Think about . . .
1. How much space do I need and why?
2. How long do I plan to live here?
3. Which is more critical: location or size?
4. Would I be interested in a fixer-upper?
5. Would I be interested in a condo? ranch? 2-story?
6. Do I need/want a basement?
7. Would I be interested in new home construction?
8. How do I feel about a homeowner’s association?
9. How much time/money do I want to spend on outdoor maintenance?
10. What features and amenities do I want? Which do I really need? (basement, flooring, bathrooms, bedrooms, formal dining room, deck, porch, yard)
11. Location, location, location * Urban, suburban or rural * Commute time * School districts * Proximity to the airport * Proximity to restaurants and retail * Access to major highways and thoroughfares * Access to public transportation * Health care facilities * Parks and recreation
Before you start visiting properties, you need to get pre-qualified; while it is not a loan commitment, you will receive information about what you can realistically afford and some of the possible loan programs to consider. lender decides what you can borrow but you decide what you can afford. Lenders are careful, but they make qualification decisions based on averages and formulas. They won't understand the nuances of your lifestyle and spending patterns quite as well as you do. So, leave a little room for the unexpected - for all the new opportunities your home will give you to spend money -- from furnishings, to landscaping, to repairs, to homeowners dues. Deciding how much you can afford should involve some careful attention to how your financial profile will change in the upcoming years. In the long run, your own peace of mind and security will matter most.
Your lender will give you a pre-qualification letter that is shared with your agent. When the time comes this letter is usually submitted to the seller's agent with a written offer to purchase a property.
VIEWING A PROPERTY
• All appointments are scheduled
• If you are going to be late please contact your agent
• If an appointment is made to view a property do everything possible to keep the appointment
• Children are to stay with parents
• No eating, drinking, smoking, using bathroom
• Do not touch equipment or personal items
• Respect the owner’s requirements regarding their pets
• Please take any trash with you
MAKING AN OFFER
The basic components of an offer are price, terms, and contingencies, earnest money, and pre-approval.
Price - the right price to offer must fairly reflect the true market value of the home you want to buy. Your agent's market research will help guide this decision.
Terms - the other financial and timing factors that will be included in the offer that usually include:
1. Schedule - a schedule of events that has to happen before closing.
2. Conveyances - the items that stay with the house when the sellers leave.
3. Commission - the real estate commission or fee, for both the agent who works with the seller and the agents who works with the buyer
4. Closing costs - your lender will provide most of this information; it can also include the price you will pay for a Home Inspection or a Clear Termite Letter
5. Home warranty - this is optional and covers repairs or replacement of appliances and major systems; sometimes it can be negotiated for the seller to pay for it and other times the buyer purchase their own if they choose
6. Earnest money - this protects the sellers from the possibility of your unexpectedly pulling of the deal and makes a statement about the seriousness of your offer - it is usually about 1% of the purchase price, and is applied to the purchase price at the time of closing
7. Contingencies – a contingency means that a clause has been written into the offer and the sale requires that certain criteria are met, typically in three categories: appraisal, home inspection and mortgage approval. Contingencies are usually put in place for a specific number of days so that the buyer can back out of the sale in case something goes wrong, usually without losing their deposit.
The property will be appraised by a licensed professional in order to get an estimate of its value based on things such as recent sales of similar nearby properties, location, structural condition, and amenities. The appraiser will walk the property, take pictures, look for safety/code violations, and prepare a written report. The lender usually chooses the appraiser, and the buyer usually pays for the appraisal.
The down payment is the cash that the buyers bring to the table at the time of closing.
• Represents a percentage of the full purchase price
• For most loans, the entire sales price is not allowed to be borrowed
• It is part of the financing arrangements with the lender
Due diligence is written into the contract for a specific number of days to give a buyer time to look into the property on a deeper level.
- Make several visits during the day and in the evening on the weekend and during the week
- Have a qualified person performa a property inspection - it should expose the major issues that may be hidden, and will identify any safety issues; if there are large problems identified in the report, you should bring in a specialist for that issue to determine if you want to proceed with the sale
- This is your time to research the area, the house, the schools, the zoning, neighborhood safety, etc. You must seek these answers directly; your agent can guide you to the sources, but you are ultimately responsible for making sure you have as much information as possible in order to make an informed decision about whether or not to purchase the property
• Can be purchased by the buyer or the seller
• Plans and prices vary, depending on the warranty company
• Generally covers some of the homes larger items/systems - specifics are written in the contract
• Does not replace home owner's insurance
The final stage of the home buying process is the lender's confirmation of the home's worth, your continued credit-worthiness, and a clear title. This entails a possible survey, appraisal, title search, and a final check of your credit and finance. Your agent will keep you posted on how each if progressing, but, for the most part, your work is done.
You have just a few pre-closing responsibilities:
1. Stay in control of your finances.
2. Return all phone calls and paperwork promptly.
3. Communicate with your agent at least once a week.
4. Several days before closing, confirm with your agent that all your documentation is in place and in order.
5. Follow the closing attorney's instructions for wiring money for the down payment at closing; instructions are given via a secure portal - verify all information you are given by calling the attorney's office directly - do not respond to or follow the directions of an email.
6. Participate in a final walk-through.
On closing day, with the guidance of an attorney, you will sign documents that do the following:
- 1. Finalize your mortgage.
- 2. Pay the seller.
- 3. Pay your closing costs.
- 4. Transfer the title from the seller to you.
- 5. Make arrangements to legally record the transaction as a public record.
- 6. You will get the keys and remote controls, along with any warranty information that was available that you asked for
As long as you have clear expectations and follow directions, closing should be a momentous conclusion to your home-searching process and commencement of your home-owning experience.
FIRST TIME BUYER’S SHOPPING LIST – MOVING IN
• Throw rugs
• Bed linens
• Additional furniture
• Painting supplies
• Window treatments
• Extension cords
• Trash baskets
• Outside mats
• Snow shovel
• Spray nozzle
• Watering can
• Push broom
• A-frame ladder
• Extension ladder
• Lawn edger
• String trimmer
• Hedge trimmer
• Hand pruner
• Hand trowel
• Outdoor furniture
New keys and locks (if not new construction)
Change entry code to security system or garage doors