Better Homes and Gardens Real Estate Life

Tag: buying a house

  • First Time Home Buyer? Ten Facts Nobody Tells You

    Buying your first home can feel like both the best of times and the worst of times. Here are 10 facts nobody tells you when you’re buying your first home.

    1. Something will go wrong

    No move is ever perfect. Something will get broken or there will be something you’ve forgotten to bring or do. With any luck, the setback will be minor, and you can chalk it up to the old adage, “things happen.”

    2. Some of your conditions might not be met

    One of the least enforceable clauses in offers to purchase is one for cleaning requests. You can stipulate that carpets, refrigerators and ovens be cleaned. However, if they haven’t been, there is often very little that you can do about it.

    If a major repair hasn’t been completed as promised, one of two things will happen: you either won’t take possession of the property on the day you planned or your funds will have to be placed in escrow pending resolution of the issue.

    3. If you don’t have the closing fees, you don’t get your new home

    Legal fees are due on closing, and your funds won’t be released to the seller unless your lawyer is paid. Closing costs usually range from two to five percent of the purchase price, but be sure to verify this information before arriving on closing day. This money is in addition to your down payment.

    4. Good schools increase a home’s value

    You’ll pay more for a house in a good school district. Of course, the good news is you’ll get more for it when you decide to sell. If the home you’re planning to buy is your “forever” home and you don’t have, or plan to have children, this may not matter. Still, it’s something to think about.

    5. Your neighborhood may be about to change drastically

    The municipality may be planning a park, a school, or a playground for your area. Depending on your lifestyle, that can mean profound changes in a short period of time. Check with local administration and the area’s local representative. The first can tell you what the plan is. The latter will have a far better grasp of whether outlined timelines are accurate or not. You can base your decision on the information they provide.

    6. You need to read all the documents yourself

    It’s tempting when you’re paying a lawyer to review HOA or condo documents to simply delegate this task. However, a close reading of the minutes of meetings will teach you a lot about your neighbors-to-be and help you avoid nasty surprises, like planned increases in fees or devolving renovations that used to be the condo board, or HOA’s responsibility to individual owners.

    7. Don’t apply for other credit while mortgage shopping

    Applying for a loan or another credit card may seem like a good idea when you’re about to take the home ownership plunge and know you’re going to need to buy things like garden tools, a gazebo, and a grill. Don’t do it unless absolutely necessary. It can negatively affect not only the amount of your pre-approved mortgage, but it can also mean you don’t get pre-approval. Wait until after you’ve bought your home to apply for more credit.

    8. You’re going to need “earnest” money

    Also known as a deposit, you’ll likely need about $1000 per $100,000 worth of house available when you make an offer. This money is required as a show of good faith and will be held in escrow. You’ll get it back if your offer isn’t accepted, or it may be applied to your down payment. You may forfeit this money, though, if you’re the one who withdraws from the deal.

    9. Your neighbors-to-be may be your best source of information

    Walk around the area you where you want to live. If you see people out gardening or mowing their lawns, talk to them. Strike up a conversation and explain that you’re thinking of buying. Ask receptive individuals what the neighborhood is like, how long they’ve lived there, and how long they’re planning to stay. If you learn that your new home is located next door to some party animals who blast music every single summer evening, you may not enjoy your own backyard, so you may want to reconsider.

    10. Check for rebates you may be entitled to

    You may qualify for first-time homeowner rebates. There may be other municipal, state, or utility-provider rebates available, too. Start investigating early. It may make more sense to invest in attic insulation than an air conditioner if you’re going to get a rebate that covers some or all the cost of the insulation. Some areas offer rebates on newer, more energy-efficient appliances. You won’t know that unless you do your homework.

    A good real estate agent can talk you through the buying process. Now you’re already ahead of the game with these ten facts nobody tells you, and you’ll be able to focus on offer strategy rather than the fundamentals.

  • Seven Ways to Simplify the Process of Buying a House

    Whether it’s your first house or what you hope will be your last, buying a house is often a very stressful process. Until the moment you take possession of your home, there’s always a chance something could go wrong. Here are seven ways to simplify the process of buying a house.

    1. Get your paperwork in order

    Start getting your paperwork in order before you even start looking at properties online. If you’re applying for a loan, you’ll need your last two years’ worth of tax returns, current pay stubs, bank statements for the last three months, cancelled rent checks, or copies of your lease. You may also need your divorce decree and bankruptcy paperwork if either of those situations apply. Remember that getting money out of a 401k or a trust for your down payment or outright purchase can take longer than you anticipate, so find out how long it’s going to take and what’s involved if that’s a route you’re considering.

    2. Find a real estate agent you can trust

    Before you start the mortgage or loan application process, finding out what’s going on in the market is vital. Interview at least three real estate agents, and listen to what they say about what you’re likely to get for the house you’re selling. In addition, speak with them about what you’ll likely pay for your new one.

    Once you’ve heard the same price ranges three times (assuming all the agents you meet with agree, which they should), choose the agent with the best track record of sales in your area, the best online or personal recommendations, and the one you like best. Staging, keeping a home show-ready, and listening to tactfully delivered feedback from people who’ve viewed your home means you’re going to be interacting with your agent a lot.

    3. Start researching banks, credit unions, and loan officers

    While it might seem simpler to use a bank or credit union that offers home buyers one-stop shopping, what the term really means is the bank has a vested interest in the sale through controlled business arrangements with realtors, attorneys, and possibly even home inspectors, and may receive a portion of the commissions. That’s no way to guarantee objectivity. To check a loan officer’s record, ask for their ID number and take a look at NMLS Consumer Access. If you’re using a mortgage broker, check their credentials with the Better Business Bureau.

    4. Get your financing in order

    Once you’ve chosen your loan officer, bank, credit union, or mortgage broker, get pre-approved for a loan or mortgage and get a pre-approval letter. This will not only help you figure out what you can afford before you start looking, it tells realtors and sellers you’re serious. Depending on how long your search takes, you may need to renew your pre-approval—they’re usually only valid for 60 to 90 days.

    5. Find a home inspector you can trust

    If you’re looking at older homes, a good home inspector will be able to warn you of areas where there are problems with termites, water seepage, or shoddy construction. Do your due diligence. One of the best ways to find a good home inspector is to talk to a tradesperson you’ve used in the past, one who takes pride in their work and wants everyone in the industry to do the same. Try to find a home inspector who’ll let you accompany them when they make their inspection so you can ask questions on the spot.

    6. Consider investing in title insurance

    While it may seem like an unnecessary expense, making sure there are no liens against the property you’re buying is important. The last thing anyone needs is to find out the home they just bought is owned by someone other than its previous occupant. It costs between $1,000 and $3,000 on average, or .05 percent of the purchase price. You can sometimes get a reissued title insurance policy if the seller went through this process. That can save you some money. Get your real estate agent to ask the seller’s realtor about this. Additionally, some banks may require you obtain title insurance if you’re getting a mortgage, so be sure to inquire with your lending officer.

    7. Get your tradespeople lined up

    If you’re already a homeowner and have been through renovations or repairs,  you may have a plumber, an electrician, a roofer, a flooring person and a general carpenter you know and trust. If you’re moving to a new city or you’re a first-time homebuyer, you’re going to have to rely on in-person and online recommendations.

    One of the best places to find good tradespeople is an independent home supplier. They know who’s sloppy and who’s not, and they’ll often have business cards for tradespeople behind the counter. Here’s hoping these seven ways to simplify the process of buying a house make the experience a little less stressful. Happy hunting!