Buying

Buying a home is a big decision. The financial and emotional stakes are high, but the rewards can make it all worth it. This material can help you prepare to start your home-buying journey.

How Much House Can You Afford?

Knowing how much you can afford to pay is a crucial step in your search. Nailing down your budget early will make the overall process more focused and less stressful.

The best way to figure out how much you can afford is by contacting Sissy Lee at La Mortgage  818.424.5099

The Benefits of Home Ownership

Plain and simple, owning a home can improve your quality of life, provide stability and give you a sense of control you just can’t get from renting. You have a place to live when you rent, but buying is something much deeper – and better.

The intangibles are tough to measure, but there are other benefits you can quantify:

 

Financial investment:

Your monthly mortgage payment creates equity for you, not your landlord.

The interest on your mortgage is a tax deduction:

While this isn’t a reason in itself to buy a home, it’s nice to get a break at tax time.

 

Fixed monthly housing payment:

If you opt for a fixed-rate mortgage, the monthly rate of your mortgage won’t change for the length of the term.

The Importance of a Buyer’s Agent

A real estate transaction is a complex process involving stacks of paperwork and a number of outside service providers and contractors.

An experienced buyer’s agent like myself can guide you through the process, answering your questions and serving as your advocate (see the Anatomy of a Home Purchase). I will help you find the property that fits your needs, submit offers and counteroffers, suggest a good property inspector and other professionals, and provide all sorts of relevant advice.

With me as your agent, you’ll have someone on your side, looking out for your interests every step of the way.

What are the costs involved in hiring a buyer’s agent?

As a buyer, you don’t pay me directly. Instead, I receives an agreed-upon portion of the listing agent’s sales commission (usually about half), which is paid by the seller.

If you’re thinking this structure works against you by giving your buyer’s agent an incentive to let you pay more than you need to, consider this:

The increase in a buyer’s agent commission on, say, a $5,000 to $10,000 jump in price would be only $125 to $250. Good buyer’s agents – those who are productive and engaged in the business full time – aren’t going to risk their reputations. Your satisfaction – which can generate referrals to your friends and family – is the lifeblood of their careers.

 

Deciding Where to Live

If you’re unfamiliar with the area where you’re moving, I can offer insider knowledge on neighborhoods, schools, access to recreation and shopping districts, and the many other details on local neighborhoods and subdivisions.

It’s important to have a clear picture on the features that matter most to you in a home or location. Creating a list of “must haves” and flexible “nice-to-haves” from the start will make things a lot easier for you.

Factors to consider:

1. Size of home – square footage, number of bathrooms, rooms, etc.

2. Home features – updated fixtures/appliances, property size, garage, storage, etc.

3. Location – proximity to schools, open space, entertainment, work, etc.

4. Neighborhood – older or newer homes? Families, retirees or singles?

5. Room to grow – planning to have more children?

6. Condition – move-in ready or a less expensive home in need of improvements?

 

Anatomy of a Home Purchase

For most people, finding the right home begins with a house-hunting strategy combining personal preferences, guidance from others and a mix of neighborhood exploring and online search.

 

For some, the search takes a while; others find what they want right away. In either case, I can be a huge resource of insight and guidance, working through issues or complications that arise along the way.

 

Here’s a general outline of what to expect during a home purchase, from the buyer’s perspective.

 

Buyers make a purchase offer.

This is it! You’ve found the home of your dreams, looked over disclosure documents, reviewed comparable sales data, talked it over with me and submitted an offer. The sellers may accept your first offer, but more often will return a counteroffer. In fact, additional negotiations are common, and I will help you through this generally stressful stage.

The sellers accept.

Once everyone is happy with the terms, the parties have reached what is known as mutual acceptance and enter into a purchase and sale agreement.

 

Buyers put up earnest money.

To solidify your intent to buy, you’ll place a deposit, or earnest money, on the property. The amount varies, but is generally at least 1 percent of the purchase price. You’ll write the check to the escrow company, not the seller. Note: This money counts toward your down payment later.

 

Escrow opens.

The earnest money deposit goes into an escrow account, where all funds will be held until closing, when they are then distributed to the right people (lender, mortgage broker, title insurer, real estate agents, etc.).

 

Buyers apply for a mortgage.

This step is streamlined if you’ve already been preapproved for a loan (which is a smart thing to do). If not, you’ll begin the loan application process now. Please Contact Sissy Lee.

 

The lender inspects title history and orders a property appraisal.

The lender needs key information about the property before granting a loan. This is when potential problems can come to light. For example, the appraisal could show a lower value than the purchase price, or the lender could have trouble finding comparable homes. Also, the title search could turn up liens or other problems.

 

A home inspection takes place.

You’ll hire an inspector – generally I provide several options – to check the home and point out minor and major problems that should be fixed before closing. At this point, you still have the option of backing out of the deal. Through me, you’ll submit a list of requested work, and the sellers have the option to complete the tasks, do some of them but not others, or reject the request. The sides will negotiate until reaching an agreement.

When attending your inspection:

Wear casual clothes and comfortable shoes. You may find yourself crawling under and behind things to see what the inspector is pointing out.

 

Plan for the inspection to take two or three hours.

 

Feel free to ask questions, but give the inspector time and space to work.

 

Removing contingencies.

If the house passes inspection, appraisal and title search, and everything is good to go, then all contingencies can be removed, paving the way to a closing.

 

Closing time arrives.

Once contingencies are removed and financing is set, all parties sign a seemingly endless stack of documents, and the transaction closes.

 

Packing begins!

When the final signatures are in place, it’s time to put down the pens, shake hands, exchange smiles and start packing for the move!