Home Buying December 15, 2019

The Buying Process: What to Expect

Understanding the buying process can better help you prepare yourself, emotionally and mentally, for what is to come and can alleviate some of that stress! Here is a general guide that breaks down the process and helps you prepare for what to expect when buying a home.

The Search
Most buyers start their home search on their own and “window shop” for homes. This is a great way to get a feel for the market and check your own commitment level. Keep in mind that having an agent at this point in time can fast track your searching efforts, as they can do the leg work for you!

The Pre-Approval
Once you are ready to take the next step, you’ll want to get pre-approved so that you can be prepared to make an offer. Note that these typically last 90 days but can be renewed at the end of this time period. This allows you to jump at any prospective homes as quickly as possible, and in hot markets, this can make all the difference.

Get an Agent
An agent is going to advocate for you and protect your interests. They have a great amount of expertise and insight that can help you make the best decision possible. They will also negotiate on the offer, give real estate advice, file all appropriate paperwork, and ensure that the transaction goes as smoothly as possible.

The Offer
You think you’ve found the one! The offer will include your price and any other terms or conditions that your offer depends upon. You will also be required to put some earnest money forward to let the seller know you are serious. This goes to escrow and is applied toward your purchase if your offer is accepted. You may lose your earnest money if you back out of the offer and it isn’t based on any of your pre-ordained contract conditions. It is wise to write an inspection as a condition to your offer, that way if major items come up, you can walk away and get your earnest money back. Be sure to read over the seller disclosure documents, as the seller is required by law to put any known flaws in the home in writing. You will also set a closing date, which sets the date in which you get the keys and the home is yours.

The Counter Offer
The seller may come back with their acceptance or denial of your offer price or conditions. Don’t worry, you can counter their offer as well. This can be a back and forth game until both parties come to a consensus.

Mutual Agreement
Once both parties have agreed on the terms in the offer, you have mutual agreement.

The Loan Application
Mutual agreement comes with a price and with that, your lender can start the underwriting process. The time to complete the loan application can vary, but you can expect at least one week during normal business times.

The Appraisal and Inspection
Lenders want to ensure that the home is at least worth the amount they are lending you. This protects you from overpaying for the home. If you are putting up an all cash offer, you are not required to have an appraisal.

Closing
If approved, you will bring your down payment and money for all other closing costs. After signing the mortgage, you are now in the possession of the deed and you will get your keys on the aforementioned closing date.

This isn’t an all-inclusive list, so if you have questions about the finer points in the buying process, let me or your lender know!

Home Buying October 29, 2019

Understanding the Market

Once you start to get more serious about making a move, you will want to understand the current market conditions. Here are a couple of things to keep an eye on while you peruse homes.

Pricing Trends
Pay close attention to the trends in the area(s) you are looking to buy in. This is where a real estate agent can be critically important. Understanding if pricing is on the rise or the decline in a specific area, can help you identify when is a good time to buy or not.

Market temperature
How long are listings lingering on the market in the area you are browsing? If homes are selling quickly, it indicates a hot or seller’s market and can usually lead to multiple offers or a bidding war in some cases. Getting a home below market value is rare in this kind of market. If homes are staying on the market for a relatively lengthy time, it means that it is a cool or buyer’s market and your chance of getting a home at less than asking price increases.

Mortgage Rates
These rates are strongly tied to our own economy and the Federal Reserve Board (FED). When the prime rate is increased to curb inflations and slow economic growth, mortgage rates rise. When they cut interest rates to stimulate economic growth, mortgage rates usually drop and makes buying a home more affordable. Pay close attention to where rates are and where they are heading when looking to buy.

If you need any more information or have any questions, fire away! I am here to help you!