HOME BUYERS GUIDE
Owning your own home is the American Dream. And that dream is more alive today than ever before.
Yet one of the first realizations a prospective home buyer often comes to is that the "dream home" does
not always seem affordable.
Buying a home has changed. In the past, buyers usually shopped for the best house they could find, then
searched for a lender and applied for a loan. Today, prospective buyers must shop as thoroughly as they
can for the best financing as they do for the best house. In today's market, both tasks are equally important.
Experience has taught us that the buying process involves common stages for all home buyers. To help you understand that process, and make the most of every day and dollar you spend, Long & Foster® Companies, Inc. has prepared this Home Buyers Guide to provide an overview from the planning table to the closing table.
How Much House?
House hunting begins at home—with planning. The first step toward buying a house is to sit down. Before you grab the road maps and hit the streets, you need to do a little planning. We call it “pre-qualifying”. Simply, it’s determining how much house you can afford to buy. Knowing your affordable price range will bring your house-hunting into focus. Many lenders, for a small “up-front” fee, will send out all required verification and pre-approve you for a mortgage, allowing you the opportunity to negotiate as a cash buyer.
How much house you can afford to buy depends on two things: how much you can afford for the monthly housing payment, and how much you can invest in the down payment. Monthly payments include principal and interest on the mortgage loan, and property taxes and insurance against fire and other hazards. These four costs are often abbreviated “P.I.T.I.”. For some buyers and lenders, monthly housing costs may also include homeowners association dues, condominium fees, and mortgage insurance.
What To Look For
Choosing a place to live can be one of the most exhilarating experiences of a lifetime. We’ve learned through the thousands of home seekers we have helped that the best approach is to be prepared. Literally, to do some homework. Our observation is simple. Your move can be an improvement if you duplicate what you like in your present community and avoid what you dislike.
House Hunting Begins At Home
The search can begin in your present home so we’ve developed some questions to stimulate your thinking and help you identify your needs and preferences. Once you’ve clarified what you like in your present community, you will have a better idea of what you want to find. Plus, you will be able to express your preferences clearly to your Long & Foster Sales Associate who can help you find it.
"The time to think about selling your home is when you’re buying it.” In other words, what appeals to you as a buyer today will probably also appeal (or what turns you off will be a turn off) to buyers tomorrow. A careful house hunter will benefit years from now when it’s time to sell to an equally value-conscious buyer. Build your buyer savvy by reading newspaper classified ads, homes-for-sale magazines, REALTOR® Web sites and visiting open houses.
Negotiating The Purchase
You've found it - your "dream house"! You want to buy it. Now what? You make an offer by submitting a signed real estate offer to purchase with the type of financing you desire.
This will be the sales contract once the seller accepts. When you and the seller sign, you are agreeing to the contract conditions. Before you sign it, read it carefully and make sure you understand every detail. Ask questions. Verbal agreements should be written into the contract. If you plan to have a lawyer represent or advise you, retain one as early as possible. This is where your Long & Foster Sales Associate and an attorney can give you the assistance you need.
Locating The Right Loan
You have the option of shopping around for the best terms you can obtain. Generally, a mortgage acceptance requires 15-30 days for conventional, 30-45 days for VA and FHA from application to approval. In some cases, loans may be approved more quickly. Long & Foster has an affiliated mortgage company— Prosperity Mortgage® Company.
Fire And Hazard Insurance
Most lenders require a home buyer to provide at settlement a one-year paid receipt for a fire and hazard insurance policy, often called homeowner’s insurance. These policies are available from several leading insurance companies through Long & Foster's Insurance Agency, Inc., or the insurance company of your choice. Fire and hazard insurance provides protection for fire and other perils to your home and its contents.
The big day is here!
Tonight you can pop open the champagne, but today there will be a lot of paper signing and a poignant passing of the keys (don’t forget the garage keys and electric door opener, too).
At the settlement will be an attorney or title company representative (chosen by the buyers), all buyers, listing and selling brokers, and all owners. The home seller should bring all warranties on equipment and any instructions on equipment maintenance or operation.
The attorney will have searched the title, provided title insurance, and obtained old and new lender instructions. First, all unresolved walk-through deficiencies are resolved.
Throughout the settlement, the attorney briefly explains various documents being signed, including: the deed of trust or mortgage; the deed of trust note or mortgage note; VA, FHA, or lender forms, and settlement sheets. The buyer signs all these and pays the balance of the down payment plus buyer’s closing costs with cashier or certified check.
Finally, the buyer receives the keys!