What we need to do to get started.
Good local lender.
They will be able to pull your credit and help us find the best loan program for your needs and wants in a home. A good loan officer with years of experience can make the all difference they can help you determine the amount to barrow to fit your monthly payment goals. *I have a great loan officer that can help if you need a little credit repair.
This letter from the lender tells the seller we are ready wiling and able to buy their home.
It is important to beat the competition to the new listings.
Making the offer.
Once we find ( The One ) it is time to make the offer. What goes into making the offer?
We will look at the homes that have sold in the area in the past year to help us reach a offering price.
Both the buyer and the sellers have closing costs. Each is responsible to pay their own cost. Buyer side closing cost can be a large sum of money, it covers months of home owner’s insurance & Taxes as well as some of the loan fees, from 2-4% of the purchase price. On average 3%, that would be $3,000 on a $100,000 loan. But the banks will allow the seller to help out the buyer by paying the buyer’s closing cost. * Keep in mind this is real money we are asking the seller to pay on your behalf.
In a competitive market it is a good idea to think about putting down earnest money. In our local market $500-$1,000 is common. Think of it this way, if you had two people wanting to buy your house and the offers were equal. Buyer #1 offers $0 earnest money and Buyer #2 offered $500 in earnest money would it make you look at the offers differently?
There is an art to making the best offer. Most people that don’t know any better will make a low offer that will cut the seller to the bone. Think how you would react to such a offer? Our goal is to make a offer that is a great deal for you and just enough that the seller won’t want to counter offer. We must keep in mind a few things when making a offer, how long has the property been on the market, have the owners made a price reduction recently, do we have competition, are we asking for help with closing cost & what do we believe the true value of this property is? We want to get to the lowest price the seller is willing to sell at.
At this point you stop looking at other homes. The seller is dealing with only you, but they are able to keep getting back up offers. The back up offers are only able to get a shot at the house if your contract (falls through).
We pick a inspector and set the time for inspection. The primary inspector will usually contract with a pest inspection company to do a pest inspection in addition to his main report. By standard contract we will have 10 days to have the home inspected and send the sellers a repair request. All inspectors are different but one thing is true of most, they will find a long list of “issues” for you to look at. It is their job to show you the home from top to bottom in the report. A good inspector will have high quality photos and descriptions for you to see any defects.
The main inspector is not a qualified professional in all areas of the construction trades. When he sees a issue that needs a qualified pro he will note it in the inspection. Some of these would be a HVAC repair person, mold inspector, roofer, foundation specialist, electrician & structural engineer. This is not a exhaustive list. Keep in mind by contract the buyer is responsible to pay all the inspectors they hire to inspect the home. The good news is we usually only need the main inspection.
* NOTE * Not all issues or defects will be high priority for repairs. We are looking for the most bang for our buck, the top defects get on the list 1st. We are looking for any dangerous issues 1st, followed by expensive repairs. Most of the inspection reports are 40+ pages of the condition of the home and best practices for maintenance. Of coarse if this is a new home we will add a punch list of repairs. Short of a new home there will always be a honey do list waiting for us. Welcome to home ownership.