As you consider buying your first home, you undoubtedly have hundreds of questions about the process. These questions begin as soon as you start thinking about moving and continue far beyond the closing. What should I expect? How can I prepare? Am I ready to own a home?  These questions are perfectly normal and are to be expected from first-time buyers.

In order to make the home-buying process as easy and smooth as possible, you need to know exactly what to expect .  By reviewing the following information, you will be well prepared to begin the process of buying your first home.

How Much Can You Afford?
The first step in buying a home for the first time is making sure that you can afford the home you plan to purchase. Even if you haven´t already found the home of your dreams, you probably have a fairly good idea of the type of home you would like to purchase.  However, you may or may not realize how much you can actually afford to spend on housing each month.  Surprisingly, speaking to a lender about your financial situation may not be the best place to start.

Lenders look at your debt-to-income ratio and not necessarily at your day-to-day spending habits.  Therefore, they will know if you have several credit cards that are responsibly maintained and a car loan that was paid off in full last month.  But they may not realize that you opt to spend several hundred dollars each month on the latest fashions or videos.  Begin tracking where and how your money is being spent and how much of that spending can or will be curtailed when you purchase a home.

Financial Counseling and Pre-Qualification
A financial advisor can help you to assess your financial information and determine how much home you can afford to purchase.  Speak with a financial advisor before beginning the search for your first home ? and know that there is one other thing you can do to ensure that you are looking at the right homes for your price range.

Most mortgage lenders are happy to complete a pre-qualification process for potential buyers who need to find out ahead of time what size of mortgage they can qualify for.  The pre-qualification process is not a guarantee that the lender will offer you funding, but it does takes into consideration your credit score and income level in order to determine how much the lender might be willing to offer through a mortgage program.  The process will also enable you to begin comparing the mortgage programs offered by different lenders.

Shopping for Lenders
With interest rates declining, you need to make sure that lenders are giving you the most competitive mortgage options and interest rates.  Talking to several lenders will help you decide which one can best serve your interests.

Ask the lender about the details of each program that you are considering, including the closing-cost requirements, down-payment percentage, and any early-payoff costs that your might face. Mention that you are a first-time buyer, because this could potentially make a difference in the types of programs that a lender offers to you.

Once you have selected a lender, make sure that the specific mortgage program you are considering is right for your borrowing needs. I can help you find a mortgage professional if you like, I have a list of individuals that I can recommend to you  that reside in Charlotte/surrounding areas.

Here are two of the most common types of mortgage programs:

Traditional 15- or 30-Year Fixed-Rate Mortgage
This type of mortgage loan usually has a 15- or 30-year payoff (amortization) schedule.  Over the years, you make equal payments that are applied to the interest and principal in varying proportions until you completely pay off the loan.  The interest rate does not change.

15- or 30-year Adjustable-Rate Mortgage (ARM)
The ARM is declining in popularity as a result of better fixed-interest rates with traditional mortgage programs.  However, sometimes a new homebuyer will want or need to purchase a home that is more expensive than what he or she can afford at the time of the purchase.  ARMs, which come with low introductory interest rates that are almost always locked-in for the first five years, can be a good option.  After the introductory period, the interest rate becomes variable and may drop or skyrocket, changing throughout the life of the loan according to a pre-defined time schedule and market interest rates.

Finding an Agent
First-time buyers often call the listing agent for homes that interest them, but this may not be the best way to protect your interests throughout the purchase process.  When a potential buyer works with a listing agent to purchase a home that is listed by that particular agent, the result is double agency. Double agency simply means that the buyer and seller have the same agent, who represents both parties and therefore cannot release information that could harm either party.

To find an agent, consider the area in which you want to buy. A local agent will be familiar with the area and can recommend specific neighborhoods for people with your particular lifestyle.  You can also request recommendations from friends and family members.

Before signing a contract with an agent, ask about the commission rate, although this cost is generally covered by the seller´s portion of the closing expenses.

Make sure that your agent understands what you are looking for and how much you are prepared to spend on your home.  As a first-time buyer, you need to work with an agent who is familiar with programs and lenders who specialize in working with first-time buyers. Please let me be that agent. I can be reached on my cell phone at (704)840-4137. My name is Rod Potter, I can help you find a home.

First-Time Homebuyer Programs
Many programs are designed specifically to assist first-time homebuyers with benefits like down-payment assistance and no closing costs.  Others offer first-time buyers competitive interest rates designed to make borrowing easier.  First-time homebuyer assistance programs almost always apply to anyone who has not purchased a home within the past three years.  Therefore, even if you are not a true first-time buyer but you have not bought a home in the past three years, you may qualify for these programs.

Conclusion
First-time homebuyers who approach the home-buying process with adequate preparation can be some of the best customers for lenders and agents.  If you are thinking of buying a home for the first time, do your research and plan for your home purchase.  Doing so will make you an educated consumer and give you a good chance of finding the best home for the best price.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

Bargain hunters and first-time home buyers alike almost always have questions about the value of buying foreclosed homes. Realtors have access to listings of foreclosed homes being sold at prices that are extremely competitive in today´s housing market.

When realtors show potential buyers foreclosed properties, they should make every effort to convey the difficulties that a new home owner may experience once the sale is complete.  If you are considering the purchase of a foreclosure property that may be too large of a commitment for your lifestyle, a good realtor will be honest and share his or her concerns with you.  This is because good realtors want their clients to be happy with their purchase, and therefore try to ensure that each client is making the best decision for his or her particular circumstances.

Logistically, the process of searching for a foreclosed home is very similar to that for any other home.  Specific listing services provide information to potential buyers, and realtors receive additional information that they can shared with potential buyers.

Potential buyers usually want more information about foreclosed homes than what is available. Understand that when you seek information about a home being sold through a foreclosure sale service, your realtor will probably need additional time to find the answers you need.

A foreclosure is almost always a home that was purchased by a buyer with a federally insured mortgage.  The buyer then defaulted on the loan and the home went into foreclosure.  Because the borrower´s mortgage was federally insured, the insuring agency was required to satisfy the remaining balance of the loan, in essence buying the home from the lender.

Obviously, the government does not want or need this surplus property.  Therefore, the government usually sells the property to a company which specializes in the sale of foreclosed properties.  These agencies are located across the country and list thousands of homes for sale.

Some of the higher-quality homes in affluent areas are sold immediately, perhaps even before they are officially listed for sale.  This leaves average home buyers with opportunities to save a significant amount of money if and when they find a home that works well for their current situation.

Many foreclosed homes have been vacant for a long time before the listing agency places them on the market for sale.  The risk of problems arising from that vacancy may leave buyers disillusioned when they finally have a chance to visit the homes they are considering.

Also, in some foreclosure situation, the previous borrower may not have maintained the home adequately and there may be missing or damaged items throughout the home.  Sometimes foreclosure homes are referred to as buyer beware, because these homes are almost always sold as-is.

Here are the three most questions that realtors are asked about foreclosed properties:

How Can I Find a List of Foreclosures?
Stay away from companies that promise to provide you with a list of homes that you can purchase for pennies on the dollar.  These companies have been known to provide sellers with lists of homes that have already sold, or lists of homes that are already available for free through realtors.

The Internet is a good place to begin your search.  Most of the reputable agencies place their listings of foreclosed properties online.

If you want to know whether additional foreclosed homes are for sale in your area, contact your realtor.  His or her office probably maintains a list of foreclosed properties, and your realtor would be more than happy to meet with you to discuss the possibilities.

So, Do I get pre-approved for a regular mortgage?  Or Am I Required to Pay Cash?
A common misunderstanding among potential buyers is that unless they are prepared to pay cash on the spot, they cannot purchase a foreclosed home.  This is simply not true.  Some lenders offer special loan programs aimed at borrowers who intend to buy a foreclosed home.

Lender appraisals and inspections may sometimes make it difficult to obtain a mortgage for a foreclosed home that has been damaged or is in need of significant repair.  Consequently, the same federal agencies that put the homes up for sale may be willing to extend financing to potential buyers.  These agencies will sometimes give the buyer grant money or a low-cost second mortgage loan to be used for the repair of the home.

In sum, you do not need to pay cash. However, you may need to borrow a specific type of mortgage loan, depending on the home´s condition and price.

Will I Save a Lot by Buying a Foreclosed Home?
Another common misconception is that foreclosed homes are priced at pennies on the dollar.  Well, if you consider this phrase to mean 99 pennies on the dollar, then you may be correct.  Generally, foreclosed homes are listed for sale at their approximate market value, according to the home´s location and condition.

Some foreclosed homes sell for very low prices, but in most of those cases the homes were razed in order to make room for new construction.  More commonly, high-priced homes in affluent areas sell for a few percentage points less than their current market value.  If this is the type of deal that you are looking for, then definitely consider purchasing a foreclosed home.

A good realtor will warn you up-front that the costs associated with buying a foreclosed home can be significant.  The buyer may be required to perform very costly repairs before occupying the property. Also, these buyers may be unable to take advantage of low interest-rate specials offered by lenders.

If you are considering the purchase of a foreclosure, be realistic in your expectations and prepare to expect the unexpected.  Many buyers are thrilled with their home after purchase, but others are forced to complete months of costly repair work before they can move in. As long as you investigate the possible options, including the available mortgage and assistance programs, you will be an educated consumer prepared to make an educated purchase.  Buying a home is often the largest investment that you will ever make, so you need to feel secure in the knowledge that you have invested wisely.

If you are interested in purchasing a foreclosure property, many realtors will offer you the benefit of their experience and expertise.  Realtors normally do not work with these types of sales every day, but they do have access to information and property listings that can help you decide whether buying a foreclosed property is the right option for you.

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

During the home sale process, both the buyer and seller need to protect their interests.  In most cases, offers are fair and equitable. Sometimes, however, the offers are less than fair and careful negotiation can bring both parties to a point of satisfaction with the buyer´s offer.  The counter-offer is extremely important in this negotiation process.

But how can the buyer and seller manage to strike a harmonious agreement that protects both sets of opposing interests?  The answer is that it depends.

Negotiation is not a strong skill for most people, specifically when it applies to haggling over purchase prices and terms for… well, anything.  However, it is possible for both buyers and sellers to learn to negotiate effectively and to compromise on some of their less-important requirements in order to finalize the home sale transaction.

There are three parts to any successful negotiation: education, preparation and honesty. Here we will consider them one at a time.

Education
Education refers not to what you read about prior to looking for a home, but rather the specific details of the home that you plan to purchase.  You need to do your research and gather information as you would for any major investment.  Some of the things that you will need to evaluate through education include:

Doing a CMA…. competitive market analysys, if you plan to seek a CMA report before making an offer, do so before you even begin looking for a home.  The reason for this is that if you are working with a listing agent and not a buyer´s agent, there is a chance that providing you with a CMA later would result in a conflict of interest for the agent.

The information is not based on opinion.  CMAs provide a list not only of the homes that have sold, but also of those currently being offered for sale, including their listing prices and listing dates.  This information will give you a very good method by which you can judge whether the asking price is fair in light of recent sales history.

The Home´s Condition
Part of the education process is becoming intimately familiar with the home that you intend to purchase.  You cannot afford to skip a home inspection.  Before finalizing the purchase, you need to know whether any major improvements must be made prior to occupancy. Furthermore, the CMA report will allow you to assess the home you are buying with the knowledge of its condition and that of the other homes that are listed on the report.  This is great knowledge to have and it will help you to formulate a fair offer for the home.

Amenities
In some areas, amenities are what drive the selling price of homes, but in other areas amenities matter little.  For example, in warmer climates a swimming pool is an amenity that most people desire.  In areas with more seasonal climates, pools are generally considered to be luxury items and will increase the home´s value when they are attractive and well-maintained.

Remember that amenities are nice, but most of the time you will not need to consider them in determining the offer price.

Seller Motivation
When you looked at the home for the first time, did you see any signs of why the owner might be selling?  Is the home simply too large or small for the current owner´s needs? Does the house need too many repairs? Or has the area simply appreciated in value?  The seller´s motivation, when you can identify it, is a great way to gauge your ability to offer less than the asking price.

So, how do you get information about the seller?  One approach is to ask your agent what he or she knows.  As long as you are not working with dual agency (meaning that you and the seller are using the same agent), the agent will probably disclose whatever he or she knows.

Friendly chats with the neighbors can also yield information about the seller.  You may learn that the home is involved in divorce proceedings and needs to sell quickly. Or you may learn that the seller is not in a hurry to move. Either way, you will have gained insight about what types of offer prices might be considered.  Doing your research will definitely serve you well.

Preparation
Being prepared means that you have made a logical decision to make an offer on a home that you would like to purchase because it meets your needs and at least some of your wants.  It means making a sound decision, rather than an emotionally driven decision.

As I mentioned earlier, being prepared also means making financial preparations. This could mean getting pre-qualified for a loan or getting a letter of credit from your mortgage lender.  Being prepared means having access to enough liquid cash to cover the down payment and any associated expenses, such as closing costs.

Honesty
Honesty comes into play when you are making an offer, because you need to be honest with yourself.  If you have found a home that you want to purchase and all signs point to that home being worth $150,000, you would be insulting the seller if you offered $60,000 when the home is listed for only $100,000.  You need to make an honest offer that is fair and equitable.

On the other hand, if you determine that the seller´s asking price far exceeds the true value of the home according to the research you have done, then you might need to walk away from the home if the seller seems unwilling to negotiate equitably.  Sometimes the seller NEEDS to get a certain price for the home in order to satisfy his or her own mortgage, but that doesn´t mean that you should be paying the difference.

Occasionally, when you strongly want a particular home no matter what, you may be willing to pay more than the market value. As long as you are honest with yourself about your motivation, there is no reason not to make what the seller considers a fair offer on the home.

Conclusion
By taking the time to become educated, prepared, and honest with yourself, you are well on your way to making an offer that no seller can refuse.  Certainly, the process takes time and effort, but the rewards will be ten-fold when you receive the keys to your new front door

Contact me today for more information!  Rod Potter/ Email: rpotter@carolina.rr.com / Phone: (704)840-4137

"The pinnacle of the American Dream can be yours if the negotiation goes well."

When searching for a new home, there are certain things that are important to do including….

1) Before you start

Before you start shopping, you should Pre-qualify for a Loan. Being pre-approved for a loan determines how much house you can afford. It also allows you to move more swiftly when you find the right house, especially when you aren’t the only interested buyer. Call me, I have some GREAT contacts for this.

2) Shop for Mortgage Rates and terms

A difference of even half a percentage point can make a huge difference in how much you pay over the life of a loan. For example, the difference in the monthly payment on a $100,000 mortgage at 8 percent vs. 7.5 percent is about $35 per month. Over 30 years, that’s $12,600.

3) Using a buyer agent

As your licensed NC buyer broker, I am legally responsible for representing your best interest in the real estate transaction. In doing this, I will be doing my best to make sure that you are treated fairly and get the best price on a new home as possible.

As the buyer agent, I am usually compensated by the seller at the closing table. Therefore, no money will be coming out of your pocket for my services.

4) Distance to your place of employment or family

If there is a destination that you need to go to frequently like a job or a family member, I recommend that you try to find a home that isn’t to far from that location. Needless to say, it can be quite burdensome to drive back and forth.

5) Crucial items of importance

Make a list of items that your new home “MUST HAVE”. For instance, you must have a large backyard, a basement, or a pool. In any event, those items are important to know BEFORE buying a house. There is nothing worse than buying a home and not having something that is extremely important to you  being missed.

6) Features that help or hurt resale value

In some areas, a swimming pool actually detracts from a home’s value and makes the home harder to sell. In neighborhoods with two-car, attached garages, a single-car or detached garage may impact the home sale and future value. As your Realtor, I will point out features that hurt, as well as those that help, resale value.

^{Feel free to contact myself for more information at (704) 840-4137 or Rod Potter at rpotter@carolina.rr.com.}