You've found a home you love and you’re ready to stake your claim. For most buyers, purchasing a home can be confusing, intimidating, and a less-than-ideal way to spend several months, but don't let off-putting factors like loans, inspections and competitive offers keep you from movin’ on up.
It's really not that scary once you’re armed with a little wisdom, an understanding of the process, and foolproof advice that will help you buy like a boss. That's where we come in.
With some help from Peter Murray, an expert realtor for RE/MAX Plus, we outlined a sweet step-by-step guide that will take you from a daydreamer to a home-buying aficionado. So get ready to start packing and picking out paint colors. Find out more by contacting an insurance agent in your area.
Peter said that the whole process begins with finding a trustworthy realtor, not a real estate agent, and yes, there’s a difference. (Sorry, agents. Nothing personal.) Realtors have more requirements, additional training and education, and in general, more insight.
They're also required to follow a Code of Ethics dictated by the National Association of Realtors, to ensure they’re following the best interests of their clients.
He added that realtors, unlike agents, will disclose all known fees up front, so you don't end up with unhappy surprises. Agents may not offer the same courtesy, and may end up tacking on some hidden fees in the end. Who wants that? Not you, right?
Peter broke down some realtor-selecting dos and don'ts for us.
“Your home will be a huge asset in your life. You want to make sure you find the absolute best, most knowledgeable and trustworthy realtor to help you with such an important process as buying your next home," said Peter.
Unless you’re swimming in stacks of cash, chances are you'll be needing a loan. Your realtor or your friends may have recommendations for a lender who could work with you, or your own bank may offer loans. Just like your realtor, it's important to be comfortable with the lender.
"A good lender should care about your unique financial situation. If, on paper, you can afford a $200,000 loan, but you know that realistically you can actually only afford a $100,000 loan, your lender should be sympathetic to that," said Peter.
Do your research and shop around to determine what you know you can afford, and don't let yourself be bullied into more than that. But what kind of credit score do you need to qualify for a loan, you may ask?
All right, you've got your realtor and your cash flow. You're ready to give the place an in-person walk-through. Your eyes/ears/nose can spot things during a walking tour that would be impossible to catch in the virtual tour.
Here are some details about the showing that Peter laid out for us:
Before the next step, it's a good idea to review the local housing and redevelopment authority, if one exists, to determine if there are any local ordinances you should be aware of.
If you're purchasing a condo, it's also a good idea to research any hidden fees that you may be hit with after you've moved in. Certain condos also don't accept all types of loans, so if you're condo-bound, plan accordingly.
You’ve finally finished the previous steps, now what? Correct, it’s time to make an offer. Rely heavily on your realtor to put together a thorough analysis of the property. They’ll check local comps, come up with an estimated value range, and add in any desired inspection fees. THEN...
Write 'em an offer they can't refuse - and act fast. There's stiff competition and you don't wanna lose. IF the offer is accepted...
Peter added that you can schedule as many inspections as you'd like, but the seller may not be patient with you. Their objective is to close the sale, and if another buyer is ready to pounce, they might not wait if you’re dragging your feet.
The most common things to inspect:
This is the part when you get to put on your negotiating hat and bring a nice list of demands to the seller. You'll mention any safety concerns uncovered by the inspections and anything else that you find not up to your high standards.
Safety concerns should be taken care of, according to Peter, but requests like adding a personal movie theater/bowling alley will probably be ignored. Or laughed at.
Next comes about 30 to 45 days of waiting for a contract to be drawn up after you've written your offer. Once you’re through that, you can finally stop biting your nails to the quick and jump up and do your just-bought-a-house dance. This is the part when the seller gets the money, and you get the key.
The title of the property will be transferred to you. But before you scout out the perfect wall to hang your life-sized self-portrait, you should really schedule a final walk-through.
"You want to make sure it's in the same conditions as when you made your offer - this is basically like validating your contract," said Peter.
If you do find any new problems, don't hesitate to point them out before you start unpacking all your junk. Otherwise, gas up that van and decide on your favorite pizza order, because you're movin' in!
The entire home buying process will take about 2 to 3 months "in a perfect world," according to Peter. That's a long lag time of eye-straining research, signing important scary legal documents, watching people tell you what's wrong with your dream house, and living out of stacked boxes.
The end result will be ultra-rewarding and totally worth it. You'll have the pride and satisfaction of having just exercised some serious adulting skills. (Plus, new house!)
Huge thanks to Peter Murray, realtor for RE/MAX Plus, for all the insights and answers. You can also find out more by contacting an insurance agent in your area.
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