My Real Estate Blog

• Study - Do your homework before you buy. Review the prices of comparable homes in the neighborhood. A real estate agent can provide the latest sales data.  A lot of the websites out there; Zillow.com, Realtor.com, and others are often behind the market by several months.  What I mean is that the information they provided is not necessarily the most accurate.

• Cure your credit - Today's best mortgage rates require a credit score of more than 700. Learn how to boost your credit score before you apply for a mortgage. Not only will a low credit score cost you more in terms of the interest rate on your mortgage, it could also prevent you from obtaining a mortgage.

• Don't bid too low - Unlike many parts of the country, the Metro DC area is quickly changing from a Buyer's market to a Seller's market.  The last 7 transactions I've had have all been multiple offer situations and some were outside of the beltway!

• Consider all types of loans -   For example, a 'Lucky 7' loan offers lower interest rates available with a 7/1 adjustable rate mortgage (ARM), when compared to a fixed-rate 30 year mortgage. The interest rate on a 7/1 ARM is fixed for seven years. In the eighth year the loan resets as an ARM. Just be sure you know what the margin, life cap and periodic caps will be beginning in the eighth year to avoid surprises. Use those seven years to reduce debit and increase your income in preparation for what is likely to be a much higher rate than your starting rate.

You might also consider 30/15 year mortgages which are fixed for 15 years, amortized over 30 years and due in full in 15 years.

• Get pre-approved - Go beyond pre-qualifying for a mortgage, which only tells you what you can likely borrow. Get a pre-approved mortgage and you'll know your home price shopping parameters. You'll also present yourself to the seller as a serious buyer. Financing in hand will also help level the playing field with all-cash buyers and investors and it will help you negotiate a better purchase price.

• Consider a newly built home - The new home sector has been harder hit than resales. Concessions and reduced prices are the norm.

• Inspect everything - Get a home inspection for a new home, a resale home, a nearly new home or a very old home. Always! Just because it's new doesn't mean it's defect free.

• Read the title report - Make sure that any new additions or construction to an existing home are fully permitted and recorded with the local municipality. • Check the appraisal - Likewise check the appraisal report for any oversights, missed features or other errors that could cause the property to be undervalued.

• Negotiate - Don't be afraid to dicker. Concessions are available from both new home builders and existing home sellers. Ask for help with the closing costs, repairs, even furnishings and other perks. Motivated sellers have much to offer.

• Don't skimp on the help - If you look for the least expensive settlement company, real estate agent, inspector, etc., you will get what you pay for. Ask family, friends, co-workers, realty professionals and others you trust for referrals and then interview them.