*Get a Pre-Approval
Meet with a mortgage broker and find out how much you can afford to pay for a home. Why?
-Sellers will not consider an offer from buyers who have not been pre-approved.
-To avoid being disappointed by falling in love with a home that is outside your price range.
A Pre-Approval is a commitment in writing from a lender stating you are capable of a purchase at that price point or below. With this in hand, a seller knows that you are a capable buyer of their property, and makes your offer stronger.
*Create a List of Needs and Wants
Make 2 lists.
-Needs include items you must have. These include vital items like minimum number of bedrooms, or a single level home if accessibility is a factor.
-Wants/wishes include the things you would like to have (big yard, den, etc.) but that are not an absolutely necessary. It is not likely you will get everything on your wish list, but it will help you and your realtor in your search.
* Get Representation with a Buyer Agent
Consider hiring your own real estate agent, one who is working for you, the buyer, not the seller. Listings agents have a fiduciary relationship with the seller, not you. you deserve equal protection and guidance.
ONCE Going To See Houses...
*Stay Organized
Keep all of your home buying items in one place. This may include
- A list or file of preferred locations, and properties you liked that your agent has shown to you.
- Notes/ photos taken on the houses you see to help your keep them all straight.
- Your pre-approval, and other pertinent paperwork.
*Visualize the House Empty & with Your Decor
Try not to be distracted by the seller’s style choices and personal items. Focus on layout, square footage, location etc.
*Be Objective
While the heart always has a say, decide with your head. Does this home meet your needs? With continued low inventory and rising prices, waiting 6 months to purchase means you will be paying more for less.
*Be Thorough
A few extra dollars well spent now may save you big expenses in the long run.
- Getting a property inspected by a professional inspector is an upfront cost that could save you thousands later.
- Be sure to schedule a walk-through on or the day before your closing. This ensures no damage to the house has occurred, or changes have been made that were not agreed on,(like a missing appliance, or a nice chandelier replaced by a cheap ceiling light)
All this may seem rather overwhelming. It is a lot to manage! Having a competent real estate professional represent you and keep track of all the details for you is highly recommended.
Please contact us to discuss any of the above in more detail. We love talking real estate!
You found a house and you love it! You are considering putting in an offer. What’s next?
If purchasing with a loan, it is vital you have been pre-approved by a lender. Sellers no longer consider offer without a pre-approval. Once that is in place, consider the following items as you craft your offer.
1) Is there an obvious reason the seller selling the house? While the seller is not required to share this information, it might be worth looking into things beyond the lot boundaries. Are there any potential changes to the neighborhood, (like zoning, building projects etc.) occurring?
2) How much did the seller pay for the home? This detail can, in some instances, help you negotiate a better deal, but it is important to remember the purchase price is influenced by several factors. The most important driver is the current market value, followed by any improvements the seller may have made to the home. The original purchase price may not have anything to do with the current value of the house.
3) What does the seller like most about the property? This might provide some interesting information! Occasionally, what a seller likes the most about a home is something the buyer is looking to avoid. "A quiet environment with no neighbors" might be negative factor if it is too remote for your taste.
4) What is the neighborhood like? Real estate professionals are not allowed to share the demographics of neighbors and protected classes due to fair housing laws. However, there are some things you can learn, like any noisy neighbors, barking dogs, heavy airplane traffic, etc. or positive things like local parks and amenities by talking with the locals.
6) What school district is the home in? Realtors / listing agents cannot provide opinions on the quality of a school district. If this is important to you, your realtor CAN point you to resources to help you make your own decisions for what is best for your family.
Congratulations! You've found your dream home and your offer is accepted. Your loan has been approved and you're eager to move into your new home. Next stop, the closing!
Also called the settlement, the closing is the process of passing ownership of property from seller to buyer. As a buyer, you will sign piles of documents and will have to present your payment for the down payment and various closing costs.
Closing costs can be confusing! These fees are both mortgage and government related. Although it may vary by lender and loan product, here is a list of the most common costs.
Appraisal Fee: This fee pays for the appraisal of the property. You most likely pre-paid this fee at when the appraisal was ordered.
Loan Origination Fee: This fee covers the lender's loan-processing costs. The fee is approximately one percent of the total mortgage.
Loan Discount: This is an optional one-time charge to pay points to lower your interest rate. Each point you purchase costs one percent of the total loan.
Title Attorney Fees: These fees generally include costs for the title search, title examination, title insurance, document preparation and other miscellaneous title fees.
PMI Premium: If you buy a home with a low down payment of less than 20%, a lender often requires that you pay for mortgage insurance. This fee protects the lender against loss due to foreclosure. Once you achieve 20 percent equity in the home, you can typically apply to eliminate this insurance fee.
Prepaid Interest Fee: This fee covers the interest payment from the date you purchase the home to the date of your first mortgage payment. If you buy a home early in the month, the prepaid interest fee will be higher than if you buy it towards the end of the month.
Escrow Accounts: Typically, your mortgage lender creates an account that holds funds for future annual property taxes and home insurance. There is an initial amount collected in your closing cost, and replenished in your monthly mortgage over the course of the loan. This is a service your lender provides to insure your taxes and insurance are always paid and up to date.
Recording Fees and transfer taxes: This cost is for transferring ownership of the property recording the purchase documents in the town/ city of residence and is unavoidable.
Consult with your lender to get more specific details on what your closing costs cost will be.
*Your realtor can often negotiate sharing these costs with the seller during the offering stage. With the right offer, the seller could agree to pay all of the settlement costs.
