1. What is the difference between a REALTOR® and a real estate agent?
A REALTOR® broker is a member of the National Association of REALTORS® and therefore is bound by its strict Code of Ethics. REALTORS® are committed to treat all parties to a transaction honestly and are expected to maintain a higher level of knowledge about the buying and selling process than practitioners who aren’t NAR members. Identify them by the REALTOR® logo a stylized block R on their business card, membership pin, or other marketing literature. All Gold Star Realty Brokers are REALTORS® and also have earned the GRI designation.
2. What is earnest money and where does it go?
Buyers will be asked to put a deposit with their offer to prove that their intentions are serious and to serve as a source of damages should the buyer default. This deposit is presented with the offer to the seller or the seller’s broker. If the offer is accepted, the earnest money is deposited into an escrow account on behalf of both Seller and Buyer. It is held there until closing where it is delivered to the title company. It is then applied to the down payment. Should the offer not be accepted, the earnest money is returned to Buyer. Your Gold Star Broker can talk to you in more detail.
3. How long does the buying process take?
Generally it takes approximately 30-45 days, after a property has been selected and the offer has been accepted. However, it can be faster if the buyer has the mortgage pre-approved pending appraisal. It is always a good idea to meet with a mortgage lender to begin the process and determine the amount of mortgage the buyer feels comfortable with.
4. Who pays for what?
Generally, in this area, the buyer pays his own fees to obtain the mortgage which may include but is not limited to the appraisal, home inspection, credit report, flood report, loan origination fee, lenders title coverage, hazard insurance, improvement location certificate, and prepaid escrows for taxes and insurance, etc. The Seller generally pays for the owner’s title commitment, the REALTOR® professional service fee, and the fees to payoff his existing mortgage. However, closing costs may be negotiated between the Buyer and the Seller. Your Gold Star Broker will be available to answer more specific questions.
5. What are the steps for buying a home?
a. Choose a mortgage lender, call and make an appointment, get prequalified and begin the mortgage process. KNOW THE AMOUNT OF MORTAGE THAT YOU ARE QUALIFIED TO OBTAIN BEFORE LOOKING AT HOMES.
b. Make an appointment with a REALTOR® and work exclusively with one REALTOR®. Your loyalty will provide a greater commitment to finding the home that is right for you.
c. If you currently own a home, have a market analysis completed before looking at another home. (Your Gold Star REALTOR® will be happy to do this for you at no cost or obligation).
d. When you see a home you like, buy it before someone else does. Always submit a written contract with earnest money.
e. After the contract has been accepted by both buyer and seller, the buyer should contact their mortgage lender immediately. The lender will explain the steps to their part of the transaction, and the REALTOR® will guide you through the steps of the contract including inspection, title review, appraisal, loan commitment, and on to the closing.
6. How do I get my house ready to sell?
Begin with the outside curb appeal. Patch any bare spots of lawn, get rid of weeds. Add some colorful flowers, such as petunias. Repaint any peeling or chipped paint. Repair broken or torn screens.
Get rid of any unwanted items in yard. Make sure the front door says "WELCOME HOME". Now step inside and try to look at your home like a buyer would. This is the time to spruce up and get rid of clutter. Make sure kitchens and bathrooms are sparkly clean. Closets and cabinets should be organized. Replace carpet if necessary and repaint walls and ceilings.
For showing your home, turn on all lights, have soft music playing, burn a few fragrant candles or make a batch of cookies or loaf of bread, and remember to make sure the toilet seats are closed.
7. Does remodeling pay?
According to the National Association of Home Builders, remodeling projects that have good recovery value include adding a 2nd story, adding a new room, adding a pool, building a garage, upgrading the attic, upgrading the basement, enclosing a porch, upgrading the kitchen, adding a new bathroom, adding a deck, adding a fireplace, and adding a patio. Remodeling Magazine adds these items – master suite conversion, family room addition, attic bedroom conversion, exterior remodel, and home office addition.
According to a December 2003 article in the REALTOR® Magazine, cost recouped by percentage on a national average for remodeling projects is:
Deck addition 104%
Siding replacement 98.1%
Bathroom addition 95.0%
Attic bedroom 92.8%
Bathroom remodel 89.3%
Window replacement 84.8%
Family room addition 80.6%
Master suite addition 76.4%
Kitchen remodel 74.9%
The numbers presented here can serve as a guideline for those contemplating the potential return on investment for particular remodeling projects. However, it’s important to acknowledge a variety of factors that can affect both the cost of remodeling and the resale value of homes. Costs for materials, subcontractors, and labor vary considerably not only in different parts of the country but also among remodeling companies operating in the same market.
8. What is Primary Residence: IRC Section 121?
Couples filing a joint tax return can exclude up to $500,000 of gain on the sale of their principal residence, and single filers can exclude up to $250,000.
Home must have been the primary residence of both spouses 2 of the last 5 years.
$500,000 exclusion available once every 2 years.
Vacation homes and second homes do not qualify.
If the home was used as a rental and a primary residence during ownership, any depreciation taken after May 7, 1997, must be recognized on the sale.
ALWAYS CONSULT YOUR CPA.
9. What are some ways to improve my credit rating and how can I check my credit rating?
a. Wait 12 months after credit difficulties to apply for a mortgage.
b. During the mortgage process, do not purchase large items such as furniture or a car.
c. Don’t open several credit card accounts at one time to try to build credit.
d. Try to reduce your overall debt by paying down credit cards and other outstanding loans.
e. Pay bills on time.
Check your credit at MyFICO.com
10. What is title insurance?
When purchasing a home, instead of purchasing the actual building or land, you are really purchasing the title to the property – the right to occupy and use the space. That title may be limited by rights and claims asserted by others, which may limit your use and enjoyment of the property and even bring financial loss. Title insurance protects against these types of title hazards. Other types of insurance that protect your home focus on possible future events and charge an annual premium. On the other hand, title insurance protects against loss from hazards and defects that already exist in the title and is purchased with a one-time premium.
11. Can I withdraw my IRA penalty free for my down payment if I’m a first time home buyer?
$10,000 penalty free withdrawal for first time home buyers.
A first-time buyer is an individual who has had no ownership interest in a home during the previous two year period.
Buyer has 120 days to spend the withdrawal on the acquisition of the home.
ALWAYS CONSULT YOUR CPA.
12. What does the Equal Housing symbol mean to me?
This house symbol represents Equal Housing for All. The Colorado Fair Housing Act was enacted in 1959. Colorado was the first state in the nation to pass anti-discrimination laws pertaining to private property. In the State of Colorado, it is illegal to refuse to show, sell, transfer, rent or lease or to refuse to receive and transmit any bona fide offer to buy, sell, rent, lease or otherwise make unavailable or deny or withhold from any person such housing because of race, creed, sex, religion, national origin, familial status, marital status or handicap. It is also unlawful to deny financial assistance based on the above classes; or to use advertising which indicates a preference, limitation or discrimination on the above classes. Any charge alleging a violation can be filed with Colorado Civil Rights Commission within one year after the alleged unfair housing practice occurred.
13. Should I work with more than one REALTOR®?
You will be disappointed if you leave your name and phone number with several REALTORS®. Work exclusively with one REALTOR®. A good REALTOR® is an invaluable asset in the buyers’ quest to find a home. REALTOR®S belong to the local association of REALTORS® and have access to the listings of the other members through the multiple list system. This enables your REALTOR® to sell the other real estate companies’ listings. Your loyalty will provide a greater commitment to find a home that is right for you. This will allow the REALTOR® to become familiar with the type of property you need, desire and can afford. You can view all area listings in our local MLS on this web site – www.GoldStarRealtyInc.com
14. What is Equity?
An owner's equity in property is normally the monetary interest the owner retains over and above the mortgage indebtedness. If the property is encumbered with a long-term mortgage, the equity in the property increases with each monthly principal mortgage payment (Not to mention increased value through appreciation). In the early years of the mortgage, the equity buildup is gradual, as most of the monthly payment is applied to the interest on the loan rather than to the principal.
If you have a question not addressed here, simply send us an email and a Gold Star Realty Broker will respond immediately.
info@goldstarrealtyinc.com