Here are some tips to help determine which house is best for you.
Once you’ve settled on a couple of preferred neighborhoods for your home search, it’s time to pick out a few homes to view. Having a house features “wish list” keeps you focused on which features are most important to you.
When narrowing down your home search, consider the following:
There are several forms of home ownership: single-family homes, multiple-family homes and condominiums.
Single-family homes: One home per lot.
Multiple-family homes: Some buyers, particularly first-timers, start with multiple-family dwellings, so they’ll have rental income to help with their costs. Many mortgage plans, including VA and FHA loans, can be used for buildings with up to four units, if the buyer intends to occupy one of them.
Condominiums: With a condo, you own “from the plaster in.” You also own a certain percentage of the “common elements” – staircases, sidewalks, roofs, etc. Monthly charges pay your share of taxes and insurance on those elements, as well as repairs and maintenance. A homeowner’s association administers the development.
Weigh your needs, budget and personal tastes in deciding whether you want to buy a newly constructed home, an older home or a “fixer-upper” that requires some work.
As you look at homes, you may want to keep in mind these resale considerations.
Make a features wish list to clarify which features are most and least important to you when looking for a home. Using this features wish list will keep your house hunt focused and effective.
While house hunting, it’s a good idea to make notes about what you see because viewing several houses at a time can be confusing. Use a home comparison chart to help you keep track of your search, organize your thoughts and record your impressions.
Before you begin the home buying process, resolve to act promptly when you do find the right house. Every REALTOR® has stories to tell about a couple who looked far and wide for their dream home, finally found it, and then said, “We always promised my Dad we’d sleep on it, so we’ll make an offer tomorrow.” Many times the story had a sad ending – someone else came in that evening with an offer that was accepted.
Resolve that you will act decisively when you find the house that’s clearly right for you. This is particularly important after a long search or if the house is newly listed and/or underpriced.
A written contract is the foundation of a real estate transaction. Oral promises are not legally enforceable when it comes to the sale of real estate. Therefore, you need to enter into a written contract that not only specifies price, but also all the terms and conditions of the purchase. For example, if the seller offered to help with $2,000 toward your closing costs, make sure that’s included in your contract, or you won’t have grounds for collecting it later.
Your REALTOR® will guide you through the offer, counteroffer, negotiating and closing processes. Certain disclosure laws must be complied with by the seller, and the REALTOR® will ensure that this takes place.
If you are not working with a real estate agent, keep in mind that you must draw up a purchase offer or contract that conforms to state and local laws and that incorporates all of the key items.
After the offer is drawn up and signed, it is usually presented to the seller by your real estate agent or by the seller’s real estate agent, if that’s a different agent, or often by the two together.
The purchase offer you submit, if accepted as it stands, will become a binding sales contract, so it’s important that it contains all the items necessary. The purchase offer includes items such as:
If your offer says “this offer is contingent upon (or subject to) a certain event,” you’re saying that you will only go through with the purchase if that event occurs. Here are two common contingencies contained in a purchase offer:
You’re in a strong bargaining position, that is, you look particularly welcome to a seller, if:
In these circumstances, you may be able to negotiate some discount from the listed price.
On the other hand, in a “hot” seller’s market, if the perfect house comes on the market, you may want to offer the list price (or more) to beat out other early offers.
It’s very helpful to find out why the house is being sold and whether the seller is under pressure. Keep the following considerations in mind:
This is a deposit that you give when making an offer on a house. A seller usually will not take seriously, an offer that is not accompanied by a cash deposit to show “good faith.” A real estate agent or an attorney usually holds the deposit, the amount of which varies. This will become part of your down payment.
You will have a binding contract if the seller, upon receiving your written offer, signs an acceptance just as it stands, unconditionally. The offer becomes a firm contract as soon as you are notified of acceptance. If the offer is rejected, that’s that – the sellers can not later change their minds and hold you to it.
If the seller likes everything except the sale price, or the proposed closing date, or the basement pool table you want left with the property, you may receive a counteroffer with the changes the seller prefers. You are then free to accept it, reject it or even make your own counteroffer. For example, “We accept the counteroffer with the higher price, except that we still insist on having the pool table.”
Each time either party makes any change in the terms, the other side is free to accept, reject or counter again. The document becomes a binding contract only when one party finally signs an unconditional acceptance of the other side’s proposal.
Can you take back an offer? The answer is yes, right up until the moment it is accepted, or even in some cases, if you haven’t yet been notified of acceptance. Even if the contract has been accepted and you have been notified, if you are in a due diligence period you can back out any time prior to the expiration of the due diligence period without loosing your earnest money deposit.
A period of time, commencing on the effective date of the contract, and ending at 5:00 pm on the date inserted in the contract. The process of a buyer investigating a property being purchased in a diligent manner, within a period of time specified in the purchase contract, to determine if the buyer is satisfied with the property and wished to proceed with the purchase. Some sellers and their agents will ask for a due diligence deposit. This money is turned over directly to the seller and is non refundable if you do not go through with the purchase. It IS however, credited back to you upon closing. The due diligence period is also used to secure a mortgage. If you do not have a mortgage commitment prior to the expiration of the due diligence period, it is recommended that you ask for a extension. If you are not approved for the mortgage and the due diligence date has passed, you will not receive a return of your earnest money or your due diligence deposit (if there is one)
When an offer comes in, you can accept it exactly as it stands, refuse it (seldom a useful response) or make a counteroffer to the buyers with the changes you want. In evaluating a purchase offer, you should estimate the amount of cash you’ll walk away with when the transaction is complete. For example, when you’re presented with two offers at the same time, you may discover you’re better off accepting the one with the lower sale price if the other asks you to pay points to the buyer’s lending institution.
Once you have a specific proposal before you, calculating net proceeds becomes simple. From the proposed purchase price you can subtract the following costs:
Your present mortgage lender may have maintained an escrow account into which you deposited money to be used for property tax bills and homeowner’s insurance. In that case, remember that you will receive a refund of money left in that account, which will add to your proceeds.
When you receive a purchase offer from a would-be buyer, remember that unless you accept it exactly as it stands, unconditionally, the buyer is free to walk away. Any change you make in a counteroffer puts you at risk of losing thaT buyer.
Who pays for what items is often determined by local custom. You can, however, negotiate with the buyer any agreement you want about who pays for the following costs:
You may feel some of these costs are none of your business, but many buyers – particularly first-timer buyers – are short of cash. Helping them may be the best way to get your home sold.
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