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Showing posts from October, 2024

Overwhelming advantages aside, there is still resistance to pre-approval

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Pre-approval is a comprehensive process where the lender verifies the buyer's financial information, including credit history, income, and assets. Pre-approval provides a conditional commitment from the mortgage company to lend a specific amount, pending appraisal of the property. Pre-qualification is an initial assessment based on self-reported financial information provided by the buyer. It gives a rough estimate of how much a buyer might be able to borrow but it is merely an opinion. Despite the well-known advantages of getting pre-approved for a mortgage early in the home-buying process, many buyers remain resistant even to their detriment. Here are several reasons why: Some buyers may not fully understand the benefits of pre-approval or may underestimate its importance. They might see it as an unnecessary step rather than a strategic move that can give them a competitive edge and streamline the home-buying process. Buyers often perceive the pre-approval process

Addressing the Buyer Agent's Fee

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Traditionally in the U.S. housing market, the seller has offered the buyer's broker and agent a share in the commission specified in the listing agreement between the seller and the listing broker and agent.   In a settlement between the National Association of REALTORS�, beginning on August 17, 2024, buyers will have to sign an agreement with their buyer's agent specifying what services will be available and the fee the buyer's agent is charging. Many sellers may continue to offer compensation to the buyer's broker and agent, maintaining the traditional practice of the seller paying both sides of the commission. However, when no offer of compensation is made, there are several distinct alternative ways to facilitate the buyer agent's fee, as well as a myriad of variations to suit different scenarios. In an instance where the seller doesn't offer compensation to buyer agents regarding a property you're interested in, there are several options to c

U.S. Homeowners Property Tax Increase

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Last year, U.S. homeowners faced an average property tax bill exceeding $4,000, marking the highest increase in five years, according to data from Attom Data Solutions , a real estate data firm. Property taxes nationwide amounted to over $363 billion in 2023, reflecting a 6.9% rise, largely attributed to inflationary pressures on local government costs and public employee wages. States with the highest effective property tax rates included Illinois, New Jersey, Connecticut, New York, and Nebraska, with notable disparities in tax increases observed across different regions, such as a 31.5% increase in Charlotte, North Carolina, and a 15.2% rise in Atlanta. Property taxes are determined by the assessed value of the property and applying the tax rates for the different taxing authorities for that year.   Generally, homeowners are notified of the assessed value of the property for that year, many times, even before the tax rate is set. There is often a procedure for disput

Use Ben's Balance Sheet to Decide

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There is a technique that has been attributed to Benjamin Franklin and used when faced with a decision.   As the lore goes, whenever Ben was faced with a decision, like you are now, he'd take a piece of paper, draw a line down the middle of it.   On the left side, he'd list all the reasons he should do something and on the right side, he'd list the reasons to avoid doing that thing. Would-be home buyers are faced with the decision of whether to buy in today's market with uncertainty about inflation, the presidential election, the economy, higher than recent mortgage rates, and increased home prices, just to mention a few. Some people have been put on the sidelines because they cannot qualify for a mortgage and others have sidelined themselves, even though they have the funds and resources, because of all the "noise" in the market.   Looking at the advantages of renting versus buying may bring clarity. Advantages of Renting: Financial Flexibili