Few people can buy a home for cash. According to the National Association of Realtors®, nearly 9 out of 10 buyers finance their purchase, which means they will need mortgage financing. Lending requirements have changed drastically over the last couple of years making it more important than ever to make sure that you have started the mortgage process long before making an offer on a home. Additionally, nearly all sellers are going to ask for a copy of the buyer’s pre-approval letter before considering an offer. A pre-approval is not the same as a final loan commitment, however it does demonstrate to the seller that your credit history has been reviewed and the loan officer believes that you can readily qualify for the home. A pre-approval from a competent mortgage professional gives you credibility in your negotiations, and also gives you peace of mind that you are shopping in the right price range, well on your way to a home you can afford. Terri & Company Realtors® can recommend a number of top notch mortgage professionals who can offer you a no charge pre-approval. Click here to view our mortgage partners.
Find a Home
When searching for a home, it is important that you know what you are looking for. A great way to do this is to sit down and create a list of “must have’s”, and “would like’s”. The following are some of the most important things to consider; 1) Location – you may have heard that real estate is all about location, this is especially true in the current market. Location is one of the few things about a house that cannot be changed, and it can often times carry a premium. A “hot” area is going to cost you a little more, but it may hold its value better than some areas that are further out. 2) Schools – Schools are important even if you don’t have children. In general, areas with good schools are going to be more desirable to a larger number of buyers. If you are in an area with top schools, you tend to see neighborhoods that are well maintained with obvious pride in ownership. People are willing to pay more for top schools, and it is important for resale. 3) Number of Bedrooms and Baths, what is the minimum number of each that is acceptable for your needs? Eliminate any properties that are lacking in either. 4) Any other necessities? Make a list of these items and give them to your Realtor®. You can waste valuable time by looking at homes that don’t meet your criteria. 5) Consider how taxes and HOA or POA fees will impact your monthly payment. Above all, you want to make sure that you only look at homes that fit comfortably in your budget. Items like high taxes or homeowner fees can have a big effect on your monthly payment.
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Write an Offer
Once we find the right home, it is time to prepare the offer. Your Terri & Company Realtor® will research to see how long the home has been on the market, what the owner paid for the property, and review recent home sales in the area. When negotiating, we always want to negotiate based on fair market value, not necessarily just based on the list price. Homes that are priced well will tend to sell closer to the asking price, while homes that are priced high will either sell for much lower, or not at all. Items that can be negotiated are who will pay closing costs, what the closing date will be, and how long we will have to complete due diligence items such as inspections. When purchasing a home that is either a foreclosure or a short sale, there are some other important things to keep in mind. I invite you to look at the following links for more details on buying those types of properties. Buying Foreclosures. Buying Short Sales.
Inspect the House/ Negotiate Repairs
It is always recommended that you get a home inspection before you purchase a property. Even when you are making an As-Is purchase, you still have the right to do an inspection. In most cases we will be able to negotiate a due-diligence period to conduct your inspections. Although a home inspection will cost a few hundred dollars, it is ultimately less expensive than making a purchase and then discovering a major defect after the fact. Depending on the type of seller we are dealing with, we can try and negotiate repairs to be completed prior to closing. Sometimes repairs are not an option, which is another reason that a home inspection is absolutely critical. You need to know what you are buying. Terri & Company Realtors® can recommend a number of Independent Home Inspectors to assist you with this process. Vendors and Services
Closing
On average, closing will take place between 30 and 45 days from the time your contract goes binding. Terri & Company Realtors® has an in-house attorney, Jeff Bowers, of The Bowers Law Firm who offers exceptional service to all of our clients. The closing attorney will research the title to be sure it is free and clear of any liens and encumbrances, and will also make title insurance available to you. We recommend that all buyers purchase Owners Title Insurance to protect their investment from any potential issues that may arise in the future. Click here for more information on The Bowers Law Firm.
