Make the decision to buy
Determine how long you want to live in the new house. If you plan to stay in your new home more than 3-5 years, then you should consider buying a home. With interest rates at historic lows, buying a home has never made more sense. Home ownership is the pathway to financial security.
Seek guidance from a mortgage profession
An important first step in buying a home is getting preapproved for a loan. Lenders have a variety of loan programs to meet your specific mortgage needs. Jennifer can put you in touch with a loan officer. The loan officer will give you a confidential review of your financial situation. The loan officer will write a preapproval letter indicating that you will be approved for a mortgage loan up to a certain amount. With the guidance of the loan officer, you can decide on a comfortable monthly payment and a reasonable price range. A preapproval letter is required before beginning your home search.
Begin the hunt
As Jennifer shows you homes, she will point out positive and negative features. Tell her what you like and what you don't like. As you realize what features are important to you, you will probably amend your "wish list" throughout your home search process. Based on your changing “wish list”, Jennifer can narrow the search criteria to help find the right house for you.
Know the market
Jennifer’s unique market knowledge will keep you a step ahead of the "house hunting competition". She will let you know when the asking price has negotiating room and when the house is "priced to sell". Homes that are priced very competitively might get multiple offers, full-price offers and even above-price offers.
Writing the offer
When you find the right house, Jennifer will put together the purchase offer tailored for your needs, including appropriate contingencies (such as obtaining financing, satisfactory home inspection, appraisal, clear title, etc.).
A preapproval letter is required to be submitted along with your offer. Jennifer can get a copy of the preapproval letter from your loan office with reference to the particular property on which you are making an offer.
Earnest money is a deposit, to show the seller that a prospective buyer is serious about purchasing the home. Typically earnest money is about 1% of the offer price and is held in escrow by the buyer’s agent’s company until closing. At closing the earnest money is applied to the buyer’s down payment and/or closing costs. In the event the buyer defaults on the contract, the earnest money is released to the seller. If the contract is voided at no fault of the buyer, the earnest money is released to the buyer.
It is standard practice to make a purchase offer contingent upon obtaining a mortgage. Because of this contingency, the seller will want the details of your financing plan included in the offer.
In the purchase offer, you will reveal the down payment amount you will apply toward the purchase. This will give the seller further evidence of your qualifications to secure a mortgage. Different loan programs require different down payments, ranging from 3% to 20% of the sale price.
Seller Assistance with Closing Costs
If the house you select is at the top-end of your budget, you may want to request that the seller assist you in paying a portion of the closing costs traditionally paid by the buyer. You may also ask the seller to pay for a 12 month home warranty for you. With any seller assistance, you can expect to pay a higher purchase price than if you handle these costs yourself.