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First Time Home-buyer? Let's Talk about Money!

By
Real Estate Broker/Owner with Golden Girls with SW Desert Homes BR564219000

First Time Home-buyer?  Let's Talk About Money!

Here's some main questions some of my first time homebuyers have asked me in the past and a brief answer to follow.  I'm not going to address short sale, reo or foreclosed-upon properties, or HUD home questions here because my blog posting will get too long! Please follow the links for more information on those types of transactions.

money

First Time Home-buyer Questions:

How much money do I need?

There are many factors involved, the first being the type of loan you are obtaining financing for in your Arizona State Real Estate Transaction.  I will have asked you to fill out a financing questionnaire with your mortgage officer prior to viewing homes so that you know your purchase power, and the down payment you will be required to make.

After the offer is made, earnest money is addressed.  The earnest money proves to the seller that you are "earnest" about your offer and serious about wanting the house.  EM can typically run any where from $500 to $2000 depending upon purchase price, or perhaps a percentage required by the seller based on list price.

If your offer is accepted, you will then run into escrow costs during the inspection period including the Inspection, the Appraisal, and the Termite Inspection.  Inspections can run $300 and up, and are based on the size and age of the home, Appraisals $375 and up, and Termite - well the company I use a lot charges $26!  Again, these costs are only approximate, based on my current clients of June 2011.

Lastly, are Closing costs:  Typically run about 3% of the price of the home - you will get an estimate from your lender, as well as the HUD-1 from Title and Escrow, prior to signing your closing docs.

Now, with an Arizona contract, buyers may ask for seller contributions to some of these costs, and we can discuss this in a personal conversation when home buying.

 

Is the Seller's Asking Price Fair?  How Low Can I Go?

Every real estate agent is different, but I will tell you up front right now - I am all about fair representation of my client, however, and will provide you with as much information as I can to discover whether or not the list price is fair, and what concessions you might be able to negotiate.  I do this with comparables, history, neighborhood, condition of property and repairs needed, length of time a listing has been for sale, and sometimes a phone call to the seller's agent!  It's good to know with the help of your lender before hand, if a home in a certain price range is within your power to purchase. Let's not try to buy a home you cannot afford by offering a ridiculously low price.


Am I going to get any surprises at closing?

Hopefully not.  The lender, title agent, and agent all work together behind the scenes with the buyer providing as much information as needed in order to close a transaction.  You will be provided a settlement statement before signing papers that will inform you of the amount needed in certified funds or a cashier's check at signing.

And one more thing - signing is not closing.  Closing is when the deed records at the City Clerk downtown and we are permitted to hand over the keys to the new owner.  You will not get the keys at signing, which is typically completed three days before recordation, so that all of the parties can be paid, records documented and transferred, etc.

 

Posted by

If I can assist you in your home buying or selling in Marana, Tucson, Oro Valley, or Vail, please don't hesitate to call me!  Email at Cara@SWDeserthomes.com

Cara Marcelle Mancuso, Golden Girls with SW Desert Homes

520-909-2988   

Regarding the material posted in my blog postings, All listing information is deemed reliable but not guaranteed and should be independently verified through personal inspection by appropriate professionals. Listings displayed on this website may be subject to prior sale or removal from sale; availability of any listing should always be independently verified.

Listing information is provided for consumer personal, non-commercial use, solely to identify potential properties for potential purchase; all other use is strictly prohibited and may violate relevant federal and state law.

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Comments (56)

Cara Marcelle Mancuso
Golden Girls with SW Desert Homes - Tucson, AZ
Call a Marana neighbor, I'm THERE!

Hi Peggy - good to know it applies all over!

John - good faith - yep, it's called that here too.  I tend to interchange the terms.

Ed - Thank you!!  I bought my first home with a blood relative downpayment.  Thank goodness for family!

Pat - Money - no one wants to be in the dark, do they.

Garrigus Real Estate - thanks so much for the reblog!  I agree, when you don't work in the BIZ, it can be daunting!!

Chris - It is good to remember that no detail is too small when you are unfamiliar with the process.  Thanks for your great comment.

Daniel - sounds like you have a great product for your clients in the Greater charlotte area!

Vegas Bob - thanks for the CONNECTION!  I'm honored! 

Gay - I find that my initial conversations with buyers can get very overwhelming with so many details.  One of the reasons for making this post is so that I can send it to my clients and they can "absorb" it at their leisure!  Thanks for commenting. 

Jul 18, 2011 05:28 AM
Karen Steed
Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton - Tallapoosa, GA
Associate Broker Haralson Realty

Nice tips for new homebuyers.  I am going to re-blog if you don't mind.  Congrats on the feature.

Jul 18, 2011 06:07 AM
Deb Espinoza
Stage Presence Homes, San Diego Real Estate - Ramona, CA
GRI, Broker, SRS,ABR ePro, SFR, CNE

Great post Cara. This is a great guide for what a buyer needs to know when planning a home purchase.

Jul 18, 2011 06:34 AM
Ben Blonder
Broker/Owner, Keller Williams - Fort Collins, CO
Buyers, Sellers, Investors!

Great blog! Definitely a good thing for buyers to see. First timers never know what to expect, and although the unexpected usually happens, having a general idea of the process is key.

Jul 18, 2011 08:01 AM
Anonymous
Denise Dimares

Great blog post for first time buyers. 

Jul 18, 2011 08:38 AM
#41
S W
Centerville, KS

Disclosing all of the costs is so crutial with 1st time Buyers. You dont want them to have any surprises along the way!

Jul 18, 2011 09:00 AM
David A. Weaver
Peoples Bank & Trust Co. - Scottsdale, AZ
24 years helping folks finance their dreams.

Well written and well stated.  I appreciate any help I can get as a loan originator in explaining the costs and managing the buyers expectations.  They hear all this from me and it is great that they hear it from you as well.  Validates us both and reinforces our expertise.

Jul 18, 2011 09:32 AM
John Cannata
214-728-0449 http://TexasLoanGuy.com - Frisco, TX
Texas Home Mortgage - Purchase or Refinance

Great information Cara and Congratulations on the Featured Star!! Well deserved for sure.

Jul 18, 2011 11:12 AM
Paddy Deighan MBA JD PhD
http://www.medicalandspaconsulting.com - Vail, CO
Paddy Deighan J.D. Ph.D

all good points...first time home buyers probably have less information going in now than they ever did...very important to get them on teh right path from the start

Jul 18, 2011 11:16 AM
Goran Utvic
Goran Utvic Real Estate Broker/Construction Consultant - Chicago, IL
Chicago 2 Flat Specialist

Cara - Great information for first time buyers. The more a buyer is informed of what the costs of buying a home are...chances are that they will not be surprised or upset at time of closing.

Jul 18, 2011 11:29 AM
Digital Digital
Alachua, FL
full service

Hi Cara,
Great job!
This is a clear and easy to read explanation of the buying process for first time buyers.
Have a wonderful week!

Jul 18, 2011 04:42 PM
Cara Marcelle Mancuso
Golden Girls with SW Desert Homes - Tucson, AZ
Call a Marana neighbor, I'm THERE!

Christina - my clients can get that so mixed up!  Closing takes place after the signatures, money, and documents are all distributed to their proper places and recorded!

Thanks Adam - I was trying to keep it as concise and simple as possible.

Tamara - Don't we all want to know what's going on!?  I'm especially bad at the dentist's office...

John - appreciate your stopping by!

Ben - good point!  Expect ANYTHING!

Scotti - 26$ in Tucson for a termite inspection is a great deal too...that's why we frequent Zeb-Tech!

Kathy - thanks for sharing your own expertise - I appreciate it

Karen- REALLY appreciate the re-blog - thank you!!!

Debbie - I like to have handy little guides to share with my buyers - makes it easy to have it "in writing".

Ben - What a nice comment!  Even repeat buyers some times like to have a "refresher" as well.  :)

Denise - thanks for stopping by

Sean - not the best kind of surprise to find out you must spend MORE money!

David - you made my day.  Thanks for your endorsement!

Hi John C.  - Thank you!  I was just trying to write a simple little post - so the feature was a big surprise!  I was trying to avoid too many explanations and too comprehensive of a post.  

Paddy - Nice point - start out on the right path!

Goran - Nice to meet you.  I certainly don't want my clients upset during their happy buying process!

Wandanna - I love your name! Thanks for visiting and your kind words.

Jul 19, 2011 08:06 AM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

Good explanation.  Many first time buyers get overwhelmed with the issues when working on the purchase.

Jul 19, 2011 09:27 AM
John Green CHP / e-pro/GRI/CBR Residential Real Estate Specialest
Century 21 North Shore - Lynn, MA

Hi Cara good job and well written. What I like to do is a mock offer so when its for real its not the first time they have seen the paper work and hopefully there are no surprises along the way. Thanks

Jul 19, 2011 01:10 PM
Lora "Leah" Stern 914-772-4528
Coldwell Banker, 170 N Main Street, New City NY 10956 - New City, NY
Real Estate Salesperson

Cara, this is a great job of explaining to buyers what to expect in terms of costs in their home buying process.  Even for those buyeres gthat are not first time homebuyers, they often don't remember the costs entailed and/or they were years past and things have changed  This should be required reading for all buyers!

Jul 20, 2011 03:32 PM
Patricia Beck
RE/MAX Properties, Inc., ABR, GRI, SRES - Colorado Springs, CO
Colorado Springs Realty

Informative post answering common questions of first time home buyers.  I've had many buyers ask about the possibility of last minute surprises at closing as well.

Jul 20, 2011 06:30 PM
Cara Marcelle Mancuso
Golden Girls with SW Desert Homes - Tucson, AZ
Call a Marana neighbor, I'm THERE!

Very true, Gene - we have to remember that as "seasoned" agents!

Hi John - sounds like you have some procedures in place that really work for you and your clients.  Great job!

Lora - good reminder - thanks for reading!

Hi Patricia - nobody likes a last minute surprise involving more money, do they!

Jul 21, 2011 06:07 AM
Gerard Gilbers
Higher Authority Markeing - Asheboro, NC
Your Marketing Master

Oh you mean I need to have money for other things other than the down payment! Great post. 

Jul 22, 2011 04:52 PM
Chuck Carstensen
RE/MAX Results - Elk River, MN
Minnesota/Wisconsin Real Estate Expert

The costs add up.  You could have a ZERO Down loan and still need a couple thousand dollars easily to get the home closed.

Jul 25, 2011 12:53 AM
Carlos Evans
Keller Williams Capital Properties - Washington, DC

 Cara, very straight forward and sound information for any first-time homebuyer.   This is so important during the buyer consultation process because it sets the tone throughout the whole process.  Great post!

Jul 25, 2011 11:27 AM