Mowing the lawn, cleaning gutters, paying real estate taxes and mortgage insurance. If all that sounds like fun than home ownership is definitely for you! Just kidding, there are way more positives to owning your piece of real estate! Independence, pride in your home, control over your surroundings, investment, and achieving a well-earned goal are just a few positives that will make it all worth it when that SOLD sign goes up on the house of your dreams you just purchased. But first, a few points to consider on the journey to the house destination…
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Location, location, location. Yes, I know that old cliché is overused but its so true! Before I purchased my home this past April I drove all over neighborhoods in Westerly and Stonington, the two areas I was most interested in to see what the houses and street locations looked like. Another cliché to keep in mind: if your budget is tight look for the “in need of the most TLC house” on the nicest street versus the nicest house on the “in need of the most TLC street.”
Look at the houses on the block; are the lawns and property well maintained, are there rental units next to the house you are interested in? If so do they look well maintained? Is the street next to a busy downtown area with lots of traffic and noise? Once you move in you have total control over your property and keeping it up to your standards, however, if your neighbor’s idea of lawn art is rotted tractors and foot high grass that will be a hurdle to get over.
A Want/Needs List. After perusing your neighborhood location think about what type of house you prefer within your budget and that meets your families needs. Do you crave a garage for car storage or lawn equipment? How many bedrooms and bathrooms would work for your family size? Is there a fireplace on your must-have list? What’s nice about Westerly is there is a home type to fit everyone’s wants and needs from handyman/woman specials, in need of a little TCL, toa plant-a-beach chair in the sand waterfront property.
Depending upon price and how flexible you are, a compromise and a willingness to see beyond what the house currently looks like is a big plus. Maybe you pass on the house with the fireplace for an updated kitchen or bathroom. Or if there is room on the property you can always add on a garage or go up or down for an extra bedroom or bathroom.
Got Budget? Before you even go to a bank or mortgage lender for a home loan, know what you can afford and what is a comfortable mortgage for your budget. Many home buying and real estate webpages have mortgage calculators on them for you to run the numbers on the house your interested in. Remember to factor in not only the price of the mortgage itself but also the insurance, taxes, and any other fees which all get factored into the total mortgage payment.
According to Wendy Brown, Owner of The Brown Realty Group in Westerly, “Westerly, Charlestown, and Narragansett have some of the lowest taxes in the state. This is primarily due to the influence of the higher priced homes on the water contributing positively to our tax base,” says Wendy. “Westerly stands out from the others in that it is a town with a downtown and shopping which neither Narragansett (though Wakefield is close) nor Charlestown do.”
Finding a real estate agent : Many real agents work as both a buyers and sellers agent. However, when you are on the hunt for a house, make sure that agent is working with you exclusively on finding a home and not representing a seller on the same home your interested in as well. That’s where the lines can get very fuzzy and the bottom line is the agent earns a commission so selling the house quickly is always to their advantage. Also don’t rely totally on the agent taking over and finding a house for you.
I kept looking on my own and many times found the property I was interested in before my agent told me about it or even knew the house had gone on the market. Having your own buyers agent is helpful as they will be able to get you into a house faster and their services are free to you! The seller is paying for their commission which comes during closing so you are not losing any money by utilizing a real estate agents knowledge and expertise.
Take your time (if you have the time to take) and find the house you want, don’t let your agent talk you into something or only highlight the positives of the property. Many times they do chose to remain neutral but asking for their opinion on certain topics can be helpful. Once you find the house that is right for you—ACT QUICKLY! Houses in the Westerly area, if priced right and in a desirable neighborhood sell fast!
“Westerly is a very desirable location because of its property taxes, robust downtown and its beaches,” Wendy said. “I like to say it’s a quintessential New England town that just happens to be a beach resort in the summer. So home prices are going up and that is primarily due to the many reasons that people look to buy in Westerly.”
So if you are serious and want the house, discuss it right away with your agent (like on your way to the car after seeing the house) and make an offer. Your agent will write up all the paperwork and present to the sellers agent or owner and that starts the next phase.
Paperwork, paperwork and more paperwork….Once your offer has been accepted and you have secured your loan with a company or bank you trust it’s a race to the finish line with the house of your dreams waiting patiently for you to cut the ribbon and move in! Be ready to spend a ton of time faxing, emailing, texting, running to the bank and back and forth to the lenders and real estate office, sorting through past bank account info, old pay stubs, and all types of other information that is needed to keep the home buying process moving at a fast clip.
Your real estate agent should keep you on track with what paperwork to sign and what comes next and a timeframe for when everything needs to be signed and submitted to the other agent, the loan company, and all other entities. I really had to hustle and thought I would lose my sanity a few times with getting documents back on time, my fax machine not working, and e-documents not going through! But be patient, it’s a processs, you will get through it, and the end result is worth it!
Negotiating-a paddle ball type of game! Once the offer by your agent has been presented, 9.9 times out of 10 the seller’s agent will come back with another offer, usually higher than yours. Everyone thinks they have the Taj Mahal and that their house is worth more than it was assessed at and that someone is willing to pay. So let the negotiating begin. Maybe you come up a bit more on the purchase price but ask for half of the closing costs to be paid by the seller. Or you offer a tad bit more and negotiate somewhere in the middle. Or if you can walk away and be okay with possibly losing out on the house stick firm to your offer and wait it out, maybe the seller wont have any other viable offers and your initial offer will be accepted.
Either way, it’s a little nerve whacking to wait it out but im a beliver in another cligue: “if its meant to be it will be.” In the meantime don’t stop looking! If it doesn’t go through or you decide to walk away there is always another house waiting around the corner!
Looking for a loan: Now the fun begins, not really. This starts one of the most stressful aspects of home buying, seeking out loan options and starting the home buying process, which usually takes anywhere between 30-90 days depending upon the type of loan, if it’s a foreclosure or short sale property, and other factors. Start with your local bank or credit union to see what you are approved for and what their mortgage interest rates are.
A good to excellent credit score and if you’re a first time home buyer or veteran will help you immensely and can help get you a lower interest rate, lower closing costs, and other benefits depending upon the type of loan you secure with your lender. Be very wary of home lending service companies or mortgage brokers that do and will charge extra fees up front or written within the loan that you don’t find out about until closing time.
I made the mistake of not going through a local bank and ended up paying more than $1,000 more at closing for added fees that a bank would not have charged. Lucky for me the seller paid most of the closing costs but they were unnecessary fees charged by the mortgage company that if I had done my home buying homework better I could have avoided if I had gone to a trusted bank.
An added bonus for your home buying process is getting preapproved which helps you know what you can afford and have been approved for by a bank . It also gives you a target home price to shoot for and will help keep you within your budget for what type of house you can afford when your looking. Also, real estate agents prefer working with a client they know has already been approved and will make the process go a little quicker once the preapproval is complete.
To inspect or not to inspect? The choice is always yours but it’s a very wise decision, highly recommended, and a well spent cost to have the house you are about to sign a mortgage of 30 years on to be inspected. Ask your friends and family who they used for their inspector and for recommendations. Your agent might know someone but then again they are pushing for the whole process to be done as quickly as possible and might have someone they know in mind but that inspector might not be as thorough or diligent as you want, so its best to find an inspector of your own choosing.
Be there right by their side when the inspection is being done. Ask lots of questions about everything about the house. I badgered the inspector on my house with “what does this do,” where does this pipe lead, where is my main water shut off valve, is that safe, etc. You can pay extra for termite/bug inspection, mold, and radon as well, although some lending companies might require you do that so your agent can let you know what is definetly a necessity. Typically a home inspection with termite added can cost anywhere between $500-800 dollars. After the inspection is done, findings and your requests for what you want done go back to the seller and more negotiating begins on what they will or will not fix or pay to have fixed.
Walk through: After the inspection is behind you and all the paperwork ink has just about dried, its time for the walk through, which typically happens a few days to a week before the actual closing date. This is the time for you to look around your future dwelling and make sure all the agreed upon inspection items were taken care of and the house has not sustained any additional damage by the previous owner since signing the original paperwork. Look in every corner, crack and crevice to make sure it looks okay to you – your agent and the sellers agent will be there and feel free to bring whoever you want for moral and decorating support.
Closing and keys. The last transaction where you have made it around the bases and are headed home! This is where you meet with your lawyer who explains the 80-100 pages of home ownership documents, you sign you name on half of those pages and read later (not really). And if all goes well and no last minute surprises the keys are in your hand, a big smile on your face and your a proud homeowner. Crack open that champagne!