Real Estate Other

Explaining an Important Real Estate Term: DTI

If you’re like most first-time homebuyers, you’ve probably wondered what the term “DTI” means. This common abbreviation stands for debt-to-income ratio, but knowing this alone isn’t really enough to answer the original question. Debt-to-income ratios are especially important to the lending side of the real estate process, and today I’d like to go a little more in-depth into what this phrase refers to and why it matters to you. To learn more, watch this short video.

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4 Reasons Why Fall is a Great Time For First Time Home Buyers to Make a Move

Buying a House During FallThinking about buying a home this fall? As previously mentioned, fall can be a great time to save money on the purchase of a new home, but the advantages to buying during the autumn season don’t just stop there. Here’s a closer look at what other reasons suggest fall is a great time for first time home buyers to make their move.

  • Less buyer competition

Spring and summer are when buyers are usually most active, which means you’ll likely be dealing with less competition after Labor Day. And although you may have fewer options to choose from, there’s something to be said for reducing the risk of a multiple offer situation.

  • Sellers are motivated

If a home has been on the market all spring and summer, chances are the seller is beyond ready to make a deal. This is what we in the business call leverage. Remember, the longer a home sits on the market, the more motivated sellers become.

  • The holidays are approaching

Almost every home seller wants to get their home sold and get settled into their new place before the busy holiday season arrives. This can also put you in the drivers seat during a negotiation, and we’re sure you’d love to be settled into your new place before all the holiday parties and festivities...

5 Tips For Choosing the Right Real Estate Agent

Choosing the Right Real Estate Agent We’ve all heard it before—buying a home is one of the biggest financial decisions you’ll make in your lifetime. Whether or not you agree is one thing, but at the very least it’s fair to say that buying a home is always a pretty big decision, regardless of whether you’re a first timer or a seasoned home buyer with plenty of experience.

Given the magnitude of whatever decision you inevitably make, aligning yourself with the right real estate agent along the way is also choice that shouldn't be taken lightly. But just how do you  know who might be the right fit? Believe it or not, finding the answer to that question tends to be easier than you might think. We explain below by identifying 5 crucial tips for picking a great real estate agent..

  • Research agent reviews

With everything online nowadays, chances are any quality agent will have lots of reviews and testimonials from past and present clients. From here you can gauge how often he or she has worked with first time home buyers and also what the experience was like for them.

  • Gauge the agent’s knowledge of the area you’re searching

It’s a real estate agent’s job to know the market, so ask questions about recent comparable properties that have sold or what other comparable properties are on the market that might also be a good fit. If your prospective agent has all the answers you’re looking...

4 Reasons First Time Home Buyers in Minnesota Should Consider a Condo

Buying a Condo As a First Time Home BuyerIt’s certainly no secret that buying a home for the first time will require you to make a number of big decisions, like where to buy, what type of home you want, and of course what sort of financing options to consider just to name a few.

While location and financing are of course critical components to any home search, the question of what to buy is also quite intriguing, especially for first-time buyers. In many ways, buying a house is truly the ultimate goal, but it’s important to note that condos can also be a great fit for any first time home buyer in Minnesota, and here’s why…

Lower Down Payment / Purchase Price

It shouldn’t be all that surprising that condos can be a more affordable option than a detached single-family home. As a result, this also means you won’t have to put quite as much money down, perhaps allowing you to buy sooner rather than later.

No Upkeep / Maintenance

While condos and other attached properties usually mean monthly or quarterly HOA fees, the trade-off is that you won’t have to worry about upkeep, on-going maintenance, or major exterior repairs. And along with saving you time, there’s also a level of comfort that goes along with the maintenance-free lifestyle that’s certainly appealing for a number of reasons.

Amenities

Buying a home with a swimming pool or an extra exercise room...

When is the Best Time of Year to Find a Great Deal on a Home?

When should first time home buyers purchase a home?If you’re in the market for your first home, decisions like where to buy, what can you afford, and who to work with all need to be made sooner rather than later. But along with all that, deciding when the right time to buy is also an under-appreciated component to the home buying process that shouldn’t be overlooked.

As you might’ve already heard, common belief is that the best time to purchase a home is sometime during the spring or summer, when inventory tends to be at its strongest.

But believe it or not, the fall season can also be an optimal time to find and get a great deal, which might be surprising to some soon-to-be home buyers out there.

According to an analysis from RealtyTrac that considered 32 million home sales over 15 years, buyers, on average, paid 2.6 percent below estimated market value at the time for their homes. And while that may not seem like a big deal, 2.6 percent of a $200,000 or $300,000 home is literally thousands of dollars in savings.

So as you begin the to find that perfect new home, remember the fall season may just present you with the best deals out there.

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How to Find out How Much Mortgage You Can Afford

How much mortgage can you afford? To answer this, you have to think of the three variables that loan officers look at: Income, debts, and credit score. Lenders look at income and debts to find your debt-to-income ratio. After this, they can decide what you may be able to pay. To find out more about this, watch my short video.

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Why You Need to Hire a Buyer's Agent When Purchasing a Home

I’m often asked about how to go about buying a house without hiring an agent. Honestly, you really do not want to do this. Today I will explain why having a buyer's agent is a good thing for you. To start, you should realize that buyer's agents are paid by the seller. To learn more, watch my short video.

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What Should Buyers Know About Closing Costs?

I’m back with another tip for first-time homebuyers. Today’s topic is closing costs. Most people will have some type of closing costs included when they close on a property. These costs can range anywhere from 1% or 2% of the purchase price all the way up to 5% or 6%. These costs include things like bank fees, funding fees, title fees, different state taxes, and other costs that get packaged together as “closing costs.”

Here’s the point I want to get across: You have a down payment to pay and closing costs to pay. You need to have all of those funds for closing. It’s really a good idea to talk to your agent and find a lender who really understands all the different first-time homebuyer programs out there. There is money out there for first-time homebuyers that will help alleviate some of the costs.

 

You have a down payment to

pay and closing costs to pay.

There is also an option of having the seller pay for your closing costs or wrap them into your purchase price. There are many different ways to...

What Is the Closing Process Like?

I’m here with the answer to a great question for first-time homebuyers today: How long does it take to close on a home?

Once you’ve found your dream home, how long do you have to wait until you get the keys? There are a lot of different things that happen during the process that you’ll have to get through first. The process starts with you signing a purchase agreement and ends with you getting the keys to your new home. The stuff that happens in between is the closing time frame.

The closing process typically
takes anywhere from 45 to 60 days.

During that time frame, there is an inspection that needs to be done. There are also loan documents that you'll have to get to your lender and an appraisal from the buyer’s lender to support the home’s value. There is also a title company who will do a search to make sure there are no liens or judgments on the property.

The closing process typically takes anywhere from 45 to 60 days. A lot of it depends on the type of financing the buyer has, but that’s a normal window. Getting a closing done in 30 days is tough these days.

If you have any questions for us about the closing process or anything else related to the real...

Home Equity And Net Worth: A Quick Overview For First Time Buyers

Home Equity Explained For First Time Home BuyersIn case you haven’t heard, home owners have a shockingly higher net worth over renters, and that gap only continues to get bigger as home values increase. But what’s even more surprising to those who haven’t yet taken the deep dive into home ownership is that this is still the case even as most “home owners” don’t actually own their home outright.

It’s safe to say that the majority of home buyers don’t have the means to pay cash for a home, and that’s especially true for first time home buyers. But taking out a mortgage doesn’t mean you can’t significantly boost your overall net worth, even if you only put down a minimal amount.

As each monthly mortgage payment is made, home owners continue to build more and more equity, which is essentially the difference between what your home or condo is worth and what you still own on it before the home loan is fully paid off. But just what does this mean for you as a soon-to-be home buyer and how can it help you down the road?

More Equity, More Options When It’s Time to Upgrade

The number one advantage to having equity in your home is that you’ll be able to use that money to help fund another purchase if or when it’s time to upgrade. This also means you might be able to borrow less, ultimately...

The Shocking Difference in Net Worth Between Home Owners & Renters

Minnesota First Time Home BuyersChances are that by now, you’re well-aware of all the advantages being a home owner provides, which of course range from enjoying a variety of tax breaks to locking in a monthly mortgage that goes a long way in stabilizing your finances.

But did you also know that the net worth of home owners is well over 44 times greater than that of a renter? That’s right—according to the Federal Reserve’s most recent Survey of Consumer Finances, the median net worth of home owners spiked 15% to $231,400 since the previous report was unveiled back in 2013, while the median net worth of renters actually dropped by 5% to just $5,200.

While it’s true that saving for a down payment and ultimately buying a home for the first time can be a huge hit to your savings, the upside is that simply paying your mortgage each and every month continues to increase the equity in your home, which almost acts as a default savings account.  

So while deducting mortgage interest and property taxes from your annual income and locking in a long-term monthly payment are certainly great reasons to make the transition from renting to owning, home ownership is also one of the best ways to build family wealth, which may just be the greatest advantage of all.

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Why Would You Need a Home Inspection?

Today, I have a tip for first-time homebuyers regarding home inspections.

A lot of buyers will consider doing a home inspection when they’re purchasing a home, and it’s crucial for those buying for the first time.

Home inspections are crucial for first-time homebuyers

You should have an independent third party come to evaluate the property to make sure that you’re aware of all of its flaws. Hopefully, that list isn’t going to be too long, but either way, it’s important to know about those items before you close on the house.

A home inspector is typically a professional who will spend between two and four hours taking photos and testing various systems and appliances, looking for red flags. Sometimes, the inspection will turn up details that require further inspection, such as a faulty furnace or an issue with the electrical or plumbing. These further evaluations will be done by an independent contractor.

Inspections typically take place within the first five to 10 days after you sign a purchase agreement. The costs are paid upfront, and can run anywhere from $200 to $700 depending on what you’re having done. Talk to your agent about what the typical cost of an inspection is for the home you’re purchasing.

If you...