Getting Started
Your first step toward buying your new home will be to analyze your needs. Determining whether you can afford to buy a home as well as how much you can afford to spend without overextending your budget is an important first step.
How much house can you afford?
The amount of money you can afford to spend on a home is a combination of your cash on hand, your salary, and your outstanding debt. Generally, you can afford a home equal in value to between 2 and 3 times your gross income, however the best route to take is to talk to a bank or mortgage broker before you begin your home search.
Why you should work with a Realtor
All real estate licensees are not the same. Only real estate licensees who are members of the NATIONAL ASSOCIATION OF REALTORS® are properly called REALTORS®. They proudly display the REALTOR "®" logo on the business card or other marketing and sales literature. REALTORS® are committed to treat all parties to a transaction honestly. REALTORS® subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling real estate.
An independent survey reports that 84% of home buyers would use the same REALTOR® again.
Choosing a Realtor
Whether you are planning to purchase a home, sell a home you already own, or both, statistics show that you will benefit from using the services of a Realtor. These benefits include both higher profits and an overall smoother transaction. You will be spending lots of time with this person for several months, so it is best to make sure you choose someone who understands you and your particular situation.
If you have a home to sell, look for a Realtor who is familiar with your neighborhood. No one can be an expert in every part of a city, but many people who work in real estate pride themselves on being extremely familiar with a small section of streets and homes. Ask your neighbors for recommendations or look at "for sale" signs that are currently posted in front of homes in your neighborhood.
Home Inspections
As a buyer, you are entitled to know exactly what kind of house you are getting. Don't take for granted what you see and what the seller or the listing agent tells you.
A home inspection is an opportunity to have an expert look closely at the property you are considering purchasing and getting both an oral and written opinion as to its condition.
You need to plan on doing an inspection after you present and negotiate your offer. It must be written in as a contingency; if you do not approve the inspection report, or if there are repairs the seller must do and they refuse, then you don't buy. Most real estate contracts automatically provide an inspection contingency. When in doubt, ask!
Loan Applications
Mortgage Lenders make no bones about it: They are tougher on second-home loan applications than on primary-home loans. Why? Because the finances of a second-home buyer are, by definition, stretched thinner. The result is that second-home rates traditionally run one-quarter to one-half point higher than those for first residences. Ditto for origination points on vacation-home loans.
Title Insurance
The primary purpose of title insurance is to eliminate risks and prevent losses caused by defects in title arising out of events that have happened in the past. To achieve this goal, title insurers perform an extensive search of the public records to determine whether there are any adverse claims on the real estate being transferred. Those claims are either eliminated prior to the issuance of a title policy or their existence is made known to the buyer, seller and lender and excluded from coverage. Title insurance is purchased with a one-time premium when the real estate is transferred.
For Home Buyers
