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There is no doubt that times can be very exciting when an offer is accepted and a new owner knows they can move forward with the purchase and begin closing on a house. From the seller's side, many of the barriers to buying the property have been taken care of and now it just comes down to the closing logistics, such as the mortgage and inspections, which are meted out with a few rounds of home negotiation between buyer and seller. But (and it's a big one), sometimes negotiations between home buyers and sellers is an uphill battle that few can accomplish. It's not enough just to be strong in an offer and budge little by little as you try to show your pride in the process. Some people just throw out tough statements and act rough as if to let the other side know they are not going to be pushed around. Believe me; this way won't work well in the long run. If anything, it will just turn the other side off to working with you. Good home negotiation comes with understanding the other side's key points, prioritizing them, and working on overcoming them. It's one of the best ways to make sure everyone agrees to the same terms when closing on a house.

During this key home negotiation process, real estate agents can be very beneficial . Not only have they taken classes on how to negotiate and reach amiable terms for both sides, but their experience has allowed them to see what works (and when) and what doesn't when closing on a house. There is a fine level of finesse in the home negotiation process that requires you to know how to get what you want out of the situation.

The Art of Home Negotiation: Understanding the Other Side

When sending the contract offer, you will need to bring up the points you want to negotiate and allow the other side to bring up their points of interest as well. This will usually happen when some of your terms are not accepted and the seller decides to counter your written offer. It is essential for both sides to understand what is important to each other when a buyer is closing on a house. Balance comes from fully understanding the other side's key points during any home negotiation session.
 

Internalizing and digesting this information during a home negotiation session will help you compare and contrast this against your own needs. If there is something you aren't willing to concede when closing on a house, you can use this information to leverage other terms that the seller will easily grant you.

Prioritization of Key Points in the Process

Once you have an understanding of which points are important to you and the other side as well, you will need to also know how those measure up. How important are they for you to continue closing on a house? You will need to know what will be acceptable or become a "must have" to you so that you can feel comfortable before signing on the dotted line and moving to your new house. Whether you are using a real estate agent or writing the offer yourself, you will need to disclose those requests in the written contract offer so that the previous homeowners can legally receive your proposal with what you are petitioning. Since your needs will be in contract form, you can be sure to cover every term or, at the very least, bring up your points for discussion with the seller. If not named or mentioned in your contract offer, you may forget specific terms you want addressed during the home negotiation session and you may lose out on what you really wanted to accomplish. In most cases, the seller is willing to make a number of concessions when closing on a house, and if you're prepared, you will be able to make it worthwhile for both sides.

If the seller counters on your offer, prioritizing the other side's key points helps you so you can use some of your requests and offer to give them up if they are willing to do the same on their side. The purpose of both sides is to agree on the most important points when closing on a house. For example, if the seller is willing to include the kitchen appliances but not fix a bathroom you requested to be fixed in your contract offer, this may or may not appeal to you and should fall appropriately within your prioritization scale. Most importantly, however, keep your eyes on the goal during any effective home negotiation session and keep the communication going!

Overcoming the Obstacles on Either Side

Explain why each term you are asking for is crucial during the negotiation process. This is another reason why I strongly suggest that buyers and sellers use agents. It will be something both sides will be able to use to help prioritize what's important to each, i.e. what you can or can't live without. Explaining each side helps with persuasion and plays a big part in home negotiation. Obviously, you'll also want to avoid damaging the relationship that you have with the seller - and closing on a house is where that fine level of finesse plays a large role. Understanding that this meeting of the minds should be a win-win situation for everyone is vital to your approach and ultimate success for effective home negotiation.

The company that I work for (and other similar companies) can help you with closing on a house as well as the numerous other steps that are involved in the home buying process. Using a real estate agent is highly recommended throughout the entire process of closing on a house as they have access to unlimited resources and are trained in home negotiation and getting the best deal for the buyer.

Overcoming the obstacles is easier when you realize you must turn this part of the home buying process into something that's profitable not only for you but beneficial to the seller as well. This kind of give-and-take when you're closing on a house will ensure the seller concedes to a great deal of your requests willingly - and maybe even with a smile.

About the Author

Neil A. Terc, a successful salesman and self-taught real estate professional, is the president of YourKasa.com, an interactive website that provides a unique real estate listing service that posts houses for sale by owner as well as by realtor. For the last seven years, he has been purchasing, selling, or leasing various properties and decided to create the website after realizing a need for helping new homebuyers and sellers overcome common challenges in the buying and selling process. To learn more about this helpful service, visit www.yourkasa.com.

Tags: Closing On A House Home Negotiation Negotiations Between Home Buyers Sell

When hunting for that first or even second or third home, there are many ways that home buyers can benefit from a little home buyer assistance. Usually provided by many different companies, these benefits, ranging from before you even start searching till after you sign on the dotted line, are there for buyers to take full advantage of when purchasing a home.

Sometimes, however, buyers are unaware of what the government and non-profit organizations are offering. Let's face it - the whole process of purchasing a home can be a little confusing without a guiding hand. As we all know, searching, purchasing, and moving are never easy. In fact, the sheer headache from it all is enough to discourage anyone. That's why a few companies, in addition to offering down payment and home buyer assistance, have also decided to include moving assistance (by way of additional services or financial discounts) to help those customers who are purchasing a home and now need a hassle-free way to get to their next location. Ultimately, an experienced real estate agent can help you with all of these options. Let's take a closer look at these benefits so you can better understand what they can do for you once you are ready to begin purchasing a home.

Down Payment Assistance Programs

If you do an online search for 'home buyer assistance,' you'll easily find numerous down payment assistance programs for first time buyers purchasing a home. Non-profit organizations and government agencies have created these home buyer assistance programs to encourage home ownership in constituencies where people might not be able to afford a down payment to get them in a home of their own. These programs assist both buyers (through down payment assistance) and sellers by increasing the number of home buyers, creating demand for homes in the market.

A great example of one of these home buyer assistance programs is Nehemiah, which since 1998, has helped provide over $1 billion in gifts to new home buyers. Nehemiah, the nation's largest and most trusted non-profit down payment assistance program, helps buyers with a Federal Housing Administration (FHA) loan purchase a home with a $0 down payment as a gift from the organization and possibly $0 in closing costs as well. Buyers utilizing down payment assistance (DPA) represent over 37% of all FHA insured purchase money mortgages.

Using a Qualified Real Estate Agent

Using the resources of a good, experienced real estate agent can be extremely beneficial for the home buyer. Assistance in searching, negotiations, and closing are just a few of the things they can guide you on while in the process of purchasing a home. They listen and understand exactly what their customers' needs and goals are and proactively look for that ideal home from the thousands on the market. Better yet, they have access to more information and more records than you do as it would require more time to research everything fully and accurately without the help of an agent.

After the perfect home is found, your real estate agent will assist you with the contract offers, negotiations, and closing. These three steps in the home buyer assistance process are of the utmost importance because an inexperienced buyer could commit many mistakes when purchasing a home for the first time. An agent uses that experience to weigh extraneous factors that only people in the industry might be aware of, possibly saving you thousands of dollars when purchasing a home.

Acquiring Proper Insurance

Every home needs insurance that will protect the owner from massive loss in the event of fire, natural disaster, or accident. For those reasons, a good home insurance policy will help protect your largest asset. If you, as the buyer, are financing the property with a mortgage, home mortgage lenders will require that you acquire the proper insurance to make sure that an investment in the property is financially protected in the case of an unfortunate event.

Another form of insurance that must be included is title insurance, which is a great tool to have against financial loss from possible defects in the title to the property you buy.

Taking Advantage of DPA

Because the real estate market is tight, many developers and individual home sellers are providing incentives to facilitate and promote the sale of their properties. Cars, pools, and even $25,000 worth of solar panels for green homes are among some of the benefits previous buyers have acquired on top of the regular home buyer assistance programs and services. It's just a matter of researching and finding the ones that are right for your situation.

The company I am associated with and many other companies in the industry, for instance, provide many of these home buyer assistance services that have been mentioned above. Our primary goals are to help you find the home of your dreams and easily acquire down payment and home buyer assistance. Whether you have bought a home before or are purchasing a home for the first time, governmentally-sponsored FHA loans and other non-profit DPA programs are there to help you realize your dream of owning a home!

About the Author

Neil A. Terc is the president of YourKasa.com, a unique, interactive website that lists real estate properties from both realtors and homeowners. Terc created the website to offer advice and discuss the common challenges that face new homebuyers and sellers. For the last seven years, he has been purchasing, selling, and leasing properties and is a self-taught real estate professional. To see some of the website's real estate listings online, visit www.yourkasa.com.

Tags: Purchasing A Home Home Buyer Assistance Home Mortgage Lenders

When it comes to purchasing a house, many people believe they know the basics but not the detailed steps to buying a home. This article can help those individuals in need of a guiding hand who are searching for and ready to begin purchasing a house. While most new buyers may turn to real estate agents for home buying assistance so they can be guided and counseled through the process of purchasing a house, others just want to get a good overview of the things they are going to encounter, and the following information will be a big help along the way.

1. Identify what type of home you want. This is the first of the initial steps to buying a home and is highly important. Ideally, what you want to consider at this stage is what will suit you best. Among the many choices you might be facing, you need to consider the number of bedrooms and bathrooms for all the family members, proximity to work and schools, school districts, amenities that a home and the area will provide, the area's safety, and maybe even the percentage paid for taxes. The better you are able to identify what you want when purchasing a house, the easier it will be to drill down when searching and not waste your time in homes that will not interest you. You will have a targeted focus that gets you straight to the home you want to live in.
2. Get financially pre-qualified. This is one of the crucial steps to buying a home that needs to be done! It is a relatively quick process of understanding your financial well-being and seeing how much of a house you can afford. It is important to have this done by a financial institution that does mortgages because they will be able to look at your entire financial picture. The more accurately this is done, the easier the financing will be when you begin purchasing a house.
3. Begin your home search! Now that you know where you stand financially and know what type of home you want, begin your search through the many properties available in your area. I strongly encourage people to work with real estate agents as they are able to give you great guidance as to some of the things you might be considering and looking for in a property. Also, they have access to a lot more information - from details and helpful steps to buying a home to layouts and pictures - much more than you would be able to acquire yourself.
4. Make an offer. Once you've found a home that matches your search criteria and budget, one of the next steps to buying a home is drafting a written contract (offer letter) to the seller with the purchase price you are willing to pay, any terms and conditions you are looking for in the deal, and remaining responsibilities by both parties (buyer and seller) so that a sale can be executed and the process of purchasing the house can begin. This important stage in purchasing a house is another great reason why I support and encourage the use of agents. Here they will be able to help you with information on how comparable homes in the area have done. This will ensure that your offer is adequate and that you do not have to pay more than what would be needed. Real estate agents also have experience drafting offer letter contracts that may be filled with legal terminology and can often be confusing.
5. Negotiate and agree to terms with the seller. One of the next big steps to buying a home is negotiation. If your offer matches all the conditions that the seller was seeking, the offer will probably be accepted. Realistically, this rarely happens, and negotiations between both sides will take place once the seller counteroffers. If you're still interested in purchasing the house, you may have to negotiate price, financing terms, repairs, closing and move-in dates, and other things that each party may find important before agreeing to the purchase details.
6. Get things ready for day of purchase. Since many home buyers finance homes, lending institutions will require that different things be done to ensure they are not lending on a house that might not be livable or have the ability to be resold. That is why appreciations and inspections are requested by the banks during the process of purchasing a house. In addition, banks want to protect the investment made by both parties, so they will ask for home insurance to be secured and the title from the seller to be clear.
7. Close. At last! One of the final steps to buying a home is here and the day that everyone has been waiting for. Both sides will meet at a title or attorney's office to make sure financing is exchanged and the title to the property is provided to the new buyer. Financing details sometimes vary between lenders, but they will be able to guide you with final closing statements, additional money you might owe, and details of how the transaction is being processed.
8. Move. Although this is one of the steps to buying a home that is outside of the actual buying process, I thought it was important to include because it is still part of the new home experience. Whether you are moving things yourself or using a moving company, there are many things to be considered for your next move and that, done ahead of time, will prevent many headaches and reduce the anxiety that goes with moving.

Companies like the one I am associated with help customers through each of these steps to buying a home, providing guidance to those who need it. Purchasing a house is not simple, and you'll likely be in need of home buying assistance along the way. If you follow these basic steps to buying a home, however, you'll soon be on your way to owning your very own property.

About the Author

Neil A. Terc is the president of YourKasa.com, a unique, interactive website that lists real estate properties from both realtors and homeowners. Terc created the website to offer advice and discuss the common challenges that face new homebuyers and sellers. For the last seven years, he has been purchasing, selling, and leasing properties and is a self-taught real estate professional. To see some of the website's real estate listings online, visit www.yourkasa.com.

Tags: Purchasing A House Steps To Buying A Home Home Buying Assistance

Wow, can we be hit with any more doom and gloom financial news? Over and over, we are bombarded by the media as to how bad things are in the economy, which leaves you thinking that now is actually a poor time to buy a new home. Gas had been hitting record highs week after week, inflation is still increasing at a faster rate than in recent years, people are losing their jobs, and the real estate market is being pounded by the many adjustable rate mortgages (ARM) that are now adjusting to higher payments, many of which people are unable to afford. Despite the current state of affairs, now is definitely a good time to buy a house.

According to some, the outlook to buy a new home may be grim - it's reported that existing home sales will decrease nearly 7% this year, and new home sales are expected to decrease 19% (1). And with a nod to the times, real estate developers in San Diego, California are offering a 'two for one' deal - on homes, that is (2). Real estate is going through an adjustment period, and for many potential buyers, now is a good time to buy a house if there are available funds to secure the financing. Mortgage interest rates are still low compared to historical data, and home prices are also similarly low compared to what some of them were 1-2 years ago. The point I'm trying to convey is that now is, in fact, a good time to buy a house for those buyers who weren't able to buy a new home when the real estate boom was happening. People looking to buy a new home and invest in properties (keeping them for a long-term period) would also benefit from the current state of the housing market.

Making the Most of Your Investment

Many financial speculators recommend that, while now is a good time to buy a house, you need to keep the property for three or more years; however, if your plan is to buy a new home and then sell it within that window of time, you'd be better off renting. Furthermore, with the current volatility of the market, it's hard to calculate the outcome of it all and when it will end (3). Many websites now provide a practical calculator tool to analyze and compare the cost of renting versus buying and which is better for your economic situation in the long run. To judge for yourself if now is a good time to buy a house, plug in your statistics to Real Estate Journal's online calculator.

Housing will continue to go through tough times and will probably remain slow or stagnant for the next 2-3 years. There are an incredible amount of homes for sale on the market far exceeding the amount of people who are looking to buy a new home or who can qualify for financing. To give you an example, as of today's writing on July 17, 2008, there are more than 106,000 homes listed for sale with local real estate agents in metro Atlanta. That number doesn't even include the ones being sold by the owners themselves, likely constituting a couple thousand more. First time home buyers with good credit and down payments of 3-5% of their purchase price can benefit by getting the right assistance from many sources that help decide if now is a good time to buy a house.

Finding Affordable Homes

However, the resistance to buy a new home is not happening everywhere. Seattle, Atlanta, and Dallas, for instance, are not feeling these strong depreciation downturns like other cities in California, Florida, and Arizona are (4). In these areas, it is not unusual to find homes that were selling for $449,000 last year and are still on the market today at $349,000 because they haven't sold. A friend of mine recently sold her house at 68% of the home's appraised value because it had taken one full year to sell. Since the home was completely paid off, she wanted to move it as soon as she could and no longer cared how much less she was going to get. She ended up selling it for $10,000 less than what she had paid eight years ago. Stories like this become persuasive evidence of why now is a good time to buy a house.

Finding affordable, quality homes and assisting home buyers with the financing are the types of things the company I am associated with and other similar companies can do for people who are ready to buy a new home. The more we are able to inform them as to what options they have available and what they can do, the easier it will be for the market to slowly but surely recover and keep things from getting worse for those in financial distress. Again, if you are looking at the long run when you decide to a buy a new home (five or more years), you will be able to benefit with the conditions the market is currently giving you, hopefully encouraging you to understand why now is a good time to buy a house.

What Are You Waiting for? Buy Now!

There are many websites out there that can point you in the right direction and help you decide, in your particular case, if you are ready to buy a new home and if it is beneficial for you. Some buyers are worried about timing the purchase of a home to the exact minute that prices drop to their lowest points. The opportunity to a buy a new home may be too late at that point, and timing anything as unpredictable as a good time to buy a house is, after all, impossible. Search around for the right home: research the neighborhood to get a feel for that location's housing market, continue to build up your funds, and talk to real estate agents and mortgage lenders or banks (5) that can help you decide if now is a good time to buy a house. Those in the know can give you first hand advice when you're ready to buy a new home at a price you feel comfortable with.

Sources

1. "Existing Homes Sales," National Association of Realtors. http://www.realtor.org/research/research/ehsdata.
2. "In Escondido: Buy one (house), get one free," The Los Angeles Times. http://www.latimesblogs.latimes.com/laland/2008/06/in-escondido-bu.html.
3. Cullen, Terry. "Is Now a Good Time To Buy a House?," The Wall Street Journal Online. http://www.realestatejournal.com/buysell/tactics/20070907-cullen.html.
4. Ibid.
5. Updegrave, Walter. "Timing the Housing Market," Money. http://money.cnn.com/2007/12/26/pf/expert/expert.moneymag/index.htm.

About the Author

Neil A. Terc is the president of YourKasa.com, a unique, interactive website that lists real estate properties from both realtors and homeowners. Terc created the website to offer advice and discuss the common challenges that face new homebuyers and sellers. For the last seven years, he has been purchasing, selling, and leasing properties and is a self-taught real estate professional. To see some of the website's real estate listings online, visit www.yourkasa.com.

Tags: Buy A New Home Good Time To Buy A House

When exercising your legal rights to purchase a home, it is important for you to be aware of the possible expenses that are often associated with real estate closing costs. Closing is usually considered the final step to purchase a home.  At this stage, a price has been agreed upon, inspections and appraisals have been done, and, hopefully, any last minute arrangements or negotiations have been discussed and agreed to as well. 

All transactions involving the purchase of a home are different, but, in every case, the seller and buyer agree on who will pay for the specific closing expenses.  In this article, we are only going to discuss those expenses for which buyers are usually responsible and end up paying if not agreed to with the seller. Future articles will discuss the expenses that sellers must cover as well as how to make sure that these real estate closing costs are kept as low as possible.

 

The expenses that buyers must cover are inclusive of fees for services that are requested when one applies for a mortgage or for services that could ultimately protect the buyer should unexpected situations come up.  Since every contract is negotiable, these expenses can be paid by either party (the seller or the buyer), but they usually are on the buyer's side of the fence.

 

In general, real estate closing costs can vary from 3 to 5 percent of the final price to purchase a home, but buyers should examine the costs from every lender closely, as some lenders may attempt to add in unnecessary fees or costs.  The best way to look at the breakdown of the real estate closing costs is by reviewing the Good Faith Estimate that will be provided within three days of completion of the mortgage application once you begin the proceedings to purchase your home. The estimates from various lenders can then be compared to one another in order to find the best deal. It is also good to know that having different mortgage lenders pull your credit will not reduce your credit score as other forms of debt (credit cards, cars) can do.  Generally, these kinds of credit requests (a.k.a. credit pulls) – taken out for the purchase of a home – are considered good debt by the credit agencies. This will help you in the process of finding the best lender with good options for real estate closing costs.

 

Keep in mind that the lower your interest rate, the higher your real estate closing costs are going to be due to the points that you are paying ahead of time. Points are interest paid up front in order to get an overall lower rate once you purchase a home. Bear in mind that it may be more beneficial to pay fewer points and get a higher interest rate in some instances, and it may be better to pay more points in trade for a lower rate in others. Talk to your mortgage lender for more information once you're ready to purchase a home.  Depending on your situation, they should be able to explain which option will be best for you.

 

When you are dealing with real estate closing costs upon the purchase of a home, there are several issues that you need to be aware of:

 

Mortgage application fees: When you apply for a loan to purchase a home, most lenders will charge you a fee (which will not be refunded, even if you are denied the loan or you choose not to accept the loan). This fee may be applied to your final real estate closing costs or may be paid up front. Ask the individual lender what his procedure is.

 

Points: As stated above, points are pre-paid interest that can result in a lower overall interest rate. There are calculators online as well as those provided by various lenders that can help you figure out how best to use points to your advantage upon the purchase of a home.

 

Appraisal Fees: In order to determine the market value of a house, an appraisal by an independent inspector must be performed. It is usually the buyer's responsibility to pay the appraisal fees for this to happen. Bear in mind that the buyer can request a copy of the appraisal from the lender once it is completed.

 

Inspection fees: Inspection fees are also usually required to be paid by the buyer as part of the real estate closing costs. This ensures that the home is inspected to make sure it is in good condition and to note any issues that may be discovered. Some lenders will cover this fee, so ask before you sign any contracts.

 

Pre-paid property insurance: During the closing process, many lenders will require you to have homeowner's insurance before you purchase the home. This insurance coverage is usually the responsibility of the buyer, but some lenders may cover this as well. The fees are often part of the closing costs.

 

Pro-rata interest: The closing date may not fall on the date that the interest is usually due for a mortgage. In that case, a calculation is made to factor in the extra days in relation to the interest payment. This amount is part of the real estate closing costs as well.

 

There are many other fees that may be incorporated into real estate closing costs, including recording fees, survey fees, a brokerage commission, home warranties, and various taxes. All of these should be discussed ahead of time with the lender so that the buyer knows what he or she is responsible for on the day of closing.  Feel free to ask as many questions as you can about real estate closing costs.  At the end of the day, an informed and educated buyer will always be better off and will be able to sleep at ease in their new home. 

Conclusion 

If you are ready to purchase a home, you need to make sure you don't get caught off guard by real estate closing costs. Learn about which fees you will need to pay and which can be waived. Get a final estimate from your lender before the day of your closing, and make sure these fees are a part of your budget. That way, your closing day can be more about keys and less about fees. Enjoy!

About the Author 

Neil A. Terc, a successful salesman and self-taught real estate professional, is the president of YourKasa.com, an interactive website that provides a unique real estate listing service that posts houses for sale by owner as well as by realtor. For the last seven years, he has been purchasing, selling, or leasing various properties and decided to create the website after realizing a need for helping new homebuyers and sellers overcome common challenges in the buying and selling process. To learn more about this helpful service, visit www.yourkasa.com.

Tags: Purchase A Home Real Estate Closing Costs