BUYING
THINKING OF BUYING A HOME?
Owning a home is the American dream, but one that requires time, homework, and effort on your part to ensure that the process goes as smoothly as possible. If your desire to own a home is based on wanting to create stability, keeping control over your living situation, building equity and investing in your future, go for it. Here's how to make your dream a reality.
13 STEPS TO OWNING YOUR OWN HOME
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Credit Debt- Strengthen your credit: Pay off credit cards, resolve any credit disputes or delinquencies, and cancel unused cards.
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Simplify your search by defining the area you'd like to live in. Scout out what's available in the vicinity. Look at prices, home design, proximity to shopping, schools and other amenities. Visit a few open houses to gauge what's on the market and to see firsthand what you want, such as overall layout, number of bedrooms and bathrooms, kitchen amenities, and storage.
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Shop for a real estate agent who will search for suitable properties, represent your interests and negotiate on your behalf. A buyer's representative can evaluate the properties you view.
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Neighborhood and condition of nearby homes is important. The area in which your home is located is sometimes a bigger consideration than the home itself, since it has a major impact on your home's resale value. The golden rule is Location, Location, and Location.
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Try not to fall in love with one particular property. It's great to find exactly what you need, but if you get your heart set on one home, you may end up paying more than it's worth because you're emotionally invested. The deal may also fall apart.
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Make sure you get a home inspection. Include earnest money with your offer. Your agent can assist in arriving at an amount (usually $1,000 to $5,000). Once you sign an offer, you are officially in escrow, which means you are committed to buy the house or lose your deposit, unless you do not get final mortgage approval. During escrow your lender arranges for purchase financing and finalizes your mortgage. This is also when all inspections must be completed.
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Close escrow. This final step in buying a home, usually conducted in a title office, involves signing documents related to the property and your mortgage arrangements. The packet of papers includes the deed, proving you now own the house, and the title, which shows that no one else has any claim to it or lien against it. If any issues remain, money may be set aside in escrow until they are resolved, which acts as an incentive for the seller to quickly remedy any problem areas in order to receive all that is owed.
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Decide what sort of home you want. A single-family home in good condition offers instant livability. However you can build equity quickly if you have the skills and ample time by purchasing a fixer-upper and making it livable. New home construction by a builder that doesn’t have a buyer can also be a good deal if the builder is eager to get its money out of the project. You acquire a new home at market value with many upgrades.
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Get pre-qualified to get the actual amount you can pay. Most lenders allow you to put up to 28 percent of your gross income or 36 percent of your net toward a house payment.
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Go into detail when describing to your agent what you want in a home: number of bathrooms and bedrooms, attached garage, land and anything else that may be important, like good light or a big enough yard for the kids. If your agent shows you homes that aren't what you want, find another one who listens more attentively.
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Visit properties you're seriously interested in at various times of the day to check traffic and congestion, available parking, noise levels and general activities. At first it may be peaceful neighborhood but at lunch time or for commuting it may become noisy and dangerous.
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Work with your agent to present an offer. In many areas multiple offers are commonplace; your agent should help you craft a competitive bid that makes the most of your financial assets. Your realtor can evaluate a market analysis to determine its value in the marketplace, select an appropriate price to begin negotiations and advise you in writing the contract. He or she can help you determine how close to the asking price you should be and, if your offer's turned down, how to counteroffer.
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Request the following surveys and reports: inspection, pests, dry rot, radon, hazardous materials, landslides, flood plains, earthquake faults and crime statistics.