Real Estate Information Archive

Blog

Displaying blog entries 1-6 of 6

9 Mistakes First-Time Home Buyers Make

by The Linda Frierdich Group - Century 21 Advantage

 

9 Mistakes First-Time Home Buyers Make

 

Buying a home is a complicated process, as it should be.  After all, the biggest purchase of your life should probably require necessary measures, time, and “getting all your ducks in a row.”  While it may be understandable that the process of buying a home is intensive, this certainly doesn’t help homebuyers navigate the housing or lending markets.  There are many mistakes that can potentially be made by home buyers, and some, in particular, tend to be made by first-time homebuyers.  Between the stress, misinformation or lack of information, and excitement of buying a first home, there are a lot of errors that can be made along the way.  Assembled here are a number of such examples, in hopes that they may get first-time homebuyers to think about these issues and how they may avoid them.

 

 


Not Attempting to Gain a Better Understanding of the Process

 

No one expects a first-time homebuyer to know the ins and outs of the housing and lending markets and processes.  The first thing a first-time homebuyer should realize is that it is okay that they not know everything; in fact, it’s okay to know nothing at all.  There is absolutely nothing wrong with asking questions.  Many first-time homebuyers make the mistake of not asking enough questions during the process of buying  home, for a number of reasons.  Being sure about the processes involved in buying a home help to ensure that a Buyer is truly happy with their purchase in the long run.  Actually, one of the best ways for first-time homebuyers to begin the process of buying a home is assembling a list of questions they have for both the real estate agent and the lender. 


Thinking You Can Do It Alone

 

When in doubt of how to complete a certain task, the best thing to do is consult a professional.  The same is true when someone is looking to Buy a home.  Meet with a few real estate agents and see how they suit you.  If one doesn’t quite click with you, there is nothing wrong with moving on to a different agent.  You should feel comfortable and confident in your real estate agent, because they will be helping you through the process.  It will be a lot more enjoyable if you are paired up with someone with whom you feel comfortable.   Your real estate agent can recommend a few lenders for you to contact, so that you can begin determining which of those individuals you will choose to work with.   It is important that you feel confident in your lender and his or her professionalism, trustworthiness, and abilities.  After all, he or she will be helping you finance your biggest investment.

 

Not Making Your Goals Clear

 

When speaking with both your real estate agent and your lender, it is important that you make your goals clear.  While your real estate agent can help you decide which characteristics of a home are most important to you, you need to be honest and open during these conversations.  Your agent will know the right questions to ask you to help you decide what you are looking for, but only if you make it clear that you need help and don’t know where to start.  Your lender needs to know what your financial goals are to help you decide what kind of loan you should be getting, as well as what price range of home you should be looking for.  It’s not just about what you can afford with your income; it’s about what you can afford with your income and other financial goals, such as saving.

 

Failing to Take Saving into Account when Budgeting

 

What you can afford doesn’t simply boil down to what you are comfortable paying each month when considering other expenses.  You should also be considering planning for your future and saving money when determining what you can afford.  Too often, this aspect of a budget is overlooked by first-time homebuyers.


Not Knowing (or Ignoring) What You Can Afford


The excitement of owning a home often overtakes first-time buyers, leading them to neglect assessing what they can afford, as well as what their budget means to what kind of home they will find.  While it’d be nice if our first homes were all our final homes, and we could afford our dream house right off the bat, that’s just not realistic.  Too often first-time buyers get mixed up in their ideas of their “perfect home” and their “perfect for right now” home.


This concept is also important for first-time buyers to consider for a different reason.  Often, buyers who have never owned a home before realize that their budgets are limited and decide that they will purchase a home that needs a lot of work, a “fixer-upper” and make it their own on the cheap.  Assuming that a fixer-upper is cheaper than buying a move-in ready home is naïve and, often, inaccurate.  Even professionals who know what they’re doing can end up sinking a lot of money into a home that needs work.  If you are considering purchasing a fixer-upper as your first home, make a list of all the projects that will need to be done for you to update the home, do a little research, and start weighing the actual costs.  Don’t forget, also, that most of the time, any single project ends up costing more than expected, because projects usually hit snags along the way.


Failing to Acknowledge that Needs/Wants will Change over Time

 

While it is important that buyers consider that their first home will probably not be their forever home, it is also important to realistically analyze how long they think they will be in their house.  A third-floor condo may be great for right now, but if a Buyer is planning on getting a dog in the near future (while they are still planning on being at that residence), they should be considering the two flights of stairs for every trip outside with their dog. 


Becoming Distracted by Over-the-Top Features

 

It may be extremely cool that a house you looked at has a wine cellar or pool in the backyard.  However, if you don’t have the money to ever have the ability to stock that wine cellar, or if you don’t have the money or means to maintain that pool, neither of those features will retain their “cool” factor.  First-time homebuyers often make the mistake of becoming enamored with special features of a home, even if they are impractical or out of the range of what can be afforded.

 

Not Hiring an Inspector


Even if an inspection is not required by your mortgage lender, get one.  Even if the home is being sold as is, get one.  Even if the cost will come our of your pocket, get one.  Regardless of the circumstances, you should make an effort to know what exact home you are purchasing.

 

Changing Finances During the Home Search

 

Your pre-approval or pre-qualification is considered from the current financial situation you were in when you sought it out from your lender.  The numbers will change if your financial situation changes.  Change jobs, and your qualifications change.  Get a car loan, and your qualifications change.  Take out a line of credit to furnish your new house, and your qualifications change.  Make a late payment, and your qualifications change.  It is so very important, during your Home Search and especially during the period of time between signing a contract and closing on a house, that none of your financial situations change. 


Overall, there are so many things that can be done wrong when buying a house.  Without experience in the process, it’s very difficult to know what to do and what not to do.  That’s why it’s so important to learn all you can and be honest with the professionals you are dealing with. 

 

Did we forget something?  Let us know in the comments!

Home-Buying Dictionary: Words and Definitions to Know for Anyone Buying a Home

by The Linda Frierdich Group - Century 21 Advantage

 

Home-Buying Dictionary

 

Words & Definitions to Know for Anyone Buying a Home

 

Buying a home is a complicated process, and first-time homebuyers, in particular, can find the process overwhelming.  Anyone who has bought a home can attest to the fact that there are many steps to buying a home, and that there is a lot of room for mistakes to be made during the process.  This prospect is daunting enough to a first-time homebuyer, and to make things more complicated, they often are faced with a feeling of ignorance due to not being familiar with the common phrases and definitions that are associated with real estate transactions.  This is a beginner’s guide to real estate terms that are important to know.

 


Acceptance

Acceptance happens when the party who received an offer accepts its terms and thereby creates a contract between the two parties.  If a Buyer puts forth an offer to purchase real estate and receives acceptance from the seller, the contract is begun.  Likewise, if a seller counteroffers the buyers’ original offer, and the buyer accepts the terms of the counteroffer, acceptance has been reached and the contract is binding.

 

Appraisal

An appraisal is an estimation of a home or property’s market value.  Appraisals are completed by licensed appraisers, and they look at comparable homes that recently sold near the home in question.  Appraisals are typically ordered by lenders during the home financing process to ensure that the investment the lender is considering is a worthy one.  If the appraisal results indicate that the home’s value is less than the loan amount, the lender may refuse to finance the loan.

 

Closing

The closing date is when the ownership of the home is transferred from the seller to the Buyer.  A closing takes place at a title company, where both buyer and seller will settle all credits and debits before signing the paperwork to transfer ownership of the home.  The certificate of title, abstract, and deed are prepared by an attorney, and the buyer signs the lender's mortgage paperwork.  The closing date is typically established during the negotiation stage of buying a home, but it is subject to certain criteria that could cause the date to change.  The closing essentially finalizes the original contract entered into by the buyer and seller.

 

Closing Costs

Closing costs are expenses other than the cost of the property in the transaction, and they are paid during the closing.  Closing costs can be incurred by either the Buyer or seller.  Closing costs typically include such expenses as the escrow fees, the real estate agent commission, the attorney fee, the appraisal, the inspection, the attorney’s fee, and more.  Some closing costs are tax-deductible, so be sure to save your closing statement and have it handy, come tax-time.

 

Commission

The commission is the money typically paid by the seller to a real estate agent as compensation for finding a Buyer and completing the sale.  The commission can be a flat fee or a percentage of the sale price, depending on the agency agreement.

 

Contingency

Contingency is a word that means that a certain condition must be met before a contract is legally binding.  When a contract is contingent on something, a provision in the contract clearly states that some or all of the terms of the contract will be altered or voided by the occurrence of a specific event, usually by specific dates leading up to the closing.  For instance, a contingency clause in a contract can state that if the Buyer doesn’t approve the inspection report for the property, the buyer can back out of the contract.  The two most common contingencies in the home buying process are that the home must pass the inspection and the borrower must be approved for the loan.

 

Counteroffer

A counteroffer occurs when a seller has made an offer on a property that rendered a response of a different offer from the seller.  When a counteroffer is made on real property, it essentially nullifies the original offer, giving the Buyer a chance to refuse and not be accountable for their initial offer in any way.  A counteroffer is intended to begin negotiations for a transaction to occur, depending on the amount and terms agreed upon by both the buyer and the seller.

 

Disclosure

A disclosure is a legal document that a seller is required to sign when listing their home for the purpose of disclosing any major physical defects in the house that they are aware of, as well as the presence of lead-based paint, radon, or other potentially hazardous materials, conditions, or contaminants.  A Buyer, before asking their agent to prepare an offer for a home, should ask to see the disclosures to make sure that there are no major hazards within the home that would prompt them to not move forward with the purchase.  When putting in an offer, a buyer will be required to sign the disclosures to acknowledge that they have read and understood them. 

 

Downpayment

The downpayment is the amount of money to be paid by the Buyer to the seller upon signing the closing paperwork.  The buyers’ loan amount is the downpayment subtracted from the purchase price from the home.

 

Earnest Money

Earnest money is a deposit made to the seller from the Buyer.  An earnest money deposit is intended to show the sellers the buyers’ good faith in their offer and intent to proceed with the transaction.  If the sale goes through, the earnest money deposit counts toward the downpayment of the home.  Unless the offer to purchase expressly states that the earnest money will be refundable if the sale does not go through, the buyer typically forfeits the earnest money in the event that the contract is not executed.  It is important to note that an earnest money deposit is not necessary to offer; it is simply to imply good faith to the seller.  Furthermore, it is not necessary that earnest money be money at all; it can be in any form that is deemed acceptable by both buyer and seller.

 

Escrow

Escrow typically refers to the escrow account, in which funds are held until the occurrence of a sale, afterwhich the funds are released to a designated individual.  Typically the escrow account holds money from the Buyer for the lender; the escrow account will store the mortgage payments, which can consist of the principal, interest, and insurance. 

 

Home Inspection

A home inspection is usually ordered by the Buyer in a real estate transaction for the purpose of obtaining a report on the home’s condition.  A home inspection is carried out by a licensed inspector, who, after completion of inspection, provides both buyer and seller with a report detailing any concerns, repairs, maintenance, or potential issues that exist within the home. 

 

Home Warranty

Sometimes offered by a seller to give their home a competitive edge in the marketplace, a home warranty covered the costs of repairs to specified parts of the home over a specified period of time.  The home warranty, if offered, is provided by the seller as a condition of the sale.  However, a Buyer can request a home warranty and write it into their offer on the home.

 

Homeowners' Association

A homeowners’ association is an organization made up of residents in a neighborhood who are concerned with managing and maintaining common areas of a subdivision or condominium complex.  Many homeowners’ associations require a monthly or annual fee from residents of the neighborhood that contributes to the maintenance of those common areas.  The association is also responsible for enforcing any covenants and restrictions that apply to homes in the neighborhood.

 

Homeowners’ Insurance

Homeowners’ insurance is a form of insurance specifically to protect a home and its possessions from damage.  A lender will require some documentation of homeowners’ insurance while processing your loan, because the lender also wishes to protect his investment in your home.

 

Mortgage

A mortgage is a lien on real property given by the Buyer to a lender as security for money borrowed.  The loan term, interest rate, and type of loan within the mortgage is typically decided upon by an in-depth assessment of a client's finances and current situation with the help of a lender.  

 

Multiple Listing Service

The Multiple Listing Service is a computer-based service commonly referred to as the MLS.  It provides real estate agents a number of services and benefits.  Agents use the MLS to disburse their listings to other agents, so that any agents working with buyers can easily see if the property is something that their client would be interested in.  An agent can also look to the MLS to get comparable properties to help the seller decide on a fair and reasonable asking price for their home.  The MLS isn’t just a tool for agents, however.  The MLS also serves as an exporter of listings and their information to other websites that the public has access to, such as REALTOR.COM or Zillow.

 

Offer

When you find the home that you would like to purchase, your real estate agent will prepare an offer to be submitted to the seller.  This offer contains the date of your offer, a description of the property, the amount of your earnest money deposit, the amount of money you are wanting to pay for the property, financing details, your name and address as well as the seller’s name and address, the closing date, and any other special requirements or contingencies you’d want to ask for.

 

Pre-Approval

Pre-Approval takes place after pre-qualification, and it tends to be a much more complicated and involved process than pre-qualification.  For pre-approval, potential borrowers will complete a mortgage application and supply the lender with all the documentation necessary for them to complete an extensive examination of your credit and finances.  After this analyzation, the lender can tell you the specific mortgage amount for which you are approved, meaning that you will have a more concrete idea of what homes you can look for.  With pre-approval, potential borrowers then receive a conditional commitment in writing for an exact loan amount, even if the potential Buyer hasn’t yet found a property they’re interested in.  Pre-approval usually happens after finding a home on which to make an offer, but it can be done during the Home Search.  Doing this step earlier can actually give potential buyers an advantage with a potential seller, because it’s one less step that must be completed for the contract to continue.  Once a buyer has found the home they are wanting to purchase, they only need to fill in the property information and they are ready to proceed with funding.

 

Pre-Qualification

Pre-qualification is the initial step in the mortgage process, and it should be done prior to beginning the Home Search.  The process of getting pre-qualified allows you to discuss any goals or needs you may have with your lender, and your lender can explain your various options and give his or her recommendations.  The pre-qualification process begins by supplying your lender with your overall financial situation, including debt, income, and assets.  The lender then analyzes your situation and can give you an idea of the mortgage amount you will likely qualify for.  Often, the pre-qualification process can be done simply, quickly, and over the phone or online.  The reason that this step should be done before the home search begins is because it allows buyers to look only at homes in their price range.  Often, without prequalification, a Buyer will fall in love with a home outside of their price range, and will subsequently be let down by every home that comes on the market, no matter how perfect or lovely the home may be. 

 

Restrictive Covenants

Private restrictions limiting the use of real property. Restrictive covenants are created by deed and may "run with the land," binding all subsequent purchasers of the land, or may be "personal" and binding only between the original seller and Buyer. The determination whether a covenant runs with the land or is personal is governed by the language of the covenant, the intent of the parties, and the law in the State where the land is situated. Restrictive covenants that run with the land are encumbrances and may affect the value and marketability of title. Restrictive covenants may limit the density of buildings per acre, regulate size, style or price range of buildings to be erected, or prevent particular businesses from operating or minority groups from owning or occupying homes in a given area. (This latter discriminatory covenant is unconstitutional and has been declared unenforceable by the U.S. Supreme Court.)

 

Survey

A map or plat made by a licensed surveyor showing the results of measuring the land with its elevations, improvements, boundaries, and its relationship to surrounding tracts of land. A survey is often required by the lender to assure him that a Building is actually sited on the land according to its legal description.

 

Underwriting

The process by which a lender decides whether to make a loan to a potential home Buyer based on an in-depth analysis of credit, employment, assets, and other factors and the weighing of this risk to an appropriate rate, term, and loan amount.

 

Zoning Ordinances

Zoning ordinances are the regulations set forth by local government that dictate what kind of property use can be utilized within a certain property.  For instance, some zoning restrictions will prevent property being utilized as farm land.  Zoning ordinances also are regulatory forces regarding Building permits and what kind of improvements can be made to property.

 

While this isn't a complete list of every term that a Buyer will be exposed to during the Home Search and purchase process, it provides a basic knowledge of terms, at the least.  It is important for homebuyers to ask questions during the process, if ever they feel confused about what is happening or like things are too moving too fast.  Choose an agent that you are comfortable with and who suits your personality.  During the lending process, too, it is important that you choose a lender with whom you feel comfortable with and who gave you the best options for your situation.  Never be afraid to ask questions, because professionals in the industry know that there is a lot to know.  They have no problem helping you along the way.

Questions Buyers Should Ask Themselves Before Searching for Homes

by The Linda Frierdich Real Estate Group

Questions Buyers Should Ask Themselves Before Searching for Homes

So, you're pre-qualified... Now what?

 

You're ready to start the journey of home ownership, and you've begun to prepare for the search for your perfect home.   You've spoken to a lender, and you've gotten a pre-qualification that will guide you via price range during your search.  Whether you've owned before or are a first-time homebuyer, this next step can be overwhelming.  There are so many resources and beautiful homes at your fingertips... Where should you begin?  It may seem boring, but there's a lot to be said for good, old-fashioned list-making.  Take the time to sit down and go over the things that are important to you in your next home.  If you are buying a home with another individual, it is also important that you both go through this process together.  The list-making can help everyone get on the same page, and then the Home Search can begin!  In case the task of making a list of home requirements and desires seems like a big task, here are some suggestions for criteria.

 

  • Minimum number of bedrooms and bathrooms
  • Overall square footage
    • If you have no idea about square footage, start with where you're at now.  What is the square footage of the place you're currently living?  Maybe ask some friends and family what the square footage of their homes are to help you get a better idea of what range of square footage is right for you.
  • Open or closed floor plan
    • Do you like the idea of each room being its own closed-up space, or do you like the idea of one large room that allows for spaces to flow into one another?
  • New or Re-Sale
  • House, Condo, Townhouse?
    • Consider what option would be best for you.  Often, first-time buyers don't consider the condominium or townhouse, but they can be a viable option.
  • Space for Office or Bonus Room
    • You know that you'll need two bedrooms, but perhaps you'd also like a space that could work for a studio or office as well.  This is something to consider when looking for a home.  An extra bedroom or space could be used for different purposes.  How important is it to you that you have that space?
  • One or Two Stories
    • Some people LOVE having all living space on one floor, and some people like having it split.  What kind of person are you?
  • Garage, Carport, Off-Street Parking
    • What's your ideal parking situation, and where does it rank in importance?
  • Lot Size
    • Do you really only care about your yard being big enough to fit a barbecue grill, or is it important to you to have room for your kids or pets to run around?
  • Proximity to Places
    • Whether you're looking for a rural home or a suburban home, this can be a vital part of a Home Search.  What places would you like to be close to?  How far is too far away from those places?  What is your cost for mileage driving to work every day?  How much money is too much money to spend on mileage to and from work every day?
Hopefully this list gave you some thinking points to consider when searching for your next home.  Buying a home is a process, and we'd just like to make this process as easy as possible for everyone.
Don't forget- If you ever find yourself needing answers to questions regarding buying or selling, we are here to help you! Visit yourhomeresource.com or call 618.719.3134

Tax Credit Closing Deadline Extended!

by The Linda Frierdich Real Estate Group

Late last night, the United States Senate passed an extension of the Homebuyer Tax Credit closing deadline. Known as the “Homebuyers Assistance and Improvement Act of 2010,” the bill was passed by unanimous consent. The extension applies only to transactions that have ratified contracts in place as of April 30, 2010 that have not yet closed. This legislation is designed to create a seamless extension, and the new closing deadline for eligible home sale transactions is now September 30, 2010. There will not be any gap between June 30 and the date the President signs the bill into law.  

 

Real Estate Is Rocking!

by The Linda Frierdich Real Estate Group

Wow!  Where to start?  Real Estate has been an exciting roller coaster this year so far!  Despite all the media hype, stock market insanity, and economic uproar, my group has exceeded my expectations for this year in real estate!  According to the Southwestern Illinois Regional MLS, we are currently #1 in the area for home sales (dollar volume AND units sold) at a little over $25,000,000 in production!  What does this mean for my clients?

It means that I am STILL SPENDING TOP DOLLAR to advertise your home!  In fact, I am in the process of adding an Interactive Voice Response system to all of my listings just to make sure we access that many more buyers.  I am expanding my marketing plan online to reach out to that many more prospects.  Also, I recently attended a Leadership University where I learned new ways to keep my team productive and cohesive.  I picked up some great marketing tips as well that will keep us on the cutting edge for marketing.  Talk to you soon!

Thanks for the Support!

by The Linda Frierdich Real Estate Group

The new site has been up and running for awhile now, and the Linda Frierdich Real Estate Group would like to thank you for your support.  This new site is only one of many new marketing techniques we are implementing.  We have created a For Sale By Owner website (www.monroecountysalebyowner.com) as well as a free Home Search site (www.lindasellsmonroecounty.com)!  We are getting awesome responses from past, current, and future clients!  Please feel free to let us know your thoughts on our new online marketing.

We also have put a few new seller and buyers programs into place to keep up with this constantly changing market.  Give us a call to find out about the details or for a free copy of our "Home Buyer's Handbook" or "Seller Success Strategies" pamplet.

Have a wonderful Thanksgiving!

Lindsey Bivins

Group Manager

Displaying blog entries 1-6 of 6

Share This Page

Contact Information

Photo of The Linda Frierdich Real Estate Group Real Estate
The Linda Frierdich Real Estate Group
Century 21 Advantage
103 S Main St
Columbia IL 62236
IL: 618.281.7621

138 Concord Plaza Dr
Saint Louis MO 63128
MO: 314.649.0221
Fax: 618.281.4311

Linda Frierdich is the area's premier real estate professional, offering services in St Louis, Kirkwood, Webster Groves, Crestwood, Ballwin, Arnold, Fenton, Oakville, Columbia, Waterloo, Millstadt, Valmeyer, Dupo, Belleville, O'Fallon, Mascoutah, Fairview Heights, Smithton, Ruma, Hecker, New Athens, Edwardsville, Collinsville, Caseyville, Shiloh, Swansea, Monroe County, Madison County, St Clair County, and Randolph County.  Her team focuses on resale homes, new construction, first time home buyers, condos, farms, land sales, subdivisions, lot sales, single family, multi-family, commercial, foreclosures, bank owned property, military relocation, and building. This site offers options to search real estate in Columbia Illinois and other areas. We offer buyer and sellers services second to none!

Listing Alerts

Be the first to know what's coming up for sale in your real estate market with our New Property Listing Alerts!

Just tell us what you're looking for and we'll email a daily update of all homes listed for sale since your last update. You can unsubscribe at any time.

Contact Us

Our offices are located at:
103 South Main, Columbia, IL 62236
- or -
138 Concord Plaza Dr, Saint Louis, MO 63128

618.444.4255
FAX: 618.281.4311