2. Is it necessary for me to use a real estate agent to purchase a home in the St. Simons Island Georgia, Sea Island or Brunswick Georgia?
While you are never required to use a St. Simons Island realtor when buying or selling a home in the St. Simons Island GA Real Estate market or in surrounding communities, a real estate agent brings wealth of knowledge to the entire process. An agent will help you prepare your property for sale as well as market your home so that it sells more quickly.
If you are purchasing a home, a real estate agent can help you narrow your search area, point out questionable property features and ultimately negotiate a great deal on your behalf.
3. What will it cost me to have a real estate agent help me find a home in the St. Simons Island Georgia area?
A St. Simon´s realtor is almost always paid at closing by the seller of the property, not the buyer. Once a home closes, the realtor will receive a commission from the sale. Someone interested in purchasing a home in the St. Simons Island Real Estate market or Sea Island Real Estate market should be wary of any agent that requires payment upfront.
4. I have heard the term escrow many times, but really don´t understand what it means. Can you please explain what escrow is?
Escrow is a term used to describe an impartial third party that oversees the distribution funds and completes the transfer of ownership. On many occasions, the closing attorney acts as this independent third party and dispenses payments once all documents are finalized.
5. Am I required to have an appraisal to buy or sell a home in the St. Simons Island Georgia Real Estate market or Sea Island GA Real Estate market?
An appraisal is an important part of the buying and selling process. Since an appraisal is a professional estimate of a property´s market value, based on recent sales of comparable properties, location, square footage and construction quality, it will help a seller determine list price and buyers determine if the property is worth the cost. An appraisal varies in cost depending on the price of the home. On average, an appraisal costs about $300 for a $250,000 house.
An appraisal is necessary for any buyer who plans on financing their home purchase. A lender will need to ensure that the value of the house is not below the amount they are loaning the buyer.
6. Before I begin looking for a home to purchase in the St. Simons Island Georgia or Brunswick Georgia area, how can I find out how much home I can afford?
In general, lenders don't want borrowers to spend more than 28 percent of their gross income per month on a mortgage payment or more than 36 percent on debts. It pays to check with several lenders before you start searching for a home. Most will be happy to roughly calculate what you can afford and pre-qualify you for a loan.
The price you can afford to pay for a home will depend on six factors:
1. Gross income
2. The amount of cash you have available for the down payment, closing costs and cash reserves required by the lender
3. Your outstanding debts
4. Your credit history
5. The type of mortgage you select
6. Current interest rates
7. What is the best way to find an experienced real estate agent in the St. Simons Island Georgia, Brunswick Georgia or Sea Island Georgia areas?
When you are looking for a St. Simons Island realtor, be sure to get a recommendation from a friend or work colleague if possible. This is an excellent way to find a good agent in the St. Simons Island Georgia or Sea Island area. Be sure to ask if they would use the agent again. You also can call the managers of reputable real estate firms and ask them for recommendations of agents who have worked in your neighborhood.
If you selling a home in the St. Simons Island Georgia or Sea Island area, you should interview at least three agents, all of whom should make a sales presentation including a comparative market analysis of local home prices in your area. The best choice isn´t always the agent with the highest asking price for your home. Be sure to evaluate all aspects of the agent´s marketing plan and how well you think you can work with the individual.
8. What determines a homes value in the St. Simons Island Real Estate market?
A property´s value is determined in several ways:
An appraisal is a professional estimate of a property's market value, based on recent sales of comparable properties, location, square footage and construction quality. This service varies in cost depending on the price of the home. On average, an appraisal costs about $300 for a $250,000 house.
A comparative market analysis is an informal estimate of market value performed by a real estate agent based on similar sales and property attributes. Most agents offer free analyses in the hopes of winning your business.
You also can get a comparable sales report for a fee from private companies that specialize in real estate data or find comparable sales information available on various real estate Internet sites.
9. Are there published standards that appraisers use to determine the value of a St. Simons Island home or Sea Island property?
Appraisers use several factors when estimating a home's value, including the home's size and square footage, the condition of the home and neighborhood, comparable local sales, any pertinent historical information, sales performance and indices that forecast future value. For detailed information on appraisal standards, contact the Appraisal Institute at 875 N. Michigan Ave., Suite 2400, Chicago, IL 60611-1980; (312) 335-4458.
10. I am new to the buying process and continue to hear a lot of different terms in regards to the prices for St. Simons Island homes for sale I am interested in. Can you explain the difference between list price, sales price and appraised value?
The list price is a seller's advertised price, a figure that usually is only a rough estimate of what the seller wants to get. Sellers can price high, low or close to what they hope to get. To judge whether the list price is a fair one, be sure to consult comparable sales prices in the area.
The sales price is the amount of money you as a buyer would pay for a property.
The appraisal value is a certified appraiser's estimate of the worth of a property, and is based on comparable sales, the condition of the property and numerous other factors.
11. I have fallen in love with a St. Simons property, but it is slightly out of my price range. Would you advise that I make a low offer for a home in the St. Simons Island Georgia, Sea Island, or Brunswick Georgia areas?
While your low offer in a normal market might be rejected immediately, in a buyer´s market a motivated seller will either accept or make a counteroffer.
Full-price offers or above are more likely to be accepted by the seller. But there are other considerations involved:
* Is the offer contingent upon anything, such as the sale of the buyer's current house? If so, a low offer, even at full price, may not be as attractive as an offer without that condition.
* Is the offer made on the house as is, or does the buyer want the seller to make some repairs or lower the price instead?
* Is the offer all cash, meaning the buyer has waived the financing contingency? If so, then an offer at less than the asking price may be more attractive to the seller than a full-price offer with a financing contingency.
12. What determines the price of a home in the St. Simons Island Georgia, Brunswick Georgia and Sea Island areas?
It´s very important to price your home according to current market conditions. Because the real estate market is continually changing, and market fluctuations have an effect on property values, it´s imperative to select your list price based on the most recent comparable sales in your neighborhood.
A so-called comparative market analysis provides the background data upon which to base your list-price decision. When you prepare to sell and are interviewing agents, study each agent´s comparable sales report (the data should be no more than three months old).
If all agents agree on a price range for your home, go with the consensus. Watch out for an agent whose opinion of value is considerably higher than the others.
13. Since I have never shopped for a mortgage before, I am unsure about what terms are static and what can change. Is it possible for me to negotiate interest rates?
Some lenders are willing to negotiate on both the loan rate and the number of points but this isn´t typical among established lenders who set their rates like large corporations set the prices on their goods. Nevertheless, it pays to shop around for loan rates and know the market before you go in to talk to a lender. You should always look at the combination of interest rate and points and get the best deal possible.
The interest rate is much more open to negotiation on purchases that involve seller financing. These usually are based on market rates but some flexibility exists when negotiating such a deal.
When shopping for rates, look for published rates in local newspapers or check the growing number of Internet sites that publish such information.
14. Are the prices for homes in the St. Simons Island Real Estate market negotiable or are they firm?
It can be difficult to negotiate the sales price with a developer because they may claim their prices are based on fixed construction costs. But it doesn't hurt to try.
Experts say builders are more likely to be flexible on price at the very beginning and the very end of a development project. Early on, most developers want to move people in quickly so the project picks up momentum. Later, developers may be more inclined to accept lower offers when only a few units remain.
If negotiating the price doesn't work, buyers commonly negotiate for better amenities (upgrade carpet, light fixtures, etc.) or lot location. Experts say a developer will rarely pass up a deal over a couple hundred dollars' worth of carpeting, for example.
15. When I purchase my St. Simons Island home, will I get the furnishings in the home as well?
It depends. Fixtures, any kind of personal property that is permanently attached to a house (such as drapery rods, built-in bookcases, tacked-down carpeting or a furnace) automatically stay with the house unless specified otherwise in the sales contract. But anything that is not nailed down negotiable. This most often involves appliances that are not built in (washer, dryer, refrigerator, for example), although some sellers will be interested in negotiating for other items, such as a piano.
16. Is there and ideal time of year or season that is more beneficial for buyers in the St. Simons Island Georgia, Sea Island Georgia or Brunswick Georgia area?
Because many buyers prefer to move in the spring or summer, the market starts to heat up as early as February. Families with children are eager to buy so they can move during summer vacation, before the new school year begins. The market slows down in late summer before picking up again briefly in the fall. November and December have traditionally been slow months, although some astute buyers look for bargains during this period
17. Once I find the St. Simons Island home I want to buy, will I need an attorney to complete the purchase?
In some states, you do need an attorney to complete a real estate transaction, but in others you do not. Most home buyers are capable of handling routine real estate purchase contracts as long as they make certain they read the fine print and understand all the terms of the contract. In particular, you should be clear on the terms of any contingency clauses that will allow them to back out of the contract.
If you have any questions at all, it may be advisable to consult an attorney to avoid future legal hassles. In looking for an attorney, ask friends for recommendations or ask your real estate agent to recommend several. Call to inquire about fees and to check on their experience. In general, more experienced attorneys will cost more, but real estate fees as a rule are small relative to the cost of the property you are buying.
18. If a St. Simons Island Georgia home I am interested in buying is in need of repairs, should I expect the seller to make the repairs?
If you want to get top dollar for your property, you probably need to make all minor repairs and selected major repairs before going on the market. Nearly all purchase contracts include an inspection clause, a buyer contingency that allows a buyer to back out if numerous defects are found or negotiate their repair.
The trick is not to overspend on pre-sale repairs, especially if there are few houses on the market but many buyers willing to buy at almost any price. On the other hand, making such repairs may be the only way to sell your house in a down market.
19. I am new to the real estate game and am curious if there are any first step I should take in order to buy a home in the St. Simons Island Georgia or Sea Island area?
Finding out what you can afford is one of the fist steps, which can be done by pre-qualifying for a home loan. This step will help you narrow your search for both a neighborhood and particular houses. A pre-qualification is a simple calculation that considers several factors, but primarily your income. There are no guarantees with a prequalification, but it will be expected of you when you make an offer on a home.
20. Is it common for buyers to include an inspection contingency in an offer for a St. Simons Island Georgia home?
An "inspection contingency" protects you as a buyer in a purchase offer by allowing you to cancel closing on the deal if an inspector finds problems with the property. As soon as the seller accepts a written offer, the document becomes a legally binding contract. The purchase contract can be written to include a contingency for any repairs found to be needed or related items the seller must take care of before closing. If these are not dealt with, and you have such a clause in your contract, you can delay or possibly cancel the closing. If it´s not stated in the contract, you could face losing your deposit. There also may be costly legal implications stemming from backing out of a contract.
You usually will have the right to choose the inspector (and be responsible for paying for the inspections). In addition to an overall inspection for structural soundness, you can request a satisfactory pest control inspection report, roof inspection report or contingency for no potential environmental hazards such as asbestos or radon gas.
21. What other contingencies should I put in an offer for a St. Simons Island, Sea Island or Brunswick Georgia home?
Most offers include two standard contingencies: a financing contingency, which makes the sale dependent on the buyer´s ability to obtain a loan commitment from a lender, and an inspection contingency, which allows buyers to have professionals inspect the property to their satisfaction.
A buyer could forfeit his or her deposit under certain circumstances, such as backing out of the deal for a reason not stipulated in the contract.
The purchase contract must include the seller´s responsibilities, such things as passing clear title, maintaining the property in its present condition until closing and making any agreed-upon repairs to the property.
22. Is there anything I can do to save on closing costs?
Studies show that the closing costs, which can average 2 to 3 percent of a total home purchase price, are often more costly than many buyers expect. But there are some ways to save:
* Negotiate with the seller to pay all or part of the closing costs. The lender must agree to this as well as the seller.
* Get a no-point loan. The trade-off is a higher interest rate on the loan and many of these loans have prepayment penalties. But buyers who are short on cash and can qualify for a higher interest rate may find a no-point loan will significantly cut their closing costs.
* Get a no-fee loan. Usually, though, these fees are wrapped into a higher interest rate though it will save you on the amount of cash you need upfront.
* Get seller financing. This kind of arrangement usually does not entail traditional loan fees or charges.
* Rent the property in which you are interested with an option to buy. That will give you more time to save for the upfront cash needed for the actual purchase.
* Shop around for the best loan deal. Each direct lender and each mortgage brokerage has their own fee structure. Call around before submitting your final loan application.
23. I am a first-time home-buyer and have no idea what closing costs are. Can you explain what exactly closing costs are and when I will need to pay them?
Closing costs are the fees for services, taxes or special interest charges that surround the purchase of a home. They include upfront loan points, title insurance, escrow or closing day charges, document fees, prepaid interest and property taxes. Unless, these charges are rolled into the loan, they must be paid when the home is closed.
24. What is a title report and will I need one to close on my St. Simons Island home?
As much as you as a buyer may want to believe that the home you have found is perfect, a clear title report ensures there are no liens placed against the prior owners or any documents that will restrict your use of the property.
A preliminary title report provides you with an opportunity to review any impediment that would prevent clear title from passing to you.
When reading a preliminary report, it is important to check the extent of your ownership rights or interest. The most common form of interest is "fee simple" or "fee," which is the highest type of interest an owner can have in land.
Liens, restrictions and interests of others excluded from title coverage will be listed numerically as exceptions in the report.
You also may have to consider interests of any third parties, such as easements granted by prior owners that limit use of the property. Some buyers attempt to clear these unwanted items prior to purchase.
A list of standard exceptions and exclusions not covered by the title insurance policy may be attached. This section includes items the buyer may want to investigate further, such as any laws governing building and zoning.
25. Is it the seller´s or buyer´s responsibility to closing costs?
Closing costs are either paid by the home seller or home buyer. It often depends on local custom and what the buyer or seller negotiates.
26. I have found a home I love and need to have an inspection performed on the property. Can you tell me how I can find a home inspector in the St. Simons Island Georgia Real Estate market or Sea Island Real Estate market?
One can usually find an inspector by looking in the phone book or by inquiring at a real estate office or sometimes at an area Realtor association. Rates for the service vary greatly. Many inspectors charge about $400, but costs go up with the scope of the inspection.
The American Society of Home Inspectors (ASHI) has developed formal inspection guidelines and a professional code of ethics for its members. Membership to ASHI is not automatic; proven field experience and technical knowledge of structures and their various systems and appliances are a prerequisite.
27. Can you explain what a home inspection is?
A home inspection provides for a paid professional inspector ? often a contractor or an engineer ? to inspect the home, searching for defects or other problems that might plague the owner later on. They usually represent the buyer and or paid by the buyer. The inspection usually takes place after a purchase contract between buyer and seller has been signed.
28. Do you recommend that I have a home inspection before I purchase a home in the St. Simons Island Georgia Real Estate market or Sea Island Real Estate market?
Yes. Buying a home "as is" is a risky proposition. Major repairs on homes can amount to thousands of dollars. Plumbing, electrical and roof problems represent significant and complex systems that are expensive to fix.
29. I have found the perfect St. Simons Island home and need to find home insurance in order to close. What kind of home insurance do you recommend?
A standard homeowners policy protects against fire, lightning, wind, storms, hail, explosions, riots, aircraft wrecks, vehicle crashes, smoke, vandalism, theft, breaking glass, falling objects, weight of snow or sleet, collapsing buildings, freezing of plumbing fixtures, electrical damage and water damage from plumbing, heating or air conditioning systems, according to the Insurance Information Institute, a Washington, D.C.-based nonprofit group for the insurance industry. Such policies are "all-risk" policies, which cover everything except earthquakes, floods, war and nuclear accidents.
A basic policy can be expanded to include additional coverage, such as for floods and earthquakes and even workers' compensation for servants or contractors. Home-based business-coverage, an increasingly popular rider, does not cover liability associated with the business.
Insurance experts recommend that homeowners obtain insurance equal to the full replacement value of the home. On a 2,000-square-foot home, for example, if the replacement cost is $80 per square foot, the house should be insured for at least $160,000.
30. A friend of mine said I should get guaranteed replacement cost insurance? Can you explain what this is and why I need it on my Sea Island home?
Guaranteed replacement insurance is a more comprehensive policy. It tends to cost more, but it promises to cover the complete costs, less deductible, of replacing a destroyed house. With these sorts of policies, limits on the policies are not as common, because complete coverage is more explicit.
31. I found the perfect Brunswick Georgia home and need to find a mortgage. Do you recommend a fixed and adjustable rate loan?
There is risk involved in selecting an adjustable rate mortgage, or ARMs, because rates may go up. On the other hand, a fixed-rate loan offers good protection against rising interest rates, but the borrower is stuck with the initial rate if interest rates drop.
Statistics show that home buyers who have chosen ARMs since 1981 have saved thousands of dollars. For a period, the percentage of home buyers applying for ARMs rose substantially, then buyers and homeowners began flocking to fixed-rate loans.
Whether to opt for a fixed or adjustable rate mortgage is a matter of personal choice. The first route offers stable payments; the second offers lower initial payments.
Another consideration is the length of time a buyer plans to own the home. If you´re planning on moving within three or four years, an ARM makes sense even if rates do nothing but rise during that period of time.
32. I made an offer on a St. Simons Island house and was informed by the sellers´ agent that they received multiple offers. Are the sellers required to disclose the terms of other offers?
Sellers are not legally obligated to disclose the terms of other offers to prospective buyers.
33. Are any home-buying costs tax deductible?
Any points you or the seller pay to purchase your home loan are deductible for that year. Property taxes and interest are deductible every year.
But while other home-buying costs (closing costs in particular) are not immediately tax-deductible, they can be figured into the adjusted cost basis of your home when you go to sell (any significant home improvements also can be calculated into your basis). These fees would include title insurance, loan-application fee, credit report, appraisal fee, service fee, settlement or closing fees, bank attorney's fee, attorney's fee, document preparation fee and recording fees. Points paid when you refinance an existing mortgage must be deducted ratably over the life of the new loan.
34. Can I deduct seller-paid points on my tax return?
As of Jan. 1, 1991, homeowners have been able to deduct points paid by the seller. This deduction previously was reserved only for points actually paid by the buyer.
35. I plan on spending a considerable amount of money on improvements to my. Simons Island Georgia home. Will these costs be tax deductible?
What you spend on permanent home improvements, such as new windows, can be added into your home´s cost basis, or amount of money invested in a home, which reduces capital gains when it comes time to sell. Capital gains are determined by the difference in price from the time a home is purchased and the time it is sold, minus the cost of any permanent improvements.
However, the 1997 tax changes virtually eliminate the capital gains tax for most homeowners (the exemption is $250,000 for single homeowners and $500,000 for married homeowners.).
Still, it is worthwhile to save all receipts for permanent home improvements just in case. They also can be useful documentation when it comes to marketing your home when you sell.
36. I am planning on buying a home in the St. Simons Island Real Estate market, Sea Island Real Estate market or Brunswick Georgia Real Estate market and want to know what tax benefits I´ll receive as a homeowner?
Homeowners benefit from several generous tax advantages. The most important benefit is the mortgage interest deduction. People may deduct interest paid on mortgage loans totaling up to $1 million used to buy, build or improve a principal residence plus a second home. The IRS calls such loans acquisition debt. Points paid by the buyer or seller on a new mortgage loan for the purchase or improvement of a principal residence are deductible for the year in which the home was purchased.
Any points paid on a refinance mortgage, a loan to purchase a second home or a mortgage on income property must be spread over the life of the loan, according to Edith Lank and Miriam S. Geisman, authors of "Your Home as a Tax Shelter," Dearborn Financial Publishing, Chicago; 1993.
Note that when obtaining a new mortgage, the borrower usually is asked to pay interest from the closing date until the first of the next month. Check whether that charge is included in the year-end report.
Some moving expenses are deductible for people who changed jobs and relocated as a result. The IRS requires that the new employment be located at least 50 miles away, among other considerations, said Analisa Collins-Sears, a public affairs officer with the IRS' Bay Area office.
Resources: * "Tax Information for First-Time Homeowners," a free guide published by the Internal Revenue Service. Order by calling 1-800-TAX-FORM.
37. What kind of property taxes can I expect when I buy a home in the St. Simons Island Georgia Real Estate market or Sea Island Real Estate market?
Property taxes are what most homeowners in the United States pay for the privilege of owning a piece of real estate, on average 1.5 percent of the property's current market value. These annual local assessments by county or local authorities help pay for public services and are calculated using a variety of formulas.
38. Can I deduct property taxes?
Property taxes on all real estate, including those levied by state and local governments and school districts, are fully deductible against current income taxes.
39. I recently heard the term impound account while hunting for a St. Simons Island home? Can you tell me what this term means?
An impound account is a trust account established by the lender to hold money to pay for real estate taxes, and mortgage and homeowners insurance premiums as they are received each month.
40. Do all loans require impound accounts?
If you are taking out a FHA or VA loan, the lender can require an impound account to pay real estate taxes and hazard insurance premiums, as with a standard loan. Most conventional loans do not require an impound account.
41. Can you explain what PMI is and if I will be required to have it when purchasing a St. Simons Island home?
Private mortgage insurance, or PMI, insures the lender against a default. It is required when the borrower is making a cash down payment of less than 20 percent of the purchase price.
PMI costs vary from one mortgage insurance firm to another, but premiums usually run about 0.50 percent of the loan amount for the first year of the loan. Most PMI premiums are a bit lower for subsequent years. The first year's mortgage insurance premium is usually paid in advance at the close of escrow, and there is usually a separate PMI approval process.
42. What can I do to avoid paying PMI?
In most cases, PMI can be dropped after the loan to value ration drops below 80 percent. The Homeowners Protection Act requires PMI to be dropped when the loan-to-value ratio reaches 78 percent of the home's original value AND the loan closed after July 29, 1999. For other loans, find out from your lender what procedure to follow to have PMI removed when your equity reaches 20 percent.
For homeowners who have improved their properties and believe that their equity has increased as a result of these improvements, refinancing the property at a loan-to-value ratio of 80 percent or less is another possible way of eliminating PMI payments.
In some states, the loans have to be at least two years old, and the borrower can not have made any late payments in the last year in order to drop private mortgage insurance. In addition, the loan-to-value ratio must be less than 75 percent. Some state disclosure laws require lenders to notify borrowers after the close of escrow whether the borrower has the right to cancel private mortgage insurance.
43. How much will PMI cost me when I purchase a Sea Island home?
PMI costs vary from one mortgage insurance firm to another, but premiums usually run about 0.50 percent of the loan amount for the first year of the loan. Most PMI premiums are a bit lower for subsequent years. The first year's mortgage insurance premium is usually paid in advance at the closing.
44. A Brunswick Georgia home I am interested in is offered with seller financing. Can you explain what this is?
Seller financing is when a seller helps to finance a real estate transaction by taking back a second note or even financing the entire purchase if the seller owns the home free and clear. Usually sellers do this when a buyer has difficulty qualifying for a conventional loan or meeting the purchase price.
