So, you’ve been hgtving for a while, and you think it would be really fun to buy a home? Well, buying a home is really fun! It is a little different from how TV portrays it. For starters, there is a lot more paperwork. The whole process is going to start with paperwork. First you want to see a loan officer you trust. I like David Xie (The Mortgage Guy). A good loan officer is going to let you know how much you can really afford, and how much the bank is willing to loan you for your mortgage. He can also tell you how much you are going to need for a down payment and closing costs. Some loans require no down payment, and others require 20% of the purchase price. A loan officer can let you know which kind of loan you qualify for, and what your approximate monthly payment would be.
Next you’re going to find a licensed Realtor that you trust to help you find a home that is within your budget. So here are 10 things to consider…
1. Where do you want to live?
This is a big question. Have you narrowed it down to a city? A neighborhood? A Street?
2. How big of a home do you need or want?
Are you planning on starting a family here? Are your children growing and you are going to need more space? Do you have big dogs? Are you trying to downsize, because you’re never home, and don’t want very much to maintain?
3. Do you need a yard?
Do you love grilling in the backyard and throwing a football around? Or, does the thought of cutting grass make you want to hose yourself off with DEET? The size of your lot is a big consideration because, you have to be willing to maintain it.
4. Do you want to do some work to your new home? Can you do any work?
Listen, if you don’t own a hammer right now, you may want to reconsider a fixer upper. The people on TV are contractors, they have taken down walls, and redone kitchens, and moved plumbing and electrical for a long time, and even they run into problems, a lot. If the house you are looking at needs electrical work, or a new kitchen, plan on hiring a professional. If it needs paint, go for it, regardless of your skill or experience. By the way, if all you want to do is paint, you actually want something that is “turn key” or “move in ready”.
5. Are you ready to maintain a home?
I know the apartment you’ve been living in is really cute, and it is really nice to call the super when the dishwasher goes out. There is no super to call when something goes out when you own a home, but there are plenty of qualified professionals who can fix things around your house. It will however cost money. Make sure you have some extra money in your savings account for a rainy day, a leaky faucet, or a broken washing machine.
6. Do you want to live in a community with a POA?
What in the world is a POA, you ask? A Property Owners Association. There are of course, pros and cons. Some of the pros, are that a good POA, keeps a neighborhood looking good, and holds everyone to the same standards. If you are the type who hates it when you neighbor leaves their trash cans at the curb too long…you will probably like a good POA. They also can make sure that the community property stays in good shape. Your neighborhood parks and walking trails, fountains etc should be maintained by a good POA. The cons, a POA costs money. They charge usually monthly or quarterly, and there can be a capital contribution when you buy into the neighborhood and a fee for preparing the POA documents when you are ready sell. That usually costs about $250. The other cons are that many of them are restrictive. You may not be able to put up the fence you want, and you may not be able paint your front door the color you want, or put up the metal shed you were going to buy from Home Depot in your back yard. Once you have written a contract to buy a home you will have an opportunity to read the POA documents and approve their restrictions.
7. It takes time to buy a home…
A good real estate agent can shorten the time it takes to buy a home, but even with the best agent, it still takes a lot of time. Not only are you spending time looking at possible homes, you are also spending time crafting an offer, and working through inspections. None of these things are necessarily problems, they are all part of making sure that the house you love is sound and ready for you to purchase. Be ready to set aside some time. It will be easier if you know that this required time is necessary.
8. We have to inspect what…?
When buying a home, you will want to have a termite inspection, a home and inspection, and I strongly suggest a survey, and sometimes, you may need to test the quality of well water, or a septic system, check for lead based paint, mold, air quality and sometimes stucco. A real estate agent, can let you know which inspections your lender will need, and which ones you may want to consider. If you are at all unsure, or have concerns, find someone and have the home tested or inspected. The peace of mind, or knowledge about potential issues you will ge,t is well worth the normally $200-$500 you will pay to have any kind inspection.
9. Submitting an offer is often just the beginning of the negotiation process.
So on HGTV, as soon as an offer is accepted, they begin celebrating the impending purchase. While this is a time of brief celebration, there is potentially more negotiating to come. After a contract is ratified (accepted by both parties), the next thing to do is to have a home inspection and termite and moisture inspection. If there are issues with any of these, you will be in a position to negotiate who will pay how much for repairs. Once those have been negotiated, your lender will order an appraisal of the property. If the appraisal comes in lower than the agreed to sales price, it may be time to negotiate again. The appraiser will see the property and use recent sales to determine the market value of the home. If there is a gap, and the sales price is more than appraised value, you may have to renegotiate the sales price, or have extra cash to make up the gap. This seems overwhelming, that’s why a real estate agent can walk you through this process.
10. Are you ready to love where you live?
With all the things above that may seem overwhelming and all-consuming about buying a home. I can say in all honesty, that there is nothing like buying and living in a home that you love. A home that you can change the paint color at any time, or change the old dishwasher whenever you want. It is a wonderful thing and it brings an enormous sense of freedom.
Realtor, Builder, Designer 