Are you thinking about buying a home? If you are a first-time buyer, or haven’t purchased for many years, you may have many questions as to how to get into the real estate market. Educating yourself-before you step into an open house-will set you up for success when it comes to purchasing a home. The four tasks below will help you go from being stressed and overwhelmed to prepared and excited.
- Find a Realtor. Ask your friends, neighbors, family and co-workers for a referral. An agent that your sphere has successfully worked with is a great place to start. Meet them for coffee, or at their office, and see if you are a good fit. Ask for references and then call them. Your goal should be to work with someone who is knowledgeable, straightforward, and easy to reach for questions and concerns. There are all levels of professionalism and experience in every industry, so find someone that brings value to you. Once you do, they will walk you through the process and education you every step of the way.
- Talk to a lender. If you don’t know a lender, ask your agent, your family and your friends who they work with. Talk to more than one lender before you commit. Shop around to make sure you are getting the best loan available. Once you have chosen a lender, they will pre-approve you for a loan based on your income to debt ratio and your FICO score. Your lender will take into consideration all the expenses you have now and all you will have once you purchase a home. Remember, there is more than just a mortgage payment to consider when you are budgeting for a home. Other expenses include primary mortgage insurance (if applicable), homeowner’s insurance, possible Homeowner’s Association fees, property taxes and maintenance.
- Prepare Your Deposit. Before you do anything with your accounts, talk to your lender about where you are getting your deposit funds from. If you are pulling money from the stock market or a 401K, they may have you start the process of liquidating those funds before you start looking at homes. If you are receiving a gift from a relative, you will need to provide a gift letter stating so. Your lender has a specific form you and your relative will need to fill out. In most sales, you will need 3% of the purchase price available within 3 business days of getting your offer accepted. This is called your Earnest Money Deposit. It is given to the escrow office after your offer is accepted; and once escrow is opened. You will pay the remaining part of your deposit at the close of escrow when your loan is funded.
4. Do your Homework. When you have a clear vision of what you want, you’ll have an easier time finding it. What city do you want to live in? What do you want in a home? Make a list of the features that are important to you including the number of bedrooms, bathrooms, kitchen size and style of home. Then, think about your deal breakers. A busy street, a pool, a two-story home: If these are items you do not want, write them down. This will allow you to eliminate the homes that do not fit your criteria which gives you more time to focus on those that do. Once you have your list, sit down with your Realtor and discuss your needs. They will set up a search for you of all homes that fit your specific criteria. Now you are ready to start looking for your dream home!
Monrovia real estate facts for October: Currently 54 properties on the market. We had 30 properties sold in October at an average sq. ft. price of $506.00. The average sale price was $780,000 with 40 days on the market.
Article by Heidi Bloks
Originally published in Monrovia Weekly