Kathleen Close - Realtor®

CALCULATE WHAT YOU CAN AFFORD
Knowing what you can afford before you embark on hunting for a new home can save you a lot of time and put you in a strong bargaining position to buy the best property for the least money. Getting pre-approved for a loan puts you firmly in the driver’s seat. Amongst other things such as interest rates and your credit history, lenders consider your income and long-term debts when calculating a “safe” mortgage payment. Typically, a ratio of 28/33 is used in this calculation. Using this ratio a mortgage payment of 28% of your gross monthly income is allowed as long as this payment and any other long-term debts do not exceed 33% of your gross income. Remember - long-term debts include property taxes, insurance and any Homeowner Association fees on the new property so don’t forget them in your calculations and don’t forget to calculate your closing costs.

SELL YOUR PROPERTY FIRST
Making an offer on a new property that is contingent on you selling your own home first weakens your bargaining position. The seller is unlikely to want to wait when he or she may get another offer from another buyer. Even if the seller agrees to your terms it is likely to be at the full asking price, meaning that you may have to pay more for the property than you would otherwise. Alternatively, the seller may set a time limit in which you have to sell your house which means you may have to accept a lower offer than you would have to otherwise.

CHOOSE A NEIGHBORHOOD
Narrowing your search to one or just a few neighborhoods will save you a lot of time in the long run. Evaluate your choices with regard to such factors as property values, schools, traffic, crime rate, proximity of shops and other amenities, etc. I can help find the information on which to base your evaluation. To maximize your property purchase check such factors as whether multiple offers are being made on the property and what is the average number of days on the market for similar properties in the neighborhood. If you can, make a “wish list” of the things you would like included in your new home and use this as a guide to evaluating each prospective property. Remember, however, to consider each property on its own merits such as layout, location, size, etc. and not on how it is currently decorated or furnished or any other factor that can be changed to meet your tastes.

TAKE YOUR TIME!
For most of us, buying a home is the biggest purchase we will ever make in our lives! Consequently it is important to make the best and most informed choice when making your buying decision. Don’t rush it! Beware of advertisements that are designed to generate phone calls and may not give a true or full representation of a property. I will provide you with the genuine information you might need to make your decision. Form a working relationship with me and I will strive to assist you through my knowledge and experience. I am legally obliged to work hard for you and protect your best interests. Whether you elect to work with me or not, I urge you to select a Realtor® to work with and receive all the rights, benefits and privileges that this relationship will accord you.

PREPARING THE OFFER
Working with a Real Estate agent is the best way to prepare your offer contract. In deciding on an offer price you can rely on your agent to research the market and provide you with professional advice. Work out how much you can afford to pay and how much you are prepared to pay before you present your offer. Too low an offer just wastes time. The idea is to offer an amount the the seller is likely to accept or, at least, to counter with a slightly higher amount.

CONTRACTS
It is important to ensure that the Purchase Contract contains all the necessary terms and conditions that reflect your requirements. Again I can help you. The contract should include the date of occupancy as mutually agreed with the seller. Include any repairs that you require the seller to perform as a condition of your purchase and also include any features or fixtures that are to be left by seller when he/she/they vacate the property. Sometimes the seller will agree to special financing arrangements in addition to or as an alternative to a conventional mortgage. This should be spelled out in the contract. All other contingencies, such as home, pool, water inspections etc. should also be documented.

CLOSING COSTS
The "Closing Date" for your property purchase is the day that you actually buy your new home. It is important that you understand and can properly budget for the additional fees you will be asked to pay at closing, in addition to your down payment, prepaid property taxes and any homeowner's insurance premiums. These "Closing Costs" can include, but are not restricted to:

Credit Check Fees (This is a fee for a credit check on mortgage applicants and is not refundable, even if you are not accepted for a mortgage loan)
Property Appraisal (This is also nonrefundable)
Title Insurance Fee
Survey Charge
Loan Origination Fee
Attorney or Escrow Fees
Document Preparation Fee
Garbage or Trash Collection Fees
Points (These are the upfront interest fees paid in exchange for a lower interest rate. Each point represents 1% of the loan amount. It may be possible to have the seller contract to pay the points).

MORTGAGES
Unlike rent payments, a portion of your mortgage payment builds equity or ownership in your home. This equity can also help you secure other loans such as auto loans, a second home or a business loan. Additionally, mortgage interest payments are tax deductible.

Click here to use my Mortgage Estimator which will give you an idea of what your monthly payments will be.

MOVING TIPS
With all the paper work complete you are ready to move in! Check out these Moving Tips to smooth the way to your new home and...