Tag Archives: buying

Should You Hire a Real Estate Agent or Lawyer When Buying a Property

When you’re thinking about buying property, one of the first questions that pop to mind is, “Should I do this on my own or hire some assistance?” In a huge majority of cases, the answer is that doing everything on your own will make the process much, much harder, and we’d also be very surprised if you got a good deal without some assistance. In most cases, the only real question is: “Should I hire a real estate agent or a lawyer?” Both can be of invaluable assistance when it’s time to buy a property, but the ways they can help differ. 

Why You Should Hire a Lawyer

What makes a real estate agent different from a lawyer when it comes to buying a property? First of all, by law, real estate agents cannot give legal advice. While you are not obligated by law to hire a lawyer when buying a property here (unlike in some other states), you may have some legal questions that only a lawyer can answer. For example, you may want to rent a property for some time (let’s say for a year) before making the decision on whether you should buy the property or not. If the seller agrees to that, an attorney can draft this unusual contract and provide legal advice on the matter that a real estate agent could not.

A good lawyer will help you by answering all the legal questions that a real estate agent cannot lawfully answer.

As lawyers charge an hourly fee, before buying a property and moving in with the help of experienced professionals from dumbomoving.com, it’s a good idea to make a list of all the legal questions you may have and arrange a meeting with an attorney. Then, you can ask everything you need, as well as make arrangements on all the additional services you may need that a real estate agent can’t help you with (drafting the contract from the previous paragraph, for example).

Why You Should Hire a Real Estate Agent

While a lawyer will help you with some specific parts of the home buying procedure, you’ll still need to hire a real estate agent as well. A real estate professional will be with you every step of the way, acting as a sort of a guide to your home buying process. And if you’re buying a property, you’ll be pleased to learn that sellers are the ones who will pay the agents of both parties. The commission is usually 10 percent of the arranged home price, divided equally between the two agents. The logic behind this rule is that sellers will be receiving a lot of money, and so they should be the ones to pay all agents who will take care of the buying-selling process.

So, if you hire a real estate agent, your wallet won’t have a problem with that; you will basically get an invaluable service for free. And what exactly does that service entail? Buying a property is a complex procedure – lots of paperwork will need to be done, inspectors will need to be hired, a comparative home prices analysis will need to be prepared, etc. While some lawyers will try to convince you that they can do everything on their own, that is most often not the case. Real estate professionals will be better at all of these tasks, simply because they have dedicated their lives to buying and selling real estate; they have much more experience and they know how to use it.

Apart from many other ways that a real estate agent can help you, he or she will be able to find a perfect house for you in the specified neighborhood.

This gives them an edge in all sorts of home-buying tasks. Apart from the ones we have already mentioned, they are also much better at negotiating. Let’s say that, for example, some parts of the home will need to be fixed. You’ll need to determine whether you or the seller will be the one who has to make these repairs. In this case, a good real estate agent will help you negotiate an arrangement that is better for you financially. What’s more, an experienced real estate agent who is a good fit for you will be acquainted with the neighborhood where you’re looking for your dream home. He or she will know just what to look for based on your description.

Additional Things to Have in Mind

So, should you hire a real estate agent or a lawyer? The answer is – why not both? Combining the individual strengths of these two professions will get you the best deal. Rely on attorneys for legal advice that a real estate agent cannot offer, and hire a real estate agent for everything else.

Before you hire a real estate agent and a lawyer who will seal the deal, you’ll need to have some things in mind. Alt text: A man signing a contract.

Still, simply hiring any real estate agent and lawyer is not enough; you will need to find a dependable and competent real estate agent, and the same goes for your lawyer. Here is what to look out for:

  • Sometimes, it may so happen that an opportunity to share a real estate agent with the seller emerges. In our opinion, that would be wrong to do. As real estate agents make a living off of commissions, they might be looking for the sellers’ best interest in this situation and not yours. Ethical agents who won’t do this certainly exist, but it’s best to be on the safe side anyway.
  • Real estate agents may press you to offer a higher price because of similarly unethical reasons. The more you pay, the larger their commission, after all. What’s more, some of them will be afraid to negotiate because doing so might mean that they won’t get to close the deal. If it seems that your agent doesn’t respect your opinion and is only looking to close the deal as soon as possible, it is best to find a different agent. Doing research on your own regarding home prices in the given neighborhood will help you avoid such unpleasant situations.
  • Most lawyers prefer to be hired and paid only after the home buying process is complete. However, it may suit you more to only pay for one consulting session or one or two specific tasks. That can be arranged, just have the arrangement in writing (better safe than sorry).

Whether you’re looking for homes for sale in Fredericksburg, Stafford, Orange, Locust Grove, Norther Virginia or even Maryland or DC, we are your Real Estate team committed to finding the perfect home for you! Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by homeowners. If you wish to sell your home, it needs to be sold for top dollar, and in a timely manner. Pricing your home accurately, one of our area expert advisors will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.

To see available properties, please visit our website lakeofthewoodsvirginia.com

Common Mistakes First-Time Homebuyers Make

Along with the excitement that buying your first home brings comes the apprehension about the decision. Millions of questions come to mind making your decision even harder to make. The best tip that you can get is to get informed. But, do you know what you have to get informed about? If you are thinking of buying your first property ever, take a deep breath and start reading through the most common mistakes first-time homebuyers make so that you can avoid making the same ones.

Starting a House Hunt Without a Financial Plan

Since you are buying your first home, it is understandable that you are very excited about the idea and impatient to find the right one. However, that doesn’t mean that you should start your search completely unprepared. You should at least know what price range to look at. Since the real estate market is quite competitive and demand is almost always higher than supply you should come prepared. That means that you should be pre-approved for a loan before looking at listings. Then you will be more acquainted with your financial prospects and you will know what you can hope to find. By the way, there are so many facts you should know about mortgage before you apply, so do not rush it.

First-time homebuyers should be prepared before house hunting, Alt. tag: A model of a house made of words FOR SALE

Sticking to One Mortgage Lender Only

A mortgage is also a product that you buy and can find at different prices with different sellers. Do not make a mistake by not comparing the quotes before committing. Choose at least three lenders and compare the estimates that you get. Remember, you are looking for a good deal as well as the lowest rates you can get. You cannot find those if you only consult one bank or lender. The same goes for finding skillful movers who can relocate your home – you need to make a list and then choose one company that suits you best.

Not Paying Attention to Your Credit Reports 

Your credit reports are extremely important to a bank or lender that you are considering taking a mortgage from. They will analyze every single detail of it, so you need to make sure that they like what they see. A credit report that contains errors may result in higher interest rates for you, so it is in your best interest to keep it as accurate as possible. The good news is that you can get a free credit report from any of the main credit bureaus at the end of a year so that you can correct any errors that you come across. The lenders need this report at pre-approval and before final loan approval. In the meantime, you shouldn’t be opening new credit cards and you should do your best to pay your bills on time every month.

Credit reports are extremely important to lenders, Alt. tag: Credit report of a first-time homebuyer

Thinking That You have to Make a 20% Down Payment

When you start calculating how much money you need for your down payment, you will probably ask yourself whether buying real estate is a good investment at all. Twenty percent of your future property’s worth is a lot of money to prepare before you even start searching for a home. Luckily, there are some loan programs that allow you to make a down payment as low as 3.5% or even 0%. It goes without saying that a bigger down payment means that you can get a smaller mortgage, so you will have more money left in your budget every month.

On the other hand, while you are saving money for your 20% down, the property prices continue to grow along with the mortgage. So, the decision is all yours and you need to make sure that you set a monthly payment that you can actually provide. And, do not forget that you are obliged to pay the mortgage insurance in case your down payment is less than 20%.

Not Considering Special Programs for First-Time Homebuyers

There are some special programs for first-time homebuyers that offer low down payment loans. You should inform yourself whether such programs exist in your state and learn about the following:

  • FHA loans – the down payment can be as low as 3.5%. Besides this obvious rebate, the Federal Housing Administration is not so strict about credit reports. But, once you commit to this loan, you will have to pay for mortgage insurance as long as you have the mortgage to pay, which means even after your equity is more than 20%.
  • USDA loans – if you are planning to buy a property in a rural area, the chances are that you qualify for zero percent down and 100% financing – a program offered by the U.S. Department of Agriculture. If you opt for this program, you will have to pay the guarantee fee instead of mortgage insurance.
  • VA loans – mortgages offered by the US Department of Veterans Affairs to people who have served in the military. These loans allow veterans to put a down payment of zero percent and get 100% financing. A funding fee has to be paid instead of mortgage insurance.

Falling in Love With the Property and Failing to See its Faults

This can be a huge mistake. It often happens that we like the house, but it turns out that its neighborhood is not a place where we would like to raise our children. You should always visit the place at least two or three times, at different times of day and week, before you make a decision to buy. If you notice that there is something the seller is trying to hide, that should be a red flag to look for

First-time homebuyers are usually impatient to move in, Alt. tag: House door with keys

Wasting All Your Savings On Your First Property

This is one of the common mistakes first-time homebuyers often make. They do this to add to the sum for a down payment and lower the monthly payment rate. However, you still need to have an emergency fund (three to six months of living expenses) because there are so many things that can go wrong when you buy a property. It is better to pay for mortgage insurance and still have your emergency fund untouched, just in case. 

Not Knowing About the Hidden Costs of Ownership

There are many costs of ownership that first-time homebuyers do not know about. Property taxes, insurance (mortgage, hazard, and homeowners), repairs, maintenance, and utilities are just a few of them. 

Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by home owners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.

To see available Lake of the Woods properties, please visit our site.

Mortgage 101: What To Know Before You Apply

Everybody loves talking about mortgages. They’re fun, easy to understand, and a great icebreaker, right?….Wrong. Thanks to their lengthy process, technical jargon, and confusing options, mortgages have a bit of an intimidating reputation—but it doesn’t have to be that way!

If you’re in the process of buying a new home and dreading the mortgage application process, here’s what you need to know to keep things running smoothly. 

Know How Much You Can Spend

A person holding up money.

If you’re feeling antsy about getting started and want a general idea of how much loan you might qualify for, consider the 28/36 rule, or the Debt-to-Income ratio—AKA what most lenders use to help calculate your mortgage. 

Essentially, the 28/36 rule means that your monthly mortgage payment shouldn’t be more than 28% of your gross income. Additionally, your outstanding debts—like mortgage, car loans, student loans—shouldn’t account for more than 36% of your gross income.

Get Your Finances in Order

Statistics on a laptop.

Not seeing the numbers you were hoping for after calculating your Debt-to-Income ratio? Then, hopefully, you’ve given yourself a little time to shift things in your favor. Paying off loans, improving your credit score, avoiding big purchases—these will all help you change those numbers. 

Of course, completing those tasks is a little harder to do in practice than in theory, so you may have to take a look at your budget and see where you can cut out some extras—at least temporarily!

What You’ll Need to Apply

 

Paperwork.

In the weeks before you plan on applying for a mortgage, you should start collecting all of the documents you need. Since a lender will be telling you exactly how much money they’re willing to loan, they’ll need a comprehensive understanding of your finances beforehand. Start gathering things like:

  • W2s/tax returns
  • Photo ID
  • Your two most recent pay stubs
  • Current and prior addresses
  • Asset information (retirement funds, 401(k), stocks and bonds, other investments) 
  • Gift letters

Depending on the lender you choose, you may need additional documents, so consider calling in to double-check beforehand. 

Find the Right Mortgage

Three women pointing at a laptop.

Once it’s time to start thinking more concretely about applying for a mortgage, you have several options to consider. While all the mortgage options out there could easily fill a whole blog post on their own, here’s a quick rundown to give you a general idea:

  • Conventional/Fixed-rate:  The interest rate of a fixed-rate loan won’t change over time, making it a popular choice for its predictability. Conventional loans typically require a 20% down payment or mortgage insurance for smaller down payments.
  • Adjustable-rate: The interest rate of adjustable-rate mortgage will fluctuate over time, sometimes lower than fixed-rate, sometimes higher. There is a cap in place so the rate doesn’t get too out of control, but ARMs are typically more popular with those who plan to refinance.
  • FHA: If you are struggling to come up with a down payment, you may have options with an FHA mortgage. Provided by the Federal Housing Administration, these loans come with a low down payment requirement and built-in mortgage insurance.
  • USDA: Live in a rural area? Then check out your USDA eligibility! A surprising amount of areas qualify for USDA loans, even if you aren’t living in the countryside. Plus, USDA loans don’t require a down payment and offer lower insurance premiums.

These aren’t the only options you’ll have, just the most common. If none of these sound right or you aren’t sure which to choose, just ask your lender!

Choose the Right Lender

When it comes time to decide who to work with, you’ll have to do your research. Each lender is different, meaning they’ll likely offer you different rates, charges, and loan options. 

Luckily, we’ve been working in real estate around the area for years, so we know exactly which lenders are right for which buyers. If you need a few suggestions before you kick off your search, just let us know! 

Still Have Questions?

That’s okay—we get it. Applying for mortgage is confusing and challenging, especially if it’s your first time. If you have any questions about the process, we’re here to help. 

Ready to start looking at a few homes in your price range? We can help with that, too! Check out our specialized search tool to narrow down your options, and give us a call to start seeing a few in person!

Whether you’re looking for homes for sale in Lake of the Woods VA or Waterfront property in Virginia we are your Real Estate Advisors for Stafford, Fredericksburg, Spotsylvania, Locust Grove, Central Virginia, and Greater Virginia. Thinking of selling? In any market condition, “what is my home worth?” is the #1 question asked by home owners. If you wish to sell your home, it needs to be sold for top dollar and in a timely manner. Pricing your home accurately, Pat will partner with you to make the selling process so much easier. Get started today by calling us at (540) 388-2541 or contact Pat Licata.

To see available Lake of the Woods properties, please visit our site.