One of the greatest milestones a person can encounter is the purchase of their first home. You’ve saved. You’ve planned. You’ve prepared, and now you’re ready to embark on the adventure into home ownership. But, as with most other things, the process goes much more smoothly if you know what to expect. Here’s a simple guide to the home buying process.
What Comes with the House You Buy
You may find yourself a just bit confused by what does and does not get included with the house you buy. When you buy a pre-existing home, you’ll get the mortgage payments, property taxes, homeowners insurance, and potentially the HOA fees if a house homeowners association governs the neighborhood. That probably comes as no surprise. But you may not get everything you expected when touring the home you’re buying.
When visiting the house the first time, you may have appreciated some of the features like the stunning chandelier, the ceiling to floor mirror in the foyer, the hot tub on the patio, or other items that seem to have disappeared before you moved in. These items, anything that’s not permanently attached to the house, are considered personal belongings of the seller. So are curtains, rugs, or anything else that can be packed up and moved away.
You can, however, ask the seller about specific items when you make the offer on the house. Often, the seller is happy to sell additional items with the house, but you’ve got to ask and get it in writing. Read More
How to Buy a House with a Realtor
You’re probably chomping at the bit to call a real estate agent and jump on the house-hunting bandwagon – but it’s not the time for that just yet. In fact, you shouldn’t begin interviewing real estate agents until you’ve secured your home mortgage loan. Many first-time buyers get this part backward and don’t apply for their loan until they find the house. But having pre-approval for your loan qualifies you as a buyer, sets your budget, and expedites the process once your offer is submitted.
Real estate agents work on commission, which means they don’t get paid until you’ve bought your home. Asking agents to show you houses before you’re prepared to buy is the same as asking them to work for free.
With your loan secured, your agent will talk with you about your wish list and will show you homes that match your criteria. When you find the ideal house and are ready to buy, your real estate representative will help you submit an offer and negotiate when necessary. Read More
What Happens When You Buy New Construction
Newly constructed homes have an element of enchantment to them. There’s something magical about shiny and new. But buying a home that’s never been lived in doesn’t mean you’re getting a steal of a deal or that the house you buy will be free of problems.
One advantage of new construction is that you have the opportunity to select a lot of the finishes such as flooring, cabinetry, etc. However, those choices also come with a premium, so you’ll pay for any upgrades you choose.
A new house needs time to settle. As it settles and shifts, the house may develop cracks or other issues. A pre-existing home has already set on its foundation and won’t have those concerns.
One disadvantage to new construction is that the landscaping is as new as the neighborhood and needs time to develop, so if you’re looking for lush lawns and mature trees, new construction won’t have those on offer.
Also, with new construction, there’s no bargaining power. You can’t expect to wheel and deal with the builders. The price of those homes is the price of those homes – period.
How to Buy a House While Selling Another
Many house-shoppers find themselves in the conundrum of having to sell their current house to purchase their next home. But there are options here, too.
You can include a contingency with the offer you submit on the new home that the contract only holds true if your current house sells within the specified time frame.
You can sell your house first and find temporary living quarters until you find the home you want to buy next.
You can keep your existing home and use it as a rental property, but that requires you to carry two mortgages, which may feel intimidating.
How to Buy a House with Cash
Buying a house with cash may get you a steal of a deal on the asking price, and can reduce closing costs, but not eliminate them entirely. You’ll still want to have the home appraised and inspected, and you’ll still have legal and/or administrative fees in conducting title check and transfer.
Before you shell out the cold, hard cash, make sure you can afford to drop that much dough without compromising yourself financially. Before you pay cash for real estate, you should have minimal to no debt, have three to six months worth of expenses tucked away for safe keeping, and have a well-established nest egg to cover emergencies.
How to Buy a Foreclosure
Foreclosures are tempting because they often come with ridiculously low price tags. However, the savings in the cost of the home often surface in other ways. Foreclosures are typically sold as-is with no guarantees or warranties. What you see is what you get, so if there are plumbing or electrical problems or faults with the foundation, or pests, you’re left footing the bill for the repairs.
Not all foreclosures are standard. Some are bank-owned properties, some are government-owned properties, and some are short sales. Each type of foreclosure and each lender come with unique terms and guidelines.
How to Buy a for Sale by Owner
Buying a house that’s for sale by owner indicates that the seller is trying to save a few bucks by cutting out the real estate agent. This can pose some problems. If the seller is that set on saving money, they may not be willing to negotiate on price, and may not have spent necessary investments in repairs and maintenance on the home.
Buying a home for sale by owner also has legal repercussions. Real estate agents are experts in real estate law, and they know their way around real estate contracts. Without that representation, you may find yourself in a legal pickle.
What Does it Cost to Close on a House
Closing costs on real estate include services provided during the transaction such as appraisals, inspections, surveys, escrow agents, lending fees, agent commissions, etc. You can expect closing costs to range between one percent and eight percent of the total value of the house you’re buying. Closing costs are not generally included in your home mortgage loan, so you may find yourself paying closing costs out of pocket. You can, however, negotiate closing costs with the seller so the seller, not the buyer, pays at closing.
There are a plethora of options available to homebuyers. Should you buy new construction or a pre-existing home? Should you obtain a home mortgage loan or pay cash? Is a foreclosure a possibility? Consider all of your options carefully, then talk with your real estate agent about the course to homeownership that’s best for you.
Call the The Laura Castillo Group at 432-701-0506 to discuss buying or selling your Midland home.