Buying a home can be fun and exciting. It can also be very challenging if you are not prepared. There are definite steps to preparing your finances for this process, and while it seems like a lot of work, and it can be, it will pay off when you are ready to purchase your new home.

Why Do I Need to Pre-Qualify for a Loan?

There are many reasons for you to pre-qualify before you begin searching for a home. The first is that before your REALTOR works with you, they will want to know you’re qualified to buy a home.

Did you know that a pre-qualification form is part of our residential purchase contract? Yep, it needs to be sent with your offer to purchase a home. This also helps the Seller know that you’re serious about the process of buying their home. They likely will not even look at or consider an offer without a letter of qualification from a reputable lender.

Another reason is that the amount you qualify for can often dictate where and what type of home you will be looking for.

If you’re planning to buy a home soon, a pre-qualification should be the first thing on your list. Check out this list of steps to help you pre-qualify for a home loan so you can be properly prepared: 

Review Your Credit Score

Your credit score plays a significant role in securing the right mortgage for you. The higher your credit score, the better. Good to excellent credit scores, those around 670 and above get higher chances of mortgage approval and lower interest rates. 

Review your credit report and make sure that you know your credit score. To get a copy of your credit report, go to places like freecreditreport.com. Everyone who goes there can get one free credit report per year.

Gather Your Financial Documents

Lenders need to know that you’re capable of paying your monthly mortgage. You need to prepare your financial documents to make sure you can give them accurate information about your income, assets and ability to pay a mortgage. 

Lenders will want to see things like your most recent 2 to 3 months of paystubs, bank statements, tax returns from the last two years, credit report, and tax transcripts from the IRS.

From that information, your debt-to-income ratio helps your mortgage professional provide you with a total amount you can afford to buy.

Prepare for the down payment

Some mortgages will require a 20% down payment, while some will require a lot less, like FHA or VA loans. If you’re not qualified for the latter, you may need to prepare to pay a larger amount. Remember, 20% is NOT needed for a conventional mortgage. In fact, it is very common for people to use 5 or 10% as their down payment amount.

Many types of loan programs are available. A good mortgage professional will help guide you to the best product for your financial situation.

You can also decide to put down a more significant down payment if you wish to do so. A higher down payment will reduce the amount you need to borrow, reducing your monthly mortgage payment. Sometimes, a higher down payment can also reduce the amount of your interest rate.

Find The Right Lender for You

We are happy to give you a list of lenders from which to choose. We work with several lenders and mortgage brokers who work with different companies to help you find the best loan program for your situation. A benefit of a mortgage broker could be having many lenders to choose from and finding the best loan programs for your unique situation.

Give yourself a variety of options and talk to reputable lenders. Most mortgage brokers have access to similar programs, so it’s best to choose the broker who has a really good communication process. 

Securing your pre-qualification letter

Once you’ve gone through all of the above, your lender will issue you a pre-qualification letter. We will send a copy of that form with your offer on the home of your choice.

A Word of CAUTION: Do not buy anything on credit once you’ve entered into the mortgage loan process. No new cars, appliances, or furniture. Any changes in your credit report could adversely affect your credit score and disqualify you from obtaining a loan.

Are you excited about your new home? 

Preparing to buy a home can be stressful if you don’t know what to do or where to start. If you think you’re ready, give us a call, and we can help you through the entire process! Our team can help you with the purchase of any home for sale, and we can help you find the one that’s best for you!

It’s true, there were 100,959 home sales last year in our market. Of those sales, nearly half ( over 47,000 ) were CASH sales. Yep, greenbacks. No financing, at all. That’s a lot of cash.

Of the homes sold in our market last year, 87% of them were under $200,000 purchases. Of that 87%, we see that a total of 63% of 2011 home sales in our market were below $100,000! Heck, remember 2005?  You were hard pressed to find anything for less than $100,000. We have seen a LOT of investor activity in this real estate market.

Who’s buying homes?

People who have been lulled to sleep or who have not been paying attention to the real estate market for a while seem to be surprised when they have difficulty “stealing” property in today’s market. Inventory is low, rates are good, and the thought of missing the bottom of the market is pulling at people’s wallets.

My question is this. If we now have record low mortgage rates, how long will this trend continue? We are hearing reports of parents buying homes for their kids, investors pulling out of the stock market and buying multiple properties, renters looking to SAVE money on housing expenses, etc. On the other hand, we hear of overall lower home ownership rates as people struggle in this economy.

Short sales and foreclosures made for more than 70% of the sales during the last year. People talk about the “shadow inventory” of bank owned homes, but many people I have talked to in the business don’t see it coming. Many properties are being sold at the “courthouse steps” before they ever go back to the bank. The market is ever changing. Stick around, we’ll have a lot more to talk about in the very near future…

If you have any questions or comments, “Just Call Nick!” I can be reached at 602-803-6425. That’s 803-NICK.

Distressed sales.  You hear the term almost every day. Like most things you hear often, there are two sides to the story.

The fact is, not everyone is singing the blues these days. For some, the recent Trulia.com report saying that it is cheaper to buy a home in most markets than it is to rent, is good news. In the report, Phoenix and Mesa are both listed in the top five of the Top 10 Cities to Buy vs. Rent comparison done for the first quarter of 2011.

Times have certainly changed since the “mortgage-anything-you-can” height of the market. People are looking at location x3 again, financing options have changed, and reasons for buying a home may have even changed.

During one of our company events, I enjoyed this “tongue in cheek” rendition of the Short Sale Foreclosure Blues by my friend and President of Realty Executives, Rich Rector.

Short sales and foreclosures are a large part of the real estate market today and probably will be for a while. If you are facing foreclosure or have questions about your options, OR if you are now beginning to think it is time to quit renting, “Just Call Nick!” I’m glad to help…

Take a look at the video. The words are below – sing along if you’d like.

Well I bought at the top in 2005,

Life was great, beginnin’ the thrive,

Then, whoa,things took a major dive,

Got the short sale, foreclosure, repo blues,

Behind on my payments, market done tanked,

prices have fallen, zilch in the bank,

went to my lender and drew a blank,

I’ve got the short sale, foreclosure, repo blues.

If I could have, I would have paid,

If I could have, I would have stayed…

I’ve been Fannie and Freddie and FHA’d,

I’ve been Chase, Wells Fargo’d and BofA’d,

I’ve got the underwater, upside down,

short sale foreclosure blues…

I’ve been Fannie and Freddie and FHA’d,

I’ve been Chase, Wells Fargo’d and BofA’d,

I’ve got the underwater, upside down,

short sale foreclosure blues…

I don’t try to hide the fact that I am a “bit of a geek” when it comes to my interest in the effective use of website strategy. Although I love working at Realty Executives, if there was one thing that I wasn’t completely thrilled about, it was the “outdated” websites the company had. For me, it wasn’t that big of a deal because I mainly point people to my own web sites instead of the Realty Executives web site for information. My “main” website simply consists of a Tempe real estate agent sharing information with people looking to buy or sell homes in the South East Valley. I’ve had the site at NickBastian.com for about a dozen years or so, and it too has gone from really bad to ( hopefully ) improving over time, a constant “ work in progress,” for sure. Another site where I occasionally post some drivel about “stuff” is my work at RailLife.com. Here, I write about things that hopefully interest a few people in what is considered a “niche market” web site focused mainly on “life” along the Phoenix light rail line.

Several months ago, I was introduced to Darrell Smith and we immediately hit it off. As the “Chief Technology Officer” brought in to design and implement a massive internet presence for Executives locally, nationally and internationally, Darrell has definitely had his work cut out for him. Over the past few years, I have had the pleasure of meeting a lot of really smart people in the “re.net” where web site development, blogging and implementation are looked at as a way of life. Within minutes of meeting Darrell, I knew he was a guy that really “gets it” when it comes to knowing what a real estate company needs to have to be found and to be effective online. Strength in numbers, a huge web site with thousands of pages of searchable content is what quickly piqued my interest. Talking a bit more of the development and execution side of these new sites with Darrell made me want to learn as much about what he was working on as possible.

OK, I need to cut to the chase. What is happening at Realty Executives and why?

Before today, Realty Executives had a platform that quite frankly was horrible. With the re-launch of www.RealtyExecutives.com and of www.SearchHomes.com that instantly changes. ( in my opinion )

As an international web presence built upon the very powerful WordPress platform utilizing cutting edge search capabilities, Executive profiles, blogs, marketing resources and more, this first phase of the Realty Executives web site will be light years ahead of the old Realty Executives web sites and light years ahead of many of the current real estate related web sites online today. Sure, there are some really good web sites out there, but I believe the ideas behind what these new sites will become have the potential to help Realty Executive agents all over the world in creating a much stronger web presence. Better yet, I believe these sites have the ability to increase MY internet presence which benefits myself AND my clients. One of the great things that has not been overlooked is the fact that real estate agents are independent contractors. The company philosophy is focused on the “Executives” in knowing that we all have individual businesses to run. The ways that Darrell has come up with to help us succeed will be a big part of the success of the main web site(s) which will be designed to tie into our individual web sites. ( more on that in the coming weeks )

The launch is today, take a look and give em’ a test drive. If you are a Realty Executives agent, make sure to take advantage of the things that are going to be available to you on an individual basis. There will be ongoing announcements soon and over the next couple of months as tests, tweaks, improvements and additions to the web sites roll out. ( you really should pay attention and take advantage of these tools )

If you are a real estate agent from another company or a person looking to join a great brokerage that will also be able to help with some serious “Google juice,” I’d be happy to give you my .02 on why Realty Executives might be a great choice for you. No, I am not a recruiter. I just happen to think this web site project is VERY cool and can be a great asset to all of us.

There will be a LOT more information available soon but, ssshhhhh, this is a “soft opening” and kind of a secret, so don’t tell anyone. OK?

In the past, Darin has written that agents “can do better” with the presentation of homes. For instance, if you are not going to keep flyers in the flyer box, don’t have a box! If people drive by a home and see a box, they expect the box to be full. When it is empty, they probably assume you are not doing your job. Many of you that know me know I am not a huge fan of fliers. What I am a fan of is properly pricing a home and then doing a GREAT job in making sure people are able to easily find the home online and to get information quickly. A custom sign or a custom sign rider with a web address for that specific home, along with a “text for information” number, allows for immediate “access” 24 hours a day, 365 days a year. To me, this is a much better idea.

Obviously, there is much more to this topic than just flyers or a sign. The video and this post really stand for properly marketing a home. It’s about telling a story.  It’s about creating interest, talking about the neighborhood, giving people a feel for what it is like to live there. This type of marketing can be considered hard work and time consuming to the average agent. Guys like Darin don’t look for average agents to coach, they look for agents that go far above and beyond what is “common” in the industry.

For the past 18 years, I have been selling homes here in Arizona. In good markets and bad, one thing remains constant, the fact that I love helping people buy and sell homes. Marketing properties has changed dramatically since “the old days” and I have been fortunate to surround myself with some top notch marketing professionals so that I can continue to do the best job possible for all of my clients.

I may not pick up a guitar and sing about things any time soon, but it is good to know that some of my friends will pick up the slack.

For many, the a/c has been cranking for weeks, but for some, they hold out as long as possible. I can tell you one thing, if you are selling a home right now, don’t try to “cheap out” and turn the a/c up to 85 or 90 when you leave for work in the morning. Try to keep it cool, it could help.

Last week, I was looking at homes in Tempe with a friend / client and was glad that many of them were occupied. As you know, there are many parts of town and a few price ranges where the majority of the homes are vacant. Not only are these homes vacant, they have no power on. No power means, no a/c. Ever step out of a car into the hot sun only to find the inside of a home to be hotter? Believe me, it’s not cool.

If a buyer needs to rush back to an air conditioned car with sweat dripping off of their forehead, he / she probably isn’t going to have a real fond memory of that home. Same thing when the sellers leave all of the blinds shut and the a/c up to barely bearable – it just doesn’t show as well.

From SRP we get this information that probably doesn’t have a home seller in mind:

“Q: Is it better to set the thermostat to a high temperature (85° to 90°) while at work all day and cool the house (two-story, approximately 3,200 square feet) when you get home to a comfortable temperature (approximately 80°), or to keep the thermostat just a degree or two higher during the day so that the cooling unit doesn’t have to work as hard during peak hours to cool the house?

A: You will save money anytime you can increase the temperature on your thermostat and cause the unit not to run. The old myth that says you will spend more energy bringing the temperature back down than you would have spent just leaving the thermostat alone is just that, a myth.”

So, you might save a few bucks by turning the a/c up to 90 when you leave for work, right? Well, if you are trying to sell a home, it could cost ya’ even more. If your home shows well and is priced correctly, leaving the a/c in a comfortable range during the day might just be money well spent…