Purchasing a Home – What It Takes and Misconceptions of Buying

When people consider purchasing a home they want to know how long it will take. However, the time varies from person to person, there are many factors that determine the length of time to purchase.

In the confusion and the maze of financing, forms, inspections, pricing, marketing plus negotiating you should work with professionals. They will know information regarding houses and neighborhoods that aren’t always or easily available to the public.

When you want to purchase a house, most individuals will need to finance their home purchase. For this you should consult with a mortgage lender which is a crucial step in the purchasing process. To purchase a home, most financial institutions require a down payment. You should consider a mortgage broker or   bank to get a mortgage and there are various reasons for doing this. They can help you determine how much you are able to qualify for. Always keep in mind what your comfort level is regarding a monthly payment. The lender’s job is to let you know what the maximum purchasing power you qualify for is.

After you have determined what you qualify for. Take the time and educate yourself on the local market, consider working with a realtor. A realtor can provide great assistance by helping you determine your priorities which can ultimately help you decide which house is best for you in the area you are interested in.

Making an offer on the home you decide to buy. Use an experienced agent he/she should be able to negotiate for you the best price given market conditions.   In many cases the negotiated terms can signify thousands of dollars in additional value for the buyers.

Once a home has come under contract and you start the actual purchasing process. It is important to make sure and have an inspection on the home by a certified home inspector. The real estate agent you hire can help you arrange the inspection to be conducted. The inspection will serve two major purposes. The first and most important is to give you a full report on the condition of the property and alert you to any major issues that exist. It also will give you the ability to renegotiate the offer if there are major issues found and in some cases withdraw the offer if the seller is unwilling to repair issues the inspection identified.

Title and Escrow will be set up by the seller, however the buyer has the right to use a title company of their choice. The title and escrow company acts as a disinterested third party to the transaction but handles all of the fiduciary and financial documents necessary to purchase the home supplied by the lender and protects the buyer, seller and financial institution in the transaction.

Finally, in closing on your purchase you will attend a signing where the escrow company has prepared your closing documents for signing. Escrow will also prepare a final settlement statement that will be provided to you with all of the details of the entire transaction and your responsibilities regarding payments etc.

 Misconceptions of buying

A common misconception is that you need 20 percent as a down payment for a loan, but there are many loans available which facilitate a variety of financial needs for different individuals. Examples of this are Down Payment Assistance Programs, USDA, VA or a FHA loan which allow as little as 0 to 3.5% down.

Credit is another issue; most borrowers believe you must have a 740 credit score or higher to obtain credit for a purchase. In fact, there are currently programs available that only require a credit score in the 580 range for financing.

Other common misconceptions buyers have:

  • A common misconception of buyers is that they think that the seller will make all repairs on the house from the inspection report.
  • They believe that closing costs are paid by the seller.
  • The price they have asked for is going to be the selling price.
  • Most buyers believe that it is always more inexpensive to rent a home than to buy a home.
  • They think they need a lot of credit to buy a house.