Buyers
Next to choosing a life partner, starting a family or choosing a career, buying a home is probably one of the biggest decisions you will ever make. And just like many of life’s biggest decisions, you should approach it with care and concern. Of course, it’s fun to dream and there’s plenty of room to do that when you are first playing with the idea of a home purchase, but once you get serious, it’s time to examine the details and get yourself and your finances in order. If you think you are ready to take the leap, make sure you have a good team of professionals to help guide you through the steps towards qualification.
The Buying Process
The buying process takes a little time and effort but with the right help, it will go by quickly and painlessly. Here’s the process in a nutshell.
Get Organized
Gather together all of the following data in one folder:
1. W-2s for the last two years (2 years tax returns if self-employed)
2. 1 month of paystubs from your current job (a Year to date profit and loss statement from your accountant if self-employed)
3. 3 months of statements from all your asset accounts like savings, money market, stocks, bonds, etc.
4. Statements from any IRA/401K accounts.
5. If you are receiving an alternate form of income like disability, annuity or alimony, have those statements with you as well.
6. Know your monthly debts and expenses. Student loans, credit card payments, car payments. Have these figures handy.
Get Qualified
It pays to know what you can afford before you start looking at houses that are beyond your means. There are many, many, many websites that will help you but I always recommend that you keep the search simple with trustworthy sites like your bank, your preferred mortgage lender, or a government agency like FHA or Ginnie Mae that will provide you with affordability calculators. These tools will help you learn exactly what you can afford based on your monthly income and your current debts. Generally you want to aim for a mortgage that does exceed 28% of your pre-tax monthly income, but that will depend upon your current debt load. For example, if you make $40,000 a year and owe a car payment of $350.00, a student loan of $100.00 and other monthly expenses like credit cards of $125.00, you probably don’t want to pay more than $1000.00 per month for a house payment. Affordability calculators will help you figure this out.
Get Approved
Once you have all your data together and know what you can afford, it’s time to get a loan approval in hand. This is very important in today’s market because the industry is cracking down on the types of loans they will issue and it’s not as easy as it used to be to go and get a loan. My team makes it as easy as possible by counseling you every step of the way. Just go to my mortgage page for details.
Shop for your Dream House
Now it’s time to begin some serious shopping with a professional REALTOR. The best part – it’s absolutely free. The way our commission is structured in South Carolina, the Realtor’s commission is paid by the Seller out of the proceeds of the sale of the house. Many buyers think that if they get their own real estate agent the house will cost more. UNTRUE! Regardless of whether there are two real estate agents in the mix or just one, the commission is the same. That means that your Realtor will cost you nothing and you will gain everything from their expertise. AND industrial real estate research indicates that buyers who use agents generally get the better deals on the houses they purchase because their agent is looking out for their best interests throughout the process. Think of your Realtor like you would your attorney. Most people prefer to have one person dedicated to looking out for their best interests. Whenever I work with a buyer, I always do so exclusively. Even if you decide to buy a house that one of my clients is selling, I always take the ethical high road by designating another agent to represent you or the seller. That way, everyone’s interests are protected – every time!
When you get to this stage, it will help to know exactly what you want. Most people really don’t know. They think they know but aren’t really sure. Sit down with a notepad and make a list of the top 20 things that are most important to you. Then look at your list. It will steer you in the right direction. For example, if cooking, gardening, playing tennis and walking your dog are top on your list, then chances are you will probably want a house in a neighborhood with or near a tennis court, preferable with a fenced in yard for your dog and your garden and a nice big kitchen to cook in. See what I mean? Many times when I have worked with buyers and I ask them to describe their dream house, they laugh, but honestly, the more I know, the better I can help narrow down your search. Don’t underestimate the value of this knowledge. It will get you the closest to your dream house that is affordably possible.
The rest of the process will include writing the offer, negotiating the terms of your contract, getting the inspections completed, and closing on your home. This can be a smooth experience or it can be a nightmare. It all depends upon your Realtor and your Mortgage loan officer. Again, trust the recommendations of your friends, family and colleagues. I love the contract-to-closing period because I feel like it truly shows my clients all that I have to offer as their trusted advisor. The home inspection can scare you to death unless you know how to interpret it. The loan process can be a series of hurdles unless you have a trustworthy loan officer like the GoTeam to guide you through it.
When you decide to buy, choose the right Realtor. The Charleston Real Estate Search team will be there to assist you every step of the way. Contact us
