If you’ve been in the market for a home this year and haven’t been one of the lucky buyers to have found your dream home, you’ve probably become quite frustrated.
If you still want to buy a home, what can you do, especially if you’re a first-time buyer?
My recent experiences with first-time buyers and buyers new to our area leads me to remind all buyers that it is worth your time to do your homework, be prepared for all sorts of challenges during the home-buying and financing process, and work with a professional local Realtor from the Carpet Capital Association of Realtors.
CCAR Realtors are the area experts. We know the schools and neighborhoods; have the latest scoop on Dalton/Whitfield and Murray County government issues; who the best doctors are in town and where to get your hair done. Local Realtors know the best places to eat and what’s happening on Friday nights. We live here, work here and call this area our home. All real estate is “local” so first, use a local Realtor.
Most folks combine contacting a Realtor with their own online search. Getting ideas from the online real estate sites, such as Realtor.com, is a great place to start for figuring out what’s available in the market, but be forewarned.
Don’t fall victim to the second- step trap!
The second step is turn off the TV. HGTV is not “real!” Yes, we’d love to have the HGTV hosts come to our homes and remodel them. And yes, we get fabulous ideas on how to do those remodels, but don’t expect the real world to look like the “Property Brothers”just breezed through town!
Every home in Dalton hasn’t been remodeled to your taste, but you certainly can make those changes after you buy a home.
Third, evaluate your finances, sit down with a mortgage loan officer and get pre-approved for a loan.
With such a shortage of homes and so many buyers in the market, only pre-qualified buyers are given any chance when competing against other buyers. Do yourself and your Realtor a favor and figure out what you can afford before going house hunting.
Today’s mortgage lending rules require you to not only have a down payment but prove where you got the money (your job, a gift, etc.). You will also have to come up with closing costs unless you can negotiate with the seller to contribute to your expenses. Let’s say your dream home will cost you $100,000. Unless the home is located in a geographically acceptable area for USDA 100 percent financing or you’re a veteran eligible for a 100 percent VA loan, you will have to come up with at least $3,500 for an FHA loan. That money has to already be in your bank account and not your cookie jar! You will have to provide proof of how the money got there and that you will have money left over after you make your home purchase.
The money you give your Realtor for your earnest money will count toward your down payment.
So what else do you need? Assuming you are paying most, if not all, of your closing costs, you can expect closing costs to be around 3 percent of your purchase price, depending on the loan and other lender fees. For simplicity sake, that’s another $3,000 for a total of $6,500 to buy your $100,000 dream home.
But wait, you’re not done! There’s money that has to be spent before closing! When you sit down with your lender you will have to give him/her money to pull your credit report (credited to the total closing costs). And it’s always recommended you perform inspections on the new house including a general home and wood infestation inspection (sometimes the lender requires a clear termite letter). Sometimes septic, well or radon tests are performed. And prior to closing you’ll have to come up with a pre-paid, one-year homeowner insurance policy (sometimes also figured as part of a purchaser’s closing costs).
Buying a house also means setting up utilities, often with a hefty deposit required by the utility company. You’ll need to pay to move your furniture unless you have weightlifting friends. And then there are the incidentals — curtains, window blinds or drapes.
How about lawn care, mowers and trimmers? And if your home inspection cited things that needed to be fixed (after and not before closing), when will you get around to paying for that or when will you be able to do it yourself?
Buying a home is serious business, often the most expensive item a family will buy. There are steps you should follow on your house-hunting journey.
Trusting your Realtor to guide you through the process is the surest way toward long-term house happiness.
Carolyn Roan is the former president of the Carpet Capital Association of Realtors and a Realtor with Coldwell Banker Kinard Realty.