It's good to have money and the things that money can buy, but
it's good, too, to check up once in a while and make sure that you haven't lost
the things that money can't buy. -- George Lorimer
Real Estate: Steps to buying a Home
If you want to buy a home, here are the steps
to buying a home:
- You have to determine how much you have saved or planning
to save for a down
payment and closing costs. The biggest problem many people face when making
the move from renting to owning a home is the down payment. You’ve been making
regular payments every month for rent and can’t seem to accumulate enough
capital for a more permanent home. Many times homes in your area appreciate in
value faster than you can save. You should explore all possibilities and make
every effort to purchase a home now and begin benefiting from the home’s
appreciation and the income tax deduction that come with home ownership. But
saving for your down payment doesn’t
need to be the mountain you’ve made it out to be. Contact me so we can discuss
this further.
- Prequalify or preapproved for a mortgage and figure out how
much of a house you can afford. Prequalification is the process where the
lender will look at a basic copy of your credit report and use the information
you supply to determine how much mortgage you can afford based on your income.
No accounts or employment information is verified. While a "pre-qual" is
non-binding to the lender (because the information you provide has not been
verified), it does serve as a good indication to potential sellers of your
general creditworthiness.
Preapproval occurs when all credit and employment is verified and the mortgage
is approved, subject to the appraisal of the property you have chosen to buy.
Final loan approval occurs when the property has been appraised, all
documentation is in the hands of the lender and all contingencies have been
met.
- Decide where you want to live. What kind of neighborhood?
What kind of schools? Urban, Suburban or rural areas?
- Decide what kind of home your want: new, older, single
family, duplex, townhouse, condominium.
- Look for a home. Most likely you will be working with real
estate agents, since most homes are sold through them. See enough houses so
you can compare what is out there and fits your needs best.
Most home sellers hire real estate agents to list and sell their homes.
Most of those who do not are known as For Sale By Owners, or FSBOs. They
market and sell their homes themselves. However, a small number of people sell
without marketing their homes. They include homeowners who transfer property
to family members or landlords who directly offer tenants the first right to
purchase property before they place it for sale on the market.
In the end, most FSBOs eventually hire an agent because the agent will handle
all the details of a successful home sale ? including the contract, forms, and
disclosure statements ? and expose the home to the widest range of prospective
buyers through the local Multiple Listing Service (MLS).
- Make an offer to purchase the home.
- Have the home inspected. Always!
- Attend closing and you are the proud owner of your own
home!
Depending on where you live, there are different style of
ownership when you are looking to buy a home. The best investment is to buy a
single family home. But in major cities such as New York, land is scarce and
homes are expensive, therefore condo and co-op may be your best choice.
|
Ownership |
You own |
Your rights |
what you pay for |
|
House |
Land and
building on which is built |
You can rent or
sell as you pleased |
-Property
taxes.
-All maintenance, repairs and renovations.
-Mortgage and insurance on the property. |
|
Condo |
Your own
private living space (not the building and land) |
You can rent or
sell as you choose |
-Real estate
taxes on your individual unit.
-Monthly maintenance fee and real estate taxes on overall condo property.
-Mortgage and insurance on your unit. |
|
Co-op |
A co-op is a
corporation that owns a particular residential property. Instead of owning
an individual unit, you own shares in the corporation, which gives you the
right to live in that unit. |
Buyer MUST be
approved by the board and renting may not be allowed. |
-Monthly
maintenance charge (for real estate taxes, mortgage on the building, fuel,
insurance, operating costs).
-Repairs paid by co-op and passed along to shareholders.
-Monthly payment on a loan used to purchase the shares, the equivalent of a
mortgage. |
Why should you use a real estate agent?
A real estate salesperson is more than just a "sales
person." They act on your behalf as your agent, providing you with advice and
guidance and doing a job - helping you buy or sell a home. While it is true
they get paid for what they do, so do other professions that provide advice,
guidance, and have a service to sell --such as Certified Public Accountants and
Attorneys.
The Internet has opened up a world of information that wasn't
previously available to homebuyers and seller. The data on listings available
for sale is almost current - but not quite. There are times when you need the
most current information about what has sold or is for sale, and the only way to
get that is with an agent.
If you're selling a home, you gain access to the most buyers
by being listed in the Multiple Listing Service. Only a licensed real estate
agent who is a member of your local MLS can get you listed there - which then
gets you automatically listed on some of the major real estate web sites. If
you're buying or selling a home, the MLS is your agent's best tool.
There are two types of agents, "Buyer's Agents"
and "Seller's Agents". It used to be common for all parties involved to work for
the seller, hence the term "Seller's Agent". Nowadays, you will most often find
a different type of agent, the "Buyer's Agent". If you are in the market to buy,
it would be advisable to use a Buyer's Agent. They can make recommendations on
what terms and prices to offer as well as negotiating a deal with your best
interest in mind. If you happen to be working with a Seller's Agent, never
disclose to them the top dollar you are willing to pay for any property. Keep it
narrowed down only to things that you would tell the seller directly.
6
biggest home-buying mistakes:
Not doing your homework - Knowledge is power.
Tremendous information is available on the Internet. There is no excuse
for entering the market unprepared. Since you are on reading this show you
are definitely doing your homework.
Trying to make a shrewd investment - People need to buy based on
what fits their family. Don't try to guess what will happen to the real
estate market in the future.
Choosing a poor location - Even within a neighborhood, location
matters. Is it on the busiest street? Is there a shopping center out the
back window? In real estate, it's LOCATION, LOCATION and LOCATION.
Overlooking how the house will function for your
family - How do you really live? Do you really need a formal
dining room and living room? Would you be happier with an eat-in kitchen
and a great room and a den to use as a home office? The house only needs
to fit one family -- yours.
Not having the home properly inspected
-
This likely will be your biggest purchase. There
is no room for surprises later, it will be more expensive.
Get an inspection from a qualified, respected professional.
Not buying at all
- If you
can afford a home and you don't make that purchase, you'll lose the
benefit of tax deductions, building home equity and the appreciation in
value.
Next -->>
What is a Mortgage and do I needed?
Table of Contents:
-
Should
you buy a home?
Renting vs. Buying:
-
Steps to buying a home
-
What is a
Mortgage and do you needed?
-
Different types of Mortgages
-
More Mortgage
Choices
-
0 to 5% down
with FHA and VA loans?
-
Cosigning: The Pitfalls
-
Qualifying for a
Mortgage
-
How much of a
mortgage and a house can you afford?
-
Finding a home with FSBOs & Real Estate Agents.
- It's closing
time: Title and the keys please!
-
Tapping your home
equity: Refinancing
-
Tapping your home equity: Home Equity Loans
-
Frequently
Asked Questions (FAQs) on Real Estate & Mortgages
|
