What Is an Earnest Money Deposit?

Prospective new home owners can often become confused by the strange-sounding terms used throughout the process of looking at homes, finding one they love, and wanting to actually buy that house. There are a lot of steps involved from looking to moving in. One of those steps at the decision-making stage is the earnest money deposit. The Earnest Money Deposit The earnest money deposit is important because it tells the seller of the house that you are a committed buyer with the money to go ahead with the sale. Without the earnest money deposit, there would be nothing to stop a prospective buyer from making offers on many homes, which would result in them being taken off the market until the buyer decided which one they liked best – leaving the other sellers in the lurch. These days, most sellers insist on having a deposit of some kind as a...
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What Is a Short Sale?

In the course of looking for a dream home, prospective buyers will often hear the term “short sale.” No, it does not mean you can move in right away. A short sale refers to the owner of the house being willing to sell the house for less than its market value. A short sale can potentially be a good deal, but there are a number of things to watch out for before getting too excited about the “bargain” in the perfect neighborhood you’ve been longing to move into. Why a Short Sale? A short sale is usually triggered for one of three reasons: 1) They don’t care about the money so much as getting rid of the property because they don’t want it any more. 2) They want to get rid of it quickly because they are paying two mortgages. 3) The house is in foreclosure due to them not...
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What Happens After My Offer Is Accepted?

You’ve found the home of your dreams, and made an offer. What happens next? Quite a few things, is the answer, before you get the keys to your new home. The offer may seem like the end of the process, but it’s actually just the beginning of the really important things you need to take care of. 1. Give Your Earnest Money Deposit Most house sales will include an earnest money deposit to show you are serious about your offer. The deposit will be accepted by the realtor and put into an escrow account. It will count towards your down payment and/or closing fees. It will usually be 1% to 3% of the asking price for the house. 2. Apply for Your Mortgage Ideally, you’ve been pre-approved with a lender, but now you need to finalize terms and get ready to sign on the dotted line. This is a crucial...
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What Expenses Will I Have When Buying a Home?

Many people get so excited at the prospect of owning their own home and dealing with the down payment and mortgage, that they overlook the many expenses that go into buying a home – both at the start and on an ongoing basis. Note that some of these fees might be up front, and others rolled into the total cost of your mortgage, in which case they can have a significant impact on the actual amount you will have to pay in the end each month. A Deposit Sometimes you will be asked for a deposit right away to secure a home. It will usually be part of your down payment. It should be refundable if the house does not pass inspection for any reason. Home Inspection Every house should be inspected to make sure there are no hidden issues that can end up costing you big time once you...
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What Does a Realtor Do Besides Show Me Homes?

A realtor can offer a wide range of assistance to prospective home buyers. Choosing the right one can save you a great deal of money and secure you the home of your dreams. Is Every Real Estate Agent a Realtor? The quick answer is no. Therefore, you need to be sure you are working with a professional realtor. It is important to be clear about definitions. * Real estate agent: Anyone who earns a real estate license can be called a real estate agent. They need to attend classes and pass their exams. * Real estate broker: This is a real estate agent who has taken further classes and passed a broker’s license exam. Brokers can work alone or hire other agents to work for them. * REALTOR®: A realtor is a real estate agent or broker who is a member of the National Association of REALTORS®, and must therefore...
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The First Steps in the Home-Buying Process

Many people dream of owning their own home. However, it can easily turn into a nightmare if a first-time buyer/couple is not prepared. There’s a steep learning curve in terms of everything that needs to be done and what paperwork will be required. Getting the right mortgage will also be one of the most important financial decisions you will ever make in your life. Start from Where You Are Unless you have enough cash in hand to pay for the home of your dreams, chances are you are going to have to come up with a down payment for the house you want, and also take out a mortgage for a certain length of time – which will be a financial commitment to pay off the house each month. In doing so, you will not be paying rent, but rather, building up equity or a stake in the house, until...
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How Soon Can I Move In?

One of the main questions new homeowners have is how soon they can move in once they spot the house of their dreams. The truth is that the process can take around three to six months from start to finish. It’s not as simple as just viewing the houses and falling in love with one and buying it. Unless you have cash in your pocket to buy it, you’ll have to deal with various stages of paperwork from opening to closing the deal, and getting the keys so you can move in. Getting Pre-Approved for Your Mortgage Getting pre-approved is key so you know your budget (roughly) and realtors will be willing to work with you. Get a pre-approval letter from your lender before you start to look. Viewing Houses Viewing houses can be the fun and also the frustrating part. It will depend on your needs and tastes. It...
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Can I Have a Home Inspected Prior to Placing an Offer?

A lot of first-time buyers wonder if it is all right to have a home inspected before they place an offer on a house they are interested in. The answer is yes, definitely, if you want to be certain it is the house for you quickly so you don’t waste time haggling. A home inspection is an essential part of any housing purchase, and should be at the top of your to-do list. The house does not have to be perfect, but you do need to know what you are letting yourself in for. In this way, you can negotiate with the person selling the house from a position of having all the facts, rather than just hoping things will work out. The Cons The only downside to a pre-offer home inspection is that they might sell the house to another person. However, home inspections usually only cost around $300...
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Are Rent-to-Own Home Offers Legitimate?

Many people dream about owning their own home but don’t feel they can afford it, for various reasons. It can be a considerable commitment to scrape together a down payment and all of the legal and closing costs involved in buying a property from a seller. In addition, people might be deemed a credit risk for various reasons, which means it could be difficult to get an affordable mortgage, homeowner’s insurance, and so on. They might also have unpredictable income due to working for a commission, for example, making them seem a greater risk to the bank they have applied to for a mortgage. One recent idea for extending home ownership to those who might not otherwise qualify is the “rent to own your home” offer. The principle behind it is that your monthly rental payments won’t just be rent, or “dead money” as some people call it, but a...
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Are Foreclosure Properties Worth Buying?

Buying a foreclosed home is different in several important ways from buying a typical home. Being aware of these key differences can help you spot a bargain versus a property to pass up. The Pros The house will be vacant so once the deal is done, you would be able to move in right away. Sometimes the price will be competitive for the neighborhood you want to move into. The Cons and How to Get Around Them Only one real estate agent is involved You will often see the abbreviation REO (Real Estate Owned); that is, the owner is a bank or other mortgage lender. They will usually only deal with one realtor, so you might not have a lot of chances to negotiate. If you do find an REO you love, see who the agent is, and meet with them. If you are very serious about moving forward quickly,...
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