The home buying process is exciting but complicated. Not only do you need the right lender, real estate agent, budget, house, neighborhood, and other criteria for the house you’re buying, but there a lot of variables in types of properties and funding that can affect your bottom line, and your satisfaction. Don’t start house-shopping until you’ve read this guide to the home buying process.
What Comes with the House You Buy?
When you buy a house, be specific and detailed with the seller about what you perceive to receive, and make sure that the information is documented explicitly in the contract. Personal property such as chandeliers, mirrors, artwork, televisions with wall mounts, and window dressings may not be part of the deal. In fact, you should not assume you’ll own the appliances with your purchase. Many sellers who have upgraded their home’s refrigerator, stove, dishwasher, washer, and dryer may decide to take those items with them when they move – or replace the ones you saw on your home tour with items of lower quality.
How to Buy a House with a Real Estate Agent
Real estate agents are experienced professionals who can help you understand and navigate the complex processes of the purchase of a home. Although real estate professionals are happy to show you houses for sale, they do not get paid until you complete your purchase because they work on commission. For this reason, you should seek pre-approval for your home mortgage loan to establish yourself as a qualified buyer before asking an agent to assist with touring homes. Your agent will not only show you properties that match your criteria but will communicate directly with sellers’ agents, help you put in a competitive offer, and guide you through negotiations, appraisals and inspections, and contracts.
What Happens When You Buy New Construction?
Buying new construction is intriguing. It’s enticing to be the first person to occupy a home. You can purchase a house that has already been built by the builders, have a semi-custom home where you can choose many of the finishes, or have a new home crafted specifically to your needs. However, new home construction does not mean the house is in perfect condition. Know what items are standard, and what items may incur additional costs such as appliances, window dressings, etc. You can request that your contract is contingent on final inspection and may still choose to purchase a home warranty to cover unexpected costs associated with your property’s structure and major systems such as heating and air, roofing, etc.
How to Buy a House When Selling Another
Buying a house is a major undertaking on its own. However, that process is significantly more challenging when you’re selling an existing home at the same time. In a perfect world, you could move into your new home first and then sell your current house. But that isn’t always possible. Before you begin that journey, meet with your lenders and financial advisers to determine whether you’ll obtain a separate mortgage on the house you’re buying, or if the offer you put in on your future residence is contingent on the sale of your existing property. In cases where you must sell your current house to afford your next house, be aware of timelines when setting a closing date in your contracts.
How to Buy a House with Cash
Paying cash for a property is ideal if you can afford it. In cases of short sales and foreclosures, it’s possible to get a whole lot of house for a reasonable amount of cash. Before jumping into an all-cash purchase, make sure the investment is realistically affordable for you. You should have 3-6 months of living expenses stashed away in an emergency fund. Then, assess your income and expenditures. You may be able to jump past a mortgage but will still have to pay property taxes, homeowner’s insurance, and potentially HOA fees. You may have to submit proof of funds with your offer, and an earnest money deposit. Although you will still be responsible for closing costs, those costs may be minimal, as low as one percent of the value of the property, because you won’t be obtaining a mortgage. Have the house you plan to pay cash for inspected to rule out any major repair costs upon purchase.
How to Buy a Foreclosure
Foreclosures can make some properties more affordable than traditional real estate purchases. However, there are various types of foreclosures that include short sales, auctions, bank-owned houses, and government-owned properties. Choose to work with an experienced real estate agent who specializes in foreclosure transactions. Because there are various types of foreclosures, the requirements for purchasing foreclosed homes differed from one to the next. As with a traditional purchase, seek out pre-approval from a home-mortgage lender before your search. Understand that most foreclosure sales come as-is, with no guarantees or warranties. It may be wise to order an independent inspection before sealing the deal to reveal any unforeseen problems.
How to Buy a For Sale by Owner
There may be some advantages to purchasing a property for sale by owner, but more often there are complications. Real estate agents specify their policies individually for working with FSBO properties. Talk with your agent to determine whether or not they can guide you through the rough waters of for sale by owner real estate transactions. The property will still need an appraisal, mortgage approval (unless you’re paying cash), seller’s disclosures, pest inspections, and determination of the house’s qualification for homeowner’s insurance. When earnest money deposit is required, do not give that deposit directly to the seller, but to a third party professional such as an independent escrow agent. Your agreement with the seller should also specify responsibility for tax transfers, escrow, title fees, and other clerical processes.
What Does it Cost to Close on a House?
Although the final amount of closing cost varies, it is safe to estimate closing costs between one percent and eight percent of the property’s value. Closing costs include real estate agent commissions, appraisers, inspectors, lenders, escrow agents, clerical work, and more. Your lender will provide you an estimate of closing costs when you obtain your loan and will furnish an actual amount no less than three days before closing.
When buying a house, don’t go into the process blindly or with naivety. Educate yourself about the various types of real estate transactions, and their risks, requirements, and rewards. Trust the qualified, professional real estate agent you hire to help you experience the journey to home ownership with maximum benefit and minimal stress.
Want to know more? Call Sheri George at 704-224-1166.