schematic steps to help
you buy your home
Buying a home is one
of the biggest investments most people make in their
lifetime. But the home-buying process should be neither
scary nor intimidating. Our step-by-step guide gives the
buyer a better understanding of expectations of their
realtor, the best places to look for a loan, and tips on
closing the deal.
Both knowledge and
experience are two of the most important factors in
completing a successful real estate transaction.
homefloridarealty.net is a good place to start when
researching for valuable information. They offer expert
realtors that are experienced in the local real estate
industry. Planning is one of the most valuable keys to
making the home-buying process easier and more
understandable. With the proper planning you will be readily
prepared for requests from lawyers, lenders, and other
professionals. This will also help to expedite your
home-buying process.
Do You Know What
You Want?
Experienced
home-buyers and first-time buyers need to ask yourselves why
you want to buy. Is there a time frame in buying involved in
your new purchase? Is there a lifestyle change involved in
moving to a new community? Is buying an option or a
requirement? What features in real estate are you looking
for that you do not now have? Ask yourself these questions.
The more knowledgeable you are in the real estate
marketplace, the easier it will be to answer these questions
and reach your buying goals. A good suggestion is to ask
some of these questions when meeting with your local real
estate agent and discuss them in detail to give you a finer
understanding of your buying needs.
Do You Have the
Money?
Homes and financing
are similarly intertwined. (Financing is the difference
between the purchase price and the down-payment, commonly
referred to as debt or the mortgage.) Fortunately, in recent
years, new and emerging loan programs have evolved which now
require a five percent down-payment or less which makes it
easier for the buyer. There are closing costs involved when
making a down-payment of a property (the final cost
associated with closing the loan). But now there are even
programs available for the buyer to make a purchase with no
down-payment as well as underwriting closing costs.
However, not everybody is interested in the concept of
little or no money down. Although there are benefits with a
little or no down-payment one repercussion is a higher
mortgage payment. Therefore, many buyers decide to put some
money down. In some markets the buyer has leverage. In this
case it may be possible to negotiate an offer for a home
that mandates that the owner pay some or all of the
settlement expenses at closing. Be sure to ask your realtor
for details.
Is Your Financial
House in Order?
With good credit you
should qualify for a loan with little or no money down.
Start preparing for this loan about a year ahead of time. Be
sure to pay every credit card payment, car payment, rent and
any other debt in full and on time.
Here is a list of
financial mistakes that consumers routinely make and you
should avoid 10 things to avoid when financing your home
Choose the wrong mortgage: Home loans are no longer a
lifetime commitment like they used to be. However, you don't
want to be stuck with wrong one even if it's a shorter one.
It is important to research all of your options and weigh
out the pros and cons of each one comparing worst-case
scenarios. Important factors to look for are initial and
future interest rates and payments, and prepayment
penalties, if any.
Confuse
"Pre-Approved" and "Pre-Qualified" with a Loan Commitment:
Not all lenders exercise the same definition for each of
these expressions. Nonetheless, "pre- qualified" is an
educated guess on how much you can borrow according to the
information you have provided for them. When you have been
"pre-approved" this means that all of that information has
been verified and is offering to lend you a certain amount
at current interest rates. Certain conditions will apply.
Either way, a loan commitment is subject to an appraisal
satisfactory to the lender and a last minute credit check as
well as other verifications. When meeting with a lender be
sure to ask him/her to define each term so you will be
prepared to take the proper steps when applying for the
loan.
Have Too
Much Credit: Having too much credit is almost as
bad as having no credit or even bad credit. Paying your
bills on time doesn't seem to be as important to lenders as
does how much credit is available to you. Having big ticket
bills like car payments and credit cards will steer lenders
away so hold off on big purchases until after you buy your
house.
Lie on Your
Loan Application: It is a federal offense to lie on
your mortgage application. It is not likely the offender
will be prosecuted, but if the lender does find out they can
call your loan due and payable. Also, never sign a loan
application is not completely and properly filled out. It is
not uncommon for loan officers to stretch the truth (to get
client approved) and the borrower will pay the price by
having a loan payment that he/she cannot afford.
Hide if You
Can't Make Your Payments: Absolutely do not ignore
phone calls or letters from your lender if you cannot make
your payments. There are many options available to help
borrowers prevent foreclosure. But these problems can not
be fixed unless you speak to your lender, just give them a
chance to help you.
Skip a Home
Inspection: It could be a costly mistake failing to
make your purchase contingent on a satisfactory home
inspection. An independent home inspector is qualified to
give you pertinent information regarding the status of your
roof, basement, mechanical systems in the house and the life
expectancies of home appliances. It is worth the $300-$400
to get your home inspected by a professional.
Hire Just
Any Agent to Sell Your House: You want to look for
an agent that specializes in your neighborhood and not only
have experience but are top producers. Ask candidates
questions like what is their marketing strategy on selling
your house? What can you do to make the property more
appealing to prospects? What's a good asking price? These
answers should determine if this is the right candidate for
you.
Fail to
Check Out Remodeled: Under no circumstance should
you use a contractor who knocks on your door. Reputable
companies don't need to solicit door to door. It is wise to
call the Better Business Bureau and performing a thorough
check on your potential contractor by calling past clients,
his bankers and suppliers and your local consumer affairs
agency.
Pay Too Much
Up Front: Never pay a contractor cash. Never pay a
contractor more than a third of the contract price as the
down-payment. Chances are he is not trustworthy and is
using the money to purchase materials (because he is
uncapitalized) or could be using the money to pay his
workers on another job.
Burn Your
Mortgage: There is nothing better than making your
last mortgage payment. Many people will have a mortgage
burning party and burn their mortgage documents. Don't. Be
sure to make a copy of these documents and burn these. Hold
on to your originals in a safe place.
You need to consider
personal finances when applying for a home loan. A lender
will allow you to borrow how much you earn versus how much
you owe. First, establish your gross monthly income. This
means any regular and recurring income. If this income is
not documented or it does not show up on your tax return
then it can not be used in qualifying for a loan. Unearned
income sources such as alimony and lottery payoffs can be
used as well as income-producing assets such as real estate
and stocks. The income from the above listed can be
calculated into your monthly income. Any good loan officer
will review these rules for you. Second, determine your
monthly debt. This includes obligations such as car
payments, child support, credit cards, any other loans you
may have pending, etc. You can use the minimum monthly
payment in calculating monthly credit card debt. If a debt
is scheduled to be paid off in the next six months it does
not need to be calculated in with your monthly debt load.
All of these items added up is called your monthly debt
service.
For the most part,
lenders do not want you to take out a loan that may overload
your ability to repay these debts. Here is an idea how most
lenders look at the numbers. Your monthly mortgage payment,
monthly taxes and insurance should not exceed 28% of your
gross monthly income. An estimated 15% of your payment will
be tax and insurance expenses. The remainder will be for
interest repayment and principal. If your monthly housing
expenses and monthly debt service (combined) exceed 36% of
your gross monthly income your loan may not be approved.
There could be some flexibility in the 28 and 36 percent
guidelines depending on each individual. For example, with a
large cash down payment the qualifying ratios become less
critical because you are borrowing less than 80% of the
home's value. Also, if you happen to have a rich cosigner,
lenders may be less focused on the above mentioned
guidelines.
Keep in mind there
are many loan programs available in today's lending market
all with various guidelines. Don't get discouraged your loan
process doesn't seem so positive right away. However, you
can control a number of factors that affect your monthly
payment. Choosing an adjustable rate loan has a lower
initial payment than that of a fixed rate program. Also, a
larger down-payment affects your projected monthly payment.
Examine Your
Finances and Shop Around Before You Apply
Shopping for a
mortgage should be the first step toward owning a new. This
experience can be the most intimidating so make sure you are
prepared. With so many services and loan companies
available, finding the mortgage company that is right for
you is no longer a simple task. There are numerous amounts
of finance companies, lenders, bankers, credit unions, and
stock brokerage firms out there. And many different types of
loans as well as loan programs to choose from, educating
yourself in the mortgage industry is key. Look on web sites,
mortgage books, read related newspaper articles and even
attend seminars and workshops. Real estate agents, lenders,
financial planners, and mortgage brokers can help you along
the way. Initially, you should be able to determine if your
new payment will fit into your current as well as future
budget. You don't want to find out when its too late that
you can't afford your mortgage payment. That could risk the
loss of your home and damage your credit for the future.
Examine Your
Finances
Determining
realistically how much you can afford for your mortgage is
the first step in buying a home. Lenders want to qualify you
for as much as possible, which, in the long run may be more
than you can afford. You need to compare your income with
your monthly expenses both current and projected. Keep in
mind that along with a mortgage payment comes other related
costs such as homeowner association dues, related insurance,
taxes, and other costs added into your mortgage payment.
Shopping for a
Loan
There are two basic
types of mortgage shops to shop when searching for a loan -
mortgage brokers and direct lenders. A mortgage broker is
the middleman who has many lenders to choose from. Direct
lenders make the final decision on your application - they
have the money to lend although they are limited on the
number of in-house loans they can give. Using an experienced
may be a good idea if you have special financial needs just
keep in mind that these brokers make a percent off of the
amount you borrow. Sometimes internet brokers can be a
bargain because they generally take a smaller cut if any at
all.
Apply for a Loan
Once you've
collected all of the documents necessary for the application
process you are ready to begin. You will have to fill out
information regarding employment stability, job tenure, and
income, assets such as investments, bank accounts, cars, and
property. You will also need to list liabilities such as
household expenses, existing mortgages, credit-card debt,
installment and auto loans. Be ready to supply documents
such as tax returns, proof of insurance, pay stubs, rental
agreements, divorce decrees, bank account statements, etc.
The lender will then research your credit status. If the
lender satisfactorily passed all of the lender
qualifications then the he/she will hire a professional
appraiser to ensure the value of your home is worth the loan
amount.
Understand Your
Credit
Your credit history
is of utmost importance to lenders today. If you are
thinking about buying a house, you too, should familiarize
yourself with it. Three different companies called credit
reporting agencies maintain your credit history: Equifax,
TransUnion, and Experian. You can order your report by phone
or on-line for a small fee. It is recommended that you order
all three reports in case there is an error on one of them.
If that is the case, this could negatively affect your
chances on getting a loan. This report is extended as far as
seven years and lists all the consumer credit activity. It
shows your current balance and what your highest balance has
been. It lists all of the payments you have made on time and
the late payments are grouped into categories showing how
late they were. Payments made over 60 days late four times,
over 120 days late two times and over 180 days late one
time, will affect your ability to borrow money. So find out
ahead of time the status of your credit report so you are
well prepared to correct any possible errors. Good credit or
bad - here are two good points to remember:
-
First, negative
credit stays on your report for seven years and then it
drops off. Bankruptcy, however, can be reported for ten
years but after that you start from scratch.
-
Second, your
more recent credit is more important than that of
several years ago. Maintaining good credit even after a
bankruptcy could qualify you for a loan in little as two
years.
Even with slightly
damaged credit it is still possible to get a loan with
risk-based pricing it just may cost you a little more. This
is a higher priced loan to borrowers bases on their
demonstrated ability to repay.
Learn How Your
Credit History Can Affect Buying a Home
Buying With a
Record of Bankruptcy
Q: As a first-time
buyer, what are my chances of getting a loan with a
bankruptcy on my credit report?
A: Lenders are very
particular about consumer's credit history especially late
payments and bankruptcy filings. A bankruptcy filing stays
on your credit record for ten years but if it was filed a
long time ago and you've been staying on top of your
payments since then, you should talk to a lender. With
proper documentation proving that you have been making all
of your payments on time in the recent years you are at low
risk to them. If that does not work then there are two other
options. The first would be to put down a large down-payment
(like 50% of the house sale price) because lenders look
favorably when a borrower invests a large sum of money the
property. Second, take out a sub prime loan which has higher
interest rates and more points (points are interests charged
up front by the lender for providing you the loan). One
point for every 1% of the loan. You will pay more every
month but it may be worth it to you.
Borrowing With Less
Than Perfect Credit
Q: My annual income
is $55,000. What kind of loan could I get with a B credit
rating and $10,000 down on a $125,000 home?
A: Because borrowers
are expected to spend no more than 28 - 33% of their monthly
income on housing you would well qualify for $115,000 loan.
With a B credit rating you may have to put down more than
the 8% that you are planning on using for a down-payment or
the lender will charge you more points for the loan.
However, the lender will take into consideration any other
investments you have, cash reserves, and recent payment
history.
Guard Your Credit
History
Guarding Your
Credit History
You Are the First
and Best Line of Defense in Maintaining an Error-Free Credit
Report
Fixing errors on
your credit report is a very important step in protecting
your ability to borrow money. Credit reports carry a lot of
very important information regarding how you pay your bills,
where you live, bankruptcies and if you've ever been
arrested. Credit bureaus such as Experian, TransUnion and
Equifax compile all of this information on a business report
used to determine whether or not you are a good candidate to
borrow money. However, if an error occurs by a department
store, and they report late payments unnecessarily, you need
to let them know. Even though the Fair Credit Reporting Act
says it is the responsibility of the bureau and the
department store, you need to stay on top of it.
Step By Step
To correct an error,
send a letter to the credit bureau responsible for filing
the false information. Here are some tips"
-
Send your full
name and street address
-
List every item
you believe to be false and why
-
Request that
errors be deleted
-
Include copies
(not originals) of documents supporting your claim
-
Enclose copy of
credit report and circle items claiming to be false
-
Write a letter
to your lender so they are aware of your dispute
-
(include copies
of documents supporting your claim)
-
Send both
letters by certified mail, return receipt requested, and
-
keep copies for
your files
Credit Bureau
Response
Within 30 days the
credit bureau will have investigated your case and forward
your dispute to the store that reported the negative
activity in the first place. They will investigate the
dispute and send their report to the credit provider. If
there is, in fact, a mistake the department store will
notify the other credit bureaus so they can amend the
information in their files. Once the investigation is
complete, the bureau should give you a free credit report
and results in writing of its results. Correction notices
may be requested.
Statement of
Dispute
If the dispute is
not resolved with the credit bureau ask them to include a
statement in your file referring to the disputed information
in your report. This will show up in future credit reports.
If you are not satisfied with the outcome of this case then
you can file a complaint with the Federal Trade Commission's
Consumer Response Center. Although tedious and
time-consuming, this may pay off when the time comes to
apply for a loan.
Some Believe
Scoring Methods Have an Unequal Impact on Minority and
Low-Income Applicants
When it comes to big
ticket items such as a house or a new care (or simple as
credit card) prospective lenders will run your credit
report.
But is credit
scoring fair and equal?
Credit scoring is
and objective way to establish one's ability to repay loans.
Race, income and nationality are not regarded in this
method. But some feel that an unequal impact is involved in
some scoring systems regarding minority and low-income
credit applicants.
Your Score is Just
One Factor
Fair, Isaac &
Company, Inc. is the most widely used credit scoring system
used by most lenders. The borrower's "credit" is determined
by his/her credit history via the company's software. These
calculations (FICO scores) are an important factor when
applying for a mortgage loan. The exact method is unknown of
calculating these scores however, in order from most to
least important factors are as follows: late and delinquent
payments, bankruptcies, outstanding debt, length of credit
history, new applications for credit, and types of credit in
use. It is against the law to factor in religion, marital
status, ethnicity, or gender when determining scores.
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10 Steps to Home
Ownership!
Although more than 2
million people in the United States have their real estate
licenses, the dropout rate is high resulting in a small
active percentage. NARS (The National Association of
Realtors) is a compilation of one million brokers and
salespeople with extensive training, community information
and a strong Code of Ethics.
Why?
Buying a new home
isn't as easy as pointing at a picture or clicking online.
Every property is unique, even identical models are two
completely different entities. As are contract terms - from
financing options to closing costs. With a cluster full of
negotiations, financing, inspections, and marketing, it's
only logical to hire a professional local realtor that knows
the ins and outs of your community. homefloridarealty.net
has an extensive list of local professionals and properties.
Other good sources would be recommendations from neighbors,
Web sites, advertising, open houses, attorneys and financial
planners. While interviewing your potential realtor, be sure
to consider issues such as experience, certifications, and
training.
What Should You
Expect? (Working With a Realtor)
It is important to
establish a proper business relationship with your realtor.
Some realtors represent buyers and others represent sellers
so have your realtor explain in detail the complete agency
disclosures and requirements in your state. Although market
conditions change have him/her provide you with information
regarding your financing options and the current market
conditions. During this time, your agent should keep you
well informed of each step in the transaction process.
What a Realtor Can
Do For You
-
Suggest a simple
change to make a home more suited to your needs and
improve on its value
-
Facilitate
negotiations that will satisfy both buyer and the
seller
-
Research your
housing needs if you are residing in another city
-
Help you to
determine what you can afford, suggest ways to accrue
down-payment, and illustrate alternative financing
methods
-
Prepare you with
what financial and personal documents to bring when
applying for a loan
Why Use a Realtor?
Buying a home is one
of the biggest investments a person will make in a lifetime
usually exceeding an investment of at least $100,000. More
than likely you would use a CPA when dealing with a $100,000
tax problem or an attorney for a $100,000 legal question. So
why would you make an investment on a property without the
professional assistance of a trained real estate agent?
Here are some
reasons you might want to consider using one:
-
Your realtor can
help you with negotiations involving price, financing,
terms, date of possession and repairs and furnishings or
equipment.
-
Your realtor is
competent in knowing when, where, and how to advertise
your property and will generally prescreen and accompany
qualified prospects through your property.
-
When selling
your home, your realtor will make sure everything goes
accordingly through the closing process.
-
Your realtor can
determine your buying power; refer you to the lenders
best suited for your needs.
-
Your realtor has
access to property that may not be advertised Your
realtor can provide you with local information regarding
schools, zoning, utilities and answer questions
regarding the resale value of your home in that area
How To Choose a
Realtor
Not All Agents or
Brokers are Realtors - There is a Difference
In order to legally
sell real estate, a person must be licensed by the state in
which they work. Education, examinations and experience must
reach a minimum standard before a license is issued. In
order to call yourself a realtor you must join your local
board or Association of Realtors and the National
Association of Realtors (the world's largest professional
trade association known for its code of ethics). A
professional agent has common-law obligations which are as
follows:
-
Client/agent
confidentiality;
-
obey the
client's instructions;
-
put your
client's interests above anyone else;
-
report to the
client anything that would be useful;
-
account to the
client regarding any money issues.
A realtor has even
higher standards of conduct because of their involvement
with NARS.
The Difference
Between a Buyer's and a Seller's Broker
Say you want to put
an offer in to buy a home for $180,000 but you are very
interested in the home so you tell the broker that you will
go up to $200,000 if you have to. But if you are dealing
with the seller's agent, it is his/her obligation to tell
his/her client the important information. The seller's agent
does not have any duty of confidentiality toward you (in
most states) and hopefully this agent would tell you this
fact.
Tip:
Don't give any confidential information to the seller's
agent. It is a good idea to hire a buyer's broker whose
duties are owed to the buyer. And regardless of the agency
relationship the buyer's broker is usually paid by the
seller.
How To Evaluate an
Agent
When evaluating a
potential agent there are certain questions you should ask
to help your decision making process. You need to find out
if the candidate is in fact a Realtor or an agent. Here are
some other important questions to ask:
-
Is real estate
your full time career?
-
How will you
help me meet my goals?
-
Is your license
active and in good standing? (you can retrieve this
information with your state's governing agency)
-
Do you belong to
a multiple listings service (MLS)
-
Which party are
you representing (you-the buyer or the seller)?
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STEP 3: GET A LOAN
PRE APPROVAL
As we all know, most
people can't purchase a home for cash. In 1999, nine out of
ten buyers, especially first time buyers, financed their
homes requiring a loan. (according to the National
Association of Realtors).
The most difficult
part with real estate financing is not getting the loan but
getting the mortgage with the terms that are best for you.
This also means the best interest rates so you aren't forced
into paying sky high rates. It is a good idea to start the
mortgage process before bidding on a home. Your real estate
agent is a good person to ask for suggestions in finding a
good lender. When meeting with your loan officer you will be
able to decipher which loan is best for you and decide
exactly how much you can afford. Pre approvals are
recommended because approval forms often require buyers to
apply for financing within a certain amount of time which is
generally seven to ten days. Meeting with your lenders ahead
of time can save you from possibly having to rush into a
financing decision that may not be the best one for you.
What is it?
"Pre approval"
means: You have met with your loan officer, your credit has
been properly reviewed and you qualify for a specific amount
involving one or more mortgage programs. The lender takes
all of this information and produces a pre approval letter;
this is not a final loan commitment. You can apply with as
many lenders as you'd like but keep in mind with each one is
a new credit check which shows up on future credit reports.
The pre approval letter shows your financial strengths and
proves you can go through with the purchase so this letter
can be shown to listing brokers when bidding on a home.
How Do You Get
Approval?
Your real estate
agent or realtor will be able to suggest one or more lenders
that they know offer competitive programs with guaranteed
rates and terms. Many lenders and mortgage companies offer
financing for real estate and can suggest programs that meet
your needs once they have seen your credit report and
collected other information. One program might be for first
time buyers which is a state-backed program with little or
no money down and low interest rates. Generally, a first
time buyer prefers a 30-year loan with a fixed rate of
interest over the life of the loan or a floating interest
rate.
Be Careful When
Pre-Qualifying Online
Qualifying for
on-line loans are quick and easy but remember too many
inquiries can hurt your credit score! Every time you apply
for a loan or credit card the lender checks your credit
history and your credit report will record another "inquiry"
that will show up on your credit report. Many inquiries on a
borrower's report indicate that the borrower will not be
able to pay his/her bills.
Don't Forget Your
Pre-Approval Letter
Here Are 5 Reasons
Why Getting a Pre-Approval Letter is a Good Idea
A pre-approval
letter is reliable. Getting a pre-qualification letter from
a mortgage broker or lender is easy and getting a "pre-qual"
from a Web is just as easy. Just type in some
information. submit. and there you have it! However, a
pre-qualification letter is a little bit more detailed in
the way that you need documentation to support your
information. This is a lot more tedious and probably even
stressful and this is exactly why the pre-approval letter
carries more weight.
This will give you a better idea of how much money you can
qualify to borrow. Home buyers usually know how much they
can afford to spend on the mortgage. But there is no way of
figuring out a specific amount because of other factors such
as property taxes, adjustable interest rates, down payment
percentage, and insurance, etc. as being part of the
calculation. And more than likely you are not qualified to
borrow as much as you thought (depending on debts, credit,
and income).
With pre-approved buyers, sellers know they are financially
qualified so they are more apt to negotiate because the
seller has the financing needed to close the deal. A
pre-approval letter is especially beneficial in a close
multiple offer situation.
A pre-approved
letter indicates to a real estate agent that you are
qualified buyer who is serious about buying a new home and
she/he will work harder on your behalf. Considering the
chances of closing a sale/commission are pretty high, your
agent will more than likely be motivated. Some agents won't
show property without a pre-approved letter.
Keep in mind, however, a pre-approval is not binding on the
lender. Many factors could change (interest rates rise, you
lose a job, extend your credit card bills) and the lender
may want to review your situation and recalculate your
mortgage amount.
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STEP 4: LOOK AT
HOMES
Over 6 million homes
are sold each year leaving buyers with many options as well
as challenges in finding the home to fulfill their needs.
The real estate market is very complex because the stock of
homes for sale is always in flux. It is important to work
the an agent that is experienced in the community and is
well informed about the choices in preferred markets.
What Are You
Looking For?
There is more to a
house than just bedrooms and bathrooms. Take for example
three properties - each with three bedrooms, three bathrooms
and all the same price. Each individual house may be
dramatically different when it comes to design, lot sizes,
tax costs, interior dimensions, and commuting distances.
Just like every person is different and has different needs.
When listing the features that are important to you consider
such things as amenities (a grand kitchen or lagoon pool),
pricing, location, size and house style (ranch style,
modern, colonial). You also need to think about your
priorities. What features are most important to you? Are you
will to sacrifice one to get another? And last but not
least, keep in mind what your needs will be in the future.
Will you be needing a larger home in the future? If so,
maybe you should consider buying the larger home now instead
of having to move in the future.
Where Should You
Look?
Every neighborhood
and community has its own unique distinctiveness and
personality. One community may be well known for its easy
access to the interstate while the other is known for its
historical nature or easy access to downtown.
homefloridarealty.net offers a wide variety of homes to
choose from along with buyer representation services.
How Do You Find a
House?
There are a few
different routes you can take when looking for a home. Some
buyers choose to search web sites such as
homefloridarealty.net while others simply take suggestions
from their realtors. Either way, it is important to narrow
your search. A simple way to refine your search is by taking
basic measures such as minimizing your search to a certain
area and affordability. Keep a file with information on each
home that you've seen and the features that stand out to you
the most.
How to Choose a
Neighborhood
Investigate local
conditions when researching a neighborhood. Some factors may
be more important to you than others like:
-
The crime rate
-
Property values
-
Quality of
schools
-
Future
construction
-
Traffic
-
Proximity to
schools, prisons, the interstate, airports, shops,
hospitals, employment, beaches, parks, theaters, and
cultural and activity centers
Neighborhood Search
Strategies
For most first-time
buyers financial resources are limited so it is wise to
maximize your home purchase location by combining some of
these strategies into your neighborhood search:
-
Look for a home
that is just out of the city, if commuting is a concern,
limit your search to communities known for good public
transportation.
-
A condominium or
a co-op may be a good idea for you rather than a house.
This makes it possible to purchase a home in a choice
neighborhood that you might not otherwise be able to
afford.
House - Hunting
Tips
-
Do your homework
- These days, consumers have much more access to
information about market trends, homes on the market,
neighborhood statistics and recent home sales prices.
This information is easy to obtain on the Web, do the
research, educated yourself.
-
Make a list -
You will save yourself time and money if you make a list
ahead of time of what it is you want. Concentrate on the
features most important to you and your family. Start a
list about your likes and dislikes in your current home
and start from there.
-
Location counts
- Location really is an important factor in purchase a
new home. How far are you willing to commute on a daily
basis to school, work or shopping centers? An
undesirable location can ruin your dreams of a perfect
home and be a bad choice as far as reselling in the
future years.
-
Get a
preapproved mortgage - Unless you are a financial expert
you can only guess on how much you can afford on a
mortgage payment each month.
-
Speak to a
lender or mortgage broker to give you letter on how much
you can afford to spend each month.
-
Wear comfortable
clothing and sturdy shoes - House - hunting can be an
exhausting chore after a while. If you are planning on
spending the whole afternoon touring home then prepare
yourself with comfortable apparel.
-
Use a checklist
- Don't try to remember every detail of every house.
-
Make a checklist
and keep notes on the features you liked most and least
about the property.
Home Purchase
Consideration
After the
neighborhood is chosen the next choice is the number of
bedrooms. Once you begin to view homes keep the following in
mind:
-
It is harder to
resell a one bedroom condo than it is a two bedroom
condo.
-
Two-bedroom/one
bath single houses have less appreciation value because
they generally are less appealing than three or more
bedrooms.
-
Homes that are
the most attractive (from the street appearance) are
easier to resell.
-
If you are
considering reselling, don't buy the most expensive or
most enormous house. The best investment, generally, is
normally found in a less expensive moderately sized
home.
When You Have Found
the Right Home
When you finally
decide on the buying process it is wise to act promptly. It
is quite possible that someone else put in an offer (that
could be accepted) while you are "thinking on it overnight".
This is particularly true if the house in newly listed or
underpriced.
The Basics of
Making an Offer
A written
proposal is the foundation of a real estate transaction
Oral promises are
not legally binding in reference to real estate so it is
very important to enter into a written contract once you've
written out a proposal. The price and terms and conditions
of the purchase are all included in the proposal. If the
sellers agree to help with the closing costs then be sure to
include this in your written offer and the final contract -
or you may not be able to collect on it later. Your realtor
will be able to answer any of your questions you have while
filling out multiple forms which include Residential
Purchase Agreements that change continuously with the law.
For Your Home
If you are not using a real estate agent, be reminded that
you will need to draw up a purchase offer that corresponds
with both state and local laws. Remember - state laws vary
and certain provisions may be required in your community.
The seller's realtor (and sometimes the buyer's realtor
along with the seller's) will present a signed offer to the
seller. Although the parties' lawyers can draw up sales
contracts in some situations.
What the Offer Contains
-
If accepted, the
submitted purchase offer will become a binding sales
contract (also known as an earnest money agreement,
purchase agreement, or deposit receipt).
-
Consequently, it
is mandatory that this
"blueprint" contains all the items pertinent to the
final sale such as:
-
Sale price
-
Seller's promise
to provide clear title of ownership
-
Address and
description of property
-
Terms
-
Type of deed to
be given
-
A time limit to
expiration
-
A last minute
walk-thru by buyer before closing
-
State-specific
clauses
-
Target date for
closing
-
Method by which
bills and utilities are to be prorated between buyer and
seller (fuel, rents, water bills real estate taxes,
etc.)
-
Amount of
earnest money deposit accompanying the offer - is it
cash, check or promissory note? How will it be returned
if offer is declined or kept as damages if party backs
out
Contingencies which are listed below:
It is likely your offer will state "this offer is contingent
upon (or subject to) a certain event" - if this is the case
you are saying that you will only go through with the
purchase if that event occurs.
2 Common Contingencies
A positive report by a home inspector with ten days after
the acceptance of the offer
If the loan of the buyer cannot be found from the lending
institution
It is very important that every detail is added properly to
the written contract.
Negotiating Tips:
You are in a particularly strong bargaining position if:
-
You are
pre-approved for a loan
-
You are an all
cash buyer
-
You are not
bound to selling a current home before you can buy
Because of this you may have more leverage in
negotiating some discount from the listed price. Try to
find out why the house is being sold and if the seller
is being pressured into selling it. If the seller is
divorcing they may want out quickly and every month the
house remains vacant means more expenses for the seller!
Earnest Money
Earnest money is the
term used for the deposit given when making an offer on a
house. A "good faith" deposit of cash is a good idea when
dealing with a written agreement. A mediator such as the
realtor or a lawyer will hold the cash deposit, this will
later become part of your deposit.
Buyers: The
Seller's Response to Your Offer
Once the seller
signs and returns the written offer it becomes a firm
contract, unconditionally. However, if the seller declines
the offer she/he cannot later change her/mind and hold you
to it. The seller may send you a written counteroffer with a
change in the sale price or the proposed selling date if
they are not happy with it. Once you receive the
counteroffer you are able to reject it or make your own
counteroffer. This can go back and forth unconditionally and
is not a binding contract until one party finally signs and
acceptance of the other side's proposal.
Withdrawing an
Offer
Under most
circumstances you can take back an offer up until the moment
it is accepted. If this is the case, you will want to
consult with a lawyer who is experienced in these types of
real estate matters before revoking your offer. You want to
prevent being sued for damages the seller may have suffered
by relying on your actions and you don't want to lose your
earnest money deposit.
Sellers:
Calculating Your Net Proceeds
Once you receive
your written offer, you can do one of three things:
Accept it exactly
the way it reads, refuse it, or make a counteroffer to the
buyer with the changes that best suit your needs. When
reviewing the purchase order calculate the amount of profit
you are left with when the transaction is complete. For
example, if you have two offers at once even though one may
have a lower sale price you would make more than if you were
to pay points to the buyer's lending institution. When
trying to calculate your proceeds from the proposed purchase
price you can subtract:
-
Broker's
commission
-
Legal costs
(attorney, escrow agent)
-
Payoff
amount of present mortgage (if any)
-
Transfer
taxes
-
Unpaid
property taxes and water bills
-
Cost of
survey, termite inspection, buyer's closing costs,
repairs, etc..if in written contract
-
Any liens
(equity loans, judgments)
-
An escrow
account may be maintained by your present mortgage
lender into which you deposit money to be used for
property tax bills and homeowner's insurance
premiums. Just keep in mind that you will receive a
refund left in that account which will add to your
proceeds.
For Sellers:
Counteroffers
Any change you make
in a counteroffer can put you at risk of losing that chance
to sell. Keep in mind that if you don't accept the purchase
offer from the potential buyer exactly as it stands you may
be at risk. You and the buyer can come to an agreement on
who pays for:
-
Buyer's broker
-
Buyer's closing
costs
-
Points to the
buyer's lender
-
Survey
Termite inspection
-
Repairs required
by the lender
-
Home protection
policy
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Choosing a home is
an enormous decision to make so choosing the right one to
fit all of your needs is very important. Is it THE house?
I'm sure you've heard the term "A man's home is his castle".
Your home is a place where you relax, bring friends, you
raise your children here and even work! Most of your life is
spent in your home so choosing that perfect home is a major
decision so you want to make sure you choose THE home for
you and your family. Start by looking at as many homes as
possible. This is where homefloridarealty.net comes in.
Here you can view as many homes as you'd like, check prices,
and get any information on the neighborhoods of your choice.
Once you have narrowed down your search contact
homefloridarealty.net to get more thorough information and
hear your options.
Can You Really
Afford It?
Now that you have
been preapproved, you have a good idea of how much money you
can borrow and how much home you can afford. Keep in mind,
however, that a pre approval in not necessarily a loan
commitment. The lender still need to check appraisals and
updated credit reports. Regardless of fluctuating interest
rates, for the most part pre approval nonetheless can
provide an analysis of what you can afford. Loan officers
are usually paid when the actual loan is originated so it
wouldn't be beneficial to the loan officer to suggest high
loan limits that later can't be delivered.
Wait! Are You
Buying the Right House?
What an amazing
feeling it is finding the perfect property for you. It
possesses all the features and qualities you have been
looking for and more! It's your dream house and you love it!
Then a million questions run through your mind, "Can we
afford it?" "Will they accept our offer?" "How long will it
take?" These positive feelings are a definite deciding
factor in buying a new home. But don't let these feelings
overrule reasonable assessment of whether this home really
fits your needs. Answer these questions before making a
rational commitment about buying.
Price - Even though your lender is willing
to give you the loan amount you want are you really able to
make the monthly payment involved? Have you thought about
moving costs and transaction costs? Are there any major
repairs or remodeling to take in consideration that comes
out of your pocket?
Condition- Along with the price, the
condition of the home should be a huge factor. Plumbing and
electrical wiring is expensive to repair. A new roof is
phenomenal. Find out if the house is disaster ready (are
there existing window treatments for hurricane season?). A
fixer-upper can be an exciting project but do you have the
funds for it? Not to mention will you be able to live in a
home that is not yet up to your standards?
Size and configuration- Take in
consideration the right combination of bedrooms, bathrooms,
and other living areas. Can your family adjust to the size
of the house? Is that small room in the corner really
sufficient for the nursery? Is one bathroom going to be
enough and if not do you have the time and money to add a
second one? Is your garage high enough for your SUV?
Comfort- Is the house adequately heated and
cool/is it central? If the house is more than one story, how
do you feel about walking up and the stairs throughout the
day? Do your guests have to use the bathroom upstairs or is
their one available on the first floor?
Style- Is the style of the home going to
mix well with your furniture? Do you really want
southwestern furniture in a colonial home?
Resale Potential- One the average, people
move to a new home every seven years. If you were
unexpectedly forced to sell your property how quickly do you
think you could finder a buyer this ready, willing and able?
Features- Quite often buyers are in awe of
the Olympic sized pool or the commercial-grade kitchen.
Immediately they fall in love the ornamental trees or the
historical hard wood floors. But more times than others
these amenities are more of a headache than a pleasure.
How to Choose a
Home
Here Are Some Tips
to Help Determine Which House is Best For You
First, choose a few
neighborhoods that peak your interest the most then pick out
a few home too tour. Bring a list with reminders of the
features and amenities that are most important to you.
Types of Homes
Single
family home: One home per lot.
Multifamily homes: Some first - time buyers
start with a multiple family dwelling, they have rental
income to assist with their costs. Some mortgage plans
(including VA and FHA loans) can be used for properties
up to four units - if the buyer intends to occupy one of
them.
Co-ops:
Cooperative apartments are most popular in cities. This
is a share in a corporation that owns the whole building
and each individual has a lease their own apartment. It
is managed by a board of directors.
Condominiums: Just as a with single house, you
own "from the plaster in". Also a percentage of the
common elements such as roofs, sidewalks, stairwells,
etc.
This is what happens
from the buyer's side: The seller begins with an asking
price and other terms and places a home on the market, this
is an offer. The buyer now has three choices, accept the
offer and start a contract, reject it and not make an offer,
or make a counteroffer with your own terms. With a
counteroffer, the seller make accept or make his/her own
counteroffer. The most complicated variable about the home
buying process is the bargaining between buyers and sellers.
Is the when having a well-qualified, experienced and
knowledgeable realtor comes is. Knowing the community is a
valuable resource because this means they have spent many
years negotiating local realty transactions.
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STEP 6: GET FUNDING
After interest and
closing costs, the cost of real estate financing is
generally greater than the original purchase price of the
home itself. Financing is a very big part of the home buying
process so a buyer should have as much information as
possible at hand when it comes to their options and costs.
homefloridarealty.net is able to provide you with all of
the mortgage information you need and discuss your financing
options and recommend loan sources.
What Kind of Loan?
With so many lenders
on the market there are limitless numbers of loans available
to you. But the mortgage you choose should be determined by
these key factors: What kind of credit do you have? The best
rates and terms are for those with excellent credit. To be
ensured you get the best loan, pay credit card, rent and
mortgage bills and installment payments in full or on time.
There are many loans available with just 5% down or less.
Even major lenders now offer "no money down" options. Are
you a "first time buyer"? A first time buyer can refer to
those who haven't owned in the past three years in most
state programs. A lot of state-backed programs offer smaller
down payment plans below market interest rates to these
first time buyers so be sure to inquire with your realtor.
Over 2.5 million VA (Veterans Administration), PMI (private
mortgage insurance), and FHA (Federal Housing
Administration) loans are given every year. With less than
20% down, lenders expect and outside third party to protect
against any mortgage defaults.
How Do You Get a
Loan?
In order to qualify
for a loan you must first fill out a complete loan
application and have supporting documentation readily
available. These payments will include rental checks, pay
stubs, and tax returns. However, the loan officer will go
into detail of the paperwork need to verify credit
information.
Where Do You Get a
Loan?
Mortgage brokers,
savings and loan associations, mutual banks, credit unions,
commercial banks, mortgage bankers, and insurance companies
can all finance mortgages. Speak with your realtor to help
you arrange financing.
What is a Mortgage?
A mortgage is a loan
given to finance one of the largest debts you will probably
ever take on - your home. A legal contract is signed
promising that you will pay back the debt including interest
usually over a 15 to 20 year time period. Your new home is
used as collateral, therefore, the lender has the right to
take back the property if the loan is not paid making
monthly installments. These payments usually include
principal, interest, insurance and taxes also know as PITI.
Interest:
A percentage called the interest rate, this is what the
lender charges you to use the money that you borrowed. On
top of the given rate, the lender may also charge you
"points" and additional loan costs. Each point is 1% of the
financed amount and is financed with the principal.
Principal:
The sum of money that you borrowed to buy your home. Before
it is financed you can give the lender a sum of cash (down
payment) to minimize the amount of money to be financed.
Both interest and principal are a part of your monthly
payment called amortization. This reduces your debt over a
fixed period of time. If your down payment is less than 20%
you are considered a risk to your lender. The lender sets up
and escrow account to offset that risk to collect those
additional expenses.
Taxes:
Property taxes your community levies based on a
percentage of the value of your home. This tax is used to
help finance the running of your community such as schools,
roads, etc.
Insurance:
Home insurance must be obtained before closing the
deal on your home purchase covering your home and property
against theft, fire, and weather.
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STEP 7: MAKE AN
OFFER
How much?
Most people believe
that the amount of your offer should be a certain percent
below the seller's asking price or a certain percent less
than you are really willing to pay. However, realistically
the offer depend on the laws of supply and demand. For
example if a lot of buyers are competing for homes, the the
sellers are more apt to get full-price offers or even more.
How Do You Make an
Offer?
The process of
making an offer varies from state to state. Generally, your
real estate will present an offer to the seller. After the
seller receives the completed offer he/she will either can
accept, reject, or make a counteroffer. A change in the
offer can happen at any time so it is important that the
buyer keeps an open line during the negotiation process with
the realtor
How Many
Inspections?
There are multiple
inspections involved in residential realty transactions.
Some common inspections would be title reviews, structural
inspections, termite checks, surveys to determine
boundaries, and appraisals to determine value for lenders.
The purpose of using an appraiser is to determine what
repairs and replacements need to take place in the next few
years. The inspection is generally a two to three hour
process and the buyer should be present during this
examination. This is an great opportunity to ask any
questions you might have regarding the property and the
mechanics and structure.
The Bottom Line on
Contract Negotiation
There are a few
questions that you should ask before deciding to pursue the
contract. The selling price is an obvious focal point in the
purchase of real estate but isn't the only factor
determining the net bottom line. It wouldn't necessarily be
a bargain for the buyer if he or she is paying all the
transaction costs or the buyer can't come up with the down
payment or qualify for the mortgage. Here are five points to
consider before buying just because of the great price
-
What amount is
the buyer putting into the escrow? A large deposit
indicates that the buyer is serious about completing
his/her transaction. As far as the seller is concerned
the more money the buyer puts in the escrow account the
sooner the money is transferred, the better.
-
Who will be
paying for the estimated transaction costs? Generally,
these costs include home inspection, termite inspection,
escrow r attorney's fees, brokers' commission, title
search, the owner's title insurance policy, and transfer
taxes and recording fees.
-
How specific is
the mortgage financing contingency (if there is one)?
Unless the buyer is paying cash for the home a mortgage
escape claus is a must. A contingency ill help prevent
any legal obligation to purchase the home even if they
cannot obtain financing. But an open-ended statement
that says the buyer will obtain a loan "at the
prevailing rate of interest" can leave the buyer exposed
to interest rate fluctuations.
-
It is a binding
legal document unless one side unless an unmet
contingency is unmet. What happens if one side breaches
the contract? If a buyer fails to perform he/she can
loose their deposit money. Sellers who try to back out
at the last minute can be sued - which forces the sale
of the home to the buyer. So be sure your real estate
agent reviews the contract with you before the purchase
offer. Be prepared to negotiate on the best deal you can
get and know what to expect ahead of time.
Hiring a Home
Inspector
Finding the best
home inspector isn't necessarily as easy at it sounds. Many
years ago, buyers relied on their own impression of the home
and representation of the seller's agent, inspectors were
not heard of in residential real estate. Today, the buyer
has the right to order one or more professional inspections
before completing the purchase. An experienced real estate
agent will be able to recommend several well trained and
qualified home inspectors. Here is a list of factors to
consider when selecting the best candidates:
-
Qualifications -
The inspector should have training and experience in
construction and building maintenance standards and a
record of experience in home inspection business.
Depending on the home the inspector may need to be
qualified to deal with lead-based paint, asbestos, or
other hazardous substances.
-
Sample Report -
The inspector should be able to provide a checklist of
his/her checklist or inspection report.
-
Scope - Ask the
inspector which elements are and are not part of the
inspection.
-
Membership -
Being a part of an association is a plus. Memberships
usually i include training and certification programs.
-
References: - It
is not uncommon to ask the inspector to provide the
names and telephone numbers of multiple homeowners that
have used his/her services in the past. Call the
references and ask them if they were satisfied with the
service that they received.
-
Errors and
omissions - Even the most experienced inspectors are
capable of making errors and overlooking problems they
probably should have noticed. Find out what the
company's policy is in case this situation should arise.
The Basics of Making an Offer
Waiving an
inspection contingency is not worth the risk. For whatever
reason, some buyers decide to not make a professional
inspection a contingency as part of their offer. The may
prevail in a multiple offer situation but this is not a wise
choice. Sellers will naturally favor offers that do not
include an inspection contingency, but whatever the
condition of the property, the buyer should insist on the
seller making any repairs that are not included in the
purchase contract. The buyer could face a huge risk if they
are buying a property with defects.
Negotiating to Yes
A few good tips can
turn a negotiation into an agreement that can make both
buyer and seller happy. Negotiation of a purchase agreement
may be the trickiest aspect of buying a home. The buyer and
the seller want to come to a winning agreement but of course
either side would prefer to have a "bigger" win than the
other! Successful negotiation is the ability to use certain
skills bring about those "win" situations. Here are some
ways to turn a negotiation into a positive agreement:
-
Respect the
other sides priorities - Knowing what is most important
to the other person in the transaction can help you
avoid sensitive issues.
-
Be prepared to
compromise - Both sides will almost never be satisfied
to the extent that they get everything that they want.
Instead of taking the approach "winner-takes-all, focus
on what factors are most important to you.
-
Leave it aside -
If you have certain issues that are not material to the
overall contract, finish the main agreement first then
continue with the "issues" in a side agreement. This
allows both parties to move forward toward a fair
compromise and remember to summarize all points of the
agreement in writing. Example: purchase of furniture or
fixtures.
-
Meet in the
middle - Splitting the difference on "who pays what" is
a successful negotiation technique. If each party pays
half of the cosmetic repairs, the recording fee, or
fixes half of the blemishes, both sides seem to be
happy.
-
Ask for advice -
Considering the more experienced realtors have worked on
countless real estate transactions, they usually are
skilled negotiators. They have come to know what works
and what doesn't and are accustomed to bringing buyers
and sellers together. It's a good idea to talk to your
real estate agent about negotiation strategies.
How to Win the
Bidding Wars
Most buyers will
face multiple offer situations which is a good example of
economic realities because they appear when the supply of
homes for sale is limited and the demand for good-condition
homes is strong. This pushes up the sale price of the home
and creates a very stressful home-buying experience. Being a
little knowledgeable in this situation can help you buy your
home at a fair price.
How Can I Make an
Offer More Attractive to the Sellers?
Start by offering
the highest price that you can afford, get preapproved (not
just pre qualified) and attach a copy of your preapproved
letter to your offer. Make the largest down payment that you
can afford showing the source of your down payment. If you
have a home that is in escrow provide information regarding
the transaction.
For Your Home
If you are planning
on using the equity in your current home as a source of down
payment, make your offer contingent on obtaining financing.
Can I Submit an
Offer on a Home with an Escrow?
Technically yes, but
it is recommended that you look for another home. The seller
would have difficulty canceling the escrow even if your
offer is accepted.
If I lost a
numerous amount of homes in many offer situations. Is my
agent to blame?
The answer is
dependent of WHY your offers were not accepted., don't blame
the agent until you have all of the facts. If you writing
offers on houses in the $400,000 range and all of your
offers are for $350,000 you aren't going to get those
houses. You have to be realistic. On the other hand some
agents are aggressive enough to get that property.
Terms and
Conditions
Never sign a
purchase agreement without reading it in entirety. There is
a lot to take into consideration when signing a contract.
Even if the purchase price is acceptable, if the terms and
conditions of the deal are not you might want to think
twice. Just because the real estate purchase contract
appears to be complicated and loaded with technical terms
don't use that as an excuse for not reading the entire
contract. Read it thoroughly and ask questions about
anything you are unsure of. Be flexible and allow for
negotiation.
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STEP 8: GET
INSURANCE
You wouldn't drive
an automobile without insurance so why would you live in a
house without it? In an event of a catastrophe, real estate
insurance can be the bargain of a lifetime. There are many
types of insurance available with home ownership including:
-
Title insurance:
title insurance protects owners in the event that title
to the property is found to be invalid and there is a
one time fee at closing. It includes "lenders" policies
which protect buyers up to the mortgage value of the
property - and "owners" coverage which protects them up
to the mortgage value of the property also up to the
purchase price.
-
Flood insurance:
is required in some parts of the country usually in
high-risk flood-prone areas. It is government issued and
provides up to $250,000 in coverage for a single-family
home and $100,000 for contents. Your real estate agent
will be able to tell you what areas require such
insurance.
-
Homeowners
insurance: is set up for theft, liability coverage and
fire. These policies are required by lenders and cover a
variety of items which include (in some cases) home
office equipment, wedding rings, and furniture. Buyers
want to be assured that if something goes wrong in their
new home the builder will be there to make the repair.
Home warranties provide this sense of security.
Generally, home warranties are bought from a third party
by home builders if the builder goes out of business.
Home warranties are usually one-year service agreements
bought by sellers and in the event of a covered defect
the warranty firm will make the repair or cover its
cost. Policies and warranties have limitations and
different levels of coverage, costs, and deductibles.
The best time to get insurance coverage is at closing
and most policies are available from insurance brokers
and some realtors.
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STEP 9: CLOSING
It is important for
a seller to obtain property records detailing real estate
ownership in their neighborhood. Records are available at
the local courthouse dating back hundreds of years. This is
proof that they have marketable and insurable titles to the
property they are selling. Also, these records are a
reliable proof that the owner is in fact the owner when
ready to sell. In many cases buyers and sellers don't have
to attend certain events because signed documents can be
sent to the closing agent by way of overnight delivery. Much
of the closing process, also known as escrow or settlement
is becoming more and more computerized or automated.
What to Expect
All of the necessary
paperwork needed to complete the transaction is signed at
the settlement. Closing generally takes place in an office
setting with both buyer and seller at the same time or
sometimes separately. However the set-up the main objective
is that the property is transferred from seller to buyer, the
buyer receives the keys and the seller receives payment for
the new home. The closing agent subtracts money to pay off
the existing mortgage and other various costs from the
amount credited to the seller. All of the loan papers, deeds
and other documents are signed and filed with the local
property record offices.
What You Need to Do
Buyers have an
opportunity to walk through the property before closing to
ensure that its condition has not materially changed since
the sale agreement was signed. Papers are then prepared by
closing agent, lenders, lawyers and title companies to be
signed at closing. Here, buyers receive the title to the
property, lenders have their loans recorded in the public
records and the government collect their transfer taxes.
You have finally
done it! From beginning to end you finally bought the house
of your dreams. Is there anything else involving home
buying? If you are a first time buyer or a repeat home
buyers there are a few steps you'll want to take. The
paperwork you received at the settlement are very important
so keep those in a file. They will be used for tax purposes
and later for reselling the house. Hopefully you obtained
the status of the utilities required by the home items
(water, sewage, gas oil, etc.). The sellers must pay for the
utilities in full at closing and the utilities be
transferred to you for billing. Within a few weeks after
closing be sure to contact your local property records
office for confirmation of your recorded deed. Hopefully
your seller left your new home "broom clean" which does not
mean cleaned to perfection. It is a good idea to make a
video or photo book of your new home and possessions for
insurance purposes and keep these records save in a safety
deposit box (your insurance provider can tell you what needs
to be photographed). Fire, theft and liability insurance is
a must and as the value of your property increases so should
your coverage. But most importantly, even though owning real
estate involves contracts, loans and taxes the most
important factor is that you enjoy your brand new home!
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