BUYING REAL ESTATE
QUESTIONS & ANSWERS
Q. How do I know what price home I can afford?
A. The best thing to do is call a mortgage lender (shop at least two!) to know how big a mortgage you can handle. A mortgage amount is based on your monthly earnings less debt that takes over ten months to pay off. Most lenders will lend so your payment is 34% of that amount. Some lenders can make the loan higher if your credit, job history and debt is very good.
Q. How much down payment do I need to buy a home?
A. To get the best interest rate, 20% down payment is often needed, but at today's low rates, even a low down loan can have affordable rates. Your loan type determines the minimum amount necessary to put down. A typical Conventional Loan will need 20% down, a typical FHA Loan requires 3%. Both of these loans will have closing costs, and may have "points" (one point is 1% of the loan amount). A typical VA Loan requires 0 down, with the seller paying closing costs. There are over 100 different types of loans with different terms; a lender will help you find the right one for your situation.
Q. Do we need to see a Lender before
looking at houses?
A. YES. (Unless you have well over 30% down payment). Your eventual offer will be stronger if you already have an approval and know what your loan amount and terms will be.
Q. What will my monthly payment be?
A. That depends on several factors, your rate of interest, property taxes, and your insurance premiums. Currently the common mortgage rate is 7.25% which is just under $7.00 per thousand dollars of loan. Example: $100,000 mortgage will be $682.18 a month for a 30 year loan. Your yearly tax can be included as well as your insurance, (it's called PITI for Principal, Interest, Taxes and Insurance).
Q. How do I know if property will qualify for a new loan?
A. Home should have a whole house inspection, and/or pest & dry rot report. An appraisal insures you and the lender the property is worth the price.
Q. Can you tell me about the schools?
A. Most communities have websites, which have school information. Our own web site, c21jcjones.com, has links to schools and other community and recreation sites.
Q. What kind of crime is in the area?
A. Like questions about schools, you can check community and/or police web sites. Dave Daniel, our own Josephine County Sheriff, indicated that while we (like nearly all other communities) have some property crime; violent crime is quite low. This is a safe community to raise a family or retire.
Q. What are the utility costs?
A. Average cost for electricity, gas and wood heat varies greatly based on where the home is sited, number of windows, insulation, square footage, and type of heat as well as individual lifestyle. In our area, Pacific Power can provide a history of electrical costs for a particular property.
Q. Will the Seller take less?
A. Price is often negotiable. The only way to know is to write an offer at a price acceptable to you. There will always be some motivation behind the Seller's decision to sell their property, and they may or may not show flexibility. But, a good Realtor will make every effort to place the home on the market with a price that is competitive and priced to attract buyers.
Q. Where do I go to get a home loan?
A. Mortgage Lenders can be found in the Yellow Pages, WWW or through Local Banks or Credit Unions. Some lenders will pre-qualify you over the phone. Here are three: CENTURY 21 MORTGAGE 1-888-716-1296 MISSION HILLS 1-888-848-5301 EVERGREEN FEDERAL 1-800-275-6148
Q. Do property values increase in Grants Pass, what are the trends?
A. The long term average home price in April, 2001 was $138, 596, while in April, 1997 the long term average home price stood at $113,490. That indicates an increase of roughly 4.5% per year. Prices reflect supply and demand, and inventory is lower now than in the past. Rural acreages are becoming in short supply, and values on 5-acre parcels went up 14% in 2000.
Q. How do I choose a Realtor?
A. You should choose a Realtor who specializes in the type of property or area you are looking for, as well as interviewing to see how comfortable you feel with them. It is also a good idea to call the Oregon Association of Realtors to check if there have been any blemishes on their record of practice. Above all, when you select an agent, tell them honestly your needs and limitations. Agents will reward your loyalty to them with hard work on your behalf.
Q. How much water from a well is sufficient? What makes a good well?
A. There are two things that make for a good well: adequate reliable flow and potability (purity). Lenders generally want a flow test showing 5 gallons per minute for 4 hours. If there is a holding tank you can get by with 2 or 3 GPM. 10 gallons per minute is considered a good well. Most household pumps won't be able to pump that much, even if the well can produce more water. Oregon law requires a bacteria and nitrate test on sale of residential property with a well, and some buyers may want a "top 10" mineral test (for common minerals) show whether or not the well is a "good" well.
SELLING REAL ESTATE
QUESTIONS & ANSWERS
Q. Should I price my home high enough to allow for expectations of low offers?
A. NO!! A well priced home will more likely get a full price offer, while too high a price eliminates buyers interest, leading to more time on the market and inviting "lowball offers". Overpriced homes almost invariably end up selling for less than properly priced properties
Q. Will I need money up front for closing costs or repairs?
A. Generally no. Bills for repairs can be sent to
the escrow company to be paid out of the seller's closing
proceeds. This needs to be arranged in advance with any
Q. What are the most important improvements I can make to my property?
A. Any improvements you make should be made to improve your enjoyment of your property. It is rare that any improvement will return its cost in the short term, the most cost effective are kitchen counters and appliances (75%), a bath or family room addition (72% &70%). Replacing shabby carpets or drapes and repainting, however, may make an otherwise unattractive home much more saleable. This is less an improvement than correcting deferred maintenance. You can make the home more saleable by "detuning" the home; that is removing clutter, too many pictures, and taking out bulky furniture items. This makes the home seem larger and more airy.
Q. How much is your commission?
A. Commission fees are not set by law. They are negotiated between the seller and broker through the agent. Fees are nearly always based on contingency: if the property doesn't sell, no fee is owed. Fees are based on costs of doing business, such as; administration of the office, marketing costs, fees to the listing agent, and fees offered to cooperating brokers and agents. Fees have to be high enough to cover costs and attract capable professionals to work on marketing the property. Naturally, brokers and agents also hope to earn a profit for their risk and efforts. Full service realtors and agents have higher costs of preparing flyers, advertising, marketing and overhead and the level of service they provide to sellers, and earn those by better pricing, marketing and negotiating on behalf of their clients. Like anything, quality costs more but is less expensive in the long run.
Q. How long will it take to sell my home?
A. It depends on your location, the property uniqueness, property condition, and listing price. If you price your property at Fair Market Value it should take between 2 to 4 months. Lower priced properties priced at market often sell within days or weeks. Higher priced properties or truly unique properties may take as much as a year or even more, unless they are very attractively priced.
Q. How do I know the roof is good?
A. It depends on the age of the roof, and whether it has been kept free of leaves and moss. Look for curled, broken or missing shingles, obvious wear where the tar shows through asphalt shingles, or heavy moss buildup. If the home is over fifteen years old, it is wise to have a roofing contractor do an inspection for estimated remaining life (most lenders are satisfied if the roof has a three year life or more).
Q. How are you different from other offices?
A. We are especially proud of our reputation as a "listing office" (we consistently have over twice as many listings per agent then the local industry average). Our excellent performance is due to our staff of hard working, high energy, effective real estate professionals. CENTURY 21 J. C. Jones American Dream agents can provide a customized marketing program designed to attract qualified buyers. We maintain an excellent working relationship with other offices in the community, meaning they are eager to show our listings. In the four years we have been with the CENTURY 21 System, we have been awarded both the Quality Service award for excellence in customer service and the Gold Medallion Award for high production three times. Our slogan is: WE WORK HARD TO BE GRANTS PASS' MOST PRODUCTIVE AND RESPECTED REALTORS.
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