Ten Steps to Stamford Home Buying.
Buying a home can be very confusing experience. I have put together
some guidelines for you to follow to make your transaction easier.
Success in homebuying starts with a strong foundation of knowledge
of the current local market, assessing your needs and financial
situation, planning forward.
Step 1. Determine If Buying A Home Now Is
In Your Best Interests.
Most of the time, buying a home is one of the smartest financial
decisions that a person can make. But not always!
Before you get started, analyze your needs.
Ask yourself some very important questions and answer them truthfully:
How long are you planning to live in your new home?
- What are your real needs? What is important to you?
- Would it still be important to you in the couple of years?
- What are the features that the new home must have in order
for you to buy it?
- What are the features that nice to have?
- What are the reasons why you are looking for a new home?
- What problems a new house will solve?
- Are you currently renting and would like to have your
first home instead of paying your landlord?
- Are you looking for an opportunity to secure your future
and to start building equity and save on taxes?
- Are you looking for a bigger or better home?
- Does your family need more space and you have outgrown
your current residence?
- Have your income increased and you thinking of a bigger
house or another neighborhood?
- What would happen when your income or family will grow?
- What would you decide if you weren't concerned or confused?
You owe it to yourself to be honest with yourself, trust your intuition,
and believe that you deserve the best!
Review your budget and determine how much you want and can to pay
each month. With mortgage rates as low as today and considering
the tax deduction benefits it make sense to use bank's money to
get a better house. Please consider that the bank won't lend you
more money without making sure that your can afford the monthly
payment. They are risking their money if you won't be able to pay
your mortgage.
I agree that homes may seem overpriced after 14-18% yearly appreciation
in last several years. I am not a wizard and can not predict the
future. But I know that many clients had the same thoughts a year,
two, and tree years ago. The luckiest one had move into their new
homes and enjoyed its price appreciation. As you compare your rent
payment with your home monthly payment and consider the much better
quality of life and other benefits of home ownership, buying a home
may be a better choice for you.
Remember that owning a home involves more than a monthly mortgage.
Don't forget the day-to-day expenses you may incur once you own
a home. In addition to the principal and interest of your mortgage
payment this includes:
- Utilities
- Homeowner or condo association dues
- Property taxes
- City or County taxes
- Should You Consider Buying?
Use rent vs. buy calculator to help determine if you are ready
to buy or if renting is still the better option.
Determine What You Can Afford
Use affordability calculator to get an idea of how much you can
afford to spend.
Give Me 30 Minutes To Show You The Options That Are Available
To You.
I would like to offer you a short no obligation meeting or phone
conversation.
We'll meet and have an interesting conversation about your situation
and your real estate needs. Based on your situation, your needs,
and goals we'll discuss your options and opportunities that are
available to you. We'll see if home buying is a best decision for
you at this time.
We'll both know, before the conversation is over, whether I can
help you achieve your goals. There are no obligations for you and
it won't cost you a dime. Whether you decide to hire me or not is
totally up to you. But one thing I am sure of that you'll get at
least one valuable idea or strategy for your that you hadn't thought
of before but want to apply in your home search.
If you decide to hire me as your real estate agent, I will represent
your best interests throughout the entire process.
Jump to Top
Step 2. Educating Yourself To The Market Place.
An important step in buying a home, whether it is your first home
or your last one is educating yourself to the market place prior
to making a purchase. Collect all information; inform yourself of
all available options.
Now that you have your list of needs and wants and what are your
best interests the next step is determining which neighborhoods
you prefer within your budget. The first rule of real estate is
location, location, location. I always recommend choosing the best
community you can afford even if it means choosing a somewhat smaller
home, as long as the home will accommodate your lifestyle comfortably.
Think about that...if you found the perfect house but it was not
in a neighborhood that you like, would it make sense to move in
there?
Even if you don't have school-aged children, neighborhoods with
good schools typically attract more buyers. Start with the end in
mind. Eventually you will sell your home and it is better be re-saleable.
When you are ready to sell the home and move on a home in a better
neighborhood will get you maximum resale value.
Next you probably would like to learn about the real estate values
in Stamford. You would like to know where the real values lie, and
whether the market is overpriced. Sure, you may know what houses
are listing for in the neighborhood, but do you know what they're
really selling for? How long the houses are on the market? What
is the bargain in the current market? To find out click here to
sign for my "Local homes prices" service.
So...what next?
Jump to Top
Step 3. Select a Realtor
When it comes to working with a Realtor®, find a professional
you trust and develop a working relationship with that agent. Interview
several realtors in the area you are looking to buy. Find out how
the realtor works and if his/her style matches your own. Determine
which one agent you feel you can work with and choose an agent you
feel comfortable with.
What To Consider? What questions to ask?
1. Do you have time to research the residential housing market?
2. Do you have the knowledge to integrate and understand the information
available to me?
3. Can you integrate the information available on real estate Internet
sites into useful data that will help me buy a home?
4. Do you have the expertise to negotiate on my own behalf?
Step 4. Get Pre-Approved For Your Loan.
As soon as you get familiar with the local market, finalized your
requirements and decided that you definitely want to buy a home,
get pre-approved for the mortgage.
Finding a good lender is critical for you. You need to know that
the lender will deliver you mortgage on time with no hidden costs.
You need to know how much home you can afford, how much money you
will need for down payment and closing costs, and what your monthly
payments will be. A pre-approved loan is one in which the lender
has fully documented your ability to borrow and set a maximum loan
amount based on your verified income, credit and down payment.
Here Are The Three Reasons Why Getting the Mortgage Pre-Approval
Is A Good Idea:
1. Once you are pre-approved, you can shop for your new home in
confidence, knowing that you won't have any problems getting the
loan.
2. Lenders can detect any potential problems that might make obtaining
a loan difficult. Credit report errors, high debt balances, and
an insufficient downpayment may be corrected with time. Loan underwriters
have specific rules and guidelines they must follow. Many would-be
homebuyers have been dismayed and disappointed to find out 2-3 weeks
after they enter a contract that the lender has turned them down.
3. Pre-approval puts you in the strongest negotiating position
possible, makes your offers very attractive to sellers and could
save you money.
Let me explain:
Think about it... one of the biggest fears a home seller has is
that they will enter a contract with a buyer, prepare to move, and
then find out that the buyer didn't qualify.
When you get pre-approved first, we will obtain a letter from the
loan company stating the amount that you are approved for. When
shown to a seller, the letter makes the seller feel more comfortable,
and will add more power for us in negotiations. Many of the best
homes can have several offers on them at the same time from different
buyers. Often, the buyer that can show that they are already approved
for their loan will get the house.
Price is only one element in the negotiations, and not necessarily
the most important one. Often other terms, such as the strength
of the buyer, ability of the buyer to move in sooner, or flexibility
to give the seller the necessary time to move out are critical to
a seller. The seller faces many risks and the biggest one is your
ability to get the mortgage. In case if your mortgage was declined
they have to start their selling process again after couple of month
and the house will raise many questions. Other buyers will ask why
this house is back on the market? Is something wrong with it? They
may try to take advantage of this fact. Plus sellers may loose the
house they were going to buy. Or pay double mortgage and sell an
empty house.
You also benefit by having your loan pre-approved in many other
ways:
You eliminate any surprises about your ability to borrow by providing
the lender with the information up-front that is required for you
to purchase a home. If there are questions about income, credit
or down-payment you can address them and resolve them without the
last minute anxiety that can occur if you have not been pre-approved.
You want to make a very strong offer after you finally find a home
you like. Very often in the sellers market you may find that someone
else is bidding this property. In the multiple offers situation
a pre-approved buyer that has lender approval for a mortgage has
an advantage.
When you consider the loan amount please keep in mind that you
will also pay real estate taxes, insurance, and utilities on your
new home. On the bright side you will benefit from the tax deductions
and home value appreciation that will make the cost of living in
your new home much more affordable.
The bottom line is that getting pre-approved for your loan first
means stress-free home shopping AND more leverage with the seller!
You can use any lender you wish, but I strongly recommend that
you use any mortgage company from my vendors list. They can meet
or beat the interest rate and pricing of any other lender, plus
you will never be at the mercy of some outside company - waiting
around helplessly trying to find out the status of your loan from
some mysterious unknown person.
Jump to Top
Step 5. Look at Homes
Now that you know what you want, where you want it and what you
can afford to spend, it's time to look at some houses! Most homebuyers
see about 15-20 houses before finding the home that meets most of
their needs and make you feel right.
The Internet is a great way to search for homes when you're in
the initial house search stage. This is the stage when you just
gathering information to help educate yourself what's available
in your price range. I encourage you to go online and browse all
available homes. It gives you a great feeling of the market. Please
use "Search for homes" link to get started.
But even the best Web site can not replace personal contact, touch
and feelings you have about the home when you see it. You see, most
home buying decisions are emotional. How does this house make you
feel? How do you feel about the area, the neighborhood?
This is why I offer my HOMES BY EMAIL service to my clients. I
know this market and have access to latest and current information.
Simply complete the form on that page to sign and use my automated
home search system.
It also helps clients to determine the features and benefits that
you are looking for in a home. I'll email your choices to you to
use as a checklist. I will search the market for homes that match
your criteria and fit your special needs, preview the homes for
you, send you an email with a property description for your review,
and only show you the ones that meet your criteria. It will ensure
that you bit the crowd and never miss the perfect home. Once you
see the house you like I will arrange an appointment. There is no
sales pressure or obligations.
My service includes not only searches in MLS, but also networking
with other brokers, open houses for brokers to preview new properties,
and other techniques. I will make sure that you have the advantage
to be the first to know about the new listings that enter the market.
"The secret of success in life is for a man to be ready for
his opportunity when it comes." Benjamin Disraeli
What is next?
Step 6. Choose a Home
Once we find the home that best meets your needs, we will write
up the purchase agreement and other necessary paperwork. Our goal
is to get you the home that you want for the best possible price
and terms, and we will discuss strategy for accomplishing this goal.
We'll start with the analyzing the value.
To help you to determine what price to offer and how close the asking
price is to fair market price, I'll prepare a Comparative Market
Analysis of a home you're interested in buying and the competitive
properties.
I will also find out how long the property has been on the market.
Usually the longer a house has been on the market, the more likely
it is the owner would accept a lower offer. Or maybe it's just overpriced
for the market.
I'll ask the seller's broker about the listing history, the other
offers the seller may have received, and the sellers motivation
and objectives.
You need to ask yourself some questions.
- How much do you want to pay for the home and what is the
top amount you are willing to pay for this home?
- How much do you want to put as the down payment?
- When do you want to close on the property?
- Is there anything you want the sellers to fix or repair
that you can visibly see?
- What amount of the earnest money will you submit with
the offer?
The earnest money is the deposit that you put to indicate that
your intentions are serious. The earnest money is held in escrow
by the brokerage firm that listed the property between the time
of signing a contract to and closing. If you buy the house, the
earnest money is applied to the downpayment or closing costs. If
your offer is not accepted, then the earnest money will be returned.
However, if after your offer has been accepted, you back out of
the contract, the seller has the right to keep the money.
Get an idea about the neighborhood by driving or walking around.
Explore, and talk to some of the residents.
Jump to Top
Step 7. Make an Offer
Next we need to negotiate an offer with the seller. The most crucial
points in the offer will be the offer's price and the terms.
Price and Terms
All sellers want the highest price, and the best terms that will
satisfy their need, fit their plans and mowing schedule and let
them sleep well during the escrow period. They always need to choose
a buyer who is most likely to able to close the transaction. The
highest price doesn't always win the home and the flexible terms
leave room for negotiation.
Sellers have a number of needs besides the price. They may want
a quick closing, or a delayed possession, or they may wish to exclude
items in the home. The terms may include for example a contingency
that you must sell your home first before you close on the seller's
home. Most offers include two main contingencies - the Inspections
contingency and the Mortgagee contingency that includes the condition
that the appraisal will be close to the selling price.
The seller will prefer an offer with the terms, which meet his/her
own needs, so if you are really interested in the house please consider
making a strong offer with flexible terms. Any offer, which puts
any of these goals at risk, will be less desirable. I'll help you
to find out from the seller's agent what are the seller's needs
and terms are important to them.
What Make Your Offer a Strong Offer
As you already know the offer price is not the only and most important
variable in the offer.
What puts you in a strong bargaining position?
- Flexible timing. If possible, I would suggest to consider to
offer flexibility about closing and move-in dates
- Well-qualified buyer. A pre-approved buyer with large down-payment
amount provides much greater security that the deal will close
easily and in shortest time.
- Substantial earnest money. A buyer's readiness to make a substantial
earnest money deposit indicate that you are serious about his
home and can go through with the sale It also might make him agree
to a lesser sales price.
Lesser number of contingencies. A buyer who doesn't have to sell
another home or who is willing to waive some contingencies are more
preferable in the seller's eyes.
Next step is to write a purchase agreement. It includes:
A complete, legal description of the house
- The price you're offering
- The down payment and financing details
- The amount of earnest money you're paying (deposit)
- A proposed move-in date
- A proposed closing date
- A list of appliances and furnishings which will stay with
the home
- The length of time your offer is valid
- Any relevant contingencies
- The sellers' disclosure obligations
- What the seller warrants about the property
- The sellers' obligation to maintain the property
This can be just the beginning of the negotiation process. The
seller has three options: accept your offer, counter your offer
or reject your offer. If the seller rejects or counters your first
offer, you may present a counter offer. You do not have a contract
until both parties have agreed to all terms and conditions and have
signed and dated the offer.
Please review your offer thoroughly before signing and submitting
it. After the offer is accepted by the seller it may be too late
to make any changes. They can be viewed as the deal breaker. If
you have any questions or concerns, they need to be addressed right
away.
Once you have a signed offer your earnest money will be deposited
into the Brokers trust account. The sellers have right to keep the
money if you change the conditions of the offer or decide to walk
out from the deal.
Four Questions to Yourself Before You Negotiate the Offer
- What is the highest price you will pay?
- At what circumstances are you prepared to walk away from the
deal?
- What negotiating points your ready to give in on and at what
price?
- What contingencies you must have as condition of the deal?
Jump to Top
Step 8. Contingency Period
After your offer is accepted, the contingency period begins. This
is time that allows you to perform inspections, obtain financing
and satisfy any other contingencies of your purchase agreement.
The average time from getting the contract accepted to closing
is about 30-45 days. I will look after and coordinate all of the
details very closely, keeping you informed every step of the way.
If you are concerned or confused at any time, please let me know
immediately. I am here to serve you for your best interest.
Order an Inspection
First, you need to choose a home inspector and finalize your choice
of the mortgage broker and an attorney. Please click here to see
my recommended vendor's list. I would suggest choosing a reputable
vendor. You need to be sure that they will be able to deliver on
time, to avoid any delays and complications with your contract.
I always recommend having home inspection. In most cases, an inspection
contingency should be a part of your purchase contract. Hire qualified
professional to thoroughly inspect the property all the major systems
before you even submit your mortgage application.
They will find defects a normal buyer could not reasonably expect
to discover and often the seller doesn't know about them either.
A few hundred dollars invested here can save you thousands.
The inspection should include a termite inspection and a test on
radon. A home inspector will also check the electrical system, plumbing
and waste disposal, the water heater, insulation and ventilation,
water source and quality, pests, foundation, doors, windows, ceilings,
walls, floors and roof. He will give you a written report and may
give you a rough price for repairs. He'll give you an educated opinion
on whether the house is structurally and mechanically sound and
point on any repairs that are needed.
Once the inspection report is received, I'll put in writing exactly
what you wants the seller to repair. If repairs are needed the seller
has three options:
1 they can fix or repair what is identified.
2. they can give the buyer money to make the repairs or reduce the
purchase price of the house
3. the seller has the option of not doing any repairs. In this you
have the option of buying the property in its "as is"
condition or terminating the contract and getting the earnest money
back.
Get Funding
Once the inspection report is received and all the repairs discussed
with the seller you apply for the loan. Before you submit your application
to a lender please make sure you obtained and compared good faith
estimates of closing costs from the lenders. The closing costs may
vary depending on the vendor.
Simply put, you need to have four items to obtain a mortgage.
· Enough stable income to qualify
· Good credit
Enough money for closing costs and down payment (order my free report
"How to Minimize the Cash You Need To Buy Your New Home)
· An acceptable property to buy
You may have already met with the loan officer. If not, here is
a list of items you should bring to your loan application.
- W-2 (2 years) & current pay stubs
- Past 2 years pay history for landlord/mortgage company
- Employment information (2 year history)
- All bank account numbers and balances
- Last 3 month's bank statements
- Open loans - names, addresses, account #, balances, monthly
payments
- All information on any other real estate loans
- Drivers license or other photo ID
- Check for credit report
- Certificate of eligibility or DD214 (VA loan only)
- Self employed: Last 2 year's complete tax returns, year to
date Profit & Loss and Balance Sheet
Obtaining financing usually take 30-60 days because it includes
an appraisal of the property and underwriting of the loan. Please
be prepared to make your down payment, which is usually due several
days before the close of escrow.
Buy Homeowner's Insurance
A homeowner's insurance policy is required at closing. Usually
you obtain insurance equal to the full replacement value of the
home.
For your Peace of Mind I also recommend to purchase a Home Protection
Plan.
A home warranty, or home protection plan, is a service contract,
normally for one year, which protects homeowners against the cost
of unexpected repairs or replacement on their major systems and
appliances that may break down.
Jump to Top
Step 9. Final Walk Through Inspection Before
The Closing
A day prior to closing we will do a final walk through inspection
of the home to make certain that all items specified to stay with
the home are still there, and to verify that all heating/cooling,
plumbing, electrical, mechanical, and other systems are in proper
working order. We'll ensure that all repairs have been made and
that the house is in order. If there are any outstanding problems,
they should be addressed prior to closing.
Then you need to get a cashier's check in your bank for the balance
of the down payment and closing costs.
You need to transfer the utilities on your name, registering for
schools, etc.
Step 10 - Close And Move.
Closing I is a meeting at your lawyer office in which you sign all
the documents, pay the balance of your down payment and closing
costs, and you get the keys from your new home. This is when the
ownership is actually transferred from the seller's name to yours.
Congratulations! You are the owner!
Jump to Top
|
