Is Buying a Home Right for me?
Buying a home used to be the default American Dream. The real estate market crash/bursting of the bubble changed the market to some extent. Whereas buyers that could afford $300,000 wanted to spend $350,000, and often could, today’s buyer might be able for afford $300,000 and only be comfortable with a $250,000 purchase. For some, the best decision may be to rent, bucking the “Now is a great time to buy” hoopla. The selection of a real estate agent, a mortgage broker, the inspections you have and understanding the process is more important that ever before. I hope you find these Five Things To Consider When Buying a Home helpful:
1) Selecting an Agent
Your real estate agent should be your trusted advisor. Our role is to give the best advice possible and execute and negotiate your decisions. Your role is to listen to the advice and make the best educated decisions based on the information available. It has to be a mutual, trusted relationship. No two agents are going to be the same. You can look at online reviews, ask for referrals, and interview until you find the right match. A team may have different points of contact that specialize in certain areas of the transaction whereas an individual agent will be your single point of contact from beginning to end. There are pros and cons to both models.
2) Selecting a Lender
Most buyers need a loan to purchase a home. Some are blessed with enough cash to skip this step. Talking to a lender should always be the first or second step in a real estate purchase. If you’ve selected a Realtor®, ask them for their referrals. The working relationship between the lender and the Realtor® is critical to your transaction. “Going local” is also important. There is nothing more
frustrating than trying to get a critical piece of information from a lender that closed at 2PM because they are on Eastern Time. I’ve been told by a mortgage manager that, “we really can’t help with that as we are a call center, not an actual office of lenders.”
3) Understanding “Agency”
A real estate agent either represents the buyer, the seller, or both. When the agent represents both it is referred to as “Disclosed Limited Agency” or “Dual Agency.” As a business practice, the Turner Team will not practice dual agency under any circumstance, other than if we represent a bank owned property. We believe that you want to make 100% certain that your agent represents your best interests throughout the transaction. Others will argue that there are some deals that will only come together and may potentially save their clients some money by the agent taking a reduced commission. The Agency Disclosure Pamphlet is a required handout by ALL Oregon real estate agents at “first contact.”
Inspections are a part of the buyer’s due diligence. The default timeframe in the offer paperwork to complete and negotiate any repairs or credits is 10 business days. Inaction means the buyer accepts the property as-is, so it’s wise to consider a home inspection as non-optional. Other common inspections include a sewer scope, radon testing, oil tank search/locate, and soil samples (if a tank, or evidence of a tank, is found). The home inspector may recommend a specialist for specific areas of concern – as a general practitioner might recommend a cardiologist. All inspections are buyer-paid; plan to budget $500-$800 for an “average” property. Learn more: Oregon Buyer Advisory.
5) Understanding Earnest Money
Earnest money is money sent to the title company, after your offer is accepted, to show that you are “earnest” about buying the property. It is usually in the form of a personal check and becomes part of the down payment. If you are putting $100,000 and your earnest money is $5,000, you’ll be bringing in $95,000 (plus closing costs) at closing (usually about 30 days after your offer is accepted).
These 5 Things To Consider When Buying a Home are just a few of the key things you will need to know as a first (or second, or third) time homebuyer. This process can be challenging and confusing. However, it will also be a positive investment in your future, and with the right agent or team, it can be a positive experience. When you’re ready to take the first step, give us a call at 503-406-5232 and speak to an agent that knows the area and the business, and who will work for your best interests.
Thank you so much for the tips. I’m considering moving to this area actually, and I’ve been unsure of how to start looking for a home. My wife and I are done renting, and we really want to own our own home. Hopefully I’ve learned a bit here and I can continue to learn and we’ll be ready to start looking when the time comes.