TIPS FOR BUYING
First main tip - Hire me! I will guide you through the entire process making it as easy as possible for you!
Get a Pre-Approval statement
IMPORTANT! This is a MUST! Before you start shopping, it’s important to get an idea of how much a lender will give you to purchase your first home. You may think you can afford a $300,000 home, but lenders may think you’re only good for $200,000 based on factors like how much other debt you have, your monthly income, and how long you’ve been at your current job. Suggestions on various lenders provided on the Preferred Lenders page or click the Pre-Approval tab at the top of the home page and get pre-approved now.
Set your budget
Let your pre-approval help guide you to a budget that you can realistically afford and stick to it! Don’t go over your budget for a home, even if it seems perfect for you, and be sure you budget in enough money for repairs or renovations if needed. The right home is out there for you, so keep searching until you find a home that fits your budget and your list of must-haves.
Lending and mortgage financing
Speak with your lender about the different financing and loan options available and what would be best for you. Be sure to ask about down payments, closing costs, various fees, how much the principal on the mortgage will be, then factor in the amount of interest costs, home insurance costs, property tax costs and if you will have a PMI – how much additional will the PMI cost? Other closing costs can include loan origination fees, title insurance, surveys, taxes, and credit report charges. This will give you a rough estimate on how much your monthly mortgage payments will be.
WARNING: VERY SERIOUS! SERIOUSLY, I'M NOT KIDDING!
Do not make any significant purchases, finance anything, purchase large items, etc. while going through the closing and financial process. Only make purchases that are for your day-to-day items such as bills, groceries, gas, etc. Any large purchases or any additional financing, can be dinged against you at closing and can hinder or deny a final approval. Do not make any large purchases until the process is closed and you have the keys in hand!
Closing Costs vs. Down Payment
Down payment and closing costs are two different things. Knowing the difference between closing costs and down payment is essential. They are two different forms of funds that you will potentially need to bring with you to the closing table. Make sure that you ask your lender to break down the difference and know exactly how much you will need to bring for closing costs (depending on financing or incentives) or you may have to have the funds for both. Know the difference! Make sure you ask your lender about the two.
Be available to your Real Estate Agent
Be available. During a transaction, there will be items that are time sensitive. It is imperative that you are able to return phone calls the same day whenever possible, and that you can sign documents in a timely manner. If for any reason you cannot, please let me know so that we can make arrangements on our end. Most documents can be signed electronically so having your smart phone, computer or WIFI tablet available is strongly suggested.
Home Owners Association (HOA)
If moving into a Home Owners Association (HOA) community, find out how much per month, quarter or year those dues will be. You may have to pay a fee upfront during closing for the current dues.
Type of home or property you are looking for
- Single Family Home – example: a home in a standard neighborhood.
- Multi-Family Home – example: a property with two or more units.
- Condominium – example: a large property complex comprised of individual units, and each unit is owned separately.
- Townhouse – example: home that shares one to two walls with adjacent properties but have their own entrances.
Note: When purchasing a mobile or manufactured home, condo or a townhouse, ask your lender about lending restrictions on those particular types of properties. Lenders have strict guidelines for financing on a mobile or manufactured home, townhouse or condo. Some lenders will not finance mobile or manufactured homes.
Your wants and needs in a home
Location, specific school district, size of home, number of bedrooms and bathrooms, single story vs. two story, open floor plan or traditional style, new construction vs. previously owned, large yard, community amenities, etc.
Keep in mind to be open and flexible in some desires and stay firm in others. This is a large purchase and you want to purchase a home that fits both your needs and wants as closely as possible.
Have the home inspected
Even if the home that you plan to purchase appears to be flawless, there’s no substitute for having a trained professional do a home inspection of the property for the quality, safety, and overall condition of your potential new home. You don’t want to get stuck with a money pit or with the headache of performing a lot of unexpected repairs. Yes, even in new construction homes.
Note: If the home inspection reveals serious defects that the seller did not disclose, then you’ll generally be able to rescind your offer and get your deposit back. Alternatively, you can negotiate to have the seller make the repairs or discount the selling price.
Save all of your paperwork
Now days it seems all documents go to the Cloud but be sure to save all of your documents, scans, correspondence on a personal computer, device or thumb drive. Do not save any of your information on work electronics or files. You will be required to send copies or scans of very important and confidential information and you want to make sure that only you, and those required, have access to that information.
Ask Questions!!!
Ask questions and voice concerns so that your real estate agent can help answer those questions or concerns so that you can make an informed decision. Do not be afraid to ask as many questions as you have. I am here to help you and guide you through this process.
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Be sure to consider the upfront costs of buying a home in order to determine if you have the appropriate cash reserves to get started. Some of these costs can be rolled into your closing costs but some will have to be paid upfront. Talk with your lender.
Things to keep in mind:
Earnest money - typically 1% of sales price - earnest money may be negotiable and it varies with the value of the property.
Inspection Fees - $500 - $1,000+
Appraisal - $325 - $825 (varies per sq. ft.)
Credit Report - $75 (varies by lender)
Attorney's Fees - $900 - $1,500+
Miscellaneous Fees
**** Amounts may vary