Questions to Ask Your Mortgage Broker

April 21, 2022/in Reality of Real Estate /by Shauna Morris

Mortgage brokers and mortgage lenders often get confused as the same entity; they are not. The mortgage lender is the financial institution that approves the amount of financing and lends funds with the expectation of repayment. It is wise to shop around before committing to a lender, which is where the mortgage broker comes in.

The mortgage broker is an advocate who acts as an intermediary between the borrower and various lenders. They shop around on the borrower’s behalf to minimize the hassle of going back and forth from one lender to another. The mortgage broker’s function is to educate you, advocate for you, and find the best loan option.

There are four questions your mortgage broker should answer explicitly:

Who pays the broker fee?
What is the best interest rate?
What are the down payment options?
What are the closing costs?

Who pays the broker fee?

It’s important to ask upfront who pays your mortgage broker’s fees. Many mortgage lenders will pay the broker fees, but that can create a conflict of interest. The broker might charge you directly for their fee. Ask exactly how much the broker’s commission is and who is responsible for payment.

What is the best interest rate?

Ask your broker about the best interest rate for your situation. Your rate will depend on your debt-to-income ratio, loan repayment history, factors surrounding the property you’re seeking, and credit factors. The mortgage balance, loan term, and interest rates for which you qualify will determine your monthly payment. Ask questions until you are absolutely positive you understand your exact APR, do not accept a guesstimate.

What are the down payment options?

The down payment is the cash you will need to pay upfront to purchase a property. While lenders prefer a 20 percent down payment, different loan types and programs are available to help lower the cost. Your broker should be willing and able to explain every option and scenario.

What are the closing costs?

There are multiple fees involved in the home-buying process. Each lender may charge different amounts, which will affect how much money you need to bring to closing. Ask your mortgage broker about fees for things like inspection reports, credit reports, origination fees, the appraisal, home inspection, and titling. The broker should compare fee structures between lenders to help you find the one that best meets your needs.

A mortgage loan is usually the most significant purchase in one’s life, and it’s essential to have an advocate that you can trust. The mortgage broker you choose should be your guide to navigate through the various lending scenarios and find you the best possible option. They should be knowledgeable, patient, and willing to work diligently on your behalf.

If you would like more information about buying a home, or if you’re looking for a great REALTOR® to show you around the Reno-Sparks area, contact the David Morris Group. We’re happy to be your helpful guide. Give us a call at (775) 828-3292.

Tips for First-Time Home Buyers

According to the National Association of REALTORS®, first-time homebuyers made up 34% of all buyers in 2021, with an average age of 33 years old. This data shows that millennials are still the most prominent home buyer demographic, with 82% of younger millennials and 48% of older millennials being first-time buyers last year. If you’re a first-time homebuyer, here are some things you can do to make your dream of homeownership come true.

Pay Down Your Debt

Buying a house is the most expensive purchase you’ll make, so you need to be as debt-free as possible before considering a home loan. The three most significant types of debt most new home buyers have are student loans, car loans, and credit cards. Paying down debt can be done. A good rule of thumb is to start paying off the smallest debts first. Student loans can be daunting, so start with what you can do. Consolidate high-interest credit cards into one monthly payment with a lower interest rate – then cancel the cards! Sell the car with a high payment for something with a lesser monthly burden. Getting out of debt isn’t easy, but you can do it!. Just take one step at a time, and when one thing is paid, move on to the next. Most importantly, don’t incur any new debts while paying down the existing ones.

Check Your Credit

Credit scores play a huge role in your ability to secure a mortgage loan. The minimum credit score most lenders have for a conventional loan is 620. It is possible to get a loan with a lower score, but the higher your score, the less interest you will pay. You can check your credit with your credit card company, online, or with a major credit bureau such as Equifax or Experian.

Know What You Can Afford

You need to sit down and decide how much you can afford to spend on a down payment, monthly mortgage payments, and household expenses. Be careful not to spread yourself so thin that you are unable to put a little bit of money in savings each month.

Get Pre-Approved

There is nothing worse than falling in love with a home only to realize you can’t afford it. Unless you plan to pay in cash, you need to get pre-approved for a loan. An initial consultation with a lender will help you determine your price range.

Hire a REALTOR®

Having a local professional guide you through the home buying process is more important than ever in this market. If you are serious about buying, you need a professional to help you find the perfect home within your budget. A REALTOR® will walk you through the information, talk you through the details, and help you make the right decisions. REALTORS® have access to the Multiple Listing Service (MLS), the largest centralized database of residential real estate listings in your area. While the internet offers some options to search for a home, the MLS is the only instant exposure to the market and is only available to Realtors®.

Once you have completed all of the prep steps, your REALTOR® will guide you through the rest of the process until you get to the closing table.

If you would like some more information about buying your first home, or if you’re looking for a great REALTOR® to show you around the Reno-Sparks area, contact the David Morris Group. We’re happy to be your helpful guide. Give us a call at (775) 828-3292.

Benefits of Selling a Home in a Seller’s Market

February 16, 2022/in Reality of Real Estate /by Shauna Morris

The real estate market is not a straight line of absolutes and certainties. There are many moving parts, some directly related to housing, and other indirect consequences of unforeseeable events that affect the supply and demand. While predictions are made each year, the housing market is cyclical, and yes – shift happens! Several factors must be at play for the real estate market to shift from favoring buyers to giving sellers the upper hand, or vice versa. According to fortune.com, “Demand for new homes is at a record high, but the inventory of new homes available is at a record low.” This data means that we are still in a Seller’s Market. A seller’s market occurs when more people are looking to buy with few homes available to purchase. What sort of advantages do sellers have when the demand exceeds the supply?

Less Time on the Market.

A larger number of people looking to buy fewer homes should increase the odds that your home will sell quickly. Homes that have been difficult to sell in the past or that may have been described as “unique” or “well-lived in” will have better odds in a seller’s market. However, it will take more than simply hanging a For Sale sign in your yard. Listing your home still requires a strategy and a plan. You’ll still want to take steps to provide value and attract buyers.

You May Get Multiple Offers.

Rather than feeling pressured to accept a lowball offer (or the only offer), sellers now have the option to look at the highest price and decide from a position of strength.

Seller Concessions are Less Negotiable.

Seller concessions are closing costs, or a percentage of the total closing costs, that the seller agrees to pay to finalize the transaction. Buyers have much less leverage to make requests or demands because sellers can stand their ground knowing they’ll probably receive several offers.

How long does a Seller’s Market last?

So many moving parts impact this question, and it would be great to see into the future to know for sure. The simple answer is that the seller’s market will last as long as demand exceeds supply or until an unforeseeable event shifts the scale. The bottom line is that if you’re thinking about selling and don’t have the time or inclination to haggle with buyers, now is the time!

If you’d like to stay up to date on what’s happening around Reno, follow our blog, and if you have questions about the Reno real estate market, or if you’re ready to list your home contact the David Morris Group. We’re happy to be your helpful guide. Give us a call at (775) 828-3292.

Home Selling Costs to Prepare For

September 23, 2021/in Reality of Real Estate, Reno-Sparks Real Estate /by Shauna Morris

Selling a home often adds dollars to your pocket, but selling a home also costs money. Some of the expenses are negotiable, but sellers should be prepared to foot the bill for the home selling costs on this list.

Real Estate Commission

Typically, real estate commission is 5%–6% of the home’s sale price, and it’s split between the buyer’s agent and the seller’s agent. In a majority of transactions, it’s a cost the seller bears.

Pre-Listing Home Inspection

The pre-listing home inspection is optional and costs between $300 and $500, but it can vary.

Home Staging

Home staging is also another optional cost. Home stagers work to enhance a home’s best features while minimizing its worst attributes. The cost of a professional stager varies according to the size of the home, the extent of the work, etc., but you can expect to spend several hundred dollars.

Utilities

If you’re moving out of the home before selling it, you’ll have to continue to cover the cost of the utilities at the home. A home without water, electricity, air conditioning, and heat can be very difficult to sell as potential buyers can’t test out these things for themselves, nor can an inspector complete the inspection.

Mortgage Payoff

The money you’ll make from the sale of your home will need to go towards paying off your mortgage. Your lender may also have a prepayment penalty or prorated interest added to your total balance, so be sure to speak to your lender about what you will need to pay back after selling your home.

Closing Costs

Many of the closing costs are negotiable, and it’s likely that the buyer will help pay for some of the costs associated with closing, but be safe and plan to meet these costs. Some of the closing costs may include attorney fees, transfer taxes, title insurance, escrow fee, brokerage fee, and a courier fee.

HOA Fees

Depending on your particular HOA, you may have to pay out of pocket for a resale certificate before the property closes. This fee can be up to $600, and in some cases higher, due to the HOA. Other HOA fees such as transfer fees and other miscellaneous fees may apply. Those fees are usually paid at closing.

Liens Against the Property

It may be a good idea to have a title company open the title for your property before listing. That way, they can pull a title commitment to see if there are any liens against the property besides the typical first and/or second mortgage. Knowing what you owe and what your take-home will be may determine if moving forward to sell your house is a good plan.

If you’d like to talk through what to expect when selling your home or if you’d like to know what’s happening in the local real estate market, contact the David Morris Group. We’re happy to be your guide. Give us a call at (775) 828-3292.

Important Terms to Know When Selling a Home

June 21, 2021/in Reality of Real Estate, Reno-Sparks Real Estate /by Shauna Morris

Real estate agents often have their own language. Learn the important terms to know when selling a home and having discussions with agents, brokerages, and lenders.

Affidavit – A statement a buyer or a seller signs to state that certain information is accurate.
Appreciation – An increase in a property’s value.
Asking Price – The seller’s value and pricing of the property.
Assessed Value – The value of the property that is decided by an assessor.
Capital Expenditure – An improvement to a property that has a lifespan and can increase the property’s value.
Closing Costs – The costs, including title insurance, legal fees, and survey, to finish transferring a property’s ownership.
Commission – The money that is given to a real estate agent for his or her association with selling the property.
Comparative Market Analysis – A method to evaluate a property by comparing it to similar homes in the area that were recently sold or have recently entered the market.
Counter Offer – A new offer that is a response to an offer that was not accepted.
Curb Appeal – The attractiveness of a property and its surroundings when viewed from the street. Landscaping, the front entrance, and the condition of the paint or siding are the biggest factors in curb appeal.
Days on Market – The total number of days a property has been available for sale.
Depreciation – A decrease in a property’s value.
Escrow – A process in which a third party takes care of funds and documents for a buyer and/or seller.
Home Inspection – An inspection of the property to check for factors like the quality and safety of the property.
Lien – A legal claim of ownership on a home’s title and security for money owed.
Market Value – An amount that a buyer would be willing to pay for the property and an estimated price based on the real estate market.
Mitigation – Alterations and improvements to a property.
Offer – A proposal to buy a property with a certain price and on certain terms.
Open House – The time in which a property is available for interested buyers to view.
Property Survey – A survey to understand a property’s boundaries.
Sales Contract – A contract between the buyer and seller of a property that provides details such as what a purchase consists of and the closing costs for the property.
Staging – Placing furniture and accessories within a house to prepare it for a sale.
Title – The evidence that shows the legal right of a person to own a property.
Under Contract – A real estate property that currently has been accepted in a contract by a seller and a buyer.
Walk-through – The last property inspection to make sure items in a purchase agreement, like repairs and property electrical systems, are working properly.
Zoning Laws – The local laws that regulate how a land is used in certain zones with factors that include the size of a lot and the way a building is used.

There are a variety of terms that you’re likely to hear as you begin the home selling process. If you have questions about buying or selling a home or you simply need a real estate translator, contact the David Morris Group. We’re happy to be your guide. Give us a call at (775) 828-3292.

The Reality of Real Estate: Understanding the Home Appraisal Process and Why It’s an Important Step in Purchasing Your First Home

January 27, 2021/in Reality of Real Estate, Reno-Sparks Real Estate /by Shauna Morris

Buying a home is a lengthy process with several steps to complete before being handed the keys to your new adventure. One of the key components of the transaction is the home appraisal. Let’s take a leap towards understanding the home appraisal process and why it’s an important step in purchasing your first home.

What is a home appraisal?

An appraisal is a professional and unbiased assessment of what your home is worth. As a buyer, you want the appraiser to find that the contract price you and the seller have agreed upon is appropriate. The lender wants to know if you’re asking to borrow more money than what the home is worth.

What is factored into the appraisal value?

The appraiser will look into several factors to determine the value of the home. Some of the factors include:

Recent sales of similar properties
Current market trends
Amenities of the home
Number of bedrooms and bathrooms
Functionality of floor plan
Square footage

The appraiser will also have to fill out a report that includes things like:

A street map with the appraised value and the other home sales data used
Sketch/photos of the home’s exterior
Square footage calculation and explanation
Photos of the front of homes used to compare sales price data

Who orders and pays for the appraisal?

Because the appraisal is meant to protect the lender in the case that the borrower cannot pay back the loan and the home would be sold to get the lender their money back, the lender usually initiates ordering the appraisal. The appraisal cost can vary but is usually a couple of hundred dollars and is a fee that the buyer must bear.

Where does the home appraisal fall in the home buying process?

The home appraisal is usually one of the first steps in the closing process and is done when you’ve entered the under contract stage of the home buying process. If the appraisal comes in at or below the agreed-upon contract price, you can move on to the next step in the process, but if the appraisal is below the price you agreed upon, there may be further steps you need to take.

The appraisal process is an important step, and it can even be a great negotiation tool if the appraiser values the home at a lower price than the agreed-upon contract price, but it can also be a factor that makes a deal fall through. Be prepared for what the appraisal will find, and let your REALTOR® help guide you through the process. If you have questions about what else you should expect when purchasing your first home, contact the David Morris Group at 775-828-3292. We’re happy to share our knowledge and skills to help you become a homeowner.

The Reality of Real Estate: Common Home Repairs Homeowners Face and the Essential Tools to Have on Hand

January 12, 2021/in Reality of Real Estate /by Shauna Morris

One of the biggest differences between being a homeowner and being a renter is that homeowners are responsible for taking care of any maintenance issues that may come up themselves. As a first-time homebuyer, it’s important to know the common home repairs homeowners face and the essential tools to have on hand to fix them.

Common Home Repairs

In your time as a homeowner, it’s likely that you’ll deal with:

Leaky faucets – Leaky faucets are very common, yet usually an easy fix. If leaky faucets are left, they can have some big impacts on your water bill.
Window and door drafts – Every other season, you’ll want to locate any drafts and properly seal them. Taking care of drafts will keep utility bills low.
Loose screws – Doorknobs and furniture get a lot of use, allowing screws to loosen.
Squeaky doors – As moisture and debris add wear and tear to door hinges, you may notice some squeaking. A lubricant spray can keep those hinges quiet.
Indoor air filter changes – Air filters typically last about three months before they need to be changed. Changing the air filter regularly keeps the air in your home rid of dust, dander, and odor.
Leaky pipes – If you think you may have a leak in a pipe, run a test. You may find that it’s in an area you can access easily and a simple fix, but treat it quickly, because it can cause bigger problems and repairs in your home.
Garbage disposal trouble – Know what you should and should not throw down the garbage disposal to increase the life expectancy of the disposal in your home. If you do run into trouble, it’s relatively easy to replace your garbage disposal.
Running toilet – Toilet repairs are often thought to be complicated, but they are usually pretty easy to fix.
Nail pops – As your home shifts, the drywall nails may start to protrude, causing the paint to “pop” out or bubble slightly.
Cracking caulk or grout – Multiple uses in the bathroom and kitchen can cause caulking and tile grout to fade and crack. Adding new caulk and grout is an easy fix.

Many of these home repairs can be fixed without calling a professional, but you need to make sure your toolkit is stocked with what you’ll need should a repair spring up.

Essential Tools to Have On Hand

Tape measure
Plunger
Hammer
Level
Pliers
Wrenches and hex keys
Multi-bit screwdriver
Nails
Screws
Caulking gun and caulk
Electrical tape, duct tape, and painter’s tape
Lubricant spray

If you’re equipped with a great toolbox and have access to how-to videos, home repairs can be a cinch to take care of. Now that you know the common home repairs homeowners face and the essential tools to have on hand, you’re more prepared to be a homeowner. If you’re interested in the tools we have in our toolbelt to help first-time homebuyers purchase the right home, contact the David Morris Group at 775-828-3292. We’re happy to share our knowledge and skills to help you become a homeowner.

The Reality of Real Estate: Predictions on Trends for Purchasing a Home in 2021

December 28, 2020/in Reality of Real Estate /by Shauna Morris

We can all admit that 2020 has been an unexpected year, and many are wondering what 2021 will hold. It’s been a question that many real estate professionals are fielding from their clients, and as your trusty real estate advisors, we’re here to offer some predictions on trends for purchasing a home in 2021.

Even Lower Mortgage Rates

2020 brought some of the lowest mortgage rates we’ve seen, but Fannie Mae, Freddie Mac, and the National Association of REALTORS® are all predicting that those rates will fall again or stay flat in 2021. If you thought you missed out on getting a great 30-year fixed mortgage rate, you may be wrong!

Prices of Homes Will Increase

This year has marked a remarkable increase in home prices, and we’re likely to see more of the same in 2021, but at a slightly lower rate than that of 2020. Freddie Mac and the National Association of REALTORS® showed that prices increased by 5.8% in 2020, and they are likely to rise by 2.7% in 2021.

Making Compromises Will Be Necessary

Because of the bidding wars that are happening, it’s likely that you will need to closely look at the loan you’re pre-approved for and look at homes below that budget to account for higher deposits, full-price offers, multiple offer situations, and those waiving appraisals and inspections altogether. Take a hard look at what you need and what you want, then crunch the numbers on the down payment, lender’s fees, and property taxes you will face for the homes that meet your budget and the items on your needs list.

Inventory Will Remain Low

Unless buyers leave the market or new construction home builds increase exponentially, we will continue to see low monthly inventory. This is what will contribute to the increase in home prices that we talked about earlier. Low mortgage rates are incentivizing many to purchase a home now, but there’s a supply shortage of homes for buyers entering the market.

If you’re interested in learning more about the predictions we have on trends for purchasing a home in 2021, contact the David Morris Group at 775-828-3292. Our years of experience have made us experts on the Reno-Sparks real estate market, and we’re always happy to share our insights with you.

The Reality of Real Estate: Resolutions That Will Help First-Time Homebuyers Purchase a Home in the New Year

December 11, 2020/in Reality of Real Estate, Reno-Sparks Real Estate /by Shauna Morris

With the new year almost here, now is the perfect time to start setting goals and creating plans for how to achieve those goals. 2021 could be your year to become a homeowner, and we have some resolutions that will help first-time homebuyers purchase a home in the new year.

Set a monthly savings goal and a down payment goal

Start off by looking at what you already have saved and how much money you would like to have that goes towards a down payment for your home. Then begin to look at your expenses each month, current wages, and calculate how much you can reasonably save each month to meet your goal. This can also help you see if you may need to find a side hustle or cut expenses to help you increase the savings you’re setting aside each month to meet your goal.

Avoid big purchases

Every penny you have should go towards paying for the things you need and saving for purchasing a home. Even if you’ve met your down payment goal, you’ll want to have money set aside to cover closing costs, home inspection fees, moving costs, home repair projects, HOA fees, home insurance costs, etc. The latest iPhone will still be there when you’re a homeowner. Sacrificing a big purchase now will pay off in the long run!

Begin reaching out and making connections with real estate professionals

You want to build relationships with people who can help you achieve your goal of purchasing a home. Create a list of potential real estate professionals you’d like to work with and interviewing them to see which one will be a good fit for you.

Begin meeting with lenders to talk about what kind of loan you qualify for

Meeting with lenders is a very important part of the homebuying process. You need to know how much house you can afford to buy as well as the interest rate to pay back the loan. If the interest rate is too high, it may have something to do with your debt-to-income ratio, and your lender may be able to give you advice on how to pay down your debt while saving for a home to score you a better deal on your mortgage!

Get your credit score checked and contest anything that’s wrong

Your credit score can also have an impact on the mortgage rates you’re offered, so be sure to get a detailed report and contest anything that is wrong or fraudulent to have it removed from your credit history.

2021 is your year to become a homeowner, but you’ll have to work hard to stick to your resolutions to make it happen. If you need more tips on how to become a homeowner in the new year, contact the David Morris Group at 775-828-3292!

The Reality of Real Estate: Question Everything – Important Questions to Ask Throughout the Homebuying Process

November 25, 2020/in Reality of Real Estate, Reno-Sparks Real Estate /by Shauna Morris

If there’s one piece of advice we could give everyone, it’s to be inquisitive and question everything. That advice is especially important in the real estate world. As a home buyer, you’re making one of the most important and biggest financial decisions of your life, and you don’t want to go through the process confused or unaware of what you’re getting yourself into. Below are some important questions to ask throughout the homebuying process.

Questions to Ask Your REALTOR® About the Community:

How good is the school district? How do the schools in this neighborhood stack up against other schools in the area?
How close are the nearest hospitals, grocery stores, businesses, etc.?
Is there anything that would be considered a nuisance going on regularly in the area — construction, trains, planes flying overhead, etc.?
Is there an HOA, and if so, what are there regulations, dues, etc.?
How does the resale value of homes in the area do year over year?

Questions to Ask the Home Inspector:

Is there insulation in the walls and ceiling, and is it sufficient for the home?
Are there any foundation or structural issues?
Is there anything in your report that you think I should have an expert inspect or repair?
Was everything you saw normal wear and tear, or are there problems with the home?
If you were in my shoes, would you feel like you were making a good investment in buying this home, or are there areas for concern?

Questions to Ask Your Lender:

Do you know of any mortgage programs that I qualify for and could lower my costs?
Will a higher down payment improve the interest rate you can offer?
What do my projected monthly mortgage, property taxes, and homeowners insurance costs look like?
How much should I expect closing costs to be?

There are no dumb questions, and it’s important to have everything laid out on the table when you’re buying a home. These are some important questions to ask throughout the homebuying process, but if you have more questions about buying or selling your home, contact the David Morris Group at 775-828-3292!