Elleston’s Top 8 Questions You Want Answered, especially #2 .
As you already know, dealing with real estate can be a very complicated subject and frustrating. One thing about me is that I love it when people ask me questions about this topic. It was something that always interested me when I was a kid. I remember watching the movie “Far and Away.” Right before the epic moment Tom Cruise’s father dies he whispers, “Without land, a man is nothing.”
Over the years spent in business I can honestly tell you that I feel like I don’t sell anything. What I do is build relationships and most relationships always start with a question…Hello, How are you today? I love questions because YOU will receive benefits. I can save you money by getting you into a home you actually can own-with tax saving advantages. I can send you listings of the neighborhood your wife loves driving by. I can make you money by finding that investment home you believe tenants will love. You can now tell your sister that she is out of her mind to buy that house. Well, you get the picture.
In this post you will get my top 8 questions that I found very important. Lots of useful information here, so let’s get started…
#1. How common is it for a buyer to pay ALL of the closing cost?
A. Closing costs are always negotiable, so it depends on the deal. Right now it is typical for a buyer to pay all of the closing costs related to their home loan. If a buyer submits an offer and asks for the seller to pay for those costs the buyer risks not getting the house because another buyer will come along and offer the same price without any closing costs.
This may not work in all cases. Within a market with an abundance of inventory, submitting an offer and asking for closing costs concessions can be a norm and may work for the buyer’s favor certainly doesn’t hurt to ask. Regardless, I need to closely examine a number for factors before I give my best guidance.
#2. I am interested in buying? Is it possible to buy with bad credit?
A. Lower credit scores are still acceptable! The lowest credit scores I’ve seen lenders work with scores of low 600 area. Great news–if you’re treading above 600, then you should be good to go! In the meantime, never stop working on your credit. You always want it to be better. Having a good size down payment helps as well. Also, it’s always a good idea to pull your credit– you’d will be surprised how many inaccuracies that may affect your credit as we speak. You always want to give accurate information to a lender of whether or not you can qualify for a mortgage. There are a lot of factors and details that would be needed, along with other other financial factors that will be assessed, like your income, expenses, assets, liabilities, debt, employment, down payment, program requirements, as well as credit scores. The best thing for you to do is to speak with a lender(and if you need one, don’t hesitate to ask for me to refer you one of my best)!
#3. How do you know whether the price of a home per square foot is reasonable?
A. Though this seems like an easy question, it is not as simple as it sounds.
Keep in mind that much more goes into the market value of a house than its square footage. For example, two houses next door to each other can have the same square footage, but if one has two bathrooms and the other has only one, guess which one will probably be worth more? It will also cost more per square foot.
I usually do what is called a comparable analysis of the neighborhood or subdivision. A good three months back should allow us to see a decent picture of pricing per square foot that should be offered. I find that I can get very close to the appraisal and what that appraiser should be looking for.
#4. Is this the right time to buy a home?
A. The best time to buy is when you are ready. No one knows for certain what the future holds and there is buzz out there that interest rates will rise. Rates may rise and go up a little. Buying today or tomorrow, you can still take advantage of historically low interest rates, but this doesn’t mean that you should be in a rush especially if you are not ready. It also means that sitting and waiting for the next downturn will only frustrate you. If you are buying this home as a primary residence, save your money and qualify for your mortgage. Then buy your home. Remember, you are buying for a place to live first, what everybody else says is secondary. Most investors usually can consider real estate a better investment than other options like securities, precious metals or starting a restaurant. Think like one. Start planning. Write down options and evaluate. More importantly, ask more questions!
#5. Is this a good area? I mean, how is the crime in the neighborhood?
A. I believe buying property anywhere in Las Vegas, Henderson and surrounding areas would be a good idea in general. Unfortunately, it would be unethical and illegal for any agent to steer you in any direction in regards to buying.
This is a very good and common question I have been asked. You defiantly have options. It may be difficult to see a full picture of the area the day we’ve viewed it. Check out the neighborhood at night and drive by again. Stop and talk to neighbors. Let them know you’re intent to buy. You’ll be surprised what valuable information you will get. Consider purchasing an alarm system or adding security doors.
Check out crime sites prior to making a decision. Bookmark them on your phone and PC. Please see the following links I have provided or simply click the next picture for an up-to -date view of what’s going on. Type in the address of the property and it will give you a detailed view of recent crimes in the area.
#6. It seems like there are still a lot of vacant houses everywhere. With so many houses in foreclosure, why aren’t lenders releasing them back on the market?
A. Many of these lenders are uneasy about dumping large numbers of properties at once, especially at discounted prices. They are worried that this may drag down prices thus lowering the value of houses have on their books. We are slowly receding from an economy that needs help and now you will see them take a very measured, controlled approach to disposing inventory. Another reason, lenders still repossess properties that need repairs and often have title issues that will take time to address.
#7. Why are home builders building new homes when they can’t sell their old ones?
A. When inventory sales of new homes shrunk dramatically a few years ago, the market shifts. In Las Vegas the shift was from a buyer’s market to a seller’s market. Cost per square footage was cheaper and building automatically made sense…at least to the long awaiting builder. Profit margins on new homes are higher and can sell faster. Now, they are concentrating on projects for first-time buyers rather than more expensive homes.
Lets do the math:
Just for painting the picture’s sake, it costs an average of $60 a square foot to build a house (in Las Vegas). A 2000 Sq. Ft. house cost, including raw materials and labor only, to build is therefore $150,000. After considering cost of land and other related fees a decent builder total costs should not exceed $190,000. These homes can typically sell for under $250,000. This is before your upgrades and choosing your lot.
Would you like to be a lender dealing with foreclosure, short-sales, and tenant issues to re-coup assets back or the builder?
#8 What is closing or escrow and what is involved in opening escrow?
A. Closing is often referred to as “settlement” or “escrow.” This process can be handled by a third party. In Nevada, mostly we use an escrow company or a title company. They are entrusted with the job of seeing that the transfer of ownership from the Seller to the Buyer takes place according to the terms of the written contract agreed upon by all parties involved. The closing agent keeps or holds any funds or documents safely until all the details have been settled and disburses them to the proper parties at the proper time. At the actual time of the closing, all the parties come together to sign their appropriate documents, the seller will be asked to provide clear title to the property and the buyer will be asked to provide the funds needed to close the sale. During this time your lender and I will be communicating and making sure all appropriate deadlines and underwriting conditions are met.
Opening escrow or starting the closing process simply involves visiting the office of the title company that handles closings, then handing over the deposit money (usually your earnest money) and giving instructions for the transaction. Anyone who is involved in the transaction may “open escrow.” Generally, I do this for you within a day of making the deal.
I appreciate you taking this small time out your day to read this quick post. I know this will be beneficial to you and if you have any questions answered or would just love to comment please do so. Also, if you know anyone who would benefit from this, please share this post. Thanks, and I’ll talk to you soon!