RESIDENTIAL BUYER TIPS

Know What You Can Afford

One of the most important aspects of buying a house is knowing exactly how much you can afford to pay. Decide how big or small of a house payment you are comfortable with making every month. Set a price limit and stick to it! Make sure that your monthly budget has the biggest say in the houses you look at, and only look at houses that you know you can afford. Paying a high price on a home is not a bad thing, especially if it is one you plan on living in for a long time, but it’s good to keep in mind that circumstances can change quickly. Ask yourself if you would be able to keep your home if a job was lost, and think about whether or not you would be able to make a profit if you decide to move in the future. Also, factor in possible future expenses, such as having kids or a new car payment. Make sure that your monthly budget has room for new expenses when necessary and that you are able to save money in preparation for them.

Use Skilled Professionals

When looking for a real estate agent, you are going to want someone that you can rely on to walk you through a process that can sometimes be tough and emotional. The best place to start in your search is to get a personal referral from someone that you trust. If this is not an option for you, you can ask for references. A good real estate agent will be knowledgeable, efficient, and thorough. They will advise Buyers to ask for a home inspection and do a final-walk-through to be sure all repairs have been completed. An agent that is designated as GRI and/or a REALTOR® member has taken the time to do additional education and is held to a higher code of ethics. A strong online presence on social media is important as well. According to the National Association of Realtors, over 90% of new buyers begin their home search online. Also, if you are using a lawyer and not an agent, remember to make sure the Seller signs a Disclosure form! This will give you legal recourse after closing, if needed. Lastly, a good agent will be easily reachable for you.

Get Pre-Approved

If you will need financing, start shopping for a loan early in your buying process. The earlier you can take care of this, the better! Your agent should be able to give you the names of at least three reputable lenders if you do not have connections with one already. Having a pre-approval for your loan will strengthen your offer. Make sure that you have gathered pay stubs, bank statements, tax returns, proof of employment, and a 580+ credit score so that you are ready to provide evidence of the following qualifications:

 

  • Steady income

  • Low to medium debt

  • Cash for down payment/closing

  • Two months of pay stubs and bank statements

  • Two years with the same company or industry

Have a Reasonable Timeline

According to the National Association of Realtors, the average home search takes around 12 weeks. Once your offer on a home is accepted, expect a 30 to 45 day wait before closing with the Title Company. If you are currently renting, it will be a good idea to go month-to-month on your lease, if allowed.

Use All of Your Senses

When walking through a home for a first time, you may not automatically notice problems that would be evident if you lived there. Make it a point to be sensitive to any smells that may lurk within the house, and keep an eye out for details such as cracks in the exterior brick or even mouse droppings on closet shelves.

 

Accept Imperfections

No home is perfect, not even new construction. Know that every home is going to require a project or some sort of upkeep over time and again in the future. Hire an independent inspector to ensure all is up to proper code whether you are buying a home that is pre-owned or new.
 

Understand the Timeline After Offer Acceptance

When your offer is accepted, you can expect to have to take care of the following:

 

•Giving earnest money to Title Company and option money to the Seller

•Inspection and repairs

•Appraisal, if financed

•Home insurance, if preferred

•Finalizing mortgage details, if financed 

•Final walkthrough

 

Expect These Usual Closing Fees:

 

•Property appraisal

•Home inspection

•Processing fee

•Underwriting fee

•Lender fee

•Loan discount fee

•Recording fee

•Settlement officer fee

•Title insurance

•Document preparation fees

•Escrow taxes and insurance

•Prepaid interest

•Credit report

•Transfer taxes

•Attorney/notary fee