Buying a Home, First Time Buyers Guide

Park circle home for saleMany have the American dream of becoming a homeowner and having the ability to make changes as you please, and not fear rent increases or eviction at the end of the lease term. Many of those dreamers have anxiety about what to expect or what will happen during the process.  I want to help guide you through the process and put some of those fears to rest.

Obviously what else would a Realtor say besides “Find a good Realtor”.  I know it sounds like I am edifying my profession, and I am.  If you have a good experienced and honest professional by your side the walk becomes much more illuminated for you.  Second find yourself a good reputable lender.  These two people will be key.

Big banks can offer fair rates but I have found they usually don’t treat your closing with the sense of urgency or importance it deserves.  As one of the larger banks once told me “Just because this is an emergency to you and your client, doesn’t mean it is an emergency to us”.  Gotta love that attitude.  I like smaller banks or lenders that are willing to work hard to get the loan through, and don’t have a pile of closings 2 feet high on their desk.  Let the lender run your credit and review it with them.  If there is a blemish you need to know it.  Listen to advise they can give on improving your score and follow it. Ask questions about closing costs, payments, tax and insurance adjustments, PMI, funding fees, and flood insurance adjustments. If you are a vet with a VA disability make sure your lender knows if you are using a VA loan. I would never recommend an adjustable rate for a home loan, if it is offered run!  Just because you fill out an application with them doesn’t mean you are locked in to use them as your only option.  Once the lender approves you they will issue you an approval letter which you will submit with your offer to let the seller know you are good for the funds.

Take the letter to your Realtor then come up with a strategy.  Think where you want to live, is a single level with no stairs important?  What about a yard or garage?  How many bedrooms and bathrooms do you need? Make of list of needs and wants and let them search.  You are free to search as well.  The third party real estate sites get better and better. Choose a Realtor who is hungry and willing to work, but not starving enough to leave your needs second to theirs. Also ask if they will be working with you the entire time or if you will be passed off to an assistant or team member once the work begins. You want someone who is vested in your closing with you the entire time.

Once you find the home, submit an offer and work on negotiating something you are comfortable with.  Price is always top of the list, but remember things like home warranties, closing costs paid by the seller, personal property to convey with sale like refrigerators and washers, and possibly some repair work that needs done. (I.E Replace missing door to closet) Allow yourself time to close and choose contingencies wisely.  I will list common ones below.

Inspection- This is the first thing you want to do.  Usually it is done within a week of ratification.  Contracts do require licensed professional inspectors now so your brother in law who used to paint homes doesn’t count.  They will give you a list of items they found in the home to review.  All homes have issues unless they are brand new so don’t panic. Look for big things especially like plumbing, electrical issues, leaking roof, foundation issues, water leaks. and foundation items.  A working HVAC system is key as well.  Work with your Realtor on presenting a list to the sellers for repair.  Don’t be to petty, but don’t accept a money pit either. This step is on a timeline so don’t delay or you could lose your rights. Ask for invoices from repairs made by the pros.  If it is something small the seller wants to do, inspect it when he is done.

Next comes the appraisal.  This is done by the lender.  You are not allowed to have contact with the appraiser as our government fears you may try to influence them in some nature.  Possibly offering them a bribe or threatening them with a sharp punch in the face.  This is a step you just need to relax on and wait for the results.  Some appraisals can look for flaws like in VA or FHA loans.  A good Realtor knows this and can warn you ahead of time about certain features that may get flagged.

CL-100 or the termite letter or infestation report is another type of inspection VA requires but most buyers ask for anyway.  Don’t let the termite letter nickname fool you, they look for a lot.  Homes on crawlspace especially need these.  A pest control expert will look around the base of the home and underneath it for mold, mildew, woodrot, bad support beams, missing pilings, standing water, termites, wood boring beetle activity, high moisture content, hanging debris and any other issues under the home that are damaged or may invite damage in the future.  To clear a letter of this nature it must be cleared by a licensed contractor in a letter. Even if the home is on a slab, they will check for rotten wood around doorjams and pest activity. Often times sellers are asked to pay for this item.

Insurance for homeowners can vary greatly.  Shop around and talk about discounts for auto and home bundles.  If you are in a flood zone see if the seller’s policy can transfer. I would recommend 3 homeowner quotes before choosing one.  A good lender can often help with this process.

Once the inspections are done, the lender has collected every last bit of paperwork they need for final approval, and all repairs are made and inspected if needed, you are nearly ready.  A day or two before closing call the utility providers for your area and give them the date of closing and get the bills transferred to your name.  If you don’t and the power or water is terminated by the seller, you may be stuck with fees to get them set up again.  Not cool.

The day before or morning of the closing do a final inspection of the home to make sure everything is as you remember it and everything is in order.  At closing your attorney will have you sign about an inch of paperwork and the keys will be yours.  Invite your friends with strong backs and pick up trucks to help you move, and enjoy your new home!

Brandname Real Estate is happy to represent buyers. We even have a wonderful app for your phone.  It doesn’t capture leads or tell me what you viewed.  It just sends any inquiries you make to me. If you have questions about buying a home or would like more information please contact me.

 

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