Buying your home
1. Decide to buy your new home.
Although there are plenty of good reasons for you to buy a new home, building up your wealth and assets ranks among the top of the list. I have heard home ownership is the best “accidental investment” most people will ever make. I believe when it is done right, home ownership becomes an “intentional investment” that will get you on the path to financial security and your own personal choice. There are solid financial reasons to support your decision to buy a home, some of these are, equity buildup, value appreciation, and tax benefits (who isn't looking for some of those these days?)
Base your decision to buy on facts, not your fears.
- If you are paying rent at the moment, the chances are you can afford to buy a home.
- Contrary to belief, there is never a wrong time to buy the right home. All you need to do is find a good home to buy and be sure you have the financial stability to keep it up for the long term (that term is up to your situation. Most people move into a new home every 5 years)
- Just because you do not have a huge down payment, doesn't mean you don't have the ability to buy a new home. Banks are beginning to lend money and take risks again. They are doing some great terms with very acceptable LTV's at the moment.
- Just because you may think your credit isn't top notch, doesn't mean you can't get financed.
- The only way you can get into your dream home is to buy it!
- It is not that complicated to buy a home. You need a real estate broker and they will take care of the hard stuff. You just need to make a few decisions. The broker should (I DO) take care of the rest.
2. When you hire your broker.
Can you believe the normal real estate transaction involves more than two dozen separate individuals? – you have your insurance assessors, your mortgage brokers and the underwriting department, Home inspectors, well inspectors, roof inspectors, foundation inspectors, inspectors that inspect your inspectors (just kidding on the last one....I think) appraisers, escrow officers, buyer’s agents, seller’s agents, bankers, title companies, and a number of other individuals whose actions and decisions have to be orchestrated in order to perform in sync to get a home sale closed. This is where your broker comes in handy. They are the "middle man". You could always quit your job, study real estate and do all this yourself but the bank you are getting a loan from may frown on this. It is the responsibility of your real estate broker to expertly coordinate all the professionals involved in your home purchase and to act as the advocate for you and your interests during the ENTIRE process.
These are the main roles of your broker as a Buyer’s Real Estate Broker:
- They will educate you on the market.
- Help you determine your wants and needs.
- Will guides you to homes that fit your financial, feature and location criteria.
- One of the best things is to coordinates the work of other needed professionals from that huge list above.
- Negotiates the best possible deal on your behalf.
- Checks and double-checks, then triple checks the paperwork and deadlines.
- Solves any and all the problems that may arise during the process.
Here are some important questions to ask your broker
Although qualifications are important. However, finding a solid, professional broker means getting beyond the broker's resume, and into what makes a broker a good broker. Use the following questions as your starting point in hiring your licensed, professional real estate broker: My answers are in blue text
- Why did you become a real estate agent? I have always been fascinated in real estate. Ever since I can remember the concept was so cool to me. I studied the markets everywhere I ever lived. I did many "deals", commercial and residential before I got my broker's license. I decided it would be great to help people understand what I have come to learn. Help them through the process of buying and selling one of the most important things in their lives.
- Why should I work with you? To be honest that is a tough question whenever I am asked that. Although I was always fascinated in real estate....real estate agents, not so much. I honestly never cared much for them. I knew they provided a much needed service but as far as their personalities, never much cared for them. I AM NOT LIKE MOST BROKERS! I really would rather let a deal fall through (and lose my commission) if it was the right thing for my client. I will negotiate, advise and advocate for you. You are my only concern.
- What do you do better than other real estate agents? I am the the king of negotiations. It is the thing I live for. I love nothing more than making two sides come to a mutual agreement.
- What process will you use to help me find the right home for my particular wants and needs? I have multiple ways to find properties. The MLS search is the main way of finding properties. I have the ability to allow you to set up for alerts for properties that fit your criteria. You can find the property email alerts here. I also have the ability to sign up in the back end of our metro list to notify other brokers if the parameters of the property you are looking for and they will notify usually before the home goes on the market so I can get a "sneak peek". We also have over 40 brokers in my office I can utilize to help locate the perfect property. I also will go and do a preview of properties that fit your needs. I attend "broker tours" that I go around and view properties.
- What are the most common things that go wrong in a transaction and how would you handle them? The most important thing for a broker to do is to remain even keeled throughout the transaction. A broker should never be too excited or too mad. I see many brokers taking things personally. When a broker does that he is acting in his best interest not their client's. I see many brokers reacting to a situation that they feel to be a big deal before even relaying the information to the client to see if that is something that even effects the client in any way. The way I approach that is I do not take anything personal. I am not supposed to be emotionally attached to the transaction. It is OK of course if you get emotional, after all this is one of the biggest decisions of your life. For me I must remain professional at all times and remember I am representing you and not myself. Your needs are all that matter in this transaction....Not the broker's needs.
- What are some mistakes that you think people make when buying their home? I think sometimes they "settle" for not exactly what they want because of the pressure of a broker that just wants to get the "deal" done. They end up with buyer's remorse from buying a product that is hundreds of thousands of dollars. I will never do that as a buyer's broker. My job is to advise, educate and help you understand ALL your options. I will never pressure you into purchasing a property. The decision is ultimately yours. Also do not buy a home you cannot afford. I will not go too deep into this but it was a big mistake back in '08 for many people, let's hope we learned our lesson.
3. Securing your financing.
Most people find home ownership thrilling and satisfying, the thought of taking on a mortgage may be very scary. Many buyers are confused about the process, especially these days with all the new regulations or nervous about making such a large financial commitment. Don't worry mortgage brokers will help you through the process and not put you into a home you can't afford.
(There are many things that happen behind the scenes but luckily you need not worry about those things)
- Choose a loan officer (or mortgage broker).
- Fill out a loan application to get pre-approved.
- Determine how much you want to pay and then choose a loan option.
- Submit to the lender an accepted purchase offer contract.
- Get an appraisal and title commitment.
- Obtain funding at the closing table.
4. Finding your perfect home.
Many people think that home buying starts with jumping in the car and driving all over town up and down the mountains. It is true that this is a very fun part of the process.....It can get old very fast. – if weeks or even months go by before finding the property you’re looking for, the magic can fade pretty fast. That’s why we say that looking for your home begins with carefully assessing your values, wants, and needs, both for the short and long terms. Then I will look on the MLS and find homes that meet your needs. You can also look online yourself as well. Please remember finding the perfect property is only a small part of what your broker does.
Things to think about
- What do I want my home to be close to? Schools? Shopping? Hiking? Freeway access?
- How much space do I need and why? RV parking? Horses? Lamas?
- Which is more critical: location or size? Farm land?
- Would I be interested in a fixer-upper? Handy man special?
- How important is home value appreciation? An up and coming area?
- Is neighborhood stability a priority? Do you want to see your neighbors?
- Would I be interested in a condo? Townhouse?
- Would I be interested in buying a lot and building?
- What features and amenities would I like? Horse property? AC? Which do I really need?
5. Making the offer.
When searching for your perfect home, you were not thinking much about what came next. Now you need to write an offer, you need to be a businessperson, professional and not over emotional. You need to approach this situation with a cool head and a realistic view of the market. The main parts of an offer are price, terms, and contingencies.
Price – the right price to offer must fairly reflect the true market value of the home you want to buy. Your agent’s market research will guide this decision.
Terms – the other financial and timing factors that will be included in the offer.
Terms fall under six basic categories in a real estate offer:
- Schedule – a schedule of events that has to happen before closing.
- Conveyances – the items that stay with the house when the sellers leave.
- Commission – the real estate commission or fee, for both the agent who works with the seller and the agents who works with the buyer.
- Closing costs – it’s standard for buyers to pay their closing costs, but if you want to roll the costs into the loan, you need to write that into the contract.
- Home warranty – this covers repairs or replacement of appliances and major systems. You may ask the seller to pay for this.
- Earnest money – this protects the sellers from the possibility of your unexpectedly pulling of the deal and makes a statement about the seriousness of your offer.
6. Perform due diligence.
Unlike most major purchases, once you buy a home, you can’t return it if something breaks or doesn’t quite work like it’s supposed to. That’s why home owner’s insurance and property inspections are so important.
A home owner’s insurance policy protects you in two ways:
- Against loss or damage to the property itself
- liability in case someone sustains an injury while on your property
The property inspection show expose the secret issues a home might hide so you know exactly what you’re getting into before you sign your closing papers.
- Your major concern is structural damage.
- Don’t sweat the small stuff. Things that are easily fixed can be overlooked.
- If you have a big problem show up in your inspection report, you should bring in a specialist. If the worst-case scenario turns out to be true, you might want to walk away from the purchase.
The final stage of the home buying process is the lender’s confirmation of the home’s value and legal statue, and your continued credit-worthiness. This entails a survey, appraisal, title search, and a final check of your credit and finance. Your agent will keep you posted on how each if progressing, but your work is pretty much done.
You just have a few preclosing responsibilities:
- Stay in control of your finances.
- Return all phone calls and paperwork promptly.
- Communicate with your agent at least once a week.
- Several days before closing, confirm with your agent that all your documentation is in place and in order.
- Obtain certified funds for closing.
- Conduct a final walk-through.
On closing day, with the guidance of a settlement agent and your agent, you’ll sign documents that do the following:
- Finalize your mortgage.
- Pay the seller.
- Pay your closing costs.
- Transfer the title from the seller to you.
- Make arrangements to legally record the transaction as a public record.
As long as you have clear expectations and follow directions, closing should be a momentous conclusion to your home-searching process and commencement of your home-owning experience.
8. Protect your investment.
Throughout the course of your home-buying experience, you’ve probably spent a lot of time with your real estate agent and you’ve gotten to know each other fairly well. There’s no reason to throw all that trust and rapport out the window just because the deal has closed. In fact, your agent wants you to keep in touch.
Even after you close on your house, you agent can still help you:
- Handle your first tax return as a home owner.
- Find contractors to help with home maintenance or remodeling.
- Help your friends find homes.
- Keep track of your home’s current market value.
Attention to you home’s maintenance needs is essential to protecting the long-term value of your investment.
Home maintenance falls into two categories:
- Keeping it clean: Perform routine maintenance on your home’s systems, depending on their age and style.
- Keeping an eye on it: Watch for signs of leaks, damage, and wear. Fixing small problems early can save you big money later.