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Buying a Home: Things to make your life easier

Real Estate Broker/Owner Gillum Group Real Estate

Buying a new home is a rollercoaster of emotions.  It's such an exciting time yet it can also be pretty stressful.  To help maintain your sanity level during the process, here's a list of helpful things to know:


1.  Get pre-approved BEFORE you start the house hunting.

There's nothing worse than falling in love with a house just to end up losing out on it because you aren't pre-approved.  Having a mortgage lender pre-approve you for a loan will give you a clear sense of how much house you can afford.  It also tells the sellers that you are a serious buyer who is approved for financing.  We have seen too many scenarios of heart-broken buyers lose out on the house they want because they didn't have their financing taken care of beforehand.  If you're in need of a local lender to pre-approve you for a loan let us know!


2.  The assessment is not the same as the value.

If you're one of those people that check out the county assessor's page on a home you're interested in, that's great!  The more information you have, the better.  However, please understand the "assessed value" is not the "market value".  The assessed value is a number the county uses for tax purposes.  It is in no way an indication of the market value.  Only a licensed real estate agent or an appraiser can give you an accurate market value on the home.  Often, buyers see the assessed value is lower than the asking price of a home which leads them to believe the price is too high when in reality it's probably priced right at the market value. 


3.  You'll be paying more than just a mortgage payment.

Along with the principal and interest of your mortgage payment, there are a few other items you'll have to pay.  Most mortgage companies require you to carry home owners insurance on the property to cover the loan in case your house is ever destroyed.  You will need to pay the annual policy once a year to your insurance agent or monthly with your mortgage payment.  If you pay it monthly, your lender establishes an escrow account for you.  This account holds your monthly insurance payments and when the premium is due the lender will pay your insurance company out of the funds accrued in your escrow account.  In addition to insurance, you're required to pay property taxes to the county your house is located in. The taxes can be paid monthly with your mortgage payment to be held in your escrow account or you can pay the county directly.  In Iowa there are 2 due dates per year for property taxes, March 1st and September 1st.  

If you're purchasing a property within a Homeowners Association you may have a monthly or yearly association fee.


4.  An appraisal is not the same as a home inspection.

Your lending institution will likely require an appraisal on the home you are purchasing.  This appraisal will tell the bank the value of the home.  Most appraisers will go through the home and note the condition of the property - they are looking for things that will affect the value.  This appraisal does not constitute as a buyer's home inspection.  We reccomend to make your offer contingent upon a satisfactory home inspection.  It's highly encouraged to hire a licensed property inspector to walk through the home with you.  The inspector will check things like plumbing, electrical, roof, foundation, and other structural areas.  If something is dangerous or needing replaced the inspector will point it out to you.  Then it's up to you and your agent to negotiate with the sellers to have the items addressed.  

To have peace of mind that your new home is a safe place for your family to live in, a home inspection is your best bet.  Inspections usually run around $400-$500 and payment is due at the time of the inspection.

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