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Buying a home is the single largest investment most
people ever make. If you are exploring the possibility
of buying a home you may be overwhelmed by what appears
to be a very complex and secretive transaction. WRONG!
Buying a home is just like buying anything else only
more so. The most important part of buying a home
is do your homework, that way you are informed and
can easily and effortlessly achieve your goal. A few
common home-buying principals are presented here for
you to consider. Take what you feel applies to you
and leave the rest, don’t be afraid to ask questions.
Remember, you are considering putting as much as 40
percent of your gross income into the purchase of
your home each and every month, so do your research
and be ready!
1. Shopping with no money. As a potential
buyer you will have a better negotiating position
if you are already pre-approved. To the seller this
means that your offer is serious and you can go to
the closing table in a relatively short time frame.
2. Verbal agreements. Basically, if it isn’t
in writing it doesn’t count!
3. Choosing a lender with the lowest rate. The rate
is important but you should consider the total cost
of the loan. The cost of the mortgage, however, shouldn’t
be your only concern. Remember anybody can tell you
anything, the true test comes at the closing table.
The night before your scheduled closing is no time
to find out the rate or fees have changed. Ask your
family and friends for referrals.
4. Not receiving a Good Faith Estimate. You are entitled
to a Good Faith Estimate within three business days
after the broker receives the application. This is
the law. Bring you copy of the Good Faith Estimate
to the closing and compare the fees. You should not
find fees that are substantially different from the
fees disclosed originally.
5. Using the same real estate agent. Buyers and sellers
have opposite interests. Buyers want to pay the lowest
price and the Seller obviously wants to receive the
highest price. In the standard real estate transaction
the seller pays the real estate commission –
where do you think that money comes from? Right the
sale of the house. So, don’t believe “the
seller pays the realtor so you don’t have to
worry about that expense”. Wrong, the selling
realtor will always look out for the seller’s
best interest because the seller is the one who put
the realtor under contract! Get your own realtor or
proceed very cautiously.
6. Not getting a professional inspection. First of
all an appraisal is not a buyer’s inspection.
Second of all you are entitled to an inspection. When
a professional inspector recommends that repairs be
done, a seller is more likely to agree to do them.
Finally, remember the old adage “Buyer beware”.
7. Last minute home insurance purchase. Start shopping
for insurance as soon as you have an agreed upon contract.
8. Not allowing for delays. In a perfect world everything
happens exactly the way we plan. In the world we live
in, delays happen. Delays start with procrastination
and end up in aggravation. The loan process will be
much smoother if you provide all the documents requested,
when they are requested. The loan process cannot go
forward without you. When you have done your part
then the rest is up to the loan officer, the processor,
the appraiser, the closing attorney, the underwriter,
the closing department and … as you can see
many people are involved in the process and they all
work to achieve one goal closing your loan!
9. Signing documents without reading them. Just read
them!
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