Realtors should represent your best interests when you are ready to purchase, whether the home is listed on the MLS® system or not. The seller source doesn’t matter – your realtor represents you when the seller is a builder, a private owner, the court system, a bank, or a home not even on the market. However, there are several things to consider before purchasing a home.
Although people are understandably shy about discussing their financial condition, this is one of the most important considerations in a home purchase. First time home buyers in particular should consider all of the costs a buyer might incur. Some costs occur only once during the actual purchase, while others will continue well beyond the day you move in to your new home. The down payment is probably the largest one-time expense in the purchase. A down payment is typically 5% to 10% of the purchase price. Some financial institutions may require as much as 20% down on a fixed rate conventional home loan.
Getting a Mortgage Pre-Qualification
Savvy home buyers meet with a lender or mortgage broker to determine how much house you will qualify to buy. Mortgage rates vary based on the lender, the amount of the down payment, and many other factors; thus, it is imperative that you shop around to determine best rate, terms, and mortgage type for your situation.
You should be prepared to cover the following costs as a part of the purchase process:
- Appraisal fee, if you are paying cash this is not required, but highly recommended
- To ensure your home is sound, it’s sensible to pay for a home inspection.
- A real estate purchase may require a survey to determine the property’s boundaries.
- Mortgages will typically include a broker’s fee in your closing costs.
- If your down payment is less than 20% of the purchase price of the home, you will be required to carry mortgage loan insurance. This will be an ongoing cost added to your monthly payment amount.
- In order to transfer the property from the seller, you will incur a deed, and possibly a mortgage registration fee, which is included in your closing costs.
- Whether you rent a truck, hire a moving company, or use some other method to move into your new home, there will be some expense associated with the move.
- If the house needs some TLC after the purchase, you may have expenses associated with renovations and repairs
- If you’re moving from a smaller space to a larger one, you may be in need of additional furniture.
- To make the house truly yours, you might incur costs for new paint, carpeting, window coverings, etc.
- Utility companies will charge to fees to connect and/or hook-up water and sewer, gas, electricity, and communications (internet, etc.)
- Regardless of the type of home you purchase, any residence with a mortgage must also have property insurance, which will be an ongoing charge included in your monthly payment (part of the escrow collected each month).
- If you purchase a condominium, there will be association fees due monthly.
- Typical Monthly Costs.
- The mortgage payment, which includes principal, interest, and escrow for property taxes and insurance.
- Utility charges, which may include water and/or sewer payments to the local municipality (unless you have a well), electricity, and natural gas (unless you have propane).
- Communications, which may include cable, telephone, and internet.
- Condominium Association fees
- Repairs and maintenance expenses, which may include lawn care, snow removal, trash removal, etc.
- Homeowner’s insurance, which is typically included in the escrow portion of your mortgage payments.
- Home Features & Amenities
- How many bedrooms and baths do you require?
- Is central air-conditioning required?
- What “bonus” spaces will you need?
- Home office or den
- Guest room
- What special amenities do you require?
- Swimming pool
- Handicapped ramp
- What type of neighborhood are you looking for, suburban, rural, central business district walking district?
- What will your commute to work look like if you chose this particular home?
- What are your yard requirements for:
- Will the home be ready to occupy as it was purchased, or are renovations needed prior to your move?
- Are the utility providers in the area on your list of choice for internet, cable, satellite, cell service, etc.?
- How much are the annual property taxes? Do the millage rates increase at a pace you can afford?
- Historically, how much have utilities costs in this home? What are factors that could be addressed to reduce these costs (such as insulation, energy efficient appliances, updated windows, etc. for heating and cooling).
- If appliances are included, what are they and are they in good condition? How old are they?
- When was the house built? Since then, have any major repairs been required? When and why were they completed? Has the roof ever leaked? Does the basement get damp or flooded?
- Has the home ever required treatment for termites or similar pests? When? Was the reason for the infestation addressed? How?
Although the above lists are lengthy, once you’ve decided you’re ready to buy, we can walk you through the entire process. Our agents are standing by to assist you in determining the answers to the questions posed above, as well as any additional questions you may have. We are here to serve you with honesty, integrity, and respect as you navigate one of the most important purchases of your life.
We welcome the opportunity to partner with you. To learn more about Integrity Real Estate Services and our core principles, select “Sustain”, “Contribute” and “Inspire”.
It will be our pleasure to hear from you.