Home Buying 101
Hello, spring! The season synonymous with renewal, fresh flowers, and cleaning is also regarded as the best time to buy a house. With home-buying numbers continuing to increase in the South, we thought you would want to know the basics.
"Many families start the process of looking for a home in late winter or early spring," says Yvonne Hamilton, a residential real-estate professional in Vestavia Hills, Alabama. "After children are out of school is a popular time for a potential move. The goal is to get settled in to a new home before fall and a new school year begins.
"Buying a home is an exciting and stressful venture," she continues. "The busiest time for realtors is from late January to October. People are in the market for a home at the right price, giving special consideration to location and school system. Your money and emotions are on the line. It's important to be satisfied with your purchase."
We asked Yvonne for some seasoned advice on what families should expect if they find themselves in this year's home-buying market.
- Get prequalified with a good mortgage company. Go to a mortgage company as early as possible to determine if you can afford to buy a home and in what price range. Based on your earnings and other factors, a mortgage company determines how much you can afford. Today's home buyer also benefits from lower interest rates.
- Select a real estate agent. Find someone with solid qualifications in residential real estate to help you find a home, especially if you are purchasing a new one.
- Communicate. Through a series of questions, the agent can establish whether a particular area or property will fit your family's needs and price range. It's good to generate a list of must-have features and those you would like to have. To help you make an informed decision, your real estate agent should convey detailed information on schools, hospitals, and churches.
- Do your homework. Research the area's sense of community, access to interstates and main roads, and proximity to workplaces. Also look at monthly estimates for water, sewage, electricity, and gas; estimated annual property taxes; and the potential for property value appreciation through comparisons of home sales in the area.
- Take out a homeowners' insurance policy. Your dwelling must be insured for the full term of the loan. The insurance carrier you choose will establish this fee based on the price of the home.
- Review the sales contract thoroughly. Make sure you understand all of the language and fine print.
- Arrange for a complete home inspection for structural issues at the purchaser's expense (in the case of previously owned homes) and a final walk-through (in all cases). Usually real estate companies will provide a list of qualified local inspectors. Allow several hours for a final walk-through before the closing date, and be prepared with a detailed checklist of interior and exterior warranty items and cosmetic needs that should be fixed.
- Review closing packet items including the appraisal, insurance policy, survey of the property, and title. Closing costs can be shared by both the buyer and the seller or paid by one party, depending on the terms of the contract. These costs usually include attorney fees, a survey fee, title clearing, recording the deed and mortgage, tax proration, clearing of termite bond, property appraisal, and fees charged by the mortgage company to process the loan.
Necessary repairs found during the initial inspection should be complete or resolved before the closing date. In some cases, mortgage companies will require that repairs be done before the loan is issued. It can also be difficult to get professionals back in a house to make repairs or touch-ups after closing.
Step 1: When the initial contract is written, list items that need to be fixed, and estimate repair costs.
Step 2: Once the final walk-through occurs and it is determined that the actual repairs amount to more than what is listed on the contract, you have two options: The parties agree that repairs be completed at the seller's expense prior to closing, or the parties agree that the seller will pay the purchaser for repair costs at the time of closing or reduce the cost from the purchasing price.
Happy house hunting!