1. I’ve Decide to Buy. Now What?
When buying a home, getting your finances in order helps you establish a budget, which is the all important first step. You’ll need to check with a lender to see what size loan you are qualified for and to get help in determining your credit score.
You’ll need to know
- Annual income
- Cash available for a down payment
- Other home loans
- Other loan balances (Vehicles, etc…)
- Credit card balances
- Other factors affecting your income (Tax payments, dividends, etc.)
2. What Is Prequalification?
Prequalification is the process of speaking to a lender about a possible home loan. Ordinarily this can be done over the phone. You will provide them with the information described above, and they in turn will give you an estimate of what size home loan you might receive. This estimate presumes the information you have given them is accurate, and is not a guarantee of anything.
People often think because they are prequalified they are sure to get a loan when they find the home of their dreams. This is not necessarily true. At this point in the loan process there has been no credit check, and the lender has not yet verified any of the information you have provided. There may be things on your credit report that are inaccurate or that you have forgotten about that may inhibit the loan process or affect the loan amount.
3. Do I Need to Be Prequalified, and What Will It Cost Me?
Many sellers require a prequalification letter with your offer to purchase, and getting one in advance is a good idea. This way you’ll have one readily available when it comes time to make an offer. There is no cost associated with getting prequalified, and in general it will make your offer look stronger. However, a preapproval is a much stronger document which often times will help a buyer negotiate a better deal.
4. What’s the Difference Between Being Preapproved and Being Prequalified?
There’s a big difference between pre-approval and pre-qualification. The importance of the distinction cannot be overstated, and it bears repeating that a pre-approval is a much more powerful document than a pre-qualification. Being pre-qualified is a preliminary process, in which a lender asks you a few questions and, based on your answers, pronounces you pre-qualified. They issue you a certificate to show sellers. However, none of the information has been verified as it has in the more extensive pre-approval process.
5. What Are the Advantages of Homeownership?
There are many benefits to owning your own home, not the least of which is pride of ownership.
Benefits of Owning A Home
- Tax advantages
- Investment value
- Builds equity
- Savings plan
- Predictable housing costs
- Freedom to personalize
- Community membership
6. Should I Work With A Realtor?
All the various steps and processes involved in shopping for your next home can understandably make anyone nervous. If you just take each task one step at a time, it won’t seem so overwhelming. The Selling St. Charles County Team has been through the house buying process with clients many, many times and we will help you through this one. You can trust our professional team to manage all of the details so you have a successful home buying experience, just as our other clients have. Contact Joanna to get started.
7. If I Find A Home That Isn’t Listed By You, Can You Still Show It?
Absolutely! Real estate agents are able to show you any home, new or resale, no matter who the listing broker is for the property. This includes homes advertised in the newspaper, or listed on other websites. If you visit an Open House or a New Home Community, it is advisable that you tell the seller’s agent immediately that you are represented as well. Also, if and when you sign in you should put Joanna’s name with yours so that she may protect your interests.
8. What Should I Consider Before I Choose A Particular Home?
Making sure the home is right for you is a very personal decision. Many folks say they just knew when they had found â€œthe one.â€ However, it’s best not to rely too much on an emotional response when preparing to make such a large commitment. To start with, ask yourself these questions:
Is the home in the right location? Make sure the home you choose is located in proximity to the things that are important to you and your family. Consider how close it is to work and schools. What about the school district? Is the home near a busy street or intersection? Estimate how long you’ll likely live in the home and try to anticipate your changing needs.
Will your lifestyle fit the home comfortably? Creating and sticking to a wish list is a good way to insure your new home will have the majority of the features you require. Are your furnishings appropriately sized for the space? Is the yard the right size for your needs? How about the layout? Since your home is probably your biggest investment, don’t buy it out of frustration. If you don’t find a home that meets all your needs, don’t compromise and buy out of impatience. Keep looking until you find what you want or consider building.
9. When I Find the Right House, How Do I Buy It?
Not surprisingly, the process of purchasing a home involves many steps. Here is a brief overview.
You will need an earnest money check to accompany the Offer to Purchase. This may be in the form of a personal check, or in some cases a certified check. A minimum of 1% of the sales price is deemed adequate in most cases. When your written Offer to Purchase is presented to the seller, they have three choices:
- They can accept your offer
- They can reject your offer
- They can make a counteroffer.
Negotiations after the initial written offer are negotiated until an agreement is reached. When the seller accepts your offer, or you accept their counteroffer in writing, you have a binding contract for sale on that property. Your earnest money will be deposited in a trust account to be held until closing.
10. Is It A Good Idea to Make A Very Low Offer At First?
Generally not. If your offer is too low, you may take some unwanted risks. For example, if you make a low offer and it is rejected or countered, you allow another prospective buyer the opportunity to submit an offer of their own which may be accepted instead. It is even possible the seller will feel insulted and refuse to entertain any more offers from you, or that they will be difficult to work with moving forward through the closing process.