2020 Home Buyers Guide
1. One of the first things you want to do in preparing for buying a home is to build a relationship with a good Mortgage Company/Bank to determine how much of a home you can afford. Keep in mind, there are different financing options that a lender can review with you based on personal information such as if you are a first time buyer or a veteran. This can be done online or with a local branch or company. You will need to gather documentation that may include income tax returns, pay stubs, bank statements, employer information, your social security number and other personal info that may be required by the lender for a prequalification letter. The lender will need to find out your credit score and the amount of money that you are looking to put down to determine what your affordability will be as well as the interest rate that would be tied to your loan. This prequalification letter is a key component that will be submitted with your purchase contract. This will also show the agent and the seller that you are a serious buyer. Please note that if your lender requires a larger down payment, he or she may advise you to discuss seller concessions with your agent when submitting an offer. Your lender should be able to answer any financial inquiries related throughout this process. Don’t be afraid to ask.
2. Selecting an agent to work with. There are a lot of variables that go into purchasing a home so be careful in your selection of an agent as you want someone that you can connect with as well as someone that is able to negotiate on your behalf and guide you through a smooth and stable transaction. This could be the biggest investment of your life so choose wisely for a great outcome!
3. Start to become familiar with online search sites like Zillow, Trulia or Realtor.com to become familiar with homes that are available for sale in your area that match your search criteria. This is a great start to view pictures online as well as the different areas that you are interested in. Now that you have an agent, they can also send you properties directly from the Multiple Listing Service that matches your criteria, including how many bedrooms, bathrooms, price range, etc. I personally like to go a step further and also get my clients setup for automation success. This is a process that automatically emails you from Multiple Listing Service whenever a new property comes available within your search criteria. So the day the new property hits the market it will be emailed to you. This becomes a great advantage in possibly putting an offer in before your competition even gets to view the property.
4. Here is a step that can save a lot of time. Before calling, texting or emailing your agent to setup a showing of a property that you like, do a quick drive by. The reason for doing this is because when you drive by this property you may see things that turn you off that were not visible in the pictures. This happens a lot where you might see something from the outside of the home that discourages you from even wanting to see the inside. I just recently viewed a property that was a great price, great location and the inside pictures looked pretty good online but when I pulled up to the house the foundation was caving in on one side of the house and there was no mention of this in the MLS listing. When I called the agent they let me know that a car plowed into the front of the building. So I always recommend a quick drive by because you may cancel the home off your list before even viewing the inside.
5. So you have finally found the home of your dreams after viewing it with your agent and you are ready to put in the offer. This is where the guidance of your agent really comes into play. After looking at similar properties sold in the area, you put in an offer/contract that may be countered or accepted and now you move into the 3 day attorney review. At this point, both parties have the option to hire an attorney to review the contract. This contract is very important. The terms setup will be signed by both parties and go into effect. In these terms you want to make sure that you are protected, have enough time for your inspection, to get your mortgage squared away and be able to negotiate any potential problems that may come out of the home inspection. So if you decided not to use an agent, it would be in your best interest to have an attorney write up the contract for your protection.
6. So you made it out of the attorney review. What’s next? The contract has determined the amount of days that you have for your inspections so you want to get started making calls and setting up appointments for your inspections including the home inspection, the termite inspection, and the radon inspection. If the home you selected is not city water and sewer, you are going to want to set up a septic inspection as well. Assuming that the seller is completing the well certification this is one thing that you do not need to worry about. Sometimes you can advance further to a structural inspection if there is a question or a recommendation from the home inspector on the foundation or structure. The lender will also set up your appraisal and you have the option to do a survey.
7. You received the inspection reports back and may feel a little overwhelmed. Your agent sees these reports all the time and will be able to go over and review the concerns. New Jersey licensed home inspectors are going to find things wrong even with brand new homes. At this point you may need to go back to the negotiating table to get repairs done before closing or get money to do repairs that may be needed. This is a give take process right here. Hopefully a deal is able to be made that all parties agree to. For more information on some detailed major home inspection issues and solutions or to figure out when to walk away from the deal, talk with your agent.
8. The buyer and seller agree on repairs. The title company will work on the title work which includes your title insurance. The seller usually orders the Certificate of Occupancy and the Fire Certification, unless noted differently in the contract, which is required by the city. The bank appraisal, ordered by your lender, has come back and meets requirements. At this point it is not suggested to make any large purchases because this could effect your credit before closing. Changing jobs in the middle of this process is also something you do not want to do. Your lender will revisit and gather updated personal information before you close to confirm your credit and verify employment.
9. Clear to close! The lender has given the okay that this file is ready to close. A final walk through the property right before closing is a good idea and should be done just to make sure everything is good. At the closing table you will need a pen full of ink, certified funds for any payment to be made and identification as well as anything else the Title company may have instructed you to bring. This may seem like a lot but it happens at a fast pace. Congratulations! You made it past the finish line and you are a new Home Owner!