A Guide To Affordable Home Purchase - Part 2
House HuntingFinally, with all the number crunching and brainstorming behind you, it's time for the exciting part: house hunting! Searching online for what's available in your preferred neighborhood is a good start. Be warned; depending on what you decided your budget is, and what features you want in your home, you might be pleasantly surprised with your findings, or you may be in for a serious reality check. Where you're looking to buy and when you're looking to buy will determine what's available.
You can do all your house hunting by yourself, and do a fine job of it too, but it's not a bad idea to consider hiring a real estate agent. There are several benefits to doing this. Agents have far more knowledge of what's available than you'll find online yourself. Agents can also organize viewing appointments, and be great mediators between you and the seller during the emotional experience of buying a home. You get this service free: the seller pays your agent.
If you're looking for an agent, don't just take the first name that pops up in Google. If you can get references, great. Meet with and interview several agents--specifically buyer's agents. A buyer's agent represents you exclusively and has no invested interests with the seller. If you do decide to go with a buyer's agent, remember the wisdom offered above--the used car lot isn't the only place you'll find sharks. Check your state's licensing board and make sure that the real estate agent is licensed, with no complaints (or even worse; suspensions) made against them. Search the internet for complaints and issues. Meet with several candidates and pay close attention to their personal style and manner. Be sure that they understand your preferences and limitations and that you can work together comfortably.
Homeowner's InsuranceShop around for home insurance and get several quotes while you are still on the hunt. A basic insurance plan should cover fire, theft, storm damage, and liability for anyone throwing a lawsuit at you due to being injured on your property. You can usually tag on any expensive items in your home, too.
Make an OfferThat's right; it's time to take the plunge! You've found a home within your budget that fits your requirements. It keeps you up all night fantasizing about the future, and you just know it's the one. It's time to put in an offer! But how much?
Low-balling risks losing the house to some other buyer, while paying more than you should is always a horrible idea. So what's a good number?
Unfortunately, there's no definite answer to this question, as every sale is on a case-by-case basis. However, there are some useful strategies. What are other houses in the area selling for, and did they sell for less than the asking prices? Does this house seem like a steal or a rip-off when compared to those prices? Making these comparisons will give you a ballpark idea of where you should be aiming.
Humans are emotional creatures, and like everything in life, leverage can sometimes be used to your advantage. If the house has been on the market for a long time, the owner might be under more pressure to sell--making a lower price more appealing than before. The usefulness of a low-ball offer, of course, also depends on where you're shopping and how high demand is. If you're in an area where homes sit a long time before selling, it will just be the norm. But if you're in an area where the market has houses selling like hotcakes, you might have a lot of leverage.
Contract and Mortgage ApplicationSo you made an offer and the seller accepted. Congratulations! Dream house or not, don't jump the gun here. Take your time and thoroughly read the contract, making sure you understand every single detail before you put pen to paper. Review any contingencies (ways you can back out of the sale if things get nasty) very carefully.
Get the house thoroughly inspected. Don't stress too much over small issues that you can repair easily, but the cost of any major repairs should be a reason for a price reduction if they're not deal-breakers. There's a vast chasm of difference between a fixer-upper and a tear-downer.
When, and only when, your inspector confirms that there are no major issues, submit that mortgage application. Review all the numbers again and make sure your budget is still solid, with enough reserve cash for any unforeseen maintenance issues.
Sign the PapersIt's finally time to make that home yours. You're entitled to another walk-through, so take advantage of that and ensure nothing has been changed since the inspection. Make sure you get copies of all the paperwork. Take them home and review them. When the closing day comes along, bring all that paperwork with you, along with a photo I.D., and insurance certificates plus home inspection certificates.
When you're finally confident that everything is as it should be, take that pen and sign the paperwork. Congratulations! It's time to pocket the keys to your new home!