Saturday, November 3, 2007

The House that Who Built?

No this is not a Dr. Seuss Book! I think it would be appropriate to share with you those who make home ownership possible. You may be asking yourself: “Hey, I’m the one that makes it possible”, right? You are correct, but there are others involved who help you reach the status of home ownership. Who are they? The list will be an eye opener for some.

First and foremost we’d like to thank the many many Investors out there who have been instrumental in the purchase of mortgage back securities (Known as MBS’s). These are just like stock certificates that investors can purchase. By purchasing MBS’s these investors bring more and more $’s into the real estate industry. Thus more and more people are able to purchase more and more homes and receive reasonable interest rates (Supply and Demand and all those economic factors that contribute to the low mortgage interest rates! But that’s another subject for another day.). So the investors help us purchase a home that we would not have the funds to purchase.

Next is the Lender. He/she will qualify us for the home to purchase. It is important to start with the Lender before finding a home. You may fall in love with a home and then try to get financing for that home, only to find out you do not qualify. So find a reputable lender. I recommend brokers over banks because of the flexibility the brokers have. Banks often have 3-6 programs that a person can qualify for. Brokers have hundreds of products and programs for the borrower (that’s you!)

After the lender comes the professional Real Estate Agent. This person can give you exposure to 100% of the homes for sale in your area. Don’t worry the fees paid to the professional real estate agent are paid by the seller. If the agent can’t find you a home, typically you do not pay anything at all. So go out and interview a great agent to help you. Remember you are in control so pick the very best one for your needs and someone you can work with.

Other key people include:

General Contractor (If you are looking for new construction).

Appraiser is critical to make sure your home will appraise at the purchase price. If it does not, the Lender will not lend the entire amount.

The Seller if you are looking at the re-sell market. At times the seller can be difficult to work with. This is where the professional real estate agent comes in. He/she can work with the seller so you do not have too!

Finally we can not forget the Taxman. Your local tax assessor will always have his hand on your property. Don’t pay him and you’ll find out real quick to whom that property really belongs! Never, never underestimate the power of your taxing authority.

There you have it. Good luck and good shopping!!!

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