Buying a Home - Tips for Buyers
Buying a home can be one of your Most Significant Investments in life. Not only are you choosing your dwelling place, and the place in which you will bring up your family, you are most likely investing a large portion of your assets into this venture. The more prepared you are, the less overwhelming and chaotic the buying process will be:
- Talk to a Lender: Speaking with a mortgage broker is one of the first steps for a buyer. Aside from getting a pre-approval letter, which will be needed to make offers, ask them about closing cost, estimated monthly payment, what it includes, and which program best fits your needs. Contact me if you need lender recommendations.
- Price Range vs Monthly Payment: Got Approved? Great! Make sure that the monthly payment of what you are approved for is what you are willing to pay. If not: find the right price range by discussing it with a mortgage broker.
- Self Employed Buyer: Are you Self-Employed? It might be harder to get a loan. Not all lenders have loans for self-employed or interest rates might be higher. Start planning at least two years ahead. Speak with a lender on the best way to prepare your taxes in order to get the best interest rate and price range. Contact me if you need lender recommendations.
- No loan 4This Home: Not all homes are financeable. Some homes with certain issues might not be insurable and therefore lender will Not give you a loan for them. That’s where agent’s expertise is important to prevent you from wasting your time and money on a home you might not be able to get.
- Loan 4Condo: Getting a loan for a condominium is different and harder. Not all Condo Projects are lender-approved. Too many units rented or not enough reserves? Red flags for lenders. Talk to your lender and agent to avoid bad surprises.
- Perfect Home: Regardless of the Budget, there is almost never a perfect home. Most of the times it comes down to dilemma: I like this house, if it was on lot of that house, and ideally with kitchen of the house #3. Therefore, the Goal is to find the house that has the most potential to become an ideal home.
- Choose wisely: Location, view and layout are the most important while choosing a home. You can always remodel or update, but you cannot change those factors.
- Look Quietly: Avoid discussing a property during showing. These days, many homes have cameras and sellers Do like to watch and listen to what buyers are saying. What you say can be used against you during negotiations. Discuss the likes and dislikes with your agent in a private setting.
- Discuss with Agent: Talk to your agent about what’s important to you. Do you need help with closing cost? Have dogs? Want to have a fence? Need to park an RV? Knowledgeable agent will try to incorporate your concerns into the offer.
- Community Rules and Fees: Most communities built in the last 30 years are most likely to have rules and restrictions, and community fees like HOA and CDD. Make yourself familiar with them to avoid surprises and financial hardship.
- Examples of Community Restrictions. Most common concerns I come across with my buyers for community restrictions:
- Pet restrictions: usually there is a limit of pets per household, size and breed limits.
- Fence: many communities has guidelines as to which fence, where and how tall fence should be and require an approval. If your house is backing to a pond, most likely, your fencing options are limited to lower, see-through fence.
- Parking: most newer communities do not allow RVs or business vehicles parking even on your driveway.
- Fruit trees and garden: many communities prohibit having fruit trees and gardens as they attract pests - Property Tax Warning: Do not rely on taxes that sellers are paying Now. New sale triggers a re-assessment and in a year or two your taxes will be higher. Drastic change is especially noticeable for new constructions purchases.
- New Construction Property Tax: When purchasing a new construction, you might be saving on property taxes the first year since taxes are assessed on just land value. But, following year, taxes will be re-assessed. Expect them to go UP significantly, which will cause your monthly payments to be much higher.
- Do Inspection! I always advise my clients to do a Home Inspection, even on As-Is deals and New Constructions. It helps to avoid surprises and extra expenses later on. Builders are more likely to fix everything before the closing vs dealing with warranty department after the deal is done. Watch out for deadlines!
- Home Warranty: If home has older appliances, or old AC: consider purchasing a home warranty.
- Walk Through: Walk through is Very important. This is Your last opportunity to make sure the property is in the condition you expect. What if there was a leak after sellers moved out? Or their movers damaged floors or walls? After closing – it becomes your problem.
- Wire Fraud: Beware of a wire fraud! Before sending a wire, be sure TO CALL the title company to verify the wiring info. Watch out for red flags, such as: changes in their contact information or account numbers.
- Agent Commission: Buyers’ Agent duty is to watch out for their buyers’ best interest and guide them through the process. Buyer is responsible for paying agent’s commission, but, in most of the deals, Agents are able to negotiate to be compensated by the seller’s side, including builders and banks.
- Do NOT Make Big Purchases: Got a new sofa and lost a house … Yeah, it can happen. Do not make big purchases before the closing! Lenders check your credit again to see if it has changed. Big purchases can negatively affect the credit score and borrower’s credibility, and your interest rate might jump or loan might be denied.
- Homestead Exemption: If this property is going to be your Primary Home, remember to Apply for Homestead Exemption which will help you save thousands of dollars over time. There are other exemptions you might qualify for like: Portability, Disability, Military and more.