A Real Estate Guide For Buyers And Sellers

A Real Estate Guide For Buyers And Sellers
If you have never bought or sold a home before or haven’t bought one in a while you may not be aware of all the steps that go into the home buying or selling process. The process does not just start the instant you decide to sell or buy a home but instead starts out well before and requires plenty of planning and coordination with a number of different professionals. This guide to buying or selling a home will take you through the steps a seller and buyer must go through in order to buy or sell a home.

Process of Buying a Home

Mortgage and Credit
When getting ready to buy a home the process should not start with getting online and searching for homes that look nice. Instead the first step should be contacting a couple of different mortgage lenders and exploring your financial options for buying a home. Borrowing to buy a home is a long term commitment and over spending on fees or the interest rate you pay means you will be paying more money than you have too. That money can be better spent on saving for retirement, paying for your children’s college, or on up keep of the home. There is no need to spend extra money when you don’t have to. So interview a number of different mortgage lenders and find out what they are offering and what are the costs associated with their mortgage options.

In addition to shopping around for mortgages you should also take a close look at your credit history. Do you have any credit report errors or negative items on your credit report? If you have errors you need to contact the credit reporting companies and ask that they remove the errors so it does not affect your borrowing ability. If there are negative items on your credit report you should discuss those items with a lender or a credit counselor to see how they affect your ability to borrow. One or two minor negative items on your report should not cause too many problems but they will reduce your credit score. Larger negative items like unpaid credit card bills, bankruptcies, collections notices and more are harder to recover from and your chances of getting a good mortgage will be more difficult. Often times minor negative items are easily dealt with by time, letting the minor negative items “age off of your credit report” by paying on time and paying all minimums and your credit score should recover. If you do have negative marks on your credit meet with a lender who has credit expertise or ask for a referral to a credit counselor so they can help guide you towards rebuilding your credit score. View Your Credit Score Here

Shopping for a mortgage and checking over your credit report should be done at least 3-4 months before you are ready to start looking for a home. In 3-4 months’ time minor negative credit items have less effect on your credit score and by going through the mortgage process ahead of time you know what price range of homes you can truly afford. It is not good practice to shop for homes that you cannot afford since your mortgage pre-approval is below those homes you looked at.

Searching For Homes
Now that you know what price of home best fits your budget through the mortgage pre-qualification process you can start the actual home search online. You can start your home search on your own without the assistance of a real estate agent, just check out one of the many local real estate listing websites in your city. Start choosing a home after you have been pre approved the use of a real estate agent but you would be advised to hire a real estate attorney to help you with the process so you don’t end up living in a new home you really don’t own. Where the homes you are interested are listed with a real estate agent it only makes sense to get an agent to help you in the process since the commissions used to pay for the buyer’s agents services will come out of the seller’s side of the transaction. By having your own real estate agent represent you, you have someone working in your best interests and not the interests of the sellers.

Making an Offer
Once you have settled on a home and want to make an offer you will need to follow up with the mortgage lender you chose and get a Mortgage Pre-Approval letter which basically states to the seller that you are able to borrow the amount of money stated in your offer to purchase their home. While not required a pre-approval letter is advisable since it shows the seller the seriousness of your offer and that you can afford to buy it. Most good mortgage lenders are able to get a pre-approval letter to you with a very short turnaround time.

Your offer will contain many of the terms and conditions that go along with the offer. The terms and conditions must be written in correctly, this is why it is a good idea to have a real estate agent to help prepare the offer or to have an attorney prepare the offer. Most real estate offers contain at least the minimum condition of the buyer being able to obtain an appropriate loan to the buy the house when borrowing is part of the offer. If you make an offer and it does not have the condition of being able to obtain a loan as part of buying the home you could still be on the hook contractually even if your loan falls through! While you may not be able to afford the home since you can’t borrow money to buy it, that does not mean the seller cannot turn around and sue you for damages. It is important to repeat, have a real estate agent or an attorney prepare the offer for you so you are not stuck being forced to buy a home or stuck having to pay the sellers damages due to incorrectly filling out the offer.

Additional requests made as part of the offer include a home inspection (including termites and radon depending on your location), lead paint inspection (depending on the age of the home), appraisal requirements, terms of occupancy, what stays with the house (i.e. fixtures, appliances, extra items…), who pays for closing costs, title work, home warranty and more. As you can see there is a lot to go wrong if the offer is not written correctly. Even if you have professionals looking over your written offer you should still read it over and make sure it has the terms you want it to have.

Other Things to Consider:1. Home Inspection Process
2. Appraisal
3. Mortgage
4. Home Warranty

LEARN MORE HERE

Tips for Improving Your Credit

Tips for Improving Your Credit

Here’s how to clean up your credit so you get the least-expensive home loan possible.
Getting the loan that suits your situation at the best possible price and terms makes home buying and rent to own easier and more affordable. Here are ways to boost your credit score so you can do just that.

Know your credit score
Credit scores range from 300 to 850, and the higher, the better. They’re based on whether you’ve paid personal loans, car loans, credit cards, and other debt in full and on time in the past. You’ll need a score of at least 580 to qualify for a home loan and 720 to get the best interest rates and terms.
You’re entitled to a free copy of your credit report annually from each of the major credit-reporting bureaus, Equifax, Experian, and TransUnion. Access all three versions of your credit report at FreeCreditScore. Review them to ensure the information is accurate.

Correct errors on your credit report
If you find mistakes on your credit report, write a letter to the credit-reporting agency explaining why you believe there’s an error. Send documents that support your case, and ask that the error be corrected or removed. Also write to the company, or debt collector, that reported the incorrect information to dispute the information, and ask to be copied on any materials sent to credit reporting agencies.

Pay every bill on time
You may be surprised at the damage even a few late payments will have on your credit score. The easiest way to make a big difference in your credit score without altering your spending habits is to diligently pay all your bills on time. You’ll also save money because you’ll keep the money you’ve been spending on late fees. Credit card or mortgage companies probably won’t report minor late payments, those less than 30 days overdue, but you’ll still have to pay late fees.

Use credit carefully
Another good way to boost your credit score is to pay your credit card bills in full every month. If you can’t do that, pay as much over your required minimum payment as possible to begin whittling away the debt. Stop using your credit cards to keep your balances from increasing, and transfer balances from high-interest credit cards to lower-interest cards.

Take care with the length of your credit
Credit rating agencies also consider the length of your credit history. If you’ve had a credit card for a long time and managed it responsibly, that works in your favor. However, opening several new credit cards at once can lower the average age of your accounts, which pushes down your score. Likewise, closing credit card accounts lowers your available credit, so keep credit cards open even if you’re not using them.

Don’t use all the credit you’re offered
Credit scores are also based on how much credit you use compared with how much you’re offered. Using $1,000 of available credit will give you a lower score than having $1,000 of available credit and using $100 of it. Occasionally opening new lines of credit can boost your available credit, which also affects your score positively.

Be patient
It can take time for your credit score to climb once you’ve begun working to improve it. Keep at it because the more distance you put between your spotty payment history and your current good payment record, the less damage you’ll do to your credit score.

Learn More Here

Rent To Own Home Ideas

Rent To Own Home Ideas

Rent-to-own deals have an unseemly image. But they can actually prove useful in today’s troubled housing market, allowing buyers and sellers to lock in deals until conditions improve.

Consider, for example, a buyer who has to move for a new job but can’t buy a new home until the old one sells, or the buyer who needs a little time to repair his credit or wait for his spouse to land a job. With a rent-to-own deal, also called a lease-purchase agreement, any of these buyers could nail down a dream home that’s available today. That can take the sting out of renting.

Sellers can benefit as well. Instead of leaving a home empty, the owner can bring in a tenant to cover expenses, something that can be hard to do if a home is up for sale. The owner thus doesn’t have to give in and sell while prices are down and buyers are scarce.

Still, a rent-to-own is not to be taken lightly. Both parties are gambling on future conditions such as home prices and mortgage rates, and their bets could backfire.
While all lease-purchase agreements are negotiable, they tend to follow a basic blueprint: Seller and buyer agree on a sale price for the property, with the buyer given a specific period to exercise the purchase option, typically one to three years.

For more tips on buying, selling or renting a home, check out Freedom Rent to Own Blog Page!

The Need for Rent to Own Homes

A Rent-to-Own option in real estate is also know as a purchase option. This option is allows the person renting or leasing a property to have the option to buy it at some point during or after the term in a lease agreement.

While there are a variety of ways to create a lease, lease to own programs are limited in many US housing markets. Many offer risks to future buyers. In an article by the Wall Street Journal, they say, "For investors, it is a chance to profit off the recovering housing market". "Consumers get a chance to lock in a home before they have the money together for a down payment".

In fact, every month over 180,000 Google searches happen around just 5 search term variations about lease to own homes. That’s over 2 million searches a year for this opportunity.

Many want to own again in the future, and find it frustrating to rent a home without any option to buy it. When they are ready to buy, they need to move again.

A Rent to Own Home could be a perfect opportunity for these borrowers.

Here’s A Few Awesome Ideas Real Estate Investors Should Consider:

#1 The Buy, Rehab, Rent to Own Home Model
Often, an investor will buy a property with intentions to rent it for a profit. They may fix up the property, but usually rehab at the bare minimum. Other times, they buy it and flip it. A buyer pays for the home with added value and the investor profits from the improvements and a lower purchase price.

There can be value when an investor buys a home, rehabs it similar to a buy and flip, and leases it to a future buyer. If you give a tenant the option to buy the home, they are more willing to do a better job with the upkeep of the property. You could even create some incentives for their upkeep and property maintenance.

#2 Offering a Shared Appreciation Incentive
A tenant renting a home with the option to buy it would love if an investor shared in their property's appreciation.

For example, the Relevium Project, a Benefit Corporation located in Maryland, created a model, which gives its future buyers up to 50% of the equity in the property. This allows the tenant to have an incentive to maintain the home, possibly get equity at their purchase, or get some closing help.

#3 Tenants Creating Some Sweat Equity
It’s common for to require the tenant to pay for some or all of the property repairs. If your tenant is preparing for homeownership, sweat equity could create fiscal responsibility. Sometimes, an investor could have a deductible before you need to pay for any repair costs.

If you are signing an agreement with some sort of sweat equity deal, review the terms and contact an attorney to make sure it’s on the up and up.

Click Here For More Information

First Time Home Buyer Tips and Advice

First Time Home Buyer Tips and Advice

Whether purchasing a home for the first time, or anything for that matter, it can come with much confusion and a lot of stress. The home buying process is often seen by many as a “daunting” process. This doesn’t have to be the case though, if the preparation and research is done. It can be even easier with rent to own as well.

Each and every person who purchases a home normally will have different experiences, hurdles to overcome, and ultimately have their own opinion on the home buying process. Even though the majority of home buyers are different, the home buying process is usually the same. There is a general outline that should be followed when buying a home for the first time.

Here are several first time home buyer tips and some advice to help make the process of purchasing a home for the first time much less stressful and effortless!

How Much Can You Afford?

When a consumer is purchasing a home for the first time, it’s important to know how much can be afforded! This is an extremely important part of the home buying process. Many first time buyers don’t realize or understand that it’s extremely important to know how much they can afford before looking at homes! It’s common to have first time home buyers contact real estate agents and get upset when they are educated on the importance of finding out how much home they can afford before getting out into the marketplace! It’s important that a first time home buyer understands what the costs of buying a home are but also why they are involved. Or you might wanna invest in learning about rent to own.

Not only is it important for a first time home buyer to know how much they can afford, but it’s also important to understand the difference between a pre-qualification and a pre-approval.

First and foremost, a pre-approval is more attractive to a seller than a pre-qualification. A pre-qualification is a quick and very general overview of a first time buyers financial situation. The information used for a pre-qualification is usually given to the lender by the potential mortgagee, which can often be inaccurate. In addition to the general overview of the first time buyers financials, the lender usually will pull a credit report to make sure the credit scores are within the required guidelines of the different loan programs. Click Here To Get Your Credit Report

A pre-approval is a detailed look into a first time buyers financials. It includes a lender pulling a fact data (Tri-merge) credit report, collecting the first time buyers pay stubs, W-2’s, verifying their employment, and any other information needed to approve the buyer. This process may sound much more difficult, but depending on the lender that a first time buyer chooses, it doesn’t have to be! Having a pre-approval instead of a pre-qualfication is not only attractive to a seller, but also can be the difference in a first time buyer winning in a multiple offer situation! Click Here To Get Your Free Credit Report

Set Realistic Expectations when purchasing your first home!Set Your Expectations when buying a home for the first time, an extremely important tip is to make sure expectations are set. By setting realistic expectations, the chance to be disappointed or let down is minimized. So, what type of expectations should be set before purchasing a home for the first time?

Once a buyer knows how much they can afford, it’s important to figure out what will their money get them. When buying a home for the first time, it’s important to do it with a purpose and a realistic goal in mind. How big of a home can be afforded? What style of home is desired? What are acceptable locations of the home? It’s important that first time buyers have a strong feeling on items like these but also a good idea on which items they are willing to be flexible with. It is a great idea to prioritize these items in order of importance.

Learn About the Home Buying ProcessThe home buying process is exactly that, a process. There are certain steps that need to be taken to ensure the process of buying a home for the first time, goes smooth. By understanding the process, it greatly reduces the chance that a buyer is disappointed, let down, heartbroken, or frustrated. There are many things that a first time buyer should be doing before looking for homes, such as getting a pre-approval, but also many things that a buyer should be doing once they are under contract on their future home. Many first time home buyers don’t understand why it generally takes 60 days from contract to closing.

Are There Any Incentives or Grants Available?
First time home buyers are often able to take advantage of first time home buyer grants or incentives. It’s important that a first time buyer understands that every lender is different. From the interest rate they are able to offer, the type of loan products they offer, to the incentives or grants they are able to offer.

Consider all the expenses involved in owning a home
Many first time home buyers make the mistake of not considering the costs of owning a home. It’s common that a first time buyer purchases a home that is the absolute maximum they can afford according to a lender. This can lead to problems once the buyer realizes the other expenses involved in owning a home. First time home buyers often forget about additional expenses of utilities, furniture, appliances, insurance, and groceries, to mention only a few. That is why rent to own is such a unique and viabl eoption for those who have subprime credit. Click Here To Learn More About Rent to Own

Home Buyers May Get Help From A Stock Downfall

Home Buyers May Get Help From A Stock Downfall

The Federal Reserve recently raised interest rates, U.S. stocks are tumbling and new worries about the Chinese economy seem to emerge daily. So now is a great time to buy that house you’ve been looking at or rent to own.

Well, not necessarily. But consider: all the worries about China that have battered the U.S. stock market in early 2016 have done the opposite for bonds. More money pouring into Treasury's has driven mortgage rates to a two-month low. A 30-year mortgage slipped to 3.92% in mid-January.

The housing market had already been gaining ground even before the latest drop in rates. Housing, has been one of the strongest parts of the economy over the past year. Sales of new and previously owned homes are likely to finish 2015 at the highest level since before the Great Recession.

What’s more, the number of permits to build additional homes is on track to reach an eight-year high.

Six years ago, builders were producing fewer than 600,000 new homes a year.

Sales of existing homes, are about 25% higher compared to the post-recession low.

Most economists predict new construction and sales will increase again in 2016, aided by a much improved labor market. In the past three years, the U.S. has produced 8.2 million new jobs to give more people entering their prime earning years the ability to buy a home.

The big wild cards are mortgage rates and home prices, both of which could deter buyers. Which is why rent to own is such a viable opportunity for someone or a family to own a home! Click Here to Find Out

How Rent-to-Own Works

Buying a home through a rent-to-own or lease-option agreement has become more popular in the aftermath of the 2008 financial meltdown. More people have been looking at creative solutions to buying a home, but it’s important to differentiate between creative and smart. Renting to own might be worth considering depending on your situation.

How Rent-to-Own Works

These deals become more common when the market is slow for two reasons. First, a slow market makes it difficult for homeowners to sell their homes. Second, when the market is slow, more people struggle with low credit and saving up for a down payment.

Rent-to-own, sometimes called a lease option or lease purchase, is a self-imposed savings plan for the renter/buyer. The renter pays an upfront fee, called an option fee, which guarantees the renter the option to purchase the home after a specified amount of time, usually one to three years. The renter agrees to pay the fair market value monthly rent on the home plus a monthly rent credit. During this time, the homeowner can’t sell the home to someone else. The price of the home is fixed at the beginning of the period, and the renter gets it at the preset price – whether the value goes up or down. After the time period is up, the renter can put their upfront option fee and accumulated rent credit toward the purchase of the home.

Read more at Freedom-Rent-to-Own.com

Who Benefits From A Rent-to-Own Property?

In the right circumstances, both parties can benefit greatly from a rent-to-own agreement. Tenants who take on rent-to-own contracts tend to take better care of the home since it will be theirs in the near future.

•Tenants that benefit from these arrangements include individuals who:
•Have mediocre credit and cannot qualify for a mortgage
•Don’t have enough employment history
•Cannot save up a down payment large enough for a mortgage
•The tenant has the opportunity to improve their credit or to gain further employment history. By the time the lease is up, the tenant should be in a good position to buy the home.

Not only will they have the necessary deposit covered (at the very least in part), but they will have already built equity in the home that they wish to buy without being penalized for poor credit history or lack of a down payment. Find out more here.

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For some potential homeowners, renting a home for a time before buying is an attractive option. It allows time to save money or otherwise get financially prepared before buying a home, and it also offers a way to get to know the property before committing to it. Regardless of your situation, a rent-to-own model could put you on the path to homeownership.

For credit-challenged former homeowners, a rent-to-own agreement (also known as a lease-purchase) allows them time to save up the required down payment, establish a longer job history, and deal with whatever is making it difficult to obtain a mortgage. For first-time buyers, the model gives them a taste of what it’s like to own a home without having to come up with a down payment or commit to a mortgage.

So is a rent-to-own agreement a good idea for you?

A lease-purchase may be right for you if:
•you have difficulty qualifying for a mortgage now but won’t in a year or two;
•you are having difficulty saving for a down payment;
•you believe interest rates will fall or home prices will rise over the next year or two and •you would like to lock in a price now;
•the owner will agree to refund all or part of your option payment; or
•you like the home and would like to live in it for years.

Do your research before you commit to a rent-to-own deal, and be sure it’s what you want.

Owning a home – it’s one of those things that we’re told we should do from early on in life.

Winter Energy Conservation Tips to Save Money.

With the Winter season fast approaching, ourselves at Freedom Rent to Own thought it would be a good idea to touch base on a few Winter energy saving tips.

Let’s face it. These days everyone is looking for as many ways as possible to save a few bucks here and there. It seems like one of the largest drawbacks for many when it comes to accomplishing such a feat is they simply don’t have a ton of time to invest in doing the research on how to do so.

Because of this, Freedom put together the following list of just a few basic things homeowners can do to help ensure they’re getting the most bang for their buck!

Purchase a Programmable Thermostat                   

Then set it for around 68 degrees. Most people prefer to have their homes kept warm during the winter, even when they’re not home, or at night. With that said, for every degree you drop the temperature in your home, you could end up saving as much as 2% off energy use for your heater. Even more, with the right thermostat, you can program the heater to come on and off at certain times and more.

Lower Your Water Heater’s Temperature

Believe it or not, lowering the temperature on your water heater to around 120 degrees can save you anywhere from 3-5% on your home’s energy bill. You may also consider insulating your water heater and any exposed pipes as it will help reduce heat loss. In other words, the water heater will have to work less.

Catch Those Drafts!

Drafts, air leaks, and poor insulation are often another cause for high-energy bills. As the fall season approaches, it’s a good idea to have an inspection done to repair any areas which might be creating an issue. Repairing any air leaks cave save upwards of 10% off your energy bill and insulating the attic door in your home can even save you up to 15% of the energy costs associated with the loss.

Clean the Fridge AND Your Dryer  

It sounds random but it works. Both of these are two very high-energy draw items. This means if your dryer’s lint traps and fridge’s coils cleaned out, you’ll increase the efficiency of both items. Fixing these items alone can help save you up to 30%.

In addition a clean drier vent helps reduce the risk of fire.

Make a Huge Impact on Your Energy Bill, As Well as Help The Environment.

Saving money on your energy bill doesn’t take a rocket scientists but it does require some due diligence and effort. Sure, just doing one of these things won’t save you a ton of money but by working on each of them, the total savings you could be looking at on your energy bill is upwards of 40 to 50%.  Why wouldn’t you want to do these things for the Winter?