I'm sure this is al getting a bit confusing for you. Let me clear it up a bit. I buy and sell houses everyday. I am a Realtor.
1. Stick with a conventional loan. 6% is a great rate and they are slowly on the rise, so do not be surprised if you close at 6.25% or there abouts. The lender will put a lock on the rate if asked to do so once you have signed a contract. This may cost you a bit extra, but you'll have to weigh the odds and see if it's worth doing that or not. The rates been pretty steady lately and most people are forgoing that. Also stay away from the arms or adjustable rates, there is no advantage to them right now. Stick with a fixed rate.
2.Realtors do NOT just work for the seller. You can go out and find yourself a buyer's agent. I have an ABR designation which stands for Accredited Buyers Representative. I have had specialized training in helping buyers like you in this type of situation. Should you like me to refer you to a ABR Realtor in your area, I'd be very happy to do so. A Buyer's agent 99.9% of the time will cost you nothing. The commissions come out of the seller's proceeds at closing based on the listing agreement. An ABR will look out for YOUR best interests. You deserve to have someone in your corner, they do.
3. When finding a lender, you are best to go with an actual lender who funds their own loans and not a mortgage broker. Mortgage brokers shop different lenders to find you a loan, but then they tack on their own fees. They are the middlemen in loans and that will cost you more in closing fees.
4. The lender as part of the process will require an appraissal to assure themselves that the home is indeed worth the money they are lending. The appraissals out here, generally run about $350. DO NOT go around paying for appraissals and then try to talk people down . It will only result in lots of spent money. After entering into a contract on a home, the lender will order the appraissal. If the home does not appraise, you can A. Renegotiate with the seller to lower their price. B. Walk away from the deal.
5. The market is a bit depressed in most areas, making it a "buyer's market". This gives you leverage when buyng your house. Many sellers are willing to pay some closing costs or even lower their prices to get the home sold. Keep in mind that with all of the other homes in their area being reduced in price, they are doing so as well. To be overpriced in today's market is NOT a good thing. As for walking in and offering 20-25% less on a house, it's just not going to happen, unless they are in financial stress. Think about it, if you had a home that was worth 240,000 last summer and is only worth 200,000 this summer whne compared to current sales. Then you aggressively price your home lower than surrounding homes at 190,000 in an effort to sell it, now being the lowest price home in the area (which many sellers are doing), would you drop another 20,000? If you are already the lowest priced home for sale, most sellers would not. That's not to say you can't pick it up in the 180-185 range, but the 20-25% rule will only get you frustrated. An ABR will arm you with a market analysis showing what the area is doing. They will also guide you in finding a resellable home that will protect your investment. It's their duty and obligation to giving you the information you need to help YOU make the right decision.
6. Look around and choose a home in a desirable area. Is it a safe area, is it kid safe with good schools? When you find a desirable home that has been on the market a very short time, if the home is "perfect" for you. Make an offer. Even in the slower markets, people are looking for that one home that stands out. The extra little touches you like about this home will also be desirable to others, and procrastination may cause you to lose the deal.
7. Most states offer an inspection period. In Arizona it's 10 days. Hire a home inspector to come out and inspect the premises. It's best to know exactly what you are getting into, instead of finding out the hard way later. Should he find anything wrong (they will always find some small stuff), you can then use this list to ask to sellers to make the repairs. They are not obligated to, but most will in order to keep you in the deal.
Give me a call if you have ANY questions or if you'd like me to refer a Buyer's agent. I look forward to talking with you, and good luck in finding the perfect home. Sal Carmona ABR (800) 551-1253 or (520) 419-8683
SalC@LongRealty.com www.SoldBySal.com
