Tips On Buying A Home
Beginning The Process
Organization is the key to finding the home you want while spending the least amount of time and energy.
1. Find out how much house you can afford. Do this before you go house-hunting. We can refer you to a loan officer who can help you determine how much of a down payment you can afford, along with a monthly payment you qualify for.
2. Make a list of everything you want in a home. Is a master suite important? How many bathrooms? What about closet space? Do you need a yard for the kids and pets to play in? How about a fireplace or a bay window? Do you prefer a rambler or multiple-story house? Are schools or access to transportation important?
3. Separate the essentials from the items you could do without and put them on the “A” list. Prioritize the rest of the items into a second and third list in order of importance. .
4. Keep good notes as we look at homes. After a while, it becomes difficult to remember which features belong to what home. If you have a Smartphone, you can easily take pictures.
5. When selecting a home, look beyond cosmetics. Make sure the home is in good physical condition and that you understand the cost of repairs. For more information on how to assess the home’s condition, click the “Home Inspections” link.
6. Look at additional homes, even if you love the first one you see. Many times, it takes looking at several homes before you find the one that is really right for you.
7. Your agent will continue to be on the lookout for homes that suit your needs, so let them know if any of the details of your situation changes.
Closing Costs, Points, And Title Insurance
What Are Closing Costs?
Closing costs are charges paid to various entities during the real estate transaction. They can include escrow fees, document preparation fees, cost of an inspection and lender fees.
What Is A Point?
A point is equal to one percent of the loan principal. Some lenders charge points, in addition to interest and fees, at closing.
What Is Title Insurance?
Title insurance protects against loss from any defects in the legal title, liens against the property or other adverse claims. The lender usually requires title insurance.
When you’re ready to complete a purchase and sale agreement on a home, your offer will generally be contingent on a professional inspection of the entire property, including improvements. The home inspector looks beyond the cosmetics to make sure that the home’s general systems operate properly.
Here are some of the things an inspector will be looking at:
-The home’s heating and cooling system
-Interior plumbing and electrical systems
-The roof, attic and visible insulation
-Walls, ceilings, floors, windows and doors
-Foundation, basement and visible structure.
-Cracks in cement walls, water stains that indicate leakage and any indication of wood rot.
A home inspector will also point out the positive aspects of a home and may warn you of maintenance that will be necessary to keep it in good shape.
Remember, no home is perfect. If problems are found, we will help you negotiate through the process.
How Much Can I Afford?
Before you start looking at homes, it’s a good idea to find a target price range that you can afford. A mortgage lender will want to make sure you can qualify for the down payment, plus a monthly mortgage payment made up of principal, interest, taxes and insurance (PITI).
Interest rates and your personal finances will influence the amount of house you can afford. For a quick estimate of a monthly mortgage payment for which you may qualify, or to see what a how much of a home you might be able to afford, use our mortgage calculator section below.
Just make sure to remember that it’s always good to talk to a lender before you start shopping for a home. We can refer you to lenders suited to your specific financial needs.
Purchase And Sale Agreement
Once you’ve found the home you want to buy, together we’ll complete a purchase and sale agreement. This is the contract in which you and the buyer outline the details of your property transfer. The purchase and sale agreement usually consists of the following pages:
-Earnest money receipt.
-Contingency addendum-when appropriate.
-Addendum outlining special conditions.
-Lead-based paint notification-when appropriate.
In many areas, the following forms will also be a required part of your agreement:
-Property disclosure form completed by the property seller.
Settlement Costs- Who Pays What
During the negotiation stage of the transaction, a mutually agreed-upon date for closing is determined. “Closing” is when you and the seller sign all the paperwork and pay your share of the settlement fees, and the documents are recorded. Settlement obligations vary widely due to specific contract language, local laws and customs. Prior to closing, the closing agent (usually an escrow or title company or attorney) will complete a detailed settlement statement for both buyer and seller.
The Buyer Will Receive
Earnest money deposit
The Buyer Pays
-One-half of escrow or legal fees paid to the attorney or escrow company for preparing the closing
-Document preparation fees
-Recording and notary fees
-Title search and title insurance
-Local transfer taxes, if any
-Repairs or inspections the buyer has agreed to pay for
-Credit report fees