(This post is part of our Free First Time HomeBuyers’ course. For more information and/or to sign up, click on this link, or select ‘Education’ under the ‘Buy’ drop-down menu above.)

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Have you ever used WebMD to diagnose yourself? Every time I do, a simple headache is immediately some rare, incurable disease and I have three days left to live. It’s kind of like that with real estate agents (just wait, I’ll explain why). Sure- a real estate agent is another expense, your mortgage company has the finances taken care of, and there are hundreds of real estate websites on which you can hunt down homes- but let’s be real: real estate agents wouldn’t exist if there wasn’t a need for them.

If you want that headache diagnosed in a much easier and way less stressful way, you go see a doctor, who looks at your particular case, knowing your history and other factors. Same goes for an agent- it isn’t one size fits all. Agents do make commission, but the pricing of homes is adjusted to account for this- and it’s well worth the money. Often, first time home buyers make the mistake of calling the listing agent, and just letting them represent you. But here’s the thing. First and foremost, they represent the buyer- meaning they’d love to get the most money possible for that listing. Sure, they’re on your team, but they’re also playing for both sides. This is why you want to find your own agent- a buyer’s agent, whose goal is to get you the most for the money, make the process as easy as possible, and advocate for you. They’re on your team, and your team only.

There’s a number of other reasons you’ll want an agent, too:

• Is your full-time job to sift through thousands of homes online? Real estate agents do this all day, and have contacts all over. Meaning, they’re privy to the market you want to be in, and might know things that Trulia or Zillow don’t (including hundreds of listings that haven’t been put up yet). They sort through everything you need and want, and find homes that are well-suited to you, so you don’t waste your time going to a hundred open houses that weren’t worth it.
  
• Do you want to play a perpetual game of telephone tag? While real estate agents know exactly who to reach in order to set up an appointment to view a listing, as a buyer you would have to find the agent, the broker, possibly another agent, and then make an appointment. Real estate agent cut out the middle-man, and make it possible for you to continue living as usual during the whole process. (Imagine that!)
• Do you want to have to deal with the seller and/or their agent? If you find a personality conflict between the seller and yourself, there goes your dream house. If they have an agent, and you don’t, you’re at a major disadvantage. In this way, a real estate agent is a welcome middle-man. You can’t exactly have an open conversation about how horrible the seller’s taste is if they’re the one showing you around. It’s nice to have a buffer to keep everything professional and simple.
• Do you really trust that seller to tell you the truth? By law, real estate agents are held much more accountable- and are very careful to give out the proper information, because they can be held liable for false representation.
• How’s your real estate jargon? Every trade has its technicalities, and real estate is no exception. You’re going to be signing some MAJOR contracts. And unlike your computer’s ‘Terms of Service and Privacy Policy’, you’ll want to read the fine print on these ones.
• Do you really think you’re going to save money? Sellers adjust their home’s pricing depending on the situation- and often, without proper representation, you’ll be suffering more than you’ll be saving.
• Do you know the market temperature? Can you tell whether it’s a buyer’s or seller’s market? Can you pull property profiles to find out exactly what you’re dealing with? Can you calculate the trends in the area to forecast the best time to buy? Are you a master of pricing strategy? List-price and sales-price ratios? Historical documents of homes?

 

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You get it. Especially as a first time home buyer, you need someone in your corner who knows what they’re doing and has your best interests at heart.

Alright so I need a realtor. How do I find one? Actually, how do I find a good one?

• Look for the realtors who are ahead of the game. They’re not just checking listings when they’re released; they know what’s going to come on the market before it ever does.
• Look at their references. People who have worked with this agent in the past will be able to give you the most honest opinion, from personal experience. Check their reviews on Zillow. Like a Yelp for real estate (on top of a million other features), Zillow allows buyers and sellers who have worked with that agent to leave reviews about their time working with them.
• Don’t settle for the first person. Do some shopping around, and interview a few agents
• Look to the agents you already know (*cough, cough*).

NextHome Element Realty can help. We invite you to come in and sit down with us, talk about what you’re looking for, and we’ll introduce you to the best agent for your needs.

(This post is part of our Free First Time HomeBuyers’ course. For more information and/or to sign up, click on this link, or select ‘Education’ under the ‘Buy’ drop-down menu above.)

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 Escrow is the purgatory of the real estate world.

You’re perched somewhere right in between euphoria and a panic attack. As soon as the purchase agreement is drawn up, all of the complicated paperwork begins (this is when you realize how much you needed an agent).

 

Three things are taken care of in escrow: (and detailed below)

1. The appraisal/inspection of the property
2. The mortgage/loan
3. The title

 

Basically, this is where all the parts come together to form a perfect bow (or a knot- depending on the circumstances).

The home inspection/appraisal process ensures that you aren’t paying more than the property is worth- and discloses any information you might need about issues with the house. This is where you might find out about a maintenance issue that was never addressed or things that need repairing- which can alter the price in the contract.

You’ll also be glad you were pre-approved for that mortgage or loan at the beginning- you’re welcome for saving you from even more stress. At that point, you weren’t locked in. Now is when you decide on one lender to go with and cross those T’s and dot those I’s.

Then comes the title, which ensures that the property and all parts of it are transferred to the new owner(s). Basically, for tax purposes.

 

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Shopping For Insurance

The minute the property is transferred to your name, any damage falls on you- the bearer of complete responsibility. That’s why, during the escrow, it’s a good idea to get your insurance all lined up and ready for the minute it is transferred to you. That way, if there’s a lightning storm the night that you close escrow and a tree falls on that beautiful colonial porch, you’re covered. You’d be shocked by how many homeowners don’t have proper homeowner’s insurance. Fortunately, it’s become standard operating procedure for obtaining mortgages, but chances are, your standard policy will include wind, hail, fire, and theft- mostly for things that would occur suddenly and be accidental. However, a sudden roof collapse from old age would likely not be covered. Then what?

 

 

The most common mistake homeowners make when purchasing insurance is not knowing exactly what their policy covers. This is why it’s important to shop around for insurance providers before settling with a policy. You want someone honest, thorough, and well-educated about the area. Ask your Element Realty agent for their recommendations- or see our recommended vendors page on NHElementRealty.com.

 

(This post is part of our Free First Time HomeBuyers’ course. For more information and/or to sign up, click on this link, or select ‘Education’ under the ‘Buy’ drop-down menu above.)

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Be prepared to make a lot of offers. In your journey, you’ll probably be outbid a few times, have counteroffers fall through, all that fun stuff. Very rarely does someone make an offer, have it immediately accepted, enter escrow, and close the deal. More often it goes like this:

 

You see the house and decide you might want to make an offer.

• You debate it internally for a bit
• You decide you’re going to go for it
• You call up the agent. “I want to put in an offer”
• Depending on your agent and length of time shopping around, your agent might have you sit down with them to write an offer- especially if it’s the first offer you’re making. You’ll make the offer taking several things into account:
  • Current market conditions
  • Condition of the home
  • Terms of closing costs
  • Number of offers

 

You’ve officially submitted an offer. Congratulate yourself on making a big move in the right direction!

• The waiting game.
• The seller’s agent reviews all offers- they may accept the best offer, or may do counteroffers for one or two buyers.
  • If they deny your offer, you can try to submit another one.
  • If they counteroffer, you will talk with your agent to decide if you’re willing to accept their counteroffer, then will either accept the counteroffer or withdraw your offer (or just leave it as is).
  • If your offer is accepted, you’re all set (for now).

 

The offer process is pretty much done. Take a deep breath.

• Come to an agreement & sign a purchase agreement (it usually will have a contingency clause on financing and home inspection)
• Welcome to Escrow (come in and stay a while).

(This post is part of our Free First Time HomeBuyers’ course. For more information and/or to sign up, click on this link, or select ‘Education’ under the ‘Buy’ drop-down menu above.)

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“I don’t even know where to begin.”

 

Nobody does. The mortgage process can be a bit (okay a lot) daunting. But that’s why you’re here. You’ve probably done a bit of research on the internet, maybe talked to your realtor, and discussed it with your mom and dad, older sister, friends, who knows. The best way to begin is (after you finish reading this, obviously) to ask homeowners you know and trust in the area you’re looking to buy in. Find out who they used for their mortgage, and whether they’d recommend them or not. Get a few options and compare them to find out who will be the best to work with, who is the most knowledgeable, and who can get you the most competitive rates. Ask each professional lots of questions- and make sure you can understand their answers. You don’t want to be working with someone who makes the process over-complicated and overwhelming. So here, we’re going to make it so simple, that we’re going to give you a recap. This is where you begin:

1. Finish reading this fantastic guide
2. Talk to homeowners in the target area
3. Get their referrals
4. Compare your options
5. Ask questions

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There’s a really important distinction we need to make first. Getting pre-qualified is not the same thing as getting pre-approved.

 

Getting pre-qualified is basically like having a lender say “sure, kid, this is a good estimate of what you can afford, now come back when you’re ready and I’ll do the real work”.

Getting pre-approved is like having a lender say “I’ve already done all the work. This is exactly what you can afford; this is exactly what the whole thing would look like, let’s go DO THIS THING!” Except maybe with a little less enthusiasm (unless they’re really good).

 

So the whole goal of the pre-approval process is do a few things. First, it allows you to talk to lenders to de-mystify the whole mortgage process. Second, it allows you to make educate purchase decisions and ensure your financial stability. Third, it makes you a better buyer. Buyers who are pre-approved aren’t just thinking about buying- they’re serious about it. This lets the seller(s)’ agent know that you are ready and gives yours an edge up over other offers. Fourth and lastly, it makes your home’s closing way faster once you’re in escrow. All of the hard work has already been done, and you just dot your I’s and cross your T’s.

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But ultimately, all we want is to answer this one, crucial question:

How much can I get?

 

Most lenders (not all, so it will depend on who you choose to work with) will allow up to 45% of your monthly gross income to go toward paying all of your debts. So- let’s use an example to show you how they calculate what you qualify for.

So, you have $3,100 each month that can go toward your mortgage. But, it also has to cover your property taxes and homeowners’ insurance. And, this is the max amount that most lenders will allow you to use. So some might not let you this high, and some people might not want that high of a debt percentage (the 45%) being taken out of their gross income each month- just some food for thought (pause for life contemplation moment). But now that you have an idea of how much you qualify for, you can go to a mortgage professional with your lovely math equations written on a napkin and depending on the rates, the professional, etc., they can give you a price point estimate.

 

In order to give you the most accurate information, they’ll probably need all (or most) of these items:

• Last two pay stubs
• W2s from the last two years
• Tax returns from the last two years
• Bank and asset statements for the last two months
• Credit report (not a huge factor, but weak credit will hurt you)

 

Or, we can work backwards- which is the way most people do it. Now I’m not saying it’s wrong, but I’m just saying it might give you a disappointing answer that you weren’t hoping for. However, if you do this step after you did the first step, you’re going to have a really good idea of where you stand.

Is that monthly payment below that “debt allowance”? Yes? (I don’t want to play Dora here but $3,075 is less than $3,100). Wow! We did it! (Insert obnoxious Dora success song here).

 

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So I mentioned down payments before (see part one), but how much is a good down payment? A lot of first time homebuyers think they have to have 20% ready for a down payment. Want to know the truth? Most first time homebuyers have 5-10% of the purchase price as a down payment. No more Dora here, you can do the math on your own, depending on the house. If that number seems a bit overwhelming, you can purchase a home with as little as 3.5% down on an FHA loan (we’ll talk about that in a bit) or 3% down on some Fannie Mae programs (no, it’s not your long-lost aunt, but we’ll go over that later too).

Once you and your loan professional figure this equation out, your loan professional will produce a loan application for you to review and sign. Then all those documents are submitted to an underwriter for full underwriting and approval, just as if you were in escrow on a home (just minus the home).

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There are approximately 12,000 kinds of mortgages.

 

That might be slightly exaggerated. But there are a lot. So let’s start with a Fannie Mae. Only because I know you’ve been dying to hear about Fannie Mae. Well sorry to shatter your dreams but she’s not real (I know I’m a monster). She’s also not that important. But you know what I think is? Knowing why in the world it’s called a Fannie Mae. Four words: Federal National Mortgage Association. It’s a government agency, so like a lot of government names, it got shortened, to F.N.M.A. (G.A.S.P.). How that somehow became “Fannie Mae” remains urban legend. Probably because nobody has ever cared enough to look into it. Sad.

 

Anyway, that’s a type of mortgage that usually involves 3-5% down. There’s also

• FHA mortgages that involve 3.5% down,
• VA mortgages (only if you’re a US Veteran) that require no money down,
• 7/1 Adjustable Rate Mortgages (ARMs- charming I know), etc.
• Most first time homebuyers take a 30-year Fixed Rate Mortgage (like 90% of them), but it’s different for every person and you should definitely consult your mortgage professional to find out what’s best for you.

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There’s one last term you might hear of during the whole process: PMI (as if there weren’t already enough acronyms to remember). It stands for Private Mortgage Insurance. It’s basically when your lender asks you to pay a little extra to make sure that no matter what, they don’t lose their money. A lot of times, buyers misconstrue this as a bad thing- as if it’s some red flag of “I don’t have enough money”. While some people think of themselves as peasantry, it’s not what they think it is.

PMI is actually super common– a lot of times if a purchaser doesn’t have (or doesn’t want to put) 20% down, lenders ask them to buy this insurance to make sure they (the lenders) don’t lose their money. Sure, it could be because you don’t want to be broke, but it also could be that a lower down payment makes more fiscal sense in your case. Technically, it’s because you’re a higher financial risk than someone who has more money to put down (just on paper- the circumstances in real life vary greatly). So this insurance protects the lender, and it comes in many forms.

If you’re planning to buy a home with less than a 20% down payment, call NextHome Element Realty at (818) 237-9426 to talk with an agent. They’ll be able to give you specific details.

Ladies and Gentlemen-

If it wasn’t official before, it sure is now! NextHome Inc. sent out a press release congratulating us on opening- and we can’t wait for them, and YOU, to see what we can do!

Read the full article, including information on Broker/Owner John Jackson, below. Or, click on the image to be led to NextHome’s site where you can see it there!

 

 

Pleasanton, CA— July 5, 2017 — NextHome is proud to announce our latest addition to the franchise, NextHome Element Realty. The Simi Valley-based brokerage will be owned and operated by John Jackson.

NextHome Element Realty will provide residential real estate sales services to all areas of Ventura County including Simi Valley, Moorpark, and Thousand Oaks.

The City of Simi Valley is located 30 minutes northwest of downtown Los Angeles. Home to 125,000 residents, Simi Valley sits in the southeast corner of Ventura County and is known for being home to the Ronald Reagan Presidential Library. The Reagan Library has hosted numerous high-profile political events, including the 2012 and 2016 Republican Presidential primary debates.

Prior to real estate, Jackson inherited his family’s aviation service business, where he learned how to pilot planes. Forced to drop out of college in 1987 to run the business, Jackson earned numerous certifications in the aviation industry and piloted many trips across the globe. Although he was the owner/operator for the company, he wasn’t passionate about the industry and eventually moved on to a different career.

For nearly a decade, Jackson served as a Deputy Sherriff for the Los Angeles County Sherriff’s Department.

Returning to school in 1992, Jackson earned his BS degree in Management from Pepperdine University.

It was the combination of conflict resolution and experience from being a sheriff, mixed in with his studies he learned as a graduate of the Management program at Pepperdine that led Jackson to following his passion for real estate.

Three years ago, Jackson joined a high-profile independent real estate brokerage in Los Angeles County. Even though he was able to jump right into real estate, it was there where he realized the fit wasn’t quite right.

“Agents there had a focus and hype on money earned rather than families helped,” recalls Jackson. “At the time, I was focused on helping as many people as I could with their real estate needs and those sales numbers sometimes reflected lower sales prices.”

“I wanted to work at a company where helping people was more important than sales prices and awards,” added Jackson.

Knowing he intended to leave his brokerage, Jackson originally wanted to be an independent broker and not be affiliated with any company or franchise. It was a Facebook post from a friend that caught his eye about NextHome.

“I saw a post from (NextHome’s Vice President of Sales) Charis Moreno about her company and the growth of their real estate franchise,” said Jackson. “As I did research, I was drawn to the company’s support for its franchisees, technology, commitment to continual innovation that is all wrapped into an affordable model. It was a no brainer for me to purchase into the franchise.”

Jackson says NextHome Element will focus on a personal concierge-type service that isn’t often found in his real estate market.

“NextHome Element Realty will help clients buy or sell their home by providing expert guidance. Not only for the negotiation of the price and terms on the contract, but throughout the entire process so the client feel comfortable with their home buying or home selling experience,” said Jackson.

“I want our company and our agents to be the standout examples of what a REALTOR® can be – not the mediocre agent,” adds Jackson. “I want to make a difference in how people see real estate agents and how we can make a positive difference in their lives.”

Please join us in welcoming John and the rest of his team at NextHome Element Realty to the NextHome family and congratulating them on their brand new office location!

(This post is part of our Free First Time HomeBuyers’ course. For more information and/or to sign up, click on this link, or select ‘Education’ under the ‘Buy’ drop-down menu above.)

 

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Sure, finding the perfect home is really a simple process on paper. But as you can imagine, it’s a lot harder in real life. Your agent’s job is to find the point at which your budget intersects with your needs and wants perfectly. It’s really an art- because too much of one side can end up with you spending more than you can handle or wishing you wouldn’t have settled (though I’d rather have this problem than the former).

With your realtor, sit down and write a list of your ideal home features as well as the deal breakers.

· Is your budget flexible or fixed?

· What kind of heating/air-conditioning system would you like?

· Is it important that the home be move-in ready? Or are you okay with putting in a little elbow grease?

· Is energy efficiency important to you?

· Do you want a pool?

· How many rooms do you need? How many do you want?

· Do you want a formal dining room?

· How many cars are you going to need to store?

· Are there bedrooms downstairs that you’ll need? Do you need a one-story or two-story home?

· Do you have a preference in the architectural design of the home?

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Here at NextHome Element Realty, we like to have everyone we work with start off with a few questions. We would love for you to answer these questions, and bring them when you come in to meet an Element Realty agent! (Click on the documents above and below to open up a PDF that you can print, or you can copy and paste it into Word to type up your answers).

Having those things written down is important- give a copy to your agent and keep one for yourself. This way, you can edit it as you search and discover new deal-breakers and wants- it makes the process significantly easier for your real estate agent, too. It helps them to find you more options that are worth your time.

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You then need to consider which neighborhoods work for you- your agent will offer suggestions and give you their input, but there are a few things to think about when considering neighborhoods:

 

1. Do you have kids or are you planning on having kids? All parents know to consider the school systems in that area before moving- but if you don’t have kids yet, it might be something you’ll want to consider for when you do. Do you want to live with a younger crowd? Or a quieter, older crowd?
2. What kind of home do you want? There are a lot more options than you’d think. Do you want a townhouse? Single family residence? Condominium?
3. How far is the commute? Don’t just think about right now- are you going to be working in the same place in 7 years? Can you handle having a commute? (This is LA after all).
4. Is anything here in my price range? If not, areas nearby might have more options. If so, where on the spectrum of real estate in this community do you fall?
5. Do you want a historic neighborhood? In some areas, this is an added bonus. In LA, our history doesn’t go back too far, but we still have options. Is that an important thing to you?
6. What do you wish your current community had? Often, looking at what you don’t want is a good way to find out what you want.
7. Is it important that things be walking distance? I mean, hey, good for you for reducing your carbon footprint.
8. What’s the crime rate? Even if you don’t have kids, you’ll probably want to know. Look up the registered sex offenders in the area, too.
9. What’s visitor parking like? Is there enough room for guests to park? Or are they going to have to walk a mile with their bags?
10. What’s it like at different times of day? I don’t usually condone hanging around a neighborhood in your car at various times throughout the day. But, some neighborhoods are completely different at night- so make sure you feel it out (just act casual).

 

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Now, it’s time to put it all together. Your real estate agent will help you curate a list of options- some people like to space it out so they have an appointment to view a new house every day, some people like to take an entire day on the weekend to see all the houses at once. Depending on your realtor’s availability, you can do either. Be patient with it. Keep in mind that the average homebuyer has to look for twelve weeks before selecting a property. Appointments are usually private walkthroughs with your agent- but open houses have an etiquette of their own.

 

Here are some of the Do’s and Don’ts for open house etiquette.

 

 

Let your NextHome Element Realty agent set some up- call (818) 237-9426

(This post is part of our Free First Time HomeBuyers’ course. For more information and/or to sign up, click on this link, or select ‘Education’ under the ‘Buy’ drop-down menu above.)

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Did You Know…

 

Open houses have an etiquette of their own. See how many you’ve done (or not done) before, then keep these in mind.

 

 

Don’t have any on your schedule, or don’t want to go at it alone? Call Element Realty at (818) 237-9426 to speak with an agent and set something up!