The Complete Guide to Purchasing a Home
Buying a home is one of the most exciting milestones of your life. To prepare yourself for this moment, you need to know what to expect during the process. This step-by-step buyer’s guide will help reduce the stress of buying a home and help you enjoy the journey.
Do you know where you want to buy? Do you want a condo, townhouse, single-family home, or multi-family home with potential to rent? Do you know which features you like and dislike? Do you know what’s available on the market now? If you answered no to any of these questions, now is the time to start researching. In addition to looking for homes that interest you, take note of any changes in asking prices. This could give you valuable insight into housing trends in specific neighborhoods and help you when the time comes to make an offer.
Don’t worry, I am here to help you through all of this! This is simply where I am going to start our journey.
Notice I said to decide on your budget—not determine how much the mortgage company will give you. In many cases, a mortgage company will pre-approve you for more than you’re comfortable spending. This is why you need to determine the monthly payment you feel comfortable with before talking to a lender. This likely includes doing a full household budget and taking into consideration what changes other than a mortgage payment will occur once you move into your new home. If you’ve lived in an apartment or with roommates, you may overlook new expenses like water, taxes or HOA fees that could be easily overlooked and need to be included in your budget.
It is important to understand your comfort with a particular monthly payment, but the mortgage company may not be in sync with that number. Just as they may approve you for too large of an amount, they may also approve you for a lesser amount or deny you a mortgage altogether. Lack of time at a job, insufficient credit, past bankruptcies, or other financial issues can cause challenges when trying to secure a mortgage. Before you get your heart set on a home, talk to a mortgage professional to find out what amount you can qualify for. This will also be an advantage when you make an offer on a home, as most sellers won’t entertain offers from those who aren’t already prequalified for a loan.
Can you shop for, look at, and ultimately make an offer on a home without a real estate agent? Technically yes; but why would you, when it costs you nothing for an agent like me to take much of the stress off your shoulders? Not only will I help identify properties that will be of interest to you, I can arrange showings and ultimately handle the offer process. Finding the perfect home can be a daunting task, this is where my expertise and wealth of knowledge come into play. Let me show you around some homes that meet your specific criteria so you can find the one that's right for you.
It is best for you to find an agent that you trust to be your agent, that will always be working with your best interest in mind. Your agent then has the opportunity to learn what is important to you, and can help you compare and contrast the homes that you are considering. Your agent should be the person to educate and guide you through every step of the journey.
This should be the most enjoyable step of the entire process (other than moving in!). I will arrange showings of homes you’re interested in, that are within your price range. Then, while I am there I will take note of what is important to you and I will let you know what issues the home may have, before you make an offer, not after you move in. I want you to feel confident and educated when putting in an offer. Don’t limit your inspection to the home itself. Make sure to take time to explore the neighborhood and keep an eye on traffic at certain times of the day, the parking situation, and how close it is to necessities, like schools and grocery stores. If there is something that you can’t figure out, just ask and I will get you all the answers you need.
Once you have selected the perfect home, I will craft a fair offer based on the value of comparable homes on the market. Depending on what the home is listed at and whether the current environment is a buyer’s or seller’s market, your offer may be below, at, or even above the asking price. If we receive a counteroffer, I will be able to help you negotiate, and reach an agreement. At this point, the house will go into attorney review, if buying in NJ.
If you are buying in the state of New Jersey, you have another step in the home buying process, called attorney review. Attorney review is a 3 day period in which both the buyer and seller have their Real Estate attorneys look at the contract and have time to contest it. In which time, the contract is disaffirmed, (which it always is) your attorney will prepare a rider and go over it with you. The rider is an addendum to the contract, to make sure both parties are clear on the terms of the sale and they are protected. The attorneys approve these new provisions with their respective clients and if all parties agree, all sign and you are now under contract.
In most cases, your offer will be contingent on having the home inspected to ensure you are going into this sale well educated. I want you to be fully aware of any and all issues there may be with this home, before we go further, prior to you putting down your deposit. I can help you arrange the inspection and get it scheduled within days of making an offer. If you are comfortable with the issues revealed during the inspection, the process will proceed. If you are not comfortable with the issues found, we will renegotiate your offer based on what needs to be repaired/replaced, or we can withdraw your offer.
Now is the time to go back to the mortgage lender who pre-approved or pre-qualified you and choose the mortgage that best suits your needs. You will be presented with various options based on your unique financial situation, including fixed-rate, variable-rate, 15-year, 30-year, or special programs such as VA or FHA loans. Work with your mortgage lender to select the option you feel the most comfortable with.
Your lender will have your prospective new home appraised, in order to determine an independent value of the home. The appraisal is to ensure that all parties involved are paying a fair price for the home.
No one looks forward to all the paperwork involved in buying a home, but it is a necessary part of the process. Fortunately, everything will be arranged by your lender, your attorney and title company. When you’re finished, you’ll know you are the legal owner of your new house.
Upon signing the final paperwork, the purchase is complete, and you are now the owner of a new home!
Whether you’re a first-time home buyer, upsizing, downsizing or an experienced real estate investor, Michele personally ensures that all Madison Group clients are treated with the honesty, respect, and efficiency that you deserve.
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