Category Archives: Buyer’s Resources

Why You Should Use Local Lenders?

by Nouman Mirza

When most of you are ready to buy a home, you begin by searching online. There are hundreds of website that provide you with little to lots of information.  A lot of these sites are generic sites that also affiliate with various lenders and offer advertising slots.  It is a common understanding that most people need a loan when buying a house.  When choosing a lender, it is extremely important that you use a local lender.

Here is some of the reasons why you should use a local lender:

  1. You can meet local lender face to face. Meeting with someone face to face doesn’t just establish a relationship but also makes people more sympathetic towards each other. When things go wrong or need more clarification, the loan officer can “care” for you and your family and will know how it effects you.  When you use an “online lender” you’re nothing but a number to them and will receive less care when things need extra attention.
  2. They have knowledge of the local market. A local lender will know what special programs may be available in certain areas. The will also know local market conditions and will try to figure out a customized solution for you after they’ve reviewed all documentations. A “online lender” will only look at your numbers and give you an “approval” or “denial” letter based on the documents without understanding the reasons behind them.
  3. They have relationships. Most Realtors® know 2 or 3 local lenders that they are actively working with. This creates an advantage because the loan officer knows that providing poor service will hurt their future referrals from that agent and possibly even their company. So don’t be afraid to ask your Realtor for a recommendation.

Local lenders have a vested interest in keeping everyone happy.  They know that if they screw up a relationship with a buyer, seller, Realtor® or settlement agent, they will hurt their chances of future business from their local market.

So if you’re ready to embark on a journey and find local experts, give me at call at 703-577-4320.

Are You In Default?

by Nouman Mirza

A real is contract can be a very tricky thing if not understood properly. Over the years I’ve done many transactions and one of my major concerns has been my clients earnest money deposit (besides other issues like termite, home inspection, financing and successful closing).  Now earnest money deposit or EMD is a “good faith” to the seller that you’re a serious buyer and are ready to purchase this home. Recently, I’ve come across too many transactions where the buyer and even their agent don’t understand the term “Default” and how they could lose their EMD.  Continue reading →

5 Tips for Buying a Short Sale

by Shazia Noreen

As a homebuyer you might come across one or more properties that are classified as a short sale. A short sale is an effort by the current owner to sell their home in lieu of the bank repossessing it through foreclosure proceedings, thus partially salvaging their credit rating and lifting the burden of high mortgage debt.

The short sale process rests on the hope that the bank will accept a loss, approve the sale, and eliminate the expensive process of foreclosing and reselling a home. Since this is a huge hope to you as a homebuyer, you should understand some things in order to reduce the chance of being disappointed of unapproved short sales. The following are some tips to assist you:

  1. Remain positive and patient during the short sale process because it may take a few months to complete.
  2. Keep your options open and continue checking out several properties. Try not to get your hopes and heart set on one property. Remain optimistic, like all real estate the right property will come along.
  3. In most cases lowball offers get slow or no response. The bank is typically aware of the pricing during a short sale. When lowball offers stream into the bank they are often scoffed at and rejected, giving the prospected buyers little or no feedback.
  4. Don’t ask for repairs. Most banks will not pay for any repairs or replace unless they’re required by the lender in order to obtain an FHA or VA loan. And sometimes they will just ask buyers or sellers to pay for the repairs or  even start marketing the property to cash or conventional financing buyers.
  5. When you get approval, it is imperative to close the loan on time. Unlike a traditional sale, there is no leniency with the closing escrow date.

Although short sales can be a wonderful opportunity to find your new home at a competitive price, a short sale can also be a major headache that may lasts for several months. It is important to have a clear understanding of the factors that lead to a successful short sale so that it can be an enjoyable and profitable experience.

New Agency Laws!

by Nouman Mirza

It’s July and the summer has started. As things heat up and buyers rush into the market, they are faced with new challenges and require proper representation. Virginia Association of REALTOR® (VAR) has developed and passed legislation that will enhance the agency relationship and disclosure requirements. These new laws go into effect on July 1, 2012 and as with any legislation, the actual language can be boring and dull so I’ve tried my best to briefly explain everything. If for some reason my explanation isn’t enough or you’d like to learn more, please visit VAR’s site at www.varealtor.com/agency.

What has changed?

  1. Inform the consumer: The law is to make sure consumers are fully informed about the real estate services they’ll receive and the nature of the relationship with the licensee.
  2. Mitigate REALTOR® liability: The law is designed to protect licensees by making sure full disclosure is provided and the nature of brokerage relationship is reduced to writing. It’s to eliminate much of the consumer confusion that can come back and bite the licensee.
  3. Discourage opportunisitic dual agency: The law is intended to make sure that licensees who practice dual agency are fully informing consumers about the risky nature of that relationship.
So, what does this mean for you?
Once you’ve found a REALTOR® you want to represent you, you need to enter into a written brokerage relationship that will outline a minimum of the following:
  • what services the REALTOR® will provide;
  • how long the REALTOR® will provide those services for; and
  • what fees will be charged and how they will be paid.
VAR has created a very informative flyer that will help you understand the changes of this law and better answer any questions. You can view the PDF document by going to the following link: Your Realtors Role – Understanding Your Options.

Now if you’re ready to start looking for homes or are interested in selling your home, please contact me at 703-577-4320 and I’ll be happy to further explain the agency relationship and help in “Giving Your Dreams An Address!”

Step 7 : Secure Financing!

by Nouman Mirza

The search for your dream home has nearly come to an end. You’ve done everything that needs to be done up to this point and now the reality of owning a home is just on the horizon. You can smell and taste your new home, but before you start shopping for new furniture, there are a few more things left. Last time we spoke of doing your part with all the inspections and appraisal. Now there is one item left before you can officially take ownership of the home, that is to secure financing!  Continue reading →

Step 6 : Do Your Due Diligence!

by Nouman Mirza

You found the perfect house, made an offer and it was ACCEPTED! You may think all is fine and dandy and in a short time you will be signing closing documents and the house will be your, this is where you can be WRONG! There is a long list of items that you must do, most of these items are written in the contract but usually not are clearly stated. Always ask your Realtor for a “checklist” of all the things that need to be completed. I provide all my buyers with a checklist of things along with due dates and the person that is responsible to do them. Most of these items need to be completed by me, the loan officer or settlement company but there are a few things that you must be aware of and these are:

Home Inspection: Even though you may think that the house is perfect, you must not let emotion trump reason. It is recommend that you order the home inspection and plan on being present to ask any questions that you may about your new home. Continue reading →

Benefits of a Home Warranty!

by Nouman Mirza

It’s only a matter of time before your dishwasher starts to leak, the dryer overheats or a pipe breaks and floods the basement. With the current economy, most of us don’t have money laying around to be able to pay for a new dishwasher, dryer or fix the basement pipes and replace the carpet! In times like these it’s important to have home warranty! A home warranty is a type of insurance that covers different types of household items, major appliances and pay for the repair of the covered items in case they break down. Some types of home warranties may even pay for replacing the damaged appliances with new ones.

A home warranty can be beneficial for both buyers and sellers.  Before I start discussing the benefits for each, here are some of the appliances that are routinely covered by most home warranties: Continue reading →

Stop Throwing Away Money On Rent!

by Nouman Mirza

It’s a well known fact that when you make your rent payment, the money is gone forever. If you rent a townhouse for three years at $1,500 per month, you’ve spent $54,000 that you will never see again.  However, the decision to buy a house is never an easy one. No one knows what the future holds for you, your family, your job or your finances but I’m going to help you understand whether it is better for you to buy or rent.

There are many online calculators that you can use to compare the costs of renting vs buying. The calculator will take many things into consideration (i.e. interest, property taxes, tax savings, appreciation, opportunity costs, closings costs, selling cost, etc.) when comparing the two prices.

Over the years, people have given me many reasons on why they would rather rent than buy. Here are the top questions and answers to them:

“My credit is bad!”  Most people think their credit is bad but in reality it is in fairly decent condition. Others have collections on their credit and think that will hurt them from buying. Please remember that most credit repairs are just minor fixes and can be fixed in a short time period. Also, there are a few lenders that will offer financing with credit scores as low as 580 and only 3.5% down payment.

“I don’t have the down payment!” With current FHA loan programs, you can purchase a home with down payment as low as 3.5% of sales prices. If you have good credit scores, you may qualify for programs that offer 100% financing. There are also some grants that will offer first time buyer $7,500 to help towards closing cost and down payment. With many of these programs combined, you may be eligible to purchase a home by paying less than your security deposit.

“I will have to pay taxes and insurance and it will exceed my monthly rent!” This is an incorrect statement in most cases. Currently the interest rates are and house prices are low which means that your principal and interest will be low also. For most buyers, the principal, interest, taxes and insurance (PITI) is typically lower by a few hundred dollars for a comparable home that they would rent.

“I would rather rent because I don’t have to worry about maintenance!” Even though it is true that you have less maintenance when you rent but it should not be deciding factor to limit your purchase. You can get home warranty for a full year for less than $500. For a small deductible, you can have “others” take of the maintenance of your home and don’t have to worry about extensive repairs.

Each area is different and in some areas it is better to rent than buy so make sure to consult a Realtor. Our Northern Virginia market offers a great deal of benefits for buyers. Just remember you can spend the same $1,500/month to buy a home valued around $230,000*. In five years, you will pay $14,405* towards principal and your home should appreciate at least $63,545** in value. Therefore, if you sell your home after five years, it should be worth $293,545 (or more) and your loan balance will be $215,595, which means you will OWN $77,950 in equity!

IF YOU’RE READY TO RECEIVE EXPERT ADVISE FOR YOU NEXT HOME PURCHASE, CONTACT NOUMAN MIRZA AT 703-577-4320.

*Based on 30 year fixed rate loan at 4.75%. Does not include down payment, closing costs, pre-paids/impounds or origination fee.
**Based on 5% appreciation per year which is the approximate national average from 2000 to 2007.

Step 5 : Make An Offer!

by Nouman Mirza

Submit Offer!So you’ve found your dream home and are really excited to get it before someone else does? Before you let emotions take over, just remember that it is still an investment. Purchasing a home is not something as simple as buying gas, groceries or clothing. It requires research from a skilled professional to find the value, prepare legal contracts and then present your offer to the seller (or seller’s realtor)! When making an offer, make sure your Realtor covers these basics:

Price: You need to make sure that the price you are offering is the fair market value. If the house requires repairs, make sure to factor those into your cost when making an offer. If there are many buyers competing, more than likely the seller will get higher than their asking price so keep that in mind as you set your price. And ALWAYS Continue reading →

Important Questions for Fixed vs ARM Loans?

by Nouman Mirza

Fixed vs ARMSo after reading the pros and cons of a fixed or adjustable rate mortgage, I’m sure you know which one is the best for you? Before you finalize your decision make sure to ask yourself these important questions:

  1. How long do you plan on staying in the home? If you plan to stay in the house for only a few years, it would make sense to take the lower rate ARM, especially if you can get a reasonably priced 3/1 or 5/1. Your payment and rate will be only and you can build up your savings for a bigger home down the road. Plus, you’ll never be exposed to huge rate adjustments because you’ll be moving before the adjustable rate period begins. Continue reading →