Closing Costs Explained

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home soldMost anyone who has ever been involved in buying a house, or even watched a few real estate shows on HGTV, is familiar with closing costs. But what exactly are closing costs? Here’s a quick rundown of these additional fees.

Closing costs are additional fees associated with processing the mortgage and are not paid to the mortgage company. Generally speaking, closing costs are assumed by the buyer of the property (VA mortgages are one exception to this rule) and are paid at the time of closing of escrow. The bulk of closing costs is comprised of the lender’s fees. These fees include the appraisal fee, which is an independent assessment of the value of the property being purchased, as well as the credit report and any property taxes. The lender’s fees also include mortgage and homeowner’s insurance, as well as any flood certification and pre-paid interest charges. These fees may also include origination and discount points depending on your lender, as well as loan application and loan processing fees.

Title fees are also part of closing costs. These fees include the title service fee, which covers the handling of title documents and funds, as well as half of the settlement and escrow fees, which cover the fees for the title search and examination.  Finally, title fees also include any title insurance. Recording fees are another part of closing costs and include recording fees, transfer taxes, and an affidavit of property value. HOA transfer fees and HOA dues are typically also included within closing costs.

While this is a brief overview of closing costs and is by no means a thorough list, we hope this sheds some light on these necessary real estate transaction fees.  Every transaction is different, and while we am unable to give legal, tax or accounting advice, we look forward to helping you navigate your own process with ease and clarity. Feel free to call us with any additional questions! Chris 480-754-9077 & Cheryl 480-754-9477

Final Walk Through Tips

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Buying a house is one of the biggest purchases many people will make in their lifetime. Therefore, it is important to always do a final walk-through of the property with your real estate agent before closing. This allows the buyer, with guidance from their agent, to ensure the property they are purchasing is in acceptable condition. If repairs were requested it is also a time to make sure they are completed in an acceptable fashion.

When walking through the property if you discover certain repairs, as stated in the contract, are not completed. Then have your agent document the findings and send the sellers a list of items to be completed before closing. Also, if certain items or fixtures are taken and/or sellers’ personal property has yet to be removed this too can be documented and fixed before closing.

A big mistake that some buyers make is forgoing the final walk through instead of reassessing the property one last time. Oftentimes the buyers feel that they have been to the property numerous times, and everything seems okay so they pass on the walk through. On many occasions, buyers have waived the walk through and found themselves moving into a dirty house or one still containing the seller’s debris and/or personal property.

Unfortunately, it is not always possible to do a final walk through after the sellers have vacated the property. Sometimes the sellers are not set to move until the real estate transaction closes. If this is the case then it is still highly recommended to have a walk through. This is to make sure that sellers are at least in the progress of moving out.

What can you do if the sellers do not adhere to their contractual obligations (i.e take items that were included in the sale, not fix repairs, or leave debris and/or personal property)? First, make sure that your agent immediately notifies the listing agent to see if the situation can be rectified. Then you can delay closing, if possible until all contractual obligations are met.

However, it is not always possible to delay closing so an alternative would be to fix all the contractual obligations and send a bill to the seller. If you do not get reimbursed, consult a real estate attorney immediately.

5 Benefits of Homeownership

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Owning a home is often referred to as the “American Dream.”  While there are many obvious benefits of owning a home, there are also some that are not so obvious.

1-Stable Monthly Payments

If you choose a fixed rate mortgage, then your monthly payments will remain mostly the same, which is one of the best benefits of owning a home. When renting a property, there is always the unknown if the monthly payments will increase each year when you renew your lease. Consistent monthly payments that come with owning a home can provide some peace of mind when it comes to creating a monthly budget. Of course, monthly payments can change when owning a home if property taxes or homeowners insurance change, but the amount of change in property taxes is typically a very small amount.

2-Opportunity to Build Equity

The longer that you own a home, the more you pay towards the principle balance of your mortagae.  As the balance of the mortgage lowers, and hopefully the value of the property increases, the larger the equity!

3-Cheaper Than Renting Overtime

Undoubtedly, there are many associated when buying a home, such as the down payment, appraisal fee, and homeowners insurance.  The upfront cost to buy a home is substantially more than just paying monthly rent to a landlord. Yet, over time, owning a home is cheaper than renting which is a great benefit. In Arizona, if you compare a rental property and the monthly mortgage of a comparable home, the cost of ownership is typically much less.

4-Owning a Home Provides Tax Advantages

Paying taxes is a necessary evil, but a great benefit of owning a home are the tax advantages that it provides.  Arguably the biggest tax advantage of owning a home is the option to deduct paid monthly interest from your tax returns. If you’re unsure how owning a home will impact your taxes, it’s recommended that you discuss it with your accountant so you fully understand how owning real estate will impact you come tax season.

5-Build Your Credit

There are many factors that impact a persons credit score, one of the most important being the length of credit history.  Since the length of a mortgage is typically 15 or 30 years, having a mortgage on your credit history is a great way to lengthen the average of your credit accounts.  In addition to improving the average length of credit accounts, each and every month that a mortgage is paid on-time it shows that you’re a responsible borrower which not only can improve a credit score but also improves the chance of approval for future credit accounts.

Owning a home is much more than just having a place to live. Give us a call when you’re ready to become a homeowner! Chris 480-754-9077 & Cheryl 480-754-9477

3 Questions to Ask Yourself Before Buying a House

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Spring and summer are often the busiest seasons to buy a home and with mortgage interest rates at an all-time low, many first-time home buyers are ready to buy. But are you really ready?

1. Why Do I Want to Buy a House?

Before you start house shopping, ask yourself why you want to buy a house. Many first-time home buyers are pressured into buying because family and friends push them. They convince first-time buyers that mortgage interests rates are so low that now is the right to buy. While it’s true interest rates are at all time low, buying a home for the wrong reasons often results in disaster. Instead, buy a house because you want a stable place to live, or a place to call “home”.

2. Can I Really Afford It?

Do you feel safe enough in your job to commit to a 30-year mortgage? Do you have enough stashed away in savings to cover your mortgage for six months? Being able to answer “yes” to these two questions is important for your financial security when buying a house.It’s important that your monthly mortgage payment be affordable. Some lenders may approve you for a loan that is more than you can comfortably afford. Plus don’t forget that your monthly mortgage payment is only the beginning. You still have to pay homeowners insurance, property taxes, as well pay for maintenance, repairs, and the inevitable home improvement projects.

3. Will I Want to Live Here in 5 Years?

As you’re searching neighborhoods and homes, imagine staying there for five years. Does the home, neighborhood, and city have everything you need to be happy? Is the house big enough to accommodate a growing family (if you decide to have one)?

Without a doubt, now is a great time to buy a home. Just make sure you can truly afford it and that you’re buying for the right reasons. When you are ready, give us a call, we’d love to help you buy your first home! Chris 480-754-9077 & Cheryl 480-754-9477

Featured Home in Desert Vista at Troon North

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scottsdale home for sale

Absolutely gorgeous home with breathtaking mountain views and tons of on-trend features located in the quiet community of Desert Vista. Spacious open great room has oversized windows for tons of natural lighting and a huge wet bar with granite counters, fridge, and breakfast bar. Gourmet eat-in kitchen incorporates granite counters, island with breakfast bar, stainless appliances, 4 burner cooktop, and double wall ovens.

Other features include soaring high ceilings, 18in ceramic tile flooring, built-in speakers throughout. den with double door entry, gas living room fireplace, and 3 car garage. The master suite offers a charming gas fireplace, two walk-in closets, wood flooring, private patio exit, and a full bathroom with dual vanities, a makeup vanity, soaked tub, and snail walk-in shower.

Oversized backyard has stunning views of Troon and McDowell mountains, extended covered patio, view fence, above ground spa, pebble tech pool with boulder waterfall, and an upgraded irrigation system! This private lot is ideal for stargazing!

Call us today for your exclusive private showing! Chris 480-754-9077 & Cheryl 480-754-9477

Homebuying During Covid-19

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With mortgage rates at all-time lows and an uncertain future due to the current Covid-19 pandemic, is now a good time to buy a home? It may feel contradictory to purchase a home at this time, however, for people who feel confident about their job security and finances, this might be the perfect time to buy.

Why Making the Move Now May Be Right for You

House hunting during the coronavirus can have its benefits. There may be less competition for the houses in the areas where you might be planning to move, and sellers may be more motivated to sell or more flexible on price. Once the crisis passes, there may be more house hunters back on the market and prices may escalate due to a more competitive market that benefits sellers rather than buyers, so taking a few steps forward now will put you ahead of the game.

Get Preapproved for a Mortgage

When you do find the home of your dreams, being preapproved for a mortgage proves to the seller you are serious. It’s possible to get preapproved online through some banks. Mortgage preapproval is a letter from a lender that indicates how much you are qualified to borrow from the lender, at a specific interest rate.

Use This Time to Research the Market

Despite the decrease in the number of newly-listed homes, there are still excellent options in property listings. This is a time to research the market and find your preferred property in a community you like. Take this time to expand your search to other surrounding neighborhoods that might have homes with excellent value for money, amenities, and facilities.

As you spend more time at home, it’s an opportunity to assess your current home and determine the level of functionality and comfort it offers you. That helps in knowing your priorities when searching and, consequently buying a home.

Virtual Home Viewing

Many real estate agents post virtual tours of properties for sale on their websites. When you take a virtual tour or attend a virtual open house, you can get a realistic view of the property. Then, with a click of the mouse, you can see all the details that are important to you. In addition, by touring homes virtually, you can see many more than would be possible in a single day with your real estate agent.

Prepare Your Home For Sale

While entertainment, sports, and other social events are canceled, take advantage of this while to prep your current home for the market. Preparation may include anything from mowing the lawn, exterior repairs, tidying the gutters, and decluttering the interior.

Start with a DIY approach to reduce expenses before calling the professionals. Do an online home improvement search to note the additional décor that can enhance the visual appeal of the home.

Do you have questions if now is the right time for you to buy? Call us today, we’d love to help answer all your questions and find your new home when the time is right for you! Chris 480-754-9077 & Cheryl 480-754-9477

Featured Home at Legend Trail in North Scottsdale

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scottsdale home for sale
Absolutely gorgeous home with excellent curb appeal and tons of on-trend updates and features! Gourmet eat-in kitchen incorporates granite counters, custom cabinetry, travertine backsplash, stainless GE Monogram appliances, gas range with cooktop, custom hood, double ovens, built-in concealed fridge, and a center island. Great room area has a charming gas fireplace with stacked stone and surround sound speakers.

Other features include a custom front door, 18in travertine tile flooring, a bonus space with built-in bar, new AC unit, dry bar with wine fridge, a spacious den wired for media system, and a 3 car garage with water softener and central vac.

The master suite boasts double door entry, private patio exit, gas fireplace, walk-in closet, and a full bathroom with high-end granite counters, his and hers vanities, makeup vanity, antiqued cabinets, walk-in shower, and a jetted tub. The guest suite has a private door to exterior, walk-in shower, and an en-suite bathroom perfect for family and friends. Resort style backyard with a massive wrap around covered patio with cantera pavers, sparkling pool and spa, built-in BBQ with stacked stone bar, faux grass lawn, fireplace, and a wrought iron view fence!

This home has everything today’s market seeks. Call us today for your exclusive private showing! Chris 480-754-9077 & Cheryl 480-754-9477

The Importance of Home Inspections

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scottsdale home for saleAfter searching for that perfect home on AZDreamHomeScottsdale.com, you have finally found the perfect fit for you and your family! Everything looks great, but have you really done a thorough inspection? Like most home buyers you probably aren’t an expert on air conditioning units or roofs. This is why it’s necessary to call in an expert to uncover any potential problems that you cannot see.

Having the home you are about to purchase go through an inspection is very important. It may bring up potentially very expensive problems before you sign on that dotted line. If the seller is made aware of these problems they can be fixed prior to closing or a negotiating tool for you. For example, a home inspector will check the roof for broken tiles, signs of deterioration, loose flashing, sagging or if it is wooden, any signs of rotting. All of these can be costly fixes and you don’t want to move in without knowing about such problems.

Foundations are another important part of an inspection. An inspector will check for cracking, signs of water, bulging or bowing, and other irregularities. Here in Arizona we depend on a fully functioning air conditioner to get us through most of the year in comfort. These are very costly to replace so an inspector will check out the unit for signs of rust and corrosion, any electrical damage, or wear and tear. If the unit was regularly serviced it is likely it will last longer than a unit that has been neglected. You really want to know what kind of life expectancy you can expect out of the unit in your new home.

Some other things that a home inspector might not look for, but you may want to call in an expert to check out, are things like pests (termites in particular), lead paint, asbestos, and toxic mold. Usually a person checking these types of things is licensed to do so.

Remember there is a lot more to purchasing a home than what you see on the surface. If you take a few extra precautions, that new home you purchased will be the best thing you ever did! Have more questions? Give us a call! Chris 480-754-9077 & Cheryl 480-754-9477

Showing Homes During the Coronavirus

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hand sanitizerThe Coronavirus is having a mixed impact on the housing market. It may be decreasing buyer traffic, yet it’s also not deterring some home buyers and sellers from taking advantage of the lowest mortgage rates in history.

To help keep our buyers and sellers healthy during this unprecedented pandemic, we have adjusted and added some procedures when showing homes:

-All of our open houses have been suspended. For now we will only doing private showings of homes to one person (or couple).
-While we am only doing private showings, we will ask buyers to meet us at each home instead of driving with them.
-We will do our best to arrive before each showing to open doors and windows to minimize door knob touching and allow fresh air inside. we will also sanitize door knobs, counters and other high traffic touch areas before and after each showing.
-Additionally, we will have hand sanitizer and gloves, or ask clients to place their hands in their pockets as they tour the home.
-We will also be using video chats for virtual tours and walkthroughs so our clients can social distance themselves by while still allowing them to see new homes.

Please don’t hesitate to reach out to us with any questions you have about how the Coronavirus/Covid-19 may be affecting the Arizona real estate market. Chris 480-754-9077 & Cheryl 480-754-9477

Tips on Improving Your Credit Score for Homeownership

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growing moneyIf you are currently renting and are considering purchasing a home you may need to check a few things before you begin your search. One of the most important things to know before you venture into home ownership is what your credit score is.

Your credit score will tell you everything about your credit history and this is what lenders will be looking at when deciding whether to approve you for a home loan. You may have thought you were doing everything right but your credit score will be the deciding factor. You are able to request a copy of your credit report from the three reporting companies (Transunion, Experian, and Equifax). If you find something on your report that is fishy you can look into it, this is another way to keep track of any identity theft that may have happened that you may not even be aware of.

Credit scores can range from an excellent rating of 800+ down to below 499 which is as you can guess, not great.  The higher your score the better chance of getting a better rate and being approved for a loan. There isn’t really a secret formula for improving your score except for paying your bills on time and being consistent. Also eliminating debt whenever possible will bump up your score. Some experts will tell you to pay off the higher interest rate credit cards or loans first, others say get rid of the smaller balances. This is really a personal decision, but either way paying off as much debt as possible will increase your credit score.

Another factor is how long your credit history is. If you have had a good history and have a had a credit card for a long time that will work in your favor. If you have cards showing on your report but they have not been used in a while you may want to charge small amounts on them every so often. These will then be considered active when the credit agency is figuring your score. Also do not open a bunch of new cards at once, this will lower the average age of your accounts and will push your score down. Another thing to consider is if you close your cards, this can lower your score as well.  Again these are all suggestions but only you can decide what your best option is.

Those that may have had financial struggles in the past may bury their head in the sand and not want to look at their credit score. However being educated on this will only help you in the end achieve the best loan rates and getting on the road to owning your home.

Have more questions, give us a call! If we can’t help you, we can direct you to an experienced lender who can. Chris 480-754-9077 & Cheryl 480-754-9477