Buyer Information
"Real estate cannot be lost or stolen, nor can it be carried away. Purchased with common sense, paid for in full, and managed with reasonable care, it is about the safest investment in the world."
- Franklin Delano Roosevelt, 32nd President of the United States
Using 1-800RealEstate.com
Buying property, whether it's your first home, a vacation getaway, or an investment, requires careful planning. Start by educating yourself to confidently select the right professionals to work with. Real estate transactions can be complex and involve various specialists with their own unique lingo. Understanding this vocabulary empowers you and will make your life much easier. 1-800RealEstate.com provides you access to a network of all the professionals you’ll need. Dive into our informative videos and service sections to research your team. We’ve compiled lists of tips from industry experts to prepare you for a seamless home buying experience.
The 12 Steps to Homeownership
Shop for a mortgage before you shop for a property
The first critical step to buying any property is figuring out how much you can afford to spend. You should talk with mortgage professionals and put together a realistic budget, which needs to include the property taxes, insurance, and what type of down payment you are going to need to purchase the property. You should also plan on how much you are going to have to come out of pocket with for closing costs. Lastly, consult with your mortgage lender on the various types of loan programs that you qualify for and know the differences.
Get a prequalification or better yet a preapproval letter
There is a difference between a pre-qualification and a pre-approval letter and most sellers want to know that you already have your financing in place before showing you anything. A prequalification letter is based upon what you told your mortgage lender that you make and what your debts are. A pre-approval is a more in-depth look at your actual debt to income ratio, which also involves pulling your credit as well as actual bank statements and paystubs. With new technology, it's easier than ever before to request both pre-qualification and a pre-approval letter.
Sit down and really plan out your search-
Just because your lender has given you an amount that you can spend on a home doesn't mean you should max that amount they will lend you. Have a financial plan in place and know what you can really afford. Then you need to figure out a list of items that you need as opposed to what you want in a property. Location, size, home type, school district, and if the home needs to be move in ready or a fixer upper should be worked out at this stage.
Do I need a real estate agent to buy a property?
While it is highly advised that you work with a buyer's agent it is not a requirement to buy property. A buyer’s agent works directly for you and can help you with negotiations, advice and local knowledge. Oftentimes the seller will pay a portion or all of the buyer’s agent commission, so it often won’t cost you much if anything to hire a buyer’s agent. If you are negotiating directly with the seller, you may be able to get a lower price without an agent however because they won’t have to pay an additional commission. If you want to research local real estate agents, please refer to our agent page where you can see videos and read reviews to help you with your decision.
Making the offer
Of course you want to get the best deal that you can but there are many factors to consider before making an offer. First off you should know how long a property has been on the market, and how that home compares to others in the area that are similarly priced. You should also know what is going on in the area because in an extremely hot market you may be in a competitive bidding situation. Educate yourself as much as possible about the market before you make an offer.
Put everything in writing
When making the initial offer be as specific as possible. Your offer should have an expiration date for your offer. It should discuss your financing terms and the date that you are going to close on the property. Your offer should also include your offered purchase price and how much you are going to put down when you sign a purchase and sales agreement. Lastly the offer should detail exactly what items or appliances you wish to stay with the property and when you are going to do a home inspection or if you don’t intend on conducting an inspection. All of these items will be up for negotiation.
Plan on negotiating
The written offer is only the beginning as the seller will most likely counter your offer at a higher price. As a buyer you need to make sure that you only offer what you can afford and it is imperative that you try your best to keep your emotions in check and keep your cool at all times. Once you have come to an agreement on the initial offer you will most likely have a home inspection done. If you find items that you would like fixed or would like a credit for these items you will have to negotiate once again. If you are open and reasonable in your requests, you should be able to come to a middle ground and keep the sale on track.
The home inspection
A home inspection is not a test where the inspector is going to give the home a grade of pass or fail. The home inspection provides a big-picture analysis of the state of the property in the form of a report which will give you tips on what items to monitor, and if there are any deficiencies with the property. The inspection is a critical part of any purchase and your offer should be contingent on having a professional inspection done. Don't get freaked out if a problem arises during the home inspection as you can usually solve the problem with a simple adjustment.
Hire a real estate attorney
Having a completely objective party working on your behalf is a must in any real estate transaction. Your attorney is going to run a title search to ensure that there are no other legal claims to the property and that there are no outstanding liens against it. Attorneys can draft a purchase and sales agreement and will look over all of the documents and deal with any unique problems which may arise.
Get your homeowners insurance
If Disaster strikes, the ideal homeowner’s policy should safeguard you from any out-of-pocket expenses to cover damages or loss. Make sure that you understand the difference between insuring the structure and the contents; and if you are buying property that is close to water, make sure that you have an agent who can help with flood insurance. Our advice is to obtain a few quotes and when comparing them make sure that you compare both the coverage and the price not just the price.
Make sure you do a final walk through
Before you go to the closing and sign papers for your new property insist on doing a final walkthrough. You want to make sure you feel good about the home and that it is in the same condition as when you wrote the offer. You also want to make sure that if you have agreed on the seller leaving certain appliances or items in the property that they are still there.
The closing
There's no need to let all the intricate details of a closing stress you out. There is a lot of important paperwork and it all has to be signed before the title can be transferred from seller to buyer but if you have taken care of the previous 11 steps it should be a breeze. Just remember that this is going to take about an hour and if you have small children you probably want leave them at home so you can understand everything that you are about to sign. Good luck!