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Carmen Badan Foege
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RealPro Realty LLC.
Naples, Florida

 

Buying a home? Bookmark and Share


Buying a home for the first time is a big step, and without the assistance of a REALTOR©, the process can often seem overwhelming.

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10 Steps to Buying a Home

  1. Deciding to buy.
    Whether you are planning to live in your new house for many years or you are investing in a property, write down the reasons and decide if buying makes financial sense. If you are planning to start a family, consider the size of the home and the proximity to schools. If you are buying as an investment, consider staying in your home for at least two years so you can benefit from Capital Gains Tax reductions. If you consider buying a distressed home for the purpose of rehabbing it and selling it for a quick profit, consider all the expenses, carrying costs, commissions and the tax on capital gains before deciding if it is the right use for your money.

  2. Find out how much house you can afford.
    When it comes to purchasing a home, you must take in consideration the economic conditions and the state of the housing market. If you are counting on a mortgage to finance your home you must consider the maximum monthly payments that you can afford. As a rule of thumb, your mortgage payment should not exceed 1/3 of your net monthly income, with a 20% down payment. You must consider also the type of mortgage you should choose: a 30 year fixed rate conventional mortgage differ vastly from an ARM (Adjustable Rate Mortgage), very popular with short term investors. A qualified mortgage consultant will be able to help you decide what financial tool is best for you.
    As a first time home buyer, you might be able to qualify for an FHA or USDA loan which could help you buy a house for as little as 3% down. If the negotiation is done right on your behalf, you might even be able to have the seller pay all your closing costs.

  3. Creating a plan of action.
    Contact me for a No Obligation, Hassle Free consultation.
    Once you decide the criteria for your home, it is time to get pre-qualified for a mortgage loan. Having a document that indicates that you will be approved for a mortgage loan up to a certain amount will be a valuable tool when you decide to make an offer on a house. Home sellers are more inclined to negotiate with potential buyers who did their homework and are qualified to the offer commitment.
    In fact, almost every transaction conducted in the past couple of years requires either a pre-approval letter from a lender or a proof of funds.
    Since Naples Real Estate is local I always recommend a local mortgage broker to help with your loan. Yes, a mortgage broker, they are commission based independent contractors and they tend to provide better service. A mortgage broker also has more choices and they shop around your loan to get you a better rate. One of my preferred local Brokers is Lauren Maxwell from America Home Key.

  4. Finding the right home for you.
    This is the fun part. This is where we start out home shopping. I am here to make your home searching experience pleasant and informative. My knowledge of the Naples Area Real Estate will be put to work. I will narrow down all the properties available on the MLS(Multiple Listings Services), and I’ll schedule appointments for you to visit these homes. As we are touring homes, your search criteria will narrow and we will be able to choose the home of your dreams.
    Some buyers know exactly what they want and the minute they see it, they know, others take longer to decide. When looking at foreclosure properties, for example, most of my buyers learned that being fast on your feet helps you get a home that you like. This is why my state of the art Naples home search system is so helpful because you can search in real time and you can receive alerts as soon as a property in your search criteria becomes available.

  5. Making an offer.
    At this point it is time to make an offer. I will assist you in writing a purchase offer that will include all your needs as well as contingencies such as home inspections, clear title, obtaining financing, etc. Usually the offer will be presented accompanied by earnest money. The earnest money will be deposited in an escrow account with a preferred title company like Naples Title. If the offer is accepted by the seller, the earnest money will be applied towards the price of the home.
    A good offer as far as the seller is concerned is obviously the asking price. However, my job as your agent is to do my best and negotiate a lower price. As a rule of thumb, a traditional transaction will close at around 10% below the asking price if the property is priced within the market values.
    When purchasing a foreclosure property, an offer below the asking price might get you the home. Some deciding factors might be how long the property has been on the market, how many other buyers are submitting offers etc.
    Statistics show that about 75% of foreclosure homes in Naples closed at or above the asking price while only about 25% slightly below the asking price.

  6. Negotiating the deal.
    In many cases the offer will receive a counter offer. I will help you decide whether to accept it, submit your own counter offer or reject it and move on to another property.
    The Market conditions will play a significant role in how motivated the sellers are and how aggressive your negotiation should be.
    In many cases, as buyer with a mortgage you could counteroffer at above the asking price but ask the seller to pay your closing costs. Many banks will accept this as customary in many cases paying up to 6% buyer's closing costs.

  7. Getting a loan.
    The next step is financing your purchase. As you are already pre-qualified, this step will be easier and less stressful. I will gather all the property information that the lender requires to close the transaction.
    First step, the lender will order an appraisal on the property. My good knowledge of the Market will give you an edge knowing that the home you are about to buy will appraise correctly and you will be able to get a loan on the entire price.
  8. Property Inspections.
    The time between your offer is accepted and closing day will also be used to perform a property inspection. A professional home inspector will be able to point out if there are any issues that will need to be addressed by the seller before the closing day. This contingency has to be taken seriously as unnoticed defects could be costly later.
    Foreclosure and Short Sale properties are transacted on a FAR-BAR AS IS contract, which means that the seller assumes no responsibilities for the condition of the property. The seller give buyer the right to inspect and cancel the contract within a period of time determined by contract. Depending on the condition of the home, certain inspections may be recommended like: mold inspection, termite inspection, water systems, septic etc.

  9. Closing day.
    The title company will work on a title search and will issue a title inspection. Usually the party who pays for the title work chooses the title company. The title company will be in touch with your lender and they will work together on creating the closing documents. Before closing day you will receive a HUD Statement of closing costs which I will help you review. This will show you the exact moneys you need to bring at closing. A pre-closing inspection will be done to make sure that the home is in the expected condition and in case of a traditional sale, to verify that all requirements have been met by the seller. The final transaction will close at a Title Company or via mail. The Original Title to your property will be mailed to you by the title company and a copy of it will be issued at closing.

  10. Moving in.

    Congratulations and Welcome Home! It is time to take ownership. You want to make sure that all utilities are on your name, you have contacted the landscaper, the pool company, the association for your dues etc, etc...

    And don't forget to tell all your friends, family and neighbors how happy you are with your Realtor.

    welcome-home

 

 

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