Advice for Buyers
» Appraisal and Market Value
» Escrow and Closing Costs
» Home Inspections
» Making an Offer
» Check your Credit Report
» Choosing the right Lender
» Choosing the right Real Estate Agent
» What every first time buyer should know
Appraisal and Market Value
Your real estate agent is qualified to perform a comparative market analysis
to determine your home's value. This analysis looks at similar homes in your
neighborhood and considers homes that are currently for sale, homes that are
in escrow, and homes that sold recently.
An appraisal, which depending on the home size may cost $300 to $1,000 to perform,
is a certified appraiser's opinion of the value of a home at any given time.
Appraisers generally review numerous factors including recent comparable sales,
location, square footage, construction quality, views and other special features.
Escrow and Closing Costs
Escrow is a term that only applies to those who own property. Escrow is often
used in the buying or selling of property, or in the refinance of that property.
Most real estate transactions utilize the services of an escrow company.
Buyers and sellers often place their faith in the real estate broker or lender
to recommend an escrow company. The escrow company being chosen is entrusted
to safeguard funds and to execute all necessary instructions in the real estate
agreement. In order to protect the interest of both buyer and seller, it is
therefore very important to ensure that the escrow company is both reputable
and impartial. The escrow fees are usually split evenly between the buyers
and sellers.
Closing costs are the fees for services, taxes and other special interest charges
that are associated with the purchase of a home. They include such items as
loan points, title insurance, escrow or closing day charges, document fees,
prepaid interest and property taxes. These costs are usually prepared by the
lending institution and the escrow company. The buyer generally pays one half
the escrow fee; document preparation fee; notary fees; recording charges for
buyer documents; interest on new loan from date of funding; the lender's title
insurance premium (the seller pays the buyer's title insurance premium); inspection
fees; appraisal fees and fire insurance premium.
Home Inspections
The purchase of a home is one of the biggest investments people will make in
their lifetimes. But it is also among the greatest sources of anxiety. A home
inspection helps ensure homebuyers of the quality of their investment by making
them aware of its condition and alerting them to any concerns. This can serve
to relieve stress, increase confidence and even reduce the threat of legal
action in the future.
Your real estate agent can provide you with a list of licensed home inspectors.
Depending on what the inspection report itemizes as defects, your Realtor would
prepare a "Request for Repairs" that is formally submitted to the seller's
agent.
Making an Offer
Your real estate agent is best qualified as to how much to offer on a property.
This is primarily based on the comparative market analysis and market conditions.
The offer generally includes two standard contingencies: a financing contingency,
which makes the sale dependent on the buyers' ability to obtain a loan commitment
from a lender, and an inspection contingency, which allows buyers to have professionals
inspect the property to their satisfaction. The buyer has a due diligence period
to check that everything is in order with the property he is purchasing. These
contingencies have to be lifted when the standard due diligence period has
expired.
Check your Credit Report
Before applying for a loan to purchase a home, you should make sure the information
in your credit report is accurate. Lenders review this information in making
credit decisions. It is good practice to review your credit score and report
from each of the three bureaus at least once per year. If you find an error,
the credit reporting agency must investigate and respond to you within 30 days.
Choosing the right Lender
It is important to select a reliable and professional lender either directly
or through a good broker. A lending professional will pre-qualify you or pre-approve
you for the loan. This is extremely important in making a strong offer that
would be considered seriously by the seller. Also with a good lender, you get
the best loan at the best terms. Once you are in escrow, the lender works to
make sure that the loan is approved and funded in a timely manner. A good lender
will provide you service as well as complete confidentiality.
Choosing the right Real Estate Agent
In making such a big financial decision as purchasing a home, make sure you
have a professional, ethical and qualified agent. The entry point in real estate
is low and there are numerous agents who lack the professional knowhow, business
acumen, legal experience and knowledge of the market place. Get an exclusive
buyer's agent who will assist you in all aspects of planning your purchase,
locating and evaluating property that is right for your needs, negotiating
price and terms, financing, inspections and more.
What every first time buyer should know
Buying a home is one of the largest financial commitments a person can make
in his or her lifetime. It's especially critical for first-time buyers to make
informed decisions about the investment that they are about to make.
Define your wants versus your needs. Making a list of wants and needs before
beginning the search for a home can make the entire process less overwhelming.
Check your credit rating. Being pre-approved for a mortgage by a lender makes
your offer stronger than an offer without an approval letter from a lender.
Investigate the neighborhood. Where are the schools and places of worship?
How far is the nearest hospital or grocery store? Is commercial garbage collection
available or do homeowners dispose of their own trash? These are basic, yet
important, questions that some first timers may not think of until after closing
on a property.
Insist on a home inspection. Attend property inspections, be aware of environmental
concerns and ask questions. Make sure you ask the seller to pay for a home
warranty for the first year.
Get help with the details. Coordinating these and the many details of a move
can be overwhelming for even the most experienced homebuyer. A good Realtor
should be able to guide you with getting all the information you need.
