And, here's the REALITY of Realty.
1. "Know your credit score" Yes, your credit score is a major factor in whether you can qualify for a mortgage, what kind of mortgage, and the interest rate. HOWEVER, it is far from the ONLY factor. INCOME!! How much money you make is a huge factor! As is your "DTI" Debt To Income. If you make $50k/year, have perfect credit, but also $100K in Debt (especially credit cards), you won't get a loan even if you have an 800 FICO!
2 "Buying a car before the house" Yes, a bad move because it MAY lower your credit, BUT!! even worse move because it will raise your DTI!!
3 "Skimping on Home inspection" Can't argue with this one. Home Inspections are a MUST!! However, If you can't afford to have a home inspection done, YOU SHOULDN'T BE BUYING A HOUSE! Seriously, a H.I. cost $250-450, and if you're that strapped that you can't pay for it, then you won't be able to afford any repairs. Wait to buy till you have more funds!
3 "Skimping on Home inspection" Can't argue with this one. Home Inspections are a MUST!! However, If you can't afford to have a home inspection done, YOU SHOULDN'T BE BUYING A HOUSE! Seriously, a H.I. cost $250-450, and if you're that strapped that you can't pay for it, then you won't be able to afford any repairs. Wait to buy till you have more funds!
4 "No Lawyer" Apparently, whoever wrote this crap either is, or has a relative who's a lawyer. The author also doesn't understand that as a Licensed Realtor, it is your duty to protect and promote your clients best interest. In other words, it's YOUR Realtor's job to make sure you don't get screwed. And that comes first and foremost in any reputable Realtor's mind. If you think your Realtor would let you take a hit just to close a deal, GET A NEW REALTOR!!
5 "No Contingencies" First of all, there are NO minimum requirements for Earnest Money Deposits!! NONE! Technically, you don't even have to OFFER an Earnest Money Deposit!
If you do, there are specific, and very broad, contingency clauses that allow the buyer to get their EMD back. Failure to appraise for sales price, failure to passinspection, failure of the buyer to secure financing are all standard language contingencies in the AAR sales contract.
I would NEVER allow a client of mine to sign a contract waiving these contingencies, and neither would any other responsible agent!
If you do, there are specific, and very broad, contingency clauses that allow the buyer to get their EMD back. Failure to appraise for sales price, failure to passinspection, failure of the buyer to secure financing are all standard language contingencies in the AAR sales contract.
I would NEVER allow a client of mine to sign a contract waiving these contingencies, and neither would any other responsible agent!
6 "not budgeting for Insurance" Further proof that the author of this article is completely ignorant!
You CAN NOT get financing, conventional or otherwise, unless you know, before purchasing, what your insurance costs will be!!
Why? #1 If your insurance costs are too high, you either won't be able to afford your total mortgage payment, and you'll default,
#2 or you'll drop the insurance, which will breach your contract with the lender who financed you, because THEY have a stake in the house too!
You CAN NOT get financing, conventional or otherwise, unless you know, before purchasing, what your insurance costs will be!!
Why? #1 If your insurance costs are too high, you either won't be able to afford your total mortgage payment, and you'll default,
#2 or you'll drop the insurance, which will breach your contract with the lender who financed you, because THEY have a stake in the house too!
If you want to sit down with a Real Estate Broker who actually knows what they're talking about, and get some good advice about buying a home, and what you'll need to do, please, call me!
Erin Goldbach
Designated Broker
Vanguard Platinum Realty
602 524 0186
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