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Buyers guide

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How to look for a property

In order to find the right property for you it is important to first decide if this is for an investment purpose, a vacation property, or a new home etc. After you have figured out why you want to buy the home, it is time for you to decide where you want to purchase, what size you want it, how many bedrooms you want, and what features it may include.

It is best recommended to use Realtor.com, this is because Realtor.com is the only website that is directly linked with the National Association of Realtors (NAR) database. As a result the website actively adds and removes properties every hour and is constantly updating itself to keep with the available inventory. There are other website which are just as informative, but most of these are not consistently updating their inventory such as Zillow or Trulia, who are platforms that are not regulated by real estate law. As a result these platforms produce inactive listings which are true listings, but might have already been taken off the market. 

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Home Inspection (What it consists of)

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Home Inspection (What it consists of)

Inspecting the conditions of a house is a very important part of the home-buying process and should be included in the purchase contract as one of the conditions of closing a deal. The inspection clause in a purchase contract gives the buyer the right to have the property thoroughly inspected. The purpose of the inspection is to provide a current report of the overall assessment of physical conditions of the property. More than one professional inspectors should look for defects in the buildings structure, systems, and physical components, such as roof, plumbing, electrical, and heating/cooling systems, floor surfaces and paint, windows, doors, foundations, and detection of pest infestations or dry rot and other damages. The inspector should also examine the land around the house for issues concerning grading, drainage, retaining walls, and plants affecting the house. Even if the seller provides a report, it is always best to not rely on that alone and get your own professional opinion.

In most cases buyers get the inspection after they are in contract to purchase the property. It’s usually made contingent on the buyers approving the results of one or multiple inspections. The buyer arranges and schedules the inspections. Before getting a professional, you can also conduct your own informal inspection. Look out for issues like sloping floors or browning walls, signs of water damage, missing roof shingles or gutters coming loose, old or low quality appliances and fixtures, and signs of wear and tear that needs repair.

Hire a general contractor or a home inspector to perform a full inspection from top to bottom, including roof, plumbing, electrical, heating, foundation, and drainage. Typically this process takes anywhere from $200-$500, depending on location, size, and age of the home. As a buyer, you want to choose someone who will be thorough and tough. I can recommend 3 well qualified seasoned home inspectors. However I do not recommend you stop there, ask other home owners and friends for recommendations or check with the American Society of Home Inspectors (ASHI). Also get a pest report, it is wise to hire a licensed structural pest control inspector, who will create a special pest report. Some general contractors are also licensed pest inspectors, but will normally charge extra. It is important to have a written report of all inspections. 

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Financing Process

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Financing Process

The financing process works in a series of steps and sometimes it is very tedious. To make things easier, I've compiled a breakdown of steps to take for the financing process including:

1.    Rechecking Credit

a.     Make sure that your credit report is as accurate and up to date as possible.

b.    Get a credit score & report- obtainable by going to any of the 3 credit bureaus (Experian, Trans-union, and Equifax). You may go to www.equifax.com and click the option on the website for a one time purchase of your credit report and score for $15.

2.    Get prequalified

a.     When financing a home, it is a better idea to be pre-qualified. This allows a lender to calculate an estimate on how much you can afford using the information that you provide. Getting prequalified helps you make an informed application for the mortgage preapproval and is evidence that realtors know you will be able to get financing.

3.    Shop for loans

a.     Shop around for the right terms for you. There are a number of different kinds of loans you can shop for. The more terms on your mortgage, the higher the monthly payment. Mortgages are typically 15-30 years, and prepaid interest is called “discount points” or “points”. I can recommend 3 professional lenders for you to decide, but I wouldn’t stop there. Keep shopping around online or through friends and referrals to decide which terms offer the best rates.

4.    Get Preapproved

a.     Getting preapproved is a firm commitment from a lender to loan you up to a certain maximum amount without the specific property. This is a very positive step, it lets you go through the financing process before making your offer, which in turn saves you time and energy down the line. After you’re preapproved, closing the loan is quick depending on a good appraisal review and title report.

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Financing costs when buying a home

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Financing costs when buying a home

The costs of buying a house is heavy, and for those who think knowing mortgage rates, tax payments, and sticking within your budget will be sufficient will be in for a surprise. There are more expenses involved in the home buying process than just property costs, here are some things you should keep in mind when budgeting your expenses:

  • An appraisal to justify the fair market value.
  • Inspection costs.
  • Real Estate attorney to review contract.
  • Property taxes for example are another cost to look out for. The general mortgage rate is about 3.8%-4.2%.
  • Homeowners Association.
  • Moving costs: packing, storing, transporting.
  • Utilities: telephone, electricity, gas, and water.
  • Appliances or furniture.
  • Maintenance and Renovations: example is trees that fall on roofs, gutters need cleaning, driveways need repair, plumbing, and wiring. The rule of thumb is to budget at least 1% of your homes purchase price each year for home maintenance costs.
  • PMI and title insurance: if the down payment on your house is less than 20% of the purchase price, you will have to pay for Private Mortgage Insurance. PMI protects your lender in case of default. It’s standard and fees may vary. Title insurance offers protection for you and your lender if you discover someone else who could claim title of the house.

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