How To Buy A Home In Woodbridge Virginia
I bet you've seen numerous websites that talk about various aspects of buying a house, but few of them put all of the pieces together. This post will cover everything from pre-approval for financing to post-settlement offers from insurance companies, in a concise format.
The first thing we do when we go out to make a major purchase is check to see if we have enough money in our bank account to cover the purchase price. It works the same with shopping for a house. You will go to a competent loan officer who will pre-approve you for a home loan, so you know what your down payment, your closing costs, and your monthly payment.
Also, find a competent, experienced REALTOR who can guide you through the process, just like a safari guide would guide would guide you around the snakes, away from the crocodiles, so you can see the elephants and zebras. Your better REALTORS will plug your wish into the MLS computer database with you by their side, pull up the listings, then let YOU choose the listings that you want to see, based on the photos, comments, and features in the homes.
A competent REALTOR will listen to your wishes, and stick to your criteria. If you qualify for a $700,000 house, but you want to spend no more than $575,000, a competent REALTOR will listen to you, and only show you houses up to $575,000.
According the a study by the National Association Of REALTORS, home buyers go through 40+ virtual showings on their computers. Virtual showings includes photo tours and video tours. The typical home shopper goes through 8 physical showings on average before choosing a house. Most folks find their home their first day out in the market, house hunting.
When you find your dream home, your REALTOR will prepare the offer to purchase, then walk you through the paperwork so you are fully prepared for what will happen next when the offer goes to the sellers.
There are four types of offers: Full price offers, and asking the seller to pay buyer closing costs; Over full price offers with the buyers asking for no closing costs assistance when there are other offers at the table; Offers slightly under the list price, with the buyer asking for some or no closing costs assistance; Lowball offers $15,000-$25,000 under the list price.
Most sellers have been prepared to get an offer that is 2%-3% below their asking price, or get their asking price, with a request for a 2%-3% credit to pay buyer closing costs.
The inventory of houses for sale is low in some areas right now, especially updated houses in creampuff condition. If you find a creampuff, expect your REALTOR to call the listing agent to find out if there are other offers on the house. Don't be surprised if sellers say today is Friday, and they will wait through the weekend before reviewing any offers as a way to collect competing offers.
Perhaps you want to be more agressive at finding the seller's bottom line. You can offer below the list price AND ask the seller to contribute 3% of the price toward your closing costs. You'll likely get a counter-offer, but you'll know the seller's bottom line.
You want to make a lowball offer $15,000 below the list price. One of two things will happen: You'll get a rejection with a message to come back when you can afford to buy the house; You will get a hard counter at the list price. Either way, you'll enter negotiations on a sour note and make future negotiations painful.
If your REALTOR is competent, he or she will build in to the contract some contingencies (bail-out clauses) to protect you from buying and over-priced piced of junk house.
The first contingency is a home inspection contingency. This gives you and an inspector the opportunity to go over the house with a fine tooth comb, looking for defect, looking at the heat/AC system to determine when they will need to be replaced, same with the water heater and the roof. Your inspector will write a summary of defects at the end of the inspection. You may submit some or all of the defects to the seller for repair at seller's expense prior to settlement. If the seller refuses to repair those items, you may bail out of the contract with no harm.
The next bail out contingency is the appraisal. A licensed appraiser will go to the house to make a professional determination of value for the bank that is funding your mortgage. The bank does not want to take an over-priced piece of collateral. If the appraisal comes back at the sale price or higher, everybody moves forward at the contract price. However, if the appraisal comes back below the contract price, the seller may lower the price and sell it to you at the lower appraised value, or you can walk away with no harm and no penalty.