On the surface, buying a home may seem like a relatively straight forward process. However there are dozens of variables in any transaction that make home buying quite complex. Being prepared and organized makes the process that much easier and more enjoyable. Here are some steps to take before beginning your search.
Assess Your Financial Situation
For starters, use our Mortgage Calculators to get a sense of your buying power and monthly mortgage payments.
This critical (and sometimes overlooked) step has many benefits. A mortgage pre-approval lets you know exactly what you can afford; it demonstrates to sellers that you are ready and able to buy; and it gives you a head start in getting an actual loan commitment. Learn more about pre-approvals in our Mortgage section.
Create a Wish List
Every home purchase involves some degree of compromise, which is why it is important to prioritize your wants and needs before you begin your search. There are many variables to think about depending on your lifestyle, budget and future plans, but some universal considerations include:
Location - Northern New Jersey offers many great towns and cities, each with its own character. Consider the factors that are important to you, such as access to schools; proximity to major roadways or public transportation; and social and recreational amenities like restaurants, theaters, shops and parks.
Type of Home - A great diversity of housing exists within the region: single-family homes, condominiums, lofts, town homes, new-construction, re-sales and fixer-uppers. You probably have a preference for a certain style of construction. Weigh the pros and cons to narrow your focus.
Once you have obtained a mortgage pre-approval and you are ready to begin your home search in earnest.
Review Listings - Using the guidelines you set forth, your Century 21 Calabrese agent will present you with available listings. You can play an active role in this process, too, by tapping into Internet-based MLS search, a powerful search tool that lets you review up-to-the-minute information on properties that match your criteria.
Visit Properties - Your Century 21 Calabrese Century 21 agent will schedule showings and accompany you on each appointment. When you walk through a home, some things to consider are: what are permanent fixtures versus items the seller is removing; what is included in the total square footage (balcony, basement or garage); and, in new construction, which features are standard and which are upgrades. The average buyer will view 4 to 6 properties before finding a new home. But that is just an average. Some buyers purchase the very first home they see. Others look at a dozen listings or more.
Compare Properties - Discuss each showing with your Century 21 Calabrese agent and provide candid feedback. Your expectations and the marketplace will begin to converge, and your Century 21 Calabrese agent will be able to adjust certain parameters such as location and features in order to present you with more and better alternatives.
When you find a home and are ready to make an offer, your Century 21 Calabrese Century 21 agent will perform a Comparative Market Analysis or CMA. This report compares the subject property with other properties that are currently listed and recently sold to help you formulate your offer.
Chances are, when you find a home you absolutely love, someone else loves it too. So if you want a seller to take you seriously, you need to act quickly, make a serious offer and negotiate intelligently.To make an offer, your Century 21 Calabrese agentwill draw up a contract that contains the price you are proposing and other terms and contingencies.
Buyers often focus on price, but there are other important terms to a real estate contract. You can include any terms you like, but the more you add, the more likely the seller is to object. Here are the most common elements of a real estate contract:
What is the home worth? The market will determine the final price, but your Century 21 Calabrese agent will help you formulate an offer based on comparable listings and sales, market conditions and trends.
A mortgage contingency stipulates that you will buy the home subject to obtaining a mortgage, and if you cannot obtain a mortgage, the contract will be void. The terms of the mortgage must be stated in the contract, and you will also need to establish a timeframe for securing financing.
A thorough inspection of the property by a licensed home inspector protects you against structural or material problems that are not detectable in a casual walk-through. You, not the seller, are responsible for hiring and paying the inspector.
Attorney Approval is usually a one-week period, in which your attorney can review the contract and suggest alterations. In most transactions, the seller is also represented by an attorney. Upon attorney review, if the contract is not acceptable to either party, both have the option to cancel.
Offers and Counteroffers
Once you have established the price and terms of your offer, your Century 21 Calabrese agent will draw up a contract and present it to the seller or seller's agent. If the seller signs it, as is, you have a binding contract with the price and terms in place. But chances are there will be a bit of negotiation before both parties are content. One thing to remember is that while buying a home is an emotional purchase, getting emotional during a negotiation is usually counterproductive. That is why it is so important to follow the advice of your Century 21 Calabrese agent. They will serve your interests and work as your liaison until the deal is done.
Once the contract has been finalized, you will pay a deposit to secure your interest in the property. The amount varies and will be discussed during negotiations, but expect to pay anywhere from 5 to 10 percent of the purchase price. If the sale goes through, the money is typically applied to your down payment. If the sale does not go through for reasons covered in your contract, then the seller is obligated to return the earnest money. With a contract signed and money deposited, your new home is just around the corner.
In a real estate transaction, there are dozens of loose ends to tie up between contract and closing. Century 21 Calabrese Realty Group is known for attention to detail during this important phase. We will coordinate or help oversee the following steps:
- Deposit money with the seller or seller's agent.
- Recommend and schedule a home inspector, if requested.
- Recommend a real estate attorney, if requested.
- Obtain important documents, such as property disclosure forms, a condominium declaration or condominium association minutes.
- Recommend a mortgage broker and help expedite the loan-application process.
- Notify you when all contingencies have been met.
- Recommend service providers for moving, home-improvement and repairs.
- Coordinate your closing
In addition, if you have an existing home to sell, Century 21 Calabrese Realty Group will customize a comprehensive marketing program to help you achieve the best possible price in the shortest amount of time.
Your Century 21 Calabrese Realty agent will work closely with you, your lender, your attorney, and the seller's agent to make sure everything is in place for an efficient and trouble-free closing.
Prior to the closing, your lender will forward all loan documentation to the title company and let you know the amount required to close. You will be responsible for the balance of your down payment and closing costs such as lender fees, title company fees, and state and city transfer taxes. At the closing, your attorney will guide you through the many documents you need to sign, including the bill of sale, the deed and the affidavit of title. The Calabrese Realty Group goal is to help provide you with the information you need to feel completely confident at the closing. If you have questions about your closing, contact your Century 21 Calabrese Century 21 Agent at any time.
Your New Home
While your transaction is complete, our work is not. In fact, Century 21 Calabrese Realty Group maintains relationships with our clients long after their closing. We are always glad to help you find a variety of service providers and trades people to perform work on your home or make life a little easier. Century 21 Calabrese Realty Group is your source for all your real estate needs.