First Time Home Buyers Guide: Part 2
1. Making the offer: We found it! Now what? Once you see the property you want to purchase, you need to make an offer. If you have an excellent agent, they will prepare a market analysis for you so you can see what comparable properties have sold for recently. Use the comps as a benchmark, while still considering just how badly you want it. I had one couple who wanted a beach home with a pool for under $600,000. We knew this was like looking for a needle in a haystack. So, when we found a house that fit that description, they bid aggressively for it and outbid 15 other people! They were smart because it is now 7 months later and I have never seen another property like that one come on the market.
2. Hire a Good Attorney: An attorney comes into place once your offer has been accepted in NJ. In NY, your agent prepares an offer letter and if this is accepted, then the attorney will write a contract. In most states, your attorney will review the contract and ensure you have a successful deal. Pick someone who listens, and is trustworthy. You want them to negotiate on your behalf and have your best interest at heart. I have seen deals fall through because the attorney didn’t do their job properly. Not everything is negotiable, but you want an attorney that will be looking out for you but understand that in order for a deal to go through, all parties need to agree to the deal.
3. The home inspection: Once the contract is signed, hire a home inspector right away, preferably one who will do the walk thru with the clients. During the inspection, ask questions. While the roof may pass inspection, will it hold up for another 5 years or more? and point out any issues that could arise while going thru the property Expect your inspector to provide a comprehensive report with photos of everything as this will help to negotiate with the seller for a credit or a repair. I also recommend that you review the report with the inspector and then again with your attorney. It is an important purchase, so make sure you do your due diligence.
4. The payment: If you have an all-cash deal, congratulations! You are nearly done. But most of you (especially first-time buyers) will be getting a mortgage. By the time you are applying for your mortgage, you will likely know who you will want to use or your agent will give you recommendations. The most important part of your mortgage is the rate. Something as small as a half point in your rate can cost you thousands of dollars over 30 years! Pay attention to the small details here. You will also receive a RESPA form that will explain the costs of closing and what you are entitled to during this process.
Stay Tuned for Part 3 of the First Time Home Buyers Guide