You have decided it is time to buy your first home. During this exciting time it’s not all rainbows and unicorns. There are some things that your friends may have forgotten to tell you when it comes to buying a new house, but we don’t want to leave you in the dark.
1. Money is not an option.
When you find the perfect house and want to make an offer, you will need to put down a deposit, or earnest money. Typically, this amounts to about $1000 per $100,000. The deposit is held in escrow and will be returned to you if your offer is not accepted or it might be applied to the down payment. It is good to know, though, that if you back out of the deal, you will likely forfeit your money.
2. While mortgage shopping, avoid applying for other credit.
When you are ready to buy a new home, you may be dreaming of all of the things you need to purchase for the place, a grill, garden tools, and new furniture. And it may seem like a smart idea to go ahead and apply for a credit card to help you get these things. However, it should be avoided as it will likely lower your pre-approved mortgage amount or even cause you to get turned down. Instead, wait until the purchase of your home is complete before applying for credit.
3. A home’s value increases with good schools in the vicinity.
If you are considering a home in a top school district, you can expect to see a higher price. This isn’t all bad, though because if you ever decide to sell, you will get more. Or, if you are planning to send your children to the school, you will be confident that their educational needs are met.
4. Check with the neighbors.
As you consider houses you may want to purchase, spend some time walking around the area where you may live. If you happen to see people out in their yards, strike up a conversation and tell them that you are considering purchasing a home in the area. You might also ask questions about the neighborhood as your neighbors are one of the best sources of information concerning the area.
5. Your new neighborhood might be about to change.
There may be a school or park being planned for the area and depending on your lifestyle, this could bring about drastic changes in a short amount of time. Talk with the local representative and local administration to find out if there are any big plans for the neighborhood and use this information to make your decisions.
6. Read all of the documents you encounter.
You will be presented with many documents and while it is easy to skim this information or delegate the task to a lawyer, you can learn a lot by spending some time reviewing HOA and other documents. By reading meeting minutes, you might find out that renovations are about to happen or fees will soon be increased. You may even learn some things about your potential neighbors that may help you make a more informed decision.
7. Plan to pay closing costs.
Along with your down payment, you will also need to pay legal fees on closing. The closing costs are typically anywhere from two to five percent of the home’s purchase price. It is a good idea to verify what you will be required to pay at closing prior to closing day.
8. Moving can be hectic.
Moving is quite an overwhelming experience. There will likely be something you forget to do or forget to bring, and something will probably get broken. Hopefully, the setback is a minor one and you can easily move past it.
9. Conditions may not be met.
If you had conditions in your offer, they may not be met. You might have asked for the oven, carpets, and refrigerator to be cleaned, however, cleaning requests are among the least enforceable clauses and there is not a lot you can do if your conditions were not met. If major conditions, such as repairs, have not been completed, you have two options. Your funds will be put into escrow until the issue is resolved or you can choose not to take possession of the house on the planned day.
10. Look into possible rebates.
You might be entitled to rebates as a first-time homeowner. There may also be rebates available through your state, municipal, or utility provider. Start looking for these rebates early as you may find some money-saving offers. For example, you may wish to invest your money in attic insulation over an air conditioning unit if you qualify for an insulation rebate. Or, you might find that your area has rebates for the more energy-efficient appliances. Doing your homework can save you money.
Now that you know these ten important facts, you can focus your home buying efforts on finding the perfect home with the help of a reputable Coral Springs real estate agent who can walk you through the process.