It is important to be educated about the home buying process before you embark on it. Being educated is essential. If you are able to get answers to some of the most common questions before you start looking for a home, it will create a smoother home buying process. Be sure to check out my recent post about questions to ask when buying a home. If you have just started to consider purchasing your first home, here are some things to think about.
This is a question that many homebuyers may be asking themselves, should I buy or should I continue to rent? Homeownership has many advantages. The goal when you invest in real estate is for it to appreciate over time. The best thing you can do is listen to your Real Estate agent about good locations that will meet your needs. Hopefully, your new home should increase in value over time. Ideally, you work with an agent who is familiar with the area and explain the benefits!
If you have recently moved away from home, renting may be more beneficial than buying. Additionally, you may not be able to qualify for a mortgage until you have an employment history, good credit, and money for a down payment.
Ultimately, renting a home may be a complete waste of money. You could be paying for a mortgage and yielding the benefits in lieu of making money for a landlord.
If you already know you want to own a home in the near future, then it is essential to start planning on transitioning from a renter to a homeowner. The more you are able to do to strengthen your financial position, the greater likelihood that you will be able to purchase a home.
You should always hire your own real estate agent. You might think you will save money without your own agent, but in reality, your agent will negotiate on your behalf. This is still the ideal way to purchase a home.
There are multiple reasons why you want to utilize your own real estate agent. You will want to hire one who is knowledgeable about the local area.
Additionally, there are many reasons why you need a buyer's agent during the pandemic. Guidelines have changed for showing a home, and you want to work with an agent who is aware of the current guidelines to protect you.
Buyer's agents are also recommended if you are considering purchasing waterfront homes or any other specialty type of property.
When a seller accepts your offer to purchase their home, they will want to know that the buyer is committed. This allows the seller to take the home off the market and proceed with the sale to you. The listing agent will change the status from active to active under contract. The earnest money deposit demonstrates to the seller that you are committed to the purchase. It gives the seller a guarantee and means that buyers can’t just speculatively make offers on multiple homes. The earnest money deposit is generally approximately 3% of the purchase price. This money is deposited into escrow within a certain number of days specified in the purchase agreement. Escrow is considered to be a neutral party between the buyer and the seller.
For many people, the amount of money they can spend is dictated by their personal finances and what they are qualified for with their lender. Buyers are free to qualify with any lender who they feel most comfortable, however, be sure to choose a lender who is experienced and is be able to get the job done.
Down payments will vary depending upon the financing. If a buyer is getting an FHA loan, then the down payment is generally 3.5%. This low down payment option allows buyers to get "in" the real estate market. FHA loans also have PMI or private mortgage insurance which is paid in addition to the principal, interest, taxes, insurance (PITI) of the mortgage payment.
Before even beginning the home search process, meet with a lender to go over your finances, your credit score to determine the amount you can afford.
The first place that home sellers look to determine the value of their home is Zillow or other online companies that offer estimates. The problem is the estimate is only as accurate as of the data that they have (i.e. number of bedrooms, number of bathrooms, etc). There are times when the value can be off by thousands of dollars.
Online estimates may give a false sense of the value of the property. If it is an inflated value, then often times seller wants to list higher, and then the property will languish on the market accumulating days on market.
Perhaps the best way to look out online estimates such as Zillow is to compare them a game. You can have a little fun with it but, you can’t replace the know-how of a skilled local real estate agent.
Have you wondered what comes with the property when you make an offer? It is important to understand the definition of fixtures. Fixtures are considered a permanent part of a house. A fixture is defined as physical property and it is attached to real property. Fixtures are considered real property and they will convey with the transfer or sale of the property. The reason why you need to understand what fixtures are versus the personal property. When you are purchasing a property, you will want to know what comes with the property. For example, the home has a refrigerator and it is not built-in, it will likely not accompany the purchase unless you request it in the purchase agreement. There are sections in the purchase agreement where you can ask for items to be included. It is best to never make assumptions that something comes with the property. If you want something, be sure to specify it so all parties understand what is included in the contract.
It is ideal to have your own agent when going through the home buying process. Ideally, you are hiring an agent who is knowledgeable of the area and will be able to guide you through the home buying process. If you have specific questions, please reach out so we can provide you with the answers. Our goal is to provide you with up to date information so you are educated in the process.
Top Newport Beach CA Realtor Sharon Paxson has written the article “Even More Questions to Ask When Buying a Home” We welcome the opportunity to work with you and guide you through your real estate transaction and share our experience with you.
We provide real estate services to our clientele within the coastal Orange County CA area including Corona del Mar, Newport Beach, Newport Coast, and Tustin, We welcome the opportunity to work with you. I would love to share my marketing knowledge and expertise to help you. Contact me today!