What To Expect When Buying a Home
How do you prepare yourself to shop for the perfect home in a competitive seller’s market? The first thing you’d want to do to prepare yourself for buying property is to make a checklist. There is so much that goes into buying property, which is why it is so important to understand the process, create a checklist, and connect with a realtor. 80% of buyers purchased their property with help from a realtor.
Buying a Property 101
Understanding the Process
Here’s what your checklist should look like:
- Finances – Savings, down payment, closing costs, understanding your budget
- LOCATION! – Think about where you want to buy and if it aligns with your finances, commute to work, etc.
- Property Type – What you look for in a property, how many bedrooms, etc. Identify what are your non-negotiables for this new property and what are you willing to be flexible about.
- Mortgage Loan approval
- Connect with a Realtor
Getting Pre-Approved and Understanding Your Budget
This step is super important and requires your due diligence. Ask the right questions and get the right answers! Before committing to a bank or lender for a mortgage, understand your financial strengths and weaknesses. Secondly, you want to build a relationship with your lender, know their policies, interest rate, and incentives (ex: help with down payment and or closing costs), if any. There are so many options to choose from when it comes to mortgages, so you literally have to shop around for the one that will best fit you. Now, not all banks have the best rates or incentives, so doing your research and being clear about what you want will make a difference when you are ready to close on the property of your dreams.
Savings, Down Payment, and Closing Costs
Being prepared also means knowing what to expect. Although some mortgages may require a 3% to 5% down payment, it is best to have at least 15% to 20% saved for your down payment and closing costs. Now, what exactly are closing costs? Closing costs are additional fees associated with the purchase of property. These fees include but are not limited to, attorney fees, home inspection, appraisal, realtor/broker fees, and of course your moving costs.
Tip: Your mortgage should be 30% of your net income. For example, if your income equals $100k annually, times 30% equals $30,000. Divide $30,000 by 12 (months in a year) equals $2,500.00. This means that based on your income, your mortgage should not exceed $2,500.00 a month.
Connect with a Realtor
When you connect with a realtor, the stress of shopping, researching the property, negotiating the selling price, and closing the deal are just a few out of many things a realtor can help you with. My goal as your realtor is to facilitate and add value to your home-buying experience.
Working with Soler Realty NYC
Shop with the pros! With over 20 years of experience and a diversity in types of listings, we know the market and understand our buyers.
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We’re Ready to Shop!
Now that you have been pre-approved, know where you want to buy, understand the conditions of the property, are aware of the taxes, have your down payment, know your monthly mortgage payments, and have your realtor, the fun part is finally here – property hunting. This is the moment when your realtor takes the information you’ve provided and begins a hunt for the best properties for you, based on your checklist.
For appointments, we like to take our clients to see three houses at a time. Based on your checklist, an agent will narrow down the best properties and take you out to see them. When you find the property you absolutely love, your agent will make an offer on the property for you. Once the offer is submitted and accepted, we may then go into contract.
In the meantime, we will schedule a home inspection. The home inspector will thoroughly check the foundation, roof, water, walls, ceilings, etc., and present a full report. This inspection will help determine what has to be fixed in the home. When both parties sign the contract, this is called an executed contract and now we’re ready for the title and appraisal of the home. The title and appraisal are the final steps to closing the deal on your dream home!
I hope this was helpful and will strengthen you as a buyer in this current real estate market.
Soler Realty Team