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Buying a Home
Buying a home is a complex process whether you are purchasing your first home or your fifth. Coldwell Banker King George Realty has put together some suggestions that we hope will help to make the process smooth and successful.
Consult with Your Lender to Find the Best Mortgage Programs for You…The needs of each buyer are almost as unique as his/her fingerprints. But, in the vast array of mortgage programs that exists, there is at least one that will be most appropriate for you.
An experienced mortgage company should be able to work with you one-on-one to determine exactly which mortgage will meet your individual needs and what you can qualify to purchase, based on your personal information. Four factors interact to define the best mortgage for you: your credit history, the amount of your down payment, closing costs including the origination fees charged by the lender, and the mortgage rate. Applicants with higher credit ratings and/or higher levels of financial reserves generally receive lower mortgage rates. For those with excellent credit, there is even a mortgage that requires 0% down. (For more information on this and other mortgage programs, check our mortgage experts at http://paulalayden.coldwellbankermortgage.com/ )
Compare the Terms of Different Mortgages…Different lenders have varying structures that can affect the amount you pay for your home. An annual percentage rate (APR) includes the actual interest rate of the loan as well as certain fees and costs associated with the loan. Because a customer may be paying points and other closing costs, the APR disclosed may appear to be higher than the actual interest rate quoted for the loan. Not all lenders calculate APR identically; however, it does give customers a relatively fair method of comparing price on their potential loans.
Ask Your Lender For A Pre-Qualified Loan Commitment…This written commitment will help you on two fronts: First, it will clearly define how much you can spend on your new home. Second, when you find the home you want and you make a purchase offer, the seller will take your offer more seriously since s/he can see that you are an “able” buyer.
Make A Shopping List…Your list should have 3 columns: the “Must Haves,” the “Want to Haves” and the “Wish List.” The list should include things such as number of bedrooms, number of baths, lot size, amenities such as lakefront, lake access, lake view, style, fireplaces, saunas – that sort of thing. Be sure to discuss this list in detail with your agent.
Speaking of Agents… Select a Buyer’s Broker to represent you. A buyer’s broker or agent represents the buyer’s interests and can identify homes that are for sale and in the right price range. The broker also can help with writing purchase offers, negotiating the asking price and closing the purchase.
Make an Offer…Shopping for a home is generally a pleasant experience, but making the decision to buy when you’ve found the right property is a huge step. Your buyer’s agent can help you to get the best price by preparing a strategic market analysis that will show you what similar homes in that area have sold for recently.
Your offer should be contingent on several things: 1) you should be able to obtain adequate financing (if you haven’t done so already); 2) you should be able pull out of the transaction if the property doesn’t pass the home inspection and the owner and you cannot come to terms about how to fix the problem; 3) You should have an attorney review clause which allows your attorney to review the terms and conditions of the contract within a specified time after you and the seller have come to an agreement.
Be prepared for counter-offers from the seller and competing offers from other buyers. Make an earnest money deposit, which is a check that you’ll give to your broker to indicate that you’re serious about buying the house. The check will apply to the sale price when the transaction closes. If the transaction doesn’t close and you have performed according to the terms of the contract, applying for your mortgage, doing your inspections in a timely fashion, etc., then you will receive your earnest money deposit back. In the meantime, it will be put into an escrow account where no one can touch it.
Hire an Attorney…Your attorney will deal with the seller’s attorney and make sure that you are buying the property you think you are buying by checking the deed and title prepared by the seller’s attorney. Your attorney should also give you a clear picture of the closing costs, so that you will have an accurate picture of how much cash you will need on closing day. Your attorney and your agent, working together, will bring your transaction to a satisfactory close.
Hire A Home Inspector…Your offer should be contingent on an inspection by a registered home inspector. This inspector can save thousands of dollars by identifying structural problems that might not be visible to the untrained eye. Your contract with the seller will state that any necessary, major repairs will be made before closing title on the property. Prior to closing, you and your agent will do a final walk through to verify that all promised repairs have been completed and that the house is in the same or better condition than when you decided to purchase it.
Buy Homeowners Insurance…Lenders require homeowners insurance to protect the homebuyer’s interests as well as their own. There are many providers, so shop around for rates.
Consider a Home Warranty…You may want to consider purchasing a warranty of the home’s appliances and systems to cover major repairs for the first year. Through our alliance with American Home Shield, we are able to make available to both sellers and buyers a comprehensive home warranty called Coldwell Banker Home Protection Plan that protects against unexpected repairs.
The Closing…This is where the seller and buyer sign settlement-closing papers to transfer the ownership of the home and all transactions are finalized. Working with your buyer’s agent from contract to closing, you should have smooth sailing on the day of closing. Congratulations! And welcome to your new home!