Buying 101
When you are making one of the biggest purchases in your life – your home - you need to ensure that your money is well spent. In addition to the purchase price, expect to spend more funds when you get into your new home. It might be for carpets and paint, or it could be for repairs. Just make sure you are aware of the major upgrades and/or repairs.
Because of the major investment of buying a home, make sure you are dealing with knowledgeable and experienced professionals, including real estate agents, inspectors, lawyers and mortgage representatives….and ask lots of questions. Whether you are a first-time home buyer or a veteran, the process of buying a home can be complicated and confusing.
1. Before you contact a real estate professional, it makes good sense to make sure your finances and credit are in good shape.
Buyers should check their credit score, taxes, 401(k)s and other aspects of their financial situation to determine the maximum they're comfortable affording for their monthly mortgage, utilities, maintenance, taxes and insurance. Do what it takes to increase your credit score – this can be the making or breaking point on being able to purchase a home. Look into getting pre-approved for a mortgage. You can do this on your own or your real estate professional can assist you. You should keep as close as you can to this mortgage amount. You should also have the required amount of a cash down payment and closing costs. The real estate agent that you decide to work with can help you with this.
2. Find a Realtor and start looking at homes.
Referrals are a great way to find an experienced real estate agent…..and make sure your real estate professional has your best interests, desires and wants in mind when selecting homes for viewing. Begin with a checklist of your pros and cons of your new home….number of bedrooms, basement, garage, bathrooms, etc. Always check into the neighborhood and school system if you have children or plan to in the future. Do you need to be close to shopping or to your work? Have a good idea of what you desire in your new home and neighborhood. If you are buying in a community that has maintenance dues, check into the financial stability of the builder or homeowner-association management company so that there are no surprises.
3. When you find that home that you want to make an offer on, discuss this in depth with your real estate agent.
He or she will be able to inform you on comparable market values based on the neighborhood and condition of the home. Your real estate professional will also handle this process for you, from offering to negotiating, to final acceptance. When your offer is accepted, a professional home inspection is key to knowing the home you are purchasing. Use a reliable inspector that is a member of an association that establishes strict requirements for membership, such as the American Society of Home Inspectors and the National Association of Home Inspectors. The inspector should provide a detailed list of what will be inspected, for example terminate damage, indoor air quality, and potential mold issues, and a report of those findings. If you do actually receive a disclosure form with the signed contract for purchase (many states require that the seller fill out this disclosure), let your inspector know about it. Remember that an inspection report is not a guarantee. The inspector is not liable for any repairs as a result of his or her performance.
If your lender doesn't require it, it still is worth your while to hire a termite inspector. But have the inspector look for all pests. Termites aren't the only pests that cause damage. So do carpenter bees, rats, squirrels and scorpions.
4. Prepare for closing.
At closing, buyers will receive the keys to their new home. But before that happens, your mortgage company will want to ensure that you have the necessary amount of homeowner’s insurance set up. After the transfer of funds for the purchase price and closing costs are paid, you are now the proud new homeowner!
