Home Buyer's Guide
Buying a home is the biggest transaction of most people's lives. It can be emotional, exciting, and even a little scary. Guidance and straight talk help. Tom Carris has provided a few tips below to help explain a few things, put your mind at ease, and get you started. We are here for you every step of the way!
A real estate transaction is a complex process involving, not just viewing homes, but lots of paperwork and a number of outside service providers and contractors.
Tom Carris and ‘The Carris Team’ can guide you through the process, answering your questions and serving as your advocate. Tom 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 Tom Carris 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 your buyer’s agent directly. Instead, the agent receives an agreed-upon portion of the listing agent's sales commission 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:
Get preapproved for a mortgage. Your lender can approve you for a certain loan amount prior to your home search. This gives you a solid number against which you can assess the affordability of the houses you visit.
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. Here’s a good way to figure out how much you can afford:
The 28/36 Rule
The 28/36 rule is an established benchmark used by many lenders to determine how much credit to offer you. Here's how it works:
The "28" refers to the notion that no more than 28 percent of your gross monthly household income should go toward housing costs, which include mortgage principal, interest, taxes and insurance.
To calculate, simply multiply your gross monthly income (amount before taxes) by .28. Use this amount as a guide for how much house you can afford.
The "36" part of the 28/36 rule refers to your overall debt, which shouldn't exceed 36 percent of your income. This is important to consider because other high monthly debt loads – such as car and credit card payments – impact the amount you can afford to spend on housing.
For first-time home buyers, the tricky part is knowing how much to budget for taxes and insurance. Your mortgage broker can assist you with this.
Tom Carris is an invaluable resource when you are deciding where to live. He can offer insider knowledge on neighborhoods, schools, access to recreation and shopping, and the many other details on local neighborhoods and subdivisions.
Some of these factors include:
1. Size of home – number of bedrooms, number of bathrooms, single family or condo, etc.
2. Home features – basement, lot size, garage, ranch style, etc.
3. Location – proximity to schools, open space, entertainment, work, etc.
4. Neighborhood – older or newer homes? Families, retirees or singles?
5. Condition – move-in ready or a less expensive home in need of improvements?
6. Distressed Property- are you a candidate to purchase a short sale or foreclosure?
This is it! You've found the home of your dreams, looked over disclosure documents, reviewed comparable sales data, talked it over with Tom 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 this is where Tom’s experience can really help. He will negotiate not only the best price for you but also the best terms, including earnest money, closing date and more!
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.
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 or listing office , not the seller. Note: This money counts toward your down payment later.
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.
You'll hire an inspector – if you do not know of an inspector Tom and his team can suggest several options – to check the home and point out minor and major problems that should be fixed before closing. Through your attorney, 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.
Once financing is set, all parties sign a seemingly endless stack of documents, and the transaction closes. Tom Carris has been with you from start to finish…Congratulations on your new home!!