Planning To Purchase A Home
You’re excited and ready to buy a new home, but making decisions without having a ‘game plan’ to follow can cost you. A well-defined plan can save you time, and most importantly, thousands of dollars. Here is some helpful information that you can use to plan your success.
- Develop a Purchase Strategy
Be prepared to invest a great deal of time during the buying process. Give some thought to whether you are ready for home ownership and the commitment it requires.You’ll be doing the work the landlord previously did. You’ll also be making a commitment for a mortgage, property taxes, insurance, and general maintenance costs. Keep in mind that the taxes current taxes being paid on a house you buy, will likely increase due to county tax reassessments. Give considerable thought to the type of house you want such as style, age, location, etc. By doing advance planning, you will likely shortcut the time it takes to find that ‘perfect’ house.
- Obtain a Mortgage Pre-approval
This is a key step in the buying process since it tells you how much house you can afford as well as telling potential sellers that you are a serious buyer and are qualified to purchase their home. It can also prevent embarrassment and potential loss of earnest monies in situations where you commit to purchase a home, you don’t include a financing contingency in the purchase agreement, and you are not able to obtain financing.
- Identify neighborhoods and properties
Purchasing the right property in the right neighborhood is very important for protecting your investment. You want to make sure that the home is in good repair, the neighborhood is not deteriorating, the school district is progressive, and the amenities offered by the borough or township are conducive to what you’re expecting. All of these will have great influence on the next buyer when you’re ready to sell.
- Verify Property Information
You’ve found the house that greatly interests you and you’re considering making an offer. Is the floor plan conducive to your life style? Is the actual square footage equal to what the owner is advertising? What is the market value of the house? A comparative market analysis (CMA) that compares this home to similar homes recently sold in the area should be obtained.
- Create a Purchase agreement and make an offer
The Purchase agreement will become the legal basis for transferring the property from the seller to the buyer. Price, terms, conditions, and contingencies all must be included in the agreement, as well as a provision to have a property inspection completed. Your initial offer will be also be important since it becomes the basis for negotiating.
- Negotiations
In addition to the Purchase agreement, this is one of the most important steps in the buying process. You may want to seek professional assistance from a competent real estate professional or attorney who can assist you in gaining the greatest return on your investment. During negotiations, neither side will win everything. Decide what is really important to you and maintain a reasonable attitude throughout the process. Make it a ‘win-win’ situation where both parties feel good about the results.
- Closing
It is important to maintain strong communications with the seller through this phase. Monitor the progress of all activities especially the mortgage process, talk with the seller to ensure that his activities are on track, complete the final walk-thru inspection to ensure that nothing has dramatically changed, and get proof that any/all agreed to inspection report items have been satisfied.
- Review Closing Documents
You should have an opportunity to review all closing documents at least one day prior to the closing. Question things you don’t understand and don’t sign the forms until you’re satisfied with the answers. Seek legal advice if necessary.