Is buying a home on your 2015 To-Do List?
Given low interest rates and high rents, buying your own New Orleans home might make perfect sense for you this year.
Everyone needs a plan, so here’s our tried and true list of how to buy a home.
Get Pre-Approved for a Mortgage
Boring, right? It sure is. But it’s the most important first step you can take. Today’s home sellers will promptly turn up their noses at offers that don’t include a pre-approval letter from a reputable lender. And, you wouldn’t go shopping for anything else without an idea of your budget, so you certainly don’t want to take a wild guess at how much home you can buy.
Need a lender? Call us at 504-327-5303 and we’ll share our list of local favorites.
Choose an Agent
Even as a buyer, you get to choose who will represent you in your home purchase. Ask your friends for recommendations, check out agent ratings on real estate websites, and google your candidates. Remember, the listing agent works for the seller every time, so we always recommend you have your own agent instead of just using the name on the sign.
Make an Offer
Once you’ve found the home of your dreams (or maybe just the one for the next few years), it’s time to make an offer. Use your agent’s market expertise to your advantage. Ask them about sale prices in the neighborhood. Ask about seller concessions that could save you money out of your pocket at closing. Ask about a home warranty. Ask them anything and everything before you make an offer, because you’ll be signing a purchase agreement that becomes a binding contract when accepted by the seller.
After your offer is accepted, the next step is inspections. This is your chance to go over the house with a fine-toothed comb, inspecting everything from the roof to the plumbing. Ask us for our recommendations on great local home inspectors that can help keep you within your inspection budget.
If there are defects found during the home inspections that you didn’t already know about, you’ll have a chance to ask the seller to either remedy them or perhaps even adjust the sales price. Lenders today don’t like to see repair allowances, so asking for a repair credit will likely not be an option if you are financing your home purchase.
If you can’t come to an agreement with the seller, this is your chance to cancel your offer and get your deposit back.
After the inspection hurdle has been cleared, there is still the matter of getting the house appraised. Your lender will order the appraisal and they usually will collect the fee from you before doing so. Average appraisal costs run anywhere from $350-$500 for a single family home. The appraiser works for YOU, ensuring that you are not overpaying for a home.
Closing/Act of Sale
This is the day you’ve been waiting for. After all of the paperwork is signed, you get the keys to your new home and leave the act of sale a homeowner! Don’t forget to turn on your utilities and have your mail forwarded to your new address.
These are the steps in the process that will cost you money out of your pocket:
- Home inspection(s) can range anywhere from $300 and up, depending on who you hire and how many different types of inspections you choose to perform. Be sure you have the cash to do all of the inspections you need to feel comfortable with your purchase. It’s better to spend a few hundred dollars up front than to find out later there are expensive fixes needed to the house.
- Deposit amounts are negotiable, but plan to put at least $1,000 down, to be held by the listing broker. Your deposit will be credited back to you at the act of sale.
- Appraisal costs range from $300 up.