Buying a home is one of the most important tasks a family makes. A home, after all, is most Americans’ most valuable asset, often being worth over ten times as much as their car. As a result, you need to take proper steps to make sure you buy a home that you can afford and enjoy.
Step 1: Get a credit report
Since you will be taking out a loan, you need to make sure that you know what your credit score is in your credit report. In the old days, credit reports were hard to come by and many people did not have the slightest idea as to what they were. They might tie individual lapses in credit with a low credit score and think “I always pay the bills on time” with a high credit score, but they would not know what a credit score is. It’s a number that companies use to determine how creditworthy a person is. As a result, it is important to have a good credit score if you want to get a good housing loan.
Step 2: Decide your price range
Lots of people want McMansions but not everybody can afford one. You need to know what your family can afford, and what you will be able to pay off. To do this you need to figure out how much money you will be making throughout your mortgage. You will also want to have some money saved up so that you can keep making payments if you lose your job.
Step 3: Find a good realtor
There are plenty of homes for sale on craigslist and many of them are posted by real estate companies. It is good to shop on your own for a house and then after that find out who the realtor is and check their history to see if they sell shoddy houses. Other strategies include knowing a realtor personally so that you do not get ripped off; this is a lot like having a neighbor who is a mechanic and asking them to look at your car.
What To Look For When Buying Your New Home
Buying a new home is always going to be difficult. Given the current economic and housing market, costs are higher and sellers are increasingly cautious about losing value on their homes. New buyers also have to face up to high mortgages and a lack of options. Renting rather than buying has similarly become more common as people look to put up investing in a mortgage. Those that can find the right deal can benefit from a long term investment and the potential to generate future value from resales. When looking for a new home, buyers should look into:
1 – Competitive Pricing
Always spend a lot of time comparing prices and speaking to different agents. Work out the best mortgages on offer, and whether you will have to pay a fixed or flexible interest rate. Similarly, explore whether different banks and lending agencies will require a significant lump sum towards a property.
2 – The Local Area for a House
The value of a local area is crucial if you plan to stay in a property for a long time. Think about the nearest school for children, as well as any parks and shops. How dangerous might the roads be, and are there any potentially damaging local features like factories? How much noise can you expect on an average day, and are any parts of the local area due for redevelopment?
3 – Average Monthly Costs
You should be able to work out the average monthly costs for a property with the agent. These costs might include energy bills, as well as any parking permits, council tax, and any other average bills. Costs also need to be combined with monthly budgets, while considering the average cost of living in a certain area.
4 – Repairs
You may need to invest further money into repairs and maintenance for a house. The benefits might be that you can resell the house or the mortgage further down the line for a better price. However, think carefully about how achievable these repairs are within your budget.
5 – Furnishings
Carefully look at the existing furnishings of a property, and consider whether they can be easily adjusted. How large are windows, and can any dressings be added? How much storage is there? Can a spare room be adapted for a baby or a child?
6 – Understand Legalities
Never commit to a housing contract without first agreeing on details with a solicitor. Conveyancing processes should also be followed, and all contracts should be scrutinized before signing.
7 – Moves and Removal Costs
Think about how much it will cost to transport your possessions to a new location, and how easy it will be to install them. Is it worth scrapping or putting some items into storage before you move, especially if it is to a smaller place?
8 – Take Your Time
Don’t rush into a deal, even if the house seems ideal. Compare multiple choices before committing, and always seek advice if you’re unsure.
9 – Understand Closing Costs
You will most likely have to pay several closing costs for a property, which can include house inspections, agents fees, interest on a principal loan for a deposit, and any miscellaneous fees that the estate agent or seller decides are necessary to complete a purchase.
10 – Security
When deciding on a new home, think about the security measures in place. How secure is the house itself, and will it need any additional security systems? Is the area safe, and is there a Neighbourhood Watch scheme in place? How quickly can a security team be called out, and how much will additional features cost?
7 Questions You Must Ask Yourself Before You Buy a House
Buying a house is one of the biggest decisions you’ll make in your entire life. It’s probably the one thing you’ll spend the most money on, so you want to make sure you’re choosing the right home for you and your family. Before you make an offer or sign on the dotted line, ask yourself these seven questions.
Can you afford it?
This is the number one question. You don’t want to risk going into debt or foreclosure because you bought a house you couldn’t afford. There are more costs than just the mortgage, like utilities, insurance, and maintenance. Consider everything against your budget.
Does it need any major repairs?
Just because a house looks good doesn’t mean it’s in perfect condition. You want to be aware of any repairs the house needs so you know exactly what you’re getting yourself into. It’s worth it to pay a building inspector to look at the home before you make an offer. The cost of repairs will tell you if you’re getting a good deal or not.
What school system will your kids attend?
If you have children in the public school system, it’s very important to consider what district your house is in. Find out what schools they would go to, and learn more about those schools. The quality of education, teaching, and after-school activities should play into your decision.
How long do you plan on living there?
Think about how long you plan on living in the house you want to buy. If you’re making a long-term decision, it’s important to make sure it’s a house you want to stay in and your kids to grow up in. If it’s a short-term, think about how long it might take you to sell the house when you want to move, and how much it will appreciate or depreciate.
How far away is it from the places you regularly go to?
You might love the house, but it might be inconvenient to get to your family, your doctor’s office, or your favorite stores. If you’ll need to do a lot of traveling, consider if the house is worth it to be far away from what you need. Find out what is nearby, like grocery stores and shopping centers.
Do you like the neighbors?
The neighborhood is so important to your enjoyment of your home. Spend some time in the neighborhood at different times of day, and try to meet some of the neighbors. If you can, ask the current owners about how they like the people that live nearby. Also, call the local police station to find out more information about crime in the area.
Is it your dream house?
You might not be able to afford your dream house right now, but if you can, make sure you’re buying something you think is perfect for you. If your ideal house isn’t in your budget yet, you can still make sure the house you buy has some of the elements that are most important to you.
Buying House Procedure That You Need To Know
Once you have chosen a property that you want to buy, the next thing that you need to do is you will have to complete an application form prepared by the broker/agent and pay the booking fee (normally it is at least 2% and above). You will then be given a receipt once you make your payment for the booking fee. In case you give up on buying the property after paying your booking fee, the seller has got the right to confiscate your booking fee. In contrast, if the sale then decided not to sell the property, he/she has to pay back double to you for the booking fee.
Two Options For Buying House
Then you will have two options:
1: You supply your financial documents to your broker. They are going to take a look at your assets, credit, and income to swiftly evaluate which housing loan you be eligible for.
2: You supply all the necessary financial documents and details to the broker.
As a buyer, you will need to have your identity card ready as well as the deposit for buying the house. Your broker will then surrender the buyer’s detail, seller’s detail, and title to the lawyer so that the lawyer can come out with the Sell & Purchase Agreement. And your deposit payment is going to give to the seller once both seller and buyer have signed the Sale & Purchase Agreement.
Buying House With Signing Sell & Purchase Agreement
After both parties have signed the Sale & Purchase Agreement, all the relevant financial documents are going to put on the application form and submit to the financial institution for approval.
You will receive a reply from the bank after 7 days whether your application is approved or denied. If your housing loan application is being approved, it will get the process and you will expect to receive an offer letter for your housing loan. You then have to sign the offer letter.
The buyer and seller can fit a date for settling the remaining deposit before signing the Sale & Purchase Agreement. Generally, the buyer will have 3 months for settling the remaining deposit. As a buyer, you can ask for an extra one month of the extension but you will have to pay for the interest that incurred within this one month which is calculated each day. The amount of the deposit that you need to pay is determined by the sum of the housing loan. For instant, in case you borrow for 70% of the total price of the house, then you will need to pay the 30% deposit in the given 3 months.
As a buyer, you will then pass your deposit to your lawyer for paying off the ransom from the financial institution or bank and tax on the property for you to receive the house. After that, the procedure for transfer could proceed.
Once the house has been redeeming and the seller of the house has paid off the property tax, the lawyer will then submit the form of the property transferring to the Land Service to register the property. Once the form of transferring is being approved, the lawyer is going to release the remaining deposit to the property seller. Concurrently, the seller needs to transfer the ownership of the house to the buyer as final realize.
Better be Safe than Sorry When Buying House
With the real estate market down, investing in a property may seem to be a good choice. Buyers may be tempted to purchase property, without considering the location and type, in the hope that they would make quick bucks when the market rebounds.
Madhavan Nambiar, principal of Countrywide Properties, advises that a good buy in any property market condition is one that meets your needs without compromise on location, type, and price, Buying a property simply because it is available at a throw-away price may have disastrous consequences. Madhavan, rich with 23 years of real estate experience, warns property buyers to beware of fraud schemes and think well before a property purchase decision is made.
With an economic revival, it may prove to be challenging to find a good buy in today’s market conditions, where prices of properties in many locations have increased manifold times. Madhavan believes that there is a strong potential for price appreciation in areas where houses can be converted for commercial use.
Buyers need to conduct adequate market research and follow the market trends before investing in a property. Many developers are now considering the customer needs of security, integrated development, and environment-friendly construction when developing new projects. Security concern has led to the immense success of landed, gated, and guarded developments. To offer greater convenience, many projects now also have retail, office, condo, or serviced apartments and SoHo (small office, home office) units, all in one site. Other forward-looking builders are considering environmentally sustainable building designs to minimize the negative impact on the environment.
Madhavan cautions that a buyer should only pay a deposit immediately if he or she is familiar with the area and transacted prices. In case a person is new to the area, it is better if he or she speaks to real estate experts to know more about the development and changes of price appreciation in the vicinity. Before signing any contract, a buyer should also read the fine print just to be sure that all terms and conditions of the purchase are acceptable.
Buyers should also beware of property agents or other entities, who are always on the hunt for naive and inexperienced investors. If a buyer is doubtful of any property agent, then he should immediately log in to the website of the Board of Valuers, Appraisers & Estate Agents (http://www.lppeh.gov.my). This will allow him or her to check and verify the name of the agent or negotiator, and also the firm’s name. If the estate agent is registered, he or she will carry an “authorization card” and the agent’s picture, identity card number, and registration (E) number would be available with the authorities.
According to Madhavan, the chances of being cheated by a registered agent are rather low. Fraud cases are more likely to involve an illegal agent or a bogus vendor. It is safest to deal with a registered agent as the deposit will be placed safely, until a lawyer clears the bona fide status of the vendor and all issues relating to the property title.