Enclosed some helpful tips on the buying process and what’s expected:
- Get Pre-Approved From A Lender: The biggest mistake buyers make is viewing property before pre-approved from a lender. It can be very disappointing to find a property and than not qualify to purchase. The process includes getting tax returns, pay stubs, employer/income verification, credit score and overview of monthly obligations. Many loan programs include FHA, VA, USDA and Conventional. Check with your lender on best option for you.
- Get Your Finances In Order: If you don’t have Quicken or Quick Books, get a list of all your finances and put together a budget sheet. Include all bills like rent, cell phone, utilities, doctor, car payments, credit card payments, health insurance etc. Than ask yourself, “Will I/we have a down payment”? This will help determine your comfort level on possible mortgage payment including insurance and taxes. Note: Use the mortgage calculator to help with possible monthly payment.
- Start Shopping For Home Owners Insurance: It a really good idea to start shopping home owners insurance in the beginning stages. Most companies have different guidelines on acceptance, so better to get a head of the game. Premiums can very based on property type like single family, condo or townhomes.
- Look Into Home Warranty Programs: This is a great way to insure items in the property like, appliances, water heaters, air-conditioners, swamp-coolers and washer/dryers. Most companies have 1-3 year premiums to cover these items.
- Start Shopping Inspectors: The inspection is something you should ALWAYS do no matter what type of property. This step happens after the property is under contract. Most inspectors cover the home top to bottom checking electrical, plumbing, roof, foundation, appliances etc. The price can run $300-$600 (approx) depending on square footage and property location. This cost is an out of pocket expense and cannot be added to your loan.
- No Big Purchases After Under Contract: This happens all to often, buyers get under contract and than go buy a car, furniture, computers etc. (DON’T DO THIS)! WAIT UNTIL AFTER YOU CLOSE! Absolutely NO big purchases after under contract! The lender/underwriter are checking your credit throughout the process, any major changes can sabotage your deal and potentially terminate the contract.
- Work With A Buyers Agent: It’s a real good idea to work with a buyers agent. They/I can work on your behalf as a coach and look out for your best interest (see blog post on agent definitions). They/I can advise you on the entire process from contract to close. Many moving parts including pre-approval, loan application, showings, contract, title, inspection, appraisal, hoa docs and under-writing. Understanding the process makes everything fall into place.
- Get Familiar With Colorado Real Estate Contracts: It’s a real good idea to get familiar with Colorado Real Estate Contracts. Here are a few that you will see on transactions. 1. Definition of Working Relationships 2. Exclusive Right to Buy 3. Sellers Property Disclosure 4. Square Footage Disclosure 5. Closing Instructions 6. Lead Based Paint Disclosure 7. Water Source Addendum 8. Amend/Extend 9. Inspection Objection. 10. Termination. You can view these documents at the Colorado Division of Real Estate https://dre.colorado.gov/real-estate-broker-contracts-and-forms. Please contact me with any questions or clarification on forms.
Source: Ken Dunham Dunham Real Estate
- This article is an opinion of the website holder, intended for informational purposes only.