|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
|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?|
and pre-approved - What's the difference?|
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
To determine the financial aspects you should complete the
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
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:
Subdivision, State, Quadrant of Lake
Number of Bedrooms
Number of Bathrooms
semi-finished space (play areas, storage space)
Garages or basement
Features: waterfront, water access,
water view or off water
body of lake or quiet cove
at your lot or at community slip
Water Depth: adequate for
boating or deep enough for swimming
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
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.
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
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
Amount of maintenance
Cost of updating or
Covenants & Restrictions, dues
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
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.
A clear definition as to
what is to be included with the home, such as appliances or window
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
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
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.
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
|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