Thinking of Buying a Home but Have a Ton of Questions
Am I ready? What is the Process?
Buying a home means you are planting your roots down for a little while. Although you can buy and a home and sell it very quickly it's a bit more tedious with many more things to consider. People choose to spend hundreds of thousands of dollars to buy a home so it's not a quick decision so you need to feel like you will be living in the home for at least a year. What kind of job do you have? Is your job stable? If you've had the same job for a couple years and think you will be able to do the same kind of work for many more years then you could be a good candidate for buying a home. Does your income stay the same or are you a commission based income? A home is a steady payment so your income also needs to be steady or you would need at least a larger pool of money to draw upon should you need to use it for your payments. Another item to consider is downpayment and savings. Do you have enough money for a downpayment? If not, you are not ready and you will need to save. Unless you have a special program through the VA or some other unique program you would need at least 3.5% of the sales price to put down. If the home is $200,000 you would need about $7000 to put down and then you would also need extra money for closing costs, unless your real estate agent and mortgage broker can get those negotiated and paid by the Seller. You will want to use a real estate agent who does not represent the Seller because in Oregon the real estate agent's commission is always paid by the Seller so you might as well have the best representation to get what you need. Generally, when you have a steady job and you have some savings it's a good idea to meet with a competent mortgage broker to see what credit obstacles they need to overcome to prepare you for the right sized loan.
Ok I met with the mortgage broker and have been preapproved for a loan of X amount. How do I get a loan and get the money from the lender?
Once you are preapproved the mortgage broker will give you a laundry list of items you need as supporting evidence after you find a home. Items you may need include copies of tax returns, bank statements, proof of other assets among many other things. Once you've provided the mortgage broker with all the documentation they request they will submit your loan to a banks underwriting department they feel will give you the best shot at the best loan for you. Once the bank agrees wants to give you a loan after reviewing your documentation then they will wire the funds to escrow (usually a title company) the morning the home is supposed to close. To see how much of a loan you can afford use our simple monthly payment calculator here.
Ok I know the process, I've been preapproved and understand how I'll get the money now how do I find the perfect home?
First you call our company and tell us who you are, what you have been approved for and what types of things interest you. Some people really know exactly what they want and where they want to live and others do not. Some of my clients tell me they want to live next to their tennis club. Some of my clients tell me they want to be in a certain school district. Some of my clients tell me they want to live within walking distance of great local restaurants. Some of my clients tell me they want to live on acreage. Some of my clients want to live near mass transit. Everyone has a different motivation. Usually the place of employment is an important factor. A good agent will help you to whiddle down what is right for you. They will be able to tell you what is realistic versus unrealistic. In the end you will pick but a good agent can eliminate days and days and hours and hours of searching just by getting to know you a little better. Once we understand your needs we can get to work and start locating the perfect homes. We can also help you and teach you how to navigate the web and find the homes on your own as well. Then you will save the homes to your account on my website and the agent will arrange showings of those homes that look good. They will also be able to add homes to your account they think you might like. Buying a home is a process. It could be very fast or it could be very slow and it entirely depends on you and your comfort level of having all your questions answered and understood. We educate our clients very well.
Ok I am now ready to buy and I even have the home I want to buy now what?
Your real estate agent will go on the computer and make sure the price of the home is in line with the current values and then they will actively prepare an offer for purchase. This is an important step and is different for every buyer. Some Buyers need a lot of help from the Seller. When negotiating you can ask for anything but a Seller will have a threshold as to what they will agree to. If you are a buyer that needs the Seller to pay for closing costs and prepaid items such as taxes and insurance then A. you will need the Seller to agree and B. you will need the Seller to reduce what they are getting for the home to accommodate those fees (which could be 5000-20,000 dollars depending). Some people can hurt there cause if they try and over negotiate. If you found the perfect home and will buy it at the current asking price but want to fiercely negotiate for the home you could risk losing the home. Real estate is emotional and if the Seller or real estate agent get's put off by your tactics then the Seller might not budge for you but they will budge for someone else. You might be asking how in the world could the Seller get mad it's just our offer. It's all about presentation and how you ask for things. If you ask for the seller to drop the price by 10% ask them to pay for 3% of your closing costs and then ask them for an extra two weeks for home inspections and ask them to fix everything and anything and their home price was just reduced by 10% then they will not want to work with you and would rather work with someone more reasonable. If the home has been sitting forever and they simply get desperate than an offer like the above might work better. It's completely different for every situation. A good real estate agent will work hand in hand with the Buyer, Seller and the listing real estate firm to effectively negotiate the sale of the home. For our company is all about information gathering. We get as much information as we possibly can about the Seller situation and what they might be open to what they might not be open too, then we use our client's personal situation with their needs and wants to formulate an effective strategy so all parties feel like they are winning.
Ok they accepted my offer now what?
Now you do your due diligence and pay for different home inspections to make sure the home is what you thought it was. It's not required but any real estate agent will tell you it's worth it. If something comes up that's a larger fix on the home inspection you ask the Seller to pay for it. Many times the Seller will want to fix it because if they know they will be required to disclose those problems to a future prospective Buyer and would rather fix it now then loosing you and more valuable time. Once repairs if applicable are worked out and agreed to then you proceed to closing with your mortgage broker. They get an appraisal, get your file in underwriting and get everything approved. Then the lender produces "docs" or documents that you need to sign. There is a very large stack of legal documents that conveys the title of the home safely from one party to another. The title company is an independent third party that takes instructions from all parties. There job is to guarantee clean title so you don't have to worry about someone else claiming they own title to your home. Once the title report is clean and load documents are signed they are e-mailed back to the lender for review and upon review the lender wires money and the home closes and records with the county of record. You could sign all your paperwork on one day and have it close and record weeks later. Recording and signing documents do not need to be all the same day. Congratulations it's moving day!
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