Marty Millner

Archive for the 'First Time Home Buyers' Category

Buying a home in Yardley or Newtown, Bucks County, let the home inspectors do their job.

I shot this quick video today, so that buyers have a better understanding of the home inspection contingency.  I have seen buyers spend so much time evaluating things in a house that they are generally not qualified to evaluate, that they often overlook the fact that any offer they make, will include a home inspection contigency.

For example, unless you are qualified, can you really tell whether the roof is in good shape, just by looking at it.

As I observe in the video, there is certainly nothing wrong with making a complete and thorough evaluation of the house, as a buyer, try not to lose sight of the fact that there will be a home inspection that will cover all major systems and mechanicals in the house.

When should you get pre-approved for a mortgage, when moving to Yardley, Newtown & Bucks County?

A lot of the first time home-buyers I work with,  ask me when they should get pre-approved for a mortgage, when they are looking to buy a house, in Yardley, Newtown, and anywhere in Bucks County. 

Check out this video, which should make the process clear.

10 steps to success for first time home buyers in Bucks County

As I write this post, here in Yardley, Pa, I am enduring the 4th major snow storm of the winter.  If you are not from the area, we have already set the record for the most snow, since the weather people started keeping records! 

Supposedly, the spring real estate market starts, just after the superbowl.  Because of the tax credit, which requires that a contract to purchase a home must be in place by April 30, 2010, and the closing occur by the end of June, 2010, while the weather permits, I have definitely noticed an increased level of activity.

As a way of thinking of the spring selling season, I thought it would be helpful to review 10 steps that can help first time home buyers, make sense out of the home buying process and decision.  In future posts, I will expand on each of these steps.

Establish Your Budget early

I suggest that before you even start looking at houses, you should have a clear understanding of what you can afford to pay each month.   When working with first time home buyers,  I want them to be aware that there are a couple of issues in this first step.  First, is what the lender will quailify you for, and more importantly, is what you are comfortable paying each month.  They are often not the same.  It is quite possible that you can obtain a mortgage for an amount that is more than what you are comfortable paying.  Set your budget realistically, before you start talking to lenders. 

Get Pre-Approved for a mortgage

This is another critical step that should be taken care of early in the process.  There is no sense in looking at homes, before you understand what you are comfortable paying, as well as knowing what sort of loan amount you will quailify for.  There should be no cost for this service, and it can be done by phone with a lender.  The lender will review all aspects of your financial situation, including income, debt, credit score, etc in order to determine what you can qualify for.  I can write an entire post on this process, but I will leave that for future posts.

Research Neighborhoods and Home Prices

Thanks to  the internet, this is a fairly easy thing to do.  You can search home prices, school districts, etc, on a variety of websites.  I also suggest actually driving through potential areas, to get a sense of how they feel to you.  Do you perfer being in a town, for example, or a more suburban location? 

Find a Local Realtor

Obviously I am biased, but I believe that it is extremely beneficial to buyers, to use the services of an experienced real estate professional.  I recently represented a client who actually called me to set up an interview with me, before he commited to doing anything.  As it turned out, he was looking to buy a house in the Yardley area, and also had a house to sell in New Jersey.  I think it is a good idea to interview agents first.  You should ask questions, and make sure that you are comfortable with the agent.  Often times buyers will walk into an open house, not realizing that the agent sitting the open house is there as an agent of the seller, actually representing the sellers best interests.  By interviewing agents before you start actually looking, you can help ensure that you will have a qualified professional looking at protecting your interests.  In general, the fee is paid by the seller, from the proceeds of the sale.

Start House Hunting

Now comes the exciting and fun part!  When working with buyers, I feel that buyers learn something with each house we see.  It is important to understand the market, values, etc.  The only way that happens, is to look at houses.  Again, it is easy for buyers to search for houses on-line, and as your realtor begins to understand your tastes, he or she should also suggest homes that are worth visiting.  It will not take you long to begin to get a good sense of what houses are priced realistically, and what houses are not priced realistically.  A common question that I am asked, especially by first time home buyers, is how many homes they should see.   Usually once we start the process, the answer becomes clear, when we find the right house.  First time home buyers tend to look at more homes, than buyers who re-locate all the time.  As I said, this is part of the learning process.  Generally your tastes become clearer the longer you look, and the more you see.

Focus on the Permanent Features of the House

Remember, cosmetic changes are generally easy to make.  This like paint and carpet can ultimately be changed.  Focus on the things that you feel that you must have.  For example, if a basement is important to you, don’t compromise.  You can’t realistically add a basement.  Pay attention to the lot, the view, style of house, square footage, etc. 

Ask Plenty of Questions.

I can’t emphasize this point enough.  I really love working with first time home buyers, and I encourage them to ask every question they can think of.  There is no such thing as a stupid question, in my mind.  Becuase, as realtors, we go through this process every day, we can overlook things that to us are obvious.  I love answering questions, and feel that my experience and knowledge should be a resource for those that I work with.

Make a Smart Offer

Again, with the help of an experienced agent, you should make smart offers.  You should expect to review other recent sales in the neighborhood in which you are buying, so you can feel comfortable that you are making a fair offer.  A fair offer has nothing to do with what the seller paid, or even in some cases, what the seller is asking.   In general, your offer will be based on several contingencies.  The most important of those contingencies are the mortgage, and home inspection contingincies.  That means that if you are not satisfied with the home inspection, you will have the right to cancel the contract, and any deposit money you have paid will be returned to you. 

Be Prepared to Negotiate

You should have a plan in mind, in the event the seller does not accept your initial offer, which is very common.  How much will you ultimately pay for the house?  Be prepared to walk away if the seller is not realistic.  At the end of the day, you must be comfortable with the outcome, or move on.  Right now it is a buyers market, which means that conditions are favorable for buyers.  There are more houses on the market, than there are buyers for those houses.  In most cases, buyers are in a strong negotiating position.

Home Inspection

I mentioned this briefly, earlier.  It is critical to get a good home inspection.  This happens after your offer has been accepted, and the cost will range from 500 to 600, depending on exactly what components of the inspection are required.  The inspector will evaluate the foundation, roof, electrical system, plumbing, HVAC, among other things.  Following the inspection, you have the right to cancel the contract, or negotiate with the seller, as to who will pay for any repairs, if there are things wrong with the house.  You should feel comfortable with this process, as well.

I believe that by following these steps, you will help ensure that you will understand the home buying process and will make smart decisions.

These steps were compliments of the HomeBuyingInstitute.  Check out the website for great information about the home buying process.

First time home buyers in Yardley, Newtown and the entire Bucks County area.

Those who know me, know that I really enjoy working with first time home buyers.  I think I have always been a frustrated teacher. I miss the days when my kids were younger, and I was involved in coaching all of their sports. Over the years, I coached softball for girls, baseball, basketball, soccer and tennis.

When working with first time home buyers, I feel like I am teaching. I especially love making first time home buyers, comfortable with the entire home buying process. I love their excitement, as well as their questions. They are so appreciative, and that makes me feel really good about what I do.

In no particular order, here are some of the questions that regularly come up when working with first time home buyers;

• We think we want to buy a house, where do we start?
  Home many houses should I see before making a decision?
  How will we know when it is time to make an offer?
  When should we speak with a mortgage person?
  What questions and what information will the mortgage person need?
  How will we know if there is something wrong with a house that we like?
  How long does it take to buy a house?
  Why are the real estate taxes on houses that are the same price, so different?
  What happens at the real estate closing?
  We see lots of properties listed as short sales. What does that mean?
  Shoud we buy something older or newer?
  What do we do when we find the right house?
  What do we have to sign, in order to make an offer?
  How much money will we need?
  Do we need an attorney?
  How do we find someone to inspect a house we are interested in?

First time home buyers are scared, and excited. I get a great deal of satisfaction, going through everything with them, and sharing in their joy and happiness, at closing. For those considering buying right now, I really belive that it is a great time to buy. Interest rates are extremely low, and prices are down. As evidence of my belief in buying opportunities in the current market, 2 of my 3 kids have either purchased a house within the past few months, or are in the process, right now.

In future posts, I will address answers to the most common questions that first time buyers ask.

As always, I welcome your thoughts and comments.

Home Buyer tips for saving for your first home

It can be one of the hardest things to do — save money for your first home. But now, more than ever, there’s incentive to buy. Government housing tax credits have been extended and that’s sparking buyers’ interest.

Reports show that U.S. homes sales increased 10 percent in October to the highest level since February 2007. The tax credit, less expensive homes, and lower mortgage rates are being credited. However, while the government is helping to support the purchasing of a home, many Americans still can’t afford to buy one.

So how do you get in a position to buy a home? For some the process can seem nearly impossible. First-time homebuyers are often fearful they’ll never be able to accumulate a down payment now that stricter guidelines are being enforced for taking out home loans.

Look over your finances and see where things can be cut back a little. For instance, maybe you have a gym membership that you really use only a few times a month; does that justify having it? Another big area to find savings, especially for single people, is the dining out category. Some people spend an enormous amount of money eating out, if you really want to save, take a look at the car you’re driving. Well, if you’re trying to save for your retirement or trying to save for a house and you go out and buy a $30,000 car by taking out an auto loan—you can’t afford it.  What you’re doing is borrowing against future income to be able to drive a car that’s more expensive than what you can really afford.

People spend an enormous amount of money on things like sporting events and while I understand their passion, if they’re trying to save for a home, something must go. “I’m not saying to cut it all out but how about cutting half of it out. It comes down to trade-offs.” Another trade-off might be to watch some of the events on TV rather than go to them. This brings us to the point of seeking savings in your utility bills by bundling cable, Internet, phone or maybe even cutting down to the bare essentials of channels. Shop around for services and see if you can combine them under one company and get discounts for doing so.

Have you checked your cell phone bill lately? A lot of times those charges add up very quickly. People are wasting an enormous amount of money in this area because of the Web surfing, the down loads, and the text messaging.

The bottom line is saving for a home is a very personal experience—what one person is willing to give up another person may not. If you keep your goal set on purchasing that home then you’ll find the effort to get there is not nearly as difficult and you’re likely to find that there are more places to cut costs than you realize.

Homebuyer Tax Credit Changes, Yardley, Lower Makefield Township, Newtown, Upper Makefield Township, Bucks County.

Good news for anyone considering purchasing a home,  in Yardley, Newtown, Lower Makefield Township, Upper Makefield Township, or anywhere in Bucks County. 

Both the house and senate have overwhelmingly passed an extension and expansion of the homebuyer tax credit, and the revised provisions were oficially enacted, as President Obama signed the legislation, today. 

What was previously, limited to an opportunity for first time home buyers, has been expanded to include those current homeowners who are looking to purchase another home.  Even the first time homebuyer credit has seen some changes, the major one being the expansion of the income limits that allow a first time homebuyer to qualify.

The new homebuyer tax credit, extends the 8,000 tax credit to first time homebuyers.  To qualify, there must be a written, binding contract in effect on or before April 30, 2010, and the property must close prior to July 1, 2010. 

The biggest change for the first time homebuyer portion of the new provision, is that the income limits to qualify, have been increased.  The new limits are $125,000 for a single person, and $225,000, for married couples filing  jointly.  There is an additional phase out for people who earn up to $20,000 more than those limits.

The most significant aspect of the new credit, is that it now includes a credit of up to $6500 for current home owners, who purchase a home under the same time frames as I indicated above.   A home that costs more than $800,000 are more, will not qualify for the new tax credit.

The Governement has made it extremely easy to file for the credit.  I have posted the required form for your review.  I have also included a a brief outline of the changes to the new credit, and have also included answers to common questions.

Click here for the form needed to file for the credit.  (5405)

FAQ

Outline of changes in the new tax credit provision.

Beat the first time homebuyer deadline & receive 8000 tax credit, Newtown, Yardley, Bucks County.

It is hard to believe that it is September 1st already.  This year, besides getting kids ready to return to school, there is a critical deadline that is looming, for those first time homebuyers, who want to get an 8,000 gift from the Federal Government.  Many people think that the first time homebuyer program is good until the end of the year.  As noted below, that is not the case.

In fact, in order to be elidgible for the tax credit of 8,000, the purchase must close by December 1st!  That is only 90 days away.  With the mortgage process taking longer than ever, and becuase it often takes 30 days or more, to find the perfect house, it is really important that first time homebuyers, begin the purchase process right away. 

In order to ensure that the deadline is not missed, consumer spokesperson for Coldwell Banker, Dianne Patton suggested 6 important steps that consumers can take, to ensure that they get to closing by November 30, 2009.

1.  Find a qualified realtor.  A good realtor will make sure that buyers are aware of all homes on the market that meet the buyers search criteria.  They will keep track of all properties visited, and will discuss, in detail the pros and cons of each home.  They will help in assessing current values, so that buyers make appropriate offers, given the current market conditions.   A good realtor will have a wide array of service providers, such as mortgage lenders, title companies, home inspectors, insurance companies, etc, and will help ensure that the transaction stays on track, so that the buyer does not miss the 8,000 tax credit.

2.  Learn before you go.  Buyers are encouraged to research the market, even before beginning the actual search process.  With free tools such as Coldwell Banker’s on location, and their new mobile application for the I phone, along with Trulia, etc, buyers should begin to seperate those things that they must have in a house, from wants.  Buyers will also be able to learn about neighborhoods, compare prices, schools, etc, from these sites.

3.  Get your credit report together and in order.  I could do an entire weeks posts on the new mortgage rules that we are dealing with right now.  It is important to note that mortgage money is readily available.  Having said that, it is more important than ever, that when you get to the point of actually applying for a mortgage, your credit report is as clean as possible.  That means clearing up any errors in advance, and making sure that if you do have things like credit cards that are overdue, you get them current as quickly as possible.  Address errors as soon as possible.

4.  Get your paperwork together.  Be proactive, and gather the documents that virtually every lender will require, as part of the loan application process.  Both the borrower and co-borrower should expect to deliver the following to the mortgage lender:

•           Verification of employment form
•           Two most recent pay check stubs, and bank statements.
•           Copies of the last two W2 forms received from employer
•           Copies of any asset statements including those for retirement accounts, stocks, bonds or mutual funds
•           Copy of social security card

5.  Get Pre-Approved.  “Pre-Approval” means that a mortgage lender has verified a buyers credit and other credentials, and has determined that the buyer will qualify for a loan.  Getting this done early, often gives the buyer additional leverage when making an offer. 

6.  Shop for the most favorable mortgage terms.  The mortgage business is competitive, and it is extremely important that you shop for the best mortgage terms available, at the time you are ready to commit to a lender.  There are still many types of mortgage programs available, and a half a percent difference in the loan rate, can make a substantial difference in your monthly payment. 

If you are considering buying a home for the first time, follow these few steps, and you are much more likely not to miss the impending deadline.  It is a great opportunity to receive 8,000 from the Federal Government, for taking the exciting step of buyer your first home.  If you want to know what is on the market, or want any other information about the home buying process, please call me.

 

Are people getting mortgages in Yardley, Newtown, Washington Crossing, Bucks County?

I saw an interesting article in the New York Times, late last week, regarding the challenges that some people are facing, obtaining mortgage financing.  This article focused on the plight of a young dentist, who had a strong credit score , six figure income, and a substantial down payment, yet could not qualify for a mortgage.

As one mortgage bank owner commented, “the credit pendulum is stuck at stupid”. 

Although my recent experience has been that qualified applicants in our area, can obtain financing, there is no question that the process is more difficult and complicated than it has been  in the past.  Lenders require much more documentation, and will require explanations and follow up for any questionable items regarding income, debts, etc.

The other issue that I have faced recently in a couple of transactions, is very conservative appraisals.  For those not familiar with the appraisal process, if you are applying for mortgage financing, your lender will order an appraisal.  This is a formal evaluation of the value of the property you are either buying or refinancing.  The appraisal will search for comparable properties, that have recently sold, and will compare those homes to the subject that is being appraised.

The lender will lend to the borrower, a percentage of the sale price, or appraised value, whichever is lower.  What that means is, if you are putting down 20% to purchase a home, so that you are looking for a loan value of 80%, you will be able to borrow 80% of the sale price or appraised value, whichever is lower.  So what happens if the house appraises for less than the sale price?

That’s where it gets complicated.  One of 3 things will generally happen.  First, assuming that the buyer has made the purchase of the property contingent on a mortgage, the buyer has the right to cancel the contract based on not being able to obtain the required loan amount.  Second option would be for the seller to lower the sale price to match the appraised value.  If that happens, the buyer is now able to obtain an 80% loan, and could proceed towards closing.  Finally, the buyer and seller can agree to a combination of the above.  That means the seller can partially lower the price, and the buyer can agree to put in more cash, to make it work.  The 4th option would be for the sale price to remain unchanged, and the buyer to put in enough cash to make it work.  If you have any questions, about how this works, please feel free to contact me.

I have had 2 transactions within the past few months, that did not appraise.  In both cases, the seller reduced the price a bit, and the buyer increased the amount of cash they were willing to put into the transaction, so that we were able to get to closing.  It is never good news to the seller, to hear that their house didn’t appraise.  It takes persistance, and creativity, to get beyond the initial emotional resposnes, to get to the closing table. 

This represents another challenge, in getting mortgage financing, and ensuring that properties go to closing.

Feel free to search for homes, at your convenience, using the search tools on this site.

Buying in Yardley & Newtown, Bucks County, how well do you know the contract?

So you have taken the plunge, and are out looking at houses.  Most first time home buyers that I work with, really enjoy the process of going around and checking out houses.  I think it is really important, especially if you have never been through the process before, to look at enough homes, that you become completely comfortable with values in the area that you are looking. 

The only way that happens, is to look at houses.  The more you see, the more you learn.

So lets say you have looked at enough homes, and you finally see something that you know is the right house for you!  What next?

Well, the next step is to sign an offer.  I find this to be one of the more stressful experiences in the process.  In Pennsylvania, you are going to be presented with a 25 page contract, that is totally binding on all parties, once it is fully executed.  In the overwhelming majority of cases, especially with first time home buyers, the first time you see the contract, is when it is put in front of you, and you are asked to sign it.  What does it say, and does it protect you?

In an effort to make this process a little less intimidating, I thought it would be helpful to review a few of the more important contingincies in the agreement, so that you can be a bit more familiar with the contract, when you first see it.  I also have several tools, that are available, that explain the agreement in detail. 

The contingincies that most buyers worry about the most, are as follows:

1. Mortgage Contingency
2. Home inspection contingency
3. Wood destroying insect contingency
4. Radon contingency
5. Planned community contingency

Mortgage Contingency

Basically, the contract says that if you are not able to obtain a mortgage according to the terms that you stipulate in the agreement, and at the interest rate you specifiy, then you have the right to void the contract, and your deposit money would be returned.

Home Inspection Contingency

This is probably the area of most concern to buyers.  What happens if you find that something is wrong with the house.  The answer is, that the purchase of the house is contingent on a home inspection.  A building inspector will evaluate all components of the house that he/she can see.  That will include, in most cases, walking the roof, checking out the HVAC system, the electrical system, plumbing, etc.  The inspection is extremely thorough.  Once you receive the home inspection report, generally there are 3 posibilities.  The first is that the house is in perfect shape, and you proceed to closing.  Secondly, you can decide that there are so many problems with the house, that you just don’t want to deal with them.  In that case, you can actually elect to void the contract.  Again, in that case, you would get your deposit money back.  The third option would be to negotiate something whereby the seller agrees to either fix problems before closing, or agrees to give you a credit so that you can fix them after you move in.  In that case, an addendum is added to the contract, reflecting the inspection agreement, and you move on to closing.

Radon Contingency

The contract is contingent on a radon inspection.  This works pretty much like the home inspection.  Bucks County does have houses with radon levels that are actionable.  If the radon test shows actionable levels, then you have the right to either cancel the agreement, or to ask the seller to remediate the radon.  If the seller is not willing to do the remediation, you have the right to cancel the agreement, and would again, be entitled to a return of your deposit money.

Wood Destroying Insect Report

Finally, the contract can be contingent on a wood destroying insect report.  Once again, this works exactly the same way the other contingencies work, in that if there are wood destroying insects, you have the right to either cancel the agreement, or ask that the seller pay to treat for the wood destroying insects, so that the treatment occurs, prior to closing.

Please note, that there are other contingincies that are sometimes found in the contract, depending on the house you are considering.  For example, if you buy a house that has on site septic, and/or a well for water, then the contract may be contingent on a septic inspection and water test.  There may also be a contingency that allows you to review and approve planned community rules and regulations, if you are buying in a planned community or condominium neighborhood.

This post is not intended to provide you with legal advice.  My point with this post, is to begin to familiarize you with the contract, so that when you get to the point where you are ready for an offer, you won’t be completely intimidated by the contract.  As always, if you have other questions, or would like to see a copy of the entire contract, please contact me.  In the meantime, please check out the consumers guide to the agreement of sale.  I think you will find very worthwhile information in it.

Bucks County, Yardley, Newtown Pa, tax appeals

As a follow up to my post yesterday, regarding the process of appealing property tax assessments, I saw that in the Bucks County Courier Times this morning, there was an interesting article about a large group of home owners in a specific neighborhood, who decided to appeal their property tax assessments. 

The neighborhood is called, “Bluestone Creek“, and it is in Warrington Township.  It is a newer developement, and many of the owners found, after moving in, that their tax assessments were based on values that were more than what they paid.  As I pointed out in my post, yesterday, property taxes are unfavorably skewed against newer construction. 

Home owners in this neighborhood, saved an average of 900.00 each, with their successful appeals. 

As I observed yesterday, in my post, this article points out that it is not a complicated process to appeal your property taxes in Bucks County, if  you feel that they are not fair, based on other homes of comparable value.