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DO YOU REALLY NEED A REAL ESTATE AGENT?

Deana M. Devereaux • June 14, 2022

      There are a few things to consider when you’re beginning the process of buying a home. One of the major key factors that could make or break your experience and deal with a home is the real estate agent you use. Let’s face it, everyone knows a real estate agent, whether it be an acquaintance from high school or your uncle’s best friend. The reason it’s so important to choose someone you trust is that they will be your advocate and ally throughout the entire process. If your agent isn’t looking out for your best interest, you could get burned along the way. 


When buying a home, you may think you don’t need an agent and realistically, people have purchased homes without agents before but if you’re a first-time buyer or would like guidance along the way, you should probably use an experienced agent. If the concern is paying for your agent, the good news is that the seller pays both your and their agent's commission out of the profit made on the home sale. Both agents’ commission is usually between 2-3% each of the home price but you don’t have to worry about that if you’re the buyer.


So now that you understand how the agent is paid, let’s talk about why you need someone. Having the right real estate agent can really make or break the process for a buyer. Your agent will identify homes that they think you will like based on the criteria you provided, they will show you said homes, assist you in deciding an offer price, negotiate that offer, and once you’re under contract, they will hold your hand until closing. It’s important to find someone that knows the market, understands your search area, and ultimately jives with you.

The real estate agent that you’re working with to buy your home should be your advocate. You want to ensure that they are aware of all risks and benefits associated with the property you’re looking to buy. There is a major benefit in having a good real estate agent because they can ultimately help you make money on the purchase of your home in the long run. If your agent shows you homes where you could add an additional bedroom or bathroom or they show a property where you could finish the basement, they’re helping you gain equity in the property. 

On the flip side of that, if they don't understand your search area and they show you a home that is overpriced and they suggest that you go in over the true value of that home, you’re losing money on the transaction. It’s important to work with someone that you trust to guide you through the process and help you make decisions that will help your bottom line, not hurt it. 


Here are some tips for choosing the correct agent for you:


1. Find someone that is relatable and that you get along with. You’re going to be spending a lot of time talking and working with this person so it’s important that you get along and will work together nicely. It’s suggested that you interview at least 3 or 4 agents before making a decision and signing any agreements. Trust, chemistry, and experience are key factors to take into consideration during your interview process.


2. Referrals from friends and family who have used certain agents can be great, but it’s still important to interview these individuals. Someone who worked great with your brother might not necessarily be the best choice for you. 


3. Finding an agent that feels passionately about helping you buy or sell your home is the person you want to hire. Finding that person who has the drive and love for their job and helping their clients will close deals faster and at more favorable prices. 


4. Sometimes when searching for an agent, you will interview someone who tells you exactly what you want to hear. That’s great at the moment but when it comes down to buying or selling, you need someone who will be honest with you about the risk and reward. 

Real estate is hardly ever cut and dry so it’s important to choose someone who will assist in setting your expectations from the beginning so that you’re prepared for what is to come. 


5. Work history is also very important when choosing an agent. Do they currently have 10 homes that have been sitting on the market for over 100 days? Or no clients under contract on new homes? Those might be a few red flags to look out for because they indicate that this agent might be pricing their listings too high or they might not have the ability to assess offer prices and terms for their clients. 


Ultimately, it’s important to find someone with compassion who will guide you through the process. Buying or selling a home is incredibly stressful and if you have an agent on your side that will guide, reassure, and ground you throughout the process, you will already be set up to succeed.

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AFFECTING THE MORTGAGE INDUSTRY? NEW LAWS 2022

By DEANA M. DEVEREAUX • June 21, 2022
It’s important to stay up to date on the ever-changing landscape that is the mortgage industry. It’s possible that the newest laws passed by congress, Fannie Mae, and Freddie Mac could affect those looking to get a mortgage, or refinance in the coming months. We’ve put together all the latest on the newest and upcoming mortgage laws affecting the industry. Additional due diligence for condo buyers If you’re looking at buying a condo that is 20 years or older, you may have to jump through a few extra hoops before signing the final loan docs. Conventional loan buyers will have to go through an additional due diligence process that includes obtaining answers on safety, soundness, structural integrity, and habitability of condos from the condo association before the loan can be processed. If you’re looking at a condo this spring, it’s best to get prepared now. While this extra due diligence step is a pain, it’s in your and your lenders best interest. This extra due diligence step was born out of the devastation of recent condo building collapses in the U.S. New fees for vacation home financing and high-balance loans If you thought 2022 was the year for. A second home, vacation home or jumbo upgrade, it may still be but you’re going to be looking at additional fees. Upfront fees for these types of loans are expected to increase between 1.125 percent to 3.875 percent. Fannie Mae and Freddie Mac explain that these increases in the second home market are to keep first-time homeownership rates low and facilitate equitable and affordable housing. You can still buy down these increases with points just like you can buy down an interest rate. This rate increase comes as we saw the housing market skyrocket and borrowers take on additional debt to compete in this hot market. Self-employed borrowers rejoice – loosened regulations Thanks to the pandemic, the number of freelanced workers has increased. The good news keeps on coming because lending criteria has relaxed for self-employed borrowers. The COVID-19 pandemic saw an increase in requirements for self-employed borrowers. If you’re a freelancer, you no longer need to provide year-to-date profit and loss statements and three months of bank statements. We’re back to the good old days of using tax returns to show income! If you’ve been waiting to buy a home because you’re a self-employed borrower, now is the time! In the past, borrowers had to show creditworthiness through any number of on time loan payments including credit cards, first mortgage loans, car loans and more. The strict creditworthiness requirement affected many buyers that did not have credit cards, mortgage loans, or car loans. Now your mortgage loan provider can use a verification tool to check bank deposits for on-time rental payments, and other creditworthiness information. Say goodbye to mounds and mounds of paperwork proving you pay your loans on time!

THE INS AND OUTS OF FINANCING A 2ND HOME

By DEANA M. DEVEREAUX • May 23, 2022
Step 1 – Decide How You’re Going to Use the Second Home Your down payment requirements and loan types will differ depending on what you plan to use your second property for. For example, do you plan to use it as a vacation home, secondary residence, or full-time rental property? A vacation home or secondary residence may qualify for a conventional home loan. When qualifying for a second conventional loan, the process is much like your first mortgage except you will be required to put down 10 percent. If you are purchasing the home to use as an investment property or full-time rental, you won’t qualify for certain loan types such as FHA or VA loans. You will also be required to put down a larger down payment than a vacation home or secondary residence. In addition, you may have to meet stricter debt to income ration requirements. All hope is not lost though! You can still qualify for a vacation home or secondary residence if you plan to rent the home out on apps like Airbnb. Typically, you must occupy the home for some portion of the year, and the home must be a one-unit home that can be used year-round. We can help you figure out what loan type you qualify for. Step 2 – Save For Your Down Payment There are multiple ways to complete this step. You can save the traditional way and put away a portion of your paycheck every month. You can also use the equity in your primary home to fund the down payment of your second home. There are multiple programs available such as: · Cash out refinance: A cash out refinance allows borrowers to borrow up to 80% of their home’s current value. The only caveat with this option is that your primary home’s monthly payment will increase. · HELOC: A HELOC, otherwise known as a Home Equity Li ne of Credit. This avenue differs from a cash out refinance because you are not refinancing your primary home’s mortgage. This is a good option if current interest rates are higher than your primary home mortgage interest rate. The last thing you want to do is refinance to a higher interest rate!

THE MORTGAGE BREAKDOWN

By DEANA M. DEVEREAUX • April 25, 2022
If you’re buying or refinancing a home, it’s important to know the different loan types that exist so you’re best prepared for what to expect. There are four main loan types that all have specific qualification criteria. These four loan types include conventional, FHA, VA, and USDA and each loan type has its pros and cons that we will walkthrough below.
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