Home Buyer' Handbook

Her'es some information that you should find valuable when looking to purchase a new home. 

Get Pre-Approved

Getting a Pre-Approval means you receive a loan qualification from your mortgage company before you have found a home, based on a reveiw of your credit and finances. A credit Pre-Approval shows sellers that you're a qualified buyer and helps you establish a clear price range.

There are many good reasons for getting a crdit pre-approval before you buy a home:

1) It makes your home search more efficient by allowing you to focus only on homes you know you can afford.

2) It lets sellers know that you can back up your offer, so they don't have to worry about whether you can get a loan.

3) It lets you know early in the process if you will have difficulty getting pre-approved, so you have a chance to address problems before finding a home.

4) It gets much of the mortgage process out of the way up front, so you can complete your transaction quickly after you find a home.

 Making an Offer

So, you've found a house you want to buy. Congradulations! Now you need to decide how much you're willing to pay to make it yours.

Your real estate agent should be able to give you a list of similar homes hearby that have sold recently, and for how much. Although you can't directly compare the home you want with the homes on the list without ever having been in them, you can use the list of comparable sales to get a general idea of the neighborhood's price range.

In addition to sale prices for other homes, there are several ways you cna determine a good amount to offer:

1)The condition of the home. Is the home in move-in condition, in need of paint and other cosmetic improvements, or a fixer-upper that needs some real work?

2) The Market. If you are in a buyer's market- where there are more homes for sale than there are people to buy them- prices are probably stable or falling. If you are in a seller's market- where there are more buyers looking for homes than there are homes for sale- prices are probably moving up.

Get a Home Inspection

When you are making what is likely the largest investment of your life, you should know as much a possible about what you are buying. That's why it's a good ideaa to have a home inspection before you make your purchase.

At a minimum, the inspector should examine the following:

1) Exterior structural components, including the foundation, roof, siding, and chimney.

2) Interior structural components, including the basement or crawlspace, attic, flooring, and ceilings.

3) Major systems, including heating, cooling, plumbing, and electrical.

You should make every effort to be present during the inspection so that you will have an opportunity to ask questions and see first-hand what the inspector looks at. You should receive an inspection report with description, and possibly photographs, of any problems with the home.

The Earnest Money Deposit

Most offers to buy a house are accompanied by a check. This check is generally referred to as the "earnest money deposit." The basic reason for the deposit is to impress the seller that the buyer "earnestly" intends to purchase the property.

The amount of the deposit varies from purchase to purchase, depending on a variety of factors. If a property generates a lot of interest, a buyer may make a larger deposit to convince the seller that their offer is stronger than the others.

Almost all deals close and the earnest money funds are applied to the buyer's down payment and closing costs.