BUYING YOUR NEW HOME
Buying a new home can be an exciting and challenging experience. To help you get started on buying your new home, take advantage of these eight resources.
1. Decide to Buy
The decision to purchase your first home is one of the biggest decisions you will ever make. After all, a home is the largest (and most emotional) investment most people make. So, how do you know if it's the right time for you to buy your first home? There is never a wrong time to buy the right home.
Purchasing your own home provides specific financial advantages, including equity buildup, value appreciation potential and tax benefits. It's also an automatic savings plan that you cannot get from renting!
Here's the most important rule for keeping your stress to a minimum: you don't have to know everything if you hire an agent to represent you that does.
2. Hire Your Agent
When you're looking for a real estate professional to help you, know that above all else, good agents put their clients first. This is your dream, and your agent is your advocate to help you make your dream come true.
Hire a real estate agent that is positioned to:
1. Educate you about the current conditions of the market.
2. Analyze what you want and what you need in your next home.
3. Guide you to homes that fit your criteria.
4. Coordinate the work of other needed professionals throughout the process.
5. Negotiate with the seller on your behalf.
6. Check and double-check paperwork and deadlines.
7. Solve any problems that may arise.
3. Secure Financing
Ultimately, your lender will pre-approve you for a certain amount, but YOU will decide what you're comfortable paying every month. Remember, your lender only sees your finances on paper. It's up to you to decide how much you're willing to stretch your budget in order to get into your dream home. Be sure to follow these six steps to financing your home:
1. Choose a loan officer.
2. Make a loan application and get preapproved.
3. Determine what you want to pay and select a loan option.
4. Submit to the lender an accepted purchase offer contract.
5. Get an appraisal and title commitment.
6. Obtain funding at closing.
4. Find Your Home
Once you are preapproved you are ready to begin your search. Rely on your agent to help you pinpoint homes that fit your criteria. The right home will meet all your important needs, and as many of your additional wants as possible. Some questions you might ask yourself include:
• What do I want my home to be close to?
• How much space do I need and why?
• Which is more critical: location or size?
• Would I be interested in a fixer-upper?
• How important is home value appreciation?
• What features and amenities do I want and what features and amenities do I need?
As you look at homes, your priorities will probably adjust along the way.
5. Make an Offer
Once you've found a home you love, the next step is making a compelling offer. Your agent will research similar properties in the neighborhood to help you determine the market value, and fair price, for your home. Look to your agent to explain and guide you through the offer process.
• The three basic components of your purchase offer are price, terms and contingencies.
• Price is the dollar amount you are willing and able to pay.
• Terms cover the other financial and timing factors that will be included in the offer.
• Contingencies are clauses that let you out of the deal if the house has a problem that didn't exist or which you weren't aware of when you went under contract. They specify any event that will need to take place in order for you to fulfill the contract.
6. Perform Due Diligence
Just because you love a particular property doesn't mean that it's perfect. In fact, this is where reason has to trump emotion. You'll need to have a property inspection that will expose hidden issues. Your main concern is the possibility of structural damage. This can come from water damage, shifting ground, or poor construction when the house was built.
• Don't sweat the small stuff. It's the inspector's job to mark everything discovered no matter how large or small. The inspectors report may be long, but, things that are easily fixed can be overlooked for the time being.
• If you have a big problem show up in your inspection report, you should bring in a specialist and if the worst-case scenario turns out to be true, you might want to walk away from the purchase or renegotiate your offer.
Once you've made your offer and have completed the inspection process, you're in the "home" stretch! But, in order to ensure that you don't put your closing date, or your mortgage at risk, you have a few pre-closing responsibilities that you'll need to be mindful of. These include:
• Staying in control of your credit and finances. If you are tempted to make any large purchases during this time, it's best to talk to your lender first.
• Keeping in touch with your agent and lender, returning all phone calls and completing paperwork promptly.
• Communicating with your agent at least once or twice a week and verifying with your lender that all mortgage funding steps are completed.
• Conducting a final walk-through of the home with your agent.
• Confirming with your agent, home insurance professional, and lender that you have the settlement statement, certified funds, and evidence of insurance lined up prior to closing.
8. Protect Your Investment
Congratulations, and welcome home! The home-buying process is complete. You are a homeowner! It's now your responsibility, and in your best financial interest, to protect your investment for years to come. Performing routine maintenance on your home's systems is always more affordable than having to fix big problems later.
And remember, just because the sale is complete, your relationship with your agent doesn't need to end! After closing, your agent can still help you - providing information for your tax returns, finding contractors and repair services, and even tracking your home's current market value.