BY STEVO · BUYING A HOME
These are short term measures not meant to make you live like a pauper, but to help you accumulate cash so that you’ll have enough on hand to buy that first home. Here are some suggestions:
Most first-time home buyers are surprised to learn that they’ll need a down payment equal to 3% to 5% of the total loan, depending on the type. There are also closing costs and prepaids that typically equal 5%-6% of the sale price of the home. A $150,000 home could require a down payment from $7,500 to $16,500.
It’s almost impossible to purchase a home without the help of a real estate lender, so your first step when you’re ready to purchase a home is to find a local lender that you can trust and who will provide information and the timely assistance you need, like the type of loan they’ll give you and how much cash you’ll need at the closing. If you work with a realtor (which is highly advisable), he or she will likely have a good working relationship with a capable and trusted lender.
Buying a home, especially your first one is a challenging process. There are a multitude of steps in the process, from searching through real estate listings to find your ideal home, to knowing what to look for when you tour a prospective home to avoid problems and disappointments if you buy, to navigating the numerous legal documents required in the buying/closing process. If you’re new to buying a home, you don’t want to lose out because you didn’t understand or complete the process. Save yourself the stress, anxiety, and disappointment by finding and working with an experienced realtor you trust and who understands what you’re looking for in your first home.
In a fast real estate market with an overabundance of buyers, you’re competing against every other person out there looking to buy a home. So when you find the home you really like, you need to make an offer quickly, because the odds are the seller will receive multiple offers. You don’t have the luxury of ‘thinking about it’ for several days. Additionally, you should keep your offer very simple, with as few contingencies as possible. Sellers are always anxious to close quickly, so they’ll most likely accept the offer that promises to do just that.
Once the seller has accepted your offer, it’s your right to have the property professionally inspected to be sure there are no hidden problems with the foundation, the structure, the wiring, the plumbing, or any other aspects of the home. You don’t want your happiness at successfully purchasing your first home to be tarnished by problems you discover after the fact that could cost you money to repair!
Keeping the seller happy is paramount because in a crazy real estate market where several buyers are clamoring for the same property, the seller has complete control. Make it easy on them with your offer. For instance, you could allow them to stay in the home for up to 30 days after the closing so they don’t feel anxious or pressured about finding a new place to live too quickly. There are other ways to accommodate the seller and your experienced and trusted realtor can assess the seller’s concerns and advise you how to address them positively.
If you’re ready to buy your very first home, please call me and I’ll be happy to talk with you about any aspect of the process. 616.638.1800.