BUYING A HOME

Buying A Home

Purchasing a primary residence, vacation home or investment property is a major decision for most people, and it involves a long-term commitment financially and emotionally. It can and should be a very exciting and rewarding experience, especially on Lake Gaston. When buying a new home, there are a few things to consider:

	What monthly payment can I afford?
	What am I looking for in a home or lot?
	Should I work with a REALTOR®?
	Once I find a home or lot to purchase, what do I need to do next?
	How much cash do I need at closing?
	How do I obtain a mortgage loan?

Before You Begin Your Search

Before you actually begin the process of looking at homes, you should have a pretty good understanding of the financial aspects of your new purchase.

Begin your search with an idea of the maximum amount you want to spend, what your monthly commitment will be for that amount, how much "up front" cash you will need, and what your on-going expenses will average (utilities, maintenance). There are a multitude of mortgage products available today and the right one depends on your intended use and timeframe of ownership.

If money is no object (lucky you!) and you have no idea of what property values are for the area, then you may want to spend a few minutes searching the MLS to get an idea of what to expect. You may also want to visit the FAQ link and read the section I provide on property values. It stands to reason you will not pay more for something than you personally think it's worth... but you need to start somewhere!

To determine the financial aspects you should complete the following:

Get Pre-Qualified: Unless you are able to pay cash for your home, most buyers will need to go through the process of applying for a mortgage. By contacting a mortgage loan specialist before you begin your search, you are able to determine the amount of loan for which you qualify. Typically, a borrower is pre-qualified for a loan that amounts to 28%, or less, of their gross monthly income. In addition, if you know the amount of the monthly payment you would be comfortable paying, a mortgage specialist can calculate the price range for your home search. Getting pre-qualified for a loan also increases your chances of your offer being accepted. A seller is more likely to accept an offer from a buyer who already has funding versus one who still needs to get a loan.

Prior to getting pre-qualified, you should obtain a copy of your credit report so that there are not any negative surprises when you are ready to apply for your loan. Correct any errors that you may discover on your credit report. Also, you will want to reduce your consumer debt as much as possible by paying down credit card balances.

By going through the pre-qualification process, your mortgage specialist can provide you with an estimate of how much cash you will need for the sales transaction. Cash is needed for the down payment, earnest money, and closing costs of the transaction.

Make an Amenities List: Decide what features are most important to you in a home. By establishing your criteria, you will save valuable time shopping for homes that do not meet your needs. Also, consider what locations you are interested in. When making an amenities list, determine which criteria you absolutely cannot live without and which ones you are willing to budge on.

Some typical criteria, especially for Lake Gaston, may include:

	Price range
	Location: Neighborhood, Subdivision, State, Quadrant of Lake

The House

	Square footage requirements
	Number of Bedrooms
	Number of Bathrooms
	Unfinished or semi-finished space (play areas, storage space)
	Garages or basement

The Lot:

	Features: waterfront, water access, water view or off water
	Waterfront: main body of lake or quiet cove
	Boathouse: required/desired, at your lot or at community slip
	Water Depth: adequate for boating or deep enough for swimming
	Acceptable View: wide water view, narrow cove view
	Slope of Lot: flat, moderate slope, or elevated for views

Choose A REALTOR®

Once you have decided on the price range and the features you are interested in, your next step, if not before, will be to decide whether you will search on your own or use the professional services of Realtor®. When choosing a Realtor, it is to your advantage to enter into a Buyer’s Agency Agreement. This ensures that the agent and agency will be able (by real estate law) to represent your best interests and not that of the seller which is the "default" relationship.

If you choose to work with me, CHRIS THOMPSON, I will not charge an additional fee to represent you in the purchase process. I am typically compensated for my services by the seller for MLS listings. I will research property listings for potential matches to your criteria and schedule showings for you at a convenient time. In addition, I will provide guidance to you during the contract negotiation phase of the purchase/selling process. I will also coordinate and schedule the home inspection, appraisal, and closing for you, as well as provide you with referrals for mortgage lenders.
CONTACT CHRIS

Beginning Your Search

Once you have talked with your Realtor® and determined what you are looking for in a property, it's time to begin your active search for homes or lots that interest you. Based on the criteria that you provide your REALTOR®, he/she will be able to search their listing database for homes that meet your needs.

While visiting properties that are on the market, compare homes. Every home is unique! Even if every home you visit has all of the main criteria you are looking for, each will have different characteristics. Bring your Amenities Checklist with you to all homes that you visit. Check off which features each house has. Make notes on each home of what you like and dislike.

Additional things to consider when touring homes:

	Cost of upkeep and utilities
	Amount of maintenance required
	Cost of updating or decorating
	Homeowner Association Covenants & Restrictions, dues
	Boating traffic

Taking notes and using your checklist will help you later when you can sit down and compare properties. By comparing notes, this will help to prevent you from making an emotional and impulsive decision.

Making an Offer

Once you have found your dream home, it is time to prepare a legally binding offer to purchase. For a real estate contract to be enforceable, the terms must be in writing and signed by all parties. At this point, you must be extremely thoughtful of your intent, the terms, conditions and responsibilities. Your buyer’s agent can provide guidance to you on these terms and price you should offer to pay for the property. A comparison of prices for similar properties that have recently sold in the area along with current market conditions will also guide you.

In addition to the purchase price, other items to include in the Offer may include:

	Contingencies to protect you if you have any specific needs that must be met.
	The amount of earnest money (deposit) to offer.
	Concessions that you want the seller to make, such as a carpet or paint allowance, or payment towards the closing costs.
	Home inspection contingencies.
	Financing contingencies.
	A clear definition as to what is to be included with the home, such as appliances or window treatments.
	A closing date.

If your initial offer is not accepted your REALTOR® will represent you in all contract negotiations until an agreement is reached or negotiations are terminated between the seller and you.

The Purchase Process

Once your offer has been accepted and the contract ratified (signed by all parties), it is time to work on the final details of purchasing your home. There are several tasks and inspections that will need to be accomplished during this phase of the sales transaction.

Home Inspection: Arrange to have a professional come out to inspect your home. They are able to find electrical, plumbing, structural and other problems that may not be detectable to the average homebuyer. The home inspection is not required, but it is in your best interest to have one performed, and its an expense incurred by the buyer.

You will want to get a well and septic inspection, and pest inspection on the property to make sure there is no structural damage to the property caused by termites. Your REALTOR® can usually make a recommendation of a reputable inspector.

Apply For A Loan

Once an offer has been accepted, you will need to contact your mortgage specialist to officially apply for your loan. The lender will usually require an appraisal of the property to protect the lender's interest.

Items that you will need for your loan application include:

	W-2s and/or tax returns from the past 2 years.
	Proof of gross monthly income for the past 30 days.
	Proof of investment income, including rental incomes.
	A list of creditors, including account numbers, balances, and monthly payments.
	Two months worth of banking statements.

The Final Walkthrough

Prior to closing, you should be given access to the house so that you can walk through and give it a final inspection. This should be done as close to the closing date as possible, preferably on the morning of the closing proceedings. When you go to do your final walkthrough, your home inspector will not be with you. It is your responsibility to inspect the home and ensure that everything meets your approval.

Things to look for during your walkthrough:

	The seller has repaired items included on the purchase agreement or home inspection report.
	The house is in the same or better condition as when you signed the purchase agreement.
	The house is vacant and "broom" clean. The home does not have to be spotless, but there should be no remaining trash or junk left behind in the house or in the yard.

Closing

The closing procedures will be handled by a settlement agent or attorney, generally of your choosing. Before closing, you will be told the amount of certified funds you will need to bring to closing. They will also provide you with any additional information you may need to prepare yourself for the proceedings.

On the day of closing, remember to bring:

	A certified check (or wired funds) for the cash balance of your closing costs.
	A picture ID, such as a driver’s license.
	Your personal checkbook (in the event there is a last minute adjustment).
	Evidence of mortgage insurance (if this information has not already been provided).

During the closing, a good settlement agent will explained to you the important details of your financial responsibilities. If everything meets your approval, you will sign the contracts to finalize the deal.

Congratulations! At this point you are a new homeowner !