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How To Buy Your First Home Together
Learning the Basics
When it comes time to think about buying
your first home, knowing how much
house you can afford will help you to
determine where you want to live and in what
type of home. Will you buy a condo or co-op,
a townhouse, or a single family home?
In this competitive market, most agents will
not take a buyer seriously unless they have a
pre-approval. It will be difficult to prove to a
seller that you are credit-worthy without any
proof in hand, so begin the process by speaking to a
mortgage broker who has access to 30 to 40
banks. Your mortgage broker should get you
the best rate and terms for your needs.
Be sure you use a Realtor¨. This means
that your agent is a member of the National
Association of Realtors (NAR), and adheres
to a strict code of conduct. Your agent may
have additional training, such as holding a
Broker's License. The agent may also have
"designations" such as GRI (a Graduate
of the Realtor Institute), CRS (Certifi ed
Residential Specialist), ABR (Accredited
Buyer Representative) or SRES (Seniors Real
Estate Specialist), just to name a few.
An agent should have access to a Multiple
Listing Service, which is a computerized
database of all the homes for sale in a particular
geographic region. Your agent should be a
full-time, active agent, and be familiar with
homes in that area. A true pro will attend
open houses to preview new listings in the
marketplace.
Once you've found your "dream home," you
make an offer to purchase through your agent. Once you have an "acceptable offer," which
details the purchase price and the terms, such as
mortgage contingency, any other contingency
(such as inspections of the structure and for
radon, termites, lead in the water, etc.), you
can work on a contract.
The contract is drawn by the seller's
attorney. Then it goes to the buyer's attorney. When the buyer signs the contract, it is
returned to the seller's attorney accompanied
with a down payment, usually in the amount
of 10% of the purchase price. This money is held in an escrow account
until the closing. The contract is then signed by
the seller, at which point it is a valid contract.A copy is returned to the buyer's attorney, so
that the buyer can use this contract to complete
his mortgage application. The home is then appraised by the bank or
lending institution and, if the home appraises
properly, a mortgage commitment is issued. The buyer signs the mortgage commitment,
and returns it to the lending institution. The closing occurs on or about the agreed
upon date and, once the closing is complete,
you can move into your new home and begin
the rest of your life. By Frank Ledermann
Licensed Associate Broker
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Learn the Basics of Buying Your First Home
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