Buying
Capacity
The process of buying a home or investment generally starts
with determining your buying capacity; that is, your financial reserves plus your
borrowing capacity. If you give a real estate representative some basic information about
your available financial resources, e.g. savings, income and current debt, he/she can
recommend the lender/s best qualified to help you. Lenders often specialize in certain
types of mortgage loans. Home
Finding Preparation
Once you know how much you can and want to invest, the next
step is to find the properties that most nearly fit your needs. You will need to make two
lists: your "Want List" (the extras: pool, den, fireplace, etc.) and your
"Need List"(e.g. # of bedrooms, garage, # of bathrooms, etc.). Items for your
lists also could include such things as privacy, size and architectural features to name
just a few. This is also the time to choose a real estate agent. You should strongly
consider choosing a Buyer's Agent who can represent you throughout the
home buying process.
Finding the Right Home
Discuss openly your likes and dislikes about the houses you
visit with your agent. The more information your agent has, the more likely he/she will be
to find the right properties. Excitement and emotion usually run high at this time. Your
real estate agent can assist you in the selection process by providing objective
information about each property. Agents have access to a variety of informational
resources, and can provide local community information on utilities, zoning, schools, etc.
There are two things you'll want to know. First, will the property provide the environment
I want for a home or investment? Second, will the property have resale value when I am
ready to sell? Once you have found the right property, ,your agent can provide you with
sales data of comparable "sold" properties in the area which can help you in
formulating an offer. Of course, only you can determine the amount of offer you are
willing to make.
Negotiating
There are a myriad of negotiating factors, including, but not
limited to price, financing, terms, date of possession, down payment and often the
inclusion or exclusion of repairs and furnishings or equipment. The purchase agreement
should also provide a period of time for you to complete appropriate inspections and
investigations of the property before you are bound to complete the purchase. Your agent
can advise you as to which investigations and inspections are recommended or required. You
might also consider purchasing a home warranty which will cover many household repairs
form plumbing to appliances.
Due Diligence
With a negotiated agreement in hand, it is time to complete
the evaluation of the property. Depending on the area and property, this could include
inspections for termites, dry rot, asbestos, faulty structure, roof condition, septic tank
and well tests, just to name a few. Your agent can assist you in finding qualified
responsible professionals to do most of these investigations and provide you with written
reports. You will also want to see a preliminary report on the title of the property.
Title indicates ownership of property and can be mired in confusing status of past owners
or rights of access. The title to most properties will have some limitations; for example,
easements (access rights) for utilities. Your agent, title company or attorney can help
you resolve issues that might cause problems at a later date.
Financing
As soon as you are reasonably sure the property is right for
you, the process of obtaining financing begins. Your agent can help you in understanding
different financing options and in identifying qualified lenders.
Closing or Settlement
Finally, there is the closing, or settlement, as it is known
in different parts of the country. Every area has its own unique customs. In some areas,
the title or escrow company will handle this process. In other parts of the country, an
attorney does it all. Again, your real estate agent can guide you through this process and
make sure everything flows together smoothly. |
