Home virgin? These four simple tips will make the process easier:
Number 1: You can’t lowball your dream home.
In my experience there is a whole subset of first time buyers who look and look and finally find that perfect home … then blow it because they make a lowball offer. In most cases this person has to go through the process of losing a home once or twice with lowball offers before they get it right.
You will have seen plenty of homes when you go to make your first offer. If the home is priced right, offer a fair price for it and get the home. Keep in mind that a fair price might be full price.
Number 2: There are closing costs associated with that loan.
Some first time buyers are so fixated on rate that they totally miss the closing costs on a loan. Then in the last days before closing they realize that they will need a few more $ thousand to close … this always throws the closing into turmoil.
It’s not that their lender didn’t level with them, it’s just that the buyers only saw “interest rate” and failed to take into account “APR,” which is the actual rate you pay when you combine the interest rate with the closing costs. Had they shopped APR instead of the published rate, there would have been no shock before closing.
So make sure you ask your lender to show you the APR when you are getting a good faith estimate. Ask how much the insurance, tax, and homeowner escrows will add to closing costs.
Number 3: Your monthly payment will include taxes, insurance, and possibly HOA or condo dues.
Like number two on this list, this is another example of a buyer focusing on the interest rate alone without looking beyond it, and another example of closing day sticker shock.
Taxes and insurance will typically add hundreds of $s to a monthly payment, as will HOA dues if the home is part of a homeowner’s association.
Ask your lender how much taxes, insurance, and association dues will add to your monthly payment.
Number 4: A closing date can be more of a suggestion than a hard and fast date.
Banks are getting better these days at hitting a closing date. But there are so many moving parts to a real estate transaction that a closing date is still more of a guideline than it is a hard and fast thing.
No matter how much you caution them, some first time buyers will schedule their lease to end on the same day as the contract closing date on their new home. And sometimes they spend a very frustrating night (or weekend) in a hotel while things grind along.
Always budget for some extra time (and money) in your closing window. If you close on time, great, you now have some time to paint, put in new flooring, and decorate without the stress and hassle of moving from one place to another in the same afternoon.
We definitely are NOT virgins when it comes to buying homes. We’ll respect you and help you through it. Just contact me at the email up top or email Kate Stevens, my partner and Broker Associate (904-377-2276).
All images, video and audio not in the public domain are used in accordance with the Fair Use Law (Per Title 17–United States Code–Section 107) and remain the property of the film or photo copyright owners. I love the 40-Year Old Virgin (buy it here at Amazon). But now that I’m in my 40s I find I can’t watch movies like this anymore. Why? Well, the kids have to be in bed before I can turn it on, and I have no energy to even watch a movie after the kids go to bed. I put in Silver Linings Playbook the other night and had to shut it off when the language got too hot … it was another five days before the kids were in bed AND I had the energy to watch it. But it was a great movie, I’m glad I was able to make the time.
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