So, after searching high and low you have finally found a property that meets your needs and you want to write an offer. This is an exciting time and you are probably feeling nervous about the whole deal. Will they accept? Are there other offers on the home already? Sometimes agreeing to a contract free of contingencies can seem like the only way your bid will be accepted, but this type of contract can cost you big, with both time and money.

Contingencies are put in place to protect you should anything major occur after the offer has been accepted and before closing. There are three main contingencies you will always want written into your offer. Especially in the Orlando Real Estate market where some home values continue to fall. Having an appraisal contingency in place will protect you should the home not appraise for the offered price.

Another valuable contingency involves the home inspection. Even if the home looks great cosmetically it could be hiding major structural problems. A home inspection contingency will give you the right to walk away from the dea,l with out penalty, should the home show extensive damage or problems that you don’t feel comfortable with.

The third main contingency you will want written into your offer, is the financing contingency. Sometimes loans just fall through, for one reason or another, the bank decides against financing the property. Should this happen, the financing contingency will allow you to walk away and most of the time get your money back from escrow.

This is a huge purchase and you should protect yourself as much as possible by demanding at least these three contingencies.

You have your pre-approval, you have found the house of your dreams and you have a signed contract accepting your offer. Everything is looking good and you can’t wait for the closing date to arrive so you can finally move into your new pad. But before your close, read this list of what not do, so you won’t have any unexpected and unwanted surprises come closing day.

1. Do NOT open new lines of credit. Of course it seems like a good time to go buy new furniture, or maybe a plasma TV, but opening a line of credit before you close on your new home, could force your lender to deny your loan. Save those big purchases for after closing.

2. Do NOT pay your bills late. Any time you pay your bills 30 days or more late, it is reported to credit bureau and hits your credit score pretty hard. Buying a house is time consuming and it’s fun to sit around and day dream about your upcoming new home, but keep your head out of the clouds long enough to pay your bills on time.

3. Do NOT close any existing accounts. This might seem counter intuitive, but by closing the accounts it shows a lack of available credit and could increase your used credit vs available, making it look like you are in more debt than you really are. Pay down your debt to at least 30% of available funds, but do not close the account.

What better way is there to explain you this important question visually… Check out the video (courtesy of Federal Title), it covers the most important points about what happens at a closing.

Here is a short summary:
Once you have found your new home and your offer has been accepted there is one final step to complete before you can take possession. This final step is the closing and is also referred to as the “settlement”.

The settlement is when the official and legal transfer of ownership occurs. There are three “steps” that must take place for this to happen: loan steps, legal steps, and title steps.

Loan Steps: Your lender has agreed to lend you the money and you have agreed to certain terms to pay them back. At closing the lender will collect the loan fees, insurance and interest as well as any necessary reserves.

Legal Steps: The government is also paid at closing for the recording of taxes, transfer of taxes and taxes and stamps.

Title Steps: The title establishes legal ownership and the title company actually handles this transfer. To do this they must complete an extensive search on the property to determine and confirm who currently has legal ownership of the home. They are paid for the title search, a closing fee, and for the title insurance, to protect your property against future claims of ownership.

All of these fees will be listed on a government form HUD1 and will be provided to you at your closing. Some fees vary based on where you live so be sure to talk to your lender before your closing date.

The best thing a first time home buyer can do when starting their search, is to take a few moments to understand the process. Buying a new home is a huge commitment and a legal transaction, as such there are many myths swirling around about how it works. An informed buyer will feel more comfortable and reduce their stress simply by understanding the common practices associated with buying a home. Listed below are the 5 most common myths and the truths behind them.

I can’t afford to hire a Realtor:

This is probably one of the biggest misconceptions. Realtors work on commission only. They are not paid by their company and they are never paid by the buyer. When a seller lists their home for sale they agree to pay a set commission to the the Realtor who listed their home and to the Realtor who brings the buyer. So there is never any upfront money needed by either party and certainly never any money exchanged between the buyer and the Realtor.

If I purchase a “For Sale by Owner” home I will save money:

Although the owner of this home may claim a lower price the fact is that home is likely over-priced. Home owners typically do not have access to true market value reports that a realtor would have and tend to price their homes, based on what they owe, not what the real value of the home is. A Realtor will help you to determine a fair price.

I don’t need a buyer’s agent, I can just use the listing or builder agent.

The listing agent or builder’s agent will certainly be happy to help you, but keep in mind that their interest is with their seller, not necessarily you. They were hired by the seller to negotiate the best deal on their behalf so it is a good idea to have your own realtor on board to help you negotiate your side of the deal and represent your interests.

My credit is not good enough to buy a house:

Obtaining financing has become a little more difficult over the past few years, but it is still possible to get a home loan with out perfect credit. FHA for example caters primarily to first time home buyers and only requires a minimum score of 580 to qualify.

I don’t have enough money for my down payment or closing costs:

There are many first time home buyer programs, both locally and federally, that will often help provide the money needed to close. And until December 2009 the federal government is offering first time home buyers up to $8,000 to help cover closing costs and downpayments.

Hopefully you already read part one of  Avoiding First Time Home Buyer Mortgage Mistakes In the Orlando Market, so you already know the top three mistakes to avoid. But don’t put down your pencils yet, there are three more common first time home buyer pit falls you should be aware of.

1. Not getting pre-approved – Many first time home buyers confuse pre-qualify with pre-approved. Getting pre-approved is a fairly solid commitment from your lender using all available documentation (such as your pay check stubs, tax returns and credit report). Getting pre-qualified is really just a verbal agreement based on what you tell your lender, no documentation is necessary and this often leads to bad news once you try to solidify your loan.  Once you have found a loan package you like, be sure to get a written pre-approval as well as a good faith estimate.

2.  Not cleaning up your credit report – It is critical in today’s market that you know and understand what is on your credit report before applying for a mortgage. Take what ever time is necessary to clear up any bad information and get your credit report ready for the scrutinizing eyes of the lenders.

3. Making major credit card purchases – After you have applied for your mortgage and received your pre-approval letter, avoid making any large credit purchases. Sure you want new furniture for your new home, but if you need to use credit for the purchase you will need to wait until after your loan has closed. It is an unfortunate scenario but many people are refused their loan or given “new” (often worse) loan terms because of this new credit card debt.

Since the collapse of the real estate market a few years ago it has become clear that many buyers simply did not know what they were getting into with their mortgages.  Lenders are in the business of selling mortgages, they are making money in a variety of ways from your mortgage amount. Obviously the higher your mortgage’s dollar amount is, the more money they can make. This as well as poor industry practices helped lead to the burst of the real estate bubble.

Although many lenders have tightened their criteria to qualify for a mortgage, there are still many loan programs available in the Orlando area for those who want to buy and especially for Orlando first-time home buyers. But as always knowledge is power and knowing what to avoid will help you to make a smart choice and choose the mortgage that fits your lifestyle and your budget.

There are six main mistakes to avoid. Here are the three  first time home buyer mistakes to avoid:

1. Relying on your lender to define your maximum mortgage – Lenders look at a set of numbers and percentages to define your maximum budget. While the have become a little more strict regarding the ratios, it is still up to you to determine how much you can afford. Only you know how much disposable income you require each month to maintain your quality of life. If you really enjoy eating dinner out 3 times a week, and taking frequent weekend trips it is up to you to run those numbers and determine how much mortgage you can comfortably afford each month.

2. Not planning for closing costs – Closing costs can run anywhere from 3 -6% of your loan and while it is sometimes possible to get the seller to pay some or all of that, it is not always the case. Be sure you know how much your closing costs are going to run and budget that into your savings. Discovering that you need an additional $3,ooo four days before closing is a panic you can avoid with a little extra preparation.

3.  Not shopping around for the best mortgage – All mortgages are not created equal and one lender may not offer the same loan package as the next. Try to shop at at least 3 lenders and go over in detail what each loan offers and what the fees with each are, before committing to one.

Now that you’re ready to start your house hunt, you have probably gathered your list of what areas you want to look in and what type of home you want to purchase.  So here are a few Dont’s to keep in mind while you’re out prospecting future homes.

1. Don’t rush yourself – be sure to set aside an ample amount of time to thoroughly look through each home. Try not to schedule any appointments or meetings within an hour of your intended house hunt. This way, if you happen on a home that your really like you can spend a little extra time looking around and maybe even discussing your offer strategy with your Realtor.

Which brings about the next point.

2. Don’t try to do it alone – There are many reasons you want a Realtor on your side while shopping for a house. For one, driving by homes and calling the seller directly can be a huge waste of your time. Let your Realtor do the research for you and schedule the showing if the house meets your criteria, there is no need for you to spend valuable time on a home that may not even have that 4th bedroom you have been looking for. By not having a Realtor you also may give the seller an unintended upper hand in the negations.

3. Don’t  keep your opinions to yourself – There is no reason to be rude about a property, but your Realtor will have a better idea what you are looking for when you explain what you like and don’t like about different properties. Save yourself and your Realtor a little time by offering your opinions, if you must have an island in the kitchen let your Realtor know, so he/she can omit the homes that don’t meet your criteria.

4. Don’t ignore details -  If you really like a home then be sure to look at all of the details. Open every door, even if you think it may be the air unit, you won’t know until you look. Check inside the cabinets and open the appliance doors.

5. Don’t stress out – Sure it can get a little stressful looking at properties all day. It is a huge investment and of course there are some things you just won’t sacrifice. But try to keep a level head and plan for time at the end of your home tour to relax and put into perspective everything you have seen and any notes you may have made.

Once you have inspected the interior of your potential new home for its eco-friendliness, it’s time to go outside and check out the exterior and landscaping.

What to look for: Natural or as close to natural is what you are looking for. Check that home’s exterior was built with products containing  zero volatile organic compounds, or VOCs.  Recycled products are always a good idea as they save the landfills and reduce the demand for new factory built fabrications.

Check the location: A home that is built in an automobile dependent area doesn’t completely negate the eco friendly features of the home, but it doesn’t really help either. For a true eco-friendly home many of your daily excursions should be able to be made on foot or bicycle. Look for a home in a area where shops, grocery stores, parks and schools are within this distance.

Inspect the yard: As beautiful as a green grass lawn looks, it requires a great deal of water to maintain. A better alternative is to plant indigenous plants that are accustomed to the local climate and need less water to survive. Think English gardens, full of plants, flowers, walk ways and little spots for entertaining. These types of gardens offer a drought resistance while still giving you a beautiful backyard. For those who must have green grass many companies now offer low-mow, low-grow grass that uses less water and needs less attention and maintenance in order to stay green.

If you decided to purchase a home that has not had a green update then be sure to check the Energy Star website to see if any of your future eco friendly purchases qualify for the federal tax rebate.

Oil prices have hit all time highs in the last few years and a new desire to go green has emerged as a top selling point for both automobiles and homes as a result. Preserving our environment through conservation of resources and smart product alternatives is not only a good choice but has become a very popular and almost trendy direction. But this is one trend that will not go out of style, so investing in it now could offer more value in the future (in more ways than one!).

If you are one of the many interested in purchasing a green home here are some things to look for on the interior while out on your house hunt.

Check out the interior:

Your main concern on the inside are the appliances, the insulation and the AC/heat. Appliances and the AC/heating unit should have an Energy Star rating and the insulation should be a minimum of  3 inches deep in the attic. Many experts agree that a radiant heated floor is more eco friendly than forced heat because it uses heated water throughout the flooring to create a more even heating as well as producing less dust than a forced air unit. An on demand hot water heater will also help to conserve energy by heating your water as needed, instead of constantly trying to keep 40 gallons of water hot throughout the day and night.

A good idea is also to have a Home Energy Rating audit performed. This will give you all of the pertinent information as well as let you know how to improve your energy efficiency. Most utility companies will do this for you or a qualified home inspector can also provide the report. Your Realtor should be able to refer you to the proper person.

If you are looking for a new green home in the Orlando area, then the Banyan Pointe neighborhood in Lake Mary and Savannah Park Townhome community in Sanford offer great homes that are all eco friendly. Historic homes are also a great option beacuase they are not new construction, so they do not require the use of additional resources.  But they could require some eco-updates. If you have found a home that needs some green updates then remember to save your receipts, the Federal Government is offering up to $1,500.00 back on qualified eco friendly home updates.

For more information about Banyan Pointe, Savannah Park and other green neighborhoods in the Orlando area, please contact us at 407-340-6458 or send us a quick message!

For all of the headaches involved in dealing with Home Owners Associations they actually exist to keep your neighborhood in tip top condition and preserve your home’s value.  Most Central Florida neighborhoods have some type of association and most certainly all Condo and town home communities. Their role differs depending on the type of home you choose as does the fee. Some communities have an annual or quarterly fee although most condo or town home’s have a larger monthly fee.

In a neighborhood of single family homes, the HOA serves to keep the common areas well maintained as well as to approve any exterior improvements you might make on your home. A new fence, a new paint color, even a child’s swing set or pool could have to be approved by the HOA before you can start the work.  The money you pay to the HOA to live in this community usually goes to maintenance, if the community is gated then part of the money collected will insure the gate functions properly and has regular service, the same for a fountain, pond and in some cases even the street lights are maintained through that communities HOA.

A condo or town home neighborhood is a little more complex. Because these types of homes usually share interior walls, the HOA is responsible for maintaining more of the property as well as the common areas, such as the pool, the landscaping and even the exterior paint. This results in a higher monthly association fee that you must pay with your mortgage each month. Because the expenses to maintain a neighborhood like this can run quite high, the HOA tries to keep a certain amount of money in a reserve account. The reserve account serves to pay for large community expenses such new roofing or painting. If the reserve does not have enough money in it to cover these costs, then the association will divide the expense among all of the owners.

It is important when looking in a condo or town home community to note the condition of the structures and gather as much information as possible regarding their plans and the HOA’s financial situation. It can be a huge relief to own your own home without some of the stresses, but it does come at a cost, so be sure you understand what you are buying before you sign on the dotted line.