Real Estate Blog

 Home Buying Basics

Buying your home is a very exciting time. In order to keep on track and not let your emotions make your decision; you should prepare and plan.

Factoid: Only 46% of all recent buyers considered themselves "ready to buy" when they purchase their home.

So evidence goes to prove that finding the home of you dreams can happen quicker than you think. And in this market you need to act fast to grab the home you like before it is gone. As the old real estate saying that goes "If you like the home today and you want to think about; just remember someone probably looked at yesterday and have already made their decision."

So how do you prepare for your purchase?

#1 Check Your Credit Score

Amazing enough many buyers have found mistakes on their credit score that if unchanged can cost them thousands in a higher mortgage interest rate or even no mortgage! Fixing your credit score can take weeks, if not months ... depending on the issues. Make sure you can get a loan and get the best rate by checking your credit score now.

#2 Get Pre-Approved

You might be thinking, how do I check my credit score? What do I look for? Well that's easy, you don't have to. You go in for a free consultation from a mortgage broker or loan officer and they will do it for you! If they find anything of concern on your credit, then they can work out a plan to fix it with you!

In addition, they will ask you about your income and debts. This will be just a 10 minute conversation. With this information they can tell you how much of a mortgage you can afford, how much of a down payment you need, what your closing cost will be and what your mortgage payments will be. They can offer any suggestions which can nudge you into a better loan program with lower interest rates. The mortgage professional can give you advice on whether you should payoff any debt or credit cards, or keep those account open.

 You should meet with a loan professional to get a free, no obligation quote in order to find out if you are ready to buy a home and get idea of cost.

#3 Get Your Cash

Most first time buyers take advantage of the FHA 3.5% down mortgage because most conventional mortgages require 10% - 20% down. That means you need to bring to closing 10% - 20% of the purchase price in cash.

Getting FHA financing is problematic on a condo, however, since there are very few condos that are FHA approved. There does exist spot approval; but you need to talk to your mortgage lender to see if that is a possibility. That is why we have seen so many townhomes pop up in Jacksonville. Those you can purchase with 3.5% FHA loan pretty easily.

In addition, in St. Johns County, in\t may be possible to get 100% USDA loan. That means no money down. Again, you should check with your lender for the specifics.

And of course, if you are a military veteran, then you can consider a 100% VA loan.

Putting less than 20% down will cause you have private mortgage insurance, additional funding fees or other cost. So your lender can layout the cost for each loan side by side for your comparison.

#4 Decide on Your Housing Criteria

Now you need to write down what you are looking for in your new home. From your lender you should know your maximum price range. So it comes down to number of bedrooms and bathrooms, minimum or maximum square footage, condo, townhome or single family home, location, etc. You can even get as specific as wanting granite counters in the Kitchen, 1,2, or 3 car garage, water, woods or golf view or more.

This is when you have your conversation with your Realtor. They can start emailing you homes to give you an idea of what is out there. All you need to do give at this point is to give your feedback of what you like and don't like. This way they can keep perfecting their search criteria for you until you are being sent the perfect homes. Then once you have a list of homes you like; you make an appointment with your Realtor to see them all.

#5 Start Looking at Homes Online

You can either start looking at homes online or rely on your Realtor to email homes that match your criteria.

In the email from the Realtor you will get address, home statistics like bedrooms & bathrooms, pictures, virtual tours, videos, schools, commentary on the home and any documents that have been provided like floorplan, survey and seller's disclosure. More importantly, this will be the most up to date and accurate information. All the information you see on real estate websites are fed from the Realtor's MLS system. And website might only update every week, every day, every hour, etc. So your Realtor will know instantaneously if something is under contract or if there has been a price reduction. Even before the website reports it!

Beware when looking by yourself at internet websites! Not all websites information is up to date. We see listings for foreclosures for low amounts that are not even on the market! We get calls all the time to let people know the homes are not for sale. We also see homes under contract that are still listed as Active. So don't get your hopes up if your Realtor didn't directly supply you with the home's information.

Also we should mention a lot of sites have "Automated Valuations". Please read the fine print about this on the website. The website itself says that this is not an actual valuation! It is just a guide to start the process. They even post statistics on how they are about 20% off most of the time. So when it comes time to make an offer on a home just ask your Realtor to do a market analysis.

#6 What to Expect From Your Realtor

The task your Realtor perform are numerous. A lot them you won't even see or know they are being done.

However, the top task that buyers have found to be helpful were:

-Guidance through the buying process, the contract, different mortgages and programs and closing

-Identification of properties' features and faults that contribute or detract to it's resale value

-Negotiation skills to get you a better price and terms

-Providing a professional team of lenders, inspectors, attorney and more!

-Making the home search process fruitful in shorter amount of time

Don't know where to start?

Well most buyers consider these 4 factors when deciding on a home.

#1 - Do I like the neighborhood? (Is it of quality?)

#2 - What is my commute?

#3 - Do I have friends or family nearby?

#4 - How good are the schools?

If you take these 4 factors into account then you will be happy with your choice of home for many years to come.

Congratulations on the start of your home search. Just remember there are some important rules that you should keep in mind when searching for a home.

These 5 Rules of Home Shopping Are:

1 -Get everything in writing

2- Know what the seller customary pays for in your area (Your Realtor will know)

3 -Get a closing cost estimate to know how much cash you need

4 -Always perform a home inspection

5 -Always review the property disclosures and discuss with your agent and inspector

Happy House Hunting!

Carey Frankel

Carey Frankel is a Realtor with the Phyllis Frankel Realty Group who specializes in homes for sale in Jacksonville, Jacksonville Beach, Atlantic Beach, Ponte Vedra Beach and St. Johns.