Step by Step Instructions for the first time home buyer
The very first thing that you have to do is arrange your financing. Many first time home buyers start looking at houses first and end up very disapointed that they can't afford the perfect home. Do not set yourself up for this disapointment. Know exactly what your payment will be and how much home you can afford.
The perfect house is always $20,000 more than you can afford.
Do you want to arrange financing over the Internet at your own pace or do You prefer to talk to a live loan officer?I have a lady that I work with on a regular basis and You will be well satisfied with Her service and loan products. Call me at 812-284-5150 for her contact information.
If you want to save every nickel possible, get your loan online. My business is selling homes, I really don't care where you get the money. Please don't rob a bank.
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As soon as You ( the first time home buyer) are comfortable with your financial situation (as if), begin to think about what you want and what you need. Do not confuse the two terms. If you will decide on the bare minimum that you need to survive, then when you find a house with some extras in your price range, you will feel good about the purchase. A first time home buyer almost always makes mistakes. This page is to help you limit your problems as a first time home buyer.
Actually sit down and make a list of everything you could possible want in a house. Then begin to rank them in order of importance. You may really want some acreage, but if you work a lot of hours at your job, You may really regret that decision when you realize how long it takes to mow the grass on a couple of acres. That is just an example of want and need. You want acreage, but you need time.
These are not easy decisions and the time you spend now with arranging the best financing and deciding on the minimum standards for your home will greatly increase you enjoyment and make the buying experience much better.
Now you know exactly what you need in a house, you know what your payment will be and you have chosen a general location. You might have even narrowed it down to a couple of subdivisions or a certain city. Let me interject a word of caution. If you narrow your choices down to far, you will never find a house. You could say, I want to live in the city of Jeffersonville, IN and I want some acreage. There are homes in Jeffersonville, IN with acreage, but it is unlikely they are in the price range of a first time home buyer. (Please remember that I am addressing a general audience and I am speaking in general, I do not know your specific financial situation).
Obviously, if I am going to the trouble to tell you what to do and help you arrange financing, I am going to want you to buy a house that I have listed for sale or use me as a Buyer's Agent in the purchase of your home. That brings us to the next subject Agency.
If you are working with a Real Estate Agent, it is vital that you know who they represent in the transaction. This can make thousands of dollars difference in the final price of the home. This issue is important enough that Indiana has laws on the books, mandating how agency is to be handled. I am not a lawyer, so I am not going into detail regarding the legal aspects and your state may be different.
The simplistic explaination is If I have a House listed, I represent the Seller. If I show you a house listed by another real estate company, I am representing you as a Buyer. Agency disclosure is to be in writing and at the first meeting when we begin to work together. The agency relationship is dynamic, it changes often during the course of a listing agreement and somes times with a transaction.
Here is a simple example. I have your house listed, I represent you. I sell your house and you decide to buy a house I have listed. I still represent you on the sale of your house and I have been representing you on the purchase of another house. I now have a conflict of interest when you decide to buy one of my listings, because I represent you as a buyer and the seller in the sale of their house that you wish to buy.
Are you still with me? In this situation, I am limited in what I can do for you as a Buyer and I am limited as to what I can do for the Seller. That is the origin of the term limited agent or limited agency that is defined by Indiana Law. Conflicts of Interest are allowed in real estate as long as all parties are informed of the conflict and agree to proceed.
Let me explain how not understanding agency can cost you big money. You decide to purchase a house from a listing agent who represents the seller of the home. You do not realize or don't pay attention and think the agent is representing you as a Buyer. You say to the sellers's agent"I will offer $100,000 for this home. This most I will give is $115,000." That Seller's agent is bound by law to disclose that you will give $115,000. On the reverse end, If you made that statement to a Buyer's agent representing you, the agent would be bound by law not to disclose your top price and not to damage your negotiating power in anyway. As you can see it makes a huge difference who the agent represents.
Now I think you are ready to start looking for a home. There are a number of places to find homes for sale, this web site, newspapers, Homes Magazines and You can now search the Southern Indiana Realtors Association's Multiple Listing service online. You can't get as much information as I can as an agent and a member, but you can get an address, price, bedrooms/baths and often times a picture of the home.
first time home buyer, first time home buyer, first time home buyer, this looks dumb but it is here for a reason.
Your Real Estate for Sale.com For Sale by Owner and Agent listings
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Now the Fun Begins!
You have found a house that gets your attention and you want to go look at the home and make a buying decision. A buying decision can be yes, I want this home or No, I don't want this home. Every time you purchase a home you make compromises. You may want 2 bathrooms and this home has 1 1/2 baths, but the price is good or it is in the perfect location. You may think the price is more than you wanted to spend, but if the home is in excellent condition with a new furnace, central air unit, roof and some very nice remodeling, then it may justify the extra price. The house may be in poor condition but the price is good enough to compensate for the condition. If you are interested in buying home in poor condition and fixing it up, You may want to get a FHA 203k Rehabilitation Loan. That is a wonderful program, but will require its own web page to explain. As long as you make your buying decision based on good information and not hype, you will be okay.
How do you get good information? If you have any concerns regarding the condition of the house. Absolutely, positively hire a professional reputable home inspector and make your offer subject to a satisfactory home inspection. If you are getting a FHA (Federal Housing Authority Loan) the home must pass FHA inspection during the appraisal process. You may decide that an Independent Home Inspection is redundant, but it is your decision.
Also make sure that your offer is subject to a satisfactory wood destroying organism inspection and that the Seller is responsible for treatment and repairs if required by the lender. The Seller may balk at agreeing to repairs prior to knowing how much it will cost, that is okay, just make sure you can get out of the deal if it has severe termite damage. I often use termite damage as a catchall phrase, but write your offer subject to satisfactory wood destroying organisms inspection. Termites are not the only critters that eat wood. There are powder post beetles, carpenter ants, various molds and who knows what else.
One important concern is the elevation of the home. If the home is in a low-lying area or close to a stream or river, Your mortgage company may require Flood Insurance. Flood Insurance is based upon elevation and not necessarily if it has ever flooded in the past.
Lets stay on the subject of the properties condition and we will get to price in a moment. In the State of Indiana, the seller of a residential property is required by law to give the Buyer a disclosure of any known defects in the property. If the Seller fails to give you a disclosure, you can refuse to buy the property and (check with an attorney on this one) you can rescind the sale and give the property back to the seller after the closing. Obviously, if the Seller makes false statements on the disclosure, You have rock solid evidence in a lawsuit, but lawsuits are very expensive and are never as simple as they sound. The best way to handle a lawsuit is to take steps to prevent it at all costs.
The value of residential property is usually determined by the Market Value Approach. Replacement Cost Approach is sometimes used, but on anything except new construction it doesn't make sense. This is how the Market Value Approach is supposed to work and does work when enough market data is available. If you want to know how much a house is worth, you find three similar houses that have sold recently in the same area. If three houses on the same street sold for the same price in the last six months and your house is just like those houses, your house is worth the same as those houses. It gets interesting when your house is not exactly the same as the other houses. If your house is bigger or better, than it is worth a little more. If your house is smaller or not as good then it is worth a little less than the other houses. If you are using a real estate agent and that agent represents you, the agent will provide you with market data from the Multiple Listing Service.
Determining a home's value is not Rocket Science, but many people think their home is worth more than their neighbor's home, regardless of a lack of evidence to prove their point. Unfortunately, because of the pressure put on Real Estate Agents by the Brokers/Owners of the company to obtain listings and the fact that agents work on straight commission, some houses are listed too high. Every once in a while, an agent will list a home too low (not often).
One of the reasons that people wish to sell their homes without the use of a real estate agent is the fact that they want too much for their home and they won't agree to list their home for what the agent recommends. The some other reasons are they do not wish to pay a commission or do not trust real estate agents.
It is now time for you to make an offer to purchase the property that you like. I want to take a moment to talk about the offer process. In the state of Indiana, a contract concerning the sale or lease of real estate must be in writing to be enforceable in court. If you are using a real estate agent, the agent will have a purchase agreement and probably all the issues that you need to worry about will be addressed. There is a lot more in the offer than price and it is very important to get all the details covered in advance. When will you have possession of the property? How long can the Seller take to make up his mind? How will you handle the property taxes? Will the seller pay for repairs if necessary? Will the Seller help you with the closing costs? Will the Seller pay some discount points to lower your interest rate? What happens if you can't get the loan? How much is the deposit and what happens to it before, after and during the closing process? What happens if there are problems on the Seller's end and the title isn't clear? Is there going to be a home inspection and what happens if the home doesn't pass? How long do you have from the time the offer is accepted until it has to close?
That reminds me; always get Owner's Title Insurance, to cover you in case of title defects that were missed during the title search and subsequent closing.
Okay, You have a loan approved, You have found a house, you have made an offer and after a little negotiation the offer is accepted. You have made the offer subject to inspections and you have made the offer subject to satisfactory appraisal. If the property has acreage or if there is a question in your mind about the property lines, you should make the offer subject to a satisfactory land survey.
Now you are faced with a little paperwork and a lot of stress, but things start to happen quickly. You will work with your agent or the Seller if no agent is involved to complete the terms of the purchase offer contract. Anything that you requested the offer to be subject to must be inspected, appraised, surveyed, treated or what ever, inside the time frame allotted on the purchase offer. When all the terms of the offer are fulfilled, you are ready to go to closing. Just before the closing you will need to purchase Hazard Insurance (typically called Homeowner's Insurance). Technical people will call it Hazard Insurance, but most people call it Homeowner's Insurance.
Many states and even areas within the state have different methods for closing real estate sales. I am going to tell you how it is done here in Southern Indiana, because that is what I know. If you are from a different state or area, ask your agent or ask an attorney. The closing is a time of high stress and writer's cramp. If you have done everything right and it is a pleasant situation, the closing can be quite friendly and it really should be friendly. If you have left a bunch of loose ends and unanswered questions, the closing can be a nightmare. Imagine if you never agreed to a specific time to take possession of the house. You arrive at the closing sign all the papers and ask the Seller for the keys. The Seller says "I need to stay in the property for 90 days", if you have given notice at your current residence thinking you will be out in 30 days, then you have a problem. The seller has your money and you have no documentation to force the Seller to give you possession. Can you make house payments and pay rent both for 90 days? I know this scenario is a little far-fetched, but it could happen. I just want to emphasize the importance of covering all the bases in the offer and not having any suprises at the closing.
At the closing you will sign numerous documents and the Seller will sign a few also. The two most important documents in my opinion are the Closing Statement (usually a HUD-1 form) and the deed to the property. The closing statement is basically a list of where the money goes. There will be a section for the costs to the seller and a section that details your costs as a buyer. Your new mortgage will show up, as a credit on your side, as will any credit that you have coming from repair allowances, tax prorations, etc. The deed is the legal document that transfers the ownership of the property to you. The seller signs the deed and it is notarized and taken to the courthouse and entered in the public record.
You now own a house.
There is an important item left and that is after a few weeks take the documents from the closing down to the courthouse, usually the Auditor's Office and file for a mortgage exemption. If you live in the house and you have a mortgage, you are entitled to a tax break called a mortgage exemption. It is your responsibility to file for this exemption.
If I haven't scared you to death then let's get busy and get you a home!
Leave first time home buyer page and back to 967andy.com homepage
Do you know how to get a page noticed on the Internet? There are about 4 billion web pages covering every subject imaginable and it is very difficult to get your page noticed and it is difficult for people to find a page that actually answers their question. Everyone knows that you submitt your page to search engines, but how do you get ranked near the top? The process of getting your page near the top of a search engine is called Search Engine Optimization (SEO). The company that hosts this site offers SEO as a part of their service. You can analyze your page and edit it accordingly. Keyword density is a big factor in SEO, that is, how many times does the keyword actually show up on the page. If it shows up to often or not enough, your page gets ranked lower. When I talk about search engine ranking, I mean which page is at the top of the list of search results. If your page is at the top of the list, you are said to be ranked #1. If your page is the fifth one down the page, you are said to be ranked #5 on that search engine for that keyword.
What this is all getting to is, I am about to type first time home buyer 19 more times and I wanted you to understand why it was there. If I was a better writer, I could blend first time home buyer into the page above and you wouldn't notice how many times I use the term first time home buyer.
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I am more worried about you, the first time home buyer, having good information and a readable page than I am about search engines, that is why this stuff is at the bottom of the page, where you, the first time home buyer, can easily skip over it.
Fourteen more first time home buyer (s) to go! Hello, first time home buyer, first time home buyer, first time home buyer, this is getting tedious and I am glad that you, first time home buyer, are not actually reading this. If you, first time home buyer, are still reading this, you, first time home buyer should probably get a life. A first time home buyer faces many challenges as a first time home buyer. Redundency is at epidemic levels. a first time home buyer is a first time home buyer who is buying a home for the first time. Last one didn't count has to be exact. Five more first time home buyer (s) to go. If a first time home buyer would click on the link below, I would give that first time home buyer a free classified ad. Just in case a first time home buyer is still reading this first time home buyer page.
I will do one better for the first time home buyer. I will provide another link to Your Real Estate for Sale.com and if there are no listings in your city, I will give that first time home buyer, or anyone else a free unlimited account where that first time home buyer or anyone else can advertise as many properties as they would like for one full year. This is the unconditional inventory guarantee for first time home buyer (s) and everyone else.
Hooray!, I pushed the button and it said I have enough keywords to rank well. Thanks for your patience and here are your links.
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