Buying Sarasota Real Estate

Siding:
Look for dents or buckling

Foundations:
Look for cracks or water seepage

Exterior Brick:
Look for cracked bricks or mortar pulling away from bricks

Insulation:
Look for condition, adequate rating for climate (the higher the R value, the more effective the insulation is)

Doors and Windows:
Look for loose or tight fits, condition of locks, condition of weatherstripping

Roof:
Look for age, conditions of flashing, pooling water, buckled shingles, or loose gutters and downspouts

Ceilings, walls, and moldings:
Look for loose pieces, dry wall that is pulling away.

Porch/Deck:
Loose railings or step, rot

Electrical:
Look for condition of fuse box/circuit breakers, number of outlets in each room

Plumbing:
Look for poor water pressure, banging pipes, rust spots or corrosion that indicate leaks, sufficient
insulation

Water Heater:
:Look for age, size adequate for house, speed of recovery, energy rating.

Furnace/Air Conditioning:
Look for age, energy rating. Furnaces are rated by annual fuel utili zation efficiency; the higher the
rating, the lower your fuel costs. However, other factors such as payback period and other operating costs, such as electricity to operate motors.

Garage:
Look for exterior in good repair; condition of floor—cracks, stains, etc.; condition of door mechanism.

Attic:
Look for adequate ventilation, water leaks from roof.

Septic Tanks (if applicable):
Adequate absorption field capacity for the percolation rate in your area and the size of your family.

Driveways/Sidewalks:
Look for cracks, heaving pavement, crumbling near edges, stains.

If your income and savings are making homebuying a challenge, consider these options.

1. Investigate local, state, and national downpayment assistance programs. These programs give loans or grants to cover all or part of your required downpayment. National programs include the Nehemiah program,http://www.getdownpayment.com, and the American Dream downpayment fund from the Department of Housing and Urban Development.
http://www.hud.gov/news/release.cfm?content=pr02-014.cfm

2. Get the seller to provide financing. In some cases, sellers may be willing to finance all or part of the purchase price of the home and let you repay them gradually, just as you do with a
mortgage.

3. Consider a shared-appreciation, or shared equity, arrangement. Under this arrangement, your family, friends, or even an third-party may buy a portion of the home and thus share in any appreciation when the home is sold. The owner/occupant usually pays the mortgage, property taxes, and maintenance costs, but all the investors' names are usually on the mortgage. There are companies that can help you find such an investor if your family can’t participate.

4. Get help from your family. Perhaps a family member will loan you money for the
downpayment and/or act as a cosigner for the mortgage. Lenders often like to have a cosigner
if you have little credit history.

5. Lease with the option to buy. Renting the home for a year or more will give you the chance to save more toward your downpayment. And in many cases, owners will apply some of the rental
amount toward the purchase price. You usually have to pay a small, nonrefundable option fee
to the owner.

6. See if you can qualify for a short-term second mortgage to give you the money to make a higher downpayment. This may be possible if you have a good income and little other debt.

The lender must disclose a good faith estimate of all settlement costs. A check to cover your closing costs will probably have to be a cashier’s check. The title company or other entity conducting the closing will tell you the required amount for:

Downpayment.

Loan origination fees.

Points, or loan discount fees you pay to receive a lower interest rate.

Appraisal fee.

Credit report.

Private mortgage insurance premium.

Insurance escrow for homeowners insurance , if being paid as part of the mortgage.
Property tax escrow, if being paid as part of the mortgage. Lenders keep funds for taxes and insurance in escrow accounts as they are paid with the mortgage, then pay the insurance or taxes for you.

Deed recording fees.

Title insurance policy premiums.

Survey.

Inspection fees—building inspection, termites, etc.

Notary fees.

Prorations - for your share of costs such as property taxes. A Note About Prorations. Because such costs are usually paid on either a monthly or yearly basis, you might have to pay a bill for services used by the sellers before they moved. Proration is a way for
the sellers to pay you back or for you to pay them for bills they may have paid in advance.

What to Keep From Your Closing:
The Real Estate Settlement Procedures Act (RESPA) statement. This form, sometimes called a HUD 1 statement, itemizes all the costs associated with the closing. You’ll need for income tax purposes and when you sell the home.

The Truth in Lending Statement summarizes the terms of your mortgage loan.

The mortgage and the note (two pieces of paper) spell out the legal terms of your mortgage obligation and the agreed-upon repayment terms.

The deed transfers ownership of the property to you.

Affidavits swearing to various statements by either party. For example, the sellers will often sign an affidavit stating that they have not incurred any liens on the property.

Riders are amendments to the sales contract that affect your rights. For example, if you buy a condominium, you may have a rider outline the condo association’s rules and restrictions.
Insurance policies provide a record and proof of your coverage.

1. Tax breaks. The U.S. Tax Code lets you deduct the interest you pay on your mortgage,
property taxes you pay, as well as some of the costs involved in buying your home.

2. Gains. Over last five years (1998-2002) national home prices have increased at an average
of 5.4 percent annually. And while there’s no guarantee of appreciation, a late study by the
National Association of REALTORS® found that the typical homeowner has approximately
$50,000 of unrealized gain in a home.

3. Equity. Money paid for rent is money that you’ll never see again, but mortgage payments let
you build equity ownership interest in your home.

4. Savings. Building equity in your home is a ready-made savings plan. And when you sell, you
can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any
federal income tax.

5. Predictability. Unlike rent, your mortgage payments don’t go up over the years so your
housing costs may actually decline as you own the home longer. However, keep in mind that
property taxes and insurance costs will rise.

6. Freedom. The home is yours. You can decorate any way you want and be able to benefit
from your investment for as long as you own the home.

7. Stability. Remaining in one neighborhood for several years gives you a chance to participate
in community activities, lets you and your family establish lasting friendships, and offers your
children the benefit of educational continuity.

Not only does owning a home give you a haven for yourself and your family, it makes great
financial sense, too. This calculation assumes a 28 percent income tax bracket. If your bracket is higher, your savings will be too.

Rent: _________________________
Multiplier: X 1.32
Mortgage payment:__________________

Because of tax deductions, you can make a mortgage payment—including taxes and
insurance—that is approximately one-third larger than your current rent payment and end up
with the same amount of income.

Choosing the Wrong Realtor
As a buyer in real estate you don't pay a real estate commission directly to your agent, this is typically taken care of by the seller out of his proceeds at the closing. But in the long run a REALTOR® with experience and many closed transactions will cost you much less than someone who is inexperienced or unknowledgeable! A top producer's business is built on repeat clientele and referrals because they have proven they know how to select a great home for their buyers and negotiate the best price and terms. Your agent is not your best friend, your agent is your financial advisor for what may be the largest single transaction in your life! Contact me when you are ready to buy!

Poor Location
Location! Location! Location! You've heard that over the years and it still holds true. You can always change a home's decor and some of its structural features, but nothing can ever change its location. Buying a home in a poor location guarantees minimal (if any) appreciation and it will be hard to sell in the future.

Not Having a Home Inspection
A home inspector can literally save you thousands of dollars! They will check all structural, mechanical, electrical, plumbing and heating and air conditioning systems for defects the homeowner may even be unaware of. They will help prevent you from purchasing a home with a major defect or one which requires too much corrective maintenance.

Choosing the Wrong Lender or Loan
The wrong lender or the wrong loan program for your particular circumstance can lead to the loss of big bucks! For example, if you know you are going to be in your home only a couple of years before that next job transfer or retirement, why pay all your closing fees up front? Often you can save thousands by raising the interest rate you pay by half a percent. Your monthly payment may be higher, but you may save $2,500 overall. A good lender will take the time to find out what works best for you! See Find a Loan!

Not Having Your Own Agent
You should always have your own agent in a real estate transaction! A new home is no exception - it costs you NOTHING and a good agent will provide invaluable negotiating experience, and will be able to save you money on loan fees, upgrade options, and more!

Buying a Home You Can't Afford
Always go by the lender's guidelines when deciding how much house you can afford. If you stretch too much you may find yourself in a financial bind which forces you to sell your home. A forced sale almost always guarantees a loss.

Buying a Home You Don't Like
You have to live in your home, not your mother, your father, your big brother, your best friend and not even your REALTOR®! Make sure the home your purchase is the best one for you that you can find within your price range.

DON'T GET "PRE-QUALIFIED”!
Do you want to get the best house you can for the least amount of money? Then make sure you are in the strongest negotiating position possible. Price is only one bargaining chip in the negotiations, and not necessarily the most important one. Often other terms, such as the strength of the buyer or the length of escrow, are critical to a seller. In years past, I always recommended that buyers get "pre- qualified" by a lender. This means that you spend a few minutes on the phone with a lender who asks you a few questions. Based on the answers, the lender pronounces you "pre-qualified" and issues a certificate that you can show to a seller. Sellers are aware that such certificates are
WORTHLESS, and here's why! None of the information has been verified! Oftentimes unknown
problems surface! Some of the problems I've seen include recorded judgments, child support payments due, glitches on the credit report due to any number of reasons both accurately and inaccurately, down payments that have not been in the clients' bank account long enough, etc. So the way to make a strong offer today is to get "pre-approved". This happens AFTER all information has been checked and verified. This process takes a day or so, depending on your situation. It's VERY POWERFUL and a weapon I recommend all my clients have in their negotiating arsenal.

SELL FIRST, THEN BUY
If you have a house to sell, sell it before selecting a house to buy!
I haven't seen a contingent sale work in the last several years, unless it's with a new home builder
who has other houses to sell and can afford to put one on a contingency. Let's pretend that we go out looking for the perfect house for you. We find it and you love it! Now you have to go make an offer to the seller. You want the seller to reduce the price and wait until you sell your house. The seller figures that's a risky deal, since he might pass up a buyer who DOESN'T have to sell a house while he's waiting for you. So he says OK, he'll do the contingency but it has to be a full price offer! So you see, you paid more for the house than you could have because of the contingency. Now you have to sell your existing house, and in a hurry! Otherwise you lose the dream house! So to sell
quickly you might take an offer that's lower than if you had more time. The bottom line is that buying before selling might cost you TENS OF THOUSANDS of dollars. I always recommend that you sell first, then buy. If you're concerned that there is not a house on the market for you, then go on a window-shopping trip. You can identify possible houses and locations without falling in love with a specific house. If you feel confident after that then put your house on the market.

PLAY THE GAME OF NINES
Before house hunting, make a list of nine things you want in the new
place. Then make a list of the nine things you don't want. I call this "NINE OF THIS AND
NONE OF THAT". You can use this list as a scorecard to rate each property that you see. The one with the biggest score wins! This helps avoid confusion and keeps things in perspective when you're comparing dozens of homes. When house hunting, keep in mind the difference between
"SKIN AND BONES". The BONES are things that cannot be changed such as the location, view, size of lot, noise in the area, school district, and floor plan. The SKIN represents easily changed surface finishes like carpet, wallpaper, color, and window coverings. Buy the house with good BONES, because the SKIN can always be changed to match your tastes. I always recommend that you imagine each house as if it were vacant. Consider each house on its underlying merits, not the seller's decorating skills.

DON'T BE PUSHED INTO ANY HOUSE
Your agent should show you everything available that meets your requirements. Don't make a decision on a house until you feel that you've seen enough to pick the best one. Go to the Multiple Listing computer with your agent to make sure that you are getting a COMPLETE list. In the late 1980's, homes were selling quickly, usually a few days after listing. In that kind of market, agents advised their clients to make an offer ON THE SPOT if they liked the house. That was good advice at the time. Today there isn't always this urgency, unless a home is drastically under priced, and you'll know if it is. Don't forget to check into the SCHOOL DISTRICTS of the area you're considering. Information is available on every school; such as class sizes, % of students that go on to
college, SAT scores, etc. You can get this information from my website at WeSellSarasota.com.

BE CAREFUL CALLING ADS WITHOUT AN AGENT REPRESENTING YOU!
A word of caution - agents create ads solely to make the phone ring! Many of the homes have some drawback that's not mentioned in the ad, such as traffic noise, power lines, or litigation in the community. What's not mentioned in the ad is usually more important than what is. For this reason, I want you to be very careful when reading ads. Remember that the person writing the ad is representing the seller and not you!

The most important thing you can do is have someone on your side looking out for your best
interests. Your own agent will critique the property with an eye towards how well it meets
your needs and will point out any drawbacks you should know about. So whether you decide to work with me or not, pick an agent you feel comfortable with and enlist the services of that agent as a buyer's broker. Then you become a client with all the rights, benefits, and privileges created by this agency relationship, and you're no longer just a shopper. Did you know that many homes are sold WITHOUT A SIGN ever going up or an AD EVER BEING PUT IN THE PAPER?
These "great deals" go to those people who are committed to working with one agent. When
an agent hears of a great buy, who do you think he's going to call? His client, who he has a
legal obligation to work hard for you, or someone who just called on the phone and said
"keep your eyes open"?

So to get the best buy on a property, I always recommend that you hire your own agent and
stick with them!

Buying a home can be an emotional, time-consuming, and complex process. There are a few
things that you can do to help make the process go as smooth as possible:

1.) Check your credit.
Before you apply for a home loan, regardless of your credit, it's a smart idea to obtain a copy
of your credit report from the three major credit bureaus and review the information. If there
are errors or things that need to be addressed, it's easier to address them before you have
found a house, than after you have found a house and are trying to close your loan.
If you know that there are a few blemishes on your credit, let your lender know what they
are, why they are there, and why you are a still good credit risk. Lenders look at your credit
to determine how likely you will pay back the loan. If you had extenuating circumstances -
like a loss of a job or medical bills - let them know so that they understand that it is not likely
to happen again in the future.

2.) Get approved before you buy.
An approval means that a lender has reviewed your credit history, verified your assets and
employment, and has approved your loan before you have found a home to purchase. As long
as the home appraises for at least the purchase price, the loan should close.
Getting approved also gives you an advantage over other buyers. Your firm approval makes
it easier for you to negotiate on the price of a home, than a person who is not approved or is
pre-qualified. While getting pre-qualified may sound official, it is really just getting an idea of what you can afford. Its having a person plug in a few numbers that you give them - your monthly
income and your monthly debt - and getting an approximate payment calculated. From the
payment, the calculator can approximate the house price range that you can afford. No
information is verified. Because your assets, income or credit is not verified, a prequalification
has little value when purchasing a home.

3.) Find a great buyer's agent.
Traditionally real estate agents represent the sellers in a transaction. When you are not
working with a buyer's agent, they are less likely to negotiate the best price or contingencies
for you. A buyer's agent's job and fiduciary responsibility (meaning legal duty) is to you, the buyer.
Before working with an agent, establish if they are a buyer's agent or a seller's agent. After
spending a lot of time with a Realtor, it's natural to feel like you're a team. But if they are not
negotiating for you, then they are not on your team.

4.) Learn about the neighborhood.
Often times the house you find may be in a neighborhood that you're not familiar with, which
is ok. It just means that you'll have to do a little more research. If you find a house that you
like, ask for a list of the neighborhood properties that sold in the last year. How does your
home rank? Is it at the top of the price range? If so, it might be hard to resell. Is it average or
on the low end? If so, great - as the other home prices go up in value, they will pull your
home's value up as well. Check out the schools - are they sought after? A good school district means your neighborhood will always be valued by families which is a great reassurance to purchase, not to mention the value-add if you have school-age children. Next, contact the police station and obtain crime statistics? Are they acceptable to you? Sometimes, if they won't give them to you, it could be a cause for alarm. Talk to the neighbors. The more people you talk to, the better sense you will get of who makes up the neighborhood and how they will effect your time spent in it.
Check out the location of the shopping, police and fire stations, schools, and air traffic overhead. These are all things that might affect your property value or quality of your life.

5.) Protect Yourself.
Ask your Realtor for a copy of the documents you will be asked to sign if you decide to buy
the house. Read them ahead of time so that you'll understand the questions that you will be
asked, the things you need to know, and the decisions you will need to make.

6.) Have reasonable expectations.
There is a lot of money at stake. No house is perfect. Understanding and remembering these
two statements will help diffuse the negotiation stage, the inspection stage and the closing
stage. Emotions are high for both buyers and sellers. - The seller may have loving memories and
years of sweat equity in the house. Maybe they are being relocated and don't want to go.
Understanding their motivations for selling will help you appreciate their situation and
predicament during these emotional times. There is a lot of money at stake for all the parties involved - Just remember that market value (the value of a home) is the price that a willing buyer and a willing seller can agree to. If you can not agree on a price, ask yourself: Is there something
you missed? Are there comparables that support the price that they want? Are there
motivations that might factor into the price they are demanding? In the end, does it matter?

What is the house worth to you today and what do you think you can reasonably sell it for
based on the amount of time you plan to spend in it? Think about the answers to those
questions before you make your move. No house is perfect - Always get an inspection. It might be a few hundred dollars, but it's worth it. It's the inspector's job to find any problems with the house that could cost you thousands to repair down the road. Some inspectors have a tendency to over play the importance of their role and the items that they find. Get objective opinions that you trust
before making a decision on an inspection report. Likewise, if an inspector says a foundation
is cracked but its nothing to worry about - get a second opinion. Ask a handyman for an idea
of how much repairs will cost and how complicated they are. The home buying process is an
emotional, complex and time-consuming process, but it is worth it. Nothing compares to
owning your own home in a neighborhood that you chose.

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