Buying a home can feel mind numbing and like an extra job. While I can try to take some legwork off your hands, what have you heard from friends, family and co-workers about their home-buying fallacies?
I know I can qualify for $XXX,XXX
Says who? This is the commonly incorrect way to start your home search. Unless you’re paying cash for a property, the first thing you should do is speak with a Lender. The way a bank qualifies your buying power is all that matters.
The seller is unrealistic about his price. I like the place but it’s not worth it.
Everyone looks at pricing properties differently. Some Sellers think their property is more unique therefore asking for 10 percent or more over the value is a good idea. Other Sellers price their homes right where they think it’s true at value. The only way we will find out how the Seller feels about the value of the home is to submit an offer and see if/how they counter.
Once the offer is accepted and we move into Escrow, I MUST CLOSE
There are contingency periods, during your escrow timeframe, which you can get an inspection on a property to make sure it’s to your satisfaction. There is also a loan and appraisal contingency on most transactions, which protects you from losing any earnest money you put down to solidify a contract.
On top of the down payment, I must cover all of the Closing Costs
If you only have the down payment monies and cannot afford to pay the closing costs, in some cases, you can ask the seller to cover a portion of the closing cost amount by adding it on top of your net offer (as long as you don’t go over the approved loan limit). Another way is to talk to your Lender to see if there’s room to pay for your closing costs by increasing the interest rate. Choosing the latter will cause the monthly mortgage payment to be slightly higher, but will allow you to get the house and pay the closing fees.
Your first purchase has to have everything because it’s your forever home
As your first purchase, your budget dictates where and what you can buy. While it may not meet all the criteria you envisioned, does one amenity compensate for the other? Remember, it’s a stepping-stone for equity.
Thank you for reading!