Oct. 30, 2021
64.8% of Americans own homes in the US, with the average home buyer age being 45 years.
Purchasing a new home is a joyous experience for everyone. For most people, it's a once-in-a-lifetime experience. Regardless of the circumstances making you do it, the homework before you take the plunge is extremely important.
Purchasing a home is a long-term investment that requires a BIG monetary investment. From search the right home to figuring out the payment plan, there are many factors to consider before making the final decision. That's why we have a detailed guide to help you understand the entire procedure and be aware of the possible issues during the purchasing process.
Before you jump into the process, there are many different types of homes; mid-century modern homes, town-homes, contemporary homes, ranch-style homes, condos, mansions, and many more.
Research about the different styles of home to determine which style suits your lifestyle the best. This will narrow down your search while keeping you on the right track.
Here's how you should proceed forward:
It always sounds fun to power on the laptops and initiate the search for your perfect home. After all, you're just looking around, so it's pretty harmless. Soon it begins frustrating you because the beautiful home you've got your heart set on is absolutely out of your budget. Before you end up getting caught in this cycle of disappointment:
- Talk about the budget.
- Think about your savings and how much you would like to invest in the down payment and the monthly mortgage plan you can afford.
- Once you've got the main issue sorted, start working your way up.
The best way to check the affordability of a home is to follow the 28/36 rule. As per this rule, your borrowings for a new home shouldn't exceed 28% of the monthly income, where the total debt shouldn't be above 36%.
The total debt here means ALL your debts, including car, credit cards, student loans, etc.
Don't start finalizing deals before you have "the talk" about a mortgage. While bank advertisements might make a mortgage seem as easy as walking in and taking money, it's more complicated than that.
Mortgage pre-approval consists of paperwork that shows how well qualified you are regarding your financials. It's a thorough report about your finances that reflects the amount you would need to borrow and whether the house can be afforded or not.
It's important to understand that pre-approval DOESN'T mean you've got a loan in hand; it only helps sellers know how serious you are about the purchase by lining up your funds.
Doing everything yourself can be very tempting, especially when it's something like purchasing your first every home. However, we highly recommend that you avoid it. Buying and selling a home involves many technicalities and verification of structure codes that you might not have any experience in.
And most importantly, sellers always have their agents, and to negotiate with them, you need an expert at your side who understands the tactics agents often use. Moreover, many realtors can leave you hanging midway, ruining your chances of securing the home of your dreams. Prevent that from happening by choosing Dallas's most trusted real estate company, Dallas Contemporary Homes.
Dallas Contemporary Homes offers the best real estate services in the Dallas area. From Dallas mid-century homes for sale to Midway Hollow homes, they have the expertise to deal with them all. Dallas has a lot of variety to offer which can get overwhelming.
With them on board, you can sit back and relax while they skim through the city to find the best home and neighborhood-based on your needs and requirements.
Visit their website for more information.
1. Needs vs. Wants
When you keep switching from one listing to another, the line between needs and wants can get blurry very quickly; an outdoor kitchen, fireplace in the bedroom, patio, and so on. The more you'll derail, the tighter your budget gets. That's why it's always best to go classic here and make a need versus wants list.
Start from the main reason that pushed you to search for a new home. For example, how many bedrooms do you need? How many bathrooms are mandatory? Do you need a garage? Is the new home near the school district or far? Will the new location affect your transportation cost to work?
The more questions you'll ask yourself, the more refined the list will be. You might not find EVERYTHING from your list in one home, but it'll help keep you on track!
2. Initiate the Hunt
Once you've sorted all the main concerns regarding the purchase plan of a new home, it's finally time to begin hunting. Having an estimated budget and a list of essential qualities in your dream home makes the process much easier. However, don't just go around jumping from one open house to another; plan it out.
Start by searching online to get an overview of the market. It'll give you a reality check about your budget and whether the home you're aiming for can fit into the budget or not. Look into different neighborhoods and check which fits you the best. Though, what you see online is not always 100% accurate. So, keep that in mind when proceeding forward.
3. Time to Make a List
When you start the trips to open houses or by appointment, it's time you start making a list. Take pictures and videos along with notes. List what you like about the property and what you don't. When you visit multiple properties in a short span, details regarding each home become foggy.
The first visit helps you decide whether the home is worth your consideration or not. It gives you clear access to match your needs with the home. If a property doesn't meet your basic needs, cross it and move forward. If you find a property that does, you can plan a revisit. And don't just settle on one home if you like it; it's still best to continue looking until you find four to five homes of your preference.
When you have your top few preferences, compare them to see which property offers the most worth for the price and meets the majority of your requirements from the list. Pay close attention to little details before deciding on a home; closet space, finishing of the interior, quality of products used, hinges, etc.
While everything might seem all good on the outside, who knows what's happening on the inside? That's why it's always important to get a home inspection, even if the seller provides you with an inspection report. Hire your home inspector to conduct a thorough inspection of the potential home.
A detailed inspection should include a check-up of:
- · Interior plumbing
- · Electrical system
- · Roof
- · Attic
- · Insulation (for heating and conditioning)
- · Structure (ceiling, walls, floor, windows)
- · Doors
- · Foundation of the home
- · Crawl spaces
- · Basement
- · Exterior drainage
- · Other safety components.
Another inspection is also mandatory to confirm whether the home has any mold or mildew issues. If it does, it requires proper treatment and removal, or else it can spread around the house, causing a bad odor and structural issues.
5. Home Appraisal
The seller is demanding $400,000 for the home, and you can only give $350,000. The negotiation war can go on, but who's right here? A home appraisal officer can help you. A licensed inspector visits the property to conduct a thorough inspection. Do keep in mind that this inspection is very different from the one mentioned above.
The inspector's role here is to check the property's structure, its condition, the value of any upgrades that were made to the property, and compares it to the other homes on the market in the same condition. Based on the information received, they will provide a fair value of the home.
Getting a home appraisal is very important for the buyer and seller as it can help clarify any confusion and enlighten the parties involved with the property's actual worth.
Once everything is clear, all reports and inspections are clear, and up to your standards, it's time to place an offer. This is where your agent will play a very important role – negotiating the perfect deal.
While the seller has listed their asking price, that's not the final price; that's just the beginning of your negotiation process.
Your agent, such as Dallas Contemporary Homes, has years of experience working in real estate. Apart from the value provided by the home appraisal offer, they can tell you what a fair offer will be and how it can be achieved. They have adequate knowledge about which is a "hot" neighborhood, which home is in a prime location, and other factors that can affect the market price of properties.
Moreover, you're probably not the only one interested in the property; there could be many other applicants like you. That's why you make your case stronger by including a "real estate love letter" and "earnest money." A love letter is attached with the offer letter that tells the seller why you think you'd be perfect to live in this home. While this isn't a mandatory requirement, it simply helps form a connection with the seller.
On the other hand, Earnest money is a goodwill deposit to show you're a serious buyer. That money is later adjusted in the down payment of your home.
It would be best if you remembered that while you're negotiating, you don't lowball or insult the other party in any way, as it can lead to the dismissal of your application altogether. Quote a fair price and be ready for the back-and-forth process.
This is the final step before the home is finally yours. Once the seller accepts the offer made by you and your agent, it's time to finalize all the paperwork and bid farewell to your years of savings.
Your lender will share a "Closing Disclosure" document with you three days before the closing. You must take your time and review every clause and detail mentioned and ask any questions you have when you sit at the closing table.
The next step is to prepare your finances. Discuss with your mortgage advisor to see how much money you can access for your down payment, closing cost, and all other bills related to the property inspection. It'll be best to have a detailed discussion with your lender to walk you through the process so that you're confident when the closing meeting happens.
And when the day arrives, you're just a signature away to have the keys to your new home. It's time to turn a new leaf and make new memories with your friends, family, and loved ones. All your home decorations tips and tricks will be coming in handy, so keep them ready.
The property market conditions are changing every day. You'll not have some experience you had from 10 years ago. Economic fluctuation, interest rates, government policies, demand and supply ratio of available homes in the market; all these factors play a huge role in defining the final price of a property.
This blog is meant to help you understand the general process one experiences when buying a new home. However, in no way is this going to prepare you for the actual problems you might face in the process. Every situation and home buying experience are different from the other.
Conduct your thorough research but also have an experienced realtor by your side.
Real estate scams are a real thing. As an average citizen, you're not expected to know about the nitty-gritty of the property world; however, an agent does. Cover all your bases with Dallas Contemporary Homes to ensure you get the right house at the right price.
They have the best realtors for the entire Dallas city and can help you find modern homes, contemporary homes, ranch-style homes, condos, and mid-century homes in Dallas.
Get in touch with them to initiate your home buying journey for a better tomorrow.