What You Need To Know to Buy or Sell a Home

By David King

Buying or Selling a Home can be Frustrating and Confusing. This ebook will help you understand all the steps in both buying, selling and cost to run a home.

You are about to engage in a very large financial transaction....

Take your time and read the book, it should save you tens of thousands of dollars!

• Language: English
• Publisher: Lulu.com
• Release date: Dec 2, 2019
• ISBN: 9781794782174

David King

David King is the New York Times bestselling author of Death in the City of Light, Vienna 1814, and Finding Atlantis. A Fulbright Scholar with a master's degree from Cambridge University, King taught European history before becoming a full-time writer. His books have been translated into several languages, including Chinese, Turkish, Polish, Korean, Italian, Swedish and Russian. Film rights have been sold in Death in the City of Light.

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What You Need To Know to Buy or Sell a Home

INTRODUCTION

Buying or Selling a Home can be Frustrating and Confusing. This book will help you understand all the steps in both buying and selling a home.

You are about to engage in a very large financial transaction.... Take your time and read this ebook, it should save you tens of thousands of dollars!

This book is written to help you understand the home buying and selling process. The same advice for sellers is also, in most cases, the same for buyers!

The largest financial investment most people make is their home. That makes buying or selling a home — whether a single-family residence, duplex, or condominium — the single largest, most complex transaction a person will ever undertake. It involves new terms and concepts, financial acumen, and an extensive process to come to a successful closing.

It is also one in which emotions may come into play to the detriment of good judgment. Surely, the seller thinks, my home where I raised my children and made so many memories is worth more than the bricks and mortar are built with. Conversely the buyer must realize that this property is where someone raised a family, made memories and wants top dollar for these experiences.

Real estate transactions involve dozens of decisions and substantial investment in time, energy, money, and emotions almost always lead to some types of challenge in the sales price negotiation.

Sellers: the objective is to find that buyer who cannot resist buying your property at the highest price. To do this, you need to offer potential buyers a striking home presentation, that outshines every other home on the market. It requires making a fantastic first impression, creating in the buyers, an instant feeling that they are traveling up the front walkway of their new home for the first time, and not visiting someone else’s home. It’s about falling in love at first sight, from the curb, in those initial fleeting seconds.

Buyers: as a buyer you are looking to fall in love with someone else's home and make it yours. But in this process you must keep the logical issues on top of your priorities - location (will this home be ideal for your family, schools, animals, resale value down the road), condition (will you have to spend a lot of money to get the home to your satisfaction), future expansion (will this home allow me to expand in the future), operational costs (how much will this house cost to run each month), to name a few.

Most buyers and sellers do not venture alone into finding/selling a home. They find it better to have an experienced real estate professional, that has the skills and knowledge to make their journey more comfortable and successful. This book was written to provide some of that comfort before you choose your realtor.

CHAPTER 1

UNDERSTANDING YOUR GOALS

Do Not Waste Time and Money — Do It Right!

To many times buyers and sellers go off and try to do the journey on their own. In most cases this wastes a lot of time and causes a lot of frustration through the process. This first chapter explains the process for the Seller and the Buyer - If you understand both sides of the transaction, you should find it a much easier journey. So please if you do not have time to read the whole book, READ THE FIRST CHAPTER!

BUYERS YOU MUST GET PRE-APPROVED BEFORE you start looking for property. Now this is not always true, but if you are serious about looking for property you need to do this. Here are the reasons why:

• The pre-approval process determines the max amount of money you can afford to borrow for a property. (on the next page is a great worksheet to help you understand what you can afford and what you need for your pre-approval application).

• This also helps you understand the different options based on your credit and earning power so that you can determine if this is the right time to buy, and the value of what you should be looking for.

• Based on your borrowing power, the lender should give you options for the loan. You must understand there are two types of lenders - mortgage originators or mortgage brokers. A mortgage originator is the actual lender that lends the money; typically, a bank. A mortgage broker sends out your loan information to a number of mortgage originators to get you the best deal on your mortgage. Some mortgage originators can also sell the loans on the open market to get you the best deal. Here are a few examples of different mortgage programs:

Conventional (typically you put 20% down on the home, but can vary depending on the lending institution), FHA (typically you put 3.5% down but in most cases you pay PMI - Private Mortgage Insurance), VA (0% down, only available to active and retired military), plus Mass Housing is a very versatile program. These are just a few of the more common programs, there are many more!

• Today most agents that list property will not accept an offer without a pre-approval letter from a reputable lender and/or P.O.F. (Proof of Funds).

The pre-approval process can be the most frustrating part of the process...Make sure your Realtor helps you with this, (offers to scan all your documents and help you find a lender) as a good lender with all the documents in hand, can help make it go much smoother.

What Can You Afford?

Here is a quick task you can do to determine how much home you can afford.

Determine your buying power. This is all about your income vs your debt. Everyone situation is different but the general rule for lending is no more than 43% of your GROSS pay can be assigned to your monthly debt.

Now take your GROSS pay - the total money you make in a year, if you have a person that is going in on the home purchase, then add their GROSS pay for a year to yours.  Now take this and times it by 43%.  Now divide this by 12 months so now you have a TOTAL amount of what you can afford per month for fixed payments.  Take this number and now subtract all your fixed expenses - these would be all of the following:  Car payments, loan payments - including student loans, personal loans, etc.  Minimum credit card payments, alimony payment, child support payment, etc.  Now you have a total amount of money you can afford for your new home.  Divide this final number by $600 and times this by $100,000.  This gives you your total amount of the mortgage you can afford.

If you find this to be difficult, you can call us, and we will help you go through these numbers - call 888-THE KING that is 888-843-5464.

The documents you need to bring to your mortgage person to get pre-approved for a mortgage are:

1. Tax Returns for the last 2 years


2. Bank Statement for the last 2 months

3. Pay Stubs for the last 30 days


4. All debt statements you have - Student Loan, Car Loans, Credit Cards, Etc.

If you are self-employed or have a home now, also bring:

1. Corporate Taxes - Filing docs All schedules for 2 years

2. Company tax returns including K1 for 2 years


3. Company's bank statements if using funds to qualify for 2 months


4. P&L from accountant


5. Proof taxes were paid for past 3 years

6. Mortgage statement


7. Insurance info


8. Taxes (real estate)


9. Bankruptcy Discharge

Once you are pre-approved now is the time to start looking for a property. Remember your real estate agent does not get paid until you find a