My Burt Reynolds is an 11-year old Cocker Spaniel and it's time for a fenced yard for my little man, so I'm out looking at homes for us. I've been an investor and now Realtor over ten years but I must keep reminding myself not to get excited and waste everyone's time looking at homes I can’t afford. I must do my homework first, but that’s not as much fun as seeing homes.
Step 1: Mortgage Prequalification. I knew what my limit was last fall, but the rates have gone up, so I can afford $30K less today with conventional financing. FHA is still a good deal with a lower down payment, and I qualify for $30k more than conventional. I wasted two days looking at homes I could not afford this week before I got the numbers from my lender. The homes I loved—and THOUGHT I could afford--were not on the FHA HUD list. When I was a new Realtor, I NEVER took people out unless then had a letter of prequalification, it's just good business. And in Atlanta where I began my real estate career, knowing who your clients are and that they have been checked out is a matter of safety. And oh my goodness, please use a well-known, reputable mortgage professional, by all means!
Step 2: Lifestyle/location. Where do I want to live? Do I want to be close to Siesta Key where my office is and where I do most of my business? Do I want the convenience of taking lunch to my grandchildren or surprising them in the morning with Dunkin Donuts before school? Or do I want to buy an affordable single-family retirement home with a nice yard for Burt Reynolds in Venice, 30 minutes away? I found four lovely possibilities yesterday with updated kitchens and baths that were under $200k, homes that would absolutely be out of my price range in Sarasota. Do I want yard work combined with the pleasure of taking my 30 patio plants and creating a beautiful large deck? Do I want to pay someone to cut my grass, and pay higher water bills? Do I really want an extra bedroom for house guests?? Living in a small place does have its benefits! Question here is that will Burt or my grandchildren be the deciding factor where I choose to live? I'll keep you informed!
Step 3: Permits: Before I look at the homes on my list, I know the age of the roof and HVAC. Those are high ticket items that must be considered when looking at comparable properties. Don't get me started on nightmares of work being done without permits or permits not being closed, which holds up closing!
Step 4: Homeowners Association/Condo Fees. Find out from your lender how much you can afford. Are the water, trash, pest control, roof maintenance/replacement and grounds maintenance included?
Step 5: Credit Score. Last fall, I was shocked at three errors on my credit report and I worked for two months to get them cleared up. This takes time, so keep up with your credit report and credit score.
Step 6: New Construction. There are many good homes in good areas, but be careful with the builder incentives. You may get $5,000 in upgrades if your use their closing company and lender, but it's been my experience with Buyers that the interest rates and closing fees are higher than the fees charged by a lender who is not affiliated with the builder.
Step 7: Credits at Closing. Buyers can a credit for closing costs, appraisal, and inspections. For a $200k purchase, I'll ask for a $5k credit from the Seller.
Step 8: Crime Reports. I was looking at a community bulletin board and found a notice about a stolen vehicle last week. That happens everywhere, but it reminded me that it’s my responsibility to get the crime reports from the Sheriff’s Department and check sex offender registry before putting in an offer.
Step 9: Survey: If I purchase a single family home, I'll be sure to get a new survey because if there are title defects, that may cost me in the future and it could affect the future marketability of the property.
Step 10: Addendum L: I'll use the Right to Inspect/Right to Cancel Addendum in the contract, which gives me the opportunity to cancel during my 15-day inspection period. Maybe the roof was replaced five years ago but if it has been leaking and repaired, that's a problem. The regular contract will not allow termination if everything is in "working order." Addendum L is just an extra security measure I always use for Buyers. Some Realtors for the Sellers don't like and try to strike - and sometimes "forget to put it back in the contract package when signed by their Seller." Yes, that happened to me recently in a condo that I just sold, but I always insist on Addendum L!
I'm here and happy to help you find your new home on Siesta, or in Sarasota, Nokomis, or Venice. New listing: 5855 Midnight Pass #217, Siesta Key, Harbor Towers, Unit 217, 2BR 2BA, Intercoastal view, $410k. See my home page at www.LindaHrealtor.com for mortgage calculator and other helpful real estate information.
Most sincerely yours,
Linda Holley, Realtor, GRI
Michael Saunders & Co.
5111 Ocean Blvd
Sarasota, FL 34242
Phone: 941-914-4914
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