Tips For Buyers

Decide to buy

 Are you ready to buy a home? Ask yourself these questions:

Get organized

Put your finances in order, get pre-approved for a loan, and you'll know what you can afford to buy. If you keep your records in one place, you can get organized fairly easily. Start a file for papers, sales brochures and other information you'll accumulate, including:

• Credit data - Check your credit and correct any credit problems you may have before the lender gets your credit report.
• Loan documents - Gather financial information the lender will request.
• Real estate listings - Search for home listings online.

Get pre-approved 

Getting pre-approved gives you an estimate of how much you can borrow and puts you in a better position to buy, particularly in a competitive market. To get pre-approved for a loan, you need to know your cash available for a down payment; cash available for closing costs; current income; job status; assets; and debts.  Additionally, you will need to do the following:

• Choose a lender or mortgage broker. A lender actually makes the loan. A broker acts as a go-between for a buyer and a lender. Don't hesitate to ask your agent, friends or associates for recommendations. Ask the lender or broker for references if you need more input.
• Submit your records.  A lender will ask for your financial records, typically including pay stubs for the last 30 days and three months of bank statements. You may also have to answer tough questions about your financial history. Be prepared - gather your financial documents ahead of time.
• Check interest rates. Interest rates tend to fluctuate. Follow interest rate news and if rates are low, you may want to ask your lender to lock-in,  or commit to that rate, that day. Just make sure the lock-in period includes the day you close on the house and that you won’t incur extra charges.
• Choose a loan.  You may think you want a 30-year, fixed-rate mortgage, but an adjustable-rate may be more appropriate for your circumstances. Some special loan programs are also geared to first-time buyers or veterans.

Do your research

Before you buy, find out about:

• Current market conditions.  The more demand there is for housing, the more you can expect to pay.  Additionally, the supply of houses for sale will affect prices.
• Prices of comparable homes sold in the area recently.   The range varies, so get up-to-date figures. 
• The seller's motivation. In cases such as divorce or relocation, the seller may settle for a lower price in exchange for a quicker sale.

Prepare your offer

Always make an offer within your ability to pay.  Also consider the following:

• To strengthen your offer, include a letter of pre-approval from a lender.
• Show you commitment to purchase. You usually have to include a deposit with your offer, to be applied to the down payment if the deal goes through.
• Consider the offer carefully.  Think about all the details that go into the offer, because once accepted, it will form a binding contract between you and the seller.  Some other things to keep in mind are the following: the  date of escrow closing; the amount of time it will take to remove your loan and apprisal contingencies; who will pay for which inspections and other costs; what items are included or excluded from the sale; the length of the time you have to remove your inspection contingencies; and whether you want liquidated damages or arbitration.
• Understand that buying a house is a process.  The seller may accept, reject, or counter within hours or days, depending on the quality of your offer and the seller's desire to sell. You can then accept the counteroffer or "counter the counter." Once the seller accepts, your agreement is typically sent to an escrow company with your initial deposit.

Other considerations

• Understand who is working for whom.  You will undoubtedly be given a disclosure regarding agency relationships.  A real estate agent may represent solely the buyer, solely the seller, or both the buyer and the seller. 
• Understand the disclosures.  On a residential purchase, the seller is obligated to give you a Transfer Disclosure Statement.  There are several other disclosure forms which may also be provided to you.  Read these very carefully.  The agreement will detail your options with respect to these disclosures.
• Satisfy yourself as to the condition of the property.  Typically, you will be given an opportunity to conduct inspections and investigations of the property. Consider all aspects of the property, and make sure that you are satisfied before removing your inspection contingencies.
• Set a closing date that works for you. If you're renting, you may want to set a closing date near the end of your lease to avoid paying unnecessary rent. The date of closing can also affect your closing costs. Be sure to schedule enough time to move in. If you plan to move on closing day, schedule the closing in the morning.
• Determine how title will be taken to the property.  This can have significant ramifications.  A real estate agent does not give legal or tax advice.  If you have any questions, you should consult your own legal or tax expert.
• Understand your closing costs. Lenders are required to give good-faith estimates of closing costs.  Review these carefully.
• Schedule a final walk-through. Make certain the seller has completed any repairs specified in the purchase contract and has satisfied any other contingencies or conditions involving the home's condition.

Closing Your Transaction

• On closing day, a deed is recorded and title to the property is transferred to you.  Depending on the complexity of your transaction, and the conditions attached to the purchase contract, this date can vary significantly.  Be sure that all aspects of your transaction, including inspections, contingency removals and loan funding are coordinated for your closing date.
• If you have any questions regarding the purchase of a property, please give me a call or e-mail me.  I am here to help.