Let the celebration begin! 2016 is almost here and as we reflect on 2015 goals, met or almost met, we can start to plan for next year. For many, homeownership was on the radar but with so much uncertainty in the economy there may have been a bit of caution and missed opportunities. There is no way we can see into the future but what you can be assured of is as long as you are paying rent you are contributing to someone else's future rather than your own - your landlord is growing their wealth while you continue to fall behind. The numbers do not lie. As you pay rent each and every month there is a big fat ZERO of equity at the end of your lease. With mortgage payments a portion goes towards your equity so when you are ready to upgrade your home, or have to move to a new city because your career is growing, you will be ahead. With mortgage rates historically low now is the time to take advantage of home ownership and the purchasing power that this gives you. This is why I put together the steps to help make homeownership a reality, to contribute to your future, and to cut off your landlord.
The first step is deciding to buy and I have already covered some reasons to help bring you to that decision. There is a lot to think about when making this type of purchase. For most of us, it will be the biggest and most important purchase we will make in our life time. Know that you do not need to be an expert in the real estate market, chose a local Realtor® to serve as your expert and enjoy the experience.
That brings me to step two, hire your agent. Finding the right agent is very important and the secret is find the agent who puts you, the client, first. Your agent should be able to educate you about the market, analyze your want and needs, guide you to homes that fit your criteria, coordinate the work of other needed professionals, negotiate on your behalf, check and double check paperwork along with deadlines and solve any problems that may arise without complaint.
Step number three is very important unless you have cash to buy and that is securing financing. This will tell you how much home you can afford and there are several mortgage programs available but they have a few things in common. They all look at your credit but not all have the same guidelines, and they want you to prove the ability to repay. Do not assume your credit is not strong enough or you do not have enough money for a down payment. Many buyers have been surprised of the programs available to them that help obtain their dream of owning a home. Remember, your rate and credit will determine how much home you can purchase. You can control your credit but the rate you cannot control. As mentioned before, rates are at a historical low and there is no way to know when they will rise and take away your purchasing power.
Now that you have secured your financing it's time for step number four -find your home. This is the time you will sit with your Realtor® and review your specific needs and wants. There is a lot that goes into this conversation from location, size, single family or condo, along with features and amenities. It's good to note that you may start with one direction but as you continue to view different properties that you may make a few adjustments and that is okay. Remember to have fun on this step you do not usually buy a home very often so enjoy this time and if it takes awhile until you find the right home you will have some good stories to share when you have your house warming party.
Congratulations you have found your home and now you are ready for step number five make your offer. There are three key components of an offer - price, terms and contingencies. Price is obviously the amount you are willing to pay for the property. Terms cover the financial parts and timing factors that will be included in your offer. Contingencies are clauses that let you out of the contract if the house has problems that didn't exist or that you were not aware of at the time of the contract. Once your Realtor® has provided information about the fair market value you will be able to know the right price for the property. Look to your Realtor® for their expertise and the ability to provide the data about the area that you want and need.
Wow! We have come a long way but now it's time for some home work because your offer is accepted and taken us to the final steps. Steps number six - perform due diligence and communicate with your lender. This is the time that logic has to trump emotion and where we always remind our buyers to not fall in love with the home until you get the keys in your hand at the closing table. The home will need to be inspected and this is when the home inspector will discover this issues no matter how large or small and sometimes the inspection report can be very lengthy. This is the time that you will decide if you want to take on the issues or move on. The other side is the underwriter and they can seem to be very needy at times asking for all kinds of documents and questioning every dollar in your account. Be sure not to utilize your credit at this time by completing a department store credit card to save money off of a purchase or that desire to buy a new car. Hold off until after your purchase your home because it could kill your financing and 'bye bye new home'.
Well we have made it to step seven - closing. Be sure to stay in touch with your lender and Realtor® they may need to have documents signed or sent into the underwriter as the closing deadline is around the corner and you do not want a delay. Time to get your homeowners insurance established and your agent will let you know about all your utilities contacts so they will be turned on when you are ready to move in. WooooooHooooo!! You are now a home owner with keys in hand. Way to go! You Did it!!!
But wait... you are almost done step eight protect your investment for years to come. It is better to keep up than catch up; for maintaining your home fix the small things watch for leaks, damage and wear. When a storm passes through take a walk around your home inside and out. It is easier to fix small problems than bigger ones and a lot less money. Now your Realtor's® job is not over either. They can help with information about your tax returns, finding contractors and repair services and a great resource for tracking your homes current market value.
There is a lot that goes into buying your home but with the right Realtor® your home buying process can be seamless and an enjoyable experience with lots of great memories. If you are thinking about buying or know someone who is thinking about buying we can help at The RJ Realtor Team w/ Empire Network Realty. Call us at 407-454-9800 and ask for Ron or Jennifer to set up an appointment today.
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