Home buyer Resources

Tax benefits.
The U.S. Tax Code lets you deduct the interest you pay on your mortgage, your property taxes, and some of the costs involved in buying a home.

Appreciation.
Historically, real estate has had a long-term, stable growth in value. In fact, median single-family existing-home sale prices have increased on average 5.2 percent each year from 1972 through 2014, according to the National Association of REALTORS®.  The recent housing crisis has caused some to question the long-term value of real estate, but even in the most recent 10 years, which included quite a few very bad years for housing, values are still up 7.0 percent on a cumulative basis. In addition, the number of U.S. households is expected to rise 10 to15 percent over the next decade, creating continued high demand for housing.

Equity.
Money paid for rent is money that you’ll never see again, but mortgage payments let you build equity ownership interest in your home.

Savings.
Building equity in your home is a ready-made savings plan. And when you sell, you can generally take up to $250,000 ($500,000 for a married couple) as gain without owing any federal income tax.

Predictability.
Unlike rent, your fixed-rate mortgage payments don’t rise over the years so your housing costs may actually decline as you own the home longer. However, keep in mind that property taxes and insurance costs will likely increase.

Freedom.
The home is yours. You can decorate any way you want and choose the types of upgrades and new amenities that appeal to your lifestyle.

Stability.
Remaining in one neighborhood for several years allows you and your family time to build long-lasting relationships within the community. It also offers children the benefit of educational and social continuity.

REALTORS® aren’t just agents. They’re professional members of the National Association of REALTORS® and subscribe to its strict code of ethics. This is the REALTOR® difference for home buyers:

Ethical treatment.
Every REALTOR® must adhere to a strict code of ethics, which is based on professionalism and protection of the public. As a REALTOR®’s client, you can expect honest and ethical treatment in all transaction-related matters. The first obligation is to you, the client.

An expert guide.
Buying a home usually requires dozens of forms, reports, disclosures, and other technical documents. A knowledgeable expert will help you prepare the best deal, and avoid delays or costly mistakes. Also, there’s a lot of jargon involved, so you want to work with a professional who can speak the language.

Objective information and opinions.
REALTORS® can provide local information on utilities, zoning, schools, and more. They also have objective information about each property. REALTORs® can use that data to help you determine if the property has what you need. By understanding both your needs and search area, they can also point out neighborhoods you don’t know much about but that might suit your needs better than you’d thought.

Expanded search power.
Sometimes properties are available but not actively advertised. A REALTOR® can help you find opportunities not listed on home search sites and can help you avoid out-of-date listings that might be showing up as available online but are no longer on the market.

Negotiation knowledge.
There are many factors up for discussion in a deal. A REALTOR® will look at every angle from your perspective, including crafting a purchase agreement that allows enough time for you to complete inspections and investigations of the property before you are bound to complete the purchase.

Up-to-date experience.
Most people buy only a few homes in their lifetime, usually with quite a few years in between each purchase. Even if you’ve done it before, laws and regulations change. REALTORS® handle hundreds of transactions over the course of their career.

Your rock during emotional moments.
A home is so much more than four walls and a roof. And for most people, property represents the biggest purchase they’ll ever make. Having a concerned, but objective, third party helps you stay focused on the issues most important to you.

How long have you been in residential real estate? Is it your full-time job?
Like most professions, experience is no guarantee of skill. But much of real estate is learned on the job.

Do you have any designations or certifications?
Real estate professionals have to take additional specialized training in order to obtain these distinctions. Designations and certifications help define the special skills that an agent can apply to your particular real estate needs. One designation buyers should look for is the ABR®, or Accredited Buyer’s Representative.

What’s your business philosophy?
While there’s no right answer to this question, the response will help you assess what’s important to the agent and determine how closely the agent’s goals and business emphasis mesh with your own.

How many buyers did you and your real estate brokerage represent last year?
This will tell you how much experience they have and how up-to-date they are on the local market.

What’s the average variation between your initial offers and final sales price?
This is one indication of a REALTOR®’s pricing and negotiating skills.

Will you represent me exclusively, or might you choose to represent the seller as well?
While it’s usually legal to represent both parties in a transaction, your REALTOR® should be able to explain his or her philosophy on client obligations and agency relationships.

Can you recommend service providers who can help me obtain a mortgage, make home repairs, and so on?
Practitioners should be able to recommend more than one provider and let you know if they have any special relationship with any of the providers.

How will you keep me informed about the progress of my transaction?
The best answer here is a question. A real estate agent who pays close attention to the way you prefer to communicate and responds accordingly will make for the smoothest transaction.

Could you please give me the contact information of your three most recent clients?
Ask their former customers if they would use the agent again in the future.

Talk to mortgage brokers.
Many first-time home buyers don’t take the time to get prequalified. They also often don’t take the time to shop around to find the best mortgage for their particular situation. It’s important to ask plenty of questions and make sure you understand the home loan process completely.

Be ready to move.
This is especially true in markets with a low inventory of homes for sale. It’s very common for home buyers to miss out on the first home they wish to purchase because they don’t act quickly enough. By the time they’ve made their decision, they may find that someone else has already purchased the house.

Find a trusted partner.
It’s absolutely vital that you find a real estate professional who understands your goals and who is ready and able to guide you through the home buying process.

Make a good offer.
Remember that your offer is very unlikely to be the only one on the table. Do what you can to ensure it’s appealing to a seller.

Factor maintenance and repair costs into your buying budget.
Even brand-new homes will require some work. Don’t leave yourself short and let your home deteriorate.

Think ahead.
It’s easy to get wrapped up in your present needs, but you should also think about reselling the home before you buy. The average first-time buyer expects to stay in a home for around 10 years, according to the National Association of REALTORS®’ 2013 Profile of Home Buyers and Sellers.

Develop your home/neighborhood wish list.
Prioritize these items from most important to least.

Select where you want to live. Compile a list of three or four neighborhoods you’d like to live in, taking into account nearby schools, recreational facilities, area expansion plans, and safety.

Credit scores range between 200 and 850, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

Your payment history.
Did you pay your credit card bills on time? Bankruptcy filing, liens, and collection activity also affect your history.

How much you owe and where.
If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, spreading debt among several accounts can help you avoid approaching the maximum on any individual credit line.

The length of your credit history.
In general, the longer an account has been open, the better.

How much new credit you have.
New credit—whether in the form of installment plans or new credit cards—is considered more risky, even if you pay down the debt promptly.

The types of credit you use.
Generally, it’s desirable to have more than one type of credit—such as installment loans, credit cards, and a mortgage.

Credit scores range between 200 and 850, with scores above 620 considered desirable for obtaining a mortgage. The following factors affect your score:

Your payment history.
Did you pay your credit card bills on time? Bankruptcy filing, liens, and collection activity also affect your history.

How much you owe and where.
If you owe a great deal of money on numerous accounts, it can indicate that you are overextended. However, spreading debt among several accounts can help you avoid approaching the maximum on any individual credit line.

The length of your credit history.
In general, the longer an account has been open, the better.

How much new credit you have.
New credit—whether in the form of installment plans or new credit cards—is considered more risky, even if you pay down the debt promptly.

The types of credit you use.
Generally, it’s desirable to have more than one type of credit—such as installment loans, credit cards, and a mortgage.

Credit scores play a big role in determining whether you’ll qualify for a loan and what your loan terms will be. So, keep your credit score high by doing the following:

Check for errors in your credit report.
Thanks to an act of Congress, you can download one free credit report each year at annualcreditreport.com. If you find any errors, correct them immediately.

Pay down credit card bills.
If possible, pay off the entire balance every month. Transferring credit card debt from one card to another could lower your score.

Don’t charge your credit cards to the max.
Pay down as much as you can every month.

Wait 12 months after credit difficulties to apply for a mortgage.
You’re penalized less severely for problems after a year.

Don’t order items for your new home on credit.
Wait until after your home loan is approved to charge appliances and furniture, as that will add to your debt.

Don’t open new credit card accounts.
If you’re applying for a mortgage, having too much available credit can lower your score.

Shop for mortgage rates all at once.
Having too many credit applications can lower your score. However, multiple inquiries about your credit score from the same type of lender are counted as one if submitted over a short period of time.

Avoid finance companies.
Even if you pay off their loan on time, the interest is high and it may be considered a sign of poor credit management.

Loan terms, rates, and products can vary significantly from one company to the next. When shopping around, these are a few things you should ask about.

General questions:

What are the most popular mortgages you offer? Why are they so popular?

Are your rates, terms, fees, and closing costs negotiable?

Do you offer discounts for inspections, home ownership classes, or automatic payment set-up?

Will I have to buy private mortgage insurance? If so, how much will it cost, and how long will it be required?

What escrow requirements do you have?

What kind of bill-pay options do you offer?

Loan-specific questions:

What would be included in my mortgage payment (homeowners insurance, property taxes, etc.)?

Which type of mortgage plan would you recommend for my situation?

Who will service this loan—your bank or another company?

How long will the rate on this loan be in a lock-in period? Will I be able to obtain a lower rate if the market rate drops during this period?

How long will the loan approval process take?

How long will it take to close the loan?

Are there any charges or penalties for prepaying this loan?

How much will I be paying total over the life of this loan?