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Frequently Asked Questions – Vella Real Estate

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Select one of the frequently asked questions below to learn more about buying, selling, and renting real estate. Also, begin to think about important things to consider when diving into your real estate search.

Questions about buying

What is the difference between being prequalified and preapproved for a loan?

If you’re prequalified it means that you POTENTIALLY could get a loan for the amount stated to you, assuming that all of the information you provide to the bank is accurate and true. This is not as strong as a preapproval.

If you’re preapproved, it means that you have undergone the extensive financial background check, which includes looking at your credit history, previous tax returns and verifying your employment – and the lender is willing to give you a loan, basically meaning you’re approved!

You will usually be provided an accurate figure which shows the maximum amount that you are approved for.  Most sellers prefer buyers that have been preapproved because they know that there will not be any problems with the purchase of their home.

How are property taxes calculated?

Estimate between 1%-2% of the purchase price of your home for property taxes.  It will depend on your counties tax rate.  But a safe estimate is typically 1.5% for property taxes.

Can a home depreciate in value?

Generally, real property never depreciates in value, or more so, it is not very common for property to depreciate.  This is why it’s a great investment. Make sure you carefully consider location and community when choosing a home, it can effect the homes future value greatly.

If you are in a newly developed area, do some research on the construction of the surrounding areas being developed to determine if they may effect your homes value.

Is an older home as good a value as a new home?

This is really just a matter of preference, but both newer and older homes offer distinct advantages, depending upon your unique taste and lifestyle.

Older homes can generally cost less than new homes, however, there are many cases where new homes can also cost less then older homes. Most new homes will not have any backyard landscaping and some don”t include any front landscaping either. With an older home, the landscaping is normally already completed and could have 10”s of thousands of dollars in landscaping done, which is included in the purchase price.

Taxes on some older homes may also be lower. Some people are charmed by the elegance of an older home but shy away because they”re concerned about potential maintenance costs. Consider a home warranty to get the peace of mind you deserve. A good Home Warranty plan protects you against unexpected repairs on many home systems and appliances for a full year or more after you move in.

In a new house, you can pick your own color schemes, flooring, kitchen cabinets, appliances, custom wiring for TV”s, electrical, computers, phones and speakers, etc., as well as have more upgrade options. Modern features like media rooms, extra-large closets and extra-large bathrooms and tubs are also more attainable in ground-up construction. In a used home, you rely largely on the previous resident”s tastes and technological whims, unless you plan to farm thousands into a remodeling and rewiring.

New-home designers can use new building materials such as glazed Energy Star windows, thicker insulation and other technology that will lower future energy costs for the owner. Most states now have minimum energy-efficiency requirements for new construction. Kitchens and laundry areas in new homes are designed to house more efficient energy-saving appliances. Older homes, unless they have undergone an energy retrofit, usually cost much more per square foot to air-condition and heat.

Builders have to follow very strict guidelines in new-homes and additions, especially in the West and Northwest, where earthquake safety standards must be observed. In general, new homes are usually more fire-safe and better accommodating of new security and garage-door systems.

Older homes can be better judged for their quality and timeless beauty. New homes that now possess a smooth veneer might reveal the use of substandard building materials or shoddy workmanship over time.

As you can see there are advantages and dis-advantages to each, but it really comes down to what fits you and what you are looking for in a home.

What is title insurance?

Title insurance is insurance that protects the lender and buyer against any losses incurred from disputes over the title of a property.

How can I avoid private mortgage insurance?

The easiest way to avoid PMI is by putting 20% down payment; however, PMI can also be avoided if you only have 5% or 10% for the down payment. The way to accomplish this is via a first and second mortgage combination commonly referred to as 80/10/10^s or 80/15/5^s.

These two methods combine a first mortgage lien for 80% of the home price with a second mortgage lien for either 10% or 15% of the home price leaving the remaining 5% or 10% as the down payment. Because the first lien is at the magical 80% loan=to-value, there is no PMI required, even though a second mortgage is being |piggybacked| onto the financing thus allowing for the lessor down payment.

While the second lien terms are not as attractive as first lien rates, the second mortgage is still home mortgage interest and thus deductible as such on your federal tax return where PMI is insurance and offers no deduction.

What benefits do I receive from private mortgage insurance?

Title insurance is insurance that protects the lender and buyer against any losses incurred from disputes over the title of a property.

Preparing to Sell your Home

What do I do if I want to sell my home?

The first thing you need to do is get educated.  Learn about the area you live in and current condition of the market.  The best seller is an educated one.  This is where we can help you with providing you a FREE comparable market analysis so you will know exactly what your home is worth.  Contact us now!

De-clutter and organize

Once you have decided to sell your home you need to start looking at it from a buyers perspective.  Declutter all of your items and make it look as inviting and clean as possible.  This will not only help you sell it faster but it will also help buyers to envision the property the way they would want it.  Minimalism is key.

Don't be at the showings or open house

To make potential buyers feel most at home in your home it’s best to be absent from showings and Open Houses.  Buyers need to feel comfortable and be able to really see themselves living in your home.  That’s hard to do when the owners are there.  Leave it to us to inform them of all the wonderful details of your home.

Consider all offers

Sometimes a property might get multiple offers.  It’s best to consider them all and weigh out the pros and cons.  Don’t be too quick to throw out an offer because there are a lot of factors to take into consideration. We’ll help to point out the most important aspects of each offer so that nothing is overlooked.

Don't be afraid to ask

Don’t be afraid to ask us any questions you might have about the home selling process.  We’re here to help make this an enjoyable experience for you.

Know your timeline for purchasing a new home

Before we get to work on selling your home we like to discuss with you what your plans are for your future home.  We will lay out a timeline for you and help you find your new home.

Why shouldn't I sell my home on my own?

Many people want to try and sell their home themselves in hopes to save- but the truth is it will cost you a lot more.  If you want to spend all of your time and effort and a big chunk of money on marketing your property,  posting it to various social networking sites,  paying for professional photographs, conducting showings during your work hours, then FSBO is your calling.  But you still might not have the knowledge a licensed professional can bring to the table.  We work with some of the best attorneys, title companies and lenders there are we have a learned a lot along the way.  Let us take care of all of the hard work for you.