Thinking about buying?
Purchasing a home is a milestone for many people in their life. It is an accomplishment to put yourself in a position to purchase your first home. I have a lot of first time home buyers that do not know where to begin when they start to think about buying. Real Estate is an amazing way to invest in your future, unlike stocks and 401k’s, you actually get to enjoy this investment everyday. This article will give you more information about what to expect in normal situations when purchasing a home.
I always advise home buyers to start by getting a pre-approval at least 6-9 months prior to the time they would like to buy. This will give you time to improve anything on your credit that may blemish your score, and give you knowledge of the price range you will feel comfortable to purchase. This also gives you time to know how much you’ll need for a down payment and closing costs to start to save up. A lender can give you lots of useful advice about different loan products (conventional, FHA, VA, etc), and what works best for you. I work with some great lenders in the business that have provided seamless transactions. I’d be happy to share my contacts.
After your pre-approval, it’s time to imagine your ideal home and align yourself with a reliable real estate profession that can help make this a reality. I like to ask my buyers a variety of questions to understand what they like for their home. How many bedrooms, bathrooms, garage size, stories, pool, flooring, ideal kitchen color, water view, conservation view, or is a yard important? Keep in mind cosmetic things can be changed, location cannot. I also ask buyers to rank these in a scale from would be nice to deal breaker. Consider if you are willing to do work to the home or if it needs to be move in ready and you plan to do minimal. Let your agent know this information, it will help them find you the best home for your needs.
Collaborate with your agent, use their resources and use your own. I always advise my clients to search online websites like Realtor.com, Zillow.com, Trulia.com and if they find anything I may of missed send it to me for additional information. No one knows what you want best like you do, but rely on your agent to get you the important information. They’ll be able to tell you if it’s available, it’s condition, organize showings. Your agent should be a resource to send you the newest listings before anyone else finds them online. The MLS, mulitple listing service that Realtors pay to have access to has the most up to date and accurate information for homes. When purchasing a home the seller pays for your real estate agent fees, it would be silly not to take advantage of a free service to you that will protect your best interests throughout the process.
Throughout the showing process, take notes! Homes start to get jumbled after seeing a bunch. Write down positive and negatives of the homes you see, it will be helpful for you when you review your options. Look at the exterior of the home, examine condition of roof and windows, consider the condition of bathrooms, kitchen, flooring, layout of the home, walk the home’s lot, look at the condition of your neighbors home, and drive around the neighborhood.
So what to expect once you find the home? After seeing homes in the price range and neighborhoods you like, you’ll get a good idea about what you can get for your money. When you are ready to put in an offer, the process gets real. Your agent will ask you to sign a contract, addendum, and company forms. They will submit these documents and your pre-approval to the listing agent for the seller to accept, counter, or reject. You can expect an answer from between 12hrs – 3 days, depending on the market. The closing date is normally 30-45 days after the contract is accepted.
Once a contract is negotiated and agreed upon, many people think they are set to close. Not so fast, we have just begun. You will need to put an earnest money deposit down with in the first few days of acceptance, depending upon the terms agreed in the contract. You need to make loan application with in 5 days of the contract being fully executed. Work with your lender to get them all documents they need as quick as possible. You will have an inspection period normally of about 10days, during this time you need to hire a professional to do a home inspection and do your due diligence to make sure the home has no major issues. Don’t panic if the home comes back with issues, I have never had a completely clean inspection. Cosmetic minor repairs are to be expected, major issues such as large leaks, termites, structural issues are of more concern. You’ll have the right to cancel if any major issues arise, but normally the contract can be negotiated if this is the home you want. The seller may agree to fix items or reduce the purchase price. After the inspection is agreed upon, an appraisal can be ordered to find the value of the home. Once again if the value is less than agreed upon as the purchase price, more negotiations may need to take place. Finally once the appraised price is agreed upon, you will be ready to move towards closing.
Throughout the process, keep in touch with your lender every couple days and make sure everything is going smoothly. If they ask for additional documents, provide them ASAP. Prior to closing, don’t forget to turn on water, electric, and cable for your home. If you are purchasing a villa or condo you may need to apply for the HOA and have an interview prior to purchasing. You’ll need to get home owners insurance. Once the loan is approved they will send the closing package to the title company who will be in charge of the closing. They will prepare a HUD which will have all the final costs. Keep in mind buying a home has closing costs, you can expect to pay 3-4% of the purchase price to cover taxes, loan costs, title search fees, survey, etc. There is a possibility your agent may write into the contract for the seller to pay some of these fees to keep your out of cash money to close lower. I’d be happy to share more information about this. Your agent and lender will review the HUD with you. Within 24hrs of closing you will do a final walk through and make sure the home is still in the condition it was during your inspection. Check appliances, windows, doors, faucets, A/C, and pool to make sure everything is functioning. You will sign off that the home is as agreed upon. You will go to the title company for closing and the title agent will review the HUD again with you and then ask you to sign tons of paperwork. You will bring a certified check or wire money of the down payment remainder and closing costs. FINALLY the keys will be yours! You are a home owner.
I know this is a TON of information. Find a real estate agent that is knowledgeable of the market, and the process. They will save you a lot of headaches and help you find what you want. I am free anytime to review any of this information if you have begun to consider purchasing or if you’re ready to make the plunge I’d love to schedule an appointment to understand your needs and get you started with the process. Please keep me in mind for any friends, coworkers, or family that may be purchasing, my business is only successful because of my referrals!
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