What Every Novice and Experienced Home Buyer Should Know
It’s an exciting time whether you are buying your first or your fourth home! However,many new and experienced home buyers can overlook some important details in the process of purchasing a new home. We sat down with experienced realtor Liza (Ruti) Wolf to get the scoop on what some are overlooking.
RD: Hi Ruti, thanks so much for meeting with us today! What are some issues that come up in purchasing a new home in regards to choosing a neighborhood?
LW: Thanks so much for having me!
The most important points to look into before choosing a neighborhood are school district, tax rates, and point of sale requirements of the city.
If you are planning on sending your children to public school it’s important to check into the school district of each neighborhood. It can be tricky sometimes because where the city borders cut off isn’t always the same as the school district borders so make sure you look into that.
Each city has different tax rates which will impact your monthly payment. This is an essential item to look into since it might really affect which neighborhoods you want to look into.
Point of sale (POS) requirements are different for each city. Some cities have many requirements and some have very few. Oftentimes sellers ask buyers to assume responsibility for the POS violations; buyers should do research and get an estimate from a contractor before accepting responsibility for POS violations.
Driving around the area at different times of day will give you a good feel for the neighborhood. (This is preferably done during the spring and summer.)
RD: What should a potential buyer look for when looking at the interior and exterior of the house?
LW: Cosmetic issues always seem like they are the biggest issue when in reality they are usually minor and the most affordable to fix. It’s important to like the way your house looks, but how the house has been maintained is far more important. Buying a house that has had regular maintenance to it – gutter roof, grading to keep moisture away from the house, HVAC servicing, etc.– can save you in the end. These items are usually harder and more expensive to replace or fix than cosmetic issues with the house.
It’s also important to look at the layout of the house and determine if it is functional for your family's needs.
RD: After completing a home inspection if there are major red flags is it ok to renegotiate or pull out of the deal?
LW: First and foremost I always stress to the buyer that they should be there for their home inspection. However, the list of repairs the inspector gives you is not a list of repairs that have to be done before closing; the list is more for maintenance tips for future ownership of the house. Anything that is health or safety related should be fixed immediately; such as gas leaks, mold, structural issues, etc. If something major is found some people do back out, but we try to avoid it if at all possible.
RD: What happens if you find the house you want, but you get into a bidding war with someone else? Should a buyer bid above their budget?
LW: There are three simple steps to take into account:
Just because a lender says you can take X amount out for a mortgage doesn’t mean you should reach that amount. Taking out a loan for the full amount you are able often causes families to live month to month and their budget feels very stretched. Lenders are not there to help you manage your money.
Take into account future expenses that are unknown to the lender- tuition, weddings, etc.
Before you sign, make sure you know what your approximate monthly payment will be. This takes into account your down payment, taxes, and insurance.
If you follow these steps it will make the process a lot less stressful.
RD: How can the buyer insure they are getting the lowest possible mortgage rate available to them?
LW: You should shop around because of all the different types of loans and different rates. You want to make sure you find the one that best fits your needs. Start at your bank, then look into other banks and actual mortgage companies.
Make sure you know how long you are going to be locked into a rate. If the closing date gets pushed off too much your rate might expire. Once you close on a house you are locked into your rate. If you choose a fixed rate plan, this rate will apply until your house is paid off. (There are some mortgages out there that have variable rates.)
RD: Closing, and closing costs are always a dreaded process in buying a home; is there any way to make this process smoother?
LW: Have a real estate agent involved; they are doing this on an everyday basis and they know how to take care of everything in a timely fashion. They can tell you what the approximate closing costs will be.
Having a title agency that knows the area you are purchasing in is also key. A title agency that is local will know what that city requires to be done before a house can close and will move along the process.
RD: Thanks so much for taking the time to give us your experienced advice. Is there anything else you think a home buyer should know?
LW: Have someone involved who understands the process; a reliable advocate in helping the process go smoothly. This will be one of the biggest purchases of your life and you should never feel uncomfortable or scared to ask questions A real estate agent can help you overcome fears that you might think are major, when in reality they are minor, but to a novice they seem like climbing a mountain.
Speak to a lender before you start looking for a house so you avoid looking at houses that are above your means. Lenders can also give you a pre approval amount which will help in negotiations and make sellers take your offer more seriously than offers from buyers that have not been pre approved.
We hope this article was helpful and informative.
If you’re looking to buy a house Liza can be contacted at 216-403-6294 or firstname.lastname@example.org.
Regency Developers is happy to meet you at your potential new home to discuss possible renovation projects you are considering. Please call our office at 216-321-4444 to schedule your appointment.