Steps to Home Ownership
Buying a home can be one of your most expensive
investments in life. It can also be one of your most complex ventures. Knowing
what to expect and being prepared will help you to minimize your stress level.
With that in mind, we are providing some of the questions most buyers have about
purchasing a home.
- How do I get started in the home buying process ?
- Why should I use a RealtorŪ to
help me with my purchase ?
- What do I need to do to get
pre-approved for a loan ?
- How do I go about finding the
home I want ?
- I found the home I want, now what
should I do
?
- What do I do if the house costs
more than I am pre-qualified with a lender ?
- What do I need to do about
insurance?
- What is Closing and what happens
at Closing ?
- What happens next?
[One of the keys to making the home buying
process easier and more understandable is planning. In doing so, you'll be able
to anticipate requests from lenders, lawyers and a host of other professionals.
Furthermore, planning will help you discover valuable shortcuts in the home buying
process.
Whether you are a first-time homebuyer
or entering the marketplace as a repeat buyer, you need to ask why you want to
buy. Are you planning to move to a new community due to a lifestyle change or is
buying an option and not a requirement? What would you like in terms of real
estate that you do not now have? Do you have a purchasing timeframe?
Whatever your answers, the more you know about the real
estate marketplace, the more likely you are to effectively define your goals.
Once you know what you want let us help
you find it.]
[Buying and selling real estate is a
complex matter. At first it might seem that by checking local picture books or
online sites you could quickly find the right home at the right price.
But a basic rule in real estate is that all properties
are unique. No two properties -- even two identical models on the same street --
are precisely and exactly alike. Homes differ and so do contract terms,
financing options, inspection requirements and closing costs. Also, no two
transactions are alike.
In this maze of forms, financing, inspections,
marketing, pricing and negotiating, it makes sense to work with professionals
who know the community and much more.
RealtorsŪ are experienced in real estate in Charlotte and the
surrounding area. We will make sure your needs are met. ]
[Few people
can buy a home for cash. According to the National Association of REALTORSŪ
(NAR), nearly nine out of 10 buyers in 1999 financed their purchase, which means
that virtually all buyers -- especially first-time purchasers -- required a
loan.
The real issue with real estate financing is not
getting a loan (virtually anyone willing to pay lofty interest rates can find a
mortgage). Instead, the idea is to get the loan that's right for you -- the
mortgage with the lowest cost and best terms.
REALTORSŪ routinely suggest that consumers start the
mortgage process well before bidding on a home. Many lenders (the sources of
money) and programs, are available depending on your needs. The sooner you get
started, the better. I recommend that
you start looking for a lender as soon as possible so that you will know exactly
how much you can afford to spend on a home. However, if you are unable to find a
lender that meets your needs, give me a call and I will help you find
the right lender for your specific circumstances.
]
[Some 6 million new and existing homes are
sold each year. There's no shortage of housing options, but with so many choices
the challenge becomes finding the property which best meets your needs.
The housing market is complicated because the
stock of homes for sale is always in flux. If it were possible to have a
complete list of every home for sale at this very moment in a given community,
such a list would become obsolete within seconds as new homes become available
and properties now for sale are put under contract.
In effect, buyers are looking at a moving
target in a marketplace that is never static. Because of this, it is important
to know as much as possible about the choices in preferred markets, and the way
to do that is by working closely with a local REALTORŪ who has a good "lay
of the land."
A home is more than just a collection of
bedrooms and bathrooms. Several properties -- each with four bedrooms, three
baths, and the same price -- may well represent radically different designs,
commuting distances, lot sizes, tax costs, interior dimensions, and exterior
finishes.
Each of us is different and so it's important to list
the features and benefits you want in a home. Consider such things as pricing,
location, size, amenities (extras such as a pool or extra-large kitchen) and
design (one floor or two, colonial or modern, etc.).
Next, it's important to consider your priorities. If
you can't get a home at your price with all the features you want, then what
features are most important? For instance, would you trade fewer bedrooms for a
larger kitchen? A longer commute for a bigger lot and lower cost?
Lastly, consider your needs in
several years. If you'll need a larger home, maybe now is the time to buy a
bigger house rather than moving or expanding in the future. If you expect your
income to increase, perhaps you should consider a more expensive home financed
with a loan program where monthly payments increase in the future.
Ready to get started? Give me
a call 704-661-0877. I am here to help!]
[There's no doubt that choosing a home is a
big decision and you want to do it right.
As a buyer, here's what actually happens. A home has
been placed on the market for which the seller has established an asking price
as well as other terms. In effect, this is an offer. At this point, you have
three choices: accept the seller's offer and create a contract; reject it and
not make an offer; or suggest different terms and make a counter-offer. If you
choose this last option, the seller may accept, reject or make a counter-offer.
No aspect of the home buying process is more complex,
personal or variable than bargaining between buyers and sellers. This is the
point where the value of an experienced REALTORŪ is clearly evident because he
or she knows the community, has seen numerous homes for sale, knows local values
and has spent years negotiating realty transactions.
The agents at Hope Advantage Realty, Inc have
helped many buyers get what they want by helping them negotiate the right terms
in their contract. Let me help you do the same!]
[Often the cost of real estate financing is
routinely greater than the original purchase price of a home (after including
interest and closing costs). Because financing is so important, buyers should
have as much information as possible regarding mortgage options and costs.
Homestore.comTMTM
provides consumers with extensive
mortgage
information as well as a variety of loan calculators. Local REALTORSŪ can
provide mortgage information, discuss financing options and recommend loan
sources. In addition, some REALTORSŪ also originate loans.
What kind of loan?
There are thousands of loans available out there from a variety of lenders, but
in general, the mortgage you choose will likely be determined by at least
several key factors:
- How much down? Loans with 5 percent down or less are
now widely available -- in fact, loans from major lenders with no money down
have appeared in recent years.
- If you place less than 20 percent down, lenders will
want the mortgage guaranteed by an outside third party such as the Veterans
Administration (VA), the Federal Housing Administration (FHA) or a private
mortgage insurer (PMI, or private mortgage insurance, is required by lender
to protect against any mortgage defaults). More than 2.5 million VA, FHA and
PMI loans are generated each year.
- How's your credit? The best rates and terms are only
available to those with solid credit. To get the best loans, make a point of
paying credit cards, installment payments, rent and mortgage bills in full
and on time.
- Are you a first-time buyer? It might seem that
"first-time buyer" means someone who has never owned property
before, but under most state programs, the term refers to those who have not
owned property within the past three years. State-backed first-timer
programs often feature smaller downpayments and below-market interest rates.
For details, speak with your local REALTORŪ.]
[No one would drive a car without insurance,
so it figures that no homeowner should be without insurance and if you are
financing your home, no lender is going to give you a loan without homeowners
insurance. Homeowners' insurance provides fire, theft and liability coverage.
However, there are also other insurance protection that you will have to think
about..
There are various forms of insurance
associated with home ownership, including these major types:
 |
Title insurance:
Purchased with a one-time fee at closing, title insurance protects owners in
the event that title to the property is found to be invalid. Coverage
includes "lenders" policies, which protect buyers up to the
mortgage value of the property, and "owners" coverage, which
protects owners up to the purchase price. In other words, "owners"
coverage protects both the mortgage amount and the value of the down
payment. |
|
|
Flood insurance: Generally required in
high-risk flood-prone areas, this insurance is issued by the
federal
government and provides as much as $250,000 in coverage for a
single-family home plus $100,000 for contents. Local REALTORSŪ can explain
which locations require such coverage. |
|
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Home warranties: With new homes, buyers want assurance that if something goes wrong after
completion the builder will be there to make repairs. But what if the
builder refuses to do the work or goes out of business?
Home warranties bought from third parties by home
builders are generally designed to provide several forms of protection:
workmanship for the first year, mechanical problems such as plumbing and
wiring for the first two years, and structural defects for up to 10 years.
Home warranties for existing homes are typically
one-year service agreements purchased by sellers. In the event of a covered
defect or breakdown, the warranty firm will step in and make the repair or
cover its cost.
Have questions about the different forms of
coverage and protection? Let me help
you find the answers you need.
|
What is Closing and what
happens at Closing?
[In
practice, closings bring together a variety of parties who are part of the
"transaction" process. For example, while the history of property
ownership has been checked, it's possible that the records contain errors,
unrecorded claims or flaws in the review itself, thus title insurance is
necessary. At closing, transfer taxes must be paid and other claims must also be
settled (including closing costs, legal fees and adjustments). In most
transactions, the closing agent also completes the paperwork needed to record
the loan.
Settlement is a brief process where all of the
necessary paperwork needed to complete the transaction is signed. Closing is
typically held in an office setting, sometimes with both buyer and seller at the
same table, sometimes with each party completing their papers separately.
Whatever the case, the result is that title to the
property is transferred from seller to buyer. The buyer receives the keys and
the seller receives payment for the home. From the amount credited to the
seller, the closing agent subtracts money to pay off the existing mortgage and
other transaction costs. Deeds, loan papers, and other documents are prepared,
signed and filed with local property record offices.
Have more questions about the Closing process? Let
me provide the answers for you! I will also
accompany to the closing to make sure everything goes smoothly]
What happens next?
[You've
done it. You've looked at properties, made an offer, obtained financing and gone
to closing. The home is yours. Is there any more to the home buying process?
Whether you're a first-time buyer or a repeat buyer,
there are several more steps you'll want to take.
Those papers you received at settlement are
extremely valuable, so hold on to them! In the short-term they can help
establish tax deductions for the year in which the property was purchased. In
the future, such papers will be important for tax purposes when the property is
sold, and in some cases, for calculating estate taxes.
Also at closing, determine the status of the utilities
required by the home, items such as water, sewage, gas, electric and oil
service. You want utility bills to be paid in full by owners as of closing and
you also want services transferred to your name for billing. Usually such
transfers can be done without turning off utilities. REALTORSŪ can provide
contact numbers and related information.
About two weeks after closing, contact your local
property records office and confirm that your deed has been officially recorded.
Such records are public notices that show your interest in the property.]
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Revised: June 16, 2005
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