8 Secrets For Saving Thousands When Finding, Buying And Financing Your Next Home
Here’s A Helpful Guide For Buying The Right Home, At The Right Price And Getting The Right Financing, brought to you by Kristen Haynes, Broker In Charge, Realtor NC / SC
“You Don’t Make Money When You Sell Real Estate, You Make Money When You BUY It!
Dear Home Buyer,
Do you see the statement above? Someone once told me it was written backwards…that you only make money when you SELL real estate. “How on earth could you make money when you buy it?” he said.
But that statement IS accurate. You see, you might receive your sales proceeds when you sell your home, but it’s how well you BOUGHT your home that will determine HOW MUCH your proceeds will be.
But the story doesn’t end there. Finding the right home, and making a prudent financial investment is more involved than just “buying right.” You also need to FINANCE it right.
Even Experienced Homeowners Make Costly Mistakes When Buying And Financing Their Home!
Hi, our company’s name is “New Home Buyers Brokers”. You can tell from our name that we specialize in Buyer Representation- and we are committed to helping people buy the right home at the right price…AND with the right financing.
It’s no surprise that borrowing $100,000…$200,000 or more is a lot of money. And how to FIND the right home…how much to PAY for the home…how much to BORROW…and on what FINANCIAL TERMS can literally mean tens of thousands of dollars MORE or LESS in your pocket!
If you’re like most people, the decision to buy a home involves a number of stresses and strains. For about 80% of buyers, it’s the single largest financial transaction of their lives. Mistakes in any part of the buying process can cost you thousands.
That’s why we wrote this special report…to give you a number of helpful, straightforward tips for finding a home that meets your needs, AND becomes a wise financial investment for you in the future.
Here are 8 strategies (we call them “secrets” because so many home buyers disregard them when buying) you should consider when buying your next home…
Secret #1: Understand What You NEED In Your Next Home.
Two things you need to consider here: Your NEEDS…and your WANTS. They’re two very different things.
You may need 4 bedrooms because of your children, or need a 3 car garage because of your 3 cars…
What you’ll find is your needs are fairly basic. It’s the “wants” that take a little more time to clarify. Here is a list of needs you should consider BEFORE looking for your home:
- General price range of home – we’ll cover this fully when discussing financing options and the amount of home you can afford (or the amount you want to spend for your monthly mortgage payment).
- Time frame (ideally when you’ll want to move in- for example, after Christmas, or when your lease term expires, etc.)
- Approximate size of home (in sq. footage) – make a reasonable range
- General location, area, or subdivision (30 miles to work, North Charlotte, etc.)
- Number of bedrooms required (don’t forget to include any home offices or guest rooms).
- Number of bathrooms you’ll need
- Style and layout of home: Do you want a more formal plan, or a Transitional plan? (ie, the Master down, a large Great Room, a Ranch floor plan, etc.)
- School requirements or districts
- Builder Inventory home, To-Be-Built, or Existing homes? How many years old?
- Do you have money for “fix up” items on top of your down payment, closing costs, inspections and warranty, or do you want a “move-in” ready home? (By the way, a good Buyer’s Agent can get usually get some money in your negotiations towards closing costs or a warranty).
Secret #2: Understand What You WANT In Your Next Home.
A great way to get a handle on your wants is to take a good look at your present home. What do you like about it? Do you like its open floor plan? Do you like the kitchen and eating areas? Do you like the bathroom layout?
List out everything you like about your present home, or homes you’ve visited.
Now, let’s take a look at what you don’t like about your home. Do you hate the small closets? Do you want the Master bedroom upstairs? Are the bedrooms too small? Is the kitchen too far from the garage? Do you need more closets or storage space?
If you dislike something with your present home, you’re going to dislike it with your new home. So the better you can identify these items, the more likely you are to avoid them.
Here’s a good suggestion: Take out a piece of paper and draw a vertical line down the middle. In the left column, write down everything you like about your present home. In the right column, write down everything you dislike about your present home. It’s also important you understand WHY you dislike something.
Now, from your list of “likes,” let’s compile a list of features you want for your new home. Now, here’s an important tip that will help you really narrow your focus.
Take out another sheet of paper and put two columns on it. On the left hand side, you will be listing out the features of your home. And on the right hand side, you’ll be listing out the benefits. For each feature, you want to list the benefit of that feature.
Features tell you what something IS: 3 bedroom, 2 bath, 3 car garage, etc. Benefits tell you what something DOES. Benefits fulfill desires.
For example, a great room concept (feature) will be ideal for entertaining friends and family at special times (benefit). So on the left hand side, you would put “great room..” And on the right hand side, list out all the benefits (or reasons) for the “great room” design: Family entertaining, business entertaining, Thanksgiving holidays with the family, etc.
Understand What Each Other Is Looking For, And WHY
If you’re a husband and wife looking for a home, this exercise will eliminate many disagreements down the road. You will both understand what the other wants, and WHY they want it.
We recommend you RANK each feature in terms of its importance to you and your spouse. You’re both going to live in the home, so you better understand what the other is looking for.
For example, a well designed gourmet kitchen (remember, list ALL the features of the kitchen you’re looking for) may rank high with a woman, while having a workshop may rank high with a man. Try to understand each other’s priorities.
Most People Have More Dreams Than Money
Ranking will also show you areas you may need to eliminate because of price constraints. And by having each person rank the importance of the features they want, you won’t be eliminating a high priority item and putting additional stress on an already stressful time.
Secret #3: Understand How Much Home You Can Afford.
Like it or not, there are 2 guidelines bankers and mortgage lenders use to determine how much loan you can afford.
The first guideline is the Payment To Income Ratio. This guideline compares your income – or your total household income – to the amount of mortgage payment you’re considering. (We specialize in “buyer’s finance”, and can help you with this if this seems too confusing).
To calculate the “payment” part of the formula, the lender will take the mortgage payment (principal + interest) and add to it Property Taxes and Insurance. Hence the term “PITI” (principal, interest, taxes, and insurance).
Usually lenders will loan up to 28 % of your total household income.
But before you think you’re home free, there’s something else you need to know…
It’s called the Debt To Income Ratio. Debt refers to ALL the major monthly payments other than your mortgage payment (PITI). To arrive at this amount, the lender will consider…
Your car payment…
Your credit card debt and payments…
Any IRS liens or payments due…
Any other payments and debts you have (boat, 2nd home, etc.)
Then, they’ll compare your total debt to your ability to make current payments with your new home loan added into the equation.
Now, here’s the “stickler.” Each mortgage company sets different limits on your Debt To Income ratio. Which is why it’s critically important to find a MOTIVATED LENDER.
Don’t follow the “canned” financial advice like you see on TV. Most of that advice is “rule of thumb,” and designed for the lowest credit rating and highest interest rates.
Think about this…
If you spend 2 or 3 days to find a loan that saves you $40,000 to $150,000 over its term, your time is WELL SPENT! Doing a little homework on your own will literally save you thousands over the term of your loan. We will only refer you to people who are the best in the business. These are professionals that we have personally used countless times in the past- and they know to treat our customers like GOLD. They will give you the best rates, a free Pre-Qualification, and will not “screw you over”. Because we trust them and know how good they are, we’ll even pay for your initial credit report, (called an “In-File” in the mortgage business).
Secret #4: Save A Bundle When Financing.
Your ability to afford a home will be related to a number of items. They are…
- The PRICE of the home;
- Your DOWN PAYMENT on your home, and thus the amount financed;
- The INTEREST RATE and POINTS of your loan – the amount a bank charges you for the money;
- The TERM of your loan: 10 year, 15 year, 30 year.
- The overall TYPE of your loan: Most common is fixed vs. variable (or, ARM ) rates. There are literally hundreds of new loan packages to choose from. Some help you with your down payment (0 % down programs are available for those who are cash-strapped but have excellent credit), some save you money on PMI ( Private Mortgage Insurance, which everyone has to pay if you put down less than 20 %), some let you keep more money in your pockets as a shield against taxation, and some are backed by the Government (FHA and VA loans). We’ll help you through the maze of programs and help you narrow down exactly which plan works best for your budget and lifestyle.
And just in case you were looking for a specific “rule of thumb,” for financing your home, you should know that…
There Are NO General Rules Of Thumb About Financing Your Home!
Each case is different, and your personal financial circumstances will have an impact on how much home you can afford.
However, you MUST understand the relationship and impact interest rates, term of loan, points, and type of loan can have on your overall financial picture.
Let’s start with the “amount financed” first. Many people often pay cash or put 20% or more down as equity. The reasons they do this are…
“The bank required us to…”
“We’ve just always put down this amount…”
“We wanted a lower payment.”
Problem is, these reasons could cost you thousands of dollars.
The answer for how much you can put down on your home is different for most people. However, we have learned over time that…
Many People Put Down More Cash On Their Home Than They Need To,
And Could Have Received A Better Return On Investment Had
They Invested The Money Instead Of Putting It Into Their Home
Here’s a simple and fast way to “ballpark” the actual annual return on investment you get from the money you put down on your home:
- Take a look at the homes in the area you’re considering. How much have the homes appreciated, each year on average, over the past 5 years? For example, you might find that values have increased an average of 5 % a year. ( We‘ll help you figure this out by performing a CMA (Comparitive Market Analysis) for you. Charlotte’s average for NEW homes right now is a PHENOMENAL 14.9 %! Compare that to the stock market, but don’t forget to add in your tax savings, too- and, remember that this return is with VERY LITTLE RISK!
- Now, take the total cost of your new home, multiply that value times 14.9 % (the average expected annual appreciation of a NEWLY BUILT home). For example, a $150,000 home, increasing in value at 14.9 % the first year. Thus, the home could be worth $22,350 more a year from now! WOW!
- Now, divide the amount of increase in your home ($2,250 in the example) by the total amount of Down Payment you put into the home. For example, if you put down 20% (or $30,000), then $2,250/$30,000 = 7.5%.
Now 7.5% sounds like a fair investment. But the question you need to ask is this: Can you make more than 7.5% elsewhere?
And did you notice something else here? Had you put down just $15,000, your return on your Down Payment would be 15%!
The moral of the story: Putting more money into your home may make your banker happy, because it lowers the risk of getting his money out if you default. That’s why they require “PMI” (legislation is currently pending to require lenders to eliminate this coverage altogether, if your loan meets certain criteria).
Putting down more money may make your overall payment a little lower…
But it may be a wiser decision to put less into your home, IF you can locate an alternate investment that will pay greater interest on your hard-earned equity. *Trick of the trade: If you still want to put more money down, the best place to do it is to buy down the interest rate, instead of increasing your down payment. Ask us, and we’ll show you how it decreases your mortgage payment even more this way…
Now, let’s shift gears a little and talk about the impact Term and Interest rate will have on your overall financial picture…
How INTEREST RATE and TERM can make or COST you thousands.
Mortgage lenders toss around interest rate numbers as if they didn’t matter.
They DO!
And to illustrate the impact interest rates can have on your overall financial picture, we’ve presented a table below showing the interest you pay over the term of a 30 year, $150,000 loan at 6%, 7% and 8%. (Keep in mind that rates today are lower than this estimate, hovering around 4.25 to 5.0 %, depending on your credit score and what type of loan you are considering).
Here’s the clincher: Just ONE percentage point on a $150,000 loan can cost you almost $37,000 over the term of the loan! TWO percentage points will cost you over $72,000!!
Your banker might tell you his “slightly higher rate” is only a matter of $103 a month in payment. But YOU should know better! Take a look at the table below…
| Loan Amount
$150,000
$150,000
$150,000 |
Interest Rate
8%
7%
6% |
Monthly Pmt.
$1,101
$998
$899 |
Interest Paid
$246,233
$209,263
$173,757 |
Savings
—
$36,970
$72,476 |
That’s money taken out of your pocket if you don’t look for good rates!
And if you think interest rate has an impact on your overall financial picture, take a look at what modifying the TERM of your loan can do…
Here’s another example of a $150,000 loan at 7% interest. But this time, we examine the total interest paid when you select a 30 year vs. a 15 year vs. a 10 year amortization…
| Term
30 Year
15 Year
10 Year |
Interest Rate
7%
7%
7% |
Monthly Pmt.
$998
$1,348
$1,742 |
Interest Paid
$209,280
$92,640
$59,040 |
Savings
—
$116,640
$150,240 |
The “bottom line”? Estimate the maximum amount of payment you can afford, and adjust TERM and INTEREST RATE of your loan to minimize the amount of total interest you’ll pay (You can also go to our website, www.NewHomesNC-SC.com, for an amortization schedule and to get payment/mortgage calculations for varying interest rates).
But then your banker cuts in and says, “but the interest you pay is Tax Deductible…” you should know this: If you’re in the 28% tax bracket, for every dollar in interest you pay, you only save 28 cents. Don’t go spending a dollar to save 28 cents if you can help it!
Here’s How To Instantly Know How Many Points You Should Pay…
Another consideration in the formula is the amount of POINTS your lender will charge you to initiate your loan. And what you’ll notice is there’s a GAME being played with you- and they hold the aces!
And if you don’t know the rules of the game, it can come back to bite you!
Sitting across from a banker while he throws obscure numbers at you that mean nothing to you can make you feel stupid and can be pretty overwhelming. And frequently you’ll hear terms like “7.5% with 1.5 points,” or “7.25 with 1 point.”
All-the-while you’re thinking to yourself, “I have no idea what he is saying or what the financial impact of this guy’s blabbering means.” And quite frankly, your banker knows…
The Less You Know About What You’re Paying, The Better For HIM!
That’s how they make their money. Hopefully this little “ballpark” example below will help you quickly determine the best points-to-interest rate for you. How many points should you pay, and what formula is best for you? Here’s a little help…
If a banker is giving you several options of interest rates and points, you need to sort out the financial consequences so you don’t lose money. Say, for example, you were considering 2 loans. Both are for $150,000, and both are 30 year amortization.
DEAL #1: One loan he offers you is 7.5% with 0 points for origination… the loan origination fee is part of what the bank or lender “makes as their fee” on your loan. The “yield spread premium” is how much they are charging you that is ABOVE typical interest rates, that goes directly to their bottom line (ie, extra padding that they don’t have to pay to other borrowers above their typical loan fees). We don’t have to tell you, you don’t want that to be YOU! NEVER, EVER pay a yield spread premium. It means that you didn’t do your homework, and they are ripping you off!
DEAL #2: Okay, so another loan he offers you is 7%, but he wants 2 points to originate the loan. NOTE: Generally, each “point” is worth 1% of the loan amount- for example, on a $100,000 loan, 1 point would be equal to $1000.00. This changes with the market- when times are great and rates are low, the points cost you less money, and when rates are high, the points will cost you more money.
What’s the ONE factor that will determine which loan is better?
How LONG You Keep The Loan!
The first thing you need to think about is how long you’re going to live in that home. The average homeowner spends about 5.5 years in their home before selling for whatever reason. They move up, need more room for a family, their job changes, etc.
So, for example sake, let’s say you plan to live in the home 5 years. Here’s how you determine which deal is better…
- Take the difference in monthly payments (principal and interest only) of EACH loan…
- Multiply that amount by 12 months to get the annual amount of difference…
- DIVIDE that amount into the $$ amount of points you pay to determine the number of years at which you recover the points paid up front. If the number of years is LESS than your anticipated time in your home, you’ll be better off paying the points and getting the lower rate. If it’s higher than you plan to spend in the home, opt for the lower points.
Here’s an Example…
| Loan
#1, $150,000
#2, $150,000
|
Points Paid
0
2.5 |
Cost of Points
$0
$3,750 |
Interest Rate
7.5%
7.0%
|
- Payment
$1,049
$998
|
- The difference in monthly payments is $51 a month ($1049 – $998 = $51).
- $51 X 12 months is a savings on (approximate) interest of $612 per year.
- Total Cost Of Points divided by $612 is 6.13 years ($3,750/$612 = 6.13).
The result? If you stay in your home for 5 years, you will NOT recoup the points you paid up front with the savings in a lower interest rate. Recoup time is about 6 years and 2 months to breakeven. Do you realistically see living in the home 7 years plus? Remember, on top of that, you will pay a selling commission to list your home out of your home’s appreciation. Easy to do when the market is hot, not so easy when it falls.
If you plan on this being a “move up” home, or think that your lifestyle may change within 6 or 7 years, your best bet would be to select loan #1.
If, however, you planned to keep your home beyond 6 years and 2 months, you’d be better off with loan #2 (i.e. the overall savings in interest rate will exceed the amount you paid in points – not considering the time value of money).
Are you starting to see how important it is to understand your home’s financing? How important it is to shop for the best rates, terms, and points?
Good! Now, let’s move on to another important secret for buying your home…
Secret #5: How You Evaluate Homes Will Save You Thousands And Heartaches!
One of the biggest mistakes people make when buying homes is they rely solely on “local neighborhood market analysis information” to determine the right price to pay for a home.
Before you buy or refinance your next home, INSIST on seeing a “total market overview” of exactly what is going on in the ENTIRE market. Ie, how the homes and neighborhoods you are looking at compare to similar ones in the city, overall. Then narrow your analysis to local market information (specific 5 or 10 mile radius, then by neighborhood, compared to other comparable neighborhoods nearby). This is especially important when looking at existing homes.
Why do we say this? Because you want to know 2 things: 1) What is the ENTIRE market doing with values? Are they going up? And by how much? 2) What is the specific area & neighborhood doing with market values? How does it compare to what the total market is doing? Are the growth rates the same, lower, or higher than the overall market? why is THIS neighborhood under-performing? Is it filled with rentals now? Are people lax about taking care of their yards?
Understanding these parameters will save you thousands of dollars when you make an offer on a home. We’re frequently asked to perform both of these analysis for our buyers, so they know EXACTLY what they’re buying!
If you are looking at only ‘New Homes’, we’ll help you compare FEATURE to FEATURE what each Builder is giving you for your money- not just price per square foot. How do their provided options stack up in the real world? Which Builder is truly putting more value into their homes with a better quality of construction, and is really giving you more house for your money, and which one talks a big game but the quality just isn’t there? We’ve spent a collective total of 20 years working directly for national builders, doing comparisons on construction quality and optional features. We know how to take all of the hype and help you get down to the “nitty-gritty”- what’s really important, and what they’re NOT telling you that can lose you, literally, thousands of dollars. They all say they’re the best- but which Builders really put their money where their mouth is?
By the way, our Broker In Charge, Kristen Haynes, is an Unlimited Building General Contractor- helpful if you are looking at new construction or are looking at an existing home to root out possible defects). If you are not in our market area (Charlotte, NC, or Charleston, SC), contact us and we can give you a market reference for a quality Realtor / Broker in your area that will be able to aptly assist you).
OK, so let’s say you’re now pre-qualified with financing, and you’ve also found a number of homes, whether new or existing, to preview.
The Way You Inspect A Home For Sale Can Save You Enormous Amounts Of Money And Time
It’s now time to find not only a home that fits your needs, but a home that will be a good investment. What are some of the things you should look for?
Well, one of the first things we pay attention to is what we call “siting.” Siting involves evaluating 3 areas: Location, Lot Siting, and Home Siting.
The general location of the home you’re considering could determine how happy you’ll be living there, and what kind of an investment you’ll have when you re-sell down the line. Here’s an important tip that will almost always make you money…
Buy The Midrange Home In The Best Neighborhood You Can Afford
Why do we say this? Because the better the neighborhood, the better the appreciation for you over time. And if you buy the midrange home, the home will “generally” appreciate faster and greater than a higher priced home in the same area.
Plus, you will most certainly spend money updating or decorating your new home, and you don’t want to get “upside down” on your homes value after spending money for improvements if the market stalls. So remember…
NEVER Buy The Top Of The Market If You Can Help It!
Now the second area you need to consider is Lot Siting. Lot Siting has to do with WHERE your particular lot is located in the subdivision you’re considering. We’ll ask for a plat map of the entire subdivision. Then we’ll take a look at where your home site is located in the subdivision, as far as it relates to location, such as a cul de sac (which is the # 1 requested item at re-sale, as far as lots go), traffic, etc.
Is it near a common area? Does it capture better views than other lots in the area? Is it more private, or shaped better than other lots? Is it near a loud street? Are there lots of trees at the rear? How close is the playground, pool, or tennis courts?
Lot “Siting” in a neighborhood will give you a basis for knowing how well the home will appreciate vs. other homes in the neighborhood (assuming the home price is reasonable).
Finally, you want to look at the Home Siting. How well did the builder take advantage of all the amenities the LOT offers a home? Are the views great? How’s the curb appeal? Is there a balance between front and back yards? Do you see any drainage problems because of where the home has been located on the lot? Is there any standing water in the swales? For how long? What does the builder’s warranty specify about their “tolerances”? Did they save the trees around the home site?
When looking at home sites in a new neighborhood, where the landscape is basically untouched, we will consider other things as well: Crawl foundation or Slab? Will the home be built standard, or reverse (with the garage on the left side?) If the home is built reverse plan because of the home site, how does that effect how you’ll live in the house? Will the Master Bedroom still be by the private treed area, or looking into the neighbor’s kitchen? (Reverse plan is like taking a “mirror-image” of the home and “flipping” it, to maximize drainage, elevations of the site, or to work with the natural flow of the landscape). We’ll explore these things, and more, when looking over home sites and reading the blueprints and plot plans and the topography maps, too.
Think through these things as you visit each home.
Now, as you approach your home, there are other things you want to keep in mind…
- What is your initial reaction of the home (or home site) as you approach it from the street? This is called “curb appeal,” and it has a great impact on the value of the home. Is the home sited right on the lot? Notice the areas around the home. Are they well maintained? Is the landscaping groomed? After excavating, clearing and grading the home site, what will it look like? Which trees will remain? What will the slope of the driveway or rear yard be like?
- Take a look at the structure of the home. As you go through the home, windows and doors should be square, and they should close correctly. Look around windows and doors for cracks. Check corners of rooms for sloping or tile/wood cracks. These may reveal foundation or water problems.
- Now think about the floor plan of the home. Is it functional? Do the common areas flow the way you want them to? Are the halls narrow and long, or are they open? How far will you have to carry the groceries from the garage? Are the rooms the right size and height for your desires? If there have been any additions, were they done professionally? Do they fit with the flow and style of the home?
- Now, check the roof and ceilings. Is the roof the type you prefer (Architectural versus normal shingle)? Is it in good condition? Who was the manufacturer? When was the last time the home’s roof was replaced? What is the warranty on the roof (ie, 20 or 30 years), and how long does the warranty have before it expires? Is it already double-layered, or can an existing layer be put on top of the existing roof?
- Now make a basic check of the plumbing, mechanical, and electrical systems. Do drains and toilets work correctly? Is the property connected to sewer, or will you have to deal with a septic system? Is the electrical wiring up to code? And are the mechanical systems working properly? On existing homes, make sure you get these systems inspected by a licensed contractor or inspector BEFORE you close any deals!
We have referrals for professional companies that we use all of the time who will go through the home with a fine-toothed comb. They will check for potential structural, mechanical and cosmetic problems. They’ll also perform a termite inspection, along with checking for infestation of other insects or rodents.
- With new homes, each and every phase of construction passes vigorous tests by licensed engineers and Inspectors from Mecklenburg County or the ruling principality. This includes a foundation check, framing member check, plumbing, HVAC, windows and doors, electrical, roof, siding, etc. The Builder must pass all inspections in order to get a “C-O”, or Certificate of Occupancy. They cannot close on the home until it has been rigorously inspected and re-inspected, and it has come with a shining recommendation. However, Inspectors are all different, with varying degrees of what they consider “normal”. And FHA and VA Inspectors and Appraisers are a different deal altogether. We’ll help make sure that everything is being done the right way to make sure that the Builder delivers you the best quality home that they could have. We want YOU to have the BEST QUALITY HOME in the neighborhood!
Secret #6: Save Thousands Writing Your Offer And Negotiating Your Deal
Years ago a real estate expert told me that the party who is less motivated almost always gets the better deal. The ONE single element that will determine how well you negotiate your offer is…
How MOTIVATED Is The Seller, And How MOTIVATED Are YOU?
If the home has been on the market for over a year, perhaps it’s because the seller hasn’t been motivated enough to sell. Or perhaps the home hasn’t sold and he/she is very motivated.
And if you’ve been looking for 4 months, your kids are late for starting school this year because you haven’t found a home yet, and you now have found the right home, YOU may be very motivated to buy!
Nevertheless, here’s a tip you MUST bring to any real estate transaction…
Move Heaven And Earth To AVOID Showing Emotional Attachment To The Home You’re Considering to The Other Side You Are Negotiating With
If you’re all giddy about the home, and if you can’t hold back your emotions when you’re around the home, then you could lose thousands when negotiating the purchase.
That’s ONE reason why you need an experienced Buyer’s Agent representing you during any transaction. If they are great, they will save you lots of money in your negotiations- plus, they combat the “sweaty hands” syndrome that you are going to feel while the bargaining process is underway.
So let’s say you have a Buyer’s Agent representing you and you’re ready to write an offer.
What’s the single best piece of information you can have?
It’s the comparable sales and market data for the entire market, the neighborhood and the general overall 10 mile area. Ask your Buyer’s Agent to print out both for you to use. Now, here’s what you want to do…
You want to take a look at 4 important “market tell-tale signs:”
- Take a look at the currently active (for sale) listings in the area. Is the home you’re considering priced within reason to the other homes? If so, you know you’re at a reasonable starting point.
- Now, take a look at what the average selling price is compared to the listing price. You may notice that most homes are selling for about 2 to 3 percent less than their offer price. If that’s the case, you know the original offers were LESS than this amount. Take this into consideration when making your offer. And leave plenty of room for negotiating other details.
- make sure you visit several of the other comparable listings in the area. How does your home compare to the other homes? Is the home you’re considering in similar shape? Is it on a nicer home site ? Is it bigger, smaller, better style, better landscaping, etc.? These factors will help you determine how much you should pay for your home vs. how much others paid for similar homes in the neighborhood.
- Now, take a look at the average market times for homes in the area. If they’re long (evaluated on a market by market basis), the market may be soft, and you might have more negotiating room with your offer.
- If it’s a ‘New Home’, how many have they sold in the last month? The last year? Now, compare them with their competition. Does one neighborhood or Builder have a faster pace of sales? Why? Have they offered special incentives to past homeowners that they are not offering to you? Does one neighborhood have a pool or amenity that the other one doesn’t have? How much have their prices gone up since they’ve opened? When and Why? What is their estimated Build-Out time? Are they ahead of or behind pace with the Developer’s “take-down” plans for the section and for the neighborhood? What has affected the change?
You’re now ready to make your offer. At this point, I highly recommend you work closely with a Buyer’s Agent to structure your offer, based on your specific needs (for down payment, closing costs, time frame, etc). They will also talk about strategies such as 1): should you offer a high price and ask the owner to throw in all kinds of extras like a refrigerator and washer / dryer, or should you consider #2): offering a low price and skim your way into the neighborhood? You need to work closely with your Buyer’s Agent to strategize your offer so it is best for YOU, not the seller. Think of it this way: people always talk about a situation being a “win-win”. That’s not how it works in real estate. It’s more like a “lose-lose”- ie, we will compromise here and give something up like closing costs or the refrigerator, and you will compromise there and move out the closing date so we have time to find another house or move.
Secret #7: Be Financially Prepared – Ahead Of Time!
Many people go about the home finding process backwards. They go through the entire process of searching, evaluating, and writing an offer on their home, WITHOUT being financially prepared.
And it usually costs them money. Big money!
Doing a few things up front, BEFORE you go searching will save you a lot of money, time, and hassles. Not to mention, it will make your deal easier for the seller to accept. What are those things?
Here are 3 of them.
First, find a MOTIVATED, INDEPENDENT lender. Your Buyer’s agent will help you find the perfect one for your unique situation. PLEASE, don’t just go down to your local bank where you’ll likely to be slowly tortured by some bureaucratic loan process, with a loan officer who makes his bonuses and gets promoted according to how much paperwork he creates (at YOUR expense), how many overrides and yield spread premiums he charges, and how many DECLINES he produced.
You see, the only quota a banker has to live by is: “How many BAD loans did you originate and did you protect the BANK’S interests?” By federal law, they have to “buy back” their bad loans now- so every possible “I” must be dotted and every “t” crossed. Banks are in this business to make money, not to build good will. Big banks offer extra bonuses and overrides based on how much money they charge you, and by how much money they make the bank. Whatever they make over their normal origination fee is extra fluff to them and to the bank that YOU are lining their pockets with. Same thing goes for junk fees. Your Buyer’s Agent will be helpful in determining what is, and what isn’t, a junk fee based on mortgages in your area. Some things they call them are “application fees”, “processing fees”, and the dreaded “yield spread premium” as already discussed.
Lenders split these extra “in-house” fees with the bank and some they get to keep as a BONUS. So, if their “in-house” interest rate is 6%, and they charge YOU 6.5%, they keep the other .05 % as a bonus. The loan origination fee goes to the bank as their payment for services rendered, but the BONUS is theirs to pocket.
They don’t get measured by their production…
They don’t get measured by their service…
They only get measured by the MISTAKES THEY AVOID and how much MONEY they make the bank!
Now, we figure if your local banker sees this, he’s going to start reciting all the ad campaign jargon most banks are spouting these days. But the truth is…
There Is Absolutely NO Incentive For A Traditional Banker To Serve Your Interests In Any Way
What you want to do is find a mortgage lender who is MOTIVATED to take your loan. One who represents many different products, and can offer you many options for making your loan most affordable.
Here’s an important tip: Ask your Buyer’s Agent to refer one or two lenders to you. Why? Realtors have power over lenders, because they send them lots of clients. It’s not just YOU alone talking to them, with one loan. It’s their future business looking them square in the face, too. We send them hundreds of loans a year, and they don’t want to ruin that relationship!
If they don’t give you first class service, the Buyer’s Agent who referred you will send (ALL) of their clients to someone else. No money passes hands to refer you- we just want our clients happy and to get paid when the home closes. Independent Lenders are highly motivated to SERVE US and therefore, YOU. The minute you have a problem with your loan, you can turn to your Buyer’s Agent…who has much more influence and leverage over the lender than you alone. There’s power in numbers and influence. Use it to your advantage.
Now, the second thing you want to do is GET PRE-QUALIFIED with a lender. Better yet, try to get PRE-APPROVED.
Why?
Because the first question any home seller will ask when an offer is presented is “Is your buyer approved for a mortgage?”
And rightfully so! The seller doesn’t want the deal to fall through because you couldn’t get financing. When the seller accepts your offer, their home comes OFF the active market. If you fall through, it costs them time and money. Most Builder’s average interest payments on completed homes is $ 1300.00 PER HOME, PER MONTH. No kidding. And, if it’s an Inventory home you’re looking at, it will help us to know how long it has been sitting since it was ready to close, so we can get you the best deal!
Plus, there’s one more reason to get pre-qualified or approved…
You Will Have Much More Power To Negotiate
Price And Terms When You’re Financially Qualified!
When you have money behind you, the seller knows you are serious. And a serious buyer ALWAYS has more influence to negotiate. So do yourself a favor, GET PRE-QUALIFIED or, better yet, PRE-APPROVED! And, yes, there is a difference. Pre-Qualified means that you got your credit pulled, talked to a lender, and, based on what you initially tell them, “think” that they can get you a loan. Pre-Approved means you have met with them, filled out a loan application, have provided them all documents needed to underwrite the loan, and they have APPROVED YOU to purchase a home, except generally for an appraisal. All they need at this point is an address and a satisfactory appraisal and possibly survey, and an update to the title work. This is a BIG difference to a seller, and a little homework upfront will make your deal MUCH stronger than the next guy’s.
Secret #8: Use A BUYERS Agent!
There’s a huge difference between a Buyer’s Agent and other agents. First and foremost, if you don’t have a specific agreement to be represented by your agent…
Chances Are, YOUR Agent Represents The SELLER!
Yes, it’s true. And the question you have to ask yourself is… “Is this person going to represent MY interests?” ALL Listing Agents (the ones with their sign in front of the yard of the home you are considering), and all Builder Representatives are SELLER’S AGENTS.
Think about this: If you had to go to court, would you use the same attorney the opposing side was using? When building a home, who does the Builder Sales Rep. answer to? To you, or to their Boss?
I think you know the answer! But did you know that by creating a “buyers representation” with your agent, you not only get someone representing you, but…
- A Buyer’s representative doesn’t cost you a nickel more than any other agent. Even though they legally and plainly represent you, they’re still paid out of the standard commission…by the Seller!
- Buyer representation is easy to enter into, and will support ONLY your interests. This includes finding your home, helping with financing, and negotiating the best possible deal for YOU…
- A Buyer’s representative will keep everything about you and your deal CONFIDENTIAL!
OK, so you know the difference between any agent and a “Buyer’s Agent.” But did you know what a really good Buyer’s Agent can do for you?
- A good Buyer’s Agent knows the area you want to buy in because he/she is out constantly looking at homes and knows what’s available on the market…
- A good Buyer’s Agent can spot trouble for you. He or she will be experienced at looking at homes and will see things you might not see.
- A good Buyer’s Agent will greatly simplify the buying process…
- A good Buyer’s Agent will give you MOTIVATED, reliable financing sources and options…
- A good Buyer’s Agent will refer you to proven inspectors, attorneys, title and escrow officers, lenders who specialize in different types of credit situations, and other service providers you’ll need.
Most importantly, you need to know that…
There Are “Real Estate Agents”…
And Then There Are Full-Time, Committed Professionals. Which One Do YOU Want Representing Your Interests?
We hope the information above has given you helpful advice for helping you find, buy and finance your next home.
At this point, you’re probably pretty clear that, in order to find the right home and save money, you need someone competent and professional to represent only YOUR interests.
We started this company because we came to realize that the majority of Home Buyer’s needs were not being met, while the “Seller” held all of the cards. Home Buyers had no one to turn to for advice and help, or to voice their valid concerns. In fact, that is why we wrote this special report, and structured our practice around giving Home Buyers the competitive edge- along with the most competent service possible.
We help clients like you every day. You can always get through to us if you have a question or need assistance. And if we’re busy with another client, there’s a million ways to leave us a message- and we will get back to you as soon as possible. We’re a small, tight-knit, highly dedicated office. You will never be “just a number” to us, and you’ll never feel ignored. We want you to be experts, too! Our business is built by referrals of satisfied customers, ONE client at a time.
There’s a difference between agents who simply sell real estate, and those who COMMIT to doing whatever it takes to serve a clients beyond their expectations. We’ve been in real estate working on behalf of buyers and sellers for a long time. But more importantly, we have the knowledge and experience to make the whole process work like a finely-tuned machine.
We make it a priority to educate you on every aspect of buying the best home for your hard-earned money in your preferred area. We have a long list of satisfied past clients and professional references whom you may call at any time to discuss the quality of our service and our follow-up.
We guarantee everything we do for you in writing. This places the burden of risk and performance on US, not you. We also have references to reputable people in mortgage lending, appraisals, title and escrow companies, tax specialists, attorneys, and even decorators. These are people we have used in other transactions, and we trust them to take care of our clients like gold.
Each year, we speak with thousands of people directly related to buying or selling real estate. And we receive over 98% of our new clients through referrals and repeat business. We want our personal marketing to involve such outstanding and exemplary service to our existing clients and personal network, that they are inclined to share our services with family and friends.
We’re Not Saying These Things To Impress Upon You The Difference Between Just A “Real Estate Agent” And A Competent, Dedicated Professional Buyer’s Agent
Buying and selling real estate can be tricky business. And making the wrong choices can cost you a lot of money, headaches, and wasted time. Believe it or not, when we worked for Builders, we On-Site Reps used to call most Agents “Lazy Agents”! If you’ve ever had a bad or lazy Agent, you’ll know exactly what we mean. They bring in their client, and then disappear until they receive their check at the closing table. That’s why we designed a specific program designed for buyers like you. We call it our…
Exclusive “Preferred Buyer Program”
Our Preferred Buyers Program is absolutely FREE to you. Here’s what you’ll get when you enroll…
- A Free Subscription to our “Home Locator” program. We’ll create a custom search model based on your personal home needs. Then, we’ll enter you into our Home Search system where our computers will sift through the market each night to find hidden bargains and new listings before anyone else gets them. Each day, we’ll search the homes on the market that meet your personal desires. We’ll also:
- Evaluate the value of your chosen home so you buy the most home for your dollar…the very same way we described earlier…
- Negotiate the best possible deal for you so you avoid costly traps and pitfalls…
- Help you locate the most affordable financing in the market and for your situation…
- Coordinate all inspections, appraisals, escrow and title services, with the very best firms, so you can feel confident and focus on other important tasks during your move…
- We will attend all structural and mechanical inspections and walkthroughs with you, because we know what to look for and know what is acceptable and unacceptable.
- Because of our experience, we’ll make the entire process as HASSLE FREE as possible for you.
- Everything you do with our Firm stays COMPLETELY CONFIDENTIAL. No one will be discussing your personal or confidential affairs.
- FREE BONUS: FREE CREDIT REPORT – a $50 value. If you call before the expiration date on the enclosed coupon, you’ll get a Free Initial Confidential Credit Report. Get the most home for your dollar, become updated on your credit status, and obtain the best financing for your next home…
On the last page, we’ve included a special “Buyer’s Coupon”, to help you get started. It gives you a FREE “Initial Credit Report”, paid for by our company.
So call us anytime, Toll-Free, at (877) 372-2252, or on our local line: (704) 372-2252 and we’ll immediately arrange a convenient time to meet with you to discuss your particular needs and to help you get started on our Exclusive Preferred Buyer Program. It’s FREE, and we absolutely guarantee your satisfaction! If you are out of our area and know someone moving to North or South Carolina, and you like what you have seen in this report, please refer us to your friends and family so we can protect them! And if you need a referral for a great Buyer’s Agent in your area, just contact us and we’ll help you find the best ones!
Happy House Hunting!
Copyright © 2014 New Home Buyers Brokers, Inc. / Realty Pros
P.S. Once you have read this report completely, make a list of areas you would like to discuss, and call us at 704-372-2252 and speak to one of our Buyer’s Agents to enroll in our Exclusive Preferred Buyer Program. We’re confident that we’ll help you find the right home, at the right price, and save you thousands in the process. So call now! What do you have to lose?!?
New Home Buyers Brokers
Preferred BUYER Coupon
| Find Your Perfect Home At The Right Price, Save Thousands When Buying, Locate Affordable Financing, And Get A FREE CONFIDENTIAL CREDIT REPORT!
Exclusive Preferred Buyer Program
COUPON
The bearer of this coupon is entitled receive the services of my Exclusive Preferred Buyer Program. My Preferred Buyers Program Includes…
- Free Subscription to my “Home Locator” program. I’ll create a custom search model based on your personal home needs. Then enter you into our Home Search system where our computers will sift through the market each night to find hidden bargains and new listings before anyone else…
- Evaluate the value of your chosen home so you buy the most home for your dollar…
- Negotiate the best possible deal for you so you avoid costly traps and pitfalls…
- Help you locate the most affordable financing in the market and for your situation…
- Coordinate all inspections, appraisals, escrow and title services, with the very best firms, so you can feel confident and focus on other important tasks during your move…
- FREE BONUS ! : FREE CREDIT REPORT – a $50 value. If you call before the expiration date, you’ll get a Free confidential, In-Line credit report. Get the most home for your dollar, become updated on your credit status, and obtain the best financing for your next home…
But Hurry! This coupon expires __________________.
New Home Buyers Brokers 704-372-2252 or, Call Toll-Free: 1-877-372-2252
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Special Home Buyers Report…
8 Secrets For Saving Thousands
When Finding, Buying And Financing Your Next Home
Copyright, New Home Buyers Brokers 1999
You’ve Worked Too Hard For Your
Money To Needlessly Give It Away.
Here’s A Helpful Guide For Buying
The Right Home, At The Right Price
And Getting The Right Financing.
“You Don’t Make Money When You Sell Real Estate,
You Make Money When You BUY It!”
Dear Home Buyer,
Do you see the statement above? Someone once told me it was written backwards…that you only make money when you SELL real estate. “How on earth could you make money when you buy it?” he said.
But that statement IS accurate. You see, you might receive your sales proceeds when you sell your home, but it’s how well you BOUGHT your home that will determine HOW MUCH your proceeds will be.
But the story doesn’t end there. Finding the right home, and making a prudent financial investment is more involved than just “buying right.” You also need to FINANCE it right.
Even Experienced Homeowners Make Costly Mistakes
When Buying And Financing Their Home
Hi, our company’s name is “New Home Buyers Brokers”. You can tell from our name that we specialize in Buyer Representation- and we are committed to helping people buy the right home at the right price…AND with the right financing.
It’s no surprise that borrowing $100,000…$200,000 or more is a lot of money. And how to FIND the right home…how much to PAY for the home…how much to BORROW…and on what FINANCIAL TERMS can literally mean tens of thousands of dollars MORE or LESS in your pocket!
If you’re like most people, the decision to buy a home involves a number of stresses and strains. For about 80% of buyers, it’s the single largest financial transaction of their lives. Mistakes in any part of the buying process can cost you thousands.
That’s why we wrote this special report…to give you a number of helpful, straightforward tips for finding a home that meets your needs, AND becomes a wise financial investment for you in the future.
Here are 8 strategies (we call them “secrets” because so many home buyers disregard them when buying) you should consider when buying your next home…
Secret #1: Understand What You NEED In Your Next Home.
Two things you need to consider here: Your NEEDS…and your WANTS. They’re two very different things.
You may need 4 bedrooms because of your children, or need a 3 car garage because of your 3 cars…
What you’ll find is your needs are fairly basic. It’s the “wants” that take a little more time to clarify. Here is a list of needs you should consider BEFORE looking for your home:
- General price range of home – we’ll cover this fully when discussing financing options and the amount of home you can afford (or the amount you want to spend for your monthly mortgage payment).
- Time frame (ideally when you’ll want to move in- for example, after Christmas, or when your lease term expires, etc.)
- Approximate size of home (in sq. footage) – make a reasonable range
- General location, area, or subdivision (30 miles to work, North Charlotte, etc.)
- Number of bedrooms required (don’t forget to include any home offices or guest rooms).
- Number of bathrooms you’ll need
- Style and layout of home: Do you want a more formal plan, or a Transitional plan? (ie, the Master down, a large Great Room, a Ranch floorplan, etc.)
- School requirements or districts
- Builder Inventory home, To-Be-Built, or Existing homes? How many years old?
Secret #2: Understand What You WANT In Your Next Home.
A great way to get a handle on your wants is to take a good look at your present home. What do you like about it? Do you like its open floor plan? Do you like the kitchen and eating areas? Do you like the bathroom layout?
List out everything you like about your present home, or homes you’ve visited.
Now, let’s take a look at what you don’t like about your home. Do you hate the small closets? Do you want the Master bedroom upstairs? Are the bedrooms too small? Is the kitchen too far from the garage? Do you need more closets or storage space?
If you dislike something with your present home, you’re going to dislike it with your new home. So the better you can identify these items, the more likely you are to avoid them.
Here’s a good suggestion: Take out a piece of paper and draw a vertical line down the middle. In the left column, write down everything you like about your present home. In the right column, write down everything you dislike about your present home. It’s also important you understand WHY you dislike something.
Now, from your list of “likes,” let’s compile a list of features you want for your new home. Now, here’s an important tip that will help you really narrow your focus.
Take out another sheet of paper and put two columns on it. On the left hand side, you will be listing out the features of your home. And on the right hand side, you’ll be listing out the benefits. For each feature, you want to list the benefit of that feature.
Features tell you what something IS: 3 bedroom, 2 bath, 3 car garage, etc. Benefits tell you what something DOES. Benefits fulfill desires.
For example, a great room concept (feature) will be ideal for entertaining friends and family at special times (benefit). So on the left hand side, you would put “great room..” And on the right hand side, list out all the benefits (or reasons) for the “great room” design: Family entertaining, business entertaining, Thanksgiving holidays with the family, etc.
Understand What Each Other Is Looking For, And WHY
If you’re a husband and wife looking for a home, this exercise will eliminate many disagreements down the road. You will both understand what the other wants, and WHY they want it.
We recommend you RANK each feature in terms of its importance to you and your spouse. You’re both going to live in the home, so you better understand what the other is looking for.
For example, a well designed gourmet kitchen (remember, list ALL the features of the kitchen you’re looking for) may rank high with a woman, while having a workshop may rank high with a man. Try to understand each other’s priorities.
Most People Have More Dreams Than Money
Ranking will also show you areas you may need to eliminate because of price constraints. And by having each person rank the importance of the features they want, you won’t be eliminating a high priority item and putting additional stress on an already stressful time.
Secret #3: Understand How Much Home You Can Afford.
Like it or not, there are 2 guidelines bankers and mortgage lenders use to determine how much loan you can afford.
The first guideline is the Payment To Income Ratio. This guideline compares your income – or your total household income – to the amount of mortgage payment you’re considering. (We specialize in “buyer’s finance”, and can help you with this if this seems too confusing).
To calculate the “payment” part of the formula, the lender will take the mortgage payment (principal + interest) and add to it Property Taxes and Insurance. Hence the term “PITI” (principal, interest, taxes, and insurance).
Usually lenders will loan up to 28 % of your total household income.
But before you think you’re home free, there’s something else you need to know…
It’s called the Debt To Income Ratio. Debt refers to ALL the major monthly payments other than your mortgage payment (PITI). To arrive at this amount, the lender will consider…
Your car payment…
Your credit card debt and payments…
Any IRS liens or payments due…
Any other payments and debts you have (boat, 2nd home, etc.)
Then, they’ll compare your total debt to your ability to make current payments with your new home loan added into the equation.
Now, here’s the “stickler.” Each mortgage company sets different limits on your Debt To Income ratio. Which is why it’s critically important to find a MOTIVATED LENDER.
Don’t follow the “canned” financial advice like you see on TV. Most of that advice is “rule of thumb,” and designed for the lowest credit rating and highest interest rates.
Think about this…
If you spend 2 or 3 days to find a loan that saves you $40,000 to $150,000 over its term, your time is WELL SPENT! Doing a little homework on your own will literally save you thousands over the term of your loan. We will only refer you to people who are the best in the business. These are professionals that we have personally used countless times in the past- and they know to treat our customers like GOLD. They will give you the best rates, a free Pre-Qualification, and will not “screw you over”. Because we trust them and know how good they are, we’ll even pay for your initial credit report
(called an “In-File” in the mortgage business).
Secret #4: Save A Bundle When Financing.
Your ability to afford a home will be related to a number of items. They are…
- The PRICE of the home;
- Your DOWN PAYMENT on your home, and thus the amount financed;
- The INTEREST RATE and POINTS of your loan – the amount a bank charges you for the money;
- The TERM of your loan: 10 year, 15 year, 30 year.
- The overall TYPE of your loan: Most common is fixed vs. variable (or, ARM ) rates. There are literally hundreds of new loan packages to choose from. Some help you with your down payment (0 % down programs are available for those who are cash-strapped but have excellent credit), some save you money on PMI ( Private Mortgage Insurance, which everyone has to pay if you put down less than 20 %), some let you keep more money in your pockets as a shield against taxation, and some are backed by the Government (FHA and VA loans). We’ll help you through the maze of programs and help you narrow down exactly which plan works best for your budget and lifestyle.
And just in case you were looking for a specific “rule of thumb,” for financing your home, you should know that…
There Are NO General Rules Of Thumb About Financing Your Home!
Each case is different, and your personal financial circumstances will have an impact on how much home you can afford.
However, you MUST understand the relationship and impact interest rates, term of loan, points, and type of loan can have on your overall financial picture.
Let’s start with the “amount financed” first. Many people often pay cash or put 20% or more down as equity. The reasons they do this are…
“The bank required us to…”
“We’ve just always put down this amount…”
“We wanted a lower payment.”
Problem is, these reasons could cost you thousands of dollars.
The answer for how much you can put down on your home is different for most people. However, we have learned over time that…
Many People Put Down More Cash On Their Home Than They Need To,
And Could Have Received A Better Return On Investment Had
They Invested The Money Instead Of Putting It Into Their Home
Here’s a simple and fast way to “ballpark” the actual annual return on investment you get from the money you put down on your home:
- Take a look at the homes in the area you’re considering. How much have the homes appreciated, each year on average, over the past 5 years? For example, you might find that values have increased an average of 5 % a year. ( We‘ll help you figure this out by performing a CMA (Comparitive Market Analysis) for you. Charlotte’s average for NEW homes right now is a PHENOMENAL 14.9 %! Compare that to the stock market, but don’t forget to add in your tax savings, too- and, remember that this return is with NO RISK!
- Now, take the total cost of your new home, multiply that value times 14.9 % (the average expected annual appreciation of a new home). For example, a $150,000 home, increasing in value at 14.9 % the first year. Thus, the home could be worth $22,350 more a year from now! WOW!
- Now, divide the amount of increase in your home ($2,250 in the example) by the total amount of Down Payment you put into the home. For example, if you put down 20% (or $30,000), then $2,250/$30,000 = 7.5%.
Now 7.5% sounds like a fair investment. But the question you need to ask is this: Can you make more than 7.5% elsewhere?
And did you notice something else here? Had you put down just $15,000, your return on your Down Payment would be 15%!
The moral of the story: Putting more money into your home may make your banker happy, because it lowers the risk of getting his money out if you default. That’s why they require “PMI” (legislation is currently pending to require lenders to eliminate this coverage altogether, if your loan meets certain criteria).
Putting down more money may make your overall payment a little lower…
But it may be a wiser decision to put less into your home, IF you can locate an alternate investment that will pay greater interest on your hard-earned equity. *Trick of the trade: If you still want to put more money down, the best place to do it is to buy down the interest rate, instead of increasing your down payment. Ask us, and we’ll show you how it decreases your mortgage payment even more this way…
Now, let’s shift gears a little and talk about the impact Term and Interest rate will have on your overall financial picture…
How INTEREST RATE and TERM can make or COST you thousands.
Mortgage lenders toss around interest rate numbers as if they didn’t matter.
They DO!
And to illustrate the impact interest rates can have on your overall financial picture, we’ve presented a table below showing the interest you pay over the term of a 30 year, $150,000 loan at 8%, 7% and 6%.
And here’s the clincher: Just ONE percentage point on a $150,000 loan can cost you almost $37,000 over the term of the loan! TWO percentage points will cost you over $72,000!!
Your banker might tell you his “slightly higher rate” is only a matter of $103 a month in payment. But YOU should know better! Take a look at the table below…
| Loan Amount
$150,000
$150,000
$150,000 |
Interest Rate
8%
7%
6% |
Monthly Pmt.
$1,101
$998
$899 |
Interest Paid
$246,233
$209,263
$173,757 |
Savings
—
$36,970
$72,476 |
That’s money taken out of your pocket if you don’t look for good rates!
And if you think interest rate has an impact on your overall financial picture, take a look at what modifying the TERM of your loan can do…
Here’s another example of a $150,000 loan at 7% interest. But this time, we examine the total interest paid when you select a 30 year vs. a 15 year vs. a 10 year amortization…
| Term
30 Year
15 Year
10 Year |
Interest Rate
7%
7%
7% |
Monthly Pmt.
$998
$1,348
$1,742 |
Interest Paid
$209,280
$92,640
$59,040 |
Savings
—
$116,640
$150,240 |
The “bottom line”? Estimate the maximum amount of payment you can afford, and adjust TERM and INTEREST RATE of your loan to minimize the amount of total interest you’ll pay (You can also go to our website, www.NewHomesNC.com, for an amortization schedule and to get payment/mortgage calculations for varying interest rates).
But then your banker cuts in and says, “but the interest you pay is Tax Deductible…” you should know this: If you’re in the 28% tax bracket, for every dollar in interest you pay, you only save 28 cents. Don’t go spending a dollar to save 28 cents if you can help it!
Here’s How To Instantly Know How Many Points You Should Pay…
Another consideration in the formula is the amount of POINTS your lender will charge you to initiate your loan. And what you’ll notice is there’s a GAME being played with you.
And if you don’t know the rules of the game, YOU LOSE!
Sitting across from a banker while he throws obscure numbers at you like you’re a human dartboard can be pretty overwhelming. And frequently you’ll hear terms like “7.5% with 1.5 points,” or “7.25 with 1 point.”
All-the-while you’re thinking to yourself, “I have no idea what the financial impact of this guy’s blabbering means to me.” And quite frankly, your banker knows…
The Less You Know About What You’re Paying The Better For HIM!
So hopefully this little “ballpark” example will help you quickly determine the best points-to-interest rate for you. How many points should you pay, and what formula is best for you? Here’s a little help…
If a banker is giving you several options of interest rates and points, you need to sort out the financial consequences so you don’t lose money. Say, for example, you were considering 2 loans. Both are for $150,000, and both are 30 year amortization.
DEAL #1: One loan he offers you is 7.5% with 0 points for origination…
DEAL #2: Another loan he offers you is 7%, but he wants 2 points to originate the loan. NOTE: Each “point” is worth 1% of the loan amount- for example, on a $100,000 loan, 1 point would be equal to $1000.00
What’s the ONE factor that will determine which loan is better?
How LONG You Keep The Loan!
The first thing you need to think about is how long you’re going to live in that home. The average homeowner spends about 5.5 years in their home before selling for whatever reason.
So, for example sake, let’s say you plan to live in the home 5 years. Here’s how you determine which deal is better…
- Take the difference in monthly payments (principal and interest only) of EACH loan…
- Multiply that amount by 12 months to get the annual amount of difference…
- DIVIDE that amount into the $$ amount of points you pay to determine the number of years at which you recover the points paid up front. If the number of years is LESS than your anticipated time in your home, you’ll be better off paying the points and getting the lower rate. If it’s higher than you plan to spend in the home, opt for the lower points.
Here’s an Example…
| Loan
#1, $150,000
#2, $150,000
|
Points
0
2.5 |
$$ Points
$0
$3,750 |
Interest Rate
7.5%
7.0%
|
- Payment
$1,049
$998
|
- The difference in monthly payments is $51 a month ($1049 – $998 = $51).
- $51 X 12 months is a savings on (approximate) interest of $612 per year.
- Total Cost Of Points divided by $612 is 6.13 years ($3,750/$612 = 6.13).
The result? If you stay in your home for 5 years, you will NOT recoup the points you paid up front with the savings in a lower interest rate. Recoup time is about 6 years and 2 months to breakeven.
So your best bet would be to select loan #1.
If, however, you planned to keep your home beyond 6 years and 2 months, you’d be better off with loan #2 (i.e. the overall savings in interest rate will exceed the amount you paid in points – not considering the time value of money).
Are you starting to see how important it is to understand your home’s financing? How important it is to shop for the best rates, terms, and points?
Good! Now, let’s move on to another important secret for buying your home…
Secret #5: How You Evaluate Homes Will Save You Thousands And Heartaches!
One of the biggest mistakes people make when buying homes is they rely solely on “local neighborhood market analysis information” to determine the right price to pay for a home.
Before you buy or refinance your next home, INSIST on seeing a “total market overview” of exactly what is going on in the ENTIRE market. Then narrow your analysis to local market information. This is especially important when looking at existing homes.
Why do we say this? Because you want to know 2 things: 1) What is the ENTIRE market doing with values? Are they going up? And by how much? 2) What is the specific area & neighborhood doing with market values? How does it compare to what the total market is doing? Are the growth rates the same, lower, or higher than the overall market?
Understanding these parameters will save you thousands of dollars when you make an offer on a home. We’re frequently asked to perform both of these analysis for our buyers, so they know EXACTLY what they’re buying!
If you are looking at only New Homes, we’ll help you compare FEATURE to FEATURE what each Builder is giving you for your money. How do the options stack up in the real world? Which Builder is truly giving you more house for your money, and which one is ripping you off? We’ve spent a collective total of 16 years working directly for National builders, doing comparisons on construction quality and optional features. We know how to take all of the hype and help you get down to the “nitty-gritty”- what’s really important, and what they’re NOT telling you that can lose you, literally, thousands of dollars. They all say they’re the best- but which Builders really put their money where their mouth is ???
OK, so let’s say you’re now pre-qualified with financing, and you’ve also found a number of homes, whether new or existing, to preview.
The Way You Inspect A Home For Sale Can Save You Enormous Amounts Of Money And Time
It’s now time to find not only a home that fits your needs, but a home that will be a good investment. What are some of the things you should look for?
Well, one of the first things we pay attention to is what we call “siting.” Siting involves evaluating 3 areas: Location, Lot siting, and Home siting.
The general location of the home you’re considering could determine how happy you’ll be living there, and what kind of an investment you’ll have when you re-sell down the line. Here’s an important tip that will almost always make you money…
Buy The Midrange Home In The Best Neighborhood You Can Afford
Why do we say this? Because the better the neighborhood, the better the appreciation for you over time. And if you buy the midrange home, the home will “generally” appreciate faster and greater than a higher priced home in the same area.
Plus, you will most certainly spend money updating or decorating your new home, and you don’t want to get “upside down” on your homes value after spending money for improvements. So remember…
NEVER Buy The Top Of The Market!
Now the second area you need to consider is Lot siting. Lot siting has to do with WHERE your particular lot is located in the subdivision you’re considering. We’ll ask for a plat map of the entire subdivision. Then we’ll take a look at where your home site is located in the subdivision.
Is it near a common area? Does it capture better views than other lots in the area? Is it more private, or shaped better than other lots? Is it near a loud street? Are there lots of trees at the rear? How close is the playground, pool, or tennis courts?
Lot “siting” in a neighborhood will give you a basis for knowing how well the home will appreciate vs. other homes in the neighborhood (assuming the home price is reasonable).
Finally, you want to look at the Home siting. How well did the builder take advantage of all the amenities the LOT offers a home? Are the views great? How’s the curb appeal? Is there a balance between front and back yards? Do you see any drainage problems because of where the home has been located on the lot? Is there any standing water in the swales? For how long? What does the builder’s warranty specify about their “tolerances”? Did they save the trees around the home site?
When looking at home sites in a new neighborhood, where the landscape is basically untouched, we will consider other things as well: Crawl foundation or Slab? Will the home be built standard, or reverse (with the garage on the left side?) If the home is built reverse plan because of the home site, how does that effect how you’ll live in the house? Will the Master Bedroom still be by the private treed area, or looking into the neighbor’s kitchen? (Reverse plan is like taking a “mirror-image” of the home and “flipping” it, to maximize drainage, elevations of the site, or to work with the natural flow of the landscape). We’ll explore these things, and more, when looking over home sites and reading the blueprints and plot plans and topo maps.
Think through these things as you visit each home.
Now, as you approach your home, there are other things you want to keep in mind…
- What is your initial reaction of the home (or home site) as you approach it from the street? This is called “curb appeal,” and it has a great impact on the value of the home. Is the home sited right on the lot? Notice the areas around the home. Are they well maintained? Is the landscaping groomed? After excavating, clearing and grading the home site, what will it look like? Which trees will remain? What will the slope of the driveway or rear yard be like?
- Take a look at the structure of the home. As you go through the home, windows and doors should be square, and they should close correctly. Look around windows and doors for cracks. Check corners of rooms for sloping or tile/wood cracks. These may reveal foundation or water problems.
- Now think about the floor plan of the home. Is it functional? Do the common areas flow the way you want them to? Are the halls narrow and long, or are they open? How far will you have to carry the groceries from the garage? Are the rooms the right size and height for your desires? If there have been any additions, were they done professionally? Do they fit with the flow and style of the home?
- Now, check the roof and ceilings. Is the roof the type you prefer? Is it in good condition? Who was the manufacturer? When was the last time the home was roofed? What is the warranty on the roof, and how long does the warranty have before it expires? Is it already double-layered, or can an existing layer be put on top of the existing roof?
- Now make a basic check of the plumbing, mechanical, and electrical systems. Do drains and toilets work correctly? Is the property connected to sewer, or will you have to deal with a septic system? Is the electrical wiring up to code? And are the mechanical systems working properly? On existing homes, make sure you get these systems inspected by a licensed contractor or inspector BEFORE you close any deals! We have referrals for professional companies that we use all of the time who will go through the home with a fine-toothed comb. They will check for potential structural, mechanical and cosmetic problems. They’ll also perform a termite inspection, along with checking for infestation of other insects or rodents.
- With new homes, each and every phase of construction passes vigorous tests by licensed engineers and Inspectors from Mecklenburg County or the ruling principality. This includes a foundation check, framing member check, plumbing, HVAC, windows and doors, electrical, roof, siding, etc. The Builder must pass all inspections in order to get a “C-O”, or Certificate of Occupancy. They cannot close on the home until it has been rigorously inspected and re-inspected, and it has come with a shining recommendation. However, Inspectors are all different, with varying degrees of what they consider “normal”. And FHA and VA Inspectors and Appraisers are a different deal altogether. We’ll help make sure that everything is being done the right way to make sure that the Builder delivers you the best quality home that they could have. We want YOU to have the BEST QUALITY HOME in the neighborhood!
Secret #6: Save Thousands Writing Your Offer And Negotiating Your Deal
Years ago a real estate expert told me that the party who is less motivated almost always gets the better deal. The ONE single element that will determine how well you negotiate your offer is…
How MOTIVATED Is The Seller, And How MOTIVATED Are YOU?
If the home has been on the market for over a year, perhaps it’s because the seller hasn’t been motivated enough to sell. Or perhaps the home hasn’t sold and he/she is very motivated.
And if you’ve been looking for 4 months, your kids are late for starting school this year because you haven’t found a home yet, and you now have found the right home, YOU may be very motivated to buy!
Nevertheless, here’s a tip you MUST bring to any real estate transaction…
Move Heaven And Earth To AVOID Emotional Attachment To The Home You’re Considering
If you’re all giddy about the home, and if you can’t hold back your emotions when you’re around the home, then you’re potentially going to get clobbered when negotiating the purchase.
And that’s ONE reason why you need a Buyer’s Agent representing you during any transaction. The middle person alone will help save you money.
So let’s say you have an Agent representing you (make sure it’s a Buyer’s Agent, or you could lose a bundle!), and you’re ready to write an offer.
What’s the single best piece of information you can have?
It’s the comparable sales and market data for the entire market, and the area. Ask your Buyer’s Agent to print out both for you to use. Now, here’s what you want to do…
You want to take a look at 4 important “market tell-tale signs:”
- Take a look at the currently active (for sale) listings in the area. Is the home you’re considering priced within reason to the other homes? If so, you know you’re at a reasonable starting point.
- Now, take a look at what the average selling price is compared to the listing price. You may notice that most homes are selling for about 2 to 3 percent less than their offer price. If that’s the case, you know the original offers were LESS than this amount. Take this into consideration when making your offer. And leave plenty of room for negotiating other details.
- Now, make sure you visit several of the other listings in the area. How does your home compare to the other homes? Is the home you’re considering in similar shape? Is it on a nicer home site ? Is it bigger, smaller, better style, better landscaping, etc.? These factors will help you determine how much you should pay for your home vs. how much others paid for similar homes in the neighborhood.
- Now, take a look at the average market times for homes in the area. If they’re long (evaluated on a market by market basis), the market may be soft, and you might have more negotiating room with your offer.
- If it’s a New Home, how many have they sold in the last month? The last year? Now, compare them with their competition. Does one neighborhood or Builder have a faster pace of sales? Why? Have they offered special incentives to past homeowners that they are not offering to you? Does one neighborhood have a pool or amenity that the other one doesn’t have? How much have their prices gone up since they’ve opened? When and Why? What is their estimated Build-Out time? Are they ahead of or behind pace with the Developer’s “take-down” plans? What has affected the change?
You’re now ready to make your offer. At this point, I highly recommend you work closely with a Buyer’s Agent to structure your offer. They will talk about strategies such as 1) should you offer a high price and ask the owner to throw in all kinds of extras, or 2) offer a low price and skim your way into the neighborhood?
The correct answer depends on your personal situation. And you need to work closely with your Buyer’s Agent to strategize your offer.
Secret #7: Be Financially Prepared – Ahead Of Time!
Many people go about the home finding process backwards. They go through the entire process of searching, evaluating, and writing an offer on their home, WITHOUT being financially prepared.
And it usually costs them money. Big money!
Doing a few things up front, BEFORE you go searching will save you a lot of money, time, and hassles. What are those things?
Here are 3 of them.
First, find a MOTIVATED, INDEPENDENT lender. We’ll help you find a perfect one. No, don’t just go down to your local bank where you’ll likely to be slowly tortured by a loan officer who makes his bonuses and gets promoted according to how much paperwork he creates (at YOUR expense), how many overrides he charges, and how many DECLINES he produced.
You see, the only quota a banker has to live by is: “How many BAD loans did you originate?” Plus, they get paid bonuses and overrides based on how much money they charge you, and by how much money they make the bank. Whatever they make over their “in-house” rate, they get to keep as a BONUS. So, if their “in-house” interest rate is 6%, and they charge YOU 6.5%, they keep the other .05 % as a bonus. The loan origination fee goes to the bank as their payment for services rendered, but the BONUS is theirs to pocket.
They don’t get measured by their production…
They don’t get measured by their service…
They only get measured by the MISTAKES THEY AVOID!
Now, we figure if your local banker sees this, he’s going to start reciting all the ad campaign jargon most banks are spouting these days. But the truth is…
There Is Absolutely NO Incentive For A Traditional Banker To Serve Your Interests In Any Way
What you want to do is find a mortgage lender who is MOTIVATED to take your loan. One who represents many different products, and can offer you many options for making your loan most affordable.
Here’s an important tip: Ask your Buyer’s Agent to refer one or two lenders to you. Why? Realtors have power over lenders, because they send them lots of clients. It’s not just YOU alone talking to them, with one loan. It’s their future business looking them square in the face, too. And we send them hundreds of loans a year!
If they don’t give you first class service, the Buyer’s Agent who referred you will send (ALL) of their clients to someone else. So they’re motivated to SERVE YOU. And the minute you have a problem with your loan, you can turn to your Buyer’s Agent…who has much more influence and leverage over the lender than you alone.
After all, your Buyer’s Agent and lender both want to see the transaction close. There’s power in numbers and influence. Use it to your advantage.
Now, the second thing you want to do is GET PRE-QUALIFIED with a lender. Better yet, try to get PRE-APPROVED.
Why?
Because the first question any home seller will ask when an offer is presented is “Is your buyer approved for a mortgage?”
And rightfully so! The seller doesn’t want the deal to fall through because you couldn’t get financing. When the seller accepts your offer, their home comes OFF the active market. If you fall through, it costs them time and money. Most Builder’s average interest payments on completed homes is $ 1300.00 PER HOME, PER MONTH. No kidding. And, if it’s an Inventory home you’re looking at, it will help us to know how long it has been sitting since it was ready to close, so we can get you the best deal!
Plus, there’s one more reason to get pre-qualified or approved…
You Will Have Much More Power To Negotiate
Price And Terms When You’re Financially Qualified!
When you have money behind you, the seller knows you are serious. And a serious buyer ALWAYS has more influence to negotiate. So do yourself a favor, GET PRE-QUALIFIED or, better yet, PRE-APPROVED!
Secret #8: Use A BUYERS Agent!
There’s a huge difference between a Buyer’s Agent and other agents. First and foremost, if you don’t have a specific agreement to be represented by your agent…
Chances Are, YOUR Agent Represents The SELLER!
Yes, it’s true. And the question you have to ask yourself is… “Is this person going to represent MY interests?” And ALL Builder Representatives are SELLER’S AGENTS.
Think about this: If you had to go to court, would you use the same attorney the opposing side was using? When building a home, who does the Builder Sales Rep. answer to? To you, or to their Boss?
I think you know the answer! But did you know that by creating a “buyers representation” with your agent, you not only get someone representing you, but…
- A Buyer’s representative doesn’t cost you a nickel more than any other agent. Even though they legally and plainly represent you, they’re still paid out of the standard commission…by the Seller!
- Buyer representation is easy to enter into, and will support ONLY your interests. This includes finding your home, helping with financing, and negotiating the best possible deal for YOU…
- A Buyer’s representative will keep everything about you and your deal CONFIDENTIAL!
OK, so you know the difference between any agent and a “Buyer’s Agent.” But did you know what a really good Buyer’s Agent can do for you?
- A good Buyer’s Agent knows the area you want to buy in because he/she is out constantly looking at homes and knows what’s available on the market…
- A good Buyer’s Agent can spot trouble for you. He or she will be experienced at looking at homes and will see things you might not see.
- A good Buyer’s Agent will greatly simplify the buying process…
- A good Buyer’s Agent will give you MOTIVATED, reliable financing sources and options…
- A good Buyer’s Agent will refer you to proven inspectors, attorneys, title and escrow officers, lenders who specialize in different types of credit situations, and other service providers you’ll need.
Most importantly, you need to know that…
There Are “Real Estate Agents”…
And Then There Are Committed Professionals.
Which One Do YOU Want Representing Your Interests?
We hope the information above has given you helpful advice for helping you find, buy and finance your next home.
At this point, you’re probably pretty clear that, in order to find the right home and save money, you need someone competent and professional to represent only YOUR interests.
We started this company because we came to realize that the majority of Home Buyer’s needs were not being met, while the “Seller” held all of the cards. Home Buyers had no one to turn to for advice and help, or to voice their valid concerns. In fact, that is why we wrote this special report, and structured our practice around giving Home Buyers the competitive edge- along with the most competent service possible.
We help clients like you every day. We have cell phones, voice-mail and digital pagers, 4 phone lines, an E-mail address, a web page, and a toll-free number. You can always get through to us if you have a question or need assistance. And if we’re busy with another client, there’s a million ways to leave us a message- and we will get back to you as soon as possible. We’re a small, tight-knit, highly dedicated office. You will never be “just a number” to us, and you’ll never feel ignored. We want you to be experts, too! Our business is built by referrals of satisfied customers, ONE client at a time.
There’s a difference between agents who simply sell real estate, and those who COMMIT to doing whatever it takes to serve a clients beyond their expectations. We’ve been in real estate working on behalf of buyers and sellers for a long time. But more importantly, we have the knowledge and experience to make the whole process work like a finely-tuned machine.
We make it a priority to educate you on every aspect of buying the best home for your hard-earned money in your preferred area. We have a long list of satisfied past clients and professional references whom you may call at any time to discuss the quality of our service and our follow-up.
We guarantee everything we do for you in writing. This places the burden of risk and performance on US, not you. We also have references to reputable people in mortgage lending, appraisals, title and escrow companies, tax specialists, attorneys, and even decorators. These are people we have used in other transactions, and we trust them to take care of our clients like gold.
Each day, we speak with hundreds of people directly related to buying or selling real estate. And we receive over 80% of our new clients through referrals and repeat business. We want our personal marketing to involve such outstanding and exemplary service to our existing clients and personal network, that they are inclined to share our services with family and friends.
We’re Not Saying These Things To “Toot Our Own Horn”,
But Impress Upon You The Difference Between Just A “Real Estate Agent”
And A Competent, Dedicated Professional
Buying and selling real estate can be tricky business. And making the wrong choices can cost you a lot of money, headaches, and wasted time. Believe it or not, when we worked for Builders, we On-Site Reps used to call most Agents “Lazy Agents”! If you’ve ever had a bad or lazy Agent, you’ll know exactly what we mean. They bring in their client, and then disappear until they receive their check at the closing table. That’s why we designed a specific program designed for buyers like you. We call it our…
Exclusive “Preferred Buyer Program”
Our Preferred Buyers Program is absolutely FREE to you. Here’s what you’ll get when you enroll…
- A Free Subscription to our “Home Locator” program. We’ll create a custom search model based on your personal home needs. Then, we’ll enter you into our Home Search system where our computers will sift through the market each night to find hidden bargains and new listings before anyone else gets them. Each day, we’ll search the homes on the market that meet your personal desires. We’ll also:
- Evaluate the value of your chosen home so you buy the most home for your dollar…the very same way we described earlier…
- Negotiate the best possible deal for you so you avoid costly traps and pitfalls…
- Help you locate the most affordable financing in the market and for your situation…
- Coordinate all inspections, appraisals, escrow and title services, with the very best firms, so you can feel confident and focus on other important tasks during your move…
- We will attend all structural and mechanical inspections and walkthroughs with you, because we know what to look for and know what is acceptable and unacceptable.
- Because of our experience, we’ll make the entire process as HASSLE FREE as possible for you.
- Everything you do with our Firm stays COMPLETELY CONFIDENTIAL. No one will be discussing your personal or confidential affairs.
- FREE BONUS: FREE CREDIT REPORT – a $50 value. If you call before the expiration date on the enclosed coupon, you’ll get a Free Initial Confidential Credit Report. Get the most home for your dollar, become updated on your credit status, and obtain the best financing for your next home…
But Don’t Wait!
When you call, we’ll give you our undivided attention. And we’ll schedule a time to meet when it’s most convenient for you.
On the last page, we’ve included a special “Buyer’s Coupon”, to help you get started. It gives you a FREE “Initial Credit Report”, paid for by our company.
You’ll notice there’s an expiration date on the coupon. We know there’s a natural tendency to procrastinate. To put off important decisions. But the more you procrastinate, the more pressure ultimately rests with you.
By Not Acting Now, You Could Open Yourself To
Losing Thousands Of Dollars
So call us now, Toll-Free, at (877) 372-2252, or on our local line: (704) 372-2252 and we’ll immediately arrange a convenient time to meet with you to discuss your particular needs and to help you get started on our Exclusive Preferred Buyer Program. It’s FREE, and we absolutely guarantee your satisfaction!
Sincerely yours,
New Home Buyers Brokers, Inc. / Realty Pros
P.S. Once you have read this report completely, make a list of areas you would like to discuss, and call us at 704-372-2252 and speak to one of our Buyer’s Agents to enroll in our Exclusive Preferred Buyer Program. We’re confident that we’ll help you find the right home, at the right price, and save you thousands in the process. So call now! What do you have to lose?!?
New Home Buyers Brokers
Preferred BUYER Coupon
| Find Your Perfect Home At The Right Price, Save Thousands When Buying, Locate Affordable Financing, And Get A FREE CONFIDENTIAL CREDIT REPORT!
Exclusive Preferred Buyer Program
COUPON
The bearer of this coupon is entitled receive the services of my Exclusive Preferred Buyer Program. My Preferred Buyers Program Includes…
- Free Subscription to my “Home Locator” program. I’ll create a custom search model based on your personal home needs. Then enter you into our Home Search system where our computers will sift through the market each night to find hidden bargains and new listings before anyone else…
- Evaluate the value of your chosen home so you buy the most home for your dollar…
- Negotiate the best possible deal for you so you avoid costly traps and pitfalls…
- Help you locate the most affordable financing in the market and for your situation…
- Coordinate all inspections, appraisals, escrow and title services, with the very best firms, so you can feel confident and focus on other important tasks during your move…
- FREE BONUS ! : FREE CREDIT REPORT – a $50 value. If you call before the expiration date, you’ll get a Free confidential, In-Line credit report. Get the most home for your dollar, become updated on your credit status, and obtain the best financing for your next home…
But Hurry! This coupon expires ____08/31/2014___.
New Home Buyers Brokers 704-372-2252 or, Call Toll-Free: 1-877-372-2252
|
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8 Secrets For Saving Thousands
When Finding, Buying And Financing Your Next Home
Copyright, New Home Buyers Brokers 2014
You’ve Worked Too Hard For Your
Money To Needlessly Give It Away.
Here’s A Helpful Guide For Buying The Right Home, At The Right Price And Getting The Right Financing.
“You Don’t Make Money When You Sell Real Estate,
You Make Money When You BUY It!”
Dear Home Buyer,
Do you see the statement above? Someone once told me it was written backwards…that you only make money when you SELL real estate. “How on earth could you make money when you buy it?” he said.
But that statement IS accurate. You see, you might receive your sales proceeds when you sell your home, but it’s how well you BOUGHT your home that will determine HOW MUCH your proceeds will be.
But the story doesn’t end there. Finding the right home, and making a prudent financial investment is more involved than just “buying right.” You also need to FINANCE it right.
Even Experienced Homeowners Make Costly Mistakes When Buying And Financing Their Home
Hi, our company’s name is “New Home Buyers Brokers”. You can tell from our name that we specialize in Buyer Representation- and we are committed to helping people buy the right home at the right price…AND with the right financing.
It’s no surprise that borrowing $100,000…$200,000 or more is a lot of money. And how to FIND the right home…how much to PAY for the home…how much to BORROW…and on what FINANCIAL TERMS can literally mean tens of thousands of dollars MORE or LESS in your pocket!
If you’re like most people, the decision to buy a home involves a number of stresses and strains. For about 80% of buyers, it’s the single largest financial transaction of their lives. Mistakes in any part of the buying process can cost you thousands.
That’s why we wrote this special report…to give you a number of helpful, straightforward tips for finding a home that meets your needs, AND becomes a wise financial investment for you in the future.
Here are 8 strategies (we call them “secrets” because so many home buyers disregard them when buying) you should consider when buying your next home…
Secret #1: Understand What You NEED In Your Next Home.
Two things you need to consider here: Your NEEDS…and your WANTS. They’re two very different things.
You may need 4 bedrooms because of your children, or need a 3 car garage because of your 3 cars…
What you’ll find is your needs are fairly basic. It’s the “wants” that take a little more time to clarify. Here is a list of needs you should consider BEFORE looking for your home:
- General price range of home – we’ll cover this fully when discussing financing options and the amount of home you can afford (or the amount you want to spend for your monthly mortgage payment).
- Time frame (ideally when you’ll want to move in- for example, after Christmas, or when your lease term expires, etc.)
- Approximate size of home (in sq. footage) – make a reasonable range
- General location, area, or subdivision (30 miles to work, North Charlotte, etc.)
- Number of bedrooms required (don’t forget to include any home offices or guest rooms).
- Number of bathrooms you’ll need
- Style and layout of home: Do you want a more formal plan, or a Transitional plan? (ie, the Master down, a large Great Room, a Ranch floorplan, etc.)
- School requirements or districts
- Builder Inventory home, To-Be-Built, or Existing homes? How many years old?
Secret #2: Understand What You WANT In Your Next Home.
A great way to get a handle on your wants is to take a good look at your present home. What do you like about it? Do you like its open floor plan? Do you like the kitchen and eating areas? Do you like the bathroom layout?
List out everything you like about your present home, or homes you’ve visited.
Now, let’s take a look at what you don’t like about your home. Do you hate the small closets? Do you want the Master bedroom upstairs? Are the bedrooms too small? Is the kitchen too far from the garage? Do you need more closets or storage space?
If you dislike something with your present home, you’re going to dislike it with your new home. So the better you can identify these items, the more likely you are to avoid them.
Here’s a good suggestion: Take out a piece of paper and draw a vertical line down the middle. In the left column, write down everything you like about your present home. In the right column, write down everything you dislike about your present home. It’s also important you understand WHY you dislike something.
Now, from your list of “likes,” let’s compile a list of features you want for your new home. Now, here’s an important tip that will help you really narrow your focus.
Take out another sheet of paper and put two columns on it. On the left hand side, you will be listing out the features of your home. And on the right hand side, you’ll be listing out the benefits. For each feature, you want to list the benefit of that feature.
Features tell you what something IS: 3 bedroom, 2 bath, 3 car garage, etc. Benefits tell you what something DOES. Benefits fulfill desires.
For example, a great room concept (feature) will be ideal for entertaining friends and family at special times (benefit). So on the left hand side, you would put “great room..” And on the right hand side, list out all the benefits (or reasons) for the “great room” design: Family entertaining, business entertaining, Thanksgiving holidays with the family, etc.
Understand What Each Other Is Looking For, And WHY
If you’re a husband and wife looking for a home, this exercise will eliminate many disagreements down the road. You will both understand what the other wants, and WHY they want it.
We recommend you RANK each feature in terms of its importance to you and your spouse. You’re both going to live in the home, so you better understand what the other is looking for.
For example, a well designed gourmet kitchen (remember, list ALL the features of the kitchen you’re looking for) may rank high with a woman, while having a workshop may rank high with a man. Try to understand each other’s priorities.
Most People Have More Dreams Than Money
Ranking will also show you areas you may need to eliminate because of price constraints. And by having each person rank the importance of the features they want, you won’t be eliminating a high priority item and putting additional stress on an already stressful time.
Secret #3: Understand How Much Home You Can Afford.
Like it or not, there are 2 guidelines bankers and mortgage lenders use to determine how much loan you can afford.
The first guideline is the Payment To Income Ratio. This guideline compares your income – or your total household income – to the amount of mortgage payment you’re considering. (We specialize in “buyer’s finance”, and can help you with this if this seems too confusing).
To calculate the “payment” part of the formula, the lender will take the mortgage payment (principal + interest) and add to it Property Taxes and Insurance. Hence the term “PITI” (principal, interest, taxes, and insurance).
Usually lenders will loan up to 28 % of your total household income.
But before you think you’re home free, there’s something else you need to know…
It’s called the Debt To Income Ratio. Debt refers to ALL the major monthly payments other than your mortgage payment (PITI). To arrive at this amount, the lender will consider…
Your car payment…
Your credit card debt and payments…
Any IRS liens or payments due…
Any other payments and debts you have (boat, 2nd home, etc.)
Then, they’ll compare your total debt to your ability to make current payments with your new home loan added into the equation.
Now, here’s the “stickler.” Each mortgage company sets different limits on your Debt To Income ratio. Which is why it’s critically important to find a MOTIVATED LENDER.
Don’t follow the “canned” financial advice like you see on TV. Most of that advice is “rule of thumb,” and designed for the lowest credit rating and highest interest rates.
Think about this…
If you spend 2 or 3 days to find a loan that saves you $40,000 to $150,000 over its term, your time is WELL SPENT! Doing a little homework on your own will literally save you thousands over the term of your loan. We will only refer you to people who are the best in the business. These are professionals that we have personally used countless times in the past- and they know to treat our customers like GOLD. They will give you the best rates, a free Pre-Qualification, and will not “screw you over”. Because we trust them and know how good they are, we’ll even pay for your initial credit report (called an “In-File” in the mortgage business).
Secret #4: Save A Bundle When Financing.
Your ability to afford a home will be related to a number of items. They are…
- The PRICE of the home;
- Your DOWN PAYMENT on your home, and thus the amount financed;
- The INTEREST RATE and POINTS of your loan – the amount a bank charges you for the money;
- The TERM of your loan: 10 year, 15 year, 30 year.
- The overall TYPE of your loan: Most common is fixed vs. variable (or, ARM ) rates. There are literally hundreds of new loan packages to choose from. Some help you with your down payment (0 % down programs are available for those who are cash-strapped but have excellent credit), some save you money on PMI ( Private Mortgage Insurance, which everyone has to pay if you put down less than 20 %), some let you keep more money in your pockets as a shield against taxation, and some are backed by the Government (FHA and VA loans). We’ll help you through the maze of programs and help you narrow down exactly which plan works best for your budget and lifestyle.
And just in case you were looking for a specific “rule of thumb,” for financing your home, you should know that…
There Are NO General Rules Of Thumb About Financing Your Home!
Each case is different, and your personal financial circumstances will have an impact on how much home you can afford.
However, you MUST understand the relationship and impact interest rates, term of loan, points, and type of loan can have on your overall financial picture.
Let’s start with the “amount financed” first. Many people often pay cash or put 20% or more down as equity. The reasons they do this are…
“The bank required us to…”
“We’ve just always put down this amount…”
“We wanted a lower payment.”
Problem is, these reasons could cost you thousands of dollars.
The answer for how much you can put down on your home is different for most people. However, we have learned over time that…
Many People Put Down More Cash On Their Home Than They Need To, And Could Have Received A Better Return On Investment Had They Invested The Money Instead Of Putting It Into Their Home
Here’s a simple and fast way to “ballpark” the actual annual return on investment you get from the money you put down on your home:
- Take a look at the homes in the area you’re considering. How much have the homes appreciated, each year on average, over the past 5 years? For example, you might find that values have increased an average of 5 % a year. ( We‘ll help you figure this out by performing a CMA (Comparitive Market Analysis) for you. Charlotte’s average for NEW homes right now is a PHENOMENAL 14.9 %! Compare that to the stock market, but don’t forget to add in your tax savings, too- and, remember that this return is with NO RISK!
- Now, take the total cost of your new home, multiply that value times 14.9 % (the average expected annual appreciation of a new home). For example, a $150,000 home, increasing in value at 14.9 % the first year. Thus, the home could be worth $22,350 more a year from now! WOW!
- Now, divide the amount of increase in your home ($2,250 in the example) by the total amount of Down Payment you put into the home. For example, if you put down 20% (or $30,000), then $2,250/$30,000 = 7.5%.
Now 7.5% sounds like a fair investment. But the question you need to ask is this: Can you make more than 7.5% elsewhere?
And did you notice something else here? Had you put down just $15,000, your return on your Down Payment would be 15%!
The moral of the story: Putting more money into your home may make your banker happy, because it lowers the risk of getting his money out if you default. That’s why they require “PMI” (legislation is currently pending to require lenders to eliminate this coverage altogether, if your loan meets certain criteria).
Putting down more money may make your overall payment a little lower…
But it may be a wiser decision to put less into your home, IF you can locate an alternate investment that will pay greater interest on your hard-earned equity. *Trick of the trade: If you still want to put more money down, the best place to do it is to buy down the interest rate, instead of increasing your down payment. Ask us, and we’ll show you how it decreases your mortgage payment even more this way…
Now, let’s shift gears a little and talk about the impact Term and Interest rate will have on your overall financial picture…
How INTEREST RATE and TERM can make or COST you thousands.
Mortgage lenders toss around interest rate numbers as if they didn’t matter.
They DO!
And to illustrate the impact interest rates can have on your overall financial picture, we’ve presented a table below showing the interest you pay over the term of a 30 year, $150,000 loan at 4%, 4.5% and 5%.
And here’s the clincher: Just ONE percentage point on a $150,000 loan can cost you over $31,000 over the term of the loan! TWO percentage points will cost you over $72,000!!
Your banker might tell you his “slightly higher rate” is only a matter of less than $100 a month in payment. But YOU should know better! Take a look at the table below…
| Loan Amount
$150,000
$150,000
$150,000 |
Interest Rate
5%
4.50%
4.0% |
Monthly Pmt.
$805
$760
$717 |
Interest Paid
$289,800
$273,600
$258,120 |
Savings
—
$16,200
$31,680
|
That’s money taken out of your pocket if you don’t look for good rates!
And if you think interest rate has an impact on your overall financial picture, take a look at what modifying the TERM of your loan can
Here’s another example of a $150,000 loan at 4.50 % interest. But this time, we examine the total interest paid when you select a 30 year vs. a 15 year vs. a 10 year amortization…
| Term
30 Year
15 Year
10 Year |
Interest Rate
4.50%
4%
5% |
Monthly Pmt.
$760
$716
$805 |
Interest Paid
$273,600
$128,880
$96,600 |
Savings
—
$144,800
$177,000 |
The “bottom line”? Estimate the maximum amount of payment you can afford, and adjust TERM and INTEREST RATE of your loan to minimize the amount of total interest you’ll pay (You can also go to our website, www.NewHomesNC.com, for an amortization schedule and to get payment/mortgage calculations for varying interest rates).
But then your banker cuts in and says, “but the interest you pay is Tax Deductible…” you should know this: If you’re in the 28% tax bracket, for every dollar in interest you pay, you only save 28 cents. Don’t go spending a dollar to save 28 cents if you can help it!
Here’s How To Instantly Know How Many Points You Should Pay…
Another consideration in the formula is the amount of POINTS your lender will charge you to initiate your loan. And what you’ll notice is there’s a GAME being played with you.
And if you don’t know the rules of the game, YOU LOSE!
Sitting across from a banker while he throws obscure numbers at you like you’re a human dartboard can be pretty overwhelming. And frequently you’ll hear terms like “4.5% with 1.5 points,” or “4.0 with 0 points.”
All-the-while you’re thinking to yourself, “I have no idea what the financial impact of this guy’s blabbering means to me.” And quite frankly, your banker knows…
The Less You Know About What You’re Paying, The Better For HIM!
So hopefully this little “ballpark” example will help you quickly determine the best points-to-interest rate for you. How many points should you pay, and what formula is best for you? Here’s a little help…
If a banker is giving you several options of interest rates and points, you need to sort out the financial consequences so you don’t lose money. Say, for example, you were considering 2 loans. Both are for $150,000, and both are 30 year amortization.
DEAL #1: One loan he offers you is 4.5% with 0 points for origination…
DEAL #2: Another loan he offers you is 4%, but he wants 2 points to originate the loan. NOTE: Each “point” is worth 1% of the loan amount- for example, on a $100,000 loan, 1 point would be equal to $1000.00
What’s the ONE factor that will determine which loan is better?
How LONG You Plan On Keeping The Loan and Home!
The first thing you need to think about is how long you’re going to live in that home. The average homeowner spends about 5.5 years in their home before selling for whatever reason.
So, for example sake, let’s say you plan to live in the home 5 years. Here’s how you determine which deal is better…
- Take the difference in monthly payments (principal and interest only) of EACH loan…
- Multiply that amount by 12 months to get the annual amount of difference…
- DIVIDE that amount into the $$ amount of points you pay to determine the number of years at which you recover the points paid up front. If the number of years is LESS than your anticipated time in your home, you’ll be better off paying the points and getting the lower rate. If it’s higher than you plan to spend in the home, opt for the lower points.
Here’s an Example…
| Loan
#1, $150,000
#2, $150,000
|
0 Points
2.5 |
Cost of Paying Points On Loan To Bring The Interest Rate Down
$0
$3,750 |
Interest Rate
4.5%
4.0%
|
- Payment
$760
$717
|
- The difference in monthly payments is $43 a month ($760 – $717 = $43).
- $43 X 12 months is a savings on (approximate) interest of $516 per year.
- Total Cost Of Points divided by $516 is 7.26 years ($3,750/$516 = 7.26).
The result? If you stay in your home for 7 years, you will NOT recoup the points you paid up front with the savings in a lower interest rate. Recoup time is about 7 years and 3 months to breakeven.
So your best bet would be to select loan #1.
If, however, you planned to keep your home beyond 6 years and 2 months, you’d be better off with loan #2 (i.e. the overall savings in interest rate will exceed the amount you paid in points – not considering the time value of money).
Are you starting to see how important it is to understand your home’s financing? How important it is to shop for the best rates, terms, and points?
Good! Now, let’s move on to another important secret for buying your home…
Secret #5: How You Evaluate Homes Will Save You Thousands And Heartaches!
One of the biggest mistakes people make when buying homes is they rely solely on “local neighborhood market analysis information” to determine the right price to pay for a home.
Before you buy or refinance your next home, INSIST on seeing a “total market overview” of exactly what is going on in the ENTIRE market. Then narrow your analysis to local market information. This is especially important when looking at existing homes.
Why do we say this? Because you want to know 2 things: 1) What is the ENTIRE market doing with values? Are they going up? And by how much? 2) What is the specific area & neighborhood doing with market values? How does it compare to what the total market is doing? Are the growth rates the same, lower, or higher than the overall market?
Understanding these parameters will save you thousands of dollars when you make an offer on a home. We’re frequently asked to perform both of these analysis for our buyers, so they know EXACTLY what they’re buying!
If you are looking at only New Homes, we’ll help you compare FEATURE to FEATURE what each Builder is giving you for your money. How do the options stack up in the real world? Which Builder is truly giving you more house for your money, and which one is ripping you off? We’ve spent a collective total of 16 years working directly for National builders, doing comparisons on construction quality and optional features. We know how to take all of the hype and help you get down to the “nitty-gritty”- what’s really important, and what they’re NOT telling you that can lose you, literally, thousands of dollars. They all say they’re the best- but which Builders really put their money where their mouth is ???
OK, so let’s say you’re now pre-qualified with financing, and you’ve also found a number of homes, whether new or existing, to preview.
The Way You Inspect A Home For Sale Can Save You Enormous Amounts Of Money And Time
It’s now time to find not only a home that fits your needs, but a home that will be a good investment. What are some of the things you should look for?
Well, one of the first things we pay attention to is what we call “siting.” Siting involves evaluating 3 areas: Location, Lot siting, and Home siting.
The general location of the home you’re considering could determine how happy you’ll be living there, and what kind of an investment you’ll have when you re-sell down the line. Here’s an important tip that will almost always make you money…
Buy The Midrange Home In The Best Neighborhood You Can Afford
Why do we say this? Because the better the neighborhood, the better the appreciation for you over time. And if you buy the midrange home, the home will “generally” appreciate faster and greater than a higher priced home in the same area.
Plus, you will most certainly spend money updating or decorating your new home, and you don’t want to get “upside down” on your homes value after spending money for improvements. So remember…
NEVER Buy The Top Of The Market!
Now the second area you need to consider is Lot siting. Lot siting has to do with WHERE your particular lot is located in the subdivision you’re considering. We’ll ask for a plat map of the entire subdivision. Then we’ll take a look at where your home site is located in the subdivision.
Is it near a common area? Does it capture better views than other lots in the area? Is it more private, or shaped better than other lots? Is it near a loud street? Are there lots of trees at the rear? How close is the playground, pool, or tennis courts?
Lot “siting” in a neighborhood will give you a basis for knowing how well the home will appreciate vs. other homes in the neighborhood (assuming the home price is reasonable).
Finally, you want to look at the Home siting. How well did the builder take advantage of all the amenities the LOT offers a home? Are the views great? How’s the curb appeal? Is there a balance between front and back yards? Do you see any drainage problems because of where the home has been located on the lot? Is there any standing water in the swales? For how long? What does the builder’s warranty specify about their “tolerances”? Did they save the trees around the home site?
When looking at home sites in a new neighborhood, where the landscape is basically untouched, we will consider other things as well: Crawl foundation or Slab? Will the home be built standard, or reverse (with the garage on the left side?) If the home is built reverse plan because of the home site, how does that effect how you’ll live in the house? Will the Master Bedroom still be by the private treed area, or looking into the neighbor’s kitchen? (Reverse plan is like taking a “mirror-image” of the home and “flipping” it, to maximize drainage, elevations of the site, or to work with the natural flow of the landscape). We’ll explore these things, and more, when looking over home sites and reading the blueprints and plot plans and topo maps.
Think through these things as you visit each home.
Now, as you approach your home, there are other things you want to keep in mind…
- What is your initial reaction of the home (or home site) as you approach it from the street? This is called “curb appeal,” and it has a great impact on the value of the home. Is the home sited right on the lot? Notice the areas around the home. Are they well maintained? Is the landscaping groomed? After excavating, clearing and grading the home site, what will it look like? Which trees will remain? What will the slope of the driveway or rear yard be like?
- Take a look at the structure of the home. As you go through the home, windows and doors should be square, and they should close correctly. Look around windows and doors for cracks. Check corners of rooms for sloping or tile/wood cracks. These may reveal foundation or water problems.
- Now think about the floor plan of the home. Is it functional? Do the common areas flow the way you want them to? Are the halls narrow and long, or are they open? How far will you have to carry the groceries from the garage? Are the rooms the right size and height for your desires? If there have been any additions, were they done professionally? Do they fit with the flow and style of the home?
- Now, check the roof and ceilings. Is the roof the type you prefer? Is it in good condition? Who was the manufacturer? When was the last time the home was roofed? What is the warranty on the roof, and how long does the warranty have before it expires? Is it already double-layered, or can an existing layer be put on top of the existing roof?
- Now make a basic check of the plumbing, mechanical, and electrical systems. Do drains and toilets work correctly? Is the property connected to sewer, or will you have to deal with a septic system? Is the electrical wiring up to code? And are the mechanical systems working properly? On existing homes, make sure you get these systems inspected by a licensed contractor or inspector BEFORE you close any deals! We have referrals for professional companies that we use all of the time who will go through the home with a fine-toothed comb. They will check for potential structural, mechanical and cosmetic problems. They’ll also perform a termite inspection, along with checking for infestation of other insects or rodents.
- With new homes, each and every phase of construction passes vigorous tests by licensed engineers and Inspectors from Mecklenburg County or the ruling principality. This includes a foundation check, framing member check, plumbing, HVAC, windows and doors, electrical, roof, siding, etc. The Builder must pass all inspections in order to get a “C-O”, or Certificate of Occupancy. They cannot close on the home until it has been rigorously inspected and re-inspected, and it has come with a shining recommendation. However, Inspectors are all different, with varying degrees of what they consider “normal”. And FHA and VA Inspectors and Appraisers are a different deal altogether. We’ll help make sure that everything is being done the right way to make sure that the Builder delivers you the best quality home that they could have. We want YOU to have the BEST QUALITY HOME in the neighborhood!
Secret #6: Save Thousands Writing Your Offer And Negotiating Your Deal
Years ago a real estate expert told me that the party who is less motivated almost always gets the better deal. The ONE single element that will determine how well you negotiate your offer is…
How MOTIVATED Is The Seller, And How MOTIVATED Are YOU?
If the home has been on the market for over a year, perhaps it’s because the seller hasn’t been motivated enough to sell. Or perhaps the home hasn’t sold and he/she is very motivated.
And if you’ve been looking for 4 months, your kids are late for starting school this year because you haven’t found a home yet, and you now have found the right home, YOU may be very motivated to buy!
Nevertheless, here’s a tip you MUST bring to any real estate transaction…
Move Heaven And Earth To AVOID Emotional Attachment
To The Home You’re Considering
If you’re all giddy about the home, and if you can’t hold back your emotions when you’re around the home, then you’re potentially going to get clobbered when negotiating the purchase.
And that’s ONE reason why you need a Buyer’s Agent representing you during any transaction. The middle person alone will help save you money.
So let’s say you have an Agent representing you (make sure it’s a Buyer’s Agent, or you could lose a bundle!), and you’re ready to write an offer.
What’s the single best piece of information you can have?
It’s the comparable sales and market data for the entire market, and the area. Ask your Buyer’s Agent to print out both for you to use. Now, here’s what you want to do…
You want to take a look at 4 important “market tell-tale signs:”
- Take a look at the currently active (for sale) listings in the area. Is the home you’re considering priced within reason to the other homes? If so, you know you’re at a reasonable starting point.
- Now, take a look at what the average selling price is compared to the listing price. You may notice that most homes are selling for about 2 to 3 percent less than their offer price. If that’s the case, you know the original offers were LESS than this amount. Take this into consideration when making your offer. And leave plenty of room for negotiating other details.
- Now, make sure you visit several of the other listings in the area. How does your home compare to the other homes? Is the home you’re considering in similar shape? Is it on a nicer home site ? Is it bigger, smaller, better style, better landscaping, etc.? These factors will help you determine how much you should pay for your home vs. how much others paid for similar homes in the neighborhood.
- Now, take a look at the average market times for homes in the area. If they’re long (evaluated on a market by market basis), the market may be soft, and you might have more negotiating room with your offer.
- If it’s a New Home, how many have they sold in the last month? The last year? Now, compare them with their competition. Does one neighborhood or Builder have a faster pace of sales? Why? Have they offered special incentives to past homeowners that they are not offering to you? Does one neighborhood have a pool or amenity that the other one doesn’t have? How much have their prices gone up since they’ve opened? When and Why? What is their estimated Build-Out time? Are they ahead of or behind pace with the Developer’s “take-down” plans? What has affected the change?
You’re now ready to make your offer. At this point, I highly recommend you work closely with a Buyer’s Agent to structure your offer. They will talk about strategies such as 1) should you offer a high price and ask the owner to throw in all kinds of extras, or 2) offer a low price and skim your way into the neighborhood?
The correct answer depends on your personal situation. And you need to work closely with your Buyer’s Agent to strategize your offer.
Secret #7: Be Financially Prepared – Ahead Of Time!
Many people go about the home finding process backwards. They go through the entire process of searching, evaluating, and writing an offer on their home, WITHOUT being financially prepared.
And it usually costs them money. Big money!
Doing a few things up front, BEFORE you go searching will save you a lot of money, time, and hassles. What are those things?
Here are 3 of them.
First, find a MOTIVATED lender. We’ll help you find a perfect one. No, don’t just go down to your local bank where you’ll likely to be slowly tortured by some bureaucratic “vice president” who makes his bonuses and gets promoted according to how much paperwork he creates (at YOUR expense), how many overrides he charges, and how many DECLINES he produced.
You see, the only quota a banker has to live by is: “How many BAD loans did you originate?” Plus, they get paid bonuses and overrides based on how much money they charge you, and by how much money they make the bank. Whatever they make over their
“in-house” rate, they get to keep as a BONUS. So, if their “in-house” interest rate is 6%, and they charge YOU 6.5%, they keep the other .05 % as a bonus. The loan origination fee goes to the bank as their payment for services rendered, but the BONUS is theirs to pocket.
They don’t get measured by their production…
They don’t get measured by their service…
They only get measured by the MISTAKES THEY AVOID!
Now, we figure if your local banker sees this, he’s going to blow a cork, and start reciting all the ad campaign jargon most banks are spouting these days. But the truth is…
There Is Absolutely NO Incentive For A Traditional Banker To Serve Your Interests In Any Way
What you want to do is find a mortgage lender who is MOTIVATED to take your loan. One who represents many different products, and can offer you many options for making your loan most affordable.
Here’s an important tip: Ask your Buyer’s Agent to refer one or two lenders to you. Why? Realtors have power over lenders, because they send them lots of clients. It’s not just YOU alone talking to them, with one loan. It’s their future business looking them square in the face, too. And we send them hundreds of loans a year!
If they don’t give you first class service, the Buyer’s Agent who referred you will send (ALL) of their clients to someone else. So they’re motivated to SERVE YOU. And the minute you have a problem with your loan, you can turn to your Buyer’s Agent…who has much more influence and leverage over the lender than you alone.
After all, your Buyer’s Agent and lender both want to see the transaction close. There’s power in numbers and influence. Use it to your advantage.
Now, the second thing you want to do is GET PRE-QUALIFIED with a lender. Better yet, try to get PRE-APPROVED.
Why?
Because the first question any home seller will ask when an offer is presented is “Is your buyer approved for a mortgage?
And rightfully so! The seller doesn’t want the deal to fall through because you couldn’t get financing. When the seller accepts your offer, their home comes OFF the active market. If you fall through, it costs them time and money. Most Builder’s average interest payments on completed homes is $ 1300.00 PER HOME, PER MONTH. No kidding. And, if it’s an Inventory home you’re looking at, it will help us to know how long it has been sitting since it was ready to close, so we can get you the best deal!
Plus, there’s one more reason to get pre-qualified or approved…
You Will Have Much More Power To Negotiate
Price And Terms When You’re Financially Qualified!
When you have money behind you, the seller knows you are serious. And a serious buyer ALWAYS has more influence to negotiate. So do yourself a favor, GET PRE-QUALIFIED or, better yet, PRE-APPROVED!
Secret #8: Use A BUYERS Agent!
There’s a huge difference between a Buyer’s Agent and other agents. First and foremost, if you don’t have a specific agreement to be represented by your agent…
Chances Are, YOUR Agent Represents The SELLER!
Yes, it’s true. And the question you have to ask yourself is… “Is this person going to represent MY interests?” And ALL Builder Representatives are SELLER’S AGENTS.
Think about this: If you had to go to court, would you use the same attorney the opposing side was using? When building a home, who does the Builder Sales Rep. answer to? To you, or to their Boss?
I think you know the answer! But did you know that by creating a “buyers representation” with your agent, you not only get someone representing you, but…
- A Buyer’s representative doesn’t cost you a nickel more than any other agent. Even though they legally and plainly represent you, they’re still paid out of the standard commission…by the Seller!
- Buyer representation is easy to enter into, and will support ONLY your interests. This includes finding your home, helping with financing, and negotiating the best possible deal for YOU…
- A Buyer’s representative will keep everything about you and your deal CONFIDENTIAL!
OK, so you know the difference between any agent and a “Buyer’s Agent.” But did you know what a really good Buyer’s Agent can do for you?
- A good Buyer’s Agent knows the area you want to buy in because he/she is out constantly looking at homes and knows what’s available on the market…
- A good Buyer’s Agent can spot trouble for you. He or she will be experienced at looking at homes and will see things you might not see.
- A good Buyer’s Agent will greatly simplify the buying process…
- A good Buyer’s Agent will give you MOTIVATED, reliable financing sources and options…
- A good Buyer’s Agent will refer you to proven inspectors, attorneys, title and escrow officers, lenders who specialize in different types of credit situations, and other service providers you’ll need.
Most importantly, you need to know that…
There Are “Real Estate Agents”…
And Then There Are Committed Buyer agent Professionals. Which One Do YOU Want Representing Your Interests?
We hope the information above has given you helpful advice for helping you find, buy and finance your next home.
At this point, you’re probably pretty clear that, in order to find the right home and save money, you need someone competent and professional to represent only YOUR interests.
We started this company because we came to realize that the majority of Home Buyer’s needs were not being met, while the “Seller” held all of the cards. Home Buyers had no one to turn to for advice and help, or to voice their valid concerns. In fact, that is why we wrote this special report, and structured our practice around giving Home Buyers the competitive edge- along with the most competent service possible.
We help clients like you every day. We have cell phones, voice-mail and digital pagers, 4 phone lines, an E-mail address, a web page, and a toll-free number. You can always get through to us if you have a question or need assistance. And if we’re busy with another client, there’s a million ways to leave us a message- and we will get back to you as soon as possible. We’re a small, tight-knit, highly dedicated office. You will never be “just a number” to us, and you’ll never feel ignored. We want you to be experts, too! Our business is built by referrals of satisfied customers, ONE client at a time.
There’s a difference between agents who simply sell real estate, and those who COMMIT to doing whatever it takes to serve a clients beyond their expectations. We’ve been in real estate working on behalf of buyers and sellers for a long time. But more importantly, we have the knowledge and experience to make the whole process work like a finely-tuned machine.
We make it a priority to educate you on every aspect of buying the best home for your hard-earned money in your preferred area. We have a long list of satisfied past clients and professional references whom you may call at any time to discuss the quality of our service and our follow-up.
We guarantee everything we do for you in writing. This places the burden of risk and performance on US, not you. We also have references to reputable people in mortgage lending, appraisals, title and escrow companies, tax specialists, attorneys, and even decorators. These are people we have used in other transactions, and we trust them to take care of our clients like gold.
Each day, we speak with hundreds of people directly related to buying or selling real estate. And we receive over 80% of our new clients through referrals and repeat business. We want our personal marketing to involve such outstanding and exemplary service to our existing clients and personal network, that they are inclined to share our services with family and friends.
We’re Not Saying These Things To “Toot Our Own Horn”, But Impress Upon You The Difference Between Just A “Real Estate Agent” And A Competent, Dedicated Professional
Buying and selling real estate can be tricky business. And making the wrong choices can cost you a lot of money, headaches, and wasted time. Believe it or not, when we worked for Builders, we On-Site Reps used to call most Agents “Lazy Agents”! If you’ve ever had a bad or lazy Agent, you’ll know exactly what we mean. They bring in their client, and then disappear until they receive their check at the closing table. That’s why we designed a specific program designed for buyers like you. We call it our…
Exclusive “Preferred Buyer Program”
Our Preferred Buyers Program is absolutely FREE to you. Here’s what you’ll get when you enroll…
- A Free Subscription to our “Home Locator” program. We’ll create a custom search model based on your personal home needs. Then, we’ll enter you into our Home Search system where our computers will sift through the market each night to find hidden bargains and new listings before anyone else gets them. Each day, we’ll search the homes on the market that meet your personal desires. We’ll also:
- Evaluate the value of your chosen home so you buy the most home for your dollar…the very same way we described earlier…
- Negotiate the best possible deal for you so you avoid costly traps and pitfalls…
- Help you locate the most affordable financing in the market and for your situation…
- Coordinate all inspections, appraisals, escrow and title services, with the very best firms, so you can feel confident and focus on other important tasks during your move…
- We will attend all structural and mechanical inspections and walkthroughs with you, because we know what to look for and know what is acceptable and unacceptable.
- Because of our experience, we’ll make the entire process as HASSLE FREE as possible for you.
- Everything you do with our Firm stays COMPLETELY CONFIDENTIAL. No one will be discussing your personal or confidential affairs.
- FREE BONUS: FREE CREDIT REPORT – a $50 value. If you call before the expiration date on the enclosed coupon, you’ll get a Free Initial Confidential Credit Report. Get the most home for your dollar, become updated on your credit status, and obtain the best financing for your next home…But Don’t Wait! When you call, we’ll give you our undivided attention. And we’ll schedule a time to meet when it’s most convenient for you. On the last page, we’ve included a special “Buyer’s Coupon”, to help you get started. It gives you a FREE “Initial Credit Report”, paid for by our company. You’ll notice there’s an expiration date on the coupon. We know there’s a natural tendency to procrastinate. To put off important decisions. But the more you procrastinate, the more pressure ultimately rests with you.
- By Not Acting Now, You Could Literally Cost Yourselves Thousands of Dollars!
Call us now, Toll-Free, at (877) 372-2252, or on our local line: (704) 372-2252, or call our Broker In Charge, Kristen Haynes, on her direct line: 704-905-4062- and we’ll immediately arrange a convenient time to meet with you to discuss your particular needs and to help you get started on our Exclusive Preferred Buyer Program. It’s FREE, and we absolutely guarantee your satisfaction!
Sincerely yours,
New Home Buyers Brokers, Inc. / Realty Pros
P.S. Once you have read this report completely, make a list of areas you would like to discuss, and call us at 704-372-2252 and speak to one of our Buyer’s Agents to enroll in our Exclusive Preferred Buyer Program. We’re confident that we’ll help you find the right home, at the right price, and save you thousands in the process. So call now! We can help you find the right home for your needs in North and South Carolina, or can refer you to an excellent Broker / Realtor in your area.
Direct: 704-905-4062 or Toll Free: 1-877-372-2252
Copyright © 2014 New Home Buyers Brokers / Realty Pros
Why 
For more information on how this is affecting our local North and South Carolina market and for a free, local market report for your neighborhood and area of town, contact Kristen Haynes, Broker In Charge, Realtor NC / SC:
REAL ESTATE TIPS FOR THE REAL WORLD 