In honor of the Southern Maine Spring Market and all the new buyers, I thought it would be helpful to review a standard checklist on what to expect when purchasing a home in Maine. Depending on the location and type of property will determine the finer details of purchase. For this article, I will present a general checklist for buying a single family home:
- Begin by understanding your finances – you will need to know what you can afford to pay monthly as well as determining how much money you will need for a down payment. Prepare a monthly budget to put everything into perspective. This budget should include EVERY expense each month.
- Choose your Realtor – you want to choose a Southern Maine Realtor you trust. The cost to a buyer for their service is “FREE” and they will represent you and your best interest throughout the transaction. In many cases, your Realtor can refer you to a mortgage broker as well as other vendors throughout the entire transaction, this becomes your “Team of Professionals” that will help you along the way to successfully purchase a home you feel comfortable with. The Realtor acts as the “conductor” of the entire process from beginning to end just like in an orchestra.
- Get Pre-approved before you start looking for a home – understanding what you can afford before you step into a property will make the process more smooth and straightforward.
- Look for a home – after meeting with your Realtor, you now should have determined what your want, how much your willing to spend and where you want to look. Start house hunting!
- Make an offer – working closely with your Realtor, they will help you understand what the best strategy is to offer on the property based the most recent sales in the area.
- Under Contract – this is the most exciting moment for the buyer! Your Realtor will guide you through the all the timeframes that are important within your contract.
- Inspection of home – by now, you are anxiously wondering what condition the home you are about to purchase is REALLY in. Your Realtor should be able to have a preferred vendor list ranging from home inspectors to air/water testing and everything in between when it comes time to inspect the home.
- Obtain Homeowners Insurance – it is best to get a few quotes from various companies to get the most affordable and best coverage for your new home. Your Realtor should have referrals for you.
- Pack and Move – If you plan to use a moving company, secure this early on in the process so you know how much you are going to pack and how much the company will pack and set the date. The rates vary depending on how much you pack yourself.
- Final Walk Through – either 24 hours or an hour before the day of closing, walk through the home to make sure it is in the same condition it was when you last viewed it and all the repairs have been completed to your satisfaction, if applicable.
- Closing – Once the title company receives your loan documents, you will receive a HUD statement which reviews in detail your fees and then amount of money needed for closing. In most cases the money need to close must be in the form of a cashiers check, so make sure you allow time to go to the bank prior to going to the closing. Your Realtor will arrange with the title company the day and time of closing where you will sign the loan documents.
- Congratulations, you are now a home owner – After signing the documents, you get your keys and move in! If there is any personalization you want to make to the home, its best to do it prior to moving in if possible.
As I have said since the beginning, please call a local Maine REALTOR for all your real estate needs no matter how big or small. We are trained professionals here to make your life easier. It’s best to surround yourself with the right team of professionals that can continuously give you the right advice for all your circumstances.
Landing Real Estate
“HOW AM I DOING?”
It’s the time of year to take stock of what we’ve done and how we’ve done it. And, to know whether we’ve been naughty or nice. Hopefully, those who judge are okey doke with our performance.
Because of the hectic pace of everything we do, how often do we do what Ed Koch, the past Mayor of New York City, always did? Simply ask his constituency, “how am I doing?” There was a United Airlines commercial a while back that featured a conference room with Sellers milling around waiting for a meeting to start. The Sales Manager enters and announces that we “are going to see our clients right away,” and distributes airline tickets as smiles appear all around. It is essential that we let our best clients know that we are willing to fix what needs fixing in our relationships.
Reach out to the top accounts in your business. Pick a workable number but make certain they are the top 15% of your business. Send a survey via e-mail, fax or snail mail. The questions are few but powerful:
From 0- 10, how satisfied are you with the job being done by us?
What two (2) things are we presently doing that should be continued?
What two (2) things aren’t we doing but should start immediately?
From 0- 10, how satisfied are you with the job being done by your Rep?
Plan on a quick follow-up phone call. Better yet, go see them but not in a selling mode. Management should accompany Sellers for this visit. Let them know how important they are to us. Heck, bring a chocolate cake!
We’ve all heard the saying, “perception is reality.” Without asking our clients what they really think, we may never know if our customer’s perception matches our perception. Don’t leave that to chance!
Construction Spending Rises
U.S. construction spending rose 0.3 percent in April as private residential construction increased at the fastest pace in six months. Overall construction spending was up 6.8 percent compared with April 2011.
Construction spending rose to an annual rate of $820.7 billion, the Commerce Department said on Friday, after an upwardly revised 0.3 percent increase in March.
Also on Friday, the Institute for Supply Management said its index of national factory activity slipped to 53.5 from 54.8 in April, just missing expectations for 53.9. But, while the pace of growth in U.S. manufacturing slowed modestly in May, according to the report, a gauge of new orders rose to its highest in over a year. A reading above 50 indicates expansion in the manufacturing sector.
What Happened to Rates Last Week?
Mortgage backed securities (MBS) gained +105 basis points from last Friday to the prior Friday which caused 30 year fixed mortgage rates to reach a new all-time low.
Mortgage rates moved lower throughout the week on heightened concerns over the banking issues in Spain and Italy as their bond yields soared to new all-time highs. This made the quality and safety of U.S. bonds very attractive to foreign investors. This added demand caused bond prices to increase and interest rates (which move in the opposite direction) to decrease.
Mortgage backed securities shot upward (causing mortgage rates to hit new all-time lows) on Friday in reaction to the much weaker than expected jobs data. The Unemployment Rate increased from 8.1% to 8.2%, but the real story was the big miss in the Non-Farm Payroll data. The market was expecting the economy to add around 150,000 new jobs but instead, it only added 69,000.
This much weaker than expected employment data caused a big-time buying spree of 10 year U.S. Treasuries and the higher yield paying Mortgage Backed Securities.
What to Watch Out For This Week:
The following are the major economic reports that will hit the market this week. They each have the ability to affect the pricing of Mortgage Backed Securities and therefore, interest rates for Government and Conventional mortgages.
||MBA Mortgage Index
||Unit Labor Costs-Rev
||Fed’s Beige Book
It’s Official: FHA Hike of 75bps Will Come April 1.
The Federal Housing Administration is following through with its pledge to increase upfront and annual insurance premiums on its forward single-family business. The plan is to help rebuild it’s insurance emergency fund which has taken a hit over the last few years during the housing collapse (FHA has paid out nearly $37 billion in defaulted mortgages since 2008).
Unveiled late Monday, the increases are designed to strengthen FHA’s capital position and “have minimal impact on the market and borrowers,” according to FHA acting commissioner Carol Galante. She noted that FHA streamline refinances are exempt from these premium hikes.
Starting April 1, FHA will hike its upfront premium by 75 basis points to 175 bp on all single-family loans, including jumbos.
FHA is also hiking the annual premium on loan balances of up to $625,500 on April 1. On higher balance loans or jumbos, FHA is planning to implement a 35-bp hike in the annual premium on June 1.
The federal mortgage insurance agency currently charges a 115 bp annual premium when the loan-to-value ratio is above 95%.
As the year draws to a close, it’s time to squeeze in some tax deductions and credits that might save you money. If you are looking to reduce your tax liability, here are some 2011 year end tax planning tips or options you may want to consider READ MORE
Mortgage bond prices closed slightly below the levels where daily pricing was set applying upward pressure to mortgage rates. Trade was volatile all day tied to the movement in stocks. Equity and bond prices were yo-yoing with each snippet of news out of Europe. Tomorrow brings weekly jobless claims and Q3 advanced GDP before lenders set pricing. Prepare yourself and your borrowers for a wild ride. Regardless of what happens in Europe stocks and bonds will most likely be EXTREMELY volatile.