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Smooth Closing

Buying a home can be chock full of complications and setbacks, or it can go remarkably smooth and fast if it is planned carefully. The end goal needs to be addressed right from the start, and that goal is to have a smooth closing. Be sure to choose a Realtor that is experienced and one that you trust to stay focused and be the voice of reason as they facilitate the process at closing and make sure all parties have completed all unfinished business prior to coming to the “closing table”. Here are a few tips that can help you make it go as smoothly as possible.

Repairs: It’s a good idea to have a complete inspection done so that any issues can be addressed before closing. You may want more than just a code inspection, because there may be issues that don’t have to be revealed since they don’t have anything to do with building codes or laws regarding seller disclosure.

The Realtor should check on the status of all repairs that were to be made on the home the day before closing. If there was an agreement that something needed to be fixed by closing, make sure that it is. If there was an arrangement for repairs to be taken care of after closing, make sure all the necessary paperwork shows this as fact. A final walk-through should be done with the buyers. The sellers should make sure, with their Realtor, that the property is in the condition promised and all of their personal items are removed.

Title Insurance: Your title company plays an essential role in closing your real estate transaction. All of the title work should be checked to ensure a clear title and that the property can be transferred without any obstructions. Should there be any title issues that might include judgments or liens, they must be settled prior to the hour of closing. The moment of truth in a real estate transaction happens at the closing table. Title First Agency will work hard to ensure a seamless experience for you and your clients. From contract to closing, we handle all the details to help a transaction run smoothly and close on time.

Financing: The lender should be contacted the day before the closing to be certain that all the documents they need have been received. Occasionally, the closing is delayed due to one document or one final verification. The interest rate for the loan should be locked as well as the final mortgage and monthly payments. The Realtor should make sure the buyer has all the funds available and ready to close. Having everything in hand the day before gives both the buyer and the seller 24 hours to review everything. If there are any questions, you can have them ready and any issues addressed.

The Bottom Line: A thorough Realtor will make sure the buyers are ready for the closing. First-time buyers may not realize all the people that could possibly be at the closing table, and all the paperwork there will be that needs their signature. The buyer needs a cashier’s check or arrangements made to wire the closing funds to the escrow company. The seller should bring all the keys, garage door openers, alarm codes, and any other controls to the settlement. The Realtor should make sure and confirm that all utilities have been disconnected by the sellers and set up ready for the buyers upon closing.

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First Impressions Matter Even in a Seller’s Market

Curb appeal is everything, even during a seller’s market. It is paramount that you make sure the exterior is in excellent shape. There is truth to that old saying, “you never get a second chance to make a first impression” – many potential buyers drive by the home before they make the call to see it. Making sure that it is in the best shape, will get them in the front door. Be sure to call the best Realtor in town to get advice. Sometimes, as the owner, you can’t see as clearly what needs to be changed or updated and need a professional to help.

Title First Agency hears a lot of what buyers see and we have listed some of the exterior home improvements that can increase the resale value of your home AND help sell your home even faster.

The front door: If potential buyers have decided to see your home, the door is the first thing they will see and walk through. Just a fresh coat of paint or replacement or removal of a damaged screen or storm door will speak volumes. Polish metal knobs. Consider replacing the door it if it is worn-out or banged-up. It’s one of the investments made that can more than pay for itself with the amount of value it adds. Then, add potted plants to each side of your freshened up or new front door.

The approach to the front door: How is the driveway? Does it need to be power washed? Resealed? Is there a fence? Is it broken anywhere? Are there cracked pavers? A knowledgeable and honest Realtor will take that “approach” walk with you and help point out things you may not even notice because you have walked by it so many times.

Update your landscaping: Before the drive-by, most potential buyers search on the internet for a home. The pictures will be worth a thousand words and to have beautiful landscaping will help showcase your home and be put on the buyer’s list to see. The best Realtor will tell you that you want to make it easy for possible buyers to envision themselves coming home to your home every day. Remove any distractions (garden accessories, etc)- spruce up it up with inexpensive shrubs and brightly colored flowers. If it’s Fall or Winter, make sure your yard has been raked of leaves, sticks and other debris.

Home repairs: Make sure there isn’t any loose siding, replace loose or damaged roof shingles. Look for any wood rot – again, you may need to call an experienced Realtor to help you “see” what you have looked at every day. Is there a deck, a front porch or a patio? If your home needs a new roof, it would be in your best interest to just replace it. Buyers tend to shy away from homes that will be needing a new roof soon. And, adding the detail of “new roof” to your listing will grab even more buyers’ attention.

Windows: Fix any cracks, clean screens, and storm windows. Have you washed your windows in a while? In between the glass and the screen is a whole world of dust and fun that should be cleaned. Shine them so that from the street they look brand new.

The Bottom Line: Even in a seller’s market as we are experiencing just about everywhere right now– some homes linger on the market for weeks or months, while the homes around them go into contract within days. A book is judged by its cover, and you only have one shot to make a good impression. Even in a hot market, buyers want to see a home without visible deferred maintenance. Take the time to put on your home’s best face. Make your home stand out from all the other homes on the market and get the most out of your sale.

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Take Advantage of This Seller’s Market

What a time to be in the real estate housing market! High buyer demand coupled with record-low housing inventory is creating the ultimate sellers’ market, which means if you have thought about selling your home, now could possibly be your time. However, that doesn’t mean sellers are guaranteed success no matter what. Don’t pass on hiring a Realtor, you’ll need their help.

When inventory is low, like it is in the current market, too many people erroneously think that buyers will pay any asking price. Even in a sellers’ market, listing your house for the right price will maximize the number of buyers that see your house. This creates the best environment for bidding wars, which in turn are more likely to increase the final sale price. An experienced Realtor will help you set the best price for your house so you can achieve your financial goals.

A big plus in a hot seller’s market is that the homes that are older, outdated, or more unconventional sell during this time more than any other. Buyers want a home and will overlook any flaws just to get in one. The seller has a better than good chance to sell their home without making major updates. A Realtor can go through the comps in your neighborhood and evaluate whether you should fix anything or leave your home as-is.

You still should stage your home so that it is seen in the best light. Buyers become more emotionally involved if they can see themselves in the home. Curb appeal is extremely important when you’re trying to sell your home. Trim the hedges, cut the grass, and remove any unsightly weeds from the yard. If the paint on the outside of your home is peeling, consider giving it a touch-up or, if that’s too much work, power wash it to remove dirt and grime. Also, give the outside of the windows a good washing to make them sparkle. Staging is a good way to get multiple buyers and perhaps start a bidding war opportunity. Why not get the most out of the sale?

Hot markets see more buyers purchasing with cash or minimal financing than other markets. Hopefully, your buyer might not need to be approved for a loan, which would greatly reduce the amount of time your property is under contract. If you decide to accept an all-cash offer, you will likely close in a short amount of time. Be prepared, at least mentally, for this possibility prior to placing your property on the market. It might even be wise to have a rental lined up if you do not find another property to buy right away.

Most importantly, know that you are selling in an up market and are more likely to sell for closer to your asking price than you would in a down market. So, you absolutely want to take advantage of it and do everything you can to make it shine. You might even be one of the many sellers that will get more for your home than you ever imagined.

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Advantages of Using a Realtor in a Seller’s Market

Here we are, in almost every state in America, smack in the middle of a seller’s market. People looking for their new homes are desperate and frustrated. Inventory is scarce and bidding wars are abundant. It is, indeed, a challenging time to purchase a home. However, if you have ever thought about selling your home, now might be the best time to do it. If that is the case, you are surely aware that your home will sell quickly and most likely for more money.

If it’s so easy to sell your home right now, you might wonder if you should just sell it yourself and skip hiring an agent. If youre going to sell it and make money on it, what is the point of getting involved with a Realtor?

There are plenty of good reasons why working with a Realtor in today’s seller’s market is important.

Marketing

All Realtors have access to a myriad of marketing opportunities that will get your home in front of buyers such as the MLS, social media, open houses, advertising, and word of mouth within their well-connected network. You’ll get much more exposure. The MLS is the first place most Realtors begin searches for their clients and it is also automatically syndicated and displayed on third-party sites like Zillow or Trulia.

Often sellers get overconfident in this market climate and forget the basics, like staging your home, updating inside and outside, and clearing out clutter. Homes are not just quickly snapped up for a high price no matter the condition. The home should have amenities comparable to other properties for sale in the same price range. If you need to upgrade certain things in the home, do it as these changes can make all the difference between a quick sale and one that sits.

It’s good to remember the condition of your home can either grab a buyer’s attention or have them running away, even in a seller’s market.

Negotiating

Do you think you would be able to handle a bidding war that is common right now in this seller’s market? There are challenges to working with multiple offers on your home and when you have a Realtor negotiating for you there is a better chance of you making the highest profit on your home.

The best Realtors know how to help their clients get the most money during negotiations. They are able to skillfully navigate prospective buyers’ emotions, work with multiple offers effectively, and know how to use timing to your advantage.

Pricing

Even though it is a seller’s market and bidding wars are normal, you will want to have a pricing strategy to ensure your home is sold for the most money possible. It’s tempting to price your home well above the market but it could and probably will turn off informed buyers and leave your home sitting on the market. Even if a buyer agrees to your big price, they might not be able to close if the appraisal comes in low. Additionally, a good Realtor will fight for your property value. They know how to deal with appraisers to get the value where it needs to be for closing.

The main goal is to find the perfect price and an experienced Realtor knows how to do that. The price will reflect the comps in your neighborhood, including homes currently in escrow which might be more than the current comps. A Realtor will be able to reach out to other agents to get the information needed.

The Bottom Line: It’s quite challenging during a normal market, it’s a whole other stressful endeavor during a seller’s market. Hiring a Realtor right now is preferable because of their experience and resources which lead homes to garner higher prices on the market.

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What to Know Before Entering the Real Estate Market

Buying a house is a milestone that many want to reach. Having a place to call our own and transform into a home where you can start a new chapter of your life seems like a great idea. Making that dream into a reality takes saving, planning, and researching, which often leaves people feeling overwhelmed and potentially discouraged. Knowing where to start isn’t always crystal clear, and in today’s competitive market, having tools to know where to start and how to stand out will help you navigate the world of buying a home for the first time.

Start Saving Now

Saving for a purchase as big as a house takes time, effort, and strategy. It is never too early to start saving for the home buying process. Consider opening a separate savings account to keep your spending money away from your future house money. It may even be beneficial to look at different savings accounts at other financial institutions to see who will give you the better interest rate while your money sits in savings. If your house buying plans are years in the future, consider putting your funds in a certificate of deposit (CD) where you can earn the most interest during that period. While standard savings accounts have an interest rate, it is smaller than the interest rate of a CD. Locking your funds into a certificate for a year or two may be a good choice if you have a good chunk of money ready to accrue interest. With the time and balance constraints CDs have, some may find a standard savings account more beneficial. While the act of saving, in general, is an incredibly important component of the home buying journey, it is also important to know all of the things you need to save up for.

Down Payment: The majority of the money you save will be for the down payment you make on a home. The more you save up, the better your chances are at securing a loan from a lender or negotiating with a seller. The larger your down payment, the less your loan amount will be, which means you can pay off your mortgage faster.

Closing Costs: The closing costs are fees collected at the end of the buying process. The day you sign the paperwork to buy the house, you will bring funds for the down payment and funds for the closing costs, which include fees from many things done during the loan process.

Here are a few examples of what your closing costs could include: an appraisal of the property, attorney fees for the documentation of the closing, the first year of homeowners insurance, escrow fees for the first two months

Your closing costs can include many things, some may be small, but they can add up quickly. Keeping track of what your closing costs include will help you prepare for how much money you will need to save. Communicating with your lender during each step of the process will prepare you for the closing date.

Understand the Market You Are in

The state of the housing market can turn on a dime. One day it is a buyer’s market and the next, a seller’s market. What that means and how it can impact your journey is important to understand before you start your home buying process.

Buyer’s Market
A buyers market is when there are more houses for sale than people looking to buy. The market consists of homes looking to sell. Often they are on the market for quite some time, which allows the buyer to have the upper hand. There may be price reductions on properties to incentivize a sale, which could bode well for your budget. You can also negotiate with the seller on things like keeping appliances in the home or having the home warranty included in the purchase.

Seller’s Market
This is when more people are looking to buy than there are houses for sale. This gives the sellers an upper hand in that they can have multiple bids on their property, thus driving up the final sale price. If this is the market you are trying to buy in, you may find yourself in a bidding war between yourself and other potential buyers. You want to find ways to stand out that do not take you outside of your budget. This could include a letter to the sellers describing yourself and your situation and why you want to buy their home, which could have them sympathizing with you and find you more deserving of the property. You may also consider offering things like a flexible closing date or a larger amount of cash as a down payment to make you more appealing to the seller.

The market you are buying in will determine how aggressive you need to be as a buyer. If bidding wars are part of your journey, you will have to be prepared to act fast and either increase bids or fold quickly. In either market, you should prepare to say goodbye to a property promptly, as situations can change an offer instantaneously. Things like problems with the inspection or appraisal or even problems with the seller’s housing situation can have them reject the sale. Remembering that nothing is set in stone until you close will help prepare you for surprises that come your way.

Consider the Pros and Cons of Your Housing Options

When you start looking for a house for sale, you and your realtor will decide what type of property you are hoping to find. There are benefits and disadvantages to each type of property available on the market.

Turnkey Home
These homes are often state-of-the-art with appliances and finishings that are on-trend at the moment. A turnkey property could be a great choice if you aren’t looking to do any work to the home after moving in. The downside to buying a turnkey home is that it can be expensive and close to the top of your budget. Depending on the type of market you are in, you could find yourself in a bidding war and potentially lose.

Foreclosed Home
Buying a house in foreclosure can have many benefits. These homes are cheap, often sold at auction, and can need quite a bit of repair. Because they sell at such a low price, you can have an easier time financing the renovations you need to do without going over budget. This will also allow you to create your dream home from scratch. The downside to buying a foreclosed home is that there could be hidden liens on the property that you don’t know about, so it is important to do your research before considering buying one of these homes.

Townhouse
A townhouse is a multi-story house that has a communal wall with the homes next to it. Usually found in urban areas, they have very little yard space and can be the perfect home for someone who craves city living. Townhouses generally have a Home Owners Association (HOA) they must be a member of, which some may view as a pro or a con. The pro is that in paying the HOA fees, they cover things like maintenance of the grounds, which many traditional homeowners would have to do on their own. While townhomes can be more affordable than a traditional home, some may find paying the membership fees for the HOA can take them outside of their budget.

Consider the type of house you want and how that will impact the cost. Buying a home that needs a lot of work to bring it back to good shape can seem like an exciting project to undertake, but make sure you can handle both the financial pressures and the time constraints. If you want to renovate the house from the ground up, chances are you aren’t going to be able to live there while renovations are happening.

Buying a home is an exciting experience. While it may be stressful and overwhelming to think of where to start, sitting down and organizing your to-do list will help you visualize the process. Crossing things off your list one step at a time will help you feel like you are making progress. Always make sure a title search is on that list of things to do before purchasing a home to make sure you are in the clear and the property can really be yours at closing. Once you have those keys in your hand and you step through your front door, you will feel your new chapter starting in a home you call your own.

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Want to Start a New Home Project? Here Are 5 Ideas

Are you moving to a new home? Are you thinking about expanding your existing space? Or are you renovating a room you hardly ever use? If you answered any of these questions with a positive nod of the head, you may be gearing up to start a new home project.

But even the thought of initiating such a project can be highly stressful. From finding the proper supplies to hiring the right experts, you have your work cut out for you every step of the way.

With that being said, pulling off this feat is not entirely impossible. After learning about some critical information, you can easily start and complete a new home project with the utmost ease.

To support you through the seemingly stressful process, here are 5 ideas for a new home project.

Pay Attention to Curb Appeal

If you have enough funds for a new home project, investing some of them into enhancing your curb appeal would be a good idea. It not only gives your home a fresh new aesthetic but also goes a long way toward enhancing its value.

Investments such as stunning landscaping and fresh exterior paint can all do wonders in this aspect. Depending upon your budget and comfort, you can choose the level of upgrades you want to make in this regard. These changes can be as minimal or as extensive as you may like. But in all cases, you should make it a point to make them as noticeable as possible.

It’s because when these curb appeal enhancements stand out at first glance, they boast of multiple benefits. In addition to giving your home a more attractive look among many other units in your neighborhood, these improvements appeal to any potential buyers whenever you decide to sell your home.

Get Professionals to Help You Out

While the DIY approach can work in some cases, that is not always an ideal solution. For instance, if you try to lift your furniture by yourself, you can end up with significant injuries. Similarly, if you try to paint your home all alone, it can end up in a haphazard job.

That’s why hiring an affordable moving service or a professional house painter is a great idea in these cases. This also applies to other professionals, such as kitchen contractors and pool designers. Getting help from these experts may seem like a large expense at first. But it actually saves you a lot of funds in the long run.

For instance, if you end up damaging your property or furniture with DIY efforts, associated repair costs can often run twice the expense of the original project. Similarly, refining your DIY work for optimal quality can also cost a pretty penny. On the other hand, seasoned professionals steer clear of damaging activities while also bringing the utmost quality to the table.

Invest in High Quality Supplies

Regardless of the type of project you are undertaking, always make it a point to go after high-quality supplies. From buying a premium kitchen pantry to investing in a new air conditioning unit, these investments deliver long-lasting performance and provide you with optimal value for money.

This ensures that you are able to get the most out of your investment while living in your home. At the same time, following these approaches in certain types of renovations also helps in increasing your home’s marketability. Whether you are investing in kitchen cabinets or bathroom countertops, this approach can work wonders in terms of bringing the desired aesthetic and
durability to your home’s fixtures.

With that being said, high-quality materials don’t always have to cost you an arm and a leg. You can obtain them from various vendors who sell their items at wholesale prices. In some cases, you can find these materials through the help of your hired contractors, who are able to source massive discounts through their industry contacts.

Secure Your Existing Belongings

Securing your existing belongings is one of the most basic points of home projects. But it often gets overlooked due to the general sense of fervor that surrounds renovation or moving plans. In turn, your home improvement may end up leaving scratches, paint marks, and lasting damage on your furniture and fixtures.

Whether you are repainting your living room or rebuilding your kitchen, get some protective supplies for your existing items. Even getting items as basic as a canvas drop cloth can go a long way in terms of protection. Whether you are worried about paint stains or wood chips, these precautionary measures do a great job at protecting your home and assets.

Securing your belongings does not ask much from you in terms of costs or expertise, but there are times where expert advice may help. With that being said, this is one of those instances where DIY efforts can actually work in an effective way. By watching YouTube tutorials or reading text posts online, you can know how to secure certain floors, walls, and fixtures during specific home projects.

Spruce It Up With Some Fresh Greenery

No matter the type of decor you are aiming for, investing in a few plants can always take it up a notch. From uber modern homes to a classic vintage aesthetic, this approach applies to all types of personal statements and styles. In many cases, simply buying a gardenia plant can elevate your surroundings in an instant.

Keeping this in mind, make it a point to invest in relevant plant life that goes in line with the look you need. From hanging plants to outdoor pots, you can choose from a variety of options that fit within your home project’s desired aesthetic and end result. In addition to adding another layer of visuals, it also lets you dress up bare walls or empty spaces that look out of place in an otherwise elaborate space.

If looking after these plants is a problem due to your schedule or lifestyle, you can choose plants that are low-maintenance but stand out as a prominent enhancement to any area. This allows you to get the most out of your efforts without having to go through extensive measures.

By exploring these suggestions, you can start your new home project with proper care and planning. Whether you are revamping your entryway or redoing your bathroom, these tips can ensure a smooth execution of the whole process.

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Buying Vacant Land

With vacant land, it is very important to thoroughly understand all that you are buying. Many buyers purchase vacant land with the plan to build their dream home. With that in mind, research plays an important role in ensuring that your lot has the capacity and potential to house your dream home and all your desired features.

Equipped with essential initial knowledge about a vacant lot, potential buyers can maximize their time during a showing to ask detailed and specific questions about each property.

If you do your research, you may be able to buy land in an area soon to experience growth or revitalization. Even if you opt not to build right away, you could see some appreciation in your investment within a relatively short amount of time.

When you are researching land for sale, you have the opportunity to select the perfect lot for your dream home. You may find land near a waterfront, with breathtaking views, or as far from civilization as you like. Once you locate the perfect spot, you can create and customize the home of your dreams.

Vacant land is less expensive than developed land. With such a low price tag, you’ll enjoy a lower interest rate and pay off the mortgage faster than a traditional home purchase might allow. From there, you can start construction on your dream home.

Vacant land has many benefits but also numerous caveats. Vacant land is always a safe, appreciable investment when you do the research and due diligence to determine the property’s value and potential.

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Selling & Buying a Home in a Buyer’s Market

Today in the United States, home sales are on the rise as mortgage interest rates remain low. Buyers are looking to take advantage of low-interest rates and sellers are looking to get top-dollar for their home in the low inventory, competitive market. Is it a buyer or seller’s market?

When the supply of homes exceeds the demand it’s a buyer’s market. The inventory of homes listed for sale is large but there aren’t many interested buyers looking. These conditions give buyers leverage over sellers because when supply is higher and demand lower, the market is forced to respond.

In a buyer’s market, real estate prices decrease, and homes linger on the market longer. Because of this, sellers will need to compete with each other in order to attract buyers. What typically happens is sellers drop their asking prices to gain an advantage in the market and they are ready to negotiate offers to prevent buyers from walking away. A buyer’s market does not mean your house won’t sell. Hire an experienced Realtor to help you get your home ready to show and to price it right to sell.

A few tips for buying a home in a buyers market knowing that it’s the ideal time to buy your dream home because the prices are lower and there are less people to compete with shopping the market:

Don’t rush. This is when you can take your time because with less competition it’s not as much of a concern that you might miss out on a property you like.

Have your Realtor show you as many homes for sale as possible. Knowing what is available on the market is favorable because it will not only ensure that you find the perfect home but give you a greater ability to negotiate on price.

A good Realtor will make sure you are familiar with all the comparable properties on the market and this will help in negotiating the price. Use the comps to your advantage.

Know how long a home has been on the market. The longer it has been available the more power you will have to negotiate for a lower price.

A few tips for selling your home in a buyers market:

Make your home stand out. Take advice from an experienced Realtor on what should be done to accomplish this.

There are more properties out there when it’s a buyer’s market and they will be pickier. If your home needs repairs it’s in your best interest to get them fixed.

Clean and depersonalize each room. If buyers can’t envision themselves living in your home, they won’t make offers. Get rid of any clutter, hire a professional cleaning service and touch up your landscaping to prepare to put your home on the market. Pull out any family photos, papers, souvenirs, or anything else that makes it “your” home.

Find the Realtor that will price your home competitively. Look at all the listings in your area and see what they are offering. Make sure your asking price is either on par with or lower than the comparable homes in your area. And when you do get an offer, make sure that you judge it fairly.

A buyer’s market is the most ideal time to buy a home. You will have the advantage as a buyer. Not only are there more homes to choose from, but you have the power in most negotiations. The ability to walk away from a sale knowing there are probably comparable homes on the market gives you the power. Sellers are more likely to make concessions, drop prices and accept less favorable offers.

If your plans are to buy or sell a home soon, align yourself with a trustworthy Realtor. They are well-versed in market trends and can answer questions you may have throughout the buying or selling process.

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Pros and Cons of a Cash Offer

The pros

Faster Closing

During a typical home sale, it averages about four weeks to close. If you’re buying in cash without a lender the closing can happen within as little as a week.

No Contingencies

Mortgages can fall through for buyers that are preapproved. When you pay in cash, you eliminate that possibility. Presenting a cash offer removes the need for a financing contingency which is usually a requirement in a real estate transaction where the buyer is using bank financing. Depending on market conditions, the buyer may present a lower offer than what other bidders with financing are offering the seller. The seller may be willing to accept a lower purchase price in exchange for being able to close a deal quickly.

You Own Your Home

Bottom line, if you’ve got a mortgage, you don’t actually own your house — the bank does. When you buy a house in cash, you can feel secure knowing that no one can take that house away from you, and big, unexpected problems like a job loss won’t leave you without a roof over your head.

The cons

Tying Up Your Funds

If you spend your life savings buying a house in cash, you’ll tie up all your money in one large investment. The money you use to buy your house isn’t liquid (meaning you don’t have direct access to the cash, and you’d have to sell your home to get your hands on it), so if you need your money for any other reason, it won’t be readily available. Additionally, you may face a shortage of cash that could have been used to invest in other lucrative assets. Taking some of the cash you use to pay for a home and investing it instead, could possibly make you more money in the long run.

No Tax Deductions

A buyer that uses a mortgage to purchase a real estate property enjoys tax breaks on the mortgage interest payments. When a buyer decides to purchase a home using cash only, they miss out on the tax deductions that they would’ve enjoyed if they used mortgage financing to complete the transaction.

Extra Title Protection

Reviewing the title for any other claims, liens, or issues that could prevent you from taking full ownership is all part of the home-buying process. The title research takes place whether you pay in cash or get a mortgage, and it’s always smart to get title insurance on your investment, which will protect you in the event that the title research missed any claims.

When you get a mortgage to buy your house, there’s another entity interested in making sure the title is clear and that you stay in the house and keep paying your mortgage: the mortgage lender. Your lender will secure title insurance, too, so that if there is a claim filed at some point, you’ll have an additional layer of protection that a cash buyer wouldn’t have.

The Bottom Line:

It’s scary to spend your entire nest egg in one place. If you can pay cash for a house and still have money left over for emergencies, home repairs, and other unexpected things that come your way, paying in cash is probably a great financial move. On the other hand, if paying cash for a house completely wipes you out, you might want to reconsider.

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Pre-Foreclosure Homes

If you are looking for an affordable home, you may come across “pre-foreclosure” homes and wonder if they are worth looking into. When you browse through real estate listings, you will see that there are plenty of pre-foreclosure listings. But is buying one something you should do?

Pre-foreclosure is the first stage in the foreclosure process. It begins when a Notice of Default (non-judicial states) or Lis Pendens (judicial states) has been filed against the homeowner. Foreclosing on a property can be a lengthy process. Homeowners are first served a notice of default notifying them of the bank’s intentions to begin foreclosure proceedings. They still have the opportunity to make it right by catching up on their payments.

Many times, the home is listed on Zillow (or other real estate sites) and the owner is not even aware of it. There will be a Google street-view image of the home, the address, details of the property, and occasionally inaccurate information. The homeowner is not allowed to opt-out of having their home publicly listed, which can cause some embarrassment for them.

Pre-foreclosures are not a done deal. While they appear to be a fantastic deal on paper, nine times out of ten there really isn’t a deal to be had. In many cases, borrowers fall a month or two on their mortgage payments and then quickly catch up. Under pressure from the government, lenders are more willing to work with delinquent borrowers than they were just a few years ago, which explains why foreclosures are at all-time low in many parts of the country. In general, pre-foreclosures fall into two categories. Homes with 90-day late notices are usually resolved before foreclosure and hardly worth a buyer’s time. Pre-foreclosures with an auction date set are much more likely to sell before the foreclosure becomes official, but even then a sale is not guaranteed.

The pre-foreclosed home is not actively listed for sale. The owner has not taken steps to list the home for sale. The transaction is dependent upon the buyer identifying a homeowner in a mortgage default list and persuading him to sell. Many homeowners will be pursuing options to cure the default and will not negotiate. As such, it is better for most buyers to assume that a pre-foreclosure home is not for sale and seek viable alternatives with help from his real estate agent.

The Bottom Line: Buying a pre-foreclosure home is an opportunity to less than what the market would list. The competition is less than if you would have bought a foreclosed home at auction. Before you look for a pre-foreclosure home, it’s important to research the distressed property laws in your state. There’s a reason that most buyers of pre-foreclosure homes are seasoned investors, not first-time homebuyers. The process is not easy to navigate. It helps to have a lot of cash on hand and plenty of negotiating savvy.

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