I Have the Internet – Why Do I Need a Realtor When I Buy a Home?

The internet is great. Never before have home buyers been so empowered. With the internet it is possible to research homes in another town, compare prices, size, features, etc. without ever speaking to a real estate professional.

If that’s the case, why should anyone ever use a Realtor to buy property? Isn’t that a waste of time? Not if making a good buying decision is the main objective. The internet can offer data but it can not interpret it. That’s the big advantage of working with a Realtor. Realtors not only know the market but they know how to interpret it.

A Realtor doesn’t just spend time working with buyers and sellers. Realtors study market trends. Which areas of town are appreciating fastest? Where are properties turning over quickly and where is inventory piling up? What features are buyers looking for that they are willing to pay more for? What features make a home dated in buyers’ eyes?

All of these are questions that Realtors research every day. With over 7000 resale properties on the market in the Naples area at any given time, and thousands more being built it is a full time job to stay on top of this ever-changing market.

Features that might be considered standard in one neighborhood could be overbuilt in another. Knowing that properties are taking longer to sell in one area than in a comparable area might make a difference in what price a buyer might want to offer. Even knowing what government or environmental regulations are new or pending can make a difference in a home’s value in the future.

Most new communities are not found on the internet through the same sources as resale homes. It makes it difficult for a prospective buyer to compare apples to apples. Realtors tour new communities on a regular basis and track their sales as well.

This market demands constant education. Seminars put on by the Naples Area Board of Realtors, the Collier County Building and Industry Association, and others are invaluable resources. Realtors work with appraisers, home inspectors, lenders, and other professionals on a regular basis. These become sources for market information as well.

Buyers can use the internet to save time and to get ideas. They can eliminate homes that do not meet their needs and explore areas that look interesting. A good realtor will not talk a customer into or out of buying a home, but will make sure it is an informed decision that results in satisfaction for years to come.

Down Payments Depend on Your Mortgage Type

A question from home buyers, particularly first timers, is: “How much do I have to put down to buy a house?” The answer is: It depends. The most important of those factors will be your credit, followed by income.

Loan TypesConventional Loans

These mortgages are loans obtained through Fannie Mae or Freddie Mac. If you have really good credit, you may be looking at a minimum down payment of 3%.

This is definitely something that first-time home buyers should be looking into when they start the financing process. With a down payment this low, you will require mortgage insurance, which, when certain conditions are met sometime in the future, can be removed.

Also, ask your mortgage professional about what is called the HomeReady mortgage program, obtained through Fannie Mae. This program caters to low-to-moderate-income borrowers and those purchasing in lower-income areas.

FHA loans

The minimum down payment with FHA programs is 3.5%. This program is ideal for borrowers whose credit scores may be on the low side.

While FHA is good for people who may be unable to qualify for conventional financing through Fannie Mae or Freddie Mac, the challenge here is that these loans are generally more expensive to own. This is due to the fact that you will be required to have two kinds of mortgage insurance, and, unlike in conventional mortgages, the mortgage insurance will be in place for the life of the loan.

Keep in mind that, in addition to the down payment on both of the loan types listed above, you can expect to have other outlays of cash associated with the purchase, including closing costs and some type of escrow account.

You will still be able to get seller credits to help you with these other outlays, but note: seller credits can’t be used to help you with a down payment.

“Always check with a Local Lender about current rates. If you are not pre-qualified, call me and I can direct you to one.”