Mark Prideaux's Blog
When you find a house that you love a lot, your main concern may be that other people really love the home too. How can you make your offer stand out? You might want to write an offer letter to go long with your proposed purchase price for the home. While making the highest offer s typically the best way to secure a bid on a home, if sellers get a few similar offers, they may be enticed by an extra bit of effort on the part of the buyer.
There are certain ways that you can craft an offer letter to help a seller be intrigued a bit more and accept your offer. Many times, sellers have a certain type of attachment to a home. They want someone who loves the home as much as they did. Most sellers who have taken pride in their homes want to pass that on to the next owner. Be sure you tell the owners that you appreciate the care that they have taken to keep their home nice. You can also mention that this home will be a great place for you and your family to grow. If you let your enthusiasm stand out, you’ll be able to shine among other offers.
Give Your Backstory
If you happen to be expecting your first child, or maybe your family is expecting another addition, you may want to note that in your letter. Getting personal with a stranger may seem kind of odd, yet sharing a bit of your story can help a seller feel more comfortable about accepting your offer as opposed to any others. If you have family or good friends that live in the neighborhood, let the seller know about that as well. Sometimes, sharing your story gives that extra touch that you need to have a winning offer.
Just as you would praise the seller for taking good care of the home, you also want to point out any specific updates that will make your life easier. If there’s a newly landscaped backyard, mention it. If the new roof looks great on the house, include it in your letter. If you notice that the sellers have dogs, let them know how much your dogs will love being in the house as well. You’re not brown-nosing, you’re just giving the sellers a little something to be proud of, letting them know that you took notice!
Don’t Be Afraid To Get Sentimental
If the home happens to be in the same neighborhood that your family grew up in, then by all means include that in your letter. If your mom lives a few blocks away and is hoping to be closer to the grandkids, it doesn’t hurt to tell the seller about it. The bottom line is to get a bit personal and let the seller know why you want the home. From the home itself to how it will suit your needs, a seller will feel good accepting an offer that they have a connection to.
Applying for a mortgage is a big step towards homeownership and financial independence. If it’s your first time buying a home, you might be curious (and a little intimidated) about all of the things that go into your mortgage application.
When reviewing your application, mortgage lenders are trying to determine how risky it is to lend you money. If all goes well, and they determine that lending to you would be a worthy investment, you’ll get approved for a mortgage.
There are three main things that lenders will use when weighing your application (however, there are other factors as well).
First, they’ll run a detailed credit report. This will tell them how much other debt you have, what kind of accounts you have open, how long you’ve had this debt, and how responsible you are when it comes to making your monthly payments in time.
Second, they’ll consider how much money you’ll be using toward a down payment. A larger down payment alleviates some of the risk associated with lending to you. Therefore, people with little or no down payment saved can have a difficult time getting approved for a mortgage. And, if they do get approved, they’ll have to pay monthly private mortgage insurance on top of their regular mortgage payments.
Finally, the third main consideration will be your current income. Lenders will look at your previous two years of income (including tax returns) and will seek out current income verification from your employer.
The latter is a key part of getting approved, as lenders will want to ensure that you are in a stable financial situation and will be able to immediately start making mortgage payments.
Today’s post will center around income verification and how mortgage lenders will use your income to determine your borrowing eligibility.
How Do I Verify My Employment?
If you’re employed with a company, most lenders will reach out to your employer directly to verify your employment. You’ll be asked to sign a form that authorizes your employer to share these details with the lender, and then your part of the job is done and you can move on to the next step of your application.
Things get trickier when you’re a freelancer, are self-employed, or work with several clients as a contract worker. In these situations, lenders will typically require you to file a Form 4506-T with the IRS. This form allows your lender to obtain your tax returns directly from the IRS.
Can I submit additional information to verify my income?
There are some situations where providing additional income information can bolster your case in terms of getting approved for a mortgage.
If you own a business, your lender of choice may ask for a profit and loss statement. If you’re an independent contractor or freelancer, your clients who have paid you at least $600 or services or $10 in royalties will be required to send you a Form 1099-MISC.
If you have mixed income, such as a full-time job with freelance work on the side, showing these 1099-MISC forms can help increase your income on paper so that lenders will approve you or a higher mortgage amount or lower interest rate.
When everything is online, it’s hard to discern when getting up, leaving the house, and checking out a home can be helpful. There’s so much information regarding real estate online; you probably want to pick and choose when and where you go to see a home. Even if you’re nowhere near being able to buy a home, you may want to check out open houses to help you in the future.
Looking at real estate is fun. You can dream of living in a neighborhood on the street you may never be able to afford. There are many advantages to checking out open houses.
You’ll Understand How Far Your Dollar Will Stretch
The type of home that you can afford, and the type of home you want may not be in the same ballpark. If you take a look at different open houses, you may be able to see where your budget takes you. Even if the market changes, you’ll be able to match your expectations with your wallet. As you know what’s out there, you’ll be able to hone in on what you want in a home.
From here, it will be easier to work with a real estate agent because you’ll be able to give them a better idea of what you want when the time does come to buy a home.
It Will Be Easier To Hire An Agent
As you go to open houses, you’ll meet more real estate agents. These agents can become potential hires once you do get more serious about buying.
You’ll See The Market Firsthand
Besides understanding how much house you can get for your dollar, you’ll be able to get an idea of how many buyers are actually out there. If you’re seeing many other potential buyers at open houses, you may be facing quite a bit of competition when you head out to buy a home of your own. When the competition is high, you’re looking at offering above asking price for houses. You could even get into bidding wars. A lot of other buyers doesn’t mean you should back out of buying a home altogether, but just enter the market with caution.
You Can Discover New Areas
By exploring open houses, you may find a neighborhood that you love that wasn’t on your list before. How can you get to know an area if you have never spent time there before?
You’ll Learn Where You Need To Compromise
By looking at different houses, you can see the potential (or lack thereof) in many homes. If you can see where you’d be willing to compromise long before the home search is on, your search will be that much smoother
Buying a home should be simple. Unfortunately, purchasing a residence can become complicated quickly, especially if you fail to consider the immediate and long-term costs associated with a house.
Ultimately, there are many hidden expenses that a homebuyer needs to consider before he or she purchases a house, including:
Heating and cooling costs, water fees, electricity expenses and other utility bills may prove to be overwhelming if you're not careful. Fortunately, if you learn about various utility costs now, you may be better equipped to keep your utility bills in check at your new residence.
Ask your real estate agent for information about a home seller's utility bills. By doing so, you can get a better idea about how much your utilities may cost if you decide to purchase a particular residence.
Also, if you plan ahead for your utility bills, you can budget accordingly. Keep in mind that utilities are essential in any home. As such, you'll need to account for these costs in addition to your monthly mortgage payments, regardless of the home you buy.
If you're moving to a new city or town, you'll want to consider how your move may impact your daily commute to work, school or any other locations that you visit regularly.
Consider a home's proximity to highways. If you move to a house that is located near a major highway, you may encounter heavy traffic at various points throughout the day, resulting in a lengthy commute.
Also, find out whether public transportation is available near your new home. In some instances, you may be able to take advantage of buses, trains and other public transportation options to get where you need to go without delay.
3. Home Upgrades
Although a home may appear to be a dream come true, there are problems beneath a house's exterior that could bubble to the surface after you complete your purchase. Thus, you may want to put aside money for home upgrades that may be necessary in the near future.
For example, an older home may require a new hot water heater and furnace soon. And if you start saving for a new hot water heater and furnace today, you may be able to replace them before it's too late.
A home inspector can help you identify home problems. This professional will conduct an in-depth review of a residence and provide honest feedback about any problems that could escalate quickly.
After a home inspection, you can always ask the home seller to perform the necessary repairs, or you can walk away from a home offer. On the other hand, you can keep your current home offer, move forward with your home purchase and complete the upgrades on your own.
When it comes to planning ahead for hidden home expenses, a real estate agent can point you in the right direction. Your real estate agent is happy to respond to your homebuying concerns and questions and will do everything possible to ensure you are fully satisfied with any residence you purchase.
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