For most people, buying a home is generally the most expensive transaction they will make in their lifetime. And during this costly purchase, there are a lot of legalities along the way that need to be adhered to, to ensure a smooth transaction. Hiring a real estate agent to represent you in the purchase of your home is going to be substantially beneficial.
For starters, buyer’s aren’t responsible for the commission payout for their agent. (With the exception of special, rare circumstances.) So without the cost of paying an agent out of pocket, you’ll receive the experience and guidance to help you through a process that could otherwise be emotionally exhausting if you are going it alone. Laws are constantly changing, and by having an educated agent guiding you through the process, you can be sure to have your best interests in the purchase always looked after.
You also get to have access to view more homes, and have a clearer view on how the market is in your area. Sites like Zillow, Trulia, and others have outdated listings and misrepresent property values. Your agent will be able to send you a list of active properties for sale, help you go out to view them, as well as
negotiate for you to get a great deal. Find an agent that will work hard to help you find your dream home and avoid the pitfalls of buying a home by doing it on your own.
The Importance Of A Pre-Approval
Prior to starting your house hunt, it’s important to find out the loan amount the bank will qualify you for. Having this knowledge will give you the upper hand in negotiating situations, because you’ll be able to place strong offers on the right home, knowing you have the funds to support your offer. This will make sellers take your offer more seriously and will help you towards winning the home of your dreams.
In such a booming housing market, most offers without a pre-approval letter will be dismissed. Which ends up wasting a lot of your time, and if you are serious about buying, can cause a lot of disappointment if you lose out on the perfect property. Get in touch with a lender to get a no-obligation pre-approval rate, and have the upper hand during the process.
Discussing Your Loan Options
There is a continued misconception about the necessities to purchasing a home. Most people are led to believe that they are required to have 20% down with a near perfect credit score to qualify for a mortgage. This scenario is simply not true. With a variety of loan options available, home ownership can be a possibility with 0% down. And standard FHA and Conventional loan downpayments are between 3.5% to 5% down. A significant difference from 20%.
You can discuss the different loan options with a lender to see what works for you. Most bank lenders will accept credit scores down to 640; however, you can find many local lenders who can work with credit scores down to 580 for FHA loans.
There are a lot of national and local loan options that can be reviewed to assist you with the approval process. Keep in mind that there are separate closing cost fees (which your agent can further explain) that are not included in the down payment. However, if you are tight on cash, you can discuss with your lender to
see if there are any programs that may be available to assist you with closing costs.
Starting The House Hunt
Looking online for a home is part of the excitement of finding the perfect place. Unfortunately, a lot of the public data that can be found online provides outdated listing information; such as, properties that have already sold, or properties that are already pending under contract.
This is where the importance of a real estate agent comes in. They can direct you to resources that provide more accurate information. Your agent will also be looking on your behalf for new homes that come on the market, so you find out about them immediately. Instead of waiting for it to show up on public resources, in which case, can be too late to get an offer in.
When it comes to finding your perfect house, be sure to take the time to sit down and write out all of features that are a must and all of the features that you would like to have, but aren’t required, and base those needs around a realistic understanding of what the market offers in your price point. Your agent can help you get a better understanding of the type of property you will be able to afford.
Avoid looking at properties far above your price point, because in a heated market, most homes are selling for over asking. Search within your budget, with an open mind that you may not get everything to fit your list perfectly, but you can find a near perfect home that you’ll still fall in love with.
Going Under Contract
When you find the perfect house, let your agent know, and you will be able to discuss the best option to move forward in putting in a strong offer. Once your offer is accepted, you will then go into the pending contract period. This is the process where your mortgage goes through the necessary steps to getting approved. Or if you are purchasing with cash, this is the process in which you will be able to handle inspections, and title will be able to ensure the sale of the home can be done without any complications.
Contract periods can range anywhere from a week to two for cash buyers, and generally 30 to 45 days for buyers who have applied for a mortgage. During this period, a home inspection, termite inspection, and appraisal is conducted. Any negotiations for repairs, or price adjustments based on appraisal outcomes, are
Your agent will be able to keep you up to date throughout the process and help you prepare to move into the home of your dreams. Once this contract period is over and you get the clear to close, you’ll be able to sign off on the papers on closing day, and celebrate home ownership!