ACE Class Report – Beginning Real Estate.
Begin: 2/2/2024
Finish: 3/4/2024
Title: Beginning Real Estate.
Instructor: David Crisp
Why I choose to take this class:
Inform myself about the process involved in the Real Estate Industry.
What I learned from this class:
Real Estate is a very wide field. To buy a house there are lots to consider:
1) Evaluating housing alternatives – Renting, buying, new or old homes, condominium, cooperative and manufactured homes.
2) Analysis between renting and owning – Lease, insurance, maintenance cost, property taxes, security deposits, determine ownership needs, type of housing available.
3) Determine how much you can afford – the amount you can spend is affected by down payment, income and current living expenditure, Other factors to consider are: current mortgage rate, tax, insurance payment. You can have a loan officer or financial institution or software on the internet to prequalify you.
4) Find and evaluate a property to purchase – select a location, location to work, schools and anticipated future construction may influence buying decision. Be aware of zoning laws on usage of property, school system, and homeowner’s association. You can use a real Estate agent to help assess you housing needs and determine amount you can afford to spend. The Real Estate agent provides: 1) presenting your offer to the seller, 2) Negotiating a settlement price, 3) Assist in obtaining financing and 4) representing you at closing. Also, recommend lawyers, insurance agent, home inspector and mortgage companies to serve your needs. Sellers usually pays the Real Estate agents commission. There are buyer, seller and dual agents.
5)Conducting a home inspection – An evaluation by a trained home inspector can minimize future problems. Most states, cities and lenders require inspection documents. Mortgage company usually conducts appraisal to determine the fair market value of the property but it is not a detailed inspection.
6) Pricing the property – Consider recent selling prices in the area, current demand, length of time property been on the market, owners need to sell, financing options, features and condition of the home. The service the Real Estate agent or Appraisal agent can assist in assessing the current value of the house. Price of home can be negotiated until a final settlement cost is agreed upon. The purchase contract becomes the basis for the real estate transaction. As part of the offer, the buyer must present earnest money to show the purchase offer is serious.
7) Obtaining financing [ The amount of cash available for a down payment will affect the size of the mortgage loan. Private Mortgage Insurance (PMI) is usually required if down payment is less than 20 percent and is paid by the borrower. Mortgage brokers can help home buyer obtain financing. Your affordability is based on 33% or 38% percent of your gross income (38 % if you have other debt i.e.. auto loan). Points are prepaid interest charged by the lending institution for the mortgage. Each discount point is equal to 1 percent of the loan amount. Conventional mortgage is a fixed rate, fixed payment home loan with equal payment over 15, 20, 30 years. Mortgage payments are set at a level that allows amortization. FHA loan program, the minimum down payment ranges 3-5%. Other home loan programs: VA programs for veterans, balloon mortgage, adjustable Rate mortgage, graduated payment mortgage, growing equity mortgage, buy downs (interest rate subsidy from home builders), shared appreciation mortgage, second mortgage, reverse mortgage and refinancing.
8) Closing the purchase transaction – walk through to inspect property you plan to buy. Documents are signed, last minutes details are settled and appropriate amount are paid. Closing cost – settlement cost includes: title insurance, Deed recording fee, Mortgage insurance. At closing you make your monthly payment and deposit money for home expenses. Lender might require property insurance, an escrow account is money usually deposited with lending institution for payment of property taxes and homeowner’s insurance.
9) The main element of buying a home: 1) Location, 2)Down Payment, 3) Mortgage Application, 4) Points, 5) Closing Cost, 6) PITI – Principal, Interest, Taxes and Insurance, 7) Maintenance Cost.
How will this class contribute to my success upon release:
Understanding the procedure for Real Estate transaction will help me secure employment in the field to invest in it. Create opportunity upon my release.
