with a signed contract that permits you to wait to make the purchase until your old house sells.

Should I Buy a New House Before I Sell the Old One?
Buying a new house before your current house sells is not an ideal situation, but there ways to get through it that can alleviate the risk and financial burden. If you’ve considered the options above and are still unable to find a solution that works, an alternative and less attractive choice may be to hold off on buying a new home until your existing home is the final stages of closing. As disappointing as this can be for sellers who are anxious to move, it is a more desirable situation than being stuck with two mortgages and no remaining credit for other daily or emergency needs.

Bud Cooke, Realtor®
Charles Rutenberg Realty, Inc.
(727) 459-5460
Bud@BudCooke.com
http://www.BelleairHomesForSale.com

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