| Here's an outline describing the process of buying a | | | | In moving on, once you're ready to sign the contract, |
| home with some first time home buyer tips. | | | | your attorney will review items in the contract and |
| First thing's first, relax. I know how you feel. I bought 2 | | | | protect you legally. Both the seller and you, the buyer, |
| homes before I became a real estate agent. I look | | | | have to be represented equally. Things like certificate |
| back and if I could say one thing to myself then, I | | | | of occupancy, survey, title work, mortgage |
| would say, "Relax and enjoy this. Have fun!" So in the | | | | contingencies, etc. will all be worked out in this contract. |
| process of buying a home, remember, relaxing and | | | | As a Licensed Real Estate Salesperson, I only show |
| taking things one day at a time is paramount! | | | | homes and help people buy and sell them. I do not |
| Here's the "nuts and bolts" of the process. Remember, | | | | render legal advise, so it's important that you hire an |
| first thing is...R E L A X. Now I will take you through the | | | | attorney you are comfortable with, who can handle |
| rest of the typical process. I'm going to just focus on | | | | your legal representation to your satisfaction. |
| when you make an offer and go from there. | | | | Once you're in fully executed contract, where both you |
| However, before any of this, you must do three things. | | | | and the seller(s) have signed an agreeable contract, |
| One, determine how much you can afford on a | | | | you will then move to acquire an appraisal of the |
| monthly basis (write down your monthly income and | | | | home you're purchasing. This is required by you bank, |
| write down your expenses, including some for | | | | to establish the value of the home. The appraised |
| savings), this will give you what you can afford to | | | | value usually always comes in very close to the |
| manage the home (Principal, Interest, Taxes, Insurance, | | | | agreed upon sales price. However, with changes to |
| Heat, Electric). | | | | Home Valuation Code of Conduct (HVCC's), there has |
| Two, meet with a mortgage professional and get | | | | been an increasing number of homes that have |
| pre-approved for a mortgage. Without this, you are | | | | received low appraisals (a symptom of the tightening in |
| driving blind, because you have no idea which direction | | | | the industry). Something I am well aware (lucky for my |
| you should be going. Without knowing what you're | | | | clients). |
| qualified for, how do you know what price range you | | | | Once you've gotten this completed, it's very important |
| should be looking in? The mortgage pre-approval is the | | | | that you follow up with your lender to assure that you |
| foundation of your entire search. | | | | receive your mortgage commitment in a timely fashion. |
| Three, discuss your needs and preferences for the | | | | It's also very important that your attorney do his/her |
| home and neighborhood you'd like to buy. Be realistic. | | | | part in ordering the title work and seeing to it that it is |
| Remember, this is a starter home most likely and over | | | | acceptable and that there are no issues to be |
| 70% of home buyers move after 7.5 years. Things | | | | addressed in the last minute. Being prepared and on |
| change, families grow, money is greater, etc, so people | | | | the ball is the key. |
| "upgrade" or just move to another area. | | | | Last minute items that you will need to address will be |
| Okay so we've got those basic items out of the way. | | | | your money at closing and your home insurance. You |
| Now you find the home (easier said than done...make it | | | | should get quotes from companies ahead of time, |
| easier!). You make an offer. Once the offer is | | | | during the beginning stages of your contract period. |
| accepted, your offer will most likely be contingent on | | | | This way, in the last two weeks before your closing, |
| an engineer inspection of the property. To this point, no | | | | you know exactly who to contact to get your proof of |
| money is put down and you are not in contract. The | | | | insurance. |
| purpose of the engineer inspection is to allow you to | | | | Things to prepare yourself for include the need for a |
| have a professional look at the home before going into | | | | new survey. Sometimes, a survey on a home can be |
| contract. | | | | old or not acceptable due to any number of issues. So |
| Normally, any issues that are noticed during the | | | | at times, you will have to pay for a new survey or an |
| inspection, are discussed up front, before the seller's | | | | updated one from the company that did the original |
| attorney sends your attorney a contract of sale. This | | | | survey (if they're still in business). This can be an |
| allows for a smooth transition for the lawyers to | | | | unexpected cost, but in my opinion, a good expense. I |
| execute a contract. | | | | believe every buyer should pay for a brand new |
| Once the inspection process is completed and any | | | | survey of their land. But that's my opinion. |
| issues are addressed, you will be meeting with your | | | | Now in a worst case scenario, your lender may be |
| attorney to sign a contract. Just a few notes here are | | | | laxed in underwriting your loan. This is where things can |
| needed. | | | | get very uncomfortable and tense. It's important that |
| One, the purpose of an engineer inspection is not to | | | | you not focus solely on the "best rate", but rather |
| renegotiate the offering price. During your time of | | | | focus on a the "best bank". What do I mean by "best |
| viewing the home before the inspection and before | | | | bank", give me a call and we can discuss that further. |
| the offer, it's important to pre-inspect the property the | | | | But I'll give you a hint, a bank that underwrites its own |
| best you can and make notes of any little items that | | | | loans and has comprehensive services (not just basic |
| may need attention such as a leaky faucet or old | | | | qualification of your credit and work history) is the bank |
| water heater that needs replacement. All this should | | | | to seriously consider. |
| be taken into account before you make your initial | | | | On the day of the closing, you will have hopefully |
| offer. The purpose of an engineer inspection is to | | | | gotten "the numbers" from your attorney and you will |
| review electrical, plumbing, heating, and foundation | | | | get any money you need for closing in a certified |
| structural components of the home and not for a | | | | check from your personal bank. You will bring that |
| running toilet or a sliding glass door that's hard to close. | | | | along with your check book and some cash to the |
| Secondly, understand that during this process where | | | | closing. The cash is for the title agent at the closing, as |
| your offer has been accepted by the seller and you | | | | it is common to tip them. |
| move to get an inspection and work things out with | | | | It is an exciting experience and with a good team of |
| your contract, that the home could still be sold to | | | | professionals helping you (real estate agent, attorney, |
| another party. You are not in contract until you (the | | | | lending institution), the process of buying your first |
| buyer) and the seller(s) have signed a complete | | | | home should be both a little "terrifying" and mostly fun! |
| contract that is agreeable to both parties. So moving | | | | Good luck! |
| somewhat swiftly is advisable. | | | | |